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2023-03-31-accounts

%transform housing & support Financial siaiements 31 March 2023

Company Secretary

Mandy Arnold

Registered office

Transform Housing & Support Bradmere House Brook Way Leatherhead Surrey, KT22 7NA 01372 387100

www.transformhousing.org.uk info@transformhousing.org.uk

Registrations

Registered charity: 264133

Company limited by guarantee registered in England and Wales: 01057984

Registered with the Regulator of Social Housing: H2452

Auditor

CLA Evelyn Partners Limited Onslow House Onslow Street Guildford Surrey GU1 4TZ

Principal solicitors

Devonshires Solicitors LLP 30 Finsbury Circus London EC2M 7DT

Banker

Barclays Bank PLC 1 Churchill Place Canary Wharf London E14 5HP

Contents

1 About Transform Housing & Support
3 Our Chair refects on 2022/23
3 Our Chair refects on 2022/23
5 Strategic report and Trustees’ annual report
6 Key strategic achievements – 2022/23
7 Financial performance
9 Health and safety
10 Equality, diversity and inclusion
11 Asset management, maintenance and repairs
12 Sustainability
13 Value for money
14 Value for money approach
15 Monitoring VFM
21 VFM – the year ahead
22 Future plans – strategic objectives 2021-24
23 Risk management
24 Principal risks and uncertainties
29 Governance, regulation and compliance
30 Governance
34 Regulation and compliance
35 Statement of Board responsibilities
37 Auditor’s report and fnancial statements
38 Auditor’s report
42 Financial statements and notes to the accounts

About Transform Housing & Support

Our purpose

Transform is a housing association and charity supporting around 1,800 people each year in Surrey, parts of southwest London, Berkshire and West Sussex. Transform was established in 1972 and we therefore celebrated our 50th anniversary during 2022. For more than 50 years, we have played a critical role in empowering over 30,000 clients to find a home and forge more independent, fulfilling lives.

Many Transform clients were homeless, excluded from society and battling multiple health challenges. We provide a safe place to live where individuals can gain stability and develop their skills and confidence. We also offer support services to help people in their own homes who are facing housing-related issues to reach their goals.

Our vision and values

Transform is ambitious and intends to continue to strengthen activity and grow to support more clients in the future. Our services are needed now more than ever as the cost-of-living crisis has exacerbated the adversities already faced by many people. These include insecure housing, poverty, discrimination, stigma and inequality. As well as providing homes for individuals, we aim to enable them to live happier and healthier lives. Our ultimate goal is to work with partners towards eradicating homelessness and provide support to those people who require it.

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The Board of Trustees

Mark Austen FCMA

Oliver Smedley FCMA – Deputy Chair and Senior Independent Director

Jane Bolton BA (Hons) FCIH (retired September 2022)

Julie Bradley

Chris Deacon BSc (Hons) MSc (retired September 2022) Sanjay Gulati (joined September 2022)

Natalia Kolotneva MSc MRICS (appointed July 2021)

Patrons

Royal Patron

HRH The Duchess of Edinburgh GCVO DStJ CD

The Rt Hon Baroness Bottomley of Nettlestone PC DL

Michael More-Molyneux, HM Lord-Lieutenant of Surrey

Professor Patrick J Dowling CBE DL FREng FRS (Died April 2023) Dame Penelope Keith DBE DL

David Hypher OBE DL BSc (Hons)

Elizabeth Kennedy FCIPD

Paul Rees MA FCA

Michael Ryan

Alec Sanderson (joined December 2022)

Katie Wadey

Executive team

Lawrence Santcross Chief Executive

Simone Bartley Director of Corporate Services

Adele Duncan Director of Client Services

Edith Parker

Interim Director of Finance (from April-August 2022)

Amanda Soobrayan Director of Finance (from August 2022)

Michael O’Brien

Director of Asset Management & Capital Development (left May 2023)

Kevin Stephens

Director of Asset Management & Capital Development (joined April 2023)

Prof G. Q. Max Lu AO, DL, FREng, FAA, FTSE, FIChemE, FRSC, FCAS, FNAI, President and Vice-Chancellor, University of Surrey

Gavin Stephens QPM, Chief Constable, Surrey Police Sir Richard Stilgoe OBE DL

Sally Varah MBE DL

The Rt Revd Andrew Watson, Bishop of Guildford

Ambassadors

Dame Elizabeth Anson DBE JP DL His Hon Christopher Critchlow DL Desmond McCann BA FCA David McNulty PhD Greg Melly Lesley Myles MBE JP DL MA Kim Rippett The Hon Mrs Lavinia Sealy DL Bernard Stevens FCA FCMA Lady Elizabeth Toulson CBE DL Paul Wates FRICS Cllr Fiona White Malcolm Young FRICS

Mandy Arnold Head of Governance & Assurance

Anita Gupta

Head of External Affairs & Communications

Caroline Felton Executive Assistant

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Our Chair reflects on 2022/23

Within the following pages, you will learn of our successes during the past year when we have provided nearly 1,800 clients with the tools, support and opportunities needed in their journey towards independence. I am pleased to report that it has been another strong year for Transform in fulfilling our core purpose.

Last year also marked an historic occasion as we celebrated Transform’s 50th anniversary. Looking back from this landmark we have supported thousands of stories of transformation. The people we supported have moved from vulnerability to resilience and from dependency to self-sufficiency. It has thus been a time to reflect on the impact we have made on the lives of more than 30,000 people since 1972.

To commemorate this significant anniversary, we organised a series of celebrations in our services, creating opportunities to share stories and remind clients of how far they have come. Additionally, we held a celebration event for colleagues where we were able to show our gratitude for their tireless efforts. Whether in the frontline supporting clients, or in central office support functions, our colleagues’ unwavering dedication has been the driving force behind our success. They have my sincerest thanks for such great service.

We also hosted a spectacular Gala evening, attended by our Royal Patron, HRH The Duchess of Edinburgh which, before costs, raised over £67,000. It was not only a celebration but also a chance to express our sincerest appreciation to those who have been instrumental in backing Transform. We were also able to say a huge thank you to Transform’s trustees, donors, colleagues and supporters whose contributions have enabled us to make a meaningful difference to the lives of those who have been marginalised and forgotten.

Programme. Transform was also successful in renewing its drop-in service contract in Wokingham and its recovery housing contract with Surrey County Council.

This year we said thank you and bid farewell to two esteemed retiring Trustees, Jane Bolton and Chris Deacon, and also welcomed two new Board members, Sanjay Gulati and Alec Sanderson. Transform benefited from two new committee members with lived experience joining the Client Experience & Impact Committee and was shortlisted, for the second year running, for a UK Housing Award in the ‘Best Supported Housing Landlord’ category.

So, as we turn the page on our 50[th] year and reflect on Transform’s accomplishments, we never forget that there are still thousands of individuals who need support. We also remain steadfast in our commitment to making an even greater impact in the future. Together with colleagues, Trustees, donors and supporters, we shall continue to strive for a society where everyone has access to safe and affordable housing. Unfortunately, among other factors, both the cost-of-living crisis and the changes of direction in Government policy will not help us to make homelessness a thing of the past.

Thank you for your continued support along Transform’s journey. It has as always been a privilege and an honour to be part of an organisation that not only provides homes but also empower individuals to rebuild their lives.

Mark Austen Chair 8 August 2023

Let me touch on just a few other highlights from 2022/23. We continued to enhance our digital capabilities, including providing a new messaging service for clients, upgrading our website, improving management information data and further bolstering IT security. Construction began on our first modular development of eight flats for young people and single young parents, which will be named after Transform’s former Chief Executive Paul Mitchell. More than £1.2 million in funding has been secured for the building from local authorities, Homes England and foundation trusts.

We received a further £35,000 this year from Surrey County Council’s Household Relief Fund and acquired a number of flats for homeless people to be run in line with Housing First principles. This was with funding from the Government’s Rough Sleeping Accommodation

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'Ji siraiegic report and Trustees, annual report

Key strategic achievements – 2022/23

Previous year’s figures in brackets

Clients

People

Growth and funding

Transform wide

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Financial performance

(2021/22 figures in brackets)

Summary

The post-Covid pandemic effects and the current economic crisis have proved to be financially challenging this year. Higher operating costs have put financial pressure on our margins. Russia’s war against Ukraine has put additional pressure on food and energy prices, as well as other goods. The surge in consumer price inflation is also having an impact on the households’ living standards.

Many Transform clients face the prospect of worsening personal finances brought about by the declining national economic growth and a delayed post-crisis recovery. Despite operating against this backdrop of economic uncertainty, our financial resilience has enabled another successful year for Transform as we have continued to focus on ensuring the delivery of excellent services to clients.

Income

We have achieved a turnover of £11.3 million (£10.6 million) which represents a 5% increase on the last financial year. A rent freeze in this financial year helped clients during the cost-of-living crisis. Charitable donations from our 50th anniversary Gala event raised over £67,000.

Operating costs

Operating costs were £10.3 million (£10.3 million). This includes abortive costs of £103,000 for a planned capital development which the Board of Trustees took a decision to discontinue as an increase in build costs had rendered the scheme unviable. Other changes in operating costs included increases in service costs due to higher heating and lighting charges.

Planned maintenance costs reduced from £558,000 in 2021/22 to £174,000 in 2022/23 as there was an extensive fire risk programme implemented last year.

We increased our provision for bad debts by £94,000 as more clients struggled with the cost-of-living crisis. As always, staffing has been our biggest area of expenditure – £4.2 million (£4.3 million) which accounts for 40% of our total costs. Across the UK housing sector however, there have been significant difficulties recruiting and retaining staff during the past year. Transform has faced similar challenges with staff vacancies for most of the 2022/23 year which has resulted in a reduction in costs of £126,000 across all areas.

