1. home and garden

Business
plan
2013 - 2016
1
2
Introduction
The Business Plan
5
Governance5
Mission, Corporate Strategy and Values
Our business environment
and strategic response
Core themes
7
9
13
Excellence
Growth
Business objectives
15
1
To maximise and protect our income stream 15
and to secure new funding streams
2
To continue to deliver excellent customer focused17
services supported by effective customer insight
3
To grow the business through the use of new markets,18
products and activities where appropriate
4
5
To ensure we reduce our environmental impact19
6
To provide value for money, and maximise 22
the value from our federal structure
7
To ensure that we have motivated high 23
performing staff, and that we encourage innovation
8
To ensure we communicate effectively24
To ensure the Group’s housing assets are 20
managed wisely, investing in existing homes
and to grow the business by providing new homes
Risk management
25
Our 30 year financial plan
27
Appendices
29
A
B
C
D
E
Organisational chart 29
Board and executive team 30
Stock map 32
About us33
Achievements 35
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4
Introduction
The business plan
The purpose of this Business Plan is to
set out Longhurst Group plans and
objectives for the forthcoming year,
within the context of our longer term and
continuing strategies.
The Business Plan is owned by the
Longhurst Group Board of Directors, but
it is informed by customers, staff, partners
and other stakeholders.
The Board of Directors review the
information, alongside performance data,
financial projections and economic data,
and agrees the main business aims for
Longhurst Group for the year ahead.
The Business Plan is an important
operating tool for Longhurst Group;
it clearly defines the objectives of the
organisation. These objectives are then
communicated to each member of staff
and inform personal objectives as set
through the appraisal process. In this
way everyone is aware of how their own
activity is contributing to the bigger picture
of the organisation.
The Business Plan is a living document
which evolves and responds to changes
in the external environment as well as to
emerging business opportunities. This is
particularly important with the significant
changes that we are currently facing within
our operating environment.
Governance
Longhurst Group Ltd is the non-stock
holding parent of the Longhurst Group of
companies. We demonstrate the Group
structure and describe how the companies
work together in Appendix A.
Led by the Group Chief Executive, the
Group provides strategic direction, support
and corporate services to member
companies – (and to a number of external
customers and partners). Information on
our Board and executive team can be
found in Appendix B.
The Group’s member companies are:
• L&H Homes Limited
• Spire Homes (LG) Limited
• Friendship Care and Housing
• Keystone Developments
(LG) Limited
• Libra (Longhurst Group)
Treasury plc
Between them the member companies
own and manage over 17,900 homes,
working in partnership across the Midlands.
Our stock map can be found in
Appendix C.
As an experienced provider of affordable
housing, the Group also builds a substantial
number of new homes of
all types through the Blue Skies Consortium
– the number one Registered Provider
(RP) development consortium in the East
Midlands.
We pride ourselves on being much more
than landlords; we deliver an extensive
range of services to support residents and
customers from all walks of life, at all levels
of affordability. More details about who
we are and what we do can be found in
Appendix D.
In spite of the challenging economic climate
of the past few years, the Longhurst Group
of companies has continued to thrive, for
example; we are currently funding a Group
development programme of 1,700 homes.
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We have remained committed to the values
that underpin our work; deploying sound
business practices whilst ensuring that we
challenge and innovate our work in order
to maintain our excellent reputation as a
leading performer in housing and care in
the Midlands.
We work hard to ensure we continue
improving the quality and range of our
services, enjoying the accreditation of
several awards for excellence and improved
satisfaction among customers and staff.
We create opportunities and seize the
chance to be innovative and creative in
delivering excellent services and developing
the business.
“All of this
means that we
are facing the
future with great
confidence.”
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Mission, corporate strategy
and values
Our mission
Our mission is to lead in the delivery
of high quality, affordable homes and
services.
Corporate strategy
Our corporate strategy is based on the
following overarching themes;
• Excellence – to be a top performing
business, which provides sustainable
homes and excellent services to our
customers
• Growth – we will secure viable
growth by developing new homes
and services, attracting new partners
and acquiring properties from other
providers
Our values
Across the Group we share the same
values, which are:
Honesty, openness and accountability
Working together to achieve our
business objectives
Respecting all people and valuing
diversity
Focusing on the needs and aspirations
of our customers
Working sustainably
Achieving excellent communication
Delivering great services
Encouraging innovative thinking
Nurturing positive relationships.
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8
Our business environment
and strategic response
We continue to face a period of
momentous change arising from significant
shifts in policy direction and continuing
measures to reduce the budget deficit.
Overall the economic context remains
challenging with growth sluggish, debt
reduction a long, slow process and public
spending reductions increasing with
continued uncertainty over jobs, pensions
and funding.
The economy in early 2013 appears to be
balanced on the edge of a third recession
in as many years and while the signs of
some recovery may be showing in London
much of the rest of the economy is flat at
best. For us the effects of low interest rates
are mixed but broadly our capital strategy
has left us well funded for the medium term
and we are able to invest heavily at a time
when the housing market is in poor shape.
This means we should be able to procure
at good terms and we plan to maximise this
strategy.
