The Association has a funding facility with the Nationwide Building Society which initially enabled the acquisition of housing stock from Tameside MBC. This credit arrangement also enables further investment in new and existing developments. We have a 30 year business plan to ensure that we meet our commitments, which currently stand at around £11M.
We can comply with the Government’s rent-setting regime without detriment to our services, or to our continuing investment in homes and estates. Our homes are already fully Decent Homes compliant.
Financial report for the year ended 31st March 2007
By John Auty, Director of Finance and Administration
Financial performance during the year
The Association reported an operational shortfall for the year of £249,000 compared to a shortfall for the previous year of £408,000. This was better than we had budgeted for.
There was an overall increase in gross rental income of £129,000. This was caused by increases to the weekly rent arising from compliance with the government's rent restructuring initiative.
The Association's costs have increased over the previous year. The overall increase was £276,000, representing a 16.14% increase. The most notable individual cost increase was £147,000 on planned repairs, as the cyelleal programme has now commenced.
Effective treasury management kept the Association's interest costs to a similar level as the year before at £675,000. This represents 24.4% of the Association's costs.
Group arrangements
The Association has a wholly owned subsidiary named APH Developments Limited, which delivers the required expertise and project management for newbuild programmes on behalf of Ashton Pioneer Homes. A contract between the two parties embodies the pursuit of common strategic objectives whilst affording the Association a considerable measure of risk management control.
The Association has an IT contract with SASSHA that involved the provision, implementation and on going maintenance of the Housing Management and Finance systems, IT office and network systems.
Business planning
As Ashton Pioneer Homes is an LSVT (Large Scale Voluntary Transfer), and was one of the first in England, its long term finances are managed by a 30 year financial business plan which must show that the Association can repay its loans within the period set by its funders, The Nationwide Building Society. Ashton Pioneer Homes has fully met and generally exceeded its business plan, which has delivered scope for building additional family homes and enhanced services to our tenants.
Stock movements in the year
The Association owned 913 properties at 31st March 2007, with no tenant exercising the right to buy / right to acquire in the preceding 12 months.
Assets
Assets are included in the Balance Sheet at cost, less Social Housing Grants and property depreciation. The net cost at 31st March 2007 was £4.588m, a 4.91% increase on the previous year. The assets are assessed for loan security purposes on an annual basis by external valuers, and the valuations are considerably higher than historic cost.
Rent increases
In October 2002 the Association was required to comply with the Government’s new rent restructuring proposals, which means that rents will be adjusted over a ten-year period to meet an agreed target rent. This will ensure that similar rents for similar properties are being charged not only within this Association but also across Associations operating within a similar geographical area.
After the Tenants Rent Guarantee ceased in October 2004, the Association began implementing the new rent guidelines. The base rent increase at October 2007 was 4.1% (Sept 2006 RPI plus 0.5%) and was the 5th year of the 10-year rent convergence plan.
Loans
During the last financial year, a further £100,000 was obtained from our funders, the Nationwide Building Society, which took our total borrowings to £10.55m.
