our purpose our corporate plan Introduction This is the third Corporate Plan for the Calico group since its creation in November 2013. The document marks the latest phase in Calico’s development as a growing and successful organisation and outlines our vision and aspirations for the future. The Group’s purpose is to “make a real difference to peoples’ lives”. Its vision is to achieve the maximum difference possible both to each individual and to the greatest number of people. While there are a number of financial and other business reasons for growth, the primary reason for generating additional business for Calico is to achieve its social purpose. The Group is active in at least 20 markets through the various company offers. Services range from drama based training, through apprentices, community café’s, construction, drug and alcohol treatment and housing. Connections between these service offers can increase outcomes for customers. For example combining the activities of Delphi, Acorn and Enterprise, in relation to people with problems with drug and alcohol abuse, offers medical and psychological therapy interventions as well as community reintegration and skills/job support. If these varied activities are combined into themes the various operations can be defined across 4 main areas: Health, Care and Support (Acorn; SafeNet; Enterprise; Delphi) Skills and Employability/Jobs (Enterprise) Housing Development and Management (Homes) Construction (Ring Stones) Our company structure positions the group with governance arrangements that reflect the diverse nature of the organisation. These arrangements will facilitate excellent service delivery and appropriate managed growth within both a charitable and commercial environment whilst ensuring robust protections are in place for the Regulator of Social Housing (RSH) regulated Calico Homes part of the group. The plan sets out how we intend to drive the success of the Calico group further and details challenging targets against which we will monitor progress. Our Corporate Plan 2018-2021 sets out our objectives over forthcoming years and highlights how we intend to achieve our targets in the current operating context and fiscal environment. Over the last twelve months, Calico has continued its performance of recent years by growing and prospering through increased turnover from new business, strong operational services and maintenance of a robust financial position. Whilst the development of Calico as a ‘group’ of companies working towards a shared vision has continued, the current economic climate and the associated changes in the public policy environment means that we face a period of uncertainty in many areas of the business, together with some real, longer term, risks. This Corporate Plan has come at an exciting time for the Group as we set up a new company called Syncora. A new Corporate Plan is currently been devised for 2019/2022 which includes a review of our strategic aims. Why was the Group set up? To continue to meet our strategic aims To achieve our objectives within our current operating environment means we need to continue to pursue our successful Growth Strategy, diversify our activities, generate profits and maximise efficiencies if we are to continue to evolve and be successful as a social business. This approach brings inherent risks and the group structure helps to minimise such risks, which is particularly important to the regulated housing association who is required to protect its assets. Diversification and the growing financial challenge The current economic environment and associated Government public expenditure reduction programme has resulted in an extremely difficult trading environment for Calico. We have embarked upon a path of seeking to generate additional income from commercial activity via Ring Stones and this will be important in helping us to deal positively with these issues (for example, the profits could be used to assist in the funding of new housing development). However, we need to accept that commercialism and income generation is increasingly becoming a requisite part of our activities. As such, it is likely that we need to continue to increase our scope of commercial activity and undertake work that brings additional income to Calico. It is important that we have an organisation and governance structure that is positioned to manage the inevitable risks associated with this expansion. Governing increasing complexity from growth and diversification and managing the risk to what was the ‘core business’ of Calico Homes Without a change to our group structure we risked the Calico Homes Board devoting increasing amounts of its time and resources to managing the activities and risks associated with the other companies in the group and less time on the core activities of housing. By making Calico Homes a subsidiary and freeing it from the governance issues associated with the management of a large (and growing) diverse group of companies we are able to ensure the Calico Homes Board is able to: Retain its current skills base which is appropriate to the management of a housing association. Have the capacity and organisational focus to concentrate on delivering its sole objectives. Strengthen the protection around the social housing assets, i.e. stop them being used to support/guarantee non-social housing activities. Protection of the social housing assets Our structure achieves the aim of strengthening the ring fencing around the social housing assets and reduces non-social housing activities in the core housing business. Regulatory Position Of the Calico companies, only Calico Homes Limited, as a social housing provider, is regulated by the Government body the RSH. The Regulator undertook an In Depth Assessment in 2016 and we continue to maintain the highest possible ratings of G1 and V1 for our governance and financial viability. The delivery of Value for Money, both financial and social, remains key to our successful navigation through the financial challenges we face for both existing and new areas of activity. Value for Money continues to be a key requirement in relation to strategic and operational decisions. Financial Position The annual assessment of Calico Homes’ financial viability by the RSH is once again at the highest graded assessment possible. This provides us with the requisite regulatory confidence in the financial viability of this core business activity to effectively manage the significant challenges posed by the current economic climate, the Government’s deficit reduction programme and their Welfare Reform policy agenda. At the summer budget on 8 July 2015, the Government announced plans to reduce rents in the social housing sector by 1% for each of the next four years from April 2016. This breaks the ten year rent settlement of consumer price index (CPI) plus 1% which was effective from 2015. The efficiency programme that was developed as a result of the Government’s 2015 announcement to reduce some core social housing rents by 1% each year for four years continues to make good progress. Efficiency savings of £1.4m have been achieved over the first two years and the 2018/19 budget includes further efficiencies of £460k. Plans are underway to achieve the remainder of the savings required in 2019/20 of £180k which includes some savings related to the removal of he Supporting People grant for Older People’s Services. During 2017 we also made the difficult decision to exit the local government pension scheme, which will have significant positive impact on our balance sheet and also reduces the risk of increased contribution in the future. Efficiencies identified in previous years were used to reinvest in improved services but these savings are now being used to offset the reduction in income. We are in the final stages of entering into a new funding arrangement with the existing funders RBS and Nationwide which will increase the Calico Homes loan facility from £115m to £142.5m from June 2018 subject to full approval. This will involve breaking the existing syndicate and moving to a bilateral loan agreement with each funder which will give more flexibility going forwards. This will move away from the requirements of annual business plan approval and LSVT covenants with the adoption of corporate covenants. The new facility will also remove the refinancing risk of £30m in March 2020, moving the risk to 2028 with £57.5m repayable and the remainder of funding to be repaid in stages to 2040. The financial positions of Acorn, Calico Enterprise, Delphi and SafeNet are facing challenges as a result of the difficult external environment. We are managing inherent risks that are a result of reliance upon contractual income from commissioners of services. We have worked hard to continue to grow by diversifying, looking for different income streams and work with a wider range of partners. Ring Stones Maintenance and Construction is now generating a surplus which will be used, in part, to fund activities of other companies in the group. During 2015, Ring Stones became 100% owned by the Calico group. Whitworth Care Trust is not financially viable in its current form and size in the medium to long term. This position is being addressed through a planned expansion of the service on a new site in the locality. The new facility will open in 2018. Delivering the Strategy – Meeting Key Challenges The current austere operating environment means that prices are being driven down; competition is fiercer than ever; contracts for services are being terminated without renewal; national and local policies are looking for more for less and markets and opportunities are continually shifting. It therefore seems now a necessity to ensure an approach which maximises recognition of future opportunities and achieve competitiveness in key markets. We have ambition to continue to build new homes to grow our Group asset base and financial strength and to help people access decent housing. There are also clearly connections between Homes and the Calico companies focussed on support. These ambitions and connections will be reflected clearly in our asset development plans. From April 2018 over the next 3 years we intend to invest £48.5m in projects and build approx. 524 new homes. A new holding company and common board – Syncora – for the Health, Care and Skills services (Acorn; SafeNet; Enterprise; Delphi) has been established. The individual companies will continue as legal entities but business decisions will be made by the common board. The new arrangements are intended to improve strategic governance and increase the opportunities for business growth by: Providing a wider brief across the different activities and a greater delegation of operational issues to the executive Making linkages and recognising influencing opportunities through increased awareness of all activities and better ability to see synergies and improved ways of working Recognising opportunities in adjacent markets Facilitating the presentation of the combined financial strength of the entities and providing a structure for joint internal supply chain tenders. In short their key role is the effective ‘sale’ of Calico’s integration offer. Organisational Excellence Further improving our operational services remains a priority. Our targets aspire to excellence and to ensuring that we continually improve performance for key services. Our performance is historically strong and for 2017/18 we have continued to see high levels of performance with the amount of rent collected and a reduction in the amount of rent loss through dwellings being vacant. Our plan identifies having motivated, well managed and developed staff as a central tenet for a successful organisation. The focus of our People Strategy is developing our talent further and we are implementing our Leadership Development programme as part of our People Strategy. We continue to progress in this area and in February 2018 were named 39th in the Sunday Times ‘Top 100 Best Not for Profit Organisations to Work for’ – the tenth year in succession that we have been placed in the top 100. Our aim is to create an organisation with a culture where people can realise their own potential to achieve a common purpose of making a difference to people’s lives. A key way of developing an organisation’s culture is through defining and then ‘living’ a set of values. In 2016 Calico undertook a collective exercise with staff across the Group to define the values that had been emerging in our organisation and will help guide us in the future. Our People Strategy places our values at the heart of everything we do to ensure that we develop an organisation that can thrive in a VUCA world and embed the desired culture and values in a way that builds staff engagement. Communicate and embed company values and behaviours across the Group Delivering a bespoke Leadership programme; The Leader’s Journey Developing a new performance and development framework – Step further Encouraging staff across the Group to collaborate and work together Developing our talent A holistic approach to