Our focus on
value for money
Cottsway’s self-assessment
report for 2015-16
Contents
Part 1: Introduction and background
1
About this self-assessment
3
2
About Cottsway Housing
3
Key facts and figures
Our mission and objectives
Our governance structure
Our area of operation
Our customers and homes
How we spend our money
3
Our approach to improving value for money
8
Part 2: A summary of our performance
1
An overview from Cottsway’s chair and chief executive
8
2
Main headlines from 2015-16
9
3
Openness and accountability
16
Part 3: Our self-assessment in full
1
Roles and responsibilities
17
2
A strategic approach to improving value for money
19
3
How we measure value for money
22
4
How we performed in 2015-16
23
Progress across Cottsway as a whole
Other efficiencies and social and environmental gains
How we compare
5
Future priorities
Contact for more information
Cottsway Housing value for money self-assessment report 2015-16)
44
46
2
Part 1: Introduction and background
1. About this self-assessment
As a social business serving 8,000 customers, achieving value for money in all
that we do is an essential part of Cottsway Housing’s thinking.
‘Value for money’ is a term used to assess whether or not an organisation has
obtained benefit from the goods and services it both acquires and provides,
within the resources available to it.
We have produced an annual value for money statement since 2012. These selfassessment reports have informed customers, partners and other people
interested in Cottsway about our progress on the journey to make our business
as effective and economical as possible.
Our ongoing work on this has also ensured that Cottsway complies with the
standards set by the housing sector’s regulator – the Homes and Communities
Agency (HCA). You can view those standards here.
The HCA’s Value for Money Standard forms part of its Governance and Viability
Standard. It requires all registered providers like Cottsway to show we
understand how we are delivering value for money, how we compare to others
and where we need to improve.
In April 2015, the standard specified that ‘registered providers shall articulate
and deliver a comprehensive and strategic approach to achieving value for
money in meeting their organisation’s objectives.’
It also stipulated that ‘Boards must maintain a robust assessment of the
performance of all their assets and resources’.
This latest self-assessment report demonstrates how we continue to develop our
value for money work and enables customers and other stakeholders to see a
transparent view of our progress. We have used a broadly similar format to last
year to help provide a clear thread for stakeholders to be able to see our
developing performance. We have strengthened and extended the information
included. It covers the last financial year, running between April 2015 and March
2016, and was approved by Cottsway’s board on 20 June 2016.
2. About Cottsway Housing
Key facts and figures
Cottsway provides affordable homes mainly in West Oxfordshire, as well as
across the neighbouring counties of Gloucestershire, Wiltshire and
Worcestershire.
Established in 2001, we now own 4,500 homes and employ 140-plus staff who
deliver housing and support services to more than 8,000 people.
Cottsway Housing value for money self-assessment report 2015-16)
3
With an asset base worth £270 million, Cottsway has an annual turnover of
around £28 million. Each year we aim to make an operating surplus of at least
£3 million to help us invest in building new homes and to develop services for
customers.
During the year, Cottsway completed a refinancing exercise to ensure we could
expand our new homes building programme. This consisted of a £50 million
revolving credit facility with Lloyds Bank to fund future developments. In
addition, an £80 million private placement was undertaken with Macquarie Bank
to enable us to repay some short-term bank debt.
Our mission and objectives
The Cottsway mission is:
‘To serve those in need of housing for whom the market is not producing a
solution, within a manageable, cost effective area.’
Our strategic objectives define the main priorities we will be concentrating on
between now and 2019, the period covered by our recently updated corporate
plan. These priorities are:
1.
2.
3.
4.
Our customers and their homes
Our people and the way that they work
Building new homes and focusing our activities
Financial strength and demonstrating value for money.
For more information about Cottsway, please read our corporate plan, which is
on our website.
Our governance structure
Cottsway’s board has 10 members who offer a comprehensive range of expertise
and experience to help drive our strategic direction.
In addition to the chief executive, there are nine non-executive members. These
include a Cottsway customer and a councillor from West Oxfordshire District
Council whose appointments are based on meeting our skills requirement. You
can find more details about the board on our website or in our full financial
statements.
Following a governance review in 2015, we now have three standing subcommittees to support the board – these cover audit and risk, governance and
remuneration, and investment. We also set up one-off working groups to look at
specific issues.
As a result of the review and the appointment of a permanent chief executive,
the housing regulator upgraded Cottsway in October 2015 to the highest G1
rating for governance, matching our existing V1 status for financial viability. This
means we achieve full compliance with regulatory requirements.
Cottsway Housing value for money self-assessment report 2015-16)
4
Our area of operation
Cottsway owns around 4,500 homes in West Oxfordshire, Gloucestershire,
Wiltshire and Worcestershire. The map below shows the numbers in each area.
Cottsway Housing value for money self-assessment report 2015-16)
5
Our customers and homes
The charts and tables below provide more detail about who we house and the
type of properties we own.
Properties by tenancy type
5%
4%
General Needs Rent
Shared Ownership
Independent Living
91%
Properties by number of bedrooms
109
49
703
1
1,431
2
3
4+
2,181
Cottsway Housing value for money self-assessment report 2015-16)
Bedsit
6
Age profile of our tenants
7%
13%
18-30
31-40
14%
41-50
35%
51-60
61+
16%
Not Known
15%
How we spend our money
The chart below shows in pence how Cottsway spent each pound of our income
during 2015-16.
Where each pound is spent
15p
Development
35p
Management Costs
20p
Service Costs
Repairs and Maintenance
27p
3p
Net Interest Cost
Cottsway Housing value for money self-assessment report 2015-16)
7
3. Our approach to improving value for money
Cottsway had previously focused mainly on our operating costs when looking at
value for money. This has changed and we are now taking a much more
sophisticated, systematic approach as a result of a strategic review undertaken
during the last financial year.
Our board wanted to emphasise the importance of widening the focus to include
efficiency and effectiveness, balanced against economy.
To achieve even two of these ‘three E’s’ involves a careful balancing act. Too
much emphasis on effectiveness can have a negative impact on financial returns,
for example, if we pursue unrealistically high levels of customer satisfaction at
all cost. On the other hand, too much focus on economy or efficiency could
damage customers’ perceptions and their experience of our services.
So how do we define our new approach in practice?
As a result of the board’s review, we have adopted a Cottsway-specific definition
of value for money that isn’t just about what we spend:
“Working efficiently and effectively in everything we do, we will maximise the
number of new homes we provide and the return on our assets and achieve high
levels of customer satisfaction.”
This definition means that Cottsway now aims to balance economy, efficiency
and effectiveness in all that we do.
As part of the revised approach, the board also agreed that we must rigorously
assess all opportunities for Cottsway to grow or change services to check that
they meet at least two of these three requirements:
1.
2.
3.
Improving customer satisfaction
Increasing surpluses
Delivering new homes.
For more information about our strategic approach to value for money, please
read the full self-assessment in Part 3 of this report.
Part 2: A summary of our performance
1. An overview from Cottsway’s chair and chief executive
As a social business providing affordable homes and services, we are proud to
say that Cottsway has a significant and positive impact on local lives.
Our role in helping to house many thousands of people and support vulnerable
individuals means we take our responsibilities to the community extremely
seriously.
Cottsway Housing value for money self-assessment report 2015-16)
8
We are particularly committed to delivering value for money services. This has
always been a key aspect of Cottsway’s work but has rightly taken on new
importance in the increasingly challenging environment that all registered
providers operate in. With a highly successful refinancing package in place and
more favourable borrowing terms, achieving value for money will be an even
stronger driver in helping us to grow surpluses. In turn, this gives us the
capacity to maintain and extend the scope of our services, as well as deliver new
homes for existing and future residents in an area of the country where demand
far outstrips housing supply.
This self-assessment report sets out the approach we took to deliver extra value
during the 2015-16 financial year. It is intended to provide a transparent picture
for our customers, other stakeholders and our regulator, the Homes and
Communities Agency, to demonstrate the progress Cottsway has made over the
last 12 months and where we believe we need to push harder to achieve even
more.
No business is ever ‘there’ when it comes to delivering value for money. That is
because it is a journey that involves continually reviewing and assessing how the
business operates in an ever-changing environment. It’s a journey that Cottsway
has been on for some time, having undergone a transformation programme in
recent years.
Making our operations as efficient and effective as possible is, however, only
part of the story. Value for money isn’t just about how much we spend or save –
how and what we deliver count too. That is why the board has changed our
approach to how Cottsway defines and measures the value we create, and in the
process has made a powerful commitment to explicitly put customer satisfaction
at the heart of the business.
Having already transformed the way we work, we know there’s much more to
come as the changes Cottsway made – and continues to make – reap the
intended longer term benefits. These will further improve services, realise more
efficiencies, and achieve additional social and environmental gains.
Kate Wareing
Chair of the Board
Vivian Rosser
Chief Executive
20 June 2016
2. Main value for money headlines from 2015-16
The last year has seen Cottsway consolidate our position as the foremost
provider of affordable homes in West Oxfordshire.
By refinancing, Cottsway has secured the extra financial capacity we need to
accelerate our programme to build more new affordable homes and extend
services and partnerships. With an experienced board at the helm, this puts us
in a strong and stable position and gives us a great platform to grow.
Cottsway Housing value for money self-assessment report 2015-16)
9
Maintaining and extending our capacity is a key reason why we need to achieve
best value in all that we do because Cottsway is committed to making year-onyear surpluses to reinvest in the things that matter most to our customers.
Having agreed Cottsway’s own definition of value for money, the board also
chose measures to assess the overall value we create on a year-by-year basis. A
summary of how we performed against those indicators is set out below.
Measure
2016 result
2015 result
1 Overall customer satisfaction
87.0%
84.0%
2 Operating margin % excluding
sales
38.5%
39.1%
3 Management costs
£5,334k
£6,065k
4 Number of new homes delivered
27
28
5 Return on assets
4.6%
4.2%
6 Net surplus*(after refinancing)
£1,769k
£4,046k
* Excluding movement in fair value of
financial instruments
The board also set four strategic value for money objectives specifically for the
2015-16 financial year. These were to:
1. Continue to focus strongly on the return on investment in our assets,
gaining an understanding of what each property costs us to maintain
compared to its value
2. Fully implement our external stores set up in 2015 to enhance
productivity within our repairs operation and improve customer services
3. Roll out mobile working solutions across Cottsway, with improved
software developed by our in-house IT team, followed by the procurement
of industry standard software
4. Develop a new strategy for our approach to older people to look at how
our homes and services will best meet the needs of an ageing population.
A summary of our progress against each of these objectives is shown below.
Further details are set out in our full self-assessment in Part 3.
 Return on investment
In our last self-assessment report, Cottsway made a commitment to take a more
systematic approach to improving the financial return on the homes we own. We
therefore appointed independent specialists to review these assets in 2015, not
just from a cost point of view but also quality. This clearly identified where it was
worth Cottsway continuing to invest and those properties that were costing too
much compared to the benefits they bring. We are now actively reviewing assets
when they become void to determine how to increase our return on investment.
Cottsway Housing value for money self-assessment report 2015-16)
10
 Set up of external stores
We launched a new partnership with Travis Perkins to improve productivity
within our repairs operation and enhance customer service. This involved setting
up external stores that went live in August 2015. The stores are now delivering
half of all supplies required for repairs direct to our trade operatives on site,
saving time and fuel costs. The new arrangement has brought another
significant gain in that Travis Perkins donates 1% of the money we spend with
them to support community projects that benefit Cottsway’s customers.
 Mobile working solutions
Our IT team built our own iPad app, which was tested out by Cottsway’s repairs
team. The bespoke system means our trade operatives can view the jobs they
have in their diary for the week ahead. This has reduced the need for them to
travel to our office every morning, saving time and fuel. With an added in-house
solution to improve how operatives complete job sheets digitally, our repairs
staff are now able to use their time more effectively, improving the service we
offer to our customers.
 Strategy for older people
Cottsway’s board has started to consider our future strategic approach to older
people’s housing and support to decide how our homes and services can best
meet the needs of an ageing population. This is particularly important to us as a
large proportion of our customers are older, with almost one in four (22.9%)
aged 61 and over. The board approved the principles of the strategy in July 2015
and we have been working since then to identify the future suitability of
residents’ homes and those properties that either need to be disposed of or
redeveloped. This will ensure that our housing stock for older people is fit for
purpose and better meets customers’ future requirements. During the year we
shut one small sheltered scheme that was unpopular with residents and hard to
let, moving the residents to higher quality accommodation. We are now selling
the building, which will bring in funds to re-invest.
Other efficiencies and social and environmental gains
We have grouped the other value for money headlines to match our four
strategic objectives. These represent our main priorities:




