In addition to the Group’s key risks outlined above, wider risks facing the sector include:
Continuing Governmental Policy changes
The ongoing reforms of the benefits and welfare system will continue to be a risk for Providers to manage. The 2015 an nouncements
regarding the 4 year rent reduction and Local Housing Allowance caps have required Providers to significantly reconsider their approaches
to service delivery. Providers to income collection pressures which they will need to equip themselves to manage.
Accounting changes
The new Statement of Recommended Practice (SORP) has been released and will be applicable for year ended 31 March 2016. The
main changes in the SORP relate to the implementation of International Accounting Standards under FRS 102. The Group has undertaken
an early impact assessment to understand the effects of the implementation of the new standards.
Pension scheme liabilities
Under the new SORP it is likely that past service deficit contributions in respect of defined benefit pension funds for multi-employer
schemes will be required to be brought ‘on Balance Sheet’. The economic performance of pension assets has deteriorated due to the
downturn in economic conditions, resulting in pension scheme liabilities exceeding the value of these assets significantly.
Value for Money
There is a clear and ongoing expectation from the HCA that Providers clearly demonstrate value for money which is clearly linked to
corporate objectives and return on assets. The effective and transparent application of finite resources is increasingly important under the
current regulatory focus.
Financial markets: interest rates, inflation and deflation
Performance of the financial markets can impact on business performance – both rent increases and debt management costs can be
directly influenced by economic market movements.
Contraction of the public sector
Public spending and associated public services continue to face funding pressure. In light of this it is increasingly important that the social
housing and care sectors position themselves appropriately in context of these pressures.
Availability and pricing of funding from the banking sector
The type and nature of new funding for the social housing sector continues to change. Bank finance continues to be a source of short
to medium term funding with ‘private placement’ finance becoming increasingly available to the sector. New finance has recently been
secured by the Group and the long term funding strategy remains under constant review as both the financial markets sources of funding
continue to evolve.
Human Resources: staff recruitment and retention
The ability to recruit and retain skilled carers is an ongoing pressure for all providers in the care and support business. This can impact on
both the cost and consistency of service delivery and is therefore a risk which is closely monitored on an ongoing basis.
Health and safety
The Board acknowledges its duty of care to employees, customers and residents in respect of all matters relating to health, safety and the
environment. A dedicated member of staff, operating under the supervision of the Group Finance Director, regularly reviews and updates
relevant policies and procedures, supervises risk assessments and provides staff with training and support on health and safety issues. During
2015/16 a number of health and safety audits and inspections have been undertaken to ensure compliance with the required standards and
legislation is maintained.
Financial Statements 2016
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