We have asipirations to do so much as a mutual but we believe that plans without resources are just dreams and therefore have a goal of basing all our work of having strong finances.
WG FVJ Our 30 year business plan is robust, it is based on reasonable assumptions and we have sufficient resources to deliver our objectives. We test our business plan regularly, taking into account different possible scenarios based on risks that apply to us. The plan also undergoes an annual approval process by our lenders as well as an annual review by our Treasury Management advisers (Link Asset Services) who independently advise the Board on the appropriateness of our assumptions.
We have continued to receive a ‘standard’ Welsh Government rating (the best result we can achieve) from their annual Financial Viability Judgement which confirms that we had adequate resources to meet current and future business commitments.
Meeting our covenants We regularly monitor and have continued to comply with our funders’ cash covenants, and report back to the Board quarterly, with an annual forecast to year end which allows us to deal with potential problems before they arise.
Audit Committee Even though our Audit Committee is a sub-committee of the Board, the Board invited two representatives from the Democratic Body to sit on this group with equal voting and decision making rights to the Board members. This demonstrates the openness and transparency between the two groups, and exhibits collaborative working. Over the past year the Committee has been very busy reviewing our financial position. They have monitored our Strategic Risk Register on behalf of the Board and have received all internal and external audit reports and monitored the implementation of the subsequent recommendations. The Minutes of the Audit Committee are reported to both the Board and Democratic Body and Committee Members provide verbal feedback on the meetings.
Social Value We launched a new project on Social Value in 2017/18 led by the Democratic Body. We held focus groups with our Members to identify what social value meant to them. We gleaned useful information which has focused our efforts on 5 areas i.e. apprenticeships; income maximisation; health and well-being; partnership working and core community facilities with a particular focus on environmental issues. We will determine a way to measure the social value our activities add in 2018/19.
Rent setting / affordability The balance for us to set a rent that tenants can afford to pay and one covers the cost of the services that we provide. This year we decided to really focus on defining affordability. The Democratic Body looked at examples of different rents in relation to affordability, reinforcing our approach of helping those tenants who will struggle the most with the cost of running a home (for example, single people and single parents who are most likely to live in our smaller properties). We did this through a series of consultations with the Board and Democratic Body which resulted in us adopting the Joseph Rowntree Foundation model of a “living rent”. Our target rents are now based on 28% of the published average residence earnings for Merthyr Tydfil. This has meant that some rents reduced in April 2018 and that others experienced a rent increase that was lower than the recommended 4.5%. Our Members want a fair rent and we are now moving all of our rents towards a living rent.
Value for Money This was the second year that the Democratic Body have evaluated value for money. Once again they that we do provide Value for Money they also acknowledged that there were some improvements to be made.
They have over the last year led on designing our new approach to Value for Money for 2017/18 onwards through the development of our new Value for Money Strategy ‘Yfory Cryf’ which means ‘Strong Tomorrow’. Our 2017/18 Value for Money Statement is based around the principles set out in Yfory Cryf.
The Democratic Body also developed a Value for Money Balanced Scorecard and along with Members agreed 7 new Golden Rules for Value for Money which the Board adopted in June 2018.
The Democratic Body has taken action following the latest STAR Survey, which showed a reduction in satisfaction around Value for Money from 80% to 77%. This was disappointing but might reflect the impact austerity is having and how important the level of rent charged.. We conducted a survey of 600 of our members and held six focus groups across the Borough to understand this more fully and to respond to the tenants' voice. Our findings were that tenants want to hear about our VFM achievements through different mediums, including social media and local notice boards. They also told us what they valued the most from our services, hence the new Golden Rules.
The Democratic Body was pleased with our overall performance in 2017/18 and confirmed that we have provided value for money however they have requested a scrutiny exercise on the Repairs service to understand why tenant satisfaction was lower in 2017 than 2015.
Members of the Democratic Body once again joined us for the annual Star Chamber sessions. They determined that they could have the biggest influence on the Capital Investment Programme and all growth items. This worked particularly well because attention was spent on areas which needed scrutiny. In total the Democratic Body helped us save £449,000 through this review, strengthening the 30 year business plan and allowing us to redirect expenditure in future years to areas with most need.
Procurement Strategy Procurement – the way we buy goods and services – plays an important role in maximising the resources available to us to deliver excellent services to tenants and to benefit the wider community. Ineffective procurement means that we run the risk of spending more than we should on goods and services which do not meet the quality standards that we expect.
We commissioned a review of our Procurement Strategy by Procurement for Housing’s Improva Team in 2017/18.This was a collaborative piece of work, involving key staff; the Democratic Body and the Board, who were all given the opportunity to express their views and to shape the guiding principles that were adopted by the Board in March 2018. The Procurement Strategy will ensure that we follow good practice and that we have adequate resources in place to deliver the required service..
Yfory (our Corporate Strategy); Yfory Cryf and the Procurement Strategy all include a theme on local investment/community benefits. This has been important to us and we have actively targeted this through our contract framework. The contract framework for repairs and maintenance returned £2.05 for every £1 spent through the framework in 2017/18. More and more we are requesting something back from a range of contractors, not just those on our framework e.g. we requested it from our insurance brokers and our external auditors contracts in 2017/18. We hope to be able to measure the social return on investment across all our contracts next year.