Today we look back on a successful year for your Association. The first in our latest 5 year corporate planning cycle.
This report sets out our performance in 2012/13, the outturns measured against the business objectives and targets set at the beginning of the year.
• Fold’s overall £4.8m surplus at 13% of turnover, exceeded budget by close to £1.3m – a very credible performance given the financial pressures at this time.
• Fold’s turnover rose by 3.6% over the year and is forecast to rise by a further 5% in 2013/14 to £37m.
• Additional housing units and excellent void management boosted turnover from housing activities by nearly £400k.
• The asset value of all our properties for the same period increased by £32m (10%) to £360m.
• Our total private borrowings rose to £54m and we are set to go out to the market for further private finance in the year ahead. This will fund our proposed development programmes over the next 2 years. I can confirm that Fold’s Interest Cover and Gearing Ratios remain well within the loan covenant targets agreed with our lenders.
• Our revenue and designated reserves now stand at £49m.
• The strength of our Balance Sheet will be critical when we seek to raise funds on the private market.
• Working even more closely with our Accord procurement partners in 2012/13, we managed to achieve 296 new starts. Accord jointly achieved 377 new starts with Fold providing just under 79% of the group’s total. At the end of March 2013 we had 455 homes at varying stages of construction across 16 sites. We also managed to complete and allocate 263 new homes. In the course of the year we drew down £14.7m of Housing Association Grant. We also purchased lands at Drumalane, Newry and Forkhill under the Advance Land Purchase Scheme.
• The Accord Group revised its rolling 5 Year Business Plan. Fold members helped to reshape the terms of reference for the Programme Board, the steering committee for the Department’s Procurement Strategy. Fold also sat on a number of subsidiary committees including the SHDP Delivery Group, charged with turning the PEDU recommendations into actions, and the Procurement Practitioners Group, promoting best practice in procurement. A positive Mid Term Review by the Department of Accord activities took place during the year. This included the approval of Accord’s progression towards a Joint Integrated Development Team drawing on the strengths of member associations. Elsewhere progress was made in:
o Submitting the fourth Accord development bid;
o Further standardisation of development and procurement policies;
o Collaborative procurement and joint training;
o Revision of the Accord Business Plan and introduction of an Accord Scorecard;
o Achieving Excellence scores of 78 pts on Accord projects.
• Fold and Accord’s Consultant Framework will expire this year. Our development teams are actively designing a new framework with a view to commencing the procurement process in the summer 2013. The new framework incorporating our learnings and those of our consultants will be in place for call-off against projects in the 2014/15 year.
• Fold has been allocated 266 new starts across 11 projects in the social development programme, in the year ahead. This represents around 60% of Accord’s total allocation. There may be further opportunities for advance land purchase and off-the-shelf developments. Fold will pilot an innovative competitive design-and-build procurement methodology during the year. It is hoped this approach will encourage more landowners, developers and banks to bring forward turnkey social housing projects.
• In parallel with the new programme, our development team will be progressing the Dunmurry based Visteon Project towards a new start in 2014/15. Visteon promises to be our most exciting and challenging project for several years. The site provides for up to 200 new homes, together with extensive commercial and community facilities. The project will help alleviate housing stress and unemployment in the area.
• The NI Housing Executive is bringing forward up to three stock transfer lots, totalling over 2,000 units. The first lot is due for tendering in first quarter of 2014. We recently submitted an expression of interest in the project and are seeking bidding partners, to share the costs of consultants and other specialists required to prepare a bid. Elsewhere, the Department having invited bids for affordable development under the ‘Get Britain Building’ programme in 2013, is expected to invite further proposals in 2014 under a new Affordable programme, based on longer term loans. These opportunities come as good news for tenants and builders alike. However associations must properly balance opportunity against risk and capacity, at all times ensuring that future surpluses sufficiently cover the cumulative cost of private finance.
• The Property Services team operating from a three year cyclical and major works programme successfully delivered an asset management programme of just under £7m, including response repairs and adaptations. The response team responding to over 14,000 calls, achieved a call-out performance, well above DSD targets, in many cases.
