Business plan 2016 2020

2016 to 2020

The Business Plan

2 |The Business Plan 2016 to 2020 |Wales & West Housing

Anne Hinchey CEO

From our small beginnings...Oluptatiis et, ut dolupta tiorest adit am, sapictem a qui nus vidit abor ma qui dolentibus que eatur sa incium untiam res net ea sitatatecat.

Bori tore pliquiat aut et et quae oditas comniendelit ‘Great opportunities to make a difference only come now and again but small ones surround us every day. Ensuring that everyone at Wales & West Housing seizes all the opportunities available is what we are about – making a difference one person at a time, in each engagement, interaction or discussion.

Social enterprise has a long history and we are proof that good business goes hand in hand with doing the right thing. Our energy, persistence and willingness to try new things is what has got us here and is what will get us through the challenges that we face. I am enormously confident that in our next fifty years we will grow and make a real difference for more and more people.’

Wales & West Housing | The Business Plan 2016 to 2020 | 3 50 years is a significant milestone for anyone and any company. Wales & West Housing was established as a social business back in 1965 with a clear purpose to provide affordable housing for the many people who struggle to afford decent housing. Our growth since then has been driven by a clear focus on our social purpose and I am immensely proud that we will soon celebrate the building of our 10,000th home.

Providing housing is crucial to every one of us, to keeping communities vibrant, our economy strong and our citizens healthy and happy.

I remain as committed now, as I was 15 years ago when I joined WWH, to being as efficient as we can be in how we use our income to provide more new homes. We will never lose sight of what we are here for and whose money we are spending. Residents have always been at the heart of how Wales & West Housing operates and this is more the case now than ever before.

In 2015, our 50th year, we have been reflecting on where we have come from and what the future holds. Our residents face considerable challenges as does the sector as a whole. In looking back we have evolved, innovated and changed at each step of our journey. We have not lost our sense of purpose and the need for organisations such as ours, which build affordable homes, support residents to realise their aspirations and help sustain communities, remains just as great.

Kathy Smart Chair

4 |The Business Plan 2016 to 2020 |Wales & West Housing

Strong and sustainable Our 50 years have enabled us to grow to become one of the largest housing associations in the country. We are a strong and effective organisation with a track record to prove it.

We have an award as the best not for profit company to work for in Wales and are in the top three in the whole of the UK. Wales & West Housing is the place where talented and committed people work, making the best use of the resources and partnerships available to make an enormous difference to people’s lives.

We run our organisation based on being clear about our purpose and what matters to our residents for each of the services we provide. It’s what makes us different from many others, taking that customer perspective and assessing our performance against what they demand from us. Our residents want peace of mind that their homes are theirs for as long as they need and part of what makes us strong is our commitment to sustaining tenancies and communities, investing in their viability.

We are here for today and here for tomorrow. Welfare reform and diminishing financial support to provide affordable homes does make achieving our vision more difficult.

Our response is to further improve our efficiency as we have done with the creation of Cambria Maintenance Services, explore new ways to generate income such as homes for sale and concentrate our investment and growth in those areas where we can have the greatest impact.

Property is a solid investment and worth the money if it’s looked after. We maintain our assets to a good standard and, mindful of demographic changes, will ensure they are well adapted and affordable to rent and to live in.

In our first 50 years: 10,000 homes, 500 people employed, being trained or in apprenticeships, and, 60,000 homes across Wales with their residents safe in the knowledge that Wales & West Housing is there in case of an emergency.

In the next 50 years, we are equally ambitious. We want to continue to invest in Wales, spending our money wisely, locally, doing the right thing to deliver what matters for our customers.

For the future, the following six priorities are where we believe we can make a difference:

Wales & West Housing | The Business Plan 2016 to 2020 | 5

OUR 6 PRIORITIES More - homes Invest - in our homes Grow - jobs and training

Technology - more for all Care - new services Lives - sustaining tenancies

Our vision is: “to achieve strong sustainable growth to make a difference to people’s lives, homes and communities.”

6 |The Business Plan 2016 to 2020 |Wales & West Housing

MORE

homes to meet housing needs

People need homes they can afford in places they want to live where there is work and a supportive community. With fewer people able to buy their own home and private rented housing costing so much, the need for more affordable homes is as strong as ever.

We plan to build a range of housing, where there is strong demand, which is genuinely affordable. Investing ÂŁ30 million each year we aim to build around 200 homes every year and will seek further opportunities to increase that number to get the most from the upturn in the housing market. Counties such as Cardiff are set to grow considerably in the next few years and we believe by working closely with local councils and developers we can build even more homes.

If we are to be as successful in 50 years’ time, our new homes need to be of an even higher standard. We are working with partners to design warmer, safer and even more affordable housing that best suits the needs of the young and the old.

Jane Hutt AM, Minister for Finance and Government Business, visits our new development at Parc Brickfield in Rhyl, Denbighshire

Wales & West Housing | The Business Plan 2016 to 2020 | 7

In June 2015 Lesley Griffiths, Minister for Communities and Tackling Poverty, officially opened our ÂŁ16.9m ground-breaking affordable housing development in Hightown, Wrexham, marking the occasion, by helping residents to bury a time capsule.

