Appendix 2: Value for Money Self-Assessment Report Executive Summary ‘Our Direction’ During the past year we have developed ‘Our Direction’. At Halton Housing Trust we do far more than provide homes - we improve people’s lives and that’s what we need to do more of in the future.
We've used Scenarios to help us consider how things might change over the next five to 10 years. We've produced different pictures of the future based on those external factors, which will have the most impact on us and our customers; the strength of the economy and the government’s approach to housing and welfare reform. What's really clear is that we cannot stand still or ignore what’s going on around us.
There are lots of opportunities to build on our success to date but we need to make good decisions which take into account a number of different possible futures. So, we've identified four Priorities: 1. We need to protect current income; 2. We need to reduce our costs & drive efficiency; 3. We need to focus our resources and services; 4. We need to generate new income. We expect to make more progress in the short term on the first two Priorities; the other two will probably take more time but will have a significant contribution over the long term.
There are two Principles, which will help us put these Priorities into practice:
First Principle: We all make choices;
Second principle: We must all take responsibility.
We’ll use these two Principles, when we’re working with our customers.
Some things will need to change and some decisions will be difficult. Every six months we will revisit our Scenarios looking for anything new on the horizon, which might alter our plans. We will also review how we’re performing to see if there are any improvements we can make. We’ll then make changes as appropriate. Whatever happens, we will not lose sight of what we’re all about - Improving People's Lives
Value for Money Our Priorities are linked to a series of strategies and projects that need to be implemented in a timely and ordered way.
We use our Project Management
Framework to make sure that our projects are managed in a controlled manner. Any savings we make are reinvested into the achievement of our four Priorities.
We have developed a suite of 17 key performance indicators that link to our four Priorities. These performance indicators are reported to Board in accordance with the reporting frequency of each indicator.
Each year, as part of our annual budget setting and business planning process, we produce service area plans that identify the objectives to be achieved and the resources that are to be used for the forthcoming year. Performance against the annual budget is discussed at each Board meeting. The budget is reviewed every six months and the Business Plan is updated on a regular basis as the need arises.
The Scenarios, Priorities and Principles will underpin our approach to value for money. By using ‘Our Direction’ our Board has a basis for making decisions using a
framework that is cascaded, understood and utilised throughout all levels of our strategic, operational and decision making processes.
This Value for Money Self-Assessment Report summarises our approach to value for money and includes;
Our approach to value for money;
Our use of resources during the past year;
Our arrangements to ensure the delivery of value for money;
Our achievements during the year and the plans for future years.
We have done this by examining our key areas of activity right across our business;
Services to our Customers
Corporate Social Responsibility
We have established a subsidiary company Open Solutions (OSUK) Ltd that is delivering and developing commercial activities that will provide a return to the Trust to reinvest in the delivery of affordable homes and services for our customers. Any new opportunities are assessed through our new business gateway model to ensure that we have rigorously assessed the investment risks and returns and adequately appraised alternative delivery models.
Our focus is on delivering the services that our customers need. We aim to provide good services that are both affordable for ourselves and our customers. We asked our customers if they feel that the Trust offers value for money for the rent that they pay. We are proud that 93% say that we do, and that 92.7% would recommend us as a landlord to a friend or family member.
We are developing and investing in new homes and our existing neighbourhoods. Using the capacity within our Business Plan we are continually assessing what, how much and when we can deliver more. We want to be able to continue to build more properties in the future and we know that we will have to invest more resources in collecting our income as a result of Welfare Reform.
We are using a Portfolio Asset Value Evaluation System (PAVE) to understand the overall performance of our property assets and to identify those homes that produce high and low returns. This system will be linked to our Asset Management Strategy to help us to focus and make decisions about how we invest in our homes and neighbourhoods.
We have a strong Scrutiny Panel, which is an independent body of customers. They review service areas and make recommendations that will improve our services. They have completed in-depth reviews of responsive repairs, voids and lettings. Currently they are undertaking a review of our Enquiries, Complaints and Compliments process.
Services to our Customers We provide services to over 14,000 people who live in our 6,401 homes. These services are primarily delivered from two locations, one in Widnes and the other in Runcorn.
The service area teams are led by the Executive Director of Customers Services who is supported by two directors; the Director of Housing Services and the Director of Construction Services.
The main activities undertaken within this area are;
Allocations and lettings
Repairs and maintenance
Neighbourhood and scheme management
Customer Relationship Management Overall 88.8% of our customers tell us that they are satisfied with the services that we provide to them, 95% are satisfied with the way that we keep them informed about the things that might affect them and 85.8% say that we take their views into account.
