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    Making homes happen Annual Report & Financial Statements 2019/20


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    A N N UA L R EP O R T & F IN A N C I A L S TAT E M E N T S 2019/ 20 Making homes happen Homes England1 Annual Report & Financial Statements 2019/20 Presented to Parliament pursuant to paragraphs 11 and 12 of Schedule 1 of the Housing and Regeneration Act 2008. Ordered by the House of Commons to be printed 5 November 2020. HC 866 The Homes and Communities Agency is an executive non-departmental public body and statutory corporation created by the Housing and Regeneration Act 2008 (as amended by the Localism Act 2011), trading as Homes England. It is sponsored by the Ministry of Housing, Communities & Local Government. This Annual Report & Financial Statements presents the audited consolidated results of the 2019/20 Financial Year for the group of entities of which Homes England is the parent. The Homes England Group is consolidated into the 2019/20 Financial Statements of the Ministry of Housing, Communities & Local Government. 3


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    HOMES ENGL AND © Crown copyright 2020 This publication is licensed under the terms of the Open Government Licence v3.0 except where otherwise stated. To view this licence, visit www.nationalarchives.gov.uk/doc/open-government-licence/version/3/ Where we have identified any third-party copyright information you will need to obtain permission from the copyright holders concerned. This publication is available at www.gov.uk/official-documents. Any enquiries regarding this publication should be sent to us at our registered office: One Friargate Coventry CV1 2GN Telephone: 0300 1234 500 Email: enquiries@homesengland.gov.uk ISBN: 978-1-5286-1461-0 CCS0320330936 11/20 Printed on paper containing 75% recycled fibre content minimum. Printed in the UK by the APS Group on behalf of the Controller of Her Majesty’s Stationery Office. 4


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    A N N UA L R EP O R T & F IN A N C I A L S TAT E M E N T S 2019/ 20 Contents 6 Interim Chair’s foreword 8 Performance report 10 Performance overview 12 Chief Executive’s statement 14 Organisational overview 18 Performance summary 22 Performance analysis 24 Delivery and financial targets 30 Financial summary 37 Sustainability report 48 The Accountability report 50 Corporate Governance report 67 Remuneration and staff report 80 Parliamentary Accountability and Audit report 84 The certificate and report of the Comptroller and Auditor General to the Houses of Parliament 88 Financial statements 174 Contact us 5


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    HOMES ENGL AND Interim Chair’s foreword Our organisation has achieved a lot in a short amount of time. We have transformed ourselves into a new type of public delivery body, one that co-invests in places and develops new services to stimulate sustainable housing growth. We’re now a stronger, members. Mark Rennison, more commercial national Olivia Scanlon, Sadie Morgan organisation capable of and Vanessa Murden joined working with our partners to us in August, bolstering the achieve the Government’s Agency with their knowledge housing ambitions, create and experience and new communities and challenging us to be better in address one of the most everything we do. important challenges of our Simon Dudley time. This year saw the Agency lay Interim Chairman & down a marker for the kind of Senior Independent This last 12 months has intervention we are looking to Director seen us meet our ambitious make in the housing market, delivery targets, reshape with the announcement the Agency to better deliver of our collaboration our mission and bring in with Japanese modular hundreds of people with housebuilder Sekisui House significant expertise in and Urban Splash announced their fields to improve our in May. capabilities. We are clear that to deliver on our mission Bringing Sekisui, one of we will become a centre the world’s leading offsite of expertise for housing manufacturers, to the UK led growth and use our shows our increased level knowledge to support our of ambition, as we use our many public and private funding to disrupt the market partners to achieve their and accelerate the change housing ambitions. we all want to see in the housing industry. In addition to welcoming new colleagues to the Agency This determination is also and new businesses to the evident in the progress country Homes England we have made on our has welcomed new board own strategic sites, 6


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    A N N UA L R EP O R T & F IN A N C I A L S TAT E M E N T S 2019/ 20 with housebuilding now The importance of our work extremely well positioned progressing at Burgess Hill, to shape new communities to play a key part in building modular homes about to and build healthy places back better and greener. be built on our own land was thrown into sharp relief at Northstowe and York by the COVID-19 pandemic I’m incredibly proud Central winning an award for which, along with other of everything we have masterplanning. We set high possible future economic accomplished this year and standards for place-making challenges, could have a full of optimism for what and will continue to broker significant impact on the our organisation will achieve partnerships to accelerate valuation of assets held in the future. As I finish my development up and down on our balance sheet, in term as interim Chair, I would the country. particular Help to Buy. There like to thank the Board and may also be changes to how the Executive Team, and The coming years will we need to think about the every colleague and partner see us invest billions built environment, the public who have worked through across the country to realm and delivering beautiful challenging times to continue accelerate new growth and places. We welcome the making homes happen. build communities. This Government’s commitment unprecedented investment to housing and our resources will lever in many more and expertise make us billions from private investors and create thousands of jobs and community assets, including schools, health centres and green spaces. 7


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    HOMES ENGL AND Performance report 8


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    A N N UA L R EP O R T & F IN A N C I A L S TAT E M E N T S 2019/ 20 Contents: Performance overview Chief Executive’s statement Organisational overview Performance summary Performance analysis Delivery and financial targets Financial summary Sustainability report 9


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    HOMES ENGL AND Performance overview 10


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    A N N UA L R EP O R T & F IN A N C I A L S TAT E M E N T S 2019/ 20 This section is designed to give the reader sufficient information to understand Homes England, its purpose, the key risks to the achievement of its objectives and how it has performed during the year. 11


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    HOMES ENGL AND Chief Executive’s statement This year has seen Homes England make significant progress towards building a different type of organisation, with the capacity, capability and relationships needed to disrupt and rebalance the housing market so it works for more people. Central to this is increasing With house prices remaining the number of high quality resilient as we moved into homes built every year. I’m the early part of 2020/21, the incredibly proud that we have pandemic did not significantly exceeded our annual delivery impact on the Agency’s targets, delivering a year on asset values at 31 March year increase in the number 2020. However, the wider of housing completions the economic consequences of Agency has supported, and COVID-19 in the second half Nick Walkley in the number of homes we of 2020/21 and beyond will Chief Executive have delivered that were no doubt have implications additional to the market, for the housing market, the as well as surpassing our sector and Homes England target for affordable housing and its mission. I note our delivery. key risks in my Governance report and the potentially Directly supporting the significant impact of changes completion of 40,452 new in economic conditions on homes, including 28,261 our balance sheet in Note 2 affordable homes, unlocking of the Financial Statements land for 114,361 homes and (in particular for our portfolio delivering a further 42,358 of Help to Buy equity loans). starts on site is a testament With these challenges firmly to the hard work and in mind, I have confidence dedication of everyone at that our work to date to Homes England. create an organisation capable of making real As an organisation we change in the housing sector never forget that behind puts us in a strong position to every deal, we’re creating tackle the challenges ahead. employment, supporting growth and transforming I was incredibly proud of how lives by supporting people everyone pulled together into new homes, something to navigate a shift to home the COVID-19 pandemic really working. Huge credit has did drive home. to go to our digital team for their work throughout 12


