Report of the Board of Management For the year ended 31 March 2022

9	     Value for money

Our context and purpose

Steve Biko Housing Association (SBHA) was formed by Liverpool's Black and Ethnic Minority (BME) community as a direct result of race discrimination in Liverpool's social housing allocations policy. Registered under the regulators BME strategy to provide quality homes for those in need.

Our Vision "Homes and Communities without Racism" and Mission "To respect our heritage by delivering quality homes and building vibrant multi-cultural communities" sets out clearly the focus of our work.

Providing value for money

As a small BME Housing Association achieving Value for Money has been central to the way we work. The Board and staff team believe that being efficient and effective is crucial to our success in delivering quality services to our tenants. We are committed to ensuring that we are making the best use of our resources and that our business planning and performance monitoring systems and efficiency mind set aid us in our desire for continuous improvement and to ensure we maximise the efficiency and quality of our services and asset base.

Following an in-depth review of our Repairs and Maintenance Service carried out in 2016 the Board approved the procurement of a new repairs service that would deliver improved customer service to tenants and efficiency savings to the Association. In April 2017 we appointed Housing Maintenance Solutions (HMS) as our main contractor for repairs and maintenance and estate management services. In August 2017 we appointed (SLH) to act as our Repairs & Maintenance Managing Agent, to provide contract management and consultancy services to ensure delivery of the HMS Contract. Our contract with SLH came to an end in June 2019 by mutual consent, with the decision taken to bring the management of our repairs service in house. The Association appointed a new in-house Repairs Specialist. We are certain that bringing this service in house, has improved our customer service experience, allowing for better communication between ourselves the tenant and our contractor.

Moving to using one contractor HMS has enabled us to improve our systems, and recording information, including moving to a fully computerised gas servicing system and our routine repairs target of 21 days being met under 12 days.

During the year the Association has continued working with BYA Architects alongside Liverpool City Council to undertake in depth surveys and develop a programme of works to make all our schemes and blocks safer from fire. These fire stopping works are the priority programme for the Association over the next year with significant investment being made to bring all the buildings up to current building safety standards which goes beyond our legal requirements.

In November 2021 the Association retendered for these fire compartmentation works across the Associations Schemes and blocks. Three contractors responded to the tender and the preferred contractor was appointed to undertake the works totalling close to £1 million with an estimated 30 weeks required to undertake all the works required. Work will be undertaken in individual flats and not just to communal areas of the buildings and these works commenced in April 2022 at Hector Peterson Court.

The Association has for many years fixed costs in respect of utilities, our current contracts are coming to an end, and we have commenced with renegotiating utility costs, we are looking to fix costs even in this extremely challenging environment where energy prices are rising steeply. Options and deals are limited but we continue to explore options available to try limit future price increases over the short to medium term. We completed the purchase our office 3 Yanwath Street, reducing revenue costs, these actions led to annual savings of £42k over the life of the business plan from our original base position in 2016.

9.	Value for money [Continued]

We also set out to build on our youth employability programme to develop and deliver employment and training programmes for our customers and wider community members to enable them to improve their skills and capacity therefore, increasing their employability. We submitted a joint bid for this work alongside the Women's Organisation and we have been successful in securing European Union funding. We have recruited both a new project coordinator and administrator to deliver this project.

We have:

■	Completed three years of the repairs and maintenance service delivered by HMS, the savings in repair and maintenance of circa £20k per annum . We entered into an extension to this contract from April 2020 until March 2022 and extended this again for a further 2 years until March 2024.
■	Maintenance costs compared to the previous contractors enabled SBHA to undertake additional 20% repair works compared to our previous arrangement.
■	Commenced year 5 of a 5-year electrical test programme for all properties.
■	Completed annual planned maintenance programme for replacement of windows.
■	Commissioned a stock condition survey that will support us in detailed planning and understanding of priorities and costs in upgrading and maintaining the Associations properties.
■	Completed the development of no 1 Croxteth Grove bringing 6 new units into management in the current and ensuing year.

In April 2018 and June 2019, the Regulator for Social Housing launched a new Value for Money Standard, which includes a set of metrics. Registered Providers are now required to report their performance against the metrics annually in their financial statements.

The regulator published an updated Value for Money Metrics - Technical note guidance issued in May 2022. The note includes the value for money metrics that providers must report on as part of their Annual Accounts reporting and explains how to calculate the metrics

Our performance against these new metrics is highlighted in the table below:

Business Health & Efficiency & Regulator for Social Housing Metrics

Performance	

Indicator	

Metrics No	
SBHAGN
/ Support
2019/20	
SBHAGN
/ Support
2020/21	
SBHAGN
/Support
2021/22	NW Peer Group Average
2021/22	SBHAGN
/Support Forecast
2022/23	
No.of Units			275	275	279	343	281	
Business Health

Efficiency	Total Operating Margin	6	12.70%	17.27%	15.43%	21.79%	13.86%	
	Social Housing Operating Margin	6	11.96%	16.12%	14.76%	22.76%	11.98%	
	EBITDA MRI (as a% of interest)	4	42.62%	251.66%	116.1%	612.5%	(576.64)%	
	Gearing	3	23.64%	23.07%	22.94%	(7.11)%	30.02%	

Efficiency	Reinvestment % investment   in properties (existing stock and new supply as
% of the value of total
properties.	

