Value for Money
Strategy 2016 – 19
HOW
WILL WE
MEASURE
UP
Value for Money Strategy 2016 – 19
For the last 70 years we have provided a variety of Social Housing and associated
services to meet the needs of people in our community. This experience will
serve us well in responding to considerable challenges over this next strategy
period. We are as committed as ever to providing a range of truly affordable
accommodation to those who need it most. Despite the current economic and
welfare pressures we are determined not to lose sight of our social objectives.
Our focus on Value for Money is key for us to be able to achieve this.
Every penny of the surplus
Viridian makes is re-invested.
Our Value for Money Strategy sets out
– for our Customers, our Colleagues,
the Regulator and the Communities
in which we work – how we will deliver
Value for Money in everything we do.
It shows clearly and transparently
the Value for Money considerations
that underpin our decision-making.
02
Value for Money Strategy 2016 – 19
Corporate Strategy and Value for Money
Our Corporate Strategy 2016 – 19 sets out in three key strands how we will
focus our efforts on ensuring that Viridian remains a high performing organisation,
making a significant contribution to the affordable housing sector.
For our
Customers
For our
Colleagues
For our
Properties
1. T
o ensure we are recognised by
our customers as trustworthy,
reliable and innovative.
3. T
o recruit, retain, reward and
develop outstanding colleagues
who feel motivated to live out our
values and deliver organisational
priorities.
5. T
o consistently improve the
quality and financial performance
of all our homes, with the focus
on improving living standards
and reducing costs for all our
customers.
2. T
o simplify processes to ensure
the organisation works more
efficiently and is focused on
producing customer satisfaction
ratings at a minimum of 90%.
4. T
o ensure we maintain good
governance and financial strength
through robust and transparent
controls, so we can continue to
meet the needs of our customers.
6. T
o develop 1,200 new properties
from organic growth, by a mix
of joint ventures and existing
channels, and to have a further
700 homes under construction by
2019 to meet the needs of those
who require our homes.
HOW
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Value for Money Strategy 2016 – 19
Value for Money Strategy 2016 – 19
What does Value for Money mean
to us and to our Customers?
Value for Money is not about cutting cost,
or the cheapest price; it is about achieving
the best possible outcomes with the best
use of finite resources.
Value for Money can be delivered
through a wide range of tools, including
expenditure control, forecasting and
benchmarking to drive cost reduction
and enable an increase in quantity, quality
and appropriateness of our homes
and services.
As a registered provider of social housing,
we are obliged to undertake certain
activities, such as essential repairs and
maintenance. But there are other areas
where we, as a good landlord, can exercise
greater discretion and apply innovative
techniques to drive Value for Money.
We provide services that aim to
improve customers’ financial wellbeing
enabling them to sustain their tenancies,
and deliver social value over and above
social housing.
Economy
We use the following criteria
to assess Value for Money.
This is how we discuss
and measure our plans,
achievements and ideas to
deliver improved quality.
Effectiveness
Efficiency
Delivering our services on budget,
on time and within other resource
constraints. We must be able to
demonstrate we have procured
services and resources (inputs)
at the lowest possible cost without
harming quality.
Ensuring that we and our customers
get a good return on the money and
resources we invest in our services.
We must be able to show the value of
what we have obtained (outputs) in
terms of what we have invested.
It is about
Spending Less
It is about
Spending Well
Equity
The extent to which we have
delivered what we set out to do.
We must be able to demonstrate
we have achieved everything we
intended (outcomes) in relation
to the total cost of what we
have put in.
The extent to which services are
available to and reach all people for
whom they are intended. We must be
able to demonstrate all services and
benefits are distributed equally.
It is about
Spending Wisely
It is about
Spending Fairly
Our approach to Value for
Money has been developed
from our Corporate Strategy,
and takes into account our
current performance and
our aims and objectives,
within the context of how
our peer organisations are
performing.
HOW
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05
Value for Money Strategy 2016 – 19
Value for Money Strategy 2016 – 19
How will we deliver Value for Money?
For Our Customers
The Homes and Communities Agency (HCA) – the industry regulator – expects
us to demonstrate a robust approach to how we use our resources to deliver our
objectives. We do this by developing other strategies and action plans for key areas
of our business, such as Asset Management, Development, Treasury, Procurement
and ICT, which determine how we invest to ensure the best Value for Money.
Performance on satisfaction and
other quality measures are detailed
in the Annual Standards report for
residents and in our operating and
financial reviews within the financial
statements.
This Strategy will form the basis for
our communication to our customers,
colleagues and to the HCA.