Net income

We achieved an operating surplus of £1.1 million compared to an operating surplus of £1.2 million in 2022. This includes the sale of one of our properties – £114,000 (£211,000). Last year’s surplus included assets of £684,000 acquired from the merger with Wey Valley Housing Association. Interest rate rises over the last year increased our interest costs to £539,000 (£412,000). Our overall surplus was £569,000 (£743,000).

The current turbulence in the economy continues to have an impact on our financial performance. However, we have a diverse portfolio of clients, our business model remains robust and continues to generate sufficient cash to invest in our housing stock and provide an excellent support service.

Investment in properties

During the year, Transform invested £3.9 million (£2.8 million) in existing and new homes in line with the organisation’s strategic plans and continued its focus on developing more homes for clients. Of this £3.9 million, £401,000 was invested in existing properties and £2.2 million in new homes. We have also invested a further £1.3 million in our new modular development.

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Cost analysis
Income
Rental 68% Housing 66%
Support 30% Support 28%
Interest 5%
Fundraised 2%
Fundraised 1%
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Statement of financial position and cash flow

The statement of financial position shows fixed assets of £55.6 million (£52.8 million). We added 10 units to our housing stock portfolio at a cost of £2.2 million through acquisition and invested £401,000 (£350.000) in our existing stock. We have invested a further £1.3 million in our current modular development. The total number of units owned and managed

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by Transform increased from 935 to 941 during 2022/23. We disposed of one property and took three properties out of management.

The total assets less current liabilities was £55.8 million, (£53.7 million). The £55.8 million includes the following items: the Social Housing Pension Scheme Defined Benefit (SHPS DB*) liability of £195,000 (£203,000), loans of £12.8 million (£13.2 million), deferred grants of £15.0 million (£13.0 million) and reserves of £27.8 million (£27.2 million). The balance sheet meets our loan covenant requirements. The cash balance stands at £1.2 million (£2.7 million) which provides a buffer to manage short-term cash flow pressures.

Capital structure and treasury

As at March 2023, Transform had a secured loan facility of £20.3 million of which £13.4 million has been drawn. The remaining loan facility is sufficient to fund our current modular development and future investment in stock. We will refinance £6.5 million of our loans in 2025. Transform has approximately 72% of its loan balance on a fixed-rate basis to protect against increases and fluctuations in interest rates. Our weighted average cost of capital is 3.9% (2.7%).

Accounting policies

These financial statements have been prepared in accordance with all applicable law and United Kingdom Accounting Standards, including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

Reserve policy

The Board reviews our reserves policy annually. Total reserves at year end, were £27.8 million (£27.2 million). We hold the following reserves:

Transfers between funds primarily represent funds designated by the Board for specific purposes.

Going concern

We prepare a 30-year business plan which is updated and approved by the Board on an annual basis. The business plan was approved at a Board meeting held on 25 May 2023. We stress-test our plan against our key strategic risks and to ensure we consider the impact of various scenarios. We have longterm debt facilities in place which provide adequate resources to finance committed reinvestment and development programmes, alongside income generated from our day-today operations.

To the best of their knowledge Trustees are satisfied that Transform is able to service these debt facilities while continuing to comply with lenders’ covenants which will be maintained throughout the period of the plan and have adequately stresstested this.

As at 31 March 2023 Transform held liquidity (comprising cash balances and undrawn committed loan facilities available for immediate drawing) of £7.2 million. Cash balances were £1.2 million.

The Board, after reviewing budgets for 2023/24 and the medium to long-term financial position as detailed in the 30year business plan, is confident that Transform is well placed to manage its risks successfully. The Board is also of the opinion that we have adequate resources to continue to operate for the foreseeable future – being a period of at least 12 months after the date of approval of the financial statements. On this basis, the Board continues to adopt the going concern basis in the financial statements.

Fundraising

Through our fundraising we aim to provide additional services to support clients to positively change their lives. Last year, we generated £335,000 (£142,000) income through fundraising from a range of trusts and foundations, corporates, community organisations and individuals. This also included monies raised from the 50th anniversary Gala event. Transform would like to thank all our supporters and donors for their continued generosity.

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Health and safety

Summary

It is of critical importance to Transform that we maintain a safe and healthy environment for clients, colleagues and all others involved in our operations.

To this end, we have aligned our health and safety policy, our statement of intent and our overall approach to safety management to the Health and Safety Executive’s guidance ‘Managing for Health and Safety’ (HSG65).

Throughout the year 2022/23, we have focused on identifying and mitigating risks, implementing robust protocols and promoting a culture of safety. Through training and awareness, as well as adapting to the evolving needs and challenges presented, we have successfully kept our facilities and operations safe.

Our aim is to always deliver effective health and safety leadership from the top – starting with the Trustees, the Senior Leadership Team and all other managers.

Key health and safety actions and achievements during 2022/23

During 2022/23 there were no breaches of any of our statutory obligations and no fire incidents. In addition, no enforcement action or notices were served on Transform by the Health & Safety Executive, any environmental health department or fire authority.

Training

In addition to other health and safety training undertaken by colleagues specific to their roles, Transform has a comprehensive training plan for all new starters and existing employees which includes mandatory online health and safety training by leading UK experts Workrite.

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Equality, diversity and inclusion

As a supported housing provider responsible for empowering clients to lead independent lives, equality, diversity, and inclusion (EDI) are not just buzzwords; they are the bedrock of our values. We recognise that true inclusion lies with valuing the diversity of all individuals. Our focus revolves around comprehending and addressing the unique requirements of all individuals, with particular emphasis on clients and colleagues (see summary of our EDI strategy below). By fostering a diverse and inclusive environment, we harness the potential of EDI to enact real change and transform lives.

Key EDI achievements during 2022/23

Colleague EDI survey

We surveyed colleagues on EDI matters and below are the two main outcomes:

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levels across Transform excellence and quality of regularly collate and promote equality, value
we will aim to refl ect the outcomes for all people monitor our data using diversity and encourage
communities we serve. using our services. this as feedback to inclusion addressing
understand our strengths barriers and bias.
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Asset management, maintenance and repairs

Previous year’s figures in brackets

Home improvements

In 2022/23 we spent £1.6 million, in capital and revenue (£2.0 million) on maintaining our properties including refurbishing 246 flats and rooms in shared accommodation. The spend in this area was lower than in the previous two years due to the stock condition survey having been carried out and paid for in 2021/22, alongside fewer fire risk and cyclical works being required and a reduction in administration costs.

Responsive repairs

During the year, we completed 4,198 (5,150) responsive repairs, 3,304 (4,030) of which were delivered by our in-house Maintenance Team.

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Repair type Target Completed within target
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Repair type Target Completed within target
Emergency – within 24 hours 100% 96% (96%)
Urgent – within fve working days 95% 94% (96%)
Essential – within 20 working days 97% 95% (98%)
Routine – within 30 working days 97% 92% (95%)

Decent Homes Standard

Of our 941 homes, 16 did not comply with the Decent Homes Standard. These are unoccupied and are situated in two buildings which are both waiting to be sold.

The Decent Homes Standard is a technical standard for public housing introduced by the United Kingdom Government.

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Sustainability

We continue to be strongly committed to reducing carbon emissions in our offices and clients’ homes. We have adopted the Sustainability Reporting Standard for Social Housing (SRS) and will be working towards its implementation. We are very aware that as well as helping to address climate change and protect the planet, there are many benefits for people to be living in energy-efficient properties which include reduced energy bills, better health and more comfortable homes.

We aim to have all our properties at EPC Band C by 2030 and at net zero carbon by 2050, in line with the Government’s sustainability targets for social housing.

Work has begun to scope out and design our sustainability strategy so it is aligned with the SRS, and we will be working with the University of Surrey to help us with research to support the development of this strategy. We are also progressing the recruitment of an Asset Planned Investment Manager who will support the net zero works.

Our headline sustainability objectives include:

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FORMI 4 Value for money

Value for money approach

This outlines Transform’s key principles and approach to achieving value for money (VFM) in the provision of housing and support services. Delivering VFM is essential for us to ensure that our resources are used efficiently and effectively in delivering quality housing and support services.

Our resources are aligned to achieve the objectives of our strategy. This contributes to Transform’s purpose to enable clients to live more independent and fulfilling lives.

Our approach to VFM is underpinned by our strategic objectives outlined in the business plan. Transform has a clear framework for achieving VFM, based on the following principles that support our strategic objectives.

The Board approves the business plan and budget on an annual basis, which sets the framework for the organisation’s operations. The strategies inform our priorities for the year and we remain focused on the delivery of our overall organisational objectives.

Our key strategic objectives to be achieved over the next five years are to:

We set ourselves challenging targets across all areas of operations and compare our performance against other similar sized housing providers to measure our efficiency and effectiveness and to identify areas for improvement.

Our strategic objective is to deliver homes that meet a range of needs. At the end of the financial year, we held 941 units of housing which were used for supported housing, temporary accommodation and general needs housing purposes.

Achieving continuous improvements remains a key strategic objective. Our focus remains on optimising value and focusing, in particular, on improving the quality of homes and delivering effective and high-quality support services to clients.

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Monitoring VFM

Our VFM performance is measured against economy, efficiency and effectiveness targets. Our aim is to work collaboratively with colleagues to deliver improvements.

Operational targets are set at the start of each financial year which are approved by the Board. We aim to deliver continuous improvement throughout the year.

We benchmark our VFM performance:

We use Acuity Benchmarking to measure ourselves against. The main resources used to compile this report are:

Transform’s operational indicators include:

Our Senior Leadership Team, including the Executive Team meet regularly to review performance and take appropriate action if targets are not being met.

Monitoring of progress is delegated to our Board of Trustees which also provides financial scrutiny of performance against budget and quarterly in-depth reviews of our financial and VFM metrics.

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How we performed and the areas for development

Economy

We measure the use of our resources ‘doing things at the right cost’ and minimising the costs per activity. This is monitored through quarterly management accounts, quarterly reforecasts, and comparing similar sized housing association benchmarking results.

