Tuesday, 07 July 2015

Value-for-money call queried

Housing providers have expressed scepticism at analysis the regulator has used to back a renewed call for better value for money.

The Homes and Communities Agency on Wednesday called on social landlords to do more to achieve value for money, after finding it cannot account for around half the variations in operating costs between providers.

It published a piece of work examining reasons for cost variations. Understanding unit costs of housing providers: regression analysis looks at the impact of factors including regional wage differences, deprivation, group structures and types of homes.

The document says: ‘There is still considerable variability in costs - on average 29 per cent above or below the mean - which cannot be explained by [these] factors.’

Matthew Bailes, director of regulation at the HCA, said: ‘This reinforces the need for boards to have a firm grip on value for money and they should be considering a number of options, including driving out unnecessary costs, as part of their management strategies.’

Joseph Carr, finance policy leader, at the National Housing Federation, is not convinced the unexplained costs are due solely to inefficiency.

‘We need to make sure there are no other explanations for the difference. More needs to be done to understand where we are, through better benchmarking by organisations,’ he said.

Nick Atkin, chief executive of 6,000-home Halton Housing Trust, said: ‘I get a bit frustrated when people make sweeping conclusions from data that is not sophisticated.’

The regulator has introduced a new standard which requires providers to submit annual self-assessments of their value for money.

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