Business Plan 2011 - 2016

P R O V I D I N G Q U A L I T Y H O M E S T H R O U G H O U T W A L E S

D A R P A R U C A R T R E F I O A N S A W D D T R W Y G Y M R U

Business Plan2011 - 2016

Business Plan 2011-2016

Page

Introduction 3

Our mission and values 4

Context 5

Themes and priority actions 6

Key Risks 10

Financial Comments 14

Conclusion 17

Income and expenditure 18

Cashflow 18

Balance sheet 19

Netborrowings 19

Cash balance reconciliation 19

Assumptions 19

Tel:08000522526www.wwha.net@wwha


Introduction...

Onceagainweandourresidentshavetocontendwithadifficulteconomicclimate,whichposesbothchallengesandopportunitiesforthecomingyears.Ourunderlyingbusiness strength has been aided inrecentyearsbyourfocusonmakingtheorganisationasefficientas possible so that all available resourcesarechannelledtofrontlineservices.Wecontinuetoprideourselvesonthequalityofourhousingandthesupportweofferourresidentstoliveinsafe,secureandpleasantneighbourhoods.Ourservicesaretailoredtothespecificneedsofcustomers,andhelpingthemsustaintheirtenancies.

Ourfinancialstrengthisalsomoreapparentsincewechangedthewayweaccountforreplacementcomponentssuchasnewkitchensandbathrooms.Thischangewasbroughtaboutbyanewstandardthatwouldhavebeencompulsoryforusfrom2012butwhichwedecidedtoadoptearlyinour2010financialaccounts.Ourfinancialresultsandprojectionsshowthatweareachieving, and expect to continue to make, healthy surpluses in each financialyear.Thisisimportantsothatwegenerateenoughcashtokeep re-investing in our existing

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housingstockandhavethefinancialstrength to take on increasing amountsofdebttofinancegrowth.WeremainontrackforourhousingstocktobecompliantwiththeWelsh Housing Quality Standard by theendof2012,andaremakinginroads into achieving environmental sustainability.

TheadventofthenewregulatoryregimeforhousingassociationsinWaleshasledtoafundamentalreviewofourserviceplanningarrangements.Asaresultwehaveimplementedanewprocesswhichismore evidence based and dynamic in responding to changing demands fromcustomersandstakeholders.Itisalsomoreforwardlooking,andwehavemovedawayfromannualcyclesinfavourofrollingplanswhicharereviewedandrefreshedbytheBoard on a quarterly basis in the lightofnewevidenceandchangingcircumstances.Inthiswayourplanningisalwaysup-to-dateandattheforefrontofourthinking.

Ourbusinessandfinancialplanningareseamless,ensuringwehavetheresources to achieve our ambitions andthatweremaininastrongpositiontoaddressunforeseenopportunitieswhentheyarise.

Welcome to the Association's Business Plan for the period 2011 - 2016


Our mission andvalues...

Our previous mission and aims serveduswellformanyyearsbut,withincreasingdiversificationofthebusinessandthedesiretoreflectmoreclearlyourambitionforthefuture,wehaveredefinedourmissionstatementtoreflectourvisionforthefuture,whichis:

Strong, sustainable growth to make a difference in people’s lives and communities

Thisnewvisionmakesaclearstatementoftheorganisation’sambitiontogrowwithoutlimitingthistothedevelopmentofnewhousing.‘Growth’isintendedtobebroadenoughtoreflectthepotentialforgrowthacrosstheGroupinareassuchasemergencyalarmandoutofhours services, maintenance services through our Cambria subsidiary, aswellasthroughpropertydevelopment.

The vision also recognises the geographicalcontextinwhichthe Association operates and the dispersednatureofourhousingstock.Wearefinanciallystrongwiththeabilitytobeasignificanthousingdeveloper and deliver high quality landlordservices.Whilstourstockisnot as concentrated geographically asthatofsomeproviders,welookto maximise the opportunities to ‘makeadifference’inthedeliveryofservicesinthecommunitiesinwhichweoperate.

