Value for Money Standard – Maximising your VFM results

The Regulator of Social Housing (RSH) recently published its report “Value for money metrics and reporting 2019” which is an essential read for all Registered Providers (RPs).

The RSH recognises that Registered Providers face numerous challenges including, but not limited to, the demand for affordable homes and the costs related to improving cladding to meet new building safety standards. Better efficiency through the VfM standard will help RP’s face these challenges efficiently and proactively. The VfM Standard was updated in April 2018 with the hope that it would assist RPs to further maximise their use of assets and resources and help with the delivery of their objectives.

The RSH has identified the following trends in its analysis of the VfM data in 2019:

• There has been stable performance at an overall sector level for the past three years;
• Increased investment back into existing stock, lower receipts from first trance sales and ongoing rent reductions have all contributed to a slight fall in operating efficiency indicators;
• Providers have increased capital expenditure across the cost distribution in relation to reinvestment in stock;
• The average rate of new housing remains at 1.5% of existing stock which has been a consistent level subject to some variation by region and size;
• Different types of RPs have shown variation in performance, particularly among smaller RPs who are more likely to provide specialist care and support.

The RSH has also identified the key areas of weakness from its analysis and in the light of these we have set out below some ways that you could improve reporting on the VfM Standard in your organisation:

• Make sure that you have, and are able to present, clear strategic objectives that relate to social housing;
• Following the above, ensure that you have measurable targets that are suitably aligned to these objectives;
• Be sure to provide full and specific information about investment plans and decision making. Steer-clear of providing non-specific information;
• Make sure that there are clear and transparent explanations where performance targets have not been met and also a detailed explanation of how these could be improved;
• If you are changing the classification of homes between categories or adjusting cost allocations, make sure that you are providing adequate supporting reasoning as to why this change is appropriate.