It is critical to our Value for Money delivery
that we have a greater understanding
of the relative value and costs of the
decisions we make, and of the return on
investment we will get from our assets and
investments. We report our progress
in these areas on an annual basis to the
regulator and our stakeholders.
Viridian’s Value for Money Strategy is
agreed and approved by our Board, who
will also monitor our performance and
hold us to account to ensure delivery.
Viridian’s Directors will lead on delivering
the Strategy, with the support of the
Leadership Team. Regular and frequent
updates and monitoring reports will be
made available, ensuring that the actions
identified within the Strategy are delivered
on time and to budget. To ensure further
transparency, we will regularly publish
our progress and will invite scrutiny and
challenge from our customers, colleagues
and stakeholders.
We will:
•D
eliver Value for Money through agreed outcomes in all organisational strategies
and departmental plans;
• Embed Value for Money across the business, and make it easier for colleagues
to progress innovative ideas in their day to day work;
•M
easure Value for Money consistently, transparently and objectively;
•R
eport our Value for Money achievements using our ‘spend less; spend well;
spend wisely; spend fairly’ approach;
• Monitor our progress against our Value for Money Scorecard;
•S
hare, with our colleagues and our customers, real life examples of our success;
…to ensure a sustainable and positive impact on our
customers’ lives.
06
Customer insight is key to our delivery
of Value for Money enabling us to fully
understand what our residents want from
us. We will use feedback received from
our customers to increase and streamline
services, improve efficiencies and increase
the number of first time fixes.
We will regularly review our services with
our customers to make sure that we
are clear about the things that matter
to them. This process allows us to be
confident that we are providing services
residents want, and – equally importantly
- not providing unwanted extras that will
not add value.
At the start of 2016, we rolled out a new
approach to gathering customer opinion.
We use a range of methods (including
SMS text messaging and Interactive Voice
Response), making it as easy as possible for
our residents to respond.
In addition to conducting transactional,
customer satisfaction surveys, we seek our
residents’ opinions of Viridian through
brand recognition surveys so we have
insight from those residents who do not
routinely access Viridian’s services.
Our programme of social initiatives is one
of the most important ways we can work
with residents.
We recognise that having a safe and
secure home is critical to a good quality
of life, and for many of our customers, the
provision of an affordable rented home, or
a shared ownership property, is as much as
they need from us. Others may find that
they would benefit from more, and with
this in mind we aim to provide a range of
services to help customers make the most
of their lives.
We see Social Impact
as supporting our
customers to sustain their
tenancies and to make the
most of opportunities for
financial, economic and
digital inclusion.
We will optimise opportunities to
achieve added value from our third party
relationships and our contractors to assist
us to deliver more impact from our work.
We will signpost our customers to other
service support areas which provide
guidance and advice on a range of
opportunities, such as saving money
on utilities bills, enabling residents to
afford the cost of their homes.
We will:
Our Social Impact work gives people
access to opportunities and resources that
will enable them do more for themselves,
make sustainable life changes with
positive impact. Our work in this area
will enable residents to maximise their
potential.
• t ake a new approach to customer
segmentation, starting by understanding
those with economic wellbeing and
vulnerability challenges, then looking at
those with digital inclusion needs,
to ensure support plans are in place
by mid-2016;
A further, positive outcome of this
approach is that a self-serving customer
base will reduce Viridian’s front line costs,
enabling us to redirect funds into more
valuable areas.
•d
evelop a new strategy for IT by
mid-2016 that addresses the current
systems, customer and reporting
applications and paints a vision of the
future for our customers and colleagues;
Underpinning all of this is our evidence-led
approach to our work.
• r educe the average void times from
30 days in 2015 to 20 working days
including repair times by mid 2019 to
ensure we can provide housing as quickly
as possible to those on waiting lists.
This approach ensures we:
•A
lign our work to corporate objectives
and value for money;
•H
ave a clear understanding of the issues
we are trying to address;
•H
ave a better understanding of our
customers’ needs; and
•U
nderstand the difference we are
making to our customers’ lives.
Viridian’s Social Impact team drives
this approach, working with customers,
other teams within Viridian and with
external partners to support business
priorities and develop services and
products our customers want. Value for
Money is always at the heart of this work.
By doing this we will
• Focus on ‘first time fix’ solutions,
which will reduce repeat contacts
and complaints.
• Develop new processes to meet the
needs of the customer more directly
such as: different communications
and different methods of customer
handling.
HOW
HOW WILL
WE MEASURE
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07
Value for Money Strategy 2016 – 19
Value for Money Strategy 2016 – 19
For Our Colleagues
Our Properties
Our colleagues are one of Viridian’s key assets.
