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Raglan Housing Association

  Value for Money Strategy


“Achieving more for less, so we
    can meet the increasing
 expectations of customers and
         stakeholders”

                            Draft




                         July 2009
Raglan HA                                                                                                                                       VFM Strategy



CONTENTS

1.    INTRODUCTION ................................................................................................................................... 3

2.    WHY HAVE A STRATEGY? ................................................................................................................. 3

3.    AIMS OF THE STRATEGY ................................................................................................................... 4

4.    WHAT DO WE MEAN BY ‘VALUE FOR MONEY’?............................................................................. 4

5.    BACKGROUND .................................................................................................................................... 5

6.    BENCHMARKING AND BUSINESS INTELLIGENCE ....................................................................... 13

7.    PERFORMANCE MONITORING & FINANCIAL CONTROL ............................................................. 14

8.    PROCUREMENT ................................................................................................................................ 15

9.    ESTABLISHING A VFM CULTURE ................................................................................................... 17

10. REINVESTMENT OF EFFICIENCY GAINS ....................................................................................... 21

11. DELIVERING THE STRATEGY .......................................................................................................... 21




July 2009                                                                                                                                         Page 2 of 23
Raglan HA                                                                              VFM Strategy




1.     INTRODUCTION

       Raglan Housing Association‟s Business Plan sets out our key purpose as “to
       meet the needs of people by providing quality, affordable homes, high
       standard services and by promoting and encouraging sustainable
       communities”. Our values include putting our customers first and delivering
       what we promise. Our aims within the business plan include being financially
       viable, effectively governed and managed, and reviewing evaluating and
       improving our work and our operational systems on a regular basis.
       We receive significant public funding, operating within a regulatory framework.
       We aim to achieve and demonstrate good practice in our approach to VFM,
       comparable with the best performers in the sector, as well as contributing to
       sector-wide expectations.
       To deliver these objectives, we must in turn achieve and demonstrate value
       for money in all our activities, addressing cost and quality together. This
       strategy sets out the framework of our approach to Value for Money and the
       corporate Service Improvement Plan – developing as we progress on the
       improvement journey – shows how we will achieve our aims.

2.     WHY HAVE A STRATEGY?

       It is essential that Raglan HA has a strategy to ensure that the organisation,
       and therefore our customers, obtain the maximum benefit for the goods and
       services that we acquires and that we operate in the most efficient way
       possible. Value for Money is one of the key drivers (along with customer
       involvement and equality and diversity) at the heart of how we deliver services
       to our customers.
       We have up to now achieved a number of successes in delivering Value for
       Money. This strategy will build on this by providing a clear framework within
       which we can:
            Set out our key aims and values;
            Identify key work streams through which VFM will be delivered;
            Ensure that we are focusing on the right things, that matter to our
             customers, and which will lead to improvements in the way the
             business is run;
            Ensure that we embed VFM within every area of Raglan‟s activities;
            Demonstrate our commitment to VFM to our residents, staff, regulators
             and other stakeholders;
            Deliver the aims of the strategy through a SMART action plan – the
             Service Improvement Plan;
            Measure our progress systematically.

July 2009                                                                                Page 3 of 23
Raglan HA                                                                                   VFM Strategy


3.     AIMS OF THE STRATEGY

       The aims of the strategy are to:
           Achieve high quality services for our customers at the best possible price,
            where appropriate redirecting resources to services delivering an impact on
            customers;
           Ensure that VFM activity supports Raglan‟s values and the delivery of key
            priorities;
           Integrate VFM principles within Raglan‟s business planning and service
            development activities;
           Embed a culture of VFM within the organisation, so that it becomes „part
            of the day job‟ for all;
           Involve residents in achieving the aims of this strategy;
           Secure informed and active commitment from Board Members in
            achievement of VFM;
           Provide a framework for the Association to contribute to the Government‟s
            efficiency agenda.

       We believe that these aims can be summed up in the overarching objective of:
       “Achieving more for less, so we can meet the increasing expectations of
       customers and stakeholders”
4.     WHAT DO WE MEAN BY ‘VALUE FOR MONEY’?

       Value for Money (VFM) is a long-standing concept, which develops the
       relationship between cost („economy‟), efficiency and effectiveness – the 3
       “Es”.
       Cost means acquiring goods and services at the most competitive rates, e.g.
       the annual cost of a member of staff – “paying the best price”.
       Efficiency means making sure we maximise productivity by using the least
       resources (e.g. staff time) to deliver the required result of an activity – “doing
       things the best way”.
       Effectiveness means making sure that the result of an activity is helping
       achieve the outcome we want – “doing the right things”. Measurement is both
       quantitative and qualitative.
       This relationship can be shown as a diagram.




July 2009                                                                                   Page 4 of 23
Raglan HA                                                                                      VFM Strategy




                                           Value for Money

                      Economy                 Efficiency            Effectiveness

                                                                   Qualitative
     Costs (£)                Inputs                  Outputs                     Outcomes
                                                                   Quantitative



      Procurement of goods and services is a key element of VFM. In deciding whether
      something is value for money, we look at whether or not we are obtaining the
      maximum benefit for the goods and services that we acquire or provide, within our
      resources. There is certainly no assumption that the cheapest price is best –
      decisions are taken on the basis of a balance of cost and quality, taking „whole life‟
      costs into account. Measurement of progress towards achieving VFM is therefore
      a combination of cost, performance and satisfaction indicators.
      We know that for our residents quality and “getting it right at the first opportunity”
      are two essential elements of VFM.

