Regulation update SE Smaller Housing Associations Seminar 8 July 2011 Steve Smedley HouseMark
Content profile - smaller housing associations latest state of play implications 2
Number of organisations 450 400 350 300 250 200 150 100 50 0 Total organisations = 1001 0 25 26 100 101 500 501 1000 Size of organisation by units managed Smaller housing associations TSA RASA data June 2011 Who? Almshouses Traditional HAs Co-Operatives Abbeyfields Hostels inc. YMCAs Co-ownership Sale and Lease Total stock = 100,418 Vital signs * financial health.. coping well * continued increase: disposal applications property as security for loans merger applications * annual reports received from virtually all HAs could do better Total stock 60,000 50,000 40,000 30,000 20,000 10,000 0 0 25 26 100 101 500 501 1000 Size of organistaion by units managed 3
Shapps regulation review Oct 10 provides framework - implementation on-going TSA continues to set regulatory standards for providers all the standards apply to smaller housing associations local offers in place April 2011 annual report to tenants (unless fewer than 25 homes) due October underpinned by robust self-assessment requirement to send copy to TSA dropped but it should be made available economic regulation covers governance, viability & VFM to maintain lender confidence & protect taxpayer consumer regulation very limited focus on setting clear service standards instead landlords self-regulate, subject to tenant scrutiny 4
Localism Bill picks up legislative requirements at Committee stage in the House of Lords - royal assent in autumn? reform of social housing regulation abolition of TSA and transfer of remaining functions to HCA beefs up tenant scrutiny landlords expected to support tenant scrutiny panels and provide the information they need complaints a single ombudsman with enhanced powers but the suggested process is causing alarm avoid it! regulatory intervention on consumer issues limited to serious detriment - yet to be determined lots of changes for local authorities, eg tenure, allocations & homelessness reform local authority duty to produce a tenancy strategy housing associations must have regard a national homeswap scheme too 5
There s more. TSA/HCA use of powers for monitoring & intervention - to be discussed informally with sector over summer DCLG to consult the sector on its proposed directions to TSA/HCA - includes policy issues which directly shape consumer standards..which means TSA will consult sector in autumn on: revisions to standards the application of serious detriment for consumer standards timing dependent on passage of bill housing associations subject to freedom of information requests? Shapps to consult later this year transparency Shapps to consult sector on publishing spend over 500 tenant cashback pilots due to report roll out? prepare to pay to be regulated watch out for the consultation 6
Latest on inspection TSA issued approach to inspection on 27 June no routine inspections a regulatory investigative tool, used at short-notice only where TSA believes serious failing of standards or other regulatory requirements (to be updated by serious detriment determination) process TSA draws up a bespoke inspection brief specifying scope directly related to identified risks no KLOEs inspection tests compliance against standards or regulatory requirement inspector provides an opinion, backed by evidence TSA makes final judgement about whether a breach has occurred where failure identified, TSA likely to publish report TSA regulatory judgements will generally reflect any inspection findings operational from 1 July until at least April 2012 7
What TSA expects from smaller HAs as standard : annual accounts within six months of year end auditor s management letter (not required if accounts are independently reviewed) RSR short form by the end of May do not require routine submission of electronic financial returns such as: Financial Viability Assessment (FVA) Financial Forecast Return (FFR) Five Year Forecast (FV5). if wanted, TSA will ask (ie if you are a developing organisation) TSA does not produce regulatory judgements reports for RASAs in general, little regulatory engagement or requests for info - only in response to specific problems. 8
Latest on data NROSH reform aim is to reduce burden property database already discontinued - no requirement to submit further data to property database from April 2012 will collect (reduced) regulatory data from HAs only, replacing RSR site to be re-launched early 2012. TSA consulting now on what data to collect to enable economic regulation (deadline 29 July) important that housing associations contribute and take note of the kind of data they will be expected to collect data suggested for smaller associations: annual contextual info like current RSR cover sheet statistical summary of homes owned and managed for year ending 31/3/12 again not unlike current RSR 9
Implications for landlords the sector needs to get co-regulation right - how will you make it work? just when you thought checklists were binned, here s a co-regulatory, non-prescriptive, take it or leave it aide memoire (it s definitely not a checklist).. 10
1. Self-regulation does the board have the leadership & skills to manage the business? do you have the right information to manage the business? how robust is your approach to selfassessment? process, evidence & sign-off are the following key management disciplines up to scratch: debt, income, risk, asset? relationship & reputation management also key 11
2. Tenants are your involvement & scrutiny arrangements up to it? to what extent are tenants having a say in decision-making, resource allocation and service design? do you understand what your tenants want & need? to what extent do they scrutinise performance and hold you to account for the decisions you make? do they have the information they need to hold you to account? to what extent does your governance/accountability structures accommodate the tenant voice? to what extent are you supporting tenants to scrutinise & challenge effectively NB tenant involvement drives VFM 12
3. VFM how good is your approach to VFM? do you understand current VFM? How well you are doing? how do you demonstrate this? Where s your evidence? who do you demonstrate it to? are you doing the right things? are you doing those things right? how do you compare? what are your strengths & weaknesses? what are your associated plans for improvement? The where & how. how do these relate to business priorities? can you generate the headroom you need for your priorities? how do smaller HAs collectively articulate a compelling value proposition? Customer focus, localism in action? 13
Monitor & evaluate Monitor delivery to stay on track. Evaluate achievement of objectives. What have you learnt? How will this affect future plans? Achieving VFM Purpose Purpose and values drive objectives and priorities. Do things right Ensure economy and efficiency by doing things right Do the right things Ensure effectiveness by focusing on the right things plan the activities and actions that will achieve your objectives and maintain quality 14
4. Complaints avoid escalation of complaints at all costs! adopt good practice involved tenants are generally happier tenants understand how the democratic filter works how will the role of tenant panel play out locally? If its across landlords you need to know and have a say. what s your relationship like with the likely protagonists? relationship/political management watch this space for developments 15
5. Localism what is your role? how do you communicate it? how can you support the local authority s strategy? how can you support the well-being of your tenants and wider community? can you help realisation of localism as facilitator? what realistically can you do? 16
Risks associated with failure return to regulation individual organisation/sector reputation political ambivalence or worse lender wobbles expensive lending, repricing tenant dissatisfaction public perception of tenure pressure to be absorbed into bigger organisation sector needs to drive improvement, excellence & professionalism through peer pressure and by not accepting mediocrity 17
How HouseMark & S&P helps SPBM - benchmarking for smaller HAs a self-regulatory tool to: understand & improve services & VFM demonstrate the value of smaller HAs to service users, funders, LAs, etc....even more important now the regulator is not able to provide this function view PIs on HouseMark PI tracking system receive annual report access to HouseMark s knowledge base clubs in most regions - valuable networking specialist clubs, eg HFOP, ex-offenders STAR (lite) satisfaction without the faff help with tenant involvement in service design, scrutiny and building capability
Thank you any final questions? 19
More info SPBM - mark.anderson@skillsprojects.co.uk other support steve.smedley@housemark.co.uk 20