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    A N N UA L R EP O R T & F IN A N C I A L S TAT E M E N T S 2019/ 20 the year to equip every and the North East. We This year has also seen Sir member of staff with the have moved our national Edward Lister leave his role new technology and training headquarters to Coventry as Chair of Homes England. that made this transition so with a smaller office in On behalf of everyone at the straightforward. It went a London. Agency I’d like to extend my long way to supporting the warmest thanks to him for his Agency to exceed its public We continue to transform support and guidance. Simon facing targets and complete ourselves from the inside Dudley, our interim Chair has on a number of sizeable out, adding the likes of stepped into the role with transactions. economists, data scientists great skill and we are all and service designers to grateful for his expertise and We want to do things our skilled workforce of leadership. differently and encourage investment, planning and our people to work creatively regeneration experts. It’s Within the Agency itself and collaboratively to deliver been immensely heartening we have moved to a more truly transformational to see how our mission and flexible, market-facing partnerships and projects. objectives resonate equally structure, launching our Nowhere is this ambition with colleagues who’ve new directorate Markets, better showcased than our worked in the private sector, Partners and Places (MPP). collaboration with Sekisui local government and other MPP will play a leading role House and Urban Splash, parts of the public sector. in driving Homes England’s bringing one of the world’s Having nearly 900 colleagues business development biggest housebuilders to the attend our All Staff event in activity, combining strategy, UK for the first time. Gateshead in July 2019 to economics, research and hear from partners, celebrate analysis alongside local The same is true of our our successes and look to the knowledge, delivery expertise Strategic Partnerships with future really did bring home and strategic market Housing Associations, by how far we’ve come. engagement. committing to work with our partners in new and more The willingness of our Securing approval for our ambitious ways we are set to people to take ownership Transformation Business deliver tens of thousands of of our values and culture is case in April 2020 is a hugely homes over and above what epitomised by the fact that important moment for the they would have otherwise this year saw Homes England Agency as we work to make delivered. ranked within the top 100 our services more usable for most inclusive employers by partners and staff. Adapting As a national organisation, Stonewall and recognised as and innovating ourselves is we work alongside our local a Top 20 Trans Employer for essential if we are to achieve partners in many places the first time. There’s always our ambitions and transform across the country. We are more to do but we’re making the housing market. By serious about working in, progress. In July 2020 we improving our processes recruiting and supporting the published our first Equality and streamlining our work, communities we are helping Diversity and Inclusion report our transformation work is to shape. We now employ setting out the steps we will freeing us up to focus more more than 1,100 high-skilled take as an agency to be the of our time on the ground staff, with the majority based change we want to see in alongside local partners. in the Midlands, North West the sector. 13


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    HOMES ENGL AND Organisational Overview Who we are Our Statutory Objects We are a non-departmental public body The Statutory Objects of Homes England are sponsored by the Ministry of Housing, set out in the Housing and Regeneration Act Communities and Local Government. Our 2008, and are: statutory objects are contained in the Housing Ò to improve the supply and quality of and Regeneration Act 2008 (‘the Act’). housing in England; We exist to accelerate the delivery of Ò to secure the regeneration or development housing across England. We are a national of land or infrastructure in England; agency with experts based in offices across Ò to support in other ways the creation, the country. We’re governed by a Board, regeneration or development of appointed by the Secretary of State for communities in England or their continued Housing, Communities and Local Government, well-being; and and led by interim chair Simon Dudley. Our Chief Executive, Nick Walkley, leads an Ò to contribute to the achievement of executive team that includes specialists sustainable development and good design in land, investment, finance, business in England, with a view to meeting the transformation and risk management. needs of people living in England. Our role is to ensure more people in England Following the launch of Homes England, in have access to better homes in the right addition to our statutory objects, we launched places. To make this happen we intervene in a new Mission and Strategic Objectives in the market to get more homes built where October 2018, aligning Homes England to the they are needed. We accelerate delivery, government’s housing priorities. tackle market failure where it occurs and help to shape a more resilient and diverse housing market. We work in collaboration with partners who share our ambition. These include local authorities, private developers, housing associations, lenders and infrastructure providers. Our activities are always in response to local needs and robust leadership ensures we deliver best value for money in all of our interventions, including those delivered with partners. 14


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    A N N UA L R EP O R T & F IN A N C I A L S TAT E M E N T S 2019/ 20 Our mission is to intervene in the market to ensure more homes are built in areas of greatest need, to improve affordability. We will make this sustainable by creating a more resilient and diverse housing market. Unlocking land Unlocking investment Increasing productivity We’ll unlock public and private We’ll ensure a range of investment We’ll improve construction land where the market will not, products are available to support productivity. to get more homes built where housebuilding and infrastructure, they are needed. including more affordable housing and homes for rent, where the market is not acting. Driving market resilience Supporting local areas Delivering home We’ll create a more resilient and We’ll offer expert support for ownership products competitive market by supporting priority locations, helping to We’ll effectively deliver home smaller builders and new entrants, create and deliver more ownership products, providing and promoting better design and ambitious plans to get more an industry standard service higher quality homes. homes built. to consumers. 15


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    HOMES ENGL AND Market disruption and managing risks where work is ongoing to identify, assess, own Our organisation is required to be active in and manage risks. areas of the residential market which are considered unattractive by commercial See our Governance Report to understand organisations. how we manage risk and a description of our key risks, (page 64). As an organisation we have an ethos of delivering for the public good in the long term. Impact of COVID-19 in 2019/20 Therefore, a substantial portion of activity in The impact of the COVID-19 pandemic delivering our Strategic Delivery Plan carries became significant from mid to late-March an inherently higher risk than the broader and as such did not have a pronounced market. impact on delivery at year-end. This market reality underpins our approach In 2019/20, COVID-19 affected our delivery to risk management, which means that we in two main areas; first, the sale of land should adopt best practice in managing risk, planned for completion was delayed as even if we are taking risk to fulfil public policy buyers deferred decision making until the objectives, rather than private sector returns. impact of COVID-19 on the sector and prices was known. Second, although the lockdown Our governance structure provides points dramatically reduced completions, there was of escalation for risks and issues from the little impact on the three key performance operational layers of the business and duly indicators for house completions in 2019/20. empowered forums and individuals, with the required delegated authority to make and The pandemic occurred very close to year-end be held accountable for risk management and the majority of the Agency’s assets have decisions. values which are closely linked to the strength of the housing market. As a result, there Our Executive Team is responsible for was relatively little impact on asset values managing risk in the organisation, overseen at 31 March 2020 (see Note 2 for details of by Homes England’s Board and specialist the accounting judgements made for each Audit and Risk Committee. The Risk and significant asset type). Assurance Corporate Group provide risk oversight for the Executive team. This may differ from financial institutions such as banks with large residential lending Over the last 12 months Homes England has due to differences in the accounting undergone significant organisational design valuation requirements for different asset change to support a new operating model types. The majority of the Agency’s assets and ensure we are an efficient and effective are valued with reference to market values team. To mitigate identified operational as at 31 March 2020, whereas conventional risks which fall outside of the organisation’s lending (e.g. residential mortgages) requires appetite, the Service Transformation Plan a valuation which considers the impact of is a key mitigation strategy, and we are possible default under future scenarios conducting internal ‘deep dive’ reviews and (as is the case for the Agency’s commercial independent assessments into operational lending, where the impact of alternative risks. Sections later in the report set out future scenarios is considered in determining 16


