The Business Plan 2017 to 2021
Understanding what matters to people and delivering what matters to people is at the centre of what we do. So whether we are building new homes, sustaining tenancies or just cutting the grass Wales & West Housing is a people business; with people, about people and for people. This shines through in our day to day practice as well as in our vision: Strong sustainable growth to make a difference to people’s lives, homes and communities.
Anne Hinchey Chief Executive
‘Gorau Chwarae, Cyd Chwarae’ is proudly displayed on the chest of the Wales football team on the national badge. Its meaning, ‘best play is team play’, was the driving theme behind the Euro 16 ‘Together Stronger’ campaign which caught the imagination and moved the heart of the footballing nation, a nation rightfully proud of its heritage, culture and people. Speaking of the ‘Together Stronger’ slogan, the FAW profoundly said that they wanted something that wasn’t so much about success but a mentality. That teams and people are together stronger is a powerful concept which rings true through business and service delivery as well as through teams and communities. When this is also based upon a shared heritage, culture and ambition it paves the way for great things to be achieved and maintained.
Sharon Lee
Chair
Wales & West Housing is proud of its 50 year heritage of working closely together with both residents and a wide variety of partners to provide the truly affordable homes and services that people need. Our 11,500 homes are set in urban and rural communities in 15 local authority areas across Wales, from the north coast, down to the south coast and across to the west coast. Our residents and customers cover all ages, come from all walks of life and include some of the most vulnerable in society today. Across Wales our alarm services extend to over 60,000 customers, responding 24 hours a day
to emergencies and concerns, reliably providing advice and support. A recent merger with Tai Cantref, a 1500 property strong association providing homes and services across West Wales, will allow the strengths of both organisations to come together to serve residents and develop much needed homes and services into the future. Alongside growth in the total number of homes, recent years have seen the development of a group structure and our direct service delivery expanding into property maintenance, catering and care and support with this expansion set to continue over the coming five years. At the core, our greatest strength as a business is our people. Staff are committed and capable, working together to ‘do the right thing’ for our customers and to make a difference to people’s lives homes and communities, day by day and contact by contact. This strong and positive culture shines through in our recognition in the Sunday Times best companies awards, where we are placed first in Wales and second in the UK, having featured in top ten for the last five years. We truly are together stronger. Together with residents and customers we listen to understand their experiences and what matters to them, both after they use services and out in their communities, using this learning to design services right, so that one size does not have to fit all. This is true of all services, from repairs to financial advice and from catering to budgeting support. The establishment of Castell Care and Support over the last year to deliver high quality care services has been a result of working together with service users and local authority partners with services set to expand over coming years. Across Wales we are working together with a
wide variety of partners to support residents to create communities and neighbourhoods that work and to support residents to achieve their aspirations via our Making a Difference framework of grants and support. Together with Welsh Government, local councils, funders and contracting partners we are working to prevent homelessness, understand housing need and provide new much needed homes. Over the last year we have completed 158 new homes and currently have a further 420 in development, with plans to complete 1000 homes over the coming five years. Our clear focus on understanding what matters to residents, doing the right thing and designing systems to deliver what matters has seen positive regulatory judgements and continuing high satisfaction amongst customers as well as strong partner relationships based on our track record of reliable delivery. The success of Wales & West Housing is the success of its people working together with the people it serves. In a world of changing expectations and an ever increasing challenge to achieve more with less we believe that answers lie in being together stronger.
TOGETHER STRONGER
A changing context Each one of us has an inbuilt desire for a home that meets our needs and is within our means. Such homes are a foundational building block for successful lives, families and communities. In stark contrast to England the Welsh Government continues to actively support the retention and provision of socially rented homes as an important part of the wider Welsh housing market. As the number of households in Wales continues to rise amongst young people and also amongst older people, the provision of suitable housing options will remain a key challenge, alongside the necessity for these homes to remain truly affordable. The Welsh Government’s positive ambitions are clear to all, not least in the aspiration for 20,000 new homes during the current government’s term. There are a number of barriers to overcome to achieve this aspiration which can only be achieved by working together. Lower levels of capital subsidy and blending this with revenue subsidy will require associations to utilise their finite financial capacity to support development expenditure, a fact which is reflected in our strong financial plans. Challenges remain over the availability of land and the increasing complexity of statutory planning requirements as well as comparatively higher statutory construction standards for social homes having the unintentional consequence of restricting output. Our healthy, growing land bank and strong track record of successful development leave us well placed to address these challenges. The affordability of homes continues to be challenged by ongoing welfare benefit reform. In practice the laudable principles of Universal Credit, simplicity and personal responsibility, can be undermined by the inefficiency of processes and require considerable initial support for most people to ensure successful transition. The freezing of local housing allowance rates and the
proposals to limit housing benefit payments to these rates also presents a significant potential challenge for many and will require careful design and implementation if undue hardship is to be avoided. The pace and impact of these potential changes are far from certain. However, even if the least favourable predictions prove true our analysis tells us that our business plan remains robust, which may not be true of the sector as a whole. The impending issue of housing association reclassification as part of the public sector by the Office for National Statistics is set to be quickly addressed by Welsh Government action to ensure this is reversed. However, a potentially detrimental side effect may be the loss of some or all of the significant gains made in the Welsh Government’s co-regulation approach, which has developed to be both positive and effective in recent years. Whilst a solid approach to achieving and judging value is rightly necessary, any judgement tools and methods should necessarily be nuanced to cope with differing stock types, age, condition and varying service delivery models. Our foundations, a customer driven approach and a strong existing coregulation relationship, set us in good stead to work closely with Welsh Government into the future.
The Welsh Government’s positive ambitions are clear to all, not least in the aspiration for
20,000
new homes during the current government’s term
4
835
Conwy
11,278
244
Denbighshire
435
Wrexham
988
EAE
Our communities are spread right across Wales and incorporate retirement communities, Extra Care schemes, supported living accommodation and other homes tailored to the specific needs of our residents, as well as our general needs houses and flats. In total we provide homes for more than 17,600 people.
CARD CARD CON CON DENFLI DEN FLI CON DEN
SWAN Pembrokeshire
345
Ceredigion
Powys
898
915
VOG
WREX
Carmarthenshire
162
Merthyr
423
Caerphilly
Swansea
96
General needs Retirement Supported Home ownership Extra Care
RCT
228
310
FLICARM MERCER POWPEM RCT
G
N
Flintshire
Total stock
Bridgend
1,396
WREX
DEN
FLI
Vale of Glamorgan
CARM 566
MER
Cardiff
3,437
POW
C
Positive about the future together Over 50 years Wales & West Housing has grown to become a strong and effective provider of truly affordable homes with an enviable track record of delivery and a strong continuing ambition to make a difference for people into the future. Bricks and mortar are a solid investment, so we make sure our homes are maintained to a good standard and are suitable for residents. We are ambitious to increase the number of homes available for residents in both urban and rural locations and we strive to take opportunities across Wales where we know we can make a real difference for people in the long term. We aim to manage our business to ensure that our resources are always focused upon sustainable growth, more homes for more people. What matters to our residents about our core services and how we deliver them is a real focus for us, as understanding this tells us our true purpose. We aim to capture this purpose for each of our core services and to judge our performance against them, always retaining an
‘outside in’ customer perspective. Supporting and enabling residents to start their tenancies well and to maintain them for as long as they need them is a key to good business and key to creating communities that work. The recent merger with Tai Cantref has seen the strengths of the both associations brought together to deliver strong, secure, locally focused services into the future. The focus upon making a difference together will see services develop and serve to deepen the strong roots already in place in West Wales. In recent years Wales & West Housing’s growth as a group has seen the creation of subsidiaries to successfully deliver maintenance, catering and most recently care and support services. This focus upon innovative ways of efficiently delivering quality services will continue in coming years. We are positive about the future together and committed to the tasks in hand, making a difference, together stronger.
Our 5 priorities
Together making a difference across Wales More homes that people need Lives sustaining tenancies and communities Care people are the heart Efficient a flexible and responsive business
Our vision is: "to achieve strong sustainable growth to make a difference to people's lives, homes and communities."
7
Together
making a difference across Wales During 2016 Wales & West Housing carried out a merger with a Tai Cantref, an association with around 1500 affordable homes across Ceredigion, Carmarthenshire, Pembrokeshire and Powys. Tai Cantref sought a merger partner with a matching ethos and the financial strength and capacity to develop and manage high quality affordable homes across West Wales, choosing Wales & West Housing as the most suitable partner. Wales & West Housing have a strong track record of delivering and managing truly affordable homes in rural communities in Wales and have a long term commitment to local employment, local partnerships and delivering what matters to residents. Based from the established West Wales office in Newcastle Emlyn we will work together to build on the services already in place to deliver what matters to residents and achieve significant benefits for local communities.
that services are designed to suit them, with an on-going commitment to the Welsh language. In carrying out its plans Wales West Housing is keen to support local businesses and to invest in the skills and opportunities of staff. Our plans take a consistent approach to designing and delivering resident centred services across Wales, ensuring we always keep our eye on the ball across all our homes and services.
