Value for Money Self assessment 2015/16

Introduction

Poplar HARCA was established in 1998 as the first urban local housing company stock transfer. Virtually all of the stock we took on was medium to high density, medium or high-rise flatted housing and had significant problems of disrepair due to historic underinvestment. Our communities had among the highest levels of deprivation in the UK, and faced particular issues with overcrowding, anti-social behaviour and the highest youth density level in Europe.

Since those early days, we have refurbished more than 4,500 homes, carried out estate improvements, taken on the transfer of another 4,000 homes and built a further 1,000 homes. We have also levered in vital infrastructure, such as the A12 crossing and a new DLR station, paving the way for future regeneration opportunities.

We now have significant regeneration schemes underway under the ‘Reshaping Poplar’ programme and are also leading on the ‘Stuck in the Middle’ strategy to redevelop some 110 hectares of land in South Poplar and the Lower Lea.

We currently own or manage 9,141 homes.

This year 89% of tenants said that we are providing Value for Money, and 91% would recommend Poplar HARCA to family and friends.

In this value for money self-assessment, we outline our return on assets, our costs and how they compare, the savings we have made and the savings we plan to make in the future. We also show how we are responding where costs are higher than anticipated and outline the VFM strategy and targets going forward in response to rent reduction.

Our strategy

Our corporate strategy for the five years to 2016 set out our vision of providing high quality homes and services in strong and sustainable communities. Our new five year corporate strategy from 2016, Creating Opportunity, sets out how we discover progress and achieve opportunities that help our communities flourish. Achieving excellent value for money in all that we do is vital to achieving this vision: we aim to make the best possible use of resources to improve housing, neighbourhoods and opportunities for our residents, with high quality outcomes and demonstrable social returns.

In response to rent reduction, the Board has approved a Resourcing the Vision Strategy that includes:  5% nominal operating cost reduction for the 2016/17 budget  Additional income generation of over £1m per annum from sweating assets further  Letting 300 homes less suitable for social housing at local housing allowance to homeless families or at market rent when most appropriate  Selling 100 homes based on asset management criteria where disposal adds significant value relative to a high cost void repair and future planned maintenance obligations  Using disposal proceeds to buy new affordable housing through S106 opportunities at a ratio of 1.5 new for every old home sold

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Key features of our VfM approach are:

Our VFM Strategy sets how we target and monitor VfM at every level of the organisation. The Board sets and monitors our VfM action plan annually. The Finance and General Purposes Committee monitors this and reports to Board on a quarterly basis. The top level targets are set as a Financial Control Framework to enable us to ‘Resource the Vision’ and to deliver the Corporate Strategic Plan. The targets are in place to manage risk and ensure financial viability. They are:

 Achieve a 25% operating margin in 2015/16 and 2016/17  Achieve 27.5% an 30% operating margin in 2017/18 and 2018/19 respectively  Achieve interest cover of 125% in 2016/17 rising to 135% as we control risk and ‘move away from the cliff edge’  Manage debt within set parameters  Control exposure to market sales  Manage liquidity

Residents are fully engaged with the VfM process. As described above, VFM is an ongoing agenda item on Poplar Board and Finance and General Purposes Committee agendas where a significant number of members are from the community.

Poplar HARCA has developed a model to conduct community research in neighbourhoods, using open questions to facilitate face to face conversations to gain an insight into what is most important to a neighbourhood. Listening campaigns aim to gain an understanding of what is working in a neighbourhood, what residents’ value and identify gaps and community priorities.

In the annual survey to tenants and leaseholders, we ask a VFM related question. We also include VFM related articles and initiatives in our resident newsletter and ask for residents’ VfM ideas in each issue.

All the above is ultimately information to improve the allocation of social regeneration resources.

The result of our value for money strategy is a rising operating surplus and operating margin, whilst holding our net annual expenditure on communities and neighbourhood programmes relatively stable. At the same time as this rising operating surplus, we have achieved rising resident satisfaction.

Operating margin in 2015/16 was below our 25% target. This is due in principal to additional costs incurred in the financial year on restructuring teams to deliver savings going forward, and due to higher than anticipated cost of repairing void properties. A new asset management strategy has been put in place to control void expenditure going forward in response to this. The result is we anticipate achieving 25% operating margin in 2016/17, which will require outperforming the prudent budget which achieves 23%.

The chart below shows operating margin under UK GAAP for 2011/12 to 2013/14 and under FRS102 from 2014/15.