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    A N N UA L R EP O R T & F IN A N C I A L S TAT E M E N T S 2019/ 20 Expected Credit Losses – please see Note future scenarios are considered to determine 15h and the sensitivity analysis performed the financial impact we might reasonably in Note 18b). expect to see if they occurred. The most significant thing to note from this analysis Future impact of COVID-19 is the overall uncertainty surrounding the COVID-19 clearly has the potential to have a potential future impact of COVID-19, with a long-lasting effect on the sector in 2020/21 £4.3bn range in estimated asset values across and beyond as lockdown and social distancing the three scenarios modelled (the majority of continue to reduce the output of partners. which relates to Help to Buy, where the main COVID-19 has affected several industry driver of asset values is house prices). variables; the pace of developers returning to site, the productivity of sites when they Future budgets and performance return, and, investor confidence. They will all targets impact on our ability to deliver against our Looking beyond 2020/21 the Spending mission and strategic objectives. Review to be announced in Autumn 2020 will establish the funding settlement and We manage our performance and Key performance outcomes for the capital Performance Indicator delivery as a portfolio, budgets through to 2024/25. This will reflect the risk profile and uncertainty that is the risk and uncertainty we face as a result of attached with specific projects is spread COVID-19, EU Exit and the economic outlook over the portfolio enabling us to effectively to set our expected future performance. manage risk and uncertainty. Delivery of our performance is secured through partners Going concern who independently manage their own risk Our net assets reflect the inclusion of and uncertainty, this represents an additional liabilities falling due in future years. If factor that can impact our performance that they are not met from our other sources we need to proactively manage. of income, we may only be able to meet these liabilities from future grants or grant Given the magnitude of the uncertainty and in aid from our sponsoring department, the risk created by COVID-19 we are forecasting Ministry of Housing, Communities and Local a material reduction in the performance of Government. Grants may not be issued in our Key Performance Indicators in 2020/21. advance of need and grant in aid for the year We are working closely with MHCLG and other ending 31 March 2021, taking into account the stakeholders to gather and share market amounts required by our liabilities falling due intelligence to understand the emerging in that year, has already been approved by challenges that the sector faces and respond Parliament. appropriately. As Homes England and MHCLG have recently Looking forward to 2020/21 year-end, changes agreed a rolling five-year business plan and in the economy as a result of the pandemic delegated authority limits for the period, the could have a significant impact on the value Board considers it appropriate to adopt a of assets managed by the Agency. This going concern basis for the preparation of our possible future impact is considered in Note 2 financial statements. of the Financial Statements. Here, alternative 17


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    HOMES ENGL AND 2019/20 Performance summary Leading the sector by building our capacity and living our values We created three Centres of Excellence that brings together specialist teams in New chair and Investment, Development and local authority capacity so we can share expertise board members across the Agency and with our partners. Sir Edward Lister stepped down to join the Prime Minister’s team, and board We were named as member Simon Dudley one of the 100 most became interim chair. We inclusive employers also welcomed Sadie Morgan, by Stonewall Vanessa Murden, Mark Rennison and Olivia Scanlon We provided training to increase understanding as non-executive members. of issues affecting LGBT and trans people as part of our commitment to fostering diversity and inclusion. Speeding up New offices delivery opened by creating a single development pipeline driven in shared spaces with local by our new MPP directorate. authority stakeholders in The new Transformation Coventry, Liverpool and directorate focuses on Manchester with our offices transforming services, use in Crawley and our purpose of technology and ways of built space in Northstowe. working. 18


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    A N N UA L R EP O R T & F IN A N C I A L S TAT E M E N T S 2019/ 20 Investing in the sector Homes England became Homes England a proud sponsor of invested £30m ReGeneration Brainery which encourages school leavers and in ilke Homes undergraduates to consider a career in as part of the property through creative workshops. ‘Construction Corridor’ in Yorkshire to deliver carbon- free homes. Delivering the initial £600m private sector remediation fund for buildings with aluminium composite cladding (ACM), with a further £1bn for other types of unsafe cladding. Worked with Launched a UK Finance to open up the new £10m Help to Buy asbestos remediation remortgage market framework, and investment in estates by enabling Equity Loan customers to management and land remortgage their homes beyond the original 25-year repayment period. survey specialisms. 19


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    HOMES ENGL AND Highlights from a year of ‘making homes happen’ 1st new town in 50 years Announced plans for the country’s first new town in 50 years at Northstowe in Cambridgeshire. The proposed scheme will create 8500 new homes plus half a million square feet of commercial and community space. Housing Infrastructure Fund unlocks Sekisui, Japan’s biggest housebuilder and MMC pioneers, moved into the 70,000 homes UK housing market after striking a Last year we worked with councils to multimillion-pound deal with Homes invest £73m through the government’s England and Urban Splash, in what Housing Infrastructure Fund that will came to be known as - ultimately unlock 70,000 homes that enhance communities and grow local ‘Deal of the decade’ economies. As construction sites closed across the country to slow COVID-19, Homes England continued to acquire 19 sites for £180m before the end of the financial year. 20


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    A N N UA L R EP O R T & F IN A N C I A L S TAT E M E N T S 2019/ 20 Funding deals with 18 local authorities worth £95m Partnership Homes England agreed funding deals with 18 local authorities worth £95m as part of between the government’s Local Authority Accelerated Homes England Construction (LAAC) Programme for infrastructure and remediation. and the Defence Infrastructure Organisation £12.2 billion grant fund An MoD site in Ripon to build affordable homes as the first site to be progressed as part of The Chancellor handed a partnership between Homes England responsibility Homes England and the for the non-London share Defence Infrastructure of a £12.2 billion grant fund Organisation (DIO) to to build affordable homes develop surplus military in the Budget. land across the country. Loans worth £150m for developments in Wimbledon and Southampton became the first deals for the government’s £1bn Housing Delivery Fund partnership with Barclays, designed to accelerate house building. 21


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    HOMES ENGL AND Performance analysis 22


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    A N N UA L R EP O R T & F IN A N C I A L S TAT E M E N T S 2019/ 20 We directly supported the completion of 40,452 new homes, including 28,261 affordable homes. We delivered 27,090 homes that were additional to the market. We supported 61,251 households into home ownership. We unlocked land with capacity for 114,361 homes. We delivered starts on site of 42,358 homes. 23


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    HOMES ENGL AND Delivery and financial targets When Homes England launched in 2018, we we have progressed these as quickly as identified ten key performance indicators possible. against which the success of the Agency would be measured over time. Since then, For the 2019/20 reporting cycle, five of the we have been working closely with MHCLG measures were approved for reporting and to define the detail behind these measures we include analysis below which reflects our to align them correctly with policy objectives progress against them. In 2020/21 we have and then standing up the system, process stood up a further three of the measures and data capture required to begin reporting (as at the date of publication of this Annual on them. This has taken time to complete to Report & Financial Statements) and have enable us to begin reporting on measures. plans for the remaining two to be stood up MHCLG, HM Treasury and other stakeholders before the end of 2020/21. are sighted on progress and barriers to ensure Completion of new homes We successfully closed 2019/20 by exceeding our delivery targets for the three key performance indicators where official targets are set by MHCLG for completions: 2019/20 Performance against targets Target Delivery performance Full year target Full year outturn % of target achieved Total completed new homes supported 40,000 40,452 101.1% by Homes England Total completed new homes which were 26,000 27,090 104.2% additional to the market Total affordable completed new homes 28,000 28,261 100.9% supported by Homes England The financial year 2019/20 was particularly completions. The result highlights the support challenging for the housing sector, which we have provided to the market to deliver started with uncertainty about the impact against our mission and strategic objectives. of the UK’s exit from the European Union and ended with an almost total shut-down In 2019/20 COVID-19 affected our delivery due to COVID-19. Despite these factors, in two main areas; first, the sale of land we exceeded our delivery targets on our planned for completion was delayed as three key performance indicators for house buyers deferred decision making until the 24