The quality of our housing is vital to our customers;
it directly impacts the quality of their daily lives.
Maintaining the condition of our properties is also
critical to ensuring our financial strength.
Our investment in our workforce is, by
cost and by value, second only to the
investment that we make in our properties.
We will develop and support the people
who work at Viridian, without whom our
goals and ambitions will not be met.
We have launched the Viridian Learning
Academy, offering our colleagues a
comprehensive programme of training
and development. This will not only enable
colleagues to be more effective in their
roles, but will also improve motivation and
job satisfaction.
We will:
By doing this we will:
• Implement competencies and a new
reward strategy in 2016 to ensure
fair and motivating rewards for our
colleagues;
• Increase overall employee
satisfaction to an average of 87%
by 2019;
• Develop and implement a Leadership
and Management Development
Programme to invest in our future talent;
• Achieve Investors in People status by the
end of 2017 to objectively measure our
progress;
• Reduce staff turnover from the current
29% to 15% by 2019 by providing better
work practices;
• Be placed in the Sunday Times Top
100 best places to work for our sector
by 2019;
• Develop a new Graduate Management
Scheme by the end of 2017 as part
of our longer term development
programme and part of the Viridian
Learning Academy.
• Increase employee satisfaction
on four key factors (leadership
behaviour, fairness of pay, how much
people feel they matter and values
being lived out) from 46% to 66% by
end of 2018.
The investment in our colleagues’
future careers, and the personal
development of their skills and talents,
will provide a strong foundation for
organisational growth.
By linking the Corporate Strategy to
departmental and individual objectives
and KPIs, our colleagues will truly
appreciate the crucial part they play in
making a difference to our customers.
We have two Key Priorities
for our properties:
•To consistently improve the quality and
financial performance of all our homes,
with the focus on improving living
standards and reducing costs for all our
customers; and
•To develop 1,200 new properties from
organic growth by a mix of joint venture
and existing channels, and to have a
further 700 homes under construction by
2019, to meet the needs of those who
require our homes.
To deliver against these
Priorities we will:
• Generate recurring income from our
Properties;
Our emphasis remains on continuous improvement,
helping individuals to grow, and recognising that investing
in our people will help us achieve real Value for Money.
• Maximise our rental income;
• Reduce arrears and tenancy fraud by
ensuring the time our properties are vacant
is kept to an absolute minimum;
• Keep the cost of delivering our services as
low as possible without sacrificing quality;
Property Value Analysis
We use a Net Present Value (NPV)
calculation as an indicator of the
financial return on our investment in our
existing properties. We can monitor the
financial performance of the estates,
neighbourhoods, regions and tenure types
within our property portfolio.
What is Net Present Value
(NPV)?
The NPV is calculated by measuring the
present value of any future cash flows, i.e.
the future rental income of a property, less
any costs required to manage it. The higher
the NPV, the better performing the property.
We will increase our average NPV by 0.5%
per annum. We will achieve this by improving
the average time we take to refurbish
our empty homes and relet them and by
reducing the number of responsive visits we
carry out each year by improved planned
maintenance programmes to ultimately
reduce our costs.
We have set the following target NPVs for
our properties to help us monitor the return
on them over the next 30 years:
Red
NPV less than £20K
Amber
NPV less than £50K
Green
NPV more than £51K
Our Options Appraisal Group (comprised
of departmental managers’ from across
our business) goes to great lengths to
understand the NPV performance of our
property portfolio. We take into account the
current management performance and the
investment required in the future.
We give due consideration to the actions
needed (including disposal) to ensure we
improve and maximise performance. Actions
required to improve low-performing homes
are a priority.
• Increase the value of our assets by
considering a range of different growth
strategies through developing new homes.
Financial Fact…
The average NPV of a Viridian
home in August 2016 was £82,991.
08
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Value for Money Strategy 2016 – 19
ValueValue
for Money
Strategy
20162016
– 19
for Money
Strategy
Reinvestment and Planned Maintenance Works
We want to ensure that 100% of our homes meet the Viridian Standard
by the end of 2017 so our customers have the best places to live.
The nature of property is that after a period
of time there will always be an element of
reinvestment and refurbishment needed to
keep it a valuable, efficient working asset in
addition to being a pleasant, safe home.
Reinvestment and planned maintenance
work can range from small projects, such
as painting and decorating, to larger
programmes of work, like installing new
bathrooms and kitchens and replacing
doors and windows.
At Viridian, we have developed a standard
for our homes that goes beyond that
defined by the HCA, where we renew
bathroom and kitchen components
more frequently. We have also adopted
a standard of ensuring all homes meet
a minimum thermal efficiency rating of
Energy Band C (SAP 69) - the Viridian
Standard.