5.        BACKGROUND

5.1       Development of VFM within the social housing sector

          Obtaining VFM has been a priority of central government, the Audit
          Commission, the Housing Corporation and now the Tenant Services Authority
          for some time. Some of the key drivers behind this include:

          Best Value
          Introduced in 1999, the Best Value regime aimed to ensure delivery of quality
          services, not the lowest price tendered. To do this, Raglan needs the capacity
          to make intelligent choices between different service delivery models and to
          implement change projects successfully.

          The Gershon Report
          Published in 2004, this report was commissioned by government to drive the
          procurement and efficiency agenda. By implementing sound procurement
          practices, public sector bodies can redirect resources to front line services.
          The Gershon Report led to the CLG introducing efficiency targets across the
          public sector, and the requirement to prepare Annual Efficiency Statements
          (now incorporated into the annual Self Assessed Compliance Statement).
          The Gershon Review identified a number of key areas or “work streams”
          where these efficiencies could be found:
                Procurement



July 2009                                                                                      Page 5 of 23
Raglan HA                                                                               VFM Strategy


            Back office (Corporate Support Services e.g. Finance, Human
             Resources, Payroll, IT, Legal, Procurement, Security and
             communications)
             Transactional services (rents, void efficiencies)
            Productive time (actions that increase productivity e.g.
             sickness/absence management)
       It defined four ways to improve efficiency:
            Reduce inputs for the same outputs – put in fewer resources to get the
             same result, i.e. “the same for less”;
            Reduce prices for the same outputs – pay less for inputs to get the
             same result, also “the same for less”;
            Achieve more outputs or improved quality for the same inputs – get
             better results from the same resources, i.e. “more for the same”;
            Achieve proportionally more outputs or improved quality compared with
             the extra resources that are used, i.e. “spend more but get even more
             back”.

       Housing Corporation Operating Cost Index
       Introduced in 2005, this sought to show the relative costs of housing
       associations, taking into account their operating environment. Although the
       methodology was flawed, it served a purpose in raising the profile of relative
       costs and performance within the sector.

       Audit Commission Key Lines of Enquiry (KLOEs)
       As well as incorporating a VFM element within each landlord service KLOE,
       there is a specific VFM KLOE. This has two overarching considerations:
       1.     How do the organisation‟s costs compare to others, allowing for local
              context, performance and policy choices?
       2.     How is value for money managed, including through partnership and
              procurement, and taking the long term view?

       Audit Commission ‘Better Buys’ HA procurement report
       Published in 2008, this provided evidence that there remained considerable
       scope for many associations to achieve further efficiency through better
       procurement, and set out the elements of good practice.
5.2    Regulation and inspection

       The Tenant Services Authority is developing its approach to regulation of the
       sector to apply from 2010. As part of this new regulatory framework there will
       be a national standard for VFM. This is unlikely to be a departure from the
       current regulatory approach. The draft objective for the Standard is:



July 2009                                                                               Page 6 of 23
Raglan HA                                                                                  VFM Strategy


       Landlords provide value for money in the delivery of services, and manage
       their financial resources effectively to provide quality services and homes to
       meet the needs of current and future tenants.
       Within this, the TSA explicitly recognises that VFM stems from a balance
       between economy, efficiency and effectiveness, and that the approach to
       achieving VFM for different services will look different for different landlords.
       There is also a recognition of the relationship between the approach to VFM
       and other strategies – so for instance service delivery can become more
       effective with improved resident engagement. Put another way, with better
       understanding of what is important to our customers we can get better at
       „doing the right things‟.
       The TSA vision of future regulation is of „co-regulation‟ between the landlord,
       tenants, and the TSA, and that regulation of VFM fits with this approach. At
       the time of development of this strategy this has yet to be fully developed.
       The Audit Commission has also developed their expectations in respect of
       demonstrating VFM as part of their inspection process. VFM is an essential
       element of each of the Key Lines of Enquiry (KLOEs) that have been
       developed to direct the inspection process and against which the performance
       of housing organisations is being measured. VFM is one element of the KLOE
       covering the quality of delivery for each activity. In addition, there is a
       crosscutting KLOE specifically considering VFM that also contributes to the
       assessment of Prospects for Improvement.
5.3    Scope

       This strategy addresses all Raglan‟s operations, while recognising that
       achieving VFM within many specific areas of our business are covered by
       other strategies and policies. Some areas have well developed approaches to
       achieving VFM and are not addressed in detail in this strategy – for example
       Supporting People contracts and Treasury Management.

5.4    Context & operating environment

       Raglan HA owns and manages over 11,000 homes, across 103 local authority
       areas. Our area of operation is the south of England and the Midlands. Our
       stock is concentrated in the urban areas of Southampton, Bedford, Reading,
       Eastbourne, Bournemouth and Poole. We employ over 400 staff, based in
       seven main locations. We operate a structure of three regions, comprising:
       South & South East
       West & Thames
       Midlands & East
       Our stock profile is primarily general needs housing, with a significant focus on
       housing for older people, including 1,600 rented sheltered properties and LSE
       schemes. We also have a long standing commitment to provision of housing
       for those with disabilities.


