Financial Statements

Notes to the Consolidated Financial Statementsfor the year to 31 December 2008

25. Provisions

 

 

Housing
maintenance
£m
Restructuring
£m
Other
£m
Total
£m
At 1 January 2007 27.9 27.9
Additional provision in the year 23.5 52.8 1.7 78.0
Acquisition of George Wimpey Plc 5.8 13.9 19.7
Utilisation of provision (18.7) (19.2) (1.2) (39.1)
Changes in exchange rates 0.1 0.1
At 31 December 2007 38.5 33.6 14.5 86.6
Additional provision in the year 5.9 35.1 36.0 77.0
Utilisation of provision (15.0) (42.2) (3.4) (60.6)
Released (0.7) (5.2) (3.2) (9.1)
Changes in exchange rates 10.3 0.8 2.1 13.2
At 31 December 2008 39.0 22.1 46.0 107.1
£m
Amount due for settlement within one year       56.1
Amount due for settlement after one year       51.0
31 December 2008   107.1

The housing maintenance provision arises principally from warranties and other liabilities on housing sold. Whilst such warranties extend to a period of 10 years, payment of these costs is likely to occur within a period of two years. The Group has a restructuring provision relating to the second stage of the reorganisation of the UK Housing business following the merger with George Wimpey Plc in 2007. It is anticipated that the majority of this provision, which comprises redundancy costs and empty property costs will be utilised within eight years. Other provisions consist of a remedial work provision, provisions for legal claims and other contract-related costs. The remedial work provision covers various obligations, including aftercare at Springfield Environmental Limited which has a legal responsibility of a long term nature for the management of old, completed sites and provisions for losses on construction contracts for which responsibility was retained by George Wimpey Plc group following an asset swap with Tarmac Plc in 1996. Provisions for legal claims and contract-related costs comprise various matters arising across the Group, the majority of which are anticipated to be settled within a three-year period.