You are viewing 1 of your 1 free articles
Wales regulation inquiry report warns over diversification risk
Housing associations in Wales are being exposed to “serious risks” by diversifying, the Welsh Assembly’s Public Accounts Committee (PAC) has warned after an inquiry into the sector.
The committee released a report on its nine-month inquiry into the regulation of housing associations today (Wednesday).
Of the 15 recommendations in the report, four relate to diversification and risk, while transparency is another significant theme.
“A key issue arising from our evidence were the potential risks associated with diversification and the movement from within the sector away from ‘traditional’ housing association ventures,” the report reads.
It recommends that the Welsh Government carries out a review of levels of diversification in the sector and assesses the risk exposure of every housing association in Wales to a rise in interest rates.
READ MORE
Total turnover from activities other than lettings among housing associations in Wales was £129m in 2016, up from £116m the previous year. The total debt level was £2.4bn in 2016, an increase from £2.2bn in 2015.
Nick Ramsay AM, chair of the PAC, said the committee “found governance and regulation within the sector to be working well enough for housing associations to be granted more autonomy”, but raised “concerns” about landlords diversifying “away from their core purpose”.
He added: “In recognising the benefits this can bring in terms of further investment in housing and services for tenants, we believe there should be greater clarity on how this activity is overseen by the Welsh Government.”
The report also recommends that a central website is put in place to compare data on policies and performance of housing associations.
It added that the new regulatory framework introduced in June, including new regulatory judgements, was “a step in the right direction” to the sector becoming more transparent.
Clarissa Corbisiero-Peters, deputy chief executive of Community Housing Cymru, said: “The report recognises the increasingly diverse work of housing associations, including the provision of support services, and the building of homes for first-time buyers and student accommodation.
“As independent social businesses, this diversification allows housing associations in Wales to generate further investment, which makes the public money we receive go further and allows us to continue to focus on our core purpose of providing affordable homes.”
Matt Dicks, director of the Chartered Institute of Housing Cymru, said the report’s recommendations were “broadly welcome”, and that diversification would help housing associations “meet the challenges of welfare reform and economic uncertainty”.
Amanda Davies, chief executive of Pobl Group, said it was “worth highlighting that we have very open dialogue with the housing regulator in respect of all of our activities, that diversification exists solely to enable our core purpose and that we are regulated by other relevant bodies”.
