Source · Select Committees · Housing, Communities and Local Government Committee
Recommendation 7
7
Accepted
Paragraph: 46
Provide social housing providers with equal access to building safety remediation funds.
Conclusion
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 Regulation of Social Housing, that “Social housing providers must have exactly the same access to funds for building safety remediation as private sector landlords.”
Government Response Summary
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 access to building safety remediation funds as private sector landlords.
Paragraph Reference:
46
Government Response
Accepted
HM Government
Accepted
10 RSH Board and committee minutes - GOV.UK 21. We explicitly seek information on large private registered providers’ financial position quarterly, including their covenant compliance and liquidity position. We undertake detailed annual reviews of provider finances, including their closing covenant position and covenant forecast, and publish our conclusions in a regulatory judgement. We also examine this during inspections and previously during In-Depth Assessments. As the committee noted there has been a significant increase in the proportion of providers graded V2, and a small increase in the number at V3 and V4, in recent years which reflects the challenging economic circumstances facing the sector. 22. Where our regulatory engagement identifies the possible risk of default we will investigate to quickly understand the relevant issues and underlying causes and may add the landlord to our gradings under review list. Where appropriate, we work collaboratively with other regulators and organisations. We aim to work with landlords so that they make self- improvements and address relevant failures. If a registered provider takes responsibility for self-improvement and we conclude that it has the capacity, capability and willingness to respond to the problems, we will generally work with it to achieve the necessary corrective actions. 23. Last year we consulted on statutory guidance relating to the use of our statutory regulatory and enforcement powers and published new guidance in February 2024. This includes, for example, guidance on insolvency and moratorium powers which are in the Housing and Regeneration Act 2008 specifically to allow the regulator to have some control and make proposals when certain insolvency events occur. This, together with the special administration regime (Housing and Planning Act 2016), form a backstop to protect tenants’ homes, keep social housing in the sector, and maintain the confidence of secured creditors. 24. Working with a registered provider may include instances where the regulator will deem it appropriate to use its powers, in order to support the improvement. In circumstances where we use our enforcement or other powers, our approach is to apply what we consider to be the most appropriate power, or combination of powers available. The scenarios in which a provider might experience financial difficulty and the potential avenues for resolving such a situation are varied. We therefore would not want fetter our discretion to react to specific situations as they arise. We are confident we have the approaches and powers in place to engage landlords at an early stage and to resolve issues should they arise and have a track record of successfully doing so. RSH has a dedicated team to deal with those cases where there are material problems who are experienced at considering resolution strategies and utilising the powers available. We share details from past cases where we can,11 for example a recent sector trade press interview regarding the financial failures at Rapport Housing and Care.12 25. We thank the Committee again for their work on the Inquiry. 11 See, for example With the benefit of hindsight - Learning from problem cases: volume 4 - GOV.UK (www.gov.uk) 12 Social Housing - Insight - Why the English regulator made a payment to a failing provider 9