Funding challenge for social housing
THE number of social housing providers with borrowings of more than £1bn has doubled to 10 since last year, according to an annual review of social housing by accountancy firm Beever and Struthers.
The report also found the total amount of net long term debt of the top 100 housing associations stands at £38.1bn.
It says the sector faces “enormous challenges” as funding for new schemes is more uncertain due to the shortage of capital grant and bank loans. In addition, cuts to the welfare budget mean income streams are uncertain.
Beevers’ report fround that only 23 of the top 100 providers show service charge surplus in their latest accounts. Eight of the top 60 groups each report service charge losses of more than £5m.
It also found the total pension liabilities in the top 100 is £992.9m. There are pension liabilities of more than £40m in four accounts and one third have pension liabilities of more than £10m.
Chris Porritt, head of social housing at Beever and Struthers, said: “Our survey shows that RPs are facing challenges across a range of areas. The decline in the availability of finance has to be the most significant challenge, but exploring more innovative ways of meeting housing need comes with increased risk.
“Following the regulatory change with the handover from the Tenants Services Authority to the Homes and Communities Agency, three new economic standards came into force on April 1, 2012 namely governance and viability, rent and value for money. Registered provider boards are required to demonstrate to stakeholders how they are meeting these standards.
“Driving for efficiency and demonstrating value for money will be major challenges on the cost side, with pressures of welfare reform and rent affordability on the income side. This means that registered providers will need to evaluate whether their objectives – particularly their growth objectives – are still achievable.”
