Download Sample Financial Projections 2010 2011 - DOC by bqh15065

VIEWS: 27 PAGES: 18

More Info
									Local Authority Chief Housing Officers

2 February 2010


Dear Sir/Madam


                Scottish Housing Quality Standard – mid-point update

We wrote to you last May to advise that we were deferring the 2009 SHQS update exercise
to give landlords time to reflect the impact of the economic downturn in their business and
asset management plans. The Scottish Government intends to consult on additional
guidance on the Standard this spring for publication this summer, including new guidance on
exemptions. Landlords will want to use this important information to review their stock
improvement strategy and feed the outcome into their broader business planning. To allow
time for this we will conduct our comprehensive review of progress on the SHQS in summer
2011 with a more limited update in 2010.

I attach at Annex A the information we plan to gather in 2011, subject to amendment based
on the outcome of the above-mentioned consultation. It is based on the templates and
definitions used for the appendices to the original Standard Delivery Plans, so you will
already be familiar with most of the measures. We hope this early indication of our
requirements will help you to prepare for the submission in 2011. And at Annex B you will
find some guidance on stock condition information, including a sample size calculator.

For the 2010 report please complete the boxes highlighted in yellow (we will email these in
excel format to you and you can also download a copy from our website1) and return it to us
by 15 September. If you can provide any figures for the measures that are not highlighted,
we will take account of this in our 2010 update.

We will collect the same information from Registered Social Landlords at the same time, so
that we will have comparable information on the whole of the rented sector’s progress
towards SHQS. In accordance with our Memorandum of Understanding between SHR and
the Scottish Government2, we may share this information with officials in the Housing and
Regeneration Directorate of Scottish Government to help inform housing policy and to
reduce the regulatory burden on landlords.




1

www.scottishhousingregulator.gov.uk/stellent/groups/public/documents/webpages/1shr_housingquality.hcsp#T
opOfPage
2

www.scottishhousingregulator.gov.uk/stellent/groups/public/documents/webpages/shr_memorandumofund_ia4a
9675c4.pdf
                      Highlander House, 58 Waterloo Street, Glasgow, G2 7DA
                               Tel: 0141 271 3810 Fax: 0141 221 0117
                                 www.scottishhousingregulator.gov.uk



If you would like to discuss this letter or related issues, please contact Ana Richardson,
Business Analyst on 0141 305 4108.

Yours sincerely




Michael Cameron
Acting Chief Executive




                    Highlander House, 58 Waterloo Street, Glasgow, G2 7DA
                            Tel: 0141 271 3810 Fax: 0141 221 0117
                             www.scottishhousingregulator.gov.uk



                                                                   Annex A




       The Standard Delivery Plan mid-point update

                     Guidance for landlords
 Introduction
 Guidance
 Table 1: Stock condition information
 Table 2: Projected stock failure rate
 Table 3: Planned investment to meet SHQS
 Table 4: Financial assumptions
 Table 5: Summary of income and expenditure
 Table 6: Capital expenditure
 Table 7: Exemptions




           Highlander House, 58 Waterloo Street, Glasgow, G2 7DA
                   Tel: 0141 271 3810 Fax: 0141 221 0117
                    www.scottishhousingregulator.gov.uk



                                                                                     Annex A


                                         Introduction

We monitor your progress towards the SHQS by analysing and comparing data from
Standard Delivery Plans (SDPs), annual progress returns, and other information
sources available to us such as inspection findings. The Scottish House Condition
Survey also provides information on progress at national and local authority level and
for other tenures.

Your original SDP gave us comprehensive information about your stock and plans for
meeting the Standard but we recognise that your circumstances may have changed
since then: the economic slowdown has affected financial projections, you may have
better stock condition information and/or revised assumptions about property sales
and development rates.

The annual information updates we receive from you are limited in scope and are
different for local authorities and RSLs. We want to move to a position where we get
comparable information across the social housing sector that assures us that
sufficient progress is being made towards achieving the Standard by 2015. This
document contains guidance on the format and timing of the update exercise.

