Regulation News/Updates
On 30 March 2012, the Welsh Government issued its second Financial Viability judgments for all Housing Associations in Wales. The categories of judgments were as follows:
- Pass
- Pass for closer monitoring
- Fail
The Hendre Group received a "Pass" from the Welsh Assembly Government (31 March 2011 - Pass)
Included below is an extract from the judgment document received from the Welsh Government:
"Overall conclusion
In relation to the Group, our Financial Viability Judgement as at 30 March 2012 is:
- Pass
The Group has adequate resources to meet current and future business and financial commitments.
Our judgement is explained as follows:
1. The 30 year forecast has been prepared using a reasonable set of assumptions and demonstrates sufficient prudence to remain viable under a variety of different economic scenarios.
2. The Group has adequate income from its operating activities to fund its forecast spending on property maintenance and improvements. The level of costs included in the forecast appears reasonable in order to deliver the Welsh Housing Quality Standard by 2016/17.
3. We are content that the Group can operate without breaching the financial covenants to which its borrowing is subject to.
4. Whilst significant, the level of committed development included in the forecast is within our expectations of what the Group can achieve and is sufficiently funded. There is a track record of the Group delivering schemes of a similar size in the past to those currently being undertaken.
5. Whilst there is some income included within the forecast relating to sales of properties we are content that there is no reliance on this income to fund the Group's operations.
6. A significant proportion of the Group's income, relating to care & support services, arises from contracts with local authorities. Within these services, there are a small number of major contracts. This income could be impacted by any re-tendering or re-negotiating as a part of on-going public sector cost savings. It is likely that similar associated saving in variable costs could be made if a major contract was to end. The impact on the Group's financial viability is not considered to be material.
Note:
The impact on the Group, of proposed changes to the Welsh Government rent review and to the UK welfare benefit legislation, is uncertain at present. The Welsh Government is in the process of modelling a new rent policy in collaboration with the RSL sector and one of the key principles is to ensure that financial viability of RSLs is maintained. The Group is aware of the proposed changes to the Welsh Government rent review and to the UK welfare benefit legislation and is monitoring the position closely to ascertain the potential impact upon them. We are content that the Group is taking the necessary steps at present."
For a full copy of the Financial Viability Judgement for 2012, click below:
For a full copy of the Financial Viability Judgement for 2011, click here