As a result of what our customers have told us, our ICE Programme (Improving the Customer Experience) is being implemented over a number of phases and is delivering savings and improving how we do things.
We have invested in our telephony and services offering as 81.4% of our customers tell us that they prefer to contact us by telephone. We answered 98.5% of all calls and resolved 87% at the first point of contact.
We have brought our services
together into two main customer contact points, which is realising savings of £120k per year on our office costs.
We have implemented a new housing management system that is much more fit for purpose for the future than what we had before and is centred on customer relationship technology.
All of our systems will become fully integrated, which will
increase functionality and visibility whilst reducing support and maintenance costs. To date further efficiencies of at least £120k per year have been identified that will begin to be realised in 2014/15.
Welfare Reform and arrears Our greatest threat is Welfare Reform.
We anticipate that our bad debts will
increase and we continue to review the provision within our Business Plan. We also recognise that staffing, mobile technology and collection costs may increase by up to £500k per annum. Any additional costs will have to be funded from the savings that we have made in other areas. To mitigate the potential increase in costs we are
undertaking a review of our arrears processes. We aim to automate as much of our process as possible to make better use of systems and digital technology and to increase field activity. Added to this we are reviewing our policies and procedures including lettings, rent setting, rent and arrears collection and write offs to ensure that they are all fit for the future.
We are working hard with our customers to keep them informed and to help them to make changes and plan for the future. Our three welfare benefits money advisors have generated £870k potential annual gains for customers including £200k in back pay and lump sum payments in benefits and provided advice to 1,083 customers. We know that around 900 of our customers are affected by the implementation of the Under Occupation Deduction, which amounts to c£700k of our income.
We keep a register of customers who want us to help them to get back into education, training or work and we are working with local partnerships and businesses to find opportunities. This has resulted in a database of 178 customers who we are working with to find opportunities.
We continue to develop partnerships and we have a place on the Board of our local Credit Union in which we have agreed to invest £100k. We are working with them to develop payment accounts and facilities to provide affordable white goods and furniture.
Lettings We have re-let 581 of our properties this year. During the year we have launched our Choice Based Lettings scheme, Property Pool Plus (PPP). There is now one waiting list, one policy and one application form for customers in Halton. In addition there have been savings achieved in the procurement of the ICT system of £17k. There are on-going operating efficiencies and the income generated from the partnership working is used to fund the additional staffing costs to deliver a more comprehensive and efficient service across the borough.
Services for older customers The overall picture across Halton is one of a population that is ageing and where the demands on health, care and housing will become increasingly acute. It is predicted that between 2012 and 2030 the number of people above the age of 65 will increase by 53.8% many with mobility, dementia, learning disabilities, depression and long term illnesses.
As a result we have reviewed our service for older people. We have concluded that we need to change our service delivery model. We are working towards delivering a much more flexible service that is tailored to the individual and removing the tie to accommodation with the aim of being able to offer a range of support to customers as their needs change. This will require a more innovative approach to funding, and a more flexible use of our homes. We aim to deliver our new approach without any extra cost to a greater number of customers based on the assumption that we continue to receive the same level of Supporting People funding.
Grounds Maintenance Our grounds maintenance service was being delivered by a third party contractor but our customers were telling us that they were unhappy with the service. We are now delivering the service in house saving ÂŁ40k per annum. This has been challenging over the first 12 months and during the wettest summer on record. In 2012 81.1% of our customers told us that they were happy with the service. We expect to see a significant increase in satisfaction when we next survey our customers.
made significant improvements in how this service is delivered and we are looking to extend the services that we provide in house and to third parties.
We have reduced our carbon footprint by reducing our waste costs by ÂŁ4k per annum. We have also re-invested some of our savings in additional machinery so that we can carry out tree works in house saving a further ÂŁ24k per annum.
Repairs and Maintenance 98.11% of our customers are satisfied with how we deal with repairs and maintenance
In response to customer demand, we have moved to just two repairs categories – emergency and appointment. The new approach is enabling us to provide a better level of customer service and helping us to improve maintenance technician productivity through better work planning, reduced level of calls to the Customer Services Team chasing follow up work and reduced levels of ‘no access’ calls. We have completed 94.5% of repairs on our first visit and 98.3% of non-emergency repairs within timescales.
