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English regulator publishes new Value for Money Standard
The Regulator of Social Housing (RSH) has adopted parts of the sector’s own scorecard in its new method of judging whether providers are delivering value for money.
The new standard and code of practice will come into effect from 1 April. The regulator has also published seven value for money metrics that providers will be expected to report against.
These metrics are based on information already collected through providers’ existing annual accounts regulatory return and drawn from the pilot launched by the Sector Scorecard working group. These metrics include new supply delivered, reinvestment, gearing and headline social housing cost per unit.
The sector developed its own scorecard last year. Results from the pilot revealed that the median amount of surplus generated by housing associations as a proportion of turnover was 30.3% in 2016/17.
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Changes to the metrics following the consultation include using net debt to measure a provider’s gearing – the ratio of a company’s loan capital to the value of its ordinary shares.
Previously providers had to produce a value for money self-assessment.
The regulator said while the value for money metrics are financially focused, providers will also be able to set performance targets themselves to reflect social outcomes.
The standard requires providers to publish performance evidence in their annual accounts against their own metrics and those defined by the regulator, and report how that performance compares to peers.
Simon Dow, interim chair of the RSH Regulation Committee, said: “The new approach will assist with scrutiny and consistency over the information reported, enable a greater focus on outcomes, and help continue to drive improvements in value for money in the sector.
“As is already our practice, we will seek assurance through in-depth assessments that registered providers are putting the standard in practice.”
