Housing Associations book record surpluses - again!
£3.4 billion surplus over the last year
English Housing Associations have produced a record surplus of £3.4 billion over the last year according to the latest ‘Global Accounts’ for the sector produced by the Homes and Communities Agency (HCA) on Friday 17th February.
This year’s surplus represents an increase of £0.8 billion over the previous year’s surplus which was also a record being 25% higher than the year before. This is undeniably a sector with growing surpluses while costs are being held in check; costs per unit grew by only 1%, below inflation by 0.3%.
Housing Association staff have faced a squeeze
Housing association staff have faced a squeeze on their pay and conditions while chief executives regularly get inflation busting increases. Unite reps have called for 4% pay increases across the sector these figures demonstrate that this is entirely affordable. Unite also rejects moves to worsen pay and conditions such as Clarion's move to deny staff full sick pay.
Meanwhile some associations are moving to shut community centres and broader non commercial activities. This is ideologically driven, not forced on them by financial necessity. Hyde CEO Elaine Bailey has claimed that associations do too much for residents producing a dependency culture for example.
The HCA state that the figures demonstrate that the “social housing sector has had a solid year of investment underpinned by strong in-year financial performance”. The Global Accounts give an annual overview of the financial status of the social housing sector and is based on analysis of the regulatory financial returns and statements that are submitted by “private registered providers” as associations are called, managing or owning 1,000 or more homes.
39% increase from sales income
For the first time the accounts give information about unregistered subsidiaries and commercial activities yielding some significant insights. The HCA highlight a ‘marked’ increase in turnover of 39% from shared ownership and outright sale activity.
Reflecting their commercial model, short term debt due is double the figure for last year. The HCA spokesperson comments: “We would expect debt to rise as the sector develops – that’s the way the model works. They gear up to build more assets. The sector seems to have the ability to raise debt at favourable rates – that model is working.” Strong arguments can be made against the commercial model for social housing providers but there is no case that they face an immediate financial squeeze and they clearly do not face problems from high staff costs or rising costs of services to residents.