During 2022/23 we:

Efficiency

We measure how we delivered the same level of service for less expense, time or effort i.e. ‘doing things the right way’ through quarterly performance reports.

Repairs

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2022/23 Peer group
Indicator 2023/24 Target Internal target 2022/23 2022/23 2021/22
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Indicator 2023/24 Target 2022/23
Internal target		 Peer group
2022/23		 2022/23 2021/22
% of repair completion time 97% 97% 86% 96% 96%
Voids % 6% 6% 6% 7% 6%
Arrears % net of housing beneft 3% 3% 5% 6% 5%

Our performance tends to benchmark well against comparable providers in terms of repair completion times. During this year we have introduced a messenger module on Pyramid (our housing management system). The Pyramid Messenger module collates customer satisfaction for reactive repairs. We strive to improve satisfaction rated by ensuring we get all repair jobs done first time and to a high standard.

Voids

Reducing voids is a key focus for Transform following a recent dip in performance post-Covid when there were delays in filling them. Delays to repairs work have also lengthened some turnaround periods. Activity to reduce voids has included:

Arrears

Another aspect we are committed to improving is arrears management and income collection.

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Covid has been a long road to recovery for the majority of clients and, in addition to the current economic crisis, this has reduced our performance in managing arrears in 2022/23 when compared to 2021/22. Ways we are addressing this include:

Effectiveness

We measure the extent to which intended outcomes are achieved.

During the 2022/23 financial year, we worked with 1,793 clients, 438 of whom moved on positively to independent living. Through delivery of our operational services, we make a significant impact to the communities in which we work.

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Internal KPIs
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2023/24
Indicator 2022/23 2021/22
target
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Indicator 2023/24
target		 2022/23 2021/22
Number of clients we worked with 1,800 1,793 1,818
Number of positive move-ons % 90% 89.6% 89.1%
Number of clients who moved to
independent accommodation		 450 438 392

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VFM metrics

VFM metrics were introduced to compare performance in the sector in a fair and comparable way. The seven metrics compare efficiency, effectiveness and economy on a comparable basis across the sector. We benchmark ourselves against the Acuity Benchmarking group.

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Supported
2022/23 housing Acuity
VFM metrics Internal 2022/23 benchmarking 2021/22
target group/peer
group 2021/22
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VFM metrics VFM metrics 2022/23
Internal
target		 2022/23 Supported
housing Acuity
benchmarking
group/peer
group 2021/22		 2021/22
1. Operating margin (overall) 10.0% 8.7% 9.0% 2.4%
2. Operating margin (social housing lettings) 8.0% 5.2% 11.7% 4.6%
3. Earnings Before Interest, Taxes and Amortization (EBITDA)
Major Repairs Included (MRI) (as a % of interest)		 150.0% 289% 171.0% 154.0%
4. Gearing 25.0% 22.0% 13.9% 21.3%
5. Supply of new social housing (as a percentage) 1.0% 1.1% n/a 0.7%
6. Reinvestment 5% 5.1% 4.0% 5.5%
7. Return on Capital Employed (ROCE) (%) 2.0% 2.0% 1.9% 2.1%
8. Headline social housing cost per unit £10,000 £10,073 £13,060 £10,242

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1 and 2 – Operating margins

Our current year performance against the VFM metrics, is lower than our peer group for both the overall operating margin and operating margin for social housing lettings. Transform’s financial performance during the past two years was affected by the challenging operating environment post-pandemic and this year, Transform had a rent freeze which supported clients during the current cost-of-living crisis.

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12%
10%
8%
6%
4%
2%
0%
18/19 19/20 20/21 21/22 22/23
Operating margin (overall) Peer group benchmarking
30%
25%
20%
15%
10%
5%
0%
18/19 19/20 20/21 21/22 22/23
Operating margin (social housing lettings) SPBM benchmarking group
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3 – EBITDA

Our EBITDA metric is above the benchmark for 2022/23. It was below our peer group during the period marked by the pandemic. The metric aligns with our VFM strategy to invest in new homes and make our existing homes ‘fit for purpose’. Reduced operating costs has improved our EBITDA KPI this year.

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400%
300%
200%
100%
0%
18/19 19/20 20/21 21/22 22/23
EBITDA major repairs included (MRI) SPBM b enc h mar ki ng group
(as a % of interest)
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4 – Gearing

Our development programme is ongoing. Our gearing ratio at March 2023 is higher than our supported housing benchmarking group but still relatively low at 26%. This satisfies loan covenant requirements and gives us the capacity to take advantage of additional borrowing, for development and growth purposes.

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30%
25%
20%
15%
10%
5%
0%
18/19 19/20 20/21 21/22 22/23
Gearing SPBM benchmarking group
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5 – New supply

We invested £2.2 million (2022: £ 1.9 million) in the provision of 10 new homes in 2022/23.

6 – Reinvestment

Capital expenditure of £401,000 (2022: £350,000) was invested in our existing stock and we performed better than our benchmarking group over the last three years.

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12%
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18/19 19/20 20/21 21/22 22/23
Reinvestment % SPBM benchmarking group
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7 – Return on Capital Employed (ROCE)

ROCE measures our overall operating surplus in relation to our total assets less current liabilities. Our ROCE has been below our benchmarking group over the past four years but for this 2022/23 year is at the same level as our benchmarking group. Any surplus that Transform makes in its operations is reinvested in maintaining its existing homes, building new homes and maintaining and investing in its support services.

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3%
2.5%
2%
1.5%
1%
0.5%
0%
18/19 19/20 20/21 21/22 22/23
ROCE % SPBM benchmarking group
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8 – Social housing cost per unit

Housing costs have reduced to £10,000 per unit which is below our peer group. This was mainly due to lower costs because of a shortfall in staffing.

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£15,000
£10,000
£5,000
£0
18/19 19/20 20/21 21/22 22/23
Headline social housing cost per unit Peer group benchmarking
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VFM - the year ahead

Our VFM objectives for 2023/24 are to:

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Future plans - strategic objectives 2021-24

Continue to focus Invest in new on quality and housing supply and compliance and ensure all existing be proactive in assets are fi t for communicating purpose, fi nancially positive outcomes. viable and relevant. Increase our Extend our operating reputation by footprint, monitor building on opportunities for relationships with asset investment commissioners, and possible trusted partners and mergers while other stakeholders. ensuring fi nancial sustainability of all services.

Further build Use our resources Improve, innovate colleague and partnerships to and develop housing engagement, embed create positive social and support inspiring leadership and environmental services, increase approaches impact, including the volume and that align with implementing diversity of client outstanding client measures to fully engagement and outcomes and understand this use technology focus on colleague impact. wherever it can add wellbeing and value. Consistently inclusivity. maintain property assets to a high standard.

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Risk management

Principal risks and uncertainties

Risk management

Risk management is fundamental to Transform’s operation. We assess risks scrupulously on an ongoing basis to monitor if they will significantly impact on the delivery of our business plan. The Board holds overall accountability for risk management with Trustees regularly reviewing Transform’s risk register. The more detailed scrutiny is delegated to committees for their respective risks. The Senior Leadership Team – which includes the Executive Team – has day-today oversight for reviewing risk. This activity supports strategic decision-making and ensures that Transform can adapt to changing circumstances.

Within the framework, risks and opportunities are continuously monitored and evaluated. From this work, policies and procedures are adapted and controls put in place to ensure appropriate action is taken to safeguard clients, colleagues and Transform as a whole. Our framework also ensures that risk informs the business planning process with proactive risk management being used to prepare for the uncertainty in our operating environment.

Transform’s key risks

Details of the most significant, highest scoring, risks listed as follows:

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Economic risk exposures such as inflation, interest rates and economic downturn
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Risk

Macroeconomic activity negatively impacting on clients and colleagues

Details and specific risk mitigations

There continues to be much uncertainty in the UK and global economies post-pandemic and as a result of the war in Ukraine. Increases in energy prices inflation and interest rates are causing operational pressures for Transform and increased cost of living for clients and colleagues.

General controls and mitigations

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Inability to recruit and retain high-quality staff
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Risk

Challenges recruiting and retaining colleagues who meet our role requirements.

Details and specific risk mitigations

The after-effects of the pandemic have resulted in a severe labour and skills shortage for organisations across the UK. This has presented a continuing challenge for recruitment, selection and retention within a strongly competitive recruitment market.

General controls and mitigations

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Effectiveness of financial controls
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Risk

Financial policies and procedures that require updating to strengthen controls.

Details and specific risk mitigations

We continue to review key financial procedures to ensure they are robust and effective. This is being led by the Director of Finance who was appointed in August 2022.

General controls and mitigations

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Data protection and IT security risks
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Risk

Threats to our IT and data security.

Details and specific risk mitigations

We are keeping pace with developments in cyber-security and data protection. Continued investment in monitoring and testing, security systems, training and awareness will continue to ensure we are doing our utmost to safeguard business continuity as well as protecting client, colleague and business data. Our partnership with LIMA Networks, which provide a fully managed IT digital system for Transform, means we have an immediate response process in place in the event of any network failures.

General controls and mitigations

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Financial hardship to clients and impact on their wellbeing
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Risk

Clients suffering from physical/mental health and wellbeing issues due to financial hardship affecting their progress

Details and specific risk mitigations

The current economic climate is having a huge impact on clients. Many are unable to afford the increases in cost of living caused by rising food costs, increased energy prices coupled with income which doesn’t keep pace with inflation. This can lead to increased financial hardship, with bigger arrears/bad debts, as well as having a negative impact on their mental health and wellbeing.

General controls and mitigations

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Regulatory intervention
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Risk

A regulatory notice from the Regulator of Social Housing

Details and specific risk mitigations

In January 2022, we self-reported to the Regulator of Social Housing an error we had identified in rent calculations. A comprehensive action plan was implemented to rectify the error.