Our customers and their homes
Our people and the way that we work
Building new homes and focusing our activities
Financial strength and demonstrating value for money.
A summary for each objective is set out below. You can find more information in
our full self-assessment in Part 3 of this report.
Corporate objective: Our customers and their homes
Achieving better value for money is essential to ensure we can continue to
provide high levels of service while maintaining strong customer satisfaction
ratings. To help strike the right balance, we worked closely with our customers
and widened opportunities for them to get involved, also strengthening the role
of our residents’ scrutiny panel.
Cottsway Housing value for money self-assessment report 2015-16)
11
Action taken
We introduced a new
service to respond to
customer feedback and
complaints.
We moved from an
annual customer
satisfaction survey to a
quarterly format.
We introduced the allpay
service for residents and
leaseholders to pay their
rents and service
charges online.
We worked with more
than 60 vulnerable
residents with health
problems or other
issues.
Resulting changes
Our customer services
team now handles cases
and has 48 hours to
resolve complaints
before escalating to
other staff.
Between April 2015 and
March 2016, the team
resolved 226 cases.
The change enables
Cottsway to track
satisfaction much more
effectively and has also
raised the profile of what
is a key issue across the
business.
Tenants are able to pay
any time or day of the
week.
We helped these
customers maintain their
tenancies and improved
their wellbeing by
signposting them to
other agencies that
could support them too.
Value created
Customers now benefit
from a quicker and more
efficient service. On
average, each case costs
£205 less than before,
giving a total saving of
£46,330.
We now have a better
understanding of what
drives customer
satisfaction. Having
more regular feedback
also helps us to take
prompter action if
performance starts
slipping back.
Customers now have a
more flexible and
convenient way to pay.
These customers now
feel valued and
supported. We also
helped them to avoid
defaulting on their rent,
reducing arrears by at
least £1,500 and
avoiding repossessions.
Other improvements included:



We launched Cottsway Connect HQ (CCHQ) as an online engagement tool
to give customers a swifter and more responsive way of getting involved
We switched from testing customer satisfaction by post to phone, saving
close to £11,000 a year
We donated almost £24,000 to support customers and local community
initiatives through our Wellcommunity fund.
Corporate objective: Our people and the way that we work
Building on the transformation programme that has already radically changed
the way Cottsway works, we continued to improve the way our staff deliver
services and made it possible for them to get out in ‘the field’ more to help
customers.
Cottsway Housing value for money self-assessment report 2015-16)
12
Action taken
We redesigned our gas
servicing process.
Resulting changes
We have introduced a
new way of allocating
work within our servicing
programme. By using a
bulk allocating option,
there is more
automation in the
process which allows
much quicker and
smarter completion of
this task.
We redesigned our gas
installation process.
The redesign has
brought similar benefits
to the changes in gas
servicing, helping to
create efficiencies and
make it easier for staff
to manage the workload.
The business developed
a ‘We are Cottsway’
behaviours framework,
using internal resources
led by the HR team.
This type of project is
often delivered by
external consultants and
can be costly. Instead,
we used expertise in the
HR team plus a small
staff working group.
Value created
The automation groups
the work by post code
which allows for a
greater reduction is
travel time. This reduces
fuel usage and allows
more work to be
allocated to a given day
due to less time spent
driving around. The
process was a manual 2
day event previously and
now takes no longer
than half that at most.
This has improved the
efficiency of the office
staff to allow for other
work to be completed in
its place.
The new process saves
time and money. We are
also using an online
system to register
installations, with the
supplier paying the fee –
saving around £560 a
year.
Involvement of staff
resulted in good
understanding and buyin, especially as
examples of behaviours
were familiar and
realistic.
Other improvements included:

We made a number of internal processes more effective and less timeconsuming. Although some were relatively minor changes, collectively the
efficiencies will add up to over time. Examples include stopping using
branded stationery supplies, cutting our costs by 21% or £1,596.
Corporate objective: Building new homes and focusing our activities
By refinancing the business, Cottsway now has the capacity to spend at least
£15 million every year to develop a minimum of 750 new affordable homes over
the next five years.
Cottsway Housing value for money self-assessment report 2015-16)
13
Action taken
For our development at
Andoversford in
Gloucestershire, we
brought the sales of
shared ownership homes
in-house.
We started to combine
stock condition surveys
and asbestos re-surveys
at the same property
into one site visit, where
possible.
We reviewed our
facilities budgets, which
cover electricity, water,
rates, postage, office
cleaning, health & safety
tests and grounds
maintenance.
Resulting changes
We now have a more
direct relationship with
our customers and have
speeded up the
conveyancing process by
an average of four to
five weeks.
Apart from the time
saved, combining the
two visits is less
disruptive and confusing
for our residents.
Value created
Providing this service
through our own staff
has saved Cottsway
£2,000 on estate agent
fees and offers a better
experience for our
buyers.
We have saved on travel
and administration time,
which equates to £2,500
in surveyors’ costs.
We assessed our
external contracts and
reduced budgets to
reflect a more accurate
picture of how much we
actually needed to
spend.
This process resulted in
an 18% saving on the
facilities budget – a total
of £32,761.
Other improvements included:


We helped 52 customers to access discretionary housing payments they
were entitled to. Their take-up of public funding has enabled our own
hardship fund to be better targeted, saving Cottsway a total of £18,000
Our income officer and welfare reform officer made joint visits to
customers in rent arrears and affected by national welfare changes to
ensure they had access to help. We now have more engaged customers,
with a £2,000 reduction in rent arrears.
Corporate objective: Financial strength and demonstrating value for
money
Despite the economic and social challenges created by the July 2015 Budget,
Cottsway retained the highest status for financial viability and increased our
governance rating to match.
Action taken
We refinanced Cottsway
to give the business
greater freedom, better
borrowing terms and
access to additional
funds from other
lenders.
Resulting changes
We raised £130 million
through a bond. This
allowed Cottsway to
partially reduce our
borrowings with the
current lenders and at
the same time put in
place a £50 million credit
facility.
Value created
Refinancing has given us
the financial backing we
need to pursue a healthy
development
programme over the
next five years.
Cottsway Housing value for money self-assessment report 2015-16)
14
Action taken
We arranged to sell 28
homes we own in the
Forest of Dean to
another registered
provider working in the
area.
We reviewed and
improved the annual
rent review letters and
rent statements.
Resulting changes
This was part of our
commitment to only
provide homes and
services within an hour’s
drive of our offices to
ensure high quality input
to customers.
The clearer information
means customers
receive better and more
timely facts and figures.
Value created
The sale will make a
profit of around
£500,000 for Cottsway
to reinvest in other
homes and services.
This has significantly
reduced the number of
customers contacting us,
saving staff time. It has
also resulted in more
understanding and trust.
Other improvements included:

We put in place new procedures for checking a faulty part on solar panels
installed on more than 1,000 of our homes to ensure we repaired those
worth fixing. This avoids long-term financial losses and we are also now
claiming at least £40,000 a year in subsidies for the panels.
Where we didn’t do so well
Our mobile working solution for operatives is not fully integrated thereby relying
on manual intervention with the system to record the completion of jobs.
We were unable to roll out mobile working for other areas of the business due to
the challenges faced around operative mobile working.
Our planned enhancement of the website to help drive digitalisation and provide
more services on line for our customers has been delayed and will not be started
until part of the way through 2016/17.
Future priorities
While we have made good progress this year, we are determined to do more and
have set ourselves six priorities to focus on in 2016-17:
1.
2.
3.
4.
5.
6.
Growth for a purpose
Customer involvement
Digital by default
Measurable social value
Effective intelligence gathering
Diverse partnerships.
For more details about these priorities, please turn to page 41 in our full selfassessment in Part 3 of this report.
Cottsway Housing value for money self-assessment report 2015-16)
15
3. Openness and accountability
Registered providers must publish a robust, transparent and accessible selfassessment which sets out for stakeholders how they are meeting the housing
regulator’s value for money standard.
Cottsway is fully committed to full transparency, and aims to present a balanced
view of how the business has performed by highlighting successes and areas
where we recognise we need to do more.
We communicate our value for money performance in a number of ways:






We send our self-assessment report each year to our regulator and key
stakeholders involved with or interested in Cottsway’s work
The full report is posted on our website alongside other documents
relating to our services and performance more generally. It is also put on
our intranet for all staff to read
Our full operating and financial review and accounts, which are
independently audited, include a summary of our performance on value
for money
A four-page summary of the main headlines from the self-assessment
appears in our annual report for customers and business stakeholders.
The 2015-16 report will be posted on our website once it is signed off by
Cottsway’s board in July 2016
A six-page summary concentrating on the issues of most interest to
customers is included in Homepage, our regular magazine for residents.
The articles include information about how to access the full selfassessment and annual report, as well as inviting feedback
Our residents’ scrutiny panel reports back to all customers on value for
money and the impact its work has had on Cottsway.
In our last self-assessment report for the 2014-15 financial year, we issued a
wider open invitation to our customers and other stakeholders for further
suggestions about how Cottsway could achieve even better value for money. We
didn’t receive any responses but continue to welcome any and all ideas.
You can contact us as follows:
Email [email protected]
Call 0800 8766366 (Freephone line for residents) or, for all other enquiries,
please ring 01993 890000.
Cottsway Housing value for money self-assessment report 2015-16)
16
Part 3: Our self-assessment in full
1. Roles and responsibilities
Governance and the board
As with other aspects of planning, delivery and reporting, Cottsway’s board is
responsible for value for money. The board exercises this responsibility in a
number of ways:
a)
Giving practical and thought leadership to value for money and, in
particular, its integration with other tools and techniques (for example, risk
management)
Having a mix of skills on the board that results in a balance of commercial
and social expertise
Challenging the status quo, scrutinising strategies and performance and
identifying areas where value for money can be improved
Focussing the business on customers, stakeholders and delivery of strategic
outcomes
Ensuring that there are robust systems of internal controls (full details
included in our financial statements), performance reporting and risk
management.
Regularly reviews front line service delivery feedback through individual
visits to front line staff, as well as receiving top level performance reports
against KPI’s and VFM performance measures.
b)
c)
d)
e)
f)
The Investment Committee is responsible to the board for:



Considering the detail of the economics and value of investment in
existing assets, new assets and service delivery
Considering details of business assumptions used in the business plan and
scrutinises the results thereof
Considering viability, opportunity costs (social and economic) and risks
associated with investment/divestment decisions
Reviewing performance reporting and systems of benchmarking services.
The Audit and Risk Committee is responsible to the board for:
The programme of internal audit assurance of value for money activity.
The board continually reviews its structure to ensure it supports Cottsway’s aims
and allows the appropriate scrutiny of business decisions in relation to value for
money.
In addition to the value for money objectives set out earlier in this report, the
board has agreed a structure to assist in developing strategy and reporting
progress (and that includes this annual value for money statement).
Managers and staff
Cottsway has embedded the value for money strategy into day-to-day
operations by ensuring it forms an integral part of all processes. In 2015-16
Cottsway Housing value for money self-assessment report 2015-16)
17
particularly, the board adopted a Cottsway-specific definition of value for money
and approved new objectives and measures. In turn, managers and staff use
these to ensure an unwavering focus on value for money and return on
investment when assessing opportunities and changes before final decisions are
made by the executive and board.
In addition, value for money features in our other strategies, operational
policies, corporate briefings and team meetings, as well as in induction, training
and appraisal processes. Information about our performance against various
measures, including value for money, is included on our intranet for all staff, as
well as featuring in external publications.
We also run a staff suggestion scheme and regularly meet with Cottsway’s
internal consultative group, Staff Matters.
Customer and stakeholder involvement
Cottsway regularly surveys customers and uses a range of other methods to
capture their feedback and ideas for improvement.
Another key mechanism for ensuring that we remain accountable to our
customers is our well-established and highly-regarded residents’ scrutiny panel.
Panel members are drawn from across all areas where we operate and regularly
review key aspects of services and report back on how Cottsway can change for
the better.
Until 2015-16, the panel had been part of the responsibilities of the communities
team in our operations directorate. However, we recognised that its role and
visibility needed to be strengthened and, following consultation with residents,
moved it to the resources directorate.
Members now work directly with our quality and performance officer. This move
aligns the panel more closely with Cottsway’s governance structure, which was
also reviewed and updated during the year, and makes it more independent of
our operational services.
Other changes have made scrutiny more accountable to all customers – for
example, through the inclusion of a value for money statement in the panel’s
own annual report to demonstrate how members have helped Cottsway to
become more efficient and effective. An excellent example in 2015-16 was the
radically improved complaints handling system we developed with the panel’s
help. This has significantly reduced time spent on handling complaints, saving
money and resolving residents’ issues much more quickly.
In addition to customers, we work in close partnership with a wide range of
other stakeholders. We are in regular contact with our regulator and professional
bodies, an essential requirement to ensure we continue to be well briefed about
the changing operating environment in the housing sector.
We also have close and productive relationships with external experts such as
treasury advisors, auditors and lawyers who provide independent professional
challenge to Cottsway. Having refinanced the business in 2015-16, we also have
regular meetings and reviews with new and existing funders.
Cottsway Housing value for money self-assessment report 2015-16)
18
Locally in the communities where we own homes, we work with local authorities,
other statutory agencies and community groups to identify where we can share
knowledge and pool other resources to achieve best value for all residents.
2. A strategic approach to improving value for money
Improving value for money makes it possible for Cottsway to provide the high
quality services we want for our customers, invest in new homes and grow as a
business. Our regulator also requires all registered providers to demonstrate
that we achieve value for money.
Defining value for money
‘Value for money' is a term used to assess whether or not an organisation has
obtained the maximum benefit from the goods and services it both acquires and
provides, within the resources available to it.
Regulatory requirements
Cottsway is regulated by the Homes and Communities Agency (HCA). This is an
executive non-departmental public body, sponsored by the Department for
Communities and Local Government (DCLG).
The HCA published its Governance and Viability Standard in April 2015, and this
includes a Value for Money Standard. You can find these standards on the
agency’s website here.
The HCA’s required outcomes are that:
“Registered providers shall articulate and deliver a comprehensive and strategic
approach to achieving value for money in meeting their organisation’s
objectives. Their boards must maintain a robust assessment of the performance
of all their assets and resources (including for example financial, social and
environmental returns). This will take into account the interests of and
commitments to stakeholders, and be available to them in a way that is
transparent and accessible. This means managing their resources economically,
efficiently and effectively to provide quality services and homes, and planning for
and delivering on-going improvements in value for money.”
We have produced a value for money self-assessment every year since they
were first required by the HCA in 2012. Cottsway’s board approved the 2015
version as part of the sign-off of our financial statements for the year ended
March 2015. The latest report was approved by the board in June 2016 and
includes comparisons with our previous year’s performance.
Cottsway’s value for money strategy
To give shape to our approach, Cottsway’s board approved a value for money
strategy in July 2014.
Cottsway Housing value for money self-assessment report 2015-16)
19
The principles and objectives of this strategy run as a thread through a range of
other strategies and operational policies at Cottsway. These include
procurement, development, repairs and maintenance, and community
engagement. They also underpin the updated corporate plan approved by the
board in March 2016. The plan is included in the appendix at the end of this selfassessment report.
A new approach for Cottsway
When the board approved our last self-assessment in August 2015, members
decided to debate what value for money meant in practice to Cottsway and how
it should be measured. This strategic challenge to our approach aimed to agree
Cottsway’s own definition of value for money and assess whether our key
performance indicators were still fit for purpose. The board considered the
results of these deliberations at its November 2015 meeting when members
approved the refreshed approach.
We had previously focused significantly on the costs of our operation in thinking
about value for money. However, the board agreed that we must now focus
more on value for money in the round, and should view it as a balance of three
key factors:



Economy: managing our available resources to do things at the right
price
Efficiency: maximising the outputs we achieve from the resources we
deploy
Effectiveness: delivering the outcomes we want to.
More detail about what we mean for each of the ‘three ‘E’s’ is given below.
Economy
To achieve economy, we must ensure that we pay the right price for the staff we
employ, and for the services and products that we procure.
For example, to do this we:

use external advisors to benchmark salaries at agreed review times

tender for all services and products we use. The exception is when we
buy homes from private house builders under the terms of Section
106 agreements. In most of these cases, we bid competitively
anyway, or at a price which hits benchmarks approved by our board

manage the cost of capital by regularly reviewing funding in
conjunction with our independent treasury advisors.
Efficiency
Efficiency for Cottsway is not just about maximising the outputs delivered by
staff and suppliers but also how we make best use of our capital and security.
For example, to do this we:

ensure that we can manage customer requirements with the least
number of staff by making best use of new technology (mobile
Cottsway Housing value for money self-assessment report 2015-16)
20



working, the new stores and our customer service centre are good
examples of how we do this). This means that the role of staff is to
add value to any interaction rather than just processing requests
are moving towards maximising return on capital, taking action to
dispose of underperforming assets in line with the findings of an
independent review undertaken by external consultants
prepared carefully ahead of our private placement refinancing to
maximise the attractiveness of our offer to investors, with the result
that we achieved £50 million to immediately support new
developments along with the option of a deferred £30 million
make use of added value from our suppliers on top of the services and
products we pay them to deliver for us. This includes, for example,
free seminars run by our lawyers. These are helpful in building
knowledge within Cottsway, which means we refer to them less
frequently.
Effectiveness
There are two main measures we can use to determine the effectiveness of the
delivery of our service. These are:

Financial returns

Customer satisfaction
In addition, during the next year we want to make progress on effective
understanding of the social value of the things that we do.
We must use our resources economically and efficiently to ensure strong
financial results and to achieve a high level of customer satisfaction.
Achieving a balance of the two is key to Cottsway’s success because too much
emphasis on either can have a negative impact on our financial returns or on
customer satisfaction.
A Cottsway definition of value for money
A simple value for money definition often used is something like “to do the same
with less, and to do more with the same”. However, given how important this
issue is to us, a simple if effective statement like that didn’t seem sufficient. It
also tended to still emphasise cost alone.
The environment in which Cottsway operates is much more complicated than
that statement suggests. Issues like the 1% rent reductions initiated by the
government over the next four years, welfare benefits changes affecting many of
our customers, a need to focus on costs and quality, and regulatory scrutiny all
bring significant challenges.
Our board therefore agreed in November 2015 that a more appropriate definition
of value for money for Cottsway would be:
“Working efficiently and effectively in everything we do, we will maximise the
number of new homes we provide and the return on our assets and achieve high
levels of customer satisfaction”
Cottsway Housing value for money self-assessment report 2015-16)
21
Cottsway is now balancing economy, efficiency and effectiveness in all that we
do. When considering new opportunities for growth or service level changes, we
also evaluate whether they will meet at least two of the following requirements:
a)
b)
c)
Improves customer satisfaction
Increases surpluses
Delivers new homes.
Our strategic value for money objectives for 2015-16
Having agreed our own definition of value for money – and bearing in mind
Cottsway’s strategic objectives of our customers, our people, building new
homes and financial strength – we set out to:
1. Continue to focus strongly on the return on investment in our assets,
gaining an understanding of what each property costs us to maintain
compared to its value
2. Fully implement our external stores set up in 2015 to enhance
productivity within our repairs operation and improve customer services
3. Roll out mobile working solutions across Cottsway, with improved
software developed by our in-house IT team, followed by the procurement
of industry standard software
4. Develop a new strategy for our approach to older people to look at how
our homes and services will best meet the needs of an ageing population.
3. How we measure value for money
Our new corporate plan sets out our ambitions following the July 2015 Budget,
November 2015 Spending Review and impending legislative changes affecting
the housing sector. As part of the process of reviewing the plan, we have also
agreed targets to measure our progress against its objectives to gauge
Cottsway’s effectiveness and the social and environmental value we are creating.
We measure our corporate performance against a number of key performance
indicators, with different areas of the business also having their own “local”
measures to ensure they are delivering value for money. For Cottsway as a
whole, the board has also agreed key measures to assess overall value from the
organisation:
1. Overall customer satisfaction
As our customers cannot easily take their business elsewhere, this is a key
measure to determine how they view the value of the service we provide.
2. Operating margin % excluding sales
This measure shows the underlying profitability generated from retained assets
(i.e. the homes we own and manage) to ensure we are managing them actively
and generating a positive return.
Cottsway Housing value for money self-assessment report 2015-16)
22
3. Management costs
The cost of managing our homes and how this moves over time and as we grow
in size is a key measure of efficiency and effectiveness.
4. Number of new homes delivered
Delivery of new homes shows us utilising the capital we have available for
investment and the percentage of market value shows the efficiency of
procurement.
5. Return on assets
Achieving satisfactory returns on housing assets ensures we are in the position
to maintain these assets while covering the cost of holding the assets.
6. Net surplus
Generating a positive net surplus means we are able to continue to invest in new
and existing homes rather than using cash to cover the cost of financing the
business.
Measurable social value
Cottsway is a significant stakeholder in the local area, and should use financial
and non-financial assets where we can for the benefit of our residents and the
community. We currently invest about £50,000 a year through our communities
team in a range of initiatives but this is a very modest investment, given the
surpluses Cottsway generates and is forecast to achieve.
We will therefore do further work on measuring the social value of what we do
across all relevant areas of the business. We want to be transparent about what
the returns are for our customers, and for Cottsway, of the things we do.
We have purchased the HACT Value Insight and Community Insight web-based
tool to start evaluating social value across our key outward-facing services. The
value insight tool will enable us to understand, measure and map the social
impact of our community investment activities and their bearing on the local
economy. This is being led by our communities team, with support from IT, and
will enable us to meet the requirements of the Public Services (Social Value) Act
2012.
We will also be leading a drive to do more to support social enterprises, including
looking at the possibility of investing in more initiatives that match our own
social purpose.
4. How we performed in 2015-16
The work delivered by Cottsway collectively and by individual services and teams
ensured that the business had a strong and stable platform to create more value
compared to previous years. Information about where we didn’t do so well is
included on page 42.
Cottsway Housing value for money self-assessment report 2015-16)
23
Progress across Cottsway as a whole
Key performance indicators (KPIs)
Our corporate indicators measure the overall effectiveness of Cottsway as a
business and, in some cases, these are different from our value for money
measures. However, as there are clear overlaps, we have included our KPI
results below to provide a complete picture of how we performed.
Key performance indicator
Void days
Voids and bad debts loss %
Arrears %
Average calls lost %
Average customer satisfaction %
Repairs appointments kept
Staff sickness
New homes delivered
2015-16
19.5
1.2%
1.5%
6.5%
87.0%
87.9%
10.4%
27
2014-15
31.1
1.5%
1.9%
5.9%
84.0%
87.9%
8.9%
28
Progress against our value for money measures
Apart from our KPIs, our performance against each of the six measures we use
to assess overall value is set out below.
Measure
2016
2015
1 Overall customer satisfaction
We have seen an overall improvement, which is
pleasing in comparison to the previous year’s fall.
Against the 2014-15 data from HouseMark (the
independent benchmarking organisation Cottsway
uses), this would put us above average in the sector.
87.0%
84.0%
2 Operating margin % excluding sales
This would put us in the upper quartile of our peer
group.
38.5%
39.1%
3 Management costs
The modernisation programme has enabled us to
reduce management costs by £700K.
£5,334k
£6,065k
4 Number of new homes delivered
Due to Cottsway’s need to refinance to fund an
accelerated development programme, the number of
new homes we delivered in the last year was similar to
2014-15. However, we have already been able to
commit to new schemes that will significantly increase
the numbers built in the future.
27
28
Cottsway Housing value for money self-assessment report 2015-16)
24
Measure
2016
2015
5 Return on assets
The simple return calculation below shows how
Cottsway is improving the financial return on our
assets. To support this work, we commissioned
independent specialists, ARK, in 2015 to carry out both
a financial and qualitative review of our assets as part
of the drive to achieve better value for money. This
has helped to identify the assets we should focus on
and those we should dispose of. Further development
looking at different tenures will be undertaken in the
future. Our medium term target is to raise this
performance to 5%
4.6%
4.2%
6 Net surplus *(after refinancing)
£1,769k £4,046k
* Excluding movement in fair value of financial instruments
Cottsway has shown a fall in net surplus for the year
due mainly to the cost of refinancing to enable further
growth. We therefore fully expect that surpluses will
rise in future years.
The following is a summary of the results for measure 5:
The simple return
2016
£10.184m
2015
£9.774m
£4.745m
£4.651m
£(2.574)m
£(3.129)m
Adjusted income
£12.355m
£11.296m
Deemed historic cost
£271.311m £270.209m
Return on investment
Number of homes
4.55%
4,560
Operating surplus on
social housing lettings
Add housing
depreciation
Deduct capitalised
major repairs
4.18%
4,542
Cottsway Housing value for money self-assessment report 2015-16)
25
The chart below shows the spread of our assets by both qualitative and
quantitative measurement as calculated during the ARK review. The assets were
split into three classes:
Class A – Long term sustainable stock
Class B – Sustainable but performance needs to be monitored
Class C – Stock that needs to be reviewed including, where necessary, a full
option appraisal
A total of 104 units within the class C stock were identified as loss making which
equates to 2.4% of total stock.
Progress against our strategic value for money objectives
In our last self-assessment report, we identified our main priorities for the year
ahead and adopted those as our strategic value for money objectives for 201516 following the board’s review of Cottsway’s approach. How we performed
against those objectives is set out below.
 Return on investment
This is covered in the information set out in the previous section relating to
return on assets.
Cottsway Housing value for money self-assessment report 2015-16)
26
 Set up of external stores
We launched a new partnership with Travis Perkins to improve productivity
within our repairs operation and enhance customer service. This involved setting
up external stores that went live in August 2015. The stores are now delivering
half of all supplies required for repairs direct to our trade operatives on site,
saving time and fuel costs.
When operatives do need to obtain supplies, they now have just one point of
collection, again saving on their time and travel expenses.
Cottsway’s finance team has benefited too – instead of having to process around
130 separate bills a week from a larger number of suppliers, we now just get
one invoice from Travis Perkins for all our everyday repairs and maintenance
supplies.
The new arrangement has brought another significant gain in that Travis Perkins
donates 1% of the money we spend with them to support community projects
that benefit Cottsway’s customers. These projects must support Travis Perkins’
own social objectives, which are:




Investing in communities
Employment, skills and training
Health and wellbeing
Contributing to a cleaner, better environment.
Travis Perkins also measures the social value that each of the projects creates
using the HACT social value calculator. This fits well with our own approach to
understanding the benefits and value of the work we do.

Mobile working solutions
Having trialled an externally supplied system for nine months, we decided it
didn't suit our needs, so our IT team built our own iPad app.
The software has been designed and trialled in-house, and the bespoke system
means Cottsway’s trade operatives can view the jobs they have in their diary for
the week ahead. This has reduced the need for them to travel to our office every
morning, saving time and fuel.
To complement the new app, our IT team created a digital solution to enable
operatives to complete job sheets on their iPads rather than on paper, again
saving them having to come to the office. The completion form has been created
as an iPad app, designed and trialled by operatives and office staff, and
automatically uploads information to our central systems.
Operatives now only need to come into the office for meetings. This means they
are able to use their time more effectively, improving the service we offer to our
customers.
Developing the app cost us around £5,756 in one-off staff time and we spend a
further £1,000 a year on licences. That represents a great return on investment
as the new system will save around £130,000 a year.
Cottsway Housing value for money self-assessment report 2015-16)
27

Strategy for older people
Cottsway’s board has started to consider our future strategic approach to older
people’s housing and support to decide how our homes and services can best
meet the needs of an ageing population. This is particularly important to us as a
large proportion of customers are older, with almost one in four (22.9%) aged
61 and over.
The board approved the principles of the strategy in July 2015 and we have been
working since then to identify the future suitability of residents’ homes and those
properties that either need to be disposed of or redeveloped. This will ensure
that our housing stock for older people is fit for purpose and better meets
customers’ future requirements.
Actions taken to date include helping older residents to downsize and moving
residents living in outdated sheltered accommodation to better and more
appropriate homes.
We also provide a budget of £250,000 every year for minor works and major
adaptations to help make it easier for older or disabled residents to continue
living in their own homes. In 2015-16, this meant we were able to fund a total of
177 minor works and part-fund the 64 major adaptations carried out in
partnership with West Oxfordshire District Council. Overall, including the grant
funding secured, the value of the work equals about £500,000.
Other efficiencies and social and environmental gains
In addition to the progress shown in the previous sections, other actions we took
during 2015-16 and the resulting value created are shown in the tables below.
We have grouped these to match our four strategic objectives, which represent
our main priorities:




Our customers and their homes
Our people and the way that we work
Building new homes and focusing our activities
Financial strength and demonstrating value for money.
Corporate objective: Our customers and their homes
The pressures and challenges for all registered providers across the country
have increased significantly in recent years, with an accelerated degree of
change over the last year or so. That has created an even more pressing need to
balance how much we can do for our customers against how much we able to
invest in their homes and services.
Achieving better value for money has therefore been a real driver to ensure we
can continue to provide high levels of service while maintaining strong customer
satisfaction ratings. To help strike the right balance, we have worked closely
with our customers and widened opportunities for them to get involved in a
greater variety of ways that suit them.
Cottsway Housing value for money self-assessment report 2015-16)
28
We continued to keep all residents updated about Cottsway through a quarterly
magazine and regular news updates on our website and social media channels,
as well as at community events. In particular, changes to strengthen the role of
our residents’ scrutiny panel have also significantly increased our accountability
to customers, as outlined elsewhere in this self-assessment.
Listening to customers and getting a better mutual understanding
Action taken
We introduced a new
service to respond to
customer feedback and
complaints.
We moved from an
annual customer
satisfaction survey
(known as a STAR
survey) to a quarterly
format.
Resulting changes
Our customer services
team now handles cases
and has 48 hours to
resolve complaints
before escalating to
other staff.
Value created
Customers now benefit
from a quicker and more
efficient service,
resulting in faster
responses to their
feedback.
Between April 2015 and
March 2016, the team
resolved 226 cases.
We have also avoided
the need to escalate the
majority of feedback
cases to full blown
complaints, saving time
and money. On average,
each case costs £205
less than before, giving
a total saving of
£46,330.
We now have a better
understanding of what
drives customer
satisfaction through
quarterly reports.
The change enables
Cottsway to track
satisfaction across our
core services much more
effectively and has also
raised the profile of what
is a key issue across the
business.
Both the corporate
leadership team and our
customer insight group
review each quarterly
report. After the board
has considered the
results, reports are also
made available to all
staff on the intranet and
to all customers through
an update in Homepage,
our regular magazine for
residents.
Having more regular
feedback also helps us
measure changes in key
performance indicators
more quickly so we can
take prompter action if
they start slipping back.
Cottsway Housing value for money self-assessment report 2015-16)
29
Action taken
We refined our
knowledge of customers
and their needs by
improving the levels of
information we hold.
Resulting changes
We improved levels of
customer data we hold
from an average of 70%
in April 2015 to 90% in
March 2016.
We also collected 365
email addresses from
forms used on our
website.
We worked with more
than 60 vulnerable
residents with health
problems or other
issues.
We ran a pre-tenancy
training workshop for
prospective tenants.
We helped these
customers maintain their
tenancies and improved
their wellbeing by
signposting them to
other agencies that
could support them as
well as us.
By engaging with
potential customers
earlier, we improved
their understanding of
the home application
process and what it
would be like to be a
Cottsway tenant.
Value created
We now have a better
understanding of our
customer demographic,
and will be better placed
to provide tailored
services and deliver
efficiencies.
We are also contacting
residents to ask
permission to use their
email address,
potentially saving us
from sending them
letters in the future.
These customers now
feel valued and
supported by Cottsway.
We also helped them to
avoid defaulting on their
rent, reducing arrears by
at least £1,500 and
avoiding repossessions.
Better knowledge of the
responsibilities of being
a tenant means
Cottsway has managed
people’s expectations in
advance so they will be
more likely to sustain
any future tenancy.
Driving the digital shift
Action taken
We launched Cottsway
Connect HQ (CCHQ) in
March 2016 as an online
engagement tool for
customers.
Resulting changes
It’s still early days but
we quickly launched
consultation on
community plans in two
areas. Much more is now
underway and to come,
as set out in our future
priorities later in this
self-assessment.
Value created
This tool gives Cottsway
customers a swifter and
more responsive way of
getting involved. It will
also help to reduce rural
and social isolation.
Cottsway Housing value for money self-assessment report 2015-16)
30
Action taken
We introduced the allpay
service for residents and
leaseholders to pay their
rents and service
charges online.
We ran a ‘get online’
workshop and provided
other in-house training
opportunities for
customers.
Cottsway stepped up
communications
delivered through our
social media channels.
Resulting changes
Customers are able to
pay any time or day of
the week. This is more
likely to encourage them
to keep up with their
payments due to the
ease of access to the
service.
Twelve people attended
the workshop. Two
borrowed tablets and
dongles to try out
getting access to the
internet, and one is
piloting a home-based
tuition course Cottsway
has offered.
More customers are now
using sites like Twitter
and Facebook to contact
us.
We are also promoting
Cottsway activities and
partners’ projects
through social media to
create better awareness
of joint initiatives.
Value created
Customers now have a
more flexible and
convenient way to pay
to fit in with their
lifestyle. It has also
helped to prepare them
for the introduction of
universal credit when
people will be paid their
benefits directly.
Our rent collected has
risen slightly too, from
an average of 94% on
2014-15 to 95% in
2015-16 and is now
more consistent month
on month, with fewer
fluctuations.
Customers have been
supported to get online,
helping to reduce
isolation, improve
wellbeing, and help
them access Cottsway
services and cheaper
prices for other goods
and services.
Putting out more
information through
social media means we
are making our services
easier to access and
quicker to respond to
customer queries or
complaints. We received
and responded to 25
direct message enquiries
via Facebook in the last
12 months.
Social media also
increases our reach with
digitally engaged
customers. For example,
the last job vacancy we
advertised on our
Facebook page reached
1,100 people.
Cottsway Housing value for money self-assessment report 2015-16)
31
Promoting joint projects
has also led to improved
partnership working and
positive PR. We have
received 22 direct posts
to our page in the last
12 months, 16 residents
have rated us and 311
have ‘liked’ our Cottsway
Facebook page.
Making better use of other systems and resources
Action taken
We reviewed the
communities team’s
budget to meet the
corporate target to
reduce spending by
10%.
We reviewed the use of
MyWorkSearch, an
online work search
service.
We helped six of our
residents living in
properties too big for
their needs to move to
smaller homes through
our Easy Moves scheme.
We moved seven
residents of a former
sheltered scheme in
Milton-under-Wychwood
to alternative
accommodation.
We switched from
testing customer
satisfaction of our
repairs service by post
Resulting changes
Improved efficiency and
more targeted
engagement of
customers have resulted
from the changes, which
included a major
restructure of the team.
Cottsway cancelled the
contract because of poor
uptake, despite it being
a good product and
heavily promoted.
Residents have been
supported to downsize
to more appropriate
accommodation. We
paid incentives of
£1,000 to £2,000
depending on the
number of spare
bedrooms they had.
Residents have been rehoused in homes that
are more suitable for
their needs.
Call2Survey provides an
automated call and text
satisfaction survey and
presents the data on a
Value created
The team achieved the
saving target in full –
just under £87,000 in
the year.
We have saved £3,200 a
year and now have more
targeted schemes to
help customers looking
for work.
The moves mean better
long-term use of limited
Cottsway resources, with
family-sized
accommodation made
available to people in
need from the housing
waiting list.
The moves mean better
use of limited Cottsway
resources and an
enhanced quality of life
for the residents. It
would not have made
economic sense to
improve the outdated
accommodation they
moved from so this site
will be made available to
develop new homes.
We have saved a little
over £10,000 in
administration costs and
the survey report also
Cottsway Housing value for money self-assessment report 2015-16)
32
to a phone system
known as Call-2-Survey.
dashboard in real time.
Previously the survey
was paper-based and
incurred postage and
administration costs.
Call2Survey will be
rolled out in future to
include other areas of
feedback, offering
further savings and
efficiencies.
We reviewed our
customer census form to
ensure we only collect
relevant data.
We now use a more
suitable form that helps
us meet data protection
requirements by only
collecting useful data.
Partnership working with
a wide range of agencies
through community
engagement work,
including local
employers, play
associations, social
services, occupational
health and SSAFA.
Activities we achieved
included three
community play days
with Oxfordshire Play
Association, a work
experience opportunity
with law firm Blake
Morgan and
neighbourhood clean-up
days.
identifies incorrect
contact numbers, which
helps us keep our
database up to date.
The response rate is
significantly higher at
48%, up from 32.5%
last year.
The results and feedback
gathered are used to
shape and improve our
service offering to our
customers.
The revised form
ensures we comply with
legislation, reducing
risks to the business. It
has also reduced time
spent by staff processing
unnecessary
information, making our
systems more efficient.
By working closely with
other agencies, we have
been able to help each
other to achieve similar
goals of community
engagement and adding
social value, while
saving on costs and
other resources.
Residents’ feedback has
been very positive about
seeing activities in their
local area.
Other value for money improvements and additional gains for our customers and
their homes included:



We set up a small-scale furniture recycling scheme to help residents
setting up home in a Cottsway property. This eco-friendly initiative
reduced the costs of clearing empty properties before we re-let them, as
well as improved the financial and mental wellbeing of customers
We held off from recruiting to a community involvement officer post,
saving around £30,000 in the year, while Cottsway considered the future
direction and priorities for our community engagement activities
We donated almost £24,000 to support customers and local community
initiatives through our Wellcommunity fund, with youth forum members
debating and deciding what should be supported. Apart from involving
Cottsway Housing value for money self-assessment report 2015-16)
33


young residents, the grants contributed to the wellbeing of the local
community and generated positive publicity
Teenager Jess Andrade won the ‘Young Tenant of the Year’ award in the
annual TPAS awards. This excellent achievement for an active member of
our thriving youth forum gave great recognition for an engaged young
resident and our support mechanisms, leading to positive national
publicity and promotion for Cottsway
Two other young residents took part in Blake Morgan’s work experience
week at the solicitors’ Oxford office. This helped them in to develop skills
and confidence, contributing to their future career development. It also
gave positive publicity about Cottsway and the benefits of partnership
working.
Corporate objective: Our people and the way that we work
Building on the transformation programme launched in 2012-13 that has already
radically changed the way Cottsway works, we continued to drive forward
improvements to the way our staff deliver services. In particular, a strong
emphasis on extending mobile working and digital solutions has created a robust
platform for further change to help tackle social and rural exclusion, as well as
achieving better value for money. This is covered in more detail in the previous
section outlining our strategic value for money objectives.
Action taken
We redesigned our gas
servicing process.
Resulting changes
An auto scheduler
calendar on our
management
information systems now
allocates appointments
for operatives to carry
out the mandatory
annual gas servicing at
all our properties. The
redesign has therefore
created a more efficient
system and made it
easier for staff to
schedule and manage
the workload.
We redesigned our gas
installation process
The redesign has
brought similar benefits
to the changes in gas
servicing, helping to
create efficiencies and
make it easier for staff
to manage the workload.
The boiler supplier’s
website now allows us to
register the boilers we
have purchased directly
Value created
The system allocates
customer appointments
in a 'best fit' way so that
they are grouped
together in neighbouring
locations. This is not
only quicker than
manually allocating
appointments but early
indications are that it
will also save on
operatives' fuel and
time. We should be able
to demonstrate this next
year, as the system was
only implemented in
February 2016.
The new process saves
time and money.
The online system
means boiler
installations are
automatically registered
with Gas Safe (a legal
requirement) and the
supplier also pays the
registration fee, which
Cottsway Housing value for money self-assessment report 2015-16)
34
The business developed
a ‘We are Cottsway’
behaviours framework,
using internal resources
led by the HR team.
We monitored
attendance at and costs
of internal and external
training for Cottsway
staff.
We reviewed the process
for VDU eye test
payments. Currently
staff claim this as an
expense, or we are
invoiced by the optician.
HR researched an online
scheme which allows us
to buy vouchers in bulk
online. The old system
involved filling in and
emailing a spreadsheet
and then receiving the
warranty in the post for
us to scan. We would
then register the boiler
with Gas Safe at a cost
of £2.70 per boiler –
£562 in 2014-15.
This type of project is
often delivered by
external consultants and
can be costly. Instead,
we used expertise in the
HR team plus a small
staff working group.
Around 30 staff across
the business were also
involved in developing
the framework.
We introduced the
framework at the end of
December 2015, and it
is now being rolled out
through the appraisal
process and other HR
processes.
The process highlighted
the tendency for staff to
drop out of courses at
the last minute when
they were provided by
internal resources and a
lack of awareness of
what this costs the
business in trainers’
preparation time. We
then used the
information to assess
whether to continue with
some courses.
We have moved to this
scheme as it will reduce
paperwork for the HR
team and staff, make it
easier to monitor use of
the vouchers, and
deliver savings as
provision of new glasses
adds up to around £560
a year.
Involvement of staff in
the design and rollout of
the framework has
resulted in good
understanding and buyin. We based the
framework on staff input
and this meant it was
immediately credible to
our people, especially as
examples of behaviours
were familiar and
realistic.
This process has helped
us to become much
more aware of the value
for money issues
involved, and the real
cost of this type of
training.
The cost of training in
2015-16 was £24,300.
By assessing the uptake
of that training, we have
halved the budget in the
current financial year.
The new scheme
reduces the call on HR’s
time and there are no
extra costs but
additional discounts for
staff.
Cottsway Housing value for money self-assessment report 2015-16)
35
and allocate them to
staff as required. This
scheme also offers staff
reduced rates on glasses
purchased for VDU use.
We carried out a tender
process to identify a new
HR and payroll system,
with self-service access
for staff.
is included or
discounted.
Before committing to the
tender process,
Cottsway carried out a
detailed assessment to
ensure the new system
would provide value for
money. This confirmed
we should go ahead and
we have now identified a
new supplier who
started work in March
2016.
Over five years, the cost
of introducing the new
system will be nearly
half the cost of
continuing to run our
current system (£14,550
as opposed to £27,390)
even with the upfront
expenditure. This is due
to the time and
resources that will be
saved within the HR and
finance teams.
Other value for money improvements and additional gains for our people and the
way they work included:


We made a number of internal processes more effective and less timeconsuming. Although some were relatively minor changes, collectively the
efficiencies will add up to make a significant and ongoing difference. For
example:
o We changed the administration process for invoices by introducing
a stamp to replace an authorisation voucher. This has saved around
£275 a year in time, paper and printing costs
o We switched our provider of online forms. Although the annual
licence cost is £339, the new service is free to use and is also more
intuitive, saving IT staff time in building or changing forms
o We have virtualised 99% of our servers, which means we are
running fewer servers on site and paying for less server warranty,
equating to a saving of £40,000 over three years. Cottsway is also
paying less on electricity, hardware maintenance, equipment
purchase and licences. The saving on licences alone equates to
£4,164 over three years, plus the additional benefit of reducing our
impact on the environment
o We stopped using branded stationery supplies but now provide a
wider range of non-branded materials that cost less, which led to a
stationery cost saving of 21% or £1,596 in 2015-16
We reviewed candidates from previous recruitment campaigns rather than
re-advertising when vacancies came up. The online system we introduced
in 2013 has enabled us to do this easily, reducing the recruitment process
by an average of two to three weeks each time.
Cottsway Housing value for money self-assessment report 2015-16)
36
Corporate objective: Building new homes and focusing our activities
Our refinancing during 2015-16 has given Cottsway the capacity to spend at
least £15 million every year to develop new affordable homes over the next five
years.
In terms of focusing our activities, we have revised our business plan following
the July 2015 Budget and November 2015 Spending Review announcements,
and this has passed our regulator’s stability tests.
Action taken
We brought the sales of
shared ownership homes
at our Andoversford
development in-house.
We prepared for a
successful private bond
to raise money for an
extended new homes
programme. Pending the
bond, development staff
assisted other teams to
save on recruiting new
people.
Resulting changes
The change has given
Cottsway a more direct
relationship with our
customers and speeded up
the conveyancing process
by an average of four to
five weeks. It also ensures
Cottsway has control over
the process and can speed
things along for new
residents looking forward
to moving into these new
homes in Gloucestershire.
We are continuing with the
in-house system this year
and will sell around a
dozen shared ownership
homes in Andoversford,
Witney and Fairford.
As it was a quieter year for
development, members of
the team were deployed to
other departments within
the business. Two
members of the team
spent 16 weeks working in
property re-investment to
alleviate staff shortages.
This has meant an
additional 744 hours to
help with completions and
other work. One member
of the team is currently
spending two days a week
in the housing team in a
job share role.
Cottsway Housing value for money self-assessment report 2015-16)
Value created
Providing this service
through our own staff
team has saved
Cottsway £2,000 on
estate agent fees.
We have also reduced
the time taken for the
conveyancing process
from 13-plus weeks
with an estate agent
to around eight to 10
weeks. This is not only
more efficient but also
offers a better
experience for our
buyers.
Our refinancing deal
has released £80
million of development
capacity, which
translates into at least
750 new homes over
five years.
37
Action taken
We started to combine
stock condition surveys
and asbestos re-surveys
at the same property
into one site visit, where
possible.
We also made other
changes to these
services, such as not
carrying out repeat
asbestos surveys when
we had previously found
no traces of the
substance.
We reviewed our
facilities budgets, which
covers electricity, water,
rates, postage, office
cleaning, health & safety
tests and grounds
maintenance.
We switched to emailing
remittance advice to our
suppliers rather than
posting it.
We helped customers to
access discretionary
housing payments (DHP)
they were entitled to.
Resulting changes
Apart from the time saved,
combining the two visits is
less disruptive and
confusing for our
residents.
Our staff also load the
surveys directly onto an
iPad rather than a less
reliable PDA mobile
device. This allows
surveyors to input results
more quickly, accurately
and reliably than before.
We assessed our external
contracts by using actual
spend data and analysing
future needs. As a result,
we reduced budgets to
reflect a more accurate
picture of expenditure
required.
We made 2,187 electronic
bank transfer payments
from 51 payment runs in
the last year. Using the
post would have involved
25 hours of staff time to
stuff letters into envelopes
and the extra cost of
stamps.
Our welfare reform officer
regularly reviews
information about
residents affected by the
bedroom tax and then
proactively approaches
them to help them
Cottsway Housing value for money self-assessment report 2015-16)
Value created
We have saved on
travel and
administration time,
which equates to
£2,500 in surveyor’s
costs. An added
benefit is that
customers have no
unnecessary visits and
therefore have a
better experience of
our service.
Survey data loads
directly onto our
database, saving
around 150 hours a
year in administration
time – the equivalent
of £2,000.
Not repeating
unnecessary asbestos
surveys saved a
further £500 in
surveyor’s costs.
This process resulted
in an 18% saving on
the facilities budget –
a total of £32,761.
We saved £1,115.37
on postage costs and
the equivalent of £298
of staff time, reducing
our spend by a total of
£1,413.37.
We supported 52
households to claim
public funding through
DHP awards. The
financial support for
these vulnerable
residents has helped
38
complete DHP forms and
re-apply when the
payment term expires.
Our income officer and
welfare reform officer
made joint visits to
customers in rent
arrears and affected by
national welfare
changes.
Collaborative working
enabled us to take a
targeted approach to help
vulnerable people through
regular visits. We have
particularly had a higher
profile presence in
Wiltshire.
them sustain their
tenancies and avoided
unnecessary
repossessions and
extra costs for
Cottsway.
Our customers’ takeup of public funding
has also enabled our
own hardship fund to
be better targeted,
making an overall
saving of £18,000 to
the business.
We now have more
engaged residents as a
result of building
closer relationships
and have ensured they
also have timely
access to other
agencies that can help
them.
As a result, rent
arrears in Wiltshire
reduced by £2,000 in
2015-16 compared to
the previous 12
months. This was
despite the number of
homes we manage in
the area increasing
due to new
developments.
Other value for money improvements and additional gains for building new
homes and focusing our activity included:

We negotiated a £100 reduction per installation with our positive input
ventilation (PIV) supplier, potentially saving upwards of £2,000 every 12
months. These devices help to prevent condensation in our homes and are
therefore exceptionally useful in reducing long-term maintenance costs.
Corporate objective: Financial strength and demonstrating value for
money
Despite the economic and social challenges created by the July 2015 Budget,
Cottsway retained the highest financial viability V1 status and increased our
governance rating to the similarly high-ranking G1. Moody’s has reconfirmed our
Cottsway Housing value for money self-assessment report 2015-16)
39
A2 credit rating as stable, all of which supported our refinancing which
completed in November 2015.
Action taken
We refinanced Cottsway
to give the business
greater freedom, better
borrowing terms and
access to additional
funds from other
lenders.
We arranged to sell 28
homes we own in the
Forest of Dean to
another registered
provider working in the
area.
We stepped up publicity
for the mobile payment
app through allpay, a
new digital payment
method for customers
introduced in August
2015.
We reviewed and
improved our annual
rent review letters sent
to customers.
Resulting changes
We raised a bond
through a £130 million
private placement. This
allowed Cottsway to
partially reduce our
borrowings with the
current lenders and at
the same time put in
place a £50 million
revolving credit facility
to enable us to commit
to new developments.
This was part of our
commitment to only
provide homes and
services within an hour’s
drive of our offices in
Witney to ensure we can
provide high quality
input to customers.
By shifting our
communications to
promote more online
services and other
payment methods such
as direct debit, we have
improved our rent
collection performance.
In particular, we
promoted the app in
rent statements and
arrears letters.
Following a fundamental
review of the process
and legal advice from
our solicitors, we made
the letters much clearer.
Value created
Refinancing has given us
the financial backing we
need to pursue a healthy
development
programme over the
next five years.
The sale will make a
profit of around
£500,000 for Cottsway
to reinvest in other
homes and services. It
also reduced our
geographic spread of
homes, therefore
reducing the average
maintenance cost per
property of our
remaining stock.
Our active promotion
increased the number of
customers using the app
from just eight to 671,
enabling us to collect
£126,000 between last
August and March this
year.
It also offers flexibility to
our customers as they
are now able to pay
anytime and anywhere.
In turn, this has reduced
costs for Cottsway as
the business doesn’t
have to handle these
transactions.
The review has resulted
in fewer customers
contacting us and only
one submission to the
independent rent
Cottsway Housing value for money self-assessment report 2015-16)
40
tribunal panel, compared
to seven cases reaching
this stage in the
previous year. This was
also the first time in the
last four years where a
challenge had not been
upheld by the rent
tribunal.
We have put into place a
procedure that includes
checking if a faulty solar
panel inverter is under
warranty and, if not, to
assess whether it would
be cost-effective to
repair. We also identified
homes where subsidies
hadn’t been claimed for
solar panel use.
We have 1,221 homes
registered with solar
panels and the average
income we receive for
each property is £650 a
year. We have therefore
reduced our financial
loss for not repairing a
unit if it was worth
fixing.
The electricity supplier is
also now paying us for
the units that have been
repaired, as well as for
the unclaimed subsidies
that run to at least
£40,000 a year.
In terms of contacts to
the business, we
received 33% fewer calls
compared with the same
time the previous year.
Based on the £650
average, the financial
loss for not repairing a
unit which has a 21-year
life span would be
£13,650 (assuming it
was installed in 2012).
The other benefit is the
2.6million KW hours that
our tenants can benefit
from by the panels
generating electricity.
This equates to an
average possible saving
per household of £285 a
year.
Other value for money improvements and additional gains for our financial
strength and value for money included:



We reduced the cost of the executive team by going from four directors to
three
We restructured the finance team which helped to fund a new post
dedicated to managing Cottsway’s cash and treasury arrangements. This
is an essential requirement following our refinancing and enlarged
development programme
Following feedback from customers and colleagues, we reviewed and
improved the annual rent statement letters sent to all customers. We now
use a colour-coding system and clearer explanations to help residents
better understand their rent statement. Adjusting the formatting and the
timing of the mail-out means they also receive the information in good
time. The clearer communication has halved the number of customers
contacting the business, saving staff time. It has also resulted in more
understanding and trust on the part of customers
Cottsway Housing value for money self-assessment report 2015-16)
41

