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Regulating the regulator
After a high-profile investigation into regulation from the Welsh Public Accounts Committee, Nathaniel Barker asks what is coming next
When Wales established a Public Accounts Committee (PAC) (right) last summer with a remit broad enough to examine virtually every aspect of public spending in Wales, you would have been forgiven for not expecting the regulation of housing associations to be high on its agenda.
But when the committee was searching for topics to scrutinise last September, it was forwarded a letter from Adam Price, a Plaid Cymru Assembly member, which has informed much of the inquiry’s discussion.
The letter detailed concerns about what is fairly termed a saga at Tai Cantref, a small mid-Wales association. For those who haven’t followed the story in detail, it involved a statutory inquiry which found evidence of “mismanagement” but was never published; followed by a merger with Wales & West, a larger Cardiff-based landlord; and lots of arguments and bitterness along the way.
The committee has used this as a jumping off point to investigate the effectiveness of regulation as a whole.
READ MORE ABOUT TAI CANTREF
So after 11 hours of questioning and evidence, and while we await the report of the PAC’s recommendations, Inside Housing rounds up some of the inquiry’s key themes and looks at what this means for the future.
Tenant engagement and governance
Helen White, chair of the Regulatory Board for Wales
Tenant involvement was an overarching topic of the whole inquiry, amid accusations that the Tai Cantref merger did not engage with tenants well enough. Those appearing were quizzed about tenant participation on boards and the availability of data from the landlord to customers.
Stuart Ropke, chief executive of Community Housing Cymru, said: “I also think it has been a useful reminder that tenants are key stakeholders, but they are not the only stakeholders.
“I think what has come out from my perspective on the inquiry is a real illustration of the very, very different ways that housing associations are involving tenants.”
Differences were also evident when the inquiry turned to a discussion about the quality of governance as a whole. In written evidence supplied to the committee before she appeared at the meeting, Helen White, chair of the Regulatory Board for Wales, wrote: “The quality of governance at some associations is of concern. For this reason, in 2016/17 the board will be commissioning a thematic review of governance.”
During the evidence session, Ms White did not expand much on these concerns, and confirmed the review will kick off “soon”. Hardly explosive, perhaps, but it could prove significant for the sector moving forward.
Problem pay cheques
Lee Waters, Labour committee member
Chief executive salaries were placed under the microscope in each evidence session.
Representatives from Pobl Group faced tough questions over senior pay, as the former boss of Gwalia, which Pobl acquired last year, had enjoyed the largest pay cheque in any Welsh association. However, general consensus among those appearing before the PAC was that chief executive salaries are generally not excessive, given the scale and complexity of the job.
Indeed, Labour committee member Lee Waters, who led the questions on pay during Pobl’s session, told Inside Housing he has “changed his mind” on this point during the inquiry.
“I am not overly concerned with the level of salaries,” he said. “It’s just about openness and transparency.”
The Welsh Government’s secretary for communities and children Carl Sargeant has also asserted that housing associations should be able to decide their own bosses’ pay in recent weeks.
A significant clampdown on pay seems unlikely in the near future, then - but it’s possible the committee will recommend associations commit to extra transparency measures on chief executive salaries, over and above the usual publication of top earners in the year-end accounts.
Murky mergers
Steve Jones, chief executive, Tai Ceredigion
Unsurprisingly, the inquiry’s main headline-grabber was the talk around that Tai Cantref merger.
Anne Hinchey, chief executive of Wales & West, faced tough questions over whether she felt the affair had been handled appropriately by the Welsh Government, which she opted not to comment on.
And Steve Jones, chief executive of Tai Ceredigion, an association which had also been courted over a possible deal, said the process was “puzzling” and had caused “a lot of problems”, given that his organisation was provided with just a seven-day window in which to bid and voice tenants’ concerns over their new landlord’s disconnection from the Welsh language.
Senior civil servant John Howells later defended the Welsh Government’s handling of the merger, but Mr Waters has since said he did not find their evidence “particularly convincing”. There was a suggestion that the Welsh Government could have intervened sooner once Tai Cantref ran into trouble, or ensured less opacity within the merger process.
We have certainly not heard the last instalment in this saga, and its conclusion may well lead to changes in the merger process in Wales.
What happens next?
John Howells, senior civil servant
The short answer? Another inquiry.
After the committee has mulled over the evidence, it will issue a concluding report with recommendations, expected to appear in May.
But in an interesting twist, Mr Waters revealed: “We have decided that it is going to be a two-part inquiry. For the second we are going to come back to Tai Cantref later on in the summer.”
He said the Welsh Government had informed the committee that currently it can only offer a “heavily redacted” version of the original Tai Cantref report, but will provide the full copy during the warmer months, which will be dissected at this next inquiry.
As far as recommendations in the upcoming report go, the key watchword here is likely to be “transparency”, Mr Waters said. That goes for tenant involvement, salaries, governance, financial risk as associations diversify and, of course, mergers.
Expect a call to scale up the publishing of data within the sector.
In the meantime, certain figures within the sector might want to start preparing for another round of questions from the PAC.