• The Accord Group made significant progress in collaborative procurement and joint working during the year. We jointly tendered the first MTC contract for the procurement group. The procurement exercise provided significant savings compared to previous arrangements as a result. Fold’s response repairs this year came in at £192k (-17%) below budget. Elsewhere other joint procurement exercises included planned and cyclical works contractors, laundry equipment and water hygiene servicing, ground maintenance works; design consultancy services; and window cleaning. Procurement of non technical services led by Fold, included recruitment advertising; scheme furniture; stationary; and insurance brokerage.
• We invested over £0.8m in IT during the year. Upgrades and new systems were implemented as part of a £2.3m - 4Yr investment plan. In addition the Board approved a special business case for reinforcing our telemetry and business continuity systems.
• The Board look forward to receiving Fold’s latest ICT investment plan, which will be aligned with the latest corporate plan. We will be installing the latest release of our core IBS Housing and Finance System. This is expected to increase our reporting capability. Over the last 12 months our management team have been trialling the use and reach of social media, including Facebook, Twitter and LinkedIn. As our customers redefine their preferred communication media, so also Fold must be able to move with them. Stay tuned to Fold’s Web, Twitter and Facebook sites.
• During 2012/13 we:
- Increased our housing stock to 5440;
- Made 896 housing lettings;
- Maintained void levels at an all time record for general needs/sheltered housing at 0.8%;
- Managed Net Arrears and past tenant debt to 3.2% of net income.
Fold’s housing management performance come out on top in the DSD’s first ever housing association league table report. In some cases our team were hitting performance levels several points ahead of other large associations. We acknowledge this excellent achievement.
• The Housing Team maintained the very good relet turnaround times they had reached in the previous year. However void management in particular continues to be ‘best-in-class’. Given our large proportion of sheltered accommodation and the increasing number of offers now required to achieve an allocation, their hard work has kept voids at under 0.8% all year. For Fold each 1% increase in voids over 12 months, represents a drop of £330k in revenues. Fold’s Housing revenues are in safe hands.
• The Housing team have kept abreast of the welfare reform agenda and its implications for tenants, staff and Board. We have benefitted from regular updates at Committee and Board Meetings. Housing staff have been surveying tenants, issuing information circulars and engaging directly with community groups all in preparation for the changes to benefits. We were the first association to develop a web based information site for calculating tenant rent shortfalls based on their particular circumstances. Our team have been working closely with Advice NI and reviewing our financial inclusion processes to ensure the necessary sign-posting for those hit by financial hardship. Our staff in anticipation of a changing tenant/housing officer relationship are receiving bespoke training on how to manage difficult conversations around arrears, financial hardship and tenant wellbeing. It is clear as we look forward, that our staff are going to need to become more familiar with and better understand the individual circumstances of all our tenants in order that we retain our excellent housing performance.
• We held two successful resident forums this year. They were well attended and the feedback was very positive. We held our second Sheltered Housing Tenant Awards. This initiative is proving very popular with an increased number of submissions compared to the previous year.
• I would like to thank our Tenant Board Representatives, namely Deirdre Hamill and Jim Morrison. They provide a most valuable contribution to Fold’s continued success. The Board reviewed its tenant representation strategy during the year, with a view to exploring how tenants from a wider base might engage on matters related to housing. The views of current tenant members were critical to the review. The outcome was a decision to create regional panels of tenant representatives and carers, with members sitting on the Housing and Care Sub Committees. A tenant representative will sit on the Board and will receive enhanced induction and support.
• We continue to work with local community groups, the PSNI and public representatives in tackling Anti-Social Behaviour within the neighbourhoods we manage. We are pleased that incidents of burglary are rare within our sheltered schemes. The vigilance of our tenants, the extra security measures introduced by Fold and the actions of the PSNI have all helped to make our Folds safe and secure.
