Linthouse Housing Association Limited - Business Plan 2017-2018 to 2019-2020
Business Plan 2017 to 2020
Year 3 - 2019-2020
Page | 1
Linthouse Housing Association Limited - Business Plan 2017-2018 to 2019-2020
Contents Page No.
1. Introduction ...... 3
2. Mission, Vision, Values and Culture ...... 4
3. Executive Summary ...... 6
4. Who We Are and Achievements to Dates ...... 7
4.1 Our History & Planned Growth ...... 7 4.2 Our Committee ...... 10 4.3 Our Staff ...... 13 4.4 Area and Community Profile ...... 20 4.5 Our Customers ...... 25 4.6 Our Stock ...... 29 4.7 Our Rents ...... 31 4.8 Asset Management ...... 32 4.9 Our Partners ...... 38 4.10 Our Performance – Benchmarking ...... 42
5. Analysis of Our Operating Environment ...... 43
5.1 PESTLE Analysis ...... 43 5.2 SWOT Analysis ...... 50 5.3 Risk Analysis...... 53
6. Strategic Objectives (What We Want to Do) ...... 54
6.1 Strategy Analysis ...... 54 6.2 Strategic Mapping ...... 54 6.3 Our Strategic Objectives ...... 55
7. Delivery Plan 2018-2019 (How We Will Do It) ...... 60
7.1 Summary Delivery Plan ...... 60 7.2 Monitoring Progress ...... 60
8. Financial Analysis (How We Will Pay for It) ...... 60
8.1 Resources ...... 61 8.2 The Long Term View ...... 61 8.3 The Medium Term View ...... 64
APPENDICES
Appendix 1 LHA Staff Structure at July 2019 ...... 69 Appendix 2 Risk Map at May 2019 ...... 70 Appendix 3 TOWS Matrix (July 2019) ...... 84 Appendix 4 Grant Funding Secured by LHA 2015- 22...... 85 Appendix 5 3 Year Plan for 2017 to 2020 ...... 86 Appendix 6 Key Performance Targets for 2019/2020 ...... 91 Appendix 7a Performance Report on Summary Delivery Plan 2017/2018 ...... 92 Appendix 7b Performance Report on Summary delivery Plan 2018/19...... 94 Appendix 8 Summary Delivery Plan 2019/2020...... 96 Appendix 9 30 Year Cash Flows ...... 97 Appendix 10 Sensitivity Analysis and Scenario Modelling ...... 106 Appendix 11 LHA Compliance with UB loan covenants ...... 113 Appendix 12 LHA Housing, Commercial and other stock holding and factored owners at 1.8.19…….114 Page | 2
Linthouse Housing Association Limited - Business Plan 2017-2018 to 2019-2020
1. INTRODUCTION
1.1 This Business Plan is the Year 3 position of our first 3-year Business Plan. It provides a comprehensive overview of Linthouse Housing Association Limited (LHA) and the environment in which we operate. This has been prepared by the Management Committee, leadership and staff team and informed by the views of key stakeholders, having reviewed and agreed the strategic direction of the organisation over the medium term to achieve our long-term mission.
1.2 Our business plan is a key strategic document which communicates our vision and objectives, plus how we will achieve those objectives. The plan articulates the strategic direction and ambition of the Committee as the governing body of the organisation. It provides a framework for action which communicates to customers, staff and key stakeholders what the organisation aims to achieve over the 3 years of the Plan. It summarises key achievements detailed in Year 1 (2017/18) and Year 2 (2018/19) of the Annual Delivery Plan. It also provides an overview of where we want to get to and how we will get there via our Annual Delivery Plan for Year 3 of the plan for 2019/20.
1.3 We have prepared this Plan cognisant of the Scottish Housing Regulator’s Recommended Practice for Business Planning of December 2015 and the new Regulatory Standards of Governance and Financial Management which came into force in April 2019.
1.4 The Business Plan Process
1.4.1 This plan has benefitted greatly from a time of consolidation and reflection where new members joined the Management Committee of the Association to help to strengthen our governance. We have also seen a 90% change in our staff team over recent times as we continue to move through a period of long overdue renewal. All of this has created the opportunity to take a step back and consider, going forward how we develop service for the tenants and communities that we are here to serve. Our review culminated in a Strategy Away Day held on 28 June 2019 attended by our Management Committee and new Senior Management Team. At this meeting, we were able to critically review our strategic direction , consider key achievements in 2018/19 and refresh our Strategy and Plan to deliver what tenants need from us now and in the future. LHA management Committee re-affirmed their commitment to the strategy of remaining an independent community-based housing association focused on striving for customer excellence, value for money, and organic growth through pursuing development and acquisitions opportunities that enhance the communities we serve. Committee also agreed which the strategy of becoming more than just a great landlord through embedding culture change in the way we work with customers and by starting to develop a strategy on tenant participation and wider role initiatives.
1.4.2 This allowed us to revise and update the 3 year Business Plan that is owned by the Management Committee and staff team and reflects the needs and aspirations of our customers and key stakeholders.
1.4.3 The Business Plan will be refreshed annually and rolled forward every year. This will ensure we always have a current Business Plan which sets out:
• Our strategic ambitions for the remaining life of the Plan. Page | 3
Linthouse Housing Association Limited - Business Plan 2017-2018 to 2019-2020
• The updated 30 year financial projections to establish and test our long term financial health and future viability. • The Summary Delivery Plan of the headline activity for the current year 2019/20.
1.4.4 Every three years, we will conduct a comprehensive review of our strategy the format and content of the Business plan, with the next due in 2020/21. The first two years of the plan saw LHA focus internally on improving its financial management and governance, as well as reviewing the staff structures required to deliver the plan and making a long overdue in- roads to lack of investment in our housing stock. A strategic options review was carried out at the 2019 Away Day and this confirmed Committee and Senior Management Team view that our strategic direction is still fit for the purpose of delivering maximum benefit for our customers and communities we serve.
2. MISSION, VISION, VALUES & CULTURE
We reviewed and updated our statements of strategic intent and agreed the following:
2.1 Mission Statement
To deliver high quality and cost effective housing services designed to meet the needs of existing and future customers. To work in partnership with others to create thriving communities that people want to live and work in.
2.2 Vision
Creating and sustaining lasting, unique, vibrant homes in stable, popular, and ambitious urban communities.
2.3 Values
The values have been agreed by our Committee and staff team in Year 3 of the plan and continue to reflect our new future. They will be visible in the workplace and easily remembered by the acronym of C.H.A.T. to capture the following:
• Customer Driven - We are committed to providing a quality, customer focused service that demonstrates value for money, delivered by professional and caring staff. • Honest - Our Committee and staff team are all bound by clear Codes of Conduct to make sure we not only do our jobs openly, honestly and to the highest standards of probity, but that we manage and declare any real or perceived conflicts of interest. • Accountable - Our Committee as the governing body and our leadership team will provide strong strategic leadership and oversight, ensuring tenant and other service user interests are protected and at the forefront of all that we do. • Transparent - We will ensure that our actions are transparent and will publicise information on how we are performing, welcoming challenge and feedback to continuously improve the effectiveness and relevance of the service we provide.
Page | 4
Linthouse Housing Association Limited - Business Plan 2017-2018 to 2019-2020
2.4 Culture
As part of our new values, we launched a culture change programme in 2017/18 that will mean a new way of working and thinking up and down LHA. This is designed to make sure we are always doing the right things, right, every time. We are passionate about this change at LHA and will use our acronym for Linthouse Housing Association of LHA to create a brand for the culture change that we seek. Our culture change programme will encompass the following actions that we will test ourselves against in every transaction:
• LISTEN - We are committed to listening to those we do business with, be that our customers, staff, stakeholders, regulators or funders to ensure that our responses are reflective of what people are saying to us. We will listen in various forms - from customer conversations/requests and feedback in all forms, to listening to staff, the views of our regulators and to understanding what is happening in our operating environment. We will listen as we form our plan, strategies, policies and in our day to day operations. Everything that we do will be shaped by listening to the views of others.
• HEAR - Once we listen and understand the need/demand/offer that is being presented, we will ensure that we fully understand what is being said. We will test options when appropriate on how we can respond to make sure we pursue the best options that deliver the solutions sought. We know that no two people are the same and with that, their needs may be different. At LHA, our staff will be charged to finding tailored solutions to suit our customers’ needs wherever possible. We will be known for being inclusive, intelligent, innovative and creative to create the best solution to what we hear.
• ACT - Whilst we will think about what we do, we want to be known for acting swiftly to deliver solutions and for always keeping our promises. We will work to agree solutions and timescales for activity and to meet these every time in every transaction. We know that a lot of what we do will be delivered collaboratively with others. This includes working collectively and individually with our colleagues, customers, suppliers, with other housing associations, statutory, public and voluntary sector partners to improve the lives of our residents. We will be a proactive member of our local communities, acting as the community anchor and always seeking out new, innovative ways to address issues that impact our residents.
Listen, Hear, Act will continue to be our service excellence mantra for the duration of this business plan.
Page | 5
Linthouse Housing Association Limited - Business Plan 2017-2018 to 2019-2020
3. EXECUTIVE SUMMARY
3.1 This Business Plan aims to ensure that we focus on providing excellent housing and factoring services and on repairing and maintaining our properties to a high standard in line with the targets set by the Scottish Government. We will ensure the long term financial health and viability of the organisation and will drive a greater focus on efficiency and value for money. During year 3 of the plan we will develop our approach to value for money and will develop a separate strategy document covering value for money in Year 3 of the plan.
3.2 The Scottish Housing Regulator (SHR) moved the Association to medium regulatory engagement during 2016/17 to gain assurance about our governance, financial management and the delivery of our maintenance function. Since then there has been a period of major managed change at the organisation and significant progress has been made with our programme of internal review, renewal and positive transformation. We have worked through the requirements of three regulation plans to improve the Association and in December 18 were moved from medium to low regulatory engagement.
3.3 Our Committee are determined to see through our improvement plans to secure the confidence of the Regulator and other stakeholders in us and to become an ever learning/improving organisation, proactive in our approach to driving positive change. The Association aims to secure a rating of low engagement with the SHR by March 2019.
3.4 This Plan aims to ensure the programme of change and improvement is implemented effectively to support excellent and sustainable services to our tenants and wider customer base. To achieve this, a set of interlinked strategic objectives have been set, underpinned by clear operational team delivery plans for the current year. These fully reflect the opportunities and threats in the evolving external environment in which we operate and the current internal strengths and weaknesses of the Association.
3.5 Our agreed 6 Strategic Objectives for the 3 Years of the life of this Plan can be summarised as follows.
✓ Objective 1 - Strong Strategic Governance ✓ Objective 2 - Deliver Excellent Services and Performance ✓ Objective 3 - Provide Quality Homes in an Attractive Environment ✓ Objective 4 - Improve our Financial Strength and Deliver Value for Money ✓ Objective 5 - Develop Leadership and People ✓ Objective 6 - Be more than just a Great Landlord
3.6 Section 5 of the Plan will set out the rationale for the 6 Objectives chosen and Section 6 provides the detail of what we will do in the coming years to take a step closer to realising our 6 Objectives.
3.7 All of the above need to be translated by the CEO and management team into practical tasks with timescales and targets and named individuals taking ownership of delivery. A Summary Delivery Plan is set out in Section 7. This has been developed to a more granular level by annual developing departmental operational plans and with staff through individual annual targets to ensure everyone is clear about who is responsible for what and the contribution each officer will make in moving the organisation forward.
Page | 6
Linthouse Housing Association Limited - Business Plan 2017-2018 to 2019-2020
4. WHO WE ARE AND ACHIEVEMENTS TO DATE
LHA is registered under the Co-operative and Community Benefit Societies Act 2014, a Scottish Registered Charity and registered with the Financial Conduct Authority (FCA). We are a Registered Social Landlord (RSL) registered with the Scottish Housing Regulator since 2000 and in accordance with the Housing (Scotland) Act 2001. We hold charitable status and employ 24.5 permanent staff, 5 temporary staff, 3 apprentices and 2 caretakers. Our turnover for the year ended 31 March 2019 was £5.08m.
4.1 Our History and Planned Growth
4.1.1 Early Years at forefront of community based and controlled housing association movement
The Linthouse area in the South West of Govan is dominated by the traditional sandstone tenements built between 1890 and 1912 to accommodate workers attracted to Govan by the thriving shipbuilding and heavy engineering employers on the Clyde. The tenements provided attractive homes for decades, but gradually conditions declined due to the lack of investment in repair and maintenance by private landlords. By the 1960s, many of the inner city areas like Govan were subject to slum clearance which saw large scale demolition of the pre-1919 tenements. Linthouse for a variety of reasons was not subject to the large scale slum clearances which affected other parts of Govan.
By the early 1970’s, local people recognised the need to tackle their unsatisfactory living conditions and looked for ways to deal with the disrepair and physical decline of their homes. Linthouse Housing Association Limited (LHA) was established in 1975 and was one of the first Community-Controlled Housing Associations (CCHAs) in Glasgow to harness the energy of local people to improve their inner city neighbourhood. Some strong and committed local people recognised and used the opportunity presented by the new powers conferred on the Housing Corporation in Scotland (HCiS) by the Housing Act 1974. This Act enabled community activists to establish community controlled organisations like LHA to secure grant funding to acquire tenement flats and deliver repairs and refurbishment schemes. On completion of the refurbishment of the tenements, effective management and factoring arrangements were put in place to secure the newly improved tenements as well managed affordable housing for future generations.
4.1.2 Linthouse Tenement Improvements
The vast majority of our housing stock 745 units built are pre-1919 stock with 714 traditional tenements, 22 units in an A listed pre-1919 former hospital and 9 sandstone quarter villas all in the LInthouse area. We provide factoring services to 345 owner occupiers’ living in our sandstone tenemental properties. LHA began its mission of improving the pre-1919 sandstone tenements by completing the refurbishment of 2 closes in September 1975 on a ‘patch and repair’ basis rather than comprehensive renewal. The pace of change picked up with a further 114 closes being subject to tenement improvement works between 1975 and 1989. During the first 7 years or so of LHA’s drive to save and improve the tenements, many of our homes were repaired on a patch and repair basis. This and the fact that 327 factored owners live in the Linthouse tenements will have a significant impact on the asset management strategy we are currently developing Page | 7
Linthouse Housing Association Limited - Business Plan 2017-2018 to 2019-2020
and on our tenant’s perception of the quality of their homes. By the mid-1980s, the standard of tenement improvement was more comprehensive as grant levels were increased. This allowed LHA to install full central heating systems, double glazing and also to remodel the layout of some flats to create better quality and more attractive living spaces.
Throughout LHA 45 years in Linthouse area we have taken opportunities to grow and to some extent diversify where such opportunities do not put our core mission as a provider of affordable rented housing at risk. A detailed breakdown of our stock holdings is provided in appendix 12.
4.1.3 Expansion into the Drumoyne/Shieldhall areas through the provision of new homes and the refurbishment of buildings of local historical interest.
Linthouse is a compact defined community with very few gap sites which may limit the Association’s ability to undertake new build developments. A number of innovative small scale stock transfers and developments were carried out by LHA to revitalise the immediate Linthouse area. The Association then expanded its area of operation to deliver developments for rent, shared ownership, and outright sale in other communities around South West Govan.
We started to work with other key partners to restore buildings of local historical interest starting with the comprehensive conversion of the pre-1919 A listed Elder Cottage Hospital and nurses’ home in Drumoyne Drive into 22 amenity housing units. We then comprehensively improved 11 pre-1919 ex-health board houses in the grounds of the Southern General Hospital for rent.
In 1994, we took over the former Barnwell Terrace Co-ownership society to modernise all 48 pre-1919 quarter sandstone villas creating 48 comprehensively improved properties which include; 45 for shared ownership, 2 for rent and 1 for owner occupation. A unique arrangement was negotiated by the Co-ownership society for occupancy agreements, which has impacted on LHA strategy for the future of these shared ownership properties. In 2017/18 LHA developed a buy back policy for the shared ownership units in response to customer requests and to diversify LHA’s stock holding by buying background floor and 1 up properties. To date 31st March 2019 we have bought back four former shared ownership units.
In 1996, we worked in partnership with a variety of funders to comprehensively restore the B listed Luma lamp factory in Shieldhall. This created 43 flats for outright sale, a unique small office space for let on a commercial basis and 12 new homes for rent.
We added 105 new build rented properties and 3 shared ownership units to the housing stock portfolio between 1983 and 2010. These developments include small purpose built sheltered and very sheltered unit, and a large house in multiple occupation on the site of the former David Elder hospital in Drumoyne. Due to a change in strategic direction by Glasgow City Council on care and support for older people we are remodelling the very sheltered housing into 11 linked amenity bungalows for older people. These new amenity flats will be more attractive and in higher demand than the very sheltered housing, which was often difficult to let, are scheduled for completion in October 2019.
Page | 8
Linthouse Housing Association Limited - Business Plan 2017-2018 to 2019-2020
4.1.4 Expansion through Stock Transfers
In 1999, our stock portfolio expanded as a result of the transfer of 217 homes from Scottish Homes in the popular Langland’s area. The 217 homes built by the Scottish Special Housing Association (SSHA) between 1945 and 1964 included 2 multi-story blocks of flats , back and front door properties and walk up flats. We carried out a mini modernisation of these properties in 2010. There is also a bank of 43 lock-up in the Langland’s estate and a review of their future use will form part of our new Master Plan for the area.
In 2004, we secured a further 99 inter war tenements as a result of stock transfers from Glasgow City Council in Drumoyne which were subject to partial refurbishment shortly after the transfer.
In total, we have added 316 homes to our stock portfolio as a result of transfers from other landlords.
4.1.5 Office and Commercial Spaces
In 2002, LHA moved into a purpose built office with a large enclosed builder’s yard to accommodate the direct labour organisation. We made the direct labour force redundant a number of years ago and the yard is now a large un-utilised space. In 2018 it is clear that the office premises are no longer meets the needs of staff or customer. The reasons for this is there is too much un-utilised space with the designated office areas, too many small individual offices, no rooms available to accommodate the growing staff team, too few interview rooms, and unwelcoming reception area. The Association started making alterations to improve the office layout in 18/19 to address the issues detailed above.
We also own 9 of 42 shops located below the Linthouse tenements and all ( except the former LUV Cafe premises) are let and there appears to be demand for continued use of LHA shops by commercial operators. There are approximately 30 shops in private ownership of which 9 (30%) are shuttered and not in use. These shuttered shops have a negative impact on the urban streetscape and LHA will review options to address this lack of demand for the shops in our new Master Plan. We own a unique small office space at the Luma Tower building which had been vacant for over 7 years, it is now let on a short term lease to a local manufacturing firm
4.1.6 Diversification through Wider Role Projects
In 2005, we started to attract a range of grant funding from a variety of sources to deliver high profile wider role projects centred on the theme of LUV (Linthouse Urban Village). The LUV initiative included rejuvenating the shop fronts along Govan Road, developing and delivering a range of innovative uses for empty shops in LHA ownership such as the LUV gallery and the LUV cafe. A full programme of community engagement and social events were delivered from both the LUV cafe and the LUV gallery with the aim of addressing social isolation. When funding ran out for the LUV project and the co-ordinator left, the momentum for the LUV project was lost. Unfortunately, the Linthouse Urban Village theme was not sustained by the shop owners and the gallery and LUV cafe are now closed.
The LUV Cafe was closed in June 2018 and is currently being marketed on the basis of a commercial lease. At the away day in June 2019, Committee expressed view that the time Page | 9
Linthouse Housing Association Limited - Business Plan 2017-2018 to 2019-2020
was right for LHA to start to consider developing a wider role strategy and projects to support customers.
4.1.7 LHA today
We currently fully own and manage 1174 homes for rent providing all of the core landlord services to our tenants (rent collection, allocating homes, repairs and investment to our properties and environment, and resolving neighbour disputes). We also have 45 shared ownership properties, 8 supported properties, 43 lockups and 9 commercial units, the associations office making a total stock of 1271 units. We also provide a full factoring service to 487 owners and a partial factoring service to a further 207 owners living in the communities we serve. This involves looking after property maintenance and landscaping, where we arrange works and services in areas of common ownership, issue invoices and recover costs for these activities. We were one of the first landlords in Glasgow to introduce street watch type CCTV security and wheeled refuse bins in the Linthouse tenement area in the early 1980’s, which we currently still monitor and maintain. We currently buy in money and welfare advice services for our tenants from a local voluntary organisation called Money Matters.
LHA during year 1 of the plan had a focus on taking quick action to address the general lack of investment to improve the quality of customers’ homes by starting our component replacement contracts. Action taken to develop our approach to embed value for money into the organisation started by competitively re-procuring 10 maintenance and asset management contracts; securing grant funding for phase 2 for a 4 close Comprehensive Tenement Improvements (CTI) programme, securing 100% grant funding to acquire 43 units in the Linthouse tenements by 2017 ; assessing the feasibility of remodelling of the very sheltered housing into amenity flats; assessing the feasibility of pursuing a strategy of organic growth and diversification of the stock by developing 49 new homes on Drumoyne Primary School site.
LHA secured funding in 19/20 to develop a master plan for the area to ensure we invest wisely in existing stock, and any growth opportunities. LHA is delighted that for the first time since 1870 Glasgow University is planning to develop a £90 million pound campus on the waterfront at the site of the former Stephens Shipyard in Linthouse, and we will work in partnership with other organisations to try to realise the benefits of this unique development for local people.
4.2 Our Committee
4.2.1 We are controlled and led by a voluntary and unpaid Management Committee. This governing body is made up of tenants, owners, and other individuals who bring particular skills to help continuously improve the governance of the organisation.
4.2.2 Our Committee make the key decisions about the Association and provide challenge and oversight over our staff team to ensure that all decisions and activity are in the best interests of our tenants.
4.2.3 Of the 15 places available on the Committee we have 13 members elected at our Annual General Meetings, 1 Co-optee, and one vacancy. Our current Committee is made up as follows:
Page | 10
Linthouse Housing Association Limited - Business Plan 2017-2018 to 2019-2020
Alexander Leishman (Chairperson) is an Association tenant who joined the Management Committee in June 2011 and held the position of Chairperson from September 2012 until September 2017. Alec has a retail background although he was previously employed in the housing association sector. In Dec 18 Alec was selected to perform role on LHA.
Alison Guthrie (Vice Chairperson) joined the Management Committee in June 2006 and was Chairperson from 2008 to 2012. Alison moved to Linthouse in 1997 and has brought up her 5 children in the area. She has worked and volunteered in social care and community organisations locally and in Renfrewshire for many years including school Parent Councils, a community dance project, a historical walking group as well as LHA’s Management Committee.
Thomas McMahon has lived in the Linthouse area for more than 40 years and he became a Committee Member in June 2010 and was elected Secretary in September 2012. He is a well-known community activist and is the Chairperson of Govan Law Centre; Chaired Govan Youth Information Project as well as serving as Chair on Elder Park School Board for 13 years. In the past he was also a member of Drumoyne Community Council.
Iain McLeish is an Association tenant and was elected onto the Management Committee in July 2013. Iain currently volunteers with Glasgow Action for Pensioners where he is also Chairperson of the Board of Management.
Richard Wilkins joined the Association as a full member of the Management Committee in July 2013. Richard plays a vital role in many organisations within the greater Govan area including Govan Action for Pensioners, the Friends of Elderpark and of course the Management Committee. Richard’s knowledge as a published physicist and interests as a statistician are invaluable to our organisation.
Marc-Andre Schmitz joined our Management Committee in September 2015 having moved into the area the previous year. He has a nursing background and a keen interest in ensuring all sections of our society are represented, particularly those with mental health issues.
Collette Ness has lived in the Linthouse area most of her life and had a long and rewarding career in the IT industry. Colette is now a full time carer and is enjoying the challenging but rewarding role as a Committee member since joining in September 2015.
Frank Murphy is a Linthouse tenant who joined the Management Committee in September 2015 after having played a vital role in the implementation of our Residents Scrutiny Panel. Frank is an avid reader who also volunteers with a local mental health group and is currently helping to set up a men's shed on Arngask Road.
Professor Mike Donnelly is a retired academic, international Business School Dean, and has experience of working at a senior level in government and with charitable organisations. He was a Trustee and non-executive board member of the Govan Law Centre; a non-executive director of Quarriers, Bridge of Weir; and served on the Board of The Star Project which provides all-round social, professional and emotional support to individuals and families in deprived areas of Paisley, to name but a few. Mike joined the Management Committee as a co-opted member in early 2016 and he became a full Page | 11
Linthouse Housing Association Limited - Business Plan 2017-2018 to 2019-2020 member in September 2016 at our Annual General Meeting. Mike is the Chairperson of the Association’s Staffing Sub Committee.
Jackie McColl has lived in the area all her life and has a broad knowledge of the local community. She has worked in the social housing sector for almost 30 years starting out with the Scottish Special Housing Association; she has worked in various other HAs across Glasgow and is now based at Barrhead Housing Association. Jackie joined the LHA Committee in September 2017 and brings an extensive background and practical experience in social housing. She also has an HNC in Working with Communities.
Gordon Laurie retired in early 2016 after a career of over 35 years in the housing sector, including 17 years as Director of a large Scottish housing association. He has extensive knowledge of the housing sector and housing operations in Scotland along with significant management experience and a strong understanding of regulatory and governance requirements. He is committed to ensuring that tenants and service users receive the highest possible standards of service. Gordon has a degree in economics from the University of Stirling and is a retired Fellow of the Chartered Institute of Housing. He now works part-time for NHS Education for Scotland, is a Member of the First-tier Tribute for Scotland (Housing and Property Chamber), and also serves on the Board of another two housing associations. Gordon is the chairperson of the Association’s Audit and Risk Sub Committee.
Mary Ray has spent most of her professional life working in clothing manufacture; she has an active interest in the Linthouse community and improvements we are planning to make for existing and future customers to ensure Linthouse remains a popular well maintained area.
David McGeoch joined the Management Committee as a co-optee in July 2018 and was formally elected as a Committee Member at the 2018 AGM in September the same year. Now retired, he worked in the housing sector over a number of years working at Scottish Homes, Elderpark, Cloch and Knowes Housing Associations. He is an avid community activist and has been involved in a number of housing campaigns in the past.
Clark Davidson (co-opted Aug 2019) started his career as a Law Clerk in 1975 and qualified as a Scots Law Accountant in 1978. He then moved to a firm of Chartered Accountants, BDO Binder Hamlyn in 1980 where he managed the Department dealing with Shared Ownership Housing Societies. He left in 1987 and went to Thenew Housing Association, who at the time provided services to smaller Associations, as Finance Manager. In 1989 he setup up on his own as A.C.Davidson & Co., who in the main provide services to small RSL’s as well as small commercial clients. He is a Fellow of the Association of Certified Public Accountants and currently provides the Finance Services for 7 registered RSL’s.
Page | 12
Linthouse Housing Association Limited - Business Plan 2017-2018 to 2019-2020
4.3 Our Staff
4.3.1 We currently employ a team of a total of 24.5 permanent office-based staff, 5 temporary staff, 2 caretakers and 3 apprentices whose job it is to ensure that our tenants and other service users receive a friendly, efficient and responsive service. The team provide housing, repairs, factoring, finance, governance and back office support. All staff are experienced in their different areas of expertise with appropriate professional qualifications. In addition to our staff team, we engage a number of third parties to deliver specialist elements of our service, e.g. technical support, IT, internal/external audit services. 4.3.2 A profile of the staff team is as follows: -
Senior Management Team Irene Campbell, Chief Executive Officer Irene was appointed as Chief Executive Officer in July 2015 and has over 33 years’ experience in social housing. She has over 30 years’ experience at senior management level and directorate level. She is our Senior Officer responsible for implementing the strategy agreed by the Committee and working with our senior management team to make sure we deliver our objectives/plans and comply with all relevant legislation and the standards set by the Scottish Housing Regulator. Irene is committed to building a firm foundation at Linthouse , to modernise the way things are done in order to ensure that we deliver customer service excellence and value for money in all that we do for existing and future customers. She is a member of the Chartered Institute of Housing and her qualifications include the a BA in Social Administration, a postgraduate Diploma in Housing Studies and a Master’s in Business Administration.
Gail Sherriff, Depute CEO, September 2018 Gail will bring 30 years of experience of delivering Comprehensive Tenement Improvements to pre-1919 tenements in Glasgow, of developing new homes for rent and alternative tenures, and of managing maintenance staff teams to deliver compliant asset management services. She has an MSc in Urban and Regional Planning from Strathclyde University and she is a Corporate Member of the Chartered Institute of Housing. Gail was appointed in September 2018 to lead and build a new asset team to serve LHA customers by delivering transformational change in the maintenance of our property assets. Gail will have a keen focus on securing value for money for LHA by shaping a new asset management team committed to delivering excellent reactive and planned maintenance services, the long overdue component replacement contracts, including window replacements. Gail will lead on exploring grant funding opportunities to develop new homes and to improve the quality of existing homes.
Yvonne Rooney, Head of Business Support Yvonne joined the organisation in October 2016 as one of our Customer Services Managers. She is a committed housing professional with over 20 years’ experience working in various housing associations across Glasgow. A member of the Charted Institute of Housing, her qualifications include the Postgraduate Diploma in Housing and a Masters in Management. In July 2017 Yvonne moved into the temporary role of Head of Customer Solutions to focus on performance management and service delivery improvements by developing policies, procedures and practice to support staff. Yvonne was promoted to this new post in August 2019 and reports directly to the CEO. She will head up a new team to support performance improvement across the organisation.
Page | 13
Linthouse Housing Association Limited - Business Plan 2017-2018 to 2019-2020
Andrea Walker, Head of Customer Services Andrea joined the Association in September 2016 as the Customer Services Manager overseeing the Langland’s, Sheildhall & Drumoyne areas as well as all our Sheltered Housing complexes. She has over 30 years of experience in the social housing sector and is a member of the Chartered Institute of Housing; her qualifications include the postgraduate Diploma in Housing from Glasgow University. In July 2019 Andrea moved into a new role of Head of Customer Service to manage customer services delivery in all our areas by our Customer Service Officers and Assistants. This new role was created to facilitate continuous improvement to service delivery throughout the staff structure review. Andrea was promoted to the post of Head of Customer Services in August 2019 and reports directly to the CEO. She heads up the Customer Service team and tenant involvement for the Association.
Craig Douglas, Technical Services Manager Craig worked in the maintenance department of his last association for 12 ½ years before taking the role of technical services manager at Linthouse HA. In that time, he gained his membership to the institute of clerk of works and building inspectorate. He has worked on various new build projects both domestic and commercial as well as day to day maintenance issues. At his last association he was heavily involved with the modernisation of its 800 properties. These works included both internal and external modernisation. The experience gained over these years along with the many years he worked in construction prior to joining the housing sector has put him in good standing to fulfil his role as technical services manager and will help us deliver our goal to modernise Linthouse HA stock and deliver high quality responsive repairs service to customers.
Derek Rainey, Asset Manager Derek joined the Association back in November 1996 and has worked both in maintenance and mainly finance during this time. Derek was appointed Asset Manager in October 2018. He has a B.A. Hons in Finance and Marketing from the University of Strathclyde and is a part qualified accountant. Derek’s knowledge of out IT systems, processes and over 20 years’ experience of working at the Association will help us to achieve our goal of investing wisely in our housing stock.
Corporate/Business Support
Alison Greig, Business Support & Corporate Services Officer Alison joined the Association in October 2016 as Business Support and Corporate Services Officer to support the work of the CEO on Corporate Governance. She holds a degree in Business Administration and has worked in the voluntary sector for just over 20 years now, mainly supporting other third sector organisations with areas such as governance, operational and strategic management, and fundraising amongst other things.
Kirsty Hendry, Administrative Assistant Business Support Kirsty has worked in the social housing sector for more than 18 years and has been with Linthouse for 8 of those. Kirsty has experience in various roles from reception, administration to housing management and maintenance.
Page | 14
Linthouse Housing Association Limited - Business Plan 2017-2018 to 2019-2020
Julie Russell, Temporary Admin Assistant Julie is our temporary Admin Assistant in the Corporate Services department. She is really looking forward to working with the CEO and Committee members. She has just finished a project with Queens Cross Housing which involved installing ground source heating systems to 448 flats. She has over 20 years’ experience customer service in both the private and public sectors. She comes with an MA Hons Degree from Glasgow University and a CIPD Level 5 certificate in HR Management.
Catherine Hall, Temporary Policy Assistant Catherine Hall is our Temporary Policy Assistant. Catherine has a 1st class honours degree in Law from the University of Strathclyde and will be returning to university in September 2019, to complete her legal studies and carry out her Diploma in Professional Legal Practice.
Finance
Kim Fuentes, Finance Officer Kim recently joined the Association as a Temporary Finance Assistant and then was successful in securing the role of Temporary Finance Officer. Kim brings 26 years of finance experience, 11 years of which was with West of Scotland Housing Association. During her time working there she was seconded for 1 year to work as an Income Officer to enhance her knowledge within the Housing Sector.