General controls and mitigations

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Over-reliance on a single local authority for housing support income
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Risk

Surrey County Council contracts represent a significant percentage of Transform’s income

Details and specific risk mitigations

We recognise the importance of not placing over-reliance on a single local authority as a source of income. We have diversified our income over the years and have re-secured existing contracts with Wokingham Borough Council, the Office of Police and Crime Commissioner, Crawley Borough Council and the London Borough of Sutton.

During this past year we have also successfully negotiated additional funding for a capital development project from the Department of Health along with revenue funding to increase the number of units we provide for young people.

General controls and mitigations

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Health and safety
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Risk

Non-compliance with statutory health and safety obligations as an employer and as a landlord.

Details and specific risk mitigations

We continually review and update policies and procedures to ensure that we meet our obligations regarding landlord and employer health and safety. We carry out health and safety checks of properties and occupational health and safety risk assessments on an ongoing basis, including, gas safety, fire risk, water quality, electrical safety, lift safety and asbestos.

General controls and mitigations

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Safeguarding clients
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Risk

Inability to discharge our duty of care in relation to safeguarding requirements.

Details and specific risk mitigations

We work in partnership with other organisations to protect those at risk and prevent incidents that could result in harm to the young people or vulnerable adults we support. We have a clear safeguarding policy aligned to our commissioners’ requirements and ensure all colleagues are clear about safeguarding processes by providing regular, compulsory training.

General controls and mitigations

The Board closely monitors the risk environment to identify changes in key risks as well as new or emerging risks. The sub-committees of the Board also review the risks relevant to their remit every quarter. This is a key focus of the Finance & Audit Committee, which, together with the Board, has overseen the development of the risk register for Transform and will continue to review and scrutinise this during the coming year.

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li rAI froPMJI. lty lid Gole nce, regulaiion and compliance 21

Governance

Board of Trustees

During 2022/23, the Board comprised nine members and was responsible for Transform’s strategy, policy framework and managing the affairs of the company. The Board members were drawn from a wide background bringing together professional, commercial and local experience.

Trustees are selected by the Nominations Committee following public advertisement for recruitment. During the year we appointed two new Trustees, Sanjay Gulati and Alec Sanderson, enhancing Board skills in supported housing, digital and IT.

Those Board members who served during the period to 31 March 2023 and Transform’s Executive Team are set out on page 2. The Trustees are also appointed as directors under the Companies Act 2006.

Board and committee structure

During the year the Board was supported by several committees, providing detailed scrutiny on its behalf.

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Client Experience
& Impact
Committee
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Development &
Asset
Management
Committee
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Clie n t Forum
Board of Trustees
Staff Forum
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Finance & Audit
Committee
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Nominations
Committee
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People
Committee
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Board and committee membership 2022/23

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Trustees Board Client Development Finance Nominations People
Experience & Asset & Audit Committee Committee
& Impact Management Committee
Committee Committee
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Trustees Board Client
Experience
& Impact
Committee		 Development
& Asset
Management
Committee		 Finance
& Audit
Committee		 Nominations
Committee		 People
Committee
Mark Austen Chair Chair
Jane Bolton (retired
September 2022)		 Member Member Member Member
Julie Bradley Member Member Member Chair
Chris Deacon (retired
September 2022)		 Member Chair (until
July 2022)		 Member
Sanjay Gulati
(appointed July 2022)		 Member Member Member
Natalia Kolotneva Member Chair (from
November
2022)		 Member Member
Paul Rees Member Member Chair
Michael Ryan Member Member Member
Alec Sanderson
(appointed December
2022)		 Member Member
Ollie Smedley Deputy Chair Member Member Member
Katie Wadey Member Chair (from
November
2022)		 Chair (until
May 2022)

Board and committee focus

The Board is responsible for the governance of Transform. Its role is to lead, direct, control, scrutinise and evaluate Transform’s work.

During the year, the Board considered a number of key matters including:

The Board delegates specific responsibilities to five committees which each report to the Board where their recommendations are considered and approved where appropriate.

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Please see below key matters discussed and approved at the five committees during 2022/23.

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Committee Key matters 022/23
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Committee Key matters 022/23
Client Experience & Impact ■
Maintained oversight on client services’ performance.
■
Reviewed and approved all client-facing policies following input from the Client
Forum.
■
Recommended to the Board the appointment of two individuals with lived
experience as formal members of the committee for an initial one-year term.
■
Approved the new Emergency Out of Hours Support Service policy.
■
Approved the updated and refreshed client handbook.
Development & Asset
Management		 ■
Maintained oversight of asset management compliance and performance.
■
Approved property investment and disposal decisions.
■
Oversaw health and safety compliance.
Finance & Audit ■
Maintained oversight on fnancial and risk management.
■
Oversaw internal/external audits and approved the internal audit plan.
■
Approved and oversaw the implementation of the Cyber-security improvement
plan.
■
Reviewed the Business continuity plan and provided input to the Governance
plan.
Nominations ■
Reviewed Board/committee composition.
■
Recommended Board appointments – Sanjay Gulati and Alec Sanderson.
■
Reviewed succession planning for Board/Executives.
■
Approved and oversaw the management of the appointment process for a new
Chair.
People ■
Endorsed the proposals arising from the review of the Transform pension schemes
and recommended a new supplier and pension scheme to the Board.
■
Agreed and recommended to the Board a cost-of-living payment to all colleagues.
■
Endorsed the salary benchmarking proposals and recommended them to the
Board.
■
Approved diversity training for the Board and a new EDI action plan for Transform.
■
Agreed and maintained oversight of wellbeing activity including fnancial wellbeing
seminars, mental health frst aider training and menopause training.

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Trustee training

In addition to the two new Trustees undertaking induction training, Trustees have also carried out a Risk management workshop, Equality, diversity and inclusion and Cyber security training. Trustees are also encouraged to attend events and networking opportunities held by recognised sector bodies such as the National Housing Federation.

Board effectiveness

The Board recognises the importance of monitoring and improving its performance. This is primarily achieved through annual appraisals and self-assessment of the effectiveness of the Board and its Committees. An external board effectiveness review was carried out in February and March 2023, with the findings being disseminated to the Board in May 2023. The review provided confidence of a dedicated and effective Board of Trustees overseeing a well-managed and governed organisation. An action plan to further strengthen board effectiveness will be overseen by the Board.

Code of governance

Transform adopted the National Housing Federation Code of Governance 2015 for the reporting period. An annual assessment of compliance against the code has been conducted and confirms that Transform complies with all the requirements of the code including the provisions in relation to:

The Head of Governance & Assurance is supporting the Board with a governance improvement plan to enable the adoption of the National Housing Federation Code of Governance 2020.

Governance and Financial Viability Standard

The annual review of compliance against the Regulator of Social Housing’s Governance and Financial Viability Standard has been carried out and Transform was compliant with the standard during the reporting period. A detailed and evidence-based assessment was completed against each requirement and the Board approved this at its meeting on 27 July 2023.

In preparing this strategic report and board report, the Board has followed the principles set out in the Statement of Recommended Practice (SORP) for Registered Social Housing Providers 2018.

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Regulation and compliance

Transform fully complies with all the regulators that are relevant to our activities; these are the Regulator of Social Housing, the Charity Commission and the Fundraising Regulator.

Fundraising Regulator, and colleagues are kept abreast of changing regulations through the year. We received no complaints relating to fundraising in the year to 31 March 2023.

Regulator of Social Housing

As a small provider, Transform is not subject to regulatory judgement from the Regulator of Social Housing and was not issued with any regulatory notices during this period of accounts.

Charity Commission public benefit reporting

Transform’s aims, objectives and activities demonstrate public benefit as defined by the Charity Commission. The Board ensures that planned activities meet the organisation’s objectives. Transform’s work supports those on the margins of society to overcome the challenges they face in their lives.

Complaints

We carry out an annual self-assessment of our complaints policy against the Housing Ombudsman Service’s Complaint Handling Code and for 2022/23 we are fully compliant. As part of our commitment to continual improvement, we value the opportunity to learn from complaints to help us get things right next time. In addition to resolving the individual complaints, we keep thorough records and take action across our services, where necessary.

Information compiled for each complaint received, includes (where relevant):

Trustees have regard to the Charity Commission’s public benefit guidance when carrying out their duties. Awareness of the guidance forms part of each Trustee’s induction and the Board takes this into account when making relevant decisions.

Fundraising Regulator’s code compliance

The Code of Fundraising Practice sets out the responsibilities that apply to fundraising carried out by charitable institutions in the UK. To provide reassurance to donors and supporters, and to demonstrate high standards for our fundraising activities, we are registered with the Fundraising Regulator and have adopted the Regulator’s Code of Fundraising Practice.

We are committed to protecting our donors and the public from any unreasonably intrusive or persistent fundraising approaches and will not apply any undue pressure on them to donate. We do not use any external professional fundraising services. We use the Fundraising Regulator’s logo on fundraising communications. Transform has not received any requests to remove or suppress donor data from the regulator’s Fundraising Preference Service.

The fundraising team continually monitors guidance and regulations from the Charity Commission and the

In 2022/23, Transform received a total of 17 formal complaints (2022:23). No complaints were referred to the Housing Ombudsman during the year.

Despite the pressures on teams, the number of complaints has decreased in 2022/23. Potential complaints from clients are being handled effectively at a local level and so do not necessarily escalate to the more formal complaints procedure. However, complaints from external sources are always progressed through the complaints procedure until resolution.

All but two complaints have been successfully resolved. These two remain open and we are liaising with the complainants to ensure they are resolved to the satisfaction of all parties.

Transform is considering all learning points arising from complaints and is working closely with colleagues, clients and community partners to carry out actions to reduce and mitigate future complaints.

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Statement of Board responsibilities

The Board is responsible for preparing the strategic report (including the board report) and financial statements in accordance with applicable law and regulations. Company law requires the Board to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards as reflected in FRS102 and applicable laws).

