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The importance of thinking about your public profile

It is important providers learn lessons from other sectors, writes Simon Dow

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Picture: Getty
Picture: Getty
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In today's IH50 regulator Simon Dow writes about the importance of the sector's profile #ukhousing

It is now ten years since the global financial crisis and the financial press is busy debating whether the banking reforms and changes to regulation have made it a safer industry, better able to withstand the next crisis.

While our sector did not experience the same traumas as the banks in 2008/09, the last decade has certainly seen a number of important changes to the way the sector works.

More tellingly, in the credit crunch social housing barely made the mainstream news, whereas today, deficiencies in the housing market regularly feature in the national press.

It is worth remembering that the banking crisis came after a prolonged period of deregulation leading to an explicitly light-touch regulatory regime.

And looking back we can see that many banks stopped being customer led and instead started focussing on seemingly exciting and innovative financing initiatives that ultimately ended up destroying shareholder value.

“It is worth remembering that the banking crisis came after a prolonged period of deregulation”

This period also saw many banks adopt opaque, highly complex financial instruments, which did not stem from any clear customer need.

Perhaps unsurprisingly it then transpired that these instruments could not be easily unwound as the underlying asset quality was poor and the financing model assumed a rising property market, and cheap, readily available, credit.

As important, beyond the destruction of monetary value, banks also lost public credibility and are still working hard to repair that damage.


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Loss of trust isn’t just a commercial phenomenon, one only has to think of events at Kids Company and now Oxfam to see how even highly regarded charities can quickly lose public and political support.

So, what does all this mean for the social housing sector and its regulator?

Like banking regulators, we have spent much of the last ten years learning from the fall out of the crisis and trying to ensure that the industry we regulate will be able to cope with future shocks or major adverse changes in its operating environment.

This is one of the reasons we are so keen on business plan stress testing.

We have also worked with the sector to develop a co-regulatory approach that places boards at the heart of their system of controls and entrusts them as the long-term custodians to work for the benefit of existing and future customers.

This approach has challenges but we think it has been overwhelmingly positive as the sector has used its greater freedoms to deliver increasing numbers of homes for less public subsidy and to continue to invest billions of pounds a year into its existing homes.

“You don’t need me to remind you that housing associations have not always been able to rely on political support”

We are not complacent; even though this is an industry where most people are seeking to do the right thing for the right reasons, one of the most sobering things about being on the regulation committee is seeing what happens when boards and executive teams get things wrong and the extent of the damage that they can do.

You don’t need me to remind you that housing associations have not always been able to rely on political support, in part because the general public do not routinely understand what they are and what they do.

This is frustrating but one of the enduring lessons from the banking and charitable sectors is that if you do not consistently keep an eye on how others see you, then in a time of crisis you may find yourself without the friends and allies that you need.

Perhaps surprisingly this is where I think our new Value for Money Standard (VfM) could have an important role to play in prompting boards and executive teams to think about their public profile.

While much of the debate about value for money has focused on the sector scorecard and our metrics, this is only part of the story.

Being open about those is a crucial part of creating public trust but for me the key part of our standard is for boards to clearly explain what they are trying to achieve, how they challenge themselves to deliver as much as they can, what results they are proud of and where they want to do better.

We all know that credibility comes from being consistently open about where things have gone well and where they haven’t.

“Housing associations are at the centre of two major public debates”

Oxfam is just one more reminder that covering up is always worse than owning up.

Housing associations are at the centre of two major public debates - how do we build more homes and how do we respond to the tragedy at Grenfell.

All sorts of people will have all sorts of ideas about what housing associations should do or not do and we can easily see how the sector might be buffeted by misguided or downright inaccurate reporting.

Associations with boards that have a clear sense of purpose with strategies that flow from that and can explain what they do in a straightforward and open way will be best placed to navigate what could be a period of intense public and political debate.

“If you do not consistently keep an eye on how others see you, then in a time of crisis you may find yourself without the friends and allies that you need.”

I hope that the Value for Money Standard can help, after all, it’s all about ensuring that boards look to deliver their objectives in the best and most efficient way they can, seeking to optimise the value they deliver and being transparent with the public about how they do that.

In our future In Depth Assessments we will challenge organisations about their progress, and in the event we cannot get assurance that boards are taking a strategic approach to achieving value for money in fulfilling their objectives then we will reflect that in our regulatory judgements.

But I hope that most boards will have already looked around them, absorbed the lessons from other sectors and are getting things right without any need for a prompt from the regulator.

Simon Dow, interim chair, Regulator of Social Housing

The Paper Trail: The Failure of Building Regulations

Read our in-depth investigation into how building regulations have changed over time and how this may have contributed to the Grenfell Tower fire:

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