Annual report 2014

www.coastandcountryhousing.org.uk

Coast & Country Housing LimitedA Company Limited by Guarantee

Consolidated Annual Report & Financial Statements

For the year ended 31 March 2014Registered Number: 04201099

Registered with the Homes and Communities Agency Number: L4342

Annual Report & Financial Statements 20142

Regent House, Darlington.

Annual Report & Financial Statements 2014 3


Contents

Information ................................................................................................................................................................................ 5

Report of the Board ............................................................................................................................................................ 6

Strategic Report and Operating & Financial Review ...................................................................................... 15

Statement of the Board’s responsibilities in the preparation of the Financial Statements ........................................................................................................................................... 45

Independent Auditors Report ..................................................................................................................................... 46

Consolidated Income and Expenditure Account ............................................................................................. 48

.................................................. 49

................................................................. 49

Balance Sheets ...................................................................................................................................................................... 50

Consolidated Cash Flow Statement ........................................................................................................................ 52

Notes to the Financial Statements ............................................................................................................................ 55

Annual Report & Financial Statements 20144 Annual Report & Financial Statements 20144

Mill Meadows, Filey.



Board

P Breen Chair R Broxham Vice Chair P Baren Appointed 05.09.13S Cash M ColesC Cook J Cruise Appointed 05.09.13R FranklandS Hardwick Appointed 17.10.13J MasonP McGrathL PallisterI Tait Resigned 17.10.13

Leadership Team

R I Sim MCIH - Chief Executive & Company SecretaryV M Harris FCIH - Assistant Chief ExecutiveH Dale FCMA - Executive Director of Finance A Brown MBA - Executive Director of Property & Developments

14 Ennis Square, DormanstownRedcar, TS10 5JR

Auditors

Baker Tilly UK Audit LLPChartered Accountants1 St James’ Gate, Newcastle-Upon-Tyne Tyne & Wear, NE1 4AD

Swinburne MaddisonVenture House, Aykley Heads Business CentreAykley Heads, DurhamDH1 5TS

Bankers

Natwest Bank PlcRoyal Bank of Scotland GroupKeel Row House, 1 SandgateQuayside, Newcastle-Upon-TyneNE1 2NG

Information


Report of the Board

The principal activity of the Group is the provision and management of housing and appropriate support services for people in housing need.

Coast & Country Housing, the Company was set up in 2001 to take over the ownership and management of housing stock and ancillary housing assets from Redcar & Cleveland Borough Council under a ‘Large Scale Voluntary Transfer’ initiative (LSVT).

In 2012 a Group structure was established to include Coast & Country Developments, a wholly owned subsidiary operating as a building contractor to the parent Company.

31 March 2014 is presented in the Strategic Report and Operating and Financial Review on pages 15 to 43.

Under its Articles of Association the direction and control of the Group’s activities is exercised by a Board consisting of up to 12 Directors. Until April 2013 this consisted of four being selected from the Group’s tenants, four being nominees of Redcar & Cleveland Borough Council and four of whom are deemed “independent” that bring experience from the professional, business and social sectors.

In April 2013, there were some changes made to the Articles of Association in relation to Board composition and Group Membership. The unanimous decision to reduce the number of ‘tenant’ and ‘Local Authority – Council’ Directors from four down to two, increase the ‘independent’ Directors from four to eight and remove Redcar & Cleveland Borough Council as a Group Member was made at a General Meeting held on 9 April 2013 following consultation and agreement with relevant stakeholders.

The Board currently has 12 Directors (with zero vacancies), the names of whom are listed on page 5.



The Board is responsible for the governance of the Group and met formally on a total of eleven occasions during 2013/14 plus an additional two strategic planning days. The role of the Board is to:

• determine and monitor the strategic direction of the Group

• agree policies and a framework for control and delegations to Committees and the Executive Directors

• set targets for the Group and monitor performance against those targets

• consider reports from the Executive Directors on a range of issues

they can enhance their skills and raise their awareness concerning issues in the sector. All new Directors undertake a comprehensive induction training programme.

Executive Directors, known as the Leadership Team, are not for legal purposes regarded as directors of the Board but are regarded as directors for the purposes of salary disclosure.

The Leadership Team meets fortnightly on a formal basis under the chairmanship of the Chief Executive in order to manage the Group within the framework set by the Board.

The Parent Company is a Company limited by guarantee. Each member undertakes to contribute such amount as may be required, not exceeding £1, to the Company’s assets if it should be wound up whilst he/she is a member or within one year after he/she ceases to be a member.

the creation of a further two subsidiaries within the Group. This is expected to be in place by April 2015.

Coast & Country Developments (CCD) is already a wholly owned subsidiary of Coast & Country Housing with its own Board of Directors with an independent Chair.


Employees

contribution of every employee.

The Group provides information on corporate aims, progress and activities through employee road-shows, departmental and team meetings with all employees. The Group has an Organisation Development Strategy underpinned by a strong commitment to ensuring “lifelong learning” for all employees. This is supported by an annual Personal Development Review process (Pathways.) Training programmes focus on ensuring continuous performance improvement across all services that the Group delivers.

race, colour, culture, nationality, ethnic origin, disability, appearance, gender, marital status, sexual orientation, religion, HIV status, age or trade union activity. Procedures are in place to ensure that positive action is taken to eliminate discrimination wherever possible.

The Group is a member of Stonewall’s Diversity Champions Programme and has a workplace focus group.

As testimony to the value we place on each and every employee, Coast & Country Housing was externally validated in the 2014 Times Top 100 Best Companies survey; the results of the survey revealed Coast & Country is ranked as the ‘6th’

Country also won a special award for “giving something back” in recognition of its community investment work. With a 71% response rate this was an excellent result.

Coast & Country Housing also continues to hold a number of key business accreditations which validate and acknowledge the level of commitment, expertise and contributions of both our employees and customers.

All have been successfully reaccredited with each assessment score improving on the previous which again demonstrates our approach to continuous improvement.

• Investors in People ‘Gold’ achieved July 2012

• Customer Service Excellence (CSE) re-accredited November 2013

• Telecare Services Association (TSA) re-accredited December 2013

• Tenant Participatory Advisory Service (TPAS) re-accredited December 2012



The Group are also members of a number of professional bodies and hold a number of professional awards, commendations and endorsements to further demonstrate our commitment to Business Excellence.

Health & Safety

The Group has adopted a formal policy on Health & Safety, the main elements of which are outlined below. As such the Group will take all measures which are reasonably practicable to:-

• Provide and maintain a safe and healthy working environment for all employees

• Provide appropriate levels of safety for other people who may be affected by the Group’s activities, such as tenants, visitors and contractors, etc

• Provide information, instruction and training on Health & Safety to employees including agency workers

• Provide suitable facilities for the welfare of all employees including agency workers

• Provide appropriate Health & Safety information to those people who use the Group’s services

• Minimise the risks created by the Group’s work activities and services

The overall responsibility for Health & Safety rests with the Chief Executive, on behalf of the Board. It is recognised, however, that key employees will also accept varying degrees of responsibility for implementing the Group’s agreed Policy. As such, the Group’s Leadership Team are responsible for all matters relating to Health, Safety and Welfare within their respective departments and for devising, gaining approval for, and publicising written safety procedures appropriate to their needs. The Group has established a Strategic Health & Safety Forum which is chaired by the Chief Executive and attended by key divisional managers, HR employees and union nominated Health & Safety representatives. It meets quarterly and has generated a Group wide action plan on health & safety issues. A formal review of the Group’s health & safety activities

the Board with all accident incidences reported.

All employees have a duty to exercise personal care and responsibility towards themselves and others and to co-operate with the Group in the execution of the agreed Health & Safety Policy.


The Board is in full compliance with the adopted National Housing Federation (NHF) Code of Governance which is widely acclaimed as an example of best practice.

The external auditors, appointed by the Board, carry out non-audit work relating to Corporation Tax and VAT. These services are provided by separate engagement teams in order to maintain auditor independence.

The Board meets every six weeks and is supported by two standing committees which are composed solely of Directors of the Board as follows:-

• The Audit and Corporate Risk Committee is responsible for ensuring that all audit functions within the Group

2013/14.

• The Selection & Review Committee are responsible for Board succession planning, recruitment and selection of board directors (across the group), training and development (including Personal Development Reviews), the appraisal and remuneration of the Chief Executive and is also responsible for addressing any conduct or standards issues. The Selection and Review Committee met on four occasions in 2013/14.

The Board has overall responsibility for establishing and maintaining the whole system of internal control and for reviewing its effectiveness.

The Board recognises that no system of internal control can provide absolute assurance or eliminate all risk. The system of

operational information and the safeguarding of the Group’s assets and interests.



In meeting its responsibilities the Board has adopted a risk-based approach to internal controls which are embedded within the normal management and governance process. This approach includes the regular evaluation of the nature and extent of risks to which the Group is exposed and is consistent with Turnbull principles.

The process adopted by the Board in reviewing the effectiveness of the system of internal control, together with some of the key elements of the control framework, includes:

There is a formal and on-going process of management review in each area of the Group’s activities. This process is set out in the Group’s Assurance Framework and co-ordinated by the Head of Corporate Assurance. The Leadership

Audit and Corporate Risk Committee considers risk at two special meetings per annum, to which all Board Directors are invited to attend.