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    A N N UA L R EP O R T & F IN A N C I A L S TAT E M E N T S 2019/ 20 impact of COVID-19 on the sector and prices to set our expected future performance. was known. Second, although the lockdown Our performance is managed against dramatically reduced completions, there was financial and non-financial delivery targets, little impact on the three key performance within the programme and operational indicators for house completions in 2019/20. expenditure limits set by MHCLG. This year, The impact will be in 2020/21 as lockdown we have been monitoring our delivery and social distancing continue to reduce the performance against portfolio based Key output of partners. Performance Indicators. They include targets for housing completions, the additionality COVID-19 has affected several industry of these completions to the market, and variables; the pace of developers returning affordable housing completions. to site, the productivity of sites when they return, and investor confidence. They will all The Board reviews and holds management impact on our ability to deliver against our to account for our performance through mission and strategic objectives. the Management Information Suite. This covers delivery and financial performance, in We manage our performance and Key addition to a housing market overview, risk Performance Indicator delivery as a portfolio, management and key corporate performance the risk profile and uncertainty that is indicators. The Management Information attached with specific projects is spread Suite provides the Board with detailed over the portfolio enabling us to effectively performance information, both financial and manage risk and uncertainty. Delivery of our non-financial, such as budgets, expenditure performance is secured through partners and receipts, actuals, forecasts and variances who independently manage their own risk and progress towards the achievement of and uncertainty, this represents an additional delivery targets agreed with MHCLG. factor that can impact our performance that we need to proactively manage. Given the magnitude of the uncertainty and risk created by COVID-19 we are forecasting a material reduction in the performance of our Key Performance Indicators in 2020/21. We are working closely with MHCLG and other stakeholders to gather and share market intelligence to understand the emerging challenges that the sector faces and respond appropriately. Looking beyond 2020/21 the Spending Review to be announced in Autumn 2020 will establish the funding settlement and performance outcomes for the capital budgets through to 2024/25. This will reflect the risk and uncertainty we face as a result of COVID-19, EU Exit and the economic outlook 25


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    HOMES ENGL AND Total completed new homes supported by Homes England We supported the delivery of 40,452 housing completions in 2019/20, ahead of our 40,000 completions target. Full details of housing delivery can be found at: https://www.gov.uk/government/collections/housing-statistics Chart 1 - Total housing completions 40,289 40,452 31,094 33,759 2016/17 2017/18 2018/19 2019/20 Total completed affordable new homes supported by Homes England 28,261 or 70 per cent of housing completions complete. The 2015-18 Affordable Housing in 2019/20 were for affordable homes. This Programme was followed by the launch represents a reduction of 2 per cent on of the Shared Ownership and Affordable the 28,726 affordable homes completed in Housing Programme 2016-21 which is now 2018/19. The drop in affordable completions seeing increasing delivery. The impact of is a result of delivery at certain points of a COVID-19 on housebuilding in March, when programme cycle of different and overlapping there has historically been an increased rate funding streams. Remaining delivery through of completions very close to year end, will the 2015-18 Affordable Housing Programme also have had an effect on overall completion is tapering off as expected as allocations numbers. Chart 2 - Total affordable housing completions 28,710 28,261 22,885 25,802 2016/17 2017/18 2018/19 2019/20 Definition of completions across Homes England’s Ò For Investment & Land programmes, a completion is defined as the physical completion of an individual housing unit or block such that it programmes: is habitable. There is scope to claim completion subject to customer Ò For Affordable Housing programmes, a completion, as defined in the options – for example if a kitchen/ flooring is to be completed upon sale. Capital Funding Guide (paragraph 4.2.7), is a housing unit that has been completed in accordance with the terms in the relevant building Units may be counted as completions both in the case of new homes, and contract, and the terms of the contract between Homes England and where units have been rehabilitated or repurposed to become habitable the Registered Provider that has an allocation; and is fit for occupation where they were not previously. as per National House-Building Council (NHBC) requirements. 26


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    A N N UA L R EP O R T & F IN A N C I A L S TAT E M E N T S 2019/ 20 Total Households supported into home ownership by Homes England Products 61,251 households were supported into home ownership in 2019/20 through Homes England Products. Chart 3- total households supported into home ownership 61,286 61,277 53,249 43,816 2016/17 2017/18 2018/19 2019/20 Forward-looking performance indicators In addition to the official targets for completions set by MHCLG, we also assess performance using two key forward-looking performance indicators: 2019/20 Performance against forecast Forecast Delivery performance Full year Full year % of forecast target outturn delivered Unlocking Housing Capacity 120,243 114,361 95.1% Starts on Site 42,544 42,358 99.6% Delivery against these performance economic uncertainty, purdah which paused indicators in 2019/20 was impacted by the our activity in late 2019 and finally the impact macroeconomic challenges highlighted of COVID-19. The delivery of some programme above, EU Exit preparation and corresponding outputs therefore slipped into 2020/21. 27


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    HOMES ENGL AND Anti-corruption, anti-bribery, modern Counter-fraud, error and loss risk assessment day slavery and human trafficking workshops have now been delivered to all We are committed to the effective business areas, which identified key fraud management and application of public funds risks. We continue to examine our existing in accordance with Managing Public Money. fraud control mechanisms to improve them This is carried out legally and in the public wherever necessary. interest, with high ethical standards while achieving value for money. We also endorse We have developed and introduced an the seven Principles of Public Life - the electronic centralised process to report, Nolan Principles - of Selflessness, Integrity, manage, supervise and oversee ‘Gifts and Objectivity, Accountability, Openness, Honesty Hospitality’ reporting to enhance usability and Leadership. and immediate supervisory intervention. We support the Government’s key objectives We fully support the Government’s objectives to mitigate against the risks of financial crime, to eradicate modern slavery and human including fraud, bribery and corruption. We trafficking. Each year we have published report progress in meeting the Government’s an annual statement setting out the steps counter-fraud functional standards to we have taken to assess risk and mitigate the HMG Cabinet Office. To support these modern slavery across our activities and objectives, we have revised and published a supply chains. five-year counter-fraud and anti-bribery and corruption strategy. In the financial year 2019/20 we have again undertaken an annual review of our modern Our fraud action plan underpins our activity. slavery policies to reflect our changing We have examined, developed and amended environment. Engagement with the Office of our existing counter-fraud, bribery and the Independent Anti-Slavery Commissioner corruption policies to reflect our activity. and the Gangmasters Labour Abuse Authority Our activity is supported by our policies and continues, which aids benchmarking and procedures. We review every reported case endorses our risk approach. We now enjoy of fraud, take appropriate action and monitor the status of being one of their approved progress. Additionally, as part of its reporting employers. function all cases are escalated and reported periodically to MHCLG. Together with construction industry partners, we signed the Gangmasters and Labour All key internal stakeholders attended Abuse Authority (GLAA) intelligence sharing counter-fraud error and loss risk assessment protocol and we maintain relationships workshops, resulting in the completion of with UK law enforcement bodies. We have a fraud risk register. In order to maintain continued to deliver external training to our our understanding of fraud risk exposure, panel firms and framework partners to ensure these assessments will form part of a rolling that our compliance requirements are met. programme of work. We continue rolling out We require partners to identify and report mandatory induction and continual periodic suspicious activity and welfare concerns. training for all staff. The content will be further developed in the forthcoming year to We have continued to prepare and deliver meet the challenges ahead. internal training to Homes England staff in 28


