11
X
Agenda Item:
Date:
26 March 2013
Meeting of the:
PCH Board
Report of:
Belinda Pascoe
This report is:
Open
Reason for confidentiality
Value for Money Strategy
Report Status:
*For Decision
Executive Summary: The HCA have issued a revised Regulatory framework, including a new
Value for Money standard. The standard requires that we demonstrate to stakeholders how we
are meeting this standard. This includes, on an annual basis, publication of a robust selfassessment. The Value for Money Strategy is intended as a first step in the self-assessment
process, by outlining our strategic approach to value for money.
The strategy is to ensure that our resources are focused on delivering the objectives in our
business plan, whilst making best use of our assets, in a cost effective, customer focused and
efficient way.
Recommendations:
1)That the revised Value for Money Strategy in appendix A is approved
Appendices:
A – Value for Money Strategy
Background Papers
Value for Money strategy and policy 2011-2015
Housemark /National Housing Federation document ‘Social Hearts,
Business heads 2012
Links to Business
Plan objectives
This strategy supports the approach to the delivery of the Business
Plan objectives
Board Report
Decision Making Implications
Value for Money and Social Return
The Value for Money Strategy outlines our strategic approach to Value for Money. It underpins
our approach to the delivery of the business plan.
The Board will have the opportunity to monitor the delivery of the strategy through Board
reports, and a revised report template that includes a section on value for money and social
return.
The strategy is supported by the Housemark /National Housing Federation document ‘Social
Hearts, Business heads
Risk and Opportunity Management
Failure to deliver on value for money, and in particular comply with the HCA value for money
standards will place our regulatory rating in jeopardy. It also means that we are not using our
resources effectively, and may not be focusing on our agreed priorities.
There is a requirement to publish a robust self-assessment of our delivery of value for money.
This presents us with an opportunity to provide stakeholders, including our tenants, with a
transparent view of how we are achieving value.
Equality and Diversity
An equality impact assessment has been completed for this strategy, and there is xxxx
Other Decision Making Implications
There is a regulatory requirement to meet the HCA value for money standard.
There is an ongoing focus on the benefits provided through social value provided by PCH.
Report
Author:
Belinda Pascoe
Head of Governance
01752 388360
[email protected]
Version:
FINAL
Date: 6 / 03 / 2013
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1.
Introduction
1.1
The original Value for Money strategy and policy was approved by the Board in June
2011.
1.2
The HCA have issued a revised Regulatory framework, including a new Value for Money
standard. Housemark and the National Housing Federation have issued a guidance
document ‘Social Hearts, Business Heads’. It is considered that this document
represents a far more rigorous and demanding approach to the issue than is implied by
the regulatory framework.
1.2
The revised Value for Money Strategy attached as appendix A is compliant with the
regulatory framework, and is supported by the Social Hearts Business Heads document.
2.
Regulatory Requirements
2.1
The revised HCA regulatory framework includes a fairly detailed value for money
standard. Our compliance with the standard (which is in appendix A of the attached
strategy) forms part of the Regulators regulatory judgement.
2.2
The standard also requires that we demonstrate to stakeholders how we are meeting this
standard. This includes, on an annual basis, publication of a robust self-assessment
which sets out in a way that is transparent and accessible to stakeholders how we are
achieving value for money in delivering their purpose and objectives. This document is
intended as a first step in the self-assessment, by outlining our strategic approach to
value for money.
3.
Revised Value for Money Strategy
2.1
The revised strategy supports the implementation of the new Business plan. It aims
to ensure that our resources are focused on delivering the objectives in the plan, whilst
making best use of our assets, in a cost effective, customer focused and efficient way.
2.2
Social Value is an important part of the PCH Brand. Social value is about looking at the
added benefit that we can provide to our residents and the communities in which they
live. Whilst, as a social housing provider we could be said to produce social value, in
delivering VFM, we will also ensure that the potential for social value is maximised.
4. Recommendations
(1) That the revised Value for Money Strategy in appendix A is approved
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Appendix A
DRAFT
Value For Money strategy 2013 -18
Part of our approach to Business Effectiveness
1
Introduction
1.1
Value for Money (VFM) is important for any organisation but particularly for housing
associations which are using public funds and income from residents and customers to
fund services and new housing developments.
1.2
At Plymouth Community Homes (PCH) we regard our residents and customers as our
main stakeholders and we owe it to them to spend their money wisely so that we can
provide good quality services to them at a cost effective price. Poor services which are
not cost effective will ultimately result in unsatisfied residents and customers who would
ironically have to pay more for the services or choose not to use them.
1.3
We are also concerned with the wider context of value for money in terms of social value
and community impact. That is how we can have a positive impact on all residents of
Plymouth and how we can play a role in supporting local businesses. It is a key element
of business effectiveness, and this will be measured in terms of the financial,
environmental and social impact of what we do.
1.4
Our approach to VFM has been reviewed to ensure compliance with the Homes and
Communities Agency (HCA) regulatory requirements, and is supported by the
Housemark /National Housing Federation document ‘Social hearts, business heads, new
thinking on value for money for housing associations.
1.5
Delivery of this Strategy is very important to the success of our 2013-18 Business Plan
objectives all of which have the principles of value for money embedded in them. This
strategy covers the same time period as the Business Plan for this reason.
2
Regulation
2.1
The HCA has VFM as one of the seven standards for registered providers. In addition to
this standard, which underpins the delivery of the other 6 standards, is the requirement
as one of the underlying principles of co-regulation that:
“Providers should have a strategy for optimising value for money, and
systems to ensure that this strategy is delivered.”
2.2
The HCA standard is set out in appendix A.
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3
Definition of VFM at PCH
3.1
We believe that everyone in Plymouth deserves a decent home, that thriving
communities are important for the City and that, working with our residents and partners.
Our ambitious, yet straightforward, purpose is, quite simply, to be a leading housing
provider.
3.2
Value for money at PCH is about delivering our strategic objectives, whilst making best
use of our assets, in a cost effective, customer focused and efficient way.
3.3
Our agreed strategic outcomes are all VFM focused, and are to



