Budget setting time
This week Prospect’s Budget group met (via Zoom of course these days) to look at the proposals for Prospect’s spend for 2021/22. Budgeting is an integral part of running any organisation and is carried out on an annual basis. We do this to create a spending plan of what is required to run the organisation and maintain your properties to a high standard. By working out a spending plan, this helps determine the rent increase required to fund the plan.
One of our aims at Prospect is to keep rents affordable so by taking a close look at all our costs and spend each year, we ensure expenditure is kept to a minimum which then allows us to keep rent increase to a minimum.
As part of the process we usually consult tenants to gain their views on the proposed rent increase. However, last year we asked for tenants’ opinions on this as part of the wider tenant satisfaction survey for the following 3 years until 2022. This feedback means we are sticking to a maximum rent increase of August’s CPI (the national Consumer Price Index) +0.5%. If we calculated that we needed to increase the rents by more than this amount, we would need to carry out another consultation.
Our Budget group consists of 5 Management Committee members and 5 members of Prospect staff. It is their job to take a close look at the spending proposals and question whether all the proposed spend is necessary. This helps ensure that tenants are receiving value for money. This group also have a look at what we predict will happen to Prospect’s finances for the next 25 years. This means we can be confident that the organisation is a healthy business with enough income now and in the future to keep the properties in good condition and continue to provide the services we do.
Once the Budget group is satisfied with the proposed budget, the full Prospect Management Committee will discuss and approve it in January. Tenants are then informed of their new rents from 1 April. Then Prospect Management Committee monitor actual spend against budget throughout the year on a quarterly basis.
If you have any questions about the budget and rent setting process, please do get in touch.
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