10am - Keynote Panel Discussion
and Q&A
“State of the Nation”
Chair: Afzal Ismail, Managing Director, Service Matters
Paul Tennant, Group Chief Executive, Orbit Group
Gavin Smart, Deputy Chief Executive, CIH

STATE OF THE ‘HA NATION’
Paul Tennant, Group Chief Executive

Environment
Rents ONS Lending
VRTB Image Regulation
Welfare Model Needs & Aspiration
Risk Uncertainty Capacity
A challenging and rapidly changing situation

Drivers for our Business
What we must, want and should do
More homes Flexibility
Range of homes Efficiency
Profit Innovation
Certainty Stability

Relationships with LA’s
Loss of s106 Homeless
Sales for RTB’s Land deals
Reduced grant Partnerships
A difficult relationship – less homes?

Land Owners
Rising demand Public land
Margins up Land for homes!
Price up
Costs may rise production could fall

Working with Developers
Controls lessened SHI
Viability up HTB
Options with SHI Partnerships
We need to share the solution but play fair

Opportunities
Develop our model Partnerships key
Grow our offer Position & value
Change our approach Culture evolution
We must build on our offer and values

Orbit
Make the future as best we can
 Transformation – business and model
 Financial strength – key
 Profit – critical message
 Partnership and delivery – focus
 Culture change – essential
 Innovation and new thinking – exciting
 Campaign and promote – intelligence

Conclusion
Housing strategy that houses people!
 World change for all – apply to HA’s
 Policy barrage – make best of it
 Adapt and deliver – moral role
 Capacity and outcomes – pressured
 Increasing inequality in market
 Opportunities are there – make it happen

11:35 pm - VfM self-assessment:
update from the HCA
Adele McNamara, Head of Strategy Analysis and Value
for Money, Homes and Communities Agency

Successful places
with homes and jobs
A NATIONAL
AGENCY
WORKING
LOCALLY
Value for Money –
An Overview
Adele McNamara
22 February 2016

The requirements of the VfM 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.
 No prescribed approach or measurements that must be used.
 Accounts Direction specifies that providers must include a self-
assessment in the Operating and Financial Review or Board Report.
 Supporting documentation reviewed BUT must be linked.

What is the aim of the VFM
standard?
 That boards have a comprehensive and strategic view on VFM
related to their objectives and how they best use the range of
resources available to them to achieve those objectives.
 They operate as efficiently, economically and effectively as
possible.
 They consider best use of their assets and seek the best strategy
for delivering value from them whilst meeting their objectives.
 They are transparent and can be held to account by key
stakeholders.

How do we measure compliance under
current regulatory approach?
I. Stability Check – Transparency/ wider intelligence
II. IDA’s – Board Assurance/ more in-depth review
 Revised Accounts Direction from April 2016 –
Providers are free to publish more detailed material elsewhere.
If this material is clearly sign-posted in the Board report /OFR,
the regulator will take it into account

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.

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.
 SROI/ Environmental Returns
reported
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.
 Key measurements not explicit

Regulator’s expectations on
approach to Return on Assets
 Its not just about setting out a ratio!
 Specific requirement within the VFM standard that a provider
should enable stakeholders to understand the return on
assets measured against the organisations objectives.
 Expect providers to have an intelligent approach to the use of
its resources, including consideration of trade-offs and
opportunity costs.
 Assurance that providers have strategy for optimising return
on assets, including appraisal of all potential options for
improving VFM.

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.

Response from the Sector since
the standard was introduced
 Sector has made step changes since 2012 in its reporting
 Self-assessments more informed - a better ‘story’ is being told
 BUT to some degree still a lack of transparency
 Variety of approaches and reporting methods
 Quantity over Quality!

