Registered with the Homes and Communities Agency as a Social Landlord Number L4230

Transcription

1 Report and Financial Statements Year ended 31 March Registered Industrial and Provident Society No 31210R Registered with the Homes and Communities Agency as a Social Landlord Number L4230 1

2 Table of Contents Mission, Vision, and Principles 3 Board Members and Executive Officers... 4 Advisors and Bankers... 5 Report of the Board... 6 Statement of Responsibilities of the Board Group Highlights Five Year Summary Value for Money Assessment 15 Independent Auditors Report Group Income and Expenditure Account Association Income and Expenditure Account Statement of Total Recognised Surpluses and Deficits Reconciliation of Movements in Group s and Association s Funds Group Balance Sheet Association Balance Sheet Consolidated Cashflow Statement Notes to the Financial Statements

3 Our Mission Making South Liverpool the place to be. Our Vision Our plans are designed to deliver real benefit to the lives of local people. These comprise: Homes quality homes in neighbourhoods of choice grow an affordable and sustainable asset base in South Liverpool understand the needs of our neighbourhoods and communities lead and influence physical regeneration activity in South Liverpool Services improve customer satisfaction and business performance involve customers and stakeholders in service improvement be acknowledged as an excellent employer delivering world class services Enterprise promote opportunities for wealth creation and retention be recognised as the lead regeneration agency in South Liverpool establish a profit making social enterprise company Our Core Principles In all that we do we aim to deliver the following; Every Customer Happy Every Place Perfect Every Opportunity Taken Every Penny Counts Every Person Positive 3

4 Board Members and Executive Officers Chair Other Members John McHale (resigned 24 September ) Ian Perry (appointed 24 September ) Barbara Southern Ruth Stott (resigned 29 May ) Doreen Knight (resigned 26 June and reappointed 23 July ) Colin Strickland (resigned 26 June ) Larry Dack Rob Brown Trevor Smith Steve Jennings Roy Davies Mary Aspinall (appointed 26 June and resigned 23 July ) Mary Rasmussen (appointed 26 June ) John Rippon (appointed 25 September ) All Board members have served on the Board throughout the year from 1 April to 31 March except where indicated. Executive Officers: Chief Executive Director of Corporate Services Director of Operations Secretary Registered office: Julie Fadden Anthony Russell Wayne Gales Anthony Russell Parklands Conleach Road Speke Liverpool L24 0TY Main Business Premises: Speke Office Parklands Conleach Road Speke Liverpool L24 0TY 4

5 Advisors and Bankers External Auditors: BDO LLP 5 Temple Square Temple Street Liverpool L2 5RH Internal Auditors: TIAA Limited Business Support Centre Gosport Business Centre Aerodrome Road Gosport PO13 0FQ Principal Solicitors: Trowers & Hamlins Sceptre Court 40 Tower Hill London EC3N 4DX Principal Bankers: National Westminster Bank Liverpool City Office 22 Castle Street Liverpool L2 0UP Principal Lenders: The Co-operative Bank plc 1 Balloon Street Manchester M60 4EP Registered with the Homes and Communities Agency as a social landlord L4230 Registered at Companies House number IP Registered Industrial and Provident Society No 31210R 5

6 Report of the Board The Board is pleased to present its report and the audited financial statements for the year ended 31 March. The Group The SLH Group is made up of four organisations. South Liverpool Homes Limited (SLH) is the group parent, a charitable industrial and provident society limited by guarantee and a housing association registered with and regulated by the Homes and Communities Agency. SLH s primary activity is housing and property management. SLH Regeneration Limited is a company which provides Non Charity works including fencing and boundary works to South Liverpool Homes Limited. SLH Projects Limited is a company which designs and builds development projects and has been dormant in the last year and has yet to commence trading. SLH Home Service LLP was established in September The business commenced trading in April, as a joint venture partnership with Penny Lane Builders Limited. Principal Activities The principal activity is the provision of affordable rented accommodation for people in housing need. The SLH Group, however, has a wider remit to contribute to the overall sustainable regeneration of the area through the development and support of appropriate activities and initiatives. Performance for the Year For the year ended 31 March, the Group made a surplus of 3.7m (: surplus of 2.8m.) This surplus was credited against Revenue Reserves. To date SLH has utilised the entire 39.6m ERCF grant allocated on transfer. The majority of this has been utilised to fund the main improvement programme. The remaining grant utilised to underpin the environmental and regeneration work around the estate. Right to Buy This year, 291k in proceeds was received through the sale of right to buy properties. seven properties were sold at an average discounted price of 41k. A fall in property values has been experienced throughout the area. Land Sales This year a surplus of 110k arose from the sale of land arising from the development detailed in Note 31. Turnover The year ended 31 March has seen a slight decrease in group turnover to 16.4m before subsidy (: 16.6m) This having arisen from the exhaustion of ERCF revenue grant in the prior year 0.9m and reduced sales of land. These reductions being partially offset by increased rental income. The majority of turnover represents rental income from social housing properties. The scope to increase rent is dictated by the rent restructuring framework issued by Central Government. This framework is designed to ensure social housing properties of a similar size and within the same area yield a similar rent by or earlier. SLH increases its rent in line with the rent restructuring guidelines. Operating Costs Operating costs have reduced to 11.5m (: 12.5m). This is mainly due to reductions in: Management; Environment works and Routine Maintenance costs. Cash and investments totalled 7.5m as at 31 March (: 5.1m). At 31 March debt totalling 25.7m was drawn leaving 5.8m of undrawn facility. Significant events during the year include: Total spending during the year on repairs and home improvements of 5.7m. This has included during the year: Voids repaired/improved; - 11,848 responsive repairs carried out to our homes. A focus on community based regeneration projects continued throughout the year. Donations, Sponsorship and Support to local agencies SLH has made the following contributions during the year: 2.8k of support to local agencies. SLH supports local agencies within a total sum 6