By setting out to achieve the Viridian
Standard for all our homes by the end
of 2017, we will ensure that our customers
have the best and most energy efficient
homes.
When dealing with a large, diverse portfolio
of properties, planning and implementing
property reinvestment and refurbishment
programmes can become complex and
time consuming.
We know that it is very important to get this
right, as getting it wrong can be very costly.
We will:
• Reduce the annual cost of repairs by
£600k by March 2019;
• Install 1600 high efficiency domestic
boilers per annum;
• Reduce our average days to complete
a repair to 10 days by April 2017;
• Maintain our emergency response
at 100%;
• Increase our routine completion in
time to 97% by April 2017;
• I ncrease our appointments kept rate
to 95% by April 2017;
• Achieve a 65% planned to 35% repair
ratio by April 2017;
• Reduce our costs by 5% or £500K
by 2018;
• Reduce void times to 20 working
days by April 2019;
• Ensure that 100% of our homes meet
the Viridian Standard by April 2017;
• Review our lifecycles and associated
costs every year;
• Invest up to £34 million on new
components/major works;
• Implement a detailed training matrix
and invest over £20K per annum to
develop our colleagues;
• Appoint one apprentice or trainee
within our surveying team by April
2017;
• Review our Reinvestment IT systems
by January 2017;
• Ensure that all our homes have a
minimum SAP rating of 39 by 2018
(band E);
Development Programme
We will:
The Viridian Corporate Strategy sets
out our aim to improve the lives of our
residents, using our financial strength
to do as much good as we can. Building
additional new homes to house more
people is a fundamental part of this.
• Build 1,200 new homes by March
2019.
We want to develop a range of new
housing products including rented
affordable homes and intermediate
housing for more economically active
households who may struggle to
find good quality affordable homes
on the open market, and look for
new opportunities in the keyworker
and student sectors to support our
commercial activities. We will also be
developing homes for outright sale
to help cross-subsidise delivery of our
affordable homes so we can build more
for those in need.
Asset Management Objectives
Capital spend on Development over
the strategy period will be around
£300m with sales income from first
tranche sales and outright sales of
around £100 million.
Reinvestment and Maintenance spend will
be circa £65million over the strategy period
with circa £8 million of receipts from asset
disposals.
We aim to achieve a minimum of
• Ensure that all our homes have a
minimum SAP rating of 69 by 2025
(band C).
We will:
• Generate a £2million annual disposal
surplus;
• Complete a stock rationalisation
review and associated programme
by April 2017.
95%
• Have a further 700 homes in
construction by March 2019.
• Be in the top 25% of cost efficient
developers of new homes by March
2017.
• Renew our Consultant framework by
March 2017 and achieve 10% savings
on our consultant spend by March
2018.
• Deliver a minimum of 200 new
homes in the programme through
Joint Venture partnerships including
homes for outright sale by March
2019.
• Implement a staircasing strategy
during 2016-17 to increase surplus
in this area by 10% annually over the
life of the strategy.
We will continue to benchmark
our costs against competitors, being in
the top 25% most efficient developers
for overhead costs of developing
new homes. We will also balance the
cost of our programme with a mixed
procurement plan of land led, section
106, package deal, regeneration and
joint venture opportunities.
customer satisfaction with our new
homes taking into account customers’
views to help us continually improve
our specification.
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Value for Money Strategy 2016 – 19
Value for Money Strategy 2016 – 19
Cost of management
Management costs
We have a clear focus to understand
our costs and use this to drive further
efficiency.
The HCA have used ‘headline social
housing cost per unit’ (CPU) as a
consistent and robust measure to
compare registered providers. Using
this methodology, Viridian is above
the median and in some cases we are
significantly above upper quartile, with
a CPU of £5,420, against a sector
median of £3,550 for the 2014/15 year.
This is a top level analysis and there are
some mitigating factors which account
for about half the variation in unit costs
across the sector. These include:
• Supported housing – each unit of
supported housing is associated with a
cost of £10,800 above general needs
properties;
• Housing for older people – each unit is
associated with a cost of £1,800 above
general needs;
•R
egional wage effects – cost differences
broadly follow the differences in
underlying regional wages. Providers in
London had average costs of £1,900 /
unit above those in the North East;
•S tock transfer providers – have on
average £1,500 / unit higher cost than
traditional providers in the first six years
post transfer, this disappears after 12
years;
The first three factors are relevant to
Viridian Housing, with our diverse business
including non-core activities and large
geographical spread. Ealing Care PFI,
University and key worker activities are not
common to many providers and have an
impact on the results.