This initiative is part of a much wider range of
improvements to the repairs service, including: removing the nine day fortnight by creating fixed teams for each work remit, introducing a tools allowance saving £9k over three years, improving customer information so they are clear about what to expect from us and what we expect from them; expanding the use of Opti-time and handheld technology to improve productivity; reducing the cost of our van fleet, and making sure we are optimising our investment in multiskilling. Overall 92.9% of our customers say that they would recommend the Trust as a landlord.
We employ around 260 people.
Our employees are primarily located in two
locations, at Foundry Lane in Widnes and at Daresbury Point in Runcorn.
We are governed by a Board of 12 people and we have an Executive Team that comprises of the Chief Executive, Executive Director of Customer Services and Executive Director of Business Services.
The focus on maintaining high levels of employee satisfaction continues to be a priority for us. We recognise that satisfied employees are more likely to perform better. Overall employee satisfaction levels are high across the organisation, 75% of our employees tell us that they “love working for the Trust”. We were awarded a “Ones to Watch” accreditation in the not-for-profit category of the Times Top 100 Best Companies survey. Our average staff turnover is 7.48% for the year and we
employ 269 permanent staff, eight of which are apprentices. We are also Investors in People accredited.
We have an employee performance development review process, which involves two formal performance reviews per year and regular 1-2-1 informal meetings throughout the year to discuss performance and progress. Personal objectives are set and monitored through the process and objectives are directly linked to our Business Plan. This ensures focus and productivity is directed towards our priorities.
Mobile and flexible working has been implemented right across all business areas. This means employees are able to work more flexibly and spend more time with customers at a time and place convenient to them.
In 2012 our Flexible Working
Survey identified that 68% of employees said they were more productive when working flexibly. 48% of employees said that flexible working enables them to work when they may otherwise have been off sick (i.e. working from home/shorter working day).
The average numbers of days lost to sickness absence are 8.9 days. This is higher than our target of 7.2 days but is a significant improvement on the previous year. We are closely monitoring all sickness absence and in particular our long term sickness cases. We encourage the utilisation of flexible working to minimise short term absence cases to improve our productivity.
Our managers are playing a
significant part in reducing sickness absence together with our health and wellbeing programme.
We have extended our intake of apprentices and since 2009 we have recruited a total of 13 apprentices in a mix of trade and office based roles. In 2013 we expect to recruit seven apprentices. Where we meet the relevant criteria, we access funding to support the apprenticeships through a local Apprenticeship Grant which provides a grant of up to £3,000 for each apprentice.
In 2013 we were shortlisted for a
number of local and regional apprentice awards.
One of our former apprentices
received the award for ‘Best Apprentice/New Starter 25 and over’ in the Women in Construction Awards 2013.
Our Assets We own and manage around 6,400 homes located in the Cheshire towns of Widnes and Runcorn. Almost all of our homes are for general needs. These homes are those received under the original transfer, less the properties sold through the Right To Buy (RTB) initiative plus those homes developed and acquired since the original transfer.
Our assets are maintained primarily by our in-house Construction Services team with support from external contractors as required.
We have an active development programme and during the last year we completed the construction of 79 new homes including the completion of our first extra care scheme, Naughton Fields in Widnes.
Overall 88.2% of our customers tell us that they are satisfied with the overall quality of their home and 89.9% tell us that they are satisfied with their neighbourhood as a place to live.
Asset Management We know that the value of our housing assets based on an existing use - social housing rent basis is £132m. Our stock condition information is updated formally every five years and we have made full provision in our business plan to complete whatever works are necessary over the next 30 years.
We are using our data to establish an asset model called PAVE (Portfolio Asset Valuation Evaluation) to help us with our strategic investment decision making. This modelling is helping us to analyse and understand the valuation of our homes at varying levels and to conduct ‘what if’ scenarios to test our long term business planning assumptions. We will use it to identify our underperforming assets, to direct our resources and make strategic interventions. The early analysis of the model is telling us that the valuation of our stock is accurate and that there are no areas of concern.
We are also reviewing our “Halton Standard” with a view to releasing
capacity that can be redirected our business plan to other activities. This work will provide the basis for our Asset Management Strategy that we are refreshing.
Investment Programme To underpin our approach to asset management we have a three year investment programme.
This is enabling us to plan our internal resource requirements and
contract procurement in a much more constructive and effective way.
Our Construction Services team are completing more works in house.
they undertook £4.6m of improvement works in addition to their day to day and planned repairs work. This will increase to £7m over the forthcoming years, which will realise VAT savings of approximately £400k per year. Our aim is to increase our skills base and bring other subcontracted works in house in the future.
undertaken a review to identify the best method/s to demonstrate and monitor Value for Money to identify a ‘Fair Price’.
