Business Plan

Transcription

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2 Contents 1. Introduction 2. Vision, Outcomes, Values and Aim 3. Our Operating Context 4. Our Achievements 5. Priorities and Plans Financial Plan 7. Supporting our Business 8. Review 9. Appendix 1: Delivery Plan 2014/ Appendix 2: SWOT and PESTLE Analysis 11. Appendix 3: Operational Budget 2014/ Appendix 4: Investment Programme 2014/ Appendix 5: 30 Year Financial Projections

3 page: 1 1. Introduction 1.1 The business plan is the key document for ; it provides strategic direction for the company, forms an integral part of the performance management framework, and helps to ensure that we remain a financially viable, fit for purpose organisation aiming to improve services and outcomes for our customers. 1.2 The business plan demonstrates how we will achieve our vision and priorities over the next five years. It confirms how we are responding to the environment in which we operate to improve services, the quality of our housing offer and to help create sustainable communities and places across Inverclyde. 1.3 As a major housing and services provider in Inverclyde, we have a significant role to play in helping to achieve the priority outcomes of the Inverclyde Alliance Single Outcome Agreement : Inverclyde Together, as well as Inverclyde s Local Housing Strategy and Strategic Housing Investment Plan. The business plan therefore sits within the wider strategic framework of priorities and plans for housing and communities within Inverclyde. 1.4 This is our second business plan and it covers the period from April 2014 to March It builds on the successes of our first business plan, which took us from our inception in December 2007, as well as the learning from some significant challenges presented to us as Scotland s most recent large scale voluntary transfer organisation. 1.5 Since our launch in 2007 we have made significant progress in delivering many of our transfer promises. However a number of challenges remain, not least the need to improve the performance of our services and to ensure all our homes are compliant with the Scottish Housing Quality Standard (SHQS). The business plan confirms our achievements to date as well as our ambition and plans to become one of the best housing providers in Scotland, delivering a comprehensive and excellent housing offer. 1.6 The period until 2019 will witness significant change for both our organisation and the environment we operate in. Our business plan for the next five years recognises this period as one in which the company and our customers must be in a position to successfully rise to any challenges and be able to grasp the opportunities that will emerge from these anticipated wider economic, political and social changes. 1.7 We have developed a number of outcomes we want our business to achieve over the lifetime of this business plan. Through achieving these outcomes we will work towards achieving our vision, deliver our strategic objectives and demonstrate our values.

4 page: The outcomes we want to achieve by 2019 are: An excellent customer experience Sustainable homes and places Improved energy efficiency and reduced fuel poverty An efficient company A growing company Safer and better supported customers A diverse, committed and empowered workforce 1.9 The outcomes will be achieved through delivering a number of business plan priorities. These business plan priorities are set out below by each strategic outcome. For full details of our outcomes and priorities for 2014/19 see section 5 of this business plan and our 2014/15 Delivery Plan which accompanies this business plan at appendix one. An Excellent Customer Experience Improve customer access to services Improve the customer experience of our services Improve our performance management and implement customer led scrutiny Receive external recognition and accreditation for our customer services Sustainable Homes and Places Achieve the SHQS for all our homes by 2016 Maximise funding for the investment needs of all our schemes and estates Improve the popularity of the neighbourhoods we work in Develop more effective ways of managing neighbourhoods with our customers and partners Improved Energy Efficiency and Reduced Fuel Poverty Reduce the number of our customers experiencing fuel poverty Reduce our carbon emissions An Efficient Company Implement improved and more effective business and information systems Maximise the resources we have available to deliver our services and use them efficiently and effectively Improve our value for money and achieve a year on year minimum 3% efficiencies Achieve CPI only rent increases from 2019

5 page: 3 A Growing Company Develop and manage new affordable homes for rent and sale Exploit new business opportunities and increase the commerciality of the company, working beyond Inverclyde s boundaries where appropriate to do so Seek new housing partnerships to ensure the continuous improvement of our services, our value for money and to maximise our investment opportunities Safer and Better Supported Customers Work with partners and customers to reduce fear of crime and tackle anti social behaviour Help to reduce worklessness and financial exclusion Deliver fair and equitable services that are tailored to effectively meet the needs of our customers Seek to minimise the impact of welfare reform on our customers A Diverse, Committed and Empowered Workforce Develop a flexible and multi skilled workforce Develop a positive staff culture and Implement the River Clyde Academy Implement a new, fairer pay line Achieve external recognition and accreditation for our organisational development 1.10 Consultation on the business plan has been achieved through a variety of methods, events and activities. We have discussed the plan and its priorities with our customers. The plan has within it extensive performance monitoring and risk management arrangements to ensure that it will deliver tangible benefits and outcomes for our customers The Board of had a number of meetings and away days during 2013 where business planning was discussed. Directors and their teams have contributed extensively to the development and production of the business plan; the plan has been influenced and shaped by our partners, including Inverclyde Council The most up to date version of our business plan is published on the River Clyde Homes website. An accessible plain English summarised version of the plan will also be developed with customers.

