value for money statement 2017 (for publication)

EHSL

VidecomHouse,NewtownRoad,Henley-on-Thames,Oxon,RG91HG

ValueforMoneystatement2017

EHSLValueformoneystatement-2017

Contents

1 Summaryandoperatingenvironment

2 StrategicObjectives

3 EHSL’svalueformoneystrategy

4 SocialImpactstatement

5 Performancein2016/175.1 Rentcollectionandarrearsmanagement5.2 TenantSatisfaction5.3 VoidManagement5.4 Repairs,maintenanceandcommunalservices5.5 Contributionstoincomefromotherhousingassociations5.6 ReviewofRents5.7 BenefitsanddrawbacksofEHSL’stwomainbusinessmodels5.8 Alternativemethodsofservicedelivery

6 UnitCostcomparison

7 Development

8 AssessingValueforMoney

9 Conclusion

AppendicesAppendixA TenantFeedbackSurveyoutcomes2017.


1 Summaryandoperatingenvironment1.1 EHSLwasestablishedin2012andisavoluntaryorganisation,meaningthatitcarriesonitsactivitiesforreasonsotherthan

profit. EHSLuses any surpluses generated in furtheranceof its objects, rather thandistributing it to other parties. ThispositionispreservedinEHSL’sarticlesofassociation,whichalsosetsoutthattherearenoshareholdersorowners.EHSLisgovernedbyaboardofsixdirectors.EHSLhastwoboardpositionsavailable.

1.2 EHSL’sobjective is toprovidequalitysupportedhousingaccommodationandassociatedservices toa rangeofdifferent

clientgroupsforwhomsuitablealternativeaccommodationisnotavailable.Thisincludespeoplewithlearningdisabilities,mentalhealthissues,autism,acquiredbraininjuries,andothersupportneeds.

1.3 EHSLprovidessupportedhousingaccommodationinconjunctionwithvariousnominatedcareproviders,whoprovideEHSL’s

tenantswithsocialcareservicesfundedbyAdultSocialCaredepartments,theNHS,andviapersonalbudgets.1.4 Theprovisionofsupportedhousingaccommodationisfundedpredominantlyviagovernmentfundingstreams, including

HousingBenefitandinalimitednumberofcases,viaLocalAuthorityAdultSocialCarebudgets.EHSLrecognisesthatithasaresponsibilitytoensurethatitisusingpublicfundsinanappropriatemanner.

1.5 EHSLoperatesmostlyinLondonandsurroundingcounties.EHSLalsooperatesaccommodationintheMidlands.Arangeof

accommodation types are offered, including shared houses, self-contained flats, purpose designed schemes with self-containedareasandcommunalspaces,andordinarypropertieswhichhavebeensecuredtomeettheneedsofaspecifictenant.EHSLintendstoexpandthenumberoflocationsthatitoperatesinordertodeliverservicestoawidernumberofpeople.

1.6 EHSLreliesontheprivaterentedsectortosecureproperty,byleasingpropertiesfromprivatelandlords.EHSLalsoleases

propertiesfromcareproviders.EHSLdoesnotcurrentlyownanyproperty.1.7 Theprovisionofsupportedhousingaccommodationhasawidersocialimpactthansolelyonthetenantsofthathousing.By

providing supported housing, local authorities are able to save money against the cost of providing alternativeaccommodationsuchasinresidentialcarehomes,longstayhospitals,orinhomelessnessservicesandhostels.Byensuringthattenantsareaccessingaccommodationandservicesthataresuitablefortheirneeds,localauthoritiescansavemoneyormakemoreexpensiveservicesavailabletopeoplewhoneeditmore.

1.8 In2016,EHSLsubmittedanapplicationtotheHomesandCommunitiesAgencytoregisterasaproviderofsocialhousing.

EHSL believes that thiswill bring benefits in the formof regulatory oversight, access to funding, increased profile, andprotectionsforitstenantsthatareassociatedwithhavingalandlordthatoperateswithinaregulatedsector

1.9 EHSLiscommittedtoachievingvalueformoneyinmeetingitsobjectives.InrespectofthisEHSLhasanalyseditsincome,

costsandperformanceduringthe2016-17accountingperiodwiththeaimtoidentifyareasinwhichithasachievedvalueformoney,andareasinwhichitcanrevieworimprovehowwellitdoesthis.EHSLhasalsogivenconsiderationtohowitoffersqualityserviceswhilstensuringvalueformoney

1.10 DecisionmadeinrelationtoValueforMoneymustalsotakequalityintoconsideration,withtheintentionalwaysbeingto

ensurethattenantsatisfactionandthequalityandavailabilityofEHSL’sserviceisnotcompromisedasaresult.1.11 EHSLmanagesitsabilitytooffervalueformoneyinthefollowingways:

• RobustandconsistentdecisionmakingbackedbypoliciesandprocedureswhicharereviewedannuallybyEHSL’sboard.• Rigorousappraisalofalternativemodelsofservicedelivery.• GivingconsiderationtothewiderimpactofthedecisionsthatmadebyEHSL.• Riskassessmentandriskmanagementcontrols.• Useofaccountingtoolstoforecastandmeasureriskandreturns.• EnsuringthattheboardscrutinisesEHSL’sexpenditureandthatacultureofpromotingvalueformoneyisfosteredat

alllevelsoftheorganisation• EnsuringthatEHSLunderstandsthefactorsthatinfluenceitscosts.


2 StrategicObjectives

EHSL’sobjectsaredefinedinitsarticlesofassociation.Theobjectsare:

Forthebenefitofthepublic,theprovisionofhousing,accommodationandassociatedadvicetopersonswhoareinneedbyreasonoftheirage,disabilityoreconomiccircumstance

InApril2017,EHSL’sboardproposedarevisiontoitsobjects,intheinterestsofwideningitsobjectivesandtoembeditsnot-for-profitstatusin itsobjects.Theproposedobjectshavebeenapprovedbytheboard,subjecttoconfirmationfromtheregulator.Therevisedobjectsare:

Objects

3.1 TheobjectsforwhichtheCompanyisestablishedare,forthebenefitofthepublic:

3.1.1 Toprovidesocialhousingasdefinedinsection68oftheHousingandRegenerationAct2008anyotherpurposesconnectedwithor incidentaltotheprovisionandmanagementofhousing,socialhousingandaccommodationincluding,butnotlimitedto,theprovisionofsupportservices,housingservices,careservices,trainingservices,adviceservices,andotherservicestopersonswhoareinneedbyreasonoftheirage,disabilitiesoreconomiccircumstances;

3.1.2 Tocarryoutitsbusinessnotforprofit.TheincomeandpropertyoftheCompanyshallbeappliedsolely

towardsthepromotionofitsobjectsassetforthinthisArticle3andnoportionthereofshallbepaidortransferred,directlyorindirectly,bywayofdividend,bonusorotherwisehowsoeverbywayofprofit,tomembersoftheCompany,providedthatnothinghereinshallpreventanypaymentingoodfaithbytheCompany

3.1.2.1 Of reasonable and proper remuneration to any member, officer or servant of the

CompanyforanyservicesrenderedtotheCompany;3.1.2.2 Of any interest onmoney lent by anymember of the Company or any director at a

reasonableandproperrate;3.1.2.3 Of reasonable and proper rent for premises demised or let by any member of the

Companyoranydirector;and3.1.2.4 toanydirectorofout-of-pocketexpenses.

