General Assumptions 
Benchmark Inflation
RPI (%) - this is a key assumption on which virtually
all the models income and expenditure items are based. But the model is
built so that it can be flexed to test alternative scenarios.
Other Inflation - Margin above/(below)
RPI
Management cost inflation (%) - when added to the assumed
RPI this gives the annual inflation rate which will be used to inflate
both the current level of management costs and the current per unit management
cost for each business stream.
Service cost inflation (%) - when added to the assumed RPI this
gives the annual inflation rate which will be used to inflate both the
current level of service costs and the current per unit service cost for
each business stream.
Care and support cost inflation (%) - when added to the
assumed RPI this gives the annual inflation rate which will be used to
inflate both the current level of care and support costs and the current
per unit care and support cost for each business stream.
Building cost inflation (%) - when added to the assumed RPI this
gives the annual inflation rate which will be used to inflate the current
per unit build cost inflation for each business stream.
Major repairs and maintenance cost inflation (%) - when added
to the assumed RPI this gives the annual inflation rate which will be
used to inflate both the current level of major repairs and maintenance
costs and the current per unit major repairs and maintenance cost for
each business stream.
Ongoing repairs and maintenance cost inflation (%) -
when added to the assumed RPI this gives the annual inflation rate which
will be used to inflate both the current level of ongoing costs and the
current per unit ongoing cost for each business stream.
Funding
Average rate on fixed rate debt (%) (absolute rate) -
these rates will always be applied to the calculated average amount of
fixed rate debt to determine the fixed interest payable, each year, which
is part of the total interest.
Average rate on floating rate debt (%) (margin over RPI) 
- this margin will be added to the assumed RPI and applied to
the calculated average amount of floating rate debt to determine the variable
interest payable, part of the total interest.
Investment/deposit rate (%) (margin over RPI) - this
will be added to the assumed RPI and applied to the calculated average
amount of cash and investments to determine interest receivable.
Fixed rate debt % total debt (%) - this will be applied
to the calculated total debt at each year end to determine the amount
of fixed-rate debt.
Scheduled debt repayments (£000s)
- these can only be negative amounts; increases in debt should
go on other lines. Increases and decreases should not be netted off.
Cash and short-term investments (£000s)
- this is the level of cash balances each year not the change
in cash balances. It should be the expected level or the minimum level
required in the light of funding and liquidity policies. The model will
deal with the cash consumed or cash generated by adjusting the level of
medium and long-term debt. It will only adjust the specified cash balance
if surplus cash is generated and all debt has been repaid:
Increase in medium and long-term debt (£000s) -
Increases and decreases should not be netted off.
(NB. Comments to come later or may be deleted)
Effective tax rate (%)
- this is the expected effective I&E tax rate which will
be applied to surplus before tax to calculate the tax charge. If allowances
result in no tax being payable this needs to be calculated prior to input.
Debtors and other current assets % turnover (%)
- based on past experience, this ratio of debtors etc to total
turnover from social housing lettings, other social housing activities
and non-social housing activities.
Creditors and other liabilities % expenditure (%)
- based on past experience, the ratio of creditors etc to social
housing expenditure.
Housing assets average depreciation rate (%)
- this is the rate that will be used to calculate the housing
assets annual depreciation charge for Income Statement and Balance sheet
purposes.
Other assets average depreciation rate (%)
- this is the rate that will be used to calculate the other assets
annual depreciation for Balance Sheet purposes. The depreciation amount
is not charged to the Income Statement because, under standard accounting
presentation for the sector, other depreciation is lost in overheads.
Impairment cost (£000s)
- a straight input of any anticipated impairment cost is required
since this is often zero or insignificant and impossible to model generically.
It will be taken direct to the Income Statement and deducted from the
Balance Sheet value of housing properties.
Capitalised interest (%)
- what is required is an estimate of the percentage of total
interest that is likely to be capitalised, reflecting the amount of borrowing
to support development activity. This will be deducted from the I&E
interest charge but included in cash interest paid on the Cash Flow Statement
and added to the Balance sheet value of fixed assets.
Development department costs (£000s)
- a straight input to be taken direct to the Income Statement
and deducted from general overheads.
Weeks in year (Units) - to allow any adjustments to ratios.
Investment in other fixed assets (£000s) - a straight input
required of the forecast capital expenditure on other fixed assets, which
tends to be "lumpy" and difficult to model in a simple way.
Will be added to other capital expenditure for Cash Flow and Balance Sheet
purposes.
Total number of employees (Units) - ideally the estimated average
number of employees during the year. This is only used as a measure of
association size and in a few efficiency ratios, not to drive key financial
parts of the model.
Annual property revaluation rate (%) - if properties are partly
or wholly revalued, either annually or periodically, this assumption needs
to quantify the likely revaluation amount as a percentage of the gross
value of housing properties eg if 25% are to be revalued each year by
an estimated 10% the input would be 2.5%. This will be applied to the
opening balance of housing properties at cost.
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