6 page: 4 2. Vision, Outcomes, Values and Aim 2.1 is a forward thinking and dynamic not for profit social housing provider that owns and manages over 6,000 homes and provides factoring services to a further 2,250 homes in the Inverclyde area of Scotland. We employ over 240 talented members of staff, including 50 specialist trades operatives. 2.2 Led by a Board of 12 members, they have developed a new vision, values and outcomes for the company. These are different to those in our previous business plan to reflect the changes in the political and economic environment since we last reviewed them and also to reflect the learning and experiences of over the last seven years. 2.3 Our vision of what we want to achieve is: To provide quality, affordable homes in neighbourhoods we can be proud of, and to deliver excellent services that make a real difference for our customers. 2.4 The outcomes we want to achieve during the lifetime of this business plan will help us to realise our vision and are as follows: An excellent customer experience Sustainable homes and places Improved energy efficiency and reduced fuel poverty An efficient company A growing company Safer and better supported customers A diverse, committed and empowered workforce 2.5 Our values as a company are summarised as CARES: Customer first, performance driven Acting with integrity, being professional Respect for each other, our partners and our environment Embrace innovation, challenge expectations Spend our money wisely 2.6 Our aim is: Customers at the heart of everything we do

7 page: There is a golden thread of plans through the company as each Directorate, team and each member of staff collectively and individually contributes to achieving the vision, outcomes, values and aim of. 2.8 The River Clyde Way is how we go about our business in Inverclyde. We pride ourselves on our positive attitudes and behaviours, and our commitment to putting the customer first. All our employees have signed up to the River Clyde Way: We value our customers; We will provide services which protect, enforce and promote equality and diversity; We will treat customers as we would like to be treated ourselves, with fairness, dignity and respect; All our staff, and contractors, will carry visible photographic ID cards at all times. We will ensure that all relevant customer facing employees wear our corporate uniform; We will seek, and use, feedback from our customers to improve services, and publish our findings in our Up Close newsletter, our website and customer reception areas; We will provide a range of information for customers; We will operate an out-of-hours emergency telephone service; We will develop customer service standards and publish them We will resolve complaints quickly in line with best practice; We will let customers know how to obtain information in other formats such as large print, Braille or audio, or other languages; We will develop telephone answering standards aimed at providing excellent service; We will ensure our customer reception arrangements are open at suitable times and accessible for all customers; Reception areas will be clean and comfortable; Where appropriate we will offer private interview facilities including home visits. This is the River Clyde Way. 2.9 The Board has placed customer care at the heart of the culture of River Clyde Homes. The River Clyde Way has been embedded in our plans and has become a key aspect of the training and development of staff, the performance management framework, our staff appraisal process and the management of our contractors.

8 page: 6 Governance 2.10 The strategic leadership of the company is provided by the Board. The full list of Board members as at 1 st April 2014 is as follows: Cllr Ronnie Ahlfeld Albert Henderson Cllr Joe McIlwee Katrina Anderson Cllr Stephen McCabe Mary Moulden Alan Duncan Cllr Christopher McEleny Lynn Wassell (Chair) Wilson Dunlop Elizabeth Grant Vacant 2.11 The Board is committed to the delivery of high quality services to its customers and to robust decision making processes. In order to carry out its responsibilities effectively, the Board has established three committees with appropriate terms of reference to carry out work on its behalf. These committees are: Audit and Finance Committee Performance and Services Committee Personnel Committee 2.12 The Board has undertaken and completed a full review of its governance arrangements. An Excellent Governance Action Plan has been adopted by the Board and a number of measures have been put in place to strengthen the governance of the company. These measures include: New Articles of Association formally recognising customer led scrutiny of services and performance; A reduced Board size and maximum terms of membership consistent with best practice; Annual appraisal of Board members; A new combined Code of Conduct for Board members, staff and involved customers; a first for Scotland The Excellent Governance Action Plan will be reviewed annually by the Board to ensure consistency and compliance with regulatory and statutory governance requirements as well as best practice across the sector. Customer Led Scrutiny 2.14 The company has been at the forefront of developing customer led-self regulation and scrutiny in Scotland and we have successfully established a Customer Senate.

9 page: The Senate enables real scrutiny of the company and its services, and enhances our accountability to customers. Comprising of 12 customers appointed by customers, the Senate offers an opportunity to investigate services and their performance in a completely new and comprehensive way. The Senate is supported by an independent mentor, TPAS Scotland, and can appointment experts to it to inform any particular scrutiny project. Its recommendations for improving a service are presented to the Board and progress in implementing Senate recommendations is monitored by the Board The Senate and customer led scrutiny is also supported by a number of other arrangements and opportunities for customer involvement including customer inspectors, service specific customer panels and armchair critics The Customer Senate will be responsible for ensuring the views of customers are represented in the on-going review of the business plan.