The forms we would like you to complete by 2011 are attached to this guidance.
They are based on the appendices for the original SDP, with the addition of free text
boxes if you wish to add any comments or explanations. And we have added some
                                                                          3
new measures, notably relating to exemptions. The Scottish Government is due to
publish clarification and guidance on SHQS issues, including exemptions, later this
year. We adjust our forms as a result of the outcome of the consultation.

To allow time for you to set up the required recording systems we will accept a
reduced return in 2010, consisting of the boxes shaded yellow. But if you can
provide a fuller return it will help us in our assessment. The principles and definitions
                                                                    4
in the guidance that was published for the original SDPs in 2004 apply to this return.

If you have any questions relating to this document, you can email me on
ana.richardson@scottishhousingregulator.gsi.gov.uk or call me on 0141 305 4108.




3
    http://www.scotland.gov.uk/Topics/Built-Environment/Housing/16342/shqs
4

www.scottishhousingregulator.gov.uk/stellent/groups/public/documents/webpages/1shr_housingquality
.hcsp
                  Highlander House, 58 Waterloo Street, Glasgow, G2 7DA
                           Tel: 0141 271 3810 Fax: 0141 221 0117
                             www.scottishhousingregulator.gov.uk



                                                                                  Annex A


                                        Guidance
      1. Stock condition information (table 1)
      We want to assess whether your return is based on reliable stock information.
      We have published guidance on our website on what constitutes a good quality
      sample survey, together with a tool to help you calculate the number of properties
      you need to have surveyed recently in order to have a reliable stock condition
      database.

      2. Financial information (tables 3 – 6)
      All monetary values should be in constant price/real values (i.e. in today’s prices);
      don’t adjust prices to take account of inflation in future years.

      In table 3 and in the first row of table 6, report only investment for SHQS
      compliance. If you do work that is only partly for SHQS, please estimate the cost
      that relates to SHQS. For example, if you refurbish 200 kitchens which only need
      an additional socket to comply with the Standard, record how much you would
      have had to spend on installing the additional sockets only. And record the
      remainder of the investment in the second row of table 6 (Other capital
      investment).

      3. Exemptions (table 7)
      Properties may be exempted from some requirements of the Standard under
      certain circumstances. Exemptions may be granted on the grounds of physical
      barriers, legal restrictions or disproportionate cost. For example, as it states in the
      Scottish Government’s Letter to landlords confirming the content of the Standard
      of February 2004: ‘In some types of housing, it is not possible to install cavity wall
      insulation; in other cases installation may be prohibited by building regulations
      because cavity wall insulation would lead to other problems such as water
      penetration and dampness.’5 And temporary exemptions may also be granted if
      householders stand in the way of improvements, such as when private owners
      won’t or can’t pay their share of improvements to common parts of properties.

      Exemptions will only be granted on receipt of sufficient evidence of the relevant
      circumstances and the measures you have taken to try to address or circumvent
      the barriers to compliance. And exemptions will only apply to the part of the
      Standard that a property cannot meet; you are still obliged to bring every other
      part of the property up to the Standard. The Scottish Government is due to
      publish guidance on SHQS in early 2010, which will clarify the criteria and the
      process for applying for exemptions.


      4. Timetable
      Send completed tables to ana.richardson@scottishhousingregulator.gsi.gov.uk
      by Wednesday 15 September 2010. If you have any difficulty completing the
      return, whether in terms of specific measures or the timing, please call Ana
      Richardson, Business Analyst, Scottish Housing Regulator, on 0141 305 4108.




5
    http://www.scotland.gov.uk/Resource/Doc/47210/0030182.pdf
                      Highlander House, 58 Waterloo Street, Glasgow, G2 7DA
                               Tel: 0141 271 3810 Fax: 0141 221 0117
                                www.scottishhousingregulator.gov.uk



Table 1: STOCK CONDITION INFORMATION

YOUR LAST STOCK CONDITION SURVEY:

When was your stock last surveyed for SHQS compliance (date
completed)?
Who did the survey (contractor or in-house)?