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    A N N UA L R EP O R T & F IN A N C I A L S TAT E M E N T S 2019/ 20 the form of presentations and workshops. Once our new training delivery platform is procured in the third quarter of 2020 we will deliver a modern slavery awareness webinar in partnership with the Chartered Institute of Builders (CIOB). We have also developed our proactive reassurance plan to deliver inspection activities in conjunction with our monitoring surveyors at our high-risk sites throughout the UK. Finally, the responsibility and governance programme, overseen by our Executive Management team and Board, continues to create a hostile environment for modern slavery and ambiguous supply chains. 29


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    HOMES ENGL AND Financial summary For the financial year 2019/20, Homes England’s performance against its programme financial control totals is summarised below: Financial programme 2019/20 2018/19 performance £m Target Outturn Variance Target Outturn Variance Capital Financial 3,826 3,762 (64) 4,142 3,848 (294) Transactions of which: Expenditure 4,309 4,219 (90) 4,546 4,254 (292) Receipts (483) (457) 26 (404) (406) (2) Capital Grant 1,805 1,723 (82) 1,021 1,010 (11) of which: Expenditure 2,076 1,951 (125) 1,173 1,145 (28) Receipts (271) (228) 43 (152) (135) 17 Resource 42 (47) (89) (50) (68) (8) of which: Expenditure 281 138 (143) 94 76 18 Receipts (239) (185) 54 (144) (144) - Total Programme 5,673 5,438 (235) 5,113 4,790 (323) of which: Expenditure 6,666 6,308 (358) 5,813 5,475 (338) Receipts (993) (870) 123 (700) (685) 15 Financial control totals within Capital Financial of 14% compared to 2018/19. Homes England Transactions, Capital Grant and Resource manages its budgets independently across funding operate independently, and to a net Capital Financial Transactions, Capital Grant budget position. The Agency’s net programme and Resource, and to a net budget position. results at £5,438m were 4% less than the The summary highlights that the Agency’s net programme target of £5,673m, and the activity remains within the financial control results show a continued increase in delivery totals set by MHCLG. 30


  • Page 31

    A N N UA L R EP O R T & F IN A N C I A L S TAT E M E N T S 2019/ 20 Financial performance in 2019/20 £230m from the sale of land assets (a 102% The Agency’s financial performance increase in sales proceeds compared to throughout 2019/20 has been strong. 2018/19, at a profit of £75m) and has suffered less than half the level of impairments on Grants to the Affordable Housing Sector land assets that it recognised in 2018/19. increased by 71% from £819m in 2018/19 to £1,398m in 2019/20 largely due to the Impact of COVID-19 increase in the strategic partnership element The impact of the COVID-19 pandemic of the programme. These partnerships provide became significant from mid to late-March additional support to Registered Providers and as such did not have a pronounced for the construction of affordable homes. impact on delivery at year-end. However, The Strategic Partnership programme, which it clearly has the potential to have a long- was launched part way through 2018/19, has lasting effect on both the Agency and the grown from £170m last year to £700m this sector in 2020/21 and beyond. The Agency’s year. current assessment of key risks, including consideration of the impact of COVID-19, is Across all financial asset programmes, the set out on page 64. Agency made new investments totalling £4.2bn (including £3.6bn under the Help to Uncertainty in how the pandemic will impact Buy scheme) and achieved receipts of £1.45bn on the economy is reflected in a wide range of (of which, £0.93bn were in relation to Help possible future economic scenarios. We have to Buy). considered this uncertainty in determining estimates for asset valuations for the 2019/20 A slowly rising housing market in 2019/20 Financial Statements. has lifted asset values for the Help to Buy portfolio by £259m (including £109m reversal It is important to note that some estimates of of previous impairments), relatively few losses asset values are based on market information have been observed on the Agency’s £1.7bn as at 31 March 2020 and others are based on commercial loan book. expectations of future performance. Broadly, our valuations fall into these categories as At the same time, the Agency has realised follows: Asset type Valued with reference Valued with reference to to observed evidence of expectations of future conditions & prices which performance existed at 31 March 2020 Home equity loans, including Help to Buy Loans measured at amortised cost: Write-offs Loans measured at amortised cost: Expected Credit Losses Market value of land and property assets Other Financial assets measured at fair value 31


  • Page 32

    HOMES ENGL AND This means that potential future effects of The most significant thing to note from this COVID-19 on the housing market are not analysis is the overall uncertainty surrounding reflected in the value of the Help to Buy the future impact of COVID-19, with a £4.3bn portfolio reported at 31 March 2020. Users range in anticipated values across the three of the accounts may wish to consider the scenarios, modelled based on the market future risks to the portfolio from changes conditions associated with each scenario in the economic environment as a result at March 2021. Of this range in outcomes, of COVID-19, which may have a significant the most significant area impacted is home impact on portfolio values in the future. equity loans, including Help to Buy, where potential movements in house prices could A detailed disclosure of the accounting drive significant short-term reductions in judgements made for valuing these key the value of assets carried on the Agency’s asset areas and a sensitivity analysis of the balance sheet, but with an expectation that effect of potential future scenarios has been asset values would recover over time with the performed and is reported on in Note 2 on housing market. page 114. Growth of assets in 2019/20 In 2019/20 the Agency’s balance sheet now represents 81% of net assets (2018/19: continued to grow significantly, driven mainly 78%). by £2.93bn net growth in Help to Buy, which Chart 3: Change in net assets during 2019/20 (£m) £’m 18,000 159 19 17,357 17,500 148 2,932 17,000 -31 -64 16,500 16,000 15,500 15,000 14,500 14,194 14,000 13,500 13,000 SoFP at Help to Legacy Other Financial Land Other net SoFP at 2019 Buy Home Equity Financial Assets at assets 2020 Assets Amortised Cost 32


  • Page 33

    A N N UA L R EP O R T & F IN A N C I A L S TAT E M E N T S 2019/ 20 Future growth of net assets Over the next five years, based on programme net asset position and the relative proportions expenditure predicted in the Agency’s Annual of the key components are predicted to Business Plan (revised to reflect the current change as illustrated below, peaking at over anticipated effect of COVID-19), the Agency’s £20bn in 2022/23. Chart 4: Projected change in net assets over time, based on the Agency’s Annual Business Plan £’b 25,000 Actual Totals 2015 to 2020 Projected Totals 2021 to 2025 20,000 15,000 10,000 5,000 0 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 2022/23 2023/4 2024/25 Help to Buy Investment Land Other Changes in the level of administrative costs in relation to assets managed As illustrated in chart 5 below, The Agency’s this point, the Agency expects to be receiving administrative costs expressed as a significant redemption proceeds from percentage of net assets managed are homeowners redeeming their Help to Buy currently half the level observed in 2015/16 equity-loans and so, whilst net assets will be and are expected to remain at below 0.8% reducing, administrative activity across the of net assets until 2023/24 after the Help to Agency is expected to remain at similar levels Buy equity-loan programme has ended. At to previous years. Chart 5: Projected change in the relationship between admin costs and net assets over time, based on the Agency’s Annual Business Plan % 1.4 1.31% 1.2 1.0 0.91% 0.86% 0.8 0.70% 0.73% 0.71% 0.73% 0.64% 0.64% 0.6 0.4 0.2 0 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 2022/23 2023/24 Admin costs as a percentage of net assets 33