10 page: 8 3. Our Operating Context 3.1 The operating context for is a radically different one to that experienced at the commencement of our original business plan in Both the Board and the executive team have considered in detail the likely challenges, risks and opportunities arising from our current context at a number of meetings and business planning events throughout They have been supported in this task by a number of organisations including the Chartered Institute of Housing (CIOH), the Scottish Federation of Housing Associations (SFHA), the Royal Bank of Scotland (RBS) and Baker Tilly. 3.3 A joint business planning session with Inverclyde Council s executive management team also took place in November A detailed analysis of strengths, weaknesses, opportunities and threats (SWOT) to our business has been undertaken. Our priorities and plans for the next 5 years will aim to exploit strengths and eliminate or reduce weaknesses. Consideration has also been given to the political, economic, social, technological, legal and environmental (PESTLE) issues currently facing the company. 3.5 Appendix 2 confirms our SWOT and PESTLE analysis. 3.6 Key issues for include: National and Sector Level a) Welfare Reform The variety of changes brought in by welfare reform over the period will increase the volatility of income cash flows. The launch of the under occupancy reform in April 2013 means that these changes have now started to take effect. Rather than simply being aware of the proposals and modelling their potential impact on our business plan, it is essential that the company has effective plans to manage and mitigate the impact of welfare reform on our customers and on our financial position. These plans must include the need for more active management of income collection and additional resources to work closely with affected customers.

11 page: 9 b) The Economy and Diversification We are undoubtedly operating in a world of lower public subsidy and expenditure, sluggish economic growth and less certainty about private finance. The need therefore to be innovative and to find additional income streams to cross subsidise core activities is stronger than ever. Diversification however has its own challenges and risks. It is essential that in growing the company over the next 5 years, the company has these risks sighted; that mitigations are in place to protect our social housing assets. c) Finance Markets benefits from a significant portion of its debt being at a low interest rate. This requires the business plan to be stress tested against a range of scenarios and to be checked regularly for headroom and covenant compliance. Any new loans are likely to be at higher margins than the sector has historically enjoyed and for shorter terms. To meet long term financing needs, other providers have looked to the bond market or index linked finance. These sources of finance offer an opportunity for to meet our growth ambitions, but also pose different risks and costs than more traditional funding. d) Referendum The referendum on Scottish independence to be held September 2014 poses a number of questions for the company irrespective of the outcome. Key issues such as welfare reform, energy efficiency, investment and development will be influenced significantly as a consequence of the vote; the post referendum period should provide for more detailed consideration of housing and social policy, as well as greater financial certainty. e) Regulation The Scottish Housing Regulator (SHR) will begin to monitor and assess our performance against the Social Housing Charter in earnest from April The need to implement an effective performance management framework, significantly improve areas of poor performance and demonstrate effective outcomes for customers will become an increasing expectation of the regulator and a key feature of regulation throughout the lifetime of this business plan.

12 page: 10 f) Changing Population Scotland s population is changing; it is getting older, growing as a whole but moving around. Households are also getting smaller with a projected 49% increase in 1 person households by These changes bring a need to review and evolve our housing product and service offer, and ensure we remain a viable and attractive option for all households and families into the future. Local and Specific Level a) Inverclyde Housing Market and Repopulation The 2011 census confirms Inverclyde s population decline has slowed down; however based on historic trends Inverclyde s population is expected to shrink further at around 66,000 and we will see a 32% reduction in the working population by In contrast the EKOSGEN study, jointly commissioned by the council and in 2013, confirms a continuing and significant need to increase the range and quality of affordable housing, both to meet identified need and to improve the quality of supply. The study evidences: the potential for an intermediate rental market; buoyant demand for private rented sector accommodation; private rented sector rental rates are relatively high, and higher than some comparator areas; for a proportion of those in the private rented sector, the ambition for owner occupation given credit availability cannot be realised; the evidence suggests demand for quality properties is good and the timing may be right for investing in mid market rental homes. improving the overall housing offer will help to increase the attractiveness of the area for in-commuters, migrants and those with a former connection to the area and to retain reluctant leavers (e.g. young graduates). A move away from the traditional social housing rental model to help secure a better housing offer from ourselves and for Inverclyde is an attractive proposition. However it will inevitably increase the exposure of the company. Decisions on new forms of provision will need to be evidenced based, and risks managed appropriately.