We are also witnessing the effects of
extreme demographic change in the
Midlands, there has been a significant and
rapid increase in population and in the
number of households, this is particularly
true of people aged over 85 where there
will be the biggest increase of any region
in the country. We also have high migration
rates into our area of operation both from
Europe and from other UK regions. High
demand in the rental market has also
increased the need for our services, as
customers experience significant increases
in private sector rent levels in most of our
areas of operation.
Indeed incomes are being squeezed on
many fronts. Domestic fuel prices alone
have risen by 8% in the past year and a
further 5% increase is predicted to plunge
even more families into fuel poverty.
Despite a recent dip, unemployment is
predicted to rise. Almost 1 million young
people are now out of work and face an
uncertain future. Sweeping reforms to
welfare systems to reduce the benefit
bill and “make work pay” - a key thrust
of Government Policy - are set to create
further hardship for some of our customers.
The reforms which start to hit this year will
remove a further £2 billion from tenants’
pockets against a backdrop of Government
proposals to embark on a fresh round of
cuts to working age welfare benefits on
top of the £18bn already announced
since 2010.
These announcements within the Autumn
Statement fail to take account of the overall
impact of welfare changes already in the
pipeline on residents and social landlords.
While the true extent of this impact will
not be known for some time, the risk of
increased debt and arrears is very real.
Not only will this decision hit low-income
families hard, it could affect housing
associations’ principal income stream and
reduce their capacity to access funding,
resulting in fewer homes being built.
Supply of new homes is already a major
issue as England faces a housing crisis
comparable to the early post war years.
The Government’s ‘Housing Strategy’
published in November 2011 could not
have been clearer about the Government’s
commitment to ensure more homes are
built and explicitly linked the supply of new
homes to economic health. In September
2012 the Prime Minister launched what
he described as a “comprehensive plan to
unleash one of the biggest homebuilding
programmes this country has seen in a
generation”.
Since then, despite a myriad of initiatives,
a whole host of legislative changes and
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new funding structures, supply remains
at the lowest peacetime levels since 1920
and there is still no sign the Government
will meet its key aim of providing enough
homes by “getting Britain building again”.
Government subsidy into the social housing
product has reduced and the funding into
the East Midlands area of operation is
disproportionately low when compared to
funding across the rest of the country. The
number of homes completed in the country
last year was just over 114,000 which is the
fourth year in succession in which less than
half the homes needed have been built.
Closer to home the housing crisis deepens
within the midlands as the chronic housing
shortfall affects thousands. Homelessness
in the region has increased by 24% in the
last two years, overcrowding has increased
by 18% and private rents are expected to
rise faster than in any other region over the
next 10 years – up by a staggering 67%.
The region is building just 45% of the
new homes it needs each year to meet
new housing demand. The need for
more investment in affordable housing is
increasingly evident, with around 116,439
households already on social housing
waiting lists and the number of households
in the East Midlands expected to rise.
This shortfall is pushing up house prices
and private rents across the Midlands and
we now face the possibility that an entire
generation will be priced out of renting a
home – let alone buying one which remains
more of a dream than a reality for most with
average house prices over eight times the
average regional income of £20,030. And
as costs soar in the private rented market,
more pressure is heaped on the limited
supply of social rented housing.
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The work of housing associations in
providing more new homes for rent and
other forms of tenure is more important
than ever. Housing associations in the
East Midlands provide affordable homes
for one in every 14 households in the
region, with rents just two thirds of the
cost of an equivalent home in the private
rented sector. Despite the tough economic
climate housing associations in the region
built more than a third of all the region’s
new homes last year. With the backdrop
of severe cuts to Government grants to
support the development of new homes,
meeting housing demand has become
more challenging than ever. Although we
are now on the Homes and Communities
Agency’s (HCA) Affordable Homes
Framework, we still face the prospect of
limited grants to support our development
activity moving forward.
The 2012 Autumn Statement potentially
provided some additional investment in
housing, by means of a £10 billion loanguarantee scheme which although a step
in the right direction did not bring much
optimism to the housing market. The initial
announcement suggested extensive terms
and conditions would apply to the scheme
however there are indications that this
will soon be undergoing review and we
anticipate that this may underpin future
investment in affordable housing.
The help-to-buy scheme announced as
part of the 2013 Budget is a significantly
more substantial guarantee scheme that
is likely to stimulate the housing market as
buyers will be enabled to provide larger
deposits through the use of government
loans and we expect this will result in a
considerable impact on house prices.
The announcement to permit private
developers to renegotiate previously agreed
Section 106 arrangements, has highlighted
that there is a risk that the Government
will increase uncertainty in the planning
system and undermine the delivery of
affordable housing. The move comes when
Councils across the country are setting
their levels of community infrastructure
levy – with some reducing their affordable
housing requirements because high levels
of subsidised housing are unviable. For
some time we have relied on a significant
number of S106 opportunities to boost our
development numbers and reduce costs as
inevitably S106 units are cheaper with no
land value attached.
