Andium: More Transparency on Income Flows

Andium: More Transparency on Income Flows

A Freedom of Information request yielded this:

“Information on the annual value of Income Support is publically available as part of the Social Security Department’s Annual Report. Where information is provided on the expenditure of individual components (housing component) it is available as an estimate based on a percentage of the total expenditure of Income Support.”

It is almost impossible to find the figures for the income support rental component relating to Andium Homes in their reports.

But thanks to a recent question by Deputy Tadier, we have a figure for 2016.

Looking at Andium Homes, their 2016 report states that:

“We will generate rental income through the continued implementation of the rent policy adopted by the States of Jersey. The rent policy provides tenants with a 10% discount compared with the private market as well as full provision for assistance in the form of Income Support, dependent on individual circumstances. Rental income funds all of our expenditure including maintenance costs and the development of new homes (through repayment of loans). The rent policy is vital to our business model and therefore to the delivery of Decent Homes and the provision of more homes”

“In 2016, we outperformed our budget and delivered an operating surplus (before depreciation and impairments) and project similar surpluses for all future years included in the 2016-2020 Strategic Business Plan.”

“We are pleased to report an operating surplus before depreciation & impairment of £5,757k (2015: £2,795k) (compared to the budgeted surplus of £3,898k). This is after returning the agreed £27,728k (2015: £27,439k) to the Guarantor.”

“The Company has delivered the agreed return to the States of Jersey of £27,728k for the year. In accordance with the Transfer Agreement entered in to between Andium Homes and the States of Jersey, the Company will continue to deliver a quarterly return to the States of Jersey of £7,010k which will continue to be adjusted annually in October by Jersey RPI.”

Does that sound good? Andium Homes is returning to the States £27,728k for 2016.

But in answer to a question to the States, Deputy Susie Pinel noted that:

“I can report that the total amount of income support allocated to rental payments for Andium tenants in 2016 was £16.5 million across 2,884 tenants.”

She also goes on to say that:

“The total amount of income support allocated to rental payments for other trust tenants was £3.3 million across 590 tenants. The total amount of income support allocated to rental payments for private sector tenants was £9.5 million across 1,868 tenants.”

And notes that:

“The rent policy that Andium set was so that we can pay back the loan of £250 million that we needed to fund this work. Tenants pay rent at below market value of 90 per cent of the market rate and enjoy a secure tenancy and the extra support that Andium provides.”

I have no doubt that Andium is delivering homes, and is better placed to do so that the States Housing Committee. I do not want to see this change. But what I do want is better transparency concerning the flow of income into Andium from the States as well as the flow back.

Where we have Rental Income of £46,091k in the accounts, it should be noted that £16,500k of that is in fact being funded by the States that is 35%. That’s not an insignificant amount.

The net return to the States then is £11,228k. That’s still good, but it is not perhaps as glowingly high as pronounced in the accounts.

The States funding via income support rental component does not appear in the accounts, but in the interests of transparency, I think it should, rather than having to be teased out by means of questions by States members.

I would also like Social Security to make the replies to Deputy Tadier’s email form a distinct and easily locatable part of their annual report.

We do need more transparency on income flows.