VALUE FOR MONEY REPORT
8th March 2017
Introduction
Highlights and summary
Understanding our costs
Benchmarking
Performance
- Providing housing services
- Managing our assets
- Acquiring new properties
- Improving our financial strength
- Investing in our society and environment
Progress against previous VfM objectives
Corporate plan actions 2016-21
Conclusion
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INTRODUCTION
Regulatory framework
As part of the Regulatory Framework for Social Housing, registered providers of
social housing are required to publish a self-assessment setting out how they are
achieving value for money (VfM) in delivering their purpose and objectives.
Our value for money self-assessment is set out below and is intended to help our
stakeholders reach an informed view on how efficiently, economically, and effectively
we are running our business and challenging ourselves to improve.
Our aims
Our mission is to be recognised as the leading local provider of affordable housing.
To achieve this mission our core objectives are:
- We will strive for quality in everything that we do and this will be the main
feature that sets us apart from others.
- We are a caring organisation that will put people first.
- We take pride in the way that we serve our tenants and maintain our
properties, and in our financial strength and efficiency.
- We will ensure the growth of our portfolio in so far as this is sustainable
In pursuing these objectives, the Board is very aware that we are working in a fast
changing environment, where demand is continuing to grow for our homes whilst we
face reductions in the availability of public subsidies.
The Welfare and Work Bill 2015 has reduced our rents by 1% per annum for four
consecutive years from April 2016 requiring Cornerstone to generate increasing
value from our existing resources to ensure that our quality of service and growth
aspirations are not compromised.
VfM strategy and action group
Our approach to value for money is embedded in a culture of seeking efficiencies
and continuous improvement throughout all our activities. This is demonstrated
through our ambitious business plan, the involvement of all staff in contributing ideas
informally through general discussions and formally during the annual appraisal
process, as well as through the support of our Performance Panel which provides a
channel for tenant scrutiny and influence over our day to day activities.
Cornerstone’s value for money strategy establishes three main aims, to run
alongside our core objectives, to make sure:
- We understand our costs and performance
- A strategic value for money framework and culture is embedded throughout
the organisation
- We minimise our costs and maximise performance through service and value
for money reviews, procurement and IT practices
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We have established a VfM framework to assist in the delivery of these strategic
objectives through:
- VFM action group (staff representatives) meeting regularly
- VFM review schedule (covering all important aspects of the business) to
determine areas for potential service improvement or efficiency savings
- VFM annual self-assessment
- reporting KPIs to the Management Team and the Board
- use of working groups to deliver business planning
- the Board to provide external challenge to the VfM processes and
initiatives
The VfM action group was extended by the Management Team in 2016 from 3 to 5
persons to include representation across all core activities.
Bob Weatherall
Dawn Hardy
Vicky Labbett
Ian Hayes
Sue Langdon
- senior management
- finance and resources
- policy and development
- maintenance and improvement schemes
- housing
VFM Action Group meeting: (left to right) Sue, Ian, Dawn, Bob & Vicky
The group meets monthly to monitor and assess VfM, support the preparation of the
VfM efficiency improvement action plan, assist with VfM service reviews, and
improve communication across the whole organisation.
Monitoring and communication
Our business structure is designed to ensure the smooth flow of communication,
from the Board through to individual sections and teams, and to ensure that potential
improvements are identified early.
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This structure comprises:
- Main Board
- Board committees for audit and risk; finance and resources; building and
development; housing management; and remuneration.
- Performance Panel, comprising tenant members
- Senior management team
- Health and safety committee
- Section teams covering all staff and providing opportunities for regular
meetings
The Board and senior management team use a variety of processes to monitor and
evaluate value for money throughout the year which include:
- Performance indicators on non-financial information are reviewed at Board
level
- Annual budgets are approved by the Finance and Resources Committee
which provides allocation of resources to achieve Cornerstone’s aims
- Monthly and quarterly accounts are reviewed by the Finance and Resources
Committee and by the Board.
- Annual benchmarking activities are undertaken with Housemark
- Cornerstone employs Internal Audit, with reports reviewed by the Audit and
Risk Committee.
- Where policies are reviewed at committee level, specific consideration is
given to value for money.
- The annual value for money self-assessment is agreed by the Board.
- Options for development and sale of properties are discussed and agreed by
the Building and Development Committee.
HIGHLIGHTS AND SUMMARY
We consider that our results for 2015-16 demonstrate our strong commitment to
providing value for money in all our activities.
In 2015-16 Cornerstone recorded an operating surplus of £1.5 million (2015: £2.3m)
and a net surplus £0.7 million (2015 £1.4m). The reduction in surplus during the year
reflects a lower number of shared ownership ‘first tranche’ sales in the year (surplus
of £63k compared to a surplus of £438k for the previous year) and in addition our
surplus was reduced by £783k for the increase in deficit of our Social Housing
Pension Scheme (SHPS) following the triannual actuarial valuation.
During 2015-16 we sold two ‘first tranche’ shared ownership sales (2015: eleven)
which generated a surplus of £63k (2015: £438k), with margins earned on these
property sales of 35% and 41% respectively.
Our operating surplus demonstrates our efficiency in managing our business and the
net surplus generated is essential in order to provide cash to invest in new homes
and make improvements to existing homes. We consider this reinvestment in
property to be our ‘social dividend’.
Cornerstone is an exempt charity and, as such, all surpluses must be retained for
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Cornerstone’s charitable objectives and cannot be distributed as profits.
The table below shows our core financial performance, across a range of key
measures which we report on annually, and compares these results with the HCA’s
benchmark average for all other registered housing providers who own or manage
more than 1,000 homes.
Comparison of financial highlights with HCA's Global Accounts
2015
2016
2017
Target
FRS 102
FRS 102
FRS 102
Benchmark
(HCA
Global
accounts
2015)
Former UK
GAAP
7.3%
2.2%
0.3%
4.1%
141%
-80%
460%
12.5%
Operating margin
Return on social housing assets
(see note below)
31.7%
23.1%
30.2%
28.3%
5.3%
3.9%
4.0%
4.2%
Interest cover (EBITDA MRI)
277%
169%
249%
156%
Net debt per unit
£16,221
£16,900
£16,661
£23,931
Management cost per unit
Routine and planned
maintenance cost per unit
£423
£455
£475
£1,034
£641
£693
£758
£1,017
Total major repair costs (incl
improvements) per unit
£1,607
£1,523
£1,588
£929
Voids for the year
3.0%
3.4%
3.2%
1.7%
Bad debts for the year
Current tenant arrears at the
year-end
0.2%
0.6%
0.7%
0.8%
0.8%
1.1%
0.9%
4.6%
Effective interest rate
4.4%
4.2%
4.3%
4.7%
Growth in turnover – social
housing lettings
Growth in turnover – other social
housing activities
Notes
The benchmark comparison figures are taken from the Homes and Communities Agency's 2015 global
accounts of housing providers.