1pm - Sink or Swim:
Using Lean to drive a commercial, customer
focused culture
Elly Hoult, Head of Business Development & Improvement,
Service Matters
Simon Shewry, Interim Head of Business Assurance,
Yarlington Housing Group

Sink or Swim:
Using Lean to drive a commercial, customer focused
culture
Elly Hoult, Head of Business Improvement, Service Matters
Simon Shewry, Interim Continuous Improvement & Scrutiny Manager,Yarlington Housing
Group

About Orbit
• 39,000 homes
• 1,300 staff
• 120 LAs
• 3 stock transfers
• Multi-regional

Our 2020 Goals:
• Deliver 12,000 new
homes
• 75% of customers
online
• 90% customer
satisfaction

What is Lean?
A systematic approach to continuous
improvement that focuses activities on
reducing waste to deliver what our
customers value most.

Improvement systems are
widespread

Think customer,
think end to end process
Unaware
Many organisations only
operate at a functional
level - with no
awareness of the
processes that run
through them
Journey to a Customer-Centric Organisation
Management
World class process
management puts the
customer at the centre
of the organisation
Awareness
Implementing a process
infrastructure builds
awareness of the end to
end customer viewpoint

Who knows best?
Empowering those involved in the process to work together to improve it

Using Lean to drive a commercial,
customer focused culture at
Yarlington
Yarlington and Service Evolution.
Why do we use Lean?
1. Because it makes commercial sense!
2. Because of political expectations on cost
3. Because it can drive cultural change.

Discussions
• What is the role of leaders in delivering and
supporting efficiency programmes e.g. Lean?
• What are the challenges leaders face in
implementing transformation programmes?
• What approaches have worked for you and your
organisations?

Top Tips
• Exec buy-in
• Process ownership
• Resourcing improvement
• Agile implementation
• Lean training for leaders
Its OK to make mistakes!!!

Thank you
Any questions?
@houltelly
elly.hoult@orbit.org.uk

2pm - How to drive up satisfaction and
drive down cost when delivering multi-channel
customer service. Is it really possible?
Colette Flattery, Head of Customer Service, Service Matters
Ivo Kerkhof, Head of Prodo Housing, Prodo Housing

Advancing your digital strategy, whilst
increasing customer satisfaction &
saving moving
Is it really possible?
Colette Flattery, Head Customer
Service Centre
Ivo Kerkhof, Head of Prodo Housing

The Expectation – quite a tall order
• Deliver channel shift
• Improve customer satisfaction
• Reduce operating costs
• Increase staff engagement

Digital Journey – the strategy and
the operating model
• Made web chat available for all but used a
targeted approach when promoting it
• Blended web chat with email
• Created a multi media team who specialise in web
chat, email and social media
• Preserved phone service level
• Introduced AHT as a target

Digital Journey – the strategy and
the operating model
• Reduced CPC by circa 50%
• Delivered channel shift of 13% in 14/15 on
target to deliver channel shift of 20% in 15/16
• Approx. 50 chats per day
• Reduced email response times from 3 days
to 4hrs

What did it mean for our customers?
Customer
Satisfaction
goes from 32%
to 89% if an
issue is
acknowledged
and resolved in
real-time
BAIN & COMPANY

BAIN & COMPANY
• Valuable goods
• Happy
customers
• Cost effective
serving
• Reputation
• Valuable
• Effortless
experience
• Individual,
empowered to
choose
• Feelings
Relevant
Low effort
In the
moment
Authentic

Resolution Team
• Deal with escalations from within the
CSC
• Proactively contact customers who have
given a low score on feedback
• Proactively contact customers who’s
verbatim comment needs further action
• Provide valuable customer
insight

• 91% of the outcomes from the Resolution Team have
been positive
• Quality standards have been written to reflect the
expectations of the customers and to drive increased
customer satisfaction
• Used the Voice of the Customer - Areas of dissatisfaction
are fed into the organisation & partners to drive
improvements
• Customer satisfaction scores of 92% in 14/15
How have we done?