July 2009                                                                                  Page 7 of 23
Raglan HA                                                                           VFM Strategy


       Our operating environment presents particular opportunities and challenges in
       achieving value for money in all our activities, especially:
              Our relatively dispersed geographic spread;
              Our devolved regional structure;
              The diversity of our operations;
              The number of local authority areas in which we operate;
              Increasing expectations from our customers and other stakeholders.
       Our corporate values underpin how we work and this strategy will complement
       other measures that reflect these values:
             Putting our customers first;

             Delivering what we promise;

             Being open and accountable;

             Promoting equality & diversity;

             Being a good employer which includes a staff appraisal and training
              process to ensure all staff have the appropriate skills and knowledge to
              carry out their jobs effectively.

             Listening and learning to improve what we do.

       We understand that our residents want well-informed, customer-focussed staff
       who follow up issues and keep residents informed.

5.5    Links to Business Plan, other strategies, etc

       This Strategy forms an integral part of our strategic approach to operating the
       business. It therefore complements other key documents including:
           The Business Plan

           Procurement Policy

           Single Equality Scheme and Action Plan

           The Customer Service Initiative

           Resident Involvement Strategy

           Treasury Management Strategy

           Supported Housing [confirm terminology – documentation on bidding
            for/costing & managing SP contracts, the QAF assessment process, stated
            strategy in relation to QAF target ratings, etc]


July 2009                                                                              Page 8 of 23
Raglan HA                                                                                                                         VFM Strategy


              Risk Management policy

              The Development Strategy

              The Asset Management Strategy

          This strategy will directly assist us to achieve the objectives of our Business
          Plan, in particular the aims to:
              Provide an efficient, good quality housing service

              To review, evaluate and improve our work and our operational systems on
               a regular basis, and

              To be financially viable, effectively governed and managed.

5.6       Where are we now?

          We use a range of information to assess our starting point for this strategy.
          Most relevant is that derived from the HouseMark benchmarking model. The
          most recent available data is for 2007-8. The information is shown in
          comparison to a peer group comprised of „traditional‟ housing associations
          (i.e. excluding local authorities, ALMOs, and stock transfer associations)
          based in the South East, South West, or the Midlands, with stock between
          5,000 and 20,000 properties. The data is shown as quartiles.


                                     Overview for Raglan Housing Association
                                      Cost KPI                                                              Quality         KPI
                                      Quartile                                                              Indicator
        Business Activity                                                Quality KPI
                                     Raglan Housing                                                           Raglan Housing
                                       Association                                                             Association
                                      (2007/2008)                                                              (2007/2008)

         Housing Management
                                                       Overall Tenant Satisfaction
Total    Pay Cost per property
Core     Overhead Cost per                                                    N/A
                                                                                                                   N/A
         property

                                                       % of residents satisfied with repairs service
Responsive & Void Repairs Spend
per Property
                                                       Percentage of repairs completed on time

Major & Cyclical Repairs Spend per                     % of dwellings failing to meet the Decent
Property                                               Homes Standard

                                                       Current tenant rent arrears as % of rent due

Tenancy Related Activities
                                                       % tenants satisfied with participation in decision
Housing Management Pay Cost per                        making
property
                                                       Number of weeks taken to re-let empty
                                                       properties

Quartile Key
                                        Upper         Middle                    Middle        Lower
                                                                 Median                                     N/A         No Data
                                       Quartile       Upper                     Lower        Quartile


July 2009                                                                                                                         Page 9 of 23
Raglan HA                                                                                 VFM Strategy


       It is also important to measure the value for money our customers perceive
       they are receiving for the rent and service charges they are paying. The data
       is drawn from survey returns. Some headline findings are:

       Perceptions of good Value for Money
       New tenants (new properties) – rent                             93%
       New tenants (all new lettings) – rent                           92%
       General needs tenants – rent                                    75%
       General needs tenants – service charge                          57%
       Sheltered tenants – rent                                        87%
       Sheltered tenants – service charge                              78%
       New Shared Owners – rent                                        47%
       New Shared Owners – service charge                              28%
       Homeowners – satisfied with VFM of cleaning                     72%
       Homeowners – satisfied with VFM of rent & service charge info   58%
       Homeowners – satisfied with VFM of repairs & maintenance        47%
       Homeowners – willing to pay higher charge for extra services    8%
       In summary, this data shows:
           Top quartile performance for overall tenant satisfaction, satisfaction with
            the repairs service, and achievement of the Decent Homes Standard;
           Better than (i.e. below) average (second quartile) housing management
            pay and overhead cost per property;
           Relatively high cost (3rd quartile) for responsive and void repairs spend,
            while achieving low performance on getting repairs completed on time –
            albeit delivering high satisfaction;
           Low expenditure (top quartile) on major and cyclical repairs;
           Poor performance on void relet periods;
           Mixed perception of levels of satisfaction with value for money with rent
            and service charges between different resident groups;
           Little appetite among home owners for enhanced services if this leads to
            greater costs.
       This data does of course only tell part of the story and in some respects is at
       odds with the findings of the 2009 Short Notice Inspection report by the Audit
       Commission into Raglan‟s gas safety, responsive repairs and void works
       service, which among other findings concluded that while costs were low,
       quality was also low. Our starting point is that there is scope to enhance our
       approach to VFM, and we aim to be a top quartile performer in relation to our
       peers in all key areas.