The financial return on assets is calculated as the operating surplus generated on social housing
lettings, before grant amortisation, property depreciation and impairment, as a percentage of the year
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end gross book value of social housing properties and land.
Interest cover is based on earnings before interest, taxation, depreciation and amortisation with all
majors repairs spending included. This does not match our loan covenant calculations but allows for
benchmarking with the Homes and Communities Agency's figures.
Our relatively high sums for voids and major repair costs, reflect Cornerstone’s
ongoing commitment to bring all its stock up to modern and good quality levels of
accommodation, in excess of the decent homes standard. These works are detailed
below in ‘managing our assets’ and will, over time, deliver significant savings through
lower future expenditure on planned and response repairs. Of the income lost
through voids in the year ended 30th September 2016 £175,000 (87% of void losses)
related to properties kept empty during periods of planned improvement works. We
anticipate a similar level of voids for the current financial year ending 30th September
2017.
Management and maintenance costs are significantly below the sector average and
demonstrate the efficiency of our core activities. As anticipated there were some
increases in these costs as a result of a higher corporate overhead to cover
increased national insurance, pension costs and the installation of a new computer
system being brought in to transform and further improve our methods of working
within housing, maintenance and finance sections, together with associated training.
Over the next few years this IT investment will enable further efficiency gains and
improved management information, resulting in productivity gains.
These results demonstrate our financial strength and our ability to continue to
reinvest in our homes and to acquire / manage additional properties for the benefit of
future tenants.
In 2016 we commenced a three year strategic programme to replace and upgrade
our core computer system for housing management, maintenance and accounting
records. This should generate significant added value for Cornerstone over the next
ten year cycle. Savings will be partly realised through lower costs with a minimum
cumulative saving of £26,000 over ten years, with an initial set up cost in 2015-16 of
£73,000 and additional set up costs of £21,000 over the next two years.
In addition we believe that the new computer system and mobile working solution will
transform many of our working practices creating greater efficiencies and better
integration across the whole business. These improved working efficiencies cannot
be easily quantified as financial savings but should be evident as savings in staff
time, improved accuracy and timeliness of management information, and
improvements in our service standards to tenants.
The historical costs, and trends, of our core service delivery (excluding cost of sale
of properties, depreciation and impairment, and including all improvement scheme
expenditure) in total and per average property managed can be viewed in the
following tables:
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Total expenditure (excluding acquisitions and sale of property)
2013-14**
2014-15*
2015-16*
Management
£550,000
£548,000
£592,000
Services
£190,000
£190,000
£213,000
Routine maintenance
£653,000
£680,000
£745,000
Planned maintenance
£184,000
£150,000
£156,000
Bad debts
£16,000
£12,000
£35,000
Other costs (social housing
£90,000
£89,000
£68,000
lettings)
Other costs (SHPS deficit reN/A
£20,000
£783,000
measurement)
Other activities (primarily
£251,000
£251,000
£269,000
development costs not
capitalised)
Improvement schemes – main £1,460,000 £1,349,000 £1,310,000
(capitalised and expensed)
Improvement scheme –
£679,000
£731,000
£670,000
Mount Dinham
Total costs
£4,073,000 £4,020,000 £4,841,000
Percentage
Allocation
2015-16
12%
4%
15%
3%
1%
2%
16%
5%
27%
15%
100%
* under FRS 102
**under former UK GAAP
Our financial return
Our key indicator for financial return, for comparison purposes, has been calculated
using ‘return on social housing assets’. This measure has been chosen as it
represents our core activity to manage our housing properties efficiently and
effectively, for the benefit of all stakeholders.
For the purpose of calculating this financial return on social housing assets, we have
used ‘operating surplus on social housing lettings’ and then excluded housing
property depreciation and impairment. Housing depreciation is a non-cash charge
which varies across registered providers depending upon policies adopted. The
adjusted operating surplus on lettings is then compared to the carrying gross book
value of all our housing assets.
For results under FRS 102, we have further excluded income from grant amortisation
on the basis that this is also a non-cash item.
This definition for ‘social housing lettings’ excludes the distorting impacts of any
shared ownership or other asset sales, and also excludes all development costs
irrespective of whether these have been capitalised.
Our aim is to be a high performing housing association in respect of managing our
business efficiently and effectively, and thereby maximise the value that we bring to
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the charity and our tenants. However our intention is not to maximise returns at the
risk of compromising the quality of our standard of accommodation.
We have considered our trend data over the past three years and compared our
performance with the HCA’s published Global Accounts’ report on all providers with
greater than 1,000 properties.
Operating
surplus on
lettings
excluding, grant
amortisation,
housing
depreciation &
impairment (A)
Gross book
value of
housing
properties
(before
depreciation)
(B)
Return on
social assets
(A / B)
Cornerstone 2013-14
£3,325,000
£69,583,000
4.78%
Cornerstone 2014-15*
£3,904,000
£73,249,000
5.33%
Cornerstone 2015-16*
Cornerstone 2016-17*
projection
HCA Global 2015 accounts –
total (average return)
£2,970,000
£76,105,000
3.90%
£3,210,000
£79,741,000
4.03%
£5.8 billion
£138 billion
4.20%
Notes
The benchmark comparison figures are taken from the Homes and Communities Agency's 2015 global
accounts of housing providers (calculated under former UK GAAP)
*2014-15, 2015-16 and 2016-17 figures are calculated under FRS 102. All other figures are under
former UK GAAP.
The comparison shows that our performance, on this measure, has reduced in 201516 below the sector average for 2015. The primary reason for this is because of a
provision of £783k for the increase in deficit of our Social Housing Pension Scheme
(SHPS) following the triannual actuarial valuation. We are also comparing results for
year ended 30th September 2016 with global accounts for the year ended 31 March
2015.
The financial return is forecast to increase to 4.03% in 2016-17, although at a lower
level to previous years reflecting the compounded impact of annual rent reductions.
We are pursuing a range of initiatives, as illustrated within this report, to improve our
systems and increase our overall efficiency to offset the rent reductions over the
short to medium term.
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UNDERSTANDING OUR COSTS
Costs per property (managed at year end)
2013-14**
Management
Services
Routine maintenance
Planned maintenance
Bad debts
Other costs (social housing
lettings excluding SHPS
deficit remeasurement)
Other activities (primarily
development costs not
capitalised)
Improvement schemes – main
(capitalised and expensed)
Improvement scheme –
Mount Dinham
Total unit costs (above
headings only)
2014-15*
2015-16*
Trend
(1 year to avoid
distortions from
FRS 102)
£434
£150
£516
£145
£13
£71
£424
£147
£525
£116
£9
£69
£455
£164
£573
£120
£27
£52
↑
↑
↑
↑
↑
↓
£198
£194
£207
↑
£1,153
£1,042
£1,007
↓
£536
£565
£515
↓
£3,216
£3,091
£3,120
↑
* under FRS 102
** under former UK GAAP
Trend for the one year change (avoiding distortions for the introduction of FRS102
accounting standards) is shown as green for reductions plus increases of up to 5%;
amber for increases between 5% and 10%, and red for increases above 10%.