Removing these plus some non-social
spend from the analysis reduces the
overall Cost per unit from £5.42k to
£4.67k. There are also some non recurring
costs and additional costs on retirement
housing which gives rise to a premium on
service charges. Adjusting for these results
gives Viridian a Cost per unit of £3,940.
We have used the HCA CPU approach to
assess how we compare with 2015/16
costs. Our initial calculations indicate
a CPU of £5,500; a 2.4% increase on
the previous year’s performance. Social
housing management costs have
improved this year, but our non-social
housing functions have increased the CPU.
This has made it clear to us that we need
to be better at analysing our costs and
applying tighter control in some areas.
We are taking a more active approach
to understanding this measurement,
and have a clear cost reduction action
plan, passing costs on to customers only
as appropriate, and with a good service
charge management regime. We have
committed to undertake this by stating
it in our Corporate Plan.
Our Commercial business
Our Commercial business operates in a much more
competitive market. As such, benchmarking data
is less accessible, so we measure ourselves and control
costs by setting financial performance targets instead.
Demonstrating Value for Money is clearly essential
to be able to compete in these wider markets, and
we will continue to set challenging financial targets.
Our focus is on maximising occupancy; minimising
arrears; turning any voids around efficiently, and finding
alternative uses for buildings during periods when they
might otherwise be vacant.
•N
eighbourhood deprivation – providers
have a £500 / unit higher cost where
they operate in the 1% most deprived
areas compared to those operating in an
area with median levels of deprivation.
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13
Value for Money Strategy 2016 – 19
Value for Money Strategy 2016 – 19
Procurement
How we will embed Value for Money
We will improve and refine our procurement methods to reduce
costs by 10% by the end of 2018.
Corporate Procurement has a key role
to play in the delivery of our Value
for Money objectives, ensuring that
quality products and services, at the
best obtainable price, are achieved
from our third party contracts.
At Viridian we recognise the importance of
ensuring that Value for Money is achieved
in all of our business activities, including
where we have taken the decision to
contract work with a third party provider.
Viridian has an influenceable spend
of approximately £28m per annum.
Generally speaking this is the amount of
money which Viridian spends on its third
party contracts.
Planning
Managing Contracts
Early involvement of the Corporate
Procurement team in any planned major
procurement ensures that optimal
commercial decisions are made, in the
most timely and compliant manner.
We recognise the need to implement a
stronger Contract Management regime,
which tracks the benefits that we assumed
would be delivered when we awarded the
contract.
Engaging the Market
We aim to control third party expenditure
through improved market knowledge
(achieved, for example, through soft
market testing and market research),
through stronger supplier relationships,
and through benchmarking.
The Value for Money principles of
Economy, Efficiency, Effectiveness
and Equity are embedded within the
Corporate Procurement Strategy, and any
Procurement activity over the value of
£50k is assured by a Gateway approval
mechanism.
Tracking the benefits ensures that our
contracts perform well and deliver to our
requirements and specifications. It gives
us the reassurance that we are spending
well and spending effectively.
Through our procurement processes we
will seek to ensure we get the best social
value for our customers by ensuring our
large contracts also provide training
and employment opportunities and
improvements to the local environment.
Our Board contains members who have
expertise in finance, development and
customer service. It considers performance
reports and management accounts
regularly, and approves strategies
which impact on Value for Money. Risk
identification and control, including
financial risk, is a driver for both Board and
Committees’ work, including stress testing
financial plans to asses the impact of
significant changes in interest rates or the
housing market.
The Board provides significant challenge
to Value for Money performance and
plans, particularly in understanding the
drivers of the relatively high operating
cost per home. At Viridian, the Board is
supported by four functional committees
which all consider and influence relevant
aspects of Value for Money.
Viridian’s Boards, committees and teams
work together to ensure Value for Money.
Viridian recognises that residents are in
a unique position to evaluate services
and consequently to assess whether we
provide Value for Money. Supporting
residents to become involved and give
their views is crucial to our success.
The Resident Scrutiny Board is an
independent group of residents who
coordinate service reviews on any aspect
of Viridians business.
It provides challenge which is closer to the
customer, less strategic, but important in
influencing how we achieve value on a day
to day basis. It reports to the Operating
Board, although it can engage directly
with the Board if it thinks action is not
being taken on its reviews. The outcomes
of service reviews are reported to the
Board. ‘The Loop’, our resident forum which
reviews quantitate and qualitative aspects
of our service delivery, reviewed this Value
for Money Strategy and inputted into its
development.
