The Board of Management is pleased to present the report and audited financial statements for the year ended 31 March 1999. This report is the fifth to be published by the Vale Housing Association and is intended to give a brief business overview of the financial affairs of the Association during the past twelve months.
A consistent theme that the Association has been keen to emphasise over its brief history is that the Association is here to do its best for its tenants. Out performance of the original Business Plan has already enabled the Association to pass on some of these gains to its tenants.
As we head for the end of the rent guarantee period, this was a year where the process of looking forward to the next five years began. The theme of quality service coupled with keeping rents to a minimum remains a high priority for the Association. In the medium term this should certainly be achievable against the background of falling interest rates and the early completion of a number of catch-up repair programmes.
During this current financial year, this process of review will be completed and to this end a number of projects are in hand to facilitate new strategies. These include, for example, a review of the current rent points system with the overall aim to introduce a fairer rent system for all tenants. Alongside this, work is progressing on updating information on the existing stock condition survey to enable a reassessment of future spending plans on repairs. These two reviews will be completed later this year.
In anticipation of these reviews and based upon past out performance, rent increases for new tenancies last year were frozen. For transferred tenancies, increases were in line with the original guarantee of inflation plus 1%.
On the development side, 74 new homes were provided during the year, and by the year end work had commenced at a number of sites throughout the area. This included the purchase of our first site outside of the immediate Vale area.
The accounts show a trading loss incurred in the year of £909,000 compared to an original forecast of £2.3 million. The significant improvement in the trading figures was due to a number of factors including increased levels of income arising from house sales (£377,000); reduced spending on property management (£945,000) affecting specific renewal programmes and the non-utilisation of contingencies provisions.
Savings on financing costs (£617,000) arose due to reduced borrowing requirements and savings from lower interest rates during the second half of the year.
Offset against these gains £822,000 spent on the offices has been classified as operational expenditure representing the difference between the cost of provision and valuation.
The largest proportion of our operational spending in the year was on repairs, maintenance and improvements to our stock in line with the original promise made at the time of transfer. In total, this amounted to almost £6 million, including £2 million on planned renewals and repairs.
The programme included over £500,000 spent on new or replacement central heating systems; £350,000 on the replacement of rainwater goods, e.g. gutters, soffits, £263,000 on additional insulation works, £150,000 on replacing kitchens and bathrooms and £130,000 on replacing garage roofs and doors.
For general routine repairs over 94% of all jobs were carried out within the target time of 20 days. For repairs classified as urgent this figure rose to 99% and for emergencies to 100%.
The Association let over 500 properties during the year, over 60% of these were to people on the current waiting list. The average time for re-letting a property between it becoming vacant and let was under 5 weeks.
During the year the Association participated in a number of benchmarking exercises, aimed at comparing performance against other associations. These results, coupled with those produced by the Housing Corporation itself, confirm that our overall financial performance compares very favourably against any chosen peer group, with the overall indication that the Association can be proven to be a low-cost Association, whilst at the same time delivering services comparable to more expensive providers.
Reference will continue to be made to the fact that the Association wishes to remain a low rent Association. Figures produced by the Housing Corporation indicate that our average rents are amongst the lowest in the South East Region, and our intended policy on rent increases over the next few years should ensure this situation is maintained. The regulatory framework set up by the Housing Corporation through the performance standards criteria should be met in its entirety as regards rent proposals.
Development potential within the Vale area itself remains difficult due to the limited availability of land and high costs. The Housing Corporation's new framework for rents to be applied to new developments will increasingly place a strain on our ability to produce new homes within the rent guidelines. The Association is also aware that with the significant reduction in interest rates over the last six months, the costs associated with buying a property are now more attractive than renting. This situation will put Associations like the Vale under increasing pressure to reassess our ability not only to provide social housing at a economic price, but whether there is a sustainable market for social housing over the next few years.
