ransform housing & support Financial siaiemenis 31 March 2022 1972 Company Secreiary Ratna Sukumaran (to 24 February 20221 Mandy Arnold Ifrom 25 February 20221 Regisiered office Transform Housing & Supp(Yt Bradmere House Brook Way Lgathgrhead Surrey. KT22 7NA 01372 387100 www.transformhousing.org.uk inlo@transformhousing.org.uk Reglsiraiions Registered charity- 264133 Company Ilmited by guarantee regSstered Sn England and Wales.. 01057984 Registered provider of S￿la1 housing: H2452 CQC registered.. 1-2756361790 Ida-registered May 20211 Audiior CLA Evelyn Partners Limited Iformerly Nexia Smith & Williamson) Onslow House Onslow Street Guildford Surrey GU1 4TZ Prlnclpal solicltors Devonshires Solicitors LLP 30 Finsbury Circu5 London EC2M 7DT Banker Barclays Bank PLC 1 Churchill Place Canary Wharf London E14 5HP Contents AboLrt Transfomi Housing & Supp￿1 Highlights, lads and figures 2021122 What clignts say Transform's Chair reflects on 2021122 Strategic report Key strategic a¢hievements- 2021122 Client engagement and feedback 13 Transforming a life- Hilary's story Financial performance Asset management, maintenance and Tepal 18 Sustsinabillty Health and safoty 20 Colleague wellbeing 21 Equality, diversity and inclusion 22 Future plans- strategic objectives 2021-24 Value for money 24 Our approach Rlsk management 30 Principal risks and uncertainties Governance, regulation and compliance 36 Governance 40 Regulation and cofflpliance 66 Auditor's report and financial ststements 15e ke9wD￿t￿£ 44 Auditor's report ett. I've hA4 AD£hiNfj kelv AN4 Financia statements and notes to the accounts 99 Traislorni cliem AbouiTransform Housing & Suppori Our purpose As a social housing provider, Transform supports more than 1,8LKI pwjple each year to grow their skills, gain indepgnden¢e and achigvg their goals. Establishgd in 1972. we cover Surrey. parts of south-west London, Bethshire and West Sussex. During the past 50 years we have supported more than 30.000 clients. Ourvision and values Transfom) has ambitious plans and we intend to continue to strengthen wr activty and grow to support more clients in the future. Our seNices are needed now mre than ever as Covid has exacert)ated the adversities already laced by many people. These include insecure housing, poverty. di￿riMination, stigma. exclusion and inequality. As w811 as providing homes for individuals. we aim to gmpower thèm to live happier. hèalthièr and more fulfilling lives. Our ultimate vision is to work with partners towards eradicating homelessness. ./*•4 J*Y Tre Boaril ol Trusiees Patrons Mark Austen FCMA Royal Patron HRH The Counte55 of Wessex GCVO DStJ CD Oliver Smedley FCMA Jane Bolton 8A (Honsl FCIH Julia Bradley Chris Deacon Bsc lH￿l Msc Natalia Kolotneva Msc MAICS laprxjinted July 20211 Paul Re@S MA FCA The Rt Hon Baroness Bottomley ol Netllestone pc DL Michael MoTe-Motyn8ux, HM Lord-￿eutenant of Surrey Professor Patrick J tlowling C8E DL FREng FRS Dame Penelope Keith DL David Hypher OBE DL Elizabeth Kennedy FCIPD Prol G. Q. Max Lu AO. DL FAEng, FAA. FTSE, FIChemE, FASC. FCAS. FNAI. President and Vi¢g-Chancellor, Univetsity ol SuTr8y Gavin Stephens OPM, Chief Conslable, Surrey Polic Sir Richard Stilgoe 08E DL Sally Varah MBE OL The Rt Revd Andrew Watson, Bishop of Gulldlord Michael Ryan Katie Wad9y Executive ieam Lawr&n¢e Sanlcross Chief Ex•cutiv• Simone Bartley Oirgctor of Poo￿• Iredesignaled as Director of Corporate Services from March 20221 Ambassadors Adele Duncan Director of Cllent Sor¥1￿5 Dame Elizabeth Anson DBE JP DL His Hon Christopher Critchlow OL DesmorKI Mccann &4 FCA Michael O'Brien Dlrector ol Ass•t Manag•m•nt & Capltsl Developm•nl David McNulty FP Greg Melfy Lesley Myles MBE Jp rx MA Kim Rippett The Hon Mrs Lavinia Seaty DL Bgrnard Stèvens FCA FCMA Ralna Sukumaran Director of Financ• & Rosourc¥s Ito April 20221 Edith Pa￿er Interim Director of Finance (from Apnl 20221 Anita Gupla Head ol Ext¢rnal Affalrs & CommunI￿On$ Lady Elizabeth Toulson CBE DL Paul Wates FRICS Cllr Fiona White Mandy Arnold Hèad of Govarnan¢o & Assuran¢e IFrom Febnjary 20221 Mdcolm Young FRICS Caroline Felton Executive Assistant IFrom May 20221 Highlighls, facis and figures 2021122 Previous year's