The Group’s Assurance Framework provides for a process of self-assessment and regulated reporting on control issues intended to provide hierarchical assurance to successive levels of management and the Board linked closely to the operational planning process. This includes a procedure for ensuring that corrective action is taken in relation to any

issues including treasury management. The Board has adopted and disseminated to all employees a Code of Conduct which is consistent with the principles and requirements of the Turnbull Code for Corporate Governance and the National Housing Federation’s Code of Governance. This sets out the Group’s policies with regard to the quality, integrity and ethics of its employees. It is supported by a framework of policies and procedures with which employees must comply. These cover issues such as delegated authority, segregation of duties, accounting, treasury management, health & safety, data and asset protection and fraud prevention and detection, ensuring that the good reputation of the Group is upheld at all times.


Financial reporting procedures cover the preparation of detailed budgets for the year ahead and include forecast outturns which are reviewed on a quarterly basis, as well as forecasts for subsequent years in the Group’s thirty year Business Plan. These are reviewed and approved by the Board. The Board reviews key performance indicators

performance monitoring. Key performance indicators, risk, value for money, equality, diversity and inclusion and

does not tolerate fraud and action is taken to reduce the risk of fraud through control systems. There is an anti-fraud policy and a bribery and corruption policy in place and incorporated into the governance framework. A register of

was one instance of attempted fraud by an external source reported to the Audit Committee during 2013/14.

for providing independent assurance to the Board via the Audit and Corporate Risk Committee. The Committee considers internal control at each of its meetings during the year, as well as a report on Risk Management activity on a quarterly basis.

The Board has received the Chief Executive’s Annual Report, has conducted its annual review of the effectiveness of the system of internal control and has taken account of any changes needed to maintain the effectiveness of the risk management and internal control framework.

the Group.

Annual General Meeting

The Group’s Annual General Meeting (AGM) is due to be held on 23 October 2014.



Auditor

The Board last approved the appointment of Baker Tilly UK Audit LLP as auditors in October 2013. Baker Tilly UK Audit

Annual General Meeting to be held on 23 October 2014.

they are aware, that there is no relevant audit information of which the auditor is unaware. Each of the Board directors

themselves aware of any relevant audit information and to establish that it has been communicated to the auditor.

By Order of the Board

Chair of the Board Executive Director of Finance

Annual Report & Financial Statements 201414 Annual Report & Financial Statements 201414

The continued success of HomeCall Independent Living Services demonstrates our commitment to expanding the business.



Strategic Report and Operating & Financial Review

The Group’s principal activity remains the provision and management of housing and appropriate support services for people in housing need.

As at 31 March 2014 the Group had a total housing stock of 9,989 properties available for rent (9,844 owned and 145 managed), together with a further 127 shared ownership properties. They are predominantly houses and bungalows, the

of the total stock was built after 1945, with 58% built after 1964.

The Company, Coast & Country Housing, is regulated by the Homes & Communities Agency (HCA) with whom it is

The Group’s strategic direction is encompassed within its Statement of Strategic Intent (SSI) and the Mission Statement sets out the vision to 2018 with the context in which it operates in terms of its corporate values and culture.

which were revised by Board during 2012/13:

• Provide a quality offer

• Support our communities

• Expand the business

• Be a strong, independent, viable Company.

some of these including performance for the twelve months ended 31 March 2014 are given in the table on the next page:


Company Performance

% of complaints handled within target 100% 100%

Customer satisfaction key services – overall 9.37 9.42

% Estate Services Jobs completed on time 99% 98%

Average Time to answer calls (seconds) 15.0 16.4

% of repairs completed within target 99.2% 98.9%

95.5% 95.5%

New build units completed in yr 73 72

Increased rental income – Acquisitions £80k £95k

No. of units completed through Empty Homes 37 49

Increase number of owned & managed housing stock 10,015 10,115

2013 / 2014

% tenancies ending within 12 mths 12% 16.4%

Average re-let time (days) 19.0 27.5

Voids as a percentage of stock 0.70% 0.89%

ASB – average days taken to resolve cases 35 25

100 167

Journey into Work – Work placements 30 38

HCA assessment Maintain Maintain

% of working days lost through sickness 3.1% 2.79%

% Rent loss due to voids 1.00% 2.03%

Housing Management Cost per prop £275 £258

2013 / 2014



that the Group’s stock is located in a range of settings, from the heavily urbanised area of Eston to the seaside towns of Redcar, Saltburn, Marske and the rural settlements of East Cleveland. The Group’s stockholding also extends to Filey, Middlesbrough and Stockton-on-Tees, which includes new build developments.

The Group’s stock and estate layouts are primarily traditional across Redcar & Cleveland, with many of the estates characterised by a mix of tenures forming larger residential settlements.

The Group currently provides a localised housing management service, with Headquarters in Redcar and strategically

offer advice on a range of housing services including rent, allocations, estate management, nuisance, anti-social behaviour,

non-housing advice and support such as employment, training and skills advice.

The Group has been able to take advantage of £161.8k of Big Lottery funding in 2013/14, awarded to support the

The Group’s responsive maintenance work is carried out by the in-house Property and Assets division who undertake

on the stock including gas and electrical compliance. Coast & Country Housing also manages its own grounds and environmental maintenance teams.

high cost, poorly designed and low demand estates, with modern, high quality mixed tenure developments. See page 33 for further information.

Development is currently on-going at 4 key locations to provide a total of more than 500 new homes at a cost of over £61m net of grant funding of £7.3m. The Group also has a healthy pipeline of potential schemes to provide future mixed tenure developments.


Redevelopment plans for Phase 2 of Hummersea Hills are now well underway with a start on site in March 2013. This phase of the scheme for a total of 40 rental units has received HCA approval to use Disposal Proceeds funding.

The phase is being built out by Coast & Country Developments Ltd, a subsidiary Company set up in 2011 primarily to

Planning permission was granted in April 2011 for the demolition of 332 properties of which 40 were owner occupiers and for the rebuilding of approximately 300 units of mixed tenure.

The Group was successful in securing HCA grant funding in May 2011 to support 143 affordable units in this redevelopment. In association with our development partner, Keepmoat, these are due for completion by March 2015.

Whilst the Group’s key priorities remain the refurbishment and, where necessary remodelling of its existing housing stock, future developments are being actively explored but will only be pursued where they are aligned with the Group’s Regeneration & Development and Asset Management Strategies, and a clear housing demand supported by a sound business case can be demonstrated. Coast & Country Housing is a member of Spirit, a North East consortium of Registered Providers which facilitates access to grant funding from the Homes & Communities Agency (HCA).



Schemes at various stages of progress are:-

Muston Road, Filey

In March 2011 the Group purchased land at Muston Road, Filey in North Yorkshire and are working with Scarborough

secured for the provision of 120 units, 60 for rent and 60 for shared ownership. There will also be 180 units built for outright sale.

Completion of Phase 1 will provide 166 units by 2015, 60 rental units, 60 shared ownership units and 46 open market sale units.

Plans to develop a further 134 open market sale units will be considered for a start on site in 2015/16.

This development to build a total of 44 units (27 rented, 17 shared ownership) started in 2013 and is expected to complete by March 2015.

people. These include creating employment and training opportunities in each locality. To ensure successful delivery of

On the back of the initial success of CCD, Coast & Country Housing agreed to engage CCD to undertake the second phase of development at Hummersea Hills.


During 2012/13 Redcar & Cleveland Council took a decision to withdraw all ‘Supporting People’ funding from the CCH HomeCall Service and two other housing support contracts. This withdrawal totalled £670,000. Following a detailed

Service, which is a ‘for pay’ service offering a range of services designed to support elderly and vulnerable people to stay in their own homes. This service builds upon the strength of services provided by the CCH HomeCall but also provides other property related services, such as adaptations and gardening services. This offer was further widened with CCH entering into a partnership with a domiciliary care provider, Heritage Healthcare. A 5 year Business Plan is in place to develop this area of the business and in Yr 1, 2013/14 performance was £53k better than forecast. The Board monitors progress and performance quarterly.

Empty Homes

During the year the Group’s Empty Homes programme went from strength to strength with 15 empty properties purchased across the Tees Valley, North Yorkshire and Tyneside and brought back into use. A further 49 Empty Homes properties were brought back into use through the Lease and Repair grant funding scheme. With a further £3.7m of HCA grant funding secured to the end of 2018 this area of the business will continue with a further linkage between empty homes and the creation of employment and training opportunities.

Supporting our Communities on their “Journey into Work”

We have continued to develop a range of initiatives and services to improve the employability and skills of our customers. Our Forging Futures Programme has been extremely successful. Forging Futures has now been mainstreamed into our suite of service provision providing a range of paid work experience opportunities both within our Group but also through Chain Reaction we have been able to provide placements with our contractors. Our delivery and expertise in

the form of Pop Up Work Hubs in South Bank, Grangetown and Dormanstown. To further develop our IAG services we have submitted a tender to be a subcontractor of the National Careers Service.

The Re:Furnish Emporium will open in Autumn 2014, this new business venture will not only provide low cost furniture options for communities but also volunteering and work experience placements.



The Financial Statements show a net surplus for the year of £3.4m before tax and any transfers from reserves, with this representing a performance below that of the equivalent budget of £516k for the period.