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Thefeedbackwehavereceivedonthenewvisionhasbeenverypositive.Peopleliketheclarityaroundgrowthofthebusinessandthat“makingadifference”issoprominent.

Our mission may have changed but ourvalueshavenot.Theseareofgreat importance to us and hold us toaccount.Inallofourdealingsweaim to be:

• Fair Balanced,givingpraisewheredueandconstructivelycritical.Inclusive in our approach, respecting the dignity and individualityofeveryone.

• Open Open to change, committed to continuous improvement andlearning.Transparent, honestandtrustworthy.

• Responsible Professional,challenging existing arrangements, taking ownershipofissuesandusingour initiative to see them throughtoresolution.

• Supportive Easytodealwith,approachable andaccessible.Welcoming, caring,listeningandresponsive.

• Efficient Makebestuseofresourcesand maximisetheimpactofouractivities.


ContextThe economic climate continues to be difficultforourresidentsandthecommunitiesinwhichtheylive,whereremaininginworkishardenoughletalonegettingnewemployment.Thosefortunatetobeinworkareseeinglittleinthewayofpayincreases,ifanyatall,whilsthighinflationmakesitincreasinglymoredifficultforthemtopaytheirway.Withlowinvestmentreturns,older people in particular are having to eat into their savings to keep up withcostincreases.Thisisresultingin more individuals becoming reliant onbenefits,whilstatthesametimethere is immense pressure on the Governmenttocurbpublicspending.

Whilst the majority in our society may still aspire to home ownership,increasinglythisisoutofreachformany,withhousepricesdisproportionate to their income and littleprospectofbeingabletosaveasufficientdeposit.Evenatrecordlowinterestrates,manywhoalreadyhave a stake in their home are struggling to meet existing mortgage payments, and this is set to get even worsewheninterestratesinevitablyriseatsometimeinthefuture.

Housebuildingvolumesarewellbelowaverageastraditionalhousebuildersexperiencedifficultiesinsellingandtheamountofgovernment subsidy available to providersofsocialhousinghasbeensubstantiallycut.Whilstthedemand

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foraffordablehomesalwaysoutstripssupply, in the current environment thegapiswidening,makingiteverharderforpeopletofindanaffordableandsecurelong-termhome. Thisisthecontextinwhichwehavesetourpriorities.

Anne HincheyChiefExecutive

Sharon Touse with her niece in her new

home at Brewery Court, Merthyr Tydfi l


Themes and priority actionsThis plan has been devised through ananalysisofourstrengths,weaknesses,opportunitiesandthreatsinthelightofournewvisionandthepresenteconomiccontext.

Aself-assessmentagainstregulatorydelivery outcomes has substantially informedourplan,whichhasbeen‘tested’withstaff,residentsandlocalauthoritypartners.Thisprocesshasresulted in actions that have naturally fallenwithinfivethemes:

• To provide homes for people in housing need

• To continually improve the quality of landlord services

• To maximise the potential of the Group structure

• To minimise the impact on

the environment by WWHA and its residents

• To work with residents

and communities to make a positive impact

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ThesethemesorareasofactivityprovidefurtherexplanationofwhattheAssociationwilldotoachieveitsoverallvision.Thesethemesarebothinwardandoutwardfacingreflectingthefocusongrowthwhilebeingmindfulofexistingcustomersandtheneedtocontinuallyimprove.

Neither the themes nor the actions to achieve them have been given completiondatesquitedeliberately.Theintentionisaflexibleplanthatis responsive to changing priorities anddemandsfromstakeholdersandcustomers.Artificiallysettingdatesor trying to prioritise one action over anotherwouldbewastefulastheywouldneedtochangesofrequently.Theplanisreviewedandmonitoredby the senior management team each monthandbytheBoardfollowingtheendofeachquarter.

Thesereviewsinformthepaceatwhichdifferentactionsarebeingprogressed at any point in time, authorisetheremovalofactionsoncesatisfactorilycompletedornolongerrelevant,andensurenewpriority actions are added in a timely manner in response to changing circumstances.