7 agreed by the Board where the agency s aims and objectives fit closely with its own. Loan Facilities The Association has loan facilities with Cooperative Bank plc and Nationwide Building Society of 31.5m, however this does not impact on the business as the projected peak debt is 30.7m and there is further capacity for borrowing additional funds. Pension Costs The Group participates in two pension schemes, the Social Housing Pension Scheme (SHPS) and the Merseyside Pension Fund (MPF). Both of these are final salary schemes, offering good benefits for our staff. The Group has contributed to the schemes in accordance with levels, set by the actuaries. An actuarial valuation of the SHPS was undertaken at 30 September 2011 and revealed a shortfall of assets to cover expected liabilities. On the advice of the actuary, scheme contributions will increase from 1 April for both SLH and the employees in the scheme. The next actuarial valuation of the MPF as at 31 March will be completed by December With investment performance having fallen short of assumed levels and the impact of other factors including changes in: market yield; RPI to CPI; indexation and inflation risk premium. In addition, there has been revision of assumptions relating to: mortality rates; ill health retirements; real salary growth and dependant benefits. Contributions to this scheme have increased. The Group will continue to contribute to the scheme in line with the advice of independent actuaries. Future Developments There are a number of key development projects that the Board supports. These include the following: Development of 68 properties with grant funding from the Homes and Communities Agency; SLH is part of the Liverpool Housing Consortium with Liverpool City Council for new build. SLH will be building 46 properties for rent and for shared ownership. Charitable Status SLH converted to a charitable industrial and provident society in April The primary benefit of charitable conversion is to reinforce SLH s charitable objectives. There will also be a cash flow advantage from corporation tax savings, which will be reinvested in services to tenants. Over the life of the 30 year business plan these savings are projected to be 20m. Decent Homes Currently all of the 3,608 properties meet the decent homes standard. Payment of Creditors In line with government guidance, our policy is to pay purchase invoices within 28 days of receipt, or earlier if agreed with the supplier. Health and Safety The Board is aware of its responsibilities on all matters relating to health and safety. The Group has prepared detailed health and safety policies and provides staff training and education on health and safety matters. Commitment to Partnership Working Board commitment to broaden partnerships is vital to the success of our business and for the regeneration of our community. The last financial year has seen SLH continue partnership working with both Penny Lane Builders and Sure Maintenance. Other key partnerships have been formed as part of the redevelopment project in Garston which sees the SLH Group working with Liverpool City Council, Liverpool Housing Trust and Lovell Partnerships Limited. Board Members and Executive Officers The names of Board Members and Executive Officers are shown on Page 4. The Board structure consists of 10 members of whom 4 are Independent, 4 are Tenants and 2 are Local Authority Nominees. The SLH Regeneration Limited Board comprises 4 members, 3 of whom were appointed by the SLH Board. The SLH Projects Limited Board comprises 4 members, 3 of whom were appointed by the SLH Board. The Executive Officers act as officers within the authority delegated by the Board. The Board and Management have agreed a framework of performance reporting that includes Key Performance Indicators (KPIs). The KPIs below have been benchmarked against a benchmarking group of North West housing associations with less than 7,500 properties on Housemark. The KPI s are reviewed monthly by the board which allows 7