Danielle McInnes, Assistant Finance Officer – starting on 1.08.19 – details to follow
Ben Black, Temporary Finance Assistant Ben joined the Finance Department in the Association on a temporary basis for 6 months. He has over 11 years’ experience working in accounting and finance. Working at LHA is his first experience working in the housing sector. He is also qualified member of the Association of Accounting Technicians.
Customer Services Team
Lisa Lindsay, Customer Services Officer - Langlands, Sheildhall and Drumoyne Team Lisa started with LHA in September 2016 as a Customer Services Officer within the Langland’s, Shieldhall and Drumoyne areas. She has worked in social housing for over 11 years now and holds a Level 4 Diploma in Housing Practice. Lisa is also a member of the Chartered Institute of Housing.
Page | 15
Linthouse Housing Association Limited - Business Plan 2017-2018 to 2019-2020
Elaine McDermott, Customer Services Officer Elaine has been in the housing sector for over 17 years and has worked with the Association for 7 years now. She is based in the Linthouse area team. During her time with the Association, Elaine has completed the Level 4 Diploma in Housing and is a member of the Chartered Institute of Housing.
Chris O’Brien, Customer Services Officer Chris joined the Association in September 2016 as part of the Customer Services Team, having previously worked in Easterhouse with Lochfield Park Housing Association for seven years. He holds a BA(Hons) in Social Sciences, a CIH Level 4 Diploma in Housing, a Postgraduate Diploma in Housing Studies and is a member of the Chartered Institute of Housing.
Laurie Kefalas, Customer Services Officer Laurie joined the Association as Temporary Customer Services Assistant in May 2018. Although a relative newcomer to social housing, Laurie has an Honours Degree in Public Policy from the University of Glasgow and has just recently completed the CIH Level 4 Certificate in Housing.
Kevin Campbell, Welfare Rights Officer – starting on 05.08.19 – details to follow
Deborah Brown, Customer Services Assistant (Special Projects) Deborah has over 30 years’ experience delivering excellent customer services in both the private and public sectors. She has been working in social housing for over 7 years and develops our wider community engagement events as well as all housing management services at our Multi Story Flats in Langlands. She enjoys delivering high quality customer focused services and building relationships within the communities we serve. Deborah has a BA in Business Studies and a Level 4 CIH Diploma in Housing. Deborah is also a member of the Chartered Institute of Housing.
Caryn Stewart, Customer Services Assistant (Part Time) Caryn joined the Association in 2012 as part of the housing management team. She has worked in Social Housing for 14 years having previously worked for a local authority. She has completed the CIH level 2 in Housing Practise. Caryn has returned to work on a part time basis following maternity leave and is now responsible for the new Central Processing Team which includes Reception and Allocations enquiries.
Steven Murphy, Customer Services Assistant Steven has joined the association on a temporary basis for 12 months to cover a maternity leave. He has been working within the social housing sector for 6 years, starting out as an apprentice with Hawthorn Housing Co-operative in Possilpark. Steven worked within a number of different teams at Hawthorn, most recently with the Maintenance Team. Steven has an SVQ Level 2 & 3 in Business Administration and the CIH Level 2 & 3 Housing Practice and is currently studying for his Level 4 Diploma in Housing Practice.
Page | 16
Linthouse Housing Association Limited - Business Plan 2017-2018 to 2019-2020
Joe Fitzpatrick, Customer Services Assistant Joe also started with the Association in September 2016 and is based in the Linthouse team. He has over 31 years’ experience working in social housing which includes Glasgow Housing Association and other local Associations.
Demi Houston, Customer Services Assistant Demi joined the Association in June 2017 straight from school and sucessfully completed the CIH Level 2 Housing Practice and Housing Level 2 SVQ and is currently studying for an SVQ Level 3 in Business & Administration. Demi has recently completed her apprenticeship and is now working with the Customer Services team as a Customer Services Assistant.
Mary Dunn, Customer Services Assistant Mary initially joined the organisation in August 2018 on a temporary 3 month contract and has recently joined LHA on a full time basis. Mary has extensive customer service experience working in retail and has gained previous reception experience working at Ross Hall Hospital before joining Linthouse Housing Association.
Hollie McGuiness, Modern Apprentice- Year 2 Hollie joined the Association in July 2018 as a Modern Apprentice. She will gain a range of experience in housing management within our Customer Services Team whilst studying for the CIH in Housing Practice and SVQ in Housing, both at Level II.
Carrie Duffy, Modern Apprentice- Year 2 Carrie joined the Association in May 2017 as a Modern Apprentice. She will gain a range of experience in housing management within our Customer Services and finance Teams. She has completed the CIH in Housing Practice and SVQ in Housing, both at Level II.
Asset Management
Iain Wylie, Technical Services Officer Iain joined the Association as Technical Services Officer in November 2018. He has worked in housing maintenance for New Gorbals Housing Association, where he started as a maintenance assistant and was later promoted to the post of maintenance officer. Iain has a Post-Graduate Certificate in Construction Project Management and is an Associate of the Chartered Institute of Building. He brings 12 years of experience in working with day-to-day repairs and planned maintenance works and looks forward to providing an excellent service for the continued improvement of our tenants’ homes.
Darren Ritchie, Technical Services Assistant Darren recently joined LHA as a Technical Services Assistant in the new Asset Management Team. Darren worked with North Glasgow Housing for 6 years as an all- trade supervisor carrying out a range of practical work. He is qualified as a painter and decorator with a City and Guilds Advanced Craft Level 3 qualification. Darren has been working in social housing and building maintenance for 15 years now and has gained a wide range of knowledge and experience.
Page | 17
Linthouse Housing Association Limited - Business Plan 2017-2018 to 2019-2020
Frank Boyle, Temp Property Data Officer Frank is employed with us on a temporary basis to review the Association’s Asset Data Management and assist on several other asset related projects. He is an experienced Project Management professional who has worked with a number of Housing Association’s across his career. Frank is passionate about the social housing sector and the great work Housing Associations do to support local communities. Frank holds a BEng. in Engineering Management from the University of Strathclyde and a MSc. in International Project Management from Glasgow Caledonian University.
Anna Goldthorp, Development Assistant Anna joined the Association as our Development Assistant at the end of April 2019. Anna previously worked at Partick Housing Association where she was involved in customer engagement, development and housing services. She has a BA(hons) in Environmental Art from The Glasgow School of Art, a Postgraduate Diploma in Housing Studies with Merit from the University of Glasgow and is a member of the Chartered Institute of Housing. Anna is working on tenement improvements, as well as our future new build developments and will be collaborating with the community throughout the whole process.
Claire Morgan, Asset Management Assistant Claire started her housing career at Irvine Housing Association where she worked for 10 years before joining Linthouse in January 2018. She has always worked within the Property Maintenance function and brings experience of day to day repairs, cyclical contracts, gas maintenance compliance and health and safety. Claire’s temporary post was created to help LHA deliver improvements to the management and delivery of the maintenance function and was made permanent as part of the 2018 staff structure review.
Joyce Gilmour, Temporary Asset Management Clerical Assistant Joyce joined the Association in January 2017. Joyce has worked in a number of Administration positions within the Army Personnel Centre, NHS and Glasgow City Council throughout her working life. After working in reception Joyce is now working within the Asset Management Team.
Tiegan Shearer, Asset Management Clerical Assistant Tiegan joined the Association in September 2016 after completing a 2 year Modern Apprenticeship in Housing at NG Homes. She also holds an SVQ Level II in Housing.
Estate Caretakers
James Docherty, Senior Estate Caretaker James has worked at the Association since 2002. He is our Senior Estate Caretaker and a well-known face around the communities that Linthouse serves, particularly in the Langland’s estate.
Michael Rice, Estate Caretaker Michael joined the Association in April 2017. He undertakes a range of practical caretaking and handyman services for the tenants and has over 5 years’ experience in facilities management.
Page | 18
Linthouse Housing Association Limited - Business Plan 2017-2018 to 2019-2020
Stephen Bulman, Apprentice Caretaker – starting on 05.08.19 – details to follow
The staff team is supplemented by external agents, as follows:
Agent Organisation Service Fettes McDonald FMD Finance Financial Services Paul McNeill Housing Regeneration Consultancy Financial Business Planning and Treasury Advice Douglas Gold Gold Consultancy Procurement Support Services Jim Gourlay / Phil Morrice Alexander Sloan Internal Audit Services
Tony Carruthers & Kenny Guardian Peoples Solutions Human Resource Nicholson Management and Staff Structure Review Support Tony Sinclair French Duncan External Audit Service
LHA is now 60% of the way through a comprehensive phased office based staff restructure which is scheduled to be complete by October 2019. The aim of the restructure is to ensure LHA have staff resources required to deliver to the objectives set out in this ambitious Business Plan.
4.3.9. Chart 1 below shows our current governance structure.
Chart 1
Management Committee Policy Working 15 members Group
Audit & Risk Sub- Staffing Sub- committee commitee 7 members 7 members
4.3.10 Chart 2 provided in Appendix 1 on page 69 shows the current staff structure at LHA at 1.8.19.
Page | 19
Linthouse Housing Association Limited - Business Plan 2017-2018 to 2019-2020
4.4 Area & Community Profile
4.4.1 LHA is based in the Linthouse district of the city of Glasgow. It is situated south of the River Clyde and lies at the west end of Govan. All of LHA’s housing stock is located in the Govan (Ward 05) of Glasgow City Council. Linthouse was a distinct area separate from Govan until 1901 when it became part of Govan Burgh until 1912 when the Govan Burgh was annexed to Glasgow. 4.4.2 Linthouse has proud connections to the shipbuilding industry and was home to the shipbuilder Alexander Stephen and Sons Limited who built many famous vessels for the Royal Navy in the 20th Century. Notable landmarks in Linthouse are the Clyde Tunnel and the Queen Elizabeth University Hospital (QEUH) which opened at the end of April 2015 and is built on the site of the former Southern General Hospital. The QEUH is the largest hospital campus in Europe. 4.4.3 The majority of LHA’s housing stock 67.3% (789 units) are located in the Linthouse community and 714 of these are the pre-1919 tenements built around the growth of the Stephens shipyards; with the remainder 32.7% or 385 units located in Drumoyne, Shieldhall, and Langland’s areas. 4.4.4 All of LHA housing stock is well connected in terms of roads, motorways and public transport links to the excellent amenities in Glasgow city centre and the popular West end of the city on the north bank of the river Clyde. In 2019 Glasgow University announced plans to build the first new campus in Glasgow since 1870 on site at Stephens Shipyard. This new initiative may open up the riverside for further development and connect the campus into Linthouse and surrounding areas. We will work with others to ensure the arrival of this prestigious University in LHA area brings benefits to local community in terms of regeneration. 4.4.5 To gain an insight into the communities our social business serves it is helpful to review the Scottish Index of Multiple Deprivation (SIMD) 2016. The SIMD is the Scottish Government's official tool for identifying places in Scotland suffering from deprivation. The SIMD divides Scotland into 6,976 small areas, called data zones and provides a relative ranking for each data zone, from 1 (most deprived) to 6,976 (least deprived). The overall rankings of eight of the ten data zones that contain LHA properties are within the most deprived 15% of Scotland. The table below details of the distribution of LHA stock by SIMD data zones. Table 1: LHA SIMD Data Zones Morefield Road Langlands G51 4NG S01003349 385 Marchglen Place Langlands G51 4NY S01003375 43 Barnwell Terrace Govan G51 4TP S01003384 116 Meldon Place Langlands G51 4PB S01003386 248 Munlochy Road Langlands G51 2NW S01003388 1 Burghead Place Govan G51 4QL S01003411 178 St Kenneth Drive Govan G51 4QD S01003412 43 1127 Govan Road Govan G51 4RX S01003424 638 1315 Govan Road Govan G51 4TE S01003436 63 Linthouse Buildings Govan G51 4RG S01003441 245 1960 Source: SNS/LHA
4.4.6 The map opposite highlights the decile distribution of overall SIMD in the Greater Govan area with most deprived areas in deep red and least deprived in navy blue. Page | 20
Linthouse Housing Association Limited - Business Plan 2017-2018 to 2019-2020
Source: Scottish Government
4.4.7 In the SIMD context, deprivation is defined as the range of problems that arise due to lack of resources or opportunities, covering health, safety, education, employment, housing and access to services, as well as financial aspects. The SIMD also provides a rank for each data zone within each of the seven domains. Table 2 below reviews the individual aspects of deprivation for each area of LHA’s datazones.
Table 2 - Overall SIMD ranking for each measure of deprivation for all 10 of the LHA datazones:
4.4.8 Key highlights from this analysis are:
• None of the datazones in the Linthouse area are considered deprived in relation to the geographic access to services. Access domain captures the financial cost and inconvenience of having to travel to access basic services (e.g. post office, schools, GPs). One datazone falls within the least deprived 3% nationally. The access domain does not take into Page | 21
Linthouse Housing Association Limited - Business Plan 2017-2018 to 2019-2020
consideration any other possible barriers such as income levels to access of key services or facilities the city has to offer. • Eight of the ten datazones are within the most deprived 15% for Income deprivation, Employment deprivation, and Health deprivation in Scotland. • There are concentrations of individuals and families living on low incomes in LHA communities • Significant issues of crime feature in four datazones within the Linthouse area with these datazones ranked within the most deprived 10% in Scotland in the crime domain • Six of the Linthouse datazones are within the most deprived 15% of Scotland for Education attainment
4.4.9 LHA population estimates for 2013 are provided by the General Register Office Scotland (GROS). The information is available at datazone level for the datazones which contain Linthouse Housing Association properties. Population estimates are shown in Table 3 with local authority and national figures included for comparison.
Table 3: Population Estimates for Study Area Datazones: 30 June 2013
Linthouse HA Glasgow City Scotland 2013
Age Count Percentage Count Percentage Count Percentage
0 - 4 722 7.16% 34,764 5.83% 294,281 5.52% ( 5-15 years) 1,114 11.04% 61,693 10.34% 617,398 11.59% Working Age ( 16 - 64) 6,728 66.68% 407,699 68.34% 3,360,462 63.08% Pension Age ( 65+) 1,526 15.12% 92,394 15.49% 1,055,559 19.81% All ages 10,090 100.00% 596,550 100.00% 5,327,700 100.00% Source: GROS
4.4.10 this table highlights that the total population of the area is 10,090 and that there are some differences in the population structure of the Linthouse HA area compared to Glasgow and Scotland as a whole.
• Approximately 18% of people in the Linthouse HA area are children which is higher than the rate across Glasgow of just over 16% and the national rate of 17%.
• 66.68% of the population in the area is of working age, a rate that is 1.66% less than that of Glasgow as a whole but 3.6% higher than the national figure.
• 15.12% of the local population are of pension age. This is significantly lower than the national figure of 19.81%.
4.4.11 The health domain identifies areas with a higher than expected level of ill health or mortality for the age-sex profile of the population. Key health related statistics are provided in table 4 opposite.
Page | 22
Linthouse Housing Association Limited - Business Plan 2017-2018 to 2019-2020
4.4.12 Some key points to note from the data on Table 4 include:
• The rate of observed deaths is on average almost 70% higher than expected, with one datazone reaching 140% higher than expected. • The rate of observed recipients of health related benefits, with exception of one datazone, ranges between 70% - 185% higher than expected. • The rate of observed hospital stays related to alcohol misuse is between 87% - 682% higher than expected. • Approximately 13% of the population are being prescribed drugs for anxiety, depression or psychosis. • The level of live singleton births in the area that is low birth weight is as high as 9% in three datazones.
4.4.13 LHA secured grant funding from GCC at end of 2015 to develop a community plan to identify customer needs and demands for wider support projects to make the Linthouse communities more attractive places to live, socialise and work in. A range of wider role projects may be developed to complement LHA’s mission and core objectives which utilise the drive and resourcefulness of Committee, staff and local community effort to secure benefits for local people whilst contributing to local and national government agenda to improve life chances of all citizens. In 2015 our customers identified 15 wider role projects that they would value. Some limited progress has been made in implementing the priority projects such as modern apprenticeship schemes; welfare rights services, community volunteering on an environmental clean-up project. Small scale grass roots and customer led projects can lead to sustained change and help tackle the serious issues of multiple deprivation. Due to our internal focus in the first 2.5 years of the plan the capacity and resources to tackle wider role issues has been limited. The focus has been on social events to raise profile of LHA’s new approach to customer service.
Table 4: SIMD Domain Health Estimated Hospital proportion stays of Health related to population Proportion domain alcohol being of live 2012 misuse: prescribed singleton rank Comparative standardis drugs for births of Standardised illness factor: ed ratio anxiety, low birth mortality standardised (ISD, depression weight % ratio (ISD, ratio (DWP, 2007- or psychosis (ISD, 2006- Datazone properties Rank % 2007-2010) 2011)2 2010) (ISD, 2010) 2009) S01003424 32.55% 12 0.2% 183 170 782 0.14 0.09 S01003441 12.50% 77 1.2% 182 220 467 0.13 0.07 S01003349 19.64% 127 2.0% 188 265 359 0.13 0.09 S01003388 0.05% 138 2.1% 143 285 387 0.13 0 S01003386 12.65% 144 2.2% 127 215 325 0.14 0.09 S01003411 9.08% 216 3.3% 190 175 232 0.14 0.03 S01003384 5.92% 260 4.0% 151 270 187 0.14 0.05 S01003375 2.19% 321 4.9% 165 195 225 0.13 0.04 S01003412 2.19% 574 8.8% 118 170 220 0.14 0.06 S01003436 3.21% 631 9.7% 240 75 194 0.13 0.07
Page | 23
Linthouse Housing Association Limited - Business Plan 2017-2018 to 2019-2020
Source: Scottish Government 4.4.14 This all means that in looking to the future, we must be mindful of both the housing and wider needs of our demographic profile. We must also be acutely aware of issues of affordability given the deprivation levels experienced in some of our areas of operation. In terms of health deprivation, we must be aware of need to diversify stock and make best use of existing stock for tenants needing ground floor or adapted housing.
4.4.15 Welfare reform has a significant impact upon our tenants and in particular the bedroom tax and the introduction of universal credit. We contacted all those affected by the bedroom tax and successfully applied for Discretionary Housing Benefit from Glasgow City Council. Letters and information contained within our newsletters also helped tenants understand the changes and the likely impact.
4.4.16 We currently pay for Money Matters a local charity to provide a welfare benefit service 4 days a week. Through this, we have access to a welfare rights officer who works alongside our customer services team to help to maximise income, process housing benefit and universal credit claims and to assist customers with debt issues. This in turn helps the tenants to pay their rent and sustain their tenancies. As part of our phased 4 staff restructure, we will recruit in house welfare rights team to protect tenants and LHA income streams.
4.4.17 As can be seen from Table 5, home ownership is the principal tenure in the City of Glasgow with 47% of households owning their property. This is almost 15% lower than the Scottish average of 62%. The social rented sector comprises some 35% of the City of Glasgow’s stock, well above the Scottish average of 24%.
Table 5 – Tenure breakdown
Page | 24
Linthouse Housing Association Limited - Business Plan 2017-2018 to 2019-2020
4.5 Our Customers
4.5.1 To be successful, we need to know our current and future customers thoroughly if we are going to best respond to their needs and predict what they will want from us in the future.
4.5.2 Figure 1 opposite shows the Scottish Government’s population estimates by age group in 2015. This information highlights across Scotland that 18% of the population is over 65, 65% is between 16 and 65 and 17% of the population are under 15. It is clear from the overall population estimates that Scotland has a growing elderly population.
Figure 1: Mid - Year Population Estimates 2015
The pie chart in Figure 2 below shows that LHA has a higher percentage (72.5%) of working age customers between 16-64 than Scottish average of 65%, and 17.5% of our customers are above state retirement age of 65 slightly lower than the Scottish average for customers above retirement age of 18%.
Figure 2: % LHA Customer by Age Range 9.37% 0.54% under 65 over 65 17.51% under 16 not known
72.58%
Source: Capita IT system July 2018
4.5.3 Table 6 opposite shows that just over 53.4 % of our tenants are under the age of 55 (within that group 21% are the more geographically mobile under 34 year olds). At the other end of the age spectrum, 36.6% of tenants are aged 55 and over. With a growing aged tenant profile a focus of our work will be on increasing need for medical adaptations, reviewing our stock profile to accommodate ease of accessibility to homes, and considering the role LHA could play in contributing to the agendas of key partners of delivering additional Page | 25
Linthouse Housing Association Limited - Business Plan 2017-2018 to 2019-2020
support required to help tenants live independently at home for longer. This data is useful for considering tailoring service development around customer needs, for example a special projects assistant post in the new structure to assist older tenant’s access care and support at home, or to promote local charities and social interaction activities to fit with GCC Health & Social Care Strategy encouraging older people to stay in their own homes longer.
Table 6 also shows that 41 % of LHA tenant base is male and 59% is female which contrasts to Scottish averages of 49% and 51% respectively.
Table 6 : Gender and Age profile of LHA Customer at end July 2019
Gender 16 - 24 25 - 34 35 - 44 45 - 54 55 - 64 65 - 74 75 - 80 80+ UNDER Unknown Total 16 0 0 0 0 0 0 0 0 0 1 1 Female 37 152 127 124 130 69 25 22 5 48 739 Male 20 76 84 108 120 86 22 15 2 59 592 Total 57 228 211 232 250 155 47 37 7 108 1332 Percentage 4.3% 17.1% 15.8% 17.4% 18.8% 11.6% 3.5% 2.8% 0.5% 8.1%
Source: LHA IT system and HB spreadsheets July 2019
4.5.4 During the year 2018/19, 135 properties (11%) became available for re-let. It is clear from the turnover of vacant properties that there is a low demand for our bedsit flats in Linthouse and this will be addressed in our Master Plan.
Ethnicity of LHA Customers
4.5.5 Table 7 below confirms White Scottish population in Linthouse at 94.5%, which is higher than the City of Glasgow at 78% and the national Scottish figure of 83%.
Table 7 –Tenant Ethnic Origin at March 2019
Ethic Background LHA All Tenants LHA % Glasgow Scotland March 2017 City % total % White total 1228 81.92% White Scottish 1161 94.5% 78% 83% White other British 8 0.65% 4% 8% White other Irish 4 0.33% 2% 2% Polish 16 1.3% 2% 1% White any other background 39 3.2% 2% 2% Mixed or multiple ethnic background 4 Asian, Asian Scottish, Asian British 12 0.80% 8% 3% Indian 3 Chinese 4 Any other Asian background 5 Black, Black Scottish, Black British 7 0.47% 4% 1% African 5 Any other black background 2 Any other ethnic background group 18 1.2% Unknown 230 15.34% TOTALS 1499 100% 100% 100% Source: LHA ARC return for LHA March 2019 and Scottish Government Scotland’s Census 2011 Page | 26
Linthouse Housing Association Limited - Business Plan 2017-2018 to 2019-2020
Our Customers, Rent Revenue and Welfare Reform
4.5.6 The Scottish Housing Regulator (SHR) in November 2016 published a thematic study into how social landlords consult tenants about rent increases and highlighted a number of areas of good practice. This study also highlighted that in 2015/16, social landlords in Scotland reported that they received about £1.2 billion of housing benefit in respect of 402,752 households. This represents on average around 56% of landlords’ income for that year and around 69% of households.
4.5.7 Just over half of our customer base currently relies on some form of DWP benefits to help pay their all or part of their rent. A snapshot of benefit dependence at April 2019 is shown in Table 8. Just less than quarter (22%) of LHA customers are in receipt of full housing benefit and 23% are on partial housing benefit. As more customers begin the migration to universal credit, this pattern of benefit dependence may mean LHA income is less at risk than other RSL’s.
Table 8 – Housing Benefit Level to assist tenants meet rent costs. Number of Entitlement tenancies % of tenants Full housing benefit 257 22% Partial housing benefit 271 23% Universal Credit 82 7% No benefit entitlement 561 48% TOTALS 1171 100% Source: Capita IT system and LHA manual records April 2019
4.5.8 Rent is a major household expenditure item for LHA tenants with 23% of our tenants receiving only partial housing benefit, and 48% of our tenants paying their rents in full. A SHR thematic study points out that 61% of households in social housing have a net income of £15,000 or less. Rent affordability is extremely important to our customers and LHA need to continue to focus on clear strategies to support tenants to pay their rent on time and in full by offering expert in work and out of work welfare rights advice and responsive customer service support.
4.5.9 Table 9 below estimates the potential impact on tenants and consequently upon Linthouse of under occupation. It identifies the number of working age tenants that we know have been under occupying by one or two tenants since April 2014.
Table 9 – Impact of Under Occupation on Tenants YEAR 1 bed 14% 2 bed 25% Total 2014 58 6 64 2015 68 3 71 2016 70 5 75 2017 72 6 78 2018 87 5 92 2019 86 4 90 Source: LHA IT system and HB monthly reports at July 2014, 2015, 2016, 2017 & April 2018, April 2019
4.5.10 In 2014, we revised our housing allocations policy to exclude single people and couples from securing a 2 bedroom property to future proof LHA exposure to rent loss due to the bedroom tax. However, Committee in May 2017 agreed to amend this restriction as it was Page | 27
Linthouse Housing Association Limited - Business Plan 2017-2018 to 2019-2020
having the unintended consequence of reducing demand for the 2-bedroom flats in our pre 1919 tenements.
4.5.11 As at April 2019, we have 82 tenants for whom we are receiving managed payments of Universal Credit. This is not be reflective of the number of tenants who are receiving Universal Credit with a housing costs entitlement, as tenants are currently paid their money direct (as opposed to Housing Benefit which is almost always paid direct to the landlord). The Customer Service Team (CST) can request a Managed Payment of housing cost to be paid directly to the association for tenants who have certain vulnerabilities and/or rent arrears. In addition, Scottish Government flexibilities allow tenants on the full digital service a number of choices, including twice monthly payments of benefit and direct payment of housing costs to the landlord. The introduction of the full digital service for all new Universal Credit claimants and current claimants with a change of circumstances took place in the Linthouse area in September 2018. The new threat to LHA is the potential impact of Universal Credit (UC) on our tenant’s ability to pay their rent and wellbeing. We continue to record how this is affecting tenants and any increase in arrears. In order to mitigate this threat, we have restructured the customer services team with more staff to resources on income maximisation for both our tenants and the organisation.
4.5.12 The picture in relation to both UC and under occupation is constantly changing as people move in and out of our homes. The most significant exposure is in relation to 1 bedroom under occupation where a Housing Benefit under occupation charge of 14% of the eligible rent applies, as 54% of LHA homes are 2 bedroom properties. This problem has not materialised to date because of the policy of comprehensive discretionary payments adopted by the Scottish Government. This could of course stop at any point. We continue to make tenants aware of the issue.
4.5.13 Another issue which arises as people move to UC is that tenants will have to claim through separate routes - UC from the Department of Work and Pensions (DWP) (online), grants from the local authority Scottish Welfare Fund and/or Discretionary Housing Payments from Glasgow City Council. This is a learning curve for our own staff, Money Matters our welfare rights advice service provider, tenants and the DWP. The CST are working to develop effective partnership working with DWP staff. The development of effective partnerships will be vital for the transition of payments received for rent from DWP. To put into context, in 2018/19, 52% of all LHA households received some form of welfare benefit support which was paid directly to the association. The value of this was £2,064,425. Of this 98.04% or £1,919,915, was received from Glasgow City Council Housing Benefit department. Only 7% or £144,510 was received from the DWP as direct Universal Credit housing costs.
4.5.14 The threat of the withdrawal of direct payments of the housing element of universal credit to landlords has been mitigated in January 2017 when the then the Scottish Social Security Minister Jeane Freeman MSP announced that people in receipt of UC will have the choice of making the housing element directly payable to their landlord in full service areas. Universal Credit claimants in full-service areas like Glasgow can ask to change the way UC is paid, including twice a month payment instead of monthly and for housing costs to be paid directly to the landlord. A full service area is one where the tenant will have an online account to manage their UC. We have taken steps to ensure the Customer Services Team is properly resourced with the correct balance of staff with the skills and tools needed to
Page | 28
Linthouse Housing Association Limited - Business Plan 2017-2018 to 2019-2020
work even more proactively with our tenants who migrate onto UC to maximise LHA and customers income.
4.5.15 Personal contact with tenants and building relationships with other key partners will help our staff and tenants understand the impact of UC. We have also emphasised in our newsletters the need for tenants to contact us as soon as their circumstances change so that early action can be taken to manage the transfer to UC. Given the changes and our new focus on driving improved performance, our staff structure review in 2019 will focus on ensuring staff resources are configured to maximise income and support to tenants with Universal Credit and other welfare reforms. Developing a strategy for rental income under threat due to welfare reforms will be crucial given that £2,064,425 direct housing payments are received via housing benefit and Universal Credit. This amounts to 49.42% of £4,176,952 which was the total rent due to be collected in 2018/19.
4.6 Our Stock
4.6.1 Table 10 contains a summary of our wholly owned stock including its age, property type, location, build type and acquisition dates. For fuller details of LHA’s entire stock holding see Appendix 12 on page 113.
Table 10 - Summary of LHA's Stock Profile of self-contained and non-self-contained stock by Age, Type, and Percentage of the overall stock holding @ 1 April 2019
Total No. Property Type % of stock Comments Units
Made up largely from original stock at formation of LHA in 1974 with additions to the stock through Pre-1919 acquisitions in 2015-2017. Most of these properties Tenements 714 60.82% were subject to comprehensive tenement Linthouse improvements from 1975-1989. Six closes comprehensively improved again between 15-19. Pre-1919 Elder House (1 A Listed former hospital and adjacent nurses home Drumoyne Drive) 22 1.87% converted built pre-1919 to Sheltered Housing in A -listed -18 flats 1994 & 6 cottages Pre-1919 Barnwell Terrace Previously private Housing Co-op merged with 5 0.43% (Sandstone ¼ Linthouse in 1996 on shared ownership basis villa) Inter war stock formerly owned by Glasgow City Balbeg 95 8.09% Council (GCC), transferred to Linthouse and subject Street/Drumoyne of limited renovation in 2002
Page | 29
Linthouse Housing Association Limited - Business Plan 2017-2018 to 2019-2020
Total No. Property Type % of stock Comments Units Ex-Health Board Units, Southern 4 0.34% Pre-1919 sandstone quarter villas Gen Hospital Stock formerly owned by SSHA, built between Langlands houses 45 3.83% 1945-1964, transferred to Linthouse in 1999 Inter war stock formerly owned by SSHA, built Langland’s Multi 112 9.54% between 1945-1964, transferred to Linthouse in Storey Flats (MSF) 1999 – added Wardens house in 2018/19 Stock formerly owned by SSHA, built between Langland’s 3 1945-1964, transferred to Linthouse in 1999. No- storey walk-up 61 5.20% fines construction, new roofs, central heating and flats kitchens upgraded 2010 and 2011 Built in 2001. LHA converting to amenity linked Eldergrove Court 11 0.94% flats in 2019/20. Eldercourt 2001 self-contained new build 2 apt linked 9 0.77% bungalows bungalows Eldercourt 2 linked houses containing 8 bed spaces providing Homelink (non- 8 0.68% supported living through agency agreement with self-contained) specialist provider Luma Gardens 12 1.02% 4- in- block flats constructed in 1997 Finsby Street 32 2.72% Semi-detached cottages built in 2002 Linthouse Mixed flatted and terraced cottage development 32 2.72% Buildings dating from 1983-2002 Aboukir Street 12 1.02% Flatted development constructed in 2010 new build Total 1,174
4.6.2 Table 11 provides further summary information of our self- contained stock by building type and apartment size:
Table 11 – Self Contained Stock Profile – By building type and apartment size at June 2019 1apt 2apt 3apt 4apt 5apt Total % 4 in a Block 0 0 16 0 0 16 1.4% House 0 0 55 28 2 85 7.4% High rise 0 0 112 0 0 112 9.7% Sheltered/amenity 0 31 0 0 0 31 2.7% Wheelchair 0 1 7 0 0 8 0.7% housing Tenement 26 381 438 58 0 903 78.2% Total 26 413 628 86 2 1155
Source: LHA IT system June 2019 (19-unit difference from table 10- excludes the non-self-contained units and 11 units at eldergrove former very sheltered undergoing comprehensive remodelling during)
Page | 30
Linthouse Housing Association Limited - Business Plan 2017-2018 to 2019-2020
4.7 Our Rents
4.7.1 Affordability of our housing stock is crucial if we are to remain an attractive choice of landlord and to help our tenants deal with the continuing difficult economy and the challenges of welfare reform.
