Introduction
Great Yarmouth Community Housing (GYCH) specialises in social housing, understanding the needs of its tenants and needs to develop into commercial ventures (Great Yarmouth, 2016). Traditionally, the business plan (BP) at GYCH focused on offering social housing in the borough with providing a maintained standard of housing with its priorities focused on clean estates, managed with equitable resources, and collecting rental income whilst listening to tenants, creating peaceful neighbourhoods, and offering new models of housing (Coates 2013). GYCH housing board should consider exploring other business opportunities to provide services to support the community and increase its business portfolio to support the development of a new BP.
The HO would introduce a new model of joint venture where different landlords could join hands in promoting the delivery of equitable and affordable housing. The new model incorporates the idea of reducing the costs that have sprouted due to the competition between HO and landlords (Duxbury 2014; Schwartz,2014). Therefore, the Housing Delivery Partnership (HDP) could be the new future of the HO in the provision of properties and housing services to the tenants. Lawson et al., (2014) report that housing providers have shown an interest in providing social amenities. HO works at ensuring poverty level decreases within a specific region; thus, broadens the role of the organisations beyond the expectation.
This report will consider the important elements of BP with developing strategies, strategic planning monitoring, and explain how we should respond to significant changes in policy from 2009 in the new BP. The changes are also in operations, environment, developing technology and service provision focusing on improving life opportunities with, and sustaining solutions to within the community. Housing providers are working in partnership ensuring poverty level decreases (Mullins et al., 2012). At GYCH, we work in partnership with partners to support our tenants, the area they live in and improve social well-being.
The Role and Purpose of a Business Plan
The BP is a document that supports GYCH to work towards achieving our defined priorities with continuing to develop and define the direction of the business and its success. The BP acts as a clarification of directing the business to succeed, and monitor development and direction of the company (Navarro 2015). The BP is useful in the context of reviewing its current operating environment, changes in legislation, and the vision of the future through strategic planning to financially support to ensure viability of GYCH continues and mitigates risks. This would depend on the information drafted in a successful BP with explanation of every step to decide whether the business would receive financial support (Navarro 2015).
The BP acts as a forecast of the strategies employed in GYCH and the possible results expected at the end of a financial year. Managers and officials lead from the BP to manage and monitor the progress, within a set of clear policies, strategies and procedures to ensure smooth running, and flow of techniques securing the goal of GYCH in an effort of ensuring a steady flow of revenues and incorporating the role of the business in a community (Navarro 2015).
Developing a Business Plan
The BP supports GYCH to achieve their goals as speculated and planned. However, the process of developing a BP would be based on the reforms made by the Localism Act (LA) 2011. The Act has brought about some of the biggest changes in self-financing, Tenure reforms, and social housing reforms aimed at defining the regulatory framework. Self-financing would be the start of the procedure to reduce the housing debt as the Council would have full control of the rents collected from the tenants. Therefore, the BP would act as a forecast (Barringer 2012).
By listening to our tenants, we have developed and incorporated the priorities and challenges that face GYCH. Similarly, GYCH has laid down instructions for tenant involvement and empowerment to provide influence on policies, strategic priorities, and service standards.
Developing a BP from a scheduled platform would mean taking the plan from one level to another. The vision of GYCH should define an appropriate way of focusing on the important strategies that aim at developing the business and its community. GYCH’s management team are aiming at implementing strategic plans that would support the organisation to move from one stage to another in profit maximisation as well as the provision of services to the tenants. The business draft offers clear and precise instructions on the strategy focusing on the development of the business (Moore and Neef, 2012).
Implementing and Monitoring of a Business Plan
The best way for GYCH to succeed in business is the utilisation of the strategies prescribed in a BP. Chang (2016) depicts that a BP offers the stages of monitoring and development of the BP. The first stage in monitoring is regular reporting of the steps speculated in the BP. GYCH management would be required to report the development of their progress quarterly to the housing board and directors. Similarly, constant checking is another stage that would help adequate monitoring of the BP. The senior managers should check the validity of the expected benefits laid down on the BP.
Implementation of the BP at GYCH gives direction to operating managers according to the laid down strategies. The senior management should have frequent meetingsto discuss the implementation and progress of the 30-year BP. The managers should also provide clear definition of their projected procedures of meeting the organisational goals. For example, GYCH management should discuss the best platform on deciding which criterion to take in the payment of their current debt. The choices are that they can repay each element of the debt as it becomes due from reserves, which have accrued over time or, re-finance the new borrowing as each loan becomes due. Quarterly meetings would support GYCH to realise the current flow of operations as well as updating some changed policies with appropriate data management; otherwise, the operations would not meet the expectations.