• We are concerned at the growing tensions within the obligatory community consultation process for off-the-shelf developments. We respect the need for communities to be informed on new developments. However these consultations are increasingly being dominated by Nimbyism and misinformed views of social tenants. Fold took the difficult decision of not proceeding with a development in Newry this year. This was out of fears for the treatment the social tenants might have received should they have taken up their housing allocations. We met with the Newry and Mourne Council to express our concerns. We have since asked through NIFHA, that the whole protocol for community consultation be reviewed, so that existing residents do not perceive themselves as having a veto on whether or not social tenants should be allowed to live in their neighbourhoods.
Housing with Care, Day Care & Brain Bus
• Our Gnangara housing-with-care scheme continues to run at a deficit, having had to carry 10 voids for the whole year. These void properties have never been allocated since the scheme opened in December 2010. Since this time Gnangara has run up an accumulated deficit of over £800k. This is despite the best efforts of staff in working reduced hours, cutting costs and undertaking a whole host of marketing and promotional activities. We have written to the DSD, NIHE and Health Board for financial assistance in light of these unprecedented losses, which are outside Fold’s control. We await their decisions. The losses at Gnangara highlight the risks around supported housing at this time. We have also experienced costly delays in decision making around Oakhouse in Lisburn. Our SNMA payments equivalent to 12% of Fold’s total HWC income, are under threat of withdrawal by April 2015. Yet at the same time the Department is aiming to accelerate its supported housing development programme to 800 units in this year and next. It now appears many associations see the lack of consistency in commissioning, uncertainty around supporting people, and care funding and the rising expectations of RQIA as unacceptable business risks.
• Recently we had a consultation on the review of the Supporting People Strategy. Fold supports the retention of Supporting People within the strategic housing body, as opposed to a move to Health. However more needs to be done to improve the commissioning process for new projects. The absence of a thorough and consistent assessment of need is no longer acceptable. Meanwhile providers such as Fold, who carry the vast majority of project risk, should have a more active role in shaping the direction of future provision and regulation. We have called for alignment between Transforming your Care, the new Supporting People Strategy and the New Housing Strategy.
• This has been a challenging time for our Care Services Business. This year we took the difficult but necessary step of restructuring the housing-with-care management structure. I know this was difficult for all concerned and in particular for those loyal and dedicated staff who were either made redundant or were redeployed outside of Care Services. Throughout this process we are aware that the team retained a high quality of service and resident care. The Board are truly appreciative of their professionalism and dedication before and during the changes.
• The Board welcomed a kind invitation to Lurgan in the Spring, for an event marking the completion of the refurbishment of the Manor Court HWC Scheme. At a cost of just over £200k, the investment marks our latest refurbishment in a programme of investment in our HWC business. Residents are able to enjoy a modern and comfortable living environment with their families and carers, not to mention a host of additional facilities. We also authorised significant expenditure of around £175, on the roof and carpets at Millbrook HWC, Bangor.
• Gnangara aside, the management of voids, arrears and response repairs were very good. Voids finished the year at 1.47% having been well within target throughout the year. Meanwhile Net Arrears finished at 4.2%. Agency Care spend exceeded target by 21%, mainly due to staffing and catering issues in one scheme.
• We appreciate the dedication and hard work of all our staff employed in our HwC schemes and those in support roles. We were particularly impressed at the HWC manager’s resourcefulness and the hard work during outbreaks of the norovirus in the past year. This will have been a challenging time for residents, their families and carers and staff. We continue to receive positive RQIA reports on the quality of care following announced and unannounced inspections.
• We continue to provide over 12,000 daycare places at our four centres at Millbrook, Avondale, Seven Oaks and Manor Court.
• We note the progress of Fold’s ‘Brain Bus’ team in their search for new business. The Care
Services Committee appreciated the recent presentation of the sales and marketing strategy.
We wish John Ewings every success in his efforts to secure additional business with the
• Our combined Telecare and Telehealth customer base now stands at 26,313. This includes 913 patients who are being monitored under our vital signs monitoring contract with the Health Trusts.
• The Telehealth business venture TF3 incorporating Fold, Tunstall and S3 has come through a year of consolidation and progress as the governance systems and inter-company protocols bed down. We have been disappointed at the much slower than forecast take-up of the service by some Health Trusts. Our business account team will be stepping up its sales efforts in the year ahead. The TF3 team achieved a double success at the TSA Awards and have been raising their profile at Stormont and in Brussels.
