Paying for the plan Financial plan summary
The financial plan is covenant compliant each year and has headroom to our golden rules. The plan includes significant investment for our existing homes, including over £458m over the next five years on repairs and investment and over £187m on management and service costs.
In line with our regulatory requirements and to satisfy the loan requirements of our funders, we prepare a 30-year financial plan on an annual basis. This plan considers our current financial position, assesses what is required to deliver the strategic objectives and then projects this over 30 years to ensure that we have the financial capacity to deliver what is needed.
The plan does not include an estimate of the cost of de-carbonising our existing homes by 2050. We will be working on a five-year strategy, but lack of clarity around the technology, timing and costs mean that it is too early to model the costs into this version of the plan.
The financial plan assumptions are set out in the appendices. They include Economic Consumer Price Index (CPI), Retail Price Index (RPI), Interest rates, increase in real costs (i.e. above CPI), income assumptions (voids and bad debts) along with expected property sales and new property developments.
Stress testing has been carried out on the financial plan with the board in March 2021. The stress testing included several single factor and multi-variant scenarios. It demonstrated how robust and resilient the financial plan is as a number of scenarios do not break the plan.
The financial plan is attached in the appendices and includes projections of activities from 1 April 2021 to 21 March 2051.
For the multi-variant scenarios that could break the plan, mitigations also consider how soon we can put a solution in place to get the plan back on track. These mitigations are tested routinely throughout the year, and the results are shared with the audit & risk committee.
The appendices also includes a statement of comprehensive income, a statement of financial position and a cashflow statement.
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