In addition to Accord’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 four year rent reduction
announcements 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.
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.
Compliance
There has been a growing trend of regulatory action and intervention where providers are not fulfilling their legal obligation with
respect to matters of health and safety related legal compliance. To manage this risk effectively it is essential Providers have reliable
and robust data and reporting systems and clearly communicate performance information to the Board.
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 longer term financing available through institutional and bond financing. New finance has recently
been secured by the Association and the long term funding strategy remains under constant review as Accord ensures it has sufficient
financial resources to match growth aspirations.
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.
48
Accord Housing Association