4.7.2 Since the inception of the Scottish Annual Return on the Housing Charter ( ARC)reporting, we appointed the independent consultant Management Information Scotland (MIS) to carry out continuous quarterly monitoring on key ARC indicators of customer satisfaction by undertaking face to face tenant satisfaction surveys. A total of 309 tenants (27%) were interviewed face to face between April 2018 and March 2019. On the question of rent affordability and value for money, 88.67% of tenants were of the opinion that their rent represents very good or good value for money. Just 6.1% felt our rent offered very or fairly poor value for money.
This proportion of tenants who were of the opinion that their rent represents very or fairly good value for money at 88.67%, remains higher than the 2016/17 Scottish average.
4.7.3 Table 12 sets out our current rent level in comparison with other registered social landlords offering accommodation in the South West of Govan along with the Scottish average rents.
Table 12 - 2017/2018 Average Weekly Rent Levels by Apartment Size Comparisons Rents LHA Govan HA Elderpark Southside GHA Scottish HA HA Average 2017/18 1apt £50.76 £68.71 £65.64 £62.97 £61.37 £71.43 2apt £62.66 £66.04 £68.47 £79.97 £73.4 £79.76 3apt £72.61 £76.10 £76.96 £89.64 £79.19 £80.39 4apt £79.65 £85.26 £92.76 £97.82 £92.71 £88.87 5apt £97.30 £101.10 £110.25 £103.16 £101.72 £98.47 Source: Scottish Housing Regulator ARC Returns 2016/17
4.7.4 Table 12 shows that LHA average rents are low and competitive for all apartment sizes and are well under sector averages. In 2017/18 LHA was the registered social landlord with the lowest rents of all registered social landlords offering housing for rent in the South West of Govan. Our rent structures have not been subject to a comprehensive review for a number of years and a more detailed analysis of individual rent charges by apartment size and property type shows significant variations between rents for rehabilitated pre-1919 properties, “new build” and property obtained through stock transfers from other landlords. An independent rent and service charge review is underway to rationalise the rent structure within our stock ensure rents are fairer and that we are financially sound and viable in the long term. This rent review is essential to help us deliver our major repair and component replacement programme to improve the quality of our homes. The review will also assess affordability of current and projected rents against the SFHA affordability model. The rent structure review will be carried out during financial year 2019/20 and implemented in 2020/21.
Page | 31
Linthouse Housing Association Limited - Business Plan 2017-2018 to 2019-2020
4.8 Asset Management
4.8.1 The Association’s physical assets along with our people are our key resources. Maintaining and investing in our properties is what we will spend most on. With this, the key building blocks for effective business planning are:
• up to date and accurate information on the condition of the housing stock and other assets (such as lock ups, commercial shop units, and office premises) • intelligence on how the stock is performing (i.e. current and future demand, repairs and maintenance information) • future investment needs to help keep the stock attractive and popular and to ensure the component parts are in a good condition
4.8.2 During the early part of the Business Plan a focus has been on actions taken to transform LHA performance in providing its asset management services. These comprise:
• At March 2019 we have completed 16 of the 18 point improvement plan devised for maintenance services. Our focus have been the two outstanding issues on procuring all 26 contracts (significant progress has been made) and we will complete this significant task before the end of Year 3 of this plan. The other outstanding issue relates to a complete IT overhaul of Capita which will form part of our new IT strategy.
• Integration of Stock Condition Survey and software information in investment planning
• Creation of a new well resourced, qualified, asset management team to develop and deliver our asset management plans led by highly motivated and experienced Asset Management Director/Depute CEO.
• A comprehensive overhaul of our procurement arrangements to ensure they are compliant with legislation and good practice
• The retendering of the reactive repairs contract within the first two years of the Plan period – complete in Dec 2018
• Re-tendering all maintenance contracts – as soon as practical with initial focus on larger cycle maintenance contracts
• The complete re-tendering of all service contracts within the Plan period
• The review of all policies relating to asset management services – ongoing
• A major overhaul of business systems supporting the asset management function, including record systems required to demonstrate compliance with legislation and good practice - ongoing
Page | 32
Linthouse Housing Association Limited - Business Plan 2017-2018 to 2019-2020
• A significant increase in the levels of investment in planned maintenance and component replacement in our stock to demonstrate to tenants LHA now embarking on a programme of investment to improve the quality of our homes. Table 13 below outlines the investment achieved or scheduled for completion during the Plan period.
• Completion of a four close Comprehensive Tenement Improvement Programme at Hutton Drive with the majority of the spend in Year 2 but spend carrying into Year 3.
• At start of Year 3 clear significant progress made in improving Asset Management at LHA and extensive investment is still required to address years of limited investment in improving the quality of the stock
Table 13 Component Replacement Work Summary 31.03.17 to 31.03.20 Phase 1 Jan19- Phase 2 Phase 3 Phase 4 Phase 5 Phase & Year June 19 2018/19 2018/19 2019/20 2019/20 No of Units Cost Boiler Replacement 154 59 90 303 £557,459.40 Kitchens 73 61 62 196 £604,244.48 Bathrooms 21 55 32 108 £357,431.08 Electric Upgrades 50 28 78 £140,853.44 Inspection of Water Tanks 113 113 £5,220.00 EPC's 42 40 82 £8,200.00 Periodic Electrical Testing 31 91 122 £11,724.20 Level Access Showers 5 5 £14,837.10 Full Central Heating System 0 15 23 38 £129,412.80 Pipework and Radiators 11 11 £13,750.00 Storage Heating 3 3 £16,776.21 Windows - Phase 1 16 £325,448.00 Total 489 74 275 124 97 1075 £2,185,357
Source: Asset Manager’s records August 2019
Stock Condition Survey
4.8.3 LHA recognises the desirability of ensuring its stock condition survey is updated to inform future investment decisions. To this end, in 2014 we commissioned John Martin Partnership (JMP) to undertake a five year survey of our stock; and to provide more sophisticated software to provide electronic storage for this information and use in investment planning. The original specification for survey was to complete 100% survey of LHA’s stock over a five year period, with 20% stock surveys being commissioned annually during this period. The first 20% tranche was surveyed in autumn 2014.
4.8.4 60% of our stock has been surveyed by JMP over the three years to 31 March 2017. This gives us a good basis for examining the stock condition survey, making adjustments to take into account work undertake in the interim from the earlier tranches, and feeding this information into our future investment plans. In Year 3 of the Plan period 2019/20 the DCEO will specify and commission a new stock condition survey.
Page | 33
Linthouse Housing Association Limited - Business Plan 2017-2018 to 2019-2020
4.8.5 We have purchased a software package from JMP ‘The Hub’ which provides electronic information on the stock surveyed with the remaining stock ‘cloned’ from the 60% surveyed to date. We will continue to populate the software as further stock condition information becomes available. The information was used to complete LHA’s ARC Return 2018-19 in May 2019. Information available from The Hub and our updates of this information, as we have started to deliver component replacement contracts, has allowed for the reporting of more accurate information on the Scottish Housing Quality Standards1 (SHQS). We now estimate that 78% of our stock is SHQS compliant; and that this figure will improve through our investment programmes in 2019/20. We will continue to invest time in 2019/20 updating the Hub and this will further inform future ARC returns and investment programmes.
4.8.6 The Hub Asset Management system provides a basis for information for the formation of contracts, in particular to progress our component replacement programme throughout the Plan period. A decision will be taken regarding future use of the Hub and on transferring the information onto the Asset Management module of Capita when Committee have considered the management response to LHA’s independent IT review is complete in early autumn 2019.
4.8.7 We are currently reviewing compliance with the Energy Efficiency Standard for Social Housing (EESSH2) which requires to be met by December 2020. As reported to Scottish Housing Regulator (SHR) within the 18/19 ARC Submission, we have recently remodelled our EPC Register and completed a significant number of additional EPC’s to increase the accuracy of the data we currently hold. This process will continue throughout the course of the next financial year and beyond. We have also indicated to the SHR that we are unlikely to meet the December 2020 EESSH deadline for all of our properties. The most significant numbers of property types currently not achieving EESSH are ground floor and top floor tenements, which we will seek a temporary exemption for, on the grounds of excessive cost reasons (primarily due to limited Government funding for energy upgrades) and social reasons (tenants not wanting the disruptive works needed to be carried out in their properties).
Linthouse intends to review the properties currently not meeting EESSH in 2019/20 and investigate innovative/less disruptive measures to maximise the Energy Efficiency of our homes, while minimising disruption to our customers and achieving value for money. Following further EPC survey's and investigations into this build type it is hoped that the figure above will reduce. Linthouse HA % of properties currently meeting EESSH: 64.3%
4.8.8 Of all of our flats and houses within the scope of EESSH, the breakdown of our heating systems by property type are as follows:
Table 14 C33.3 Number of self-contained properties in scope of the EESSH Gas Electric Other fuels Total Flats 939 115 0 1,054 Four-in-a-block 16 0 0 16 Houses (other than detached) 85 0 0 85 Detached houses 0 0 0 0 Total (Numbers) 1,040 115 0 1,155 Total (%) (90%) (10%) (0%) (100%)
1 The Scottish Housing Quality Standard (SHQS) is the Scottish Government's principal measure of housing quality in Scotland. 2 The Energy Efficiency Standard for Social Housing (EESSH) aims to improve the energy efficiency of social housing in Scotland. Page | 34
Linthouse Housing Association Limited - Business Plan 2017-2018 to 2019-2020
4.8.9 Linthouse HA recognises that levels of investment in its own stock have been historically low. The information recently made available through The Hub software shows a considerable backlog of work derived from replacement due dates and life cycles for components. It also bears out considerable investment requirements in the Plan period in windows, sandstone repairs, heating systems and kitchen replacements. Committee charged staff with the challenge of using their skills, to make as much progress as possible, during the life span of the plan to deliver planned investment and component replacements for tenants whilst shaping and populating a highly skilled, experienced, and qualified asset management team in preparation for the significant investment programmes that lie ahead. Table 13 demonstrates the progress made during the life span of the plan (this is remarkable given that the last member of the team of 10 Asset management staff to be appointed was as recently as 1st April 2019). LHA will have invested over £2.1 million in component replacement contracts over a 26-month period from January 2019 to March 2020.
4.8.10 Our levels of debt are relatively low, and this has facilitated recent work to accelerate our investment programmes through loan refinancing and negotiating short term loan of £5.5 million from Unity bank.
Information provided in the thirty year projections shows that with access to loan facilities in conjunction with the recent recruitment of a fully resourced asset management team, has allowed LHA to greatly expand its proposed early investment programmes. The thirty year financial projections will therefore allow Linthouse to:
• Start window replacement work to its 714 pre-1919 tenements in Linthouse within the Plan period. The first phase (2 close) is now on site and due to be complete in 2019. Proposals for a larger phase 2 of windows replacement and sandstone repair contract will be considered by Committee in Sept 19. We will develop our window replacement plans including indicative budgets and clear time lines during 2019-2020. The window replacement plans will allow us to assess the costs, timescales and secure any additional loan funding to deliver the phased window renewals and sandstone repairs to 714 tenanted units. The DCEO/Director of Asset Management will scope out the phasing of window replacements to ensure LHA have the organisational capacity to deliver the replacements in a way that best protects tenant’s interests, and facilitates the maximum number of closes in mixed ownership to benefit from essential sandstone repairs. Agreement on the phasing of the windows/sandstone works will allow LHA to develop into part 2 of our funding strategy.
• Completion of central heating and boiler replacement works to ensure EESSH compliance by 2020. For properties that will not meet EESSH (for technical or social reason) by 2020 we will develop an innovative solution.
• Allowances throughout the thirty year programme with proposed spend concentrated on early years in the programme to allow for essential priority stonework repairs to pre- 1919 tenements in Linthouse
• Allowances for professional fees and staffing resources to support the proposed investment programme
Page | 35
Linthouse Housing Association Limited - Business Plan 2017-2018 to 2019-2020
• The initial feasibility study for the potential new build project at the Drumoyne Primary School was fully grant funded. Financial provision is included in the projections for site acquisition in 2019 and construction commencement in 20/21.
• The feasibility study for the remodeling of Eldergove very sheltered housing was fully grant funded. Financial provision is included for the project, in our financial projections, and completion of the partially grant funded conversion is scheduled for October 2019.
Procurement and Asset Management Policies
4.8.11 During the early part of Year 1 of the Plan period, we reviewed and approved a new Procurement Policy and Strategy. This will ensure full compliance with legislation and good practice. We will put in place all business systems required to support the implementation of these documents. In year 2 of the plan we have populated the new asset management team with highly qualified and experienced permanent staff to embed knowledge of the procurement and management of new contracts into the organisation.
4.8.12 During the Plan period, we will keep under review all asset management related policies and work towards establishing business systems required for the implementation of these policies/good practice.
Service Contracts and Reactive Repairs Contract
4.8.13 LHA will renew all of its service contracts during the plan period to ensure full compliance with legislation and good practice. During year 1 of the plan we procured gas servicing, landscape maintenance, maintenance painter work, gutter cleaning, 4 close CTI contract, Acquisitions and Decant works contract, a 245 unit component replacement contract, and started the process of re-tendering our reactive repairs contract. In year 2 we completed retendering of reactive maintenance and voids and started to retender landscape maintenance. In Year 3 of the plan we will also review and retender special services contracts such as fire protection devices, legionella, and asbestos management, (the number of contracts to be re-tendered will reduce as a result of withdrawal from sheltered and very sheltered housing.) The Technical Services Manager provides Committee with regular updates on progress with the challenging task of re-tendering all LHA maintenance contracts within the life span of this Business Plan to demonstrate value for money and compliance with procurement regulations.
Business Systems including Record Systems
4.8.14 Linthouse recognises the critical importance of establishing and actively managing asset management record systems that enables us to deliver asset management services on time, and of the required quality; and to demonstrate legal and regulatory compliance. These include critical activities such as gas servicing. In year 1 of the plan we completed an independent audit of current business systems in gas management to assist us to develop and embed a more robust approach to gas management with our new contractor. During Year 2 of the Plan period, we put in place permanent staff resources to support embedding these business processes and record systems into LHA. A new permanent qualified asset management team with appropriate technical and administrative skills were recruited in the early part of Year 2 of the plan to embed good practice in the organisation. In the later
Page | 36
Linthouse Housing Association Limited - Business Plan 2017-2018 to 2019-2020
part of year 3 of the plan, an independent internal audit of gas management will be undertaken to evidence if new good practice is embedded at LHA.
Consultancy and Staffing Resources, Learning and Development
4.8.15 Linthouse recruited qualified technical and administrative asset management staff to fulfil our legal, regulatory and service objectives during year 2 of the plan. We will ensure that employees fully understand their roles and implement policies and practices consistent with the Business Plan. We will invest in our staff to support their work through our learning and development plans.
Regulatory and Other Asset Management Issues
4.8.16 In 2019/20 we introduced operational Delivery Plans for each department. The Asset Management Delivery Plan will address asset management related priorities. These include proposals to improve our performance on tenant satisfaction with the quality of our homes; updates on the development of our repairs service, an asset management strategy; and improving business systems. This will help us to ensure a culture of continuous improvement and performance management is embedded into the work of the Asset Management Team.
Development Strategy
4.8.18 Provision is made in the thirty year projections for the acquisition and construction of 49 new build units on the site at Drumoyne Primary School. There are a limited number of gap sites in the communities Linthouse serves, as well as extensive former industrial land that may become available in future along the south bank of the River Clyde. Glasgow University plans to build a £90 million Campus in Linthouse on the site of the former Stephens Shipyard. This will be a significant development for Glasgow and may present LHA with possible development opportunities and possible threats of further changes to road layouts, with risk of further traffic congestion, and pressure on the Clyde tunnel. The decommissioning of care homes within the City and move by Glasgow City Council toward large scale care hubs may offer further development opportunities as might the re- introduction of their tenement acquisition programme to all housing associations.
4.8.19 Linthouse Committee are progressing with the development of the Drumoyne Primary School Site (DPS) subject to the required level of grant being offered by Glasgow City Council (GCC).
4.8.20 Our Committee of Management take a full risk based approach in assessing in particular the financial impacts of all development opportunities on the Association’s ongoing financial viability.
4.8.21 We will commission a Master Plan in 2019 funded by GCC to guide investment in our stock and identify new acquisition and development opportunities, and other investments needed to ensure our estates remain attractive, high demand areas, where people want to live. New development opportunities will be identified which allow LHA to address housing need, diversify our housing stock, and may be included in our funded masterplan due for completion in March 2020.
Page | 37
Linthouse Housing Association Limited - Business Plan 2017-2018 to 2019-2020
4.9 Our Partners
Customers
4.9.1 We recognise the support of our tenants, especially those who are longstanding residents and those who serve on our governing body, is the underpinning most important relationship to the success of the LHA. We work in 4 distinct communities Linthouse, Drumoyne, Shieldhall and Langland’s and our stock holding and number of estates in each of these areas varies significantly in size and proximity to our office.
We have a long standing and Registered Tenant’s Organisation (RTO) covering the Langland’s estate. In recent months the group has not been meeting frequently and our Head of Customer Service has offered support including Tenants Information Service (TIS) to try to revive interest in this group. We will engage further with the Langland’s Residents Association during the lifetime of this Business Plan to try to develop their goals and refresh interest in the group.
We have an active Residents Panel established in 2014 to encourage our customers (tenants and owners) to have a strong voice in shaping how we work and what we do. The Residents Panel are kept up to date with the current change management programme and are currently developing a grass roots residents action group to tackle environmental issues impacting on the appearance of our estates. We have supported the Panel to review and develop its role by engaging the independent Tenant Participation Advisory Service (TPAS) to help them as well as having LHA staff attend their regular meetings. The Panel’s Chairperson provides an annual report to Committee, and members attend various conferences or events with staff and Committee.
We also support a Monday Club for the over 55’s with a goal of promoting social activities and address social isolation of tenants and their families. This club lunches and meets in LHA IT Stephens Lounge. It operates independently of LHA and has had some recent success in attracting external grant funding to support their work. The Head of Customer Service Delivery works closely with this group and LHA will do more to promote the activities of the group during year 3 of the plan.
In Year 3 of the plan LHA applied for and secured the opportunity to be part of Scottish Government Funded Next Steps Programme to develop our approach to supporting tenant participation for customers.
In the last 2 years there has been a significant increase in the number of members attending our AGM. When the formal business of the AGM is over, members are invited and encouraged to comment on the previous years’ work at LHA and plans for the future.
We issue a quarterly newsletter to tenants. Many in the last 2 years have included surveys and feedback opportunities with prizes to ensure customers feel that LHA is becoming a learning organisation, listening to our customers, hearing their voices and views, and reflecting on this feedback then taking action to ensure customer priorities are at the centre of our current transformational change management process.
We also issue bi-annual newsletters to our factored owners.
Page | 38
Linthouse Housing Association Limited - Business Plan 2017-2018 to 2019-2020
In year 3 of the plan we will hold our first tenant conference to update tenants on our plans.
We want to do more on this including how we inform and engage customers on developing our Asset Management Strategy. A comprehensive approach to providing high quality information to our customers was taken in Phase 1 window and sandstone repair contract.
Glasgow City Council, the Scottish Government, Westminster Government
4.9.2 We work closely with Glasgow City Council (GCC) on a range of projects. We completed changes to our sheltered housing in Year 2 of the plan. We considered how best to support to our older tenants to ensure they can benefit from GCC change in strategic direction on the support of older people and have appointed a part time member of staff to work on addressing older tenant needs.
We are committed to assisting GCC to deliver its legal obligation to meet the needs of homeless people by preventative measures and to try to ensure existing tenants sustain their tenancies. This includes making suitable offers of permanent accommodation to section 5 homeless referrals by the Council’s case work team. LHA remains committed to improving performance on providing settled accommodation for homeless people.
We have been successful in attracting grant awards from GCC to support our developing Asset Management Strategy for current and future investment in the housing stock. In 2014/15 we started working with GCC on an Acquisitions Strategy to assist LHA as the factor of the tenements in Linthouse to more effectively manage and maintain tenements which are in mixed ownership. From the period March 2015 to March 2017, LHA acquired an additional 43 pre-1919 tenements which were fully grant funded to the value of £3.19 million. We completed a 5 close Comprehensive Tenement Improvement (CTI) programme. The first close was complete in June 2017, and the remaining 4 closes complete in March 2019. The value of these CTI’s is circa £5 million and will result in 5 closes and 41 units being fully refurbished to 21st century standards. In 2016/17 we also secured 100% grant funding to complete component replacements to bring 33 voids up to excellent standards to provide temporary accommodation for customers to facilitate the CTI works. Full details of LHA’s success in attracting grant funding is provided in Appendix 4.
New development opportunities to allow LHA to address housing need, diversify our housing stock will be informed by our Masterplan funded by GCC.
Part 1 of LHA’s finance strategy is complete and includes funding of all component works to end of 2020, and the circa £3.5 million loan required for the private finance element of Drumoyne Primary School Development. The negotiations for the loan will be complete by the third quarter of 2019/20. This will allow LHA to contribute to the Scottish Governments target of 50,000 new homes by 2021.
We continue to receive annual funding from GCC to support disabled adaptation work to allow customers to remain in their homes for longer.
We will continue to build our relationships with the local authorities and Scottish Government to maximise resources to LHA through grant assistance and also aim to play
Page | 39
Linthouse Housing Association Limited - Business Plan 2017-2018 to 2019-2020
an active part in delivering national government policy and contributing to effective local strategies.
We received grant funding from Glasgow City Council to develop a Community Plan in 2016 which captured our customers’ views and priorities for projects that would make the communities LHA serves better places to live. Many of the projects that our customers would like LHA to be involved in, or attract additional resources for, actually match some of the government policies and local strategies. Committee will consider during year 3 of the plan how much of LHA resources both staff, premises, and monetary may be allocated to tackle wider role issues and developing a clear strategic approach to this addition area of work.
Lenders
4.9.3 In 2017/18 we re-financed and paid off all loans to the Royal Bank of Scotland (RBS). Our new loan facility for £5.5million secured in March 2018 with the Unity bank was drawn down in March 2019 and our financial projections show that it will be invested in improvements of existing stock by March 2020. The Unity Bank currently holds security over 150 units valued at £6.7 million on a market value subject to tenancies basis (MV_ST). LHA has 912 units available to use as security for additional borrowing to an estimated value of £35,835,000 on the MV_ST valuation basis. The Unity Bank are currently a major stakeholder as we need to demonstrate compliance with our current loan covenants, and these will be kept under strict review by our Management Committee. The impact of non- compliance with the covenants being that loan margins could be reviewed and in extreme situations, loans recalled if, for any unforeseen reason, the Scottish Housing Regulator moved the Association from low to non-compliant engagement. Committee are in the process of funding another loan for DPS. Towards the end of Year 3 Committee will review need for third phase of borrowing for the pre-1919 tenement windows and sandstone repairs, when the AMT plans are at a more advanced stage.
In 2018 we started to review the indicative cost of window replacements, sandstone repairs using the cost from the 4 close CTI. The estimated cost of 714 sandstone repairs assumes 100% participation by all 345 owners living in the Linthouse tenements as this is the figure included in our 30-year cash flows. Phase 1 of window replacements and sandstone repairs in 2019/20 will help to establish the most cost effective working methods and tendered prices for the window replacements. LHA will continue to review borrowing requirements in an informed way, to project plan the window replacement work, to ensure that the organisation has the internal capacity and funding in place to deliver high quality replacement contracts in a way which protects tenants and the organisations interests.
We have commissioned a consultant to update our stock conditions survey and this work is scheduled to be complete in 2020.
Our Asset Management Team (AMT) are developing an action focussed approach to our window replacement and sandstone repair programme in pre-1919 tenements by focussing initially on delivering works to closes which are owned entirely by LHA. This approach will demonstrate to tenants we are making progress on one of their top priorities. It will also allow AMT time to consult with owners in closes where LHA have majority ownership, in close where LHA does not have the majority ownership, on the basis Page | 40
Linthouse Housing Association Limited - Business Plan 2017-2018 to 2019-2020
of having actual costs for 2 phases of the work. It will also allow AMT time to establish if we can assist owners to source grant funding.
We have commissioned Arneil Johnston to carry out a review of our rent and service charges which is scheduled to be complete by October 2019. The outcome of this consultancy work will be used to develop our new rent and service charge policy and to update the 30-year cash flows again in December 2019. This will enable LHA to further assess the organisations capacity to speed up investment and allow more clarity on the level of borrowing required to deliver for tenants. Any changes to the rent levels are likely to have a positive impact on future independent valuations of the housing stock.
We aim to complete windows and sandstone repairs within a 5-year time frame between 2019/20, to 2024/25.
Part 1 of the finance strategy is now complete and includes funding of all component works to end of 2020, and the circa £3.5 million loan required for the private finance element of Drumoyne Primary School Development.
As a result of the rent review, new stock conditions survey, and developing approach to windows replacement and sandstone repairs contracts we do not expect to start work on part 2 of the finance strategy until 2020/21.
LHA will borrow a further circa £3.5 million for DPS development and have offer of lending in place by end of 2019. LHA debt per unit remains significantly lower than the 2015/16 Scottish average. Table 15 below shows the debt per unit at 2016/17 and compares LHA current position with the other 2 Govan RSL’s.
Table 15 : LHA Debt per Unit compared to local RSL’s and national average. RSL Name Debt per Unit 2016/17 Estimated debt per unit 2019/20 Linthouse £742 £4,497 ( after RBS loan paid off) * Govan £6,828 Not known Elderpark £11,381 Not known Scottish average £10,613 Not known *LHA drew down Unity Bank Loan in full in March 19
We will keep our funders fully informed and engaged as we review our borrowing requirements during 2019/20 and 2020/21.
The Scottish Housing Regulator (SHR)
4.9.4 Our Management Committee and CEO are fully convinced of the important role that the SHR plays in protecting the interests of tenants by setting high regulatory standards for all RSL’s to meet in terms of governance and financial management. We work in an open, co- operative manner with SHR to address any issues that might impact on the level of regulatory engagement the Regulator needs to have with LHA.
We provided the SHR with all assurances required to secure a reclassification to low engagement by end December 2018. During year 3 of this plan we will develop our fist Assurance Statement for SHR and aim to secured compliant assessment despite level and pace of change required at LHA.
Page | 41
Linthouse Housing Association Limited - Business Plan 2017-2018 to 2019-2020
4.10 Our Performance – Benchmarking
4.10.1 Table 16 compares our performance over the last 2 years against other RSL in South Govan and sector averages.
Table 16 – Benchmarked Performance of LHA 2017-2018 LHA Elderpark Govan Southside GHA SCOTTISH 2017/18 HA HA HA AVERAGE 2017/18 2017/18 2017/18 2017/18 2017/18 Tenant 91.9% 95.6% 89% 92.9% 90.7% 89.7% Satisfaction Repairs (last 82.4% 95.9% 89.9% 97.2% 94% 90.6% 12 months) % % Rent 98.7% 100.6% 100% 98% 99.3% 99.6% Collected Void Loss % 0.9% 0.4% 0.7% 0.5% 0.4% 0.9%
Relet days 23 18.2 19 18.7 14.9 31.5
4.10.2 Performance is improving despite the impact of the level and pace of change being delivered at LHA. All staff teams are now stabilising, and a clear focus is now back on our core business. The first phase of the 2019 staff structure focused on populating a separate Asset Management Team to secure improvements in quality of the stock, and in out reactive and planned maintenance services. Restructure is now 60% complete and on completion we are confident that our capacity and capability to demonstrate to key stakeholders’ significant improvements in our key performance indicators (KPI’s) and customer services.
Page | 42
Linthouse Housing Association Limited - Business Plan 2017-2018 to 2019-2020
5. ANALYSIS OF OUR OPERATING ENVIRONMENT
Our third annual strategy planning event was held on 26th June 2019 and attended by the Management Committee and new senior management team. A separate session was held with all staff on 14.06.19 with focus on drafting PESTL, SWOT and TOWS matrix for MC consideration with 1st draft of plan. At this meeting we looked at the following:
➢ Review of whether LHA current strategy continues to have Committee support ➢ our internal capabilities (limited time spent on reviewing this issue as LHA 60% of the way through a full staff restructure with the aim of matching internal capabilities to this ambitious business plan). The staff restructure will be complete by October 2019. ➢ set against these and the knowledge of our business capabilities and appetite, what we want to do going forward; ➢ the risk considerations that present from our plans and how best to address these in terms of being able to avoid, mitigate or manage each key risk. (Reference made to LHA comprehensive risk map which is now updated quarterly at audit and risk meetings. The latest version of the risk map is provided in appendix 1) ➢ Review of new Operational Plans developed by Heads of Department to compliment Business Plan ➢ Review of ARC and other performance KPI’s and an assessment of relative importance to Committee ➢ current or future issues in our external operating environment and what implications they might have for the organisation and to consider how these can, as appropriate, be built upon and/or improved;
The aim was to align the organisation to the changing environment so that we manage the threats and take advantage of opportunities that further our Strategic Objectives.
5.1 Political, Economic, Social and Technological, Legal, Environmental Factors (PESTLE) Analysis
Table 17 sets out assessment of the key external considerations that could impact on our organisation.)
Page | 43
Linthouse Housing Association Limited - Business Plan 2017-2018 to 2019-2020
TABLE 17: PESTLE ANALYSIS (Political, Economic, Social, Technological, Legal, Environmental Factors) POSITIVES/OPPORTUNITIES RISKS/THREATS/PRESSURE POINTS POLITICAL/LEGAL/REGULATORY • Building up reputation for good strategic and • Political uncertainty due to Brexit (impact on operational relationships with GCC and all economy/migration) elected members • Potential change of government • Regulatory confidence in LHA’s ability to manage organization for improvement and • 2018 review of SHR Regulatory Framework transformation • Extension of freedom of information legislation • Funding stock to build new housing and diversify to RSLs (likely to take effect 2019) LHA • EU General Data Protection Regulation (takes • Legislation to restore classification of Scottish effect May 2018) RSLs as private, not public, bodies • Cuts to GCC funding for local services ( pressure • Scottish Government powers over welfare on LHA to fill gap left by GCC cuts and move into (around 20% of all welfare spending in Scotland) wider role activities- ( potential upward pressure • Legislation due in 2019 that may enable on rents or service charges.) community-controlled bodies to become • Prospect of a further independence referendum ( responsible for some public services delivery for political and economic uncertainty) • UK government elections due 06.05.21 • Digital by default - ( Threat to LHA and tenant • Scottish Government election due 06.05.21 income -if LHA do not assist tenants to get on line to manage UC accounts)
ECONOMIC • Interest rates are still at historically low levels • 5-week target time for paying UC will increase rent arrears and put additional pressure on • LHA has refinanced and secured short to working age individuals and families – if no medium term private finance needs income for 5 weeks. ( Driver for LHA to get • Scottish Government mitigations mandating UC involved in food and fuel poverty initiatives?) payments to landlords • Unclear how the Bedroom Tax will be abolished • No new UK Government welfare cuts expected in Scotland (SNP Manifesto, 2016), or whether ahead of 2020 future mitigation will continue to be in the form of DHPs • Proposals for introduction of Housing Benefit caps in 2019 have been abandoned • Brexit and volatility of sterling may make future inflation rates harder to predict or control • Sustainable grant levels now available for building new homes • Failure to control inflation will impact on cost of living for tenants and on LHA’s costs of delivering • Inflation has risen to 1.9% at June 2019 and is services. Also likely to cause interest rates to forecast to remain above the BofE target rate of rise. 2% for the next 3 years • Possible Brexit impacts on • Need to implement rent re-structure as soon as construction/materials costs, future inflation and practical to link into improvements made or interest rates (though BofE says peak risk has planned for housing stock) passed) • Brexit and a second Scottish independence referendum will both create economic uncertainty and may impact on private finance availability and costs. SHR predicts that any
Page | 44
Linthouse Housing Association Limited - Business Plan 2017-2018 to 2019-2020
POSITIVES/OPPORTUNITIES RISKS/THREATS/PRESSURE POINTS legislation reducing its powers may have the same effect. • Potential regulatory pressure on future rent increases – this will impact more on LHA as historical low rents for 60% stock in pre- 1919 tenements which pull down all LHA rents to lower than local and national averages. • General trend to moving from rent increases based on RPI to CPI ( LHA still using RPI) • Sustainability of final salary pensions costs arising from SHAPS, SPF and auto-enrolment SOCIAL • Demographic change and the impact on our • Demographic change and the impact on our customer profile (e.g. increased demand for customer profile (e.g. an ageing tenant housing by single person households) population that may need new or different services due to GCC strategy of wrap around care • Growth in ethnic minority customers and at home targeted due to cuts on most vulnerable) communities, requiring tailored service responses • Challenges involved in meeting older customers’ • Homelessness prevention needs, when most stock is Victorian tenements • LHA financial inclusion/ advice services via 4 days with no lifts per week from Money Matters local respected • Rising demand from GCC for settled advice agency accommodation for homeless persons but staff • High and increasing demand for LHA services on need to work hard to secure referrals from GCC welfare and income maximization for tenants and for LHA stock from GCC organization ( will be addressed via staff re- • High and increasing demand for LHA services on structure - also a weakness – 2x welfare Rights welfare and income maximization for tenants and require staff) organization ( will address via staff re-structure- also a strength) TECHNOLOGICAL • Review of current ITC systems in late 2018 offers • New ways of communicating and doing business potential to work more efficiently and to improve with customers and contractors (e.g. social media services presence, providing options for customers who prefer to access services online via a portal, • Review of ITC systems in 2018 provides increased contractors portal for live information,) scope for customer profiling and tailoring service
solutions, and a self-service portal for customers
• Cost of Improving Technology – software and hardware at LHA • LHA key decision to make in review of Capita to assess if it can deliver for organisation. LHA new IT strategy to be developed during life span of this plan
ENVIRONMENTAL
Page | 45
Linthouse Housing Association Limited - Business Plan 2017-2018 to 2019-2020
POSITIVES/OPPORTUNITIES RISKS/THREATS/PRESSURE POINTS
• Component Replacement programme • New Scottish Government’s energy efficiency contributes significantly to energy efficiency and standards (EESSH), and reduced commitment by reduction of fuel poverty UK Government to make funding available via energy companies • Component Replacement and development programmes offer scope to realise and deliver • Likelihood of continued mandatory raising of community benefits building standards, to meet government Climate Change targets or new safety concerns add to LHA overall costs.