INVEST

to maintain great quality homes

Our homes are in such great condition because of the investment made to date. As we are here for the long term, it makes sense to invest in ensuring our homes are what people want into the future. The feedback from our residents is that homes need to be even warmer and better suited for people that are older or have limiting abilities such as dementia.

Through our new Asset Management Strategy, we better understand the value of our housing to our residents and to our business. It is helping us make better investment decisions, knowing when to improve, when to remodel and when to sell. The past decisions to build high quality homes in good locations, means that for the vast majority of our homes spending to improve them will always be the right choice.

8 |The Business Plan 2016 to 2020 |Wales & West Housing

G.R.O.W.

Generating Real Opportunities for Work

Sometimes we all need a helping hand and some of our residents need a little help to realise their aspirations and to take advantage of the improving state of the economy. Whether paid or voluntary, working makes a huge difference to people’s lives and their communities. Our Community Enterprise Team is learning fast the best way to provide help and has supported many of our residents towards employment or training.

We are providing funding to help our residents ‘make a difference’ to their own lives for example by setting up their own business. We will look to maximise the community benefits we receive from the contractors we work with to help more of our residents achieve their personal goals.

Kyle Hexter, 17, successfully completed a two-week work experience programme with WWH CAPTION HERE CAPTION HERE CAPTION HERE CAPTION HERE CAPTION HERE

Wales & West Housing | The Business Plan 2016 to 2020 | 9

Residents at Cwrt Anghorfa, Bridgend enjoy the free WiFi installed at their scheme.

TECHNOLOGY

going digital

The way that people access services and interact with each other is changing.

Technology in some shape or form has become part of our lives and people shop, chat and work online in a way that would not have been possible a decade ago.

We can use technology to improve how we deliver services, making us more efficient and resilient. Our investment in new ICT systems will enable our staff to work remotely in our residents’ homes as effectively as if they were in the office.

We don’t want residents to get left behind in the digital revolution and will continue to roll out free WiFi wherever it is cost effective to do so.

702 47

residents connect their devices to our WiFi network each month

schemes benefited from WiFi installation by Cambria to date

Technology also keeps people safe – in our case almost 60,000 people rely on our emergency alarm and telecare services. With so many new devices and ways to assist we will invest in new technology to make our systems even better.

10 |The Business Plan 2016 to 2020 |Wales & West Housing

CARE

a new service

We know that many of our residents require care and support services to live fulfilling and independent lives. We also know that the quality of these services can vary considerably and we see the impact of this.

We believe we can offer a high quality service to our residents who live in extra care and supported housing schemes. In the latter part of 2015 the Care and Support division of our subsidiary company Castell Ventures Ltd should receive confirmation of CSSIW registration and be able to tender for the contracts to provide services in our schemes.

Throughout the Group we want to be able to provide the homes, the maintenance, the support and the care cost effectively in line with our values and principles, always putting the resident at the heart of what we do.

Resident Miss Margaret Collins chats with Llys Jasmine Extra Care Scheme Manager Kara Foulkes

Wales & West Housing | The Business Plan 2016 to 2020| 11

Jennifer Lunt (right), from Mold, Flintshire, applied for a grant from WWH and purchased a laptop and printer to enable her to work from home whilst studying for a nursing degree.

Kristin Vaughan, our Employment and Enterprise Coach, is supporting her.

LIVES

supporting tenancies

Providing homes in which people prosper and thrive is at the heart of what we do. We are more than just a landlord and want people to start their tenancy positively so that the euphoria of getting the home they have waited and longed for is not lost because they have no support, furniture, heating or light.

Our focus is on putting the right services in place before and throughout a tenancy to help make it a success. We are learning about the different type of support we need to provide or arrange to ensure that as people’s lives and circumstances change, their tenancy with us can be sustained.

Welfare reform has hit some people very hard and failing tenancies ruin lives. We have invested in delivering expert advice to reduce the impact of welfare reform and continue to work on initiatives to help us and our residents deal with universal credit as it is rolled out.

12 |The Business Plan 2016 to 2020 |Wales & West Housing

Where we operate General Needs

249

Retirement Supported

12

Retirement

204

34

36

Total on site now

General Needs

Home Ownership Extra Care

58

Home Ownership

General Needs

58

1

Supported

63

General Needs

821

Supported

24

In development

38

54

Retirement Home Ownership

19

Extra Care

In development

71

141

In development

32

In development

Retirement

58

In development

305

606

158

Home Ownership

88 23

Retirement

Total Stock

11

9,729

General Needs

632

Supported

49

In development

Retirement Home Ownership

1

245

Home Ownership

3

General Needs

31

149

253

Supported

8

92

106

Home Ownership

General Needs

31

Retirement

1,028

683

Home Ownership Home Ownership

26 305 34 Retirement

General Needs Retirement

65

Supported

Figures as at June 2015

Retirement

64

General Needs Home Ownership

19

General Needs

165

In development

47

Supported

Home Ownership

General Needs

247

629

Retirement

128

General Needs

2,102

33

Wales & West Housing | The Business Plan 2016 to 2020 | 13

Financially strong Our financial strength enables us to borrow at favourable rates to grow our housing stock and to do the right thing at the right time for our residents and our properties.