The continued low interest rates affecting the Group’s loans payments resulted in a reduction of £2.2m against the annual

A total of 53 properties were sold under Right to Buy/Acquire legislation during the year, an increase from the 28 sales completed during the previous year. This provided net proceeds of more than £2,108k.

In total, 72 properties were developed this year, 31 for rent, 27 for shared ownership and 14 for open market sale. There were 54 new build sales in 2013/14, 32 for shared ownership and 22 for open market sales, providing income of £5.8m.

in the course of construction all properties are stated in the Balance Sheet at valuation based on the existing use valuation for registered social landlords.

commissioned which estimated the existing use value of the building to be £1.3m, which is £2.1m below the depreciated cost value. However, a facility of this nature is an essential requirement of the organisation and as such, it is considered that the most appropriate accounting treatment is to depreciate the full original cost of the building over its estimated

During the year a total of £2.5m of improvements to the Group’s property stock were capitalised with this being in addition to revenue expenditure of £8.9m on responsive repairs and £5.1m on planned maintenance and improvement works. As at the end of March 2014 the value of the Group’s housing stock available for letting stood at £295m.


The Group’s activities are funded on the basis of a 30 year Business Plan, which is updated annually. The loan facility of £215m, repayable over a period of up to 27 years is to deliver the Group’s Regeneration and Development Programme on the basis of the approved Business Plan.

The latest Business Plan is based on a strong rental income stream but with an increased void and turnover rate as a result of Government Welfare Reform policies. Using an average and taking into account the HCA’s tolerance allowance of plus or minus 5%, the Group achieved convergence before March 2012. However, there are still approximately 2,500 tenants who will now not reach target rent due to the recent changes in the governments Social Rent Formula policy from April 2015.

2014 and presented to the funders in May 2014 show a peak debt of £211.2million by March 2018 with repayment in 2040/41 (Year 27).

satisfactory asset cover ratios.

The Group aggregates all cash balances for the purpose of treasury management and utilises such balances against its net spending needs before drawing on new borrowings. No new funds were drawn down from the Nationwide during the year leaving a total loans balance at the end of March 2014 of £190m.

March 2014) repayable at varying periods through to 2040/41.

The Group’s Treasury Policy sets out the framework for investing and managing cash, raising loans and interest rate

new properties.



Current Liquidity

Monitoring Report which is reviewed by the Board.

future requirements. Short term cash balances are placed on overnight/short-term deposits at competitive rates.

Coast & Country Housing Group (CCH) is committed to putting customers at the heart of everything it does and believes customers have a real role to play in shaping the services they want and need. CCH recognises that Value for Money (VfM) is a key component to continually improving services to residents, partners and the wider community.

The VfM strategy aims to provide a clear, strategic approach to achieving VfM in the delivery of the Corporate Plan and

to maximise social outcomes for our customers.

make a real difference to people’s lives and we will do this through the successful delivery of four key strategic aims by 2018.

We believe that providing a quality offer by way of the products and services we deliver to our customers can only be achieved by listening to and investing in our employees, customers and communities. By 2018 the group will have:-

• employees who feel valued and are skilled to carry out their roles

• customers that feel their views and ideas are listened to and acted upon

• excellent standards of service across the Group, and



Aim 2 - Support our Communities

We believe that supporting our communities is as important as the home we provide because one is sustained by the other. By 2018 we aim to:

• enhance the quality of life and the life chances for our communities by increasing employment and improving

• embed the principles of the Social Value Act in our procurement practices

Aim 3 - Expand our business

In order to continue to offer the range and level of services we provide to customers we need to have a robust and targeted plan for business growth. By 2018 we aim to have:-

• increased our commercial contracts to £3m per annum

• increased our housing stock levels to 11,000 units, and

• achieved the Independent Living Services business plan assumptions.

robust governance structure in place. By 2018 we will:

• have achieved the Value for Money target of £5 million for cashable and non-cashable savings

• have the highest standards of governance and accountability


Our overarching VfM strategy, approved by the Board, is to:-

• know what customers want,

• ensure that customer priorities drive corporate planning, service planning and decision making,

• provide customers with feedback on progress and gather their input to support continuous improvement

• continue our commitment to consortia procurement.

The strategy is aimed at ensuring customers are fully involved in driving the priorities for the Company and in ensuring

there is full Company awareness and commitment to VfM.

threats now presented to the Group. In preparing the new strategy, comparisons have been made with other Housing Associations in the sector and it now provides more context to improve stakeholder understanding of the need for greater business effectiveness. This will drive change and deliver improvement by focussing on:-

• improving benchmarking information, reviewing trend analysis information

• producing individual service area VfM self-assessment

• developing methodologies for capturing social return outcomes and evaluation

• improving stakeholder engagement in delivery of the VfM Strategy



success they have. We understand that with such arrangements in place business effectiveness can be naturally achieved and in turn so can the VfM culture. An outline of our governance arrangements is below:-

• We have adopted the National Housing Federation’s (NHF) code of governance.

• Our 2013 - 2018 Corporate Plan, approved by the Board, sets out our approach and aspirations for the next

we provide, how we will expand our business and how we will continue to develop new homes and regenerate communities.

updated on an annual basis and is approved by Board and the Company’s funders. Detailed sensitivity analysis is

• There are a full range of robust strategies each with its own action plan that is regularly reported to the Board and communicated to all stakeholders.

• Audit and Corporate Risk Committee scrutinise the corporate risk register on a bi-annual basis with the Board receiving a quarterly update. A robust assurance framework exists and is embedded across the Company.

• Fundamental service reviews were independently undertaken during 2006 and 2012 on all areas of the business

course.

period, business case methodologies are all employed to advise business decisions and resource utilisation.

• Annual performance targets which are aimed at continuous improvement are set based on previous performance information, comparing progress through benchmarking, consultations with key stakeholders and central government expectations.

• Performance information is reviewed by the Leadership Team, senior management and reported to the Board on a quarterly basis.

• Performance is reported to and scrutinised by our customers through the Tenant Panel, Resident Scrutiny Group and via Hometruths tenant magazine.

• Customer insight is gathered through the Complaints procedure, satisfaction surveys, About You questionnaires and general day-to-day contact. This information is used to shape and improve services.

Our approach to effective performance management translates the Coast & Country vision and priorities into effective, deliverable actions. Lessons are learned through reviews of what we do and how we do it, identifying any potential for improvement across all services.


The VfM Steering Group consists of employees from across the business, tenant members (including a Resident Scrutiny Group member) and a Board member champion.

communications via a revised communications plan and new corporate website.

The Group’s VfM register and scorecard demonstrates the good progress made embedding a VfM culture. For the year ended March 2014 the following highlights can be noted:-

• Approximately 169 VfM initiatives logged

• Approximately 27 staff suggestions put forward

A broad mix of initiatives are evidenced through the VfM register including:-

• Decisions to employ or absorb work within current resources

• Provision of tenant training – internal v external

• Tenant engagement and employment programmes

• IT systems development and rationalisation

• Standardisation and improvement of internal processes

• Sourcing of travel arrangements

• Accessing external funding/grant funding

• Offering commercial services and spreading corporate overheads

• Purchase of equipment v hire of equipment

• Requisition and procurement of goods and services

• Improving the utilisation of assets

• Working with our partners and other public authority services



Over the past twelve months the VfM Steering Group has focussed on:

• re-writing the VfM Strategy and creating a new supporting action plan,

• creating new terms of reference for the Steering Group,

• embedding VfM in the service planning framework,

• addressing the Group’s benchmarking information weakness,

• developing relationships with the Resident Scrutiny Group,

• improving VfM communications, and

• continuing to measure VfM performance.

this has been a key area of focus for the VfM Steering Group in 2013/14. The Group has subscribed to Housemark for

The Group is now a member of a regional benchmarking group and uses various other means to benchmark including:-

• Conference attendance

• Group memberships

o Digital Inclusion groups

o North East Asset Manager Practioner group

o North East Maintenance group

o Housing Diversity Network

o ALARM committee

• KPI’s compared to Industry standards

• Satisfaction Surveys

• Partnership working

• Focus Groups

• Professional body membership

• Organisational accreditations

• Procurement consortia/framework membership

• Performance Management Framework

o Corporate & Local Scorecards

o Local Offer


The steering group has increased focus on VfM in the service planning/budgeting framework by providing managers with

area of the business. During 2014/15 the intention is to further develop this into departmental VfM self-assessments

achievements.

We have developed an Asset Performance Tool (APT) to inform us how well our portfolio of housing stock is performing

• Net Present Value

• Housing Demand

• Repair costs

• Deprivation

• Void costs

• SAT rating

• Stock turnover

• ASB

• Tenancy duration

• Property characteristics

• Property satisfaction

• Investment programmes

The APT tool informs asset management decision making on investment and demolition programmes, and disposal/acquisition proposals. It focuses the Company’s attention on where to invest resource to improve the return on assets and provides a baseline performance against which success can be measured. The system is currently being populated with 2013/14 data and will then be developed further.



The Group’s biggest asset is our housing stock, having a value of £295m. We have almost 10,000 properties, housing 25,000 people which in 2013-14 generated rental income of £42m. This income is reinvested annually into the provision of core services, maintaining and improving homes, investing in our neighbourhoods and communities and in developing new homes.

In order to grow our business, mitigate risks and achieve our corporate aims it is essential that our assets are managed

requirement to effectively control our physical assets so that they can be maintained and improved to achieve the highest level of return.

