Board Value for Money
Self-Assessment
September 2013
Aldwyck Housing Group
ALDWYCK HOUSING GROUP
BOARD VALUE FOR MONEY SELF-ASSESSMENT SEPTEMBER 2013
Statement from Aldwyck Housing Group’s Board of Directors
Aldwyck Housing Group is governed by a Board of Directors with responsibility for strategic
oversight of the Group’s activities. The Board considers Value for Money to be a key area for
the Group and its customers and is committed to securing year on year improvements in this
area.
Why is Value for Money important to Aldwyck Housing Group?
Value for Money has always been a key area of focus for Aldwyck Housing Group but the
current economic climate makes it even more important that we adopt a comprehensive and
strategic approach to getting the most from the Group’s resources. The Group has limited
income and long term funding obligations, so must ensure that all expenditure is considered
fully and carefully. Aldwyck recognises that to ensure Value for Money where the Group is
resourced constrained means comparing the relative costs and outcomes of different
activities being planned across the Group.
From April 2013 Aldwyck Housing Group, as with all Registered Providers of Social Housing,
is required to carry out a robust self-assessment indicating how well we are meeting the
Homes & Communities Agency (HCA) standard on Value for Money and how wisely we
spend the money our customers give us through their rents and service charges.
This first annual self-assessment comes in two parts.
Firstly in June 2013 the Board reviewed and approved the existing Value for Money
Strategy. This document sets out what Value for Money means for Aldwyck Housing Group.
Importantly this document recognises that Value for Money is the relationship between cost,
performance and quality of the service being provided. Value for Money is high when there is
an optimum balance between all three such that the group provides services at a relatively
low cost, with high productivity (performance) and with successful outcomes (quality).
The second part of our self-assessment is contained within this document, which explains
how well Aldwyck Housing Group meets the HCA standard.
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ALDWYCK HOUSING GROUP
BOARD VALUE FOR MONEY SELF-ASSESSMENT SEPTEMBER 2013
Our costs and our performance
Aldwyck has benchmarked its costs and performance against both the sector generally,
based on the latest “2012 Global Accounts of Housing Providers” published by the social
housing regulator the HCA, and against a smaller peer group of registered providers in our
local area through our subscription to HouseMark. Aldwyck is part of a peer group of 21
social landlords in the local area (covering the Eastern region and North London). This peer
group has been chosen to be large enough group for a meaningful comparison and includes
social landlords with a unit size of several thousand to around 50,000.
Indicators of operating performance
The table below sets out Aldwyck Housing Group’s indicators of operating performance
against those published in the “2012 Global Accounts of Housing Providers”.
Indicator
Aldwyck Housing Group
Sector
Average
2013
2012
2012
0%
0%
1.9%
Voids for the year
1.44%
1.47%
1.75%
Bad debts for the year
0.24%
0.23%
0.8%
4.1%
4.2%
4.8%
Stock failing to meet Decent Homes Standard
at year end
Current tenant arrears at year end
Aldwyck’s indicators of operating performance in 2012 were better than the sector average
for each of the four indices detailed above. The Group has no properties which fail to meet
the Decent Homes Standard and voids/bad debts and arrears performance is well below the
sector average.
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ALDWYCK HOUSING GROUP
BOARD VALUE FOR MONEY SELF-ASSESSMENT SEPTEMBER 2013
Financial highlights and key financial ratios
The table below sets out Aldwyck Housing Group’s financial highlights and key financial
ratios against those published in the “2012 Global Accounts of Housing Providers”.
Indicator
Aldwyck Housing Group
Sector
Average
2013
2012
2012
Operating margin
41.4%
39.5%
23.4%
Growth in turnover
6.8%
7.6%
8.7%
Growth in total assets
6.6%
12.2%
5.6%
38,477
37,204
18,372
Debt per home (£)
A key element of Value for Money as detailed in the HCA Standard is for social landlords to
obtain a detailed understanding of both their absolute and comparative costs. Aldwyck has
concentrated on cost control for many years and the Group’s operating margin is a key
measure of focus for both management and the Board. This key ratio is derived from audited
statutory accounts and measures the total cost of providing services including overhead.
Aldwyck is ranked 3rd in our local benchmarking group through HouseMark (out of 21 social
landlords) and is in the top decile (top 10%) nationally for this indicator.
