"Use assets effectively and support sound financial health"
This year, we're looking ahead and also reviewing our past Value for Money Statement. This comprehensive analysis enables a better understanding of performance across all areas of our business and informs how planned gains can be achieved. Spotlighting the values that matter to English Rural and its residents is part of this unique approach, alongside the standard accepted values.
Our in-depth look at value for money isn't just a financial exercise; it's a reaffirmation of our commitment to provide the best possible service to our residents. It's about understanding our performance from every angle and continuously seeking ways to improve.
In recent years, the need for more frequent updating of our financial business plan has arisen due to deteriorating economic and financial factors that affect the housing association sector. This proactive monitoring allows us to understand potential vulnerabilities across the English Rural group.
The planned mid-term review of our business strategy in the autumn of 2023 provides an opportunity to explore the impact of these factors, particularly on financial capacity that can be applied to each strategic ambition. Housing associations like ours are especially susceptible to high inflation, below-inflationary rent reviews, and higher borrowing costs.
Our treasury strategy has been carefully reviewed during the year. We've adopted a cautious approach to entering contractual commitments, ensuring we don't over-rely on our agreed financing, notably the £32m facility negotiated with Santander. This strategy has allowed us to conduct a more comprehensive review of how financial capacity can be best applied in the changing operating environment.
In the past year, we've fine-tuned our financial strategy to ensure development costs align with our budget, responsibly using extra funds generated from asset reallocation. Acknowledging the impact of rising living costs, the Board has opted for a below-inflation rent increase for the 2022/23 review to sustain affordability for our residents.
Despite the disconnect between income and cost continuing to erode our financial capacity, we've managed to generate a significant income stream from sales activity, amounting to £1.8m at the group level. This income can be used to deliver our strategic ambitions of building new homes and supporting residents.
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Continued focus on value for money through our standalone statement.
Dynamic approach to financial business planning to test vulnerabilities at group and entity level
Income secured through de-risked sales activity
Access to a new £32m lending facility and effective treasury management.
Support for residents through a dedicated financial fund
HRH The Princess Royal meets guests in Kent at a recent opening of affordable rural homes.
>> The testing of our financial business plan demonstrated our ability to respond to financial shock with the deployment of agreed recovery actions. However, given the continuing economic deterioration, a mid-term strategic review is timely to allow the Board to appraise the pace of future ambitions based on revised capacity predictions.
>> As the complexity of strategic activity develops, enhancing the way that systems and processes utilise data across the business becomes increasingly important. With new technology, a larger staff team, and increased data integrity, we aim to advance this approach in the coming year, with updates planned for the development appraisal model and data from the new stock condition survey due in the autumn.
