1. Preparing for Self Financing Not Long Left….. Joe Logan Chief Executive Poole Housing Partnership

2. Poole Background  5,200 homes  ALMO since 2004  Management Agreement expires in March 2014  Achieved Decent Homes December 2010  High housing cost; low wage economy

3. Stock Options Appraisal  Began in 2009  ALMO brought back in house “not an option”  Twin strategic objectives; existing stock and regeneration  ALMO retention and Stock Transfer main options  Self-financing process intervened  Self-financing presents short term funding problems –Meets needs of existing stock over the 30 year plan but… –Does not support regeneration of existing stock

4. Poole’s HRA Debt Position Additional Debt Payment to the Government - £44M £44M £90M Headroom - £4M to Govt's assumed Subsidy Debt £4M Actual HRA Debt - £42M £42M £46M

5. Self Financing Offer as it now stands

6. So…..  5 years’ investment to be spread over 10 years  Revenue contributions to capital increased –Service charges reviewed –Garage rents increased –Efficiency savings  Begin repaying debt at Year 18  Debt could be cleared at Year 29 So, from Year 18, there is the potential to raise capital

7. Self Financing Offer – Balanced Programme Work is underway to achieve this Self Financing Offer – Balanced Programme Work is underway to achieve this

8. Closing the finance gap  Reviewing component longevity on Stock Condition database  Holding back on a range of planned works  Reducing contingency funds  Efficiency savings: increased revenue contributions to capital  Income from external sources –Grant funding –Supporting other organisations –Non-housing contracts –Creating new income streams e.g. Feed in tariff

9. Closing the finance gap

10. Photo-voltaic scheme  Reduces fuel poverty  Stops 32,500 tons of carbon emissions over 25 years  1,300 PHP homes to be covered  Provides local employment  Creates a surplus of £15 Million for HRA  Purchasing through North Somerset Housing Steve Drew (steve.drew@nshousing.org.uk)steve.drew@nshousing.org.uk Steve Drew; Director of Assets Tel: 01275-398020

11. HRA DEBT POSITION Additional Debt Payment to the Government - £44M £44M £100M Headroom (Now Borrowed) - £4M to Govt's assumed Subsidy Debt £4M Actual HRA Debt (Now includes the £10M borrowed for PV) - £52M £52M £56M

12. A Quality Stock Condition Database In Poole  Carried out in house  Over 50% of stock with full condition survey  98% partial surveys  100% non-housing assets surveyed  Periodic external quality control It needs to be dependable!

13. Preparing for Self-Financing in Poole  Governance – Joint Council/ALMO Working Party  HRA remains managed by ALMO/Resident scrutiny  Debt split into General Fund and HRA pools  Short term internal borrowing  Short, medium and long term loans  Depreciation – Using CIPFA Component Accounting Method

14. What are the main risks?  The final settlement could be worse than the offer  Future above-inflation rent increases  Benefits changes and benefits paid direct  Right to Buy increases  Government ability to open up settlement  Building cost inflation  Depreciation calculation  IFRS/Impairment

15. Big Challenges  First 10 years will be tight  No opportunity for regeneration  Urgent need for more affordable housing  Brownfield sites gone  Poole’s economy increasingly dependant on affordable housing

16. What is the NFA doing?  Survey of all ALMOs  Sessions on Self Financing at Annual Conference  Guidance notes being circulated for ALMOs  ALMOs sharing best practice with each other  Working with CWAG, LGA, CIH  Resident/Board training events  Exploring Community Ownerships models

17. and remember….  Rent and other income will be the only long-term income resources for the HRA business plan  The first priority: existing debt  The second priority: properties are maintained to raise income and cover debt  The third priority: service delivery  …and maximising income must also be a priority; rent, service charges, financial inclusion support for residents, other income streams

18. and finally….. Self-financing was the sector’s idea. Enables long term planning. It is not without challenge, but it is better than the current subsidy system.