Someofthekeyactionsaresummarisedoverleaf.


1. To provide homes for people in housing need

• Identifythestrategicareaswheredevelopmentisbothviableand sustainable

• DevelopaWWHAstandardfornewbuild

• Reviewprocurementarrangementstoensurevalueformoney

2. To continually improve the quality of landlord services

• Redesignthedeliveryofestatemanagementservices

• Redesignthedeliveryoftherepairsservice • Launchanewwebsite

• Designandimplementanewrentsettingpolicy

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Resident Lee Cribb enjoys his hi-tech adapted kitchen in Greenfi eld, Flintshire


3. To maximise the potential of the Group structure

• Re-brandtheorganisationtoreflectitsnewmissionandfocus

• Embed Cambria Maintenance Services

4. To minimise the impact on the environment by WWHA and its residents

• Introduce a green travel plan

• Reducethenumberofresidentsinfuelpovertythroughadvice andfurtherimprovementstoproperties

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Craig, Rob and Wayne are part of Cambria’s area-based workforce

Tel:08000522526www.wwha.net@wwha9

WWHA’s Board donated £3,500 to help Clubs for Young People Wales

5. To work with residents and communities to make a positive impact

• Developandextendtheuseofareaimprovementplans

• Exploreopportunitiestomakelowcostbroadbandavailable to residents


Keyrisks...

Rent levels

Around80%oftheAssociation’sincomeisderivedfromrents.Rentlevels are regulated by the Welsh Governmentwhichpermitsincreasesat1%abovegeneralinflation.

Aconsultationonfuturerentregulationisunderwayand,ifimplementedascurrentlydrafted,willenable WWHA to charge marginally higher rents on general needs housingunitsoverall,andwillpermitgreaterdiscretioninthesettingofrentsonindividualunits.

The Welsh Government also intends to bring retirement (sheltered) housingstockwithinrentregulationatsomepointinthefuture,thoughcurrently there is no detail available astowhenorhowtheyintendtodothat.Currentlyapproximately65%oftheAssociation’srentsaresubjecttoregulatedrentceilings.

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Maintenance costs

Around50%ofourtotalcashreceiptsare required over the plan period to meet maintenance and component renewalcosts.Toensuregoodvalueandadequatesupplyofcontractorresource the Association has long-termpartnershipswithanumberofcontractors.Since5January2011, the day to day maintenance ofapproximatelytwothirdsoftheAssociation’shousingstockhasbeenundertaken by Cambria Maintenance ServicesLimited,a100%ownedsubsidiaryofWWHA,affordinggreater control over quality and cost ofworks.Forotherpropertiesandworks,theAssociationhasinplaceterm maintenance service contracts uptotheendof2013.Theselongtermpartnershipsarewithestablishedlocalcontractorswhoareused to supporting our residents, and theyworkonanopenbookbasis.

Thereareanumberofrisks(someofwhichareoutsideourcontrol)whichimpactuponourbusinessandwhichaffectthewayinwhichwemanageanddeliverourservices.Thekeyrisksarehighlightedbelow.


Diversification into intermediate market rentals

TheAssociationfundsitsdevelopment activity using a combinationofsocialhousinggrantandloans.Theamountofgrantavailable to the housing sector as a wholehasbeensubstantiallyreduced,whichwillinevitablyreducecapacityin the sector to deliver homes at socialrents.Atthesametimethereisanincreasingdemandforrentedaccommodationastheaspirationofhomeownershipcannolongerbeachievedbymanyhouseholds.TheAssociation plans to develop around 700homesoverthefiveyearsto2016,whichitcandowhilstkeepingwithingearingconstraintscontainedinexistingloancovenants.

Where social housing grant can besecuredtheAssociationwillseek to maximise the number ofhomesthatcanbedevelopedthroughacombinationofsocialandintermediate market rents, and by seekingcosteconomieswithoutcompromisingonstandards.Whilethe Association has only limited experienceto-dateofintermediate

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market rentals, it is not envisaged thattherewillbeparticulardifficultiesinfullylettingavailableunits.Sothatevenmorehomescanbeprovidedforhouseholds in need, the Association willalsoseektoincreaseitsfuturecapacity to develop by renegotiating loancovenantsifnecessary,whereitiscosteffectivetodoso.