13 page: 11 b) Assets Social housing is largely an asset based business. The effective management of our existing stock, as well as adding to it, is a critical consideration for the Board. We need to meet SHQS compliance for all our homes and maintain the standard over the long term. We have in excess of 300 voids, some of which have been empty since 2002; we also have a challenging stock profile including: significantly more flats than houses, a large supply of 2 and 3 bedroom flats, much fewer 1 bedroom, large numbers of non traditional constructed homes. The need to continuously review our stock profile, reconfigure and change the profile to ensure its longer term sustainability and to enable wider customer choice in the allocation of homes will be critical moving forward. c) Health and Supported Housing Life expectancy in Inverclyde at 70.1 years is amongst the lowest in the UK (av. 80.6yrs); persistent problems remain in relation to alcohol and drug abuse; there is a growing need for dementia and related services; the demand for adapted and level access homes significantly outstrips supply, over 106,000 households will need adapted accommodation by 2033 in Scotland; our approach to sustaining tenancies will be significantly influenced by the need to support older people in their home for as long as possible and to work with a range of health and care agencies to provide effective and responsive services. Supported housing has always been a low margin activity for providers such as and pressures on Supporting People (SP) contracts means that we will have to deal with further reductions in income. The removal of local ring-fencing of SP funding, set alongside increasing pressure on local authority budgets means that SP funding is now a much less reliable source of income. The need plan for the loss of this income is paramount, as is the need to review our overall support and housing provision for older people. We tend to have a uniform sheltered housing offer at a time when Inverclyde s ageing population has more complex housing needs and requirements. d) Fuel Poverty and Financial Exclusion Our 2013 Customer Survey confirms that a quarter of all our customers experience fuel poverty; many of our customers have no access to a basic account or to affordable forms of credit. Unemployment in Inverclyde is higher than the Scottish and UK averages at 11%; average household incomes in Inverclyde remain less than the Scottish and UK averages at 23k ( 26.5k for UK); average household incomes for those dependent on benefits in Inverclyde is around 10k. We need to consider what role we can play in enabling our customers to access work and training, to improve their household incomes and to remove them from fuel poverty.

14 page: 12 e) Costs Pension and wage costs remain areas requiring careful consideration. The Scottish Housing Association Pension Scheme (SHAPS) had, at its last valuation date, a significant deficit. The Local Government Pension Scheme (LGPS) triennial valuations in 2013 confirmed on-going deficits. The UK government is keen to ensure that more employees are included within pension schemes and are rolling out pension auto-enrolment which is likely to increase costs. The company has an agreement with its recognised trades unions to match the annual pay award determined through the Employers in Voluntary Housing (EVH) pay bargaining process. We need to plan carefully to mitigate our exposure to rising pension costs and wage inflation; whilst at the same time ensuring that we can maintain employment packages that enable us to recruit and retain high quality staff. 3.7 A major consideration when considering our operating context is the vision, aims and objectives of Inverclyde s Community Planning Partnership, Inverclyde Alliance (IA). The Single Outcome Agreement , Inverclyde Together, sets out the strategic framework for the Community Planning Partnership. 3.8 The Community Planning Partnership vision for Inverclyde is: Getting it right for every Child, Citizen and Community 3.9 To deliver this vision, the Partnership has agreed a number of strategic local outcomes: Inverclyde s population is stable with a good balance of socioeconomic groups; Communities are stronger, responsible and more able to identify, articulate and take action on their needs and aspirations to bring about an improvement in the quality of community life; The area s economic regeneration is secured, economic activity in Inverclyde is increased, and skills development enables both those in work and those furthest from the labour market to realise their full potential; The health of local people is improved, combating health inequality and promoting healthy lifestyles; A positive culture change will have taken place in Inverclyde in attitudes to alcohol, resulting in fewer associated health problems, social problems and reduced crime rates; A nurturing Inverclyde gives all our children and young people the best possible start in life;

15 page: 13 All children, citizens and communities in Inverclyde play an active role in nurturing the environment to make the area a sustainable and desirable place to live and visit; Our public services are high quality, continually improving, efficient and responsive to local people s needs The Partnership s outcomes will be achieved through a number of actions and plans confirmed in the Single Outcome Agreement, and through the business plans of the partner organisations, including the business plan. Our own business plan therefore confirms our commitment to supporting the Partnership s vision and outcomes for Inverclyde are members of the Inverclyde Alliance; one of our Board members is the Chair of the Inverclyde Alliance Board, and our Chief Executive is a member of the Partnership s Programme Board.