Our Executive and Leadership Teams
are key to delivering our Corporate
Strategy and has overall responsibility for
operational Value for Money.
Savings targets delivered / to be delivered via a competitive
Procurement process across a range of Capital and Revenue projects
Capital & Revenue Savings
2015/2016
2016/2017
2017/2018
2018/2019
£000
£000
£000
£000
£000
515
902
895
895
895
Construction
327
654
654
654
Operational Services
90
180
180
180
People and Professional Services
63
125
125
125
Sub Total
480
959
959
959
Delivered / Recurrent savings
Viridian Board
2019/2020
Forecast savings by Category:
Governance &
Remuneration
Committee
Treasury
Committee
Growth and
Investment
Committee
Our colleagues need to know what
Value for Money means to our customers,
and at every level of our business, including themselves. It is imperative that
they clearly understand how they can
influence and deliver it. One of the key
ways of delivering this is through benefit
tracking; we need to embed a culture of
benefit realisation so we can evidence the
progress we are making with delivering
Value for Money as well as monitoring the
impact on anything else.
In order to do this we will:
•Focus on cost control,
ensuring our financial regulations,
electronic ordering systems and
management accounts are fit for
purpose, tested and deliver the control
mechanisms we require;
•Improve our approach to performance
management, ensuring that individuals
as well as teams have specific targets;
•Personal development of our staff - Job
Descriptions for new roles will explicitly
require that everyone is responsible for
Value for Money, and can contribute;
•Establish a Value for Money task
group where frontline staff will take
ownership of quick wins and to become
the champions in the business to carry
the achievements and generate new
efficiency ideas.
Risk & Audit
Committee
Executive Team
Leadership Team
TOTAL SAVINGS DELIVERED / PLANNED
515
1382
1854
1854
1854
Operating Board
14
Resident
Scrutiny Board
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Value for Money Strategy 2016 – 19
Value for Money Strategy 2016 – 19
How we will measure Value for Money
Benchmarking
To support the priorities we have identified and to monitor our progress,
we have developed a new suite of strategic key performance indicators.
Over 950 social housing providers are members of HouseMark,
with approximately 400 participating in an annual cost and
performance benchmarking exercise. This is where we compare
ourselves with other similar sized housing providers operating in
a similar region to Viridian.
Each priority in the new Corporate
Strategy is supported by at least three
performance measures, including many
measures not previously reported - for
example, general satisfaction with
Viridian as a landlord, satisfaction with
neighbourhood, social impact initiatives,
measures on staffing and the quality of
our homes. These will give us a greater
insight in to how residents are using and
perceiving our services. They will also
enable us to measure how successfully
we are delivering the Corporate Strategy.
We have also included KPIs around
Development, reflecting the importance
of this programme to Viridian.
Sixteen of the 29 measures are consistent
with the HouseMark methodology; these
represent the core social housing KPIs.
By aligning our KPIs to HouseMark –
the cost benchmarking tool – we will
know how much it costs us to deliver
our services compared to others. We will
know how much money we have spent
on a particular service and how well it is
performing, and then we will be able to
directly compare that to other housing
providers. This will help us identify
organisations from whom we can learn.
The remaining thirteen measures are
specific to Viridian and we will monitor
internally to demonstrate progress.
Surpluses
Tenancy Fraud
Our Banks look at our cash or ‘operating’
surplus to make sure that we can pay the
interest on our loans each year, and to
determine if we are an efficient business.
The more efficient we are the less we
need to borrow and subsequently pay
interest on. This also means that when we
do need to borrow money we can secure
better deals to finance our home building
programme and any other priorities.
Our focus on preventing, detecting,
and taking action on tenancy fraud is
well documented and has been held up
as best practice in the sector. We are
committed to freeing up sub-let properties
and preventing wrongful allocations and
successions. This is the most effective way
to make best use of social housing and
therefore is a key element of our Value for
Money Strategy.
We make surpluses to be able to carry out
more of our charitable aims. The primary
use is to build more homes, and the more
homes we have, the more money we
can borrow to build even more homes.
We also use surpluses to reinvest in our
extra services or provide others that don’t
generate income but do provide a social
benefit. Examples of these services include
our work on Tenancy Fraud, Anti Social
behaviour and our other initiatives to help
people back into work.
During 2015/16, we successfully brought
49 properties back into use as social
housing that had been fraudulently let.
These properties were not available for
use by legitimate people in need. This
means a cost to the public purse (the
Local Authority) of housing those 49
families in temporary accommodation.
Notionally, this is calculated at £18k per
household which means that Viridian’s
work in bringing those properties back into
use saved the Local Authorities £882k.
