Housing minister confirms plan to break up HCA and create standalone regulator

News30 Nov 2016Luke Cross

A government review of the Homes and Communities Agency (HCA) has recommended the separation of its regulatory and investments functions, resulting in the creation of a standalone social housing regulator.

It follows widespread speculation around the creation of a standalone social housing regulator and follows the launch of a consultation this week into plans to introduce regulatory fees.

In a written statement, Gavin Barwell, housing and planning minister and minister for London, said his department and the agency are working closely together and have developed a timetable for implementation of the recommendations.

The creation of a standalone regulator is a ‘purely administrative change that will not affect the regulator’s powers or operations’, the minister said. He added that the change will result in no increase on existing government budgeted spending. The news comes amid plans for increased sharing of back office functions across the Department for Communities and Local Government. The HCA has already launched a consultation on regulatory fees against a backdrop of 40 per cent savings targets across the department, with more to come.

The review has also made a number of recommendations for improving the efficiency, effectiveness and governance of HCA, aimed at ‘improving stakeholder engagement, reducing bureaucracy and ensuring that the agency has the right set of skills’.

In the review foreword, communities secretary Sajid Javid said the agency ‘must have a clear principal objective of delivering housing’. He said the review ‘signals significant change and a corresponding leadership challenge for the new chair and his team’.

Mr Barwell said: ‘This comes shortly after a consultation issued by the regulator on introducing fees for social housing regulation. Taken together these changes will ensure the regulator remains independent, and retains the powers and resources needed to maintain the confidence of the sector and lenders.’

He pointed out that since 2010, government has delivered almost 900,000 new homes, including 293,000 affordable homes, but that ‘we need to build many more homes if we are going to create a housing market that works for everyone’.

He said the HCA will play a vital role in this, pointing out that it is the national housing, land and regeneration agency and the regulator of registered social housing providers in England.

The review was launched by former housing minister Brandon Lewis in February 2016.

Mr Barwell said today: ‘The review concluded that functions exercised by the HCA are required, and, with the exception of social housing regulation, should continue to be performed by the HCA in its current form as a non-departmental public body (NDPB).

‘The review recommends that the agency’s regulatory function should be established as a standalone NDPB, reaffirming the government’s commitment to a strong, independent regulator for social housing.

‘This is a purely administrative change that will not affect the regulator’s powers or operations.’

The regulator will also be part of plans for increased sharing of back office functions across the DCLG group. DCLG is launching a consultation today on using a legislative reform order to establish the regulator as an independent body.

Mr Barwell said the chairs of the HCA and the regulation committee have welcomed the recommendations.

He added: ‘My department and the agency are working closely together and have developed a timetable for implementation of the recommendations.’

The review has been carried out independently within government and with the full and active participation of the HCA.

The minister added: ‘I would like to thank the HCA and all stakeholders that have contributed to the review.’

Sajid Javid foreword: Tailored Review of the Homes and Communities Agency

The challenge of building many more homes over this Parliament is a key objective for this government and one of my personal priorities as secretary of state.

One of the most important tools we have to increase our housing supply as dramatically as we would like is the Homes and Communities Agency – our national housing delivery body.

Since its formation in 2008 the agency has delivered on its targets and objectives. But we now need greater ambition, rising to the housing challenge with renewed leadership and focus.

The agency must have a clear principal objective of delivering housing.

It will remain a delivery agent for essential government programmes but will take a broad approach, using its expertise, land and investment to facilitate and maximise housebuilding.

This requires a transformation of the organisation’s capability to become more active and innovative.

It needs to become more active in the land market, to enter and shape new markets through accelerated construction, and to drive delivery of new products such as shared ownership and starter homes.

This review signals significant change and a corresponding leadership challenge for the new chair and his team.

They will need to create a leaner, more commercially astute, and more professional organisation that operates with greater agility and demonstrates best value in everything it does.

The agency must take a leadership role in the housing sector, supporting SMEs, new approaches and diversifying the market.

So that it can focus properly on its task, the agency’s current regulatory function will be vested in a separate regulator.

This review sets out how ministers and my department will support the agency’s leadership team as they embark on one of the most important delivery tasks for this Parliament. I look forward to working with them as we work to achieve these ambitions together.

See the review document here.