Surpluses, reserves, positive free cash flows and adequate security are all important elements in enabling us to borrow at favourable rates over long periods of time. In recent years just about all of the free cash generated by our housing portfolio has been reinvested in our existing housing stock, replacing components that had worn out over time and ensuring that our properties all comply with the Welsh Housing Quality Standard. Whilst our properties are built to last and can be refinanced several times over during their useful lives, eventually loans have to be repaid and with that in mind we plan to retain an average of around ÂŁ3m a year in free cash, giving us strength to deal with the changing environment and allowing us to repay our loans on average over some 70 years.

Our plan allows us to continue to grow, maintain our housing stock and properly serve our residents. Our current five-year plan is to spend more than ÂŁ300 million in the communities in which our residents live, delivering around 1,000 new homes, providing substantial economic stimulus and ensuring our properties are properly maintained. Some of this expenditure is through our subsidiary companies, whose over riding purpose is to serve WWH, whether in providing maintenance services, new kitchens, bathrooms and boilers or care and catering to our residents. They contribute significantly to our aim to be even more efficient, making the best use of every pound we have.

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. If that commitment was rescinded (as has been the case in England) then we would take remedial action to ensure that our continuing financial viability is maintained. We are strong enough to absorb such knocks, but fundamental changes would make it harder to meet all of our future aspirations.

14 |The Business Plan 2016 to 2020 |Wales & West Housing

INCOME AND EXPENDITURE ACCOUNT for years ending 31 December Income Operating costs Operating surplus Interest payable Net surplus

2016

2017

2018

2019

2020

£m 41.3 (30.9) 10.4 (6.2) 3.8

£m 43.3 (32.2) 11.1 (7.0) 3.9

£m 46.0 (33.6) 12.4 (7.9) 4.3

£m 48.3 (34.7) 13.6 (9.0) 4.4

£m 50.7 (36.2) 14.5 (10.1) 4.3

2016 £m 546.3 (44.1) 502.2 (291.2) (176.3) 17.8 52.5

2017 £m 582.4 (49.8) 532.6 (306.8) (193.3) 23.9 56.4

2018 £m 619.8 (55.9) 563.9 (323.6) (208.0) 28.3 60.6

2019 £m 651.9 (62.4) 589.5 (336.9) (220.4) 32.8 65.0

2020 £m 682.0 (69.3) 612.7 (350.8) (230.5) 37.9 69.3

51% 32%

53% 33%

54% 34%

55% 34%

55% 34%

20162020 £m 229.6 (167.6) 62.0 (40.2) 20.7

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)

Mark Drakeford AM, Minister for Health and Social Services, chats with residents at Nant y Môr Extra Care scheme in Prestatyn, Denbighshire

Wales & West Housing | The Business Plan 2016 to 2020 | 15

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

2016

2017

2018

2019

2020

£m 15.8 (6.2) (0.8) (6.9) 1.9 (35.6) 8.3 (25.4) 22.0 1.9 (2.3) (3.8)

£m 17.1 (6.9) (0.7) (6.8) 2.7 (26.9) 9.0 (15.2) 0.0 19.8 (2.8) 1.8

£m 18.9 (7.9) (0.7) (6.6) 3.7 (28.2) 9.9 (14.6) 0.0 17.6 (2.8) 0.2

£m 20.1 (9.3) (0.7) (6.4) 3.7 (23.3) 6.5 (13.1) 0.0 15.2 (2.8) (0.7)

£m 21.5 (10.3) (0.7) (6.5) 4.0 (20.9) 6.9 (10.0) 20.0 13.0 (22.9) 0.1

2016 Plan

2017 Plan

2018 Plan

2019 Plan

2020 Plan

4.0% 2.0% 2.5% 1.0%

3.0% 2.3% 3.0% 1.5%

3.5% 2.5% 3.5% 2.0%

3.0% 2.5% 3.5% 2.0%

3.0% 2.5% 3.5% 2.0%

3.5% 58% 289

4.5% 58% 166

4.8% 58% 203

5.0% 58% 125

5.2% 58% 175

20162020 £m 93.4 (40.6) (3.6) (33.2) 16.0 (134.9) 40.6 (78.3) 42.0 67.5 (33.6) (2.4)

WWH staff members and residents of Llys Ben Bowen Thomas and Llys Nazareth in RCT, are involved in an innovative road safety campaign

Wales & West Housing 3 Alexandra Gate, Ffordd Pengam, Tremorfa, Cardiff CF24 2UD and Unit 2, Acorn Business Park, Aber Road, Flint CH6 5YN. Telephone: 0800 052 2526 Email: contactus@wwha.co.uk Website: www.wwha.co.uk @wwha wwhahomesforwales