8 regular performance assessment and comparison within the sector. KPI s include: Percentage of rent collected of % (: 99.28%) against an upper quartile benchmark of %. Emergency repairs completed in target of 98.9% (: 99.70%) against an upper quartile benchmark 100%. Urgent repairs completed in target of 99.2% (: 99.3%) against an upper quartile benchmark of 99.9%. Routine repairs completed in target of 99.3% (: 99.1%) against an upper quartile benchmark of 99.8%. Insurance SLH maintains insurance policies for Members and Executive Officers against liabilities in relation to the Group. Employees The Board believes that SLH s success is linked to the quality and commitment of its employees. The Association s ability to meet its objectives and commitments to tenants, the community and its wider stakeholders in an efficient and effective way depends upon the contribution of its employees. Information on the Association s objectives, progress and activities are shared through regular briefings and meetings. SLH has an appraisal system linked to the Company s agreed objectives and priorities. Staff and managers have quarterly joint reviews of progress throughout the year. The appraisal system informs the Company s learning and development plan reflecting the training needs of employees to enable them to deliver SLH s objectives. SLH is committed to equality and diversity in the recruitment and retention of all of its employees. SLH particularly welcomes applications for employment from people with one or more of the protected characteristics of the Equalities Act These are given full and fair consideration for all vacancies, having regard to their particular aptitudes and abilities. In the event of an employee acquiring a protected characteristic, every effort would be made to enable the person to continue their employment within the Company. It is SLH s policy that training, career development and promotion opportunities should be available to all employees. Governance Following an annual self-assessment, the Board is pleased to report that SLH complies with the principals and provisions of its adopted code of governance, the NHF Code of Governance (revised 2010). The Board is committed to integrity and accountability in the stewardship of the Company s affairs. The Board is also pleased to report that, following self assessment and regulatory review by the Homes and Communities Agency, SLH remains compliant with the required outcomes and specific expectations of the Governance and Financial Viability Standard. The Board wishes to encourage tenants to participate in the running of SLH and to stand for election to become board members. SLH through its Neighbourhood Engagement Team have been involved throughout the year on a range of resident involvement activities aimed at encouraging more tenants to take an active part in the running of the Association. The Board delegates authority to two Committees each having its own Terms of Reference. Committees of the Board The Board is supported by two Committees operating under the following terms of reference: The Audit and Risk Committee has 4 members. Its duties and responsibilities include: Review the Annual Financial Statements before submission to the Board; Considering Internal Audit reports and findings and monitoring progress; Ensuring a formal review of strategic and corporate risks is carried out on a sixmonthly basis and reported to Board annually; Advising the Board on the appointment or removal of Internal and External Auditors. The Governance and Remuneration Committee has 4 members. Its duties and responsibilities include: Board succession planning including recruiting and selecting new board members and ensuring effective systems of personal development and appraisal are in place; 8

9 Setting targets and reviewing the performance of the Chief Executive and setting their remuneration; Resolving Board Disputes and other issues involving Board Membership. Resident Involvement Following a best value review of the resident involvement structure, SLH has established a Tenant Assembly which brings together all tenants of SLH who want the opportunity to be involved and to contribute to the organisation. The ways to get involved now include Board or Scrutiny Panel membership, mystery shopping, task and finish groups to review policies, editorial panel, survey / questionnaire groups, the SLH Academy and Junior Board. Within this structure tenants have the means to inform strategy and policy decisions, scrutinise performance and contribute to the overall governance of SLH. Statement of Internal Control Introduction The Board has overall responsibility for establishing and maintaining the system of internal control and for reviewing its effectiveness. This responsibility applies for all organisations within the Group, including those not registered with the Homes and Communities Agency. Scope of Responsibility The Chief Executive, as the Accountable Officer, is responsible for maintaining a sound system of internal control that supports the achievement of the Group s policies, aims and objectives as determined by the Board, while ensuring compliance with statutory duties and responsibilities, safeguarding funds and assets, ensuring they are used in an effective, efficient and economic manner. Purpose of System of Internal Control The Group s system of internal control is designed to manage rather than eliminate the risk of failure to achieve policies, aims and objectives; to comply with statutory requirements; and to safeguard, and make best use of, public funds and assets. It can therefore only provide reasonable and not absolute assurance of effectiveness. The Board has adopted a risk-based approach to establishing and maintaining internal controls which are embedded within day to day management and governance processes. This approach includes the regular evaluation of the nature and extent of risks to which the Group is exposed and is consistent with the expectations of the Homes and Communities Agency standard on Governance and Financial Viability. The system of internal control continues to be maintained through an ongoing process designed to: Identify and evaluate principal risks to the achievement of the Group s policies, aims and objectives and for their effective management; Evaluate the likelihood of those risks being realised; Mitigate the impact should they be realised; Manage these risks efficiently, effectively, economically, and as far as is reasonably practicable. The Internal Control Environment The Group has a Corporate Plan, developed and reviewed annually with extensive engagement with Board members and the Executive Team. The Plan forms the basis for the performance management cycle that details the annual performance expectations of employees and Board members. The corporate objectives continue to be communicated to employees through regular team and performance reviews. This process has ensured that work plans have remained relevant whilst providing clear links to corporate objectives; for example: demonstrating the contributions made by employees to the achievement of corporate objectives; identifying the impact of initiatives; promoting the pursuit of value for money and the identification of efficiency savings. During the period there have been a range of initiatives to ensure employees are clear about the way in which the corporate objectives affect their role: two Senior Management Team presentations to all employees to alert them to relevant strategic issues; the Intranet used in circumstances where the rapid and consistent communication of information was judged important; the Group Management Team, comprising all managers met timely, providing a forum for two-way communication. 9