16 page: Our Achievements 4.1 Since our launch in 2007 we have made notable progress in delivering the initial objectives confirmed in our first business plan. These objectives were confirmed following the decision of tenants to transfer the previously Inverclyde Council owned housing stock of over 7,700 homes to. The objectives accurately reflect 5 promises made to tenants during the stock transfer process. Our progress in meeting these promises is set out below: 4.2 Greater Rights: our key achievements and outcomes for this objective were: Preserved all existing tenants right to buy their home; Promoted and developed customer membership of the company, with over 190 members; Enhanced the rights of tenants within their tenancy agreement to include a rent guarantee. 4.3 Tenant Focus: our key achievements and outcomes for this objective were: Obtained early adopter status from the Scottish government in the introduction of customer led scrutiny; Established new an innovative customer involvement arrangements reflecting sector wide best practice such as a Customer Senate, service specific Customer Panels, Customer Inspectors and armchair critics ; Amended our constitution to formally recognise customer led scrutiny and the Customer Senate. 4.4 Affordable Rents: our key achievements and outcomes for this objective were: Increased rents at RPI only for the first 5 years, consistent with the rent guarantee; From having the highest average social housing rents in Scotland, to now ranked 111th out 159 registered providers with the SHR; Reducing the amount of rental income required to service borrowing from 40p per 1 to 12p per 1; Increased customer satisfaction with the value for money of our rents from 42% to 66%.

17 page: First Class Service: our key achievements and outcomes for this objective were: Completion of the Right Person, Right Place, Right Time organisational restructure to ensure our staffing resources and organisational arrangements provide the services and functions prioritised by our customers; Increased customer satisfaction with some of our services such as responsive repairs from 73% to 79%; Achieved benchmark upper quartile performance for some services such as gas servicing st Century Homes: our key achievements and outcomes for this objective were: Invested 61m in our existing housing stock to increased the number of homes that comply with the Scottish Housing Quality Standard from 375 homes to 4356; Spent 16m to demolish 1595 unpopular and poor quality homes; Invested 61m in Inverclyde to build 429 new modern and energy efficient homes for rent and sale across Inverclyde. 4.7 We recognise however that we have much work still to do demonstrate excellent performance, the delivery of across the board customer focussed and tailored services, improved value for money, a better housing product and improved overall customer satisfaction with.

18 page: Priorities and Plans As outlined in section 3, the period until 2019 will see a time of significant change for both and the environment we operate in. Our business plan priorities for the next five years reflects this period of change and aim to ensure the company and its customers are in a position to meet the challenges and grasp the opportunities that will emerge over the coming years. 5.2 To support the development of our new business plan we set up our Steps to Excellence change management programme during This change programme was established to address a number of immediate challenges and risks including: A high level of engagement from the regulator; The need to review and strengthen our governance arrangements to reflect sector best practice; The need to introduce new and more effective ways of customer involvement and influence; Reduced levels of development funding and investment and a need therefore to review the company s asset management plan and wider regeneration plans; Continued poor performance across a number of services and the need to develop a more effective and robust performance management framework; Outdated and ineffective business systems and ICT; The need to make best use of our staffing resources and to provide services and functions that meet the needs and priorities of our customers; A need to significantly improve our communication; A dissatisfied workforce and the need to develop a different culture for the company, more customer focussed and performance driven; The impacts of welfare reform on our income stream. 5.3 The Steps to Excellence change programme has included a number of actions and events designed to review our existing business plan. This review has involved the Board, executive team, staff, customers and partners. It has also ensured that the principal features of our change management programme have been incorporated into our new business plan. This will further ensure we continue our progress toward achieving our ambition of becoming an excellent and fit for purpose housing provider.

19 page: Additionally we have used our business intelligence and feedback from our customers to help develop and test our priorities and plans for the next 5 years including: 2013 Customer Survey; HouseMark Benchmark Report 2012/13; Customer consultation events including our Setting the Standards Summer Carnival, attended by over 350 customers; Various meetings with our customer led Count Me In group; 2013 Staff Survey; Updated stock condition survey; Our improving customer profile. 5.5 We have developed a number of outcomes we want our business to achieve over the lifetime of this business plan. Through achieving these outcomes we will work towards achieving our vision, values and aim. The outcomes we want to achieve are: An excellent customer experience Sustainable homes and places Improved energy efficiency and reduced fuel poverty An efficient company A growing company Safer and better supported customers A diverse, committed and empowered workforce 5.6 Our success in achieving these outcomes will be measured through a number of success factors. Full details of these success factors and the performance measures we will use to measure them are set out in the initial 2014/15 Delivery Plan at appendix one. 5.7 The outcomes themselves will be achieved by delivering our business plan priorities. These are set out below under each strategic outcome: 5.8 An Excellent Customer Experience: our key priorities to achieve this strategic outcome over the next 5 years are: Improve customer access to services Improve the customer experience of our services Improve our performance management and implement customer led scrutiny Receive external recognition and accreditation for our customer services