A fifty per cent increase in investment in our homes across West Wales will encompass both day to day repairs and proactive refurbishment, with services continuing to be regionally focussed and driven. Increased local engagement with residents will also ensure
A fifty per cent increase in investment in our homes across West Wales, supporting local businesses and communities. 8
More
homes that people need Although we all naturally desire a home that meets our needs and is within our means, this is becoming increasing difficult for many people. Fewer people are able to buy and private rental costs continue to increase, making the need for affordable homes greater than ever.
68
8
Flintshire
1 Conwy
19 Wrexham
56
53 17 Ceridigion
Powys
18 8 Pembrokeshire
Number of new homes now on site for handover in 2016 (243)
11 Merthyr
28
New homes completed so far in 2016 (139)
35
The use of innovative energy efficient materials and home grown timber frames will feature in our programmes of work so that we learn how to maximise energy efficiency for residents, benefits for the local economy and greener construction. We will also learn to develop homes for sale to generate income for the development of more truly affordable homes.
30
Population is predicted to rise in areas such as Cardiff and Wrexham, as well as there being pressure for affordable homes in rural locations. Our aim is to proactively manage our land holdings to ensure we own sufficient land in the right areas to allow us to seize good opportunities to develop new homes where there is clear demand. Investing £30 million each year we will plan to complete 200 homes each year and by working closely with local councils and developers we aim to maximise the number of homes built.
30 Vale of Glamorgan
Lives
sustaining tenancies and communities We are more than just a landlord; we want to support and enable people to thrive in their homes and in their lives. People have a range of practical needs in making a house a home as well as sometimes needing some support to improve their skills and realise their ambitions. Our customer facing teams are equipped to help with both of these aspects, from benefit and budgeting advice through to support towards employment or training. We aim to have the right support in place to ensure that tenancies are set up right in the first place. As welfare benefit reform continues and resident’s circumstances or incomes change we will take a supportive stance, drawing in the resources of both our partners and our skilled specialist staff to advise around debt or budgeting, to support community groups or initiatives or to facilitate skills training, work placements or employment opportunities. In order to ensure that the services residents receive are cost effective and right for them we
will review what estate services we carry out and consider what matters to residents about those services to allow them to be properly tailored to each location. Our aim is to create neighbourhoods and communities that work and to this end we will review how we support residents to solve anti-social behaviour and estate management issues, consistently taking an inclusive and restorative approach.
Care
people are the heart At some point in our lives we are all likely to benefit from care and support services to help us achieve our aspirations. When these services are seamlessly delivered alongside a landlord function the overall quality of service can be truly life changing. In the last year our subsidiary Castell Ventures Ltd has achieved registration with the CSSIW and has won contracts to carry out care and support in both extra care and supported living settings where Wales & West Housing are also the landlord. We will continue to develop joined up and effective care and support services based on a good understanding of what matters to residents in the newly established supported living and extra care settings. Our plans include carrying out comprehensive training for staff across the business to further equip them to understand and empathise with customers and to challenge any existing assumptions which they have. We will also seek to develop new care and support services for our residents as well as working more widely with Local Health Boards on joint solutions.
Castell Care & Support in numbers We provide 356 hours support each week plus 7 sleep-ins
We have 11 staff members (additional 15 by the end of 2016)
Efficient
a flexible and responsive business Technology is moving on apace in today’s world. The internet and social media are quickly changing how we communicate and how we do business. Technology is increasingly developing via ‘apps’ and flexible information technology systems which are adaptable to the requirements of their users. Over the last few years Wales & West Housing has provided free wifi access for residents wherever it is cost effective to do so and facilitated residents accessing the digital world in the way they want to. Step by step new information technology applications are being developed and introduced to provide the right functions to front line staff and residents. We plan to continue developing powerful and flexible applications to give the right functionality to users, with the capability to easily amend these as user needs change. This will include making functionality available away from office bases and in resident’s homes, as well as creating new asset management systems to retain and report on detailed property information. Efficient and flexible technology means tailored service delivery, where delivering what matters to customers comes first not the capability of our systems. In this age of fast changing social media and
communication methods there are many conflicting opinions about what is most efficient and cost effective. We will review the content and functionality of our websites and work with residents on their communication preferences to ensure that what matters to residents themselves is the basis of both website and communication tool design.
