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January 14, 2020

Regulator under spotlight

Public accountability and scrutiny is essential where public money is concerned. No one would disagree with that and indeed it is why the Scottish Government has established any number of regulatory bodies to ensure standards of performance are maintained across the sector. But regulation also needs to be proportionate and balanced so that those who are being regulated can retain trust and have confidence in the regulator. Recently, some concerns have been aired in the press that all is not well in the relationship between the Housing Regulator and our Registered Social Landlords.

Retired housing professional John Clark believes that following its statement last week, the Scottish Housing Regulator (SHR) still has some questions to answer.

Mr Walker, SHR’s chair, has written to Scottish Housing News to address some of the criticisms directed at his organisation. He refers to SHR as working to be an effective, open and transparent regulator, intervening proportionately when required, and to the importance of being transparent and accountable in how SHR uses its powers.

No problem with any of that, it’s just that actions speak louder than words and SHR’s practice is clearly at odds with the rhetoric in many people’s minds.

Critically, the Housing (Scotland) Act 2010 says that SHR must carry out its functions in a way that is “proportionate, accountable and transparent, and targeted only where action is needed”.  These are not just words – they are statutory obligations that SHR must meet.

SHR’s failure to comply in its delivery of these things is why many in the sector are so concerned. This is not just an issue for organisations that have experienced formal intervention – lower-level engagement with SHR can also be a suffocating and disruptive experience that is disproportionate to the issues involved.

Housing association governing bodies typically combine strategic oversight and decision making, along with a firm grasp of the actual work carried out by their organisations on behalf of their tenants and communities. By contrast, there is nothing in the public record of SHR board’s proceedings to indicate it has strong oversight of regulatory practice and decisions – or of the impact on regulated organisations.

This is not about the board being involved in operational matters – it’s about the assurance the board should be getting periodically so that it has real knowledge of how the organisation is really working when carrying out its role. Good governance, in other words. On which note, a few questions for SHR.

1) What formal, evidence-based assurance does the SHR board have that regulatory actions and practice meet its statutory obligations to perform its functions in a way that is proportionate, accountable and transparent, and targeted only where action is needed? 

SHR has placed an obligation on all housing association governing bodies to carry out detailed, evidence-based self-assurance assessments covering around 90 individual regulatory requirements. Has SHR’s board taken similar action to be assured that SHR is meeting all of its legal obligations as well as the Regulatory Framework itself?  How is this documented and reported to the board?

2) What external assurance has the board received about how SHR is carrying out its regulatory functions and activities, in the eight years since SHR was first set up?

The requirement for housing association governing bodies to obtain external assurance is a central requirement of the Regulatory Framework. Does SHR follow the same rules, and how is the external assurance has it received documented and reported to the board?

3) How many of SHR’s senior management (CEO, directors, assistant directors) have worked in a senior management role in a housing association – with senior experience of governance, financial management or tenant services?

4) How many secondments of SHR senior managers to housing associations have taken place in the eight years since SHR was first set up?

SHR’s Regulatory Standards for housing associations require senior staff to have the skills and knowledge to do their job. It is reasonable to expect that SHR’s senior staff should have a strong understanding of the bodies they regulate.

By responding to these questions, SHR can show whether its statements about how it regulates are based on hard facts and that actions really do count more than mere words.