Some Councils are also requiring
1 bedroom homes on sites as demand for
smaller homes is set to increase as tenants
look to downsize to avoid the impact of
the ‘bedroom tax’ in April. In the past we
have tended to build larger (minimum two
bedroom), more desirable homes that are
more cost effective and sustainable in the
long run. This may be an issue for review
if demand for smaller properties increases
moving forward.
Our competitive environment has also
increased with Councils and private
developers now having the same access to
funding as housing associations. However
this may be a positive change as grant
funding is often accompanied by restriction,
whereas using our own funds offers us the
opportunity to be increasingly innovative
and deliver more diverse tenures and
ground-breaking designs.
In terms of growth beyond the development
of new homes the difficult economic
climate is opening up further opportunities
for groups like ours with ambitions to
grow. Already we are seeing an increasing
number of stock rationalisation processes
and mergers across the sector which may
present opportunities.
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Stock owning councils may also revisit
their options for transfer or management
arrangements as the reforms mean they
have to take on a share of historic debt,
formerly held by the Treasury, in return
for greater financial freedom to manage
revenue from housing.
People who require care and support are
also affected, with significant reductions in
grant to this sector.
Housing associations are undoubtedly
working through some of the biggest
challenges in the sector’s history. Alongside
the substantial impacts of the financial
and economic crisis, we are responding to
the most radical changes to our operating
environment for decades. Undoubtedly
it remains a period of considerable
uncertainty and change.
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The business plan is a Group-wide
response to the collective challenges
we face. Equally, it recognises that each
member company has particular
objectives and strategies it must pursue.
It is a living document; evolving in
response to changes in the external
environment, customer needs and
emerging business opportunities –
particularly relevant given the significant
changes that all RPs are facing in the
current operating environment.
We are prepared for the challenges that
we will face in the years ahead, and this
business plan demonstrates how we will
continue to successfully fulfil our aims and
objectives, putting customers first every
step of the way.
Corporate themes
We have two overarching themes which
drive our business.
Excellence
Growth
Quite simply we want to provide excellent
services to all of our customers, this needs
to be achieved despite difficult financial
pressures. This theme will underpin all of
our business activities.
There is a housing crisis; a chronic shortfall
in supply resulting in many hundreds
of thousands of people living in dire
circumstances. Our core objective is to
provide homes for people who need them
so we are committed to ensure that we
achieve growth to help meet the demand.
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Business objectives
1 To maximise and protect our income streams
and to secure new funding streams
Protecting our Income Streams
The welfare system is undergoing major
changes with the aim of cutting the overall
welfare bill, simplifying the current system,
and providing greater incentives to work.
April 2013 saw the introduction of the new
Under Occupation rules, or ‘Bedroom Tax’,
for social housing tenants. This means
that some of our tenants have had their
housing benefit reduced because they are
deemed to have too many bedrooms for
their households needs. These tenants will
have sole responsibility for making up the
difference between their housing benefit
and their rent, a sum we estimate as being
between £8 and £30 per week, depending
on their individual circumstances.
At the same time, the move to local
Council Tax Benefit Rules will see tenants
who formerly received full Council Tax
Benefit, having to pay a contribution of
around £4- £8 a week. The combined
effect of these extra demands on their very
limited incomes poses a high risk to their
ability to pay.
The introduction of Universal Credit in
October 2013 poses a further threat to our
income stream as housing benefit will no
longer be paid directly to landlords.
As outlined, reductions in benefits will bring
further hardship for many already struggling
to pay their bills as the cost of living rises
and job prospects become even bleaker as
unemployment rises.
Across the Group we are responding to
this in two ways. We are increasing the
advice and support that we provide for our
tenants on money matters, helping them
to get into work through initiatives such as
apprenticeships, helping them to budget
and ensuring they are receiving benefits
where appropriate.
We are also ensuring that our rent collection
and rent arrears processes are robust and
we are providing incentives and assistance
for those tenants who would like to downsize.
An important aspect of the coming year
will be the work the member companies
are undertaking to understand the full and
far reaching impact of the Welfare Reforms
across all of our areas of operation. We
are actively exploring different models of
provision, and alternative funding streams
to enable key services to be maintained.
Over the past two years, the care and
support sector has undergone significant
change, which also risks our income
streams. Our member companies have
worked collaboratively in reviewing our care
and support provision across the Group
and are now working alongside external
partners to continue moving towards
‘personalisation’, allowing customers
greater involvement in designing services
and direct control over budgets.
There is increased Group-wide
co-operation in sharing best practice and
knowledge with scope to build upon this
further, particularly on back office functions
common to care and support work such
as tendering, ICT systems and financial
control. In the next few years we are
determined to ensure the Group’s care
and support work survives fit for the future
and to a quality of which we will continue to
be proud.
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Our care and support strategy will
continue to evolve accordingly and we
will emerge from the confusion and
challenges of today with our commitment
to helping vulnerable people through the
provision of good quality services intact.
Some of these services will develop from
current work and schemes but others
need investment in skills and systems to
ensure we can operate effectively in the
changing environment.
So the Group will focus on what it does
well; for example, we intend to further
develop community-based support
services, provide specialist dementia care
and build upon the services provided in
mental health and learning disabilities.