10 The Performance Management Framework has remained in place throughout the period and has been the mechanism for cascading corporate strategy into individuals work goals and reviewing their performance and development. Use of Performance Monitoring During the period the well-developed procedure for reporting performance management has continued, including: The Business Excellence Team ensuring timely and consistent evidence of performance against target was available to management and Board members; The Group s Key Performance Indicators benchmarked via Housemark to ensure effective scrutiny of each area; Housemark presentation to the Group Management Team on the quality and cost of services using 2011/12 data; Performance reports reviewed at Scrutiny Panel and at Board quarterly by exception.; Senior Management Team review of performance data each month. The Group has Financial Regulations and Standing Orders in place to define the processes and responsibilities for budget management. Effective Governance Arrangements The Group s two Committees have continued to support and provide assurance about the quality of governance. The Committees have: monitored the ongoing effectiveness of the internal reporting within the Group; considered reports from internal and external audit; made, as appropriate, recommendations to the Board on the terms and conditions of employment. The Audit and Risk Committee in particular has continued to provide independent assurance on the adequacy of the risk management framework and the associated internal control environment; independent scrutiny of the Group s financial and nonfinancial performance to the extent that it affects the Group s exposure to risk as well as overseeing the financial reporting process. Specifically, during the period this Committee has: Reviewed internal audit reports and issues arising and sought assurance that action was taken through a mechanism of exception and follow up reporting; Approved internal audit s annual plan; Ensured effective arrangements between internal and external audit; Met with and considered the reports of external audit, reviewed the financial statements, and monitored management action in response to issues raised; Considered the effectiveness of the Group s governance arrangements with regard to compliance with the regulatory code and a review of anti fraud controls; Reviewed the effectiveness of the Board s approach to appraising new business; Obtained assurance that performance indicators are accurate and reliable through a validation exercise; Obtained assurance that effective controls to ensure health and safety (including controls to mitigate against the risks of asbestos and legionella); Reviewed and obtained assurance on the controls around procurement, cyclical maintenance, payroll, and fixed assets; Reviewed and obtained assurance on IT controls around internet and usage; Reviewed and obtained assurance on supported housing provisions including its funding; Reviewed and obtained assurance on service charges policy and procedures; Reviewed and obtained assurance on the approach to aids and adaptations; Reviewed the Group s Service/VFM Reviews; Continued to review Fraud through a standing item on its agenda. The Group recognises that effective Board member appraisal is an important element in good governance and continued to carry out appraisals during the year. These went to inform the Board s learning and development plan. Robust Risk Management Processes A Risk Management Forum, made up of key staff, continued to meet quarterly throughout the year. The forum has clear terms of reference and considers reports from teams and individuals on potential changes to risk exposure and internal controls. Risk management continued to be a standing agenda item on the Audit and Risk Committee meeting agenda and the Board and Committee report template continued to be directly cross referenced with the Risk Map. 10