1	

3.47%	

1.31%	

4.48%	

3.66%	

7.75%	

9.	Value for money [Continued]

Performance	

Indicator	

Metrics No	
SBHAGN
/Support
2019/20	
SBHAGN
/ Support
2020/21	
SBHAGN
/Support
2021/22	NW Peer Group Average
2021/22	SBHAGN
/ Support Forecast
2022/23	
Operating efficiencies

Efficiency	Headline Social housing
costs per unit.	5	£4,742	£3,557	£4,514	£3,939	£8,056	
	Rent Collected as % of rent owed (excluding
arrears b/f)		
99.90%	
99.80%	
98.30%	
99.69%	
100.00%	
	Overheads as a % of adjusted turnover		13.14%	11.14%	8.75%	16.02%	12.37%	
Effective Asset Management

Efficiency	Return on Capital employed % compares the overall operating surplus to total assets
less current liabilities	

7	

1.32%	

1.80%	

1.63%	

1.94%	

1.44%	
	General Needs Occupancy		98.8%	97.7%	97.00%	98.7%	98.00%	
	Ratio of responsive repairs to planned spend		
0.46	
1.49	
0.71	
0.73	
0.18	
Development Capacity& Supply

Effectiveness	Units Developed		
0	
0	
4	
2	
2	
	Units Developed as a% of units owned	2	0%	0%	1.43%	0.60%	0.71%	
Outcomes Delivered	Customers  satisfied their rent provides value for money
*2011survey results
*2015  survey results		

81%	

81%	

81%	

87%	

81%	
	£ invested for every £
generated in new housing units		
£0	
£0	
£105.85	
£0	
£26.46	
	£ invested for every £ generated in
communities		
£0.0172	
£0.0134	
£0.0140	
£0	
£0.0175	
Local Targets	BME Lettings Target set
at 45% based on demographics of area.		
86.60%	
83.30%	
87.50%	
46.91%	
80.00%	

SBHA has had a decrease in operating margins in 2021/22 largely due to one off management costs, increased maintenance costs post pandemic and increased housing property depreciation.

The increase in Social Housing costs per unit in 2021/22 was due a return to the annual stock reinvestment works post pandemic.

9.	Value for money [Continued]

The NW benchmarking peer group average includes those members with less than 500 units:

Provider	No. Units	
Provider	No. Units	
Crosby Homes HA	437	People First HA	275	
Family HA	383	Steve Biko HA	275	

Benchmarking

SBHA is part of the Acuity NW Benchmarking Group that oversees the collection of data. This report uses the  data taken from NW Acuity Benchmarking Group. The annual datasets for the year have been made available by Acuity.

Business health

The Association's operating margin currently stands at 15.43%. SBHA has 279 units which will increase to 281 following the final two units at 1 Croxteth Grove. Our Business Plan shows a modest period of growth at 4 to 6 units per year to enable us to gain critical mass to reduce our costs per unit. This development expenditure will be funded by the secured loan facilities and social housing grant.

Operating Efficiencies

The Association's headline social housing cost per unit was £4,514 in 2022. This reflects the return of stock reinvestment post the pandemic. In the ensuing year the forecast cost per unit will increase to £8,056 due to the programme of fire compartmentation works. The Association provides an intensive housing management service delivering services in very challenging neighbourhoods. Our size exacerbates the higher base cost per unit. The Association's growth strategy together with efficiencies we plan to see a reduction in our headline social housing costs per unit from 2024 onwards.

One of the results of our intensive housing management service is achieving close to circa 100% rent collection rates (subject to timing) at a time when the pandemic, changes to legislation and welfare reform is having a major impact upon our tenants and the communities in which we work. Princes Park Ward where the majority of our homes are situated has 23% of its wards within the 1% most deprived of the country; 69% of Ward in 10% most deprived wards nationally.

Effective Asset Management

Return on capital employed for the  year was in  the region of 1.63%.  We anticipate  that this figure will increase as the Association's growth strategy of developing 4 to 6 units per year is realised. The Association's long term business plan includes 27 units over the next five years.

Occupancy levels at Steve Biko Housing Association were 97.0% which reflects our intensive housing management service. There was an impact during the year due to the pandemic with a small number of  units void.

Ratio of responsive repairs expenditure to planned spend is 71%. This has fallen as intended and reflects the return of stock reinvestment during the year. In the previous year we were not as favourable than our NW housing association benchmarking peers although we are planning on undertaking significant works to our properties over the next 12 months.

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9.	Value for money [Continued]

Development Capacity & Supply

SBHA has completed works on a significant refurbishment to one large villa during this financial year. Works commenced on site in December 2020 and were virtually complete by the end of March 2022.

The villa is a result of stock transfer and had been vacant for many years. We therefore have brought these properties back in to use, helped with solving blight in a neighbourhood and added to units in the social housing sector whilst meeting our own growth strategy.

Our gearing levels has decreased from 23.07% to 22.94%. This reflects the net repayment of loan balances during the course of the year.

Outcomes Delivered

Our last full STAR Survey was undertaken in 2018. Customer Satisfaction by tenants that their rent provided value for money was at 81%.

We currently spend 1.40p in each £ on tenant participation and community regeneration activities this expenditure enables the Association to deliver against its vision and mission.

SBHA has a target of achieving 45% of our lettings to BME people. This target is set to reflect the 45% BME population in Princes Park and Picton wards, the main wards in which we operate. In recent years we have consistently achieved rates in excess of 80% of our lets to BME people.

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