Are you meeting the VfM standard? You can use the Global Accounts from the RSH to check!
By Alistair McIntosh, HQN CEO
You’ve got to be on top of VfM. Ask anyone that’s been through an IDA. It’s top of the agenda. You will get a grilling on:
- Your understanding of your own costs
- Making sure you are spending the right amount on keeping the homes safe
- Knowing who your peers are and why costs differ
- Taking steps to save money without putting safety at stake
- Whether you are building as many homes as you can.
Your board need to have the facts and figures at their fingertips. The answers to many of these questions can be found in the Global Accounts.
Does it look like you are spending more than others on managing the homes? Do your repair costs seem very low? You will be asked to justify these. So, you must get ready for this.
It could be that management costs are high because your tenants need more care. Or your stock survey may say you need to do less work than others. But you must be precise in what you say. If your figures look odd, you will be asked why.
Ian Parker, Lead Associate of the HQN Housing Finance Network, has taken the Global Accounts data from the RSH and turned it into an easy to use model. You can see at a glance:
- Where you sit on all of the VfM metrics against the entire data set
- How you compare to any group of peers you choose
- Graphs and charts of these comparisons that can go straight into board reports and your accounts
- A breakdown of your cost per unit across – for example – management, maintenance and service charges
- Your rates of building social and non-social housing versus others.
This will give you a great start on getting to grips with your VfM. It will also help with preparing for the sorts of league tables that are mooted in the Green Paper. (Do take care though. The costs for this year are worked out on a different basis than before. The RSH asked you to exclude leasehold homes sold through the RTB or 100% staircasing this time around. All things being equal this will lead to some higher costs per unit.)
Ian’s model also lets you compare and contrast key data from the financial statements you send into the RSH. The VfM Code of Practice says you do need to consider whether you are better off standing alone or merging. And this is one way of starting to think about the pros and cons. You can see whether there is any scope to do more if you pooled your financial strength and asset base.
These new models are available to members of The Housing Finance Network – if you’d like to join, or simply would like more information on these models or the network, then please visit the website here or get in touch: firstname.lastname@example.org / 01904 557150