Overall, on average, and excluding housing depreciation, exceptional items and the
re-measurement of our SHPS pension deficit, unit costs over the past year have
increased by less than 1%.
There are two cost headings showing an increase of more than 10%, being services
and bad debts.
Service costs show an increase of £17 per unit. A more detailed review of this cost
heading has revealed a higher than average expenditure relating to lifts at Cherry
Barton and Norwood House (adding an average of £5.85 annual cost per unit across
all our housing stock) and a sizeable increase in external site maintenance costs
(adding £5.05 annual cost per unit across all our housing stock). The annual site
maintenance costs are typically charged by ‘management companies’ set up by
developers to support new housing estates and costs will follow only after all
development phases on an estate are complete. These costs have increased
alongside local authority and highway reductions in their support to new estates.
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Bad debts represent sums considered irrecoverable from tenants for rents and
service charge owed. At an average of £27 per tenant this represents 0.59% of rents
and service charges owed at the year end and is a large percentage increase from
comparisons of 0.20% in 2015 and 0.29% in 2014.
The improvement schemes are considered below in ‘managing our assets’. The
Mount Dinham project is over an 8 year time span to 2020 and variations in spend
will partly reflect the pace in the work carried out by external contractors for more
specialised roles such as stonework.
During 2017 we plan to review our apportionment methods for allocating overheads
across all our sections, including improvement schemes, to ensure these are being
fairly stated and not distorting comparisons with the sector averages.
HCA global accounts
The summary outputs from the HCA’s work on reviewing operating costs across the
sector was published in June 2016 and showed the following output from the Global
Accounts 2015 information alongside their analysis which was published in
‘Delivering Better Value for Money: Understanding differences in unit costs’.
This analysis was carried out by the HCA to provide a better understanding of the
wide variations in headline social housing costs across the sector.
Our headline social housing costs for 2014-15 (all stated under former UK GAAP)
were as follows:
The table shows that Cornerstone’s outturn in 2015 of £3,200 cost per unit was in
line with the lower quartile for social housing cost across the sector of £3,190 per
unit.
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The comparison illustrates that our overhead base is competitive, however our
improvement schemes are significantly ahead of the sector average and this is
because of our larger scale planned improvement schemes.
In particular the results include expenditure of £731,000 within ‘major repairs’ for a
renovation programme of 44 almshouses acquired under a long term lease at nil
premium on condition that the properties are brought up to modern standards, which
we consider to be a comparable investment to that of a new build development
scheme. If Mount Dinham renovation works were excluded, our 2015 unit cost would
reduce to £2,622 and would place Cornerstone’s results very comfortably within the
lowest cost quartile for the sector.
The HCA’s regression analysis has sought to provide a more meaningful
understanding across the sector by considering the impact of supported housing,
housing for older people, regional wage effects, stock transfer providers,
neighbourhood deprivation and decent homes. The results of the HCA’s regression
analysis showed that the most powerful explanatory variables in terms of explaining
unit cost variation were: supported housing, regional wage index and LSVT (stock
transfer) variables. For general needs only, the HCA’s regression analysis identified
a baseline unit cost of £3,300, based on a traditional provider with 100% general
needs stock and no non-decent homes, operating in an area with average
deprivation and wages.
For Cornerstone, the vast majority of our stock is general needs without significant
neighbourhood deprivation issues and we have the advantage of a lower regional
wage index of 94%.
Cornerstone’s unit cost (excluding Mount Dinham) of £2,622 could therefore be
reasonably compared to the HCA’s baseline figure for general needs £3,300,
reduced for the 6% regional wage advantage providing a revised sector baseline
comparison of £3,102. The difference over our 1,266 units provides an annual
efficiency saving against the sector baseline of £608,000.
BENCHMARKING
We have compared our performance with Housemark’s benchmark group of 27
traditional housing associations based in England (excluding London) with between
1,000 and 2,500 units. Our most recent Housemark data collates data for the year
ended 30th September 2015.
The Housemark ‘efficiency summary’ scorecard for this comparison group is shown
below.
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Efficiency Summary for Cornerstone Housing
Cost KPI
Quartile
Business
activity
Cost KPI
Overheads
Overhead costs as % adjusted
turnover
Major works
& cyclical
maintenance
Total CPP of Major Works & Cyclical
Maintenance
Cornerstone
Housing
(2015/2016)
Quality KPI
Quartile
Quality KPI
Cornerstone Housing
(2015/2016)
Overhead costs as % direct revenue
costs
Percentage of tenants satisfied with the
overall quality of their home (GN & HfOP)
Percentage of dwellings that are nondecent
Percentage of tenants satisfied with
repairs and maintenance (GN & HfOP)
Responsive
repairs & void
works
Average number of calendar days taken
to complete repairs
Total CPP of Responsive Repairs &
Void Works
Average re-let time in days (standard relets)
Percentage of tenants satisfied with the
service provided (GN & HfOP)
Housing
management
Percentage of anti-social behaviour
cases resolved successfully
Total CPP of Housing Management
Current tenant rent arrears as % of rent
due
Estate
services
Percentage of tenants satisfied with their
neighbourhood as a place to live (GN
&HfOP)
Total CPP of Estate Services
Quartile key
Upper
Quartile
Middle
Upper
Median
Middle
Lower
Lower
Quartile
N/A
No Data
Valid dataset
These results demonstrate that we are amongst the best performers for efficiency in
expenditure for overheads and housing management, as well as in the collection of
rent arrears.
The scorecard shows that we are in the 4th quartile for expenditure on major repairs,
which reflects our asset management strategy to reinvest a relatively high level of
expenditure in our properties in order to provide an exceptional quality of housing,
increased insulation, and an extension of the useful working life of these properties.
We are also placed in the 4th quartile for ‘non decent’ dwellings because of seven
properties not meeting the standard. All of these properties are flats at Norwood
House which are being modernised in 2016-17 and will then ensure that 100% of our
properties will meet the Decent Homes Standard by next year.
In the previous year our resolution of anti-social behaviour cases had been in the 4th
quartile and this has improved over the year to the 3rd quartile, with further initiatives
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planned to improve these results further through an agreed action plan in 2016-17.
PERFORMANCE – PROVIDING HOUSING SERVICES
Our housing services support is at the forefront of all our activities and is critically
important to maintain our high standards in our interaction with tenants and the
quality of the homes we provide.
In Summer 2016 we conducted a full census, seeking information from all our
tenants, to: ensure we are communicating with tenants in the most appropriate way;
help us understand our tenants’ current and future needs; improve our customer
insight and inform future policy; help us and our tenants prepare for Welfare Reform;
and help detect and prevent tenancy fraud. 640 surveys were completed in total
which is a 51% response rate.
The census has revealed some helpful information on tenant preferences which will
enable our future planning to focus services more effectively in the future; for
example 16% of respondents would prefer to be contacted by email.