July 2009                                                                                 Page 10 of 23
Raglan HA                                                                              VFM Strategy


5.7    Developing the strategy

       We have involved a range of key stakeholders in the development of this
       strategy. Consultation is including:
           Feedback from residents in various ways, including:
               o Responses to the special edition of our newsletter Round Up
                 following the Audit Commission‟s inspection in March 2009;
               o Responses to a „Where‟s the waste?‟ message in a special edition
                 of Round Up in July 2009;
        Discussions with key directors, managers and staff to identify existing
         initiatives and potential further actions to promote VFM;
        Presentation to and discussion with Board members;
        Involvement of residents through the creation of a VFM Resident Panel, in
         particular obtaining feedback on the aims and the priorities within the
         strategy;
        Involvement of staff through the creation of a VFM working group;
        Feedback from staff through our newsletter Inside Out,
        Feedback from the Regional Committees in July 2009.

       We have also considered best practice within the social housing sector.
       The process through which Raglan HA buys goods and services is key to
       demonstrating VFM within the organisation and our current position and
       proposed way forward is outlined in section 8 - Procurement.
       It is also essential that a culture exists throughout Raglan that considers VFM
       at every stage and at all levels and takes the appropriate actions in an
       unconscious way rather than because there is a box to “tick”. Our aim is for
       VFM to become „part of the day job‟ for all. This will be achieved in stages and
       section 9 - Establishing a VFM Culture sets out some of the ways in which we
       will work towards the development of this culture.
       The VFM elements of the Service Improvement Plan draws on key areas
       already identified though information gathering, previous inspections, best
       practice, resident consultation and internal discussion. It aims to ensure that
       Raglan has a clear framework of information and monitoring to guide resource
       allocation, improvement plans and decision making over the life of the
       strategy.
       In developing the Action Plan, Raglan develops expectations and therefore
       targets of the changes that it wishes to see in a number of areas. These cover
       a wide range from targets around a broad allocation of available resources,
       though to detailed targets for specific service areas. As well as delivering an
       efficient, value for money service, Raglan has an overriding objective of
       maximising the share of available resources that are directed towards the
       needs of our residents, whilst managing within our overall financial constraints.


July 2009                                                                             Page 11 of 23
Raglan HA                                                                             VFM Strategy


5.8    Achievements to date

       Although Raglan has not previously had a VFM strategy in place, there are
       many examples of VFM achievements, and the concepts are not new to many
       areas of our operations. Key achievements to date have been achieved in the
       following areas:
           Partnering maintenance contracts.
           Our supported housing operations consistently achieve high quality
            service, externally accredited, within a competitive cost environment, and
            with no internal subsidy. Two of our projects so far have received 6
            Grade „A‟ Quality Assurance Framework assessments under the
            Supporting People funding system – an extra care project in Bromley and
            an Asian Women‟s Refuse in Bedford. The Quay Foyer was the first in
            the country to be awarded the „Excellence‟ level for the national Matrix
            Standards, and has attracted over £100,000 in inward investment for
            refurbishment. The West Dorset Women‟s Refuge was shortlisted for the
            National Housing Federation‟s Annual Awards „Best Front Line Service‟
            in 2007, and has a strong track record of inward investment through both
            volunteer led fundraising, partnership with the local authority, and an
            innovative partnership with the local university.
           Our Development operation delivers good VFM as measured by a
            balance of costs (grant per unit and per person, and taking unit sizes into
            account) and quality as measured by HCA impact assessments and
            resident satisfaction. In particular, through our development strategy we
            have focused on the long term cost implications of alternative
            procurement models and this has led to development via a combination
            of sites we have purchased ourselves and Section 106 partnerships.
           Restructuring housing management regions, achieving a saving of £53K.
           A range of efficiency measures in Human Resources, including extensive
            use of benchmarking of costs and processes, a £70K saving in
            recruitment costs derived from a move to competency based
            assessment, and improved assessment of the impact of learning and
            development through monitoring both immediately after the completion of
            training and 2-4 months later.
           LHC membership, providing a rebate in 08-9 of £10,737.
       Our Annual Efficiency Statements for 2006-7 and 2007-8 show a total of over
       £2M gains, spread across the areas of capital works, management &
       maintenance, and commodities. In 2008-9, our targeted efficiency savings
       were £560K . The gain actually achieved in the year was £202,000. For
       2009/10, in addition to the measures set out in this strategy, the Association is
       developing a stock rationalisation strategy with the primary aim of improving its
       service deliveries. The expected efficiencies will be quantified as the strategy
       develops but it is not possible to do so at this stage.