If you used a contractor, who was it?

What proportion of stock was physically surveyed (dwellings visited
by a surveyor as a percentage of all stock)?

YOUR STOCK CONDITION DATABASE:

Does your stock database record compliance by individual property?

Does your stock database record compliance by SHQS criterion
and/or element?
NEXT STOCK CONDITION SURVEY:

When will you next do a stock condition survey?

Who will do the survey (contractor or in-house)?

What proportion of stock will be surveyed (number of dwellings as a
percentage of all stock)?
COMMENTS: If you haven’t surveyed every property, please use this space to
describe your sampling methodology and how you scaled up the results.




                Highlander House, 58 Waterloo Street, Glasgow, G2 7DA
                        Tel: 0141 271 3810 Fax: 0141 221 0117
                         www.scottishhousingregulator.gov.uk



Table 2: PROJECTED STOCK FAILURE RATE

How many of your properties do not currently comply with the SHQS and how many do you project will not comply in future years? Exclude
anticipated exemptions. If possible, break this down to show the criteria by which they fail.

DWELLINGS FAILING SHQS BY CRITERION (as at 31 March each year)
                                                          2010              2011          2012         2013         2014          2015
Below Tolerable Standard
Free from Serious Disrepair
Energy Efficiency
Modern Facilities and Services
Healthy, Safe & Secure

Dwellings failing one criterion only
Dwellings failing two or more criteria
Dwellings failing the Standard
Total stock number
% of stock failing the Standard

Comments & explanations




                                           Highlander House, 58 Waterloo Street, Glasgow, G2 7DA
                                                   Tel: 0141 271 3810 Fax: 0141 221 0117
                                                    www.scottishhousingregulator.gov.uk



Table 3: PLANNED INVESTMENT TO MEET SHQS

How much did you invest on SHQS-related improvements to your stock in the year to 31 March 2010? How many properties were improved
(i.e. brought nearer to the Standard) as a result? And how much will you invest in such improvements between then and 2015? Show this by
element if you can and by criterion as a minimum. In the Totals row please show the number of properties for which one or more
improvements were made. See the guidance (note 1) for more information.

                                                                                                   Actual to 31/3/10     Projected from 1/4/10
                                                                                                                               to 31/3/15
                                       SHQS
SHQS 5 broad criteria                 element           SHQS 53 individual elements                Homes     Invested     Homes       Invested
                                        code                                                      improved      (£)      improved        (£)
1. Below tolerable standard
                                         1
(1 element)

                                    Primary building elements (4 elements)
2. Free from serious disrepair          2       Internal floor structure
(20 elements)
                                        3       Foundations
                                        4       Roof structure
                                        5       Wall structure
                                    Secondary building elements (14 elements)
                                        6       Attached garage
                                        7       Balconies
                                        8       Chimney
                                        9       Stairs etc
                                       10       Access decks/balustrades
                                       11       Damp proof course
                                       12       Drainage
                                       13       External wall finish
                                       14       Flashings
                                       15       Gutters
                                          Highlander House, 58 Waterloo Street, Glasgow, G2 7DA
                                                   Tel: 0141 271 3810 Fax: 0141 221 0117
                                                    www.scottishhousingregulator.gov.uk



                                     16          Internal Stairs
                                     17          Paths, paved areas
                                     18          Roof covering
                                     19          Common access stairs/landings
                                     20          Windows
                                     21          Common rooflights
                             Free from serious disrepair

                                     22         Cavity wall insulation
3. Energy efficiency                 23a        Full central heating
(5 elements)                         23b        Efficient central heating
                                      24        100mm minimum loft insulation
                                      25        Hot water tank and pipe insulation
                                                Additional energy efficiency measures, if required
                                     26
                                                to meet NHER 5 or SAP 50/60
                                  Energy efficiency