3.1.3Tocarryonanyobjectthatcanbecarriedoutbyacompanyregisteredasaproviderofsocialhousing

bytheregulator.

3.2 EHSLisregisteredasanEnglishbodyunderthecompanyregistrationnumber7965814.

3.3 Theobjectssetforth ineachsub-Articleof thisArticle3shallnotberestrictivelyconstruedbut thewidestinterpretationshallbegiventhereto,andtheyshallnot,exceptwherethecontextexpresslysorequires,beinanywaylimitedorrestrictedbyreferencetoorinferencefromanyotherobjectorobjectssetforthineachsub-Article or from the nameof the Company. None of each sub-Articles or the object or objects thereinspecifiedorthepowers therebyconferredshallbedeemedsubsidiaryorancillary totheobjectsorpowersmentionedinanyothersub-Article,buttheCompanyshallhavefullpowertoexercisealloranyoftheobjectsconferredbyandprovided ineachof thesaidsub-Articlesas ifeachsub-Articlecontainedtheobjectsofaseparatecompany.ThewordcompanyinthisArticle,exceptwhereusedinreferencetotheCompany,shallbedeemedtoincludeanypartnershiporotherbodyofpersons,whetherincorporatedorunincorporatedandwhetherdomiciledintheUnitedKingdomorelsewhere.

3.4 IfuponthewindingupordissolutionoftheCompanythereremains,afterthesatisfactionofallitsdebtsandliabilities,anypropertywhatsoever, the sameshallnot bepaidordistributedamongthemembersof theCompany,butshallbegivenortransferredtosomeotherinstitutionhavingobjectssimilartotheobjectsoftheCompanyandwhichshallprohibit thedistributionof its or their income to itsor theirmembers, suchinstitutionstobedeterminedbythemembersoftheCompanyatorbeforethetimeofdissolutionsubjecttoS167oftheHousingandRegenerationAct2008andwiththeapprovaloftheCharityCommissionifrequired.”


3 EHSL’sValueforMoneystrategy3.1 InOctober2016,EHSLprepareditsfirstValueforMoneyStrategy.Thepurposeofthestrategy istoensurethatEHSL is

maximisingopportunitiestoachieveoptimumvalueformoney,inthecontextofsustainabilitywhilstensuringqualityandtenantsatisfaction.

3.2 Withinthisstrategy isadefinitionofValue forMoney,specificpriorities, informationonhowEHSL involvesresidents in

ensuringvalueformoney,strategicobjectionsandactions,responsibilitiesfordelivery,andtheKeyPerformanceIndicatorsthatallowEHSLtomeasurehowandwhereitisachievingvalueformoney,andwhereimprovementscanbemade

3.3 EHSL’sstrategyhasbeenmadeavailabletoallstaff,andvalueformoneyisdiscussedaspartofalldecision-makingprocess.3.4 TheSocialHousingRegulatorhasproposed thatchangesaremade to theValue forMoneystandardand thatacodeof

practice is introducedtoaccompanythestandard.Theproposedstandardwill requireproviderstomoveawayfromthecurrentnarrativereportingmethodofassessingvalueformoney,andtowardsasetofmetricsdefinedbytheregulator.ThenewstandardisproposedtobeintroducedfromApril2018.EHSLwillmonitortheproposalinorderthatitcanensurethatitsstrategyiscompliantwiththenewstandard.


4 SocialimpactStatement

EHSL’sprovisionofsupportedhousingaccommodationpreventstenantsfromrelyingonmorecostlyservicessuchasresidentialcarehomesandlongstayhospitals,contributingtoagovernmentpolicywhichcommencedaslongagoas1959withthe1959MentalHealthAct.EHSLhasprovidedaccommodationtopeoplewhohavepreviouslylivedinlongstaymentalhospitalsorNHScampuses.Inothercases,EHSL’saccommodationhasbeenmadeavailabletopeoplewhowouldotherwisehavebeeninprison,orbereliantonshorttermaccommodationsuchashomelessnesshostels,shelters,ortemporaryaccommodation.WhilstitisdifficulttoquantifyexactlyhowmuchhasbeensavedduetothevaryingprofileofneedofEHSL’stenantsandtheabsenceofexactcostfiguresofalternatives,thereareanumberofresearchpapersandstatementsinwhichthewidereconomicvalueofsupportedhousingismeasured.

“Supportedhousingmakesgoodeconomicsense.Itdeliversaveragenetsavingstothepublicpurseofaround£940perresidentperyear.Dependingonthetypeofscheme,thelevelofsavingscanbeevengreater;forexampleforpeoplewithlearningdisabilitiesthesavingis£6,764perresidentperyear.Researchundertakenin2009showedanetfinancialbenefitoftheSupportingPeopleprogrammeof£3.41bnperyearagainstanoverall investmentof£1.61bn.Anew,sustainableapproachtofundingsupportedhousingisneededtoensurethebenefitsofsupportedhousingaremaximisedandpositiveoutcomesforthepeoplethatliveinitcontinuetobedelivered.

Theavailabilityofspecialistandsupportedhousingisfailingtokeepupwithexistingandincreasingfuturedemand.Thisleavesolderandvulnerablepeopleinhousingthatdoesnotsuittheirneedsandwhichdoesnotdelivertheintegratedcareandsupportwhichissovitalfortheirindependence.Itisestimatedthataround16,000morespecialisthomesareneededeveryyearforolderpeoplealonetoclosethisgapby2030.Thisdoesnotincludetheextrahomesrequiredforthethousandsofotherswithsupportneedssuchasthosewithlearningdisabilitiesormentalhealthproblems”1

Based on the saving calculation of £6,764 per resident per annum, as above. EHSL’s provision of supported housingaccommodationfor180peoplecontributedtoacentralgovernmentsavingofaround£1,217,520in2016/17.

1 Aproposalforastrongandsustainablefutureforsupportedandshelteredhousing,TheNationalHousingFederation,2016


5 Performancein2016/175.1 Rentcollectionandarrearsmanagement

RentarrearsplacesstressonEHSL’sfinancesbecauseatenant’sfailuretopaytheirrentresultsinEHSL’sresourcesbeinglimited,constrictingitsabilitytodeliveritsobjectives.During2016/17,EHSL’srentarrearsfigurewas£71,886,representing4.5%ofrentsdue.Rentarrearsmayoccurforanyofthefollowingreasons,whichEHSLaddressesinthefollowingways.

Reason ApproachTechnicalRestrictionofHousingBenefitawardstoalevelbelowtheeligiblerent.

EHSLsupportstenantstoappealtotheHousingBenefitdepartment.Arobustrentsettingmethodologyandconsistencyinapproachensuresthatrentsarereasonableandwithinmarketrentlevels,reducingtheriskofthesedecisionsbeingmade.

RestrictionofHousingBenefitawardstotheleveloftheLocalHousingAllowance.

EHSL supports tenants to appeal to the Housing Benefit department, andsubmitsdocumentationevidencingeligibility forclaimstobetreatedunderexemptaccommodationrules.EHSL’sstaffhavealsoreceivedtrainingspecifictowelfarebenefitlegislation.

Tenantscircumstancesaffectingtheirabilitytoclaimhousingbenefit(i.e.notbeinginreceiptofqualifyingwelfarebenefits)

EHSLseekstoidentifyeligibilityissuesatanearlystageaspartofitsrobustreferralprocess.Whenanissueisidentified,EHSLoffersadvicetotenantsandstakeholders,signpostingtenantstoadditionaladviceasappropriate.

