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Perceived Risks

Extracts from 2012 Annual Report:

The removal of the Supporting People "ring-fence,"[1] coupled with extreme funding cuts faced by local authorities, has cast doubt on the future of many supported housing and social care services. At Ability we place faith in maintaining the quality and value for money of services and being able to demonstrate positive outcomes for customers and commissioners.

Exhibit 8.5 Financial Performance of Ability Housing Association

Panel A: Income and Expenditure Account

Income and expenditure account (£ million)

2012

2011

2010

2009

2008

Turnover

8.8

8.6

8.6

7.4

5.6

Operating costs and cost of sales

(7.6)

(7.4)

(7.3)

(6.5)

(4.9)

Operating surplus

1.2

1.2

1.3

0.9

0.7

Net interest charge

(0.4)

(0.2)

(0.1)

(0.1)

(0.1)

Surplus on disposal of assets

0.1

0.4

0.1

Taxation

Surplus for the year after tax

0.9

1.4

1.2

0.8

0.7

Panel B: Balance Sheet

Balance sheet (£ million)

2012

2011

2010

2009

2008

Housing properties at cost less depreciation & grant

18.9

16.7

13.0

8.8

7.2

Other tangible fixed assets and investments

1.1

1.1

1.1

0.5

0.5

Net current assets

0.8

0.2

0.8

0.4

0.3

20.7

20.0

14.9

9.7

8.0

Creditors due after more than

(9.9)

(8.1)

(6.6)

(2.5)

(1.6)

one year

Other long-term liabilities

_

10.8

9.9

8.3

7.2

6.4

We are pleased therefore to have been able to agree with local authorities in London Borough of Hillingdon and West Sussex extensions to some of our most valuable services. Sadly this has not always been the way and, following a competitive tendering exercise, some of our floating support services in Slough have been transferred to another provider…

Again this year we have seen the loss of some of our supporting people contracts with others reducing in value. We expect further reductions in the years ahead. By winning new business through competitive tender processes we have been able to replace a part of the lost income.

The summarized financial statements of Ability Housing Association for the previous five years are presented in Exhibit 8.5.

  • [1] Ring-fencing occurs when a portion of a company's assets or profits are financially separated without necessarily being operated as a separate entity. This might be for regulatory reasons, creating asset protection schemes with respect to financing arrangements, or segregating into separate income streams for taxation purposes. Ring-fencing guarantees that funds allocated for a particular purpose will not be used for anything else. Source: oxforddictionaries.com/definition/english/ring-fence. Note: The removal of the Supporting People ring-fence allows local authorities to divert to other activities the money allocated to them for this program. The result has been severe cuts in the total Supporting People funding.
 
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