The census has provided a considerable amount of data across age, gender, marital
status, ethnic origin, disabilities, religion, sexuality, employment status, finances,
earnings and benefits. Overall, we achieved a good response rate across a broad
range of tenants with most sharing personal data with us. Generally we have an
aging and fairly disabled population within our properties and the impact on turnover
and associated costs will be borne in mind when business planning. The information
will enable us to better understand and support the individual needs of tenants.
Improving communication with our tenants will be key to ensuring we deliver services
that are right for them and that they remain satisfied that we are providing them with
value for money as their landlord.
Alongside the census we conducted the STAR satisfaction survey so that we can
measure satisfaction with services and map it alongside different criteria such as age
and ethnic origin. This allows us to identify if particular groups are more or less
satisfied than others and take steps to ensure consistency if required.
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STAR satisfaction survey results
Trend
(2
years)
Benchmark
sector
upper
quartile
2014
2015
2016
94.40%
95.70%
93.50%
↓
89.90%
91.80%
91.10%
90.80%
↓
87.30%
STAR2
Taking everything into account, how
satisfied or dissatisfied are you with
the service provided by
Cornerstone?
How satisfied or dissatisfied are you
with the overall quality of your
home?
STAR3
How satisfied or dissatisfied are you
with your neighbourhood as a place
to live?
88.40%
86.10%
86.20%
↓
86.70%
STAR4
How satisfied or dissatisfied are you
that your rent provides value for
money?
90.70%
90.40%
89.70%
↓
87.00%
75.80%
72.90%
↓
76.10%
95.70%
91.70%
↓
85.20%
80.20%
76.60%
↓
74.60%
STAR1
STAR6
How satisfied or dissatisfied are you
that your service charges provide
value for money?
Generally, how satisfied or
dissatisfied are you with the way
Cornerstone deals with repairs and
maintenance?
STAR7
How satisfied or dissatisfied are you
that Cornerstone listens to your
views and acts upon them?
STAR5
94.90%
The STAR satisfaction survey results show a drop in satisfaction levels although
most, including overall satisfaction, compare favourably with upper quartile
performance across the sector. The Housing Manager has produced an action plan,
agreed with the senior management team, to seek improvements in tenant
satisfaction and reverse the identified trend.
We have continued to maintain exceptionally low levels of rent arrears throughout
2015-16 and our total rent arrears for tenants at 30th September 2016 was just
1.07%, excluding former tenants. Our rents are collected monthly and therefore are
not synced with housing benefit receipts which are collected on a four week cycle.
As a result our rent arrears will vary during the course of the year and at 30th
September 2016 represented 0.87% owed by current tenants and 0.2% in respect of
housing benefit receipts due.
We are in the process of preparing for the full roll out of Universal Credit which takes
place for Cornerstone between April 2018 and June 2018 for new claims plus
changes to tenant circumstances. We have worked with Allpay to set up a system so
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that individual tenants can choose their own preferred rent collection date. By 31 st
March 2016 we collected 29.9% of our rents by direct debit and we are targeting this
to increase to 33% of all rent receipts by 31st March 2017.
We have rolled out ‘mobile working’ to our housing officers through the distribution of
tablets with mobile data connections to our core housing database. This new
technology has been welcomed by our three housing officers and enables improved,
quick and easy access to relevant tenant data as well as direct input whilst away
from the office.
‘The mobile forms are working really well and when I come back into the office from
visits, the majority of the work that I normally generate has been done. This also
means that repair requests can start to be processed much sooner which should
improve customer care.’ Anita Merritt, Senior Housing Officer.
In October 2016 we rolled out tenant access to a web portal to enable individual ‘look
up’ of rent statements and reporting of repairs and changes of personal details. This
has been very successful and provides efficiency savings through reductions in the
postage of paper statements. All tenants have been offered the option to continue to
receive paper statements if they wish.
Housemark benchmark data, using the peer group of 27 similar traditional housing
associations
Housing Management - Cost Summary
Cornerstone Housing (2015/2016)
Sample
Size
KPI
Upper
Median
Lower
Result
Rank
Total CPP of Housing Management
27
452.69
596.95
651.96
273.79
1
Direct CPP of Housing Management
27
256.39
286.42
328.66
169.83
2
Direct CPP of Rent Arrears & Collection
27
76.55
90.72
99.37
45.73
1
Direct CPP of Resident Involvement
27
39.53
48.94
77.00
34.61
5
Direct CPP of Anti-Social Behaviour
27
27.59
36.34
48.63
19.71
5
Direct CPP of Lettings
27
32.90
39.98
54.87
28.93
4
Direct CPP of Tenancy Management
27
41.64
55.54
78.93
40.84
5
Quartile key
Upper
Quartile
Middle
Upper
Median
Middle
Lower
Valid dataset
15
Lower
Quartile
N/A
No Data
Quartile
PERFORMANCE - MANAGING OUR ASSETS
As a property business, it is critical that we understand how our assets are
performing financially.
We achieve this financial understanding of our properties through: our stock
condition surveys and projected component replacement costs (identified through
our Lifespan property management software); our historic and budgeted overhead
costs; our knowledge of our rents; and our past records for lettable voids.
We maintain all our properties through the use of our in-house Direct Labour Force
and this provides our maintenance section with an absolute understanding of the
state of repair of all our stock and awareness of where future costs are likely to
occur.
Our asset management strategy was updated in 2016. It considers all our individual
estates and properties and identifies those properties which are expensive to
maintain, require significant expenditure over the near to medium term, or are harder
to let. These properties are then reviewed in further detail to determine their financial
viability and, if appropriate, plan for their future improvement.
Where properties are no longer financially viable, or better use can be made of their
market value, these are disposed of or converted to alternative accommodation.
There have been three instances in 2015-16 where decisions which were taken to
dispose of, or convert, existing homes:
1. In 2013-14 the Board identified ten individual properties that did not generally
meet Cornerstone’s property standards. These properties are in different parts
of Exeter and, unlike most of Cornerstone’s stock, are not part of a larger
development and therefore presented certain management and maintenance
issues. The Board agreed a strategy that these individual properties should be
considered for sale on an individual basis as they become vacant after
carrying out a financial appraisal of the costs required to bring them up to
Cornerstone’s property standards. As a result of this strategy one property
was sold in 2015-16 bringing the total of individual properties sold so far to
three under this strategy.
2. We demolished three terraced properties (all in poor condition) in Water Lane
in early 2016 in order to replace with nine new modern flats. These properties
will complete in 2016-17 and will increase the value of this site, providing
additional affordable homes.
3. Six bedsits at Mermaid Court, Exeter, were proving difficult to let and
therefore potentially unviable. These were converted to two new two bedroom
flats and a new two bedroom house in 2015-16.
We are currently preparing a net present value (NPV) analysis of all our estates to
determine which properties will generate a positive financial return over the long term
and whether any estates are expected to generate negative returns. This exercise
will take into account levels of rent, service charges, previous void history, ongoing
16
maintenance costs and planned component replacements.
