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Delivering value for money

Welcome | Our 2050 strategy | Value to society | Supporting customers | Providing safe, energy-efficient homes | Financial performance | Value for money | Our staff 

We ensure value for money (VFM) is at the heart of everything we do. By being more efficient, we can build more of the right homes, in the right places, that are safe, decent and energy efficient, and deliver high levels of customer service.

We track VFM performance through a range of financial, operational and strategic metrics, as well as those required by the Regulator for Social Housing. You can find the detailed scorecards in the Value for money section of the Financial report.

  • Business health
    • Core operating margin (excluding profit from development sales and fire safety costs) was 31.3% (2019/20: 31.8%)
    • Overall operating margin increased to 26.3% from 13.0% in 2019/20, primarily due to one-off costs taken in 2019/20 relating to COVID-19
    • Overhead costs as a percentage of turnover reduced to 9.5% from 10.9% in 2019/20 because of increased efficiencies and tight control of overheads.
  • Customer
  • Asset management
    • Reinvestment in homes was 2.9% of the total value of properties we hold, lower than 2019/20 (7.4%), because fewer homes were completed during the pandemic
    • Occupancy rate was 99.5% (2019/20: 99.5%), a four-year high in the number of homes that became empty and were re-let, despite COVID-19
    • Return on Capital Employed, showing the efficiency of investment of our capital, was 4.1% (2019/20: 5.1%), because of fewer disposals and a lower operating surplus
    • Our ratio of responsive repairs to planned repairs increased to 56.4% from 48.5% in 2019/20, due to COVID-19 delaying some planned works.
  • Funding
    • Gearing increased to 47.7% (2019/20: 44.7%), reflecting a £77m increase in net debt to £1.49bn and a £32m reduction in the value of our housing properties to £3.01bn. Our gearing remains low, relatively consistent and in line with the G15 median
    • Our interest cover ratios of 166.1% and 165.6% (2019/20: 59.8% and 120.1%) improved significantly, mainly because of lower interest payments resulting from our successful debt refinancing strategy, including a £400m bond issue in August 2020.
  • Social housing lettings
    • Social housing operating cost per home reduced to £3,951 (2019/20: £4,445), mainly due to lower costs. Our performance remains significantly above the G15 median
    • Property management costs increased to £1,325 per home (2019/20: £1,281), due to increased central costs
    • Service charge costs increased from £624 per home in 2019/20 to £630 per home in 2020/21, due to higher fire safety costs and cleaning costs (as a result of COVID-19)
    • Responsive maintenance costs reduced to £1,074 per home (2019/20: £1,107), as a result of the pandemic
    • Major repairs costs reduced to £610 per home (2019/20: £655), due to the phasing of our stock investment programme
    • Income collection performance of 98.8% was reasonable, considering customers’ financial difficulties during COVID-19 and because it was more difficult to pursue overdue rent through legal enforcement.
  • Development

    We completed 570 new homes in 2020/21: 38% of them for affordable rent, 36% for shared ownership and 26% for outright sale. This was lower than 2019/20, due to delays caused by COVID-19 and the planned completion dates of new properties. We expect to hand over more homes in 2021/22, as we complete delayed projects alongside those originally planned to finish next year.

  • VFM initiatives 2020/21

    We began several VFM initiatives this year:

    • We approved a new integrated, cloud-based finance system and our Digital Programme, which will see us transform our customer services and data management
    • 40 staff were trained in Lean Six Sigma and change management techniques, to help address local process issues and reduce waste
    • We launched an efficiency programme with a target of £11m of benefits in 2021/22.
    • We identified contract life savings of £3.7m through 40 procurement projects
    • We raised £125,000 through selling our procurement frameworks.