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Regulator: value for money ‘more important than ever’, as consultation launched
It is “more important than ever” that housing associations demonstrate how their value for money performance delivers new housing and supports tenants, the English social housing regulator has said.
The Homes and Communities Agency (HCA) today launched a consultation into strengthening its Value for Money Standard, which will come into force from April next year.
Julian Ashby, chair of the HCA Regulation Committee, said there is an “increased level of interest on how providers’ value for money performance influences their ability to deliver new homes, support tenants and ensures existing stock is well maintained”.
He added: “This means it is more important than ever that boards build on progress to date and maintain a clear focus on delivering value for money as an integral part of running their businesses.”
The government has been pushing for housing associations to deliver more homes since previous chancellor George Osborne said the sector’s housebuilding performance was “not particularly impressive” in 2015.
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The new standard will move away from the current focus on self-assessment reporting “in order to increase consistency, comparability and transparency”.
Housing associations will be expected to set targets against which they will measure their performance in achieving value for money and delivering their business objectives. They will also be expected to report their performance to the regulator against a suite of value for money metrics.
The regulator has proposed including some of the sector’s own efficiency scorecard metrics in its list. The metrics will be separate from the Value for Money Standard.
The proposed metrics are:
- Reinvestment in existing stock and new homes
- New supply delivered – separate figures for social and non-social housing
- Gearing
- EBTIDA MRI
- Headline social housing cost per unit
- Operating margin
- Return on capital employed
Mr Ashby said: “Since we introduced the Value for Money Standard in 2012, we have seen improvements in transparency and the delivery of value for money, with registered providers demonstrating much more clearly to stakeholders how they are managing their resources and assets.
“But there is more work to be done to demonstrate the effectiveness of the sector’s response to the value for money challenge.”