• With new ventures come new processes and risks. An internal audit of the Telehealth business highlighted a number of concerns around invoice management and reporting. This necessitated the setting up of a special overview committee, to monitor telecare and telehealth activities. We are assured now by management that these matters have been addressed and will not reoccur. It is imperative that each budget holder does not lose sight of their cashflow responsibilities. And in reporting to Board, all such reports and KPI’s must accurately describe the key processes and risks within their operating environment.
• The Board appreciated the dedication of the call handling team during the snowfall in March. The general feedback from end users and corporate customers is that Fold’s telecare team provides a very professional and comprehensive service as they handle around 460,000 calls per annum. With increasing call levels it is proving a challenge for the team to consistently achieve the TSA caller response targets. We note the recent trend in improving performance, towards the TSA target and we will monitor caller response times closely through 2013/14.
• Looking to 2013/14, the team have forecast growth in connections to 28,475. We also expect to see a marked growth in monitored telehealth days to over 500,000. The telehealth service is now subject to performance penalties. However the management team is confident of restricting such losses within an approved contingency figure.
• Fold’s Home Improvement Agency (HIA), Staying Put, performed well during the year against Housing Executive targets, helping 569 families to complete disabled facility grants. The team also received 591 approvals from the Housing Executive.
• The Staying Put was subject to a review commissioned by the Housing Executive during the year. This followed a previous review in 2005. Again Staying Put was found to provide a very valuable contribution to easing the burden for those applying for DFG grants. However the review came to a number of conclusions which inferred that Supporting People Funding should be reduced in line with reduced referrals. Fold responded to the review, pointing out anomalies in the assumptions. We also included recommendations for improving the service for applicants and for reducing costs. Discussions are ongoing regarding these recommendations. In the meantime a 10% reduction in SP funding has been imposed from Qtr2 of the 2013/14 business year. We have challenged this decision on the basis that whilst DFG’s continue to be in demand, some grant offices are not referring applicants to our service as much as they should. The grants staff appear to have been diverted away from DFG’s to other work.
• These grant cuts are an example of failed inter-departmental thinking. On one hand, we see a reduction in the DFG and Staying Put budgets. On the other hand we see the Health Minister promoting enablement and independence in the community through his ‘Transforming your Care Agenda’. Staying Put as evidenced by our own survey comprising 239 questionnaires in 2012/13 shows that 86% of claimants would not have proceeded with their DFG without our help. We hope that good sense will prevail and this most valued service will be adequately funded to expand and increase in scope to help people live independently.
Staff, Equality, Community & Communication
• Fold employs over 800 staff across 110 locations in Northern Ireland. During 2012/13 the HR team delivered an extensive training and development programme, representing an investment of around £200k. We were pleased to see our care and housing staff attain further qualifications in training, enabling their progression up the organisation. We also completed the latest stage of our externally accredited management development programme. This followed a competency assessment focussing on performance and project management. The HR team rolled out a substantial mandatory training programme for all our staff.
• Fold’s sickness and absence figure reduced over the last 12 months from 4% to 3.5%. This improvement equates to a saving of £80k in salary costs. This is even before we consider the reduced disruption to customers and colleagues that improved attendance brings. Our staff turnover increased to 13% from 10% a year ago. We believe this trend mirrors that of other organisations in our sector.
• Fold’s Annual Equality Review was presented to the Equality Commission and incorporates our 5-year Equality Scheme and action plan templates.
• We operate staff welfare initiatives including our Occupational Health Care MOT service and staff counselling. We carried out our Health and Wellbeing Survey in the latter part of the year and will roll out the responses together with an action plan in 2013/14. We were grateful to Action Cancer who visited our Holywood Offices with their Big Bus providing screening and health advice to our staff.