figures in bra¢kets Cllent outcomes umloroi ciiems 1,817 ol Iho 440 who movad M dld so ￿ a posi￿, phnned wayl86%1 11,8 Cliem satisfaciion A new client satisfaction suNey methodology was introduced this year. See page 10 for further details. Hauslry and ¥uppryl 810( Floiltinfj oilPPDrt' 66513911 Houslng manwwl onty 258 (JJ51 83.70/0 •voragb ov•rnI *aii&lxiion *¢• Shett8r•J hou8lTrJ Cabins Hwe¢are Isdoj 28 FotKuary 20211 011801 8.8110 av•rag• &cor• for •as• ol d•allng wfjth Tr8n•fomi Extra Iwkj 26 F•bnJory 20211 0 (351 8.7110 averay ￿ore om cllents. ￿￿$t Unlts ol accommoilatloi Translorni people 935 19651 A¥wa9B numbw ol colleagubs 137 Tr•a(ICou￿{I9S- r•Jucllon dueto sile gt cire seryice51 Flnanclal Derforniance Underlying operating margin. Colloagu8 satlslaciion (￿1r colleague wdlbeing survey found.. 2.40/0 17.2% olThnsfovm cOl￿gueS w tholr h•$ Lvoughllhemloy 74% stythey ￿ inllLwnGe deGisiohsthai are i￿￿Ortant in theirwork eel erKouraged to t&kto their line 1. FIDat￿￿ S￿p( 2. F￿￿￿￿est8ted for 2fr21 frrth 8.6% 1s99 page 72 ftydstailsl meTrtal hea Whai clients say 66 66 66 Thty henevei l £yeik D £OMeD￿ A I feel pYwi4e4 beert nee4£ AN4 Arfe vei 99 99 99 Transl•rni ¢llDiil 66 66 66 I hive owering stsff to be inventive in changing their resFMJnse to any potential crisis. involved in compliance with the rent standard particularly on proportios that became part of our portfolio through merger or acquisrtion. We are taking an in-depth look at our whole property portfolio and will need to reshape it to meet the need5 of a more sustwnable ftjture. This year has seen Transfomi sail out of the choppy Covid waters of the past two years and. as we are about to enter our sixth decade of transforming lives- steer purposefully towards the future. The pandemic has certainly changed how we use technology, our working At the same time as Covid restrictions patterns and health and safety were loosened, the cost ol living, procedures. What it has not affgcted including fuel and energy, Wan however, is Transfomi's fundamental to rise dramatically. We ar6 acutely purpos&. First established in 1972, we aware of the impacl this has had on provide exemplary support lor clients th8 financial and mentsl wellboing of enabling them to turn their lives teams, as well as clients. around and achieve thair ambitions. This y9ar, w9 SUPPOrt9d 1,817 people lo do just that. C•lloague wellboi 8uiiMord Increasod On 1 April 2021, Transform merged with Guildlord-based W&y v￿leY Housing Association (WVHAI. The merger involved the transfer ol two propgrtlgs and two members of staff to Transfomi. WVHA had been supporting 11 residents who As Trustees we have been Imp￿sSed had. or were wovering from. by the dedication and loyalty shown long-temi mental health issues. Wo by all our colleagues. even when were pleased to b& able to provide While navigating the 'new normal,. coping with their own setbacks. The security for these clients as well as Transfomi made several stops on the Board has a strong commitment to to slightly extend our mental health way towards our 50th anniversary do everything we can lo support supFy)rt provision in Guildlord. We destination. We started the year them and wg recgiV8d a boost for continuo to look lor furthor suitable by merging with a small housing this activity when the Community opportunities lor expansion. assoclallon in Guildford. Later, we Foundation for Suffey awarded vs saw development ol our Housing First grant to appoint a W8llbeing Lead to services, won new service contracts build on and expand our colleagu8 and were successful in renewing wellbeing programme. A wellbeing existing contracts. review was carried out and a plan 1$ b￿ng developed. Thanks in larg8 part to support trom local boroughs, districts and Homes England, we have been able to d￿elOp and grow our Housing First setvices. These are critical in addressing the complex reasons for homelessness. Homes England also provided funding lor us to acquire an additional move-on property in Elmbridgg. Transform successfully re-tendered and expanded the Surrey County Council Young People's Accommodation and Support conlract and Crawley Borough Council's Temporary Housing Support contract. I