Are you a board member? If so, you need to get right on top of this. It sets the agenda for the sorts of questions the HCA will be asking you.
So, what I’ll do is go over some of the headlines and pick out a few of the issues you need to be clear on.
You know what the first question is going to be.
How do your costs compare to others? The HCA data lets you look at cost per unit (CPU) and the seven new VfM metrics. So, it’s a big help. For now, let’s start with CPU.
The median overall sits at £3298. How do you compare to that? Maybe it would be better to pick a fight with someone your own size. Here’s the chart:
Size band Median consolidated CPU 2016/17
Up to 5,000 homes – £3831
5,000-10,000 homes – £3203
10,000-20,000 homes – £3206
20,000-40,000 homes – £3155
More than 40,000 homes – £3443
In years gone by folk pounced on these figures to make the case for going big by merger or staying small. But as ever it’s a mixed picture.
The smalls are indeed expensive. Is it a price worth paying? Do they do something special? That’s not for me to say.
But if you are over the line you have a duty to defend it (or change things). And on merger is it always a case of jam tomorrow? The big boys are expensive.
Do you do more? Or is it just easier to take the foot off the gas and coast? Board members need to know the answers.
But one clear fact comes out of the data. It is always best to sit on the fence in the middle! Not true.
Every association needs to know where its costs lie and where they are heading.
Of course, cost is not the whole story. Are you spending the right amount of money on the right things?
The HCA shows costs of management and major repairs are coming down. No doubt the rent cut played its part here.
The HCA lets you see who is spending a lot or a little on repairs. And there are some figures in there that make no sense to me.
They are indeed accurate, but they seem much too low. The HCA will ask if your spending is in line with a pukka survey.
On the other hand, some management figures are so high it begs a question. Is the Wolf of Wall Street running the show?
While we have all stuck to the rules on the rent cut has there been sharp practice in other areas? Service charges rocketed up by 3.6%. Why?
Are you robbing Peter to pay Paul? If you have hiked up these charges, you’d better have kept all the receipts.
The HCA needs to get to the bottom of this. And they will.
There is an Achilles Heel in the data. The whole point of housing associations is to build homes.
How did they do? It’s very poor. How many new social homes did we get? The answer is right there in black and white. It’s around twenty thousand at the HCA’s reckoning.
I see that lots of chiefs got a bonus. One question. Why?
And while we are at it what are all the flash Harry financial advisers doing? Not much by the looks of things.
We’re better at constructing deals than constructing homes! If the HCA comes to call you need to say what you are doing to put this right.
Thanks to the HCA for getting the figures out early this year. By the end of January each board member should know:
- Where their costs sit versus the national median
- Where their costs sit against peers
- How they are doing on the seven VfM metrics
- What cost areas they need to tackle
Its all there in the data. Ian Parker at HQN has put together a handy tool to let you interrogate the data and produce your own charts.
Contact us in the New Year for details.
Its simple to know how well you are doing. So, don’t let a visit from the HCA catch you cold.
Be ready to explain how you are doing on the Global Accounts. There are many imitators, but these are the figures that count.