As we enter a recession, we have been here before, and a key question is what did we learn and how can we benefit from that learning?
As we continue to await an outcome to Brexit and further certainty around new requirements in relation to building standards and fire safety requirements following on from the Grenfell tragedy, we also witness the cooling property sales market spreading beyond the South East and the continued impact of fundamental changes to the welfare state on our customers.
Housing associations must continue to deliver core functions effectively and compliantly notwithstanding the uncertainty over the standards to which will be held in the future, and doubts as to where your income and new supply of housing will come from.
The 7th annual Sector Risk Profile was published in mid-October – later in the year than previous ones, as though the Regulator held out as long as it could to see whether any of these uncertainties resolved themselves (spoiler: they didn’t).
There were no surprises in its areas of focus, nor that these were couched in the strongest terms of Board responsibility:
- Health and safety compliance – Boards are required to have strong and appropriate oversight of decisions around stock quality and health and safety compliance, and to ensure compliance with all health and safety law and regulation;
- Stock condition and asset management – anticipating the challenge to Boards will be around prioritising essential investment in existing stock against resource-hungry development and new supply, and the need for Boards to have a well-integrated strategic approach to asset management. Linked to this, registered providers (RPs) must have reliable and up-to-date data, to accurately inform both compliance positions and asset management decisions;
- Market sales exposure – a rapidly cooling outright sales market jeopardises the traditional cross-subsidy model for new supply. Boards are expected to understand their local – and the national – housing market cycle and be aware of the impact on their business and take appropriate action to avoid impairment charges that could impact on funding covenants in particular;
- Reputational risk – it is now more important than ever that Boards treasure and protect their reputation at organisation and sector level. Risks to this come in many guises – executive payoffs, health and safety failings, fraud and failures under the consumer standards;
- Rents/income – notwithstanding the end of rent reductions, Boards are urged to be careful about placing too much reliance in their business plan on assurances from Government as to rent stability over the next five years (a prescient warning given we now have a general election on 12 December that could see a new party or parties in Government for that period).
The Regulator’s expectation is that Boards are fully in control of their organisation, understand the inherent risks in all areas of their business and own the effective management and mitigation of those risks (and any consequences of not doing so).
Where things go wrong, we continue to see the Regulator treat this as a failure of governance laid at the feet of the Board. Its lack of sympathy for Boards that are not on the front foot is evident in the wording of recent regulatory reports and downgrades – early disclosure to the Regulator of any potential regulatory breaches is key, as is keeping them informed of what, when and how you are doing to fix things.
However, beware the Board that comes across the Regulator’s desk a little too often – it often views a series of seemingly minor breaches as a more significant indicator of systemic governance failure than one mighty one.
We provide support to Boards and organisations on all types of governance issues, including managing breaches and potential breaches and engagement with the Regulator. We also provide advice to organisations on how to strengthen their governance arrangements and test risk flow within their current structures.
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It is anticipated that as lockdown restrictions ease, and particularly with children and young adults returning to education, cases of meningitis will start to rise.
As we continue to emerge from lockdown measures and deal with local measures and the short and long term economic impact of Covid-19, local authorities will need to re-assess how services will be delivered for years to come.
The Government first announced plans for a shared ownership right to buy in October 2019. At the time the sector raised concerns about the impact the plans would have on housing associations ability to borrow. An election and a pandemic later the Government announced, during the CIH Housing Festival last week, the return of the right to shared ownership as part of its Affordable Homes Programme (AHP).
Two final pieces of the possession jigsaw have been published on 15 September 2020. Mr Justice Knowles’ working group on possession proceedings has issued its guidance on the “overall arrangements” for possession proceedings.
One change proposed by the Building Safety Bill is the introduction of a duty holder regime, which will see statutory responsibility for the safety of higher risk buildings placed on key individuals
Throughout this pandemic, the Competition and Markets Authority (CMA) has been publishing various “Statements on Coronavirus” (Statements) which provide guidance on consumer rights during this time.
A recent increase in COVID-19 cases in the UK means new measures are being put in place in an effort to reduce the risk of a second wave. Whilst the impact of COVID-19 continues to be felt, it is important to remain focused on the sector’s road to recovery.
Sometimes half an hour at a conference gives you the reality that has been staring you in the face all along. That was my experience watching “Change is on the Horizon”
Following our recent e-briefing on Possession Notices, Helen Tucker and Emilie Pownall from our housing litigation team discuss the impact of the changes on social landlords.
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