would like to warmly thank Surrey County Council. our local authority partners and Homes England lor their backing, wrthout which we could not have enablèd so many poople to gain thgir independence. Other highlights during the year include being shortlisted lor a 2021 UK Housing Award in the 'Besl Supported Housing Landlord. category, creating our new Clienl engagement strategy and weiving funding to help provide additional wellbeing supw)rt lor colleagues. In the autumn, we held a Confe￿nCe bringing colleagues together lor the first time since Covid and hosted a visit from our royal patron, HRH The Countess ol Wessex. The New Year 2022 saw us reflecting on the impact Transfom) has had sinc8 It launched as we began a year of celebrating 50 years of Transform. leade￿h1￿ developme To help strengthen levels ol colleagu8 engagement and development. we rolled out a well-received, nin&month bespokglgadwship developmgnt programme for all managers and senior leaders. Keeilnu curre We have been reminded several times r￿ntlY of Ihe importance of keeping up to date with. or even ahead of, the regulatory requirements for our sector. For example, we have monitored Vgry ¢arèfulty thè new réquirements pn)mpled by the Grenfell To disaster to ensure we rn￿t the more stringent standards which has required significanl investment. In We were aso delighted that our bids wtth other5, we have had to the Government's Rough Sleeper some Ch￿lengeS wilh interp￿tIng and Accommodation Programme were apptying the complex calculations successfvl this year. Over a period, wlth Covl As the UK came out ol lockdown, Transform continued lo keep a tight locus on the heatth. safety and wellbeing of clients and colleagues. these will enable us to acquire nine new, one-bedTLK)m flats including support for thoso clients (we hav8 purchased the first of th$so this y8ar). In addition, we secured contracts for the provision of support services to 10 r>eopla living in Runnymede and Surrèy Heath and havè also negotiated for a continuation of a contract with the Office of the Police & Crime Commissioner in Surrey for the continued provision of support lor clients with a history of offending. In¥eMmeni During the year, Transform invested t2.8m12021.. £2.6ml in existing and new homes in lintr with our strat8gi¢ plans and continueAI lo focus on developing more homgs lor clignts. A royal There was much excitement on 18 November when Her Royal Highness The Counl8ss of Wessex paid a visit to our Elmbridge team. The Countess. who has been Transform's Royal Patron lor more than 16 years, talked to clients and collèagues while making pizza and playing games. She pr&s8d Transfomi colleagues lor their tremendous eff￿$ supF4)rting clients. ospecially during the Covid pandemic. 66 Ag TThdeeg we hve eeth i*yYt¥ 99 Hllarfs keyworker My initial contact wtth Hilary was a bit bizarre b￿ause we met in the middle of the Coronavirus pandemic, so il wasn't lace-to-facg. She was very down beaten and had spent four or five years living in a touring caravan in ill-health. People who live in touring caravans are not allowed lo stay in one park for more than 28 day5. She was forced to move out and live in a field lor a few days ￿fOre goiThJ back to the park so that she wasn't breaking any laws. It was tough and she just didn't know where to turn. She had previously been misadvised by drfferent services, which meant she never got th8 SUPPOrt she needed. How sha could have been living in that tiny little touring caravan through winters is beyond me- it makes me sad. Hilary can find it challenging to do things when She's ill or tired. so there was a lot of me ringing her up going, 'Come on Hilary, we've got to do thisl" We got the housing benefits done in the end and she was able to move into her new place. Seelng her move in was a stand-out moment lor me because I don't think she realised that she was homeless before. She was getting older. and she was homeless, and I don't think she lully took that on board. Now she's gol her allotment. a garden. and a little dcg- sounds idyllic to be honest. She's doing a lol of pro bono leaching online in subjects like maths and English. and sh8's said she'd be happy