After a turbluent year in the wake of the Grenfell Tower fire and with austerity measures still affecting rents, the social housing sector has been warned by its regulator that it is under greater scrutiny than ever before.
In its annual Sector Risk Profile which runs to just over 30 pages, the regulator has summarised what it sees as the major risks which HA boards need to be alert to and have appropriate plans for dealing with them. It opens by drawing attention to three specific risks it sees as increasing in importance. These are:
- Health and safety risks;
- Reputational risks; and
- Sales risks.
On health and safety it reminds boards that they are ultimately responsible for ensuring the safety of their tenants and staff. It acknowledges that significant investments in fire safety have taken place in the aftermath of the Grenfell Tower fire, but it advises HAs to ensure they have the appropriate controls in place to comply with the full range of health and safety requirements.
Highlighting the higher level of scrutiny facing the sector, the regulator says “It is vital that boards should have regard to stakeholders’ expectations in their decision making.” This can be seen as an indication of a greater focus on consumer protection and resident engagement in the future. It will also be interesting to see how much attention is given in next year’s report to the likely introduction of league tables for HAs. It is clear from the many charts and tables included in the report that the regulator has concerns over the potential exposure which many HAs have to a possible downturn in the property market, particularly with more social landlords undertaking open market sales.
“More registered providers than ever are reliant on sales income to fund their development programmes including some registered providers with limited previous experience in this area. While sales revenues can make a valuable contribution to delivering much needed affordable housing, it is vital that boards should understand the markets they operate in and have skills appropriate to the activities their business undertakes.” With Brexit on the horizon and further interest rate rises possible, it is clear the regulator wants HA boards to plan carefully for a challenging environment and a variety of scenarios including falls in the value of land. This could be made more difficult by cuts in welfare benefits and the future roll out of Universal Credit to existing claimants.
By Patrick Mooney, editor