20 page: Sustainable Homes and Places: our key priorities to achieve this strategic outcome over the next 5 years are: Achieve the SHQS for all our homes by 2016 Maximise funding for the investment needs of all our schemes and estates Improve the popularity of the neighbourhoods we work in Develop more effective ways of managing neighbourhoods with our customers and partners 5.10 Improved Energy Efficiency and Reduced Fuel Poverty: our key priorities to achieve this strategic outcome over the next 5 years are: Reduce the number of our customers experiencing fuel poverty Reduce our carbon emissions 5.11 An Efficient Company: our key priorities to achieve this strategic outcome over the next 5 years are: Implement improved and more effective business and information systems Maximise the resources we have available to deliver our services and use them efficiently and effectively Improve our value for money and achieve a year on year minimum 3% efficiencies Achieve CPI only rent increases from A Growing Company: our key priorities to achieve this strategic outcome over the next 5 years are: Develop and manage new affordable homes for rent and sale Exploit new business opportunities and increase the commerciality of the company, working beyond Inverclyde s boundaries where appropriate to do so Seek new housing partnerships to ensure the continuous improvement of our services, our value for money and to maximise our investment opportunities 5.13 Safer and Better Supported Customers: our key priorities to achieve this strategic outcome over the next 5 years are: Work with partners and customers to reduce fear of crime and tackle anti social behaviour Help to reduce worklessness and financial exclusion Deliver fair and equitable services that are tailored to effectively meet the needs of our customers Seek to minimise the impact of welfare reform on our customers

21 page: A Diverse, Committed and Empowered Workforce: our key priorities to achieve this strategic outcome over the next 5 years are: Develop a flexible and multi skilled workforce Develop a positive staff culture and Implement the River Clyde Academy Implement a new, fairer pay line Achieve external recognition and accreditation for our organisational development 5.15 To further ensure we achieve our business plan outcomes and priorities we have developed a range of underpinning strategies and strategic actions plans. These are: Sustainable Homes and Places Strategy Our sustainable homes and places strategy sets out our holistic approach to managing our assets and the delivery of our services at the neighbourhood level. The strategy therefore covers our joined up approach to providing neighbourhood focussed services such as anti social behaviour, security, caretaking, street scene management, our approach to people focussed services such as allocations and tenancy support, and our plans for investment in homes and the regeneration of our priority intervention areas, including the building of new homes. Green Strategy Our green strategy sets out our approach to increasing the energy efficiency of our homes and reducing our carbon footprint. The strategy sets out our role in relation to our obligations as a business and as a landlord including the support and investment we can bring to reducing the fuel poverty of our customers. Sustainable Tenancies Strategy The sustainable tenancies strategy sets out our approach to supporting our customers to stay in their home. It recognises the need to have a range of support measures for our customers, the need to improve their capacity to maintain a tenancy and to improve our links with a number of other organisations and agencies that work with our customers on a day to day basis. It also includes our approach to tackling financial exclusion and how we will maximise rental and other income, support our customers in maximising their personal and household income, and work in partnership with key agencies to enable financial inclusion.

22 page: 20 Equality and Diversity Strategy Our equality and diversity strategy sets our how we will promote equality both in relation to our role as a service provider and as an employer across all the protected characteristics. Customer Involvement and Co-regulation Strategy Our customer involvement strategy sets out our approach to how we will continue to adopt best practice in customer involvement and customer led self regulation, ensuring our customers remain at the heart of and are able to influence the decision making and direction of the company. Organisational Development Strategy Our organisational development strategy sets out our approach to developing our workforce, making sure it is customer focussed and performance driven, motivated and empowered. Business Support Strategy Our business support strategy aims to consolidate our plans to improve our corporate infrastructure and recognises the importance of back office functions in the day to day effectiveness of the company and the delivery of our business plan. This strategy is considered further in section 7. Value for Money Strategy Our value for money strategy outlines our approach to achieving better value for money in the delivery of our services, our plans for efficiencies across the organisation and maximising the value of all our resources, as well as our strategic approach to procurement In addition to actions confirmed in our Strategy Action Plans (SAPS), we also have Service Improvement Plans (SIPS). Each team within River Clyde Homes has a SIP confirming at the team level their priorities and actions for a 12 month period. As with SAPS our SIPS will further ensure the achievement of our business plan outcomes.

