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Regulation update

Helen White outlines the latest work of the Regulatory Board for Wales.

It’s hard to believe Summer is over and we are heading quickly towards the end of 2017. Sadly this year will always be associated with the terrible Grenfell tragedy. It is still shocking and hard to believe this happened in one the richest areas of the richest cities in the world. In amidst the sadness and countless stories of personal tragedy and loss it seems hard to draw any positives. However, importantly, it has started a number of new conversations about governance.

It almost seems so obvious it feels odd to have to reiterate that the responsibility for the strategic decisions regarding all areas of an association’s work lies with its board. These decisions need to be under-pinned by high-quality information from executives and independent sources when appropriate. They should also be supplemented by a robust approach to measures such as risk management, value for money and stress testing.

It is vital that board members seek the appropriate assurance about issues relating to performance and compliance. Board members need to be fully engaged and thoroughly understand the information they receive and what it tells them about their business. Of course, this is important from a regulatory perspective but it’s also vital if associations are going to be truly accountable to the communities and tenants they serve.

Information to boards shouldn’t just be ‘served up and nodded through’. Board reports should create a platform for debate and discussion with the right balance of looking back at past performance and looking ahead to the future. The Regulatory Board’s thematic review on governance, currently underway, will seek to give some practical advice on how Boards can address some of the challenges. Close liaison with Community Housing Cymru (CHC) is key to the review approach and the review findings will inform CHC’s review of its code of governance. The outcome of the review will be shared at next CHC governance conference in Spring 2018.

Public Accounts Committee inquiry

Over the Summer the Regulatory Board welcomed the findings of the Public Accounts Committee Inquiry into the regulatory oversight of housing associations in Wales.

We welcome the report’s finding that ‘governance and regulation within the housing sector to be working well enough for housing associations to be granted more autonomy’ and that ‘the new regulatory Judgements are a step in the right direction’ and the Public Accounts Committee view that housing associations ‘should do more to be open and transparent in their decision making’.

As set out in our submission to the committee, the Regulatory Board is committed to ensuring that the regulatory framework’s key principle of tenants being at the heart of regulation is a reality. Our work to embed new ways of engaging with tenants is ongoing. I chair the Making It Work steering group set up specifically to drive forward progress on this important area. We recognise the challenges in making sure tenants are truly at the heart of regulation and remain committed to making sure this is the case.

We welcome the committee’s vision of the availability of clear and comparable data sets to assist tenants in determining and challenging the position and policies of their housing association. The board would like to see relevant data being available to all tenants of social housing – housing association and local authority tenants.

We agree that diversification brings potential benefits as well as risks. As independent organisations, we believe that decisions on diversification are the sole responsibility of autonomous housing association boards. However, there is a key role for regulation, through ongoing regulatory engagement, in ensuring good governance around those decisions, in particular, gaining assurance that housing associations understand the risks of such decisions and have the skills needed to take robust decisions.

We welcome the committee’s recommendation that a review be undertaken of current levels of diversification and proposes, in the interests of openness, that up to date information on levels of diversification within the housing association sector should form a regular part our annual report to the cabinet secretary. The board has a particular interest in the impacts of diversification on tenants and will seek to ensure that this is considered as part of continuous regulatory assessment.

Review of the regulatory framework

The effectiveness of the application of the regulatory framework will be the subject of review in the New Year. I look forward to numerous conversations with board members, executives, tenants and other stakeholders about the framework at the many conferences and events I am due to attend between now and the end of the year.

Please don’t be afraid to share your views with me! The board will be very actively involved in the review and, to ensure its robustness, have agreed that the review should include independent objective input reporting directly to the Regulatory Board.

Helen White is chair of the Regulatory Board for Wales. She is on Twitter @arthursmam

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