Value For Money

For CHISEL, Value For Money (VFM) is about spending wisely and making the best use of our resources, ensuring we are an effective social business. It is important that CHISEL is able to demonstrate that it delivers Value for Money in its delivery of housing services to its tenants and other stakeholders. Our focus on delivering efficiencies and investing resources where they add value had been through involving our tenants in defining services by continually seeking their feedback both on an individual level and through Operational Security Committee. This enables us to identify our tenant’s priorities and shape our services  to meet these. As a small housing association getting value for money is very important to us and we have this in the forefront of our minds in all the spending decisions we make.

In the last year the Regulator of Social Housing (RSH) has revised the regulatory approach to VFM with the objectives of:

  • Continuing to drive improvements in VFM within the social housing sector
  • Ensuring a strategic approach to delivering VFM is embedded within the business
  • Encouraging investment in existing homes and new housing supply
  • Enhancing the consistency, comparability and transparency of VFM reporting

The RSH requires that we report against a prescribed set of metrics. As this is the first year that these metrics have been introduced, for comparative purposes, we have also included last year’s performance, had these metrics been in place and the social housing sector median results taken from the pilot of these new measures last year, known as the “Sector Scorecard” .CHISEL through the BM320 small housing Associations benchmarking club for London and took part in the “Sector Scorecard” pilot.

Our Performance against regulatory metrics


RSH Metric 2017/18 20116/17 2016/17

Sector Scorecard


1.             Reinvestment   % 1.6% 1.2% No Data
2.             New Supply Delivered % n/a n/a 1.1%
3.             Gearing % 12.4% 12.7% 41.6%
4.             EBITA MRI interest cover % 168.6% 734% 227.6%
5.             Headline social Housing Cost per unit £3,958 £3,470 £3,306 – all  HA’s

£4,995 – London

£4,347 – small less   than 100 homes

6A.         Operating Margin ( social housing lettings only) 18.7% 26.4% 31.56%
6B           Operating Margin ( overall) 18.7% 1.4% 30.28%
7.             Return on Capital Employed 1.7% 2.5% 4%


Explanation of our performance against the RSH Metrics

These new RSH metrics focus upon measures of efficiency, effectiveness and economy:-

  1. Reinvestment % – the investment in properties (existing stock and new supply) as a percentage of the value of total properties held. As our stock ages we are increasing the level of investment in our stock as we move more from undertaking day to day repairs to component replacement.
  2. New supply delivered (social housing units) % – the number of new social housing units delivered as a proportion of total social housing units owned. CHISEL is currently not developing / building new homes.
  3. Gearing % – net debt as a percentage of the value of total properties held. Our gearing is low compared to the median as we are currently not taking on any new loans, just repaying existing.
  4. EBITDA MRI Interest cover % – the level surplus generated compared to the interest payable. Last year our surplus was higher than normal as we had the income from a property sale but this was a “one off” rather than the norm. We are below the median and we need to improve, our rents are low and our expenditure as a whole is comparatively high in comparison to our income, this directly impacts on our level of surplus.
  5. Headline social housing cost per unit – social housing costs (as defined by the regulator) divided by total units owned and / or managed. Our headline cost per unit is above the national average but below the average cost for small associations and London based associations. As part of our VFM we will continue to work to reduce these costs.
  6. 6A. Operating margin (social housing lettings only) % – operating surplus (deficit) from social housing lettings  divided by turnover from social housing lettings. Again the “one off” sale of a property in 2016/17 increased our operating surplus, hence 2016/17 operating margin on social housing lettings is better than 2017/18. Our operating margin is +12% below the sector median, again for similar reasons as outlined in 4 above and we need to improve in this area of our performance and become more efficient going forward in our use of resources.
    6B. Operating margin (overall) % – overall operating surplus (deficit) divided by overall turnover. As above we need to improve our efficiency as our current performance is below the sector median.
  7. Return on capital employed (ROCE) % – compares the overall operating surplus to total assets less current liabilities. This needs to improve as we are below the median, although the properties we own are of a relatively high value because of their location, the income generated by these properties is low in comparison because rents are low.

In addition to the above metrics, CHISEL’s Board will be setting strategic targets to measure our performance against our objectives for the forthcoming year. These targets will reflect our core values and beliefs. CHISEL remains part of the BM320 Benchmarking group for small housing associations in London, and will continue as part of that group to benchmark performance across a wide range of performance measures that go to make up the wider sector score card.

You can see the 2017 BM320 Benchmarking Report here BM320 Annual Report 2017

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