Securing New Funding
During 2012 we concluded a major piece
of work which culminated in a £250m own
name debut bond issue being completed
in July.
The work we undertook on Group funding
last year also involved restructuring our
existing bank facilities for L&H Homes and
Spire Homes. These restructured facilities
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will help to provide further growth for the
Group over the next 3-4 years.
The new funding we secured in 2012 will
fund our development commitments for the
next 18-24 months.
Looking forward beyond the next 18
months, we are already starting to
research funding opportunities to finance
further growth for the Group. We have
registered our interest in the Government’s
Guaranteed Lending Scheme and await
further details on how this could help
facilitate further growth in our business.
To carry on developing, we recognise
the need to make the best use of our
available resources and assets across
the Group. Over the last few months,
we have been working with the National
Housing Federation and our legal advisors
to explore the possibility of improving the
security valuation that is applied to our
Local Authority transfer stock. A move in
valuation models from Existing Use Value
Social Housing to Market Value, subject
to tenancy, would create around £80m in
extra Business Plan capacity.
To continue to deliver excellent customer
2 focused
services supported by effective
customer insight
Placing customers at the heart of the
business remains essential to our
approach. The Group’s tradition of resident
involvement in shaping service delivery
has helped to provide excellent customer
focused services for many years.
Recent changes in the regulatory
framework, with consequent focus upon
‘co-regulation’ and enhanced ‘resident
scrutiny’, mean customers are making
greater demands of the Group to deliver
services which meet their needs and
preferences while representing good value
for money.
As such, the stock-owning member
companies continue to offer a range of
involvement opportunities for customers,
ensuring they carry on addressing
customers’ key priorities within the housing
management and care and support
environments. Member companies
have established scrutiny groups and
committees to ensure customers have
the opportunity to examine services and
hold the companies to account for quality
and cost.
and cost-effective ways of understanding
customer ‘journeys’. Feedback and
detailed knowledge of the circumstances
and preferences of key customer groups
and individuals is essential in fine-tuning the
delivery of, and adding value to, services.
Collectively these approaches will maintain
and drive forward levels of customer
satisfaction, ensuring better outcomes for
customers. From a business perspective,
improved insight will enable the business
to keep pace with changing needs and
help the Group prepare effectively for
forthcoming changes, such as those
presented by the Welfare Reform Act, and
allow better targeting of precious resources.
The key customers of Longhurst Group
Ltd are the member companies and
others to whom we provide services. We
continue to strive for excellence in service
provision, working hard to further develop
our services to meet the needs of our
customers and fulfill our desire to grow.
The company is also preparing for reaccreditation with Investors in Excellence,
originally achieved in 2010.
Member companies are developing
insight strategies to produce innovative
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grow the business through the use of
3 To
new markets, products and activities
where appropriate
Across Longhurst Group we seek to find
innovative ways to continue to meet our
customers’ expectations, and seek to
grow the business where appropriate, for
example; we are currently looking at
the following:
Services to the elderly
Across the Group we are looking at
expanding services to meet the needs
of our elderly residents, for example;
we are providing services, such as ‘the
handyperson’ service where small works
are undertaken, which allow people to stay
at home for longer.
Menus of service provision, such as
gardening and cleaning have also been
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drawn up in order to meet our residents’
needs, and raise revenue in this area
of operation.
Market Rent Portfolio
At the time of writing this plan the
organisation is researching the possibility of
expanding its market rent activity.
This could be a commercial undertaking
with the objective of raising finance
to support the future development of
affordable homes and the core social
housing business. There is a clear market
for those denied access to buying a
home but not qualifying for social or
affordable renting.
4 To ensure we reduce our environmental impact
Longhurst Group has become increasingly
aware of its environmental responsibilities,
both as a landlord and an employer.
Through our environmental management
focus, we hope to make a positive change
to our environmental impact, as well as
educate and influence others.
In developing a Sustainability Strategy
we are embracing the challenges of
climate change. Our objectives are to
manage our business to provide the
‘Triple Bottom Line’ of environmental,
economic and social improvement for the
group and to educate and encourage our
contracting, procurement and supply chain
to follow suit.
Our work in 2012-13 concentrated on
proving the value of an Environmental
Management System (EMS) approach to
sustainability issues and generating cost
savings across the Group.
All work undertaken has had the
desired triple bottom line effect
achieving environmental, social and
economic successes.
Our work to date has focused heavily on
developing trials of technology, reviewing
and renegotiating existing environmental
contracts and evaluating existing business
practices and processes. We will continue
with these objectives in the year ahead.
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o ensure the Group’s housing assets are managed
5 Twisely,
investing in existing homes and to grow the
business by providing new homes
A two thirds cut in capital investment
following the Comprehensive spending
review in 2010 has led to the virtual
collapse of social housing starts. Combined
with the long-term trend of dwindling social
housing stock, there are 1.2 million fewer
social homes today than 30 years ago.
Meanwhile the demand for social housing is
growing as evidenced by ballooning waiting
lists and rising homeless applications with
most experts predicting at least a 100,000
shortfall in affordable homes per year for
the foreseeable future.