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Operating surplus and community investment (£m) £14 25%

£12 £10 20%

£8 15% £m £6

£4 10% Oparating margin % £2 £0 5% 11 -12 actual 12 -13 actual 13 -14 actual 14 -15 actual 15 -16 actual 16 17 budget

Operating surplus (£m) Net community investment (£m) Operating margin (%)

Return on assets

Since our earliest days, robust asset management has been vital to our work. This has involved comprehensive stock condition surveys and net present value assessments, followed by the development of detailed masterplans and high quality refurbishment of the housing stock, using significant levels of capital grant to bridge the funding gap on negative value stock.

Where refurbishment was not financially viable, decisions were made to maximise the return on our land assets through regeneration by new build and the creation of mixed tenure neighbourhoods.

More recently we have further developed this approach through our Reshaping Poplar programme, which is built around a comprehensive approach to asset management and return on investment. We recognise that we now own 32% of land in the area, with another 30% of land being potentially available brownfield sites of which 8% are owned by the London Borough of Tower Hamlets. We therefore have one of the strongest regeneration opportunities in London. We are committed to achieving mixed-tenure development at higher densities than the existing stock, so maximising cross-subsidy from homes for sale whilst mitigating development and sales risk.

We have also facilitated the development of the ‘Stuck in the Middle’ strategy for the neighbouring areas of Lower Lea and South Poplar in partnership with the London Borough of Tower Hamlets, the GLA, Transport for London, the London Borough of Newham and the London Legacy Development Company. The Stuck in the Middle partnership has identified 110 hectares adjacent to our stock with the potential to build 40,000 new homes and create 13,000 jobs. On the back of this initiative we worked with LBTH to submit a bid to the GLA and have now secured a Housing Zone for the Lower Lea. The GLA are also developing an Opportunity Area Planning Framework for South Poplar. Both of these initiatives will help to lever in investment into the area, both in terms of new infrastructure and new housing, which will greatly increase the value of our existing assets.

Our current approach to maximising the return on our assets is characterised by extensive stock option appraisals based on detailed density calculations and net present value analysis.

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Our work in securing wider infrastructure improvements, such as a pedestrian road crossing over an urban motorway near the Aberfeldy Estate and a new school and health centre in the St Paul’s Way area, has been key to securing the improved neighbourhoods that allow for increased values and successful regeneration.

Asset Income Management Group

Beyond large scale projects, we recognise the importance to sweat every asset in the organisation. The Asset Income Management Group was set up in 2015/16, chaired by the Chief Executive, with an aim to achieve £300,000 of additional income from existing non social housing assets. Some examples of what has been achieved to date are listed below:

Hidden Homes

Our Hidden Homes programme has been created to identify unused or redundant spaces in our buildings and convert them into new homes that can either be let or sold. In 2016 we have converted six spaces to create a one 1 bed home, four 2 bed homes and one 3 bed at a cost of £1.4m. These new homes have now been let at a combined annual rental of over £122k, representing a NPV of £422k, and have a positive impact on operating margin and interest cover. A second programme of hidden homes is now underway which will generate at least six more new properties.

Virgin Media

A one off opportunity has resulted in £400k of income (in 2015/16 only) from Virgin Media by granting wayleave and enabling upgrade to the Virgin broadband technology. This enabled Poplar HARCA to take a prudent view on a 2015/16 legal matter and provide accordingly. This is an example of being financially resilient in being able to adsorb shocks. Our Resourcing the Vision Strategy will take us further from the cliff edge to ensure we are even more resilient.

5 Alton Street Nursery

This asset has in recent years been an estate services base. An alternative asset was identified and a cost of £78k approved to convert it to a new estate services base. This has released 5 Alton Street to be let as a nursery for over £26k per annum. The project overall achieves an NPV of £240k and improves operating margin and interest cover.

Sleaford ground floor and Baring House basement commercial space

These available spaces were identified and tenants found, achieving a rent of £20k and £10k per annum for Sleaford and Baring respectively.

Risk based approach

We take a risk based approach to ensure we achieve the desired return on assets within our financial control framework. For example, we work in partnership with residential developers using land sale and barter arrangements, which means the risk is carried by the developers. We insist on overage clauses, but there is no underage. We therefore protect ourselves financially from any development losses, but share in development gains. We could take more risk and potentially

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make a higher financial return. However the priority is to ensure the area is regenerated and we need to ensure that that we can continue with this work in the future.