July 2009                                                                             Page 12 of 23
Raglan HA                                                                              VFM Strategy


6.     BENCHMARKING AND BUSINESS INTELLIGENCE

       Benchmarking is an essential tool in measuring, monitoring and reviewing
       both internal and external costs and a key driver in assisting us achieve our
       aims. Rather than answering questions about costs, it prompts us to ask
       questions about where we are spending our money, as one tool to establish
       robust business intelligence about our operations.
       Raglan HA is committed to using benchmark data to compare itself against
       other similar organisations. Raglan shares its costs and key performance
       indicators (KPIs) with other similar organisations to ensure that the services
       provided are delivered in an efficient and effective way whilst delivering a high
       quality standard of service. We will also introduce an element of competition
       by trying to perform better than other housing associations.
       Raglan along with many other social landlords is a member of the HouseMark
       benchmarking club. The club works on the principle that members share
       information regarding their financial and operational performance to enable
       comparisons to be made. Bringing comparable cost, performance and
       satisfaction data together is a key element of our self assessment of how we
       are achieving progress towards achieving and demonstrating VFM. Initially we
       will focus on the comparative costs of the responsive repairs, voids and gas
       safety services, to establish a clear understanding of the variances against our
       peer organisations.
       We will develop our approach further, to drill down to establish comparative
       costs at the level of individual transactions – e.g. responsive repairs, rent
       payments, ASB case handling, and legal actions.
       In looking at costs, we analyse the cost drivers within our overall service costs.
       We especially focus on our overheads, looking to build our knowledge of
       where these can be reduced and thereby redirecting resources to direct
       service delivery. As part of this approach, we already benchmark many of our
       human resources costs and processes against our peers as members of the
       Winmark RSL Network. These have included benchmarking of:
           Temporary staff costs
           Sickness levels
           Costs of the HR department in relation to staff numbers
           Pay and job evaluation
           HR processes and terms & conditions in relation to top performing
            Associations as defined by their ranking in the Sunday Times top 100
            employers.
       We will also develop our approach to comparing costs internally, for instance
       between regions and between our partner contractors.
       In addition to benchmarking, we will take other measures to achieve better
       business intelligence about where we are spending money. Initially we will
       focus on property services. This will include for example:


July 2009                                                                              Page 13 of 23
Raglan HA                                                                                  VFM Strategy


           Greater knowledge about the patterns of demand for the responsive
            repairs service, initially through a programme of visits to those properties
            with a history of high demand (and therefore high cost) defined as a large
            number of reported repairs. This will tell us more about why the repairs
            were needed and enable a more pro-active approach.
           Analysis of variances in the cost of void and responsive repairs by property
            type, location, age etc, to understand more about underlying cost drivers.
       We will ensure that business intelligence data including benchmarking is
       integral to our approach to service review and improvement.

7.     PERFORMANCE MONITORING & FINANCIAL CONTROL

7.1    Budget setting and control

       As part of our new approach to achieving VFM, we are revising our approach
       to budget setting, moving towards a zero based approach across the
       organisation. This will establish stronger links between allocation of financial
       resources and business priorities.
       This revised approach will provide significantly more clarity in establishing the
       costs of delivery for each service. Armed with this information it is possible to
       make a clearer link between the cost of delivery and the performance
       achieved. High cost/low output service areas can be clearly identified to better
       focus process and service reviews. This also enables more detailed
       comparison with other high performing housing organisations looking at the
       cost effectiveness and efficiency of service delivery.
       This will be the start of a process of developing more effective joint working
       between the Finance team and individual budget holders.

7.2    Performance monitoring

       Performance both financially and against KPIs is monitored throughout the
       organisation. Managers are expected to discuss performance regularly with
       staff at team meetings and the Board receive and discuss performance reports
       on a regular basis. The monitoring of financial performance against budget
       and KPIs is an integral part of monthly management information to the
       management team and individual reports to budget holders.
       The financial reporting package as well as other performance reports
       continues to evolve to meet the needs of managers in managing performance
       as well as for scrutiny purposes. This ensures that managers have the
       necessary tools to enable them to assess structures, processes, proposals
       and changes in terms of VFM. We will revise our performance monitoring
       „dashboard‟ to capture cost data alongside performance measures.
       In working with our maintenance partners, we will incorporate KPIs measuring
       VFM into our approach to contract management.




July 2009                                                                                  Page 14 of 23
Raglan HA                                                                              VFM Strategy


7.3    Building an evidence log

       We will establish an effective system of capturing evidence via a log of
       ongoing efficiency gains, both reduced costs and added value. This will act as
       a means of monitoring our overall progress towards achieving efficiency, to
       track the relative contributions of different departments and teams, and to help
       identify future work streams. It will also assist us to monitor the impact of the
       staff suggestion scheme.

7.4    Gathering resident feedback

       We already gather feedback from residents in a range of ways to measure the
       impact of actions we take, but recognise that there is scope to enhance our
       approach. We will use the pilot exercise in relation to the VFM of service
       charges (Section 9.2 below), to establish a robust method of gathering this
       information, and will incorporate VFM assessments within all survey feedback
       where this is meaningful.

       We will also involve residents more in performance monitoring by, for
       example, inviting them to inspect and/or comment on work and services
       carried out.

8.     PROCUREMENT

8.1    Procurement Strategy

       We have had a procurement policy since 2007. This sets out some key
       procurement principles, but we recognise that it could be improved to meet our
       future requirements. We are therefore committed to developing a revised
       procurement strategy and action plan during 2009. This will draw on a range
       of good practice, including the Audit Commission‟s 2008 „Better Buys‟
       procurement report.
       Central to the achievement of VFM is achieving the best balance of cost and
       quality.

