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Scottish Housing Regulator’s analysis shows large increase in RSL development spend

Initial SHR analysis shows RSLs’ expenditure on development has risen by 24% to £807 million.

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Initial analysis from the Scottish Housing Regulator (SHR) of RSLs’ 2016/17 audited financial statements shows that RSLs’ expenditure on development – including spending on new homes – has risen by 24% to £807 million. Capital grants from the Scottish Government to RSLs are also up by 32% to £336 million, and new borrowing is up by 47% to £371 million.

Interest payable on outstanding debt rose by 6%, to £167 million. This increase is mainly due to the higher level of RSL borrowing, along with the re-financing of old pre-credit crunch loans with new loans.

Overall turnover – RSLs’ income from goods and services – was £1,560 million, a fall of 1.6% on the previous year. Turnover from social housing activities was £1,363 million, a small increase of 1%. Turnover from RSLs’ other activities fell by 16% to £197 million. SHR said that one of the reasons for this was a reduction in the provision of RSL care and support services.

Defined benefit pension schemes – in which the benefit on retirement relates to the employee’s average or final salary – continue to operate in, what the SHR described as “a challenging environment”. In aggregate RSLs recorded an actuarial loss of £42 million in defined benefit schemes in the year to March 2017.

RSLs’ financial statements are now available in an accessible format. You can read the data, carry out your own analysis and benchmarking on the SHR website. If there is any additional data that you would find useful, please contact the regulator at shr@scottishhousingregulator.gsi.gov.uk

The regulator will publish detailed analysis and regulatory comment during 2018 as part of its annual review of the RSL sector’s financial position.