We only include conservative estimates for overages in our business plan. We do include conservative assumptions for shared ownership sales and a cash inflow from the Balfron Tower redevelopment. To test financial stability, we run a sensitivity of a 20% fall in property prices to ensure resilience and that we are operating well within our financial framework and funder’s covenants.

Examples of our success in maximising the return on our assets

A section later in this report gives detail of VFM savings achieved, which are part of maximising the return on assets.

Our communities and neighbourhoods (CaN) programme utilises community assets and a £3m annual revenue budget to produce social returns valued at £25m a year (calculated by HACT and excluding events). An example is we supported 268 local people into jobs. This amounts to a social impact value of £4.0m and savings of £2.2m to the Treasury, based on their formula.

The regeneration of the Aberfeldy Estate, which is now onsite, where we are replacing 297 existing homes with 1,176 new homes, of which 828 are for sale, 158 are for private rent, 170 are for affordable rent and 20 are for shared ownership. We are increasing the density of the estate from an existing 160 habitable rooms per hectare to 527, increasing the value of the land and our stock holding without the need to buy additional land. The first phase is now complete and generated a profit of 28% of GDV, considerably above our original appraisal assumption of 16%. Phase 2 is on site and sales “off plan” have secured in excess of £550 per square foot. We have sold all but four of the private sale flats, and profit share from phase 2 is anticipated to be £10m for Poplar HARCA.

We have secured overage clauses in contracts to ensure that we benefit from any upturn in the market. This strategy has generated £6.6m to date including recent completions of £1.9m for Tweed House and £1.8m for Bartlett Park. The strategy is expected to generate at least £4m for the Leopold 2 regeneration scheme.

Overage rights are assigned to Poplar HARCA Projects Ltd. Poplar HARCA Developments Ltd is the joint venture partner for the Aberfeldy regeneration project. This has enabled profits to be distributed to Poplar HARCA Ltd (the Registered Provider and Charity) by way of gift aid, thus minimising corporation tax and maximising our return on investment.

Converting the Grade 2 listed Balfron Tower from a social rented block to all private sales. The red book valuation of Balfron Tower using EUV–SH is negative (£4,030,000). By changing the tenure to private sale we anticipate that the project will generate a positive NPV and reduce financial risk for Poplar HARCA.

On the Burdett Estate we are working in partnership with the London Borough of Tower Hamlets and the St Pauls Way Trust School to build a new mixed residential development that will integrate a new primary school with housing above, thereby providing much needed primary school places for our residents.

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Work is progressing on our Chrisp Street regeneration project and we submitted a full planning application in June 2016. 169 existing homes are being replaced by 649 new homes and the commercial space is being increased by 16,777sq ft. This project will significantly increase the value of Chrisp St and will ensure that it continues to be the vibrant commercial heart of Poplar.

Absolute and comparative costs of delivering services

Poplar HARCA is a member of HouseMark. We use HouseMark data to compare our operating costs against 15 other housing providers (London stock transfer organisations, the local ALMO and other comparable providers with whom we share information).

Each year an independent polling company carries out a statistically representative survey of our residents. Analysis of resident satisfaction is therefore provided in a separate section below.

We have also analysed our costs using data from the Homes and Communities Agency’s global accounts against 12 of these providers to give us more information about our costs and performance. (Three of these were not in the Global Accounts data).

Peer comparisons and cost trends

Overhead cost summary

Overhead cost breakdown per direct user

Peer Group Quartiles 2015/2016 2014/2015 2013/2014 2012/2013

KPI Sample Upper Median Lower Result Rank Result Rank Result Rank Result Rank

Premises 13 £4,831 £5,476 £6,449 £2,891 1 £3,623 2 £3,127 1 £3,752 3

ITC 13 £6,051 £9,102 £9,500 £9,280 9 £9,221 9 £7,802 7 £6,688 6

Finance 13 £3,030 £4,170 £4,603 £3,123 5 £2,285 2 £1,903 2 £1,562 1

Central 13 £8,400 £9,973 £14,147 £5,653 1 £7,531 1 £6,287 1 £6,256 1

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Housing Management cost

Direct Housing Management - cost per property

Peer Group Quartiles 2015/16 2014/15 2013/2014 2012/2013

KPI Sample Upper Median Lower Result Rank Result Rank Result Rank Result Rank Total Housing Management 14 £526 £551 £644 £532 5 £563 9 £515 4 £458 4