3.4
Be forward looking and on the move, ensuring investment in the right housing, to
the right standard, in the right place at the right cost
Create places where people want to live and have the opportunity to contribute to
their community
Make the best use of our assets in driving an effective business, meeting
residents’ expectations and embracing change
In delivering Value for Money we aim to
a)
b)
c)
d)
Provide the right homes and the right services of the right quality
Be cost efficient
Work effectively with our suppliers
Manage our assets (both housing and operational assets) effectively and
efficiently
e) Maximise opportunities for adding social value
3.5
Social value is about looking at the added benefit that we can provide to our residents
and the communities in which they live. Whilst, as a social housing provider we could be
said to produce social value, in delivering VFM, we will also ensure that the potential for
social value is maximised.
3.5
Social Value can be categorised as




Social and economic benefits
Service quality
Environmental benefits
Financial benefits through reinvestment and the knock on benefits to others
4
Delivering Value for Money and maximising Social Value
4.1
The mechanism for ensuring that we deliver effectively is illustrated in the diagram below,
which is core to our business effectiveness strategy.
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Delivering Value for Money
1
Accomplishing
our strategic
objectives
5 An effective
social
business with
excellent
service
Plymouth
Community
Homes -
2 Delivering
our key
activities
A Leading
Housing
Provider
4 Working as
one
organisation
to make it
happen
4.2
3 Managing
all our assets
Strategic objectives
Our approach to ensuring that we meet our purpose over the next five years is based
upon nine objectives which are our agreed priorities. They combine, when delivered
effectively, to produce our social value. These are to:






We will make our homes and our business environmentally sustainable
We will develop more homes and improve our existing stock
We will improve the appearance and safety of our neighbourhoods
We will transform our customer experience
We will work with residents and other agencies to make our communities thrive
We will work in partnership with other organisations to reduce worklessness and
contribute to the City's growth agenda
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


