FOR THE YEAR ENDED 31 MARCH 2026
HOMES IN SOMERSET LIMITED
COMPANY INFORMATION
HOMES IN SOMERSET LIMITED
CONTENTS
HOMES IN SOMERSET LIMITED
CHAIR'S STATEMENT
FOR THE YEAR ENDED 31 MARCH 2026
The chairman presents his statement for the period.
Having reflected on my previous two statements, I am sadly still reporting on uncertainty and instability at national and global levels. Financial markets have experienced ongoing volatility during the year, reflecting economic uncertainty and changing market conditions. It is a position which sees little chance of a swift resolution so we must plan and cater for ongoing impacts within our business and its associated partners and supply chains.
Nationally, the operating environment continues to evolve, with changes in the wider political and policy landscape. In some areas of England there are almost equal voting numbers for 4 or 5 different parties. We are seeing Councils shifting their political make-up, not just at the Ward level but at County, Mayoral and Metropolitan levels.
Our Somerset story is one of far greater certainty. The last year has seen the conducting of an independent Options Appraisal Review by Savills. This concluded with the recommendation that the future single delivery model for social housing owned by Somerset Council should be an expanded Homes in Somerset. That recommendation has since been ratified and it is expected that the Go-Live date will be 1 September 2026. This outcome followed a comprehensive service assessment and clear customer consultation processes.
The year-end performance was another massive success for Homes in Somerset with some really high performing areas, as reported via the Tenant Satisfaction Measures (TSMs) and other indicators. The overall customer satisfaction was top quartile performance which is to the massive credit of the entire colleague team and supporting contractors.
During the year, we started Project Fusion which was about preparing and planning for a 10,000 home landlord. This process involved considerable joint working with Council colleagues to develop a shared approach to the key strategies and delivery plans, such as a Joint Asset Management Strategy and Joint Development Strategy. There is clearly still a great deal of work to be done in aligning the current two services, not least around data and compliance issues to ensure we are delivering effectively against the variety of standards we are accountable for within the regulatory regime.
The HiS Board have been actively involved in steering a desired future for the business, one which we will now seek to deliver against during the transition period and beyond Go-Live. I am very grateful to all Board colleagues for their commitment in considering how best to respond to the Options Appraisal challenges and risks, which was done in a spirit of camaraderie and recognition of the need to ensure customer services were maintained and ultimately improved.
I again need to thank and recognise the dedication and commitment of the Sedgemoor Tenants Assurance Committee (STAC). Yet again, they have ensured the business is held to account while driving for improvement and ensuring the tenant voice is clearly heard and listened to. I also need to thank and recognise the joint working successes with Council colleagues, something which should not be taken for granted but which has been incredibly positive and beneficial. This Partnership has and always will be a key component of HiS effectiveness and our selection as the future landlord shows the trust and confidence Somerset Council feel.
So, another highly rewarding year concludes and I would like to finish with a big thank you to all the Homes in Somerset colleagues who have again helped the organisation achieve so much. We look forward to the challenge and opportunities which will be experienced during 2026 while creating a new 10,000 home landlord.
Massive thanks to all involved.
Nationally, the operating environment continues to evolve, with changes in the wider political and policy landscape. In some areas of England there are almost equal voting numbers for 4 or 5 different parties. We are seeing Councils shifting their political make-up, not just at the Ward level but at County, Mayoral and Metropolitan levels.
Our Somerset story is one of far greater certainty. The last year has seen the conducting of an independent Options Appraisal Review by Savills. This concluded with the recommendation that the future single delivery model for social housing owned by Somerset Council should be an expanded Homes in Somerset. That recommendation has since been ratified and it is expected that the Go-Live date will be 1 September 2026. This outcome followed a comprehensive service assessment and clear customer consultation processes.
The year-end performance was another massive success for Homes in Somerset with some really high performing areas, as reported via the Tenant Satisfaction Measures (TSMs) and other indicators. The overall customer satisfaction was top quartile performance which is to the massive credit of the entire colleague team and supporting contractors.
During the year, we started Project Fusion which was about preparing and planning for a 10,000 home landlord. This process involved considerable joint working with Council colleagues to develop a shared approach to the key strategies and delivery plans, such as a Joint Asset Management Strategy and Joint Development Strategy. There is clearly still a great deal of work to be done in aligning the current two services, not least around data and compliance issues to ensure we are delivering effectively against the variety of standards we are accountable for within the regulatory regime.
The HiS Board have been actively involved in steering a desired future for the business, one which we will now seek to deliver against during the transition period and beyond Go-Live. I am very grateful to all Board colleagues for their commitment in considering how best to respond to the Options Appraisal challenges and risks, which was done in a spirit of camaraderie and recognition of the need to ensure customer services were maintained and ultimately improved.
I again need to thank and recognise the dedication and commitment of the Sedgemoor Tenants Assurance Committee (STAC). Yet again, they have ensured the business is held to account while driving for improvement and ensuring the tenant voice is clearly heard and listened to. I also need to thank and recognise the joint working successes with Council colleagues, something which should not be taken for granted but which has been incredibly positive and beneficial. This Partnership has and always will be a key component of HiS effectiveness and our selection as the future landlord shows the trust and confidence Somerset Council feel.
So, another highly rewarding year concludes and I would like to finish with a big thank you to all the Homes in Somerset colleagues who have again helped the organisation achieve so much. We look forward to the challenge and opportunities which will be experienced during 2026 while creating a new 10,000 home landlord.
Massive thanks to all involved.