  • Page 34

    HOMES ENGL AND Operating Expenditure offset by increases in; accommodation Operating Expenditure of £1,878m in 2019/20 and office running costs (£1.4m), travel & has gone up from £1,288m last year, an subsistence (£0.9m), and depreciation and increase of £590m (46%). The key drivers for amortisation (£0.9m). These increases reflect this are a net increase of £669m in grants (of changes to the Agency’s level of staffing and which Affordable Housing Grants increased associated office and equipment costs as the by £579m), offset by a decrease of £183m in new operating structure is implemented. impairment charges across Land & Financial Asset investments. Within programme costs, Help to Buy costs have also fallen, from £21m to £14m. This is Administration expenditure reduced by £7.4m primarily driven by new contracts with local from 2018/19 to 2019/20. This is primarily due agents, which have reduced the average fee to £11.5m reduced costs under the Homes per new loan by a third, from just over £300 England Development Programme (HEDP), per transaction to £200 per transaction. Chart 6: Analysis of the components of Operating Expenditure £’m 2,000 1800 1,600 1,400 Increase/(decrease) 1,200 in provisions 1,000 Impairments Administration expenses 800 Staff costs, inc pensions 600 Programme costs 400 Cost of land and property 200 disposals Grants 0 2019/20 2018/19 34


  • Page 35

    A N N UA L R EP O R T & F IN A N C I A L S TAT E M E N T S 2019/ 20 Operating income Operating Income for 2019/20 is £566m which is an increase of £346m (157%) from 2018/19, driven mainly by proceeds from the disposal of land and property assets which have doubled from £114m in 2018/19 to £230m in 2019/20 and valuation gains on financial assets held at fair value which have increased from £22m in 2018/19 to £208m in 2019/20. This mainly reflects small increases in house prices which have been observed for most regions of England during this period resulting in valuation increases for the Agency’s Help to Buy and other home equity portfolios. Chart 7: Analysis of the components of Operating Income £’m 600 500 400 Other operating income 300 Interest income Net gain/(loss) on disposal 200 of financial assets Valuation gains on financial 100 assets held at fair value Proceeds from disposal of land and property assets 0 2019/20 2018/19 -50 35


  • Page 36

    HOMES ENGL AND Help to Buy: Equity Loan repayment statistics The table below summarises the number of Help to Buy: Equity Loans issued in each financial year and the cumulative repayment of those loans at the end of 2019/20: Cumulative equity loans Cumulative equity loans repaid 2019/20 repaid 2018/19 Financial Number Number Original Receipt Number Original Receipt year of equity of loans cost of from of loans cost of from loans repaid repaid repaid repaid repaid repaid issued loans loans loans loans (£m) (£m) (£m) (£m) 2019/20 51,449 28 1.4 1.4 n/a n/a n/a 2018/19 52,467 516 28.4 28.1 32 1.6 1.6 2017/18 47,587 3,147 175.6 175.4 358 17.9 18.1 2016/17 39,807 6,262 326.4 337.8 3,460 181.5 188.1 2015/16 33,873 11,127 522.9 569.9 6,543 311.6 339.5 2014/15 27,874 15,747 690.4 780.4 10,006 440.4 499.1 2013/14 19,754 12,193 504.0 588.0 10,246 421.3 494.0 All years 272,811 49,020 2,249.1 2,481.0 21,645 1,374.3 1,540.4 The repayment statistics show that between The repayment statistics also show that April 2013 and March 2020 a total of 272,811 Homes England received £2,481m from these households bought homes with a Help to Buy: 49,020 households, when the original cost of Equity Loan. By March 2020 a total of 49,020 the loans was £2,249.1m. The realised gain on households (18%) had repaid their loan. disposal of £232m is due to the increase in the value of homes between the time the loan was issued and repaid. 36


  • Page 37

    A N N UA L R EP O R T & F IN A N C I A L S TAT E M E N T S 2019/ 20 Sustainability report We work towards the Greening Government Commitment (GGC) targets to reduce the environmental impact of our operations. Sustainability in Homes England Sustainable Development Goals Sustainability lies at the heart of what we In 2015, the UK government, along with 192 do. We are committed to reducing the other United Nations members, committed to environmental impacts associated with our achieving the Sustainable Development Goals. day to day operations whilst encouraging and These form part of a global development enabling our delivery partners to do the same. framework, the UN’s Agenda 2030 for Sustainable Development. The 17 goals and There are two main strands of work on 169 indicators cover issues such as poverty, sustainability within Homes England: economic opportunity for all, provision of education, access to healthcare, gender Ò Contributing to achieving the UN equality and environmental problems such Sustainable Development Goals, (SDG’s) as biodiversity loss and climate change. and Countries are committed to achieving the Ò The Greening Government Commitments, goals by 2030. including sustainable procurement. The UK Government is firmly committed to delivering the Goals both at home and around the world. 37


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    HOMES ENGL AND As the Government’s housing delivery agency, our mission is to intervene in the market to ensure that more homes are built in areas of greatest need. Through the delivery of this mission we contribute to the delivery of several of the Sustainable Development Goals: End poverty in all its forms, everywhere. Our contribution Through greater access to affordable housing we contribute to increasing purchasing power for all, particularly the poor and vulnerable. Specifically, we: Ò Ensure that a range of investment products are made available to support housebuilding and infrastructure to create more affordable housing; Ò Build in areas of greatest need; and Ò Deliver home ownership products, providing an industry standard service to consumers. Ensure access to affordable, reliable, sustainable and modern energy. Our contribution We are committed to working alongside our partners and the housing industry to support a low carbon economy that is reliable and effective. We embrace Modern Methods of Construction, (MMC) and ensure that it is compatible with Smart Technology and energy efficient systems. Build resilient infrastructure, promote sustainable industrialisation and foster innovation. Our contribution Our mission is to increase the supply of housing. Through financial investment and the provision of expert support we: Ò Invest in local infrastructure to unlock new homes through the delivery of the Housing Infrastructure Fund; Ò Continue to drive housing and economic growth in the Oxford-Milton Keynes- Cambridge corridor; and Ò Work with local councils and Enterprise Partnerships. 38


  • Page 39

    A N N UA L R EP O R T & F IN A N C I A L S TAT E M E N T S 2019/ 20 Make cities and human settlements, inclusive, safe, resilient and sustainable. Our contribution We contribute to developing communities that are safe, resilient and sustainable. We make places happen by: Ò Increasing homes in the places that need them the most; Ò Disposing of land on terms that accelerate development, economic growth and environmental protection; Ò As a master developer, influencing the way sustainability is incorporated into design to deliver decarbonisation, biodiversity net gain, sustainable transport, building community resilience, and digital infrastructure; Ò Aligning the delivery of housing with major transport infrastructure projects such as HS2 and Northern Powerhouse rail where possible; Ò Supporting local authorities’ ambitions for growth by providing additional professional skills and capacity; Ò Connecting people with the environment to improve health and wellbeing through place making design; and Ò Supporting the government in the delivery of new garden communities. Climate change and resilience. Our contribution One of our objectives is to create a more resilient market. In response to SDG 13 we work with our delivery partners to ensure that our activities and developments are resilient to climate change through: Ò Future proofing the design and planning of developments to ensure that the water infrastructure and water environments can cope with extreme events; and Ò Ensuring new homes are low-carbon and energy efficient with sustainable transport links. In addition, we report annually on progress towards meeting Greening Government Commitments, demonstrating the UK government’s determination to operate in an efficient and sustainable manner. Protect, restore and promote sustainable use of terrestrial ecosystems and halt biodiversity loss. Our contribution In our role as master developer and landowner, we protect, restore and enhance terrestrial habitats. Specifically, we: Ò Progress developments, where appropriate, towards the UK’s biodiversity net gain targets; Ò Collaborate with our partners to retain protected sites and species as a minimum and engage local wildlife partnerships and community groups; and Ò Encourage the use of Building with Nature and other recognised nature conservation schemes when engaging developers as we have done at Lea Castle. 39