The Asset Performance tool (APT) provides meaningful insight into the performance of our housing stock and estates. A sample of information is provided below:

Percentage Stock Turnover

Indicative ave. NPV per prop

Responsive Repairs Direct Cost per property pa

Deprivation Assessment

Average tenancy duration (wks)

Housing Demand (average)

Resident Satisfaction % - Home

Percentage ASB cases

Resident Satisfaction % - neighbourhood

SAP rating per property

8%

£17,953

£166

1,471

305

24

87%

6%

88%

70

12%

£13,961

£195

147

281

25

75%

5%

82%

68

8%

£18,162

£144

1,317

334

27

85%

3%

80%

70

14%

£13,360

£188

480

249

15

79%

4%

73%

68

13%

£18,671

£187

1,765

307

67

85%

5%

82%

69


For the Company, simply sustaining the current level of return on assets presents a challenge. The impact of the Government’s comprehensive spending review on the public sector, of welfare reform and the future impact of universal credit (amongst other factors) are all likely to impede opportunities to improve returns from our asset portfolio.

In maintaining our stock portfolio during 2013/14 we spent:-

• £4.6m on 42,000 responsive repairs.

• £1.8m on cyclical maintenance.

• £4.2m on property improvements replacing approximately 1,106 key components

• £1.9m on void property repair/improvements to reach a decent homes lettable standard.

• £0.1m on property adaptations for vulnerable people.

• £0.3m on external wall insulation for 74 properties, but offset by grant funding of £0.3m.

We continued the rationalisation/viability review of our garage stock that commenced 2012/13. As a result of the review a demolition and improvements programme was developed and completed in 2013/14. 349 garages were demolished due to poor demand and the need for a high level of investment. £286k was invested in improving 261 garages in locations of high demand and we have increased the weekly rent by £2 per week in those areas.

Since 2012/13 we have converted several buildings into general needs properties, and in 2013/14 we agreed to convert

improved viability.

We also invested £0.7m on other estate/environmental improvements aimed at improving the appearance and security of some of our neighbourhoods that included new fencing, play areas and planted areas.

• Our return on assets is 0.96% compared to the sector’s 2.4% (2013 HCA Global Accounts data)

• Our debt/unit is £18,706 compared to the sector’s £15,417 (2013 HCA Global Accounts data)



We have since 2007 used available funds to increase housing stock and deliver affordable homes within our communities. In 2011 the Company secured a further £40 million long term funding to continue to build new housing. In the 2014 Business Plan there is an aspirational development programme through to 2024 delivering approximately 1,584 new homes, 963 affordable and 621 open market sale units at a cost of £133 million (net of SHG). We have achieved this without a breach of the funders covenants and there is no forecast that we will.

The group has an up to date Development Strategy which outlines the Group’s ambitions for future development. Since 2007 the Group has invested:-

• £50m (net of SHG) in developing 521 new homes (an average rented/shared ownership unit build cost is £84k compared to outright sale unit build cost of £108k).

• £26m WIP (net of SHG) in developing 293 properties currently under construction.

• £10m (net of SHG) acquiring properties via Mortgage Rescue and Purchase & Repair schemes.

• £24m of government grant funding.

criterion and approved by the Finance Director prior to being presented to the Board for approval. The schemes progress

Rents are set annually using the Governments guidelines and the Company have now adopted the maximum 5% tolerance. Other income streams are assessed individually considering elements such as the cost of provision, market, economy and competitors.


Using cost and performance information for each of the services we offer is key to investing the right level of resource to attain optimum service outcomes. Zero based budgeting, base case and business plan methodologies, the review of trend analysis and benchmarking information help us understand and control our performance.

We participate in the Housemark Northern LSVT benchmarking club which compares us with 60 other similar organisations. The initial 2013/14 key results are included in the above table with our quartile position (Q1 being top quartile and Q4 being bottom quartile).

Key areas of performance in relation to VfM are as follows:-

Operating costs as a percentage of turnover

Housing Management costs per Property

Responsive & Void Repair costs per unit

Percentage Repairs satisfaction

Average re-let times (days)

Overhead costs per unit (Hsg Mgt)

Percentage of Current Tenant rent arrears

Social Housing Units

2012 / 13

N/A

Q2

Q1

Q1

Q3

Q1

Q1

Q2

Q1

N/A

2012 / 13

76%

£354

£680

97.1%

£1,844

17.2

£130

3.54%

95.8%

9,946

2013 / 14

N/A

Q1

Q1

Q1

Q2

Q3

Q1

Q2

Q1

N/A

2013 / 14

74%

£349

£679

97.4%

£1,385

28.9

£119

3.79%

95.5%

9,989



Improvement in the “Operating cost as a percentage of turnover” arises primarily from an increase in turnover of £5.3m. This was achieved by the annual rent increase of 5.7% (including 2% tolerance) which increased turnover by £1.4m, development property sales proceeds increase of £3.7m, and £0.2m on other service income. This is despite welfare

As a result of high void properties due to the impact of “bedroom tax”, lost rental income has increased from £374k to £983k, a 263% increase in one year. Our re-let indicator demonstrates that it took on average 12 days longer to let a void property whilst tenant rent arrears have increased on average by 11%.

We are incurring higher maintenance, security, and cleaning costs because of the high number of void properties and rent loss due to increased re-let times and low demand. We now have a Void property focus group reviewing processes and options to identify opportunities to better manage this high cost problem.

Despite increased costs to support tenants affected by Welfare Reform, Housing Management costs per property

business expansion including:

• Coast & Country Developments Limited

• Commercial property services (Time4)

• Commercial properties – Empty Homes/Letting Agent etc.

• Independent Living Service

• Pursuing our Journey into Work targets

• Improving our tenant digital inclusion

• Setting up our furniture recycling scheme - Re:Furnish


A key driver in delivering VfM and continuous improvement is effective procurement. The Group has a Central Procurement team that has the specialist skills required to ensure quality goods and services are procured at competitive prices and they can develop the supplier relationships required to create social value.

CCH is a founder member of North East Procurement Limited, a procurement consortium set up with other local associations to create and access procurement frameworks where pooled volumes provide economies of scale and lower prices for goods and services. We are also members of other procurement consortiums such as the Northern Housing Consortium and the Procurement for Housing Consortium.

• £464k - saving relating to the decision in 2010/11 to outsource roof replacement works.

• £221k - saving on garage maintenance programme via tendering process.

• £75k – lower property component costs i.e baths, doors, windows etc.

• £65k – purchase versus hire of open space machinery over three years.

• £31k – tiling, decorating and fencing at our Hummersea development.

• £25k – negotiated price decrease on fencing programme.

• £25k – price negotiation for Purchase & Repair materials.

• £22k – the provision of CCTV at Filey development.

There is active engagement with the supply chain through events such as the ‘Chain ReAction’ event to encourage

testament to what can be achieved as we hope the Re:Furnish Emporium venture will be.

Analysis of the supply chain indicates that:-

• 34% of ours suppliers are Teesside based

• 21% are within a 50 mile radius, and

• 45% are beyond a 50 mile radius.



During 2013/14 a new Independent Living Service (ILS) was launched that helps approximately 4,650 vulnerable people remain safe and happy in their homes through the provision of an alarm/warden service. We have also partnered with Heritage Healthcare to provide a quality domiciliary care for those who need extra support.

The ILS service delivers a quality performance which during 2013-14 achieved an emergency response time of 14.5 minutes, 4.5 minutes better than the North East Ambulance service for category B calls (which includes domestic falls). During 2013-14, 731 emergency visits involved a fall. Our contact centre also provides exceptional value answering calls on average in 16.4 seconds.

The Journey into Work programme is the core of our community investment ethos, supporting people into employment.

number of key partners our approach covers such schemes as:-

• Click Start – helping residents get on-line

• Joint enterprises with Job Centre Plus and Work Programme Providers

• Promoting the value of apprenticeships

• Forging Futures

• Resident Training Programmes

Taken together the outcomes achieved to date are summarised in the table on page 39.


Forging Futures is a hugely successful employability scheme.



5,133

Forging Futures is a hugely successful employability scheme which offers self-marketing training and paid work placements to the long term unemployed. The scheme has been developed in partnership with Avanta, a work programme provider, and is unique in its approach. There are relatively few examples nationally of Housing Providers and Work Programme

Procurement, of which Coast & Country is a founder member. During 2013/14 138 people went through the programme

volunteering opportunities and is a resource centre for our formal involvement groups including Tenants Panel and Resident Scrutiny Group.

Over the last twelve months we have been developing a Furniture Recycling Scheme (Re:Furnish Emporium), and recently secured a suitable location. We aim to recycle a mix of donated furniture and good quality furniture left in void properties to provide a low cost furnishing option to local communities. In addition we also aim to stock new low cost furniture by accessing a variety of furniture frameworks. The scheme will provide volunteering, training and work placement opportunities for the long term unemployed. We hope to launch Re:Furnish Emporium in September 2014.

Taken together the outcomes achieved to date are summarised in the table below:

1,1672,8641211,521


by the changes through consultation and advice, developing a Bedroom Tax Toolkit and delivering a loan shark and payday loans awareness campaign. We have also invested in My Home Finance, a National Housing Federation (NHF) initiative to provide low cost loans, an alternative to pay day type lending. We have supported our local credit union through the provision of accommodation at a ‘peppercorn’ rent. Some key outcomes include:-

• Carried out home exchange events resulting in a 50% increase in the number of exchanges.