Direct Housing Management 14 £304 £326 £360 £360 11 £378 12 £361 12 £325 8

Direct Rent Collection 14 £75 £86 £110 £110 10 £112 11 £114 13 £79 5 Direct Resident Involvement 14 £33 £42 £66 £59 9 £37 6 £30 2 £33 4

Direct Anti-Social Behaviour 14 £39 £47 £63 £68 11 £75 13 £59 10 £59 10

Direct Lettings 14 £32 £33 £56 £32 3 £43 8 £39 8 £43 8 Direct Tenancy Management 14 £72 £93 £109 £91 6 £111 11 £120 12 £111 11

Housing Management performance Performance Summary Housing Management Performance

Peer Group Quartiles 2015/16 2014/2015 2013/2014 2012/2013 KPI Sample Upper Median Lower Result Rank Result Rank Result Rank Result Rank Rent collected as % rent due (excluding arrears b/f) 14 100.8% 99.9% 99.7% 100.1% TBC 96.6% 14 101.5% 1 98.8% 13 Current tenant rent arrears as % of rent due 14 2.9% 3.9% 4.8% 3.7% TBC 5.2% 11 4.3% 8 6.5% 15 % of anti-social behaviour cases successfully resolved 12 99.6% 93.8% 86.2% 100.0% 1 95.9% 5 99.4% 4 98.2% 5 Rent loss due to voids as % of rent due 14 0.4% 0.6% 1.0% 1.3% TBC 1.7% 14 1.1% 11 1.3% 11 Number of tenancies terminated as % of properties managed 14 3.5% 3.8% 4.6% 4.2% TBC 6.4% 14 4.4% 9 5.7% 14

Percentage of all repairs completed on time 10 96.4% 95.3% 92.0% 99.6% TBC 98.8% N/A 98.4% 97.8% 2 Average number of calendar days taken to complete repairs 14 5.8 8.5 12.8 5.5 5 6.2 3 4.2 1 5.2 3 Average re-let time in days (standard re-lets) 14 22.7 26.0 30.4 20.0 TBC 28.0 9 25.0 6 21.0 5 Average cost of a void repair 14 £2,769 £3,471 £4,180 £6,494 TBC £2,821 3 £6,105 14 £5,061 14

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Repairs and voids cost

Responsive Repairs & Void Works - Cost Summary Peer Group Quartiles 2015/2016 2014/15 2013/2014 2012/2013 2011/2012

KPI Sample Upper Median Lower Result Rank Result Rank Result Rank Result Rank Result Rank Total CPP of Responsive Repairs & Void Works 14 £813 £932 £1,150 £1,121 10 £929 8 £1,092 10 £1,080 9 £931 8 Total CPP of Responsive Repairs (Service Provision) 14 £504 £527 £569 £528 9 £483 4 £537 10 £535 10 £538 10 Total CPP of Responsive Repairs (Management) 14 £159 £200 £271 £213 8 £231 9 £269 11 £248 9 £219 9 Total CPP of Void Works (Service Provision) 14 £116 £163 £193 £338 14 £180 9 £263 13 £274 13 £149 8 Total CPP of Void Works (Management) 14 £31 £41 £58 £41 8 £35 7 £22 4 £23 4 £24 4

Current arrears as % of rental income after HB payment since April 14 5.50%

5.00%

4.50%

4.00%

3.50%

3.00%

04/2014 05/2014 06/2014 06/2014 07/2014 08/2014 09/2014 10/2014 11/2014 12/2014 01/2015 02/2015 03/2015 04/2015 05/2015 06/2015 06/2015 07/2015 08/2015 09/2015 10/2015 11/2015 12/2015 01/2016 02/2016 03/2016 04/2016 05/2016 06/2016 07/2016

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Resident satisfaction survey

Each year an independent polling company carries out a statistically representative survey of residents. The 2015 survey was presented to our Board in November 2015.

The headline survey results are:

87% of tenants surveyed are satisfied overall (2014: 85%, 2013: 83%, 2012: 79%, 2011: 69%) 69% of leaseholders surveyed are satisfied overall (2014: 69%, 2013: 51%, 2012: 68%, 2011: 48%) 82% of all residents surveyed are satisfied overall (2014: 80%, 2013: 79%, 2012: 77%, 2011: 59%)

