Value For Money: Social Housing Cost Per Unit Rises 12%

The regulator’s annual VfM report shows that the cost rose to £3,690 per unit (sector median) in financial year 2019, up from £3,290 in 2017 and £3,400 in 2018. Meanwhile, the median overall operating margin fell by 5.6 percentage points, to 25.8 per cent, while return on capital employed fell half a percentage point to 3.8 per cent, down from 4.3 per cent and 4.1 per cent in 2017 and 2018 respectively. The falling margins largely reflected increasing nationwide reinvestment into existing stock, lower receipts from first tranche sales in London and the South East, and the ongoing rent cut. Download the report from the RSH website.

https://www.gov.uk/government/publications/value-for-money-metrics-report?utm_source=2cc2b044-cad2-4afe-a93e-3208ed17f72d&utm_medium=email&utm_campaign=govuk-notifications&utm_content=immediate

Sector Needs Improvement On Value For Money Reporting

The Regulator of Social Housing (RSH) has slammed some recent Value for Money (VfM) reports from providers as “less than transparent” in either lacking targets or being defined “vague, generic” objectives. In a report on the reports, RSH says some providers have not met the requirements of the new Standard first time and need to improve. “It is essential that boards and executives ask themselves the right questions to ensure that their organisation’s assets and resources – including those subsidised by the taxpayer – are used efficiently and effectively,” said RSH Fiona MacGregor. Download the report from the RSH website.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/860187/Value_for_Money_metrics_report_Annex_to_Global_accounts_2019.pdf

Help To Buy Scheme Yet To Prove Worth, Says NAO Report

Help To Buy has increased home ownership and housing supply, but many of those using the scheme would have been able to buy a home anyway, according to a report by the National Audit Office (NAO) which has questioned the scheme’s overall value for money. According to MHCLG’s own independent research, 37% of households would not have been able to buy any property without the scheme. The research also found around 60% of buyers could have bought a property without of Help To Buy. It also highlighted that 65,000 households could have purchased a property they wanted without the scheme. Overall take-up of the scheme is said to have been low in less affordable areas where the ratio of house prices to average earnings is higher. Read more on 24housing.

https://www.24housing.co.uk/news/governments-help-to-buy-scheme-yet-to-prove-worth-says-nao-report/

Minister Hits Out At UK Property Firms Over £200m Cladding Bailout

The behaviour of some of Britain’s biggest property owners has been criticised as morally indefensible by the government after ministers were forced to launch a £200m taxpayer bailout to fix combustible Grenfell-style cladding on private residential towers. James Brokenshire, the housing secretary, announced he was diverting public money to make safe about 20,000 high-rise homes, in an embarrassing defeat for the government after a months-long standoff with property firms where many refused to pay. Brokenshire’s plan immediately ran into internal opposition when Melanie Dawes, his most senior civil servant, said it was bad value for money for the taxpayer and regressively diverted money to richer parts of the population Read more on the Guardian website.

https://www.theguardian.com/uk-news/2019/may/09/minister-hits-out-uk-property-owners-cladding-bailout-grenfell

Regulator Changes Accounting Requirements For Housing Associations

The RSH has changed its accounting rules for housing associations in a new direction. The new rules are part of the English regulator’s plan to align its requirements with the Value for Money Standard introduced in April last year. Seven metrics are included in the Value for Money Standard and the regulator will now require housing associations to report their progress against these in their accounts.  As well as this, associations will have to set out “measurable plans to address any areas of underperformance”. Another change has been brought in in light of the deregulation of how housing associations can use funds raised from selling homes. Read more on Inside Housing.

https://www.insidehousing.co.uk/news/news/regulator-changes-accounting-requirements-for-housing-associations-60245

Sector Scorecard Results Reveal Fall In Average Operating Margin

The ‘Sector Scorecard’ figures for housing associations show a fall in the sector’s overall operating margin.  The scorecard, which was developed by housing associations in 2016, provides benchmark figures for 15 areas which are seen as key to housing association business performance. Some of the metrics are used by the English regulator to assess the ‘value for money’ performance of housing associations. Last year the scorecard was piloted with 315 housing associations, with this year’s report taken from data provided by 329, owning 2.3 million homes and representing 80% of the sector by stock. It revealed the average operating margin has fallen more than two percentage points to 27.89% from 30.3% last year. Read more on Inside Housing.

https://www.insidehousing.co.uk/news/sector-scorecard-results-reveal-fall-in-average-operating-margin--59307?utm_source=Housing60&utm_medium=email&utm_content=article_link&utm_campaign=H60

Universal Credit Has Not Delivered Value For Money

Universal Credit has not delivered value for money and it is uncertain if it ever will, the National Audit Office (NAO) has concluded. The DWP has estimated it can make an annual net saving of £8bn, but in a critical report published today the NAO said this “remains unproven”. The DWP has spent £1.9bn to date on the rollout of the new welfare system, which replaces six means-tested benefits. This £1.9bn spend is made up of £1.3bn of investment and £0.6bn on running costs, the NAO said. Download the report from the NAO website.

https://www.nao.org.uk/wp-content/uploads/2018/06/Rolling-out-Universal-Credit.pdf

Regulator’s New Vfm Standard Praised By Housing Leaders

The Regulator of Social Housing’s use of comparative metrics in its new value for money (VfM) standard has been welcomed by housing leaders. The new standard and code of practice will come into effect from 1 April. The standard requires providers to publish performance evidence in their annual accounts against their own metrics and those defined by the regulator, and report how that performance compares to their peers. The regulator has also published seven value for money metrics that providers will be expected to report against. They include new supply delivered, reinvestment, gearing and headline social housing cost per unit. Read more on Inside Housing.

https://webcache.googleusercontent.com/search?q=cache:RlfW0eiHNRIJ:https://www.insidehousing.co.uk/news/english-regulators-new-vfm-standard-praised-by-housing-leaders-55232+&cd=1&hl=en&ct=clnk&gl=uk&safe=vss

Social Housing Regulator Consults On Value For Money Standard

The regulator of social housing has launched a statutory consultation on proposals to revise its Value for Money Standard from April 2018. The proposed Standard is intended to encourage providers to achieve their objectives by making the best use of every pound and every property to deliver more new homes, make improvements to the existing housing stock, and provide better services to tenants without placing additional burden on the taxpayer. The proposed VfM Standard is complemented by a Code of Practice that is designed to help registered providers understand what the regulator is looking for when seeking assurance against the Standard. Download the consultation from the HCA website.

Sector Scorecard Gets Industry Backing

A pilot scheme designed to improve efficiency in the affordable housing sector has received backing from industry leaders. The Sector Scorecard aims to create an agreed set of metrics upon which housing providers can compare their performances and ensure they are providing value for money for their customers.  The scheme has received the backing of Housing Minister Gavin Barwell and NHF chief executive David Orr. The Sector Scorecard will measure 15 indicators across five general areas focusing on: business health, development, outcomes delivered, effective asset management and operating efficiencies. Read more on the Home Group website.

Regulator Warns Housing Associations On Value For Money

Housing associations must improve their performance on value for money evidence, or the regulator will step in, the housing sector has been warned. Fiona MacGregor, executive director of regulation at the HCA, told the Homes 2016 event that the regulator remained ‘very strongly interested’ in value for money and called on social landlords to provide a common framework against which to measure their performance. She said: ‘We are very keen that the housing sector comes up with its own value for money metrics. If it doesn’t though, we will take a look ourselves.’ MacGregor added that she remained ‘concerned’ on the transparency of value for money statements by housing providers and said that many were still ‘weak’. Read more on the Homes Event website.

HCA Announces Tougher New Approach To VFM

The English social housing regulator has announced a tougher new approach to value for money, as research shows “concerning” unexplained cost variations in the sector. Julian Ashby, chair of the HCA’s Regulation Committee, wrote to the chairs of the 350 largest housing associations this morning over his concerns about the sector’s approach towards efficiency. The letters point out the individual landlord’s social housing costs per unit, compared to sector averages. Mr Ashby sets out how the HCA will “reinforce” value for money regulation. Currently, housing associations are required to set out transparently how they measure value for money. However, the HCA will now also look more closely at how well landlords are obtaining value for money in practice. Read more on Inside Housing.

Average Length Of Time In PRS Rises To 14 Years

A survey of more than 800 Private Rented Sector (PRS) tenants has found high levels of satisfaction with rented accommodation – with 90% of those surveyed saying they consider their rented property to be their home. 79% said they felt satisfied with their current landlord, while just 13% said they had ever rented from a ‘rogue’ landlord. Average rents decreased among respondents from £660 in Q3 2015, to £607 in Q4 2015. Those perceiving their rent to be ‘very good’ and ‘good’ value for money increased from 18% and 48% respectively in Q3 2015, to 20% and 49% in Q4 2015. The average length of time spent in the PRS has also risen, from 12 years in Q3 2015, to 14 years, with respondents staying an average of 9.5 years in their current rented properties. Read more on the Best Advice website.