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ALDWYCK HOUSING GROUP
BOARD VALUE FOR MONEY SELF-ASSESSMENT SEPTEMBER 2013
How we compare against other social landlords
One way of looking at our costs and comparing them against other organisations is to
calculate the cost per property of the various activities we undertake. This ensures, as much
as possible, that a like for like comparison is being made across different landlords. The
HouseMark benchmarking service calculates costs in this way and once this has been done
it is possible to see which landlords are performing best (those in the top quartile) and those
that are performing least well (those in the bottom quartile). Some of our results compared to
our benchmarking group are shown below.
Housing Management - Total cost per property
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ALDWYCK HOUSING GROUP
BOARD VALUE FOR MONEY SELF-ASSESSMENT SEPTEMBER 2013
Major & Cyclical Works – Total costs
Overhead costs as a % of adjusted turnover
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ALDWYCK HOUSING GROUP
BOARD VALUE FOR MONEY SELF-ASSESSMENT SEPTEMBER 2013
Quality and customer satisfaction
Value for Money is not just about costs; we also need to take account of quality and
customer service satisfaction when assessing our performance. In the past Aldwyck has, in
common with other social landlords, participated in a biannual survey of tenant satisfaction.
In an effort to get more timely feedback on our customer satisfaction data the Board has, in
the last 18 months, asked the management team to move away from this approach and
towards conducting a smaller number of surveys on a continuous/rolling basis after a
customer has received a service from us, for example when they have had a repair done.
The questions used include those used via the STATUS/STAR surveys added to by bespoke
questions requested by the Board. Some of the results of these surveys are shown below:
• 87% of customers were satisfied with the most recent repair that had been performed
(up from 82% in 2012)
• 83% of customers are satisfied with the service provided by Aldwyck
(up from 80% in 2012)
• 86% of customers are satisfied with the quality of their home
(up from 71% in 2012)
The results of these surveys will inform us more quickly of areas in which we need to
improve our customer service. The Board recognises that we need to “get better at what we
do” and within Aldwyck’s Corporate Strategy 2013-2016 we have set ourselves a target to
achieve 90% overall customer satisfaction by March 2016.
How our assets perform
We know from the information we receive from our staff and customers that some properties
are more expensive to repair and some are less popular than others. In a number of
instances we have taken the decision to sell individual properties where the repair costs are
high or where there is no demand from customers wishing to rent properties from us. A
number of projects are ongoing to convert bedsits into flats; places where people want to
live. In addition, Aldwyck is engaged in a review of the financial performance of its properties
by comparing the future rental stream for each property with its projected costs of
maintenance. The outcome of this, together with layering information about our local
communities (such as instances of antisocial behaviour) will form an integral part of our new
Asset Management Strategy.
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ALDWYCK HOUSING GROUP
BOARD VALUE FOR MONEY SELF-ASSESSMENT SEPTEMBER 2013
Social and environmental impact
Social and environmental value can be a difficult to quantify, certainly in financial terms. For
this reason we have chosen not to attempt to monetise every example of the value created.
The major social value we create is clear, in meeting the long term housing needs of almost
25,000 customers. We believe that the quality and security of this accommodation leads to a
range of benefits including improved health and well-being and general quality of life. In
addition to this we detail below some case studies of other examples of our social and
environmental work.
Welfare reform
Prior to the implementation of welfare reform the Board made a decision to invest in a
Housing Debt Advice team to support individual arrears cases, to help resolve benefit
entitlement issues and prevent evictions. The team has provided frontline support to
residents, both from the start of new tenancies and to existing customers. The direct
financial impact on the Group has been to mitigate the budgeted increase in arrears. But in
addition to this there have been substantial additional benefits for a number of our customers
themselves through increased benefit entitlement.
The additional support provided by the Housing Debt Advice team has allowed the Rent
Services team to work more closely with residents in managing payment agreements, as
evidenced by the arrears performance trend analysis remaining stable despite the
implementation of welfare reform. To date there has been no increase in the number of
evictions in comparison to figures from previous years.
Youth and antisocial behaviour interventions
Aldwyck Housing Group recognises that youth nuisance and antisocial behaviour impacts
not only on the communities in which we work, but on the organisation as a whole. The
Group has developed an in-house intervention and preventative delivery model to combat
such issues working closely with community groups. Delivery of these programmes provide
great financial savings compared to outsourced products and ensures that the needs of our
whole community are met, which is not always the case with external delivery partners.
These initiatives demonstrate a measurable decrease in antisocial behaviour/youth nuisance
complaints, a reduction in vandalism costs and other intangible benefits. In turn these
initiatives have also shown a decrease in rent arrears and voids against an increase in
customer satisfaction ratings relating to their communities.