• The Health and Safety Committee was relaunched in the last year with a renewed focus on raising awareness around hazards and the well being of customers, staff and the general public who live, work and visit our facilities. The Board had approved a programme of fire risk assessments and these were completed in 2013. A list of recommendations came forward and these are being addressed on a priority basis. A further programme of general risk assessments has been approved for the 2013/14 year. We recorded 6 Riddor incidents in the year, similar to the previous figure. The Core Brief for staff now includes a standing agenda section on health and safety with staff being briefed on organisational learnings from Riddors and other advice on personal and customer safety. Across Fold the HR and Corporate Services team continue to raise health and safety awareness through posters and Fold’s intranet site.
• Fold tendered its insurance brokerage services at the end of 2012 with a new broker, being appointed in early 2013. Whilst we achieved a considerable saving on this new appointment, we have seen a jump in our insurance premiums for 2013/14. This increase is consistent with increases applied to other social landlords and is indicative of changes in the current GB insurance market.
Continuous Improvement, Audit & Control
• Fold was re-accredited under Customer Service Excellence (CSE), a customer focused quality system. The assessor was impressed by Fold’s ability as a large and diversified organisation, to consistently achieve the requirements of the quality standard. In a time of rising customer expectations with many prepared to change provider, we should take comfort from this endorsement of the excellent customer focus of our front line and support staff.
• We completed Best Value reviews of our Staying Put service, the Development Financial Appraisal Model and Fold’s Insurance Arrangements. The recommendations arising have been implemented.
• We revamped our Business Continuity Plan (BCP) during the year drawing on the experiences of the previous year. Fold now has a back-up office in Ballymena complete with an independent server, backup computer stations and an additional telecoms switch.
• Fold’s Internal Auditors provided their year-end report against the 2012/13 Audit Plan. They had completed audits of financial controls, IT controls, property development and Telehealth’s service delivery and contract compliance. In their follow-up report they awarded development a substantial rating and all other areas a satisfactory rating.
• Our management team reviewed Fold’s Corporate Risk Register during each business quarter. This was reported through to the Board via the Audit and Risk Committee. In addition a special Welfare Reform Risk Register was developed linked to the Corporate Risk Register.
• Fold will be subject to a DSD Inspection in early July 2013. The inspection is the first of Round 3 inspections for the sector and is expected to follow a new and reduced format, based on an assessment of risk within the association.
• A number of our senior team continue to manage the Fold Ireland business under a service level agreement. This requires travel to Dublin on a regular basis. The operating environment in the ROI continues to be particularly harsh and the guidance of our staff ha proved invaluable. Chris Murdock recently retired from the Fold Ireland Board. We thank him for all his hard work dating back since the original setting up of the association. I know Fold Ireland’s Chairman, Jim McCaffrey, is very grateful to David Crothers, who sits on the Fold Ireland Board and provides his advice and experience in housing matters. As you know, Fold NI and Fold Ireland are two entirely separate associations albeit working towards a common goal on either side of the border.
Fold faces many challenges over the coming years and these will come from unprecedented changes in our operating environment, including:
• A stagnant economy
• Reducing capital and revenue funding
• Affordable and stock transfer development opportunities
• Welfare and Health reforms
• Restructuring of the NI Housing Executive
• The roll out of the new Housing Strategy
• Changes to structure of Local Government
• Changes within Fold’s own Board
Some of us wonder when we will return to normality. The reality is that we are in the new normality now. The current business environment is likely to prevail, well into the next corporate planning cycle. Pressures will continue to come our way, to do more with less, to diversify and to take on more risk. We accept that an organisation needs to change to meet customer expectations and the changing economic environment. And Fold has a track record in introducing new and innovative services which provide value for money. However we must remain clear on our social objectives, do things we are good at, and thoroughly risk-assess new ventures against their possible impact on our existing and already successful business model.
We await confirmation of the Assembly’s proposed changes to the welfare system. We are grateful for any concessions which will assist people on benefits, to cope with the cuts which lie ahead. Whatever respite may be felt through the reshaping of the so called ‘Room-tax,’ and the move away from direct payments, we still expect great hardship with the implementation of the Universal Credit system of payments in early 2014. Lord Best recently stated that even the most effective housing associations should anticipate at least a doubling of their arrears following the changes to benefits. More still needs to be done around: strengthening the discretionary payment pot; improving awareness of all the benefit changes; increasing access to personal banking and the internet for those on benefits; and improving access to debt advice. Fold has been very proactive in seeking to tailor its processes and services in anticipation of the changes. We have a specific Welfare Reform Risk Register driving a number of key projects covering: increased payment options; revised development guidelines for new projects; enhanced skills and training for staff to support tenants after the changes; enhancements to IT based rent and debt reports, etc We even developed a special Welfare Reform web page with a calculator for claimants to assess shortfalls in rent following the changes. Going into 2013/14, the Board approved a special budget of up to £150k to help cope with the changes.
