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Regulator to hike fees by 15%

The Regulator of Social Housing (RSH) will hike its per unit fees by 15% next year as it tries to cope with housing associations’ greater market focus and the emergence of for-profit providers.

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Is £5.47 a unit a reasonable price for larger housing associations to pay for regulation? #ukhousing

Fiona MacGregor, chief executive of the RSH, wrote to all housing associations today outlining plans to increase fees for providers with more than 1,000 homes to £5.47 per unit in April 2020/21, up from the current level of £4.72.

She said a review of the regulator’s resources had identified “the need for an increase in capacity to ensure that we can continue to effectively regulate the changing risk profile of the sector”.

This includes keeping pace with the “increasing market focus among some registered providers” and new funding models such as “commercial for-profit providers”, her letter added.

The fee increase will add tens of thousands of pounds to the bills of the largest housing associations.


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Fees for small providers with less than 1,000 homes will stay at £300 a year and the initial registration fee will not be increased from the current rate of £2,500.

An estimated 30 new RSH staff are needed across several teams with a required budget increase for 2020/21 of £2.8m, including £700,000 for non-staff costs such as IT and external legal advice.

Among the teams to be expanded is regulatory operations as the RSH seeks to carry out more in-depth assessments and ongoing engagement with large, complex associations that are potential rescue partners for providers in financial difficulty.

The RSH will ask government to provide £800,000 of the budget increase through grant in aid.

Ms MacGregor’s letter said more resources are needed in the regulator’s investigation and enforcement function – which is funded by grant in aid – to reflect increasing workloads partly arising from commercial for-profits and lease-based providers.

She has previously warned that her staff are “exhausted” from their investigations into lease-based providers, which sign long-term lease deals with equity funds to which they make index-linked monthly payments.

Six such housing associations have been ruled non-compliant with the RSH’s standards.

The remaining £2m budget increase will be sought from fee increases, up from the current total level of £12.75m.

The new budget requirements do not include potential extra costs arising from policies in the Social Housing Green Paper, which proposed giving RSH a more proactive role in consumer regulation.

Feedback on the proposed increases must be submitted by 14 August, with RSH set to issue a fees statement for 2020/21 in November.

Fees were introduced by the regulator in October 2017, with the body committing to a maximum 1% annual increase in the total level up to the end of March 2020.

Housing associations received refunds reflecting an underspend in the regulator’s budget for 2017/18 and Ms MacGregor’s letter said they “can expect to do so again for 2018/19”.

The government argues that by helping ensure the regulator is properly resourced, fees reduce housing associations’ borrowing costs by increasing lenders’ confidence in the sector.

Ms MacGregor’s letter said the RSH has made efficiency improvements and that its costs are low compared with other regulators of similar-sized sectors.

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