Interest rates and loan finance

Followingtheimplementationofcomponent accounting, operating surplusescomfortablycoverinterestpayable.Forloancovenantpurposesthe Association can accordingly absorbagreaterleveloffluctuationininterestrates.Asshortterminterest rates are expected to rise onlygraduallyfromtheirpresentlowlevelstowardslong-termfixedrates, it is intended that the overall interestchargewillbehelddownby permitting a higher proportion ofvariabledebtthanhasappliedinpreviousyears.

Theappropriatenessofthisstrategyisreviewedonaregularbasis.


The margins payable to lenders on someoftheAssociation’sexistingloansmaybelowerthanthecostsbeingincurredbythoselenders.Accordingly such lenders may seek torenegotiatethetermsofexistingloans under certain circumstances, forexampleonvariationofaloancovenant,oronthegrantingofnewloans.

TheAssociationhassufficientloanfacilitiesinplacetomeetexistingcommitmentsbutwillrequireadditionalfundingtomeetgrowthambitionsovertheperiodoftheplan.Somebanksarenolongerwillingtolendforlongperiodssuchas25years,andthusinfutureproperty investments may need to be refinancedmorefrequently.Longer-termfinanceisstillavailablethroughfixedinterestloanssourcedinthebondmarkets.Theseloansgenerallyresult in a carrying cost until the fundsarerequiredandthustokeepcostsdownitmaybenecessaryto raise smaller amounts more frequently.

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Low demand

DemandisgoodforthevastmajorityofourhousingthroughoutWales,resultinginlowandmanageablevacancies.Thedemandforretirementhousingismoremixedwithstrongdemandinsomeareasandlowdemandinothers,particularlyforsmallerflatsandstudioapartments.Theproportionofpropertieswhichtake more than six months to re-letishoweververysmall.Rentalloss throughout the plan has been assumedataround1%,whichiscommensuratewithrecentachievements.

In 2011 we opened our fi rst Extra Care housing scheme in Prestatyn,

Denbighshire


Welfare Benefit Reform

TheGovernment’sproposalsforwelfarebenefitreformareradicalandfarreachingthoughtheimpactfortheAssociationanditsresidentsisdifficulttopredict.Somechangesshouldnotaffectthe Association at all, such as the overallhouseholdbenefitcapandthemaximumamountsofhousingbenefitforcertaintypesofproperty.Theincreaseindeductionsfornon-dependent residents introduced this year has not had an adverse impact onincomeasitaffectsrelativelyfewoftheAssociation’sresidentsandmosthaveabsorbedthechange.

TheothertwomajorchangesthatwillaffecttheAssociation;limitingbenefittothesizeofthepropertyand universal credit are not due until2013.Theimpactoftheuniversal credit is hard to predict thoughresearchintotheremovalofdirectpaymentsofrenttolandlordssuggeststhatarrearswillincrease.

Forthepurposesofthisplanitisassumed that direct payments to theAssociationwillcontinueandthereforenoadverseimpactonincomewilloccur.

Inrelationtothelimitingofhousingbenefittoreflectthesizeofhomeaworkinghouseholdneeds,theAssociationhasexaminedwhichofitsresidentswillbeaffected.Approximately 1,000 residents are under-occupying their home by one bedroomormoreandthereforecouldbeaffectedbythechange.Discussionswithasampleofthesehasrevealedamixofreactionswithsomewillingtoabsorbthereducedbenefitandotherslookingtotransfertoasmallerhome.

While the Government are still reviewingwhetherthecriteriashouldbeoneortwoormorebedroomsindetermining under-occupation, the Association has started discussions withresidentstohelpavoidanyadverseimpact.


Financialcomments...Income and expenditure

Theimplementationofcomponentaccountinghaseliminatedmuchofthe volatility previously experienced through the income and expenditure account.Themajorityofincomeandexpenditureitemsarenowpredictablewithinreasonablebounds.