During the last 12 months, the Association has undertaken a complete Risk Appraisal throughout the organisation, with the aim of looking at all our operations, and assessing the risk associated with one or any of those operations failing. This is the first stage of this process, and this work will form an integral part of the Association's work from now on.
The potential problem of Year 2000 compliance for all businesses remains an important issue which will not be completely resolved as to whether enough work has taken place until 1st January 2000. Like many other businesses, the Association has reviewed the potential risk areas and the impact on its own operations, and taken steps to minimise the risks. In the main this has involved upgrading some of our computer systems, replacing computer hardware, and seeking assurance from our suppliers that their equipment will be operational on 1st January 2000. £24,959 was spent last year on this issue to minimise potential disruption.
Contingency planning for service areas where tenants may be vulnerable are being reviewed particularly where there may be failings in such areas as power and water supplies. Existing emergency procedures are being reviewed so as to ensure that services are maintained and that that the Association can respond where it is reasonable to do so.
Whilst the Association does not expect material disruption to the business from the year 2000 problem, the complexity of the matter does prevent any business offering absolute assurance on this issue.
Finally, it was our hope that the new headquarters building in Abingdon would have been completed and occupied during the last year. Due to the delays on site, the building was occupied in June of this year, with the 21 new homes adjacent to the offices being available from February.
This marks another key stage in the development of the Association
| Housing Properties and Other Fixed Assets | |
|---|---|
| Other assets acquired during the year: | |
| Purchase of 4 vehicles for the Works Division | £62,000 |
| Computer equipment | £49,000 |
| Equipment Purchases | £15,000 |
| The amount spent on the Abingdon offices during the year was £601,000. |
The original business plan provided for loan drawdowns during the year of £7.8 million. Actual loan drawdowns amounted to £2.4 million with a total debt outstanding at the year end of £74.4 million. Drawdowns were significantly lower than anticipated due primarily to reduced spending on development projects and the improved trading position.
The Board of Management follows the Code of Governance published by the National Housing Federation and believes that the Association complies with the principal recommendations of the Governance requirements. However, the Board feels that Members' ages cover a range commensurate with experience and does not consider it appropriate to disclose individual ages.
The Board of Management comprises 15 non executive Members and is responsible for the management of the affairs of the Association. The Board Members are drawn from 3 elements of our community; there are five tenant representatives; 3 local authority appointments; and 7 Members drawn from professional local business sectors. The Board normally meets formally 5 times a year for regular business together with an annual general meeting. It has 3 sitting Committees in place to consider the detailed work of the Association. These cover Resources, Housing Management, Development and Property Services. These Committees meet on a regular basis, usually in the weeks prior to the Board meeting itself. Also in place are an Urgency Committee; an Audit Committee; a Remuneration Committee; and Appeals Committee.
The Board is responsible for the Association's statutory and policy framework. The implementation of that framework is delegated to the Chief Executive and other executive officers. The Management Team comprises of the Chief Executive, the Director of Finance and Administration, the Director of Housing Services and the Director of Property Services. The Management Team meets on a weekly basis to review and discuss internal matters and are present either individually or collectively at all Committee and Board meetings.
Tenant Board Members are elected by the tenant forums and serve for a 3 year term. Local Authority nominees are appointed by the Vale of White Horse District Council annually.
Professional Members of the Board were recruited following public advertisement initially prior to transfer and subsequently when vacancies have arisen.
It is the intention that no Board Member should serve more than 12 consecutive years on the Board.
The Association has 127 shareholding Members and an open membership policy.
Each Committee comprises either 5 or 6 Members with the allocation to tenant representatives being no more than 1/3 of each Committees membership. The Chair of a Committee cannot be a local authority nominee with the local authority representation being no more than 1/5 of each Committee's membership.
Each of the Committees consider policy and detailed issues arising within their terms of reference with, if necessary, recommendations to the Board of Management where appropriate. The broad terms of reference for each Committee are as follows: