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English regulator to increase rate of in-depth assessments for associations
The Regulator of Social Housing is planning to carry out in-depth assessments (IDAs) more often for larger and more complex housing associations, it has announced.
In an update to its ‘Regulating the Standards’ document, the regulator said that it will carry out IDAs on “the largest and/or most complex providers” every two years.
This is more regular than the current process, which involves carrying out IDAs every three to four years. It also plans to carry out an update meeting for each provider in the year it is not receiving an IDA.
The English regulator has carried out IDAs since 2015, when they replaced annual viability reviews on all providers with more than 1,000 homes.
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The new regime will come in next month, although for most providers the regulator will still carry out IDAs once every three to four years.
Also in the new document is a stronger requirement that boards of housing associations “have ownership of stress-testing”, with the regulator saying that it expects providers to test “severe but plausible scenarios”.
This requirement is especially relevant in the run-up to the UK’s imminent departure from the European Union.
According to a statement issued by the regulator, its changes to the document will require boards to ensure they understand the impact of economic cycles as well as “one-off shocks”.
Fiona MacGregor, chief executive at the regulator, said: “As part of our commitment to take a proportionate, risk-based regulatory approach, we are making changes to our planned regulatory engagement with larger providers and those that have more risk exposure. This will allow us to seek the frequency of assurance that organisations are effectively managing their changing risk profiles and keeping pace with the fast-moving operating environment.
“We will also ask for evidence of well-developed and tested strategies that boards and senior teams of all registered providers have in place to be able to respond promptly and recover from potential scenarios such as a housing market downturn.”
The regulator also said it will now issue an interim regulatory judgement if a provider goes through a “significant constitutional change or group restructure”.
Currently, these are used to give regulatory assessments of newly merged organisations.
