Welsh Government Housing Policy Regulation

Transcription

1 Welsh Government Housing Policy Regulation Regulatory Assessment Report August 2015

2 Welsh Government Regulatory Assessment The Welsh Ministers have powers under the Housing Act 1996 to regulate Registered Social Landlords in relation to the provision of housing and matters relating to governance and financial management. Part 1 of the 1996 Act is amended by Part 2 of the Housing (Wales) Measure 2011 ( The Measure ) and provides the Welsh Ministers with enhanced regulatory and intervention powers concerning the provision of housing by Registered Social Landlords and the enforcement action that may be taken against them. The Welsh Ministers are publishing this Regulatory Assessment report under section 33A of the Housing Act The work undertaken follows the risk-based approach to regulation and seeks to identify strengths and areas for improvement in meeting the delivery outcomes (standards of performance) set out in The Regulatory Framework for Housing Associations Registered in Wales ( The Regulatory Framework ). Basis of Regulatory Assessment The report is designed to provide the Registered Social Landlords, its tenants, service users and other stakeholders with an understanding of how well it is performing, at a specific moment in time in relation to: Governance Financial Management Services This report is a Regulatory Assessment. It is based on information provided by the Registered Social Landlords and the Regulator s knowledge and must not be relied upon by any other party for any other purpose. The Registered Social Landlord is responsible for the completeness and accuracy of information provided to the Regulator. Housing Regulation Team Housing Policy Division Welsh Government Merthyr Tydfil Office Rhydycar CF48 1UZ housingregulation@wales.gsi.gov.uk Digital ISBN Crown Copyright

3 Introduction Tai Calon Community Housing Limited (Tai Calon) Tai Calon (the Association) was created following a large scale voluntary transfer from Blaenau Gwent County Borough Council in July It is a Community Housing Mutual registered under the Co-operative and Community Benefit Societies Act 2014, with charitable rules. Tai Calon owns and manages 6,150 homes and provides services to 339 leaseholders within the Blaenau Gwent County Borough Council area. Scope Details of the risks identified for the social housing sector in Wales can be found at: An assessment of these risks identified the following as significant for Tai Calon: Significant risks which are part of this Regulatory Assessment: Governance Risk management Existing stock Services Liabilities (new and existing) Costs Differential inflation rates Governance and Financial Management Governance Tai Calon s governance is weak. Our opinion is evidenced by regulatory contact and confirmed by two recent independent governance reviews. Urgent action is required to address numerous serious governance concerns. These include dysfunctional relationships and lack of trust, between the Board, Executive and tenants involved in the Association s work as well as a lack of constructive challenge and strategic focus at Board level. The Executive lacks leadership due to the recent departure of the Chief Executive Officer and its membership is largely new in post. Tai Calon is currently recruiting an interim Chief Executive Officer. Tai Calon s self-evaluation has not been developed in accordance with guidance issued by the Welsh Government. It provides limited evidence to demonstrate performance on delivery outcomes, is not being used as a dynamic tool to measure outcomes and performance and there is little evidence of Board ownership and stakeholder engagement. 2