Why what we believe is so important…
Recent research from Curo revealed that tenants
want…
A human touch at the initial interaction
Not to be left hanging on
To help you, especially the loyal ones
Well trained and empowered staff…

CONTACT BABEL
88.6% of contact
centre execs
believes customer
experience strategy
is a priority only
58.7% believe
employee
satisfaction is
being considered

Engagement
• Customer satisfaction is a KPI in everyone’s objectives in the
CSC
• Feedback is reviewed daily individually and in teams
• Created friendly competition
• Recognise top performers
• Feedback is within 24hrs
• Advisors have access to their own dashboards

Highly engaged employees lead to
a 20% reduction in customer
complaints and an increase in
customer loyalty
Highly engaged employees
lead to a 20% reduction in
customer complaints and an
increase in customer loyalty
2014 FORBES
ARTICLE

In Summary
- Communicate in REAL-TIME – using
digital & feedback
- Engage & Empower the FRONTLINE
- Always ACT!
- Make the experience EASY
-Be brave & have FUN !

Designing
better online
experiences
Ivo Kerkhof
Head of Prodo Housing,
Prodo Digital

18
YEARS
YOUNG
92
%
CLIENT
RETENTION
300
+
WEBSITES
BUILT
34
HOUSING
SECTOR
CLIENTS
2000+
PROJECTS
DELIVERED
2OFFICE
S
1
ENGAGEME
NT
BUS
58
AMAZING
PEOPLE
7
DESIGN &
UX
EXPERTS
8
IN HOUSE
DEVELOP
ERS

Consultancy
- Digital consultants
- UX and CRO
- Client Services
Development
- Design and
development
- Project management
- Technical Support
Reach & Convert
- SEO
- Social
- PPC

User Centric
Design
Techniques

Analytics / SurveysCustomer
Engagement

http://www.prodohousing.com/community/roi-
Ensuring
ROI

2:55pm - Innovation Lab
Exploring future delivery models for
corporate services in housing
Julian Beaney, Business Services Director, Service Matters
David Leach, Operations Director, Orbit Group
Sharron Webster, Partner, Trowers & Hamlins

Exploring future delivery models for
corporate services
Julian Beaney, Business Services Director, Service Matters
David Leach, Operations Director, Orbit
Sharron Webster, Partner, Trowers and Hamlin

Our agenda
• Insights
• Debate
• Challenge
• Opportunities

Can we answer these questions?
• Are we kidding ourselves that we are as efficient as we think?
• Are we open to new ideas …really?
• Can our current risk appetites enable us to work differently?
• If you started with a blank piece of paper would you look like?
• Are we all making a million and 1 excuses for not making
changes?
• Can we continue to use the same excuses from 2 years ago?
• We are not efficient enough as a sector… are we asking the
right challenging questions?
• Do we have a new target operating model post Autumn 2016
• Yes…. But…no …but…..maybe?

Digital disruption or more of
the same….
David Leach, Operation Director
@leachdj

Not every customer contact is the same
Specialist
Strategic
Transactional
Self Service
CostsVolume

Work is what you do, not where you go

A blank sheet of paper……..

Questions?
David Leach
@leachdj

Service Matters – Ideas Lab 2016
Innovation Lab
Sharron Webster – Partner, Trowers and Hamlins LLP

Exploring future delivery models
What else is out there?
What are the trends?
What’s likely to be on the horizon?
Examples are not exhaustive

RP1 RP2 RP3
Cost
Sharing
Vehicle
Cost sharing groups
• Isos/ Two Castles (gas servicing)
(soon to be a second generation
CSV)
• Mosscare/ St Vincents
• East Thames/ Triathlon (housing
management)
• Guinness/ Westward/ Teign (gas
servicing) (second generation csv)
• Aster/ English Rural (audit and
rural development)
• Fortis/ Rooftop (R&M)
• bpha/ Flagship (housing
management)
• Watford Community/ Thrive (R&M
and apprenticeship)
• Housing co-operative/ multiple
members (multiple services)
• DCH/ West Devon