11 Review of Effectiveness of Internal Controls The Board is satisfied that effective systems of internal control have been operated in the period under review. In arriving at its opinion, the Board has conducted its annual review and placed reliance on several sources of evidence. The primary source of evidence is the reports from the internal audit service provided by TIAA. During /13, 56 days of internal audit time was committed to the management of the internal audit function by TIAA, with a further 45 committed for /14, the plan for which was agreed by the Audit and Risk Committee in January. Identifying and Evaluating Key Risks The Group s Risk Management Framework, setting out the Board s attitude to risk in the achievement of its objectives, underpins the risk management, business planning and control arrangements. These arrangements clearly define management responsibility for the identification, evaluation and control of significant risks. The executive directors regularly consider reports on these risks and the Chief Executive is responsible for reporting to the Board any significant changes affecting key risks. Welfare Reform The Association has performed a detailed analysis of the likely effects of the Welfare Reforms. The changes include Non- Dependant Deductions, Size Restrictions to Working Age and Universal Credit with housing benefit paid direct to tenants. The Association is adopting a number of strategies to mitigate the effects of these changes. Pensions The recent valuation of the Social Housing Pension Scheme (SHPS) underlines that increased payment will be needed by both employers and employees to address the undervaluation of the fund. In the longer term, SLH will need to make decisions about how to mitigate the exposure to rising pension costs, and maintaining an attractive employment package to recruit and retain high quality staff. Grant Funding The Association has experienced reductions in grant funding for a number of activities, including Supporting People. The Board has prioritised the activities which are funded by grants and costs are being reviewed. Financial instruments The Association s principal financial instruments comprise sterling cash and bank deposits, bank loans and overdrafts, other loans and trade debtors and trade creditors that arise directly from its operations. Cash flow interest rate risk Interest bearing assets comprise cash and bank deposits, all of which earn interest at a fixed rate. The Assocation s policy is to maintain other borrowings at between 60 and 100% fixed rates to provide mitigation from any adverse movements in interest rates and also allow some benefit from the relatively low cost of LIBOR funding. The directors monitor the overall level of borrowings and interest costs to limit any adverse effects on financial performance of the Assocation. Inflation There is a risk to the business of inflation particularly for commodities and the effect of inflation which will impact on rent levels and costs. The Board monitors inflation indices and mitigates inflation changes through the value for money and procurement strategies. Control Environment and Internal Controls The processes to identify and manage the keys risks to which the Group is exposed are an integral part of the internal control environment. Such processes, which are reviewed at least annually, include strategic planning, the recruitment of executive directors and senior staff, regular performance monitoring, control over developments and the setting of standards and targets for health and safety, data protection, fraud prevention and detection, and environmental performance. Specifically, the Association has the following mechanisms in place which are designed to provide effective internal control: A Risk Management Framework approved by the Board with new initiatives subject to a full risk assessment; Monitoring of the control system by the Audit and Risk Committee, Internal Auditors and Management Review; A clearly defined management and reporting structure; 11

12 A Corporate Plan for the Association approved and in place supported by an Annual Plan for the year allocating the main tasks and priorities to senior staff; Approval by the Board of an annual budget; A 30 year Financial Business Plan; Financial Regulations and key procedures for staff; The production of monthly performance information and management accounts for monitoring and review. so far as each member is aware, there is no relevant information needed by the Association s auditor in connection with preparing their report of which the Company s auditor is unaware, and each member has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant information needed by the Association s auditor in connection with preparing their report and to establish that the Association s auditor is aware of that information. The Board is of the opinion that no weaknesses in internal control have arisen which resulted in any material losses, contingencies or uncertainties that would require disclosure. Annual General Meeting The annual general meeting will be held on 24 September Information and Reporting Systems Financial reporting procedures include detailed budgets for the year ahead and forecasts for subsequent years. These are reviewed and approved by the Board and monitored throughout the year. The Board also receives reports on key performance indicators to assess progress towards the achievement of key business objectives, targets and outcomes. The outcomes of these reviews are reported to the Board throughout the year. Monitoring Arrangements Regular management reporting on control issues provides assurance to successive levels of management and to the Board. It is supplemented by regular reviews by internal audit that provide independent assurance to the Board, via the Audit and Risk Committee. This committee ensures that corrective action is taken in relation to any significant control issues. External Auditors A resolution to reappoint BDO LLP will be proposed at the forthcoming Annual General Meeting. The report of the board was approved on 24 September and signed on its behalf by: Anthony Russell Secretary Date: 24 September Going Concern After making enquiries the Board has a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future, being a period of twelve months after the date on which the report and financial statements are signed. For this reason, it continues to adopt the going concern basis in the financial statements. Disclosure of information to auditors At the date of making this report each of the board members, as set out on page 4, confirm the following: 12

13 STATEMENT OF BOARD MEMBER RESPONSIBILITIES The board members are responsible for preparing the report of the board and the financial statements in accordance with applicable law and regulations. Industrial and Provident Society law and social housing legislation require the board members to prepare financial statements for each financial year for the group and association in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). The directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the association and of the surplus or deficit of the group and association for that period. reasonable steps for the prevention and detection of fraud and other irregularities. The board is responsible for ensuring that the report of the board is prepared in accordance with the Statement of Recommended Practice: Accounting by registered social housing providers (Update 2010). Financial statements are published on the group s website in accordance with legislation in the United Kingdom governing the preparation and dissemination of financial statements, which may vary from legislation in other jurisdictions. The maintenance and integrity of the group s website is the responsibility of the board members. The board members' responsibility also extends to the ongoing integrity of the financial statements contained therein. In preparing these financial statements, the board members are required to: select suitable accounting policies and then apply them consistently; make judgements and accounting estimates that are reasonable and prudent; state whether applicable UK Accounting Standards and the Statement of Recommended Practice: Accounting by registered social housing providers (Update 2010) have been followed, subject to any material departures disclosed and explained in the financial statements; and prepare the financial statements on the going concern basis unless it is inappropriate to presume that the association will continue in business. The Board is responsible for keeping adequate accounting records that are sufficient to show and explain the association s transactions and disclose with reasonable accuracy at any time the financial position of the association and enable them to ensure that the financial statements comply with the Industrial and Provident Societies Acts 1965 to 2002, the Industrial and Provident Societies (Group Accounts) Regulations 1969, the Housing and Regeneration Act 2008 and the Accounting Direction for Private Registered Providers of Social Housing in England from April. They are also responsible for safeguarding the assets of the association and hence for taking 13