4.3
We will ensure our business remains viable and our Governance arrangements
provide assurance
We will become more enterprising and invest surpluses in our communities
We will be creative in using opportunities to enhance the wellbeing of our
residents and staff
Key Activities
Delivering value for money requires prioritising our activities. Our strategic objectives are
supported by agreed activities, which have been identified, as part of the business
planning process to enable us to achieve our strategic principles. These activities are our
agreed priorities for delivery.
We have engaged with stakeholders, in particular our residents, to establish these
principles and activities. In this way, we are clear that the delivery of these activities
supports stakeholder needs and ambitions.
We focus our investment in these activities, and use a range of tools, including
performance information and benchmarking information, to apportion resources across
these activities.
VFM can only be delivered if our strategies are aligned to an approach that assists us in
delivering our purpose and the associated outcomes.
Strategic framework for delivery of VFM includes










Procurement strategy
Treasury Management strategy
IT strategy
Brand strategy
Risk management strategy
Asset management strategy
Regeneration and Development strategy
Employee engagement strategy
Co-regulation strategy
Subsidiary Company business plans, including, in particular, the Plymouth
Community Homes Services business plans
We also aim to optimise our income (whilst implementing fair collection policies) to
ensure that we are able to fund our activities.
4.4
Effective use of Assets
Ensuring that we provide VFM means that we will target and prioritise investment in all of
our assets in a way that helps to deliver our strategic objectives. These assets include

the housing stock,
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



other building assets, such as our shops, offices, and garages
the land that we own
the people that help to deliver our key activities,
other operational assets, such as our contractors and subsidiary companies.
This means ensuring that we are clear about the value and cost associated with our
assets, and the expected outputs, so that we can ensure that we get the best return.
Housing Assets
Our Asset management strategy provides a framework within which we will manage our
current and future housing assets. The principle of our Asset management strategy is to
ensure that all aspects of delivery from new build, improvement, repair and cyclical
maintenance are integrated into an investment model which will utilise a balanced score
card approach and will take into account each assets environmental, economic and
social value to the organisation.
The strategy is underpinned by stock condition information, and uses sustainability
modelling to help achieve the objectives within the strategy, which are




The achievement of Decent Homes for all properties by March 2015
The disposal or alternative use of any assets which do not meet our environmental
/ economic / social viability criteria
Move towards achieving an average SAP Rating of 81+ (EPC Rating B) across
the managed stock by 2020.
The improvement of the value of our stock through growth and development.
Our Development and Regeneration Strategy identifies that our approach to development
will focus activities in 3 core ways:



Regeneration - Replacement and renewal of Current Stock
Optimising existing land asset
Growth – Partnering with developers, and new land
These two strategies are key to delivering on a number of our strategic objectives, and
are aligned in such a way that they support the agreed outcomes.
Operational Assets
These include our staff and the contractors who deliver services, along with the offices,
plant and equipment used to support that delivery.
We recognise the importance of ensuring that these operational assets are focused on
delivering our agreed activities, and are aligned to ensure that the overall aim is
achieved. We will target investment in these operational assets, to ensure that they
support the delivery of our business plan outcomes and maximise social value. We will
do this by ensuring that
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





4.5
We have a productive workforce, with the appropriate skills and and support to
deliver agreed activities, through the delivery of our employee engagement
strategy, including learning and development plans, and our recruitment process,
Our procurement priorities include a balance of cost and quality, and support the
delivery of objectives
As part of the procurement process, our contractors understand our strategic
vision and add social value where possible.
Our office accommodation through the use of Plumer House, support VFM by
encouraging more effective working arrangements, and that investment in our
offices, stores, depots and customer service points support our overall strategic
objectives.
Our fixed assets are managed and renewed in a way that support the delivery of
our objectives, whilst also delivering a balance of quality and cost.
That our subsidiary companies (Plymouth Community Homes Services,
Regeneration and Energy) also sign up to our approach to VFM, including
business effective systems, and continue to gift aid surpluses back to PCH at the
end of each financial year.
Co-ordinated delivery mechanisms
We recognise the need to ensure that the right delivery mechanisms, (including a joined
up approach to delivering our activities and meeting our objectives) are in place. This
means being efficient and effective.
This includes ensuring that our workforce are productive, and supported by smart
business processes, including lean systems. Our Employee Engagement strategy assists
this process by supporting business performance and service excellence, through
engaged and motivated staff. This includes, for example, a significant learning and
development programme, focused on supporting the delivery of the business plan. Lean
systems are being introduced in Manufacturing, with the potential to extend this across
the Association.
Also fundamental to the delivery of value for money are effective business practices,
including