Benchmarking of London tenants’ satisfaction through Housemark shows upper quartile at 79%. Through the Tower Hamlets Housing Forum and information shared from local landlords we can compare some headline results:

tenants leaseholders listens estate services repairs A2 Dominion 84% 76% 53% 87% 83% East End Homes 83% 57% 51% 65% 60% East Thames 54% 25% 50% - - Family Mosaic 67% 60% - - 58% Gallions 77% - 65% 66% 77% Gateway 65% 50% 47% 61% 48% Genesis 67% 45% - 56% 77% L&Q 81% - 64% 72% 80% Metropolitan 71% 40% 53% - 61% Notting Hill 76% - 64% 81% 65% Old Ford 52% - - - - One Housing Group 83% 69% - - 94% Peabody 74% 57% 62% 91% 70% Poplar HARCA 87% 69% 90% 84% 79% Southern Housing Group 75% 51% 61% - 68% Swan* 81% 53% 67% 88% 74% THCH 80% 60% 67% 73% 72% Tower Hamlets Homes 77% 52% 55% 73% 69%

Tenant satisfaction has increased further in 2014 and we are now number one in the Tower Hamlets Housing Forum as shown above. Leaseholder satisfaction held steady at 69%, still the highest score we have achieved and joint second in the benchmark group.

The full resident survey report can be found on the Value for Money page on our website: http://www.poplarharca.co.uk/content/value-money

 landlord has stock outside Tower Hamlets and/or London 9

overall satisfaction 2012 2013 2014 2015

87% 83% 85% 82% 79% 77% 79% 80% 67% 69% 69%

51%

Leaseholders Tenants All

quality of repairs

2012 2013 2014 2015

78% 81% 79% 78% 79% 73% 74% 73% 76% 66% 60% 55%

Leaseholders Tenants All

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opportunities to be involved 2012 2013 2014 2015 81% 82% 79% 77% 78% 78% 69% 68% 62% 63% 61% 52%

Leaseholders Tenants All

VfM 2012 2013 2014 2015 89% 89% 77% 79% 80% 75% 72% 73%

57% 57% 50% 45%

Leaseholders Tenants All

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HCA Regression Analysis

The HCA completed a regression analysis of the sector using the 2014/15 Global Accounts. All figures below therefore refer to the statutory accounts (rather than HouseMark figures for example which allocate cost in a different way).

The headline 2014/15 social housing cost per unit for Poplar HARCA is £3,640. This is 2.5% higher than the median for the sector of £3,550.

The HCA analysis indicates that wages in our area are 24% higher than the national average. Since a significant portion of cost per unit is staff related (including that for contractors), it is expected that our average cost will be higher than the national average.

Adjusting the national average for the higher wages in our area would likely give a median of approximately £4,000 per unit. This is assuming approximately half of social housing costs are for wages. That puts Poplar HARCA at a little under 10% cheaper than the adjusted national average.

The chart below shows the average (rather than median) costs per unit for the sector going forward. The chart shows the sector is expecting cost per unit to increase by approximately 4% from 14/15 to 15/16, and then fall by around 6% in the following two years.

The Poplar HARCA 2015/16 statutory accounts show cost per unit to be 7% higher than 2014/15 at £3,900. This increase is largely driven by void repair expenditure. Looking forward, the forecast cost per unit for Poplar HARCA for March 2018 is approximately £3,700 (when sector average is approximately £3,800). Achieving £3,700 relies on the Resourcing the Vision Strategy being delivered.

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In summary, the HCA regression analysis shows Poplar HARCA to be reducing cost at a quicker rate than the sector over the next few years, dropping from slightly above to slightly below average. This is without adjusting for wages in the area being 24% higher than the national average.

Review of HouseMark benchmarking cost and performance data

In summary, we are close to upper quartile in our HouseMark data on total housing management costs, but nearer the lower quartile on repairs and some of the direct housing management costs. The trend does show management and maintenance costs are relatively stable or reducing when taking into account 2016/17 budgeted costs. Our new financial strategy from 2016 will deliver this cost reduction with 5% nominal reduction in the majority of operating cost budgets for 2016/17 compared to 2015/16.

The latest resident satisfaction figures show excellent performance, confirmed by the repairs and voids performance summary. Performance on repairs is among the top few in our benchmark group. Housing Management performance in 2015/16 was very good and significantly better than 2014/15. Performance on resolving anti social behaviour was excellent. Income collection has performed very well as the trend chart for arrears shows.

Overhead cost summary

Poplar HARCA has low overhead costs (also known as back-office costs). The results show that both premises and central overhead costs are the lowest in the peer group. This is largely driven by the termination of the lease agreement for occupation at Quebec wharf and retendering of the general business insurance. These have both reduced cost in terms of rental payment and policy premiums payable.

