All posts from: November 2011
Inefficient housing associations will from April have nowhere to hide – that is the strong message from the new regulatory framework published this week.
The current value for money regulations only require landlords to inform their tenants in annual reports of expenditure and what plans they have to ensure value for money.
But from April 2013, associations will have to comply with much more stringent rules. They will have to publish self-assessments demonstrating that they understand the financial, social and environmental return on their assets.
Much talk in the sector over recent months has focused on how landlords can continue to develop without the large levels of public subsidy we have seen in the past. The need to identify latent capacity in balance sheets and working out how to ‘sweat’ assets to fund new homes has never been more important.
Many associations recognise this and are already undergoing an appraisal of their assets.
But the fact the regulator has felt the need to amend its standards to force associations to obtain better value for money suggests much more needs to be done.
Associations which are not achieving value for money in order to achieve their objectives can expect firm treatment from the regulator.
With a growing housebuilding crisis, illustrated by the pitiful numbers of new affordable housing starts announced this week, and not much public money around, there is now simply no excuse for not looking to squeeze extra value from balance sheets.
The new world of regulation for housing associations is now looking likely to get off to at best, a confusing start.
From 1 April, financial regulation of registered providers will move from the Tenant Services Authority to a new Homes and Communities Agency committee chaired by Julian Ashby.
Mr Ashby was hoping to publish a consultation on new regulatory standards in plenty of time to allow landlords to understand them, while allowing them to come into effect before 1 April.
But, as we report this week, this is now unlikely to happen because the Communities and Local Government department has not yet published its directions to the regulator. The reason for the delay is unclear, but with the housing strategy due on Monday it is possible the department has prioritised that ahead of the directions.
The most likely scenario now is that the new committee will implement the current standards for a while beyond 1 April in order to give landlords enough time to get to grips with the new rules.
This, on the face of it, is not going to be a huge problem for associations, but symbolically, it does not look great. The new committee will have been keen to make its mark, with an expected stronger focus on value for money, from the off.
The sector needs reassurance that the new committee will provide strong, independent regulation and the sooner it can implement its new standards, the better.
As Inside Housing reported this week, Spectrum Housing Group has had early discussions with major retailers B&Q and Argos about potentially doing work for them through its in-house repairs subsidiary.
The talks are at an early stage, but could potentially see the beginning of a new source of revenue for the sector.
While many housing associations already provide repair services for public bodies, including local authorities and health trusts, selling services to high street retailers appears to be new (If anyone else is doing this already though, please get in touch.)
Wayne Morris, chief executive of SHG, says he sees large retailers becoming part of the housing association repairs market place. He justifies the move on the basis that it would provide much-needed employment and that the proceeds could cross-subsidise the building of new affordable homes.
The move would be consistent with wider thinking across the sector about ways of generating extra revenues in a world of less capital grant.
But as one sector figure has already pointed out on Twitter, problems may arise if a housing association’s performance on repairing its housing stock decreases.
One can only imagine the uproar if tenants are not getting their homes fixed and they see the landlords’ staff doing up the local B & Q instead.
It is early, but SHG should be commended for its innovative thinking, and it will be interesting to see how things progress.