The use of our in-house maintenance section ensures that our properties are
maintained to the highest standard with the majority of repairs completed on the
same day, wherever possible. This is reflected in our tenant satisfaction outturn for
repairs and maintenance of 91.6%, although we recognise that this has reduced
from the previous outturn of 95.7%. We are undertaking further work to understand
the reasons for the reduction in tenant satisfaction and a possible explanation might
be the introduction made in the year to introduce a booking system for gas servicing
which was necessary to improve accountability but has resulted in the loss of
flexibility for some tenants under the previous carding system.
We set high standards for our maintenance section and to help mitigate the costs
associated with the service we have introduced mechanisms for our tradesmen to be
kept continually engaged in productive work through transferring between
maintenance and improvement sections, as well as covering less urgent tasks such
as periodic electrical tests between assignments.
In addition to our maintenance section, we maintain two separate improvement
teams to ensure that all housing stock provides quality, modern, efficient, and low
cost accommodation for our tenants. This work is agreed in advance by the Board,
after extensive financial appraisal of all options and consultation with tenants.
The improvement teams form the mainstay of our initiatives to ensure that our
housing stock continues to meet our core aspirations to provide quality homes
which take into account and care about our tenants’ needs and the environment, and
provide a legacy to future generations that we can be justly proud of. Our remodernised (and in some cases re-modelled) homes will last a minimum of fifty
years before requiring any further extensive works, with the exception only of
component replacements, and therefore the consultation and VfM analysis of these
works is paramount to our business planning.
Prior to setting budgets for our improvement schemes the Board reviews the
financial viability of each scheme, including any alternative options for sale or
conversion, and thereby establishes the overall benefit of the improvement scheme
before committing resources. Budgets are agreed with Randall Simmonds LLP, an
independent firm of chartered surveyors, to establish a minimum 15% cost saving
target on works by our own in-house improvement teams compared to external
private contractors. The cost saving recognises the VAT saving on use of our own
labour and the absence of a profit element to these works.
Our improvement works in 2015-16 covered significant projects at: Mount Dinham;
Raleigh House; the Courts estate; and commencement of works at Norwood House.
These schemes and their VfM attributes are outlined below.
The Mount Dinham estate comprises 44 almshouses which are leased by
Cornerstone from The Mount Dinham Cottage Trust on a nil premium 125 year lease
in order that these properties can be brought back up to modern and comfortable
living standards. This is a significant project up to year 2020 with an expected total
expenditure of £6.1 million (£139,000 per almshouse). The renovation works are
17
equivalent to a new development scheme and all scheme costs are capitalised.
During the financial year 2015-16 the Mount Dinham improvements team completed
the refurbishment of four almshouses in phase 5 at a capitalised cost of £532,000
(£133,000 per unit) and completed seven weeks work on phase 6, comprising four
almshouses and two flats. During the year there was some additional unforeseen
works but this was offset through improved working practices such as use of our own
Direct Labour Force to construct stone window frames, saving £1,250 per window.
Our larger improvements team, led by Paul Mills, re-modernised in 2015-16 sixteen
flats at Raleigh House in Exeter. The total refurbishment cost of Raleigh House was
£764,744 (£47,797 per flat) and compared to the original budget of £749,226. This
sum includes planned void losses and tenant expenses of £71,283 attributable to the
temporary move of tenants whilst works were ongoing.
Additionally the improvements team has worked on converting six bedsits at the
Courts estate in Exeter into two flats and one house at a cost of £243,034 (£81,011
per unit) and compared favourably to the budget of £303,000. In early 2017 work is
ongoing for the full refurbishment and modernisation of 26 flats at Norwood House in
Exeter.
Our refurbishment programme provides considerable benefit to our tenants through
the creation of improved living accommodation, noise reductions, fire prevention
improvements, neighbourhood enhancements and thermal insulation of their homes.
This provides social and environmental benefits as well as making the properties
more desirable to improve future re-letting.
Tenants have been very pleased with their newly modernised homes and one tenant
commented that he is paying half the monthly cost on his electric bill and is very
happy with the efficiency of his new heating system compared to his previous night
storage heaters.
From an economic perspective the refurbishment programmes have been designed
to minimise future maintenance programmes through choice of materials and design.
In particular, significant use has been made of timber treatments and upvc fascia
boards to reduce the need for future re-painting and the expensive scaffolding
associated with this. Such materials can simply be washed down through long pole
mounted cleaning systems.
We have continued to use our own Direct Labour Force for the majority of our
improvement and maintenance works because of the higher quality of work that can
be maintained, faster response rates, continuity of contacts for tenants, local
knowledge and the significant financial savings through avoidance of VAT on labour
rates and efficiency savings from knowing our own housing stock. We also
appreciate that our tenants value the peace of mind that they gain from knowing the
local tradesperson calling to see them.
From April 2016 we have introduced a new maintenance computer system to
improve the processing of our data and the management information available to us.
We plan to build on these efficiency gains through the roll-out in 2016-17 of mobile
working for tradespersons, providing access to email, tenant records and electronic
18
timesheets. At the same time we plan to introduce electronic scheduling of works
orders (including gas servicing) which should transform working practices and bring
considerable efficiency gains for both administration and tradespersons.
Housemark’s benchmark of our overheads with the selected benchmark group of 27
housing associations, is detailed below. This shows that we have a relatively higher
cost for the service element of our response repairs but that this outweighed by
lower costs for voids and management, placing Cornerstone overall in the 2 nd
quartile for response repairs and voids combined.
For major repairs we are classed in the lowest quartile and potentially one of the
highest costs for our peer group. A primary reason for this is because these planned
costs include the renovated works at Mount Dinham (referred to above) which are
recorded as improvement works but are more similar in substance to new build
development. If the Mount Dinham works are excluded this would reduce the
resulting cost from £1,984 to £1,314 placing us close to the third quartile.
Responsive Repairs & Void Works - Cost Summary
Sample
Size
KPI
Cornerstone Housing (2015/2016)
Upper
Median
Lower
Result
Rank
Total CPP of Responsive Repairs & Void Works
27
714
755
794
727
9
Total CPP of Responsive Repairs (Service Provision)
27
272
359
427
587
24
Total CPP of Responsive Repairs (Management)
27
126
147
201
62
2
Total CPP of Void Works (Service Provision)
27
117
155
198
63
1
Total CPP of Void Works (Management)
27
42
62
79
16
1
Sample
Size
Upper
Quartile
Major Works & Cyclical Maintenance - Cost Summary
KPI
Cornerstone Housing (2015/2016)
Median
Lower
Result
Rank
Total CPP of Major Works & Cyclical Maintenance
27
884
1,096
1,321
1,984
25
Total CPP of Major Works (Service Provision)
27
562
665
930
1,752
26
Total CPP of Major Works (Management)
27
59
69
101
63
11
Total CPP of Cyclical Maintenance (Service Provision)
27
133
191
259
150
11
Total CPP of Cyclical Maintenance (Management)
27
25
55
70
18
5
Middle
Upper
Median
Quartile key
Upper
Quartile
Valid dataset
19
Middle
Lower
Lower
Quartile
N/A
No Data
Quartile
PERFORMANCE - ACQUIRING NEW PROPERTIES
Cornerstone maintains an active development programme to acquire new housing
stock.
