Value for money: Will you be up to Standard?Follow @PwC_North
Value for Money’ (“VfM”) is certainly not a new concept within the Social Housing sector but following the recent review of regulation, the Social Housing Regulator will be taking a more proactive role in ensuring that VfM is being demonstrated in the sector to achieve better returns for the taxpayer and support the new affordable housing supply.
Following the publication of the Regulator’s new VfM Standard, it is clear that the Regulator expects greater assurance from providers that they can articulate what VfM means for their organisation and can show how they are driving and delivering VfM in meeting their strategic objectives. In looking to achieve this it is important to remind ourselves of what the definition of ‘VfM’ is:
- “VfM is concerned with the relationships between the inputs, outputs and outcomes from the investment of resources – economy, efficiency and effectiveness”
- “Provider Boards should maintain a robust assessment of the performance of all their assets and resources”
One of the initial challenges for providers will be to firstly decide how VfM works for them.
Once established, this should be set out in a VfM strategy which describes the approach to be taken to achieving VfM in the organisation’s strategic objectives. In demonstrating how they are meeting the VfM Standard, provider Boards will be required to produce an annual selfassessment
of how VfM is being achieved and evidence how it has gained its assurance.
In assessing your current position, can you answer “yes” to having the following in place:
- A Value for Money strategy that articulates what VfM means to your organisation, yourcustomers and your staff that drives culture and behaviours and enables a coordinated andjoined up approach to be taken?
- An understanding of both the costs and outcomes of delivering your services and what factorsunderpin these?
- A strategy for optimising returns on your assets in line with your strategic objectives?
- Complete and robust performance information on which VfM decisions can be made?
- Effective scrutiny and performance management functions that drive and deliver on theachievement of VfM?
- A Board that engages effectively and challenges itself on achieving VfM?
If you are unsure on your responses to these questions, then we can support you in finding the answers.
“An embedded VfM culture can not only result in efficiency savings but in improved quality of service to your customers.”
How we can help
At PwC, we have the tools to help you to:
- Assess your current position on VfM
- Identify and track efficiency savings
- Link cost savings to performance improvement
- Evidence value for money gains
- Benchmark your costs against leading practice across the public and private sector
- Assess your scrutiny and performance management functions, including Audit Committee and Board reporting
- Demonstrate how you deliver VfM across your services and facilitate your self-assessment. We can also provide training and facilitate sessions with your Board on its role in driving VfM across your organisation.
PwC has extensive experience in VfM projects and working with organisations to identify and deliver cost savings. Working with a range of private and public sector organisations, we have achieved operating cost reductions of up to 20%.
In the context of changes to Government subsidy, new regulatory changes and the VfM standard, a number of providers are reviewing their business strategy and operating model – exploring new markets and consolidating existing ones.
We are working with some of the biggest providers in the sector, helping them rethink the way they work by looking at how to reduce organisational complexity and become more agile. We challenge ways of working and generate opportunities for improvement using leading practice across both the public and private sector.
Other providers are assessing their position on VfM, working on a strategy that will embed VfM into working practises and performance management systems, and developing reporting
frameworks for effective monitoring and scrutiny.
Whether it be supporting you to assess your current position on VfM, providing training to your Board or helping you to move to flexible operating models with reduced complexity, we have a local team that would be delighted to work with you to meet your specific needs in this area.
Jane Forbes, Director, North West Housing Team, T: 0161 2452053/E: email@example.com
Madeline Nelson, Managing Consultant, North West Housing Team: T: 0161 2474541/E: firstname.lastname@example.org/