IneligibilityforHousingBenefitforreasonsrelatingtoalackofidentificationorsupportingevidence.

EHSLseekstoobtainthisdocumentationpriortoissuingatenancyagreement.

Failuretosuccessfullyclaimhousingbenefit

EHSLoffersassistancetotenantstomakeahousingbenefitclaimonthedaytheymoveintotheaccommodation.EHSLthenfollowsuptheclaimwiththeHousingbenefitdepartmenttoensurethatitremainsopenuntilitisawarded.

Non-technicalFailuretopayHBineligiblecharges.

EHSLissuestenantswithapre-populatedstandingorderforminorderthatastandingordercaneasilybesetuptocoveranychargesthatarenoteligibleforHousingBenefit.During2017EHSLmovedbanksfromClydesdaleBanktoHSBCtoenabletenantstomakecashpaymentsinbranch.

Poorbudgetingdecisions

EHSLoffersitstenantsconsultativevisitsandworksinpartnershipwithlocalauthorities, care providers and other stakeholders to assist tenants withbudgeting. Where a tenant is unable to manage their money and theiraccommodationisatriskasaresult,EHSLwillbeinsupportofarrangementstoappointanappropriatedeputy.

Derelictionofdutiesbyanappointeeordeputy

EHSLchallengesdeputiesandappointeeswhodonotmeettheirobligationstowardsEHSL’stenants.Insomecases,parentaldeputyshiphasbeenrevokedinfavouroflocalauthoritydeputyship.

Disputesoverliability

EHSLpresentsitsrentandservicechargeinformationinaclearformat,witheasy-readmaterialsavailabletoassisttenantsunderstandingofwhattheyareresponsibleforpayingfor.Thetenants’handbookprovidesinformationabouthowtopayrentandothercharges.Thisensuresthat tenantsareawareoftheirresponsibilities,minimisingdisputes.

Lackofcapacity

EHSL works with local authorities to address matters relating to lack ofcapacity, seeking to establish arrangements for money management fortenantswholackcapacity.

Availabilityoffunds.

EHSLoffersitstenantsconsultationvisitsandworksinpartnershipwithlocalauthorities,careprovidersandotherstakeholderstoassisttenantstoaccessthewelfarebenefitsthattheyareentitledto.

NoteInsituationswhereatenantfailstomakepaymentofanysumsduetoEHSL,EHSLwillconsideralloptions inrespectofrecoveringthedebt.Thismayincludesettingapaymentplan,appealingtotheauthoritytoinstigatedeputyshipproceedings,invoking direct deductions from source via the DWP, and opening possession proceedings to recover possession if thesituationhasbecomeuntenable.


5.2 TenantSatisfaction.InFebruary2017EHSLpreparedananonymoussurveyusingthe‘SurveyMonkey’website,whichwasdistributedviaemail.EHSL contacted thecare companies thatprovidecare to its tenants, asking them forassistance inengaging tenants torespondtothesurvey.Wealsoofferedfamilymembersandprofessionalstakeholdersanopportunitytorespond.Somecareproviderswereparticularlysupportive inengagingtenantstorespond,othersdidnotrespondoracknowledgetherequest.Thefullsurveyreportcanbefoundattherearofthisstatement.

EHSLreceived5responsestothesurvey.Werecognisethatthisisalevelthatistoolowtoestablishthebroadscopeofareasthatmayrequireimprovement,althoughitislikelytobethecasethattenantswhowouldgivefeedbackfornegativereasonmayhavebeenmoremotivatedtocompletethesurvey.ResponsesmayalsorelatetostockthatEHSLmanagesforotherassociations,forwhichwedonothavecontrolovercertainaspectsofservicedelivery.Thelackofawiderresponseindicatedthatthecareprovidersmaynothavemadealltenantsawareofthesurvey,orcareprovidersmayhavecompletedoneformtosummarisetheresponsesofanumberofpeoplethatitsupports.EHSLaskedtherespondenttostatewhethertheyareatenant,supportproviderorotherstakeholder.Havingreviewedfeedbackreceived,EHSL’sactionplanincludedthefollowingpoints.

ActionPointfromFebruary2017. Positionatendof20171. EHSLwillappointapropertymanagerwhose

role is to deal exclusively with repairs andproperty related matters. This will ensurethatweareappropriatelyresourcedtodealwithmattersofthisnatureandcanimprovetheservicebeingoffered.

InMay2017EHSLappointedafull-timepropertymanager.Thenewrolehasmadetimeavailableforhousingofficerstofocusontenancymanagement, with all repairs, maintenance, adaptations, safetychecksandcompliancerelatedworksbeingdealtwithaspartofthefocusedPropertyManagerrole.

2. EHSLwillreviewitspropertymanagementsoftwareandthefunctionsitoffers,withaviewtoensuringthatitfollowsuponahighernumberofrepairstoensurethatthetenantissatisfiedwiththeworkperformed.

In May 2017 EHSL started using Re-Leased property managementsoftware,whichisbettersuitedtomeetEHSL’sneeds.Thissoftwareis integratedwith theonlineaccounting softwareEHSLuses,whichsavestimeinthepreparationoffinancialreports.Thesoftwareallowstrackingandflaggingoflatejobs.

3. EHSL will review its response times andclearlysetoutwhattenantsshouldexpect.

EHSLhasrevieweditsrepairsandmaintenancepolicyandmadethisavailable via its website. Further information is provided in theTenantsHandbook.

4. EHSLwilldistributeaTenant’sHandbooktoallnewandexisting tenants. Indoingso, itwill provide relevantinformation about itsservices.

EHSLpreparedanddistributedaTenantsHandbookinApril2017.Thehandbookisgiventoeachnewtenant.

5. EHSL will conduct a further feedbackexerciseaimedatassessingthequalityandvalue formoneyof the communal servicesprovided.

EHSLintendstoconductanewsurveyinFebruary2018,andwillmakeit easier for tenants to respondbyalsoofferingpaper formsandatelephoneresponseoption. Itwillpromote thesurveymorewidelyusingbothemailandthepostalservice.

6. EHSL will review the quality of the repairscontractors that it uses and seek tointroducenewcontractorswherealackofqualityisidentifiedandnotremedied.

EHSL has reviewed the level of service from its contractors andstoppedusinganumberwhoitfeltwerenotmeetingthestandardsexpected.The issues related topoorqualityof communicationandtimekeeping,andfailuretomeetagreeddeadlines.EHSLhasalsointroducedanewemergencymaintenancecontractor.Thecontractoroffersa‘troubleshooting’servicewhichisintendedtominimise unnecessary call-outs. There are also tighter controls forauthorisation of works which exceed the pre-approved limit thantherewerewiththepreviouscontractor.

7. EHSL will review its rent arrears andevictionspolicy

EHSLhasrevieweditspolicyandwhilstitfeelsthatthepolicyremainsappropriate,EHSLhasreceivedfeedbackthatitissometimesquicktocommencepossessionproceedingswhenotherstakeholdersfeelthatall alternative avenues have not been explored fully. EHSL isaddressing this by reviewing authorisation procedures prior toinstigatinganeviction–thisincludestheintroductionofanEqualityActassessmentpriortoanyproceedingscommencing,alongwiththerequirementforacapacityassessmentthatwillinformotheractions.EHSL has prepared and distributed information for tenants andstakeholdersexplaininghowtheevictionprocessworks.