In addition, to calculate the value of
recovering 49 properties, we nominally
use a replacement figure of £130k per
property (the cost of producing a new
social housing property). Last year, based
on this figure, the value of our fraud work
could be calculated as £7.3m plus £880k
which equates to £8.1m of savings to the
public purse. The costs of delivering this
service is £220k. This gives a return on
investment of 1:36 i.e. for every £1 we
invest we are returning £36 to the public
purse, helping us deliver on our Value for
Money objectives.
Value for Money scorecard
•Resident Satisfaction.
•Value of combined rent arrears in £.
•Staff satisfaction.
•Average combined void turnaround
time.
•Cost per Unit (HCA formula).
•Cost per Unit (reworked for exceptions).
•Operating Margin.
•Average cost of a reactive repair.
•Average costs of a re investment repair.
•Operating Surplus per Unit.
•Average Cost of a Planned Repair.
16
•Average interest rate of debt.
•Net Present Value (NPV) of our
properties.
•Return on Social Investment.
•Percentage of total spend on contract.
•% of bad debt written off.
•Saving’s from procurement actions.
We are considering expanding the service
in 2016/17 so that more homes can be
brought back into use for families who
need them.
We undertook a full cost and performance
benchmarking exercise at the start of the
new Corporate Strategy.This shows how
we compare with other housing providers,
taking into account all factors specific
to Viridian - such as the diversity of our
business, and our geographical location.
We compare our performance with other
social housing providers in G15. This is a
group of organisations comprising fifteen
of the largest housing associations in
and around London which collectively are
responsible for managing in the region of
410,000 homes. Although Viridian is not
a member of G15, most of our housing
stock is located within London among the
homes of these housing providers. We
know we face the same opportunities and
challenges as these providers, and work
within the same Local Authorities and with
residents facing similar challenges.
HACT (Housing
Associations’ Charitable
Trust) Evaluation
We are committed to demonstrating our
social values and purpose through our
work; as part of this we have adopted the
HACT Wellbeing Valuation Tool to help
us understand the impact of our work.
Wellbeing Valuation analyses existing
datasets of national surveys which reveal
effects on wellbeing in a robust way. An
Impact Valuation Statement gives a
view of social impact related to a specific
activity or programme of activities. It is
difficult to measure everything that may
influence people’s lives and this method
seeks to give a financial value as a simple
indicator of the effect these activities
have had.
Where the HACT measures are not
applicable we develop specific KPIs and
targets. We ask our customers for their
views on the services provided and use
this information to deliver improvement
through innovation and improved business
processes, at all times considering value
for money.
Transparency
Long Term Financial Plan
•D
etails of all non-payroll payments in
excess of £500 (we publish expenditure
type, supplier name and amount of
payment);
We continually monitor and model the
impact of the Welfare Reform Act and
the 1% rent reduction on our income,
testing the pros and cons of different
development strategies.
We also model the impact of various
alternative scenarios to stress test our
long term financial plan. We update the
long term financial plan at the start of the
year to take account of new information,
such as the results of the previous year
and the annual budget and any potential
government policy change. Underlying
assumptions are checked and challenged.
This facilitates effective and efficient
treasury decisions.
Our approach to governance and
service delivery is as open as possible.
It is important to be transparent to our
customers about how we spend our
money. Some examples of the information
we publish are:
•T
he total payments to our Board
members, Chief Executive and Executive
Directors;
•O
ur internal structure chart, strategy
and regulatory information.
The details of our expenditure are
updated every month and we will be held
to account by our customers, Board and
colleagues.
Management Accounts
Once the budget has been approved,
progress is measured through our
monthly management accounts. These
are prepared by the Finance Team and
sent to all Directors and Heads of Service.
Performance is reported monthly to
the Executive Team and to every Board
meeting so we reflect progress against the
VFM strategy.
HOW
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Value for Money Strategy 2016 – 19
Value for Money Strategy 2016 – 19
Energy Advice
Employment
Financial Inclusion
Within our Property Services department,
we employ an Energy Advisor who
provides free energy saving advice to our
customers. The Energy Advisor attends
customer events, visits customers in their
homes and gives tailored energy saving
advice. Customers can potentially save
an average of £130 a year on their fuel
bills, if they follow all the advice we give.
In 2015-16 the Energy Advisor helped
231 customers (compared with 124 in
2013/14), saving a potential of £27,690
in fuel bills (compared with £16,120 in
2013/14). We have now expanded the
service outside London to areas where we
have less density of stock by using local
energy advice bodies like the Citizens
Advice Service in Milton Keynes and
Northampton, ensuring this service is
available to all Viridian customers.