NamePaul Stephenson
Chair
Chair
Date5 August 2026
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HOMES IN SOMERSET LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2026
Finance Overview
The finalisation of the accounts has confirmed the strong financial performance reported to the Board in May 2026 through the 'pre-audit' final management accounts paper. The management accounts focus on the 'profit and loss' element of the accounts. Headlines are:
∙£2k (£0k balanced budget reported to the Board in May) operating surplus recorded against the balanced budget set.
∙£556k of spend recorded against the £823k allocated by the Board as 'Managed Use of Reserves'.
∙£97k worth of Garage Income recovered from the Council in accordance with agreed performance criteria.
These amounts account for the £457k 'loss' (24/25 profit £167k) shown against the Statement of Comprehensive Income.
With specific reference to the financial statements, HiS has reported a loss before tax of £211,000 (24/25 profit: £275,000). The Company's turnover was £24,617,000 (24/25: £19,182,000) funded primarily by a management fee, capital management fee and funding to support the capital programme. The increased turnover reflects the larger capital programme in 25/26 compared to 24/25, demonstrating the increased investment year on year in customers' homes.
The trading position for Homes in Somerset at the end of the 25/26 financial year, shows a gross loss of £344,000 (24/25 profit: £112,000).
Further analysis of the three main elements contributing to the £457k 'loss' are given below:
Operating Surplus - £2,000
A balanced budget was set by the Board for the 25/26 year. A £2k surplus was recorded at the year end despite managing several significant one-off cost pressures during the year. The main contributing factors to this position include:
∙The Responsive Repairs service, delivered under contract by MD Group, reported an underspend of £140k, primarily due to lower labour and vehicle costs than originally budgeted.
∙The year also saw increased expenditure on external legal services, including £62k relating to a Coroner's Court inquest, resulting in an overspend of £117k against the legal services budget.
∙An overspend on fly-tipping budget (£21k) was reported for a second consecutive year. Although most of this fly-tipping is in areas that come under the remit of the local council under DEFRA guidance, Homes in Somerset continues to arrange prompt removal to maintain clean, safe and welcoming neighbourhoods for our tenants and residents.
Managed Use of Reserves - £556,000
£823,000 was allocated from Reserves in 25/26 to support non-recurring specific projects and initiatives. Allocations were made in accordance with the Reserves Policy. These allocations are referred to as 'Managed Use of Reserves'. Spend of £556,000 was incurred against the £823,000 allocated, creating a £267,000 favourable variance. The Board agreed to roll-over £225,000 of this underspend into 26/27 to enable projects to be finalised. Projects in 25/26 included the investment of funds in ICT and Digital solutions to enhance efficiencies across the company, the investment of resource to increase Development capacity to support the Council in the building of new homes for customers, and the allocation of funds to prepare for the impact of the
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HOMES IN SOMERSET LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2026
outcome of Somerset Council’s Housing Options appraisal. Reserves were also utilised to prepare for the introduction of Awaab’s Law which gives social housing tenants the right to have serious hazards in their homes, such as damp and mould, investigated and resolved within clear legal timescales, helping to ensure they live in safe, healthy homes.
Garage Income - £97,000
In financial year 2018/19 Homes in Somerset undertook a programme of works to refurbish dilapidated block garages that it was managing on behalf of the Council with the intention to improve the marketability of the garages and drive an improved rental income stream for the Council. The cost of the works was £901,045 and was initially borne by HiS as a distinct "negative" reserve on the Balance Sheet. An agreement was struck whereby, if HiS could demonstrate that income from garage rent increased beyond an agreed baseline of £307,300, the excess would be paid over to HiS on an annual basis. For 25/26 the excess was calculated as £97,000 (24/25: £117,000). A negative reserve balance of £164,000 remains at the end of 25/26
Performance Overview
The company delivered good performance across several key areas of service delivery during 25/26. It is a company priority to deliver the best possible outcomes which have a significant positive impact on our stakeholders. The table below shows the progress made against several Key Performance Indicators (KPls) between both years.
Company performance is measured using several key performance indicators (KPls). Where available performance is benchmarked and reported both internally and to Somerset Council. 47 KPls were regularly monitored by the Board. Of the 47, 22 are Tenant Satisfaction Measures (TSMs).
40 of the 47 KPls are considered to be 'Management Agreement' (MA) KPls and are the performance areas that the Council has identified that it will monitor to hold HiS to account. At the year-end 9 MA KPls were classified red, 6 amber, 24 green and one is for 'information only'.
The suite of KPls reported during 25/26 are aligned to Homes in Somerset's (HiS) Corporate Strategy and are identified under five strategic themes; i) Healthy Homes, ii) Customer Driven, iii) Enriching Partnerships, iv) Thoughtful Enterprise, and v) Sustainable by Design.
Tenant Satisfaction Measures (TSMs)
These are part of a system, introduced by the Regulator of Social Housing in 23/24, to assess how well social housing landlords are doing at providing good quality homes and services.
The measures are aimed at helping improve standards for people living in social housing, by:
∙Providing visibility, letting tenants see how well their landlord is doing, and enabling tenants to hold their landlords to account,
∙Giving the Regulator insight into which landlords might need to improve things for their tenants.
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HOMES IN SOMERSET LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2026
The TSMs are designed to see how well landlords are doing at keeping properties in good repair, maintaining building safety, respectful and helpful engagement, effective handling of complaints and responsible neighbourhood management. The TSMs are grouped around these five themes.
Of the 22 TSMs, 12 are compiled from 'perception' customer satisfaction responses and 10 are generated from 'management information' held by HiS.
TSM performance reports were uploaded to the website regularly showing performance against target. The final year end TSM performance can be found here: https://www.homesinsomerset .org/about-us /how-are-we-doing/.