5.3 Voidmanagement

EHSL’s position is thatwhere aunit of its accommodation is not beingused, EHSL’s ability tooffer value formoney iscompromised.Thus,voidriskmanagementisakeyareaoffocusaffectingbothvalueformoneyandviability.ThenatureofEHSL’ssupportedhousingaccommodationissuchthatvoidperiodsaresometimeslongerthanwewouldlike.Voidsmaynotberefilledpromptlyforanyofthefollowingreasons,eithersinglyorincombination:• QualityofEHSL’srelationshipwiththelocalauthority• Qualityofthenominatedcareprovider’srelationshipwiththelocalauthority.• Lackoflocalsupportforthescheme.• Difficultiesinfindingnewtenantswhoarecompatiblewithexistingtenants.• Desirabilityoftheaccommodation,includingsize,qualityoffacilities,location,condition.• Limitednumbersofpeoplewithinthescheme’sintendedclientgroup.• Lackofsuitabilityofreferralsreceived• Oversupplyinsurroundingarea.• Forthcomingclosure• ChangeofcommissioningprioritiesSharedhousingschemesareexposedtoagreaternumberoftheserisks.Theseschemesshouldonlybesetupwherethereisstrongdemandcommunicatedbyalocalauthority,andthatitisexpectedthatthisdemandwillbesustainedforthefull

durationofanylease.Schemescontainingself-containedflatsareleastlikelytosufferfromlong-termvoidsastheyareconsideredamongstthemoredesirableofaccommodationtypes.Singleoccupancyschemesindispersedaccommodationarelesslikelytobecomevoidastheytendtobesecuredwithaparticulartenant’sneedsinmind.Dependingonlocation,voidsintheseschemesmaybemoredifficulttore-fill.Longstandingissueswithvoidssuggesteitherineffectivecommissioningorthataserviceisnolongerrelevanttomeetingtheintendedclients’needs.EHSLconsidersvoidriskmanagementtobeoneofthemostimportantaspectsofensuringvalueformoney.Bypartneringwithacareproviderwhoundertakestocoverperiodsinwhichpropertiesarevoid,themajorityofriskismitigated.EHSLisexposedtovoidriskinthefollowingareas.• WhereEHSLleasesapropertyfromtheprivatesector,itmayneedtospendsomeperiodoftimepreparingthe

propertyforoccupancybysupportedhousingtenants.Thismightincludefiresafetymeasures,adaptations,HMOrelatedworks,provisionof furnishings/whitegoods,andothersuchhealthandsafetyrelatedtasks.Oncethiswork is completed and any void free periods expires, the care providers liability to meet the cost of voidscommences.

• InsituationswhereacareproviderceasestoprovidecaretoanEHSLtenantandEHSLchoosestocontinuetoprovideaccommodationwithoutavoidcoveragreementinplace,EHSLwouldcoveranylossesrelatingtovoidsoccurringafterthecareproviderhasbeenreleasedfromitsobligations.

• Situations inwhichEHSL leasesaproperty fromacareproviderwithrentpayableonthebasisofoccupancy.Duringvoidperiods,EHSLdoesnothavetopayrenttotheheadlandlord,butalsocannotcollectarentorvoidcovertocontributetowardsitsothercosts.

During2016/17,£58,709.70of incomewasforegoneasaresultofvoids.EHSLdidhowevercollect£153,420fromcareprovidersinrespectofvoidsthattheywereliableforundertheagreementsinplace.EHSLcontinuestoworkwithitscareproviderpartnerstoensurethatvoidsaremanagedeffectively.EHSLincludesacomponentwithinitsrentforvoidandbaddebtcovertomeetthecostsofvoidsthatEHSLisliablefor.EHSLisseekingtofillingapsinitsvoidcoverarrangements.VoidCoverinsuranceEHSLhasassessedwhetherVoidCoverinsurancewouldbeanappropriatewaytomanagevoidrisk.EHSLdeterminedthatthecostofinsurancewouldbegreaterthanthepaymentsitwouldreceivefromtheinsurer–thisisbecausetheinsurerwillonlypaywherevoidshaveoccurredforspecifiedreasons-manyvoidshaveoccurredforreasonsthattheinsurerwillnotinsureagainst,includingEHSLledterminationsandterminationsthatdonotrelatedirectlytothetenants’healthandsocialcareneeds.


5.4 Repairs,Maintenance,andcommunalservices

ExtentofrepairsandmaintenanceservicesEHSLleasespropertiesfromprivatelandlordsandcareproviders,onvaryingterms.Thelongestleasesare5yearswiththeoptiontorenew,andtheshortestcanbeforjustoneyear.Inmostleases,thebuildingownerisresponsibleforsomerepairsandmaintenance,althoughthisisusuallylimitedtoworksunderSection11oftheLandlordandTenantAct1985.Broadly,thismeansthattheyareresponsibleforensuringthatthereareworkingsystemsforheating,plumbingandelectricitysupply,andthattherearenoissueswiththefabricandstructureofthebuilding.WhilstthisreducesEHSL’sliabilityforrepairs,itdoesmeanthatEHSLisnotincontrolofupgradesandrenewalsthatmayberequired.EHSLincurscostinrelationtoresponserepairstothesesystems,includingviaemergencycall-outs.ItisimportantthatEHSLmakesprudentdecisionsinrelationtowhereitspendsmoneywhereitdoesnotownthebuildingsaccommodationisprovidedin.AnothersignificantareaofmaintenanceexpenditureforEHSLisinensuringthattheaccommodationitsecuresissuitablefor itstenants.Thisoften includesthe installationofmorerobust firealarmandemergency lightingsystems, firedoors,otherworks related to standards for Houses inMultiple Occupation, including local standards and legal requirements,installationofdifferenttypesofsanitaryfacilities,worksintendedtopreventorminimiseanticipatedfuturedamage,andworksintendedtoensurethatthepropertymeetstherequirementsoftheDecentHomesstandard.Inmakingdecisionsaroundthistypeofexpenditure,considerationmustbegiventothelongevityandsuitabilityoftheaccommodation,theexpectedlifespanoftheaccommodation,therecoverabilityofthecostsincurredinmakingthesechanges,andwhetherthecostsproposedarereasonable.

Useofmaintenancemanagementsoftware,and24/7reporting.EHSLhasrevieweditsrepairsreportingprocessandthesoftwareitusesformanagingrepairs.In2017,EHSLimplementedtheRe-Leasedpropertymanagementsystem,allowingrepairstobetrackedeffectivelyandforcoststobelinkeddirectlyintoEHSL’saccountingsystem.

EHSL’stenantscanreportrepairsviaemailorbytelephone,viaa24/7callcentrenumber.Whereanemergencyisreportedduringeveningsandweekends,EHSL’sout-of-hourscontractorisnotifiedinorderthatthenatureoftheemergencycanbeverifiedagainstalistofagreedemergencysituations.Thecontractor’sservicewilldiscusspossibleend-userledsolutionswiththecaller(i.e.switchinganRCDon,placingabucketunderacontainableleak,adjustingathermostat),andacontractordispatchedonlyifrequired.IfanemergencyisreportedduringofficehoursEHSLstaffconsiderthemostcost-effectivewayto resolve the issue, limiting the use of expensive emergency contractors only to situationswhere they are absolutelynecessary. It is importantwhenarrangingrepairs toensurethat theresponse isproportionate– theappropriatenessofsendinganemergencycontractorwilldependontheextentoftheissue,theimpactitishavingonthetenant,theneedsofthetenant,andthecomparativecostbetweenanemergencyrepairandaroutinerepair.