Training and volunteering ensures
residents are in a much stronger position
to gain steady, rewarding employment,
which puts them in a better, more stable,
financial position. This means they are
better able to pay their rent and we can
keep arrears low. This ensures we can
continue to invest in their homes, keeping
them in the best possible condition.
Viridian’s Financial Inclusion team plays
a pivotal role in managing the effects
of welfare reform, increasing customers’
incomes through benefits maximisation,
and driving down household costs through
budgeting advice and referrals to internal
and external services such as our Energy
Advice Team. Every potential new Viridian
household goes through an affordability
assessment to identify what support will
enable them to afford their home, and
therefore secure Viridian’s rental income.
The Financial Inclusion team aims to help
customers manage their finances better,
reduce rent arrears, and ideally avoid
getting into arrears in the first place. This
has a direct positive financial impact on
residents and puts them in a position
where they are able to successfully
manage their finances, ensuring they
remain independent and are socially
included.
In addition to working with our customers,
our Energy Advisor continues to train
customer-facing Viridian colleagues so
they can give energy saving advice to
our customers and sign post them to the
Energy Advice Service. 67% of all Viridian
staff have now received training on
sustainability issues.
We have expanded our employment
support partnership work with other
providers and will offer increased
opportunities for taking part in
employability training, apprentices, sector
specific training and advice for customers
who want to set up their own business.
Volunteering
Volunteering is an important part of our
social impact offer; it increases a person’s
confidence so they can play a role in
the wider community, or help them into
training or employment opportunities. By
the end of 2015/16, we had registered
408 volunteers. Of these 127 were new
registrations who had not volunteered
before. In total we provided 183 volunteer
placements in the period, with 105 of
these being in Viridian, with support and
coaching being provided by the local
teams. We continue to be committed to
this approach.
Forecasting
We re-forecast our financial position every three
months so we can ensure we achieve our annual
targets. By using formal quarterly forecasts, we
have greater insight into our budgets and this allows
us to have greater financial manoeuvrability during
the year. This approach enables the Executive Team
and the Board to make robust strategic decisions.
Supporting residents via
the training, education,
employment and
emergency fund
We recognise that supporting individual
customers to improve their employment
opportunities and ability to maintain their
tenancy can be further enhanced through
small grants. This can solve practical
issues such as purchasing course books
or an interview outfit through to larger
items like payment of course fees. We
provide access to funding to assist with
emergencies, work related training and
further education.
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19
Value for Money Strategy 2016 – 19
Value for Money Strategy 2016 – 19
How will we report on Value for Money?
Annually, the Board publishes a robust
Value for Money self assessment setting
out how Viridian is achieving value for
money whilst delivering our values and
objectives. This assessment is available
to all residents and other Viridian
stakeholders.
We will publish our Value for Money
scorecard results quarterly on our website.
The annual self assessment:
•Defines Value for Money in terms of
Viridian’s values and objectives;
•Describes our approach to Value for
Money and use of resources;
•Details our arrangements to ensure we
deliver Value for Money;
•Enables residents and stakeholders
to understand the return on assets
measured against our objectives;
•S ets out absolute and comparative costs
of delivering specific services;
•Evidences the Value for Money gains
that have been made and will be made
and how these will be realised over time;
•Details how the Board has gained
assurance of the Value for Money
self-assessment.
We will focus our report on outcomes
and use case studies along with key
performance indicators.
We have introduced more robust business plan monitoring that includes
budget and Value for Money reporting.
We will let our customers know how we are doing against this strategy
through our regular updates in social media and our resident briefings.
We will invite scrutiny on our progress and make sure our strategy remains
fit for purpose by continually referring our residents to the outcomes we
are achieving.
Our colleagues will know how we are doing through regular updates
in our colleague briefings, with awareness workshops, idea generation
and reporting - not only around Value for Money, but through our
Corporate Plan reporting, highlighting areas of achievement and
innovation, and where teams and individuals are actively embracing
Value for Money in their everyday work.
The Value for Money task group will lead
on communicating how we are measuring
up against our Strategy.
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21
Value for Money Strategy 2016 – 19
London and South East
Location: Colwell house,
376 Clapham Road,
London SW9 9AR
Tel: 0330 123 0220
www.viridianhousing.org.uk
Reception opening times:
Monday to Friday 8am – 5:00pm
Customer service centre for
housing management and repair
enquiries opening times:
Monday to Friday 8am – 6pm
@viridianhsg
/Viridianhousing1
The Loop’, our resident forum which reviews quantitative
and qualitative aspects of our service delivery, reviewed
this document and inputted into its development.