                                                Bathroom Condition: Hot & cold to wash hand
                                     27
                                                basin
4. Modern facilities & services      28         Bathroom Condition: Hot & cold to bath/shower
(11 elements)                        29         Bathroom Condition: Bath/shower
                                     30         Bathroom Condition: Main WC
                                     31         Bathroom Condition: Wash hand basin
                                     32         Kitchen Condition: Hot & cold to sink
                                     33         Kitchen Condition: storage/worktops
                                     34         Kitchen : Safe working arrangements
                                     35         Kitchen Condition: Sink
                                     36         Kitchen : Adequate sockets
                                     37         Kitchen Condition: Storage
                            Modern facilities and services
                                           Highlander House, 58 Waterloo Street, Glasgow, G2 7DA
                                                   Tel: 0141 271 3810 Fax: 0141 221 0117
                                                    www.scottishhousingregulator.gov.uk



                                 38        Healthy: External noise insulation
                                 39        Safe: Bin stores
                                 40        Secure: Common external doors
5. Healthy, safe and secure      41        Secure: Common door entry system
(16 items)                       42        Secure: Individual dwelling external doors
                                 43        Secure: Doors
                                 44        Safe: Electrical system
                                 45        Safe: Halls
                                 46        Healthy: Lead free pipework
                                 47        Safe: Lifts
                                           Healthy: Mechanical ventilation in kitchen and
                                 48
                                           bathroom
                                  49       Safe: Public lighting (internal and external)
                                  50       Safe: Refuse chambers
                                  51       Safe: Smoke alarms
                                  52       Safe: Gas/oil system
                                   9
                                           Safe:Stairs
                              (repeated)
                         Healthy, safe and secure
                                  TOTAL
                               Demolitions
Comments and explanations




                                      Highlander House, 58 Waterloo Street, Glasgow, G2 7DA
                                              Tel: 0141 271 3810 Fax: 0141 221 0117
                                               www.scottishhousingregulator.gov.uk



Table 4: FINANCIAL ASSUMPTIONS

STOCK NUMBERS                                   2009/10   2010/11   2011/12   2012/13   2013/14   2014/15
Stock lost through Right to Buy
Stock lost through demolition
Other stock lost
Stock gained through development
Other stock gain
Stock number at year end (31 March)
Average stock number for the year
RENT
Average weekly rent charged per unit (£)
OTHER ASSUMPTIONS
Management and supervision costs per unit (£)
Responsive repairs & maintenance per unit (£)
Cyclical repairs & maintenance per unit (£)
Income from Right to Buy per unit sold (£)

Comments & explanations




                    Highlander House, 58 Waterloo Street, Glasgow, G2 7DA
                            Tel: 0141 271 3810 Fax: 0141 221 0117
                             www.scottishhousingregulator.gov.uk



Table 5: SUMMARY OF INCOME AND EXPENDITURE

                                           2009/10   2010/11   2011/12   2012/13   2013/14   2014/15
INCOME                                      £000s     £000s     £000s     £000s     £000s     £000s
Gross rental income
Void losses
Bad debts
Net rental income
Other Income
Total Income

                                           2009/10   2010/11   2011/12   2012/13   2013/14   2014/15
EXPENDITURE                                 £000s     £000s     £000s     £000s     £000s     £000s
Staff Costs
Other management costs
Responsive repairs & maintenance
Cyclical repairs & maintenance
Capital Works funded by Current Revenue
Loan Charges
Other expenditure
Total Expenditure

Surplus / (Deficit) for Year

Reserves brought forward
Net transfers from other reserve funds
Reserves carried forward

Comments & explanations




                    Highlander House, 58 Waterloo Street, Glasgow, G2 7DA
                            Tel: 0141 271 3810 Fax: 0141 221 0117
                             www.scottishhousingregulator.gov.uk



Table 6: CAPITAL EXPENDITURE

Include here capitalised maintenance costs and revenue expenditure on
planned maintenance

                                          2009/10   2010/11    2011/12     2012/13    2013/14       2014/15
                                          £000s     £000s     £000s       £000s      £000s          £000s
                                      6
    Capital investment to meet SHQS
    Other capital investment
    Total Capital Investment

    SOURCES OF FUNDING for above
    capital investment:
    Rental income / CFCR
             7
    Borrowing
    Right to Buy receipts
    Other income (please specify below)
    Total Funding