In response to this environment we will
focus on the following:
Managing our assets
The operating companies within the Group
all have asset management plans. This
means that they ensure they make best
use of property, land and sites they own,
exploring all options for development use,
re-designation or potential disposal.
All have robust plans in place to ensure
that stock meets the Decent Homes
Standard as an absolute minimum and
has projected replacement programmes in
place to ensure that properties are kept well
maintained into the future.
Developing new homes
In 2012 Longhurst Group Ltd completed
a significant development programme
of 265 homes on behalf of the member
companies. A total of 141 homes were
also completed on behalf of the Blue Skies
Consortium and local authority customers,
working in partnership with Nottingham
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Community Housing Association (NCHA) as
part of our development consultancy POD
(Partnerships, Opportunities, Development).
All our member companies expect to
meet their new homes targets for the next
three years without having to rely on grant
funding; any additional schemes which do
receive grant funding will have a positive
impact on the business plan profile.
Attention has focused on the opportunities
for commercial activity; whether that
is within the member companies and
their own schemes or through the
Keystone Developments brand. Keystone
Developments was originally formed
within Longhurst Group to specialise in
the development of private sale housing,
particularly retirement properties and
family homes. With reduced grant funding,
other forms of cross subsidy are essential
in maintaining long-term viability and
Keystone can provide this – we envisage
that Keystone Developments will be a very
useful vehicle over the coming years.
Corporate acquisition, amalgamation
and partnerships
During the life of this business plan, there is
likely to be opportunity for growth through
corporate acquisitions, estate transfers,
amalgamations and partnerships rather
than traditional ‘organic’ development
activities as outlined above. Led by the
Chief Executive’s Office, we proactively
seek these exciting opportunities which
will be essential in meeting our ambitious
objectives, allowing us the benefits
associated with a wider experience base.
In doing this, the Group needs to promote
the ‘offer’; demonstrating the mutual
benefits available in joining our group,
combined with the positive impact such
moves have on customers and partners.
We anticipate developing local partnerships
and joint ventures, progressing new
management agreements, supporting
member companies in large and smaller
scale transfers (e.g. estate transfers) and
exploring finance initiatives. Stock-owning
councils are now able to revisit their options
for transfer or management arrangements
as the reforms will mean they have to
take on a share of historic debt (currently
held by the Treasury) in return for greater
financial freedom to manage revenue from
housing. It is already evident that there is
a growing number of stock rationalisation
processes across the sector which may
present further opportunities for ambitious
organisations such as ours.
The structure of the Group and our federal
approach is a unique selling point. We
believe that this combined with our
excellent track record, financial strength
and our extensive experience of managing
corporate growth, increases our appeal to
potential future partners. We want to attract
strong and experienced partners that would
benefit from being part of a successful and
mutually supportive group of companies.
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o provide value for money, and maximise the value
6 Tfrom
our federal structure
22
We have an established set of overarching
principles, which companies across the
Group work within to achieve value for
money. These principles recognise that
value is not always a quantitative or easily
measurable calculation. For us, value for
money is the relationship between desired
quality, cost, efficiency of delivery and
successful outcomes achieved.
Working within our individual companies,
and collaboratively where appropriate, we
focus on:
b) The link between asset management
and procurement – by ensuring we
are investing in the right properties
in a planned and fully-costed way,
realising the benefits of investment
and sharing knowledge around repairs
contracting and service delivery. All
operating companies within the Group
are members of CHIC a housing
investment consortium (through
which we have achieved cost efficient
repairs savings).
a) Our costs – we seek to understand
the breakdown of our operating
costs and identify business areas for
the focus of our efforts in reviewing
services, reworking processes
or retendering arises. We use
benchmarking to inform our reviews
and benchmark internally as well as
externally through Housemark and
commission work where appropriate.
This includes a value for money
assessment.
c) Our customers – who are involved
in the process of delivering value for
money, setting objectives with us and
monitoring performance. We obtain
feedback on value for money from our
customers and this contributes to the
culture of excellence we encourage in
our companies.
o ensure that we have motivated high performing
7 Tstaff
and that we encourage innovation
During 2012 a Group-wide People
Strategy was produced which sets out our
commitment and approach to our people.
A key priority in the year ahead will be to
implement the Strategy, identifying work
that can be taken forward collectively and
at an individual company level. To achieve
this we will set up working groups to
develop our approaches to rewards and
recognition, performance management,
training and development and HR
practices. The Group Executive Team will
continue to ‘hold’ the People Strategy and
provide mandates to the working groups to
take the Strategy forward.
A key aspect of implementing the People
Strategy will be to maintain strong
communication and consult with staff
and Boards as necessary throughout the
process.
We will maintain the Group-wide process of
organisational development to ensure that
we continue to listen, learn and develop
as an organisation to meet our current and
future business priorities.
We will continue to value our staff as our
greatest asset, fostering a team spirit and
a culture of continuous improvement,
innovation and creativity, and build on our
high levels of staff satisfaction. This will
include Group-wide staff surveys that we
undertake periodically and on-going cultural
development work across the Group.