23 page: Financial Plan 6.1 Robust financial planning and strong financial management are essential components in ensuring that we can successfully deliver our business plan outcomes and priorities. 6.2 To ensure that we remain financially viable we have a rolling five year medium term financial plan: see Tables 1 and 4 below. This plan provides a financial assessment of our operational income and expenditure position as well as our investment programme and funding sources for the period 2014/15 to 2018/ In developing our operational income and expenditure plan an assessment has been made on anticipated rent levels, the level of planned efficiencies, the impact of inflation, occupation levels in our housing stock, staffing establishment levels together with likely borrowing costs over the 5 year term. Table 1: Operational Income and Expenditure Summary 2014/19 Expenditure Management Services Responsive Repairs Planned Repairs Depreciation Bad Debts Other Costs 2014/15 Approved Base Budget m /16 Draft Budget m /17 Draft Budget m /18 Draft Budget m /19 Draft Budget m Gross Expenditure Income Rents Service & Other Charges Supporting People RTB Insurance Street Scene Contribution Less Void Loss Less Welfare Reform (23.66) (0.81) (0.17) (0.06) (0.10) (1.50) (24.20) (0.87) (0.17) (0.07) (0.10) (1.50) (25.10) (0.89) (0.17) (0.08) (0.10) (1.50) (26.10) (0.91) (0.17) (0.09) (0.10) (27.14) (0.93) (0.17) (0.09) (0.10) Interest Collected Payable Gross Income (24.13) (24.65) (25.50) (24.96) (25.95) (0.06) 1.20 (0.06) 1.67 (0.02) 2.20 (0.02) 2.77 (0.02) 3.10 Gross Payment Net Balance: (Income) / Expenditure (5.27) (3.93) (2.48) (0.27) (0.19)

24 page: The 2014/15 operational budget was approved by the Board in March 2014 and is attached as Appendix A key consideration in developing the medium term financial plan was the rent setting strategy approved by the Board at its meeting in January This strategy sets out our approach to setting rents over the next 5 years and confirms the following planned increases: see Table 2 below: Table 2: Rent Setting Strategy 2014/19 Year Increase Comment 2014/15 RPI + 2% 2015/16 RPI + 1.5% To be ratified by the Board in /17 RPI + 1.5% To be ratified by the Board in /18 RPI + 1.5% To be ratified by the Board in /19 CPI only Subject to Business Plan performance 6.6 Consultation with customers on the rent setting strategy was undertaken during December 2013 and January 2014 and confirmed a general acceptance of the rationale of the strategy. 6.7 In addition the strategy also confirms planned increases for service and other charges as follows: see Table 3 below: Table 3: Service and Other Charges 2014/19 Charge Increase Comment Warden Cost Only To be phased in until 2016/17 Caretaking Heating Garages and Covered parking Allotments and Ground Sites Cost Only Cost Only Same as Rent Setting Same as Rent Setting

25 page: The rent setting strategy confirms an intention to achieve a CPI only rent increase from 2018/19. This will a key business plan outcome over the 5 year period and confirmation of our out performance of financial planning assumptions including: Void Loss: initially 6%, achieving 3% by 2020; Bad Debts: constant 1.2% over 5 years Number of Tenancies: constant 5560 over 5 years Business Growth: constant nil over 5 years 6.9 In addition from 2015 all Directorates will be required to identify an annual (year on year) 3% efficiency target; meeting this efficiency target on a consistent basis will be another key step toward achieving CPI only rent increases from 2018/ As well as our operational income and expenditure we will also deliver a significant investment programme over the next 5 years. This investment programme will ensure we can meet our SHQS targets, achieve our aspirations for the regeneration of our priority investment areas including any new build, street scene improvement and demolition plans, ensure the reconfiguration of our sheltered and other housing schemes, adapt individual homes to promote more independent living for our customers, deliver an ambitious heating improvement scheme and invest in our non housing assets such as open spaces, garages and the provision of new office and customer service accommodation The 2014/15 investment programme was approved by the Board in March 2014 and is attached as appendix 4. This programme together with our planned investment for the remaining period of the business plan and our resources to deliver programme is confirmed in Table 4 below:

26 page: 24 Table 4: Investment Programme and Resource Summary 2014/ /15 Approved Base Budget m 2015/16 Draft Budget m 2016/17 Draft Budget m 2017/18 Draft Budget m 2018/19 Draft Budget m Total Investment Programme Investment Investment inc SHQS New Build Demolition Heating Upgrade Street Scene Broomhill John St Long Term Voids Adaptations Stock Condition Asbestos Big Lottery Office Accommodation Business System Total Expenditure Resources Operational Surplus Support Grant HAG Development Income (5.27) (2.51) (1.11) (1.41) (3.93) (0.51) (0.83) (1.34) (2.48) 0 - (0.05) (0.27) 0 (1.67) (3.05) (0.19) 0 - (0.05) (12.14) (3.02) (3.61) (5.90) Total Resources (10.30) (6.61) (2.53) (4.99) (0.24) (24.67) Borrowing Requirement Table 4 confirms that our investment programme is fully resourced. We will seek to maximise use of the remainder of our loan facility over the 5 year period whilst at the same time maintain sufficient headroom in our financial plan to enable us to cope with any unexpected events or unforeseen expenditure The investment programme will be refined over the 5 year period as schemes evolve and develop, costs become certain and new investment and funding opportunities arise. The company will seek to increase its current loan facility if the need arises. Any exploration of new finance options will be undertaken by the Board as part of its annual refresh of the business plan and will include a detailed examination of the risks, costs and outcomes any new finance would bring to the company In addition to 1 and 5 year financial plans, 30 year financial projections covering income and expenditure, the balance sheet and cash flow are attached as appendix 5.

