VFM Strategy 2014/15 1. Introduction Trent & Dove s Approach to VFM
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1 VFM Strategy 2014/15 1. Introduction 2. Trent & Dove s Approach to VFM 3. Setting of Priorities 4. Best Practice Achieving VFM 5. Responsibilities 6. Reporting 7. Impact of VFM Strategy in 2014/15 Appendices i Value for Money Standard 1
2 Aim of Strategy: To maximise VFM throughout Trent & Dove. 1.0 Introduction 1.1 The Government s review of social housing regulation resulted in the new regulator being more proactive in its approach to regulating VFM. The revised Social Housing Regulator s Value for Money standard requires registered providers to articulate and deliver a comprehensive approach to achieving value for money in meeting their objectives, taking into account the interests and commitments to stakeholders. This means managing resources economically, efficiently and effectively to provide quality services and homes, and planning for and delivering on-going improvements. See Appendix i for the new standard. The VFM standard was effective from 1 April The HCA is responsible for monitoring the implementation of this standard. 1.2 Boards are expected to be responsible for meeting expectations of the standard and to be accountable and transparent. In the first year, 2012/13, the regulator reviewed the extent to which Board and Executives are taking on the VFM agenda. Those providers who were found to be failing to engage with the new requirements had their governance assessment downgraded. 1.3 Over the current year the regulator will be looking for evidence that Boards are driving the VFM agenda across their organisation and that they are thinking strategically about achieving VFM in their activities, asset base and operations. The new regulation and focus is on an organisation wide interpretation of VFM, not just service delivery. The regulator has made it clear that failure to demonstrate appropriate focus in the VFM Self Assessment will result in governance being downgraded. 1.4 The purpose of this Strategy is to set out how Trent & Dove intends to meet the VFM standard. This Strategy is updated annually. 2.0 Trent & Dove s Approach to VFM 2.1 Trent & Dove s current approach to ensuring VFM is delivered is shown in the diagram below: 2
3 Board Executive & Staff Tenants Strategic Priorities Company Plan VFM Approach The key is to establish clear strategic priorities and incorporate them into the Company Plan such that the best means of delivery can be identified and actioned. In terms of identifying priorities and desired outcomes, consideration always needs to be given to Company Values which underpin all activities. It is vital that planned outcomes take fairness principles, valuing customers and staff, and serving and engaging with local communities fully into account. 2.2 Trent & Dove uses the traditional 3E s (Economy, Efficient and Effectiveness) Value for Money model, and has further defined the attributes that make up these three headings. 2.3 Trent & Dove s understanding of value for money can be shown as follows. a) Economy Cost and Sustainability 3
4 We consider economy from two perspectives; we want competitive prices from our suppliers, and we want to do things in a sustainable, sensitive and inclusive way for the local economies we operate within. When we assess costs, we assess our people s time and investment as well as input costs, and the return on any investment in equipment, IT etc. Sustainability means we are sensitive to our environments, be they regulator, community, economic or physical. As noted in 4.3, Trent & Dove s emphasis on reducing its impact on reducing the environmental impact of its operations is detailed in its Environmental Policy. b) Efficiency Simplicity and Timeliness We consider efficiency from two perspectives; we want simple, easy working relationships with our tenants and suppliers, and we want to do things without delay. Simplicity means we get things right first time together; we do things in a consistent way, and we work to reduce waste. Timeliness means we make things convenient for each other; we do things when we say we will and we do not over-elaborate or complicate things between us. c) Effectiveness Satisfaction and Quality We consider Effectiveness from two perspectives; we want customers to be satisfied with what we do and we want to maintain an agreed level of quality. Satisfaction means we communicate clearly between our tenants, our partners and ourselves; we set mutual expectations properly, and we/they do what we/they say. Quality means we set out standards (for instance what every litter pick should achieve) and specifications (when and where we want things done), and then routinely adhere to them. 3.0 Setting of Priorities 3.1 Resident engagement and consultation are key in setting VFM priorities. Satisfaction surveys such as the STAR Survey can highlight perceived shortfalls in service delivery and reveal areas where Trent & Dove can deliver greater value to its customers. Focused surveys, such as those carried out at Resident Fun Days can help identify customers priorities. A new Resident Involvement and Governance structure was put in place in 2012 in response to the Localism Bill. The Performance and Standards Group (made up of tenants) has responsibility for monitoring performance, service standards and prompting 4
5 improvements while the Policy and Scrutiny Group (made up of tenants) influence the business planning process. 3.2 Benchmarking information is used to identify areas where cost and/or performance could be improved. A full analysis is undertaken on an annual basis with an action plan proposed. This is considered by the Executive and priorities identified. The analysis is also included with budget instructions as a factor to be considered when setting budgets. 3.3 A comprehensive business planning process is in place. This consults with stakeholders and results in priorities being set for future years. This is focused on service and delivery improvement whilst maintaining financial robustness. A PESTOT analysis is carried out as part of the planning process and this ensures that priorities are considered in the light of the operating environment. Priorities are evaluated by the Executive team and presented to the Operational Forum before being approved as part of the Business Plan by the Board. 3.4 A well established Value for Money Working Group also helps deliver key company objectives from a VFM perspective, with the aim of prioritising and embedding VFM activities throughout the organisation. 