“Dependingonthecontractingarrangements,respondingtoarepairasaprioritycanbemoreexpensivethantreatingthesamerepairasroutine.Reducingthenumberofemergencyandurgentrepairscanbringimportantfinancialsavings.Theproportionofpriorityworkundertakenwillbeinfluencedbyseveralfactors,includingthenatureofthestockandtenantprofile.However,ahighpercentageofemergencyandurgentrepairsmayindicatethatworkisbeingover-prioritisedandhighlighttrainingneedsaroundtheaccuratediagnosisandprioritisationofrepairs2.”

EHSLseekstoensurethatrepairsarediagnosedeffectively.Allout-of-hourscallersareaskedtoidentifywhethertheirrepairisanemergencyrepairoraroutinerepair.Ifthecalleridentifiesthattheyhaveanemergency,theyaredirectedtotheout-of-hourscontractor,whowillverifytheissueagainstalistofpre-agreedemergencies.Secondly,theout-of-hourscontractorwillattempttotalkthecallerthroughpossiblesolutionsiftheremaybeasolutionthatcanbeimplementedbyanend-user.Anout-of-hourscontractorwillbedispatchediftheissueisanemergencyandthe‘troubleshooting’hasn’tworked.Iftheissueisn’tanemergencythecontractorwillrefertheissuetoEHSL’steamforadecision.Theout-of-hourscontractorcanalsoperformroutineworksatEHSL’s request,atdaytime rates.The service is subject toanauthorisation limitwhich issufficientforallsituationstobemadesafe.

ProcurementServicesandworksatEHSL’spropertiesaretwoofEHSL’smainareasofexpenditure.It isgovernedbytheprocurementpolicy,whichisdesignedtoensurethatservicesarecontractedwithbusinessesthatprovidevalueformoney.ItisimportanttoEHSLthatitisnotspendinginappropriatelyonservices,orcollectingfundsforservicesitisnotrequiredtoprovide.EHSLiscurrentlyexploringopportunitiestojoinprocurementclubsandassociatedinitiatives

2HouseMarkG15Clubbenchmarkingreport2012/13


Appointingin-housemaintenancestaff.EHSL relieson thirdpartymaintenancecontractors tomeet itsmaintenanceobligations.EHSLdoesnotemploy itsownmaintenancestaffbecauseEHSL’spropertiesarespreadacrossawidearea.EHSLhasconsideredappointingmaintenancestafftocoverspecificareas,andhasassessedthatthiswouldnotoffervalueformoneyforthefollowingreasons:

• EHSLwouldstillneedtousethirdpartycontractorsforworkswhichitsownmaintenancestaffwerenottrainedtodo–appointingamulti-skilledtradespersonwouldincreasecostbecausesalaryexpectationswouldbehigher,andinmanycasestheywouldbespendingtimedoinglower-skilledworksuchaspaintingandhandymantypetasks.

• EHSLhas23 siteswithin reachof theM25, including in Londonboroughs, Kent, SurreyandHertfordshire. ThelocationofEHSL’sconcentratedstockisinpredominantlyhighcostareas,withhighersalaryexpectationsasaresultofthecostofliving.

• Comparableroleswithinotherorganisationsarefilledatsalariesofaround£23k-28kpa.• Othercostswouldincludetools,avehicle,insurance,NICandpensioncontributions,holidayandsicknessabsence

allowances,fuelandparking,management,andtimelosttotravel.Basedonprudentassumptionsaroundsalaryandothercosts,eachdayofworkwouldcostaround£195,notincludingmaterials.EHSLfeelsthatwhilstthisiscomparable to emergencymaintenance contractors’ costs, EHSL does not engage an emergencymaintenancecontractorforeverydayofeveryweek,andthereforecannotjustifyemployingsomebodytocoveraspecificareaatthiscost.

• EHSL engages contractors to perform routinemaintenance, withmany jobs costing significantly less than thecalculateddailyrateabove.

ThesuggestionwasdiscountedbecauseEHSLfeelsthatitsstockistoogeographicallydispersedforittobecosteffectivetoappointitsownmaintenancestaff.EHSLwillreviewthispositionperiodically,particularlyifitsecuresasignificantamountofstockwithinaclearlydefinedgeographicalarea.

5.5 ContributionstoincomefromotherHousingAssociations.

EHSLhasprovidedtenancymanagementservicestoanotherhousingassociationsince2014,anactivitywhichisdeemedtobeanon-socialhousingactivity.Attheendofthe2016/17accountingperiod,EHSLwasprovidingservicesto83units.Theservices include tenancy sign-ups, inspections, addressing anti-social behaviour, the arranging of communal serviceprovisions,accesstoEHSL’srepairsreportingfunctions,liaisonwithtenantsandotherstakeholders,andengagementwithHousingBenefitdepartmentsinrespectofbenefitawardsandrentlevels.Thecostsincurredrelatepredominantlytostaffingandtravel.TheprovisionoftheseservicesallowsEHSLtocollectadditionalincome,whichisallocatedagainststaffingcostsonapro-ratabasis–meaningthatthecostofmanaginganEHSLtenancywasconsideredtobethesameasthecostofmanagingatenancyforanotherassociation.EHSL’ssurplusfortheperiodincludedacontributionfromtheincomereceivedfromtheotherhousingassociation.EHSLconsiders that theprovisionofservicestootherassociations’stockassistswithofferingvalue formoneybecauseEHSL cancharge feesat a levelwhich supportsEHSL’s staffingprovision,enablingefficienciesassociatedwithscale.

5.6 Reviewofrents

During 2017, EHSL has reviewed how it sets rents and has prepared a new rent setting policy to comply with therequirementsoftheWelfareReformandWorkAct2016.EHSLhaspreparedarevisedmethodologyofdeterminingthatitsrentsarewithinthemarketrents,whichhasbeenapprovedbySavillsHousingConsultancy.ThismethodologyensuresthatEHSLproducesrentsthatarewithinmarketrentsforsupportedhousing.RentsaresubjecttointernalapprovalbytheChiefExecutive,priortoexternalapprovalbeingsoughtfromtherelevantlocalauthority.InFebruary2017,allrespondentstoEHSL’s feedbacksurveystated that theywereeither satisfiedorvery satisfied thatEHSLwas fairand transparentwhensettingrentsandservicecharges,andmanagingdebt.

5.7 BenefitsanddrawbacksofEHSL’stwomainbusinessmodels.

OneofthemethodsthatEHSLreliesonisaccessingthePrivateRentedSectortosecuresuitableproperty,whichitthenoffersforaslongasitisableto,renewingleaseseveryfewyearstocontinuetheprovision.AnothersignificantamountofEHSL’sbusinessrelatestopropertywhichisownedbyacareproviderthatalsoofferscaretothepeoplelivingintheproperty.

EHSLisawarethateachmodelhasdifferentstrengthsandweaknesses,andthatitshouldexplorealternativemethodsofservicedeliveryinallareasoftheorganisation–thisisparticularlypertinentwhenitrelatestohowEHSLconductsitscorebusiness.


EHSLhasconducted‘SWOT’analysisofthetwomainmodelsofaccommodationprovision.

SWOTanalysisofworkingwiththePrivaterentedsectorStrengths Weaknesses • There isawide rangeofpropertyadvertised to

leaseatanyonetime• Theturnaroundtimeonceapropertyisidentified

israrelylongerthanamonth.• Lease rents are favourable to other models as

EHSL’sleasepaymentcostsarealignedwiththewiderhousingmarket.

