The Sector Scorecard

The Regulator for Social Housing has issued a new Value for Money standard for social housing providers. The new standard requires providers to publish performance evidence in their annual accounts against seven metrics defined by the regulator, as well as their own metrics, and to report how that performance compares with their peers. Some of the metrics draw on those from the Sector Scorecard, which has just launched after a successful pilot programme.

There is no longer a requirement to produce a VfM self-assessment (hurrah, say many) and the new standard encourages providers to publish more financially focused reporting while also allowing them to set their own additional targets for social (and non-financial) outcomes. It is hoped that the Sector Scorecard will help associations not only report on comparative peer group performance but also identify areas for improving efficiency and effectiveness.

The Sector Scorecard pilot revealed the (perhaps unsurprising) fact that cost-per-unit figures varied widely between housing associations. Peer comparisons of unit costs can only be a can-opener for more detailed analysis – associations will need to triangulate with other metrics (whether sector-wide, peer group, benchmarking data or circumstances specific to the RP) to gain a deeper understanding. While there is scope for plenty of number-crunching and analysis, Boards will have to keep the strategic aspects in sight:

  • whether to target different returns on capital employed or social and non-social activities and, if so, what;
  • since the regulatory focus is on optimal returns rather than maximum return, defining what ‘optimal’ means for their organisation, and the rationale for accepting lower than maximum returns where applicable;
  • how to decide on the right balance of the investment priorities between new supply, existing stock and community expenditure;
  • how to set the right balance of investment priorities between existing tenants/customers and prospective tenants/customers, and to what extent (or whether) one should subsidise the other.

As strategic considerations, these aren’t anything new.  However, some Boards may find that the process of deciding how to use metrics to evidence performance requires a clearer focus on the costs, benefits and trade-offs in their organisation’s varied activities.

Although there will be less focus on the ‘essay’ and more on the numbers, those numbers are the backbone of a consistent and credible narrative.  RPs need to have a robust and consistent methodological approach that they can explain clearly, and present an analysis that drills down from, and supports, their headline conclusions.

They can choose measures and analyses that are appropriate for their own organisation – but resist the urge to cherry pick statistics, or to report different metrics in different years depending on which give the most flattering results!

Altair can work with you to make sense of your VfM information, providing a fresh pair of eyes to help you identify areas to explore in more detail, and suggesting appropriate metrics or analyses.  For our Brixx clients, we have developed two new reports which apply the Sector Scorecard and the VfM metrics to your business plan outputs. It also provides a  supporting Excel benchmarking analysis, helping you demonstrate that your planned investment and improvement programme will deliver your organisation’s VfM targets.

Joanna Williams is a Principal Consultant at Altair

Contact her at or 07586 324 948