Whilst healthy annual surpluses are predictedtoariseeachyearwithintheperiodoftheplan,thecashgeneratedfromthosesurplusesisrequiredforreinvestmentincomponentsfortheexistinghousingstockandtopartiallyfundloanprincipalrepayments.

Cash flows

Theprojectionsshowsmallpositivefreecashflowsafterreplacementcapitalexpenditure.Thiscashgoessomewaytowardsfundingprincipalrepayments on loans, though in the main those loans are essentially beingrefinancedbynewloans.

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Growthintheformoflandpurchases,property development and net propertyacquisitionsarefundedthrough Social Housing Grant and additionalinterest–bearingloans.Overthefiveyearsto2016theplanshowsaninvestmentinlandandpropertydevelopmentof£76.6million,netofSocialHousingGrant,as the Association expands its housing stock by 699 homes to meet increasingdemand.

TheAssociationhadinplace£20millionofconfirmedlong-termloanfacilitiesasat1January2011,whichisexpectedtobesufficienttomeettheneedsoftheAssociationuntilthesecondhalfof2012.Furthernewfundingisbeingsoughttomeetongoinggrowthambitionsbeyondthattime.

Reserves

At December 2010 the Association hadaccumulatedreservesof£20.4million.By2016thesereservesareexpectedtohaveincreasedto£53.6million.


Financial covenants

TherearetwoprincipalfinancialcovenantswithwhichtheAssociationmustcomply.Firstlysurplusesmustexceed10%ofnetinterestchargesovereachrollingthree-yearperiod.Followingtheimplementationofcomponent accounting this covenant shouldbemetcomfortablyovertheperiodoftheplan.

SecondlyasubstantialminorityofAssociation loans require gearing to benomorethan50%,whileotherspermit 60% and 70%, or impose norestriction.GearingisdefinedasthelevelofgrossborrowingsasaproportionofthesumofreservesandSocialHousingGrantliabilities.TheAssociation’sgearingratioisexpectedtoincreasefrom35%asat1January2011to48%by2016astheAssociationcontinuestogrowitshousingstock.

Whilstthisiswithintheceilinglevelof50%applicabletocertainloanstheAssociationwillconsiderrenegotiationtopermitahigherlevelofborrowingifsuchachangecanbeagreedatareasonablecost.

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Financial assumptions

Thefinancialprojectionsaresensitiveto changes in rents, maintenance prices, employment costs and interest rates.

TheproposednewregulatoryrentregimeconfirmsthatrentincreasesofRPI+1%willcontinuetoapplyprovidedanassociation’stotalincomefromregulatedunitsiswithin5%ofatotaltargetlevelofincome.WWHA’scurrentincomeisbelowtheindicativetarget level in the consultation documents and thus rent increases at RPI+1%areassumedtocontinue.In addition it is also planned that a further3%outofthepermitted5%additionalallowancewillbegraduallyintroducedthroughrentincreases.The proposed regulation protects individualresidentsfromfacingincreasesgreaterthanRPI+1%+£2.

Maintenance price changes have beenbelowinflationoverthelasttwoyears,whereasinearlieryearsincreases had been around 2% above generalinflation,inlinewiththebuildingcostindex.ItisassumedthatpriceswillfollowRPIthroughtotheendof2012,andthereafterwillgraduallyriseaboveinflationreaching1%aboveRPIfrom2015.


Financial control

The Association uses quarterly rollingforecaststomonitorincome,expenditureandcashflowtrends,andthedriversoffinancialperformance.Therollingforecastsenable management and the Board tohaveanunderstandingofcurrentfinancialperformanceinanygivenperiod relative to that in earlier periods and at the same time to haveaviewonfuturefinancialperformance,andhowthatmaybeinfluenced.Reviewsundertakenensurethatfinancialcovenantscan be met at all times, and that appropriate and timely action is taken toarrangeloanfacilitiesaheadofneed.

