Value for Money Statement June 2017
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- Prosper Bryant
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1 Value for Money Statement June 2017 Page 1 Value for Money Statement June 2017
2 Introduction Plexus UK (First Project) Limited is a not-for-profit registered provider with the Homes and Communities Agency, supplying accommodation to support the activities of local authorities, housing associations and other relevant agencies in providing homes for those households who are homeless or have a high degree of housing need. Plexus was acquired by the Stock Exchange listed Mears Group in July Plexus currently manages in excess of 1500 properties. Plexus aims is to provide good quality social housing by motivating and empowering its staff to be role models, achieving the highest standards of services to customers. Value for Money (VfM) is key to delivering this aim. We work with landlords to identify suitable properties to rent which offer value to Plexus and are competitive to attract the right type of landlords. We pride ourselves in sourcing good quality properties where the landlords take Health and Safety as serious as we do. We consistently achieve 100% compliance on all areas of legislative compliance, including gas safety checks. The Value for Money statement supports the Business Plan and underlying strategies of the Association. As such it forms part of a wider aim to continually improve and enhance the services that Plexus provides by implementing innovative ways of working and new technologies. Business Model Our business model is based on acquiring leases from private landlords for a relatively short fixed term period as well as long term leases on the back of institutional funding to acquire stock. Plexus do not hold any properties on a freehold basis. The long term leases are FRI (full repairing and insuring) leases where Plexus guarantee the rent to the landlord, in many cases institutional investors, as well as all reactive repairs and planned maintenance. Plexus takes responsibility for all Health and Safety matters and ensure that all properties are compliant with current Health and Safety legislation, including gas safety certificates. Plexus has a management agreement with Mears Housing Management Ltd who in turn carry out all the day to day management of the properties, including repairs, rent collection and asset management. Page 2 Value for Money Statement June 2017
3 Tenure types Plexus makes the properties available for homeless prevention and discharge of duty cases nominated by local authorities based on temporary accommodation subsidy arrangements. Plexus also has a small portfolio of PRS properties made available at affordable market rents aimed at key workers or working families on lower incomes. Plexus issues Assured Short Hold Tenancy Agreements, typically on 12 month agreements. Plexus has seen significant growth due to the pressures on local authorities to meet acute housing need as well as its unique funding model making more properties available for a social purpose. Value for Money - Our Approach Plexus believes that VfM is about meeting the needs of residents and other stakeholders by delivering the best service we can using the resources available. We do this by working as effectively, efficiently and economically as possible. Specifically, we: Focus our resources on the right activities; ensuring the properties we manage are maintained to a high standard and tenants and landlords are experiencing first class customer service Invest in technology and developing the knowledge and skills of our staff Check that we meet our goals and learn from our experiences Keep a close watch on cost, value and returns e.g. benchmarking against our competitors where applicable, setting realistic targets for cost reduction and management fees The Value for Money Standard As a Registered Provider (RP), the Homes and Communities Agency (HCA) requires Plexus to keep within its Regulatory Framework. The Value for Money Standard states that RPs are expected to: have a robust approach to making decisions on the use of resources to deliver the provider s objectives, including an understanding of the trade-offs and opportunity costs of its decisions understand the return on its assets, and have a strategy for optimising the future returns on assets including rigorous appraisal of all potential options for improving value for money including the potential benefits in alternative delivery models - measured against the organisation s purpose and objectives Page 3 Value for Money Statement June 2017
4 have performance management and scrutiny functions which are effective at driving and delivering improved value for money performance understand the costs and outcomes of delivering specific services and which underlying factors influence these costs and how they do so Registered providers boards shall demonstrate to stakeholders how they are meeting this standard. As part of that process, on an annual basis, they will publish a robust self-assessment which sets out in a way that is transparent and accessible to stakeholders how they are achieving value for money in delivering their purpose and objectives. The assessment shall: enable stakeholders to understand the return on assets measured against the organisation s objectives set out the absolute and comparative costs of delivering specific services evidence the value for money gains that have been and will be made and how these have and will be realised over time National Audit Office Value for Money Definition illustration: Page 4 Value for Money Statement June 2017
5 What Value for Money means to us As a private RP, economy, efficiency and effectiveness is central to our continued success. We use the principles of commercial awareness to increase our Value for Money whenever possible. Every person in the organisation, from the Chair of the Board to Managers and Administrators are empowered and encouraged to consider the value their actions add to the services Plexus provides. This will ensure Plexus is able to keep to its long term commitments and go from strength to strength, which is in keeping with the Plexus Business Plan. In keeping with HCA regulations, the Plexus Board is committed to: Carrying out an annual Value for Money self-assessment Delivering the regulatory requirements of the HCA in relation to VfM Making decisions on how recourses are used to deliver objectives Delivering business objectives through a culture of performance management Ensuring that every member of the organisation is empowered and encouraged to deliver VfM Ensuring that there is adequate monitoring and scrutiny in the delivery of VfM Delivering Value for Money The Senior Leadership Team is directly responsible for ensuring the delivery of Value for Money throughout the business. This is done by carrying out the following: Performance reviews where portfolios are losing money or performing poorly, setting clear service and improvement action plans as required Overseeing procurement of properties/leases to ensure consistency in approach and best value for the business Realistic target setting for the achievement of VfM savings and improved outcomes Accountability and Ownership reviews for processes and activities The responsibility for delivery VfM lies with all staff throughout the business. We are committed to staff training and development to ensure staff understands the principles of VfM and how their action impact on our successful delivery of VfM. We believe in embedding VfM by ensuring that it runs throughout the business and that staff is focussed on delivering VfM through their goals and objectives Page 5 Value for Money Statement June 2017
6 Staff Remaining financially viable in the challenging market while maximising VfM is a key objectives. To deliver VfM while maintaining financial robustness, we are implementing measures to: Reviewing and changing our operating models to reduce operating costs/deliver greater value from existing resources Update our approach to asset management with the planned implementation of asset management software Maximise our return on social investments Improve the VfM culture within the workforce Financial Summary 2017 to 2019 Financial Year Number of Properties Revenue 13,600 17,000 21,251 Operating Cost (13, 752) (16,923) (20,450) Operating Defecit/surplus (152) Main areas of focus in 2017/2018 Through the continued growth and delivery of our VfM strategy, we are forecasting to have an operation surplus by This will be achieved through a combination of cost efficiencies and economies of scale achieved by growing the business in key areas. The main areas of focus in the current financial year are: Improved management information through our new property management system, Veco Improve customer relationships launching our Customer Insight Strategy to gain feedback from our customers, engaging with us at different transactional points to inform our service development and improvement. Our customer access strategy we will deliver improved access to customers through an enhanced web portal to allow tenants and landlords to communicate with us via a website and through self-service and through Mears 24/7, offering personalised services 24 hours, 7 days a week. Reviewing income collection systems and processes to reduce rent arrears and potential bad debt write offs Introduction of an asset management structure and strategy to ensure there is a coherent approach to planned investment in properties on long term leases which delivers cost effective investment and is informed by responsive repairs history, demand and market changes and legislative requirements. Page 6 Value for Money Statement June 2017
7 Monitoring and Review of Value for Money Statement The Senior Management Team regularly reports to the Board on performance and use of resources. This includes current performance against expectation as well as projections for the coming year, the annual budget process, the asset management strategy, KPI reports and new business. The Board members monitor the effectiveness of the delivering the Value for Money strategy and recommend improvements following scrutiny of performance and delivery. The next review date for the VfM statement is June 2018 and annually thereafter. Page 7 Value for Money Statement June 2017
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