4.0 Best Practice Achieving VFM 4.1 Self Assessment of VFM and Understanding the Cost Base The use of Housemark and other benchmarking tools allows Trent & Dove to form a good understanding of its VFM performance and direction of travel. Comprehensive budgets and management accounts lead to a good understanding of the cost base and costs associated with the delivery of services. Work is currently being undertaken to appraise the financial performance of Trent & Dove s housing stock at a more detailed level. The resulting analysis will make clear which units are Trent & Dove s most valuable assets and those where future options need to be considered, regeneration, remodelling, disposal etc. Further work is also being undertaken to assess the social value and impact of Trent & Dove s activities, especially those where revenue streams only cover direct costs. The demand for these services by tenants is high suggesting a high value is placed on these services, but a more objective way of appraising the benefits is being considered. 4.2 Recording of VFM Efficiencies and the Embedding of a VFM Culture A major project took place in 2012/13 which started to embed VFM across the organisation. All account managers were tasked with recording VFM efficiencies and progress such that this information can be collected and communicated to the Board. This project continued into 2013/14 encouraging accounts managers to take greater ownership of VFM reporting and utilise Covalent as a means of 5
6 communicating initiatives. The VFM Working Group also has a key role to play in managing VFM initiatives and embedding a VFM culture across the organisation. Trent & Dove has used a VFM survey which indicates the level of understanding and embeddness of VFM across the organisation. This can be carried out at appropriate intervals to monitor progress. 4.3 Strategic Decision Making and VFM Policies, procedures and strategies are in place to support Trent & Dove deliver VFM. These are regularly updated and include:- Financial Regulations to ensure robust financial management. Procurement Strategy to ensure effective purchasing. Asset Management Strategy to ensure properties owned contribute most effectively to corporate objectives. This ensures our main assets are deployed for maximum effect. Risk Management Strategy to ensure risks facing T&D are appropriately responded to. Personnel Policies to ensure effective staff recruitment, retention, training and development. New Business Appraisal Procedures to ensure new opportunities are appraised in a robust way such that scarce resources are used to deliver maximum VFM. Environmental Policy Equality and Diversity Policy 4.4 Target Setting and Monitoring of Efficiencies and VFM The Board approve performance targets and annual KPI s when reviewing the annual Business Plan. Housemark analysis provides guidance as to areas Trent & Dove might seek to improve, targeting areas for attention. The VFM Working Group also sets targets for key projects, defining how services will be delivered more effectively. With VFM being embedded to account managers, this will be another source for identifying targeted improvements. 4.5 Service Reviews to Challenge Current Service Delivery The Business Plan details many initiatives taking place during the year. Many of these are of a service review nature, eg voids process improvement, improved repairs appointments, making better use of mobile IT etc. VFM is a key component of these reviews and will be pursued through a range of assessment techniques including cost and quality benchmarking, customer feedbacks, impact assessments and process reviews. 5.0 Responsibilities 5.1 The Board is clear that VFM is a core responsibility. The VFM Strategy is approved by the Board and reports are brought regularly to update progress. Trent & Dove s Values include Striving for Excellence and VFM in everything we do. 6
7 5.2 The HCA are expecting Boards to complete an annual self assessment of VFM. This self assessment forms part of the operating and financial review section of the statutory audited financial statements, and can be supplemented by further information on the internet. Failure to complete a satisfactory self assessment is deemed to be a failure of Governance and will result in a downgrade by the HCA. 5.3 The Executive have a responsibility for ensuring operations are carried out in a way that demonstrates VFM and embedding a VFM culture. 5.4 The VFM Working Group promotes VFM across the organisation ensuring there is good communication across different functions. 5.5 Managers have responsibility for ensuring all staff are targeted in their performance reviews with delivering VFM for Trent & Dove s customers. VFM is a regular standing item on Executive and Team agendas. 6.0 Reporting 6.1 Board reporting consists primarily of strategy updates together with progress on delivering key targets and objectives. Housemark results form part of the reporting. In addition, all reports are now required to detail how VFM will be impacted. The year end accounts for 2013 included a section on VFM. A more detailed supporting report will also be prepared in 2014 to support the report in the Financial Statements. 6.2 Staff are updated on VFM matters in team briefs and Company wide updates which are held twice a year to share objectives and progress made. 6.3 Customers have VFM information presented to them in the Annual Report. VFM is also a key consideration in the Local Offers which are also included in the Annual Report. This demonstrates our commitment to improving services, raising satisfaction levels and driving down costs. 6.4 The Performance and Standards Group forms part of our new Resident Involvement structure. Performance against the new standards, including VFM, will be reported to this group. 7.0 Impact of VFM Strategy in 2014/15 It is anticipated that the VFM Strategy will result in the following outcomes in 2014/ The stock evaluation project is now underway and will report its findings in This will greatly improve Trent & Dove s understanding of return on assets, a key driver in developing a more commercial approach to its asset base. 7
8 7.2 Higher value properties are currently being identified such that disposals can be considered when they become void. The resources generated will be deployed in a more effective way in delivering Trent & Dove s objectives. 7.3 Work is on-going in the area of capturing the social value of Trent & Dove s activities where income only covers direct costs. This will complement the work undertaken which reviewed the costs and income of Trent & Dove s different activities. A report is due to be taken to the Board in May VFM reporting will be developed in 2014 to develop the Self Assessment such that it fully meets the HCA requirements. 7.5 Provision of VFM information to stakeholders is to be reviewed with improved internet content and annual report information being developed. 7.6 Housemark Benchmarking will continue with reports being produced and reported to the Board. This will be used to challenge and drive improved value for money. Trent & Dove are also taking part in a back office benchmarking project which is being led by B3 Living. 8
9 9 Appendix 1
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