Demonstrating and delivering “value for money” (VFM) are important and significant challenges for the housing association sector in Wales. Taking a robust approach to VFM provides an opportunity not only to show how money is spent and resources used but also to demonstrate the impact of investment whilst offering the potential for associations to achieve more and better outcomes.
The importance which the Regulatory Board for Wales (RBW) has placed on VFM is reflected in the priority which the Board gave it in our work programme during 2016-17,undertaking a thematic review which was published in March this year. The link is here.
We have taken a collaborative approach working closely with Community Housing Cymru (CHC) and others, highlighting the three pillars of VFM identified by the sector; indicators developed by the CHC Finance Forum, social value and the tenant perspective. In addition, the revised Regulatory Framework has included a specific performance standard (PS6) focused on delivering VFM.
All of this raises questions about what VFM means in the evolving housing policy landscape. Whilst the Regulator will be using the 10 measures of VFM proposed by the CHC Finance Forum to better understand VFM performance, this is not about drawing false conclusions from limited information. Nor is it about producing league tables of association performance. VFM is not just about financial measures or cutting costs. It should be an overarching principle covering the whole business, seeking to balance costs with desired outcomes and informing options and choices; supporting more new housing provision, improving homes and services and allowing associations to develop appropriate additional activities. As such the RBW believes VFM should be at the heart of good governance and, from a strategic viewpoint, be firmly located in the Board room.
Of course, there are different perspectives on VFM – and it’s appropriate to ask how these different perspectives should be developed and prioritised? How can tenants be more involved in decision-making to inform VFM? How can we develop a longer-term perspective on the value of housing associations and evidence the wider social and economic benefits which flow from their work?The RBW is continuing with its VFM steering group and further work is underway on social value (led by CHC) whilst TPAS Cymru is finalising the scoping for work on tenant perspectives on VFM. We recognise there is a lot more to do in understanding VFM, in testing and developing measures of value and in getting the message across as to the benefits of better VFM.
As a sector we need to think carefully about how to meet the challenges of maintaining public confidence in the value of what we do. Openness and transparency are key in this regard, but housing associations need to think about how they use accessible measures of VFM to help explain the decisions which underpin what they do. The RBW wants to encourage a step change in the ways in which housing associations in Wales think about, demonstrate and deliver on VFM. We are keen to continue to work collaboratively with the housing association sector and other key stakeholders to achieve what I’m sure is a shared goal.
Bob Smith, Regulatory Board for Wales