Risksareregularlyreviewedandanumberofkeyrisksarehighlightedinthisreport.Socialandintermediatemarket rent developments not only requirecashup-frontforlandandbuilding costs, but they continue toconsumecashformanyyearsafterwardsuntilinflationaryrentincreasesoffsetcostsincluding,inparticular,interestpayments.

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Whileovertheperiodofthisplanitis believed that likely risk outcomes can be readily absorbed, should some majorunforeseeneventarisetheAssociationwouldalwayshaveafall-backpositionofbeingabletocurtaildevelopment activity to restore a satisfactoryfinancialposition.Intheabsenceofdevelopmentactivitytheexistingpropertyportfoliowouldgenerateannualincomeandexpendituresurplusesandsufficientcash to maintain properties at the required Welsh Housing Quality Standard.

InDecemberofeachyeartheforecastfortheyearaheadiscapturedintheformofabudget,andanymaterialvariancesfromthatbudget are subsequently monitored, thoughtheprimaryfocusofmanagementisonrollingforecasts.

Thefirstyearofthefiveyearbusiness plan is based on a mid-year Boardapprovedreforecastfor2011,whichismorecurrent,andthereforerelevant, than the budget set several monthsearlier.


Conclusion

TheAssociationiswellplacedtomeetitsambitions,growitsbusinesstomeetsociety’sincreasingneedforrented accommodation, and make a differencetothecommunitiesserved.With a likely shortage in development grantfundingavailabletothesectorovertheplanperiod,fewerhomesthan desired can be delivered at socialrents.Wherefeasiblehowever,theAssociationwilluseitscapacitytosubstitute properties at intermediate marketrents.

WeareconfidentthatthisBusinessPlanwillenableustoachieveourcorporateaimsoverthenextfiveyears.

Treasury management

TheBoardreviewsitsfinancialstrategy at least once in every year and regularly receives reports on theperformanceoftheloanportfolioandtreasuryinvestments.Asat1January2011,56%ofloanswereatratesfixedtomaturity,13%wereatrateswhichwerelinkedtoinflationand31%wereatvariablerates.Withvariableratesbeingsignificantlylowerthanfixedrates,coupledwithan ability to absorb rate changes, the present strategy does not restrict the proportionofvariableratedebt,andthustheproportionofvariableratedebt might increase over the period oftheplan.

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Anne HincheyChiefExecutive

Ivor GittensChair


FinancialPlan...

Income & Expenditure2010

Actual £m

2011 Forecast

£m

2012Plan£m

2013Plan£m

2014Plan£m

2015Plan£m

2016Plan£m

foryearsending31stDecemberIncome

Net rent/service charge 33.2 35.0 37.1 38.9 41.4 44.0 46.2Other income 0.2 2.4 0.6 0.7 0.7 0.7 0.7

Total income 33.4 37.4 37.7 39.6 42.1 44.7 46.9

Expenditure

Salary&wages (6.3) (6.8) (7.1) (7.4) (7.7) (8.1) (8.4)

Repairs (7.5) (7.8) (7.1) (7.8) (7.7) (8.1) (8.4)

Property depreciation (3.3) (3.5) (4.0) (4.4) (5.1) (5.7) (6.1)Other costs (7.2) (7.3) (7.8) (8.3) (8.7) (9.0) (9.4)

Total expenditure (24.3) (25.4) (26.0) (27.9) (29.2) (30.9) (32.3)

Net interest (4.5) (4.5) (5.5) (6.7) (8.3) (9.0) (9.5)

Net surplus 4.6 7.5 6.2 5.0 4.6 4.8 5.1

Interest cover 2.0 2.7 2.1 1.7 1.6 1.5 1.5

Cashflows2010

Actual £m

2011 Forecast

£m

2012Plan£m

2013Plan£m

2014Plan£m

2015Plan£m

2016Plan£m

foryearsending31stDecemberNetcashflowsfromoperations 12.6 14.4 16.5 17.1 19.2 20.9 22.2