Political
5.1.1 The Westminster election on 8 June 2017 produced a Conservative government without an overall majority and reliant on a likely alliance with the Northern Ireland Democratic Unionist party (DUP) to advance its agenda. This will make for an interesting time, particularly on their ability to continue to drive through its wide ranging welfare reform programme, part of which DUP oppose. Whilst the Scottish Government is committed to mitigating the changes for those most in need in Scotland, welfare reform will continue to impact on the poorest in society who will commonly be social housing tenants. We must therefore ensure that we fully understand our tenant base and their changing needs and help them prepare for the future including how they will pay for their rent and cope with delays in Universal Credit payments. We must also proactively counsel prospective tenants in the same way and continue to demonstrate that we keep LHA rents affordable in comparison to other RSL’s. This will remain a top priority going forward.
5.1.2 In the summer budget of 2015, the UK Chancellor announced plans to reduce rents in social housing in England by 1% for 4 years. Whilst rent policy in the social rented sector is a devolved matter in Scotland, indications are that the UK government will be looking at ways to ensure that proportionate savings are achieved across the whole of the UK. The Scottish government have made public that they would not support such a change in Scotland given that current social rent levels are lower than our English counterparts. That said, any change in thinking about rent policy would be a major concern to the viability of any housing association, particularly those with higher than local and national average rent charges. Our rents compare favourably with local and sector comparator rents. That said, we know we want to accelerate investment in our homes and rent plus new borrowing will be our core sources of finance. Whilst the threat of a national change in rent policy is considered low at this time, we will model the sensitivity of changes to rent levels carefully in our short, medium and long term financial cash flows. In year 3 of the plan we are undertaking an independent rent structure and service charge review to ensure we can balance housing investment in component replacement, affordability and long term financial sustainability of LHA.
5.1.3 In terms of our physical assets, we have seen the welcome commitment of Scottish Government to secure the delivery of 50,000 new homes by 2020. Our local authority partners, Glasgow City Council (GCC) have their own housing strategies and strategic housing investment plan to contribute to this. Housing associations across the City are being expected to step up to the mark and play their part to support delivery. With this and in considering our local environment, opportunities exist for LHA to become involved directly in delivery. Page | 46
Linthouse Housing Association Limited - Business Plan 2017-2018 to 2019-2020
LHA is progressing with grant funding from GCC on the development of 49 new homes on the Drumoyne Primary School site and to convert our former very sheltered housing at Eldergrove into 11 unit linked bungalows for older people. We have assessed these opportunities and the risks of the delivery of new build developments brings, as set out in the recent SHR Development of Affordable Housing in Scotland (March 2017). In September 2018 we recruited a highly experienced and qualified senior manager to the post of Director of Asset Management /Depute Chief Executive Officer. LHA has a fully populated Asset management team with the range of technical, maintenance, and development skills required to deliver to a multi-million pound asset management and development programme over the next few years. For LHA the decision to return to organic new build development has been a measured and risk aware decision set against our plans to deliver major accelerated component replacement investment in our existing homes, whilst positively transforming LHA into organisations focused on excellence in all that we do. A summary of the grant funding received to date and projected estimated grant funding to end of 2021/22 is provided in Appendix 4. Due to the scale of the Asset Management programme of works ahead we will keep new staff structure under review.
5.1.4 We are also developing our position on what we need to do to achieve the Energy Efficiency Standard for Social Housing (EESSH) which aims to improve the energy efficiency of social housing in Scotland by 2020. Based on our current knowledge and emerging intelligence of our stock, we will have considerable work to do to ensure our houses all meet this standard by the end of this Business Plan.
5.1.5 In July 2019 the Association received correspondence from TPT Retirement Solutions which confirmed that the Actuarial Valuation at September 2018 showed a reduction in the deficit valuation of around £77m (moving from £198m to £121m).
The Employer Committee believes that the current recovery plan remains appropriate and contributions should remain at the same aggregate level as currently planned. On the basis of a funding deficit of £121m this will result in the Scheme reaching full funding by the Summer of 2022.
Discussions are continuing regarding the impact on individual employers as at September 2018 and funding arrangements until the September 2021 valuation.
We have already withdrawn from the Final Salary Scheme but overall performance of the SHAPS pension scheme remains a key risk factor for housing association members and an area that we must continue to closely monitor.
5.1.6 On 23 June 2016, the UK voted to leave its membership of the European Union. This was despite quite a different outcome in Scotland and other UK jurisdictions. This has led to the Scottish Government now agreeing to seek a second referendum ballot on Scotland leaving the UK. With the Conservative’s returned to government at the General Election on 8 June 2017, but without an overall majority and reliant on the pro Brexit DUP for support to advance its policy agenda, uncertain times lie ahead. Whilst exit will take several years to both negotiate the detail of and then implement, we now see the added dimension of the potential change in government at the coming election. If BREXIT proceeds, or if Scotland were to leave the UK, there will be clear impacts for housing associations, e.g. outlook for the economy, migration levels, impacts on demand and services and
Page | 47
Linthouse Housing Association Limited - Business Plan 2017-2018 to 2019-2020
procurement arrangements. We will keep all of this on our strategic agenda and map the impacts and plan responses accordingly as this debate unfolds.
Economic
5.1.7 The economic outlook has been shaped by the austerity agenda but more so, by the outcome of the BREXIT vote. Whilst the UK has not suffered the economic disaster that some commentators predicted after the BREXIT vote, there are global forces which could undermine the progress to date.
5.1.8 House prices and the size of deposits for first time buyers and the general poor performance of the economy continue to act as a barrier restricting the ability of low- income families to access a mortgage which means the demand for social housing will remain strong. The predicted rises in inflation in 2018 and beyond have still not materialised with inflation at June 2019 at 1.9% (CPI).
5.1.9 Poor global economic performance and quantitative easing have generated a very low bond yield, despite this the pension deficit position improved slightly in 2017/18. We will continue to monitor the potential impact of macroeconomics changes on our costs going forward
5.1.10 Spending cuts will continue to place pressure on public and voluntary services, creating increasing pressure on local projects and their future sustainability. This puts LHA and other housing providers under added pressure to support services no longer funded by the state as we had seen in terms of support to LHA’s sheltered housing. However, it does create the opportunity to explore how we might work better with GCC, other RSL partners and the host of local voluntary projects to create complementary services that we can share to best effect. LHA Committee will in year 3 of plan start to consider how to resource wider role activities or initiatives to shape LHA strategic objectives of supporting our tenants to maximise their income and contribute to delivering a thriving community.
5.1.11 Shifts in energy usage and costing are inevitable. These will continue to increase demand for improvements to energy efficiency and fuel poverty advice.
Social
5.1.12 The big social challenge going forward for LHA in common with the whole of society is the changing demographic landscape. This has a number of implications. Firstly, the customer base will continue to get older and generate new demands. This is at a time when the NHS and local authorities have changed their models of care with a greater emphasis on keeping people at home but set against diminishing budgets. We will need to consider developing new relationships with health and voluntary agencies and what new services are required to support people to stay in their homes. A first step towards developing our approach is the creation of a new post in the Customer Services Team of Customer Services Assistant (Special Projects) to develop tailored housing and support services and link older people into care, support, and social inclusion activates to enable them to sustain their tenancies.
5.1.13 We operate in an area with 3 local RSLs (Govan, Elderpark and Southside), but several other RSLs of varying size have an operating presence. We know that some are already Page | 48
Linthouse Housing Association Limited - Business Plan 2017-2018 to 2019-2020
developing new homes and have ambitions to further expand. This landscape creates opportunity, both to partner and share resources with our local RSL neighbours where this makes sense and fits with our strategic objectives. However, this environment also presents a threat to LHA if we are unable to compete favourably in terms of price, perception of quality of housing stock and quality of our neighbourhoods and services. We must ensure that this Plan looks to the future to ensure that we build unique selling points for LHA, particularly through our journey to excellence programme where we want to be the landlord of choice in the area.
Technological
5.1.14 Customer behaviour in engaging with service provision has changed dramatically over the past decade. More and more simple transactions (paying rent etc.) are being handled online with people of all ages using an array of IT devices and happy to do business in this way. Accessible phone contact can handle more complex issues, but there is still a place and a need for face to face contact on complex queries/needs. This shift in the channels by which modern consumers engage means that we must continuously consider and review our approach to meet existing and future tenants demand or to assist our developing approach to value for money.
5.1.15 We need to widen our online offering, but still provide the means to speak to us directly in a cost-effective and accessible way, either on the phone or in person. The technology needed to get our services online will be important to meet consumer needs but can also be a cost reduction driver. As we develop our services, we need to ensure our staff team are comfortable and adept at using modern technology to help consumers, but also to do their own business e.g. home working, handheld devices to take the service into the customers’ home. In year 3 of the plan we will review the independent audit of our Information and Communication Technologies (ICT) to assist us to develop an IT strategy to realise some of these ambitions, we need to develop a funded plan to ensure our hardware, software, IT platform, meets our needs to ensure the IT side of our business is fit for purpose and allows us to modernise how we do things.
5.1.16 As well as rethinking how we offer services; we are aware that social tenants are still the most digitally excluded in society3. Despite this, more and more public and commercial services are being designed as “digital by default” including the Universal Credit system on which so many of our tenants will rely on going forward. There are also the proven benefits of being able to access services online to get cheaper products and service, to learn and to access jobs and training.
5.1.17 We therefore must make sure we play our part to make it easier for tenants to get online confidently to engage and carry out business with us and others by developing a digital engagement plan as part of our strategy to mitigate possible impacts of universal credit on LHA’s and our customers incomes.
5.2 Strengths, Weaknesses, Opportunities and Threats (SWOT) Analysis Table 18 opposite sets out our internal strengths and weaknesses and our key external opportunities and threats as agreed by our Committee and staff team at our strategy day.
3Spreading the Benefits of Digital Participation Final Report April 2014 – Royal Society of Edinburgh
Page | 49
Linthouse Housing Association Limited - Business Plan 2017-2018 to 2019-2020
Table 18 - SWOT Analysis STRENGTHS WEAKNESSES 1. Listen, Hear, Act Cultural change programme. MC and SMT 1. Need to address Negative historical culture/ and staff committed to delivering excellence for customers. Reputation/relationships issues with customers 2. Rent levels (under sector average & cheapest locally) Scope 2. Poor stock condition and lack of phased planned investment to review 19/20 to fairer system (SHQS/EESSH failings) 3. Excellence ambitions (Committee and staff appetite for 3. Cash flow (esp. in early years) change) to deliver excellence for customers 4. Stock mix (sheltered sites, MSFS, Pre- 1919 tenements, 4. Customer satisfaction levels compare well to peers for most interwar tenements, listed buildings) KPI’s 5. Significant backlogs of work inherited from previous SMT 5. Strong Leadership (Committee and SMT) 6. Office layout 6. Staff (capacity, committed, skilled, caring) 7. IT systems not using to full capacity and lack of in-house IT 7. Low borrowing despite re-financing / Strong asset base expertise to drive forward changes required 8. Demand & stock location, popular communities 8. Policies, procedure and processes out of date and not aligned 9. Relationship with SHR and moved to low engagement in Dec to IT system impacts on staff efficiency and effectiveness 2018. 9. Competition (local, national RSLs) 10. Short term focused consultancy engaged on right tasks to 10. Performance on some KPIs relating to stock quality and rent keep staff structure relatively lean arrears will take long lead in times to improve 11. Size and local office (local knowledge, can be 11. Limited on-line services/ IT innovation (feedback, texting, nimble/responsive) etc.) – delays in getting fully functioning website on track. 12. Residents panel – membership growing and reviewing role 12. SCS needs to be updated 19/20 to assist planning and 13. Modern apprentice programme financial forecasts – may show higher levels investment needed 14. Housing demand- stock mix generally good (issue 1 13. Capita in its current set up, outdated software – time apartments and lack of larger family homes) intensive for staff due to complex processing and limited 15. Active Client management of new Maintenance training Contractors 14. Lack of Card Payments and opportunity for customers to pay 16. Better investment decisions on new component online replacements 15. Lack of wheelchair access properties 17. Demand/Waiting list – continues to be healthy – no DTL 16. Lack of investment in tenements impacting on demand stock 18. Committee & Staff – morale high as building a new track record of success and positive culture of Listen, Hear, Act and track record of success 19. Recruited Depute CEO with expertise for delivery of accelerated investment programme and new developments 20. Staff restructure complete in 19/20 to ensure properly resourced to deliver B.P. 21. MC almost up to full strength of 15 committed people THREATS OPPORTUNITIES 1. Political – changes increase pressure on cost of delivering 1. Collaboration/ partnership both ways (RSLs/other) services change/BREXIT/legislation/regulation/ONS/Freedom of 2. Build Staff capacity to deliver improvements (within industry Information issues average staff to turnover costs) to demonstrate competitiveness 2. Rents lower than national averages and traditionally low rent and value for money to improve performance in majority of stock pre-1919 tenements in comparison to “new 3. New borrowing to fund accelerated component replacement build “ and stock transferred from other landlords contracts and reconfigurations 3. Welfare reform – impact on income of our tenants and the 4. Deliver new build to diversify stock base and meet customer Association aspiration for different house types 4 .Competition from other RSL’s for customers/new 5. Phased Staff restructure/improve morale/productivity developments 6. Culture change programme to transform LHA and way we do 5. New Build impacts on existing stock – need to ensure things to change any negative perceptions amongst tenants continued demand for tenements 7. Widen tenant/community involvement – aim to ensure 6. Stock deteriorates in blocks where LHA does not have tenant value, LHA brand majority ownership and prevents essential work being carried 8. Wider role – develop realistic strategy out (access/jobs/apprenticeships/financial inclusion/food poverty – 7. Lack of clear funding strategy from Scottish Government or needs to be properly resourced GCC on grant funding to protect Pre-1919 tenements which 9. Improve governance stabilise and develop management form circa 70% properties in the City of Glasgow committee 8. Increases in Inflation (costs v income) puts pressure on costs 10. Track record of success last 4 years in attracting external 9. Diverse Tenant Base (aspirations, ageing, sicker, support funding (energy efficiency, wider role. DRS funding) to reduce needs) pressure on rents 10. Fuel poverty 11. Decide future of LUV café if unable to let commercially 11. Breaching new loan covenants 12. Digital by default 12. Digital by default 13. Factoring costs versus income - review, to develop 13. IT failure/hacking/computer virus attacks sustainable quality Service which covers cost and is not 14. Interest rate increase – increase in cost of borrowing subsidised by tenants.
Page | 50
Linthouse Housing Association Limited - Business Plan 2017-2018 to 2019-2020
15. Staff absence/sickness (double KPI target) and impact on 14. Rent review/restructure – fair, clearer system rest of team/costs 15. Procurement savings from re-tendering – all contracts 16. Average days to re-let (10 days higher than Scottish 16. Master Plan to guide investment and attract grant funding average) for opportunities in planned and systematic way 17. Bad publicity in relation to poor service, performance or 17. Better investment decisions with AMT to drive forward non-compliance with legislation accelerated investment in stock 18. Owners fail to participate in sandstone repairs 18. Government affordable housing targets – opportunity for 19. No grant funding for owners for sandstone repairs more new build to diversify stock 20. Changes to road layouts around tenement stock causing 19. New use of communal facilities in the former sheltered further traffic congestion as result of Glasgow University housing Campus in Linthouse 20. Gearing up to assist tenants cope with UC 21. Committee & staff – morale high as building a new track record of success with positive culture focussed on customer excellence 22. Glasgow University Campus on site Stephens Yard may help to re-juvenate Linthouse and increase demand for tenements and opportunities to build social housing for rent on waterfront 23. Welfare Rights Service – in-house help to address rent arrears and max income 24. Stock Conditions Survey – update 19/20 clear information on costs 25. Drumoyne Primary/ expand and diversify house types/sizes ages to meet local housing needs 26. Tenant satisfaction – increase as we invest in housing stock and communities 27. Applying for government funding 28. Team Building/Staff Development 29. Assurance Statement
5.2.1 Strengths
In essence, our biggest strength is that we are local and have a 45 year track record of delivering services to the community of Linthouse. Our staff know our customers well and have the ability, skills, and motivation to build up good, trusted relationships to achieve high levels of customer satisfaction.
Our Committee and staff team have been through a lot of change in the last 3 years but remain determined to make the right operational and strategic decisions that create the best outcome for tenants now and for the future.
We have good relationship with GCC and enjoy high levels of customer satisfaction despite the fact that we know we have let some customers down over the years on how they have been treated and, on the quality, and lack of investment of some of our homes.
Rent levels are comparatively low. In addition, the basic economics of the business are sound. Whilst stock condition in some areas needs to be addressed and investment accelerated, our current low levels of borrowing, supported by positive stock valuations mean that we have ample capability to pursue additional borrowing and generate supporting cash flows that allow us to do what is needed over the 30 year financial projections.
5.2.2 Weaknesses
Whilst we have high levels of tenant satisfaction, we are now working towards ensuring that customers value the Linthouse brand. In year 3 of the plan we will rebrand the organisation around our new Listen, Hear, Act approach. Page | 51
Linthouse Housing Association Limited - Business Plan 2017-2018 to 2019-2020
We know we need to do much more to improve the quality and particularly the energy efficiency of our homes. Whilst rents are low, there is pressure to continue to accelerate investment, but we know that we must also strive to keep our costs down and rents affordable and fair across all property types for our existing and future tenants.
Historically, core performance was not given the attention it needed, and the result is that significant intensive work is needed to continue to turn this position around. Corrective action is now underway across all areas of the business with a particular emphasis on radically improving the quality of our homes, rent collection levels, letting performance and void management, and the way in which we deliver customer service by putting customer needs first.
We are 60% of the way through a radical office based staff structure review to make sure that we have the right number of people, with the right attitudes, training, and skills set to make this business plan a reality. This phased staff restructure will be complete by October 2019, and it is clear that this weakness is currently transforming into a strength.
New ways of working will be at the heart of the planned changes. With all that is planned, the core challenge for LHA is careful planning to ensure the service does not suffer as we make the big changes to secure our long term future.
5.2.3 Opportunities
We also see real opportunities for renewal of our governance and staffing structures to best prepare us for the future.
With the government and GCC drive for more new homes, we are well placed to play a part in delivery of local projects and have started with the reconfiguration of the Elderhouse Very Sheltered which is scheduled for completion in October 2019.
We closed the LUV café subsidiary in 2018/19 and it is currently being marketed on the basis of a commercial lease.
At the away day in June 2019 the Committee agreed that they want to pursue organic growth in existing areas of operation where this contributes to refreshing and sustaining these communities. Committee will consider the master plan for Linthouse as a key planning document to support investment in our existing stock and new homes in the communities we serve.
We aim to acquire the Drumoyne Primary School site in November 2019 with the project going on site in January 2020, we estimate completion of 49 new homes by March 2021.
We factor in excess of 500 properties. Given the level of owner occupation in our areas of operation, the opportunity exists to expand the factoring services subject to a suitable business case. In Year 3 of the plan, we will start to review resources required to deliver factoring service against costs to assess if this is an area where LHA should expand or retract services.
Page | 52
Linthouse Housing Association Limited - Business Plan 2017-2018 to 2019-2020
5.2.4 Threats
Whilst local housing regeneration is a potential opportunity, it is also a clear potential threat. This applies if we are involved in provision or not. With performance concerns over the quality of some of our stock, if new homes are built without a clear view of who the provision is for in terms of existing unmet need, there is a threat of displacement of existing households.
There are other issues that we must not take our eyes off around welfare reform impacts and performance of our pension scheme.
We, like every other modern business have a huge reliance on IT for effective operations but are at risk of service interruptions/failure and must protect the data we hold and manage. We are currently reviewing arrangements around IT to ensure resilience with a view to developing a costed IT strategy which, due to costs, would be phased in over the next 2-3 years.
Last but not least, we continue to work positively with SHR to address any issues. We will continue to relentlessly deliver continuous improvements to ensure our first Assurance Statement due in October 2019 results in a compliant assessment, despite the levels of change we know that we want to deliver to modernise the business.
5.2.5 In 2016, we received the publication of the second triennial actuarial pension valuation carried out in 2015. Whilst some improvement in performance has been seen, the outlook for the scheme remains challenging. The impact has been reflected in our new budget and Business Plan. Performance of the SHAPS pension scheme is a key risk factor for housing association members and an area that is closely monitored by SHR. Whilst we have exited the final salary scheme this does appear on our Risk Register as a risk.
5.3 Risk Analysis
5.3.1 Risk is present throughout LHA - in our buildings, equipment, policies, systems, processes, staff, tenants and visitors. We recognise that the management of risk is vital to our success and resilience. It must be an integral part of all the functions and activities of the organisation.
5.3.2 We have updated our Risk Management Policy to ensure a consistent approach towards risk across the organisation. This will outline the processes for recognising, analysing and dealing with risks as well as assuring the effectiveness of the identified processes. In addition, risk management should actively support the achievement of our agreed objectives and not simply to avoid risk.
5.3.3 Our approach to risk management will be designed to enable us to minimise the frequency and effect of adverse incidents arising from risks and to identify improvements in procedures and service delivery in order to ensure the efficient and effective use of funds.
5.3.4 Risk management extends to the culture, processes and organisational structures, which contribute to the effective management of potential opportunities, threats and adverse incidents.
Page | 53
Linthouse Housing Association Limited - Business Plan 2017-2018 to 2019-2020
5.3.5 Risk consideration and management will be an integral part of our strategic planning and decision-making processes. For new initiatives and projects, risk analysis shall also be used to inform our decision-making process.
5.3.6 Whilst our Risk Register will be overseen each quarter by the Audit & Risk Sub Committee and bi-annually by our Management Committee through the Business Plan process, and summary report at the mid year, we will promote the integration of risk management in the governance and management of our business so that it naturally flows through our business.
5.3.7 Appendix 2 shows the Key Risk Analysis capturing the major risks presently facing LHA and the action we have taken or plan to take to mitigate/manage/avoid them. (Updated by CEO following Audit & Risk meeting in May 2019)
6. STRATEGIC OBJECTIVES
6.1 Strategic Analysis
6.1.2 Having reflected on our mission, vision and values, reviewed our customers, physical assets, performance, and stakeholder expectations, and scanned our external/internal environment and the key risks we face, we have brought all these elements together to update our strategic objectives.
6.1.3 This Business Plan aims to ensure the programme of change and improvement is implemented effectively to support sustainable, excellent services to our tenants.
6.2 Strategic Mapping
6.2.1 The Management Committee and staff team were able to clearly map the key threats, opportunities, weaknesses and strengths and as a result form 6 interlinked strategic objectives for the life of the Plan. These reflect the opportunities and threats in the evolving external environment in which we operate and the current internal strengths and weaknesses of the organisation. (See TOWS Matrix shown in Appendix 3)
6.2.2 A host of specific activity was then agreed, and these were prioritised and updated following Committee Strategy away day for the years ahead, focusing primarily on activity for the current year. The 3 Year Plan of detailed activity for 2019/20 along with headlines for the other 2 years is attached as Appendix 5.
6.3 Our Strategic Objectives
6.3.1 Objective 1 - Strong Strategic Governance
In spring 2017, we conducted a self-assessment to test our governance arrangements against the SHR Regulatory Standards of Governance & Financial Management. From this, we have been delivering improvements detailed in our Governance & Financial Management Improvement Plan (GFMIP) to ensure continuous improvement on compliance with SHR standards. We completed all action required from 2017 review to demonstrate compliance with Regulatory standards in April 2019. We will use the April 2019 assessment as starting point for Assurance Statement Assessment in Year 3 of plan. Page | 54
Linthouse Housing Association Limited - Business Plan 2017-2018 to 2019-2020
We have made changes in our governing body, but recognise the importance of testing the contribution of each member by conducting annual Committee member appraisals.
The appraisals will also allow us to devise and deliver a training programme to develop our Management Committee to ensure that individually and collectively, they demonstrate high levels of effective governance over the organisation. This will include a comprehensive programme of induction and development for new Committee members. As part of our commitment to work collaboratively with our neighbouring RSL’s, we have agreed to share costs and expertise by delivering training together during 2019/20.
We will throughout the lifespan of the plan continue to progress an overhaul of our governance, finance, corporate and service policy suite to ensure all policies and related procedures are up to date, reflect law and regulatory requirements and good practice and are embedded in our operations. We created in Year 1 of the plan new Standing Orders that expand on our Rules and make clear how we will govern and make decisions including the role of any Sub Committees and working parties that we form.
Having begun the renewal of our governance arrangements, we will ensure we hold successful Annual General Meeting’s (AGM) to apprise our shareholders of how we are performing, the work we have done and what we plan for the future. From this, we want to ensure strong Management Committee membership. We currently have 13 of a possible 15 management committee places filled with active members.
We will complete required actions on recent internal audits and agree and deliver our annual Internal Audit Programme to test the resilience of key areas of our business against policy and best practice.
We will embed the active consideration of risk management in our strategic and operational activity. In developing year 3 of this plan we have reviewed key financial assumptions in chapter 8 to test our ability to respond if risks materialise.
6.3.2 Objective 2 - Deliver Excellent Services and Performance
We will embed our new C.H.A.T. values created by our staff team and agreed by our Management Committee as follows:
• Customer Driven • Honest • Accountable • Transparent
We completed and will embed the Listen, Hear, Act customer excellence initiative to drive up satisfaction levels and improve staff morale. This will empower our staff to streamline all that they do, driving out wasteful processes and encouraging positive behaviours. Our firm focus will always be on finding and delivering the right solutions, at the right time and in the right manner to suit the needs of individual customers.
Page | 55
Linthouse Housing Association Limited - Business Plan 2017-2018 to 2019-2020
To supplement our continuous satisfaction surveys, we will produce a Tenant Engagement Strategy in 2019/20 to set out how we will ensure that we are listening to our customers and acting on what they say and to get the customer voice at the heart of all we do.
We recognise that good intelligence will help us better understand customer needs now and tomorrow and shape our business accordingly. We will review and develop our IT platform in Year 3 of the plan to get better use of automation, intelligence and reporting. This will also help to remove waste to let us dedicate more time and resources to things that matter to customers.
We want to break down the barriers that interfere with good service and communication including the physical barriers in our offices. In 2017/18 we made minor revisions to our office layout to improve working arrangements, communication and to remove any silos that have had a negative effect on our customer experience. We recognise that the office needs to be remodelled. During 2019/20 further alternations will be required to the office to create space for additional staff we will employ as part of the office based staff structure.
6.3.3 Objective 3 - Provide Quality Homes in an Attractive Environment
Effective management of our physical assets will always be a top strategic objective and part of our core business. In 2019/20, we will:
Develop our first Asset Management Strategy (AMS) to consider how to best manage, maintain and invest in our physical assets for maximum return over the short, medium and long term. The strategy will allow us to explore in more detail our strategic response to our, pre-1919 tenements in mixed ownership and our high rise blocks to ensure ongoing demand for this stock.
During 2019/20 we will begin a compliance audit to provide assurance that we are delivering on our legal and regulatory health and safety responsibilities in relation to our physical assets and aim to complete this audit by October 2019.
We will deliver year 3 of our 5-year investment plan so that we can articulate to tenants what they can expect over this term. This will also allow us to seek economies of scale by procuring bigger work packages. We will as a priority formalise and deliver our 2019-20 investment programme so that tenants continue to see a physical difference in the stock and a demonstration of our commitment to improve their homes.
To demonstrate our commitment to the area, and our capability to play our part in addressing Glasgow’s need for new housing supply, Committee have agreed to progress detailed negotiations on the Drumoyne development opportunity and complete the Eldergrove remodel during Year 3 of the plan.
We have secured funding from GCC to develop a Comprehensive Master Plan for area which will include our AMS to scope out opportunities for investment in our existing stock, complimentary new build developments and improvements to the environment around our estates.
Page | 56
Linthouse Housing Association Limited - Business Plan 2017-2018 to 2019-2020
6.3.4 Objective 4 - Improve our Financial Strength and Deliver Value for Money
Like all good businesses, we need to improve our financial strength to maintain the solid financial base of the organisation now and in the future and to demonstrate that we provide value for money to our customers and other key stakeholders.
We remain conscious that although we have a funded Business Plan, we know we want to do more to accelerate investment, particularly to improve the energy efficiency of our houses and help address fuel poverty. We also know that we enjoy a position of having comparatively low rents and whilst we are committed to keeping rent affordable, we must generate enough income to deliver the much needed major investment and demonstrate fairness in rent levels across different property types.
Section 8 sets out our financial position over the short, medium and long term. We have run a host of sensitivities to stress test our financial plans against the key risks that could affect us. In year 3 of this plan we will develop options and financial sensitivity analysis of a range of options to realise our plans to replace windows in the pre-1919 tenements and carry out urgent sandstone repairs. The results of our financial analysis indicate a business capable of withstanding challenges. That said, we know that we want to do more in terms of faster investment, so must deliver on our fourth objective of demonstrating strong financial management and value for money.
To formalise our investment plans, we developed a Funding Strategy during year 2 of the plan detailing how we will finance our plans in terms of utilising the loan facilities with Unity Bank secured in March 2018 and outline the additional borrowing required to improve the quality of the existing stock and to realise our ambitions for Eldergrove conversion, and the Drumoyne Primary School. Our Funding Strategy part 1 will be complete when we secure the circa £3.5 million loan for Drumoyne Primary School.
In Year 3 of the plan we will complete and independent review of the rent structures and policy. We aim to complete this by end second quarter of 2019. This rent review will inform the new revised 30 year financial projection we will prepare in Dec 2019. These financial projections will be refined further when the 2019/2020 stock conditions information is available. We aim is to start work on part 2 of the Funding Strategy when this information is available to inform the next tranche of borrowing required to fund the next phase of accelerated investment in the housing stock.
In year 1 of this plan we started to improve the performance that we currently achieve against the performance indicators of the Annual Return of the Charter (ARC). Our aim is to be a high performing RSL, recognised for excellence. We aim to achieve our Key Performance Targets in 2019/20 set out in Appendix 6. Our new staff structure will help to drive forward improvements in key performance indicators, continuous improvement, and excellent customer service.
We will maintain the solid financial base of the organisation now and in the future. However, we recognise that we will need to invest significant amounts to improve the quality of our homes. We will update our budgets and long term financial assumptions again in December 2019 to ensure they reflect our long term stock investment needs. We will ensure that we manage our service in line with or better than budget assumptions.
Page | 57
Linthouse Housing Association Limited - Business Plan 2017-2018 to 2019-2020
Value for Money statement – Committee aim to develop a meaningful value for money strategy during 2019/20 to link into the rent review and update of 30-year projections. The CEO has been charged with developing Value for Money strategy by December 2019.
6.3.5 Objective 5 - Develop our Leadership and Staff
In year 3 of the plan we will conduct annual staff performance evaluations to ensure all of our team understand the vision, values, culture, strategic direction and delivery commitments of the organisation and their part in achieving same.
From this, we will create learning and development plans to ensure staff members are trained and developed to deliver on expectations detailed in this plan and to reach their full potential in their current roles. We recognise the vital importance of strong and visionary leadership from our senior team to develop our staff to be the best they can be. We will develop tailored senior management development training plans to ensure senior managers are equipped for challenge ahead and most importantly are exemplars of good practice for Listen Hear Act cultural change required at LHA.
In year 2 and 3 of the plan we will further review and refine our staff structure to ensure we have the resources, supplemented where appropriate by temporary external support to deliver our Business Plan and excellence ambitions. Our goal will be to ensure good quality leadership, keep our management costs comparative and competitive, and to create an empowered structure where everyone is clear on their role and goals and is supported and trusted to produce great results.