  • Page 40

    HOMES ENGL AND Performance 2019/2020 Notes on sustainability This report sets out our progress against performance data the GGC targets over the past 12 months Utilities and waste data are presented for the compared to 2018/19 and the 2009/10 operational offices we directly control in each baselines. It also outlines our broader year. Utilities and waste volumes apportioned activities including those relevant to our to non-government tenants are excluded. wider estate, in line with current public Travel and paper use data is for the whole sector sustainability reporting guidance organisation. from HM Treasury. Special Note: COVID-19 Greening Government Commitments Where offices could not be accessed at the We subscribe to the GGCs to drive reductions end of the final quarter to obtain meter and continually improve our environmental readings, the data has been estimated based performance across our operational office on the previous quarter. Where Q3 data was estate and official business travel. not available, (new offices only), the data was estimated based on the consumption of an As part of the GGC targets, we’ve committed equivalent office, e.g. size, function etc. to: Ò reducing greenhouse gas emissions by 60% from the 2009/10 baseline; Ò sending less than 10% of waste to landfill and reducing the overall amount of waste we produce; and Ò reducing water consumption. We’re also committed to: Ò buying more sustainable and efficient products and services with the aim of achieving the best long-term, overall value for money for society; and Ò reporting transparently on key sustainability issues. 40


  • Page 41

    A N N UA L R EP O R T & F IN A N C I A L S TAT E M E N T S 2019/ 20 Summary of 2019/2020 performance against the Greening Government Commitments Requirement by 2020 Overall Commentary Achievement (where target has not been met) 2009/2010 to 2019/2020 Reduce greenhouse gas (GHG) emissions by 60% - 40% X As a growing organisation, there have been several operational changes between 2018 -2020, increasing our built estate and business travel. Reduce domestic business flights by at least 30% + 583% X Since 2013/2014, the organisation initially reduced in size and then grew, particularly since 2018. Increased headcount and low air fares for internal flights has Note: The baseline year for meant that we did not reduce the number of domestic this commitment is 2013/14 flights by 30% or more. as the data was not readily available and accurate prior Specifically, this period of growth has been to this date. accompanied by an increase in staff numbers, built estate, stakeholders and development sites and a move towards collaborative working. Whilst the flight routes have remained consistent throughout the period being measured, more flights were taken between 2016-20 for meetings, conferences and events reflecting the culture of collaboration. In addition to a changing organisation, a quarter of all flights between 2018 and 2020 were taken as they offered a cheaper fare than the alternative methods such as rail. COVID-19 has demonstrated that the digital solutions that were rolled out in 2019/2020 allow us to operate in a collaborative way supporting the case for less air travel. Air travel will continue to require director approval. Continue to reduce overall - 83% waste beyond 45% Reduce the amount of 2.3% waste going to landfill to less than 10%. Reduce paper use by 50% - 52% Continue to reduce total - 73% estate water consumption beyond 49% 41


  • Page 42

    HOMES ENGL AND Environmental sustainability performance data Greenhouse house gas emissions 2016/17 2017/18 2018/19 2019/20 Non-financial Total Scope 1 (direct) 378.2 386.8 349 232 indicators emissions (tonnes CO2e) Total Scope 2 (indirect) 377.4 303.3 222.1 223.9 emissions Total Scope 3 (official 390.8 352.7 439.7 231 business travel) GHG emissions Total emissions: Scopes 1,146 1,043 1,011 1,083 1, 2 and 3 Related energy Gas consumption 85.98 101.29 94.92 134.05 consumption (MWh) Electricity consumption 377.41 303.32 222.11 216.02 Related energy Business travel 6,655 6,572 8,157 8,313 consumption distance total ('000s km) Distance per full time 8 8 9 9 equivalent (FTE) staff Related energy Domestic Business 99 95 130 246 consumption Flights (number) Financial Energy consumption 127 132 134 130 indicators (£'000) Expenditure on 1 74 3 0 accredited offsets CRC Allowances 0 0 0 0 Official Business Travel 1,585 1,772 2,433 3,164 Resources, waste and recycling 2016/17 2017/18 2018/19 2019/20 Non-financial Total waste generated 23.03 26.07 37.39 43.0 indicators (tonnes) Hazardous waste: 0.05 0.03 0.02 0.0 landfill Non-hazardous waste: 1.72 1.11 0.91 1.0 landfill 42


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    A N N UA L R EP O R T & F IN A N C I A L S TAT E M E N T S 2019/ 20 Resources, waste and recycling 2016/17 2017/18 2018/19 2019/20 Non-financial Non-hazardous waste: 2.59 2.74 2.53 2.0 indicators incineration with (tonnes) energy recovery Non-hazardous waste: 17.34 16.49 32.90 40.0 recycled Non-hazardous waste: 1.33 6.34 1.03 0.0 ICT reused / recycled Non-financial Recycling rate (%) 81 85 91 98 indicators (%) Landfill Rate % 8 4 2 2 Non-financial No of A4 reams 6,039 5,542 5,287 8,755 indicators (No.) consumed No. of reams per 7.3 7.1 6.1 9.5 FTE staff Financial Landfill/ Incineration 12 15 11 1.4 indicators Recycling 12 9 18 29 (£’000) Paper Procurement 8 19 21 26 Water consumption 2016/17 2017/18 2018/19 2019/20 Non-financial Water consumption - 1,543 1,553 1,689 3,439 indicators (m3) supplied (none abstracted) Consumption per FTE 4.5 4.2 4.3 3.4 staff (Homes England owned offices) Financial Water supply and 19 19 20 24 indicators sewerage costs (£'000) 43


  • Page 44

    HOMES ENGL AND Greenhouse gas emissions Waste management We’ve increased our greenhouse gas We’ve produced 15% more waste from emissions by 7% against last year’s total. our offices this year compared to last year. By comparison, we have decreased our However, we continue to meet the GGC target greenhouse gas emissions by 40% since of less than 10% of waste going to landfill, 2009/10, against a departmental GGC target with 98% of waste recycled this year. of 60%. Given the increase in the number of staff working in our offices, the use per The increase in waste was primarily due to person (FTE) remained broadly similar. Gas the closure of our offices generating surplus consumption from our built estate has office furniture which was recycled. increased by 41% during 2019/20 compared to the previous year. Finite resource consumption: paper We have reduced paper consumption by 52% This increase in energy demand reflects compared to 2009/10, against a GGC target the increasing size of our organisation and of 50%. In part, this is due to the adoption the increase in the number of offices that of digital solutions that reduce the need to we directly control following a period of print. Despite the adoption of these digital downsizing between 2015/18. solutions, with the increased headcount we have still experienced a significant increase in Travel on official business via road and rail the amount of paper being consumed. is up by 2% compared to 2018/19. We’ve continued to make ICT improvements to In 2019/20, paper use has increased by 65% support agile ways of working which has compared to 2018/19. Paper consumption contributed to us achieving a steady state in increased significantly during quarter’s three terms of business travel despite the increased and four which reflects a period of growth number of staff within our organisation. in staff numbers, suggesting that wasteful behaviours around paper consumption may The number of domestic flights has increased be responsible for this increase. by 89% in comparison to 2018/2019 and has more than doubled since the baseline Finite resource consumption: single year. This is attributable to the growth in use plastics staff numbers and evolving business need to Working with our facilities management (FM) collaborate, such as annual all-staff events provider, we have reviewed the plastics within and away days. Greenhouse gas emissions our supply chain and phased out many of the from domestic air travel have increased single use plastics from across our operations by 80%. Colleagues must obtain director including cutlery, condiments, plastic cups approval before they can travel by air. and envelopes with plastic windows. We’ll continue to work with our FM provider throughout 2020/2021 to identify all plastics within our supply chain to find suitable alternatives where they exist. This will include products containing plastic packaging. 44