to do that for some of our clients too. I might just lake her up on that ofierl a4 Financial performance Summary Rent anil penslon aillusthients Desprte a number of national and ILKal challenges this year, we have continued to focus on ensuring our financial performance supports the delivery of excellent seNices to Glienls. Transform is grateful for the Incre(lible teamwork and commitmant ol eollèagues across thè organisation which has led lo 83.7% of Transfomi clients being satisfied with our services. Following a review ol Transform's rent setting approach, er￿r$ were identified in the calculation of fomiula rgnts, between 2016 and 2022. This affected the rents set for some tenancies during that period. In addition, while carrying out a compliancè revièw ol Transform's pension arrangements, we became aware of an error in the way employee pension contribLrtions had been processed resurting in tcxj much tax relief being applied. In common with other UK organisations. Transform financial performance has been affected during this year by the challenging operating environment and uncertain economy. This impact has been exacerbated by a number of factors. These include increased fire and safety regulatory costs. Continued planned Investment in asset management and IT infrastructurè, along with higher operational staff costs ggneratgd by essential Covid-managernent activities. These factors have increased our overall management and planned maintenance costs lor this year. As soon as these errors were identified, Transfom corrected them and Ljndertook full investigations into how they occurred. We have been working closely with our Board to ensure that the system of management control Is appropriate lor the needs of the onJanisation. Investmom In proDOrtles During the year, Transfomi invested £2.8m12021.. £2.6ml in existing and new homes in line with the organisalion's strategic plans and continued focus on developing more homes for clients. Howevèr, drawing on our Strong track word and financial stability, we have succgssfully navigated th￿￿ ¢hallgnges lo achieve a turnover of t10.6m12021= £12.2m4 and operating costs of £10.3m12021.. £11.3ml. This gives us an underlying operating surplus of E255.000 12021.. £880,0004. Ilablllll8S balance she81 The balance sheet summary broadly shows fixed assets of £52.8m, wrth eight units of accommodation being added during 2021122 through acquisition and a further 11 through the merger with VVVHA. The lolal number of units owned by Translomi increased from 900 to 905 during 2021122. However, the overall total ol managed units went down. This was because the number ol properties We manage but do not own, dgcrgased from 65 to 30 when we handed back the management of an extra care Scheme (following the sale of the care services). We also disposed ol som8 properties and ¢onvèrtad othgrs into Iwo-bedroom flats. SurDllls Transform generated an overall yurplus of £662,000 for the year ending 31 March 202212021.. £4.1 ml. The operating surplus to 31 March 2022 was £1.2m12021.' £4.6mfj. These figures included the £684,OCKI gift Irom the meTger with WVHA and £211,000 from the sale of Transfomi¥ Chaldon Road properties. Last y8ar's overall surplus was £3.4m high8r than this year's, mainly due lo the merger with Reigate Quaker Housing Association IRQHAI which account￿1 for £3.6m of tha E4.1 m overall surplus. In addftion. the total assets- less current liabilities- was t53.7m.12021: £52.Oml. This comprised of.. Social Housing Pension Scheme Defined Benefi't ISHPS DBI liabiliv of £0.2m ovisions of nil12021'. £0.2ml £13.3m12021: £13.1 ml loans £13.Om12021- £12.Oml unarnortised grants £27.2m12021.' £26.5ml of reserves. The balance sh￿1 reflects satisfactory performance which meets our loan Covenant ￿quirements. The cash balance stands at £2.7m12021.' £2.6ml which provides a substantial buffer to manage short-term cash flow pressurgs. We also generated an addttional E98,0(X) of surplus last year following the strategic decision to sell the care services, which completed on 28 February 2021 Uhe financial pèrformanc8 ol thè carè services up to thè date of sale was shown in last year's accounts as 'discontinued operations'l. 2.Al I￿ule$ rt8tated. see Ntste31 on page72. 