The document discusses the expectations and evaluations of Value for Money (VfM) self-assessments conducted by housing providers in the UK for the years 2014/15, emphasizing the importance of transparency and continuous improvement. It highlights the key themes of asset performance, cost comparisons, and future goals, noting that some providers have not yet met the regulatory expectations. The updated framework and messages for the next reporting year suggest a focus on risk management and asset understanding.

1. Successful places
with homes and jobs
A NATIONAL
AGENCY
WORKING
LOCALLY
Value for Money in
the HA sector –
An Update 2014/15

2. The self-assessment
 The VfM standard sets specific expectations that a provider’s self-
assessment must:
– 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.
 Accounts Direction specifies that providers must include a self-
assessment in the Operating and Financial Review or Board Report.
 The self-assessment is a key focus of the HCA’s regulatory activity

3. A recap of the 2013 VfM self-
assessment reviews
 First year in which providers were required to submit VfM self-
assessment.
 118 ‘partially’ complaint providers received letters.
 15 providers had governance downgrades.
 ‘Unusual’ year end providers adhered to key messages sent out by
the Regulator following September 2013 reviews.

4. Key messages sent out for 2014/15
 Higher bar was set for 2014 VfM self-assessments.
 Providers should have addressed all weaknesses that were cited in
2013 responses and publicly set out in publications / speeches.
 We expect self-assessments to transparently address all the
requirements of the standard.
 Expectation that providers should develop a strategy to deliver
continuous improvement year on year.
 Regulator would not provide tailored feedback to compliant
providers.

5. How has the sector responded
 Sector has made a step change in its reporting.
 Self-assessments more informed - a better ‘story’ has been told.
 Transparency is still key.
 But Regulator remains unconvinced by some providers.
 To date, eleven registered providers have not met the expectations
set out in the VfM standard – six of these providers had on-going
governance issues.
 View on individual providers has been reflected in governance
judgements/notices where appropriate.
 ‘Unusual’ year end self-assessments currently being reviewed.

6. Key themes – Return on assets
Better Statements
Appreciation of property aligned
with location, type of stock.
Links to delivery of objectives.
Evidence of data to inform
decisions.
Weaker Statements
Little understanding on
variations on asset performance.
Use of assets not considered to
achieve best outcome.
Little progress year on year.
Future actions with no
explanations.

7. Key themes – Absolute and comparative
costs
Better Statements
Quantified absolute cost data for
a wide range of services.
Compared against prior years.
Compared with a relevant and
identifiable peer group.
Costs linked to outputs and
performance.
Balanced narrative.
Weaker Statements
Lower level of detail or none at
all.
Lack of comparative data.
Selective benchmarking.
Poor narrative.

8. Key themes – past gains and future use
Better Statements
Set out timescale for improvement
and resources required.
One off or continuing
savings/efficiencies in terms of
cost or performance.
Savings aligned with
performance.
Measurable targets and
timescales.
Weaker Statements
Isolated examples not aligned
with the business or objectives.
Lack of context to savings
achieved and whether they were
one off or continuing.
Lacked impact on outcomes or
how utilised elsewhere to deliver
objectives.
No targets or timescales.

9. Framework Changes
New Framework published April 2015:
VfM standard remains unchanged;
don’t put assets or viability at undue risk;
active stress testing;
maintain records of assets and liabilities;
skills and capabilities of Board to match activities;
Boards to certify compliance to Governance and Financial
Viability Standard.

10. Key messages for 2015/16
 Further detail included in 2014 Global Accounts.
 What does the future hold:
– Providers are free to publish more detailed material elsewhere. If
this material is clearly sign-posted in the OFR, the regulator will
take it into account.
– Expectation that providers should develop a strategy to deliver
continuous improvement year on year.
– Understanding of assets key to both VfM standard and new
requirement on Asset and Liability registers.
– We are considering our approach to regulating the VfM standard
in 2015/16.