• Helped 136 under-occupying tenants downsize.

• Arranged with the local food bank for our Money Advisors to be able to distribute food bank vouchers (290 issued in 2013/14).

• Helped 570 tenants affected by under-occupation to obtain £266K of Discretionary Housing Payments

possible start in their new homes. The scheme offers help and advice to tenants to manage their bills, access better deals

On average we resolved ASB cases in 25 days compared to 29 days in 2012/13. Satisfaction with case outcome remains high at 8.6 out of a possible score of 10. Successful case management has led to a reduction in the need for legal action.

Our approach to digital inclusion has been extensively developed to support our tenants and residents to get on-line in order to improve their lives and life chances. For the 55% of our tenants without internet access ‘ Click Start: Your Way to an On-line Future’ was launched. We have also launched a new registered UK-Online Centre hosting various events. The initiative has proved a great success with the number of tenants with access to the internet increasing from 38% in 2012 to 45% in 2013. We have established partnerships with GoON UK, EE and UK-Online Centres linking our approach

access CCH services direct from their home.



Our nationally recognised Empty Homes scheme has been very well received at all levels of regional and national government. The Empty Homes scheme was set up in 2010 as an innovative pilot led by ourselves to tackle three key government aims:-

• Bring long term empty homes back into use

• Increase the number of affordable homes across the Tees Valley

• Increase the training and employment opportunities for young unemployed people.

In total Coast & Country has secured £6.8m funding to deliver 284 units of accommodation by the end of March 2015. A further £3.7m of grant funding has been awarded in the 2015-18 HCA grant bidding round.

What next

VfM Strategy.

The Steering Group will focus on improving the quality and use of benchmarking information, trend analysis and performance information to facilitate performance reviews. There will be a review of how we capture and use information

fair value for the resource invested.

We will continue to promote VfM, to encourage greater employee, tenant and supplier involvement and to investigate ways to help our tenants save money and manage their budgets.

We will further develop the APT system providing detailed information on Housing Stock performance and improving Asset Management decision making to provide us with the intelligence to sustain and improve our return on assets.

Across the four Corporate Aims we want to continue to improve our performance and customer satisfaction standards in all our core services, and to increase the opportunities for our communities. The achievement of our business expansion

communities.

We will monitor the impact of welfare reform to ensure action plans will continue to mitigate risks to the company. Linked to this is the void property process review.


With the Homes & Communities Agency’s (HCA’s) new approach to regulation and the requirement for a Value for Money self-assessment we had an independent internal audit on our progress undertaken in July 2013. This provided us with valuable insight into our VfM position compared to the sector. It also provided our Board with assurance that we were compliant with HCA expectations.

The corporate board reporting templates now include a VfM section for consideration and comment by the author. This ensures that all Board reports will evidence VfM has been considered and the outcomes will be clearly visible to the Board for debate. We are also developing a process of a six monthly update to the Board on VfM progress.

The steering group has a Board member champion who is actively involved in the development of the VfM framework providing support to the group whilst also providing a direct link to the Board.

Self-assessments are presented to the Board as part of the Statutory Accounts sign-off and are publically available on our website. VfM is evident throughout our quarterly comprehensive business pack and Board reports, and is a key indicator on our Corporate Scorecard.

The independent accreditations and awards that we hold also serve to assure the Board of our business effectiveness. For 2013/14 these include:-

• Investors in People – Gold Award (IIP)

• Customer Services Excellence Award (CSE)

• Telecare Services Authority (TSA)

• Tenant Participation Advisory Service (TPAS)

• Considerate Constructors/Construction Health & Safety Scheme (CHAS)

After taking into account the actions and initiatives outlined in this assessment we believe that the Coast & Country

needing review and our plans to tackle these areas, and demonstrates how our approach to VfM will enable the successful achievement of the 2013 - 2018 Corporate Plan.



future development, performance and position are set out in the Strategic Report and Operating and Financial Review

described in the Strategic Report and Operating and Financial Review on pages 15 and 16. In addition, notes 1 to 27 to

without the use of the agreed overdraft facility that is due for renewal in January 2015.

the Group should be able to operate within the level of its current facility.

The directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. Thus they continue to adopt the going concern basis of accounting in preparing the annual

This Strategic Report and Operating and Financial Review has been prepared in accordance with the Statement of Recommended Practice issued by the National Housing Federation in 2010 and complies with Reporting Statement: ‘Operating & Financial Review’ issued by the Accounting Standards Board in January 2006.

By Order of the Board

Chair of the Board Executive Director of Finance


Mill Meadows, Filey.



The Board are responsible for preparing the Annual Report and Financial Statements in accordance with applicable law and regulations.

Company law and registered social landlord legislation in the United Kingdom requires the Board to prepare Financial

In preparing those Financial Statements the Board is required to:

• select suitable accounting policies and then apply them consistently

• state whether applicable accounting standards and the statement of recommended practice “Accounting by

and explained in the Financial Statements

• prepare the Financial Statements on the “going concern” basis unless it is inappropriate to assume that the Group will continue in business.

The Board is responsible for keeping proper accounting records, which disclose with reasonable accuracy at any time,

2006, the Housing and Regeneration Act 2008 and the Accounting Direction for Private Registered Providers of Social Housing 2012. It is also responsible for safeguarding the assets of the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Board is responsible for ensuring that the Report of the Board is prepared in accordance with the statement of recommended practice “Accounting by Registered Social Housing Providers” (2010).

Statement of the Board’s responsibilities in the preparation of the Financial Statements


applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

This report is made solely to the Company’s members as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

As more fully explained in the Board’s Responsibilities Statement set out on page 45, the Board are responsible for the

on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board’s (APB’s) Ethical Standards for Auditors.

http://www.frc.org.uk/auditscopeukprivate

Independent Auditor’s report to the members of Coast & Country Housing Limited



• give a true and fair view of the state of the Group’s and the parent Company’s affairs as at 31 March 2014 and of the Group’s income and expenditure for the year then ended;

• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

• have been prepared in accordance with the requirements of the Companies Act 2006, the Housing and Regeneration Act 2008 and the Accounting Direction for Private Registered Providers of Social Housing 2012.

In our opinion the information given in the Strategic Report and Operating and Financial Review, and the Report of the

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

• adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or

• we have not received all the information and explanations we require for our audit.

(Senior Statutory Auditor)For and on behalf of BAKER TILLY UK AUDIT LLP, Statutory Auditor Chartered Accountants1 St James’ Gate, Newcastle upon Tyne, NE1 4AD


Coast & Country Housing Limited

2013 £000

2014 £000

Operating costs

Cost of sales

49,318

(35,898)

(2,141)

54,665

(35,898)

(6,017)

2

2

2

Interest receivable and similar income

Interest payable and similar charges

(913)

24

(8,545)

(330)

(37)

(1,282)

53

(8,801)

677

(38)

2

3

4

5

21

5

Taxation 409

All amounts relate to continuing activities.

The notes on pages 55 to 87 form part of these Financial Statements.




Actuarial gain/(loss) on pension scheme

Deferred Tax on Pension Liability

2013 £000

2,903

(668)

2014 £000

5,086

(1,017)

21

16

Unrealised surplus on revaluation of housing properties

Unrealised surplus on revaluation of non-housing properties

1

370

18,457

1,977

16

16

Realisation of property revaluation surplus due to property disposals

Difference between an historical cost depreciation charge and the actual depreciation charge for the year calculated on the revalued amount

1,565

83

2,099

64


2,823

52

(218)

5,562

103

(647)

2013 £000

2014 £000



£000

344,473

678

478

345,629

£000

320,097

746

498

321,341

£000

344,543

678

478

345,699

Land & Buildings

Other tangible assets

Investments

Total Fixed Assets

10

11

£000

319,947

746

498

4,800

7,583

7,052

19,435

6,017

6,148

6,640

18,805

4,774

7,876

6,607

19,257

Properties held for sale

Debtors

Cash at bank and in hand

12

6,017

7,316

6,626

19,959

321,191

353,806331,112353,538 331,427

(11,258)(9,034)(11,418)13 (9,723)

8,1779,7717,839 10,236



£000£000£000 £000

190,000

0

190,000

0

190,000

0

Housing Loans

Other Loans

14,15

14,15

190,000

0

1,2172,0931,217Disposal Proceeds Fund 19 2,093

191,217192,093191,217 192,093

135,196

7,243

205

323

142,967

353,806

117,024

(2,212)

308

0

115,120

331,112

135,296

6,875

205

323

142,699

353,538

Property Revaluation Reserve

Revenue Reserve

Designated Reserve

Other Reserve

16

16

16

117,024

(1,897)

308

0

115,435

331,427

11,13711,68711,137Provisions for Liabilities 9 11,687

8,48612,2128,486Net Pension Liability 21 12,212


These Financial Statements were approved by the Board and authorised for issue on 4 September 2014 and signed on its behalf by:

Chair of the Board


Coast & Country Housing LimitedA Company Limited by Guarantee Consolidated Cash

2014£000

2013£000

19,553

2014£000

17

2013£000

20,755

24

(8,528)

(37)

53

(8,680)

(38)

Interest received

Interest paid

Loan Arrangement Fees

(8,665)

-

Taxation

Corporation tax paid 9

(8,541)

-

(23,774)

15,000

(4,491)

3,833

(12,668)

-

(2,510)

2,344

Acquisition & Construction of Properties

Loans received

Capitalised Improvements

Loans repaid

Capital Grants Received

1,084

(175)

2,065

15

Net proceeds from disposal of housing properties

Investment

(23,522)




Notes

....................................................................................................................................................................................................................................................................................................................................................