We want to continue to play our part in creating opportunities for local people including training and jobs within our organisation. We will continue to support the creation of modern apprenticeships to develop local talent in the housing sector.
6.3.6 Objective 6 - Be more than just a Great Landlord
We want to be known for more than just good quality housing and great service. Knowing the challenges faced by tenants in our communities, we want to play our part directly and with others where it makes sense to become a community anchor. We want LHA to be a conduit to work with our residents and local partners to create community solutions that improve the lives and fortunes of our local people. In Year 3 of this Plan, we want to develop a More Than Housing Strategy that will start to articulate what this will mean in practice.
Whilst we plan our future strategy, in the current year we want to continue to expand our efforts beyond our core landlord function. In this computer age, we will continue to play our part in supporting digital engagement in the community. In 2019/20, we will support digital engagement in the community informed by our customer surveys and other data to help improve access and opportunity for tenants to do business with us and others online, as well as access jobs, training and to help build social networks via the internet.
We know that more and more tenants will struggle with paying bills including rent to us. Our core team will support tenants to ensure that they know their obligations to us and are best supported to maintain them. This includes helping customers get any benefit
Page | 58
Linthouse Housing Association Limited - Business Plan 2017-2018 to 2019-2020 assistance that they may be entitled to. In addition, we will deliver financial inclusion support to help improve the financial health of customers.
Page | 59
Linthouse Housing Association Limited - Business Plan 2017-2018 to 2019-2020
7. DELIVERY PLAN 2019-2020
7.1 Summary Delivery Plan
7.1.1 Our 6 Strategic Objectives above all need to be translated into practical tasks with timescales and targets with named individuals taking ownership of delivery. For sake of competencies the Summary Delivery Plans along with lead officers for each task and timescale for 3 years of this plan are provided:
• Summary Delivery Plan 2019/20 – Appendix 7a • Summary Delivery Plan 2018/19 – Appendix 7b • Summary Delivery Plan 2017/18 – Appendix 8
7.1.2 An operational Delivery Plan has been developed by each department director to compliment the business plan and staff performance and development appraisals used to ensure all staff are clear about responsibilities and the part each officer will play in taking the organisation forward once the Plan is approved by the Committee.
7.2 Monitoring Progress
7.2.1 Progress against the Summary Delivery Plan will be reported to Committee on a quarterly basis.
7.2.2 The annual business planning process will commence again in December 2019 to create the annual budget, review of the 3 year strategic objectives and the next annual plan for 2020/21 to be fully considered and approved by June 2020.
Page | 60
Linthouse Housing Association Limited - Business Plan 2017-2018 to 2019-2020
8. FINANCIAL ANALYSIS
8.1 Resources
8.1.1 The achievement of our strategic objectives requires the ability to understand and control costs. This is important to maintain an affordable rent structure, invest in the development of the business and have the strength and flexibility to adapt to external challenge. Achieving this is vital if we are to achieve our purpose and make a difference in the community.
8.1.2 Our long-term financial forecasts prepared by our external finance agents include comprehensive scenario planning and stress testing, assessing the impact of different assumptions and identifying alternative strategies.
8.1.3 A key priority is to understand and adapt to the challenge of welfare reform and the uncertainty of Brexit especially a no deal Brexit could cause significant economic damage. The potential for an increase in bad debt continues to present a significant and serious financial challenge. The staff restructure in 2018/19 reviewed how customer service and staff resources will be configured in 2019 to best achieve income maximisation. This included the recruitment of an in house Welfare Rights Team in year 3 of the plan.
8.1.4 We will ensure that our financial forecasts have the headroom to meet external challenges, achieve loan covenant compliance and deliver the services to support tenants and sustain tenancies.
8.1.5 A key priority is to maintain affordable rents. Accordingly, we will consider the need to preserve value for money while at the same time providing a first class service to tenants. The business will continue to focus on cost control, operational efficiency and required level of investment in our assets. We will keep under review how we can do what tenants need in the most cost-effect manner to demonstrate value for money and prudent use of resources. In order to measure our effectiveness in delivering Value for Money (VFM) we will in 2019 test LHA approach against House Mark Scotland/Wheatley Group Guidance.
8.1.6 The long-term projections base case assumes, at this stage, a real rent rise of 1% above inflation up until year 2026/27. Sensitivity analysis considers the impact of limiting real rent rises. The potential for limiting increases exists to a degree but will depend on the ability of the Association to continue to control its costs, as well as changes in inflation and interest rates. However, the scale of the investment programme and divergence in rent levels between the Pre-1919 tenements and other properties and other tenements would suggest that real rent increases above inflation will be required especially within the first 9 years. The rent restructure exercise currently under consideration, will take into account our investment in the housing stock and aim to narrow the gap in rent levels between property types.
8.2 The Long Term View
8.2.1 Whilst we cannot expect to be precise over such a period of time, it is sensible to project forward based on realistic assumptions of likely trends and expectations. The bottom line cash position of the Association provides an indication of the level of comfort available to manage risk and changes in circumstances. Page | 61
Linthouse Housing Association Limited - Business Plan 2017-2018 to 2019-2020
8.2.2 As a property business with 1,229 houses to maintain over the long term LHA needs a robust business plan underpinned by a 30-year financial model to provide reassurance to the Management Committee, SHR and lenders that we can meet our long-term maintenance and debt repayment obligations. At Appendix 8 is a summary of the output from the Association's 30 year financial forecasts.
8.2.3 A key element to the foundations of such a model is a set of realistic cost assumptions. The 2019/20 budget provides a starting point for this based on current experience of actual costs across the organisation.
8.2.4 A second key element is the assumptions on how costs are likely to increase over the lifetime of the plan. Inflation obviously needs to be taken into account, but also differential real cost increases need to be considered. The following table sets out the key assumptions used in this business plan followed by some commentary on the rationale for their use.
Table 19 - Business Plan Assumptions Year 1 2 3 4 5 6-9 10-30 Assumption 2019/20 2020/21 2021/22 2022/23 2023/24 2024/28 2028/49 Inflation 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% Rent Policy ** Infl+1.5% Infl+1.5% Infl+1.5% Infl+1% Infl+1% Infl+1% Infl+1% Real Cost Increase Repairs & Salary 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% Real Major Repairs Inflation 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% Voids 2.50% 2.50% 2.40% 2.30% 2.20% 2.1-2% 2.10% Bad Debts 2.50% 2.50% 2.00% 2.00% 2.00% 2.00% 2.00% LIBOR/BBR 1.00% 2.00% 2.50% 3.00% 4.00% 4.00% 4.00% ** Rent Policy – Inflation +1.5% for Years 2 to 4, Inflation +1% to year 8
8.2.5 Clearly, any predictions about the future have to be treated with care. However, our belief is the above assumptions are prudent and realistic. The figure for inflation will clearly have an impact on the plan but from the analysis undertaken, any significant increase has a positive impact on the business plan.
8.2.6 The assumption on voids has been assumed at a higher level than our trend of around 1% due to current experience. With continued investment in the properties and progress to reviewing rent levels, we anticipate that voids will remain low.
8.2.7 Historic performance on bad debt has been in line with levels experienced by other Govan RSL’s. Whilst it is very likely that bad debt in particular will increase, the assumption on bad debt is considered adequate.
8.2.8 The most significant of the above assumptions have been subject to stress testing to see where the greatest exposure to risk exists. The results of this can be seen in Appendix 10 on Sensitivity Analysis.
8.2.9 Finally, given the nature of the assets of the business (physical stock), a long-term investment plan needs to be factored in to take account of the cyclical nature of maintenance costs. The stock was surveyed in 2017 and the plans arising from that survey has been reflected in this Business Plan. However, further checks need to be carried out on the current investment Page | 62
Linthouse Housing Association Limited - Business Plan 2017-2018 to 2019-2020
assumptions to ensure they remain accurate. We plan to update the stock condition survey in 2019/20.
8.2.10 In brief, the 30 year accounts summarised in Appendix 9 show a healthy business that needs to borrow to deliver the required investment in the housing stock. The projected comprehensive income for the year projects an average surplus figure of just over £525k per annum in the first 5 years of the plan, then moves to an average surplus of over £630k per annum in the following 5 years. They then move to an average surplus of £523k per annum for the subsequent 10 years and finally, an average surplus £872k per annum average for the last 10 years of the plan. It should be noted the projected income is supported by approximately £670k of amortised grant each year.
8.2.11 The figures are based upon a set of prudent assumptions. They indicate that the organisation has a degree of financial resilience and whilst this might well be tested over the coming 30 years, we start from a financially sound base.
8.2.12 Funding Strategy
During the financial year 2017/18 we refinanced. We paid off the 4 loans we had with the Royal Bank of Scotland (£863k) and secured funding of £5.5 million from the Unity Trust Bank on favourable terms. This loan offers us a great degree of flexibility while we refinanced to allow us to accelerate our planned maintenance program and to cover the costs of the Eldergrove Conversion we may use the loan for any business purpose. The loan is now fully drawn and can be used for any business purpose. Details of our compliance with Unity Bank loans covenants is provided in appendix 11.
Since we refinanced, we have secured the opportunity to build 49 new homes on the Drumoyne Primary School (DPS) site. The costs of this are £8.5 million and we anticipate grant funding of £5.5 million. We are currently assessing option from lenders to secure £3.5m of private finance for DPS.
Our sheltered housing service was restructured during 2017/18 which meant we had to look at alternative uses for our specialist Very Sheltered Unit at Eldergrove and after a review the best option is to remodel the unit into 11 homes. The costs for this are estimated at £1.2 million with grant funding of £673k. The site completion for Eldergrove is October 2019.
Both the new build development at Drumoyne and the remodelling of Eldergrove are included in the financial projections.
We have now received indicative costs for stonework and window replacement from Thomson Cost Consultants Ltd for our pre 1919 tenement properties. We are currently analysing the proposed works further but it will only be when the phase 1 project on 2 closes has been carried out in 2019/20 and when have tendered costs and a program of how the works will be carried out that we will we be in a position to more accurately assess the true costs. More detailed reports on the windows and stonework will be presented to Management Committee starting during 2019/20.
Linthouse average rents are low in comparison to our neighbouring RSL’s. From analysis of our rents we know it is the tenement rents which are too low. This issue will be addressed in the rent restructure review currently underway 2019/20. As part of our aim to address Page | 63
Linthouse Housing Association Limited - Business Plan 2017-2018 to 2019-2020
the need to borrow to improve the quality of our homes we intend to carry out a rent restructure during 2019/20 to be implemented in 2020/21 to ensure we offer a fair and consistent rent system which allows LHA to cover its costs.
While a rent restructure may see rents increase for some it is unlikely to be across the board and it is probable that some rents will be frozen which should assist in mitigating some of the impact of universal credit by realigning our rents in line with other local RSL’s across all of our stock. Additionally, as the window replacement program for the pre 1919 tenement properties is the main priority in the short to medium term of the plan. The major investment planned for tenements should assist us when we carry out the rent restructure as it is likely that the tenement rents will rise as the quality of tenant’s homes improve.
Universal credit was implemented within the majority of our stock in September 2018 for all new UC claimants and those with change of circumstances. We received just over £2 million in both housing benefit and universal credit in 2018/19 so this is likely to have a negative impact on our rent collection. Other RSL’s who have experienced full roll out of Universal Credit have seen rent arrears and rent collection costs increase. LHA will develop an income maximisation strategy in 2019/20.
In 2017/18 we stated in the Business Plan that we would refinance to cover planned maintenance over the next 3 years, which we did, but since that time we have secured the opportunity to build 49 new units which will necessitate further borrowings. We have also started to build our intelligence re possible window and stonework costs and it is likely that we will need to borrow to cover the stonework and windows program for the tenements but this will be dependent on the costs, participation by owners, and the programme of works.
We now have experience of refinancing and are confident going forward that we are in strong financial position to obtain the finance we require to fund our ambitious development and component replacement plans. Unity Trust Bank has security over 150 units of our stock this leaves 898 units (excluding the 122 Multis and 45 Shared Ownership and also 11 units at eldergrove under review at the time of the JLL valuation and now undergoing remodelling, or the 3 shared ownership units LHA bought back in 2018/19) . These 898 unsecured units have with an estimated MVST of £35.7 million based on the values in the Jones Lang LaSalle report prepared in May 2017 which have not been adjusted for the rent increase in 2018/19 or 2019/20.
8.3 Medium Term View
8.3.1 Table 20 opposite sets out the position over the next 5 years in relation to the statement of comprehensive income. This shows that even with the prudent assumptions on voids, bad debts and interest rates, the average net surplus over the 5 years is planned to be £525k.
Page | 64
Linthouse Housing Association Limited - Business Plan 2017-2018 to 2019-2020
Table 20 – Statement of Comprehensive Income Five Year Forward View 2020/24
Period: 01 April 2019 - 31 March 2024 2020 2021 2022 2023 2024 £000's £000's £000's £000's £000's TURNOVER
Gross Rental Income Rent Receivable 4,556.80 4,755.70 4,927.70 5,348.10 5,529.50 Service Charge Income 103 105.1 107.2 109.3 111.5 Charges for Support Services Gross Rental Income 4,659.80 4,860.80 5,034.80 5,457.40 5,641.00
Management Charge Income Less Voids -115.6 -120.5 -118.6 -122.7 -121.7 Net Rental Income 4,544.20 4,740.20 4,916.30 5,334.70 5,519.30
HC Grants for Major Repairs Other Income 272.9 277.4 429.6 437.2 445 Total Turnover from Social Housing Lettings 4,817.10 5,017.60 5,345.90 5,771.90 5,964.30 Grant Amortisation Accrual Method Total 616.2 622.4 622.4 677.8 677.8 Total Turnover 5,433.30 5,640.00 5,968.30 6,449.80 6,642.10
OPERATING EXPENDITURE Operating Costs Social Housing Management Costs Total -2,092.70 -2,017.90 -2,076.40 -2,110.10 -2,155.30 Service Costs -226.4 -230.9 -235.5 -240.3 -245.1 Care and Support Costs Routine Maintenance -683.6 -678.2 -674.8 -681.3 -679.6 Planned Maintenance -605.7 -524.7 -538 -567.5 -582 Major Repairs -129.6 -317.7 -24.9 -7.3 -142.1 Bad Debts -93.8 -97.9 -101.4 -109.9 -113.7 Lease Charges Depreciation of Housing Properties -989.9 -1,099.90 -1,209.30 -1,388.80 -1,487.10 Other Costs -1.1 -2.6 -3.7 -4.8 -6 Operating Costs Social Housing -4,822.70 -4,969.70 -4,864.10 -5,110.10 -5,410.80 Operating Expenditure Total 4,822.70 4,969.70 4,864.10 5,110.10 5,410.80 Operating Surplus/(deficit) 610.5 670.3 1,104.20 1,339.70 1,231.30 Interest Receivable 31.3 30.4 59.1 57.6 58.1 Interest and financing costs -147.8 -317 -557.5 -754.2 -790.9 Surplus before tax 494 383.7 605.9 643.1 498.5
8.3.2 The Statement of Financial Position as set out in Table 21 opposite, shows an increase in property assets despite depreciation charges increasing due to component replacements. Grant increases through the first 4 years due to amortisation.
• Conversion of Eldergove Sheltered Housing to 11 properties (Grant Support of £673k) • 49 new build properties at Drumoyne Primary site (Grant Support of £5.5m) • The purchase of 15 shared ownership properties at Barnwell Terrace. (Average of 3 per year)
8.3.3 Cash remains relatively strong throughout the period with the lowest holding in 2023/24 at £1.8m as the Association accelerates their planned maintenance programme.
Page | 65
Linthouse Housing Association Limited - Business Plan 2017-2018 to 2019-2020
Table 21 – Statement of Financial Position Five Year Forward View 2020-2024 Period: 01 April 2019 - 31 March 2024 2020 2021 2022 2023 2024 £ 000's £ 000's £ 000's £ 000's £ 000's Fixed Assets Intangible assets and goodwill Land & Buildings Total 58,374.70 66,013.60 72,628.50 76,159.90 79,984.70 Depreciation Land & Buildings Total -22,080.70 -23,180.60 -24,389.90 -25,778.70 -27,265.80 Housing Properties NBV 36,294.00 42,833.00 48,238.60 50,381.20 52,718.90 Other Fixed Assets Tangible 463.9 448.6 395.4 379 354.7 Tangible fixed assets 36,757.90 43,281.60 48,634.00 50,760.20 53,073.60 Investments FA 6.2 6.2 6.2 6.2 6.2 Fixed Assets Total 36,764.10 43,287.80 48,640.30 50,766.40 53,079.80
Current Assets Trade and other debtors 495.8 495.8 495.8 495.8 495.8 Cash and cash equivalents 3,657.40 2,784.10 2,474.90 4,532.60 1,808.60 Current Assets Total 4,153.20 3,280.00 2,970.70 5,028.40 2,304.50
Less - Creditors - amounts due within 1 year -1,332.40 -1,332.40 -1,332.40 -1,332.40 -1,332.40 Net current assets/liabilities 2,820.80 1,947.60 1,638.30 3,696.00 972.1 Assets less current liabilities Total 39,584.90 45,235.40 50,278.60 54,462.40 54,051.90 Creditors - amounts due after more than 1 year Outstanding Loan Balance -5,283.40 -8,132.90 -13,391.80 -17,649.20 -17,411.80 Loan Fees 28.5 79.6 118.5 112.3 Deferred Income -21,965.20 -24,622.80 -24,065.50 -23,387.70 -22,709.90 Long Term Creditors Balance -425 -213.2 0 0 0 Creditors - amounts due after more than 1 year -27,673.60 -32,940.40 -37,377.70 -40,918.40 -40,009.40 Net assets Total 11,911.30 12,295.00 12,900.90 13,544.00 14,042.50
Reserves Income and Expenditure Reserve 11,911.20 12,294.80 12,900.70 13,543.80 14,042.40 Stockholders Equity Total 0.2 0.2 0.2 0.2 0.2 Restricted [and/or Endowment] Reserve 0.2 0.2 0.2 0.2 0.2 Total reserves 11,911.30 12,295.00 12,900.90 13,544.00 14,042.50
8.3.4 Table 22 below provides projected cash flow figures for the five years to 31 March 2024.
Table 22 Projected cash flow figures for the five years to 31 March 2024 Period: 01 April 2019 - 31 March 2024 2020 2021 2022 2023 2024 £000's £000's £000's £000's £000's
Total Receipts 4,723.30 4,919.80 5,244.50 5,662.00 5,850.60 Total Payments -2,559.40 -2,581.00 -2,318.10 -2,147.30 -2,314.20 Cash Paid To Employees -1,313.00 -1,337.40 -1,380.80 -1,416.80 -1,452.20 Cash flow from Operating Activities 850.9 1,001.30 1,545.60 2,097.90 2,084.20 Surplus for the year 850.9 1,001.30 1,545.60 2,097.90 2,084.20 Net cash generated from operating activities 850.9 1,001.30 1,545.60 2,097.90 2,084.20 Cash flow from investing activities Purchase of tangible fixed assets -6,018.80 -7,688.80 -6,629.50 -3,562.10 -3,844.20 Grants received 2,815.10 3,280.00 65.1 Interest Received (cash) 31.3 30.4 59.1 57.6 58.1 Total Cash flow from investing activities -3,172.40 -4,378.40 -6,505.30 -3,504.60 -3,786.10 Cash flow from financing activities Interest paid -147.8 -345.5 -608.6 -793 -784.8 New secured loans 3,000.00 5,500.00 4,500.00 Repayment of borrowings -112.8 -150.6 -241.1 -242.6 -237.4 Total Cash flow from financing activities -260.6 2,503.90 4,650.30 3,464.40 -1,022.10 Cash & cash equivalents at the beginning of year 6,239.40 3,657.40 2,784.10 2,474.90 4,532.60 Net Change in Cash & cash equivalents -2,582.10 -873.2 -309.3 2,057.70 -2,723.90 Cash & cash equivalents at the end of year 3,657.40 2,784.10 2,474.90 4,532.60 1,808.60
Page | 66
Linthouse Housing Association Limited - Business Plan 2017-2018 to 2019-2020
8.3.5 Table 22 shows that the balance of cash decreases as the Association accelerates their component replacement programme and the costs of the new build at Drumoyne and reconfiguring the Eldergrove Very Sheltered Unit are incurred. Figure 1 below highlights the projected cash at bank figure per the 30-year business plan which is supported by the drawdown of private finance of £17m in the first 6 years which is assumed to be a combination of traditional (new loan from Unity Bank) and bond finance. The actual level of borrowing will be determined by the outcome of the updated stock condition survey, the outcome of the pilot projects (windows and sandstone) and the grant support given to owners to support them to participate in the refurbishment programme.
Cash at Bank 14,000.00
12,000.00
10,000.00
8,000.00
6,000.00
4,000.00
2,000.00
0.00 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
8.3.6 As at 31 March 2018, the average debt per unit of RSLs in Scotland was £13,500. LHA debt is currently well below the Scottish average. By 2025 the projections show that LHA will have debt per unit of £16,700 (table 21 below)
Table 23 LHA projected date per unit Year end 31 March 2020 2021 2022 2023 2024 2025 Debt Per Unit £4,331 £6,666 £10,977 £13,908 £13,721 £16,682
It is likely that the average debt across RSLs in Scotland will be higher in 6 years’ time than the projected £16,700 of LHA if other Associations continue to build and invest. Our plans are detailed below in table 24, with plans to invest over £18m (excluding inflation) in our homes over the next 6 years as detailed below.
Table 24 Investment Plans Year end March 2020 2021 2022 2023 2024 2025 Total Lifts £0 £0 £0 £0 £54,000 £0 £54,000 Central Heating £165,600 £297,000 £88,800 £67,700 £155,100 £17,500 £791,700 Bathrooms £27,300 £146,000 £98,400 £58,100 £159,900 £22,500 £512,200 Kitchens £55,700 £82,700 £344,300 £231,800 £149,300 £310,600 £1,174,400 Radiators £24,000 £26,000 £18,000 £11,000 £51,900 £26,000 £156,900 Windows £1,743,200 £2,193,900 £1,652,400 £1,620,600 £1,670,500 £0 £8,880,600 Stonework £261,700 £1,224,700 £1,224,700 £1,017,900 £945,000 £1,183,100 £5,857,100 Internal Doors £155,400 £192,000 £51,700 £76,900 £206,300 £67,600 £749,900 Total £2,434,920 £4,164,321 £3,480,322 £3,086,023 £3,394,024 £1,629,325 £18,176,800
Page | 67
Linthouse Housing Association Limited - Business Plan 2017-2018 to 2019-2020
8.3.6 There are three covenants over the Association's borrowings with Unity Trust Bank; Interest Cover, Gearing and Loan to Value. The interest cover covenant allows us to add back depreciation to the operating surplus which shall be no less than 110% of interest payable less interest receivable plus capital repayment for each. The gearing covenant measures the level of borrowings to the book cost of the properties and must not be more than 0.60:1. The third covenant, Loan to Value measures the value of the properties held as security by Unity to the borrowings and must be equal to or more than 120%. Details of LHA compliance with UB loan covenants are provided in appendix 11.
8.3.7 The calculations indicate that the Association would not breach its gearing covenant position in the short to medium term. If a series of 20-year bond finance is secured there would potentially be an issue towards the end of the Unity Bank loan with the debt service covenant. This issue has been raised with the Bank and they appear to be relaxed about this given the potential breach is 20 years away, by which time their loan would have only £2.5m outstanding from a total lend of £9m. LHA could refinance Unity at that point if this was going to be an issue for the Bank.
Table 25 - Loan Covenants Key Loan Covenant 2020 2021 2022 2023 2024 Unity Interest Cover 698% 405% 313% 291% 280% Minimum 110% 110% 110% 110% 110% Unity Gearing 9% 12% 18% 23% 22% Maximum 60% 60% 60% 60% 60% Loan to Value MVST* 120% 120% 120% 120% 120%
*The last valuation on the 150 units secured to Unity was completed in February 2018 valuations must be carried out on a tri-annual basis the next being due February 2021. In terms UB loan requirement this will be completed again in x (tested every 3-5 years for UB by JLL).
8.3.8 The Association is about to embark on a major improvement programme which will need to be supported by a new source of private finance. It must not lose sight of the need to ensure that it continues to let houses quickly, collect rent and deliver a best value service for its tenants. Strength in governance must be the key words going forward. Signing up to loan covenants which may prove to be challenging in the future would not be in LHA’s interest.
Page | 68
Linthouse Housing Association Limited - Business Plan 2017-2018 to 2019-2020
Appendix 1: Chart 2 LHA Staff Structure at 26.7.19
LHA MANAGEMENT COMMITTEE
CHIEF EXECUTIVE OFFICER IRENE CAMPBELL
DEPUTE CEO GAIL SHERRIFF
HEAD OF BUSINESS HEAD OF CUSTOMER SUPPORT TECHNICAL SERVICES ASSET MANAGER SERVICES YVONNE ROONEY MANAGER DEREK RAINEY ANDREA WALKER CRAIG DOUGLAS
BUSINESS CUSTOMER SUPPORT & SERVICES WELFARE RIGHTS CORPORATE FINANCE OFFICER TECHNICAL DATA OFFICER OFFICERS SNR CUSTOMER OFFICER SNR CUSTOMER SERVICES OFFICER KIM FUENTES SERVICES OFFICER DEVELOPMENT SERVICE ASST FRANK BOYLE ELAINE SERVICE ASST KEVIN CAMPBELL ALISON GREIG IAIN WYLIE ASSISTANT McDERMOTT (Special Projects) (Central Service) ANNA LISA LINDSAY DEBORAH GOLDTHORP CARYN STEWART CHRIS O'BRIEN BROWN ADMIN POLICY ASSISTANT FINANCE ASSISTANT LAURIE KEFALAS ASSISTANT FINANCE OFFICER ASSISTANT TECHNICAL KIRSTY HENDRY SERVICES CATHERINE HALL DANIELLE (Temp) WELFARE RIGHTS JULIE RUSSELL ASSISTANT ASSET (Temp) MCINNES BEN BLACK SNR CUSTOMER ASSISTANT (Temp) DARREN RITCHIE MANAGEMENT ASSISTANT SERVICE ASSTS (Vacant) CUSTOMER MODERN CLAIRE MORGAN STEVEN MURPHY SERVICES APPRENTICE JOE FITZPATRICK ASSISTANTS YR2 ESTATE ASSET MGT MODERN MODERN DEMI HOUSTON OFFICE CLEANER CARETAKERS CLERICAL HOLLIE APPRENTICE, YR2 ASSISTANT APPRENTICE, YR1 ASSET MGT CLERICAL MARY DUNN McGUINESS MARGARET JAMES DOCHERTY ASSISTANT McCAFFERTY CARRIE DUFFY (Temp) STEPHEN MICHAEL RICE BULMAN JOYCE GILMOUR TIEGAN SHEARER
Page | 69
APPENDIX 2 Risk Assessment Updated from May 2019 Audit & Risk Meeting
Risk Name Risk Risk Control Measure Risk Action Plan/ Current Status
ID/ Level Level
Lead
Off
Impact
Impact
likelihood
likelihood
Total Risk Score Risk Total Total Risk Score Risk Total 1 Customer Failure to 4 4 16 HIGH A) Culture change underway – in-house 2 3 6 MOD Customer excellence and culture change Services establish a – work on embedding it 19/20 programme and new values (LHA = CEO Culture culture of B) Residents Panel well established and Listen, Hear, Act)- Full Circle Consulting – customer meets six-weekly – reviewed role Complete service results during 19/20 – further development Review of job profiles with firm focus on in perceptions required customer service and behaviours – of service not C) (Langland’s RA) – inactive for at least ongoing part of staff restructure improving 12 months review by HCS Continuous Monitoring tenant satisfaction amongst D) Tenant Engagement Strategy to be Staff Consultative Forum (LEAF) tenants and no drafted by HBS continues to meet to discuss changes at of E) Full suite of staff meetings, all LHA improvement meeting 6 weekly, from 1 to1 with line Risk rating movement reflects downward of reputation manager, team meetings, SMT trend reported to last A and R Sub meetings, and cross department team Committee balanced by emerging need to Failure to meetings effective from Jan 2019 develop clear Tenant Engagement secure ensure F) Longer term – follow up LHA training Strategy ‘buy in’ to LHA with clear customer service standards cultural applies across LHA – CEO/SM to change champion 2019/20 programme G) Develop and embed staff dilute impact performance culture to promote focus of change on primacy of customer service and experienced achieving customer satisfaction by internal and starting March 2019 external customers 2 SHQS/ Failure to meet 4 4 16 HIGH A) New SCS commissioned 2019/20 3 3 9 SIG Asset Management Strategy to be EESSH the deadline B) BP and 30-year cash flows updated developed DAoM/ compliance for housing and regularly reviewed to support Moving into Year 3-3 of 3-year investment DCEO stock to delivery of accelerated investment plan in 19/20
comply with C) New DCEO started 3 September Funding Strategy to 2020 implemented-
SHQS/ 2018 and at May 2019 AMT- all in use of Unity Bank loan to be finalised and EESSH results post with Temporary Data Officer reported to Committee. in regulatory assisting cleansing SHQS and Considerable attention will continue to be engagement EESSH data given to ARC return to improve quality of Page | 70
D) Procurement expertise now available data reported- Temp Data Officer will lead in house and consultant D Gold only on ARC indicators for Asset. In-house used when volume of work expertise built up from previous use of C necessitates additional input. Dugan consultant on all other key E) SCS software to continue to be used indicators in ARC. to target/prioritize SHQS and EESSH failures- Temp data officer speeding However continuing emphasis from staff up approach to AM planning and on investment delivery to improve stock focus on ARC return for May 2019. quality performance will help to address F) Window Replacement in Pre-1919 risk. tenements will help address compliance with both standards Risk rating movement shown on Phase 1 which will be 2 closes downward trend at Oct 18, downward followed by a further 4 closes, to movement in May 2019, to reflect ongoing start May 19/20. investment of resources on measures to improve knowledge and reporting of SHQS/ EESSH compliance performance 3 Contracts Failure to 2 3 6 MOD A) New and restructured AMT building 2 3 6 MOD Procurement Strategy to be fully and contract establish on progress all in post implanted across organisation – focus to DoAM management contracts and B) Procurement expertise in-house and date has been on Maintenance contract engage D Gold as required to deal Development and larger spend items management with peaks in procurement work process C) Procurement strategy approved Sep LHA Asset Management Team staffing results in 17 MC due for review Sept 19 structure to be kept under review to failure to D) Gas contract re-procured and ensure properly resourced for properly commenced Dec 17 professional efficient and effective manage E) External painter work and gutter delivery of projects. contract cleaning re-procured Spring 2018 delivery and F) Reactive repairs and voids with Asset Management Team in 2019/20 will associated Mears start Dec 2018 consolidate approach to improving quality costs G) MC will continue to receive progress of stock and compliance with good report and timetable for re- practices to secure continuous procurement of remaining contracts improvement and progress in re- – update to be provided by TSM at procurement activity and resulting in the Sep 19 MC meeting downward rating of this risk in June 2019. H) DCEO/FMD reviewing financial reporting requirements and review risks from current policies, practices and frequency of reporting to SMT and committee to ensure timely oversight of contract performance against spend and learn lessons from any RSL that have gone into high engagement for this type of failure
Page | 71
Contracts Failure to 5 4 20 HIGH I) Prompt attention is being given to 3 3 9 SIG Have managed to sustain progress with and contract achieve staff restructure and other major investment work programmed for management desired operational challenges in achieving 2019/20 and plans for 20/21 in place. investment targets. These are considerable AMT will update committee on approach
targets given the extent, value and wide to 2019/20 contracts via regular reports.
range of LHA’s proposed stock investment in next few years Resource requirements to progress J) Need to address historic backlog of Windows and sandstone repairs component replacement work and Programme – Temp Data Officer assisting failure to plan or carry out investment DCEO with analysis and shaping phase 2. requirements for window replacement works within required Risk rating movement reflects the timescales, including matching of professional Asset Management Team these requirements to organisational resources in place whilst balancing this capacity and securing required loan against growing perception of risks to LHA Windows funding in managing high value investment Strategy and programmes in future. FMD financial Replacement services will help to reduce this risk. Programme Clarity needs to be established on full re- financing strategy and estimated timelines for borrowing requirements and future cashflow monitoring and reporting. Progress being made to complete Phase 2 of funding for Drumoyne Primary School.
