Navigator

Promoting understanding of homelessness sector finance

In 2009 the LHF commissioned research to analyse the finances of the agencies working in the London homelessness sector, identifying meaningful ratios drawn from the published financial statements. These ratios were then aligned to key revenue headings and the strength of the balance sheet.

Further analysis was gathered from the accounts from the following two financial years so that for all the ratios trends could be identified to test against future years’. The outputs are useful to the London Housing Foundation for its own analytical work. The results of this financial work was published in Navigator.

Navigator - Issue 2 - Autumn 2011

Key findings from the completed research were published in issue two:

1. The sector's turnover increased by 8.2%, with turnover per staff memeber up by 4.7% year-on-year. This suggests that staff numbers are increasing at a slower rate than agencies' income.
2. Homelessness agencies' total expenditure increased by 7.4%, while costs per staff member were up by only 3.9%. Overall spending is therefore rising at a rate faster than the sector's increase in staff.
3. Income from grants was down 1.9%, while income from donations, trusts and fundraising increased year-on-year. This suggests that the government's cutbacks to Supporting People funding are starting to filter through.
4. Agencies' reserves were up by 4.9% but as a percentage of turnover, reserves reduced from 44.7% to 43.4%. Total reserves of £324 million compared with turnover of £747 million.
5. Although agencies increased the amount of cash they hold, their total exposure to creditors as indicated by the 'acid test' ((cash in hand + debtors)/creditors) has worsened from 1.74 to 1.66 year-on-year.

Navigator - Issue 1 - Autumn 2010