....................................................................................................................................................................................................................................................................................................................................................

....................................................................................................................................................................................................................................................................................................................................................

....................................................................................................................................................................................................................................................................................................................................................

....................................................................................................................................................................................................................................................................................................................................................

....................................................................................................................................................................................................................................................................................................................................................

....................................................................................................................................................................................................................................................................................................................................................

....................................................................................................................................................................................................................................................................................................................................................

....................................................................................................................................................................................................................................................................................................................................................

....................................................................................................................................................................................................................................................................................................................................................

....................................................................................................................................................................................................................................................................................................................................................

....................................................................................................................................................................................................................................................................................................................................................

....................................................................................................................................................................................................................................................................................................................................................

....................................................................................................................................................................................................................................................................................................................................................

....................................................................................................................................................................................................................................................................................................................................................

....................................................................................................................................................................................................................................................................................................................................................

....................................................................................................................................................................................................................................................................................................................................................

....................................................................................................................................................................................................................................................................................................................................................

....................................................................................................................................................................................................................................................................................................................................................

....................................................................................................................................................................................................................................................................................................................................................

....................................................................................................................................................................................................................................................................................................................................................

....................................................................................................................................................................................................................................................................................................................................................

....................................................................................................................................................................................................................................................................................................................................................

....................................................................................................................................................................................................................................................................................................................................................

....................................................................................................................................................................................................................................................................................................................................................

....................................................................................................................................................................................................................................................................................................................................................

....................................................................................................................................................................................................................................................................................................................................................

....................................................................................................................................................................................................................................................................................................................................................

....................................................................................................................................................................................................................................................................................................................................................

....................................................................................................................................................................................................................................................................................................................................................

....................................................................................................................................................................................................................................................................................................................................................

....................................................................................................................................................................................................................................................................................................................................................


New Homes.



The Financial Statements have been prepared in accordance with applicable accounting standards and statements of recommended practice of the United Kingdom and in accordance with the ‘Accounting Direction for Private Registered Providers of Social Housing 2012. The Financial Statements have also been prepared in compliance with the Statement of Recommended Practice, (SORP) Accounting by Registered Social Landlord Providers Update 2010. A summary of the more important accounting policies, which have been applied consistently, is set out below.

Further reference to “Going Concern” can be found in the Strategic Report and Operating and Financial Review on page 43.

properties. As the Group accounts for its income on a weekly basis, the accounting period end always falls on the last day of the rent week ending on or immediately after 31 March in any year. For this set of accounts, the period end was 31 March 2014.

statements are made up to 31 March 2014. All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. As permitted by the Companies Act 2006 s408, the Company has not presented its individual income and expenditure account.


A Company Limited by Guarantee Notes to the Consolidated


Turnover represents all rental, water rates, service charge and agency income receivable including income from the Group’s Independent Living Service where this is provided to customers other than the Group’s own tenants. Also

properties.

Coast & Country Housing is an admitted body member of the Teesside Pension Fund, a Local Government Pension

Pension Scheme Regulations 1997, as amended.

The difference between the fair value of the Group’s assets held within the scheme and the Group’s scheme liabilities

pension scheme asset or liability as appropriate net of the related deferred tax provision or liability.

The carrying value of any resulting pension scheme asset is restricted to the extent that the Group is able to recover the surplus either through reduced contributions in the future or through refunds from the scheme. The pension

arising from factors other than cash contributions by the Group are charged to the Income & Expenditure Account or

New Government guidance to increase future pensions by CPI rather than RPI has been applied by the actuaries

2010/11. Further details relating to pension arrangements are given in Note 21.



expected useful economic lives.

Structure 80 years

Roof 60 years

Windows 30 years

Kitchen 20 years

Bathroom 30 years

Wiring 30 years

Doors 30 years

Boiler 15 years

Heating System (excluding Boiler) 30 years

Elevator 20 years

Freehold land is not depreciated.

result of a planned improvements programme. One-off replacements occurring as a maintenance repair will not be capitalised.

Depreciation is not charged in the year of acquisition / installation but is charged in the year of disposal.

All completed properties including housing properties available for rent, retail properties and garages with the exception of shared ownership properties, have been valued on the Existing Use Valuation for Registered Social Landlords basis and are re-valued annually. The aggregate surplus on revaluation is the difference between the cost of all property components and the amount of the valuation which is then transferred to a revaluation reserve. The revaluation surplus is depreciated over the economic lifetime of the structure.

outright sale are included in current assets.


All properties are reviewed for impairment annually, in accordance with FRS 11, and where it is deemed they have

to the provisions of the SORP and considerations surrounding scheme cost approvals.

developments has been reduced by the amount of the grant received. Social Housing and Other Capital Grants are proportionally allocated to land and structure components based on their cost. Any remaining unallocated grant is

Revenue grant income is credited to the Income and Expenditure account in the same period to which it relates. Social Housing Grant (SHG) can be recycled under certain circumstances, for example if a property is sold. In these

have to be repaid if certain conditions are not met.

The net SHG received and not spent is included in current liabilities. In certain circumstances, SHG may be repayable and in that event is a subordinated unsecured repayable debt.

Other tangible assets are stated at cost less depreciation. With the exception of computer equipment depreciation is charged on a straight line basis over the expected economic useful lives of the assets at the following annual rates:

Furniture & Fittings 50%

Independent Living Service equipment 6.7% (15 years)

All computer equipment, including both software and hardware, is written off in the year of initial purchase.

Sales of housing property are taken into account on completion of contracts. For properties acquired under the large scale voluntary transfer from Redcar and Cleveland Borough Council it is not possible to identify separately the original value of each property sold. Instead, an average value is eliminated from housing property valuation as determined at the previous year end with the historic cost element charged to the Income and Expenditure Account and any corresponding revaluation uplift released from the revaluation reserve.



leases, they are treated as if they have been purchased outright. The amount capitalised is the present value of the minimum lease payments due during the term of the lease. The corresponding leasing commitments are shown as obligations to the lessor. Rentals paid under operating leases are charged to the Income and Expenditure Account on the accruals basis.

Provision is made against rent arrears of current and former tenants to the extent that they are considered potentially irrecoverable.

Section 24 of the Housing Act 1996 requires Registered Social Landlords to credit to a Disposal Proceeds Fund the net proceeds of Right to Acquire property sales. Net proceeds comprise the sales proceeds and grant receivable from the Homes & Communities Agency towards the discount, less permitted deductions. The purpose of the Fund is to provide replacement properties for rent, at no greater cost than properties provided through the Approved Development Programme.

As the Group is non-charitable it is liable to Corporation Tax on any taxable surpluses and capital gains.

The payment of taxation is deferred or accelerated because of timing differences between the treatment of certain items for accounting and taxation purposes. Except as noted below, full provision for deferred taxation is made under the incremental liability method on all timing differences that have arisen, but not reversed by the balance sheet date.

In accordance with FRS 19, deferred tax is not provided for gains on the sale of non-monetary assets, if the taxable gain will probably be rolled over.

Deferred tax is measured at the tax rates that are expected to apply in the periods when the timing differences are expected to reverse, based on tax rates and law enacted or substantively enacted at the balance sheet date. Deferred tax assets and liabilities are not discounted.


The Group is registered for VAT but a large proportion of its income, including rental, is exempt for VAT purposes. The

of VAT. Partial exemption has been obtained for some business activities. Any VAT recovered is credited to the Income and Expenditure Account.

The costs of day-to-day repairs are included in operating expenses together with expenditure incurred on minor

viewed as an increase in the net rental income stream over the life of the property, are deemed to be improvements and capitalised. An increase in the net rental income stream may arise through an increase in rental income, a



(9,767)(9,767) (9,991)--

Coast & Country Housing LimitedA Company Limited by Guarantee Notes to the Consolidated

£000£000£000

£000£000£000£000 £000

12,583-Social housing activities (a) 10,665(35,137)47,720

348-Non-social housing activities (b) 621(760)1,108

(180)(6,017)Sale of properties (7)-5,836

42,71142,560 40,658-151

1,2411,241Service income 1,222--

3,7043,704Water rates (net of voids) 3,668--

202202Other Income ---

(956)(956)Voids (361)--

818-Assisted Living Income 638818-

Management

(1,963)(1,160)Services (1,816)(803)-

(463)(465)Bad debts (698)2-

(8,815)(8,812)Routine maintenance (8,841)-(3)

(5,402)(5,334)Depreciation of properties (5,532)(68)-

(605)(605)Development Administration (484)--

(4,747)(4,745)Planned maintenance (4,467)-(2)

(3,375)(3,375)Water Rates (3,331)--


--Floating Support (59)--

444-Commercial Property Lettings 481-444


£000£000£000£000 £000

--Floating Support 32--

313444

--Supporting People Contract Income 53--

664313Other 794351-

(1)-Bad Debts (18)-(1)

(368)(11)Other (396)(344)(13)

(69)(23)Routine Maintenance (25)-(46)

(322)(2)Planned Maintenance (241)-(320)

2013£000

2014£000

Proceeds of Sales 1,0842,108

Carrying value of original asset (1,932)(3,182)

Cost of demolition (41)(169)

Administration (23)(39)

Costs shown relate to 53 sales completed under the Right to Buy or Right to Acquire legislation (2013:28) plus 116 property demolitions (2013:170).