Finance and IT costs have increased as part of a deliberate strategy to invest in enhanced controls. The majority of the highest strategic risks that we face are owned and monitored by the Finance Team. IT has invested significantly in recent years in areas such a disaster recovery and battery backup to ensure no down time.

Housing Management We are committed to improving the lives of our residents creating sustainable, safe and healthy neighbourhoods with good access to employment and leisure opportunities. We have resourced a number of initiatives such as a family intervention programme, an intervention for households at risk of eviction and Police and anti-social behaviour initiatives (detailed in the savings section below). These impact on our costs in areas such as tenancy management and anti-social behaviour but produce high social returns and savings in, for example, reducing evictions and crime-related costs. We are top quartile performers on percentage of anti-social behaviour cases successfully resolved, showing the value of our work in this area. The investment in these areas also contributes to tenant satisfaction levels as detailed earlier in this document.

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Further improvement in cost of voids

In the section below we describe our strategy moving forward to reduce the cost of repairs and voids. A chart is provided below showing the repair cost per property owned. In comparison with our house mark peer group, property repair performance is in the median quartile with the exception of void repair which is in the lower quartile. Performance in terms of repair completion and satisfaction with repair quality has been excellent; therefore our primary focus is to reduce cost.

Given the singularity of our stock profile and population, with significant levels of overcrowding and a high youth density, benchmarking effectively is difficult for us. We have the highest level of communal areas of any housing association, as 90% of our stock is made up of flats.

We have a long-term regeneration and redevelopment programme, which aims to replace lower quality stock over a period of time. Decanting crystallises void repair costs and has a negative impact on the tenant turnaround performance. Decanting is a necessary part of regeneration for those sites where we have calculated that redevelopment is more efficient and effective than refurbishment. Our strategy is delivering better quality stock and the recent void expenditure improves the quality of existing homes in addition to the new homes that we are building.

We have seen a major reduction in repairs spending after refurbishment work – our analysis of four blocks has shown a 58% average decrease in communal repairs post refurbishment. Internal repairs in refurbished homes cost 25% less than internal repairs in properties pre-refurbishment.

We have deliberately avoided major partnering contracts with repairs and maintenance contractors which have caused financial and operational difficulties for some other associations. Instead, we recruit smaller locally-based contractors, producing a positive social return and boost to the local economy.

We developed an Asset Evaluation Matrix which is used to calculate the value and return on our properties. We will use this information to identify areas for improvement and as a decision making tool to calculate properties that it would be advantageous to sell or use in another way. Disposal proceeds will be used to buy new S106 affordable homes. Selling void stock that have the highest void repair need and future maintenance liability will reduce void expenditure in the short term and planned maintenance in the longer term.

The Resourcing the Vision Strategy, reported regularly to Board, details how the cost reductions in the charts below will be achieved. Recognition of the high void cost being incurred due to dilapidated stock has resulted in a strategic response by the Board.

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Repairs cost per property owned

11-12 12-13 13-14 14-15 15-16 16-17 actual actual actual actual actual budget

Total repairs 1,071.36 1,277.26 1,218.39 1,017.33 1,320.28 1,001.20 Responsive repairs 695.15 717.45 679.28 649.85 652.86 461.14

Void repairs 172.37 339.45 313.00 201.93 381.20 190.57

Homes owned 6,216.00 6,206.00 6,260.00 6,122.00 6,195.00 6,198.00

Repair cost per property owned £1,400

£1,200

£1,000

£800

£600

£400

£200

£0 11-12 actual 12-13 actual 13-14 actual 14-15 actual 15-16 actual 16-17 budget

Total repairs Responsive repairs Void repairs

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Estate services

Estate services costs have been relatively static whilst performance has improved significantly. We describe in this document how a restructure added more front line resource and a higher specification service without additional cost by reducing back office management costs. The results in our independent survey found that satisfaction with the quality of the estate has increase from 69% in 2012 to 73% for all residents (including leaseholders). We now aim to continue to improve the quality of estates, keep cost per home stable.

In 2016-17 we will be changing to a standards- based service delivery model. In practice this means that instead of Estate Services Operative mopping the floor every day (input centred approach), they will carry out daily checks and ensure that the floor is kept to a prescribed standard of cleanliness (output- centred approach). This adjustment will lead to time and cost efficiencies.

quality of estate

2012 2013 2014 2015

88% 87% 80% 75% 73% 69% 70% 68% 69% 70% 69% 70%

Leaseholders Tenants All

green spaces

2012 2013 2014 2015 75% 70% 70% 71% 70% 73% 61% 61% 64% 61% 62% 51%

Leaseholders Tenants All

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Evidence for past VfM gains and VfM gains going forward:

Key VfM gains:

We achieved a one off income stream of 2015/16 of £400k from Virgin Media

We have saved £150,000 per year by closing down an office and using existing office space more efficiently.

