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Regulator warns social landlords that bail-outs are not guaranteed
The Regulator of Social Housing (RSH) would allow a housing association to fail if there was “limited or no value” in its business, its executive director has said.
Speaking at the Housing 2018 conference and exhibition in Manchester today (Tuesday), Fiona MacGregor said: “It’s important that the regulator’s ability to effect rescues is not overstated. We are clear that if there’s limited or no value in a business, our focus is to make sure we do what we can to protect tenants.”
No housing association has ever gone bankrupt, but some have required rescue mergers to be arranged by the regulator in order to stay afloat – most notoriously Cosmopolitan in 2012.
Ms MacGregor also told delegates that the RSH would use the increased volume and quality of data it was collecting from landlords to identify at-risk associations and prioritise its resources accordingly.
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“It means we can focus on organisations that are developing pretty rapidly,” she said, adding that the regulator would look in particular at those involved in “leasing-based activity”.
Ms MacGregor’s comments come in the wake of the RSH censuring lease-based supported housing specialist First Priority for what it called “a fundamental failure of governance”.
The regulator followed up its judgement by writing to associations with similar models, seeking assurances that they were financially viable.
Speaking to Inside Housing after her appearance at the event, Ms MacGregor said: “If we can see that there’s an association that appears to be associated with higher-risk activities, we will take a closer look. That’s in particular what we are doing with lease-based models.
“It’s not to say it’s wrong per se, but it brings different risks. Some have gone from [managing] a very small number of homes to a big number in quite a short space of time.”
At the same session, Tony Stacey, chief executive of South Yorkshire Housing Association, called for increasing regulation of the sector.
“I think regulation at the moment is in a pretty good state but I think we need more of it and we need to put tenants at the heart of the process.”
It comes ahead of the publication of the government’s Social Housing Green Paper, which is widely expected to introduce more consumer, or tenant, service-based standards into the regulatory regime.
But Clare Miller, executive director of governance and compliance at Clarion Housing Group, said housing associations, rather than the regulator, should take the lead on tenant engagement.
She said: “In 2018, it’s no longer tenable for us to sit back and wait for the government or the regulator to tell us what to do.