14 Group Highlights Five Year Summary For the year ended 31 March Restated Group Income and Expenditure account (s) Total turnover continuing activities 16,374 16,588 15,008 14,506 12,458 Income from lettings 14,990 14,084 13,258 9,982 10,707 Operating Surplus 4,863 4,120 3,469 4,220 1,650 Surplus / (Deficit) for the year 3,680 2,796 (103) 2, Group Balance Sheet (s) Tangible fixed assets, net of depreciation 79,917 79,871 80,805 65,373 50,533 HG and other capital grants (30,717) (30,688) (30,641) (35,957) (30,406) Tangible fixed assets net of capital grants and depreciation 49,200 49,183 50,164 29,416 20,127 Net current assets / (liabilities) 6,689 2,894 (864) (33) 3,131 Loans (due over one year) 25,700 25,700 25,700 25,700 20,000 Revenue Reserves 25,623 22,450 19,976 (1,438) (3,269) Accommodation figures Total housing stock owned and managed at year end (number of dwellings): Social housing 3,608 3,619 3,630 3,621 3,413 14

15 Value for Money Assessment The SLH Group has a comprehensive and strategic approach to achieving value for money (VFM) in meeting our objectives. The Board reviews the performance of all its assets and resources and how these generate financial, social and environmental value. The group aims to manage its resources economically, efficiently and effectively to provide quality services and homes. The approach includes gaining a good understanding of the trade offs and opportunity costs of the group s decisions, an understanding of the return on its assets, and has a strategy for optimising the future returns on assets. This includes appraisal of all potential options for improving value for money. We also have a performance management framework and scrutiny function in place which are effective at driving and delivering improved value for money performance. The costs and outcomes of services selected for review by the resident Scrutiny Panel, which help determine future priorities and plans. The group also uses an annual survey to establish stakeholder expectations and the the feedback from this is part of the corporate planning process that informs the corporate strategy. In addition the group carries out VFM reviews, has VFM criteria with measurable targets which link back to the business plan, its risk management and budgets and also a VFM register to record achievements. Performance information is provided to the board to enable it to analyse actual performance against Housemark benchmark averages. Return on Assets As reported in the financial statements the group surplus for the year was 3.68m on property with a market value with vacant possession of 228.9m. This represents a return on investment of 1.6%. In /14 we plan to introduce a system of reporting the return on assets beyond the organisational level through a neighbourhood level and down to a property level to bring more transparency of reporting and strengthen decision making around investment, divestment, and service provision. Assessment Against our Aims Every Customer Happy Our customers are at the heart of everything that we do. We want each and every one to be satisfied with our services, their home and the place that they live.the table below shows actual performance against the targets set by our involved residents and Board and aginst our peers; Every Customer Happy Target Actual Benchmark Actual /13 /13 / /12 % Overall satisfaction with new home 98.00% 96.00% 97.00% 98.00% % Emergency repairs completed in target 99.80% 98.90% % 99.70% % Urgent repairs completed within target 99.40% 99.20% 99.70% 99.30% % Routine repairs completed within target 99.00% 99.30% 99.50% 99.10% % Repairs appointments kept 99.00% 99.80% 99.50% 99.80% % Overall satisfaction with repairs service 97.00% 96.00% 97.00% 97.00% % Day to day jobs done as promised 95.00% 96.00% N/A 99.00% % Overall satisfaction with planned maintenance service 97.00% 98.00% N/A N/A % Contacts dealt with first time 90.00% 98.50% 92.00% 95.50% Average telephone calls to customer service centre answered in target 30 secs 28 secs 7 secs 34 secs % Satisfaction with formal complaint handling 95.00% 66.00% 95.00% % 15