We enabled residents to connect 1,602 devices to the internet (August 2016)
4.5Tb of bandwidth was consumed by residents (August 2016)
Financially strong Being financially strong allows us to make the right investments at the right time for the benefit of our residents and to pursue strong growth to provide more much needed homes. Our central financial efficiency barometer is ‘free cash generated’, as it reflects operational performance, the level of reinvestment in our assets and interest on our borrowings. Recent years have seen most of the free cash generated invested in our homes to ensure that they continue to meet or exceed the Welsh Housing Quality Standard. In 2015 we achieved our planned £1.5million free cash inflow and in future years we plan to retain an average of around £3million free cash each year to allow us resilience to address challenges or take opportunities. This financial strength and our good levels of available security allow us to borrow for long periods at low interest rates and to access grant funding to implement our
Investing
£250 MILLION
plans. Our plan for the next five years includes investing £250 million delivering 1,000 new homes and investing in our existing properties, bringing a substantial economic stimulus to communities across Wales. Our projections assume that rents will continue to increase over and above inflation, and in particular at inflation plus 1.5% through to March 2019 as previously agreed with Welsh Government. Were that commitment to rent increase permission to be rescinded (as has been the case in England) then we would take remedial action to ensure that our continuing financial viability is paramount. We are strong enough to absorb such knocks, but fundamental changes would make it harder to meet all of our future aspirations.
Delivering
1,000 NEW HOMES
Income and expenditure account for years ending 31 December Income Operating costs Operating surplus Major repairs Interest payable Net surplus
2017
2018
2019
2020
2021
£m 49.8 (34.2) 15.6 (2.8) (7.5) 5.3
£m 52.7 (36.2) 16.5 (3.1) (8.3) 5.1
£m 55.7 (38.0) 17.7 (2.9) (9.8) 5.0
£m 58.6 (39.4) 19.2 (3.0) (10.6) 5.6
£m 61.5 (41.1) 20.4 (2.9) (11.1) 6.4
2017 £m 665.2 (116.7) 548.5 (290.5) (209.9) 16.5 64.6
2018 £m 703.0 (126.5) 576.5 (300.1) (225.5) 18.6 69.5
2019 £m 740.4 (137.0) 603.4 (312.1) (238.2) 21.1 74.2
2020 £m 776.8 (148.2) 628.6 (323.0) (250.1) 23.8 79.3
2021 £m 811.8 (160.0) 651.8 (333.9) (262.9) 30.2 85.2
50% 32%
52% 32%
53% 32%
53% 32%
53% 32%
Balance sheet as at 31 December Gross property cost Depreciation Net cost of property Housing grant Borrowings Other assets Net assets & reserves Gearing Ratio (net worth) Gearing Ratio (gross property cost)
2017 -2021 £m 278.3 (188.9) 89.4 (14.7) (47.3) 27.4
Cashflows for years ending 31 December
Net cash flow from operations Net interest payments Replacement capital expenditure Replacement components Free cash inflow Development expenditure Grants Net cash outflow before financing Known facility drawdown Additional facility requirement Loan principal repayments Net increase / (decrease) in cash
Assumptions
for years ending 31 December Inflation Rent Salaries Maintenance costs CPI Funding New borrowings rate Grant rate Housing completions
2017
2018
2019
2020
2021
£m 22.1 (7.4) (0.8) (10.6) 3.3 (21.4) 10.9 (7.2) 2.3 5.0 (2.8) (2.7)
£m 23.5 (8.4) (0.7) (10.5) 3.9 (31.5) 12.0 (15.6) (15.0) 33.4 (2.8) 0.0
£m 25.3 (9.6) (0.7) (10.1) 4.9 (30.2) 12.6 (12.7) 0.0 15.5 (2.8) 0.0
£m 27.1 (10.5) (0.7) (10.5) 5.4 (26.7) 9.9 (11.4) (20.0) 34.3 (2.9) 0.0
£m 28.8 (11.1) (0.9) (10.8) 6.0 (27.0) 8.6 (12.4) 0.0 15.3 (2.9) 0.0
2017 Plan
2018 Plan
2019 Plan
2020 Plan
2021 Plan
2.9% 2.9% 3.0% 1.5%
3.6% 2.8% 3.5% 2.0%
3.2% 2.7% 3.5% 2.0%
3.0% 2.5% 3.5% 2.0%
3.0% 2.5% 3.5% 2.0%
3.9% 58% 131
4.4% 58% 229
5.0% 58% 198
5.2% 58% 195
5.4% 58% 140
20172021 £m 126.8 (47.0) (3.8) (52.5) 23.5 (136.8) 54.0 (59.3) (32.7) 103.5 (14.2) (2.7)
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