8.2    Procurement Processes

       The procurement processes we use are set out in our Procurement Policy.
       There are also Standing Orders setting out the procedures and authority levels
       that all staff should follow in purchasing both goods and services from external
       suppliers. By following the procedures set out, staff ensure that any new
       contract that they enter into has been properly assessed against a wide range
       of operating and financial criteria and should therefore be value for money.
       We use a number of different procurement methods, including:
            Alternative quotations
            Competitive tendering
            Procurement consortia
July 2009                                                                              Page 15 of 23
Raglan HA                                                                                  VFM Strategy


             Partnering
             Procurement clubs
             Specialist providers
       We choose the most appropriate method, following authorisation under our
       Standing Orders. We comply with OJEU tendering procedures where required.
8.3    Procurement Consortia

       The use of procurement consortia is recognised as a good way to ensure
       value for money contracts without having to always break new ground.
       Consortium members can draw on bulk contracts that have already been
       tendered and assessed for value for money, without having to carry out every
       stage of the procurement process internally. A particular benefit of such
       arrangements is the potential for significant savings arising from the power of
       bulk purchasing and negotiating.
       Alongside membership of national consortia such as Procurement for Housing
       and the London Housing Consortium, Raglan also uses the services of the
       Office for Government Commerce (OGC). We will use the consortium
       procurement approach in a way to deliver the optimum value for money. This
       can be both purchasing through a consortium, and using prices offered
       through a consortium as a benchmark for measuring alternative procurement
       routes.

8.4    Whole life costing

       A key principle within our approach to procurement is to select goods on the
       basis of „whole life‟ costs. This will apply to all purchasing, but initially the
       focus will be on components for our maintenance service and the
       improvement programme. We will develop our approach using comparative
       cost and performance data, in particular analysing purchase costs, failure
       rates and repair/ renewal costs. We will promote effective joint working
       between staff within our Operations, Development and Finance departments
       to achieve this. We recognise that provision of new housing via Section 106
       agreements where the developer specifies the detailed design, limits our
       control of component selection but we apply a „whole life costing‟ approach in
       developing new homes wherever possible.
       We will during the life of this strategy, use the learning developed above to
       apply whole life costing more widely across all our procurement activities, and
       involving all Departments.

8.5    Working with suppliers and contractors

       We believe that to achieve the best outcomes for Raglan, we need to actively
       manage the relationship with our key suppliers of goods and services. Our
       partners themselves have supply chain partners on place. Our Procurement
       Strategy will set out more information on how this operates in practice.



July 2009                                                                                  Page 16 of 23
Raglan HA                                                                                 VFM Strategy


9.     ESTABLISHING A VFM CULTURE

9.1    Introduction

       We will not achieve our Value for Money objectives purely through changes to
       systems, structures and procedures. We must also develop and support a
       „Value for Money culture‟ within the three key groups of people within our
       organisation – residents, the Board, and staff. Our starting point on the journey
       towards becoming an organisation with a strongly embedded VFM culture is
       that while there are pockets of good practice within Raglan, we need to make
       significant progress overall, over the life of this strategy, to enhance this
       aspect of our organisation.

9.2    Residents

       We aim to achieve a greater level of awareness of VFM amongst our
       customers. This includes:
             Communicating to residents Raglan‟s commitment to achieving better
              VFM;
             Awareness of the opportunities for residents to get involved further;
             Confidence and opportunity to make suggestions; together with
              recognition/ reward;
             Reporting back to residents progress with VFM initiatives, including
              savings made and improved service quality;
             Opportunities to indicate priority areas for reinvestment of savings
              made.
       Knowing whether our residents think that our current services are value for
       money is a key part of ensuring that these services do actually deliver value.
       We know that residents do take value for money very seriously and many of
       the comments made on consultation questionnaires and satisfaction surveys
       refer to it. As the end users, it is important that residents believe that they are
       receiving the best quality and the most efficient service with the funds that are
       available to Raglan. We want to encourage all residents to be confident in
       expressing their views and ideas relating to value for money.
       One example of this is understanding more about our residents‟ perception of
       the VFM of service charges. We already carry out an annual survey of all
       residents who receive services paid for through a service charge, asking for
       feedback on service quality. We will, initially on a pilot basis, expand this to
       gather feedback on their perception of the value for money of the service
       charge.
       An emphasis for residents will be the issue of shared responsibility for
       achieving value for money. Raglan staff will review processes and structures
       and make resourcing and procurement decisions that seek to achieve this.
       Tenants and leaseholders will however be reminded that they also have a part
       to play through:

July 2009                                                                                 Page 17 of 23
Raglan HA                                                                                VFM Strategy


              keeping the terms of their tenancy or lease agreement;
              meeting their own repair responsibilities;
              ensuring that they (and their families) maintain the external
               environment;
              reporting acts of vandalism and waste that they see.
       Our Resident Participation Strategy incorporates a number of resident panels.
       We are establishing a VFM resident panel that will:
              Comprise residents with a particular interest in VFM issues;
              Meet regularly to identify issues and opportunities for improving VFM;
              Make suggestions for improving VFM;
              Examine how to raise the profile of VFM issues among all Raglan
               residents;
              Work together with the staff led VFM group on VFM issues;
              Be part of the resident group addressing service improvement
               generally;
       We will also seek new ideas in as many ways as possible:
           Simple view-finding – questions in the resident magazine Round Up with a
            reply slip;
           Suggestion scheme seeking ideas for more effective ways to deliver
            services – either in response to articles in the newsletter or through an
            option on the Raglan website;
           Competitions in the newsletter – with prizes for the best suggestions;
           “Doorstep” surveys.
9.3    Staff