    DEBT:
    Opening debt
    New borrowing
    Debt repayment
    Debt carried forward
    Debt per house

    Comments & explanations




6
  This should correspond to the investment columns in Table 3. See the guidance (note 1) for more
information.
7
  From new and existing facilities
                   Highlander House, 58 Waterloo Street, Glasgow, G2 7DA
                             Tel: 0141 271 3810 Fax: 0141 221 0117
                                www.scottishhousingregulator.gov.uk



Table 7: Exemptions
Record here the number of properties for which you plan to apply for an exemption by element together with a brief description of the reason for
needing an exemption. See the guidance (note 2) for more information on exemptions.

                                                                                                             Exemptions anticipated
                                                    SHQS                                           No. of      No. of
SHQS 5 broad criteria                              element     SHQS 53 individual elements       temporary   permanent           Reason
                                                     code                                       exemptions   exemptions
1. Below tolerable standard
                                                      1
(1 element)
                                                 Primary building elements (4 elements)
                                                      2       Internal floor structure
2. Free from serious disrepair (20 elements)          3       Foundations
                                                      4       Roof structure
                                                      5       Wall structure
                                                 Secondary building elements (14 elements)
                                                      6       Attached garage
                                                      7       Balconies
                                                      8      Chimney
                                                      9       Stairs etc
                                                     10       Access decks/balustrades
                                                     11       Damp proof course
                                                     12       Drainage
                                                     13       External wall finish
                                                     14       Flashings
                                                     15       Gutters
                                                     16       Internal Stairs
                                                     17       Paths, paved areas
                                                     18       Roof covering
                                                     19       Common access stairs/landings
                                                     20       Windows
                                             Highlander House, 58 Waterloo Street, Glasgow, G2 7DA
                                                     Tel: 0141 271 3810 Fax: 0141 221 0117
                                                      www.scottishhousingregulator.gov.uk



                                          21        Common rooflights
                                          22        Cavity wall insulation
                                          23a        Full central heating
3. Energy efficiency                      23b        Efficient central heating
(5 elements)                               24        100mm minimum loft insulation
                                           25        Hot water tank and pipe insulation
                                                     Additional energy efficiency
                                           26        measures, if required to meet
                                                     NHER 5 or SAP 50/60
                                                     Bathroom Condition: Hot & cold to
                                           27
                                                     wash hand basin
                                                      Bathroom Condition: Hot & cold
                                           28
                                                     to bath/shower
                                                      Bathroom Condition:
                                           29
                                                     Bath/shower
4. Modern facilities & services            30         Bathroom Condition: Main WC
(11 elements)                                         Bathroom Condition: Wash hand
                                           31
                                                     basin
                                                      Kitchen Condition: Hot & cold to
                                           32
                                                     sink
                                                      Kitchen Condition:
                                           33
                                                     storage/worktops
                                                      Kitchen : Safe working
                                           34
                                                     arrangements
                                           35        Kitchen Condition: Sink
                                           36         Kitchen : Adequate sockets
                                           37         Kitchen Condition: Storage
5. Healthy, safe and secure                38         Healthy: External noise insulation
(16 items)                                 39         Safe: Bin stores
                                           40         Secure: Common external doors
                                                      Secure: Common door entry
                                           41
                                                     system
                                           42         Secure: Individual dwelling
                                  Highlander House, 58 Waterloo Street, Glasgow, G2 7DA
                                          Tel: 0141 271 3810 Fax: 0141 221 0117
                                            www.scottishhousingregulator.gov.uk



                                                external doors
                                     43          Secure: Doors
                                     44          Safe: Electrical system
                                     45          Safe: Halls
                                     46          Healthy: Lead free pipework
                                     47          Safe: Lifts
                                                 Healthy: Mechanical ventilation in
                                     48
                                                kitchen and bathroom
                                                Safe: Public lighting (internal and
                                     49
                                                external)
                                      50         Safe: Refuse chambers
                                      51         Safe: Smoke alarms
                                      52         Safe: Gas/oil system
                                 9 (repeated)   Safe: Stairs
                            TOTAL
Comments and explanations




                             Highlander House, 58 Waterloo Street, Glasgow, G2 7DA
                                     Tel: 0141 271 3810 Fax: 0141 221 0117
                                      www.scottishhousingregulator.gov.uk



                                                                                      Annex B


Stock Condition Information

1.      Guidance was issued by Communities Scotland in 2004 to accompany
the submission of Standard Delivery Plans:
http://www.scottishhousingregulator.gov.uk/stellent/groups/public/documents/
webpages/shr_shqs_deliveryplanguidance.pdf

This guidance is generally still valid today.

2.     Chapter 3 describes the stock condition information that landlords
should hold, and it makes a distinction between the information that is
required for the monitoring of SHQS compliance and the information that
landlords will usually need to manage the effective delivery of improvements.
This note clarifies the information requirements for effective monitoring
(paragraphs 3.1 to 3.4 and 3.9 to 3.10 of the 2004 guidance).

Stock condition information required for the monitoring return to SHR:

3.     Landlords must be able to demonstrate that their monitoring return is
based on reliable stock information. This may be demonstrated in different
ways, but for most landlords the likely source of such stock condition
information will be a ‘good quality sample survey’ (3.2) and the expectation is
that the survey meets ‘accepted professional quality standards’ (3.10).

4.       Good quality in this context means:

        The sample is drawn from a complete listing of the landlord’s
         dwellings;
        The sample is well structured8, selected in an unbiased way and
         large enough to deliver a reasonable degree of accuracy (see 6
         below);
        All properties in the sample have been visited9 in the past two
         years to assess (at minimum) elements that can deteriorate or can be
         changed by the tenant;
        If an element can be assessed by reference to building design
         features or improvement records then these records should be
         complete and improvement records should be recent;
        The surveys are undertaken by qualified staff or contractors that
         have been trained in the application of the Scottish Housing Quality
         Standard;
        The sampled property, and not a substitute, should be contacted
         repeatedly if necessary until access is gained. The number of
         properties where no access was achieved should be reported and be
         small; and

8
  For example if an organisation has 1500 units and wants to draw a sample of 300, sort in address
order and select every 5th; some larger organisations may wish to use stratified sampling
9
  Units in the sample should not be ‘cloned’
                    Highlander House, 58 Waterloo Street, Glasgow, G2 7DA
                               Tel: 0141 271 3810 Fax: 0141 221 0117
                                www.scottishhousingregulator.gov.uk



                                                                                          Annex B


        The sample should be grossed10 up to give figures for all the
         housing stock.

5.     Many landlords have undertaken recent stock condition surveys and
these can be the basis of the return, provided SHR is assured that they are of
good quality for monitoring purposes.

6.     We would consider a 5% error margin a reasonable degree of
accuracy, i.e. 2.5% too high or 2.5% too low. The spreadsheet attached
contains a calculator that can be used to find the sample size required,
depending on the size of your organisation and your initial rough estimate of
the percentage of properties that meet the Standard.

7.    Required sample sizes are in the range of 600 -1,500 properties
depending on stock. This means in practical terms that all landlords with fewer
than 500 units will require a 100% survey of their stock.

8.     Landlords with a high percentage of modern or improved stock may be
able to use building design or improvement records to demonstrate
compliance for some elements of the Standard. A visit will still be required to
check items subject to deterioration.

                                        _________________________

Sample size calculator:

Note that the sample size relates to the number of properties for which
information is collected. So you need to start with a slightly larger set to take
account of properties where you can’t gain access.




Sample size calulator




10
  For the example in Note 1, and assuming that access was gained to 250 units, the findings should
simply be multiplied by 6; if a more complicated sample is chosen then appropriate statistical methods
should be used
                   Highlander House, 58 Waterloo Street, Glasgow, G2 7DA
                              Tel: 0141 271 3810 Fax: 0141 221 0117
                                www.scottishhousingregulator.gov.uk




								
To top