We've all had differing experiences of the last nine months but one of the positives is how the sector has shared information and collaborated in developing our response to coronavirus. James Walder, Executive Director of Finance & Business Support at North Star Housing Group, shares thoughts from FPAG on the main issues for the sector as we move towards 2021.
Over the past nine months, organisations have had to be flexible and agile to continue to deliver services to customers and keep their customers, staff contractors and partners safe. At a recent FPAG meeting, we discussed the impact of coronavirus on the sector and the main challenges it may pose for the future.
With development and maintenance work being delayed until later in the year or in some cases, such as sheltered housing, pushed back until there is more clarity on vaccines, the initial impact here is on customers. This will put more pressure on a number of areas including MRI interest cover, the capacity of contractors and the materials supply chain.
Whilst the deferral of planned works may provide an immediate covenant and cash benefit, organisations need to ensure they are engaging with funders over the impact this could have on covenants in the next 2-3 years.
We are in a recession in all but name and the slowing recovery and the eventual end of furlough will have a huge impact on our customers. Finance teams will all be working on 2021 business plans and trying to model the medium and long-term impact of coronavirus whilst also factoring in Brexit and the usual range of scenarios and stress tests.
It is more important than ever that these stress tests consider the potential mitigations available to boards and reflect some of the lessons from the last nine months.