Under company law, the Board must not approve the financial statements unless they are satisfied that they give a true and fair view of the situation and surplus or deficit of the company for that period.

In preparing these financial statements, the Board is required to:

The Board is responsible for keeping proper accounting records and Trustees must be able to disclose with reasonable accuracy at any time the financial position of the company and enable it to ensure that the financial statements comply with the Companies Act 2006, the Housing and Regeneration Act 2008 and the Accounting Direction for Private Registered Providers of Social Housing 2022. It is also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

In so far as each member of the Board is aware:

The Board is responsible for the maintenance and integrity of the corporate and financial information, including that provided on Transform’s website.

Internal control framework

The Board acknowledges its overall responsibility for establishing and maintaining the system of internal controls and for annually reviewing its effectiveness. The system of internal controls is designed to manage, rather than to eliminate, the risk of failure to achieve the business objectives and to provide reasonable assurance against material misstatement or loss.

The process of identifying, evaluating, and managing significant risks facing the organisation is ongoing. It has been in place from 1 April 2022 to the date of Board approval (27 July 2023).

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The key elements of the framework include:

Internal audit

The Board delegated responsibility for overseeing the adequacy and effectiveness of the internal control system to the Finance & Audit Committee. Internal Audit reported directly to the Committee and a risk-based internal audit plan was prepared and approved by the Committee. The Committee subsequently monitored the programme of internal audits and received assurances to confirm that recommendations had been implemented as agreed. Follow-up internal audit reviews were undertaken to check recommendations had been implemented. Transform appointed new internal auditors, RSM UK during 2022/23.

External audit

The work of the external auditors provides assurance through the audit plan detailing the scope of work which is approved by the Finance & Audit Committee, together with the resulting audit report and management letter setting out their findings. Regular meetings are held with the external auditors to provide an update on changes in the business and to discuss strategic and technical matters. This includes a confidential meeting with members of the Finance & Audit Committee without officers present at least once a year.

Performance monitoring framework

Key performance indicators were produced regularly and reported through the Executive Team, Committees and the Board. These reports include performance-monitoring on client services, client satisfaction and complaints, compliance, asset management, development, colleagues and financial results.

Anti-fraud

We maintain a fraud register which is inspected by the internal auditors, together with regular updates reporting any such occurrences to the Finance & Audit Committee. During the year 2022/23 there were no such incidents of fraud reported.

Regulatory reporting

Transform submitted a range of regulatory returns to the Regulator of Social Housing and the Charity Commission. The Executive Team ensures that regulatory matters are dealt with promptly and efficiently, co-ordinates the selfmonitoring system operated by the Board and monitors compliance with the required standards.

External Auditors

External auditors CLA Evelyn Partners Limited were re-appointed as external auditor at our Annual General Meeting (AGM) on 29 September 2022. A resolution for the appointment of external auditors will be proposed at the AGM on 28 September 2023.

By order of the Board.

Mark Austen Chair 8 August 2023

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Auditor’s report and financial statements Front page

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Auditor’s report

CLA Evelyn Partners Limited

Report of the independent auditor to the members of Transform Housing & Support

Opinion

We have audited the financial statements of Transform Housing & Support (the ‘Company’) for the year ended 31 March 2023 which comprise the Statement of Comprehensive Income, the Statement of Financial Position, the Statement of Changes in Reserves, the Statement of Cash flows and the notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (United Kingdom Generally Accepted Accounting Practice).

In our opinion, the financial statements:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the Board members’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Company’s ability to continue as a going concern for the period of at least 12 months, from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the Board members with respect to going concern are described in the relevant sections of this report.

Other information

The other information comprises the information included in the Financial Statements, other than the financial statements and our auditor’s report thereon. The Board members are responsible for the other information. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements, or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information; we are required to report that fact.

We have nothing to report in this regard.

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Opinion on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken during the audit:

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report (incorporating the Board Members’ report).

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

Responsibilities of Board Members

As explained more fully in the Statement of Board’s Responsibilities on page 35, the Board Members who are the directors of the Company for the purposes of company law, are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal controls as the Board Members determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Board Members are responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board Members either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, are as follows:

We obtained a general understanding of the company’s legal and regulatory framework through enquiry of management in respect of their understanding of the relevant laws and regulations. We obtained an understanding of the company’s policies and procedures in relation to compliance with relevant laws and regulations. We also drew on our existing understanding of the company’s industry and regulation.

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We understand that the company complies with the framework through:

In the context of the audit, we considered those laws and regulations which determine the form and content of the financial statements, those which are central to the company’s ability to conduct operations and those where failure to comply could result in material penalties. We have identified the following laws and regulations as being of significance in the context of the company:

We performed the following specific procedures to gain evidence about compliance with the significant laws and regulations above:

The senior statutory auditor led a discussion with senior members of the engagement team regarding the susceptibility of the company’s financial statements to material misstatement, including how fraud might occur. The key areas identified as part of the discussion were:

These areas were communicated to the other members of the engagement team not present at the discussion.

The procedures carried out to gain evidence in the above areas included:

The senior statutory auditor was satisfied that the engagement team collectively had the appropriate competence and capabilities to identify or recognise irregularities. In particular, both the senior statutory auditor and the audit manager have a number of years’ experience in dealing with group’s with similar risk profiles.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities . This description forms part of our auditor’s report.

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Use of our report

This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

Julie Mutton

Senior Statutory Auditor for and on behalf of CLA Evelyn Partners Limited Statutory Auditors Chartered Accountants Onslow House Onslow Street Guildford Surrey GU1 4TZ

7 September 2023

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Financial statements and notes to the accounts

Statement of comprehensive income for year ending 31 March 2023

Turnover Note
3		 2023 2022
£000s
11,270		 £000s
10,570
Operatingexpenditure 3 (10,294) (10,315)
Underlyingoperatingsurplus 976 255
Gain on disposal of housing properties 9 114 211
Donation of WeyValleyHousingAssociation (WVHA) net assets 30 - 684
Operating surplus/(defcit) 1,090 1,150
Interest receivable 7 18 5
Interest and other fnancingcosts 8 (539) (412)
Surplus for the year
Other comprehensive income		 569 743
Actuarial (loss) in respect of pension scheme (23) (81)
Total comprehensive income for the year 546 662

The accompanying notes form part of these financial statements.

Mark Austen Chairman

Paul Rees Chair of the Finance & Audit Committee

Mandy Arnold Company Secretary

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Statement of financial position as at 31 March 2023

Fixed assets Note 2023 2022
£000s £000s
Tangible fxed assets – housingproperties and other fxed assets 11 55,561 52,817
Current assets
Trade and other debtors 12 1,834 818
Cash and cash equivalents 13 1,238 2,667
3,072 3,485
Creditors: amounts falling due within oneyear 14 (2,794) (2,583)
Net current assets 278 902
Total assets less current liabilities 55,839 53,719
Less: creditors – amounts falling due after more than oneyear 15 (27,870) (26,288)
Pension – defned beneft liability 24 (195) (203)
Other provisions for liabilities and charges 19 (-) (-)
Total net assets 27,774 27,228
Capital and reserves
Restricted reserve 409 294
Designated reserves 250 (-)
General reserve
- invested inproperty		 26,996 25,950
- free reserve 119 984
27,774 27,228

The accompanying notes form part of these financial statements. The financial statements were issued and approved by the Board on 8 August 2023.

Company number: 01057984

Mark Austen Chairman

Paul Rees Chair of the Finance & Audit Committee

Mandy Arnold Company Secretary

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Statement of changes in reserves for year ending 31 March 2023

Balance at 1 April 2021 Restricted
reserves		 Designated
reserves		 General reserves Total
Invested in
properties		 Free
reserves
£000s
237		 £000s
-		 £000s
25,260		 £000s
1,069		 £000s
26,566
Surplus for theyear as restated - - 743 - 743
Other comprehensive income for theyear - - (81) - (81)
Total comprehensive income for theyear - - 662 - 662
Transfer between reserves 57 - 28) (85) -
At 31 March 2022 294 - 25,950 984 27,228
Surplus for theyear - - 569 - 569
Other comprehensive income for theyear - - (23) - (23)
Total comprehensive income for theyear - - 546 - 546
Transfer between reserves 115 250 500 (865) -
At 31 March 2023 409 250 26,996 119 27,774

The accompanying notes form part of these financial statements.

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Statement of cash flows for the year ending 31 March 2023

Net cashgenerated from operating activities Note
22		 2023 2022
£000s
1,938		 £000s
1,598
Purchase and refurbishment of housing properties (4,004) (2,820)
Proceeds from sale of tangible fxed assets 9 157 298
Cash received on merger 30 - 176
Merger expenses 30 - (34)
Grants received 1,393 1,112
Grants repaid - -
Interest received 18 5
Net cash used in investing activities (2,436) (1,263)
Interestpaid (571) (409)
Further borrowing - 455
Repayment of borrowings (360) (270)
Net cash used in fnancing activities (931) (224
Net change in cash and cash equivalents (1,429) 111
Cash and cash equivalents at:
Beginning of theyear 2,667 2,556
End of theyear 1,238 2,667

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Notes to the financial statements

1. Legal status

Transform Housing & Support is

2. Accounting policies

The principal accounting policies are summarised below. Except as explained below, they have all been applied consistently throughout the year and to the preceding year.

Basis of accounting

The financial statements have been prepared in accordance with the UK Generally Accepted Accounting Practice (UK GAAP) including Financial Reporting Standard 102 (FRS 102) and the Housing SORP 2018: Statement of Recommended Practice for Registered Social Housing Providers. They comply with the Accounting Direction for Private Registered Providers of Social Housing 2022.

Transform’s objectives are to provide housing and support services and to improve the wellbeing for vulnerable and socially excluded clients and is therefore considered as a Public Benefit Entity (PBE), in accordance with FRS 102.