• Lowset-upcosts,usuallynomorethan£10,000.• Arrangementscanbeexitedwithrelativeease.• Some landlords are willing to dispose of their

propertytoEHSLshouldEHSLhavethemeanstopurchaseit.

• Abilitytosecurepropertyissubjecttolandlords’perceptionofthearrangements,andofthecaresector

• Leasetermsarerarelylongerthan3years.• Lackofflexibilitywithcarryingoutadaptations• Short-termismmeansthatitismaynotoffervalueformoney

toinvestinimprovementswhichEHSLwillnotseeabenefitforduringthelifespanoftheimprovement.

• Some lease terms are onerous and letting agents will notalter standard leases to allow terms that consent to sub-letting.Thiscanobstructproposals.

• Searching for suitable and available property is time-intensive.

Opportunities Threats • EHSLisinastrongpositiontoleasepropertyina

widegeographicareadueto itsexperienceandknowledgeofthismodel

• Arrangementscanbemadetoprovidebespoketransitional accommodation which enables aclearcarepathwayfortenants.

• A higher volume of accommodation can beprovidedwithminimalcapitalinvestment.

• Schemesinareaswithhighpropertycostscanbedeliveredusingaleasedbuildingatalowercostthan could be achieved where a property ispurchased.

• Incidencesofdamageandanti-socialbehaviourposeahighriskofarrangementsbeingterminated.

• Arrangementsmaybe terminated at the expiry of a lease,witharelativelyshortnoticeperiod.

• Rentincreasesarerarelylimitedtoapre-setlevel.• Somelandlordsareemotionallyinvestedintheirproperties

and can become more involved than is desired, makingschemesvulnerableshouldtherebeissueswithdamageorchallengingbehaviour.

• Landlordscanbepooratmeetingtheirrepairingobligations.• EHSLmayincurcostatterminationduetodilapidations.

SWOTanalysisofworkingwithcareproviderlandlordsStrengths Weaknesses• Accommodationtendstobepurposebuiltandof

a good size, designed with a particular clientgroupinmind.

• Arrangements are made with care operatorswhohaveextensiveknowledgeofthesectorandtherisksassociatedwithit–partnershipworkingtendstoberobustasaresult.

• Rentstendtoberealisticandthecareoperatoroftenretainssomerepairingobligations.

• There is often strong support fromcommissioningwhenacareoperator setsupanewschemeinabuildingthattheyown.

• Nominations are often solely the responsibility of the careoperator and there is little control over who lives in theproperty.

• Theissuingofanewtenanciesmaybesubjecttocare,supportorsupervisionbeingprovidedbythecareproviderthatownsthebuilding

• Occupancybasedheadrentpaymentscanmeanadeficitofservicechargeincomeduringperiodsofunder-occupancy.

• ThesuccessoftheschemeisoftensolelyinthehandsoftheCareoperator and their relationshipwith the relevant localauthority.

Opportunities Threats• Care operators can own large estates, which

includepropertiesthatrequirederegisteringandconverting from Care Homes to SupportedLiving.

• Careoperatorsrequireahousingpartnertobeinvolvedwheretheywishtoprovidesupportedhousinginabuildingthattheyown.

• Continued development activity by careoperatorsmeansastrongpipelineofthistypeofproperty

• Thearrangementscanbeseentobecontrivedtocreateanartificial separation of housing and support if notmanagedappropriately.

• Arrangementsmayallowthecareoperatortowithdrawwithshortnoticeandpasstheschemetoacompetitor

• Therehasbeensomedifficultywithimplementingnewrentsat existing schemes – new rents can be perceived to be‘contrivedtotakeadvantageoftheHousingBenefitscheme’

• Lackofcontroloverrepairsandmaintenance.


6 UnitcostcomparisonInJune2016,theHomesandCommunitiesAgency(thesocialhousingregulator)publishedareportentitled“Deliveringbettervalueformoney–understandingdifferingunitcosts”Thereportsetsoutthemediansocialhousingcostfiguresforthesectorandprovidesnarrativearoundthefactorsthataffectcost,andhowvalueformoneyismonitoredacrossthesector.

“Medianheadlinesocialhousingcostswere£3,550perunit in2015.This ismadeupofmanagementandservicechargecosts,maintenance,majorrepairsandothersocialhousingcosts.However,thereisconsiderablevariationincosts:withthelowerandupperquartilesofheadlineunitcostsbeing£3,200and£4,300respectively,andaminorityofproviders-mainlysupportedhousingspecialists-withheadlineunitcostsinexcessof£10,000.”

Ahypothetical‘baseline’provider(with100%generalneedsproperties,traditionalstatus,withallunitsmeetingtheDecentHomesstandard,andoperatinginanareawithmeanaveragewagesandmediandeprivation)mightbeexpectedtohaveacostof£3,300perunit.Around50%ofthevariationinheadlinesocialhousingcostsperunitcanbeexplainedbythefollowingkeyfactors,orderedbyrelativeimportance,andholdingallotherfactorsconstant:

• Supportedhousing(notincludinghousingforolderpeople)–eachunitisassociatedwithcostsof£10,800aboveGeneralNeedsproperties.Thisislikelytobeassociatedwiththehighsupportcosts,andabroaderscopeofactivitiesundertakenbyorganisationswithaspecialisedfocus.Thepreciseestimateofassociatedcosts issensitivetotheinclusion or removal of more specialised supported housing organisations, with model estimates varying from£8,400to£14,000perunit.Thereislikelytobeconsiderablediversitywiththecostassociatedwitheachsupportedhousingunitinthesector,forexamplebytheclientgroupandthelevelofservicesupplied.”

EHSLhasassesseditsheadlinesocialhousingcostperunitforthe2016/17periodbasedontheHCA’sunitcostdefinitions,andthefiguresprovidedintheglobalaccountspublishedon13December2017.

Sector mean for 2017 – source, HCA global accounts 2017 SectorMean

Medianbyprovider(unweighted)

EHSL’scostsin16/17(180tenancies)

Management&servicechargecosts £1,494 £1,313 £7,601.92 1

Maintenancecosts £991 £925 £757.60 2

Majorrepairscosts £747 £683 Nil 3

Othersocialhousingcosts £467 £241 £323.64 4

Headlinesocialhousingcosts £3,698 £3,162 £8,683.15

Notes:

1. ManagementandservicechargecostsareinclusiveoftherentspaidbyEHSLtoleaseproperties,staffingcosts,andservicechargesthatarepredominantlymadeupofgardening,windowcleaning,communalcleaning,andutilitysupplieswhichEHSLcollectsandrecharges.EHSLbelievesthatitsmanagementcostsarehigherthanthesectoraveragebecauseEHSLprovidessupportedhousingservicesacrossawidegeographicarea,toasmallernumberoftenantswithcomplexneedsforwhomahigherlevelofmanagementinputisrequired.AkeycontributortothesecostsaretherentspaidbyEHSL.Servicechargesincludeservicessuchasgardeningandwindowcleaningthatareperformedfortenantswithadisability,whengeneralneedstenantsmaynotbeprovidedwithsuchservices.EHSLbelievesthatincreasingitsstocklevelswillenablegreatervalueformoneytobeachieved for itsmanagementcosts,andthiswillbring itscostcloser to thesectormean.ManagementandServicechargecostsarebrokendownmorefinelyasfollows.