Net interest paid (3.9) (4.3) (5.3) (6.6) (8.2) (8.9) (9.4)Replacement capital expenditure (8.8) (8.9) (9.0) (7.9) (10.7) (7.0) (8.0)

Free cash inflow/(outflow) (0.1) 1.2 2.2 2.6 0.3 5.0 4.8

Development Expenditure (18.7) (14.0) (24.3) (22.0) (21.0) (19.3) (15.1)

SHG 11.5 9.1 4.7 5.5 6.1 5.3 3.5

Saleofproperties 2.9

Net property development expenditure (7.2) (2.0) (19.6) (16.5) (14.9) (14.0) (11.6)

Net cash outflow before financing (7.3) (0.8) (17.4) (13.9) (14.6) (9.0) (6.8)

Loanprincipaldrawdown-existingfacility 5.5 5.0 15.0

-additionalfacilityrequirement 3.2 16.7 17.6 12.1 10.1Loan principal repayments (2.0) (2.2) (2.9) (2.8) (3.0) (3.1) (3.3)

Net increase/decrease in cash (3.8) 2.0 (2.1) 0.0 0.0 0.0 0.0


FinancialPlan...Balance Sheetas at 31st December

2010 Actual

£m

2011 Forecast

£m

2012Plan£m

2013Plan£m

2014Plan£m

2015Plan£m

2016Plan£m

Gross property cost 376.5 398.0 430.5 459.4 490.3 515.6 537.6

Housing Grant (233.5) (242.4) (247.1) (252.7) (258.8) (264.0) (267.6)

Depreciation (33.7) (37.1) (41.1) (45.5) (50.7) (56.4) (62.5)

Net cost of property 109.3 118.5 142.3 161.2 180.8 195.2 207.5

Otherfixedassets 3.3 3.6 3.7 3.7 3.5 3.1 2.7

Total fixed assets 112.6 122.1 146.0 164.9 184.3 198.3 210.2

Netborrowings (87.6) (88.7) (106.3) (120.5) (135.4) (144.7) (151.8)

Other net liabilities (4.6) (5.5) (5.6) (5.3) (5.2) (5.1) (4.8)

Net assets & reserves 20.4 27.9 34.1 39.1 43.7 48.5 53.6

Gearing Ratio 35% 34% 39% 42% 45% 47% 48%

Net Borrowings Reconciliation

2010 Actual

£m

2011 Forecast

£m

2012Plan£m

2013Plan£m

2014Plan£m

2015Plan£m

2016Plan£m

Borrowingsnetofcashon1January (79.7) (87.6) (88.7) (106.3) (120.5) (135.4) (144.7)

Capitalised interest on index linked loans (0.6) (0.3) (0.2) (0.3) (0.3) (0.3) (0.3)

Netcashflowforyear (7.3) (0.8) (17.4) (13.9) (14.6) (9.0) (6.8)

Borrowings net of cash on 31 December (87.6) (88.7) (106.3) (120.5) (135.4) (144.7) (151.8)

Cash Balance Reconciliation

2010 Actual

£m

2011 Forecast

£m

2012Plan£m

2013Plan£m

2014Plan£m

2015Plan£m

2016Plan£m

Cashbalanceon1January 5.4 1.6 3.6 1.5 1.5 1.5 1.5

Net movement (3.8) 2.0 (2.1) 0.0 0.0 0.0 0.0

Cash balance on 31 December 1.6 3.6 1.5 1.5 1.5 1.5 1.5

Assumptions foryearsending31stDecember

2012Plan£m

2013Plan£m

2014Plan£m

2015Plan£m

2016Plan£m

Inflation

Rent 4.50% 4.00% 3.50% 3.50% 3.50%

Maintenance costs 3.50% 3.50% 3.25% 3.50% 3.75%

RPI 3.50% 3.00% 2.50% 2.50% 2.50%

Funding

Newborrowingsrate 5.63% 6.13% 6.63% 6.63% 6.63%

Grant rate 58.00% 58.00% 58.00% 58.00% 58.00%

Housing completions 69 194 195 141 100

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Documents

Business Plan 2011 - 2016