  • Page 45

    A N N UA L R EP O R T & F IN A N C I A L S TAT E M E N T S 2019/ 20 Finite resource consumption: water Biodiversity and the natural Throughout 2019/2020 we have increased the environment number of operational offices that we directly Our directly controlled operational office control and our staff numbers. As a result, estate contains limited green space, although we’ve used more water in our offices during we maintain a green roof on our Gateshead this period, with recorded use up by 103% office. on 2018/2019. Despite the organisational changes, the use per FTE has reduced by On the land we own, we are committed to 0.9m3 in the last financial year. Overall, we preventing pollution and where possible, have reduced our water use by 73% against avoiding adverse impacts on soil, water, 2009/10. air and biodiversity, in line with our public safety, health and environmental (SHE) policy Sustainable procurement statement. We take account of the Government’s mandatory Buying Standards when procuring In 2018, we acquired the Lodge Hill site in goods and services, and our procurement Kent, which includes a Site of Special Scientific policy follows Crown Commercial Service Interest (SSSI). We are actively managing principles. the site to ensure its continued suitability for nightingales, focusing on creating dynamic Climate change resilience and areas of mixed-age scrub thicket that provides adaptation optimal habitat. We’ve considered climate change adaptation as we have expanded our built estate. In 2019/20, work has included felling areas Our new head office in Coventry is heated of secondary plantation woodland within and cooled using a low carbon and low- Lodge Hill Training Area affected by ash cost solution; a district heating network. dieback, to promote the growth of the In addition, many of our new offices, like understorey vegetation which is favoured by Coventry have been selected to encourage the nightingales. the use of public transport by our colleagues and visitors. In most cases parking is not All habitat management work is planned available on site to further encourage the use and delivered under the supervision of of public transport. professional ecologists and with the assent of Natural England. No development is planned In creating a more resilient market, we also on any part of the SSSI and the number of work with our delivery partners to ensure that new homes planned by Homes England to the climate resilient designs are incorporated south of the site has been reduced to c500. in relevant developments. In managing our estate, we are reviewing our sites and any potential receptors that may be adversely affected by a changing climate. This will allow our robust business continuity plans to be reviewed and updated to ensure that we manage occurrences of extreme weather events. 45


  • Page 46

    HOMES ENGL AND Looking ahead We also recognise the potential for the As the Government’s housing delivery agency, new homes we enable to help deliver other we recognise that there is more we can do to government sustainability agendas, such ensure sustainability is embedded in our work as improving public health, growing local and reflected in the homes delivered by our economies and helping to meeting the needs partners. Over the last 12 months we have of people with specific requirements. We will been engaging with our government partners work with allies across the housing sector to and stakeholders to better understand what ensure our homes support the creation of part we might play in delivering this agenda sustainable communities whilst supporting and what good practice is being delivered at a the UK Government’s long-term approach to national and international level. improving our natural capital. The introduction of the Environment Bill will The Performance report is signed on be an essential part of the new government 29 October 2020 approach to put environmental protection and accountability at the heart of what it does. We are committed to supporting the sector to embrace this commitment around green governance to address priorities such ………………............…………………. as the decarbonisation agenda. Nick Walkley We will work with the sector to adopt new Chief Executive and Accounting Officer delivery mechanisms and grow to meet emerging policies, such as the Future Homes Standard. The sector is responding positively to this challenge however, some will only get there with our help. Housing has a critical role in delivering the UK’s target of net zero emissions by 2050. Homes England will help drive the change needed to make this happen. As a major landowner and master developer, we can directly influence activity on the sites as well as demonstrating to others how sustainability can be incorporated through good design. In addition to supporting the decarbonisation of the homes, we will work, where appropriate, with partners to deliver additional environmental benefits such as increased biodiversity, the encouragement of sustainable transport, and the inclusion of digital infrastructure. 46


  • Page 47

    A N N UA L R EP O R T & F IN A N C I A L S TAT E M E N T S 2019/ 20 47


  • Page 48

    HOMES ENGL AND The Accountability report 48


  • Page 49

    A N N UA L R EP O R T & F IN A N C I A L S TAT E M E N T S 2019/ 20 The Accountability report is included to meet key accountability requirements to Parliament. Contents: 50 Corporate Governance report 67 Remuneration and staff report 80 Parliamentary Accountability and Audit report 84 The certificate and report of the Comptroller and Auditor General to the Houses of Parliament 49


  • Page 50

    HOMES ENGL AND Corporate Governance report Our Board has overseen a major programme Ò sets out our governance and decision- of change for the Agency over the year in making arrangements; and support of its ambitious new mission, set out Ò sets out the financial and management in its five-year Strategic Plan. processes that govern our operation. We have established a new governance and There have been no fundamental changes to operational relationship with the Ministry of this Framework document in the period. Housing, Communities and Local Government (MHCLG); carried out a reorganisation to a Board Members Report new operating model; established a new Markets, Partners and Places function to reset The role of our Board is to provide strategic the Agency’s relationships with the housing leadership and to promote our long term, sector and significantly increased our capacity sustainable success. and capabilities. All these changes were necessary to support the ongoing delivery of Our Board has statutory responsibility for our Mission, and help Government achieve its exercising our functions while working housing ambitions. closely with MHCLG to ensure the delivery of our strategic objectives. Some of the Board’s Our Board and committees have themselves statutory functions are delegated to its undergone significant transformation, with members, Committees, sub-Committees updated terms of reference, ways of working and staff. and delegation of decision making to enable the Agency to deliver our new mission and Our Board is specifically responsible for: objectives. Ò Overall governance, including preservation of the reputation of the Agency, and This report explains the composition and relationships with MHCLG and other key organisation of our governance structures stakeholders. and how they support the achievement of our mission and strategic objectives. It comprises Ò Recommends to MHCLG the Agency’s a Governance Statement, Board Members’ overall strategic direction, within the policy Report and Statement of Accounting Officer’s and resources framework agreed and set Responsibilities. out on the Framework Document. Ò Approves the Agency’s periodic draft Governance Statement Corporate Plans, including output targets, We are a Non Departmental Public Body for submission to Ministers for approval. sponsored by MHCLG. Our relationships with MHCLG, including how we interact, the Ò Agrees the Agency’s Annual Budget, parameters within which we operate and consistent with the Corporate Plan, for the obligations we comply with are formally approval by MHCLG. governed by a Framework Document which: Ò Agrees the Annual Report and Accounts, Ò recognises our functional and day-to-day for submission to Parliament. operational independence; 50

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