We are always striving for value for money and every decision our Board makes is considered on this basis.
Each year we select specific areas of the business to receive a critical look at how things are done looking at; can we do more; can we do it better; and, is it what our customers want? In the last year there we delivered the following by undertaking these reviews:
We are always aware that overheads are a burden on services and need to be as low as possible. We have been efficient in this area but still look to do better. The growth of Gilbert and Goode has enabled the social housing activities in Ocean Housing to benefit from lower overhead charges. Overheads attributed to social housing activity have reduced by £87,000 in 2015/16 compared to the previous year.
We spend over £6 million per year on maintaining and improving our houses, and as such, we always work hard on keeping down the costs of materials. In 2015/16, our membership of the Advantage South West procurement consortium saved us £250,000.
We have focused on procurement activity in 2015/16 and have established a new post of Group Procurement Manager. This new post has helped us get better Value for Money in contracts let in the year. A number of contract negotiations have taken place in the year which has led to a combined annual financial benefit of £164,000.
In-house delivery of the maintenance programme ensures that tight control on costs can be achieved, as well as maximising savings on VAT. The use of this VAT efficient in-house model means the equivalent of a 5% VAT rate on the whole programme, a value estimated at £300,000.
Group Restructure – streamlining
The Group restructure in 2015 resulted in costs being reduced by £313,000 in 2015/16. The full year benefit in 2016/17 is expected to be £650,000.
Cost Reduction Initiatives
A number of management cost reduction initiatives have been delivered in the year resulting in a saving of £62,000. These include staff efficiencies and reviewing the timing and method of tenant communications.
For a full assessment of Ocean’s Value for Money activity, please click on the Value for Money Assessment document link.