Revised Value for Money Standard
Does it feel like you could be going in the right direction at last? As ever, the devil’s in the detail, as Mike Victory Rowe, SDS Asset consultancy, explains…
The Homes England consultation to strengthen the Value for Money (VfM) Standard ended on Wednesday 20 December 2017 and Homes England are currently analysing feedback and the new standard. The proposed Standard would move their regulatory approach away from the existing, primarily narrative, self-assessment to a more focused reporting approach.
Homes England continues to place value for money at the heart of the business, moving away from self-assessment to more outcome-based reporting on targets, including a suite of metrics and new associated Code of Practice.
Julian Ashby’s (Chair, HCA Regulation Committee) opening sentence at the Consultation on the Value for Money Standard was that providers needing to make the best use of every pound and every property is the key to delivering more new homes, improvements to the existing housing stock and better services to tenants without placing an additional burden on the taxpayer. The revised VfM standard strengthens the requirements for Board accountability and enhances transparency through a focused, outcome-based approach to measuring and reporting the value for money gains.
It will be essential to ensure that your Board has both understanding of and confidence in the data and business intelligence associated with your property portfolio performance, investment and appraisal decisions. The revised standard explores in more detail some of the factors that Boards should consider when undertaking a ‘rigorous appraisal’ of all potential options for improving performance and delivering their strategic objectives. Boards will need to consider how to make the best use of its assets in contributing to an organisation’s broad business objectives through retention in their existing use, conversion to another tenure, or outright disposal.
Providers will be expected to set targets to measure and evidence performance in achieving VfM to ensure the best value is derived from assets in the delivery of strategic asset management. One of the required outcomes for providers will be to demonstrate that you have a full understanding of the return generated from your assets compared to the costs of maintaining those assets. You will have to show how this return varies across your asset base, according to tenure, stock type or geographical location. There is a requirement in the proposed standard to invest in your existing homes but also evidence your decision to retain assets that don’t maximise their return for your business.
So, what next?
“I don’t need to know everything; I just need to know where to find it when I need it.”
In terms of achieving the VfM standard, knowing where to find your asset data is essential if we are to truly understand your asset performance and deliver VfM solutions. Accessible and relevant data on how your assets perform and the ability to complete rigorous appraisal is critical.
What if your data was meticulously cleansed to ensure it was accurate and accessible, giving you all the information and data needed at the touch of a button?
That would give your board the confidence in knowledge and evidence to set strategic goals that are right, both for now and in the longer term.
So, what can you do to address this?
What if every member of your team had access to the data they needed, when they needed it, across function and level in the organisation? Imagine the greater transparency if it was immediately available how much a property cost to maintain, what should happen to it in the future and what factors were causing it to perform as it does? Then you could model alternative options to either improve the worth of performing assets or realise its value by disposal to build new homes.
SDS StockProfiler can support this process enabling housing associations and local authorities to KNOW your stock, INVESTIGATE anomalies and ACT to deliver value to your organisation. Supporting the change required to improve your VfM strategy and make good strategic decisions regarding future investment, obsolescence, disposal and growth.