We will invest further in staff training and
development, to ensure staff have the
right skills, knowledge and experience to
deliver our business objectives within the
agreed culture and values. This will include
ensuring staff are up to date in the complex
and changing operating environment which
will be critical in the year ahead and running
a further cohort of the Oasis Lifelong,
Learning and Leadership Programme for
key staff.
We aim to create an innovative workforce;
where staff are encouraged to think
creatively about how we can provide
excellent services.
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8 To ensure we communicate effectively
We will continue to develop the Groupwide intranet as a central hub for
communications and information-sharing,
increasing opportunities for sharing good
practice and discussing key issues. This
will include developing the Board Member
area to help improve the flow of information
across all Group Boards and committees.
We will continue to work with our senior
management teams to collectively consider
the operating environment and develop
future plans and strategies.
We will further develop the systems which
enable us to build and share knowledge of
our business, leading to a more meaningful
and targeted approach in communicating
with stakeholders – particularly those who
can influence the organisations’ growth
objectives.
Following the review of the Group’s Digital
Media Strategy, and with the support
of the Board, we will develop the use of
social media channels such as Twitter
and Facebook to promote the work of the
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Group and further develop customer and
stakeholder relationships.
We will continue to develop our internal
communication channels, recognising that
the strength of the brand comes from the
staff within the organisation, reinforcing
the importance of good quality, meaningful
internal communication.
Our external communications, particularly
those promoting our achievements and
the difference we make to people’s lives,
help to develop a compelling proposition
to attract stakeholders who can assist
us in achieving our growth objectives.
As awareness of the Group and each
member company grows, it becomes
increasingly important we take good care
of our great reputation through careful
management of our brands. Marketing
strategies and delivery plans will continue
to be developed and implemented for the
Group and individual companies to ensure
we understand our key stakeholders and
effectively communicate with them.
Risk management
Group Approach
The Group considers that Risk
Management is a vital tool in mitigating
threats to its business objectives and goals.
It also recognises that there are many
opportunities available to the Group which
can be managed through an effective risk
management governance structure.
The Group has reviewed its Risk Registers
and approaches against the ‘Sector Risk
Profile’ issued by the HCA in June 2012
and acknowledges and agrees with the
HCA Regulation Committee’s statement
that Boards need to be aware of the
challenges ahead, the Group is confident
in its approach to meet the Regulator’s
requirements and best practice in Risk
Management.
The Group’s approach is to have an
embedded risk management culture
throughout the whole organisation; steps
taken to achieve this include:
• The Audit Committee has
responsibility for the review and
scrutiny of this function
• Company Boards receive regular
reports and risk registers
• A Risk Management Group exists
with representatives from each
company which ensure that this area
is given the appropriate high profile
and is embedded at every level of the
organisation
• A web based risk management
database is used to ensure that the
registers are kept up to date, controls
and actions are monitored, that the
overall risk exposure to the group can
be easily identified, and best practice
can be shared effectively throughout
the Group
In 2012/2013 an internal audit review
was conducted into the use of our risk
management systems and to test the
degree to which good practice was
embedded in the organisation. The results
were extremely encouraging and we will
be using this review together with further
development of our systems to continue to
strengthen our approach.
We have developed a key risks dashboard
approach to reporting for Boards and are
considering differentiating at that level
between risks we can influence and risks
we can mitigate.
Risk in the plan
The organisation has clearly identified the
changing state of economic performance
in Britain and Europe as a key threat to
our business plans and to our corporate
performance. We can do little to influence
the manifestation of this risk so therefore
have concentrated on our Treasury and
Financial strategy providing protection from
the potential consequences of higher cost
borrowing, the availability of capital funding
and our ability to meet interest and other
costs in the medium term future. By using
a combination of long term capital market
funding and short term banking facilities
we can demonstrate access to reasonable
cost funding and secure our development
programme at affordable cost.
The risks associated with the impact of
the government’s welfare reforms are
a good example of the nature of our
risk management measures. We have
spent about a year planning for change,
identifying impacts on our customers,
informing our customers and seeking
means to mitigate the impacts involved.
We have also built financial provision into
the plan based on evidence obtained from
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test projects and through our trade
body networks. For example, across
the Group, member companies have
visited every customer affected by the
potential loss of benefits associated
with under occupation of properties
in order to help and advise customers
and to identify those who could be
assisted or rehoused.
In the course of the next few years
the pressure on revenue streams will
be much greater but we are also likely
to experience strong revenue growth
from the development of new homes
and new tenures and near market rent
levels.
Longhurst Group recognises the
significant investment set out in
this business plan in both new
developments and maintenance and
improvement works on existing stock
and will be closely managing the risks
associated with contract delivery,
26
contractor performance and contractor
financial viability.
With the stimulus that the government
is trying to inject into house building
over the next few years, we will be
closely monitoring our assumptions
in the business plan on projected
costs of new developments, as this
stimulus may reverse the recent trend
where there was spare capacity in
the building sector which enabled
the Group to achieve extremely
competitive rates on contracts.
Care and Support is a sector where
the Group has recently been reviewing
its strategy and as such the business
plan focuses on providing in-home
services or specialist areas of support
where the risks can be managed far
more responsively than in providing
Care Homes, an area in which the
Group has reduced its exposure over
recent years.