Fold for many years has championed the rights of older residents living in housing-with-care schemes, so they may continue to maximise their independence and access housing support, alongside personal care. This support has been funded through the Special Management Needs Allowance (SMNA). This year, the Department finally confirmed its intention to remove SNMA. They have applied a 10% cut from April 2013 and we are told to expect a further cut next year. We were disappointed by this decision and the process by which it was reached. We sought clarifications as to the rationale for the cuts and the apparent lack of legislative process. The Department’s response failed to clarify either point. Faced with the responsibility for protecting the rights of current and future residents, the Board felt they had no choice other than to seek a judicial review of the Department’s decision. We await the ruling of the courts on this matter. Whilst Fold remains fully committed to working in partnership with its colleagues in the Department on all housing related matters, we must also protect the interests of those vulnerable residents, their families and carers who put their trust in us.
We are very pleased to welcome the Gosford tenants, the Gosford staff and Gosford’s Board Member, Graham Long, into the Fold. The votes at Gosford’s AGM on the 14th June and today’s Fold AGM pave the way for a merger between Fold and Gosford Housing Association. The merger will complete on the 30th June. Gosford with 196 homes in the Armagh and Newry areas comes to Fold in good financial health with its housing stock maintained at a high level. This is a credit to the staff, Graham and his fellow board members. The unfortunate reality is that smaller associations in the face of rising regulatory pressures and customer expectations will struggle to retain their autonomy. This is despite the best efforts of their board and staff. We can expect to see more consolidation in our sector in the years ahead.
Fold remains committed to growth and seeks to be the provider of choice for families and others in need of housing, care and support. We are redefining our relationship with our tenants to support them through the radical changes to benefits which lie ahead. We will continue to take radical steps in reducing our costs and achieving value for money in all that we do. And we remain committed to continuous improvement through the professionalism and dedication of our excellent staff.
We were sad to see the retirement this year of two long serving board members in Aileen Graham and Brendan Henry. Both members gave very generously of their time at Committee and Board level much to the appreciation of the staff and fellow members. We also thank Elizabeth Jack, a tenant board member who resigned earlier in the year after a short time on the board. In their places we welcome on to the Fold Board, Trevor Conway and Stephen Torrens. In a short period both Trevor and Stephen have become fully immersed in their Committee roles. I have no doubt they will contribute to the success of Fold for years to come.
We also welcome Graham Long onto the Board. Graham joins us as the custodian and former Board Member of Gosford. We thank Graham and his colleague Wallace Moffett who is also with us today, for the exceptional effort they both put into progressing the Gosford – Fold merger, from their side. I have no doubt we would not have got here today without their personal input and the vision of the Gosford Board.
In conclusion despite the continued challenges it has been another successful year for Fold. In preparing our latest Business Plan I can confirm that Fold is in good financial shape and is prepared for the challenges and opportunities which lie ahead. We must be wary of being forced to pursue risky strategies and ventures not within our control. Our Board and management team have the skills and experience to make decisions which are in the long term interests of all our tenants and customers.
I know the Board would wish me to place on the record our thanks to the Chief Executive, the senior management team, and all our staff for the excellent efforts they continue to make on behalf of the organisation. Any success we enjoy is due to their hard work.
Thanks to my fellow Board members for their support. You make an invaluable contribution to Fold. I know this represents a substantial commitment of your time to attend Board and sub committee meetings.
Finally thanks to our stakeholders, to the Department, the Housing Executive, our voluntary and statutory partners, our tenants and their representatives on the Board. Your support is vital if Fold is to continue to prosper.