"Use assets effectively and support sound financial health"
English Rural continued to face financial pressures in 2023/24, mirroring challenges across the social housing sector.
Inflationary pressures increased the costs of building new homes and maintaining existing properties, while higher interest rates impacted borrowing costs. Despite these challenges, sound financial stewardship allowed the association to navigate this difficult period effectively.
The association's lenders remain confident in English Rural's financial plans and management. Regular updates to the long-term financial business plan helped map out the impact of the changed economic environment on future operations. This informed a review of the Business Strategy, ensuring alignment with the new financial realities.
In 2023/24, we prioritised strategic asset management and financial prudence. This approach allowed us to balance the needs of our current residents with ongoing investment in our homes, despite negative economic headwinds. By optimising our resources and embracing technological advancements, we've laid a strong foundation for future sustainability and growth.
Treasury management has been a key focus, with internal cash from across the group utilised to manage down borrowing needs. A review of how development opportunities are financially modelled, agreed and delivered was undertaken, reflecting the new environment for building homes. Importantly, the stock condition survey completed during the year informed investment levels needed to maintain existing homes in the future, as well as ensuring provision for improvements to environmental performance of older properties.
The association's approach to value for money continued to evolve, not only seeking to work more efficiently but also monitoring and improving the effectiveness of how money is spent. The next phase of this approach will review procurement and contract management for repairs and maintenance work, the second largest item of expenditure after development.
Despite the challenging economic environment, our focus on sound financial management has allowed us to maintain our commitment to residents while continuing to invest in new and existing homes. We remain well-positioned to navigate future challenges and opportunities.
The IT transformation project progressed well, with the second stage fully completed during the year. This moved all activity onto Microsoft 365 arrangements, providing greater protection against cyber incidents. Progress was also made on the third stage of the project, with detailed mapping and consultation informing the tender of housing management software used across the business.
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Successful stewardship of finances within an uncertain economic environment, maintaining key covenants within internally agreed parameters.
Further implementation of the Value for Money Strategy through the review of development financial appraisals to agree updated viability modelling.
Planning for and using cash within the business to enhance treasury management and mitigate the higher cost of borrowing.
Delivery of second IT project phase in a managed and positive way.
An English Rural resident enjoying her home in the village of Roxwell, Essex.
>> The dispersed and sparse nature of the association's homes means that contractor coverage for repairs and maintenance work can lack scale and attract a premium compared to sector averages. A review of the approach to procurement and contract management is needed to address this.
>> While better using cash across the association has overall reduced anticipated borrowing costs, it has resulted in an alignment of refinancing of new debt with a small proportion of existing debt. This will require careful planning and preparation in the coming years.
