Financial Statements 2018 financial statement- joomag | Page 12

3. Performance against 2017 Value for Money targets Included in Accord’s 2017 Value for Money Self-Assessment Statement were a number of targets and objectives for 2017/18. These targets were all fully aligned with Business Plan objectives and performance is summarised below. Targets for future value for money objectives, deliverables and areas for improvement are outlined in section 4. 2017/18 VFM target Progress against targets 1. Manage the on-going impact of the second year of the rent reduction regime c£3.5m Achieved The cost pressures associated with year two of the rent reductions were fully absorbed in the 2017/18 budget setting process – both budgeted and actual surpluses were greater than those forecast in the ‘pre-rent reduction’ business plan. 2. Exceed Board approved 2017/18 budget surplus Achieved In 2017/18 Accord again posted record surpluses of c£10.7m which outperformed budget surpluses by almost £1m. Achieved In July 2017 a new £25m loan facility was secured at competitive rates which would not have been achieved with this lender with the pre-simplification structures. The target efficiencies of £100k are fully embedded in this facility. Achieved New leaner and consistent operating delivery structures have been implemented throughout the organisation during 2017/18. These structures ensure Accord remains focussed on excellent customer focussed services. Efficiencies in operational staffing models, overhead reductions and streamlined governance arrangements have already realised efficiencies and savings substantially in excess of the target of £300k. Achieved During 2017/18 the repairs service was fully in-sourced as planned with the team going live in December 2017. Savings identified in the final four months of the 2017/18 financial year were c£300k. Further savings of £1.4m have also been incorporated into the 2018/19 budget, with even greater efficiencies to be delivered in future periods. 6. Continue to achieve savings of a minimum of 10% against externally validated budgets for construction services as part of the delivery of the 2016-21 Shared Ownership Affordable Homes Programme (SOAHP) Achieved In recently delivered projects led by Accord’s construction services team a total of £4.8m of efficiencies have been identified across nine individual sites. These sites had a total development cost of £43.7m. 7. As a minimum, deliver against budget but with a stretch target to exceed budget by 10% for the sale of new and existing homes Achieved 8. Achieve efficiencies against budget of 7.5% on treasury debt servicing budgets Achieved 3. Secure new financing with a lower cost of finance therefore realising the benefits of the group simplification process, achieving savings of over £100k 4. As part of an ongoing review of operations through Accord’s Change Programme, a leaner, more efficient management structure will be implemented without compromise to service standards and achieving savings of over £300k 5. Accord will fully in-source its repairs and maintenance service resulting in annualised savings of up to £2m 9. Year on year improved voids, lettings and arrears performance in the Communities Directorate Ongoing 10. Procurement savings of £500k Achieved 11. Identify efficiencies of a further £100k through rationalisation of commercial building portfolio Achieved 12. Year on year improved performance in social housing cost per unit metrics calculations Achieved Overall income generated from the sale of new and existing homes (£5.7m) was 12% greater than budget (£5.1m). Through active treasury management substantial savings against the debt service cost budget were achieved. The target of 7.5% was surpassed with the year end position reporting favourable performance against budget of 10%, being £1.7m. The desired performance improvements in housing management KPIs in the Communities directorate have not yet been fully achieved. A renewed focus has been adopted to improve these measures. Through the re-procurement of the HR and Payroll systems, all corporate insurance services and the procurement activity associated with the in-sourcing of Accord’s repairs and maintenance services the target procurement savings of £500k were achieved. During the year Accord has divested of commercial property and other underutilised non-housing properties. Capital receipts generated have been reinvested in new homes and have also identified overhead savings in line with expectations. As demonstrated throughout section 4 below, year on year improvements across VFM metrics continue to be identified. Financial Statements 2018 11