4 Tai Calon s current approach to performance management is not effective and does not provide necessary support to effective Board decision making. This has been recognised by the Association and it is revising its approach to focus on more specific measurable outcomes, linking the organisation s recently agreed strategic objectives to operational business plans and individual staff performance. Tai Calon needs to strengthen governance arrangements across the whole organisation. The Association has adopted Community Housing Cymru s Code of Governance (the Code). It has not yet appraised its governance performance against the Code, but plans to do so. In-house annual Board appraisals and induction training are conducted but have been ineffective in building a Board with effective skills, experience and training which works together effectively as a team. The Association has co-opted two persons to strengthen the Board but it continues to be difficult to manage due to its large size. The quality of Board challenge varies considerably, is often not directed at key business objectives and is overly focussed on operational detail. The Association s Board and staff have sought to demonstrate adherence to the principles of co-regulation but have not always been proactive in raising issues of concern with the Regulator in a timely manner. Tenant engagement and opportunities for tenants to influence and shape services are weak. The Association recognises that improvements are required to develop a proactive, effective and robust tenant involvement strategy and has commissioned a review of its engagement practises. Work is also required to ensure tenants involved in the Association are representative of the wider tenant population. A low proportion of Tai Calon s tenants are aware of its complaints policy and the monitoring of tenant satisfaction with complaints is not robust. The Board is informed of complaints via a regular report. There is limited evidence that complaints are contributing to service improvement. The Association gains regular assurance as to the quality of staff culture and morale via annual staff surveys. Results indicate that staff morale is variable. Addressing staff culture issues is a key priority for the Association s recently recruited Director of Organisation Development, HR and IT. Tai Calon has adopted a Value for Money strategy with evidenced financial savings across the Association. Further work is required to ensure that value for money is fully embedded across the Association and to include a focus on non financial added value elements such as employment and training opportunities. The Association s governance promotes equality of opportunity by monitoring the diversity of its Board and staff. The Board currently has 14 members (2 co-optees); 5 (36%) of whom are female. 3

5 Addressing serious governance concerns and the recommendations of the two recent governance reviews Assurance around the recruitment of an effective interim Chief Executive Officer Improvements in the quality of self-evaluation Implementation of a revised performance management framework including measures to evidence outcomes Strengthening governance arrangements across the organisation Formal assessment of governance against Community Housing Cymru s Code of Governance Implementation of a skills and competency framework for Board members Quality of contribution and challenge of Board members Development of an effective approach to tenant and service user engagement Improving the approach to, and learning from, complaints Addressing staff culture issues Widening the scope of, and embedding, the approach to Value for Money across the organisation Financial Viability The Financial Viability Judgement was published in March 2015 As at 31 March 2015, the judgement is: Pass with closer regulatory monitoring This is discussed in further detail below Costs and Liabilities During 2014/15, poor financial control resulted in a very significant overspend on expenditure on action to achieve the Welsh Housing Quality Standard. Due to failures in internal governance, this was not identified at an early stage. The Association temporarily halted expenditure pending an internal audit review. This review has produced an improvement plan which aims to ensure rigorous monitoring of expenditure committed to achieving the Standard. Financial control continues to be an area for focus going forward as the Association is operating very close to its cash flow covenant in 2015/16. Whilst the covenant is monitored on regular basis, improvements in financial control and budgetary systems need to be effectively implemented to ensure that the covenant remains within its target level. Improvements in financial and budgetary control including implementation of the internal audit improvement plan 4

6 Differential Inflation Rates Tai Calon undertakes some sensitivity testing on its 30 year forecast but would benefit from expanding this to include more complex and compound scenarios and consideration of options available to mitigate risks. The Association is operating near to its lender covenants in the short term and therefore has some exposure to changes in its underlying assumptions. Compound scenario analysis of the Business Plan and consideration of options available to mitigate risk Continued monitoring of financial performance to ensure compliance with the lender covenants Risk Management Tai Calon s current approach to risk management is ineffective. The Association has acknowledged it is immature in its approach to risk and needs to ensure risk management is embedded into the culture of the whole organisation. The Association is currently working with consultants to comprehensively review its approach to risk to enable it to identify, manage and mitigate risk effectively. Development and implementation of an effective approach to risk management Existing Stock Tai Calon has demonstrated it has adequate funding is in place to deliver both planned and reactive maintenance programmes. It is on target to meet the Welsh Housing Quality Standard by December Tenant satisfaction with housing improvement works is good. Most of the tenant promises agreed when the housing stock was transferred from Blaenau Gwent County Borough Council have been completed or are in progress. The window replacement programme will not be achieved by the December 2015 target date due to the Association s business plans being misaligned with its promises tracking document. This governance failure has resulted in inaccurate and misleading communication with tenants, which needs to be rectified as soon as possible. The Association has implemented some limited window works in 2015/16 and a full window replacement programme will commence in 2016/17. Tai Calon undertakes a rolling 20% per annum external stock condition survey. The resultant data is not currently independently validated though the Association intends to obtain such validation. The Association s Asset Management Strategy has recently been approved by the Board. The Strategy has been informed by stock condition data. It identifies the financial and neighbourhood value of the stock to inform future stock investment decisions. The strategy also needs to consider its approach to dealing with long term/low demand void properties. 5