The BP supports GYCH by reviewing financial monitoring throughout the year and measuring progress as well as the forecasted budgets and capital in the forthcoming years. The BP should provide a platform in directing GYCH officials in determining the best criterion in discussing the basic assumptions that have been placed to implement the legal strategies in the LA 2011. For instance, inflation is expected to increase and the Act has suggested a reduction of rent by 1% in the next four years (Power and Hahn 2015).
Changes in Government Policy regarding Housing Organisations
The Government has passed two Welfare Reform Acts in 2012 and 2016. These Acts introduced measures including the ‘spare room subsidy’ or ‘bedroom tax’, Universal Credit, replacing DLA with PIP, the benefit cap, a freeze on any increase for some benefits and the imposition of a two child limit on some new claims for tax credits. A particular impact on GYCH was the imposition of a 1% rent cut per year for four years. We will therefore, use the business plan to model the impact of reduced income from rent and to manage the risk of rising rent arrears due to some households receiving less income form welfare benefit payments (Alcock 2014).
The recent changes in government policies will have an impact on the BP at GYCH. The new policy on rent reduction set by the Welfare Reform and Work Act 2016 focused on minimising the costs of housing. For instance, the government accredited a reduction in rents to the tenants by 1% in the next four years (Cross 2015). The government had initiated the policy to protect the rising costs of rents and taxpayers from the rising subsidy. The government targets a reduction of 12% of rent before 2020 hence; protecting the housing benefits as well as the rising housing costs (Alcock 2014).
Changes to Regulatory Framework
GYCH has aimed at changing the regulatory framework on the issue of value for money as they prioritise on maximising profits. The BP would reduce cases of rent arrears that would slow their operations. Similarly, tenants would to cater for the repairs hence; reducing the expenses incurred in repair and maintenance. GYCH aims at reducing procurement costs by involving the Eastern Procurement Association. The framework requires the company to reduce rents, but that would weigh down the strategies for repairing, development, and servicing the rental homes. Therefore, GYCH aims at reducing costs of major maintenance and repairs work. Similarly, the government have removed ‘pay to stay’ strategy and enhanced the purchasing of homes at a discounting rate and introducing the selling of “higher value homes” (Teck-Hong 2012).
Response to Government Changes (Political Economic Social Technology)
GYCH should focus in analysing the external factors that would affect the business. The analysis would help identifying the PEST attributes contributing to the business negatively. Similarly, reducing rents by 1% would reduce income that the organisation would remove or consider a reduction of some services. GYCH would need a balanced economic value that would sustain the business and respond to the issue of increased rent arrears through UC with caution because many tenants may not be eligible to the usual income related benefits due to impacts of Welfare Reforms. Therefore, GYCH should intervene with a support strategy to mitigate the risks of tenants failing to pay their rents.
Protecting Service Users
The standards set by the regulator places duties on GYCH to support tenant involvement and empowerment by offering tenants opportunity to be involved in policies, strategic planning, service standards, and service delivery. The improvements could benefit both the tenants and GYCH. For instance, the tenants could be eligible for the repair and maintenance of their homes at a discounting fee. Similarly, the property owners are supposed to share their savings made by imposing the repairs and maintenance to the tenants by introducing ‘Tenants Cashback’ although administration costs may increase. Additionally, the reduction of rent by 1% supports the tenants by reducing their expenses.
Business Plan Outline
Executive Summary
- The purpose of the GYCH is to provide housing services to the tenants and its environment (Ball, 2013).
- GYCH has set objectives to support tenants to live in safe places, improve estates, and live in a peaceful neighbourhood.
- GYCH offers services to all tenants regardless of their income.
- The financial purpose and objective of GYCH is to sustain our business as well as generate enough revenues that would help the communities within their borough.
Legislative Framework
- The LA 2011 changed to a self-financing strategy that aimed at retaining the revenues generated from rents. The revenues are kept to reduce England’s housing debt of £58 Millions (Ball, 2013).
- The HPA 2016 requires all social landlords to reform their tenancy policies that would meet strategic housing strategies.
- The HPA asks the housing department to meet regulatory standards that would demonstrate different communication methods with their tenants and the authority.
