Transcript Proposed SHBVN/HouseMark Agreement

The new normal
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new relationship between individual and state
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unemployment, welfare, exit other services – risk to revenue
cutting deficit, cutting grant, HAs carry more debt, more risk
• lender behaviour, covenants, no cheap finance
• global finance, Eurozone stabilising?
• regulation reduced, refocused, follows the money
• rents still pegged to RPI phew
• trimming costs, cutting cloth, surpluses up
• demand for social housing high & rising
• tenure flexibility offers opportunity
• competition from new entrants too early to tell
…..end of the world as we know it but the sector’s
getting on with it and managing the risks
VFM: business imperative
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regulation takes its cue from new normal:
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‘lever’ to improve taxpayer’s return on
embedded public £s
promotes active asset management, backed
by tenure reform
but VFM standard has broader perspective
tension between existing & potential tenant?
social business imperative: VFM generates
margin to keep delivering objectives
smaller HAs need a compelling value
proposition and evidence to back it……
….customer focus, responsiveness,
specialism, localism, health & well-being?
What are they looking for?:
economic regulation in practice
integrated assessment based on 8
questions
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understand operating environment?
appropriate strategic business plan?
financial plan?
risk management?
robust approach to VFM?
track record of achieving objectives?
transparent & accountable – challenge
drives improvement?
• effectively led and controlled?
VFM standard: requirements
• boards understand and deliver VFM across
operations (people) and assets (property)
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in the context of the provider’s purpose
mindful of stakeholder interests & 3 Es (includes
benchmarking)
involves understanding the ‘return’ on all resources
available, expressed in financial, social,
environmental & (service quality) terms
• annually self-assess VFM & make it publicly
available
• VFM was about the cost & performance of
services but this is wider – the whole
business
• reality check – are we really talking about
business effectiveness here?
VFM standard: implications
• as a basis for active regulation – intrusive?
• as a set of (voluntary) principles to ensure (social) business
effectiveness - good practice?
• should herald genuine board engagement in strategic business
planning:
• boards define VFM (business effectiveness) in their own image
• essential to assert a clear vision of what they value (are in business for)
• taking account of the value perspective of different stakeholders
• more strategic debate about running the business
• total VFM = bigger picture - forces challenge of previous ‘givens’
• the right activity or product mix to meet business objectives, eg social rents,
care, affordable homes, services, regeneration…….tenure fits here
• the right resource allocation between activities
VFM standard: implications
• appetite for risk – a clear position
• understand which opportunities you go for
• understand the business case
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the right housing assets (in the right places)
the right service delivery system
efficient & effective service delivery
the right information to make business decisions –
includes systems for capturing investment & operational
costs & measuring the success of that investment
• board competence - skills to provide strategic leadership,
challenge & ask the right questions
• requires investment of time – on strategic business
issues and in skills development
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