Is it your job to write the VfM statement for your housing association? If so, you are about to do one of the most political things you have ever done in your life.
Have you thought about who will read it? The minister’s advisors can’t wait. What are they looking for? You don’t have to be a genius to work it out. They will be going like a heat seeking missile towards high salaries and high costs. And you don’t need me to tell you what will happen next. It’s time to think before we put pen to paper.
The attack by the Spectator, the Times and Channel 4 was all based on material you sent in to the HCA which they pulled together into the Global Accounts. Do you know what the press will make of your VfM statement and OFR?
Now don’t shoot the messenger, but there are a lot of changes this time around. This government says it is brand new. So it will look at what you say with fresh eyes. Let’s just pull out a few of the contentious points. How do you grapple with these?
The one and only job for the minister is to boost homeownership. What are you doing to help him? Are you straining every sinew to push low cost home ownership? We can expect that RtB will be a hot potato in the future. I think they want to go ahead with this irrespective of the cost to you.
Do you still want to do build homes for cheaper rents? I hope you do. But we are in the era of buy one get one free. The Tories want you to sell your homes in high value areas and build more in cheaper ones. I know that a lot of local councils are not too happy about associations doing this. And no wonder, if you take it too far it could alter the make-up of local voters and change who runs the town hall. So you are between a rock and a hard place.
That bit of the VfM statement on return on assets is a minefield to write this year isn’t it? One thing’s for sure, it’s not just a technical exercise.
What are you saying about cutting costs? This is the danger zone. You saw how Channel 4 had a go at Peabody for costing more than L&Q. Do your costs stand up to scrutiny? And I don’t mean from your friends. What would a hostile journalist make of them?
You can expect to feel pressure on pay at all levels. The Achilles Heel is top pay. To be honest I have no view on the rights and wrongs of this. For years the mantra was that we needed private sector terms and conditions to attract the best. Now the mantra is that we should be on council terms and conditions due to austerity. I don’t write these rules. But you do know that the rent cut was justified by pointing to high salaries. So walk into this with your eyes wide open.
It’s not just top pay you need to get to grips with. The minister will want you to cut costs at all levels. That will mean moving harder and faster on things like channel shift and mergers. Of course this will lead to big job losses. Old-style mergers and half-hearted IT strategies are a thing of the past. And watch out if you fail to keep the promises you make on savings.
Like Arnie, the minister will be back.
So this year will be the hardest test on VfM partly because we have new masters. It will also be a lot tougher as we have less money. The rent cut and the changes to welfare will bite sharply.
What sorts of services will we see? My big fear is that we could go backwards. Will we just provide the basics and retreat from communities? Is it time to just do essential repairs and punt everything else into the long grass? We have been here before. That was how it was twenty or so years ago.
It’s a difficult path to tread for the poor souls that won the lucky ticket to write the VfM statement. You can’t even save time by cutting and pasting from last year. Those days are gone. The big question now is this.
How do you strike the best balance between cutting costs and running the right level of services? And how do you come up with an answer that makes sense to tenants, your board, the HCA, a hostile press and a sceptical minister? Of course you can’t please everyone. But it absolutely is your job to work out in advance what they all will say and have a plan to deal with it.
Good luck!