Our 30 year financial plan
The Group’s consolidated 30 year
Business Plan has been updated and
now incorporates the new funding
structure that was put in place during
the summer of 2012. The 2013/14
Business Plan has much more
certainty on both funding costs and
the development programme that have
been incorporated into the plan. The
other key assumptions that underpin
the projected financial performance
in this plan have been based on a
prudent assessment of the economy
and market conditions across the
business sectors we operate in.
The bond issue and restructured bank
facilities mean that our development
programme is now fully funded for the
next 12-18 months. The development
assumptions have been updated for
the 2013/14 plan and now assume a
total programme of over 2,350 units in
the next 5-6 years. Just under half of
this programme is now committed at
average values which are well within
the assumptions made in the 2012/13
plan. Our Business Plan does not
assume any further development
growth after years 5-6. The rationale
for this approach is to demonstrate
the projected strength of the business
in being able to meet the Loan
Repayments and interest costs within
the plan.
The projected performance in the
plan shows a marked improvement
in operating margins with 28.4%
projected in 2013/14 compared to
22.5% in 2012/13. The improvement
in operating margins is projected to be
achieved following a detailed review
of the Group’s cost base. Further
improvements in operating margins
are anticipated over the first five years,
with 32.5% projected in 2017/18. The
improvement in margins is largely as a
result of increased revenues from the
development programme.
The Net Book Value of the Group’s
housing stock is forecast to increase
from £395.9m at the start of the
plan to £612.7m in 2017/18. Total
outstanding debt is projected to
increase from £416m to a peak of
£556.9m
The total funding that will be required
over the first 5 years is in excess of
£240m. Of this over £75m is in place
from facilities that are already agreed.
The Group also has the option to take
up £25m of Reserve Bonds by August
2014. Part of the funding requirement
during the first five years is needed to
re-finance existing facilities with just
over £70m falling due in 2017/18.
The consolidated cash flow projects a
strong position post 2018/19 when the
development programme is assumed
to finish.
This Business Plan has been prepared
in accordance with current UK GAAP.
The Financial Report Council (FRC)
has recently published FRS 102 which
will necessitate a full re-write of the
Statement of Recommended Practice
(SORP) for Housing Associations. The
changes announced in FRS 102 will
result in some presentational changes
to our accounts and the way Social
Housing Grant is accounted for in
future.
27
28
Appendix A
Longhurst Group
organisational chart
Friendship
CARE AND HOUSING
in partnership with
Beechdale Community Housing
Libra
Tr e a s u r y
29
Appendix B
Board and executive team
Executive team
30
Bob Walder
BSc FCIH
Group Chief
Executive &
Company
Secretary
Julie Doyle
DMS MBA MCMI
Deputy Chief
Executive &
Managing Director
of Spire Homes
Peter Osborne
Managing Director
Longhurst Group
Mike Hardy
BA (Hons)
FCIH MBA
Managing Director
of L&H Homes
Jonathan Driffill
BA (Hons), MSc,
DMS DipUPI,
MRTPI, MIOD
Managing Director
of Friendship Care
and Housing
Robert Griffiths
FCCA CMS
Group Executive
Director of
Financial Services
Board members
David Armes
Chairman
Longhurst Group
Tina McEwen
Vice Chairman
Longhurst Group
Roger Rudd
Independent
Member
John Robson
Independent
Member
Sidney
McFarlane MBE
Chairman of
L&H Homes
John Farrar
Chairman of
Spire Homes
Derek Young
MBE JP
Independent
Member
Lynda Bowen
Independent
Member
Cllr Ernie
Hendricks
Chairman of
Friendship
Care & Housing
Julie
Reader-Sullivan
Independent
Member
Anne
Adamwaite
Independent
Member
Rob Lankey
Chairman of Libra
Treasury
Bob Wilson
Independent
Member
31
Total 17,946 properties
Bromsgrove
6
1,263
Walsall
Cannock Chase
Solihull
1,560
51
3
Warwick
6
Rugby
164
Bedworth
ood
Rutland
37
105
Wellingborough
2
Kettering
Corby
72
3,415
Peterborough
South Kesteven
266
169
5
452
NORTH SEA
Revised April 2013
King’s Lynn and
West Norfolk
THE WASH
Fenland
South Holland
Boston
497
East Lindsey
601
699
1,557
No
Lin rth E
co ast
lns
hir
e
West Lindsey
North Kesteven
604
44
1,312
Northampton
Oadby and
Wigston
49
91
6
Melton
26
37
Rushcliffe
130
17
L
882
ln
o
inc
North
Lincolnshire
405
445
Newark and
Sherwood
312
Leicester
70 Blaby
13
Nuneaton and
25
North West
Leicestershire 258
202
Bassetlaw
501
rnw
Cha
152
h
ut hire
So bys
r
22
De
54 752
am
69
e
Erewash
79
35
155
gh
43
East
Staffordshire
Derby
33
97
xtow
L&H Homes/ Friendship Care
and Housing
36
Amber Valley
60
Bro
Friendship Care and Housing
Spire Homes
L&H Homes
Areas covered
Friendship Care and Housing
Spire Homes
L&H Homes
Longhurst Group
Main offices
ttin
am
No
gh
ng
min
dli
Bir
Mansfield
32
Ge
Eas
Northam t
ptonshire
Longhurst Group Stock owned and
managed by Local Authority
Appendix C
Appendix D
About us
The Longhurst Group of Companies represents a
united ambition to improve people’s lives across the
Midlands and East of England.