This Fair Price will be identified through
benchmarking in a manner that will enable the fair market price to be established for key components within each year’s Investment Programme for both standard decent homes components and any specialised works.
We will review the fair price
annually. We have moved to 100% surveys for our properties that are included in the annual Investment Programme, all of which is undertaken in house.
Not only does this
improve our knowledge of our assets and our customers but it also enables us to confirm access to undertake work and reduce the levels of no access and set our programme ahead of the budget setting process so that we can budget our resources accordingly.
We have delivered the 2012/13 decent homes programme within budget and customer satisfaction with the Investment Programme is 93% and the quality of the work has reflected in generally achieving zero defects.
We identified and negotiated £210k of electric sub mains works with Scottish Power to our flatted blocks.
The Trust did not have to contribute towards this.
provided our customers with a more robust energy supply.
The Environmental Improvement Programme (EIP) works comprise of the removal and replacement of the existing boundary walls metal fencing and gates to the front and pre-treated timber fencing to the rear.
We have ensured that small, Halton
based businesses are involved in our EIP. Over £350,000 worth of orders for the manufacture of metal fences, galvanising and powder coating were placed directly with businesses operating within a Halton postcode. As a result the local supplier has employed an additional six people.
Energy Efficiency We are continuing to develop a more joined up approach to energy efficiency. We secured Community Energy Saving Programme (CESP) funding of £245k on a project of £400k, which was used to subsidise the costs of external wall insulation and boiler replacement to 36 flats. We estimate that our customers will save £185 per year as a result of this work.
Insulation works worth £26k were completed under Carbon Emission Reduction Target Funding (CERT) with funding from EDF for 66 cavity walls and 34 lofts where there was previously no insulation. We estimate that the loft works will save each customer £85 per annum and the cavity wall insulation £53 per annum.
Although the vast majority of our homes have already been insulated as part of our decent homes programme resulting in a SAP rating of 77 we are continuing to explore further opportunities for cavity and loft insulation under the Energy Company Obligation (ECO), which replaces CESP & CERT for insulation and heating so that any additional works to our homes may be fully funded.
Void Properties We have introduced a safe, clean and clear void standard as our minimum that is varied according to the ease of letting and the customer’s circumstances. We are letting more void properties on a ‘back to back’ basis, which has helped to reduce our void loss to 0.8% of our rental income. Overall our average void cost is £991 with a turnaround of 25 days.
New Development This year we commenced building of 90 new homes and we have completed building of 79 new homes for our customers including our first Extra Care Scheme, offering accommodation for 47 customers to live supported in their own homes. We have purchased a further eight homes through mortgage rescue and 171 homes through stock rationalisation.
We are exploring funding opportunities as they become available so that we can deliver more homes using the sites that we have identified for development.
have a contract with the HCA to build 125 new homes by March 2015.
In partnership with the Plus Dane Group Consortium we have driven down the build costs of our planned developments by 15% from £1,360 per m2 under the National Affordable Homes programme 2008-11 to £1,160 per m2.
By working with this
consortium we have been able to reduce costs through a diverse and innovative approach that includes large-scale procurement through the Innovation Chain North West 2011-15 OJEU-compliant Framework. This multi-scheme procurement through a single contractor has enabled design efficiencies and value engineering.
Corporate Social Responsibility (CSR)
For every £1 that we spend with our contractors (internal and external) 1% is protected in a fund that we call ‘Transforming Lives’. This year we have generated £35k.
We will continue to use this fund to support projects that will assist our
customers; examples of the things that we do include respite care, community sponsorship and community payback.
We have an extensive ‘Worklessness’ programme to support our customers into training, employment and education. We invest directly through an internal budget of £40k and through the use of our internal resources to support the work we do. In 2012 we supported nine customers gain employment and 13 customers have received funding for training through our Bursary Scheme. A total of 68 customers have received training from the Trust which equates to 114 places on training
courses and events we have delivered or that we have funded an external provider to deliver. We have also been successful in creating work experience opportunities both internally at the Trust and externally.
One of our customers who had been
unemployed for over eight years joined us on a work experience programme in 2012. He has since been employed on a seasonal contract for 2013.
We are reviewing our approach to CSR over the next 12 months to make sure that we are focusing our services and resources on those activities and initiatives that add the most value to the Trust, our employees and our customers.
