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Benchmarking costs

costsWe are introducing four new cost-per-property indicators with detailed definitions provided by our colleagues at HouseMark.

These indicators are in line with HouseMark core definitions and enable wider sector benchmarking, as well as benchmarking with other Acuity members.

However, the key to successful benchmarking of these measures is allocating your costs in a consistent way.

Cost allocation varies significantly between housing providers, meaning cost per property measures within financial statements are not comparable.

Organisations wishing to benchmark these high level cost per property measures need to ensure they are closely following the definitions.

HouseMark is available to respond to any definitions queries. However, responsibility for ensuring data accuracy of these measures falls to the housing provider. If participants require detailed validation of their data, assistance with collating it (over and above clarity on definitions), or would like to benchmark their costs in more detail, HouseMark can provide this but there will be an additional charge.

The purpose of this exercise is effectively to split your total operating costs into five distinct areas:

Housing management

Responsive repairs and void works

Major works and cyclical maintenance

Overheads

‘Other’

Includes costs relating to front-line housing management, namely:

  • Rent collection and arrears management
  • Tenancy management
  • Lettings
  • Anti-social behaviour management
  • Resident involvement
Includes all costs relating to responsive maintenance and standard void works. Importantly, it includes both service provision (contractor side) and management (client side) meaning that staff involved in taking repairs calls or managing contractors should be included. Includes all costs relating to major works and cyclical maintenance including any capital spend. Importantly, it includes both service provision (contractor side) and management (client side) meaning that staff involved in programme management or stock condition surveys should be included. Also referred to as ‘back office costs’, this category includes costs relating to:

  • Office premises
  • Finance
  • ITC
  • Central overheads (including HR)
Includes all costs relating to estate services, care and support, development and ‘wider-role’ type activities (such as area regeneration, employment and training, financial inclusion). Also includes any ‘reconciling items’ like depreciation of housing stock.

With the exception of capital spend included in the major works and cyclical maintenance section, all costs should total your operating costs (ie. all costs should be allocated somewhere).

However, the fifth category (‘other’) includes items that are not benchmarkable (as they will vary depending on your operational portfolio) and as such are merely ‘set aside’ for the purposes of this benchmarking exercise.

We are effectively benchmarking the costs of your core landlord functions that every landlord needs to carry out as part of their raison d’etre.

Click here for frequently asked  questions about SPBM cost benchmarking >>>

Full definitions for the indicators are available in SPBM on-line.

About Mark Anderson

Acuity Director
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