Phase 2 of borrowing for next phases of windows to be assessed by Dec 2019 when rent and SC review complete. Contracts Embedding 5 3 15 HIGH K) To be addressed through staffing 3 3 9 SIGN DCEO will develop team in these key and contract procurement appointments; and associated FT skills as identified in appraisals in early management skills and training and procedures 2019 knowledge in development LHA permanent staff 4 Welfare (a) Uncertainty 5 4 20 HIGH A) WBA and tenancy support services 4 3 12 SIG Ongoing monitoring Reform around expertise continue to be provided to HCS(D) pending ensure continuity and best use of Will require close monitoring of impact of changes in resources to support tenants UC across Glasgow throughout 19/20 and
welfare reform B) Staff being trained to ensure potential re-assessment of risks and
results in loss satisfactory levels of knowledge and mitigation measures of income understanding
Page | 72
Currently C) In house Welfare Rights staff – Importance of Scottish Government estimate up to Welfare Rights Officer (WRO) Payment direct of rent element of UC to £2 million of appointed July 2019 landlord may help to mitigate this risk LHA’s annual D) Detailed analysis of tenant
rental income circumstances to be undertaken to Extension of Money Matters Service in HIGH is at risk identify those at risk 2019/20 budget until new in-house E) Information programme ongoing to Welfare Rights staff recruited – WRO make tenants aware of risks, options starts August 19 and support available F) Utilise range of communications Requirement to consider improving on methods including newsletters, current lack of interactive on-line IT to leaflets, website etc. assist tenants in claiming benefits.
A) Deficit being made up by the Scottish Importance of LHA developing website.
5 3 15 HIGH Government at present, but this may b) Under be withdrawn at some point in future occupation B) Communications strategy has been charge put in place to ensure that all know impacting on the responsibility for payment lies tenants, with the tenant – newsletters – face results in to face with CS staff income loss compared to Business Plan assumptions and greater need for tenancy A) Communications strategy has been support 4 4 16 put in place to ensure that all know services the responsibility for payment lies with the tenant (c) Shift to B) Benefits advice is being made direct payment available of benefits to C) WR Mitigation Strategy needs to be tenants, developed and implemented results in loss of income through non- payment of rent 5 IT Systems Failure of IT 4 5 20 HIGH A) IT supplier in place to support LHA- 3 5 15 HIGH Deep audit of Finance and IT capacity, failure systems or a contract due to go out to tender April systems and service function delivery CEO/ critical element 19- 6-9-month extension considered by Committee Nov 2018 DFBS of them results B) IT systems back-up taken and held in disruption to off-site
Page | 73
delivery of C) Lessons and actions to be Finance & BS Team staff restructure is services considered from NE 5 as part phase 3 & 4 due to need to develop Disaster response to W&B report management response to Finance & IT Recovery Plan D) Capita review complete as part of Options appraisal. Interim finance – NE 5 CGPM Nov 2018 IT Options Appraisal – arrangements in place to Dec 2019. Investigatory extensive work and resources Report found required for effective use of this Review and develop Business Continuity weaknesses in system Plan lack of detail E) IT systems deep audit- complete Nov and planning 2018 Insurance cover in place for IT failure for IT systems F) IT Strategy to be developed when perils failures appropriate IT skills available in- house G) Future IT support/ partnership arrangements to be considered quarter 3 2018/19 H) CEO to develop a management response to Finance & IT options Appraisal for Committee consideration at Sept 2019 MC I) All the above measures will mitigate this risk 6 Policy Suite Policy review 4 4 16 HIGH A) Policy Working Group established 2 3 6 MOD Requires consideration of resourcing in Review is not B) Progress, policy review timetable, context of staffing structure phase 3. CEO/ completed in pace of review activity and workplan GPS reasonable to be reviewed in 2019/20 Policy review timetable to be reprioritised timescales and C) Progress on policy review and by HBS and approved by CEO by June new policies establishment of associated 2019. are not procedures during 17/18 =23, 18/19= embedded in X, 19/20=X policies. The is still Risk movement largely unchanged whilst operational significant backlog of work and the we consider resourcing issues as part of business focus needs to move to more the staffing restructure operational policies which impact on customers and to ensure compliance As interim arrangement GPS continuing to with legislation rather that on work on key HR policies governance issues to address former regulation plans A policy assistant appointed on 6.11.18 D) Best practice templates will be for 6 months to work with HOS(S) sourced from others and used to avoid ‘reinventing the wheel’ E) Report on future resourcing of activity to be considered by CEO and SSC as part of staff restructure, but if responsibilities to be mainstreamed in duties of existing and new staff
Page | 74
members consideration may need to be given to further interim consultancy resources to address significant inherited backlogs
7 Tenant Tenants’ 4 3 12 SIG A) New BP 2019-22 created in Aug 19 2 3 6 MOD To be re-assessed as Business Plan Expectation expectations to articulate vision and objectives, 2019-22 is implemented HCD/ of service and with a strong focus on VFM and TSM housing stock compliance with best practice New BP 2019-2022 to be considered by BSCO quality guidance MC June 2019 – Focus on Y3 19/20 to B) LHA Management Committee Aug 19 MC for approval. regular reviews of BP implementation – next review June Importance of BP to Assurance 2019 complete Statement. C) Culture change programme used to focus staff on the customer satisfaction D) Continuous customer satisfaction monitoring by MIS – contract due to be re-tendered 19/20 E) New BP 2019-22 to be developed June 2018 – Year 3 19/20
8 SHR SHR is 1 4 4 MOD A) MC continues to review further 1 4 4 MOD No room for complacency as a lot still Relationship satisfied with recruitment. Governing Body needs to be done to CEO progress and currently has all 13 places of 15 Improve LHA and deliver for all of our the level of occupied existing and prospective customers.
engagement B) Governance and financial
from Dec 2018 management action plan complete in CEO and SMT reviewing risks which is low June 2019 when Equalities Policy resulted in 9 RSL’s moving into high Complete engagement and checking these against C) LHA continues to support close and LHA plans as well as current practices. ongoing relationship with SHR including CEO and SHR officers in CEO & Head of CS, BSCO will develop future LHA approach to the new regulatory D) LHA secured goal of moving to low standards and assurance statement engagement in December 2018 as starting in Q2 of 2019/20 SHR satisfied LHA complete all tasks Due to potential costs LHA of going into in July 18 Regulation plan and that high engagement whilst A& R Committee governance and change may wish to down grade assessment of management is resulting in required this risk- not recommended remove it changed completely. E) Foreseeable Challenges which lie ahead are the response to the
Page | 75
Finance & IT Options Appraisal, and Arrange additional MC training session on finishing the staff restructure, Assurance statements before Sep 19 and improving effective use of IT have first statement prepared by F) Assurance Statement to independent expert before approval by development of assessment of LHA MC and submission to SHR. position by October 2019 against new regulatory standards 9 Staff Service 3 5 15 SIG A) Permanent office-based staff 2 4 8 SIG Ongoing work to embed new culture and Capacity/ disruption/ structure review 65% complete values CEO Capability/ failures B) Staff will continue to be consulted Behaviours and led to ensure ‘buy in’ to change Progress staff restructure 65% complete – High absence management programme and AMT and CST levels objectives C) HR partner Guardian People Appointment of GPS providing support for Employment Solutions (GPS) appointed in Spring SMT tackling persistent absence amongst disputes 2018 assisting with staffing structure small minority of staff in key areas of review; business and supporting staffing to Failure to meet D) Department Operation Plans to be address this risk budget targets developed in 2019/20 and will be continuously reviewed to ensure staff Failure to live focus on BP implementation, cultural up to the code change, and to ensure high quality of conduct and timeous information to MC impacting on E) Staff appraisal framework approved Committee responsive to the need for LHA by Committee; complete by June additional temp resources is welcomed by performance 2019 staff and helps with staff motivation to get or causing F) Senior staff have received ACAS through backlogs of work thereby helping reputational or training on managing serious staffing to mitigate this risk. regulatory issues; and are key participants in intervention the Customer Excellence programme J Harvey to carried out training for SMT to as exemplars of required behaviours develop clear SMART department Failure to to improve Team and staff culture operation plans to guide staff efforts on achieve key G) Associated training needs core business and customer satisfaction workplan tasks assessments and programme to be tasks. developed following staff appraisals Introduction of staff appraisal system in Failure of during 2019/20 last quarter of 18/19 will assist mitigate senior and key H) Establish a ‘no surprises’ culture risk with more formal assessments of staff staff members amongst SMT. Consider overtime contribution against business targets in managing and temporary resources more change readily in future to deal with workload GPS support on HR matters to deal with ‘bulges’ difficult cases and support SMT Potential Down grade risk from high to significant underperforma by May 2019 nce of senior and key staff
Page | 76
members impacting on business 10 Comparative Performance 3 5 15 SIG A) Benchmarking will be carried out 3 3 9 SIG Benchmarking visits to help staff gain Performance against peers primarily through ARC, Housemark external perspective where this could CEO/ against is poor in a and Quality and Efficiency Forum assist in areas where performance HOS(S) Peers limited number (QEF) and improving quality of improvement is required during 2019/20 of key information systems development to performance support production of ARC May 19 ARC return and SMT will review indicators B) In medium term LHA will improve core service performance figures resulting particularly participation in Housemark, QEF, in downward movement over 2018-19 around stock benchmarking arrangements with quality and importing good practices from Committee decision to re-join SFHA, another HA’s membership of GWSF, TPAS and TIS is C) LHA will develop performance facilitating access to good quality management and accountability research and campaigning and practice culture in the Association notes D) Resource development of Capita software to improve performance As result of restructuring exercise many information- Wylie & Bisset 2018 more qualified staff with memberships of review professional bodies such as CIOH, CIB, CICW, ACCS in delivering to MC priorities.
All above -staff and committee attendance at various training and conference events is reduces risk of LHA being insular. 11 Funding Bank interest 2 4 8 MOD A) New Unity bank loan is in place and 2 4 8 MOD Ongoing treasury and covenant rates increase, no restriction on timing of first draw- management. DCEO/FMD to PMcN/ resulting in down against loan demonstrate to Committee planned use of FMD higher cost of B) Full rent and service charge structure UB loan via 5 year projections complete SMT borrowing review scheduled to be complete by end June 19 Aug 2019 to ensure rent structure; and to fund major investment in A& R taken on role of reviewing written re- LHA’s component replacement financing strategy with timelines linked to contracts. major stock investment decisions and C) LHA continue to develop detailed future development plans. Committee to funding strategy. Phase I complete ensure correct levels of borrowing and and phase II by FMD after AGM. income are in place or in the pipeline to match LHA requirements and aspirations with support FMD 12 Committee The scope of 2 3 6 MOD A) MC continues to consider further 1 4 4 MOD Ongoing support to MC members to fulfil Capacity and size and recruitment. Governing Body their governance responsibilities CEO/ Prioritisation change places currently has all 13 places occupied HCS strain on the – 1 new casual vacancy
Page | 77
Committee’s B) Chair succession plan completed Regular review support and capacity and needs to be developed to build implementation of MC L and D Plan- ability to capacity for future office bearers and August 2019 prioritise work skills needs assessment reasonably, C) During 19/20 carry out refreshed MC results in self-assessment created against Consultant has completed governance delays and SHR Standards and link to review. 29 recommendations accepted of deferrals in assurance statement – complete by which 24 have been implemented in May implementing Sep 19 2019. the changes D) MC and SMT planning a day for with failing June 2019 to create shared vision on Strategy meetings now embedded as part morale LHA strategy and priorities and of annual business planning process amongst the improve communications for Year 3 whole Business Plan Move to low engagement positive but Committee E) MC continues to rise to challenges SHR focus on good governance practices and staff team and committed to continuing change essential for LHA to deliver for tenants management programme and comply with the regulatory standards F) CEO, SMT and staff team to monitor, feedback and support change Attract a committee member with finance programme skills for casual vacancy and further G) We have completed three rounds of casual vacancy to be discussed by MC Committee member appraisals and will embed arrangements for future MC appraisals complete May 2019 Committee member appraisals, addressing any issues arising from these appraisals H) Developed and used staff appraisal systems as critical focus in driving change management programme and objectives 13 Pensions Pension 2 3 6 MOD A) LHA has exited Final Salary scheme 2 3 6 MOD Ongoing management and monitoring of Scheme scheme deficit to mitigate growth in level of this risk this by FMD as new treatment of this for FMD Deficit due to historic B) LHA will maintain discussions and 18/19 accounts. FMD will discuss scheme liaison arrangements with pensions approach with external auditor, CEO and performance provider to continuously monitor risk MC.
issues, results level in increase in C) Sensitivity analyses will continue to New reporting regulations on pension
deficit be used in financial and business deficit affecting all RSL’s. This will impact recovery planning to manage this risk outturns and each financial year thereafter contributions in 18/19 accounts. in excess of assumptions 14 Compliance LHA fails to 4 4 16 HIGH A) Committee to be kept fully and 3 4 12 HIGH Embed and cascade down Operational Register comply with regularly informed of backlogs of Delivery Plans and targets, regular relevant work facing SMT and progress in
Page | 78
CEO/ legislation in addressing these, and their relative performance review of staff, and 1:1 SMT relation to priorities session delivery of B) Senior Managers will regularly special update their Department Operations Operational Delivery Plans presented to services Plans & Targets to identify, prioritise, MC at 2019 Away Day. Audit and Risk maintenance and make recommendations with Sub Committee to receive 6 monthly obligations, timescales to fully address potential updates on progress with operation plan. health and activities of legal and regulatory non- safety compliance Embed internal audit arrangements and obligations, C) These Department Operations Plans continue to address internal audit needs and any & Targets Pl will be used as key through appropriate mix of general relevant legal documents in 1:1 meeting to review systems and specialist auditors obligations to work progress between the CEO and customers e.g. SMT data protection D) Insurance cover will be kept under regular review in relation to Audit of 2018/19 Accounts to involve compliance issues. Current regular updates from FMD & External Insurance moved to year 4 of an up Auditor to CEO and Chair of Audit & Risk to 5-year cover in April 2019 E) LHA will ensure satisfactory external audit arrangements and reporting on CEO to complete first draft management progress with completion of audit response to Finance & IT Options from FMD, CEO and Chair of Audit appraisal in August 2019. May require and Risk additional single issue meeting. F) Continue development of Audit and Risk Sub Committee to draft, agree Ongoing staff restructure will assist to and manage internal audit mitigate some of these compliance risks programmes; to reflect the priorities as organisation builds up to full in this Risk Register; and to receive complement of staff to deliver B.P. and consider reports on internal audit activity, outcomes and proposed IT strategy delayed by staff restructure will actions now be phase 4. G) The Internal Audit programme 2017- 20 has been outsourced to specialist systems auditors and a three-year programme of audits agreed by Audit and Risk Sub Committee H) LHA will continue to develop and support internal audit arrangements as a key control measure in managing potential non-compliance risks I) Raise awareness amongst managers and staff of business implications of non-compliance, and associated
Page | 79
regulatory reporting requirements and risks associated with RSL’s currently in high engagement J) Develop an IT Strategy and regularly review it to mitigate against compliance breaches through non- compliance with legislative and regulatory requirements, including data protection requirements- pending management response to Wylie and Bisset Audit K) Resources identified to progress GDPR implementation plan to be kept under review through phase 3 staff restructure of BS Team 15 Notifiable General Risks 3 3 9 SIG A) Develop Notifiable Events policy – to 3 3 9 SIG IT services will always be a high-risk Events PWG summer 2019 activity and will require careful and regular CEO Cost in B) Develop and maintain required staff management and to be properly and investigations behaviour standards for satisfactory proportionately resourced. Phase 4 staff management of potential Notifiable restructure. SMT diverted Events from BP and C) Work closely with Regulators to Management recommendations emerging core business ensure constructive and ongoing from NE investigations and reports have notification and dialogue on Notifiable been mainstreamed and will be managed Committee Events as part of Governance and Financial and staff burn- D) Incorporation of NE recommendations Management Improvement Plan out; in Governance and Financial preparation for Management Improvement plan offers Risk rating movement reflects continued and duration of prospect of risk reducing over next investment of time and resources to and MC meetings; few months if no further NE’s emerge commitment of Committee members / number of CEO to managing Notifiable Events additional MC meetings CEO proposal to move this risk from high to significant, due to good practical All Sub experience of managing NE at LHA. Committees and Working CEO to work with CGPM if required to Groups have complete any actions required by ICO to significant destroy data now that Police have workloads confirmed no further action.
Baseline starting point for most areas of business for
Page | 80
staff and MC, Sub Comms and Working Groups reflects poor baseline position inherited from previous SMT – but risk is reducing at effective pace as systems and practices are improved Potential PR disaster from NE if adverse publicity from IT notifiable events CEO Notifiable IT Server 4 4 16 HIGH A) Investigatory report considered. 3 3 9 SIG Open – with ICO. Police advised case Event 5 Attack; IT- Views of MC, senior managers and closed in May 2019 – SHR to updated on Website attack management responses to be Police outcomes and will be updated on Notifiable Nov 2017; and incorporated in Governance and ICO outcome when LHA receives Event 7 IT Website Financial Improvement Plan; and notification of the ICO’s decision. CEO to Attack 19 Jan Operations Delivery Plans make contact with ICO following Police Notifiable 2018 B) Investigation of ICO and any of their completing their investigation to discuss Event 8 proposed actions to be ascertained ICO’s next step. As above for and actions considered Notifiable C) Deep audit of IT function by W&B A and R Sub Committee meeting of Events – complete – management response August 2018 noted downward movement General Risks from LHA due Aug 2019 in this risk, but recent trend suggests unlikely to be any change in this risk until Specific Risk outcome of ICO investigations is known; and until an Action Plan can be drafted in Outcome of response to Wylie and Bisset’s current IT ongoing ICO Audit work. report and investigations CEO Notifiable Office Staff 2 3 6 MOD A) Ensure staff buy-in to process by 2 3 6 MOD Open – for duration of restructure Event 10 Restructure high quality communications; support to LEAF; This is a routine NE and should remain on Risk Register until Restructure completed
Page | 81
B) Ensure process completed as . quickly as practical to manage any Risk will continue to reduce in coming potential dip in staff morale months as we progress with the staffing C) Ensure compliance by close restructure – now 50% complete involvement and support of Guardian People Solutions, HR Consultants 16 General Need to 5 3 15 HIGH A) Feb 18 TCDS drafted 3 2 6 MOD Good recent progress with this project Data demonstrate Implementation Plan to move and in reducing risk. HOBS Protection LHA’s towards compliance and progress Regulations commitment to will be shared regularly with Progress to date includes:
move towards Committee members • Data Register completed full compliance B) Key Fair Processing Notices sent to • Implementation Plan audited by internal within a residents, members and employees auditors reasonable on 24 May 2018 • Fair Processing Notices issued to timescale C) Data Register completed as key tenants, factored owners, members and given effective working document underpinning employees date of 25 May Implementation Plan • Additional staffing resources secured 2 2018 has D) Head of Customer Service Solutions days per week 6-months passed has taken over from Part Time Last A and R sub noted downward Compliance Officer (GDPR) as his movement in this risk, but recent trend Non- contract ended in December 18. To suggests risk unchanged over last three compliance report progress to MC Oct 19. months – although ongoing investment of with new E) Quarterly updates of Implementation time and resources to this project likely to Regulations Plan progress will be made to reduce risk during 19/20 when new Management Committee/ Audit and Business Support Team in place following Significant Risk Sub Committee starting Oct 19. Phase 4 staff restructure. fines/ actions F) During 2019/20 an internal audit for non- process on GDPR and FOI will be compliance carried out by Alexander Sloan
RISK KEY Business Impact Reputation - Sustained widespread media critical coverage. SHR statutory intervention & potential transfer of assets. Financial Loss in excess of £1m Service Delivery - Significant disruption of the whole organisation 5 Extreme Legislative - legislation has significant impact on the whole operation Reputation - Prolonged National Media Exposure. SHR statutory intervention. Financial Loss between £250k and £1m Service Delivery - Significant disruption of large parts of the organisation 4 Major Legislative - legislation has significant impact on a key area Reputation - One-off National Media Exposure. SHR engagement - Regulation Plan Financial Loss between £50k and £250k Service Delivery - Significant disruption of one part of the organisation 3 Moderate Legislative - legislation has moderate impact on a number of functions.
Page | 82
Reputation -Prolonged Local Media Exposure. SHR engagement Financial Loss less than £50k Service Delivery - Minimal disruption of the whole organisation 2 Minor Legislative - legislative impact affects small number of procedures. Reputation - One-off Local Media Exposure. Financial Loss - Negligible financial impact Service Delivery - Minimal disruption of one part of the organisation 1 Insignificant Legislative - minimal Legislative Implications Likelihood (of risk manifesting) 5 Almost Certain The risk is almost certain to occur (greater than 80% chance) 4 Likely The risk is more likely to occur than not (between 51% and 80% chance) 3 Possible The risk is fairly likely to occur (between 21% and 50% chance) 2 Unlikely The risk is unlikely but not impossible to occur (between 6% and 20% chance) 1 Rare The risk is unlikely to occur (<5% chance) Risk Score = Business Impact x Likelihood 15 or more Risk Score is High 8-12 Risk Score is Significant 4-6 Risk Score is Moderate 3 or less Risk Score is Low
5 5 10 15 20 25
4 4 8 12 16 20
3 3 6 9 12 15
Impact 2 2 4 6 8 10 1 1 2 3 4 5
1 2 3 4 5 Likelihood
Page | 83
APPENDIX 3 - TOWS MATRIX – July 2019 TOWS MATRIX THREATS OPPORTUNITIES PURPOSE to map main SWOT - Strengths, Weaknesses, 1. Political change/BREXIT/legislation/regulation/ONS/FOI issues; 1. Collaboration/ partnership both ways (RSLs/other); Opportunities and Threats analysis findings and develop 2. Rents lower than national averages and traditionally low rent in 2. Build Staff capacity to deliver improvements within industry average appropriate strategies to best respond to same majority of stock pre-1919 tenements in comparison to other staff costs to turnover % to demonstrate competitiveness & VFN/improve stock; 3. Welfare reform & Digital by default; 4. Government efficiency/performance; 3. Further borrowing to fund accelerated affordable housing targets; 5 .Competition from other RSL’s; component replacement contract; 4. Deliver new build to diversify stock 6. New Build impacts on existing stock; 7. Stock deteriorates base and meet customer aspiration; 5. Phased Staff restructure/ improve further in blocks where LHA does not have majority ownership; morale/ productivity/ capacity and capability; 6. Culture change 8. Lack of clear funding strategy from Scottish Government or GCC programme to transform LHA approach to customers; 7. Widen on grant funding to protect Pre-1919 tenements which form circa tenant/community involvement; 8. Wider role (digital access/ jobs/ 70% properties in city of Glasgow; 9. SHR move LHA into non- apprenticeships/financial inclusion/food poverty) if properly resourced; compliant engagement if new regulatory issues arise; 10. Inflation 9. Improve governance stabilise and develop management committee; (costs v income); 11. Diverse Tenant Base (aspirations, ageing, 10. Tap into external funding (energy efficiency, wider role. DRS funding); sicker); 12. Fuel poverty; 13. Breaching new loan covenants; 14. IT 11. Factoring (£ & review); 12. Rent review/restructure to support fairer failure/ hacking/computer virus attacks; 15. 2019/20 SCS may system; 13. Procurement savings; 14. Better investment decisions; throw up higher costs to improve quality of stock 15 . Government affordable housing targets WEAKNESSES STRATEGIC RESPONSES 1. Need to change any negative historical culture/reputation of LHA with tenants; 2. Staff team – turnover; 3. Poor stock condition (SHQS/EESSH failings); 4. Gearing up to assist tenants cope with UC; 5. Cash flow (esp. in early years); level of investment required in OBJECTIVE 1 – STRONG STRATEGIC GOVERNANCE & FINANCIAL CONTROL stock; 6. Stock mix (sheltered sites, MSFS, Pre- 1919 tenements, inter-war tenements, listed buildings); OBJECTIVE 2 – DELIVER EXCELLENT SERVICES 7. Significant backlogs of legacy issues from previous SMT;
8. Office layout and 9. IT systems;
10. Policies, procedure and processes out of date;
11. Performance on some KPIs relating to stock quality and rent OBJECTIVE 3 – PROVIDE QUALITY HOMES IN AN ATTRACTIVE ENVIRONMENT arrears will take long lead in times to improve; 12. Limited on- line services/ IT innovation; 13. Possible changes to road layout as result of new Uni campus STRENGTHS OBJECTIVE 4 – IMPROVE FINANCIAL STRENGTH AND DELIVER VALUE FOR MONEY 1. Rent levels (under sector average & cheapest locally); 2. Excellence ambitions (Committee and staff appetite for change); 3. Customer satisfaction levels; OBJECTIVE 5 – DEVELOP LEADERSHIP AND PEOPLE 4. Strong Leadership (Committee and new senior team); 5. Staff (capacity, committed, skilled, caring); 6. Up to date SCS/ investment knowledge; 7. Low borrowing/ Strong asset base; OBJECTIVE 6 – BE MORE THAN JUST A GREAT LANDLORD 8. Demand & stock location (motorway & hospital & new Uni campus);
9. Relationship with SHR; 10. Short term consultancy engaged when VFM to do so; 11. Size (local knowledge, are nimble); 12. Office location; 13. Residents panel; 14. Modern apprentice programme
Page | 84
Appendix 4
Grant Funding Secured by LHA 2015- Cost to Grant Cost 2022 Linthouse Fin Year Acquisitions increased stock pre- 14/15 586,870 599,370 -12,500 1919 tenements by 9 units 14/15 Total 586,870 599,370 -12,500
Acquisitions increased stock of pre- 15/16 1,439,325 1,439,325 0 1919 tenements by 19 units 15/16 Decant flats 56,923 52,688 4,235 15/16 Total 1,496,248 1,492,013 4,235
16/17 15 Kennedar Drive CTI 505,411 1,010,822 -505,411 Acquisitions increased stock of pre- 16/17 1,171,404 1,180,785 -9,381 1919 tenements by 15 units 16/17 Decant flats ( component upgrades) 454,285 424,190 30,095 16/17 Total 2,131,100 2,615,797 -484,697
17/18 Feasibility study - Drumoyne Primary 34,940 34,940 0 Acquisition Work 16-17 ( component 17/18 54,072 110,595 -56,523 upgrades) Acquisition Work 15-16 ( component 17/18 39,952 83,896 -43,944 upgrades) 17/18 CTI 4 closes - 2 years - Year 1 519,614 1,020,365 -500,751 17/18 Total 648,577 1,249,796 -601,219
18/19 Eldergrove (feasibility study) 18,136 0 Eldergrove VSH conversion to 11 18/19 673,571 1,141,436 -467,865 unit linked bungalows 18/19 CTI 4 closes - 2 years - Year 2 1,491,814 3,002,491 -1,510,677 18/19 Drumoyne Primary 748,316 748,316 0 18/19 Total 2,913,701 4,910,379 -1,978,542
19/20 Drumoyne Primary 4,783,601 5,859,060 -1,075,459 19/20 Total 4,783,601 5,859,060 -1,075,459
20/21 Total Drumoyne Primary 1,884,284 -1,884,284 21/22 Total Drumoyne Primary 131,220 -131,220
Grand Total 12,560,097 18,741,919 -6,181,822
CTI 4 Closes 2,011,428 4,022,856 -2,011,428 Drumoyne Primary 48 units 5,566,857 8,622,880 -3,056,023 Eldergrove VSH to 11 units 673,571 1,159,572 -486,001 8,251,856 13,805,308 -5,553,452
Page | 85
APPENDIX 5 – 3 YEAR PLAN 2017/18 TO 2019/20
Annual Delivery Plan No Strategic Year 1- 2017/18 Year 2- 2018/19 Year 3- 2019/20 – Current Year . Objective Develop Governance & Financial Secured move to low engagement by Complete first assurance statement for SHR by Management Improvement Plan Dec 2018 as complete key tasks in 31st Oct 2019- a template GFMIP become live (GFMIP) –live document use for final regulation plan document used to demonstrate continuous continuous improvement improvement Conduct annual self-assessment Conduct annual self-assessment Conduct annual self-assessment against SHR against SHR Standards- live document against SHR Standards- Complete Standards- use as template for Assurance carried into to Y2 April 2019 statement refresh in August Conduct MC appraisals- Complete Conduct MC appraisals Conduct MC appraisals- completer May 2019 Agree Chair succession plan- complete Fill 1 vacancy available on MC at Fill 3 vacancies at Sept 19 AGM AGM Develop & deliver MC training plan Develop & deliver MC training plan Develop & deliver MC training plan STRONG Complete the overhaul of all out of Complete the overhaul of all out of Complete the overhaul of all out of policies x 1 STRATEGIC date policies – 23 complete in 2017/18 date policies- X complete during complete 19/20 GOVERNANCE ongoing 2018/19 Update Standing Orders and agree new Sub Committee structure- complete Hold a successful AGM and ensure Hold a successful AGM and ensure Hold a successful AGM and ensure strong MC strong MC membership strong MC membership membership Agree & deliver Internal Audit Plan Agree & deliver Internal Audit Plan Agree & deliver annual Internal Audit Plan
Implement new Risk Management Conduct Independent Governance Develop and finalise Management Response to Policy Review complete the Wylie & Bisset financial management & IT Options Appraisal.
Page | 86
Embed our new Values – ongoing Deliver a Customer Excellence Pursue external accreditations ( IIP)- carry Programme- complete Full Circle forward to 20/21 Solutions Complete suite of HR Policies & Practices to support staff thrive and deliver customer excellence with support GPS Complete staff restructure to ensure LHA properly resourced to deliver requirements of this Business Plan Deliver Listen, Hear, Act culture Produce Tenant Engagement Produce Tenant Engagement Strategy to get the change to improve satisfaction, Strategy to get the customer voice at customer voice at the heart of all we do- secured remove waste and achieve right first the heart of all we do – focus on free place on July 2019 for SG next steps time – ongoing residents’ panel and social events – programme
carried forward
Produce Tenant Engagement Strategy Develop ITC platform to get better Develop ITC platform to get better use of DELIVER to get the customer voice at the heart use of automation, intelligence, automation, intelligence, reporting customer EXCELLENT of all we do- carry forward- use all ops reporting customer accessibility and accessibility and ease of use. SERVICES AND 2 over 3 years to deliver until strategy in ease of use- Carried forward PERFORMANCE place Develop IT platform to get better use Independent IT Options Appraisal Develop a Digital Strategy- starting with new of automation, and reporting- carried out by W & B - website to be complete in 2019/20 ongoing –to be addressed over next 3 Develop IT Strategy to ensure staff have right years phase in due to costs and work- tools to deliver excellent services and load – carr y forward annually performance
Revise office layout to improve Revisions to office layout to Continue necessary revisions to office layout. working arrangements/ remove silos- accommodate new teams and limited progress increase in staff numbers due to staff restructure – ongoing
Create asset management strategy & Create new asset management Develop intelligence on stock conditions to PROVIDE 3-year investment plan supported by strategy to guide rolling 3- year develop a master plan for the communities LHA QUALITY required cash flows and update investment plans - develop our serves which includes a clear asset management 3 HOMES IN AN annually dynamic financial strategy to fund strategy to guide our priority of to improving ATTRACTIVE the programmes. Ensure AMT phase the quality of existing stock to ensure continued ENVIRONMENT demand. Page | 87
1 of the restructure- Complete and ongoing
Deliver 3-year investment programme each year as approved by Management Committee Develop a Procurement Strategy for DCEO applied to DRS for funding for DRS funding Masterplan to be complete by investment programme to advance Masterplan from GCC for LHA March 2020 procurement of new investment existing stock and potential new contracts - 13 new maintenance development opportunities to assist contracts procured securing value for money and wise investments. Build upon intelligence on demand to inform future investments, reconfiguration of existing stock, and new build strategy – carried forward Conduct compliance audit to ensure Complete compliance audit to ensure New Asset Management Team all in post and LHA is delivering on its asset LHA is delivering on its asset working to new Department Operations Plan responsibilities- started responsibilities with a focus on compliance issues
Complete sheltered housing review Implement sheltered housing Reconfiguration of Eldergrove on site and will changes and disengage from service be complete in 2019 to offer amenity properties by Aug 2018- ongoing to over 55-year olds Complete grant funded new build Drumoyne Primary new build in DRS DCEO progressing new development with DRS at feasibility study (FS) 48 new build units SHIP progress detailed FS to enable Drumoyne and expected site start Dec 2019 on Drumoyne Primary site committee to take decision on purchase land during 2018/19. Complete grant funded feasibility Eldergrove emptied and secured by On site and complete by October 2019 study into remodel of Very sheltered July 2018 housing at Eldergrove to 11 linked bungalows Comply with EESSH/ SHQS- ongoing throughout duration of this Business Plan Agree Funding Strategy for major Unity Bank loan of £5.5 million Commission rent and service policy review and repairs secured , reviewing additional consult tenants – for use in 2019/20 funding required for Drumoyne Page | 88
Progressing funding for Drumoyne with support from PMCN of HRC will be in place in time to accept RSR offer of right level of grant for project to proceed. Review future of LUV Café Develop Annual VFM Statement and Develop Business Excellence Strategy which approach that makes sense to links to business and operational plans and ties tenants – carry forward . embedding cultural change- carry forward Secure new funding to support new Secure new funding required to Review factoring service quality and costs Business Plan and accelerated support new Business Plan and versus income, charge incurred on owner’s investment- complete accelerated investment and new behalf versus what charged out and review staff IMPROVE 4 development programme through resources required to deliver and efficient and FINANCIAL securing additional private finance in effective service STRENGTH AND 2018/19 and securing grant funding DELIVER VALUE from Glasgow City Council (GCC) FOR MONEY
Achieve all operational targets and Achieve all operational targets and Achieve all operational targets and improve
improve operational performance improve operational performance operational performance (letting, rents, voids,
(letting, rents, voids, factoring, mgt. (letting, rents, voids, factoring, mgt. factoring, mgt. costs)
costs) Costs)
Develop a Procurement Strategy for Continue to progress re- Complete re-procurement of all 26 investment programme to procurement of all 26 maintenance, maintenance, cyclical and special services demonstrate better VFM & secure cyclical and special services contracts contracts community development clauses Manage our service in line with or Manage our service in line with or Develop a clear value for money strategy to better than budget assumptions. better than budget assumptions. complement business plan. Conduct staff appraisals- CEO Conduct staff appraisals – all staff Conduct staff appraisals – all staff
Develop & deliver staff training & Develop Internal & External Develop Internal & External Communications DEVELOP development plan Communications Plan. Rebranding of Plan. Rebranding of LHA 5 LEADERSHIP LHA AND PEOPLE Review staff structure to support Review staff structure to support Complete staff restructure delivery of BP and excellence delivery of BP and excellence ambitions- ongoing ambitions- ongoing until all 3 restructures complete
Page | 89
Support Modern Apprenticeships Support Modern Apprenticeships Develop People Excellence Strategy linked to BP and department operations plan delivery Explore health & wellbeing support Develop Equality and Diversity strategy for staff – ongoing staff forum
Deliver digital support to help tenants Deliver digital support to help Develop an IT strategy which includes an get online to mitigate against roll out tenants get online to mitigate against approach to helping tenants get online, UC roll out UC Deliver financial inclusion support to Develop a More Than Housing Develop approach and resources to deliver BE MORE THAN help improve the financial health of Strategy wider role initiatives that link clearly to 6 JUST A GREAT customers improving core services or physical LANDLORD improvements in estate LHA manages Options Appraisal for revised use of Let LUV Cafe and include an approach to LUV Cafe shop- shuttered shops in LHA master plan.