27 page: The financial plan is built on a number of key assumptions that will need to monitored, reviewed and assessed on at least an annual basis over the 5 year period. These assumptions include: Asset Management Plan Our Asset Management Plan is contained within our Sustainable Homes and Places strategy and is based on our analysis of a range of information sources including a housing stock condition survey undertaken by John Martin Partners (JMP) (currently covering 31% of our housing stock), an assessment of Inverclyde s housing markets completed by EKOSGEN in 2013 and jointly commissioned with Inverclyde Council, an assessment of a variety of business intelligence indicators including the demand for our homes, their energy performance, the balance of our stock profile, our customer profile, the performance of our neighbourhoods and customer satisfaction with our homes and neighbourhoods. A key consideration in determining our asset management plan has also been the investment and regeneration plans of Inverclyde Council and the Inverclyde Alliance. It is also important to note the proposed abolition of the Right to Buy. Rent Setting Strategy Approved by the Board in January 2014, the rent setting strategy confirms levels of increases over the lifetime of the business plan. However these planned increases will be reviewed and confirmed on an annual basis by the Board. Welfare Reform The implementation of these reforms is changing and is less than certain. Measures to mitigate their current likely impact on our customers and on the company s income streams are confirmed in the business plan but will need to be reviewed as welfare policy evolves and timescales for reform are amended. Pay and Price Increases The likely impact of pay and price increases have been accounted for but will need to be reviewed to ensure current assumptions remain robust. Pension Liabilities A key area of review going forward will be the impact of pension valuations on our business plan and the impact of auto-enrolment. Current anticipated pension costs and liabilities are contained with the financial plan.

28 page: 26 Efficiencies and Savings The financial plan assumes that cashable and non cashable efficiency savings will be delivered going forward, with a year on year 3% target from 2015/16. Business plan performance may determine a different required level of efficiencies over the five year financial plan A key outcome of our business plan will be an embedded value for money (VfM) culture throughout the company. We have a bespoke Value for Money strategy which recognises the need to utilise our resources (staff, financial and assets) in the most effective way particularly if we are going to deliver quality services to our customers and achieve high levels of customer satisfaction. We are members of HouseMark, a UK wide benchmarking club providing a range of information on benchmarked performance and costs allowing us to set challenging VfM and performance targets. HouseMark feedback has helped to inform our VfM strategy and our business plan. We also recognise that effective procurement will be a key means of achieving efficiencies and better VfM; we will need to ensure skilful management of procurement and supply chains.

29 page: Supporting Our Business 7.1 The need to support our business through an effective corporate infrastructure is critical to the achievement of our business plan outcomes and priorities. Our Business Support strategy confirms how our back office functions, systems and operations will be significantly improved during the lifetime of the business plan and the outcomes we expect to achieve. Key improvements and outcomes will cover the following areas: Business Management Systems and Customer Relationship Management Our approach to information and communication technology aims to ensure we have the right tools and systems to support our staff in delivering our services in the most efficient and effective way possible and to provide the best possible customer experience. We also aim to ensure we use information and communication technology to enable our customers to access and use our services in the ways that are most convenient to them. Performance Management Our approach to performance management will ensure we can accurately measure what we change to improve services, our homes and neighbourhoods. We do this through an outcome based approach to performance management: the so what test. We will ensure that each employee understands and recognises their part in contributing to the vision, values, planned outcomes and aim of the company. Our performance management framework ensures we can effectively measure, manage and monitor our progress in achieving our business plan outcomes and priorities. Risk Management as a business will be exposed to risk. To achieve our business plan outcomes and priorities successful risk management must be a key priority. Our approach to risk management, involving the Board, will ensure a robust and effective framework is in place from which to continually assess risks and both implement and monitor actions that aim to mitigate risks on our business plan.

30 page: 28 Organisational Development and New Office Accommodation Successful delivery of our business plan will depend on the effectiveness of our workforce and the values and competencies they demonstrate on a daily basis. Our approach to organisational development will ensure we have the right number of people in the right place at the right time to deliver improved services, higher productivity and greater customer focus. We also aim to ensure we can empower our workforce through providing the training and tools for them to carry out their roles effectively, and by providing a fit for purpose, modern and professional working environment.. Marketing and Communications We want to ensure we communicate effectively with our customers and partners to ensure they have the information they need to live in our homes and to know what we are doing, and to our staff to ensure they can carry out their jobs effectively. Our approach to marketing and communications will ensure our customers, partners and staff receive regular and timely information that keep them informed about the issues that are important to them through a variety of different formats including newsletters, website, intranet, social media, events and face to face meetings.