Our governance process to assess new opportunities requires the full approval of the
Board, which is assisted by a Building and Development Committee to consider
development proposals in detail. In addition, the Finance and Resources Committee
oversees resource implications and ensures that new developments are contained
within the overall business plan.
Individual schemes are assessed for their financial viability using SDS ProVal
software to determine their funding requirement, expected timescale, anticipated net
present value impact on the business, and forecast payback period in years.
The Board recognises that the return on assets should be considered not just from a
financial perspective but also from social and environmental outcomes. In this
respect the Board has established a weighted points system to help determine the
relative priorities of potential development schemes, and to assist in the process of
selecting which schemes should be pursued. Weighted points are allocated in
respect of the following factors:
- Location
- S106 or own build
- Size of the scheme
- Type of scheme (houses / flats)
- Housing need
- Amenities
- Financial appraisal
- Net cost
- Risks and probability
- Estimated completion date
As part of the strategy to maintain sustainable growth, Cornerstone is a member of
Partnership South West and applied for funding under the HCA programme for 201621. As a result of this programme and the earlier 2015-18 programme Cornerstone
receives social housing grant on some developments.
During the financial year 2015-16 we invested £1.6 million in the acquisition of new
homes in Dawlish and Exeter, where a further 41 new homes are currently under
construction.
Fifteen new properties were completed in the year which included three new homes
created by Cornerstone’s own Direct Labour Force from the conversion of six
bedsits.
Cornerstone sold two properties during the year, being a 100% stair-casing sale of a
shared ownership property and the sale of an individual property identified by the
Board as part of a planned disposal strategy. A further property was demolished to
provide land for the creation of a new block of flats in Exeter.
20
Cornerstone has consistently increased the number of homes owned and managed
as detailed in the table below.
2013
2014
2015
2016
Rented housing - social rents
Rented housing - affordable rents
Rented housing - intermediate rents and
mortgage rescue
Shared ownership
Managed for other registered providers
1,176
35
1,164
71
1,153
99
1,151
106
8
18
-
8
23
-
8
34
-
8
35
-
Total
1,237
1,266
1,294
1,300
Against a background of reducing government grants, Cornerstone has sought
additional subsidies to ensure property developments continue to be financially
viable.
Through inclusion within the HCA’s affordable rent programme, Cornerstone has
been granted permission to charge affordable rents on some schemes and to
convert some existing social rent properties to affordable rents. In this context
affordable rents are defined as being up to 80% of market rents including service
charges. By 30th September 2016 Cornerstone had acquired or converted 106
properties on affordable rent tenancies.
Our development plans for our business plan 2016-21 targets 113 new homes (net)
plus an additional 80 homes under management for RentPlus.
We have agreed with RentPlus to lease new homes (on an estate by estate basis)
for periods up to 20 years. These schemes will provide additional affordable homes
without a requirement for capital outlay. The RentPlus model is a management
contract with RentPlus under which private investors own and fund the housing stock
and Cornerstone will provide the full management service. This model has the
significant advantage that it encourages and supports tenants to purchase their own
homes and aligns closely with the Government’s aspiration to encourage
opportunities for increased home ownership.
PERFORMANCE – IMPROVING OUR FINANCIAL STRENGTH
We seek continually to improve our financial strength in order that we can reinvest in
our properties and seek growth to help support our future tenants. This means
seeking efficiencies in our day to day activities, our overheads and our ability to
secure funding on the best possible terms.
During the year we have invested in a new accounting system, linked to housing and
maintenance client databases, to streamline our accounts administration and ability
to extract relevant management information. This work was undertaken from April
21
2016 and has enabled us to prepare management accounts direct on the system
(previously was via spreadsheets) enabling quicker reports. This has included a wide
range of other reports, with drill down facility, supporting all core sections.
Cornerstone is a member of the Social Housing Pension Scheme (SHPS) and a
significant unpredictable cost has been the deficit arising from our pension obligation
for our ‘defined benefit’ scheme members. There was a charge of £783,000 in our
2015-16 accounts for the re-measurement of the pension deficit following a three
yearly actuarial valuation of the scheme. In order to help manage the risks
associated with future valuations of the scheme, the defined benefit structure was
closed to new members on 1 October 2010 and the final salary benefit was closed to
future accrual from 1 April 2016. Members affected by the closure of the final salary
benefit were transferred to a new career average earnings defined benefit structure
from this same date, making the scheme more affordable for both the employer and
employees.
In 2016 Cornerstone drew down a loan of £5.1 million from Affordable Housing
Finance plc to support the funding of development programmes. This funding was
provided under a government guarantee loan scheme and attracted an exceptionally
low interest rate of just 2.8% over a 28 year tenure. At the time, this rate was
amongst the lowest fixed interest rates that had been secured by our sector.
Last year’s VfM action plan reported on the successful implementation of a formal
process of supplier appraisals. Now in its second year we have completed a further
10 appraisals including two of our largest suppliers of building materials, the
appraisal process has been used to provide relevant feedback for individual
suppliers improving and strengthening relationships and helped to determine an
appropriate timetable for formal tenders. There is now a rolling programme for
suppliers appraisals with 16 reviews planned for 2016-17.
We reported, last year, that a review of fleet management was in its early stages.
This was completed during the year and has led to the subsequent purchase of three
new vehicles from a local supplier who was able to match discounts offered by
Crown Commercial Services (circa 33%). This has been an important achievement
during the year as Cornerstone maintains a fleet of 17 vehicles with planned
periodical replacements representing future savings.
Housemark’s benchmark of our overheads with the selected benchmark group of 27
housing associations, is detailed below. This shows that our overhead costs are
primarily amongst the top quartile of our peer group.
22
Overhead costs as a % of adjusted turnover
Sample
Size
KPI
Upper
Median
Lower
Cornerstone Housing (2015/2016)
Result
Rank
IT & Communications as % adjusted turnover
27
2.02
2.39
3.27
1.35
3
Office Premises as % adjusted turnover
27
1.28
1.76
2.05
1.63
13
Finance as % adjusted turnover
27
2.34
2.58
2.94
1.79
3
Central & Other overhead as % adjusted turnover
27
6.00
7.21
8.01
4.22
3
Total Overhead as % adjusted turnover
27
12.37
13.89
16.31
8.99
2
Quartile key
Upper
Quartile
Middle
Upper
Median
Middle
Lower
Lower
Quartile
N/A
No Data
Valid dataset
PERFORMANCE - INVESTING IN OUR SOCIETY AND ENVIRONMENT
Cornerstone is committed to a range of initiatives, through our housing activities, to
improve the environment.