7 Tai Calon s large number of void and low demand properties require early, urgent and effective implementation of this strategy. Completion of the Welsh Housing Quality Standard environmental standard Communication to tenants advising of the accurate position regarding delivery of promises Assurance that the stock condition data is accurate and fit for purpose Effective implementation of the asset management strategy Services There is scope for improvement across some of the core services provided by the Association. The repairs and allocation service are reasonable with improving levels of satisfaction, particularly with repairs being done right first time. The Association s approach to empty homes is a matter of concern. Vacant periods and income loss as a result of empty properties are very high. It needs to urgently address the excessive number of in demand empty properties, lengthy vacant periods and associated income loss. It needs to develop a credible and comprehensive strategy for dealing with empty properties for which there is evident demand. The Association has a large number of properties which it classifies as having low or no demand. Urgent approval and implementation of an effective strategy to deal with theses properties is required. Comprehensive tenant profiling information has been gathered for over 80% of tenants. Tai Calon has used this information for a limited range of purposes. The information is not readily accessible to staff and thus is not being used effectively to tailor services for individual tenants. The Association involves tenants through a variety of strategic groups. This approach is ineffective with low confidence and trust generally between tenant groups, the Board, senior management and staff. The Association has recognised the need to address this and has commenced work on a comprehensive review of its approach. The Association contributes to the provision of rehousing homeless households although its stock composition, mainly 2 and 3 bedroom houses, limits its capacity to provide assistance to the Local Authority for single person households. Levels of tenant satisfaction with Tai Calon s approach to dealing with anti-social behaviour are lower than for its other services. Limited tenant feedback on this service, due to low survey response rates, makes it difficult to identify where improvement is required. The Association is working to address this. Tenants are generally satisfied with their neighbourhood and recognise the role the Association has played in implementing improvements. The environmental works programme, agreed when the Association was established and intended to contribute towards physical interventions to reduce anti-social behaviour and prevent crime has been significantly delayed, due in part to external factors beyond the Association s direct control. 6

8 An action plan to progress these works is in place. Urgent action is required and underway to complete these works to meet transfer promises. The Association has not ensured that it is accountable to its tenants for the quality of its services. Whilst it has service standards in place for customer care, planned maintenance and repairs requested by tenants, the Welsh Housing Quality Standard improvement programme and anti-social behaviour, these are not accessible to tenants. The Association needs to develop service standards across all key areas of its activity and ensure tenants are able to access and easily interpret them. A substantial proportion of tenants are satisfied that Tai Calon keeps them informed. Information is disseminated via newsletters, neighbourhood bulletins and the internet. Tenant scrutiny of the front line customer services indicates a good quality of service and has informed proposals for further improvement including the introduction of a tool to measure customer satisfaction at the point of contact. Lack of equalities monitoring of services means the Association does not know whether its service provision is fair and promotes equalities. It recognises that it needs to improve its approach to equalities and is developing an approach to equality monitoring and Equality Impact Assessments. The Association has a recently developed action plan for workplace domestic violence and abuse and has a well established strategy for preventing and tackling domestic violence among service users; having achieved White Ribbon status. Leaseholders have expressed lower satisfaction overall with communication and service provision. A leasehold and service charge advisor has been recruited to improve the quality of services to leaseholders. Performance improvement and raising satisfaction ratings around voids, anti-social behaviour and tenant involvement Implementation of a revised approach to voids Improving tenant profiling information and monitoring outcomes of the data Implementation of revised tenant engagement methods and focus on outcomes Completion of environmental works programme Development and implementation of a comprehensive suite of service standards Implementation of equalities monitoring of services Improving Leaseholder satisfaction with services and communication 7