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ALDWYCK HOUSING GROUP
BOARD VALUE FOR MONEY SELF-ASSESSMENT SEPTEMBER 2013
Building for life
The Group submitted a proposal to St Albans District Council to provide a small number of
apartments that would be targeted at older residents, to take full advantage of the
surrounding families. The proposal includes a second benefit, whereby it allows the Local
Authority to target initial lettings at older single residents who have existing tenancies in
large family houses. The scheme has allowed the Local Authority to offer modern
accommodation that is seen as more attractive to older residents, and thereby releasing
much needed family accommodation for other families in housing need.
The internal design and fit out of the scheme enables the units to be fully adaptive to meet
older clients future needs. All units are wheelchair accessible with a lift servicing the 2nd
floor. The flat layouts are designed to accommodate wheelchair turning areas and special
provision was allowed for any future potential adaptations, for example knock-out panels to
bedrooms and the provision of tracked hoists. Drainage was provided so that baths can be
easily adapted into walk-in showers. The aim of these properties is to provide a home for life
set within a busy and active neighbourhood.
The development incorporates solar panels to the slate roof which provide hot water to each
flat. The systems are independent and serve each flat separately. This cuts down on the
running costs for the residents and reduces the impact on the environment. Timber frame
construction uses timber from sustainable sources. High levels of thermal insulation and
energy efficient boilers have been used, the dwelling emission rates achieves a 25%
improvement over the requirements of Part-L of the Buildings Regulations and the project
has achieved Level 3 of the Code for Sustainable Homes.
St. Paul’s Place in St. Albans was awarded the Building for Life Silver Standard and
achieved 14 of the 20 Building for Life criteria.
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ALDWYCK HOUSING GROUP
BOARD VALUE FOR MONEY SELF-ASSESSMENT SEPTEMBER 2013
Some of our other successes to date
Asset management and development
•
•
•
•
We have achieved cashable savings of over £1m by renegotiating some of our
development contracts
We have also made savings on our VAT payments by turning our subsidiary Lea
Valley Developments into a design and build company. This is estimated to save the
Group £200,000 each year
Connect Property Services (our repairs subsidiary) saved over £300,000 last year by
hiring more operatives and using fewer subcontractors whilst still providing the same
level of service
Connect Property Services also saved £115,000 by joining CHIC (Central Housing
Investment Consortium), a group of landlords who purchase materials and service
contracts together in order to secure bulk buy savings.
Housing
•
•
•
•
We have re-tendered our gardening and grounds maintenance contracts, reducing
the number of contractors from over 200 to just one supplier for part of our stock
locations. This process, only recently completed, is intended to both save money and
increase service standards
We have invested over £50,000 in refurbishing our residential care home at Celia
Johnson Court. Anyone interested in accessing our Older Persons Services can now
apply online through Hertfordshire County Council’s emarketplace
We have added a number of new posts including two Housing Debt Advisors and a
Youth and ASB Intervention Officer. These posts are critical to ensuring our
customers are assisted through the significant changes arising from welfare reform
and reducing levels of anti-social behaviour within our communities
Better void management has reduced the number of days taken to re-let a property
from 23 days in 2011/12 to 21 days in 2012/13. This compares to an average of 27
days to re-let a property for the sector generally. For each day a property is vacant
we lose £53 of rental income and two days reduction in the length of re-let equates to
an annual saving of £60,000.
Finance
•
•
We have renegotiated a number of our significant contracts including those for
insurance and internal and external audit services. Annual savings are expected to
be in the region of £40,000
The Group entered into a number of swaps in 2007/2008 as part of a de-risking
strategy against upward movements in interest rates. During the year we entered into
a number of interest-offset swaps which has led to a saving of over £1m in our
annual interest bill. During 2012/13 our loans increased by 5.5% but our interest bill
rose by only £8k (or 0.4%).
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ALDWYCK HOUSING GROUP
BOARD VALUE FOR MONEY SELF-ASSESSMENT SEPTEMBER 2013
How we monitor performance
Aldwyck has developed mechanisms for monitoring performance generally and for
scrutinising performance in relation to Value for Money. The Board takes a keen interest in
ensuring that Aldwyck delivers services that our customers consider to be of good value.
The Board receives and reviews (through our Service Delivery Committee) key performance
data on a quarterly basis and have access to monthly performance packs that are reviewed
by the Executive team.
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