DRIVING PROFITABILITY IN CHALLENGING TIMES Steve Mather Neighbourhoods and Regeneration Director © Places for People Homes Limited 2013

Why is the Neighbourhood Strategy critical to our business ? Welfare Reform Reduced public funding Challenging housing market / economy Increasing importance of investor confidence Drive for efficiency / vfm Alignment of functions in terms of delivery Need for increased profitability / Return on Investment Ability to focus resources and access external funding © Places for People Homes Limited 2013

Neighbourhood Strategy – Five Key Phases Neighbourhood Definition In year Performance Monitoring Annual Assessment and Benchmarking Tackling poor performance - “Neighbourhood Planning” Making difficult decisions – “Option Appraisal” © Places for People Homes Limited 2013

Neighbourhood Definition neighbourhoods / 55,000 homes All Group owned / managed stock included Neighbourhoods vary in size from 20 homes up to 1,000 homes Alignment with existing structures is key - scheme codes, data management systems, etc. Care and support schemes are included where appropriate. Get this right and it works ! © Places for People Homes Limited 2013

In Year Performance Surplus Per Property (profitability !) Key financial and housing management performance data  Turnover  Arrears  Void Loss  Repairs costs  Economic activity rates Historic and current performance data Dashboard – accessible to all and simple ! © Places for People Homes Limited 2013

Neighbourhood Dashboard © Places for People Homes Limited 2013

Neighbourhood Dashboard © Places for People Homes Limited 2013

Annual Assessment KPI’s :  Surplus Per Property  Turnover  Repairs cost per property  Planned maintenance  Future investment needs Year on Year comparisons (3 years) Minimum “surplus” required from each property ( e.g. £2k) Regional “League Tables” / Benchmarking at “Assessment Group” level Reviewed with local management to agree banding © Places for People Homes Limited 2013

Banding GREEN Performing well retain focus to drive up performance AMBER Performing poorly but the Group have a long term interest (Neighbourhood Planning) RED Future to be considered (e.g. disposal, investment, conversions, management arrangements, etc.) (Option Appraisal) © Places for People Homes Limited 2013

Amber - Neighbourhood Planning © Places for People Homes Limited 2013

Neighbourhood Planning Develop long term vision Customer and stakeholder involvement Focuses upon the wider neighbourhood Framework model Evidence based Long term impact measured Physical, social, economic and environmental interventions © Places for People Homes Limited 2013

Red - Option Appraisal Detailed financial analysis Considers all options to test viability (e.g. Rationalisation / Disposal / investment) Linked to “Tenure Diversification” strategy Linked to “Asset Management” investment strategy Linked to “Rationalisation” strategy Challenges conventional thinking and assumptions Often least worst option Forces decisions to be made ! © Places for People Homes Limited 2013

What difference have we made in our neighbourhoods… Reduced turnover : 19.6% to 9.8% (Padiham, Lancashire) Reduced repairs spend : £ 1619 to £ 625 per property = £ 395k (Norfolk Park, Sheffield) Reduced re-let times : 45 days to 11 days (Manor, Sheffield) Increased surplus per property : £ 2,287 to £ 3,071 = £ 770K (Clayton Brook, Lancashire) Improved customer satisfaction : 58% to 92% (Kingsmere, Eastbourne) © Places for People Homes Limited 2013

How has it changed the way our business operates ? Move away from managing by “averages” and dealing with the detail Management at the most meaningful level Staff understand the financial implications of their decisions and actions Quality of data and the analysis and reporting has improved All staff / functions that impact upon a neighbourhood now work together There is nowhere to hide the most challenging issues ! Good and bad performance is clearly identified Staff have the data they need and meaningful performance measures Significantly improved stakeholder and customer relationships © Places for People Homes Limited 2013

What difference have we made to our business … Significant organisational change :  SHU Evaluation Improved neighbourhoods :  93% of areas banded “Green”  21 areas moved from “Amber” to “Green” (11/12-12/13)  2 “Red” areas (both for disposal) Increased financial performance :  £ 2.4m (11/12 – 12/13) in our most challenging areas  Profitability in all regions improved by between 4% and 16% (11-12 to 12-13)  Significant overall improvement in financial performance at a company and Group level © Places for People Homes Limited 2013

Neighbourhoods we are proud of … © Places for People Homes Limited 2013