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Regulation update

Doug Elliott reflects on the work of the Regulatory Board for Wales over this past year and its focus for 2020.

Retaining regulatory relevance

Housing associations continue to operate in a challenging and dynamic environment. As a Board, we believe a well-regulated sector provides vital assurances to tenants, investors and other stakeholders about the quality of services and homes provided, and about the resilience of housing associations operating in that dynamic environment.

Regulation should also of course stimulate change and improvement by using its accumulated knowledge to provide timely and relevant perspectives and advice on emerging issues. Those principles have been the key drivers for the recent and planned work of the Board.

 Hearing the tenants’ voice

The Board is a strong advocate of bringing tenants to the forefront of an association’s decision making, and the current regulatory framework helps ensure that. The Board’s 2019 review and accompanying report – The Right Stuff: Hearing the Tenants’ Voice – were well received, making a range of practical suggestions for associations to reflect upon in their work and their engagement with tenants.

Linked to that, the Board is committed to ensuring the regulatory framework continues to reflect up-to-date regulatory practices, and remains focussed on current issues and challenges. With that in mind, the Board has commissioned a review of the regulatory framework in early 2020.

The review will examine a range of issues, including evaluating whether Performance Standard 2 – effective and appropriate tenant involvement, and high quality and improving services – requires strengthening and clarifying, and whether there is a need to introduce a specific regulatory judgement category for the tenant involvement/service quality dimension.

Supporting good governance

Robust governance arrangements continue to be the cornerstone for effective management and service delivery. Community Housing Cymru’s Code of Governance and the Board’s own complementary review report – The Right Stuff-Improving Housing Association Governance in Wales – provide the valuable framework for governance approaches and principles for the sector.

It is significant and encouraging that regulatory judgements to date suggest that most of the sector generally demonstrates effective governance, financial management and viability, and strong service delivery to tenants and service users.

That said, the Board remains concerned that there are still too many specific instances of significant governance failings that have given rise to a wide range of additional regulatory involvement, including intervention.

To continue to help support governance development, the minister for housing and local government has agreed to fund work, to conclude in 2020, aimed at further developing the approach to assessing governance to ensure we are best able to identify poor governance and governance failure at the earliest possible stage. The aim is to give boards and executives the best chance to make the necessary improvements on a voluntary basis.

The project is seeking to develop a governance assessment model designed to provide better evidenced assessments of:

  • the quality of organisational governance in its widest sense – but with a strong focus on culture, behaviours and leadership; and
  • the governance structures of an organisation and their appropriateness for delivering diverse business plans.

Campbell Tickell is undertaking this work and it is intended that the model will also identify and prioritise areas for governance improvement both locally and for wider sector consideration. [See article by Ceri Victory Rowe pxx for more details on this work].

The Board also remains committed to learning the governance lessons from any regulatory interventions, and will continue in 2020 to publish any relevant Lessons Learnt papers for the sector as appropriate. These have been well received to date and a helpful contribution in stimulating governance improvement more widely.

Developing the regulatory framework

The Board’s annual report to the minister for housing and local government provides a key opportunity to advise the minister on regulatory work and performance, and what that work is indicating about current sector performance and challenges.

The 2019 report was the most comprehensive the Board has produced to date, and can be found at gov.wales/sites/default/files/publications/2019-05/regulatory-board-for-wales-performance-report.pdf.

The report also provided an opportunity for the Board to reflect more broadly on regulatory practice and principles elsewhere in Wales and across the UK, and highlight areas where opportunities potentially exist to change arrangements in Wales.

One area relates to regulating across both the housing association and local government sectors under a common approach – ‘domain regulation’. The Board believes social housing tenants should expect the same high standards of service regardless of the landlord.

Currently regulation and audit and inspection of housing services of local government and housing association housing functions are undertaken by different agencies and are looking increasingly inequitable and inconsistent with arrangements elsewhere in the UK.

To help stimulate that debate, a research project has been commissioned to better understand the risks, challenges and benefits of any move to a domain regulation approach in Wales. This review is in association with TPAS Cymru, Community Housing Cymru, the Welsh Local Government Association and the Wales Audit Office and will report in 2020.

It resonates well with recommendations around the potential for domain regulation emerging from the Welsh Government’s Affordable Housing Supply review – and the Board will continue to work closely with the Welsh Government as the roll out of that review continues in 2020.

It inevitably will place a spotlight on existing regulatory resources too, and by necessity also stimulate discussions around the most appropriate way to fund regulation going forward.

Board recruitment

Finally, we have recently said farewell to Helen White, the Board’s chair since its inception in 2016. Helen has been a fantastic ambassador for the Board and the sector. She will be sorely missed, but we wish her the very best in her new role as chief executive at Taff Housing Association. Arrangements are currently ongoing to appoint a new chair, alongside other board member vacancies, and the minister will make announcements in due course.

 Doug Elliott is a member of the Regulatory Board for Wales

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