16 Last year we said we would hold road shows in our neighbourhoods to raise awareness of forthcoming benefit changes. We did this, speaking to over 416 customers at seven road shows. These were a really good way of telling them about what s happening and helping them to understand how the changes would affect them. The under occupation penalty or bedroom tax as more commonly known came into effect from April. In the lead up to it, we made sure that we contacted all those that were known to be affected so that we could help them to explore options available to them before the tax came into effect. Since April, we have and will continue to work with those affected to make sure they are clear on what options are available and have the relevant advice and support. Through /14 we will continue to try and make Every penny count for you. We will do this by: Continuing to maximise our income by collecting money owed to us; Help you prepare for the changes Universal Credit will bring; Reviewing our welfare and benefits advice service; Looking at the option of introducing a cash office facility at the Parklands office. We want to make sure we run our business in the right way. We do this by trying to make sure we get the best value out of everything we do. Our Corporate Plan sets out how we will do this, showing what money we predict we will have available against where we are going to spend it. The Every s, as highlighted in this report, are our corporate aims and show what we are trying to do in the future. To make sure that we can do what we say we will, we have a business plan. The business plan is the numbers which we test against numerous situations so that we can effectively plan for the future. By running the business well and making these savings we have been able to make the following improvements to services: mobile working for our officers. This helps them to complete more work whilst they are out visiting our customers without making unnecessary trips back to the office to complete paperwork; Set up a Tenancy Support Service to help those tenants that find it difficult managing their tenancy on a day to day basis. This replaces the previous Supported Housing Service which ended when funding was withdrawn by Liverpool City Council. Create 9 apprenticeship opportunities across the group; In /13 we achieved; Re-accreditation of the national Customer Service Excellence standard; Reviewed the way we handle complaints to help improve the customers experience of making a complaint; Reviewed the standard for continued upkeep of our homes; Analysed the type of contact we get from customers so that we handle enquiries better. One of the results from this analysis is that we have changed the pattern of work for our Customer Service Team; introducing shift patterns to cover busy periods. Based on customer feedback in /14 we plan to: Review our reception service as we have more customers than ever coming into reception and we want to give them the best service without having to wait too long; Look at the option of introducing a scheme which rewards those customers that comply with their tenancy agreement; Revamp our website to make sure it meets customer and future needs and is easy to use; Work with customers to understand how they want us to communicate with them in the future; Continue to look at mobile working solutions to collect information about our customers to help make sure we deliver the right services at the right time to the right people. We did want to do this in /13 but we have been delayed, so in we will work hard to make this happen. 16

17 Every Place Perfect We want to create vibrant places where people want to live. We will do this by delivering cleaner and safer neighbourhoods with homes that people choose to live in. The table below shows actual performance against the targets set by our involved residents and Board and aginst our peers; Every Place Perfect Target Actual Benchmark Actual /13 /13 / /12 % Homes empty and available to let 0.50% 0.33% 0.45% 30.00% % Homes empty and not available to let 0.20% 0.25% 0.02% 33.00% Average number of days to re-let empty homes 24 days 27 days 27 days 30 days % Homes with annual gas safety check completed % 99.86% 100% 99.45% % Failing SLH Homes Standard 0.00% 0.11% N/A 0.00% % New anti-social behaviour cases responded to in target % 100% N/A % % Satisfaction with anti-social behaviour case handling 88.00% 97% 99% % % Satisfaction with anti-social behaviour case outcome 87.00% 95% 87% % % Rent lost through empty homes 1.01% 0.72% 0.81% 0.74% Every Opportunity Taken We want to create opportunities for wealth creation and retention through enterprising partnerships, education, employment and development (physical or services). Every opportunity that will support us to make South Liverpool the place to be will be considered in a responsible way that generates value. We introduced SLH Home Service, a joint venture with Penny Lane Builders, in. Last year we committed to seeing how they performed in their first year. We completed this review which found that that the service to you is continuing to be very good, delivered at one of the most competitive rates in the North West. What the review did find though, is that SLH Home Service has some work to do to keep improving how it manages its repairs and maintenance service. We have put a plan in place to make sure these improvements happen. In /13 we developed our Employment Gateway which will be launched in. This gateway is about ensuring that as a local employer, we continue to develop employment and training initiatives for our customers by working in partnership with Liverpool City Council and local employers. In /14 we will: Continue to create local employment opportunities by creating 8 further apprenticeships and 20 new training opportunities; we will also generate 9 new training opportunities through Countryside Properties as part of the new development programme. Support our Fencing Enterprise Team to deliver a boundary service to the new homes we are building with Countryside Properties; Look at further opportunities to diversify the type of homes we offer through our development programme. 17