The Housing and Corporate Services Directorates were restructured in 2015/16 creating an annual saving of almost £140,000 (equivalent to 5% of the salaries budget for these teams).

Following the tender of out insurance contract, we have saved £100k per annum from 2015/16 for three years.

In the first year, investment in a dedicated counter fraud resource delivered savings equivalent to £3.43m, with 17 homes recovered, 4 successions refused and 5 fraudulent RtB applications halted.

Using HACT’s Value Calculator in measuring social impact, the value of the impact that CaN has achieved is £25m excluding events for the public.

We have a successful volunteering programme: we estimate that in 2014/15, through the work carried out by over 700 volunteers, added value of approximately £0.9m was achieved.

Alert-a-call, a telephone help service supported around 300 clients at a cost of £37,000. Our evaluation suggests this service is the equivalent of five full-time employees providing a welfare visiting service which would cost upwards of £250,000.

In 2016 we have renewed our Development Framework agreements, thereby saving the need for expensive OJEU compliant tendering procedures every time we commence a new development.

We invested £90,000 in a family intervention programme in 2015/16. The project has a 100% success rate in avoiding eviction for families at risk as a result of involvement in anti-social behaviour. Research by the Department of Education proves each successful case saves a landlord approximately £24,000 by avoiding the costs associated with a failing tenancy. This means that the programme saves Poplar HARCA tenants at least £170,000 annually. In addition, the government’s cost savings model confirms each family successfully supported saves the taxpayer £250,000 a year.

We invested £60,000 into an intervention programme for families and vulnerable individuals at risk of eviction due to rent arrears, or affected by welfare reforms. This project has a 97% success rate. Using the same cost-saving methodology as for family intervention, the project has saved Poplar HARCA at least £350,000 by avoiding evictions, legal fees and saved officer time.

As in previous years, we invested £450,000 in a police team, leading to significant reductions in crime and crime-related costs, as well as boosting satisfaction and perceptions of safety. This has had a whole raft of added-value to Poplar HARCA residents including arrests, criminal reports,

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13,500 hours of patrols, staff training and support for legal action, and has realised benefits calculated in excess of £1m in savings and costs avoided.

Other social value

Poplar HARCA covers three wards. Up until 2007 two of these were the two poorest and the third was the 8th poorest in London. Encouragingly, by 2010, this had improved with two wards being 2nd and 8th poorest and the third ward no longer in the bottom 20. By 2013, the two poorest wards had moved out of the bottom 10.

Communities and Neighbourhoods VFM 2015-2016

Our communities and neighbourhoods (CaN) programme is a key priority for us. Our budget of £2.8m is supplemented by further funding of £1m secured externally. Over 90% of activities run from our 12 community hubs are delivered by (and often funded by) external partners, with savings secured through these arrangements contributing towards the funding of three new community hubs.

The CaN programme delivers excellent social returns, helping to address the effects of high youth density such as youth-related crime and anti-social behaviour. Using HACT’s Value Calculator in measuring social impact, the value of the impact that CaN has achieved is £23M.

Analysis of benefit Activity Overall budget Overall social impact Budget : social Net benefit impact Employment & Training Hub £ 150,000 £ 2,503,676 17 £ 2,353,676 Employment & Training Hub £ 150,000 £ 2,023,754 13 £ 1,873,754 Volunteering £ 60,000 £ 1,059,888 18 £ 999,888 Youth Work (Spotlight) £ 500,000 £ 1,954,960 4 £ 1,454,960 Supporting Community Organisations £ 160,000 £ 11,591,991 72 £ 11,431,991 Centre activity £ 900,000 £ 3,679,434 4 £ 3,601,434 Others £ 700,000 £- 0 -£ 700,000 TOTALS: £ 2,620,000 £ 22,813,704 9 £ 21,015,704

Our Employment and Training Team working jointly with our partners this year has supported 268 local people into jobs. This amounts to a social impact value of £3,961,734. In terms of savings to the Treasury, based on their formula of £8,144 per person we get into a job, we have saved them a total of £2,182,592.