Develop signpost services focused on needs of older tenants to link into voluntary, health and social care services.
Page | 90
APPENDIX 6: Performance Outcomes 2017/18, 2018/19, and comparison to Targets for 18/19 and Key Performance Targets for 2019/20
2017/18 ARC 2018/19ARC Actual (Green Targets set for Draft Target for KPI Actual improvement ) 2018/2019 2019/20 % Rent Collected as a percentage of rent due 98.72% 98.87% 100% 100% Tenants satisfied with repairs carried out in last 12 months 82.35% 87.18% 85% 90% Percentage occupied houses with valid gas safety certificate 98.85% 99.72% 100% 100% Percentage tenants satisfied with the quality of their home 80.84% 77.9% 85% 80% % lets to section 5 referrals 21.21% 29% 30% 30% Average days to re-let 23.02 days 25.75 days 15 days 20 days % Rental income lost from empty properties 0.91% 0.90% 0.75% 0.75% Non-technical rent arrears 4.99% 4.91% 4% 3.5% Gross current rent arrears 8.31% 7.84% 7% 6% Former tenant arrears 3.32% 2.93% 3% 0.5% Stage 1 complaints responded to within timescale 98.91% 100% 100% 100% Stage 2 complaints responded to within timescale 100% 85.71% 100% 90% Tenant Satisfaction with landlord (from 2016 TSS) 91.88% 90.29% 95% 92% Percentage tenants satisfied with home when moving in 89.69% 96.51% 95% 97% Average length of time to complete emergency repairs 2.34 hours 3.69 hours <4 hours <4 hours Average length of time to complete non-emergency repairs 3.82 days 4.06 days <5 days <5 days Percentage of repairs right first time 93.16% 93.26% 95% 94% % Stock meeting Scottish housing quality standard (SHQS) 76.77% 85.02% TBC 90.05% % Stock meeting Energy Efficiency Standard (EESSH) 58.31% 99.65% TBC 100% Respond to anti-social behaviour complaints in timescales 100% 92.4% 100% 95% % Properties that require gas safety check and record completed by anniversary date 98.85 99.72% 100% 100% Staff absence rates (%) 5.48% 8.4% 4% 4% Tenants satisfied with management of neighbourhood 88.64% 84.47% 90% 90% Tenancy Sustainment for homeless lets 100% 100% 100% 100% % of tenants who feel rent represents good value for money 82.14% 88.67% 85% 90% % of tenants who had repair in last 12 months and satisfied with repair and 82.35% 87.18 Tbc 88% maintenance service
Page | 91
Draft Summary Delivery Plan for Year 3 - 2019/2020 Appendix 7a
Activity Lead Officer Timescale Objective 1 – Strong Strategic Governance & Financial Control Deliver Governance & Financial Management Improvement Plan SMT/PMCN March 2020 Conduct M.C. Appraisals then develop & deliver MC training plan BSCO, Chair June 2019 Hold a compliant AGM and ensure strong MC membership BSCO/SMT Sept 2019 Continue to review of all out of date governance, finance & service policies SMT/HCS/BSCO March 2019 and procedures /GPS Agree & deliver annual Internal Audit Plan for 2019/20 and put internal audit CEO/HCS March 2020 out to tender for the next 3 years Progress short term ( £3.5m) and medium term (TBC) Financial Strategy to CEO/DCEO/PMC required timescales for additional borrowing to support acceleration of N/FMD Dec 2019 programmes of work Develop clear approach and cycles of standard financial reports to LHA SMT in FMD/SMT/ CEO advance of Audit & Risk Sub Committee e.g. quarterly accounts, annual April 2019 budgets, monthly spend to budget and cash flow reports for key projects Develop Treasury Management approach and clear reporting to manage loan FMD/DCEO/AM August 2019 funding and Asset Management and Development spend /CEO Develop assurance statement and plan to evidence LHA compliance with SHR CEO/HCS Oct 2019 regulatory standards Objective 2 – Deliver Excellent Services and Performance Deliver Listen, Hear, Act culture change to improve satisfaction, remove SMT/MC March 2020 waste and achieve right first time Delivery Year 1 Action Plan from new Tenant Engagement Strategy to put the HCS/CEO/HCD March 2020 customer voice at the heart of all we do Develop ICT platform and ITC strategy to get better use of automation, CEO/ WB/SMT intelligence, reporting and customer friendly accessibility – due to cost this Oct 2019 may need to be spread over a number of financial years (CF) Minimal alterations to LHA offices; to accommodate new staff structure and TSM/DCEO/SMT Nov 2019 ensure Committee facilities barrier free Consultant Objective 3 – Provide Quality Homes in an Attractive Environment Create asset management and development strategy & 5-year investment CEO/DCEO/ plan supported by required cash flows and financial strategy including HCs/AJ/FMD December window and sandstone repairs programme for pre-1919 tenements linked to 2019 rent restructure 2019 Deliver Year 3 of 3-year investment programme – including phase 1& 2 DCEO/AM/TSM March 2020 windows and sandstone repairs programme Deliver Year 3 Component Replacements to comply with EESSH/ SHQS DCEO/AM March 2019 Deliver the conversion of Eldergrove Very Sheltered Housing into 11 amenity DCEO/AM/ October 2019 Bungalows and claim 50% Grant- maximise lets to existing tenants HCS(D) Complete Year 2 activity on new build feasibility study Drumoyne and put DCEO September contract out to tender to secure firm costs for DRS/MC approval 2019 Market the buy backs to resolve Barnwell Terrace SO issue - fund circa 2 buy HCD March 2020 backs during 2019/20 Commission Masterplan Part funded by GCC to guide LHA asset management DCEO March 2020 investment and new build developments – (CF)- DRS funding secured June 19
Page | 92
Activity Lead Officer Timescale Objective 4 – Improve Financial Strength and Deliver Value for Money Continue to develop LHA’s Funding Strategy to secure lending 2019/20 and FDM/CEO/DCEO December beyond for window replacements and sandstone repairs. This new funding 2019 will support Business Plan, ambitions for accelerated investment, Achieve all operational targets and improve operational performance in key HCS/HCD/ KPI’s that have max impact on improving service, and stock quality for /DCEO/AM/TM May 2019 customers and income collection maximisation for LHA Deliver rent and service charge restructure arising from independent rent CEO/SMT/AJ/F October 2019 policy implementation in December 2019 to ensure long term financial MD viability of LHA and fairer system for tenants. Objective 5 – Develop our Leadership and Staff Conduct staff appraisals CEO/SMT June 2019 Develop & deliver staff training & development plan – (CF) SMT/BSCO August 2019 Complete the staff structure started in 2018 to support delivery of BP and CEO/ SMT/GPS October 2019 LHA’s excellence ambitions. Adjust structure and target costs if any major shifts in LHA’s strategic direct agreed for Year 3 BP 2020/21 Support Modern Apprenticeships HCD/ BSCO Ongoing Develop Internal & External communications plan – including staff forum HCS/BSCO/GPS March 2020 Explore health & well-being support for staff – via staff forum BSCO/FGS Ongoing Objective 6 – Be more than just a great landlord Implement an alternative use for the LUV Cafe premises- let as commercial CEO/HCSD/G&S July 2019 lease Identify an alternative use former warden’s office in MSF and communal HCD/Older March 2020 facilities in Elderhouse to address social isolation of older tenants in persons partnership with voluntary sector, health and social care services – (CF) assistant (OPA) Develop new interactive relevant website focused in needs of LHA customers CEO/HCS Dec 2019 Set up a tenant engagement /community chest fund and budget to promote HCD/HCS April 2019 LHA new mission via annual programme of community engagement activities
Of 33 objectives in 19/20 Summary Delivery Plan to end first quarter June 2019, 3 of 33 are complete.
Page | 93
Summary Delivery Plan for year 2 2018/2019 APPENDIX 7b
Activity Lead Officer Timescale Objective 1 – Strong Strategic Governance & Financial Control Deliver Governance & Financial Management Improvement Plan SMT/PMCN March 2019 Conduct M.C. Appraisals then develop & deliver MC training plan BSCO + Chair Mar & Oct 18 Hold AGM and ensure strong MC membership by filling 1 x vacancy BSCO Sept 2018 Continue to review of all out of date governance, finance & service policies SMT/HCS/BSCO March 2019 and procedures -CF /GPS Agree & deliver annual Internal Audit Plan for 2018/19 and put internal audit DFBS/TDCS/CEO March 2019 out to tender for the next 3 years Develop LHA approach to value for money – (CF) CEO March 2019 Secure an assessment of low engagement with SHR CEO Dec 2018 Independent review of governance for SHR Mar 18 Regulation plan (RP) CEO/Jim Harvey August 2018 Independent review of financial management & IT for SHR Mar 18 RP Wylie & Bisset September 18 Objective 2 – Deliver Excellent Services and Performance Embed new Values by delivering Customer Excellence Development for staff – CEO/SMT/FCS March 2019 (CF) Deliver Listen, Hear, Act culture change to improve satisfaction, remove SMT Ongoing waste and achieve right first time – (CF) Produce Tenant Engagement Strategy to get the customer voice at the heart HCS/CEO March 2019 of all we do- CF Develop ICT platform and ITC strategy to get better use of automation, CEO/DFBS/WB March 2019 intelligence, reporting and customer friendly accessibility – (CF) Commission Feasibility Study into upgrading LHA offices; identify and secure DCEO/TSM/ sources of funding to create large community hub or nursery in former DLO Architect March 2019 yard – ( set aside and carry out only necessary alterations to accommodate staff ) Objective 3 – Provide Quality Homes in an Attractive Environment Create asset management strategy & 3-year investment plan supported by CEO/TDCS/ June 2018 required cash flows and financial strategy PMCN/DFBS Deliver Year 2 of 3-year investment programme DCEO March 2019 Deliver Year 2 Component Replacements to comply with EESSH/ SHQS DCEO/AM March 2019 Conduct compliance audit to ensure LHA is delivering on its asset TDCS October 2018 responsibilities Implement sheltered housing review and convert all units to amenity housing CEO/HCD/ -Complete feasibility study into remodelling Eldergrove VS and secure grant DCEO August 2018 funding from DRS Complete Year 1 & 2 activity on new build feasibility at Drumoyne PS – (CF) CEO/DCEO March 2019 Complete Year 1 activity on conversion of Eldergrove to 11 amenity flats HCD/DCEO February 2019 Market the buy backs to resolve Barnwell Terrace SO issue & sell warden’s CEO/ house at Eldergrove to fund circa an additional 5 buy backs – budget for circa DFBS/PMCN/ March 2019 9 buy backs – (CF) HCD Commission Masterplan funded by GCC to guide LHA asset management DCEO Dec 2018 investment and new build developments – (CF) Objective 4 – Improve Financial Strength and Deliver Value for Money Continue to develop LHA’s Funding Strategy to secure lending for components SMT/ PMCN/MC March 2019- replacements including window replacements (from 20/21), Drumoyne £3m (£3.5m new loan in 19/20), Eldergrove (using existing Unity loan). This new funding will support Year 3 Business Plan. Achieve all operational targets and improve operational performance CST/DFBS/DoA May 2019 M Commission independent rent policy review for completion 2018/19 and CEO/DFBS March 2019 implementation in 2019/20 – (CF) Objective 5 – Develop our Leadership and Staff Page | 94
Activity Lead Officer Timescale Conduct staff appraisals – (CF) CEO/SMT March 2019 Develop & deliver staff training & development plan – (CF) SMT/BSCO March 2019 Review staff structure to support delivery of BP and excellence ambitions-CF CEO/ SMT/GPS March 2019 Support Modern Apprenticeships CSM/ BSCO July 2018 Develop Internal & External communications plan – new staff forum - CF HCS/BSCO/FCS March 2019 Explore health & well-being support for staff – via staff forum CEO/FCS March 2019 Objective 6 – Be more than just a great landlord Identify an alternative use for the LUV Cafe premises to compatible with LHA CEO/HCS March 2019 Business Plan – decision to let it on a commercial basis to maximise LHA’s income- CF Deliver digital support to help tenants get online- via new pop-up community HCS/DFBS March 2019 hub 2 Drive Road or LHA training suite to help mitigate against UC roll out across Glasgow. Develop new interactive relevant website focused in needs of LHA customers – (CF) Identify an alternative use former warden’s office in MSF and communal HCD/Older March 2019 facilities in Elder house to address social isolation of older tenants in persons partnership with voluntary sector, health and social care services – (CF) assistant (OPA) Set up a tenant engagement /community chest fund and budget to promote CEO/SMT March 2019 LHA new mission and tackle environmental issues of concern to local people and promote community involvement e.g. lease of park at tunnel- CF?
Outcome for 18/19 Business Plan is that of the 36 objectives set for LHA Committee and Staff we completed 22 (shown in =boxes shaded grey), 12 are outstanding or 0ngoing, MC agreed to scrap 2 of the objectives
Page | 95
Performance Report on Summary Delivery Plan for year 1 2017/2018 APPENDIX 8 Activity Lead Officer Timescale Objective 1 – Strong Strategic Governance & Financial Control Deliver Governance & Financial Management Improvement Plan CEO/SMT/PMCN/ML Complete Conduct Mgt. Comm. Appraisals – then ongoing annually CEO + BSCO Complete Agree Chair succession plan CEO + BSCO Complete Develop & deliver MC training plan– then ongoing annually BSCO + CEO Complete Complete the of all out of date governance, finance, corporate & service SMT/ Policy Mgr 23 complete and policies ongoing Update Standing Orders and agree new Sub Committee structure CEO, Policy Mgr Complete Hold a successful AGM and ensure strong MC membership. Audit BSCO Complete membership list Agree & deliver 2 annual Internal Audit Plans in 2017/18 DFBS/TDCS/CEO Complete Approve and implement Risk Management Policy CEO Complete Objective 2 – Deliver Excellent Services and Performance Embed our new Values CEO/ ML Ongoing & CF Deliver Listen, Hear, Act culture change to improve satisfaction, remove SMT Ongoing & CF waste and achieve right first time Produce Tenant Engagement Strategy to get the customer voice at the DCS + CSM Carry Forward heart of all we do (CF) Develop IT platform to get better use of automation, intelligence and DFBS Carry Forward reporting (CF) Revise office layout to improve working arrangements/ remove silos CEO/ SMT CF Objective 3 – Provide Quality Homes in an Attractive Environment Create asset management strategy & 3 year investment plan supported CEO, DCS, Complete by required cash flows PMCN/DFBS Deliver Year 1 of 3 year investment programme DCS/GS Complete Develop a Procurement Strategy for investment programme to advance DCS/ DG Complete procurement of new investment contracts Conduct compliance audit to ensure LHA is delivering on its asset DCS/ GS Ongoing & CF responsibilities Complete sheltered housing review CEO/CSM Complete Deliver Yr1 Component Replacements to comply with EESSH/ SHQS DCS/GS Complete & CF Complete Year 1 activity on new build feasibility study (Drumoyne PS) CEO/ GS Complete Assess viability of the buyback to resolve Barnwell Terrace SO issue CEO/ DFBS/PMCN Complete Objective 4 – Improve Financial Strength and Deliver Value for Money Agree Funding Strategy & rent policy DFBS/ PMCN/CEO Part Complete & CF Secure new funding to support new Business Plan and accelerated investment DFBS/ PMCN/CEO Complete & CF Achieve all operational targets and improve operational performance SMT & CSM Complete & CF Develop a Procurement Strategy for investment programme to DCS/DG Complete demonstrate better VFM & secure comm. dev. clauses Manage our service in line with or better than budget assumptions. DFBS/ SMT Complete & CF Objective 5 – Develop our Leadership and Staff Conduct staff appraisals CEO/ SMT CF- not done Develop & deliver staff training & development plan SMT Ongoing Review staff structure to support delivery of BP and excellence CEO/ SMT/GPS Ongoing & CF ambitions Support Modern Apprenticeships CSM/ BSCO Complete & CF Objective 6 – Be more than just a great landlord Deliver digital support to help tenants get online Not done-CF Deliver financial inclusion to improve the financial health of customers CSM Complete & CF Outcome of 17/18 Business Plan of 33 objectives set for MC and staff 22 complete, 10 ongoing,
Page | 96
Detailed Consolidated Statement of Comprehensive Income
Period: 01 April 2019 - 31 March 2049 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 £000's £000's £000's £000's £000's £000's £000's £000's £000's £000's TURNOVER Gross Rental Income Rent Receivable 4,556.80 4,755.70 4,927.70 5,348.10 5,529.50 5,685.90 5,862.80 6,045.10 6,189.50 6,301.10 Service Charge Income 103 105.1 107.2 109.3 111.5 113.7 116 118.3 120.7 123.1 Charges For Support Services Gross Rental Income 4,659.80 4,860.80 5,034.80 5,457.40 5,641.00 5,799.70 5,978.80 6,163.40 6,310.20 6,424.20
Management Charge Income Less Voids -115.6 -120.5 -118.6 -122.7 -121.7 -119.8 -118.1 -121.7 -124.7 -127.1 Net Rental Income 4,544.20 4,740.20 4,916.30 5,334.70 5,519.30 5,679.80 5,860.70 6,041.70 6,185.50 6,297.10 Other Income 272.9 277.4 429.6 437.2 445 452.8 460.8 305.9 311.2 317.1 Total Turnover From Social Housing Lettings 4,817.10 5,017.60 5,345.90 5,771.90 5,964.30 6,132.70 6,321.50 6,347.70 6,496.70 6,614.20
Grant Amortisation Accrual Method Total 616.2 622.4 622.4 677.8 677.8 677.8 677.8 677.8 677.8 677.8 Total Turnover 5,433.30 5,640.00 5,968.30 6,449.80 6,642.10 6,810.50 6,999.40 7,025.50 7,174.50 7,292.00 OPERATING EXPENDITURE Operating Costs Social Housing
Management Costs Total -2,092.70 -2,017.90 -2,076.40 -2,110.10 -2,155.30 -2,071.00 -1,977.60 -2,027.60 -2,072.00 -2,120.30 Service Costs -226.4 -230.9 -235.5 -240.3 -245.1 -250 -255 -260.1 -265.3 -270.6 Care And Support Costs Routine Maintenance -683.6 -678.2 -674.8 -681.3 -679.6 -697.9 -716 -734.7 -753.8 -779.4 Planned Maintenance -605.7 -524.7 -538 -567.5 -582 -589.5 -604.6 -619.9 -635.7 -651.8 Major Repairs -129.6 -317.7 -24.9 -7.3 -142.1 -99.9 -194.8 -126.9 -9 -304.5 Bad Debts -93.8 -97.9 -101.4 -109.9 -113.7 -116.9 -120.6 -124.4 -127.4 -129.8 Lease Charges Depreciation of Housing Properties -989.9 -1,099.90 -1,209.30 -1,388.80 -1,487.10 -1,559.10 -1,618.60 -1,684.60 -1,728.60 -1,777.00 Impairment Of Housing Properties Other Costs -1.1 -2.6 -3.7 -4.8 -6 -7.2 -8.5 -9.8 -11.2 -12.6 Operating Costs Social Housing -4,822.70 -4,969.70 -4,864.10 -5,110.10 -5,410.80 -5,391.70 -5,495.60 -5,588.00 -5,602.90 -6,045.90 Other Activities Expenditure Total
Operating Expenditure Total 4,822.70 4,969.70 4,864.10 5,110.10 5,410.80 5,391.70 5,495.60 5,588.00 5,602.90 6,045.90 Operating Surplus/(deficit) 610.5 670.3 1,104.20 1,339.70 1,231.30 1,418.80 1,503.80 1,437.50 1,571.60 1,246.10
Interest Receivable 31.3 30.4 59.1 57.6 58.1 58.7 119.2 121.6 124 126.5 Interest and financing costs -147.8 -317 -557.5 -754.2 -790.9 -940.8 -928.2 -914.8 -900.8 -885.9 Surplus before tax 494 383.7 605.9 643.1 498.5 536.8 694.8 644.3 794.8 486.8 Surplus after tax 494 383.7 605.9 643.1 498.5 536.8 694.8 644.3 794.8 486.8 Comprehensive Income for the year 494 383.7 605.9 643.1 498.5 536.8 694.8 644.3 794.8 486.8
Page | 95
Detailed Consolidated Statement of Comprehensive Income
Period: 01 April 2019 - 31 March 2049 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 £000's £000's £000's £000's £000's £000's £000's £000's £000's £000's TURNOVER Gross Rental Income Rent Receivable 6,430.90 6,563.40 6,716.90 6,836.50 6,977.30 7,121.00 7,291.60 7,422.50 7,570.90 7,722.40 Service Charge Income 125.6 128.1 130.7 133.3 135.9 138.7 141.4 144.3 147.1 150.1 Charges For Support Services Gross Rental Income 6,556.50 6,691.40 6,847.50 6,969.80 7,113.20 7,259.70 7,433.00 7,566.70 7,718.10 7,872.40
Management Charge Income Less Voids -129.9 -132.8 -136.1 -138.7 -141.8 -144.9 -148.6 -151.3 -154.4 -157.4 Net Rental Income 6,426.50 6,558.60 6,711.50 6,831.10 6,971.50 7,114.80 7,284.40 7,415.40 7,563.70 7,715.00 Other Income 323.4 329.9 336.5 343.2 350.1 357.1 364.2 371.5 378.9 386.5 Total Turnover From Social Housing Lettings 6,749.90 6,888.50 7,047.90 7,174.30 7,321.50 7,471.80 7,648.60 7,786.90 7,942.60 8,101.50
Grant Amortisation Accrual Method Total 677.8 677.8 677.8 677.8 677.8 677.8 677.8 677.8 677.8 677.8 Total Turnover 7,427.80 7,566.40 7,725.80 7,852.10 7,999.40 8,149.70 8,326.50 8,464.70 8,620.50 8,779.30 OPERATING EXPENDITURE Operating Costs Social Housing
Management Costs Total -2,164.90 -2,216.70 -2,275.60 -2,327.40 -2,376.90 -2,430.10 -2,487.90 -2,548.10 -2,608.80 -2,666.00 Service Costs -276 -281.5 -287.1 -292.9 -298.7 -304.7 -310.8 -317 -323.4 -329.8 Care And Support Costs Routine Maintenance -800.8 -808.3 -829.1 -850.5 -872.4 -894.9 -918.3 -941.8 -965.4 -989.5 Planned Maintenance -640.2 -656.3 -672.9 -689.8 -707.2 -725 -743.5 -762.3 -781.4 -800.9 Major Repairs -352.5 -1,183.70 -216.4 -147.7 -281.4 -226.6 -757.1 -275.3 -18 -279.9 Bad Debts -132.5 -135.3 -138.5 -141.1 -144 -147.1 -150.7 -153.4 -156.5 -159.6 Lease Charges Depreciation of Housing Properties -1,832.40 -1,879.00 -1,927.30 -1,992.90 -2,062.00 -2,109.90 -2,162.90 -2,224.80 -2,263.00 -2,309.60 Impairment Of Housing Properties Other Costs -14.1 -15.6 -17.2 -18.8 -20.5 -22.3 -24.5 Operating Costs Social Housing -6,213.40 -7,176.40 -6,364.10 -6,461.00 -6,763.10 -6,860.50 -7,555.60 -7,222.70 -7,116.40 -7,535.30 Other Activities Expenditure Total
Operating Expenditure Total 6,213.40 7,176.40 6,364.10 6,461.00 6,763.10 6,860.50 7,555.60 7,222.70 7,116.40 7,535.30 Operating Surplus/(deficit) 1,214.40 390 1,361.70 1,391.10 1,236.30 1,289.20 770.9 1,242.00 1,504.10 1,244.00
Interest Receivable 129.1 131.7 134.3 137.1 139.8 142.6 145.5 148.5 151.5 154.5 Interest and financing costs -870.1 -853.5 -835.8 -817.2 -797.5 -776.6 -754.6 -731.2 -706.5 -680.3 Surplus before tax 473.4 -331.8 660.2 710.9 578.6 655.2 161.8 659.3 949.1 718.2 Surplus after tax 473.4 -331.8 660.2 710.9 578.6 655.2 161.8 659.3 949.1 718.2 Comprehensive Income for the year 473.4 -331.8 660.2 710.9 578.6 655.2 161.8 659.3 949.1 718.2
Page | 96
Detailed Consolidated Statement of Comprehensive Income
Period: 01 April 2019 - 31 March 2049 2040 2041 2042 2043 2044 2045 2046 2047 2048 2049 Total £000's £000's £000's £000's £000's £000's £000's £000's £000's £000's £000's TURNOVER Gross Rental Income Rent Receivable 7,898.40 8,034.30 8,195.00 8,358.90 8,549.50 8,696.60 8,870.60 9,048.00 9,254.20 9,413.50 212,174.40 Service Charge Income 153.1 156.1 159.3 162.5 165.7 169 172.4 175.8 179.4 182.9 4,179.30 Charges For Support Services Gross Rental Income 8,051.50 8,190.50 8,354.30 8,521.40 8,715.20 8,865.60 9,043.00 9,223.80 9,433.60 9,596.50 216,353.70
Management Charge Income Less Voids -161 -163.8 -167.1 -170.4 -174.3 -177.3 -180.9 -184.5 -188.7 -180.6 -4,395.00 Net Rental Income 7,890.40 8,026.70 8,187.20 8,351.00 8,540.90 8,688.30 8,862.10 9,039.30 9,244.90 9,415.80 211,958.70 Other Income 394.2 402.1 410.2 418.4 426.7 435.3 444 452.9 461.9 721.8 11,818.80 Total Turnover From Social Housing Lettings 8,284.70 8,428.80 8,597.40 8,769.30 8,967.60 9,123.60 9,306.10 9,492.20 9,706.80 10,137.70 223,777.50
Grant Amortisation Accrual Method Total 677.8 677.8 677.8 677.8 677.8 677.8 677.8 677.8 677.8 677.8 20,162.50 Total Turnover 8,962.50 9,106.60 9,275.20 9,447.20 9,645.40 9,801.40 9,983.90 10,170.00 10,384.70 10,815.50 243,939.90 OPERATING EXPENDITURE Operating Costs Social Housing
Management Costs Total -2,719.90 -2,790.00 -2,860.00 -2,922.60 -2,990.40 -3,053.30 -3,125.90 -3,208.30 -3,281.00 -3,479.00 -75,253.70 Service Costs -336.4 -343.1 -350 -357 -364.2 -371.4 -378.9 -386.4 -394.2 -402.1 -9,184.60 Care And Support Costs Routine Maintenance -1,030.60 -1,039.60 -1,065.60 -1,092.20 -1,119.50 -1,147.50 -1,176.20 -1,109.20 -1,136.90 -1,165.40 -27,033.10 Planned Maintenance -820.9 -841.4 -862.5 -884 -906.1 -928.8 -952 -975.8 -1,000.20 -1,025.20 -22,295.90 Major Repairs -278.6 -407.2 -100.3 -33.3 -436.6 -389.7 -292.3 -105.8 -80.9 -572.6 -7,792.50 Bad Debts -163.3 -166.1 -169.4 -172.8 -176.7 -179.8 -183.4 -187 -191.3 -194.6 -4,378.90 Lease Charges Depreciation of Housing Properties -2,345.90 -2,376.70 -2,449.90 -2,507.80 -2,538.50 -2,562.50 -2,592.30 -2,617.70 -2,657.80 -2,713.50 -60,669.40 Impairment Of Housing Properties Other Costs -200.4 Operating Costs Social Housing -7,695.60 -7,964.20 -7,857.70 -7,969.80 -8,532.00 -8,633.10 -8,701.00 -8,590.30 -8,742.40 -9,552.30 -206,808.40 Other Activities Expenditure Total
Operating Expenditure Total 7,695.60 7,964.20 7,857.70 7,969.80 8,532.00 8,633.10 8,701.00 8,590.30 8,742.40 9,552.30 206,808.40 Operating Surplus/(deficit) 1,266.90 1,142.40 1,417.50 1,477.30 1,113.40 1,168.30 1,282.90 1,579.70 1,642.30 1,263.20 37,131.50
Interest Receivable 157.6 160.8 164.1 167.4 170.8 174.2 177.7 181.3 185 188.7 3,928.70 Interest and financing costs -775.4 -706.4 -778.5 -575.4 -737.2 -567 -558.5 -552.4 -552.4 -552.4 -21,316.50 Surplus before tax 649.1 596.9 803.1 1,069.30 547 775.5 902.1 1,208.60 1,274.90 899.5 19,743.70 Surplus after tax 649.1 596.9 803.1 1,069.30 547 775.5 902.1 1,208.60 1,274.90 899.5 19,743.70 Comprehensive Income for the year 649.1 596.9 803.1 1,069.30 547 775.5 902.1 1,208.60 1,274.90 899.5 19,743.70
Page | 97
Consolidated Statement of Financial Position Period: 01 April 2019 - 31 March 2049 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 £ 000's £ 000's £ 000's £ 000's £ 000's £ 000's £ 000's £ 000's £ 000's £ 000's Fixed Assets Intangible assets and goodwill Land & Buildings Total 58,374.70 66,013.60 72,628.50 76,159.90 79,984.70 81,889.80 84,440.20 86,096.30 86,734.60 88,576.90 - Depreciation Land & Buildings Total 22,080.70 -23,180.60 -24,389.90 -25,778.70 -27,265.80 -28,825.00 -30,443.60 -32,128.20 -33,856.80 -35,633.80 Housing Properties NBV 36,294.00 42,833.00 48,238.60 50,381.20 52,718.90 53,064.80 53,996.70 53,968.10 52,877.80 52,943.10 Other Fixed Assets Tangible 463.9 448.6 395.4 379 354.7 351.6 382.8 353.4 326.4 321.6 Tangible fixed assets 36,757.90 43,281.60 48,634.00 50,760.20 53,073.60 53,416.40 54,379.40 54,321.50 53,204.20 53,264.70 Investments FA 6.2 6.2 6.2 6.2 6.2 6.2 6.2 6.2 6.2 6.2 Investments in joint ventures Investments in associates Fixed Assets Total 36,764.10 43,287.80 48,640.30 50,766.40 53,079.80 53,422.70 54,385.70 54,327.70 53,210.40 53,271.00
Current Assets Stock Trade and other debtors 495.8 495.8 495.8 495.8 495.8 495.8 495.8 495.8 495.8 495.8 Investments CA Cash and cash equivalents 3,657.40 2,784.10 2,474.90 4,532.60 1,808.60 5,050.80 3,857.50 3,620.40 4,578.30 4,034.50 Current Assets Total 4,153.20 3,280.00 2,970.70 5,028.40 2,304.50 5,546.70 4,353.30 4,116.30 5,074.20 4,530.30
Less - Creditors - amounts due within 1 year -1,332.40 -1,332.40 -1,332.40 -1,332.40 -1,332.40 -1,332.40 -1,332.40 -1,332.40 -1,332.40 -1,332.40 Net current assets/liabilities 2,820.80 1,947.60 1,638.30 3,696.00 972.1 4,214.30 3,020.90 2,783.90 3,741.80 3,197.90
Assets less current liabilities Total 39,584.90 45,235.40 50,278.60 54,462.40 54,051.90 57,636.90 57,406.60 57,111.60 56,952.20 56,468.90
Creditors - amounts due after more than 1 year Outstanding Loan Balance -5,283.40 -8,132.90 -13,391.80 -17,649.20 -17,411.80 -21,169.70 -20,914.30 -20,644.70 -20,360.20 -20,059.80 Loan Fees 28.5 79.6 118.5 112.3 144.2 136 127.9 119.7 111.6 Fair Value Provision Total - Deferred Income 21,965.20 -24,622.80 -24,065.50 -23,387.70 -22,709.90 -22,032.00 -21,354.20 -20,676.40 -19,998.50 -19,320.70 Long Term Creditors Balance -425 -213.2 0 0 0 0 0 0 0 0 Deferred Premium - Creditors - amounts due after more than 1 year 27,673.60 -32,940.40 -37,377.70 -40,918.40 -40,009.40 -43,057.60 -42,132.50 -41,193.20 -40,239.00 -39,268.90 Net assets Total 11,911.30 12,295.00 12,900.90 13,544.00 14,042.50 14,579.30 15,274.10 15,918.40 16,713.20 17,200.00