● Cost sharing group between Fortis and Rooftop
● Has achieved everything it set out to:
• increase turnover and greater efficiencies
• spread of overheads across a wider business base
• increase the number of trades staff and apprentices within
our growing workforce.
• share knowledge and expertise through a long term
partnership
• improved maintenance services to customers
● Business growth from £15-18 mil in 18 months
● Contributes £1m of £3 mil planned efficiency savings

Wholly-owned subsidiary model
Client
Wholly-Owned
Subsidiary of Client
Contractor
Management of
Employees

Strategic alliance
● Shared governance
● Shared staff
● Shared operations
RP2Contractual
Strategic alliance
RP1

● Strategic alliance of two smaller RPs
● Shared governance and staff
● Easier and cheaper than merger
● Allowed bedding down time
● Lower impact on loans
● £350k sustained savings per year

Merger - the Isos-Cestria partnership
● Cestria - strongly performing organisation but drive for
efficiency and capacity
● Also greater range and depth of skills and knowledge -
growth and diversification
● Approached as a genuine partnership despite the
difference in scale
● Both partners had complimentary skills
● Set out to achieve annual efficiencies of c £2m by
year 5, and after 12 months c£1.1m have already
been delivered

Developing a new operating model
Julian Beaney, Business Services Director

Changing our mindsets…..
….. Are we making the next leap?

Developing a new operating model

Moving away from silo thinking

Developing your new operating model
 Environmental analysis
 Evaluation of business drivers
 Refining the vision
 Defining our change drivers
 Outcomes to achieve
 Strategies to deliver
WHY
WHAT
HOW

Challenge and Opportunities
• Why   
• What ??
• How ??

Over to you
• What ……
– new operating models or blueprints are we
considering?
• How…..
– are we overcoming challenges and
obstacles?

101
Service Matters
Ideas Lab
22nd February 2016
Chris Mansfield

102
In this session, I will cover:
•Who are Hargreaves Risk and Strategy?
•Current / emerging risk environment
•Strategic response
•How risk management can support that response

103
Hargreaves Risk and Strategy
•We have worked in the sector for 20 years
•Specialise in housing associations, regulation and funding
•Membership service:
– Risk information and advice constantly updated
– Standard sector risks, assessments and best practice controls
– Review of risk map, financial plan and risk management system
– Work with boards on scenario planning, risk appetite etc.

104
There is no risk-free environment / strategy

105
Reputation of the sector with the government
"We give £13 billion a year to housing associations so that
they can discharge their duty to house people. They have to
raise their game and meet the challenge. This is not often
commented on, but housing associations are not subject to
the Freedom of Information Act. We need to see that they
are as efficient as possible. They are very efficient when it
comes to campaigning against the Government, but they
are not so efficient in resource allocation to deliver front-line
services to the most vulnerable tenants.“
Brandon Lewis, House of Commons, 27/1/16

106
In this environment:
•We need use a more commercial approach to
demonstrate that:
– We are efficient
– We are capable of taking reasonable risks with our resources
•In order to:
– Deliver a step-change in our contribution to housing supply

107
Improved efficiency entails:
•Higher outputs
– Increasing participation in the labour market
– Reducing cost of Housing Benefit
•Lower costs
– Responding to the 1% per annum rent cut

108
New / greater exposure to market risks
•Causes
– The government wishes to reverse the decline in home ownership
– There will be no grant to support development for sub-market rent
•Effect
– We will have to increase our exposure to the housing market

109
Threats … or opportunities?
•Welfare reform
•Right to Buy
•Rent reduction / Pay to Stay
•Fixed-term tenancies
•Deregulation

110
How should risk management respond?
•Dynamic risk evaluation
•Risk analysis before commitment
•Scenario analysis, contingency plan and detection
•Assurance requirements proportional to risk / criticality of
control
•Comparison of controls with best practice
•Follow-up missing / weak / negative assurance

111
Dynamic risk evaluation
Impact
•Update the impacts in
your risk map as your
exposures change, e.g.
through commitment to
/ delivery of:
– Development schemes
– Sales programmes
– Major contracts
Probability
•Amend probabilities in
response to changes in
your perception of the
effectiveness of your
control framework:
– Internal / external
assurance feedback
– Changes in external
markets / political
environment

112
Scenario analysis
•Identify the scenarios that could hurt you
– Political? Economic? Internal failure? Some combination?
•Evaluate the impact of the worst case
– Run out of cash? Breach covenants?
•Agree contingency plan to respond to scenario
•Identify how you would detect the onset of the scenario
•Review in the light of internal / external changes

113
Assurance
•Proportional to the size of the risk and the criticality of the
control
•Assurance on critical controls for key risks to the Board
•Monitoring of other assurances delegated to Audit
Committee / management
•Vigorously pursue any assurances that are overdue or that
indicate that the control is not operating as intended,
escalating as appropriate

114
c.mansfield@hargreavesrs.co.uk

Protected
environment
Increasingly
exposed
environment
Steel industry?

Not our finest hour!
Fire risk actions
Repairs service
Lease terms
Inaccurate returns
Margin / cash calls
Reliance on asset
sales and unrealistic
efficiencies

Lessons
 Understand the risks
that can be fatal
 Must have a plan B and
even C
 Strategy and vision are
no good without an iron
grip on performance and
compliance.
 Empower and value the
Audit Committee –
immune system of any
organisation
 Assurance reported to
be in place was not.

Risk Analysis
Early
Warning
Indicators
Risk Triggers
Risk
Scorecard
and Risk
register
Scenarios
Environment
Appetite

Risk pillar Description of
risk
Inherent risk to
Organisation
Controls in
place
Assurance
Financial
Strength
Excessive
maintenance
spend
High
Procurement
card fraud
Low
Reduction of
rental income
High

EWI and Risk Triggers
1) Reviewed the existing risks.
2) What would need to change which could
indicate that the risk is materialising?
3) What data do we need to monitor this
change? (EWI)
4) At what point would you be worried about
this change? (risk trigger).

Three scenarios have been identified to stress test Orbit’s financial plan:
1. Credit crunch 2 – replicating the financial crisis in 2007
2. Political pressures – austerity, public spending cuts, welfare reform
3. Management failing leading to reputational damage
In terms of scenarios 1 and 2, these are predominately influenced externally by
parameters which are aligned to a property business and largely impact the whole
sector.
Scenario 3 is very much influenced by an internal management decision(s) which
have catastrophic outcomes from Orbit. This is an important scenario as the most
recent HA failure was as a result of internal failures.
Each of the three scenarios includes:
1. Key planning assumptions
2. Description of the scenario
3. Financial Plan assumptions which will be impacted.

Procurement Team – Orbit Savings Achieved 2006/07 to 2015/16
2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16
Achievement £313,004 £477,076 £413,317 £1,152,61 £5,547,96 £739,073 £1,288,36 £1,996,83 £1,141,35 £1,368,41
Target £90,000 £150,000 £500,000 £1,000,00 £2,000,00 £1,000,00 £1,000,00 £1,200,00 £1,200,00 £1,200,00
£0
£500,000
£1,000,000
£1,500,000
£2,000,000
£2,500,000
£3,000,000
Achievement Target
Customer Satisfaction 2013/14 2014/15 2015/16
Overall Customer Satisfaction 85% 93% 94%
Projects delivered within agreed timescales 82% 94% 90%
Likely to recommend us 90% 93% 95%

The HCA said following the completion of an In Depth
Assessment (IDA), it had concluded that the board was
unable to “demonstrate that it fully considers,
challenges and debates whether it has the most
effective strategy for delivering against its purpose and
objectives”. It also said the organisation had failed to
provide a robust value for money self-assessment.
Inside Housing –
12/02/2016

Our customers want…
• Good spend and risk data
• Support in the delivery of projects
• Systems & processes – easy to follow
• An optimal number of suppliers
• Effective supplier systems
• Effective engagement
• Contract advice and legal guidance to reduce risk
• Effective management of group-wide contracts