Ensuring that we are consulting with residents, and use profiling to understand
what residents want
Ensure that there are good governance arrangements in place to oversee delivery,
including good
o
o
o
o
Risk management
Performance management
Financial management and cost control
Income management
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
o Procurement processes
o Transparency, accountability, scrutiny and challenge
Ensure that we work effectively with contractors and suppliers to maintain a
seamless service
We do not work in isolation, and we will continue to work with our partners and
stakeholders to help deliver services. This joint working is often at the heart of adding
social value, be it part of the Lovelife campaign, or working with the Peninsula Medical
School to improve understanding of the links between health issues and social housing.
We also understand that it is important to ensure that the most appropriate delivery
mechanism is used, and that on occasion this may involve outsourcing, or indeed
bringing services back in house.
4.6
An effective social business with excellent service
Our success at delivering VFM is dependent upon not only delivering our strategic
outcomes, but measuring how they were delivered, in terms of business effectiveness.
To measure our effectiveness, we will




Continue to consult with our residents to ensure that our objectives and activities
are what they want, and are delivered in a way that meets their expectations
Continue to benchmark our services against other providers nationally, for cost
and performance /quality
Ensure that performance management measures progress against our objectives
Use Business cases which show
o How proposals are aligned to our strategic objectives,
o Identify what we should get for our money.
o Measures of the success (anticipated outputs and outcomes)


5
Evaluate post implementation against the measures of success, and compare the
cost against the outputs and outcomes –which will give the value.
Through our co-regulatory work with tenants, ensure that the methodology for
reviews includes an assessment of value for money.
VFM Governance arrangements
The Board is responsible for ensuring the delivery of business effectiveness. There is a
requirement to demonstrate to stakeholders how we are meeting this standard, through
the publication of a robust annual self-assessment (see appendix B).
The Executive Management Team is responsible for the implementation of the strategy
and integrating value for money into organisational culture and processes. The Senior
Management Team is responsible for implementation at team level, whilst front line staff
ensure the integration of VFM into day to day work.
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The Customer Assurance Panel (CAP), and the Continuous Improvement Groups (CIGs)
will assess VFM and social value as part of the methodology for their reviews. The
reports from these groups are presented to the Board.
The strategy will be reviewed in conjunction with reviews of our business plan and
strategic objectives.
6
Actions for delivery
6.1
All outline business cases for future spend /additional services must include a case for
delivering VFM and social value
6.2
Board and committee reports must include a completed section on VFM, including social
value
6.3
Review the methodology for Co-regulation assessment of VFM
6.4
Review the implementation of Lean systems within manufacturing, and consider rolling
out similar across the Association.
6.5
Agree a consistent methodology for evaluating post implementation against the
measures of success, and compare the cost against the outputs and outcomes –which
will give the value.
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Appendix A
Required outcomes of the VFM standard
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.
Specific expectations of the VFM standard
Registered providers shall:

have a robust approach to making decisions on the use of resources to deliver the
provider’s objectives, including an understanding of the trade-offs and opportunity
costs of its decisions

understand the return on its assets, and have a strategy for optimising the future
returns on assets – including rigorous appraisal of all potential options for
improving value for money including the potential benefits in alternative delivery
models - measured against the organisation’s purpose and objectives

have performance management and scrutiny functions which
are effective at driving and delivering improved value for money
performance understand the costs and outcomes of delivering specific
services and which underlying factors influence these costs and how they do so.

Registered providers’ boards shall demonstrate to stakeholders how
they are meeting this standard. As part of that process, on an annual
basis, they will publish a robust self-assessment which sets out in a
way that is transparent and accessible to stakeholders how they are
achieving value for money in delivering their purpose and objectives.
The assessment shall:



enable stakeholders to understand the return on assets measured
against the organisation’s objectives
set out the absolute and comparative costs of delivering specific
services
evidence the value for money gains that have been and will be
made and how these have and will be realised over time
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