Going concern

In preparing the financial statements, management has assessed the company’s ability to continue as a going concern. In this assessment management considered all available information about the future, which is at least, but is not limited to, 12 months from the date when the financial statements are authorised.

Transform has considered the business activities and current financial position and the factors that are likely to impact our future development are set out in the Strategic Report. In assessing its future viability, the Board has carried out a thorough review of the cash-flow forecast, treasury management policy, compliance with the debt facilities as well as covenants’ compliance, liquidity levels and financial plan outputs. In addition, the Board stress tested the operating and financial pressures on the business activities and implemented mitigating factors to protect the financial viability of the organisation. Having evaluated the impact on each business activity, the Board is confident that services are well-managed and continue to make positive contributions to the organisation.

Furthermore, the company has in place adequate long-term debt facilities to fund commitments on the strategic investments and development programmes, along with the organisation’s day-to-day operations. The company’s long-term business plan reflects a viable financial position capable of servicing these debt facilities while continuing to comply with lenders’ covenants.

A wide range of multi-variant stress tests have been run and are regularly monitored through the risk register, these include economic risk exposure from inflation, interest rates and economic downturn. We have also considered the post-Brexit environment and potential impact on Transform by way of shortages in accessing fresh capital and EU workers, alongside increasing staffing costs, stretched supply chains and the effect of property valuation.

Transform had adopted various approaches to mitigate against risks for example delaying uncommitted nonessential expenditure, implementing efficiencies in our procurement processes and closely monitoring increased regulatory costs such as fire safety expenditure. The appropriate governance support has been factored in for all scenarios. This stress testing found that the business plan is robust and does not affect the company’s ability to meet its obligations.

On this basis, the Board has reasonable expectation that Transform has adequate resources to continue in operational existence for the foreseeable future, being a period of at least 12 months after the date on which the report and the financial statements are signed. For this reason, it continues to adopt the going concern basis in the financial statements.

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Significant management judgements

There were no significant judgements in applying the accounting policies for the company that have the most significant effect on the amounts recognised in the financial statements.

Other key sources of estimation uncertainty

Information about estimates and assumptions that have the most significant effect on recognition and the measurement of assets, liabilities, income and expenses, is provided below. Actual results may be substantially different.

Turnover and revenue recognition

Turnover represents the income received or receivable from the following sources:

Rental and service charge income – this income is in respect of the year, net of any voids. The rental and service charge income from properties developed during the year is recognised from the point at which these properties reach practical completion or are otherwise available for letting. The enhanced housing management fees receivable that is funded by housing benefit is also included here.

Housing related support income – income is recognised as it falls due under the contractual agreements. The ‘block subsidy’ housing-related support income is classed as social housing income and ‘block gross’ income as other social housing income in the Statement of Comprehensive Income.

Charitable donations – grants and donations from charitable trusts and voluntary sources for the development of property or for the acquisition of other tangible fixed assets are treated as income. Income is recognised on any significant pledges, only after the grant conditions are fulfilled.

Donation of net assets – in a merger or otherwise, when an entity donates its assets and liabilities to Transform, the donated assets and liabilities are recognised at their fair value. Any excess of the net fair value of assets and liabilities donated over costs incurred is then recorded as an exceptional income within the Statement of Comprehensive Income. This income is recognised, on legal completion of the agreement for the transfer of engagement.

Financial instruments

Financial instruments which meet the criteria of a basic financial instrument as defined in Section 11 of FRS 102 are accounted for under an amortisation cost model.

Non-basic financial instruments are recognised at fair value using a valuation technique with any gains or losses being reported in surplus or deficit. At the year end, the instruments are revalued to fair value, with the movements posted to the income and expenditure account.

Transform’s significant financial liability is the bank loan, and this is classed as a basic financial instrument, measured at amortised cost. The values are similar to those previously shown with no significant adjustments.

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Any payment arrangements entered into with clients are also classed as basic instruments and need to be measured at their present value. Our assessment shows that Transform has a limited number of such agreements at the year end, and these are not considered to be material. Transform does not have any other financial instruments falling into the category of financing transactions.

Housing properties and depreciation

Housing properties are properties held for the provision of social housing or otherwise to provide social benefit. Housing properties are principally properties available for rent and stated at cost less accumulated depreciation and impairment losses. Cost includes the cost of acquiring the land and building, development costs, and the interest cost capitalised during the development period. Works to existing properties which replaces a component that has been treated separately for depreciation purposes, along with those works that result in increase in net rental income over the lives of the properties, thereby enhancing the economic benefits of the assets, are capitalised as improvements.

Housing properties under construction are stated at cost and are not depreciated. Donated land and other assets are included within costs at fair value, at the time of the transfer.

The property disposals are recognised in the financial statements only when the legal completion for the transaction is concluded, realising any surplus or deficit on the disposal.

Depreciation is charged over the estimated useful lives of the structure and major components of the housing properties, so as to write down the cost of each component to its estimated residual value, on a straight-line basis, over its estimated economic life. No depreciation is charged on freehold land. Leasehold properties are amortised over the life of the lease or their estimated useful economic lives in the business, if shorter. Depreciation is charged on qualifying fixed assets on the following estimated useful lives:

Components identifed within housing properties
Structure
100years		 Components identifed within housing properties
Structure
100years		 Other fxed assets
Furniture and fttings
7years		 Other fxed assets
Furniture and fttings
7years
Roofs 70years Offce equipment 7years
Flat roofs 15years Offce fttings 10years
Windows 30years Specialist software 7years
Kitchens 15-20years Computer equipment 3years
Bathrooms 25-30years
Boilers 15years
Fire doors 30years
Other buildingfacilities 10years

Impairment of housing properties

Housing properties are assessed annually for impairment indicators. Where indicators are identified, an assessment for impairment is undertaken comparing the schemes carrying amount to its recoverable amount.

For the purposes of impairment assessments, housing properties are grouped together into schemes. Each scheme typically comprises one or more buildings in the immediate locality, and each building consists of one or more accommodation units. Schemes are typically developed or acquired as a single block of units.

When comparing a scheme’s carrying amount with its recoverable amount, any excess carrying amount on the scheme is written down to its recoverable amount. The resulting impairment loss is recognised as an operating expenditure.

With regards to supported housing schemes, management deems the properties are held not just to generate future cash, but to provide an additional social value i.e. these properties are held for their service potential. Therefore, the recoverable amount for these properties should be higher of (a) fair market value less cost of sale, and (b) its value in use Service Potential (VIU-SP).

VIU-SP can be used when the schemes can be let in the current condition and that fulfils a social purpose in addition to generating net rental cash flow. The depreciated replacement cost (DRC) methodology can be used to measure this.

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The DRC basis considers (a) cost of purchasing an equivalent property on the open market, and (b) the rebuilding cost of the property (of a similar condition, age, location, and type) less depreciation, considering the age and condition of the property. However, when establishing no active market for these properties, then (b) above (i.e. rebuilding costs less depreciation) can be considered as value in use for the properties under DRC basis.

Other fixed assets

Other tangible fixed assets are measured at cost, less accumulated depreciation. Depreciation is provided evenly throughout the assets’ estimated useful lives..

Government grants

Government grants include grants receivable from Homes England, local authorities and other government organisations. Government grants received for housing properties are treated as deferred income and recognised in turnover over the estimated useful life of the housing property structure, under the accrual model.

Revenue grants are recognised in the Statement of Comprehensive Income over the same period as the expenditure to which they relate, once reasonable assurance has been gained that the entity will comply with the conditions and that the funds will be received. Grants due from government organisations or received in advance are included as current liabilities.

Government grants released on the sale of the property may be repayable but are normally available to be recycled and are credited to a Recycled Capital Grant Fund and are included in the balance sheet in creditors. If there is no requirement to recycle or repay the grant on disposal of the asset, any unamortised grant remaining within creditors is released and recognised as income in the statement of comprehensive income.

Other grants

Grants received from non-government sources are recognised using the performance model. A grant which does not impose specific future performance conditions is recognised as revenue when the grant proceeds are received. A grant that imposes specific future performance related conditions on the company is only recognised when these conditions are met. A grant received before the revenue recognition criteria are satisfied is shown as a liability in the Statement of Financial Position.

Leases

Leases are classified as finance leases where the terms of the lease transfer substantially all the risks and the rewards of ownership of the leased asset to the company. All other leases are classified as operating leases.

Rental payable under operating leases is charged to income and expenditure on a straight-line basis over the lease term. With regard to lease incentives, the aggregate benefits of the lease incentive are recognised as a reduction in expenses recognised over the term of the lease.

Cash and cash equivalents

This includes all forms of cash and deposits repayable on demand, overdraft repayable on demand and shortterm deposits held with various banks. These cash balances are used in our cash flow statements and future cash projections.

Interest payable

Interest costs are capitalised on borrowing to finance the development of qualifying assets to the extent that it accrues in respect of the period of the development. Other interest payable is charged to the Statement of Comprehensive Income.

Pension

During this period, Transform has participated in the following contribution pension schemes – the group personal pension scheme operated by Aviva Group (Friends Life), the Social Housing Pension Scheme (SHPS) defined contributions scheme and the SHPS multi-employer defined benefits scheme

Defined contribution pension schemes

For the SHPS, the association has been able to identify its share of the scheme assets and scheme liabilities from 1 April 2018 and has applied defined benefit accounting from this date onwards.

The scheme assets are measured at fair value. Scheme liabilities are measured on an actuarial basis using the projected unit credit method and are discounted at appropriate high-quality corporate bond rates. The net surplus or

4 9

deficit is presented separately from other net assets on the statement of financial position. This has been recognised within the defined benefit pension liability on the face of the statement of financial position.

The current service cost and costs from settlements and curtailments are charged against operating surplus. Interest is calculated on the net defined liability. Re-measurements are reported in the Statement of Comprehensive Income.

Provision for liabilities

Provisions are recognised when the company has a present obligation as a result of a past event, and it is probable that the company is required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation, at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation.