ManagementandServiceChargeCosts EHSL’scostin16/17Headlandlordrentspaid £5,637.86Staffing £929.11Communalservices £269.93Utilitybillcosts £527.17Other(professionalfees) £98.16CouncilTax £139.70Total £7,601.92


2. EHSL’smaintenancecostsare lowerbecausemanyof the landlordsthat itworkswithareresponsible forspecific repairsunderbothindividualleasesandunderSection11oftheLandlordandTenantAct1985.Theseworksarefundedindirectlyvia the lease rents paid by EHSL. EHSL does however incur cost in relation to its emergency maintenance provision,adaptations,andworkstopreparepropertiesforletforitsclientgroup.LandlordsalsoexpectEHSLtomeetcostsrelatingtohowitstenantsandtheirstaffusetheaccommodation,includingworksrequiredasaresultofdamageandgreaterwearandtear.

3. EHSL does not generally have significantmajor repairs costs because it does not own the buildings inwhich it providesaccommodation,andlandlordsareusuallyresponsibleforcarryingoutmajorrepairs.Anyitemswhichmightbeclassedasmajorrepairshavebeenincludedwithinmaintenancecosts.EHSLhasreviewedhowitrecordsmaintenanceexpenditureandwillrecordmajorrepairsseparatelyfrommaintenanceforthe2017/18period

4. Includesoverheadsandcentraloperatingcosts,inclusiveofofficerent,ITequipmentandservices,postage,advertisingandpromotion,consumables,accountingandlegalcosts.Itisfeltthatefficiencieswillbeachievedwithanincreaseinstocklevels–forinstance,EHSLwillnothavetopayahigherrentforitsoffice,butcouldaccommodateuptotwiceasmanyfull-timestaffasarecurrentlyemployed.

EHSLhasconsideredhowitscostscomparetotheHCA’sunitcostfiguresandestablishedthatitsaccommodationisofferedatacostsignificantlyhigherthanthesocialhousingsectormean.Thisisbecausethesectormeanisbasedonatraditionalassociationproviding100%generalneedsstockinanareawithaveragewagesandmediandeprivation.EHSL’scostissignificantlylowerwhencomparedtothe£14,000perunitperannumfortheHCA’shypotheticalbaselineproviderwith100%supportedhousingstock,ThismaybebecauseasignificantamountofEHSL‘saccommodationissharedhousing,whichcanbesecuredatacomparativelylowleasecostwhencomparedtoself-containedorbespokeaccommodation.Insomeareas,priortoEHSL’sregistration,EHSLhashadtoworkwithintheboundariesoftheLocalHousingAllowance,whichhasmeantthatEHSLhasonlysecuredaccommodationthatcanbeofferedwithinrentsthatreflecttheselevels.


7 DevelopmentDevelopmentplanEHSLhasprepareda5-yeardevelopmentplanwhichsetsouthowEHSLwillincreaseitscapacityto500tenanciesbytheendof 2022. EHSL’s aim is to develop a range ofmodels of accommodation, and to diversify both in terms of the types ofaccommodationitoffers,andthegeographicalareas.FacilitatinggrowthVariousstudiesincludingtheNHF’s‘SupportedHousing,understandingneedandSupply3’havedeterminedthatthereisanundersupply of suitable supported accommodation. EHSL intends to develop its provision to ensure that it can makeaccommodationavailabletoagreaternumberofpeoplewhoneedit.Thiswillbeachievedinthefollowingmanner:

EHSLisconsciousthatgrowthneedstobemanagedinorderthatitdoesn’texposeEHSLtoanunsuitablelevelofassociatedrisk.ThiswillbemanagedbyensuringthatEHSLhassufficientfinancialand logisticalresourcestoservicethenewstockwithoutreducingitsqualityoravailabilityofserviceforitsexistingstock.EHSLhasexposuretoanumberofopportunitiesfor growth, driven by the needs of prospective tenants, adult social care commissioners and care providers, and theavailabilityofbuildings.OnceEHSLhassufficientresourcetoappointaservicedevelopmentmanagerwhowillberesponsibleforfacilitatinggrowth,itwilldoso.

LocationsforgrowthDuetothelocationofEHSL’sofficeandstaffteam,thekeyareasforgrowtharetheHomeCounties,theThamesValleyandLondon.EHSLalsowishestobridgegaps in itscurrentfootprint,providingservices intheM4corridor,theareasouthofBirminghamandtheEastMidlands.ShouldEHSLbeabletodevelopasubstantialamountofaccommodationoutsideofthisarea,itmaybepossibletosupportaregionalofficetofacilitatefuelcostsavingsandtraveltime.

3http://s3-eu-west-1.amazonaws.com/pub.housing.org.uk/Supported_housing_understanding_needs_and_supply.pdf

PlannedincreaseofcapacitywithinEHSL'scurrentcapabilities

Enhancementofstaffteamwithgrowthspecificrolesbeingcreatedtoidentify

andactonopportunities

Increaseincapacitydrivenbygrowth-focusedstaff

Furtherstrengtheningof

EHSL'sstaffteamtosupportincreasedvolumeofstock


ModelsofaccommodationEHSL’scurrentstockismadeupofasubstantialnumberofsharedhouses,mostofwhichareleasedfromtheprivaterentedsector.WhilstEHSLrecognisesthatthereisaplaceinthemarketforsharedaccommodation,itbelievesthatthemostrobustanddesirableaccommodation is inblocksof self-containedunits, atwhichvarying levelsof support canbeprovided topeoplewhohavemorecomplexneeds.EHSLwishestofocusontheprovisionofsingleordualoccupancyaccommodation,bothdispersedandinclusters,inordertodeliveraccommodationthatisinincreasingdemandandforwhichEHSLbelievesisexposedtolowerlevelsofvoidrisk,bothcurrentlyandintothefuture.EHSLintendstocontinuetoprovideSpecialisedSupportedHousing4,butwillconsiderprovidingnon-specialisedsupportedhousingwhereitisviableandappropriatetodoso.

SourcesofpropertyEHSLrecognisesthatnewsupportedhousingsupplyisincreasinglybeingfundedviaprivatefinance,includingREITs,pensionfundsandothercommercialentities.Theavailabilityofprivatefinancecanenablefast-pacedgrowthandtheprovisionofhigh quality, long term accommodation – it is however not without risk due to the level of finance required and theconcurrentcommitment.EHSLwillconsiderallopportunitiesavailableforgrowthandconductarigorousappraisalofriskprior to entering into any new arrangements. Decisions made in respect of growth will be reflected in EHSL’s riskmanagementplanandriskregister.EHSLwillcontinuetoaccesstheprivaterentedsectortosecurequalityaccommodationthatcanbeofferedatmarketrents,andwillperiodicallyreviewitscapabilitytopurchasestock.AlternativemethodsofservicedeliveryEHSLhasconsideredothermethodsofprovidingaccommodation–thesearesummarisedinthetablebelowModel Strengths WeaknessesBuyingproperty • Providesthegreatest

securityoftenureforEHSL’stenants

• EHSLwouldbenefitfromincreasesinpropertyvalues.

• Ultimateflexibilitytoadapt,reconfigure,anddesignforpurpose.

• EHSLdoesnotcurrentlyhaveaccesstocapitalatalevelthatwouldallowsufficientvolumeofaccommodationtobeprovided.

• WoulddecreaseEHSL’scashreserves,whichareheldtomitigateriskandensureliquidity

• Somelackofflexibilityshoulddisposalsbesought• EHSLwouldhavenewriskstomanage,including

adversemarketconditions,interestraterisk,andbreachoflenderscovenants.

