Source · Select Committees · Housing, Communities and Local Government Committee
Recommendation 2
2
Accepted
Financial pressures from costs, income, and Right to Buy challenge social housing stability.
Conclusion
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 taken seriously: this cannot be ignored. In addition, damaging restrictions on how local authorities use money from sales under the Right to Buy scheme place further constraints on councils’ housing budgets and ability to fund much needed development. (Paragraph 27) Cost of improving properties
Government Response Summary
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 governance judgements assess and contextualise provider performance.
Government Response
Accepted
HM Government
Accepted
13. We agree with the committee that the effective use of provider resources is an important element of their governance, value for money and responsiveness for tenants. Landlords must deliver the right outcomes for tenants. It is their responsibility to put in place governance arrangements that will achieve this. The Value for Money Standard requires providers to ensure that optimal benefit is derived from their resources and assets and to optimise economy, efficiency and effectiveness in the delivery of their strategic objectives. Our new consumer standards set out our expectations of meaningful scrutiny by tenants and the provision of information relating to how income is spent. These aspects are all explored thoroughly as part of our regulatory engagement with the sector. 14. The challenging economic climate in which providers are operating, along with greater focus on the quality of their homes and services, makes value for money increasingly important. Providers are required to report each year on their performance against a suite of value for money measures set by the regulator.5 Individual provider information is published by the regulator alongside a report summarising the findings at sector level. Our most recent report highlights how the difficult decisions made by many Boards regarding their strategic priorities have collectively had a significant impact on the sector’s value for money performance.6 We produce a value for money benchmarking tool7 which enables providers to assess their performance against our metrics and have seen evidence of its use by the sector when we do inspections. This work forms part of our continuing activity to help the sector contextualise the performance of individual providers more easily and enabling a wide range of stakeholders, including tenants, to assess their landlord’s performance against the rest of the sector. Where we have concerns about providers meeting the requirements of the Value for Money Standard this is reflected in their published governance judgement. 5 Value for money reports and guidance - GOV.UK (www.gov.uk) 6 Value for money metrics and reporting 2023 - GOV.UK (www.gov.uk) 7 Value for money 2023 benchmarking tool - GOV.UK (www.gov.uk) Impact of regeneration on tenants