Recommendations & Conclusions
11 items
1
Recommendation
Sixth Report - The Finances and Sustain…
Accepted
The problem of a continuing chronic shortage of social housing that we identified in our 2020 Report, Building More Social Housing, remains. In line with the conclusions of our 2020 report, we conclude that the Government must support, regulate and invest in the social housing sector so that the country …
Government response. The government agrees with the committee that providers face significant financial challenges and notes record investment in repairs and maintenance. It highlights its existing regulatory casework, where it has downgraded providers' governance judgements and worked with them to address failures …
Ministry of Housing, Communities and Local Government
2
Conclusion
Sixth Report - The Finances and Sustain…
Accepted
The social housing sector as a whole remains relatively financially resilient. However, it does face the simultaneous financial pressures of higher costs and lower income. Despite the sector’s overall resilience this is a clear and direct challenge to individual social housing providers’ business models and financial stability that must be …
Government response. The government agrees on the importance of effective use of provider resources and outlines how existing Value for Money and new consumer standards, along with regulatory engagement, address this. It details how its value for money benchmarking tool and published …
Ministry of Housing, Communities and Local Government
6
Conclusion
Sixth Report - The Finances and Sustain…
Accepted
Necessary fire safety work has resulted in significant additional costs for social housing providers, as the Government has acknowledged in its written evidence.
Government response. The government describes existing regulatory standards and inspections by the Regulator of Social Housing (RSH) that ensure social housing providers have appropriate expertise and financial management capabilities to handle complex issues, without committing to new action regarding additional fire safety …
Ministry of Housing, Communities and Local Government
7
Conclusion
Sixth Report - The Finances and Sustain…
Accepted
The Government’s focus on holding social housing providers responsible for remediating building safety work is producing an unhelpful disparity between the private and social housing sectors. There is no justification for private sector landlords to be treated more favourably. We once again reiterate the recommendation from our 2020 Report, The …
Government response. The government details how the Regulator of Social Housing (RSH) already monitors the financial health of providers and intervenes in cases of financial difficulty, stating it has sufficient powers. It does not commit to providing social housing providers with equal …
Ministry of Housing, Communities and Local Government
9
Recommendation
Sixth Report - The Finances and Sustain…
Accepted
The ultimate responsibility for ensuring that existing and future social housing is fit for habitation lies with the housing providers. Those housing providers facing the highest maintenance costs may not be the most financially resilient. Nonetheless, where registered housing providers have homes that require major improvements and significant reserves, the …
Government response. The government agrees that providers must manage resources effectively and outlines the Regulator's existing processes for oversight. It states the Regulator ensures providers have plans in place for stock improvements, citing examples where governance judgments were downgraded due to maintenance …
Ministry of Housing, Communities and Local Government
11
Recommendation
Sixth Report - The Finances and Sustain…
Accepted
We welcome the Regulator’s efforts to ensure that regeneration projects are properly explained to tenants, and that tenants have had some opportunity to share their views. However, we believe the Regulator must go further to ensure registered providers not only listen to, but appropriately act on, tenants’ views, by considering …
Government response. The government agrees on the importance of providers listening and acting on tenant views in regeneration projects, stating that existing Governance and Financial Viability, and Transparency, Influence and Accountability Standards already set clear expectations for providers and are monitored during …
Ministry of Housing, Communities and Local Government
14
Conclusion
Sixth Report - The Finances and Sustain…
Accepted
We remain very concerned about the impact of rent increases on social housing tenants. These are some of the most financially vulnerable people in our society. We believe housing associations must bear this in mind when they are setting rent levels, and reflect on the levels of their reserves they …
Government response. The government agrees on the importance of providers' effective use of resources and responsibility to tenants, stating that existing Value for Money and new consumer standards, along with regulatory engagement and benchmarking tools, already ensure landlords consider rent levels and …
Ministry of Housing, Communities and Local Government
15
Recommendation
Sixth Report - The Finances and Sustain…
Accepted
Social housing providers should involve their tenants in discussions about rent levels. When rent rises are being considered providers should explain to residents why such rises may be necessary. The Regulator should proactively assess how registered providers use their reserves not only as an indication of financial viability, but also …
Government response. The government agrees that providers should involve tenants and that the Regulator should assess resource use, stating that existing Value for Money and new consumer standards already cover these aspects through regulatory engagement, published measures, and governance judgements.
Ministry of Housing, Communities and Local Government
18
Conclusion
Sixth Report - The Finances and Sustain…
Accepted
The for-profit financial models involved in social housing are evolving and can be more complicated than traditional financing models. However, we are optimistic that new financing models have some role to play in generating the investment that the sector as a whole needs, although these new models do need careful …
Government response. The government agrees on the importance of understanding and scrutinizing the for-profit sector, detailing how it has recruited expert staff, engages with advisors, conducts audits, and has a 2024-25 priority to review knowledge of for-profit providers, thereby addressing the need …
Ministry of Housing, Communities and Local Government
19
Recommendation
Sixth Report - The Finances and Sustain…
Accepted
We are pleased that the Regulator has taken steps to ensure that it has the adequate skills and resources which are required for it to have an effective understanding and scrutiny of the new financing models emerging in the sector, particularly equity investment and for-profit registered providers. Nonetheless, for the …
Government response. The government accepts the need for continuous improvement, detailing current efforts in recruiting specialist staff, engaging advisors, and conducting internal audits, along with a planned 2024-25 review of knowledge and development for for-profit providers.
Ministry of Housing, Communities and Local Government
21
Recommendation
Sixth Report - The Finances and Sustain…
Accepted
Furthermore, the Regulator must ensure that, as part of its governance ratings, it examines whether registered providers’ boards and executive teams have individuals with sufficient expertise in the financial models the provider is using. Registered providers must demonstrate that they properly understand any capital markets and financial products they are …
Government response. The government welcomes the recognition of expertise importance, stating that its existing Governance and Financial Viability Standard and Code of Practice already set expectations for board capability and expertise, which are examined during regulatory inspections and inform governance gradings.
Ministry of Housing, Communities and Local Government