Long-termLeasingfrominstitutionalinvestors/REITs

• Longtermsecurityoftenurecanbeoffered

• Accesstoarangeofaccommodationtypes

• Abilitytooffervolume

• Highleasingcostsexacerbaterentriskandvoidrisk• Significantlackofflexibilityifaccommodationisno

longerrequired

Becomingthemanagingagentforschemescurrentlyoperatedbyotherhousingproviders

• Allowsefficienciestobeachievedviacontributionstostaffingandoverheads

• DoesnotincreaseEHSL’sownstocklevels.• Vulnerabilitytocontractterminations• Lackofcontrolinpreviousarrangementshasaffected

EHSL’sabilitytocontrolquality,whichcanhaveanadverseimpactonEHSL’sreputation

• Doesnotaddtooverallsocialhousingstock–negligiblesocialimpact.

StaffingThesizeofEHSL’sstaffteamisdeterminedprimarilybytheresourcesgeneratedthroughitsrentalincome.Increasedstocklevelswillenablethedevelopmentofalargerstaffteamtosupportthegrowthoftheorganisation.EHSLwillmakerolesavailabletomeetthedemandsoftheorganisation,withsalariesbenchmarkedagainstsimilarroleswithotherorganisationswithin the sector. Increasing EHSL’s operational staff team will assist with ensuring the following essential tasks areperformedefficiently.

• Issuingandterminatingtenancyagreements• Enforcingthetermsofthetenancy(particularlywithregardtoanti-socialbehaviouranddamage)

4AsdefinedintheSocialHousingRent(ExceptionsandMiscellaneousProvisions)Regulations2016


• Collectingrentandservicecharges• Arrangingrepairs,adaptations,redecorations,andtheprovisionofservices.• Inspectingproperties

PartnershiparrangementsEHSLrecognisesthatitmaybemostcosteffectiveforservicestobedeliveredinpartnershipwithotherproviders,suchasotherhousingassociations,privatesectorpropertycompanies,careproviders,andotherrelevantbodies.EHSLisopentodiscussionswithotherorganisationsaboutjointprovisionofservices,andwillalsoconsideropportunitiesformergersandacquisitionswherethiswillenablevalueformoneytobeachieved.


8 AssessingValueforMoney

TooffervalueformoneyitisessentialthatEHSLunderstandshowtomeasureit.Valueformoneyisachievedwhenasuitablelevelofqualityisachieved,andreflectedbythepaymentofappropriateamountstoachievethatlevel.Valueformoneyisnotachievedbyspendingaslittleaspossibleandallowingqualitytosufferasaresult.Itisalsonotachievedwhentheexpenditureincurredisgreaterthanthequalityachieved.EHSLusesthefollowingtoolstomeasurevalueformoney.KeyperformanceindicatorsEHSL’s key financial indicators are capacity, occupancy, voids, rent arrears, turnover and expenditure. EHSL’s costs pertenancyarecomparedagainstpreviousperiodstoestablishyearonyearfinancialperformancelevels.

HeadlineSocialHousingCostsEHSLwillcontinuetoassessitsheadlinesocialhousingcostinorderthatitcancompareitagainstthefigurespublishedforthesector.BenchmarkingEHSLisseekingtojointheSmallProvidersBenchmarkingclub,whichwillenableEHSLtomeasureitsperformanceagainstother similar sized housing providers. Thiswill assist in identifying areas of improvement andwill allow EHSL to accessinformationandresourcesfromsimilarsizedproviders.TenantFeedbackEHSLhasadedicatedfeedbackemailaddress,whichisfeedback@ehsl-uk.com.EHSLwillconductafurthertenantfeedbackexercisein2018.TenantsarewelcometoprovidefeedbacktoEHSLatanytime.


9 Conclusion9.1 ThisstatementsupportsEHSLpositionthatitoffersvalueformoneyandhasincorporatedvalueformoneyintoallareas

ofitsoperation.WhatEHSLhasdonewell

- Wehavetakenmeasurestoensurethatwearesettingrentsatanappropriatelevelwithmeasuresputinplacetoensureefficiencyofrentcollection.

- WehavemanagedriskeffectivelyandinamannertoensurethatEHSL’sviabilityisnotthreatened.- Wehaveensuredthatourobjectiveshaveremainedrelevanttoourbusinessplan.- Wehavesetouthowwewillexpandourservicestobenefitmorepeople.- Wehavedevelopedtoolsforengagementwithtenantsandotherstakeholders,includingatenant’s

handbookandinformationsheetsonkeymatters.

Whatwecandotoimprove.- We can increase engagement with tenants using appropriate communication tools and easy-read

materials- We can improve response times for routinemaintenance by closermonitoring of contractors, and

improvingourcommunicationwithourtenants.- Wecanimproveourconsistencyindecisionmakingrelatingtorentarrearsandtenancyevictions,by

followingournewlyadoptedprocess.- Wecandiversifyourbusinessmodeltoimproveourrateofgrowth.- Wecaninvolveourselvesmorewithourpeersinthesector,byparticipatinginsectorrelatedevents.- Wecanincreasemarketinganddevelopmentoutputbyallocatingmoreresourcetodevelopment.- Wecanassesswhethergoodsandservicescanbeprocuredatalowercost,byusingprocurementclubs

orotherassociatedinitiatives

9.2 Actionplanfor2018Action Ownershipofaction HowwillthisachieveValueforMoney?ReviewCouncilTaxexemptionstoestablishwhetherEHSLcanobtainClassUexemptionsandreductionsinsharedhousing.

FinanceManager AccessingfurtherClassUexemptionswillreducethesumsthatEHSLspendsonCouncilTax,whichwillbereflectedintherentscharged.

Reviewenergyconsumptioninsharedhousingandinblocksofflats,andseektoreducecostbychangingutilityproviders,fittingenergyefficientdevices,andofferingfurtheradviceandinformationtotenantsinrespectofenergyusage.

FinanceManagerPropertyManager

ReducingenergyconsumptionwillmeanthatEHSLspendslessonutilitybills,asavingwhichcanbepassedontotenants.

Atanappropriatetime,introduceadevelopmentmanagerroleintotheorganisationtoincreasestocklevels.

BoardofDirectors AppointingadevelopmentmanagerwillenableEHSLtoimproveitsrateofgrowth,allowingitsservicestobeofferedtoagreaternumberofpeopleandforsomeefficienciestobeachieved.

JointheSmallProvidersBenchmarkingClub CEO EHSLwillbebetterplacedtoidentifyareasforimprovementwhencomparingitscostsandperformancetoitspeers,andbysharingbestpracticewiththem.

Improvesatisfactionwithmaintenanceresponsetimesbyallocatingtaskstotheemergency,urgent,androutineclassifications,andcommunicatingthisallocationandexpectedresolutiontimetotenantsandsupportstaffinorderthattheyareapprisedoftheexpectedresponse.

PropertyManager Improvedtenantsatisfactionisreflectiveofvalueformoneywheretheimprovementcomesatnegligiblecost.

Improverecordingofmaintenanceexpenditurebyallocatingcostagainstawidernumberofcategories.

FinanceManager EHSLwillbeabletomoreaccuratelyrecordexpenditure,toassistwithcurrentandfuturemonitoring.

Improveconsistencyofdecisionmakinginrespectofrentarrearsandevictions.

CEO Aqualityserviceisbuiltonconsistency.


AppendixA–TenantFeedbacksurveyreport

value for money statement 2017 (for publication)

Documents