- The regulators require landlords to involve tenants in empowerment as well as improving service delivery. Similarly, the HPA provides a framework where tenants are entitled to cater for the repairs and maintenance at a cash-back system where the landlords would refund the amount used in the repairs (Beuren, et al., 2013).
- The HPA requires the HO to contribute towards the development of the new strategy involving the “Right to Buy”, which requires the selling of ‘higher value vacant council homes’ that would make an effort of raising the estimated £4.5 billion annually (Mahmoud 2016).
- The WRA 2013 changes, reduces working age tenants benefit entitlement where the required number of bedrooms exceeds the need. The reduction would affect the tenants with a one bedroom being reduced by 14% and those with more than two bedrooms, their benefits would be reduced with 25%. The introduction of the “benefit cap, to cap the amount of benefit received by a tenant and the roll out of UC” in Great Yarmouth paying tenants benefits in a monthly payment in arrears including their housing costs has led to an increase of rent arrears.
- The regulatory pledges the company to provide affordable homes to the tenants in the strategy of “Right to buy discounts” where the company is asked to build a new home after every sale of a discounted home. This is resulting in less social homes available for those in housing need and reducing income.
- The business plan aims at reducing the rent by 1% every year in the subsequent four years aiming at providing affordable rents to the tenants (Teck-Hong 2012).
Products and Services
- The business plan focuses on providing housing services to our tenants, and the main services include offering homes to residents (Beuren, et al., 2013).
- GYCH business plan does not cover naming other services beyond their expertise but helps the readers in understanding the different roles of an organisation in a community.
Target Market
- The business plan aims at reconnecting the current tenants and new tenants that would understand the role of a GYCH and the benefits behind it.
- The BP would incorporate the new amendment bill introduced by the Housing and Planning Act 2016 that orders the HO to contribute towards the selling of council homes to fund the “Right to Buy” strategy (Mahmoud 2016).
- GYCH helps in understanding the role of a government regarding finance through policies aimed at protecting the welfare of the residents.
- The target market includes the concentrated urban area with a flow and improving employment opportunities that would help the community to pay for rents and improve self-sustainment.
Implementation Strategy
- The business plan aims at pressing the officials in convenient ways of implementing the written document.
- The organisation should press the importance of following protocol in implementing the business plan. Therefore, monitoring stages should be followed promptly.
- The senior managers are asked to review the business plan yearly with the changes in the policies of the government.
Company Management
- The management comprises of the Organisational Officials ranking from the Chief Executive Officer, followed by Director who is followed by the Group Manager. The office has a financial business manager who is also included in decision-making (Gainullina, et al., 2016).
- The offices have subordinate managers, clerks, housing representatives, and community engagement support.
Financial Overview
- GYCH aims at getting financial help from bank loans, shares, bonds, and government funding (Clatworthy and Peel 2016).
- The government regulates most practices through policies and legislation. For instance, imposing policies inhibiting the increase of rents that would affect the tenants.
- The company had targeted a minimum increase of rent revenues from 2012 with a rate of 2.6% per annum increasing profits from £20 million to £30 million from 2012-2042 (Clatworthy and Peel 2016). The change in legislation and reduction of rents by 1% reduces projected profits.
Threats of Government Policies
The government has developed new policies aimed at protecting the interests of the tenants but still would affect the business of housing. For instance, Hays (2012) claims that the rate of reducing the rent by 1% per every year would lead to housing organisations make losses within the subsequent years. Similarly, the role of government in interfering in supporting buying a home with a discount through RTB, including current low mortgage interest rates would encourage tenants to leaving the rental market. Lastly, diminishing stock and reduced revenues generated are leading to a negative financial statement with the government imposing changes that would gradually affect the housing business at GYCH (Liba and Harding 2015).
Conclusion
The role of GYCH in the provision of rental services, repairs, neighbourhood environment, and community development the business plan is a statement that aims at providing a platform that the business would follow in an effort of meeting their objectives. Therefore, the BP aims at forecasting on the possibilities of the company in the future service. Similarly, the Housing and Planning Act 2016 has projected a change in the “pay to stay” policy by introducing the new amendment of selling ‘high’ to ‘higher’ of home values by expanding the “Right to Buy” to the tenants. Housing Organisations have managed to provide adequate services to the people as well as providing revenues to the government. Therefore, the business plan is the key strategy that would help every business in implementing effective procedures in a company.
Acronyms
BP – Business Plan
HO – Housing Organisation
PEST – Political, Economic, Social, and Technology
UC – Universal Credit
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