We recognise that a large element of our environmental impact is linked to energy
efficiency improvements of our existing housing stock and the purchase of new
housing stock.
To help measure these improvements we plan to establish a baseline average SAP
across all our rented properties to assess the impact of our investment in energy
efficiency by monitoring changes in the SAP rating for our properties.
The Board is committed to providing modern and comfortable homes for our tenants
at affordable levels of rent and, in so doing, improve the quality of people’s lives as
well as the local neighbourhood and community.
Although we are run as a commercial business, continually seeking efficiency and
effectiveness in all our activities, we recognise and fully embrace our social purpose
to provide good homes at affordable rents, and thereby enhance the lives of all our
tenants. Our strapline ‘housing people’ demonstrates our commitment to putting
people first, and ensuring quality, care and pride in all that we do.
We carry out a substantial and varied range of activities linked to our social purpose
and we have listed some examples of key areas below to demonstrate our work.
i) Our developments are regularly assessed for their environmental impact and
we have examples where we have introduced roosts for bats and birds.
23
Quartile
ii) A very important element of our improvement schemes is to provide high
levels of thermal insulation and thereby improve comfort for tenants and
minimise their utility costs.
iii) We maintain an ‘assisted gardening scheme’ (10 tenants supported in the
year) and an ‘assisted decorating scheme’ (15 tenants supported in the
year) to help tenants in maintaining their homes. The decorating scheme is
limited to one room per year and is available to elderly and disabled
tenants.
iv) Annual support for a named charity. In 2016 we raised £350 to support St
Petrocks plus the donation of clothing and rucksacks.
v) We assisted 28 tenants, through Homeswapper, with mutual exchanges over
the year.
vi) We provided 61 tenants with aids and adaptations, such as use of grab rails
or ramps for easier access.
PROGRESS AGAINST PREVIOUS VFM OBJECTIVES
The Audit and Risk Committee, senior management and staff collectively identified a
range of measures, as part of an action plan, to further embed value for money
across the whole business. This work established a wide range of value for money
initiatives up to 2017 based on clear, measurable and stretching objectives to further
improve upon our economy, efficiency and effectiveness across all aspects of our
activities. These have been further added to by ‘one off’ initiatives agreed with the
Board.
A new three year efficiency improvement plan is being prepared for discussion with
the Audit and Risk Committee in May 2017.
Our VfM action plan 2014-17 and initiatives focused on the following main areas:
Target
To support staff in their
wider understanding of
the whole business.
Progress achieved
We have increased
communication throughout
Cornerstone through staff
briefings and meetings,
including regular site visits
from the Chief Executive.
Staff lunch briefings have
still to be organised in
2017.
24
VfM gains
Greater staff knowledge
increasing productivity in
own work areas.
Further utilisation of
benchmarking to
compare practices
Value for money service
reviews
Determine which
properties should be
retained, modified or
sold.
Housemark has presented
annual benchmark
comparisons with the
housing sector to the
Management Team and a
summary report has been
discussed by the Board.
Housemark data has been
incorporated into Key
Performance Target
comparisons across core
sections of the business.
Our Performance Panel
has completed two recent
service reviews: anti-social
behaviour (Nov 2015) and
voids (Oct 2016).
Our asset management
strategy identified
individual properties (nonestate) which should be
considered for possible
sale as they become void.
During 2015-16 one
individual property was
sold. In addition six
bedsits were converted to
make two flats and a
house, and three poor
condition terrace houses
were demolished to create
a site for nine flats.
25
Benchmarking data has
provided focus of those
areas of activity where
greatest potential
efficiency can be realised.
These reviews have
identified a series of
recommendations to
improve our services. An
example is an action
arising from the ‘voids’
service review to create a
leaflet for tenants moving
out of their homes,
providing clarity on
acceptable standards such
as cleanliness.
The strategy of reviewing
properties for retention,
modification or sale is
ensuring that our assets
and resources are being
focused according to need
and best use of financial
resources.
Use of supplier
appraisals to encourage
continuous improvement
and strengthen
relationships.
To evaluate VfM and
energy savings as a
result of our improvement
schemes
To encourage greater
use of electronic
document management
to reduce reliance on
paper based systems.
In 2016 calendar year, 10
supplier appraisals were
carried out covering a
wide range of services and
supplies.
Each of the reviews
covered price, customer
service, delivery, quality,
administration and
availability of paperless
services. Comprehensive
feedback, including
negative and positive
aspects across all review
headings, was provided in
summary to each supplier.
Our work on reviewing
energy usage pre and post
improvement scheme
expenditure has been
difficult to conclude,
primarily because of the
absence of continuous
data.
Considerable
advancements have been
made towards electronic
document management
and paperless systems.
These have included:
introduction of mobile
working for housing staff;
introduction of electronic
workflows between
maintenance and housing
sections (via the customer
administration database);
granting of additional
licences to the document
management database;
and encouragement of
electronic invoicing from
suppliers through
feedback on supplier
appraisals.
26
The purpose of each
supplier appraisal is to
monitor and improve upon
value for money of
services. Since the
introduction of supplier
appraisals there has been
significant improvements
across a range of services
or change of suppliers
where services were substandard and
improvements not
realised.
Demonstration of energy
savings though
improvement schemes
and insulation works will in
future be reviewed through
changes to SAP scores.
VfM gains have been
achieved through use of
less paper, less storage
facilities, increased speed
of processing transactions,
and increased efficiency in
the use of staff time.
To use IT to improve
efficiency of operations
and back office functions.
We have invested
resources in changing the
core computer systems
used by maintenance,
housing and finance. This
has streamlined our
processes and added
additional functionality for
all sections. Gains have
included: reductions in the
number of spreadsheets to
maintain information;
mobile working for housing
staff; streamlining of the
recording of timesheets
and by implication the
costing of maintenance
works orders; and the
ability to share and access
data across sections more
efficiently.
To encourage further
take up of our assisted
gardening and decorating
schemes for our older
residents
The assisted gardening
and decorating schemes
are available to elderly
and disabled tenants, and
have been further
promoted to tenants.
The take up of these
schemes improved
marginally in the year to
10 tenants receiving
gardening support and 15
tenants receiving
decorating support.
During 2015-16 there were
three apprentices
(plumbing, carpentry and
bricklaying). The
bricklaying apprentice left
Cornerstone employment
in March 2016.
Creation of training
opportunities through our
apprenticeship schemes
27
VfM gains are through
reductions in paper usage,
less postage of rent
statements to tenants, less
use of spreadsheets (with
an expected increase in
accuracy of data),
improved use of staff time
and improved allocation of
staff resources.
Importantly, the change of
computer system has
created a more flexible
package where additional
gains will be pursued over
the next two years,
including mobile working
for the maintenance
section and integrated text
messaging to improve
communication with
tenants.
Tenants benefit from the
financial subsidy of these
schemes, with the work
carried out during quieter
periods of time for the
gardeners and painters.
The actual take up
remains below
expectations and we plan
to continue efforts to
promote the availability of
these schemes.