18 Every Penny Counts One of the biggest challenges we face is how we increase value, maximise our income and reduce our costs. We want to make sure that we are responsible with our spending and use of resources so that we spend money delivering the right services whilst also making sure we take a firm but fair approach to collecting money that is owed to us. We also want to make sure that we help customers make Every penny count by making sure that they have access to employment and training opportunities, and are receiving the right advice and support to help them manage their tenancy. Every Penny Counts Target Actual Benchmark Actual /13 /13 / /12 % Income collected % % 98.16% 99.28% % Current tenants rent in arrears 5.00% 4.39% 1.70% 5.31% % Former Tenant Arrears 2.00% 1.79% 0.62% 2.29% % Total rent arrears 7.00% 6.18% N/A 7.60% % Total arrears 7.80% 6.88% N/A 8.55% % Bad debts written off 1.00% 1.29% 0.00% 1.01% % Chargeable repairs money owing 70.00% 46.90% N/A 62.50% Amount of benefits secured through RAISE ,452 N/A 373,159 Making Best Use of Assets The homes that SLH own are our biggest asset so it s important we make sure we look after them. We know that looking after homes is our customers biggest ask of us so it s right that we spend the most money in this area. Through our Asset Management Strategy we detail how we will do this. It includes how we plan to maintain our homes in line with all legal and statutory obligations, as well as the needs and standards of customers, ensure that any new developments positively contribute to the long term sustainability of a neighbourhood and how we will ensure that all property investment activity is delivered efficiently and effectively. We collect information on all our homes so that we can identify, model and create short, medium and long term investment programmes which are built into our business plan. In doing so the process also allows us to take into account customer wishes. SLH has identified around 187m of investment is required over the next 30 years, this investment is provided for in full within the current business plan. We also have a new build programme, we have received some funding for this but we have also invested our own money. We plan to develop 88 homes over the next 3 years for which we have received 2.3 grant funding. Before we draw plans for these developments, we look at what it will cost to build and maintain in the future to make sure the decision is right to go ahead and build. When our development schemes are built, we will check back on this forecast so we can see if we predicted the right costs so we can adapt this and learn for future schemes. How do we know Every penny is counting? We regularly compare how we do against other housing providers, as we have done with performance in this report. But, we don t only do this for performance we also look at how our costs compare with others. This is so that we can see whether our costs differ and identify the reasons for this. We compare these costs through a national organisation called HouseMark. For example, we know that compared to other organisations like SLH, we have higher Community Safety costs. This is because we have a dedicated team to deal with anti-social behaviour and keep customers safe. The tenant satisfaction survey we carried out in 2010 with customers told us that behind looking after their home, dealing with anti-social behaviour is their top priority. Last year we spent more money than predicted on our Neighbourhood Services Team. This was following a review that we carried out, with our Scrutiny Panel, which found that we needed to improve the way that we collect rent. We have spent 26k additionally within the Neighbourhood Services Team but this has helped increase the amount of rent we have received. By continuing to scrutinise performance and costs, we predict that we will be able to continue making savings: our aim is to increase the value of the business by 5m over the next 5 years. These will enable us to continue running the business effectively. 18

19 Every Person Positive Our people are our greatest asset. We value each one of them and as such treat them with fairness, respect and dignity. We believe that happy colleagues lead to happy customers! The table below shows actual performance against the targets set by our involved residents and board and aginst our peers; Every Person Positive Target Actual Benchmark Actual /13 /13 / /12 Average days lost due to sickness 7.00 days 7.38 days 0.96 days days % Staff turnover 8.30% 10.30% 3.10% 22.90% In /13 we worked hard to make sure that we continue to be an employer of choice. We offer training and development opportunities for our staff to make sure that they continue to deliver excellent services to our customers. All our front line staff are receiving continuous welfare reform training so they keep up to date on changes which affect you. Our approach to staff was recognised in February when we were named the country s 12th best company to work for in the Not-For- Profit category of The Sunday Times Top 100 list. We are also pleased that we were the first housing provider to be awarded and then re-accredited with the Daisy UK standard to show our commitment to both staff and customers with disabilities. 19

20 INDEPENDENT AUDITOR S REPORT TO THE MEMBERS OF SOUTH LIVERPOOL HOMES LIMITED We have audited the financial statements of South Liverpool Homes Limited for the year ended 31 March which comprise the group s and the association s income and expenditure accounts, the group s and the association s statement of total recognised surpluses and deficits, the reconciliation of movements in the group s and association s funds, the group and association balance sheets, the group cash flow statement and the related notes. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice). This report is made solely to the association s members, as a body, in accordance with the Housing and Regeneration Act 2008 and section 9 of the Friendly and Industrial and Provident Societies Act Our audit work has been undertaken so that we might state to the association s members those matters we are required to state to them in an auditor s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the association and the association s members as a body, for our audit work, for this report, or for the opinions we have formed. Respective responsibilities of the board and auditors As explained more fully in the statement of board member responsibilities, the board members are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board s Ethical Standards for Auditors. Scope of the audit of the financial statements A description of the scope of an audit of financial statements is provided on the Financial Reporting Council s website at Opinion on financial statements In our opinion the financial statements: give a true and fair view of the state of the group s and parent association s affairs as at 31 March and of the group s and parent association s surplus for the year then ended; have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and have been prepared in accordance with the requirements of the Industrial and Provident Societies Acts 1965 to 2002, the Industrial and Provident Societies (Group Accounts) Regulations 1969, the Housing and Regeneration Act 2008 and the Accounting Direction for Private Registered Providers of Social Housing in England from April. 20