WE ARE all understandably concerned to read about the

problems being experienced by the private healthcare

company 'Southern Cross' which provide services through

care homes to our most vulnerable people.

Since I've been involved with Two Rivers Housing I

have made the financial viability of the company one of

my top priorities.

Chris Gardner's recent letter (Review letters June 8

'Wrong Priorities') seems to completely miss the point

regarding our proposed new office development.

The Southern Cross failed business model seems to

be in line with Mr Gardner's expectations of Two Rivers

Housing.

Southern Cross sale and lease-back arrangements

require the spending of revenues on rented premises

rather than on servicing a loan.

The Board at Two Rivers commissioned a detailed

financial model of the alternatives and concluded that a

Southern Cross type model, as seemingly advocated by Mr

Gardner, produces long term instability and financial

weaknesses. The eventual acquisition of office premises

was part of the financial business plan when the

association was established in 2002 and the development

costs were included in the original loan facility.

We have taken our time over the decision to build

partly because in the early years we decided to give top

priority to delivering the transfer promises we made to the

council and tenants about investments in the transferred

stock and new homes. We also wanted to carry out a

thorough investigation of possible sites.

The Board set up strict criteria for site selection

including the requirement that it should be in The Forest

of Dean's administrative area. Our development team

worked with independent surveyors and all possible sites

in the area were analysed. The Newent site was shown to

be the most appropriate for a variety of reasons, not in

least in terms of long-term financial viability.

I have over 30 years experience as a writer and

consultant in housing finance and my Board includes a

number of experts including those with private and public

sector experience in accountancy, auditing and financial

management.

Unlike Southern Cross, the Board of Two Rivers

comprises unpaid voluntary people with no pecuniary

interests in the charity and whose sole concern is to

ensure that limited and valuable resources are used in the

best interest of current and future tenants.

I would like to reiterate, yet again, that

unquestionably this project will make both capital and

revenue cost savings for the association into the future.

These savings will be used to continue to improve existing

homes and develop new homes for those in housing need.

Incorporated into the planned move is a commitment

to further enhance the accessibility of our services to our

tenants. In addition to the free phone service it is our

policy to ensure that staff will not be tied to the office

desks, but will be required to be out and about on our

estates bringing the services to the customers.

– Dr David Garnett, Chair, Board Two Rivers Housing.