       We aim to embed rigorously the VFM skills and a VFM culture needed within
       the Raglan staff team. This means that VFM becomes „part of the day job‟ for
       everyone in Raglan. So all staff – in a way that is appropriate to their post –
       will:
              Be able to define in general terms what VFM is, why it is important to
               Raglan, and what Raglan‟s approach is;
              Recognise that they have both a personal and a collective responsibility
               through their team to promote and achieve VFM within Raglan – to treat
               every penny as their own.
              Identify specific contributions they can make to this process;
              Record efficiency gains and savings, so progress can be measured;
              Be encouraged to constructively challenge colleagues and managers
               where opportunities to deliver VFM are not being maximised;

July 2009                                                                                Page 18 of 23
Raglan HA                                                                               VFM Strategy


            Be recognised for their contribution.
       We will ensure we provide staff with the means of achieving this. We have
       already established a VFM Working Group as a key area of expertise within
       Raglan. Further measures will include:
             Launching the strategy, in ways that are meaningful to our staff group;
             Incorporating discussion of VFM issues within team meetings;
             Including VFM within the induction training for all new staff;
             Re-launch the staff suggestion scheme, with appropriate rewards and
              where possible the involvement of the staff member in implementing
              successful suggestions;
             Specific training in VFM issues within our management development
              training programme;
             Further measures to enhance staff skills in achieving VFM through
              procurement will be included within our revised Procurement Strategy;
             Assessing VFM contributions within supervision and performance
              appraisal.
             Reviewing processes to ensure that they are not encumbered by
              unnecessary official procedures.
       As managers continue to develop their role, their understanding of the
       interaction between financial performance and operational targets will
       increase. This will ensure that over time they play an increasing role in
       improving VFM across Raglan.
       Good communication is key to ensuring that all staff understand the Raglan
       approach to VFM. We are developing a Communications Plan for the VFM
       strategy to achieve this in different ways, including:
             Feedback to all staff from key external reviews such as QAF
              assessments of our supported housing services, internal audit reviews,
              external service reviews and inspections;
             Regular Team briefing sessions cascading information down to all staff;
             Development of team plans outlining objectives for the coming year,
              which also demonstrate how they contribute to cross-cutting issues
              including VFM.
       In addition, we will continue to explore ways to improve awareness of VFM
       across Raglan, especially with more junior members of staff. This may include
       recognition award schemes for individuals and teams, based on staff
       nominating colleagues for their contribution.

9.4    Partnership working

       We are committed to working in partnership where this will deliver enhanced
       VFM. In particular we aim to maximise the value of inward investment we
       secure for the benefit of our customers. In our partnership work we look to
July 2009                                                                               Page 19 of 23
Raglan HA                                                                             VFM Strategy


       develop the efficiency of the working relationship, in order to derive the
       greatest benefit. Partnerships that we operate include:
             Partnering contracts for responsive maintenance – as well as enabling
              efficiency gains partnering contractors have also added value by putting
              time & resource back into the environment via estate „cleanup‟ days;
             Partnership working in our supported housing operations, for example
              with Dorset CC Children‟s Services to fund a Child Support Worker at
              our West Dorset Women‟s Refuge, fundraising through voluntary effort,
              and partnership working with local universities;
             We have worked in partnership with numerous LAs to procure and
              deliver hundreds of units of good quality housing schemes at VFM
              costs;
             We are currently working in partnership with Southampton PCT on
              Phase 2 of a scheme to deliver Locally Based Hospital Units to the
              profoundly challenged. Phase one housed 27 people with special
              needs but without the benefit of Social Housing Grant, thus the
              emphasis was on VFM.
             We have worked in partnership on a large number of schemes with
              other RSLs; Harbour Reach in Poole is one such example where with
              the Swathling Housing Trust 105 new homes were acquired at VFM
              rates on a 340 unit development through joint working;
             Again Raglan‟s procurement methods include a successful VFM
              partnership approach to site assembly and to construction through a
              Design & Build.
             Some service level agreements are in place;
             Joint initiative with debt advice line;
             Insulation grants;
        We aim to maximise the VFM derived from these partnerships, through
        collaborative working that produces efficiency gains for both parties.
        We aim to establish new partnerships with organisations or to seek external
        funding in order to generate maximum benefits from the funds that are
        available to Raglan. Where feasible we aim to access external funding
        sources to maximise inward investment. Some of the key opportunities for
        partnership working are expected to arise from a more systematic approach
        to procurement, through delivery of the procurement strategy when in place.

9.5    Board Members

       One of the key roles of the Board is to develop and approve overall strategies
       for the organisation, from business objectives in the long term through to
       strategies for service delivery. The Board also has the role of scrutinising the
       delivery of the strategy.


