The Homes and Communities Agency said today it had taken a £31m hit following the cancellation earlier this year of the London Wide Initiative key worker scheme.
Details of the liability emerged as the government body unveiled full year accounts for 2009/10 that it said “met or exceeded” all key targets.
The governmetn body, formed from the merger between English Partnerhips and the Housing Corporation, said difficult market conditions had “continued to impact on the HCA’s receipts, with proceeds from land sales falling by 34%; and on exceptional items with a £26m liability on the London Wide Initiative, recorded as a potential liability last year and crystallised in this year’s accounts, and a £5.1m impairment relating to the same scheme”.
The HCA announced it was terminating the London Wide Initiative in April despite only partially completing the project.
The project was launched by HCA predecessor English Partners in 2003 to construct key worker homes on 16 HCA-owned
Elsewhere the group said it had “partially recovered” from the market turmoil of the previous year as it posted full-year accounts that “met or exceeded” all key targets.
The group said its net operating expenditure had lifted by 21% in 2009/10 but had stayed within budget at £5.2bn.
It added that it had seen an “exceptional” housing performance, starting or completing over 120,000 new and affordable homes. The total equates to more than half of all homes under construction during the reporting period.
The value of the HCA’s net assets grew by £214m to £1.16bn, while development assets also saw an increase in value, of £20m, resulting from a £24m write back of the impairment charge recorded in the previous financial year.
Available for sale assets grew by 130% to £381m, as a result of “greater investment in low cost home ownership products, helping first time buyers and the house building industry as well as promising a return to the taxpayer in future years”.
Overall administration costs fell resulting in a £2m saving.
The HCA said it was responsible for a proportion of a pension deficit which totals £141m. Provision for the Agency’s pensions increased by 30%, to £77m.
The HCA said that, despite being owed nearly £390m at the beginning of the year, all its major debtors met their repayments, representing a “significant achievement at a time of continued economic difficulty”. As a result the amount of money due to the Agency fell by 25% to just under £293m.
The Agency attracted £583m of private investment to the sector, created 175,000 sqm of employment floorspace, and reclaimed 356ha of brownfield land.
Chief executive of the HCA, Sir Bob Kerslake, said: “I am pleased to be able to report a steadily improving financial position, which underlies the Agency’s strong delivery this year. Like the recovery in the market to which it is linked, our improved position has been achieved gradually and through tight financial control.
“I am particularly pleased that we met or exceeded all of our key targets for delivery, achieving our ambitions and helping local authorities to achieve theirs, and managed to shave £2m off our running costs at the same time as our operation grew by over 40%.
“We are now in a healthier position for delivery this financial year and we remain well placed to meet Government objectives and enable local authorities to achieve their ambitions for their own areas.”
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The HCA’s Annual report and Financial Statements are available from the HCA website: http://www.homesandcommunities.co.uk/public/documents/HCA_Annual_Report_0910.pdf
paul.norman@estatesgazette.com
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