2013£000

2014£000

Proceeds of Sales 2453

24

2013£000

2014£000

Housing loans repayable by instalments after 5 years 8,3128,619

Non housing loans repayable in 5 years 2422

Loan facility arrangement fee 3738

Non Utilisation Fees 210160

2013£000

2014£000

Is stated after charging:-

Depreciation: properties 5,4645,334

Depreciation: other assets 6868

Audit: parent and consolidated accounts

Taxation: parent and consolidated accounts

subsidiary accounts

28

4

1

29

4

1

Auditors’ remuneration (including VAT):-

subsidiary accounts 55



of £49,641 (2013, 9 members paid a total of £36,484).

2013£000

2014£000

Aggregate emoluments payable to directors (including pension contributions 529498

£60,001 - £70,000 98

156160

£70,001 - £80,000 -1

recharged to Coast & Country Developments Ltd, the subsidiary (2013: £10k)

Aggregate amount of directors’ pensions 5962

£80,001 - £90,000 -1

The number of employees including the directors, who receive emoluments (including pension contributions) in excess of £60,000 pa are as follows:

£90,001 - £100,000 --

£100,001 - £110,000 22

£110,001 - £120,000 1-

£120,001 - £130,000 -1

£150,001 - £160,000 11

Total expenses reimbursed to the Board not chargeable to UK income tax £1,554£2,014




20132014

The average number of persons employed during the period, expressed in equivalent full time employees, was:

- Domestics 15.214.5

- wages and salaries 12,58313,429

262.7272.6

The costs in relation to these employees were as follows:

- Workforce 211.6217.7

- pension costs 2,1671,971

- social security costs 9901,038Pension costs include £510k relating to the adoption of FRS17 (2013: £953k). Further details relating to pension arrangements are given in Note 21.

2013£000

2014£000

2013£000

2014£000

Adjustments in respect of prior years --

303(40)

UK corporation tax on surplus for the year --

Net origination and reversal of timing differences 303(40)

--

Surplus on ordinary activities before tax 1,4783,359

656306

355773

The tax assessed on the surplus on ordinary activities for the period is lower than the rate of Corporation Tax in the UK of 23% (2013: 24%)

Capital allowances in excess of depreciation (204)(43)

Unrelieved tax losses and other deductions arising in the period (1,116)(1,915)

Other short term timing differences 309879

Current tax charge --



2013£000

2014£000

Offset against FRS17 pension liability 120(510)

At 1 April 11,26411,687

Transfer from income and expenditure account 303(40)

At 31 March 11,68711,137

Comprising:

Fixed Asset timing differences 19,19215,962

Losses and other deductions (7,505)(4,825)

-(457)Transfer to Current Assets 1,2431,700-

£000£000£000£000

2014

£000

15,4325,141Balance b/fwd 320,09825,154274,371

32158Additions – new properties 18,69515,2973,019

--Capitalised Improvements 2,510-2,510

(2,038)(2,157)Disposals (9,638)(2,106)(3,336)

-(75) (3,466)(2,750)(640)

-5,055Transfer of Completed Properties -(11,299)6,244

1,926-Surplus on Revaluation 31 March (note 16) 15,100-13,174

51122Depreciation charge for year 5,334-5,161

(51)(122)Released upon revaluation (note 16) (5,334)-(5,161)

6,7437,564Cost 40,30225,995-

8,898-Valuation 304,241-295,343




to identify the major components which make up its housing property assets and depreciate these over individual useful economic lives.

assumed in line with those disclosed in note 23.

The valuation of £295,343k in respect of social rented stock has been made in accordance with the Royal Institute of Chartered Surveyors’ Appraisal & Valuation Standards and takes into account the provisions of the Housing White Paper published in December 2000.

It should be noted that future growth in both capital and rental values may not occur and values can fall as well as rise.

such are unable to be sold on the open market.

£000£000£000

2014

£000

384Balance b/fwd 17,6833,75813,541

-Transfers -(1,010)1,010

75Additions 1,6501,55025

-Use of Disposal Proceeds Fund (note 19) 1,2001,200-

£000

-

-

-

0

-

2013

£000

15,958

-

1,725

-

-Balance b/fwd 3,292-3,292

-Additions 616-616

-Transfers --0

-

-

-

2,180

1,112

-




If the properties had not been re-valued they would have been shown in the balance sheet as the following:-

An analysis of the total expenditure on works to Housing & Non-Housing Properties is shown below:

£000

2014

£000£000

£000

Capitalised Improvements 3,974 11,0677,094 -

Land Bank - 321- 321

Capitalised Components 1,139 9,8178,678 -

17 13,95213,388 546

£000 £000£000 £000

2014

£000

Additions 15,297 3215,530 58

Balance b/fwd 24,905 10,712191,468 5,318

Balance b/fwd

(2,750)

(68)

-

399

(640)

28,901

(75)

96

Disposals

Depreciation Charge for the Year

(1,926)

-

(719)

51

(2,944)

5,098

(2,338)

122

Transfers

Disposals

(9,599)

-

-

-

6,244

(350)

4,598

(38)

21,206

232,402

(3,466)

(7,927)

1,243

29,328

5,271

(388)


25,004

-

25,859

15,432

51

6,743

274,371

5,161

-

5,141

122

7,630

319,948

5,334

40,232


£000£000

£000 £000

2014

£000

Transfer of Completed Properties (11,518) -6,345 5,173

Capitalised Improvements

Released upon revaluation (note 16)

Valuation

-

-

-

-

(51)

8,898

2,510

(5,161)

295,343

-

(122)

-

Balance b/fwd

Depreciation charge for the year

Cost

(2,750) -(640) (75)

Additions – new properties 15,580 3213,019 58

Disposals (2,157) (2,038)(3,335) (2,183)

-

2,510

(5,334)

304,241

(3,466)

18,978

(9,713)

Transfer to Current Assets 1,700 -- (483)

- 1,92613,073 -

1,217

14,999



3,758 -13,541 384 17,683


£000£000

£000 £000

2014

£000

Additions 1,550 -25 75

Balance b/fwd

Use of Disposal Proceeds Fund (note 19) 1,200 -- -

Transfers (1,010) -1,010 -

1,650

1,200

-

- -3,292 - 3,292

Additions - -616 -

Balance b/fwd

Transfers - -- -

- --

616

-

The Company has adopted the Statement of Recommended Practise (SORP) Accounting by Registered Social Housing Providers Update 2010. This has required the Company to identify the major components which make up its housing property assets and depreciate these over individual useful economic lives.

assumed in line with those disclosed in note 23.

The valuation of £295,343k in respect of social rented stock has been made in accordance with the Royal Institute of Chartered Surveyors’ Appraisal & Valuation Standards and takes into account the provisions of the Housing White Paper published in December 2000.

It should be noted that future growth in both capital and rental values may not occur and values can fall as well as rise.

such are unable to be sold on the open market.



If the properties had not been re-valued they would have been shown in the balance sheet as the following:-

An analysis of the total expenditure on works to Housing & Non-Housing Properties is shown below:

£000£000

£000

£000

Capitalised Improvements 4,092 11,3507,258 -

Land Bank - 321- 321

Capitalised Components 1,139 9,8178,678 -

17 13,95213,388 546

24,755

(68)

10,712

399

191,468

28,901

5,318

96

232,252

29,328

£000£000

£000 £000

2014

£000

Additions

Depreciation Charge for the Year

15,580

-

321

51

5,530

5,098

58

122

Balance b/fwd

Balance b/fwd

Disposals

(2,750)

-

-

-

(640)

(350)

(75)

(38)

Disposals (1,976) (719)(2,944) (2,364)

Transfers (9,817) -6,345 4,690

21,488

5,271

(3,466)

(388)

(8,003)

1,217




2013£000

2014£000

Balance b/fwd 1,1521,152

Disposals --

Acquisitions --

Balance b/fwd

Disposals

(338)

-

(406)

-

Charge for the year

Balance as at 31 March

(68)

(406)

(68)

(474)

2013£000

2013£000

2014£000

2014£000

Tenants 4,090 4,0904,225 4,225

Arrears of rent and service charges -

Less: provision for bad and doubtful debts (875) (875)(934) (934)

Trade debtors 605 5221,122 988

Prepayments and accrued income 356 356338 338

Other debtors 281 313872 392

Inter-company debtors - 1,218- 320

1,692 1,6922,254 2,254



2013£000

2013£000

2014£000

2014£000

440 435412 405

Inter-company creditors - 2,179- 2,712

Trade creditors

Rent and service charges prepayments 484 484579 579

Pension Contributions 142 142205 205

Accruals and deferred income 5,893 4,6347,496 4,831

Other creditors 1,259 1,2591,969 1,969

- -- -

816 588758 558

Non housing loans (note 15) --

Housing loans (note 15) 190,000190,000

2013£000

2014£000



£000 %£000 £000

Non instalment loans 130,000 3.7760,000 190,000

Between one and two years -8,420

Due within one year

17,44110,842

9,886-

2013£000

2014£000

162,673170,738



A further non-housing loan was unsecured and repayable at a rate of 2.64% as follows:

2013£000

2014£000

Due within one year 165-

£000

Committed facilities 190,000

Un-drawn facilities 25,000

5,119 -111,905 117,024 (2,211)

£000

£000

£000£000

Surplus for the year - -- -

As at 1 April 2012

Transfer to income & expenditure account:-

• Depreciation on Revaluation - -(63) (63)

3,399

63

£000

308

-

(1,319) -(780) (2,099) 2,099

Transfer to Disposal Proceeds Fund - -- -

• Revaluation surplus eliminated on disposal

Transfer to Other Reserve - 323- -

Transfer from Designated Reserves - -- -

(324)

(323)

103

-

-

-

(103)

1,977 -18,457 20,434 -

Actuarial gain in pension scheme liability - -- -

Surplus on revaluation (note 10)

Deferred tax on Pension Liability - -- -

323

5,086

(1,017)

-

-

-




The revenue reserve is split as follows:-

The individual income and expenditure account result of the Company for the year was a surplus after tax of £3,453k (2013: £1,489k)

5,119 -111,905 117,024 (1,897)

£000

£000

£000£000

Surplus for the year - -- -

As at 1 April 2013

Transfer to income & expenditure account:-

• Depreciation on Revaluation - -(63) (63)

3,453

63

£000

308

-

(1,319) -(779) (2,098) 2,098

Transfer to Disposal Proceeds Fund - -- -

• Revaluation surplus eliminated on disposal

Transfer to Other Reserve - 323- -

Transfer from Designated Reserves - -- -

(324)

(323)

103

-

-

-

(103)

1,977 -18,356 20,333 -

Actuarial gain in pension scheme liability - -- -

Surplus on revaluation (note 10)

Deferred tax on Pension Liability - -- -

323

5,086

(1,017)

-

-

-

2013£000

2013£000

2014£000

2014£000

Income and expenditure reserve 10,001 10,31515,361 15,729

Pension Reserve (12,212) (12,212)(8,486) (8,486)




2013£000

2014£000

Operating Surplus 11,27912,750

Pension Costs Charge 953510

Depreciation charge

Increase/(Decrease) in creditors

5,532

1,659

5,402

2,894

(Increase)/Decrease in debtors 1,332(2,003)

2013£000

2014£000

(Decrease)/Increase in cash in the period 3,512(33)

Increase in loan debt (14,820)165

Change in net debt (11,308)132

Net debt at beginning of period (172,218)(183,526)

£0002014£000

Cash at bank and in hand (33)6,607

Bank overdrafts --

Total Cash

Non Housing Loans

(33)

165

6,607

-

Housing Loans -(190,000)

132

2013£000

6,640

-

6,640

(165)

(190,000)

expenditure to be funded from committed loan facilities (see

and property sale receipts.

2013£000

2014£000

18,08324,612

--




2013£000

2014£000

Balance Brought Forward 1,8752,093

Additions for the year 218324

Withdrawn for the year -(1,200)

During the year the tenancies held by Tenant Board Members were held on normal commercial terms and they are unable to use their position to their advantage.

In accordance with Company’s constitution, the local authority has the power to nominate two Board Members. All transactions with the local authority are made at

The Company retains a register of members’ interests.

On the 9 March 2011 a Management Company was established for the sole purpose of management of the building and grounds of the Carrick Corner development of 13 private apartments. It is intended that control of the Management Company will transfer to the apartment owners during 2014/15. There were no transactions up to 31 March 2014.

Coast & Country Housing Limited (CCH) established a wholly owned subsidiary, Coast & Country Developments which was incorporated on 23 March 2011 and began

There are no interests in related parties that need to be declared.

undertakings.

member of the Board of Directors.

Transactions between Spirit Devco and Coast & Country Housing Limited during the year were as follows:

2013£

2014£

Purchases 5,044,9015,977,813

124,2218,377

All transactions are completed on an arms length basis.



is a member of the Board of Directors.

2013£

2014£

Sales 55,16462,628

Year-end debtor balance 21,90028,499

There were no purchase transactions in the year.

The total cost of the pension scheme for the Company in the period was £1,971k (note 8) (2013: £2,167k). The pension cost has been assessed in accordance with the

Assumed life expectations from age 65 are:-

Retiring today 22.9Males

25.4Females

Retiring in 20 years 25.1Males

27.7Females




3.4 3.53.4 3.3 3.9

2013

2011

2014

2012

2010

Salary Increases 4.4 5.03.9 4.7

Price Increases

Pension Increases 2.5 2.72.4 2.5

Discount Rate 4.4 5.54.3 4.6

5.4

3.9

5.5




The Company’s share of the assets in the Scheme and the expected rate of return are:-

7.8 7.27.6 6.1 7.3

2013%

2011%

2014%

2012%

2010%

2.8 4.43.4 3.3

Other Bonds 3.8 5.54.0 4.6

Property

Cash

7.3

0.9

5.4

3.0

6.9

0.9

4.3

3.0

4.5

5.5

5.5

3.0

42,403 39,86446,236 39,068 36,953

3,944 2,8471,085 2,824

Other Bonds 1,096 9492,626 941

Property 2,903 1,8982,968 1,883

3,116

445

1,781

Cash 2,845 1,8982,968 2,354 2,226

Other 1,589 -1,199 - -

2013£000

2011£000

2014 2012£000

2010£000

54,784 47,45657,082 47,070 44,521

Present value of scheme liabilities (70,470) (51,018)(67,487) (64,378)

Company’s estimated asset share

Value of unfunded liabilities (174) (160)(202) (172)

(56,664)

(168)

2013£000

2011£000

2014 2012£000

2010£000




Amounts for the current and previous periods:-

2013£000

2011£000

2014£000

2012£000

2010£000

4,461 (1,639) (2,363) (3,916) 10,146

63 1747,900 - (91)

2013£000

2011£000

2014£000

2012£000

2010£000

2,167 2,2751,863 1,765 1,315Current service cost

3,004 3,2273,137 2,840 2,185Interest on obligation

(2,674) (2,922)(3,814) (3,217) (1,998)

-- - -Past service (credit)/cost

141 88- 44 104Curtailments & settlements

rather than RPI which actuaries anticipate will lower FRS17 liabilities.


£000£000

Actual Return on Scheme Assets 7,1351,451


£000£000

Service cost

Past service (credit)/cost

Interest cost

Contributions by Scheme participants

Actuarial losses (gains)

Unfunded pension payments

Losses (gains) on curtailments

64,550

(1,297)

2,167

-

3,004

531

1,558

(10)

141

70,644

(1,062)

1,863

-

3,137

566

(7,449)

(10)

-

Opening fair value of Scheme assets

Actuarial gains (losses)

Contributions by Scheme participants

47,070

(1,307)

2,674

4,461

1,355

531

54,784

(1,072)

3,814

(2,363)

1,353

566

Other Finance Income / (Cost)

Current Service Cost

Settlements/Curtailments

Unfunded pension payments

Past Service Credit

(13,285)

(330)

(2,167)

(141)

1,345

10

-

(12,212)

677

(1,863)

-

1,353

-

-

Deferred Tax on Pension Liability

Actuarial gain / (loss)

(547)

2,903

(1,527)

5,086




£000

Service cost 1,8041,737

Interest cost 3,1172,936

Return on assets (4,321)(3,975)

2013£000

2014£000

Actual return less expected return on pension scheme assets 4,461(2,363)

Changes in assumptions (1,558)7,449



Coast & Country Housing Limited is a Company limited by guarantee registered with the Registrar of Companies (No 04201099), and the HCA as a registered social landlord, (No L4342).

£ ££ £

Bedsit 59.21 59.2161.05 61.05

Three bedroom 85.82 88.1089.68 90.83

One bedroom 70.22 71.7873.10 73.99

Four bedroom 93.58 97.8398.33 101.36

Six bedroom 116.02 116.02119.62 119.62

Two bedroom 78.09 79.3281.08 81.79

Five bedroom 98.71 105.33103.78 108.53

£ ££ £

Bedsit 2.53 -4.63 -

Three bedroom 7.79 3.017.44 3.10

One bedroom 6.43 3.206.55 3.25

Four bedroom 9.61 -12.24 -

Six bedroom - -- -

Two bedroom 5.30 3.055.25 3.10

Five bedroom 7.35 -7.57 -

3.13



Brought forward 101 3910,196 10,142

Units acquired 29 62128 251

Units sold (3) -(53) (28)

101

Units demolished - -(116) (170)

110

Havelock Park, Redcar.

construction at the end of March 2014; 197 for rent, 64 for shared ownership and 32 for open market sale units.

administration as well as the need to maintain/replace any equipment needed to provide the service. Subject to the following, all such charges are then reviewed annually

paid within 30 days (2013: 88.2%).

member undertakes to contribute to the assets of the Company in the event of its being wound up while he/she is a member or within one year after he ceases to be a member, for:

• payment of the Company’s debts and liabilities contracted before he ceases to be a member,• payment of the costs, charges and expenses of winding up, and

all debts and liabilities there remains any property or assets whatsoever, these shall not be paid to or distributed amongst the members, but shall be given or transferred

and property to an extent at least as great as is imposed on the Company by virtue of these Articles. The decision as to which institutions should receive the property or


Annual report 2014

Documents

Transcript of Annual report 2014