Inside Housing – Response
In response to your article ‘Landlords face Value For Money questions’ (8th July) it’s important to point out that first and foremost, the findings in the HCA (Homes and Communities Agency) report (Regulating the Standards) help to show that benchmarking Registered Providers (RP) costs against each other, actually tells us very little about their efficiency.
In reality, each RP is operating in a different environment with completely different tenures, operational complexities, geographic locations and size. Cross market benchmarking does not take this into account and shouldn’t be used to record performance. What is key, is value, and simply being below the market benchmark for cost per unit does not mean that an RP is operating efficiently.
The second point is that RP Boards will now need to assure the HCA that they have a comprehensive strategy to deliver on-going improvements in efficiency and can prove that they are delivering VfM. This means Board members and their management teams will need to be able to categorically prove that that their costs are correct and they are making the most efficient use of their budgets.
To do this, management teams will need to be able to drill down on how their budget is being spent and understand how their costs compare to that of other RPs. RPs should be challenging their management operations in a proactive manner. They need to ensure that they have robust cost data which is reviewed on a regular basis. Good contract management and fully understanding their cost base and will be key to this.
The responsibility is not with the HCA to tell RPs that their costs are high but with the RPs themselves. If they cannot prove that their costs represent good VfM they will risk being downgraded which is not good for their future.
Head of Public Sector and Asset Management