TSM performance for 25/26 has been consolidated with Somerset Council's 'in-house' housing team's performance and submitted to the Regulator of Social Housing. The regulator will publish TSM information in the Autumn of 2026. The performance information contained in this report only relates to HiS.
In advance of the publication by the regulator, Housemark have gathered year end TSM data from 223 organisations. 2 of the 22 TSMs are split into sub measures resulting in 24 measures overall. Of the 24, 22 relate to data that can be classified into quartile performance. Of the 22, HiS has recorded 'upper quartile' performance against 17 measures, with 3 areas in quartile 2, 1 in quartile 3 and 1 in quartile 4.
The section below provides a brief overview of the performance highlights in 25/26.
Overall Customer Satisfaction
Overall satisfaction with the service provided by the landlord ended the year at a very strong 84% (24/25: 83%) matching the target set. The months of July 2025 and February 2026 recorded the highest satisfaction of the year at 87%.
Rental Income Management and Voids
The rent collection rate at end of the year was 99.49 % compared to target of 97% resulting in this KPI indicated as Green. This performance demonstrates good progress made in collecting prior year and current year debts.
As at end of 25/26 rent year, current tenant rent arrears was £125k (24/25: £131k) which is 0.56% (24/25: 0.59%) of the total annual rent due and is reported as green when compared to target of 2%. This improvement in performance year on year is particularly impressive given that 24/25 performance was already sector leading.
The Average re-let time for all relets (225) in the period April 25 to March 26 was 74.8 days (24/25: 48 days) compared to a target of 45 days with this KPI reported as red. Several properties were held as 'policy voids' meaning that they were not re-let as either significant work was needed to bring them up to standard or they are awaiting disposal. Re-let performance improved toward the end of the year and is predicted to continue to improve during 26/27.
The satisfaction of new customers with the lettings process has ended the year at 95.8% (24/25: 94.6%) and is indicated as green when compared to the target of 95%.
Neighbourhood Management
There were a total of 97 ASB cases in 25/26 (24/25: 96). The number of new ASB cases per 1,000 properties managed by HiS ended the year at 23.98 (24/25: 23.54) compared to target of 25 and hence is indicated in green.
Responsive Repairs
The KPI, 'repairs completed within target timescales' reports on the performance of our main Repairs & Maintenance contractors and performance at the end of March was 91.9% (24/25: 85.9%) compared to a target of 95% and is reported as amber.
Customer satisfaction with repairs (transactional) achieved performance of 85% (24/25: 84%) compared to a target of 81% resulting in this KPI remaining as green for four years in a row.
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STRATEGIC REPORT (CONTINUED)
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Planned works delivery and customer satisfaction
Of the total capital budget allocated for the year, 97% (24/25: 89.8%) was spent as at the end of March 2026, this equates to spend of £9,302k compared to budget of £9,589k. Performance is rated as amber for the year.
Employee - Sickness and turnover
Percentage staff turnover ended the year at 14.6% (24/25: 19.8%) compared to a target of 12%. This equates to 15 leavers compared to 17 in 24/25. This performance is reported as red.
The percentage of working days lost due to sickness remained stable year on year and was reported as 4.3% (24/25: 4.4%) which was above the target of 3.2% and therefore reported as red. 4.3% represents 1,050 lost working days.
Housemark Pulse Benchmarking
HiS continued to participate in Housemark's monthly pulse monitoring benchmarking exercise during 25/26. The exercise provides helpful in year peer performance comparators. The KPls reflect current priorities for the sector. The number of KPIs monitored in 25/26 increased from 15 KPls in 24/25 to 20 KPIs, due to the introduction of performance measures in respect of Awaab’s Law. 16 of the 20 are presented with polarity (which means that Upper Quartile always represents the most favourable performance) and 4 KPls don't have a polarity (meaning that neither high or low values are better). Benchmarking against sector performance indicates that 10 of the 16 HiS KPIs were above the sector median, with the remaining 6 measures below the median.
We continue to review our performance, monitoring government guidelines and adopting new ways of working, to seek improved performance across the company.
Value for Money (VFM)
The Board and Executive Team at HiS are committed to the delivery of Value For Money for its customers and the Council.
The Corporate Strategy includes the following commitment, to deliver "relatively good performance at low cost'' across all areas of service delivery.
The company pro-actively participates in several benchmarking exercises to ensure that it is able to measure its value for money progress against peers across the sector.
HiS has participated in Housemark's 'annual cost and performance comparison exercise' for several years. Housemark is the leading data and insight company for the UK housing sector.
The 24/25 exercise identified five of the eight measures as falling into the "relatively good performance at low cost", the same numbers as recorded in the 23/24 exercise.
The output from the annual exercise helps to drive decision making within the organisation. It helps to support the budget setting process and facilitates the internal review of the efficiency and effectiveness of service delivery.
A VFM annual report is produced for the Board. Some of the highlights from the latest annual performance summary are given below:
i.£2k surplus achieved for the year against the balanced revenue budget set - delivered in a climate of ongoing inflation and cost pressures.
ii.Overall average customer satisfaction increased from 83% to 84% placing HiS in the top quartile (based on RSH benchmarked results for 2024/25 published in November 2025)
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STRATEGIC REPORT (CONTINUED)
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iii.£140k underspend against the MD Responsive Repair ‘Cost Model’ contract recorded, with ‘Satisfaction with Repairs’ increasing from 84% to 85% and ‘Satisfaction with time taken to complete most recent repair’ increasing slightly from 86.2% to 86.3%.
iv.89% of customers were satisfied that ‘the rent provides value for money’, an increase compared to the 87% reported for 24/25.
v.79% of customers were satisfied that ‘service charges provide value for money - a small increase compared to 78% recorded in 24/25.
vi.Patch focused approach continues to maximise business efficiencies whilst preserving excellent performance and providing greater support for customers.
vii.All 12 Tenant Satisfaction Perception results for the year were in the top quartile or above median.
viii.Retained Investors in People (IIP) Gold Status.
