Delivering value for money

Welcome | Our 2050 strategy | Becoming truly customer-driven | Our social impact | Providing safe, energy-efficient homes | Building homes | Financial sustainability | Our staff

Value for money (VFM) forms a key element of our 2050 Strategic Plan: by being more efficient, we can create more value that will enable us to build more of the right homes, in the right places, that are safe, decent and energy efficient, and deliver high levels of service to our customers.

We made £11m of efficiencies this year, generating additional income and reducing costs, without compromising customer service. More savings will be made in the next five years, through our Digital Programme and initiatives such as managing the disposal of our empty homes in-house and increasing the size of our inhouse legal team.

We must also continue to get the best possible value for money for our customers whenever we buy goods or services, in the face of increasing costs. In 2021/22, our Procurement team worked on seven major contract tenders, identifying combined savings of £4.1m over the life of the contracts. We also raised £280k by selling our procurement frameworks, and collaborated with external partners in managing and promoting about 90 more.

We track VFM performance through a range of financial, operational and strategic metrics, as well as those required by the Regulator for Social Housing. Highlights are below; you can find detailed scorecards in the Value for money section of the Financial report (PDF, 13MB).

Business health
- Core operating margin (excluding profit from development sales and fire safety costs) was 29.5% (2020/21: 31.3%)
- Overall operating margin fell to 20.2% from 26.3% in 2020/21
- Overhead costs as a percentage of turnover increased to 11.7% (9.5% 2020/21), reflecting our increased operating costs as we invest in our core business.
Customer
- Customer satisfaction with our services was 81.6%; slightly lower than last year. This was partly due to service pressures on ourselves and key suppliers. We’re working to improve overall satisfaction by making improvements and bringing more of our repairs and maintenance services in house in 2022/23
- We continued to provide support to customers and communities, investing a further £2.7m in 2021/22.
Asset management
- Reinvestment in homes was 4% of the total value of properties we hold, higher than 2020/21 (2.9%), as we continued to invest in homes that are safe, decent and energy-efficient
- Occupancy rate was 99.5% (2020/21: 99.5%), reflecting the success of our strategy of increasing customer mobility
- Return on Capital Employed, showing the efficiency of investment of our capital, was 3.2% (2020/21: 4.1%)
- Our ratio of responsive repairs to planned repairs fell to 48.9% from 56.4% but this was still above our target of 36.9%.
Funding
- Gearing reduced to 44.7% (2020/21: 47.7%), reflecting our ongoing work to cut net debt and to have stable treasury management
- Our interest cover ratios of 130.1% and 163.9% (2020/21: 166.1% and 165.6%) remained strong, driven by our lower interest payments resulting from our successful debt refinancing strategy over the last few years.
Social housing lettings
- Our headline social housing operating cost per home increased to £4,464 (2020/21: £3,951) as we continued to invest in our core business
- Property management costs increased slightly to £1,392 per home (2020/21: £1,325)
- Service charge costs increased to £708 per home (2020/21: £630)
- Maintenance costs increased to £1,172 per home (2020/21: £1.074)
- Major repairs costs increased to £865 per home (2020/21: £610)
- Our income collection performance of 100.44% reflects the great work in supporting our customers to pay their rent on time.
Development
We completed 456 homes (including joint ventures) in 2021/22: 73% were social rent and 27% were outright sale. This was lower than 2020/21, due to the timing of completions, combined with hand over delays because of labour and contractor shortages.
We expect to handover more homes in 2022/23, as we complete delayed projects alongside those originally planned to finish next year. We also expect our development activity to increase grow in future years, through our partnerships with private investors. By 2025, we aim to be building an average of 2,000 homes a year.