3. SHPS DB1&4bility iStheshCKrf￿1 ollhe vak*of t￿￿#$?￿$ ￿ ty*s(Jiw*r the¢osts¢faminiStwng It have been taken irfo a¢C￿rt CaDiial Slruciure and treasury As at March 2022, Transform had a secured l(ian faciltty of £20.3m of which £13.8m has been drawn. Based on the current devolopment programme. the remaining loan facility is sufficient to ftjnd future investments for the ngxt couple of years. 01 the outstanding loan balance. approximately 83% is now on a fixed-rate basis protecting Transform against Increases and fluctuations in Interest rates. Our weighted average cost of capital 15 2.7%12021'. 2.4%). Accouniing Dollcles Th&s& financial slalements have been pret)ared in accordance with all applicable law and United Kingdom Accounting Standards, including FRS 102 The Financial Reporting Standard applicable in the UK and Republic ol Ireland. (United Kingdom Generally Accepted Accounting Practice). Reserve Dollcy The Board regularfy rèviews and updates our reserve policy and the reserve balance. Al year end this was £27.2m 12021: £26.5ml. The merger gift from WVHA increased the reserves. Transfom) hold8 reserves for the following purposes.. Working capital. To mitigate operational risks such as pandemics., staffing shortages,. rerned1￿ asset management work,. property flr8 damage or contract lerminalion. To protect against any income fluctu*ions which may arise. To smooth the financial impact of property transacti￿￿. We hold three types of reserves: Restricted reserves- funds received Irorn donors for restricted purposes. General reserves- invested in property. generated through normal operations used lor asset investment purposes. Free reserves- generated trom normal opeiations arKI invested in future activities benefitling clients. As ol March 2022, our free reseNes amounted lo circa t984,000, this exceeded our target of £500,000. providing an operational buffer in rnanaging any unexpected operational risks Golng concorn The Board has reviewed our latest financial forecasts in(x)rporating the necessary Investment in existing and new stock to meet all our commitments. Trtjstees are. to the best of their knowledge, satisfied that tha covenant complianca will ba maintained throughout the period of the plan and have adequately stress-tested this. After making enquiries, the Board has a reasonable expectation that Transfom) has adequale resources to continue to operate lor at least 12 months from the dale of approval ol the financial slalernents. Therefore, the Board believes that Transfom) is well-pla¢ed to manage its risks successfully. For this reason. we continue to adopt the going concern basis in preparing the f1nancial statements. Funilraising Through our fundraising we aim to FM)Sitivety change the lives of homeless and vulnerable people. Last year, we generated £142,38812021.. £110,000) income through fundraising from a range of trusts, foundations, ¢orporates, commLJnity organisations and individuas. We have also recaved many donations in kind dLJring the year including food and clothing. Transform would like to thank dl of our donors and volurrteers for their continued support. Assei managemeni, maintenance and repairs Previous yearfs figures in brackets Horne imurovements In 2021122 we spent £2.Om1£2.Oml on maintaining our properties Irevenue and Capital maintenance) including.. refurbishing 107 flats prior to occupation by new clients refurbishing 109 rooms in shared accommodation prior to occupation by new clients replacing and updating 1 S bathrooms placing and updating 16 kitchens placing and upd*ing boilers lor 36 homes replacing gntrancg d¢)ors on 100 flats with new firg doors taking over responsibility lor delivering grounds maintenance seryices Iweviousty outsourced to a Prlvate contractor). ResD alrs During thg year we Completed 5.150 rgsponsive rgpairs14,0301 of which 72% (74%) were delivered by our in-house maintenance tèam. D8SPit8 the challenges pr8sant8d by Covid lockdown pariods and shortage5 of some materials, more than 95%194%1 of responsive repairs were completed within target. R•Dalrtypo Targei Compleied wllhln tariot Emergency- within 24 hours Urgent- within