The social impact value of the activities delivered at our 4 major community centres in 2015-16 is £4M. This will be higher when Poplar Union, the new waterside centre opens to the public in late 2016 expected to attract 1,000 users per year.

Poplar HARCA expects to benefit from falling management costs such as anti-social behaviour and reduced arrears as this economic and social benefit comes to fruition over the next ten years. For residents, the economic benefit will impact positively on local job opportunities and the social benefit will improve people’s lives in areas such as health and education. Therefore CaN is a crucial element to delivering our mission of making Poplar a place where people choose to live, work and enjoy life. 18

The Spotlight Youth Centre

Spotlight in 2015/16 saw itself embedded as a high quality provider of youth services within Tower Hamlets and recognised as an example of national excellence in youth work. The centre is now highlighted as an example of best practise across the myplace centre network.

An exciting programme of delivery was implemented during the year across music, dance, theatre, sports, media and art. All offers are underpinned by a strong youth work framework. Implementation has been led by external partners with Spotlight utilising local delivery partners such IMD Legion, UI Dance, Ruff Sqwad, Limehouse Boxing Academy, XLP, Bow Arts and High Rise Theatre. The centre has also attracted high profile partners such as the V&A, Dulwich picture Gallery, the Barbican, CREATE London, the London College of Fashion, Celtic FC Foundation and Fight 4 Change. This partnership work has seen £426,405 worth of in-kind delivery provided by external sources.

As of 31st March 2016, we have 3,045 young people registered as Spotlight members. Throughout the year, 1,676 individual young people have attended Spotlight (459 more than in 2014-2015).

Attendance has been across 1,511 different sessions, equating to 3,774 hours. There have been 24,816 attendances by young people, equating to an average of each young person attending 15 times.

Of the 1,676 individual young people who have attended spotlight over the period, 56% were male and 44%. The age was spread across the 11-19 range, with the highest proportion being aged 13 to 17 years, 17% of which were 15 years old. Young people at Spotlight identify within a range of ethnic groups. The largest groups are; Bangladeshi at 28%. White British at 22% and there are significant numbers of young people attending from a Black African background at 14%, and Black Caribbean at 6%.

Spotlight has developed partnerships to tackle serious issues including youth violence / gangs, mental health and child sexual exploitation.

Working closely with the Tower Hamlets Police, Poplar HARCA ASB Team and Trident (the Metropolitan Police Gang Command) Spotlight developed a problem solving group to coordinate intervention activities. The partnership approach reduced youth violence in the Poplar area and provided support to young people at risk of offending.

Figures from the Metropolitan Police’s Annual Crime Count shows that crimes in Lansbury Ward in Poplar has fallen from 1,153 in 2013 to 693 in 2015, a 40% reduction for all crimes. This is significantly higher than the 18% reduction recorded for the whole borough. Most wards have only gone down by 17-20% during the same period. This is a very clear indication of the impact our world class youth facility has effected in the area in just over two years.

Following advice from Tower Hamlet’s Social Services it was noted that young people were at risk of and some were victims of child sexual exploitation. Spotlight developed a partnership with the NSPCC to provide support and guidance to young people from Tower Hamlets around this key 19

issues. The NSPCC have provided invaluable support to the Spotlight delivery team to ensure the safety of all young people.

Through conversations with young people, education and social care professionals it was noted that a significant proportion of young people were experiencing mental health issues including anxiety and depression. Spotlight have developed a key partnership with Docklands Outreach to provide specific support and counselling to young people experiencing mental health issues.

Environmental returns

Our major community hubs have supported 15 new and existing local community food growing projects spread over 12 estates, benefitting a total of 564 people. This has generated a social value impact of £729,432.

Our Energy Champions who are also regular volunteers at our community centres have helped over 40 local residents to install smart gas and electricity loops in their homes. This has enabled them to monitor their energy use and make adjustments and adopt more energy efficient ways. The project has saved each household an average of £10-£20 a month.

Volunteering:

Volunteering is an essential element of a thriving and successful community. Those who volunteer to help others also help themselves, and their wider community, through creating strong social bonds that protect us all. We develop and run services in a way that involves volunteers in all aspects of our work and our aim is to build the most successful volunteering community in London.

In 2015-16, we have engaged a total of 767 volunteers, 300 of whom volunteered regularly at least once a month at our neighbourhood centres. The social value impact generated by our regular volunteers is £887,695 while the value they created for Poplar HARCA, using the Accounting for Worth tool is £550,736.

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