Corporate Strategy - Focus on:
• Financial Drivers – Need to save £Xm
• Right culture – Right People
• Right Operating Model (Digital)
• Continue to provide homes
• Improved Customer satisfaction to X%
Our operating environment…
the “Why”

£
Annual Costs
Registered Provider Improvement Strategy

How? Financial…
 Effective procurement; embedded culture
 Category management, target highest
spends...strategically driven
 Do you know when your contracts are up for renewal?
 Are you speaking to procurement experts?
 Outsourcing/in-sourcing?
 Supply chain/contract management
 How effectively are you managing your contracts?

You are a Procurement Consultant advising another
housing provider.
Split into small teams (2-3). You will be provided with a
briefing sheet.
You are required to review each activity and advise the
client which activity should be undertaken 1st, 2nd, 3rd etc.
in order to achieve a strategic approach to procurement
Be prepared to feedback your answers to the group
Strategic Procurement - Activity 1

Procurement
Activity
Procedures
Strategy/Policy/
Targets/KPI’s
Category Management
Spend Analysis
Analysing
Spend
Spend Analysis – the foundation

1. Spend
Analysis
2. Category
Management
3. Identify
Category Owners
4.Carry out
analysis with
Category Owners
(Contracts)
5. Create 5 Year
Sourcing Plan
6. Carry out
Tender activity
7.On-going
supplier
management
8. Procurement
Hub
9. Contracts
Database/
Management
Spend Analysis – the issue

Category Management drives organisational
procurement reviews
Contracts due to expire
High Risk Areas (e.g. Statutory, Financial,
Reputational)
Other client preferences (link to a co-ordinated
approach to change – people, process,
procurement, digital)
Other reviews – need to source is uncertain (low
level support – worked in around workload)
Category Management - Principles

Category 12/13 13/14 14/15 Contract? Procurement
Risk
Contract Risk
Tree Maintenance £81k £121K £107K No High High
Reactive
Maintenance
£5.2m £6.5m £7.1m 31/05/2019 High High
Servicing Lifts £55k £951K £90K 31/05/2016 High High
Utilities –
Electricity
£65k £95K £110K 31/05/2016 High High
Cleaning £150k £190K £185K 31/10/2018 High Low
Printing £95k £105k £119K No High High
Insurance £1.3m £1.5m £2m 31/10/2016 High High
Activity 2 - Category Analysis

Category 12/13 13/14 14/15 Contract? Procurement
Risk
Contract
Risk
Tree Maintenance £81k £121K £107K No High High
Servicing Lifts £55k £951K £90K 31/05/2016 High High
Utilities –
Electricity
£65k £95K £110K 31/05/2016 High High
Printing &
Promotional
Merchandise
£95k £105k £119K No High High
Insurance £1.3m £1.5m £2m 31/10/2016 High High
2016/17 Programme of Reviews
Procurement Programme

An example: Print and Promotional Merchandise
No Contract in place with any supplier
2012/13 2013/14 2014/15
Jo Bloggs Printers £75,000 £86,000 £105,000
Katie the Printers £3,000 £4,500 £6,500
Jones the Printers £15,000 £12,000 £5,000
Lucie Merchandise £2,500 £3,000 £2,500
£95,500 £105,500 £119,000 £320,000
Increase in Spend 12/13 to 14/15 £23,500 25%
Questions:
What are the considerations?
What are the main options?
Anything else?
Activity 3 - Procurement Programme

Spend
Analysis
Category
Management
Tender
Activity
Contract
Management
Supplier
Management
Digital
strategy
Systems Approach

gary.stephens@ServiceMatters.uk.com
Follow me on Twitter @garyservmatters

4pm - Networking drinks:
a call to action

Recommended

Recommended

More Related Content

What's hot

What's hot (20)

Recently uploaded

Recently uploaded (20)