five working days Essential- within 20 working days Routing- within 30 working days 100% 96%194%1 96%196Yol 98%198%1 95%197%1 95% 97% 97% 01 our 935 homes.17 did not compty with the Decent Homes Standard. Al 17 are unoccupie(l and are waiting Teclevelopment or disposal. Susiainabiliiy Transform is committed to reducing carLK)n emissions in our offices and Clients, homos. We have achieved an average energy effIC￿nCY rating at Energy Performance Certificate IEPGI Band C. To achieve the Government's sustainability targèts S￿la1 housing. we aim to have all our properties at EPC Band C by 2030 and at net zero carbon by 2050. As w811 as helping to address climate change and prOt￿t the planet, the￿ are significant benefits to ¢lients from living in energy-efficient homes. Thes8 targats require a significant capital commitment trx)th for retrofitting existing properties and for ensuring new developments rneel these standards. These commitmtrnts are laclored into our asset management strategy and long-temi businoss plan. Durlng Ihg stock condition survey carried out last year. tt was noted that: 97% 01 Transform shettered housing flats are achieving EPC Band C or above 32% 01 pro￿rtIeS with multiple ￿¢upanCY are achigving EPC Band C or above 78% of independent living Imovtronl properties are achieving EPC Band C or above. Work has begun to scope out and design our sustainability strategy so it is aligned with the Suslainabilily Reporting Standard for Social Housing. •ur hoadllno Sustslnablllty •bl•ciive$ Reduclng the carbon footprint ol housing stock to achleve net zero. Redu¢ing our oporation$' Car￿￿ output. Prioritising improvements for properties with pc4)r energy gffi¢*r ratings. Designing measures and finding the best solutions to improve the themal performance and enèrgy efficiency of our buildings for the benefit of clients. Promoting smart metering and energy saving to reduce consumption. Assessing environmental impacts. Supporting suslainabilily awareness and training. Heallh and safety Approach During the year 2(Y21122, Transform has been diligent in ensuring that clients havg been living in safe homes and that Colleagues have been safe at their places of work. We have aligned our health and salety policy. our statement of intent and our overall approach to safety management to the Health and Safety Executive￿ Guidance HSG65 'Managing lor Health and Safety,. Our aim is to continue to deliver effective health and safety leadership- with Trustees, the Senior Leadership Team and managers- and to then ensure this is being diwminated as a golden thread running through the organisation. Transfomi established a dedi￿ted Head of Heahh & Safety role in support of cmjr Commitment lo providing hèalthy living and Working environments for clients and colleagues. Key health and saloty aciions and achlovemonis Iluring 2021122 DeliveTed improvements and actions recommended in the independ8nt review ol Landlord and O¢¢upational H8alth & Safgty commissioned last year by the Executive Team and carried out by Housing Heatth and Safety Compliance UK. Ensured actions arising trom fire risk assgssm8nls were completed. Further strengthwwd data quality and record keeping. Commissioned Rand Associates to undertake a full stock condition survey. Delivered and Maintair￿ excellent result5 against key pertormance indicators on Tran$fom)'s Health and safety compliance scorecard Members of the Executive. Senior Leadership Team and several Twstees attended an Institution ol Occupation Safely and Health IIOSHI training course- Leading Safely and IOSH Managing Safely training is being rolled out to other managers across thg organisation during 2022. During 2021122, there were no breaches of any of our statutory obligations, no fire incidents and no disrepair claims presented or settled. In addition, no enfor¢ernent a¢tion or notices were served on Transforrn by thg Heatth & Safety Executive. any environmental health department or fire authority. 66 £bMYleéely Training TransforTn ha5 a comprehensive plan for all colleagues which, in addition to role-specific traning. dso includes mandatory online heatth and safety training by leading UK experts Workrite. 4b ékeg