Ten years on from the introduction of the Value for Money (VFM) Standard, we look at how the regulations have been implemented, what it has meant for housing associations (HAs) and whether the desired impact has been achieved. We also looked at the challenges facing the sector in the current economic climate, and how the VFM regulations can continue to deliver for both HAs and tenants alike.
The VFM standard, introduced in 2012, is one of the economic standards that the Regulator of Social Housing expects registered providers to comply with. It looks at whether a provider is making the best use of the resources that it has, to meet it objectives. From 2013, HAs have been required to report on VFM in their annual accounts.
The VFM regulatory framework is about transparency and accountability, focussing on the efficiency and effectiveness of the organisation as a whole, rather than just efficiency and service delivery. When the regulations were first introduced, the aim was to ensure that social housing providers were focussed on how value for money would be achieved in the short, medium and long term, through service delivery and collaboration with other partners. The hope was that these strands would filter through the whole entity, at all levels.
Housing providers needed to demonstrate how they were listening to their tenants, whether they were utilising their housing assets to the full and how the associations could potentially work collaboratively to provide best service and value.
It took a few years, but most HAs have embraced the regulations in the way they were intended. There have been some modifications to the requirements along the way, most recently when the Regulator of Social Housing issued the VFM Standard 2018. This allowed HAs to integrate the requirements into a long-term strategy and provide public visibility on that process by incorporating it into their reporting.
That being said, there have been some high-profile cases recently in the media, where a number of HAs have been found to fall short of the standard of providing value for money. These include cases where the HA has not undertaken essential, timely maintenance or repairs.
In response to rising complaints, the Housing Ombudsman is preparing to undertake over 10,000 investigations in 2023-24 to meet increased demand.
When investigating the VFM reporting of those associations, it is clear that, ten years on, reporting is being taking more seriously and strategy is being influenced by the requirements. In these cases, however, the impact of the regulations was slow, change did not come quickly enough, and the outcomes show how vital the requirements are.
It takes time for new regulations to bed in, and many HAs are only now fully onboard with strategies to meet the VFM across their organisations.
So, what now for the future of the regulations, in the current economic crisis?
HAs support some of the most vulnerable people in our society, including those on low incomes, people with welfare or medical issues, victims of domestic violence or abuse and elderly people in need of supported accommodation. Their services are needed now more than ever, as the cost-of-living crisis and skyrocketing energy prices are putting increased pressure on tenants’ financial stability and resilience.
HAs themselves are also facing multiple challenges in the current economic climate, with rising inflation, higher borrowing costs and a shortage of skilled labour to undertake repair and maintenance work. The sector is also under pressure to make significant investments in existing homes to meet quality, building safety, and decarbonisation commitments; at the same time as rent increases have been capped at 7% and tenants are struggling with bills.
This is an ideal time for HAs to revisit their strategies, and consider where priorities need to change, certainly in the short term. Prioritising ’value for money’ and VFM reporting is more crucial now, ten years on from inception, than it has ever been.
We have experienced specialists spanning both HAs and other not-for-profit organisations that can support you to review your value for money strategy and reporting.
Find out more at mha-uk.co.uk