We reduced electricity costs by manually overriding the automatic heating
settings for Cottsway House, switching them to ‘weekend mode’ for the
bank holidays over Christmas.
Where we didn’t do so well
We made good to excellent progress in most but not all areas.
Although we have introduced an internally created solution for mobile working
for operatives it is still not the final solution that we want in place as there is still
a manual requirement for the recording of the completion of jobs which means
we are not delivering all the savings anticipated. We are currently reviewing an
externally sourced mobile working application, which we believe will give
operatives more functionality and speed. We are carefully assessing the quality
and value the application will give us, before committing to purchase. We expect
to have the enhanced mobile working solution in place before the end of the
financial year.
Due to delays in mobile working for operatives we have not managed to roll out
in any scale the mobile working for housing management teams or surveyors,
while we focus on delivering a high quality solution for operatives.
Our website needs modernisation to deliver more digital solutions for customers
and this will not be started until the 2016/17 year.
We have deferred the planned refurbishment of the office until a better value for
money solution can be found that supports the longer term requirements of the
organisation.
How we compare
Producing and monitoring performance indicators on its own does not in itself
demonstrate that Cottsway is delivering value for money. That is why we
measure how we compare to our peers.
We currently use two methods of benchmarking:
1. House Mark
HouseMark is a national provider of social housing data and insight, which we
use to compare ourselves based on peer group averages and some overall sector
performance. During the year, we reviewed who we should be classifying as our
peer group and agreed that registered providers with between 2,500 and 7,500
rented homes in the south east or south west best match our aspirations.
We also use HouseMark’s STAR survey to compare our performance on customer
satisfaction against other registered providers and have switched from annual to
quarterly surveys. Apart from testing how satisfied our residents are with
Cottsway, they also help us understand whether they believe their rent and
service charges provide them with value for money.
Cottsway Housing value for money self-assessment report 2015-16)
42
2. Homes and Communities Agency Global Accounts
We use the housing regulator’s global accounts as a comparator to some of our
financial performance indicators so we can see how we perform against the
sector.
Our performance
Like last year, we have used a traffic light system of red, amber and green to
reflect the board’s assessment of how well Cottsway has performed as shown in
the table below. We are giving the two red indicators highest priority to bring
about improvements in the current financial year.
Cottsway’s performance
2014
2015
2016
2017
Actual
1.6%
Actual
1.9%
Actual
1.5%
Forecast
1.9%
HouseMark
data
2014-15
median
Actual
1.8%
Rent loss through
voids % of rents
0.68%
0.58%
0.76%
0.75%
0.72%
About the
same
Empty homes at
year end and
available to let
(number)
Average re-let
time (calendar
days)
Properties with a
valid gas
certificate (%)
Residents
satisfied with all
repairs (%)
Customer
satisfaction with
services overall
(%)
Housing
management
cost per property
(£)
Total repairs and
maintenance per
property (£)
7
7
16
10
Data not
available
-
29.4
31
19.5
20
27.9
Better
100%
100%
100%
100%
Data not
available
-
81.0%
74.0%
77.8%
77.5%
79.7%
Worse
88.0%
84%
87%
87%
86.7%
About the
same
£471
£462
£444
£420
£468
About the
same
£2,483
£2,334
£2,256
£2,100
£2,681
Better
Overheads as a
percentage of
turnover (%)
11.69%
13.03%
11.14%
11.00%
10.51%
About the
same
Rent arrears due
from current
tenants (%)
Cottsway Housing value for money self-assessment report 2015-16)
How we
compare
About the
same
43
Cottsway’s performance
2014/15
HCA*
data
How we
compare
2014
Actual
30.4%
2015
Actual
38.1%
2016
Actual
37.8%
2017
Forecast
39.0%
28.8%
Better
EBITDA - MRI
interest cover
(%)
174.8%
163.2%
166.9%
170.0%
160.5%
Better
Gearing ** loans/housing
assets (%)
60.6%
61.1%
62.3%
63.0%
56.2%
3.3
3.2
3.1
2.9
Operating
margin (%)
Social
Housing Cost
per
Unit(£’000)
About the
same
Better
3.55
* HCA is the housing regular, the Homes and Communities Agency
** We believe that higher levels of gearing show we are utilising our capacity to deliver new homes.
5. Future priorities
Looking more broadly at other value for money issues, Cottsway’s board has
identified other priorities for the current financial year, which we will report on
this time next year. They cover six key areas:
1. Growth for a purpose
2. Customer involvement
3. Digital by default
4. Measurable social value
5. Effective intelligence gathering
6. Diverse partnerships.
More detail about each priority is given below.
Growth for a purpose
We will continue to focus strongly on delivering good, effective services while
also achieving value for money. Apart from growing through building new
homes, we will also rationalise our stock outside of our core area of operation
where this will deliver better value to our customers and the business.
Customer involvement
While our residents’ scrutiny panel is highly effective, we have agreed to review
scrutiny and co-regulation structures in 2016. This will ensure our approach to
co-regulation continues to meet the needs of the business and of our customers.
This will include changes to enable customers to influence future scrutiny
exercises and to collaborate more effectively with the panel.
Cottsway Housing value for money self-assessment report 2015-16)
44
We will also use our new involvement mechanisms such as online tools and
improved use of customer intelligence (as outlined below) to help deliver
improvements.
Digital by default
A key aim will be to help more customers get online to overcome rural, social
and financial exclusion, and further reduce costs to the business. As part of our
digital inclusion agenda, we will expand the range of resident involvement
portals and ways of gathering more accurate intelligence about our customers’
needs.
In March 2016, we launched Cottsway Connect HQ (CCHQ), an online
community engagement tool that enables us to very easily set up various
projects and add engaging features such as surveys, videos, forums, image
galleries and polls. The first projects we launched have been supporting the
development of community plans for Charlbury and Eynsham and we have also
carried out a quick consultation on community bin stores. Coming soon will be
four new developments that will be open for consultation and a regeneration
project.
We will also be developing a more interactive website to provide more services
online to our customers. Apart from the benefits to individuals, website
interactions reduce our costs.
Building on progress to date, we will mobilise more staff to ensure they are less
office-based and are equipped to spend even more time in the ‘field’ delivering
services to customers.
Our HR and payroll system will go digital too. Following a competitive tender, we
have identified a new supplier, with the new system due to be implemented in
full by the end of 2016.
Effective intelligence gathering
We need to better understand our customers and what matters to them and
their communities to target resources.
To achieve this, we have taken a number of steps. These include reviewing the
integrity of the customer data we already hold and updating it where we have
identified gaps, as well as setting improvement targets. This will help us to fully
understand the profile of our customer base and how we can provide more
tailored services that meet the needs of individuals.
As previously mentioned, we began to develop community plans for Charlbury
and Eynsham. These plans are written in partnership with local residents and
enable us to identify the issues and priorities for each area and to set out what
we will do to meet them. Once this pilot project is complete, we will roll out
community plans to more of our communities, helping us to target resources
where they are needed most.
Cottsway Housing value for money self-assessment report 2015-16)
45
To support this process, we have invested in Community Insight, a web-based
tool that enables us to draw on a range of ‘big-data’ sources that will help us
build up a profile of the wider communities we work in.
We have also moved from collecting customer satisfaction information once a
year to gathering it quarterly. When we combine this information with our
customer profiling data, we will better understand customer satisfaction with the
services we provide and help us make them more effective and efficient.
Diverse partnerships
Cottsway is a strong, stable and ambitious housing provider and we are keen to
do much more both for our customers and local communities. We already have
excellent relationships with our many and varied partners, suppliers and advisors
but have made extended partnership working a high priority in our revised
corporate plan.
In particular, we will focus on partnering with local authorities and developers to
fast-track our affordable homes building programme. We are also looking at
ways in which we can generate additional resources so that we can invest much
more in community initiatives and social enterprises that bring real social value.
Any organisation that thinks we would be a good fit for them as a partner is very
welcome to get in touch with Cottsway to discuss their ideas. If you are one of
our customers and have any suggestions for new or extended partnerships that
you think would benefit local people, please let us know.
Cottsway Housing value for money self-assessment report 2015-16)
46
Contact
We hope you will agree that our self-assessment report demonstrates how
Cottsway provided good value for money in the 2015-16 financial year.
Reviewing our starting point 12 months ago, we strongly believe that the
business has shown clear and growing progress, supported by a much more
strategic and systematic approach to embed value for money in everyone’s
thinking here at Cottsway.
We know there is still much for us to do but we have robust plans and
monitoring mechanisms in place to keep us on track.
How do you think we performed?
We welcome any feedback about our performance and plans. If you have any
suggestions about how we can achieve even better value from how we work or
how to improve this self-assessment report, please contact us:
Email [email protected]
Call 0800 8766366 (Freephone line for residents) or, for all other enquiries, ring
01993 890000
Cottsway is a registered society under the Co-operative and Community Benefits
Societies Act 2014, registered by the Financial Conduct Authority No. 30651R
and by the Homes and Communities Agency No. L4312
Registered office: Cottsway House, Heynes Place, Avenue Two, Witney, OX28
4YG
www.cottsway.co.uk
Published August 2016
Cottsway Housing value for money self-assessment report 2015-16)
47