The financial challenges faced by Homes In Somerset in 26/27 and beyond will require the organisation to focus its attention on all areas that are considered 'high cost' to ensure that any services that remain 'high cost' do so because of conscious decisions to invest in certain areas of activity.
The Executive Team remain committed to delivering 'Relatively good performance at Low Cost' across all areas of the organisation.
Environmental, Social and Governance (ESG)
Homes in Somerset’s approach to Environmental, Social and Governance matters is rooted in the organisation’s 2023–2026 Corporate Strategy, which sets out the vision “to provide healthy homes and inspiring communities in Somerset” and is structured around five strategic themes: Healthy Homes, Customer Driven, Enriching Partnerships, Thoughtful Enterprise and Sustainability by Design.
The year ended 31 March 2026 was a significant year for Homes in Somerset. The organisation continued to deliver core landlord services for tenants and leaseholders while preparing for major organisational growth, strengthening governance arrangements and supporting Somerset Council’s wider housing ambitions. The transfer of development and regeneration activity into Homes in Somerset from April 2025, the development of a new housing development strategy, the housing management options appraisal, and preparations for a potential single landlord model all shaped the ESG agenda during the year.
Environmental
One of the five core themes of the Corporate Strategy is Sustainability by Design. This recognises the implications of climate change and commits Homes in Somerset to embedding sustainability into the way it works, reducing fuel poverty, working with like-minded partners and fulfilling its climate change responsibilities.
This environmental commitment is closely linked to the strategy’s Healthy Homes theme, particularly the objectives of providing safe, affordable and fit-for-the-future homes, alongside the development of new homes. The Corporate Strategy makes clear that homes should not only be safe and well maintained, but also affordable to heat and light, sustainable over the medium to long term and improved through well-informed investment decisions.
During 25/26, environmental considerations were embedded in both asset management and housing development activity. The Development Committee oversaw a major housing development programme which, by March 2026, comprised approximately 580 homes with a capital value of approximately £142m. This programme includes new homes, regeneration, acquisitions, Local Authority Housing Fund properties, garage redevelopment opportunities, bespoke homes and future development schemes across Somerset.
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STRATEGIC REPORT (CONTINUED)
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A key milestone during the year was the approval and progression of six turnkey acquisition schemes, comprising 112 new homes with a total approved 25/26 HRA budget of approximately £23.7m. These schemes included Badgers Close in Langport, Brymore Way in Cannington, Charlton Adam, Combe Batch in Wedmore, Cricketers Farm Phase 2 in Nether Stowey and North Newton Road in North Petherton. The Development Committee report confirmed that these new homes would provide affordable, safe and thermally efficient homes for residents.
The organisation also continued to address the energy efficiency of existing homes. The Sedgemoor Tenants Assurance Committee (STAC) considered updates on retrofit activity, including use of Social Housing Decarbonisation Fund and ECO4 funding, and noted measures such as insulation, solar panels and alternative heating technologies. During the year STAC noted that approximately 300 properties had already had solar panels installed, including around 50 properties at Schoolfields and installations at Woolavington.
Homes in Somerset continued to monitor stock condition and energy performance through its performance framework. At the end of the year 0.53% of homes did not meet the Decent Homes Standard, equivalent to 21 properties. Some of these homes were included in the SHDF programme, with works scheduled for completion during the financial year, although access issues affected progress in some cases.
The organisation also continued to respond to the challenge of fuel poverty. The Corporate Strategy recognises the need to reduce fuel poverty by improving data, targeting support and maximising investment in energy efficiency. STAC discussions during the year also highlighted the link between damp and mould reporting, heating affordability, support for vulnerable tenants and wider cost-of-living pressures.
A significant environmental and asset sustainability matter during the year was the consideration of Westfield House. Westfield House is Somerset Council’s only high-rise block, comprising 61 flats. The Development Committee considered options including full refurbishment and a phased safety-critical works approach.
The preferred phased approach involved approximately £2.25m of safety-critical investment to extend the life of Westfield House. The works include lift refurbishment, replacement of the gas heating system with electric heating, removal of gas from the building, fire alarm and emergency lighting adjustments, redundant asbestos pipework removal, sprinkler mist installation and balcony refurbishment. This approach was designed to maintain safety and compliance, reduce risk, protect residents and allow time for a more strategic long-term decision about the building.
The organisation also considered the environmental and community use of underutilised assets. In March 2026, the Development Committee considered the proposed disposal of three garage sites comprising 52 garages at Broadway Avenue, Chilton Polden; Southbrook/Grange Close, Cannington; and Poplar Estate, Highbridge. Detailed feasibility work concluded that the sites were unsuitable or uneconomic for residential redevelopment due to constraints including low demand, planning issues, tree root protection areas, layout restrictions, anti-social behaviour, and high abnormal costs. Disposal was recommended to reduce maintenance burdens, generate capital receipts and support potential community-led uses.
Social
Homes in Somerset’s social purpose is central to its role as an ALMO. The Corporate Strategy’s Customer Driven theme emphasises listening, engagement, aspiration, person-centred services and treating customers with dignity, compassion and respect. The strategy also recognises that customer voice is fundamental to the ALMO model and to the organisation’s governance arrangements.