To put this business plan into context it is
important to understand who we are and how
we work.
Our mission is to deliver high quality housing
and care and support services that have
a positive impact on individuals and their
communities.
It’s our shared strength that enables our
subsidiary members the flexibility and
freedom to focus on their individual goals,
which fit with our Group-wide ethos and
shared values of working with integrity and
striving for excellence.
Longhurst Group’s federal structure
allows our member companies to do
what they do best. Each of our Group
members has the freedom to do what’s right
for their business and local community, while
prospering from the shared learning and
corporate services that come with being part
of a stable and influential group.
Our corporate services include:
• Strategic Support including
corporate advice on governance issues,
developing organisational excellence
and benchmarking performance
• Development and regeneration
including partnering to deliver new
affordable housing and access to our
technical consultancy arm
• Financial and business support
including funding strategies, treasury
management, business planning,
managing accounts and day-to-day
financial management
• Human resources including
management services and advice on
training and development
• Health and safety including a wide
range of accredited training courses
Three out of five of our members are
stock holding companies, managing
17,900 homes and working in more
than 40 local authority areas. Our group
purchasing power helps members to make
significant savings on their own operating
costs, leaving them to concentrate on
investing in frontline services.
• Sustainability including specialist
advice and training on sustainability
issues, including codes for sustainable
homes and housebuilding
High quality corporate services offer
Longhurst Group members a competitive
advantage in an increasingly crowded
market place – providing direct access to
skilled in-house specialists to fit with individual
organisational needs.
• Marketing and Communications
including research and analysis, digital
communications and web development,
graphic design services and copywriting
• ICT including procurement,
management and development
of systems
33
• The leasehold management
team at L&H Homes also offers
expertise in managing independent
living for older people and is
accredited by the Association of
Retirment Housing Managers
(ARHM).
Longhurst Group is proud to make
a positive difference to people’s
lives by providing support services
and affordable housing for all. We
anchor all we do to a socially responsible
34
approach, and remain not-for-profit,
ploughing surpluses back into the
business to cross-subsidise service
provision across the Group.
As a Group, we are stronger together
than the sum of our parts. The core
strength of our business opens new doors
for our member companies, offering a
stable base from which we can all grow
and achieve our goals together
Appendix E
Achievements
Longhurst Group has shown great fortitude
throughout a period of considerable change
and sector uncertainty. Summarised are a
selection of recent achievements that we’re
proud to be celebrating.
Excellence
• Spire Homes was awarded 2 star
accreditation by Best Companies as
a top employer and achieved national
recognition ranking 20th on the Sunday
Times Top 100 Companies to Work for
list (not-for-profit).
• Friendship stood out from the crowd
and was named winner of the CIH Best
Practice Award (West Midlands) for their
submission which focussed on ‘Valuing
Our Workforce’ and engaging with staff.
• L&H Homes maintained the Customer
Service Excellence Standard (awarded
by the Cabinet Office) for another year
after their assessment at the beginning of
2013.
Growth
• As part of the capital market issue and
loan restructuring process, the Group
established a special purpose funding
vehicle. Libra (Longhurst Group) Treasury
plc, was incorporated as the 5th member
company in May 2012 to facilitate these
new borrowing arrangements. Libra
manages the treasury arrangements and
associated security for the bond and
new loan facilities on behalf of two of our
member companies, L&H Homes and
Spire Homes.
• In 2012 Longhurst Group Ltd completed
a significant development programme
of 265 homes on behalf of the member
companies. A further 141 homes were
also completed on behalf of the Blue
Skies Consortium and local authority
customers, working in partnership
with Nottingham Community Housing
Association (NCHA).
Communication
• Conveying messages surrounding
the Government’s welfare reform has
remained the priority over the past 12
months with all three stock holding
member companies developing and
delivering detailed communications
strategies to safeguard tenants and
Longhurst Group’s business interests.
• Refreshed websites have been launched
across the Group with increased
opportunity for customer and stakeholder
engagement; each site has been tailored
to audience needs and offers the chance
to ‘do it online’ e.g. reporting repairs,
request statements and pay rent.
• Expansion into multi-media
communications has been rapid in
2012/13 with member companies
producing videos and the parent
company an infographic to engage more
effectively with a wider demographic. This
multi-media content has been shared
via Group websites and social media
accounts.
35
Longhurst Group Ltd
Leverett House, Gilbert Drive, Endeavour Park, Boston PE21 7TQ
Please call us to discuss the possibilities that a shared future could bring: 0845 30 90 700
For further information please contact Mandy Upsall on 01205 319618
www.longhurst-group.org.uk
Tweet us @longhurstgroup
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