Value Added Tax

Transform is not registered for Value Added Tax (VAT) and VAT is accounted for as a cost to the organisation within the respective expenditure heading.

Reserves

The reserves comprise the general reserves, the designated reserves and restricted reserves. The restricted reserves are provided by donors to be spent on specific client activities, designated reserves are reserves allocated by the Board for a specific future purpose and general reserves have no restrictions on their use. Transform’s reserve policy is shown in the strategic report on page 8.

Free reserves

Free reserves are general reserves that are currently not invested in the property assets and are freely available to fund charitable activities.

Reserves that are invested in property are calculated as being the net book value of the properties, less the grants and loans that part fund these assets. The free reserves are the balance of the general reserves.

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3. Particulars of turnover, operating expenditure and operating surplus

----- Start of picture text -----
Operating
Operating
Turnover surplus
2023 Note expenditure (deficit)
£000s £000s £000s
----- End of picture text -----

£000s
£000s		 £000s
£000s		 £000s
£000s		 £000s
£000s		 £000s
Continuing operations
Social housing lettings 4 7,534 (7,141) 393
Other social housing activities
Housingrelated support income 3,386 (3,043) 343
Charitable donations 335 (104) 231
Other income 15 (6) 9
11,270 (10,214) 976
Gain on disposal ofproperty,plant and equipment 9 114
1,090

----- Start of picture text -----
Operating
Operating
Turnover surplus
2022 Note expenditure (deficit)
£000s £000s £000s
----- End of picture text -----

2022
Note
Turnover
Operating
expenditure
Operating
surplus
(defcit)
£000s
£000s
£000s		 2022
Note
Turnover
Operating
expenditure
Operating
surplus
(defcit)
£000s
£000s
£000s		 Turnover Operating
expenditure		 Operating
surplus
(defcit)
Continuing operations
Social housing lettings 4 7,462 (7,121) 341
Other social housing activities
Housingrelated support income 2,886 (3,084) (198)
Charitable donations 142 (78) 64
Other income 80 (32) 48
10,570 (10,315) 255
Gain on disposal ofproperty, plant and equipment 9 211
Donation of WVHA net assets 30 684
1,150

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4. Particulars of turnover and operating expenditure from social housing lettings

Rents receivable net of identifable service charges Note 2022 Restated
2021
£000s
4,424		 £000s
4,443
Charges for housingrelated support services 1,182 1,027
Service charges income 1,707 1,779
Amortisedgovernmentgrants 16 221 213
Turnover from social housing lettings 3 7,534 7,462
Operating expenditure: Operating expenditure:
Service charge costs 1,929 1,690
Management 2,126 2,099
Routine maintenance 1,184 1,301
Planned maintenance 174 558
Bad debts 162 63
Propertycharges – lease/management agreement 457 431
Depreciation of housing properties 11 944 916
Abortive costs 11 103 -
Other costs 62 63
Operating expenditure on social housing lettings 3 7,141 7,121
Operating surplus on social housing lettings 3 393 341
Void losses (335) (269)

5 2

5. Directors and key management personnel salary cost

Executive team covers those shown in page 2. None of the Board members received any salary.

----- Start of picture text -----
2023 2022
£000s £000s
----- End of picture text -----

2023
2022
£000s
£000s		 2023 2022
Aggregate emoluments including pension scheme contributions, payable to:
Executive Team(2023: 7.0 FTEs, 2022: 6.0 FTEs) 561 502
The highestpaid Executive member:
Emoluments 116 113
Pension contributions 11 10

The Executive team represents the key management personnel under FRS 102 and their aggregate emoluments including employer’s national insurance contributions were £618,000 (2022: £545,000). There were no compensation payments for loss of office to any previous members of the Executive Team (2022: nil). The Chief Executive was the highest paid Executive member during the year. His pension arrangements are the same as other colleagues – a money-purchase pension scheme with no additional benefits.

6. Employee information

6. Employee information
The average number of employees employed (headcount)
Housingand support staff		 2023 2022
Number
89		 Number
89
Administration staff 34 40
Maintenance staff 8 8
131 137
The average number of employees employed (FTEs)
Housingand support staff		 2023 2022
Number
76		 Number
78
Administration staff 29 33
Maintenance staff 7 7
112 118

The number of full-time employees is calculated based on a 39-hour working week.

Staff costs for the above persons:
Wages and salaries		 2023 2022
£000s
3,653		 £000s
3,792
Social securitycosts 346 327
Other pension costs 156 162
4,155 4,281

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The number of full-time equivalent staff who received remuneration (including pension contributions) above £60,000 (including the Executive Team) is shown in the following bands.

The average number of employees employed (headcount)
More than £60,000 but not more than £70,000		 2023 2022
3 2
More than £70,000 but not more than £80,000 2 2
More than £100,000 but not more than £110,000 - 1
More than £120,000 but not more than £130,000 1 1

7. Interest receivable

Interest from bank deposits 2023 2022
£000s
18		 £000s
5

8. Interest and financing costs

8. Interest and fnancing costs
Interestpayable on bank loans 2023 2022
£000s
534		 £000s
409
Net interest expense on SHPS pension scheme 5 3
539 412

9. Surplus on property disposal

9. Surplus on property disposal
Disposalproceeds 2023 2022
£000s
157		 £000s
298
Carryingcost of the property (43) (87)
114 211

There was no capital grant allocation that requires recycling.

10. Surplus for the year

The operating surplus is arrived at after charging: 2023 2022
£000s
£000s
Depreciation of housing properties 944 916
Depreciation of other tangible fxed assets 226 206
Surplus on disposal ofproperty,plant and equipment 114 211
Operating lease rentals:
Land and buildings 473 458
Other leases 45 46
Auditor’s remuneration(excluding VAT):
Audit fees 31 25
Other services 3 3

5 4

11. Tangible fixed assets – housing properties and other fixed assets

Cost Housing
properties		 Properties
under
construction		 Total
housing
properties		 Furniture
and
equipment		 Total
£000s £000s £000s £000s £000s
At 1 April 2022 59,777 632 60,409 1,552 61,961
Additions 2,273 1,255 3,528 132 3,660
Aborted costs - (103) (103) - (103)
Works to existing properties. 401 - 401 - 401
Disposals (210) - (210) (17) (227)
At 31 March 2023 62,241 1,784 64,025 1,667 65,692
Depreciation
At 1 April 2022 8,543 - 8,543 601 9,144
Charges for theperiod 944 - 944 226 1,170
Disposals (166) - (166) (17) (183)
At 31 March 2023 9,321 - 9,321 810 10,131
Net book value
At 31 March 2023
At 31 March 2022		 52,920 1,784 54,704 857 55,561
51,234 632 51,866 951 52,817

Housing properties book value, net of depreciation, comprises:

Freehold land and buildings 2023 2022
£000s
45,614		 £000s
44,508
Longleasehold land and buildings 7,476 5,649
Short leasehold land and buildings 1,614 1,709
54,704 51,866

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12. Debtors

----- Start of picture text -----
2023 2022
£000s £000s
----- End of picture text -----

2023
2022
£000s
£000s		 2023 2022
Due within one year
Rent and service charges receivable 703 506
Less: provision for bad and doubtful debts (503) (409)
200 97
Trade debtors 795 173
Other debtors 361 163
Prepayments and accrued income 478 385
1,834 818

13. Cash and cash equivalents

13. Cash and cash equivalents
Cash in bank and in hand 2023 2022
£000s
1,238		 £000s
2,667

The cash balances include deposits to meet Transform’s future working capital requirements.

14. Creditors: amounts falling due within one year

Housingloans Note 2023 2022
£000s
460		 £000s
360
Deferredgrant income 235 221
Trade creditors 817 439
Loan interest due 69 107
Rent and service charges received in advance 233 555
Recycled capitalgrant fund 50 50
Capital accruals and retentions 65 8
Other creditors 395 507
Other taxation and social security 96 85
Other accruals and deferred income 374 251
2,794 2,583

15. Creditors: amounts falling due after more than one year

15. Creditors: amounts falling due after more than one year
Housingloans Note 2023 2022
£000s
12,836		 £000s
13,248
Deferredgrant income 15,034 13,040
Recycled capitalgrant fund - -
27,870 26,288

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16. Deferred grant income

16. Deferred grant income
Balance at 1 April 2023 2022
£000s
13,260		 £000s
12,195
Grant received in theyear 2,230 1,175
Grant transferred from Recycled Capital Grant Fund - 103
Released to Statement of Comprehensive Income (221) (213)
Balance at 31 March 15,269 13,260
Deferred income to be released to the Statement of Comprehensive Income
Amount to be released inless than oneyear 235 221
Amount to be released inmore than one year 15,034 13,039
15,269 13,260

The above summary excludes grants transferred through the merger and grants which have been written off to income; the total grants received to date in respect of properties owned are detailed in note 28.

17. Housing loan debt analysis

Due withinone year 2023 2022
£000s
460		 £000s
360
Due aftermore than oneyear
Loan 12,980 13,440
Less: issue costs (144) (192)
12,836 13,248
13,296 13,608

We have the following loan facilities in place:

Repayment profile:

Of the drawn loan facility £10.0 million is on fixed interest rates and divided into several fixed-rate loan tranches with Barclays Bank. These tranches have different interest rates ranging from 1.4% to 5.5% and varying maturity dates. Once they mature all tranches revert to variable rates.

The remainder is comprised of floating rate loans, with interest that is based on SONIA (Barclays Bank) rate or the bank’s base rate (Unity). The loan facilities are secured by fixed charges on a selected property portfolio. However, there are several other properties that are free from this charge and can be charged in the future to cover further borrowings, if required.