During 25/26, customer voice continued to be strengthened through the Sedgemoor Tenants Assurance Committee, customer scrutiny activity, Service Improvement Panels, customer champions, surveys, complaints learning and targeted engagement activity. STAC’s purpose is to provide assurance that agreed service delivery standards are being achieved and that Homes in Somerset meets the expectations and outcomes of the Consumer Standards
The Customer Influence and Engagement Strategy remained an important area of delivery. By May 2025, the previous strategy had achieved 99% completion, with 40 actions completed, one action in progress and one action overdue. The strategy supported customer scrutiny, customer involvement in procurement, building safety engagement, customer ambassadors, the STRIVE programme and community-based activity.
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Examples of customer influence and community activity during the year included:
∙17 estate walks undertaken since January 2025 to identify maintenance, safety and environmental issues within communities.
∙Customer involvement in procurement activity, including gutter cleaning, window cleaning, solar panel installation, bat inspection services, retrofit works and house clearances.
∙A Bridgwater Big Spring Clean event, where volunteers collected 12 bags of litter.
∙Tenant engagement recruitment events, community drop-ins, garden improvements and local resident events.
∙Making a Difference Fund activity, which supported community groups with grants in 25/26.
Tenant Satisfaction Measures remained a key measure of customer experience. Overall satisfaction reached 87.3% in July 2025, the highest result in the previous 10 months. At the year-end overall satisfaction stood at 84%
Repairs performance was also positive. 85% satisfaction with repairs was reported at the year end, while repairs completed within target timescale hit 91.9%
STAC continued to scrutinise areas where improvement was needed. Satisfaction with the landlord’s approach to handling ASB was 64% against a target of 65%, and ASB cases were 23.98 per 1,000 properties against a year end target of 25. 97 ASB cases were reported, broadly consistent with the previous year. As with previous years the summer months saw a seasonal increase.
Complaints handling and learning remained a central feature of customer assurance. STAC considered the Housing Ombudsman Complaint Handling Code, complaints performance, learning outcomes, policy updates and reasonable adjustments. In January 2026, STAC noted 27 Stage 1 complaints, with 30% upheld, mainly because of process or contractor communication issues. Four Stage 2 complaints were recorded, with three not upheld and one ongoing.
The Committee also paid particular attention to support for vulnerable tenants and tenancy sustainment. STAC discussed allocations and tenancy onboarding, including how information is provided to new tenants, how different needs are identified, and how support can be improved for tenants who may not self-identify as requiring assistance. Suggestions included providing clearer welcome packs, improving proactive support and involving tenants in reviewing onboarding materials.
The organisation’s social impact was also demonstrated through the delivery of new affordable homes. By March 2026, Seaward Way, Oxford Inn and Local Authority Housing Fund Wave 3 acquisitions had achieved practical completion, delivering 54 homes. The wider programme continued to support additional affordable housing supply, temporary accommodation acquisition and specialist housing opportunities.
Temporary accommodation became an increasing area of focus during the year. The Development Committee reported that 19 properties had been identified for temporary accommodation acquisitions, with completion expected during Q1 and Q2 of 2026/27. This work supports Somerset Council’s wider response to homelessness and housing need.
Governance
Homes in Somerset continued to operate through a governance framework designed to provide assurance to the Board, Somerset Council, tenants and other stakeholders. Governance is embedded in the Corporate Strategy through the Thoughtful Enterprise theme, particularly the objectives of risk awareness, business intelligence and data management, whole systems thinking and good governance.
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HOMES IN SOMERSET LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2026
During 25/26, governance arrangements strengthened further. The Board continued to oversee the organisation’s strategic direction, while the Audit and Risk Committee (ARC) provided assurance over risk management, internal control, audit actions, rent assurance, cyber security and compliance. The Sedgemoor Tenants Assurance Committee (STAC) provided tenant-based assurance, and the Development Committee provided oversight of the housing development programme.
Combined Board and Co-optee attendance was 88% during 25/26 compared to 91% during 24/25.
ARC’s attendance slightly increased to 72% in 25/26 from 68% in 24/25.
STAC attendance improved significantly year on year 68% in 24/25 to 93% in 25/26. During the year HiS have introduced payment for STAC members which appears to correlate with improved attendance.
Attendance at the Development Committee for all Members and Co-optees slightly dropped from 78% in 24/25 to 75% during 25/26.
The Development Committee played a particularly important role during the year following the transfer of development and regeneration activity into Homes in Somerset from April 2025. The Committee considered scheme approvals, development risk, programme delivery, the Development Strategy, Westfield House, garage disposals, temporary accommodation acquisitions and the North Taunton Woolaway Project.
Development governance matured significantly during the year. A dedicated Development Committee risk register was established, with high-scoring risks including availability of key support services and programme-level funding instability. Other risks included failure to secure funding, viability issues, inflation, planning delays, inaccurate financial modelling, contractor appetite, regulatory change, service capacity and environmental risk.
Compliance governance remained a strong area of assurance. Fire, Asbestos, Water and Lift safety checks reported year on year stable performance of 100%. Gas safety checks stood at 99.76% (7 properties out of compliance).
Awaab’s Law preparation was also subject to regular scrutiny. In January 2026, 242 emergency hazards were reported, with 219 resolved within 24 hours, representing 90% performance. There were 73 reports of significant damp and mould, with 70 visited within the 10-working-day timescale, representing 96% performance. Customer communications following inspection were sent within three working days in 100% of cases.
The Audit and Risk Committee also oversaw major control and assurance matters during the year, including rent assurance, cyber security, business continuity, internal audit actions, compliance and the strengthening of the risk management framework. Rent assurance was a significant governance matter, with ARC overseeing independent review work, legal advice, tenant refunds, regulatory engagement and the embedding of annual assurance checks into future controls.