wellbeing Growth Our previous Growth Strategy was extremely successful and resulted in turnover which had more than doubled since 2008 and an increase in employment numbers from just over 300 in 2012 to over 700 in 2018. Our latest Strategy was adopted in April 2018. This analysis suggests that key principles and ambitions to be addressed by our growth strategy are: To ensure leadership capacity and arrangements are optimised; To secure longer, more stable contracts and be able to compete with lead/prime providers to do this; To integrate internal services form Calico supply chains and develop preferred external partnerships for the same reason; To develop preferred partnerships where internal services are not available or not the best solution; To diversify and penetrate further into new markets supporting this approach To identify and develop influence in key target areas, services, sectors, geographies and with relevant commissioners and other stake holders; To establish and maintain a core response and delivery infrastructure; To ensure external perceptions of Calico reflect our growth ambitions. Group Structure and Governance In 2014 we restructured the Calico group such that the parent company become a non-asset owning, non-HCA registered body. All the companies are subsidiaries of the new parent although Calico Homes is the trustee of Whitworth Care Trust. This structure retains the focus on delivery of objectives at a subsidiary level, increases the legal protection of the social housing assets and enables a stronger governance structure to be in place. Cohesive, experienced and skilled Boards are critical to our future success. Board development plans framed from a robust selection and appraisal process are in place to ensure we have high quality governance and this will be more important than ever as the effectiveness of Boards takes on greater significance through the localism agenda and co-regulation emphasis from the regulatory body. Additionally, the cohesiveness of all subsidiary Boards and their effectiveness in working together to achieve the Calico vision is critical and is therefore an important feature of the development plans. After a further review in 2017, a new company called Syncora was established to improve strategic governance and increase the opportunities for business growth though. Operating Environment Our operating environment for the lifetime of this plan will require organisations such as ours to be strategically agile to respond to the continued public expenditure pressures, associated threats brought about by the current state of the UK economy and the implementation of the Government’s policy agenda. Particular threats and opportunities are: Welfare Reform, in particular Housing Benefit eligibility. The levels of public subsidy being available to fund new social housing construction and the focus of the Government on home ownership. The HCA approach to regulation that places more emphasis upon local decisions and housing association board effectiveness. The amount of funding available for Supporting People and local authority funding in general. The overall ‘spending’ power of all of our key customers and particularly challenging times for charities and organisations seeking non-core funding to provide services. Levels of pay in a number of sectors that we operate can be low such as in the care sector, or high in the construction sector. Local authority service provision – meaning that on our estates, key services are being reduced, potentially resulting in ourselves having to consider additional services. Growth and diversification opportunities have emerged, such as supported housing and extra care. Uncertainty following the EU Referendum. Cost effective, responsive and innovative organisations such as Calico are likely to prosper at the expense of other organisations in times of reduced public spending. Such a financial environment may actually offer more opportunities and delivery of this plan positions us positively in this respect and means we can approach the forthcoming period with confidence. Summary Our Corporate Plan sets out our future direction and defines how we intend to meet our challenging targets. Achieving these targets will continue to ensure that we are well managed, financially viable and delivering excellent customer services that our current and future tenants and service users want, meeting their individual requirements and providing high levels of satisfaction. The significance of the group structure and the ability of Calico companies to provide a comprehensive offer around a range of valuable and diverse services means that we are well placed to prosper in the markets within which we operate. Footnotes Note on terminology The Calico Group (or “the Group”) is the parent company of Acorn Recovery Projects, Calico Enterprise Limited, Calico Homes Limited, Ring Stones Maintenance and Construction LLP, and SafeNet. Syncora is a registered charity and is the parent company of Acorn Recovery Projects, Calico Enterprise Limited, Delphi and SafeNet. Acorn Recovery Projects is a registered charity that provides a range of innovative drug and alcohol rehabilitation services across the North West. Calico Enterprise Limited is a registered charity that undertakes a range of activities including housing related support, provision of worklessness initiatives and information and advice services. Calico Homes Limited is a housing association whose principal activity is owning and managing approximately 4,600 properties. In April 2013 it became a registered charity. Delphi Medical is an independent provider of drug and alcohol treatment in the UK. Ring Stones Maintenance and Construction LLP undertakes maintenance and house building contracts on a commercial basis. SafeNet is a registered charity that empowers women and children to live free from domestic violence and abuse. get in touch For all general and customer enquiries, please contact us today contact privacy policy modern slavery statement gender pay gap financial reports about coronavirus covid-19 Share Share The Calico Group comprising: Calico Homes Limited, Syncora Limited, Calico Enterprise Limited, SafeNet Domestic Abuse and Support Services Ltd, Ring Stones Maintenance and Construction, Acorn Recovery Projects, Delphi Medical Limited, Delphi Medical Consultants Limited, Hobstones Homes Limited. Registered Office: Centenary Court, Croft Street, Burnley, Lancashire, BB11 2ED calico.org.uk contact@calico.org.uk The Calico Group Limited Registered England No. 8747100