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18. Recycled capital grant fund – Homes England

18. Recycled capital grant fund – Homes England
Balance at 1 April 2023 2022
£000s
50		 £000s
153
Recyclingofgrants – new build - (103)
Grant repaid - -
Interest ongrant fund - -
Balance at 31 March 50 50
Due withinone year 2023 2022
£000s
50		 £000s
50
Due aftermore than oneyear - -

19. Provisions for liabilities and charges

Balance at 1 April 2023 2022
£000s
-		 £000s
182
Spend in theyear - (164)
Release ofprovision - (18)
Increase in provision - -
Balance at 31 March - -

During 2022 dilapidation work at the Mill Street office and entrance doors at several schemes as recommended by the scheme Fire Risk Assessments were completed and the balance of the provision released. No further provisions were required in 2023.

20. Financial and other commitments

Capital expenditure commitments at the year-ends were as follows:

Expenditure contracted for but notprovided in the Financial statements 2023 2022
£000s
525		 £000s
420
Expenditure authorised bythe Board but notyet contracted - 3,085

The above commitments will be financed primarily through borrowings, which are available for drawdown under existing loan arrangements with the balance through social housing grant.

5 8

Leasing commitments

The future minimum lease payments are set out below.

Leasing commitments
The future minimum lease payments are set out below.
Within oneyear 2023 2023 2022 2022
Property Others Property Others
£000s
448		 £000s
11		 £000s
460		 £000s
26
Between one and fveyears 1,290 10 987 35
Over fveyears 844 - 873 -
At 31 March 2023 2,582 21 2,320 61

21. Social housing units

The number of housing units under management at the end of the period:

The number of housing units under management at the end of the period:
Supported housingunits 2023 2022
Restated
£000s £000s
798 793
Housingfor older people units 113 112
Total owned and managed 911 905
Not owned but managed 30 30
941 935

5 9

22. Notes to the statement of cash flow

22. Notes to the statement of cash fow
Surplus for the year 2023 2022
Restated
£000s
569		 £000s
743
Adjustments for non-cash items
Surplus on disposal ofproperty,plant and equipment (114) (211)
Depreciation of tangible fxed assets 1,170 1,122
Donation on merger - (684)
Amortisation of loan arrangement fee 48 33
1,776 1,003
Movements in working capital
(Increase)/decrease in debtors (180) 712
Increase/(decrease) in creditors 78 (270)
1,674 1,445
Adjustments for investing or fnancing activities
Governmentgrants amortised in theyear (221) (213)
Aborted development costs 103 -
Pension costs less contributions (36) (41)
Interestpayable 539 412
Interest received (18) (5)
Net cash generated from operating activities 1,938 1,598

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23. Analysis of changes in net debt

----- Start of picture text -----
At 1 April Cash flow Non-cash Total
2022 changes
£000s £000s £000s £000s
----- End of picture text -----

£000s £000s £000s £000s
Housing loans
Due in less than oneyear 360 (360) 460 460
Due after more than oneyear 13,248 - (412) 12,836
13,608 (360) 48 13,296
Cash at bank and in hand (2,667) 1,429 - (1,238)
At 31 March 2023 10,941 1,069 48 12,058

24. Social Housing Pension Scheme (SHPS)

Transform participates in SHPS, a multi-employer pension scheme which provides benefits to non-associated participating employers. The scheme is classed as a defined benefits scheme in the UK. The scheme is classed as a ‘last man standing’ arrangement. Therefore, Transform is potentially liable for other participating employers’ obligation if those employers are unable to meet their share of the scheme deficit following withdrawal from the scheme. Participating employers are legally required to meet their share of the scheme deficit on an annuity purchase basis on withdrawal from the scheme.

The most recent formal actuarial valuation was completed as at 30 September 2021 and rolled forward, allowing for the different financial assumptions required under FRS 102, to 31 March 2023 by a qualified independent actuary.

The net defined benefit liability at the year ended 31 March 2023 is £195k (2022: £203k). We have been notified by the Trustee of the scheme that it has performed a review of the changes to the scheme’s benefits over the years and the result is that there is uncertainty surrounding some of these changes. The Trustee has been advised to seek clarification from the court on these items. This process is ongoing and the matter is unlikely to be resolved before the end of 2024 at the earliest. It is recognised that this could potentially impact the value of scheme liabilities, but until court directions are received, it is not possible to calculate the impact of this issue, particularly on an individual employer basis, with any accuracy at this time. No adjustment has been made in these financial statements in respect of this potential issue.

Present value of defined benefit obligation

Fair value ofplan assets 31 March 2023 31 March 2022
£000s
808		 £000s
1,096
Present value of the scheme liabilities 1,003 1,299
Defcit in plan (195) (203)
Defned beneft liabilities to be recognised (195) (203)

6 1

Reconciliation of the opening and closing present value of scheme liabilities

Reconciliation of the opening and closing present value of scheme liabilities
Opening Scheme liability 2023 2022
£000s
1,299		 £000s
1,395
Expenses 3 3
Interest expense 35 28
Actuarial(losses)/gains (279) (75)
Net benefts paid (55) (52)
Closing scheme liability 1,003 1,299

Reconciliation of the opening and closing balances of the fair value of the plan assets

Openingfair value of theplan assets 2023 2022
£000s
1,096		 £000s
1,236
Interest income 30 25
Return onplan assets (302) (156)
Contributions bythe employer 39 43
Benefts paid (55) (52)
Fair value of assets 808 1,096

The actual return on plan assets (including any changes in share assets) over the period from 31 March 2022 to 31 March 2023 was £272,000.

Amounts recognised in the surplus

Amounts recognised in the surplus
Amounts charged to operatingcosts 2023 2022
£000s
3		 £000s
3
Amounts charged to interest costs 5 3
Total charge for theyear 8 6

6 2

Defined benefits costs recognised in the other comprehensive income

Defned benefts costs recognised in the other comprehensive income
Experience to plan assets (excluding amounts included in net interest cost) – gain (loss) 2023 2022
£000s
(302)		 £000s
(156)
Experience gains and losses arising on plan liabilities – gain (loss) (28) (18)
Effects of changes in the demographic assumptions underlying the present value of the
defned beneft obligation – gain (loss)		 3 24)
Effects of changes in the fnancial assumptions underlying the present value of the defned
beneft obligation – gain (loss)		 304 69
Total amount recognised in other comprehensive income – gain (loss) (23) (81)

Principal actuarial assumptions: Financial assumptions

Discount rate 31 March 2023 31 March 2022
% per Annum
4.90		 % per Annum
2.78
Future salaryincrease 3.21 3.77
Infation(RPI) 2.67 3.28
Infation(CPI) 3.67 4.28
Allowance for commutation ofpension for cash at retirement 75% of max. allowance 75% of max. allowance

Mortality assumptions

Male retiringin 2023 31 March 2023 31 March 2022
Life expectancy at age of 65 years
21.0
21.1
Female retiringin 2023 23.4 23.7
Male retiringin 2043 22.2 22.4
Female retiringin 2043 24.9 25.2

6 3

Analysis of pension scheme assets

Analysis of pension scheme assets
Global equity 31 March 2023 31 March 2022
£000s
15		 £000s
210
Absolute return 9 44
Destressed opportunities 24 39
Credit relative values 31 36
Alternative riskpremia 2 36
Hedge fund funds - -
Emergingmarkets debts 4 32
Risk sharing 59 36
Insurance linked securities 20 26
Property 35 30
Infrastructure 92 78
Private debt 36 28
Opportunistic illiquid credit 35 37
Highyield 3 9
Opportunistic credit - 4
Cash 6 4
Corporate bond fund - 73
Liquid credit - -
Longleaseproperty 24 28
Secured income 37 41
Liabilitydriven investments 372 306
CurrencyHedging 2 (4)
Net current assets 2 3
808 1,096

None of the fair value of the assets shown above include any direct investments in the employer’s own financial instruments or any property occupied by, or other assets used by, the employer.

6 4

25. Fundraising activities

We receive fundraising income from individuals, companies and trusts and, below, we report performance on a cash basis. Based on the accounting policy, fundraising income is usually recognised in the financial statements on a receivable basis.

Fundraising cashgenerated 2023 2022
£000s £000s
Fundraisingcash 335 142
Fundraising costs
Salarycosts 44 57
Other costs 60 21
104 78
Net fundraisingcontributions 231 64
Return on investment(ROI) 3.22 1.82
Fundraising cost ratio 31% 55%
Allocation of funds
Capitalprojects
Redhill modular development 43 -
Revenueprojects
For specifc clientgroups/projects 292 142
Total fundraising cash allocation 335 142

6 5

26. Share capital

Transform is limited by guarantee and therefore has no share capital. Each member (see numbers below) agrees to contribute £5 in the event of the organisation winding up.

Number of members
At 1 April		 2023 2022
No
23		 No
23
Joiningduringtheyear 2 1
Leavingduringtheyear (3) (1)
At 31 March 22 23

27. Related party transactions

The members of the Board and Executive Team are considered related parties as defined by FRS 102. Transform retains a register of members’ interests. We can confirm that we do not have any transactions that require disclosure.

28. Government grants

Government grants are Social Housing Grants and other grants received to enable us to acquire properties for social housing use. Should the properties to which the grants relate ceases to be used for social housing, the grants may be repayable in full.

Total grants received:
Grants credited to the income statement or arisingon merger/acquisition		 2023 2022
£000s
9,959		 £000s
9,738
Deferredgrants (note 16) 15,269 13,260
25,228 22,998

29. Taxation status

Transform is a registered charity and as such is exempt from taxation on its charitable activities.

30. Donation of WVHA net assets

WVHA transferred all its assets and liabilities as at 1 April 2021 to Transform, through a transfer of engagement. The fair values of the housing properties were based on existing use value for social housing. The valuations were undertaken by Savills.

Housing property Book value Restated to
fair value		 Fair value to
Transform
£000s
462		 £000s
85		 £000s
547
Debtors 7 - 7
Short-term liabilities (12) - (12)
Cash 176 - 176
633 85 718
Less: merger costs (34)
684

6 6

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