Overall, 2025/26 was a year in which Homes in Somerset strengthened its governance arrangements while preparing for a larger and more complex operating environment. The organisation continued to demonstrate a clear focus on assurance, transparency, customer voice, compliance, financial stewardship and strategic risk management.
Homes in Somerset maintains a Corporate Risk Register owned by the Board and managed through the Audit and Risk Committee, with day-to-day support from the Executive Team. The Corporate Strategy places risk awareness, good governance and business intelligence at the centre of the organisation’s “Thoughtful Enterprise” theme.
During 25/26, the risk environment became more complex because of potential organisational growth, the housing management options appraisal, development responsibilities, regulatory change, financial pressure, cyber risk, contractor exposure and increased expectations from tenants, regulators and the shareholder.
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STRATEGIC REPORT (CONTINUED)
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1. Project Fusion and future housing management model
The most significant strategic uncertainty during the year related to Somerset Council’s housing management options appraisal. Somerset Council owns and manages approximately 10,356 homes, with 4,157 managed by Homes in Somerset and 6,199 managed by the Council’s in-house service. Savills were appointed to review the current model, including tenant engagement and comparison of cost, quality and scalability.
Savills’ recommendation was to bring all housing services under Homes in Somerset, with a potential transition period leading to a go-live date of 1 September 2026. The potential change would substantially increase the scale of Homes in Somerset and could involve the transfer of approximately 200 colleagues into the future operating model.
The principal risks include transition capacity, governance complexity, staff engagement, service continuity, customer communication, data transfer, performance alignment and reputational risk. The organisation has mitigated these risks through Board oversight, ARC risk review, STAC engagement, transition planning and early work on the new Corporate Strategy for 2026–2031.
2. Financial sustainability and HRA pressures
Financial sustainability remains a principal uncertainty. The Corporate Strategy recognises the risks arising from high inflation, low economic growth, rent pressures, HRA financial constraints and increasing regulatory obligations.
The development programme adds further financial complexity. By March 2026, the programme comprised approximately 580 homes with a capital value of approximately £142m. While this supports housing supply and Somerset Council’s strategic objectives, it also creates exposure to inflation, planning delays, contractor performance, grant conditions, scheme viability and HRA affordability.
The Development Committee risk register identified programme-level funding instability as a high risk, reflecting the risk that reliance on uncertain or short-term funding could affect the long-term viability of the housing programme.
Mitigations include multi-year financial planning, scheme-by-scheme approval, Homes England engagement, Proval modelling, Development Committee scrutiny, sensitivity analysis, and work with Somerset Council Finance to strengthen scheme-level budget reporting.
3. Compliance, building safety and changing regulation
Homes in Somerset has a low appetite for compliance and building safety risk. Compliance remained generally strong during the year, but the regulatory environment continued to increase in complexity.
Awaab’s Law created additional statutory expectations around damp, mould and emergency hazards.
Westfield House also presented a significant building safety and asset sustainability risk. The preferred approach of approximately £2.25m safety-critical works was developed to maintain compliance, reduce risk and extend the life of the building while longer-term options are considered.
4. Cyber security and business continuity
Cyber security continued to be a high corporate risk during the year. A major incident exercise was undertaken in the year to test the impact of a major IT incident caused by a cyber security breach. The exercise enabled HiS to test how it would cope with systems being unavailable and explored workarounds that would be put in place to maintain service delivery.
The risk includes service disruption, data security, customer communication, regulatory compliance, supplier assurance and business continuity. Mitigations include cyber action planning, business continuity testing, engagement with Somerset Council ICT and cyber teams, supplier assurance and operational workarounds to protect essential services.
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HOMES IN SOMERSET LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2026
5. Customer satisfaction, complaints and consumer regulation
The strengthened consumer regulation regime and Housing Ombudsman Complaint Handling Code increased expectations around complaints, transparency, accountability and learning.
Overall satisfaction remained strong in the year. However, some indicators remained below target, including complaints handling and ASB satisfaction.
Mitigations include STAC scrutiny, complaints learning panels, customer-led scrutiny, policy review, reasonable adjustments, Ombudsman case monitoring, customer insight and planned scrutiny of complaint handling and tenancy sustainment.
6. Workforce capacity, competence and organisational growth
Workforce capacity remains a key uncertainty, particularly given potential organisational growth and the impact of transfer activity. The Corporate Strategy identifies resilience due to small teams as a weakness and access to skilled workforce as a threat.
STAC considered competence and conduct requirements, organisational culture and training needs.
The potential transfer of wider housing management responsibilities creates further risk in relation to TUPE, culture, leadership capacity, training, staff engagement, competence standards and service continuity. Mitigations include workforce planning, training plans, organisational culture work, Board oversight and transition planning.
Homes in Somerset continues to manage financial performance through budget monitoring, treasury management, reserves management, procurement controls, risk management and Board and Committee oversight. The organisation remains a non-asset-owning ALMO, dependent on its management agreement with Somerset Council for core income, and the Corporate Strategy recognises the importance of maintaining financial sustainability and delivering value for money.
During 25/26, the financial performance narrative was shaped by a larger and more complex operating environment. The transfer of development responsibilities to Homes in Somerset increased the scale of financial oversight.
Price risk
Price risk remained a key financial exposure, particularly in relation to repairs, maintenance, compliance, development contracts and supply chain inflation. The Development Committee risk register identified housing supply chain inflation and contractor tender prices exceeding approved budgets as risks that could result in increased costs, reduced value for money, viability challenges and programme disruption.
Mitigations include contract management, market testing, cost benchmarking, contingency allowances, value engineering, procurement strategy, early engagement with contractors and programme-level monitoring through Development Committee.
Credit risk
Credit risk remains limited where balances relate to Somerset Council as sole shareholder and principal funding partner. Wider recoverability risks are managed through normal financial controls and accounting policies.
Liquidity, reserves and cash flow risk
Liquidity and reserves remain important to Homes in Somerset’s resilience. The organisation’s ability to respond to transition, cyber incidents, service pressures, regulatory change and organisational growth depends on maintaining adequate financial headroom. Homes in Somerset has no long-term borrowings and has a stable level of cash which it invests as appropriate in short term deposits. £2.699m is held within the Profit & Loss Reserve at the 31 March 2026. This is £1.199m greater than the £1.5m minimum reserve level set by the Board.
Page 11
HOMES IN SOMERSET LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2026
Financial control and management
Homes in Somerset continued to operate within a financial framework designed to protect organisational resilience, maintain effective financial control and support the delivery of high-quality housing services on behalf of Somerset Council.
The year saw a significant increase in the scale and complexity of financial oversight following the transfer of development responsibilities into Homes in Somerset. Financial scrutiny focused on value for money, scheme viability, funding assumptions, grant availability, contractor performance and programme risk. The organisation also continued to strengthen financial reporting. New processes were developed with Somerset Council Finance to improve scheme-level budget reporting and ensure costs are accurately reported against original scheme budgets.
Overall, the 25/26 financial performance framework remained focused on maintaining financial resilience, controlling contracts and supporting value for money, and ensuring that growth, development and transition activity are subject to appropriate governance.
This report was approved by the board and signed on its behalf.
Page 12
HOMES IN SOMERSET LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2026
The directors present their report and the financial statements for the year ended 31 March 2026.
The profit for the year, after taxation, amounted to £306,000 (2025: £271,000).
The directors who served during the year were:
The Company's future developments are discussed within the Principal Risks and Uncertainties section of the Strategic Report.
The outcome of an independent Options Appraisal Review by Savills concluded with the recommendation that the future single delivery model for social housing owned by Somerset Council should be an expanded Homes in Somerset. That recommendation has since been ratified and it is expected that the Go-Live date will be 1 September 2026. The Board expects that the Company will continue to provide services in line with the management agreement for the foreseeable future.
The outcome of an independent Options Appraisal Review by Savills concluded with the recommendation that the future single delivery model for social housing owned by Somerset Council should be an expanded Homes in Somerset. That recommendation has since been ratified and it is expected that the Go-Live date will be 1 September 2026. The Board expects that the Company will continue to provide services in line with the management agreement for the foreseeable future.
The auditors, Bishop Fleming Audit Limited, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
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HOMES IN SOMERSET LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2026
This report was approved by the board and signed on its behalf.
Page 14
HOMES IN SOMERSET LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 MARCH 2026
The directors are responsible for preparing the Strategic Report, the Directors' Report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the Company's financial statements and then apply them consistently;
∙make judgments and accounting estimates that are reasonable and prudent;
∙state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Page 15
HOMES IN SOMERSET LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF HOMES IN SOMERSET LIMITED
We have audited the financial statements of Homes in Somerset Limited (the 'Company') for the year ended 31 March 2026, which comprise the Statement of Comprehensive Income, the Statement of Financial Position, the Statement of Changes in Equity, the Statement of Cash Flows and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the Annual Report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the Annual Report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Page 16
HOMES IN SOMERSET LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF HOMES IN SOMERSET LIMITED (CONTINUED)
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙the Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Directors' Report.
Page 17
HOMES IN SOMERSET LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF HOMES IN SOMERSET LIMITED (CONTINUED)
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
∙We have considered the nature of the sector, control environment and financial performance of the Company;
∙We have considered the result of enquiries with management in relation to their own identification and assessment of the risk of irregularities within the Company; and
∙We have reviewed the documentation of key processes and controls and performed walkthroughs of transactions to confirm that the systems are operating in line with documentation.
As a result of these procedures, we have considered the opportunities and incentives that may exist within the Company for fraud and identified the highest area of risk to be in relation to revenue recognition, with a particular risk in relation to year-end cut off and pension assumptions used in valuing the year end pension balance. In common with all audits under ISAs (UK) we are also required to perform specific procedures to respond to the risk of management override.
We have also obtained an understanding of the legal and regulatory frameworks that the Company operates in focusing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements. The key laws and regulations we considered in this context included the Companies Act 2006, FRS 102 and UK tax legislation. In addition, we considered the provisions of other laws and regulations that do not have a direct effect on the financial statements but compliance with which may be fundamental to the Company's ability to operate or avoid a material penalty, including landlord health and safety laws and regulations covering fire risks, gas safety, water hygiene, electrical safety and asbestos.
Our procedures to respond to the risks identified included the following:
∙Reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements;
∙Performing analytical procedures to identify unusual or unexpected relationships that may indicate risks of material misstatement due to fraud;
∙Reviewing board meeting minutes;
∙Enquiring of management in relation to actual and potential claims or litigations or areas of non-compliance with laws and regulations;
∙Performing detailed testing in relation to the recognition of revenue, with a particular focus around year-end cut off;
∙Performing a benchmarking summary of the assumptions used by the actuary and comparing to local government pension schemes across various counties and across different actuaries; and
∙In addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and other adjustments; assessing whether the judgements made in accounting estimates are indicative of potential bias; and evaluating the business rationale of significant transactions that are unusual or outside the normal course of business.
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HOMES IN SOMERSET LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF HOMES IN SOMERSET LIMITED (CONTINUED)
We also communicated identified laws and regulations and potential fraud risks to all members of the engagement team and remained alert to possible indicators of fraud or non-compliance with laws and regulations throughout the audit.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
for and on behalf of
Chartered Accountants
Statutory Auditors
Salt Quay House
4 North East Quay
Sutton Harbour
PL4 0BN
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HOMES IN SOMERSET LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2026
Page 20
HOMES IN SOMERSET LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH 2026
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 24 to 36 form part of these financial statements.
Page 21
HOMES IN SOMERSET LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2026
Page 22
HOMES IN SOMERSET LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2026
Page 23
HOMES IN SOMERSET LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2026
Homes in Somerset Limited (HiS or the Company) is a private company limited by guarantee with no share capital, registered in England and Wales in the United Kingdom.
2.ACCOUNTING POLICIES
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies (see note 3).
The following principal accounting policies have been applied:
The Directors consider it appropriate to prepare the Financial Statements on a going concern basis, supported by the ongoing financial backing of the ultimate parent. Confirmation has been received that Somerset Council will continue to fund the Company for the foreseeable future, with the management fee for 2026/27 agreed and the management fee for 2027/28 under current discussion. Somerset Council expects the Company to continue to delivering housing services on its behalf for the foreseeable future. This expectation follows the conclusion of an options appraisal and the decision of Somerset Council’s Executive on 11 March 2026, which was subject to tenant consultation under Section 105 of the Housing Act 1985 and completed by the end of April 2026.
Grants of a revenue nature are recognised in the Statement of Comprehensive Income in the same period as the related expenditure.
Page 24
HOMES IN SOMERSET LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2026
2.ACCOUNTING POLICIES (CONTINUED)
DEFINED BENEFIT PENSION PLAN
Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.
Page 25
HOMES IN SOMERSET LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2026
2.ACCOUNTING POLICIES (CONTINUED)
Financial instruments are recognised in the Company's Statement of Financial Position when the Company becomes party to the contractual provisions of the instrument.
Basic financial assets
Basic financial assets, which include trade and other debtors, cash and bank balances, are initially measured at their transaction price (adjusted for transaction costs except in the initial measurement of financial assets that are subsequently measured at fair value through profit and loss) and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.
Basic financial liabilities
Basic financial liabilities, which include trade and other creditors, bank loans and other loans are initially measured at their transaction price (adjusting for transaction costs except in the initial measurement of financial liabilities that are subsequently measured at fair value through profit and loss). When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future payments discounted at a market rate of interest, discounting is omitted where the effect of discounting is immaterial.
Basic financial liabilities, which include trade and other creditors, bank loans and other loans are initially measured at their transaction price (adjusting for transaction costs except in the initial measurement of financial liabilities that are subsequently measured at fair value through profit and loss). When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future payments discounted at a market rate of interest, discounting is omitted where the effect of discounting is immaterial.
Pension asset
The net pension asset of £4,777,000 (2025: £4,420,000) has not been recognised on the grounds that it is not directly recoverable as a refund or reduction in contributions. The three year valuation driving the contributions uses different methodology and assumptions.
Page 26
HOMES IN SOMERSET LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2026
Page 27
HOMES IN SOMERSET LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2026
Page 28
HOMES IN SOMERSET LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2026
Page 29
HOMES IN SOMERSET LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2026
10.TAXATION (CONTINUED)
There were no factors that may affect future tax charges.
Page 30
HOMES IN SOMERSET LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2026
Other reserves
In the financial year 2018/19 Homes in Somerset Limited (then Homes in Sedgemoor Limited) (HiS) undertook a programme of works to refurbish dilapidated block garages that it was managing on behalf of Sedgemoor District Council (now Somerset Council) with the intention to improve the marketability of the garages and drive an improved rental income stream to Somerset Council. The cost of the works was £901,045 and was initially borne by Homes in Somerset Limited as a distinct "negative" reserve on the Statement of Financial Position. An agreement was struck whereby, if HiS could demonstrate that income from garage rent increased beyond a target set by the Council, the excess would be paid over to HiS on an annual basis until the cost of the works was reimbursed fully. The balance on the garage reserve at the end of 2025/26 was £163,303 - a total reduction of £737,742 through this mechanism.
Pension Reserve
The pension reserve reflects the financial impact of the defined benefit pension scheme and whether it is in a surplus or deficit position.
Profit and loss account
Page 31
HOMES IN SOMERSET LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2026
Page 32
HOMES IN SOMERSET LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2026
The Company operates a Defined Benefit Pension Scheme.
The employers' contributions to the Local Government Pension Scheme for the year to 31 March 2026 were £750,000 (2025: £573,000).
The agreed employers' contribution rate is 19.9% (2025: 19.9%) of pensionable earnings. The employees' contribution rate is tiered starting at 5.5% for employees below £16,500, raising to 12.5% for our highest earning employee with pensionable earnings of £205k.
Page 33
HOMES IN SOMERSET LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2026
17.PENSION COMMITMENTS (CONTINUED)
Page 34
HOMES IN SOMERSET LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2026
17.PENSION COMMITMENTS (CONTINUED)
Page 35
HOMES IN SOMERSET LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2026
The ultimate parent undertaking and controlling party as at the 31 March 2026 is Somerset Council. The Company is wholly owned by the Council.
The consolidated financial statements including the results of Homes in Somerset Limited are available from:
Somerset Council
Council Buildings
County Hall
The Crescent
Taunton
TA1 4DY
The consolidated financial statements including the results of Homes in Somerset Limited are available from:
Somerset Council
Council Buildings
County Hall
The Crescent
Taunton
TA1 4DY
Page 36