PI's: Housing Management Cost
Value for Money: Responsive Repairs Per Unit
CPP 01: Cost per property of Housing Management
Rationale, Definition & Worked Example
Below you can find information regarding the rationale, definition and formula for this performance indicator. This includes a worked example to demonstrate how this indicator should be calculated.
Rationale
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.
However, responsibility for ensuring data accuracy of these measures falls to the housing provider.
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
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. Employee and non-pay costs Your non-pay costs should generally be fairly straightforward to allocate to the above five categories, using the guidance below. Your employee costs may be more difficult. We would expect the majority of employees to fall wholly into one of the above five categories. However, some staff (particularly in smaller housing providers) may carry out functions that cut across two or more of the categories. In this instance, the cost of these staff should be apportioned between the five categories based on the time they spend carrying out each role. For example, a call-handler taking calls relating to both arrears and repairs will need to have their cost split between housing management and responsive repairs and void works.
Units and turnover
To scale your costs for benchmarking purposes, we divide them by the number of units in management.
The exercise splits costs by tenure type to provide additional granularity and accuracy. For the purpose of these measures (and ease of data collation) we do not apply this split. Ie you need not be concerned by tenure type. Simply divide all costs into the five categories and divide them by all units in management.
Definition
This performance indicator Includes costs relating to front-line housing management, namely:
- Rent collection and arrears management
- Tenancy management
- Lettings
- Anti-social behaviour management
- Resident involvement
This is the total direct costs relating to housing management of your stock in management, divided by the number of units in management.
The numerator must include:
- Total cost of all staff directly engaged in the delivery of housing management, including their national insurance, pensions and on-costs.
- All non-pay costs relating to housing management
Housing management direct staff includes:
- Rent collection and arrears management (excluding rent and service charge accounting)
- ASB management
- Tenancy management
- Lettings
- Resident involvement
Note housing management direct staff would include:
- Generic housing officers
- Income management specialist teams
- ASB specialist teams
- Lettings specialist teams
- Resident involvement specialist officers
- Estate services management (client side) staff.
- Directors and heads of housing management /estate services / customer service functions and their PAs
- A proportion of contact centre staff time based on the amount of time they spend on housing management and estate services calls (for a multi-functional call centre this would usually be around 50%)
- A proportion of central complaints management teams based on the percentage of time spent on housing management issues (usually around 50%)
Note housing management direct staff would exclude:
- All staff engaged in management or delivery of responsive repairs and maintenance as detailed under direct cost per property of responsive repairs and void works.
- All staff engaged in management or delivery of major works and cyclical maintenance programmes as detailed under direct cost per property of major works and cyclical maintenance.
- The chief executive and all staff involved in overhead / back-office functions, as detailed under overheads as a percentage of turnover
- All estate services contractor-side staff, such as caretakers, concierges, groundsmen, cleaners etc.
- All care and support (intensive housing management) staff
- All staff carrying out wider-role functions, such as community investment, financial inclusion, regeneration etc.
Housing management non-pay costs include:
- Payments to debt collection agencies for the recovery of former tenant arrears
- Legal fees, bailiff/sheriff officer costs and court costs relating to housing management
- Cash collection charges (including security charges e.g. Securicor)
- Bank charges (including Giro bank)
- Swipe card costs
- Spend on communication (resident newsletters, reports for residents etc.)
- Spend on resident training to enable the resident to be involved in scrutiny
- Spend on formal and informal resident involvement groups
- Spend on resident board memberships
- Grants to resident groups
- Professional witness costs in relation to ASB
- Assistance to tenants to help them move home e.g. removal service (excluding grants to move or downsize)
- Choice based lettings fees
- Any other costs relating to direct housing management functions
Note it would exclude:
- All maintenance costs as detailed in direct cost per property of responsive repairs and void works and direct cost per property of major works and cyclical maintenance
- All overhead / back-office costs as detailed in overheads as a percentage of adjusted turnover
- Estate services (contractor side) costs
- Costs relating to care and support (intensive housing management)
- Other costs eligible for service charge
- All costs relating to wider role type activities (such as area regeneration, financial inclusion, employment and training)
- Reconciling items such as
- One off redundancy costs
- One-off pension deficit funding
- Loan fees and financing arrangements
- Charges for bad debts
- Charitable donations
- Depreciation of housing stock
- Impairment
- Cost of sales
- And any other costs that are not part of your ongoing operating expenses.
Formula
Total direct housing management costs ÷ Total number of units in management
Where:
A = Total direct housing management costs
B = Total number of units in management
CPP 01 = A ÷ B
Worked Example
Total housing management costs = £1,200,000
Total number of units = 800
Calculation:
£1,200,000 ÷ 800 = £1,500