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DARLINGTON BOROUGH COUNCIL

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					                                                                    Appendix 2

 Key assumptions

 All analyses are at 2004/05 prices, with starting stock numbers at 1st April 2004. Key
 assumptions about volume and cost behaviour and inflation plus movements year on
 year are common to all options. These assumptions are for the baseline analysis
 which is intended to represent the current position projected forward subject to
 external influences. Decisions able to be taken on budget behaviour are contained
 within the sensitivities and scenarios.

 Description                              Amount    Comments
 Stock numbers 1/4/04                         6,295
 Average rent (52 week basis) 2004/05         52.04
 Average EUV at January 2001                 45,303
 Void rate                                   3.00% Constant through 30 years
 Bad debt rate                               0.91% Based on current budget
                                                    provision for 30 years
 Management costs real increase                 1% Per annum for 5 years; no
                                                    reductions for RTB sales in base
 Repairs costs real increase                    1% Per annum for 5 years; no
                                                    reductions RTB sales in base
 All revenue budgets at 2004/05 budget level

Stock Condition Survey Capital Investment needs
Fees added to raw profiles                                  8%
£m                                        -2010/11 -2033/34
                                          7 years 30 years

Minimum Standard                                     59.3     164.2 Raw profile
                                                     62.9     165.6 Incl fees adj for RTBs

Reduced Standard                                     74.8     203.0 Raw profile
                                                     79.2     204.9 Incl fees adj for RTBs

Headline Standard                                    87.0     241.6 Raw profile
                                                     92.2     243.5 Incl fees adj for RTBs

Southend Standard                                    83.5     222.8 Raw profile
                                                     88.5     224.8 Incl fees adj for RTBs
Baseline modelling against headline standard

Description                               Amount      Comments
Retention / ALMO
Real increase in national guideline rents     1.50% Per annum to 2011/12
Target rent 2004/05                            53.83
Target rent 2011/12 (2004/05 prices)           59.15
Real increases in rent 2004-2011/12            2.0%
Right to Buy sales                                50 Reducing by 5& per year
Use of RTB sales receipts for HRA                 Nil All years
Level of Supported Capital Expenditure      £1.588m Approx 55% allocated for HRA
to support HRA expenditure 2004/05                    purposes   in  2004/05,  nil
and 2005/06 only                                      thereafter
Major Repairs Allowance real increases           0%
M&M allowances real increases                    8% 2005/06
M&M allowances real increases                    2% Per annum 2006/07-2011/12
Stock Transfer
Real increase in national guideline rents   0.50% Per annum to 2011/12
Target rent 2004/05                          58.05
Target rent 2011/12 (2004/05 prices)         60.11
Real increases in rent 2005-2011/12          2.1% Assumes no convergence of
                                                   formulae – note recent review
                                                   proposes use of this formula for
                                                   all options
Diseconomy of scale overhead                  10%
VAT on revenue funded repairs               11.0%
VAT on capital repairs                      17.5%
Discount rate                                  7%
                                                                          Appendix 3
BASELINE OUTPUTS – revenue and capital

Revenue

                                 1       2       3       4       5       6       7       8
                           2004.05 2005.06 2006.07 2007.08 2008.09 2009.10 2010.11 2011.12

Dwelling rent income        16,458     16,656      16,861    17,071    17,289    17,514    17,746    17,808
Less Bad Debt Provision       -150       -150        -150      -150      -150      -150      -150      -150
Other income                 3,221      3,221       3,221     3,221     3,221     3,221     3,221     3,221
Interest income                500        651         752       864       975     1,089     1,204     1,327
Housing Subsidy               -314        -20        -217      -464      -701      -939    -1,178    -1,240
Income                      19,715     20,358      20,467    20,542    20,634    20,735    20,843    20,966
Management & Other          -8,154     -8,047      -7,941    -8,020    -8,100    -8,181    -8,181    -8,181
Repairs & Maintenance       -4,491     -4,536      -4,581    -4,627    -4,673    -4,720    -4,720    -4,720
Capital Charges             -1,511     -1,511      -1,511    -1,511    -1,511    -1,511    -1,511    -1,511
Major Repairs Allowance     -4,424     -4,382      -4,347    -4,314    -4,282    -4,251    -4,222    -4,194
Expenditure                -18,580    -18,476     -18,380   -18,472   -18,566   -18,663   -18,634   -18,606
Surplus / (Deficit)          1,135      1,882       2,087     2,070     2,068     2,072     2,209     2,360
** Operating account           650      1,244       1,344     1,211     1,094       983     1,005     1,033



Capital (Stock Condition Survey)

                           Year 1    Yrs 1-7 Yrs 1-10 Yrs 1-20 Yrs 1-30
                           2004.05 - 2010/11 - 2013/14 - 2023/24 - 2033/24

Total programme             15,446      92,177      115,969    172,274    243,493

Capital resources            7,993      33,791       46,294     86,581    125,335
Revenue surpluses                0           0            0          0          0
Prudential Borrowing             0           0            0          0          0
Total resource potential     7,993      33,791       46,294     86,581    125,335

Excess / shortfall           -7,453     -58,386      -69,675    -85,693 -118,158

				
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