Reserves Income and Expenditure Reserve 11,911.20 12,294.80 12,900.70 13,543.80 14,042.40 14,579.20 15,273.90 15,918.20 16,713.00 17,199.80 Stockholders Equity Total 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 Total reserves 11,911.30 12,295.00 12,900.90 13,544.00 14,042.50 14,579.30 15,274.10 15,918.40 16,713.20 17,200.00
Page | 98
Consolidated Statement of Financial Position Period: 01 April 2019 - 31 March 2049 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 £ 000's £ 000's £ 000's £ 000's £ 000's £ 000's £ 000's £ 000's £ 000's £ 000's Fixed Assets Intangible assets and goodwill Land & Buildings Total 89,826.60 91,124.70 92,303.40 94,087.40 95,605.40 96,673.00 99,193.10 100,562.40 101,000.20 102,581.40 Depreciation Land & Buildings Total -37,466.20 -39,345.20 -41,272.50 -43,265.40 -45,327.30 -47,271.60 -49,130.10 -51,259.60 -53,449.60 -55,588.00 Housing Properties NBV 52,360.40 51,779.50 51,030.90 50,822.00 50,278.00 49,401.40 50,063.00 49,302.80 47,550.60 46,993.40 Other Fixed Assets Tangible 317.1 336.2 323.3 292.3 270.8 286.4 308.6 280.1 270.9 248.8 Tangible fixed assets 52,677.50 52,115.70 51,354.20 51,114.30 50,548.80 49,687.80 50,371.60 49,582.90 47,821.50 47,242.20 Investments FA 6.2 6.2 6.2 6.2 6.2 6.2 6.2 6.2 6.2 6.2 Investments in joint ventures Investments in associates Fixed Assets Total 52,683.70 52,122.00 51,360.50 51,120.60 50,555.00 49,694.10 50,377.80 49,589.20 47,827.80 47,248.40
Current Assets Stock Trade and other debtors 495.8 495.8 495.8 495.8 495.8 495.8 495.8 495.8 495.8 495.8 Investments CA Cash and cash equivalents 4,108.30 3,333.90 3,732.40 3,640.30 3,720.40 4,150.40 2,518.90 2,832.30 4,382.00 4,490.90 Current Assets Total 4,604.20 3,829.70 4,228.20 4,136.10 4,216.30 4,646.20 3,014.70 3,328.20 4,877.80 4,986.70
Less - Creditors - amounts due within 1 year -1,332.40 -1,332.40 -1,332.40 -1,332.40 -1,332.40 -1,332.40 -1,332.40 -1,332.40 -1,332.40 -1,332.40 Net current assets/liabilities 3,271.80 2,497.30 2,895.80 2,803.70 2,883.80 3,313.80 1,682.30 1,995.70 3,545.40 3,654.30
Assets less current liabilities Total 55,955.50 54,619.30 54,256.30 53,924.20 53,438.90 53,007.90 52,060.10 51,584.90 51,373.20 50,902.70
Creditors - amounts due after more than 1 year Outstanding Loan Balance -19,742.70 -19,408.00 -19,054.50 -18,681.20 -18,286.90 -17,870.50 -17,430.50 -16,965.70 -16,474.60 -15,955.60 Loan Fees 103.4 95.3 87.1 79 70.8 62.7 54.5 46.4 38.2 30.1 Fair Value Provision Total Deferred Income -18,642.90 -17,965.00 -17,287.20 -16,609.40 -15,931.50 -15,253.70 -14,575.90 -13,898.00 -13,220.20 -12,542.30 Long Term Creditors Balance 0 0 0 0 0 0 0 0 0 0 Deferred Premium - - Creditors - amounts due after more than 1 year -38,282.20 -37,277.70 36,254.60 -35,211.60 -34,147.60 -33,061.50 31,951.90 -30,817.40 -29,656.60 -28,467.90 Net assets Total 17,673.30 17,341.50 18,001.70 18,712.70 19,291.20 19,946.40 20,108.20 20,767.50 21,716.60 22,434.90
Reserves Income and Expenditure Reserve 17,673.20 17,341.40 18,001.50 18,712.50 19,291.10 19,946.20 20,108.10 20,767.40 21,716.50 22,434.70 Stockholders Equity Total 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 Total reserves 17,673.30 17,341.50 18,001.70 18,712.70 19,291.20 19,946.40 20,108.20 20,767.50 21,716.60 22,434.90
Page | 99
Consolidated Statement of Financial Position Period: 01 April 2019 - 31 March 2049 2040 2041 2042 2043 2044 2045 2046 2047 2048 2049 £ 000's £ 000's £ 000's £ 000's £ 000's £ 000's £ 000's £ 000's £ 000's £ 000's Fixed Assets Intangible assets and goodwill Land & Buildings Total 102,844.10 104,389.20 106,693.70 107,504.70 108,309.60 108,729.70 110,206.30 110,756.00 112,011.00 113,695.70 Depreciation Land & Buildings Total -57,858.50 -59,926.30 -61,814.10 -63,978.70 -66,147.20 -68,091.10 -70,384.60 -72,294.10 -73,971.70 -75,787.10 Housing Properties NBV 44,985.70 44,463.00 44,879.60 43,526.00 42,162.40 40,638.60 39,821.70 38,461.90 38,039.30 37,908.70 Other Fixed Assets Tangible 250.8 299 265.7 235.5 235.4 235.5 267.5 256.3 220.8 69.9 Tangible fixed assets 45,236.50 44,762.00 45,145.20 43,761.50 42,397.80 40,874.10 40,089.20 38,718.20 38,260.10 37,978.60 Investments FA 6.2 6.2 6.2 6.2 6.2 6.2 6.2 6.2 6.2 Investments in joint ventures Investments in associates Fixed Assets Total 45,242.70 44,768.20 45,151.50 43,767.80 42,404.00 40,880.30 40,095.40 38,724.50 38,266.30 37,978.60
Current Assets Stock Trade and other debtors 495.8 495.8 495.8 495.8 495.8 495.8 495.8 495.8 495.8 495.8 Investments CA Cash and cash equivalents 5,900.30 5,705.20 4,803.70 6,398.60 7,407.00 8,833.60 9,639.60 11,553.70 12,621.30 13,143.10 Current Assets Total 6,396.10 6,201.10 5,299.50 6,894.40 7,902.80 9,329.40 10,135.50 12,049.60 13,117.10 13,639.00
Less - Creditors - amounts due within 1 year -1,332.40 -1,332.40 -1,332.40 -1,332.40 -1,332.40 -1,332.40 -1,332.40 -1,332.40 -1,332.40 -1,332.40 Net current assets/liabilities 5,063.70 4,868.70 3,967.10 5,562.00 6,570.40 7,997.00 8,803.00 10,717.20 11,784.70 12,306.60
Assets less current liabilities Total 50,306.40 49,636.90 49,118.60 49,329.80 48,974.40 48,877.40 48,898.50 49,441.60 50,051.10 50,285.10
Creditors - amounts due after more than 1 year Outstanding Loan Balance -15,407.10 -14,827.30 -14,214.40 -14,021.90 -13,821.60 -13,613.20 -13,396.20 -13,396.20 -13,396.20 -13,396.20 Loan Fees 49.2 57.9 88.6 76.5 100.7 86.9 73.2 60.8 48.4 36.1 Fair Value Provision Total Deferred Income -11,864.50 -11,186.70 -10,508.80 -9,831.00 -9,153.20 -8,475.30 -7,797.50 -7,119.70 -6,441.80 -5,764.00 Long Term Creditors Balance 0 0 0 0 0 0 0 0 0 0 Deferred Premium - - - Creditors - amounts due after more than 1 year -27,222.40 -25,956.00 -24,634.70 -23,776.50 -22,874.10 -22,001.60 -21,120.50 20,455.10 19,789.60 19,124.10 Net assets Total 23,084.00 23,680.90 24,484.00 25,553.30 26,100.30 26,875.80 27,777.90 28,986.60 30,261.50 31,161.00
Reserves Income and Expenditure Reserve 23,083.80 23,680.70 24,483.80 25,553.10 26,100.10 26,875.60 27,777.80 28,986.40 30,261.30 31,160.80 Stockholders Equity Total 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 Total reserves 23,084.00 23,680.90 24,484.00 25,553.30 26,100.30 26,875.80 27,777.90 28,986.60 30,261.50 31,161.00
Page | 100
Consolidated Statement of Cash Flow Period: 01 April 2019 - 31 March 2049 Total Period 2020 2021 2022 2023 2024 2025 2026 2027 2028 £000's £000's £000's £000's £000's £000's £000's £000's £000's £000's
Total Receipts 219,398.60 4,723.30 4,919.80 5,244.50 5,662.00 5,850.60 6,015.70 6,200.90 6,223.30 6,369.20 Total Payments -92,084.10 -2,559.40 -2,581.00 -2,318.10 -2,147.30 -2,314.20 -2,317.60 -2,465.80 -2,452.50 -2,390.60 Cash Paid To Employees -48,689.50 -1,313.00 -1,337.40 -1,380.80 -1,416.80 -1,452.20 -1,362.80 -1,249.70 -1,280.90 -1,313.00 Cash flow from Operating Activities 78,624.90 850.9 1,001.30 1,545.60 2,097.90 2,084.20 2,335.30 2,485.50 2,489.80 2,665.70 Provisions for tax Surplus for the year 78,624.90 850.9 1,001.30 1,545.60 2,097.90 2,084.20 2,335.30 2,485.50 2,489.80 2,665.70 Net cash generated from operating activities 78,624.90 850.9 1,001.30 1,545.60 2,097.90 2,084.20 2,335.30 2,485.50 2,489.80 2,665.70
Cash flow from investing activities Purchase of tangible fixed assets -68,457.60 -6,018.80 -7,688.80 -6,629.50 -3,562.10 -3,844.20 -1,937.10 -2,622.50 -1,672.20 -654.7 Proceeds from sale of tangible fixed assets Grants received 6,160.20 2,815.10 3,280.00 65.1 Interest Received (cash) 3,928.70 31.3 30.4 59.1 57.6 58.1 58.7 119.2 121.6 124 Total Cash flow from investing activities -58,368.70 -3,172.40 -4,378.40 -6,505.30 -3,504.60 -3,786.10 -1,878.40 -2,503.30 -1,550.60 -530.7 Cash flow from financing activities Interest paid -21,352.60 -147.8 -345.5 -608.6 -793 -784.8 -972.6 -920 -906.7 -892.6 Interest element of finance lease rental payment New secured loans 30,500.00 3,000.00 5,500.00 4,500.00 4,000.00 Repayment of borrowings -22,500.00 -112.8 -150.6 -241.1 -242.6 -237.4 -242.1 -255.5 -269.6 -284.5 Total Cash flow from financing activities -13,352.60 -260.6 2,503.90 4,650.30 3,464.40 -1,022.10 2,785.30 -1,175.50 -1,176.30 -1,177.10
Cash & cash equivalents at the beginning of year 6,239.40 6,239.40 3,657.40 2,784.10 2,474.90 4,532.60 1,808.60 5,050.80 3,857.50 3,620.40 Net Change in Cash & cash equivalents 6,903.70 -2,582.10 -873.2 -309.3 2,057.70 -2,723.90 3,242.20 -1,193.40 -237 957.9 Cash & cash equivalents at the end of year 13,143.10 3,657.40 2,784.10 2,474.90 4,532.60 1,808.60 5,050.80 3,857.50 3,620.40 4,578.30
Page | 101
Consolidated Statement of Cash Flow
2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 £000's £000's £000's £000's £000's £000's £000's £000's £000's £000's
Total Receipts 6,484.40 6,617.40 6,753.20 6,909.40 7,033.20 7,177.50 7,324.80 7,498.00 7,633.50 7,786.10 Total Payments -2,749.30 -2,829.10 -3,706.40 -2,799.30 -2,792.40 -2,989.30 -2,999.30 -3,597.20 -3,156.70 -2,965.60 Cash Paid To Employees -1,345.80 -1,379.40 -1,413.90 -1,449.30 -1,485.50 -1,522.60 -1,560.70 -1,599.70 -1,639.70 -1,680.70 Cash flow from Operating Activities 2,389.30 2,408.90 1,632.90 2,660.80 2,755.30 2,665.50 2,764.80 2,301.10 2,837.00 3,139.80 Provisions for tax Surplus for the year 2,389.30 2,408.90 1,632.90 2,660.80 2,755.30 2,665.50 2,764.80 2,301.10 2,837.00 3,139.80 Net cash generated from operating activities 2,389.30 2,408.90 1,632.90 2,660.80 2,755.30 2,665.50 2,764.80 2,301.10 2,837.00 3,139.80
Cash flow from investing activities Purchase of tangible fixed assets -1,881.60 -1,285.10 -1,359.00 -1,215.50 -1,802.10 -1,541.60 -1,292.50 -2,891.80 -1,484.20 -552.2 Proceeds from sale of tangible fixed assets Grants received Interest Received (cash) 126.5 129.1 131.7 134.3 137.1 139.8 142.6 145.5 148.5 151.5 Total Cash flow from investing activities -1,755.10 -1,156.00 -1,227.30 -1,081.10 -1,665.10 -1,401.80 -1,149.90 -2,746.20 -1,335.70 -400.7 Cash flow from financing activities Interest paid -877.7 -862 -845.3 -827.7 -809.1 -789.3 -768.5 -746.4 -723.1 -698.3 Interest element of finance lease rental payment New secured loans Repayment of borrowings -300.3 -317.1 -334.8 -353.5 -373.3 -394.3 -416.5 -439.9 -464.8 -491.1 Total Cash flow from financing activities -1,178.10 -1,179.00 -1,180.10 -1,181.20 -1,182.40 -1,183.60 -1,184.90 -1,186.40 -1,187.90 -1,189.50
Cash & cash equivalents at the beginning of year 4,578.30 4,034.50 4,108.30 3,333.90 3,732.40 3,640.30 3,720.40 4,150.40 2,518.90 2,832.30 Net Change in Cash & cash equivalents -543.8 73.9 -774.5 398.5 -92.1 80.2 430 -1,631.50 313.4 1,549.70 Cash & cash equivalents at the end of year 4,034.50 4,108.30 3,333.90 3,732.40 3,640.30 3,720.40 4,150.40 2,518.90 2,832.30 4,382.00
Page | 102
Consolidated Statement of Cash Flow | Linthouse 2019 BP
2039 2040 2041 2042 2043 2044 2045 2046 2047 2048 2049 £000's £000's £000's £000's £000's £000's £000's £000's £000's £000's £000's
Total Receipts 7,941.90 8,121.40 8,262.70 8,428.00 8,596.50 8,790.90 8,943.80 9,122.70 9,305.20 9,515.50 9,943.10 Total Payments -3,295.20 -3,379.60 -3,562.60 -3,328.20 -3,335.40 -3,814.60 -3,845.50 -3,827.60 -3,626.00 -3,681.90 -4,256.30 Cash Paid To Employees -1,722.70 -1,765.80 -1,809.90 -1,855.20 -1,901.60 -1,949.10 -1,997.80 -2,047.80 -2,099.00 -2,151.40 -2,205.20 Cash flow from Operating Activities 2,923.90 2,976.00 2,890.20 3,244.60 3,359.50 3,027.20 3,100.50 3,247.30 3,580.20 3,682.20 3,481.50 Provisions for tax Surplus for the year 2,923.90 2,976.00 2,890.20 3,244.60 3,359.50 3,027.20 3,100.50 3,247.30 3,580.20 3,682.20 3,481.50 Net cash generated from operating activities 2,923.90 2,976.00 2,890.20 3,244.60 3,359.50 3,027.20 3,100.50 3,247.30 3,580.20 3,682.20 3,481.50
Cash flow from investing activities Purchase of tangible fixed assets -1,778.40 -381.3 -1,951.10 -2,888.20 -1,176.30 -1,227.80 -1,086.40 -1,857.40 -1,307.40 -2,259.50 -2,608.40 Proceeds from sale of tangible fixed assets Grants received Interest Received (cash) 154.5 157.6 160.8 164.1 167.4 170.8 174.2 177.7 181.3 185 188.7 Total Cash flow from investing activities -1,623.90 -223.6 -1,790.20 -2,724.10 -1,008.90 -1,057.10 -912.2 -1,679.60 -1,126.10 -2,074.60 -2,419.70 Cash flow from financing activities Interest paid -672.2 -794.5 -715.2 -809.1 -563.3 -761.4 -553.2 -544.7 -540 -540 -540 Interest element of finance lease rental payment New secured loans 3,000.00 2,000.00 4,500.00 4,000.00 Repayment of borrowings -519 -3,548.50 -2,579.80 -5,112.90 -192.5 -4,200.30 -208.5 -217 Total Cash flow from financing activities -1,191.20 -1,343.00 -1,294.90 -1,422.00 -755.7 -961.7 -761.7 -761.7 -540 -540 -540
Cash & cash equivalents at the beginning of year 4,382.00 4,490.90 5,900.30 5,705.20 4,803.70 6,398.60 7,407.00 8,833.60 9,639.60 11,553.70 12,621.30 Net Change in Cash & cash equivalents 108.9 1,409.40 -195 -901.6 1,594.90 1,008.40 1,426.60 806 1,914.10 1,067.60 521.8 Cash & cash equivalents at the end of year 4,490.90 5,900.30 5,705.20 4,803.70 6,398.60 7,407.00 8,833.60 9,639.60 11,553.70 12,621.30 13,143.10
Page | 103
Appendix 10 - Sensitivity Analysis
1.0 Sensitivity Analysis & Scenario Modelling 1.1 The following sensitivity analysis and scenario testing considers the impact on the cash resources. 1.2 The sensitivities run was:
1) Inflation increase by 0.5% 2) Variable loan rate reduction by 0.5% 3) No real increase in planned maintenance costs 4) Management cost savings of £50,000 per annum 5) No real rent increases 6) No real rent increase after Year 5 7) Inflation reduction by 0.5% 8) Variable loan rate increase by 1% 9) Increase in salary costs of 5% per annum 10) Increase in planned maintenance costs of 5% 11) Increase in reactive maintenance costs of 10% 12) Combination of 5, 7, 9 10 & 11 13) Acceleration of the window and stonework programme
1.2.1 The impact of the positive sensitivities (SA 1 to SA 4) are illustrated in Graph 1 below. The baseline cash balance in Year 30 is £13.1m.
1.2.2 SA 1 - The slight increase in inflation has had a positive effect on the cash balances over the 30-year period. Cash at Year 30 is around £2.6m higher than the baseline.
1.2.3 SA 2 - The reduction in the variable loan rate by 0.5% generates additional cash of £400,000 by Year 30.
1.2.4 SA 3 - No real cost increase in cyclical, planned and reactive maintenance costs generates additional cash of £7.6m.
1.2.5 SA 4 - Management cost savings of £50,000 per annum generates additional cash of £2.1m by Year 30.
1.2.6 A Debt Service test (operating Surplus +Depreciation: Interest paid+ capital repayment) 110% is met with all positive sensitivities, except ion the years the bond finance is repaid by a bullet payment which as mentioned in the main report has already been raised with Unity Bank
1.2.7 A gearing covenant loans/historic cost of properties at 60% is met with all positive sensitivities.
Page | 104
Graph 1 Positive sensitivity SA 1 to SA 4
Positive Sensitivities
25,000.00
20,000.00
15,000.00
10,000.00
5,000.00
0.00 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
Base Cash No inflation increase Repairs Inflation increase LIBOR reduced Reduction in Management Costs
Page | 105
1.2.8 The impact of the negative sensitivities (SA 5 to SA 11) are illustrated in Graph 2 below. The baseline cash balance in Year 30 is £13.1m.
1.2.9 SA 5 - No real rent increase over the 30-year period results in mostly negative cash balances in Years 12 to Years 30. The cash in Year 30 would be - £1.7m. This is a reduction of £14.8m.
1.2.10 SA 6 - No real rent increase after Year 5 shows positive cash balances for the full 30 Years, but the overall position is a £5m reduction in cash.
1.2.11 SA 7 - Reducing inflation by 0.5% shows positive cash balances for the full 30 years. The cash at Year 30 is £2.3m lower than the baseline model.
1.2.12 SA 8 - Increasing the variable loan rate by 1% each year shows positive cash balances for the full 30 Years. The cash at Year 30 is £200,000 lower than the baseline model. With the assumption that fixed rate bond finance is the source of future funding there is protection from an increase in interest rates.
1.2.13 SA 9 - Increasing salary costs by 5% each year shows positive cash balances for the full 30 Years. The cash at Year 30 is £2.4m lower than the baseline model.
1.2.14 SA 10 - Increasing the planned maintenance costs by 5% each year shows positive cash balances for the full 30 Years. The cash at Year 30 is £2.7m lower than the baseline model.
1.2.15 SA 11 - Increasing reactive maintenance costs by 10% each year shows positive cash balances for the full 30 Years. The cash at Year 30 is £2.5m lower than the baseline model.
1.2.16 Based on the current covenant structure the Association will run out of cash before lending covenants are breached.
1.2.17 SA 5 - assumes that there will be no real rent increases for 30 years. Despite a reduction in cash flow of nearly £15m the gearing and interest covenant are not breached. Under SA 5 the Association runs out of cash by year 10 but still meets their covenants.
1.2.18 SA 7 to 11 are all covenant compliant until the bond is repaid.
1.2.19 This highlights the increasing importance of monitoring cash flows going forward.
Page | 106
Graph 2 Negative Sensitivity SA 5 to SA 11
Negative Sensitivities
15,000.00
10,000.00
5,000.00
0.00 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
-5,000.00
-10,000.00
Base Re4nt inflation only from yr 6 Inflation only rent inflation reduction PM + 5% Libor + 1% Salary + 5% Reactive + 10%
Page | 107
Graph 3 Combined Sensitivity Analysis - SA 12
Combined sensitivity 15,000.00
10,000.00
5,000.00
0.00 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
-5,000.00
-10,000.00
-15,000.00
Base Cash Negative Combinantion
1.2.21 Graph 3 above illustrates the combination scenario, and results in the most serious financial situation for the Association.
1.2.22 SA 12 - this combines no real rent increase, reduction in inflation, an increase in management costs, and an increase in planned and reactive maintenance costs. The results in negative cash balances from Year 8 to Year 30. The cash at the end of Year 30 is £21.6mm worse off. Although the Association runs out of cash by year 8 it remains in theory covenant compliant 1.2.23 whilst the Association remains financially sound (other than the combination scenarios), it is clear that the rate of rent increase has the biggest impact of all the sensitivities run.
Page | 108
Graph 4 Acceleration of the window and stonework programme SA 13
1.2.24 Graph 4 below illustrates the effects of accelerating the window and stonework programme over a 3-year period 2019/20 and completing 2021/22. This results in a requirement of additional private finance which we have estimated to be £11m, drawn in year 2 of the cash flow. Implications re new covenants etc. the risks involved, including ability to manage such a programme and the delivery of a good quality product would need to be considered carefully before commencing on such a strategy, The acceleration of the programme is not a strategy supported by the senior management team a bond finance was assumed and the Association was willing to offer sufficient security to the Bond holder, covenants could be avoided.
Acceleration windows and sandstone 14,000.00
12,000.00
10,000.00
8,000.00
6,000.00
4,000.00
2,000.00
0.00 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 Base Accelerate windows and etc
1.2.25 The strategy would only work with bond finance, which assumes interest only payment for 20 years and then the loan is refinanced at that point. The Unity Bank covenant issue when a bullet payment is made to repay the bond remains.
Page | 109
1.2.26 Whilst the Association remains financially sound (other than the combination and no real rent increase scenarios), it is clear that the maintaining the proper level of working capital will be the main challenge for the Association. The outcomes from the updated stock condition surveys will be crucial in determining the future viability of Linthouse HA.
In Conclusion
What emerges from the above is that the Association, aside from the combination scenarios, remains reasonably robust. The stress test assumptions look reasonable and are built upon prudent base case assumptions. The covenants remain compliant until the bullet repayments are made for the bond finance. As mentioned earlier the covenant issue has been raised with Unity Bank who because the issue does not crystallise till 2040 they appear to be relaxed about this.
Page | 110
Appendix 11 LHA Compliance with UN Loan Covenants
Covenant Calculations DST Minimum 110% 110% 110% 110% 110% 110% 110% 110% 110% 110% 110% 110% 110% 110% 110% Year end 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 Projected 698% 405% 313% 291% 280% 265% 293% 294% 311% 285% 288% 215% 312% 321% 314% Compliant Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes
Gearing Maximum 60% 60% 60% 60% 60% 60% 60% 60% 60% 60% 60% 60% 60% 60% 60% Year end 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 Projected 9% 12% 18% 23% 22% 26% 25% 24% 23% 23% 22% 21% 21% 20% 19% Compliant Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes
op surplus 610.5 670.3 1104.2 1339.7 1231.3 1418.8 1503.8 1437.5 1571.6 1246.1 1214.4 390 1361.7 1391.1 1236.3 depreciation 989.9 1099.9 1209.3 1388.8 1487.1 1559.1 1618.6 1684.6 1728.6 1777 1832.4 1879 1927.3 1992.9 2062 1600.4 1770.2 2313.5 2728.5 2718.4 2977.9 3122.4 3122.1 3300.2 3023.1 3046.8 2269 3289 3384 3298.3 int earned 31.3 30.4 59.1 57.6 58.1 58.7 119.2 121.6 124 126.5 129.1 131.7 134.3 137.1 139.8 Int paid 147.8 317 557.5 754.2 790.9 940.8 928.2 914.8 900.8 885.9 870.1 853.5 835.8 817.2 797.5 116.5 286.6 498.4 696.6 732.8 882.1 809 793.2 776.8 759.4 741 721.8 701.5 680.1 657.7 Debt repaid 112.8 150.6 241.1 242.6 237.4 242.1 255.5 269.6 284.5 300.3 317.1 334.8 353.5 373.3 394.3
Page | 111
LHA Compliance with UN Loan Covenants Appendix 11
DST Minimum 110% 110% 110% 110% 110% 110% 110% 110% 110% 110% 110% 110% 110% 110% 110% Year end 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 2048 2049 Projected 324% 280% 331% 360% 340% 87% 113% 68% 664% 77% 620% 648% 1131% 1170% 1093% Compliant Yes Yes Yes Yes Yes No Yes No Yes No Yes Yes Yes Yes Yes
Gearing Maximum 60% 60% 60% 60% 60% 60% 60% 60% 60% 60% 60% 60% 60% 60% 60% Year end 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 2048 2049 Projected 18% 18% 17% 16% 16% 15% 14% 13% 13% 13% 13% 12% 12% 12% 12% Compliant Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes
op surplus 1289.2 770.9 1242 1504.1 1244 1266.9 1142.4 1417.5 1477.3 1113.4 1168.3 1282.9 1579.7 1642.3 1263.2 depreciation 2109.9 2162.9 2224.8 2263 2309.6 2345.9 2376.7 2449.9 2507.8 2538.5 2562.5 2592.3 2617.7 2657.8 2713.5 3399.1 2933.8 3466.8 3767.1 3553.6 3612.8 3519.1 3867.4 3985.1 3651.9 3730.8 3875.2 4197.4 4300.1 3976.7 int earned 142.6 145.5 148.5 151.5 154.5 157.6 160.8 164.1 167.4 170.8 174.2 177.7 181.3 185 188.7 Int paid 776.6 754.6 731.2 706.5 680.3 775.4 706.4 778.5 575.4 737.2 567 558.5 552.4 552.4 552.4 634 609.1 582.7 555 525.8 617.8 545.6 614.4 408 566.4 392.8 380.8 371.1 367.4 363.7 Debt repaid 416.5 439.9 464.8 491.1 519 3548.5 2579.8 5112.9 192.5 4200.3 208.5 217 0 0 0
There are three covenants over the Association's borrowings with Unity Trust Bank; Interest Cover, Gearing and Loan to Value. The interest cover covenant allows us to add back depreciation to the operating surplus which shall be no less than 110% of interest payable less interest receivable plus capital repayment for each. The gearing covenant measures the level of borrowings to the book cost of the properties and must not be more than 0.60:1. The third covenant, Loan to Value measures the value of the properties held as security by Unity to the borrowings and must be equal to or more than 120%.
Page | 112
Appendix 12 Linthouse Stock Holding self-contained rented, non-self-contained rented, commercial, shared ownership units, lockups and office
Throughout the business plan we have counted our housing stock in different ways in relation to the definitions provided by the Scottish Housing Regulator (SHR) and used the most relevant figure relating to the context of the discussions in the plan. This appendix is designed to provide clarity on exact numbers and types of stock in LHA’s full or partial ownership at 1.8.19.
Property Type Total Number Commercial 9 8 shops below Linthouse tenements and 1 small commercial office space at the Luma tower. In total there are X shops/pubs below the Linthouse tenements which will have an impact on future planned maintenance. Approx. 30% are shuttered and not in use. Review as part of Masterplan as impacting negatively on streetscape. Lockups 43 Bank of lockups at Langland’s multi-storey flats – review future use as part of Masterplan Mainstream rented 1166 Located in Linthouse, Shiedhall, and Drumoyne areas Shared Owners 45 Located in Drumoyne and Linthouse Supported Accommodation 8 Located in 2 large houses in the Eldergrove estate with 8 bed spaces LHA Office Accommodation 1 Office in LHA full ownership and base for service delivery Grand Total 1272
The above figures are reported in different ways to meet the definitions required by the SHR for the purposes of the annual return on the charter (ARC), the 5 Year Loan Portfolio return financial projection returns, and a third figure is used for the calculations for the stock valuations as some of LHA stock is excluded as it would not be acceptable for security by potential lenders. As detailed in the table below for 2018/19 returns:
Submission Type Number of Units Definition (What is included?) Loan Portfolio Return, 5 Year Projections 1219 1166 Mainstream Rent, 45 Shared Owners, 8 supported units ARC Submission 1174 Is concerned with the wholly owned units 1166 Mainstream Units, and 8 supported units Long Term 30-year Projections prepared by HRC 1230 This includes 9 commercial, 43 lock-ups, 1167 mainstream rent, 8 supported, 1 Office, 2 wardens flats. This figure excludes the 45 shared ownership. Stock Valued by Jones Lang Lassle (JLL) in 2015 for 1062 JLL valuation of the stock excluded 112 multi storey flats in the Langland’s estate and all 45 shared purposes of borrowing ownership units as lenders don’t accept as these security, the 11 units at Eldergrove under renovation and 3 shared ownerships LHA bought back in 18/19 were not included in the JLL valuation. Unity bank have security over 150 which leaves 912 free if further borrowing is required
Throughout the report and in discussions at Committee staff often quote two different figures for the factoring service delivered by LHA the table below explains the reason for this and provides clarity on actual numbers factored and reason for differences: Type of factoring Service Number of Units Estates & Numbers Factored Full Factoring Service (For in 18/19 ARC) 487 Linthouse 345, Langland’s 59 (flats only), Luma 43, Drumoyne 9, Barnwell 1, Ridgeway 30 Partial Factoring Service 207 Shared Owners 45, Ridgeway Park 158, Langland’s 4 Total 694 A review of the factoring service in terms of level of service and cost recovery is required
Page | 113
THIS PAGE IS INTENTIONALLY BLANK
Page | 114