Green Deal Funding To End, Government Announces

The government has announced it is to cease funding for the Green Deal, spelling the end for its flagship energy household efficiency programme. The scheme offers cashbacks and incentives on such things as double-glazing, insulation and boilers. The Department for Energy and Climate Change (DECC) said it took the decision to protect taxpayers, citing low take-up and concerns about industry standards. Labour said ministers' approach to energy efficiency had been a "failure". DECC said it would work with the building industry and consumer groups to agree a new "value-for-money approach". Future schemes needed to provide better value for money, and support the goal of insulating one million more homes and the government's commitment to tackle fuel poverty, it said. Read more on the BBC website.

MP Calls On Watchdog to Probe Right to Buy

A Labour MP has written to parliamentary spending watchdog the National Audit Office (NAO) to call for an investigation into the Right to Buy. Former housing minister John Healey has contacted the NAO outlining concerns about the policy, which he says ‘risks becoming a severe failure of ministers to achieve value for money in public spending’. Mr Healey has estimated, using assumptions about homes sold and how many are likely to be subsequently let privately, that the policy will lead to £1.5bn being added to the housing benefit bill over 30 years. This is because of replacement homes being let at more expensive ‘affordable rents’ and homes sold under the Right to Buy being let privately. Read more on Inside Housing.

Sector-Wide Tenant Satisfaction 'Remains High'

Tenant satisfaction has remained consistent year-on-year, with 86% of housing association customers happy with their overall service. Data from Housemark, which provides benchmarking information to the sector, showed the figure has remained static between 2012/13 and 2013/14. It found repairs and maintenance services were the biggest influencing factor on overall satisfaction across the sector. The next biggest influencer is listening and responding to tenants’ views, closely followed by the value for money of rent and the quality of homes, according to the survey. The data showed 79% of tenants were satisfied with repairs, while 80% were satisfied rent offered value for money.  Read more on HouseMark.

New Independent Report On the Private Rented Sector

A new independent report examines the impact of proposed housing polices on the UK’s private rented sector (PRS).  The report looks at the wider roles and responsibilities of those involved in the rental process and how the PRS needs to change to meet the needs of a growing tenant population.  There has been growing scrutiny of the sector and a call for it to become a more ‘mature’ market offering good value for money together with security of tenure and properties which are let in good condition. The report concludes that while the PRS works well for most tenants and landlords, it does fail a proportion, notably through the condition of rented property and retaliatory eviction.  Download the report from the RICS website.

Social Landlords 'Still Uncertain' About Value for Money Rules

More than half of English social landlords are still uncertain about what they need to do to meet the HCA value for money rules. This is the finding from a survey of 71 landlords. The report found 54% of landlords think the rules are ‘still not as clear as they need to be’. The rules require landlords to produce a ‘transparent’ assessment which enables stakeholders to understand return on assets, sets out costs and provides evidence of value for money gains. Of the 38 landlords who say they are uncertain about what’s required, 22 cited the requirements on return on assets as the most problematic area. Read more on Inside Housing.

Council to Fill Housing Void Left by RtB Sales

A council that has lost nearly 200 of its homes to right to buy in the last two years has announced plans for a large housebuilding programme to fill the void. Stevenage Borough council has laid out plans to build 1,900 new homes, around 550 of them in the next ten years, to fill the void left by RtB sales. The plans also include continued significant investment in existing council homes to maintain their quality and sustainability, and a new programme - 'Decent Neighbourhoods' - which the council says will complement the decent homes programme and improve residents’ quality of life. The plan also focuses on value for money for tenants and leaseholders paying rent and fees. Read more on 24dash.

UK's Private Renters Being Ripped-Off By Letting Agents

A majority of the UK's private rented sector (PRS) tenants believe that the fees charged by letting agents are poor value for money. A Populus survey found that 60% of PRS tenants believe they have been overcharged by letting agents - and a quarter said they were unlikely to use the same letting agent again based on their previous experience. Those polled said that they didn't believe more government regulation would offer a solution. Read more on 24dash.