Our Finances Headline Results 2013
Surplus / (deficit) for the year
Turnover Operating costs
Revenue reserve at 31 March
Treasury Management We have a current loan facility of £75m. We are continually updating our Business Plan and we are planning to build more new homes. As a result we project that our borrowings will increase to £75m by February 2014. We have plans to grow and develop further and we are exploring the financial opportunities to increase our borrowings to utilise the capacity within our asset valuation of £132m. By the end of March 2013 we had drawn down £40 million from our fixed term loan facility and £17.5 million from the revolving loan facility. The loans drawn down were lower than budgeted and at an average interest rate of 3.67%. We are reviewing our funding options for the future before we commit to any further longer term fixed rate debt. Whilst we maintain a higher proportion of variable rate debt we continue to benefit from the current relatively low variable interest rates.
Long Term Financial Planning We consider that the financial parameters that are set in the Business Plan are prudent. They will be used to manage cost and income expectations in future years. Cashable savings or additional costs from strategic projects have been included within the plan as per the table below:
Investment Programme VAT saving from more works in house Beyond The Garden Gate reduction
Additional costs for Welfare Reform have also been incorporated into the Business Plan and the Budget. This increase is in two elements. The first is an increase in the
management/employee costs as detailed in the table below (before inflation):
uplifted from 1% to Increase in bad debts Increase
Rents During the last year we disaggregated the service charge from the gross rent. This was done in such a way as to minimise the number of customers who would end up paying more than they did before disaggregation. Not only is this a requirement of the regulator but it also enables our customers to see exactly how much they are paying for the services. This provides them with information that they can use to make their own value for money assessment of the services provided.
We charge our rents over 48 weeks. The average rent for a general needs home is £82.98, supported housing £72.54 and affordable rented home £109.63.
customer survey tell us that 92.9% of our customers are satisfied that their rent provides good value for money and 90.5% that their service charge provides value for money.
Absolute and comparative costs of delivering services Our analysis of operating cost per unit using the methodology that was used by the CIH in their publication “Does size matter” shows that our gross operating costs per unit have decreased over the last three years from £3,872 per unit to £3,726, compared to the average association at £3,787.
A number of headline indicators and our forward budgeting are included in the table below:
2010/11 (actual) 2011/12 (Actual) 2012/13 (Actual) 2013/14 (Budget)
Number of properties Income per home Void loss per home Bad debt charge per home NIF costs per home Management costs per home Repairs costs per home Interest cost per home Debt per home
6143 £3,697 £33 £24 £2,081 £1,099 £497 £251 £7,398
Annual increase/decrease % Income per home Void loss per home Bad debt charge per home NIF costs per home Management costs per home Repairs costs per home Interest cost per home Debt per home
6,171 £3,956 £41 £38 £1,661 £1,128 £575 £299 £7,859
6,401 £4,141 £34 £25 £1,818 £1,114 £626 £302 £8,983
6,426 £4,333 £43 £71 £1,925 £1,211 £591 £371 £11,438
7.02% 23.69% 59.27% -20.16% 2.63% 15.72% 19.13% 6.23%
4.66% -15.50% -34.76% 9.44% -1.22% 8.90% 1.27% 14.30%
4.65% 24.97% 188.05% 5.88% 8.75% -5.68% 22.61% 27.33%
Procurement activity We have analysed and profiled our expenditure to categorise active suppliers and produce a directory of active suppliers to assist our employees to procure goods and services efficiently and in line with EU requirements, risk management and benchmarking activity. Our procurement activity has included; in house construction services team market rates, construction materials, office supplies, out of hours call handling,
management, environmental improvement
programme, van fleet, sheltered housing review and our warden call service.
We are currently consolidating our procurement documentation, outsourcing the materials stores and tendering for mobile phones and lifts in our only high rise accommodation building.
As a result we have achieved the following cashable and non-cashable savings and efficiencies
environmental improvement programme
£51k by value engineering of materials
£40k from the cleaning contract
£11k by reducing material costs for composite doors
Improved risk control across the supply chain
Introduction of category management approach to expenditure to enable a more holistic approach to strategic purchasing decisions
Better visibility of active suppliers and distribution of expenditure
More robust approach to ensuring EU compliance
Access to benchmarking data to inform purchasing priorities
We have a number of procurement activities planned including, rationalisation of service contracts to optimise efficiency, legal and insurance re-procurement renegotiating our development consultants costs rates.
and agency temporary labour