1. The new normal • new relationship between individual and state • unemployment, welfare, exit other services – risk to revenue • cutting deficit, cutting grant, HAs carry more debt, more risk • lender behaviour, covenants, no cheap finance • global finance, Eurozone stabilising? • regulation reduced, refocused, follows the money • rents still pegged to RPI phew • trimming costs, cutting cloth, surpluses up • demand for social housing high & rising • tenure flexibility offers opportunity • competition from new entrants too early to tell …..end of the world as we know it but the sector’s getting on with it and managing the risks

2. VFM: business imperative • regulation takes its cue from new normal: • ‘lever’ to improve taxpayer’s return on embedded public £s • promotes active asset management, backed by tenure reform • but VFM standard has broader perspective • tension between existing & potential tenant? • social business imperative: VFM generates margin to keep delivering objectives • smaller HAs need a compelling value proposition and evidence to back it…… • ….customer focus, responsiveness, specialism, localism, health & well-being?

3. What are they looking for?: economic regulation in practice integrated assessment based on 8 questions • understand operating environment? • appropriate strategic business plan? • financial plan? • risk management? • robust approach to VFM? • track record of achieving objectives? • transparent & accountable – challenge drives improvement? • effectively led and controlled?

4. VFM standard: requirements • boards understand and deliver VFM across operations (people) and assets (property) • in the context of the provider’s purpose • mindful of stakeholder interests & 3 Es (includes benchmarking) • involves understanding the ‘return’ on all resources available, expressed in financial, social, environmental & (service quality) terms • annually self-assess VFM & make it publicly available • VFM was about the cost & performance of services but this is wider – the whole business • reality check – are we really talking about business effectiveness here?

5. VFM standard: implications • as a basis for active regulation – intrusive? • as a set of (voluntary) principles to ensure (social) business effectiveness - good practice? • should herald genuine board engagementin strategic business planning: • boards define VFM (business effectiveness) in their own image • essential to assert a clear vision of what they value (are in business for) • taking account of the value perspective of different stakeholders • more strategic debate about running the business • total VFM = bigger picture - forces challenge of previous ‘givens’ • the right activity or product mix to meet business objectives, eg social rents, care, affordable homes, services, regeneration…….tenure fits here • the right resource allocation between activities

6. VFM standard: implications • appetite for risk – a clear position • understand which opportunities you go for • understand the business case • the right housing assets (in the right places) • the right service delivery system • efficient & effective service delivery • the right information to make business decisions – includes systems for capturing investment & operational costs & measuring the success of that investment • board competence - skills to provide strategic leadership, challenge & ask the right questions • requires investment of time – on strategic business issues and in skills development