July 2009                                                                             Page 20 of 23
Raglan HA                                                                                   VFM Strategy


       The delivery of this strategy falls within the remit of Finance & Policy
       Committee. It is then the role of the Board as a whole to ensure that any
       specific decisions that they take, are made after full consideration of all
       relevant factors including Value for Money. To assist with this, we will
       incorporate assessment of VFM implications as a standard element within
       Board and Committee papers seeking decisions. This will include the long-
       term implications of proposals (e.g. future revenue costs of a capital
       expenditure decision). It will also include efficiency implications – the impact of
       any proposals on working practices and whether changes will result in
       efficiency savings as defined by Gershon – i.e. delivering the same or more for
       less, more for the same, or proportionally more for increased spend.

10.    REINVESTMENT OF EFFICIENCY GAINS

       We will develop our approach to reinvesting the gains we derive from our VFM
       activities over the life of this strategy. A key element in this approach will be
       involving residents in making choices and expressing their priorities. We are
       committed to making this a meaningful exercise, and recognise that this will
       require investment in capacity building with residents to achieve.

11.    DELIVERING THE STRATEGY

11.1   Action Planning

       The delivery of this strategy will initially be through the relevant section of
       Raglan‟s Service Improvement Plan, itself a development of the association‟s
       response to the Audit Commission inspection in 2009. There is therefore –
       initially at least – no „standalone‟ delivery plan for VFM. The Service
       Improvement Plan will develop further as our approach to improvement
       evolves, and as we refine our approach to achieving VFM within Raglan. A
       central principle is that we see it as essential to deliver our strategy through a
       robust and SMART action plan.

11.2   Links to other strategies and service improvement plans

       The VFM strategy and action plan cannot contain everything we are doing to
       promote VFM. Our approach to achieving VFM does not sit in isolation from
       other areas of our work. Equally important is that there is a strong VFM
       element in all service reviews & improvement plans, as part of the continuing
       process of embedding a VFM culture across the organisation. Within the
       corporate Service Improvement Plan is an action to widen the scope of
       Service Reviews to include a VFM element. We aim for VFM to become an
       integral part of how we plan our operations and review service delivery.
       Our approach will include assessment of:
             The whole-life costs of a supply or service;
             The materiality of expenditure and the related costs of achieving best
              prices;


July 2009                                                                                   Page 21 of 23
Raglan HA                                                                                       VFM Strategy


             The quality and performance of product/service;
             The reliability and service levels of external suppliers;
             Risk Management implications: the strategic impact of services/
              products/activities;
             Legal and regulatory requirements;

             Evidence as to whether the current service provides value or
              alternatives are worthy of consideration, including survey of external
              markets;

             Customer satisfaction.

       The forward plan for the Board and relevant committees includes provision for
       regular reviews of performance in key areas, picking up especially progress in
       the delivery of major projects.

11.3   Working Group and VFM Champions

       We have established a Working Group to promote and help deliver VFM within
       Raglan. Initially this comprises a small core group of staff drawn from across
       the organisation, with an intention to widen the membership to include
       residents, Board members, and staff from different levels within the
       organisation.
       Some members of the Working Group also have the role of being VFM
       Champions. This role involves:
             Promoting VFM within their department and workplace, including via the
              staff suggestion scheme;
             Acting as a source of greater knowledge and expertise on VFM,
              advising colleagues regarding VFM;
             Acting as a „critical friend‟ in relation to the VFM of the activities of their
              department, for instance by constructively challenging existing working
              practices;
             Encouraging their colleagues to constructively challenge others where
              they feel there are opportunities to achieve better VFM that have not
              been fully taken.

11.4   Value for Money Sponsor

       As part of our drive to establish a VFM culture within Raglan, we have
       established the role of a VFM Sponsor within the Management Team.
       Currently this is the Director of Finance. This role will develop further over
       time, and includes:
             Overseeing the work of the VFM Working Group;
             Reporting progress in delivering the strategy to the Board;

July 2009                                                                                   Page 22 of 23
Raglan HA                                                                                VFM Strategy


             Proposing to the Board additions and amendments to this strategy and
              the Service Improvement Plan.

11.5   Internal communication

       It is important that this Strategy and the key actions to deliver it are
       communicated across the organisation. As set out in the Service Improvement
       Plan, a communications plan comprising a range of actions is in place.
11.6   Monitoring & Review

       The Service Improvement Plan is subject to monitoring and review as a key
       corporate priority. This includes all VFM actions. Within the life of the Strategy,
       we expect to evolve and develop our approach to delivery of VFM. This may
       lead to amendment of the Strategy itself. We will carry out a comprehensive
       review of the Strategy no later than 2012.
       We will monitor delivery of the strategy in a range of ways, reflecting its
       importance to different audiences:
             Developing and implementing the Association‟s Value for Money
              strategy is included in the action plan being monitored by the Working
              Group of the Board dealing with the service improvement plan. Ongoing
              arrangements will be agreed as the work of this group is completed.
             Our Residents‟ Service Improvement Panel is closely monitoring
              delivery of the Service Improvement Plan.
             We report annually to our resident on performance. We will develop
              how we include reporting progress on VFM in this report.




July 2009                                                                                Page 23 of 23

				
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