HRABP - Draft 8 - Flipbook - Page 29
Risk
Impact
Mitigation
Capital Receipts:
The plan assumes
estimated capital
receipts of £20.4m
over 30 years will be
recovered and used to
fund the development
of new homes.
Any significant slippage in
the recovery of these receipts
may pose a risk to the capital
programme.
Monitoring of the timing of the
receipts will help inform management
action to mitigate this risk.
Management options identified
above would need to be applied.
Additionally, we are in a position to
borrow additional funds with the
capacity in the headroom.
Rent Policy
Rents increase at
a lower rate than
expected.
If rents were to increase
annually by a lower
percentage than the CPI + 1%
projected over the life of the
business plan there would be a
long term loss of revenue to us
The Government have guaranteed a
permitted rent increase of CPI +1%
from 2020 to 2025 bringing certainty
in the medium term. This business
plan projects a lower increase of 2%
from year 5.
Inflation
If RPI inflation were to increase
above the assumed 2.5% the
Plan would be under pressure.
But the increase in costs would
be partially offset by increased
income as this is also based on
CPI inflation.
Management options identified
in para.3 above would need to be
applied. Additionally, assumed
expenditure in the plan is at 3% and
would minimise any impact.
Capital Costs
If the cost of construction and
professional fees on the new
build programme were to
increase.
This is provided for within the
development programme budgets
when tendered. Professional fees are
considered a small proportion of the
costs.
Welfare Reform:
Implementation of
Universal Credit,
benefit cap and
other welfare reform
changes.
Increasing rent arrears which
impacts on our HRA income.
Robust monitoring of arrears
(reported already on a quarterly
basis) and quarterly review of HRA
budgets. Additional action through
the Business Transformation detailed
in the Business Plan.
Brexit
Adverse impacts on
costs and values as a
consequence of Brexit
There is increased uncertainty
about the costs of projects
due to changes in the cost of
materials and labour arising
from changes in the value of
the pound. This could lead to
uncertainty with developers
tendering for our programmes
as well as responsive repairs
costs increasing.
Responsive repair costs will not make
a great impact on the budget because
of the comparatively low expenditure
in this area. Programmed work can
follow the management options
identified in para.3.
New developments will be tendered
and will not be started unless funding
is in place .
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