The apprenticeship
scheme provides career
opportunities as well as
meeting succession
planning needs for
Cornerstone.
To enhance our online
service provision,
including availability of
online rent statements
To review pension
provision in order to
provide an affordable and
sustainable pension
scheme.
To increase the choice
available for tenants to
pay their rents.
To undertake a full cost /
benefit and
environmental review of
our vehicle fleet
management.
We have created a new
secure web portal for
tenants to access rent
statements, record
changes to contact details
and report on any repairs.
VfM gains include:
improvements for tenant
access to rent statements;
reductions in postage cost
of rent statements, except
where requested; and
corresponding savings in
staff time.
The ‘Final Salary 1/60th
Financial savings have
DB’ pension scheme was
been achieved for both
closed on 1st April 2016 for Cornerstone and
existing DB scheme
employees from the
members and replaced
change in DB structure.
with a new and more
Financial savings
affordable ‘Career
achieved for Cornerstone
Average Earnings (CARE) through the DB change
1/60th’ DB pension
are £52,274 per annum.
scheme.
Scheme joiners from 2010
are members of the SHPS
defined contribution
pension scheme.
Flexible choice of direct
The additional take up of
debit payment dates has
direct debits has
been rolled out with
contributed to
increased tenant choice of improvements in the
this payment method.
management of rent
In 2014-15 27% of rents
arrears and additional
were received by direct
savings in finance staff
debit. This increased to
time. Tenants have
29.9% in 2015-16 and has benefitted from greater
increased further to 32.1% choice of rent collection
by January 2017.
dates.
The management target of
33% for 2015-16 has been
extended to 2016-17.
The vehicle fleet review
The financial saving in
was completed in
2015-16 of £16k are
September 2016. As a
expected to continue into
result Cornerstone has
future years.
changed its supplier,
The use of larger vehicles
achieved purchase
will enable tradesmen to
discounts of 33% on list
carry more stock in the
price for two new vans,
vans, reducing travel time
and has changed its
to visit suppliers and
specification to include
enabling more repairs to
larger Connect vans.
be completed at first visit.
28
CORPORATE PLAN 2016-21
Our business plan for 2016-21 was prepared in December 2016 and includes the
follows corporate objectives, which will be monitored through future VfM selfassessment:
To maintain sustainable growth:
- to acquire a total of 113 (net additional) owned units (by Sept 2021)
- a significant element of new homes to be shared ownership (25% by Sept
2021)
- additional (provisional) target of 80 extra ‘managed’ units without capital
outlay (by sept 2021)
To develop under the HCA affordable rent regime:
- to complete the 2016-18 HCA programme comprising 16 new units and
completion of the renovation of 18 units at Mount Dinham
- to target 27 re-lets at affordable rents
- to develop 10 shared ownership units plus renovate a further 13 units at
Mount Dinham under the 2016-21 HCA programme
To enable our customers to play a significant part in the direction and management
of the organisation:
- to increase tenant involvement, scrutiny and co-regulation, particularly
involving tenants of schemes outside of Exeter.
- adopt a greater use of social media and modern technologies to interact with
our customers
To maintain high standards of housing management:
- to consider the impact of the first fixed term tenancies coming to an end (by
March 2018)
- to monitor the number and condition of voids and ensure procedures and
resources are reviewed to tackle any significant increase.
To continue the programme of comprehensive refurbishment of stock:
- to refurbish all the properties at Norwood House (by Dec 2017)
- to complete the modernisation of the properties at Mount Dinham (by Sept
2021)
- to appraise options for the refurbishment of 114 pre-war flats (by March 2017)
and commence works (by October 2017).
To continue to maintain our homes to a high standard:
- to undertake stock condition surveys and plan for component replacement
works (as detailed in the asset management strategy)
- to review the viability of ‘individual’ (non-estate) properties as they become
vacant and reconsider remaining properties (by Dec 2018)
To maintain the marketing strategy:
- to expand upon Cornerstone’s high public profile through the marketing
strategy
- to launch a new website (by March 2018)
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-
to focus on ‘quality’ as a key feature of the marketing strategy
to develop and strengthen relationships in our ‘growth area’
To maintain appropriate staffing levels:
- to review staff structures across the organisation to ensure efficiency and VfM
- succession planning where the workforce, plus senior positions, are
approaching retirement
To continually improve on services and activities, through improvements in economy,
efficiency and effectiveness
- to prepare an updated VfM efficiency improvement plan across all areas of
activity (by April 2017)
- to create and carry out a programme of continual VfM reviews.
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CONCLUSION
The Value for Money Standard requires Registered Providers to:
(a) have a robust approach to making
decisions on the use of resources to
deliver the provider’s objectives,
including an understanding of the tradeoffs and opportunity costs of its decisions
(b) understand the return on its assets,
and have a strategy for optimising the
future returns on assets – including
rigorous appraisal of all potential options
for improving value for money including
the potential benefits in alternative
delivery models - measured against the
organisation’s purpose and objectives
(c) have performance management and
scrutiny functions which are effective at
driving and delivering improved value for
money performance
(d) understand the costs and outcomes
of delivering specific services and which
underlying factors influence these costs
and how they do so.
Our Business Plan sets out our corporate
objectives, our financial plans, and
detailed stress testing of assumptions
made. All investment and strategic
decisions are taken by the Board after
full appraisal plus review of alternative
options and impact on VfM and risk
management.
The financial return on our assets is set
out in this report. We use our asset
management strategy to inform our
decisions and help identify alternative
delivery models. We plan to create a net
present value analysis of the return on
individual estates to better inform our
future investment decisions.
Our performance management is
regularly reviewed across all activities by
the executive and the Board, with
support provided by our Performance
Panel and our VfM Action Group. For
2017 we are preparing an updated 3 year
VfM efficiency plan to identify additional
efficiencies that could be pursued across
all areas of the business.
Cornerstone is a member of Housemark
and undertakes detailed benchmarking of
costs and performance across the
business.
The Value for Money Standard requires this report (our annual assessment) to:
(a) enable stakeholders to understand
the return on assets measured against
the organisation’s objectives
Our return on assets has been set out in
this report as the financial return
generated on our core social lettings,
with additional information provided on
social and environmental aspects of our
business.
We plan to extend our work on financial
returns for future reports to analyse
financial returns on individual estates
using a net present value model.
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(b) set out the absolute and comparative
costs of delivering specific services
The absolute and comparative costs are
set out in this paper.
Additionally, we carry out service reviews
of individual aspects of our business to
gain a fuller understanding of the costs
and drivers of specific services.
(c) evidence the value for money gains
that have been and will be made and
how these have and will be realised over
time.
Evidence of VfM gains have been
provided in this report.
Our VfM Action Group is working
alongside the executive to prepare a
three year plan for 2017 to identify
opportunities for future VfM gains.
Taking the above evidence into account the Board believes that Cornerstone
complies with the Homes and Communities Agency’s value for money standard.
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