Risk and resilience: Fiona MacGregor on regulating through 11 years of shocks and shake-ups

Added to these has been the importance of tending to the sector’s vital ‘no loss on default’ record, something Ms MacGregor says she is “relieved” to have maintained. Against a ceaseless flurry of macroeconomic storms that have impacted financial markets, development and more, and with total sector debt now exceeding £105.4bn, it has surely been no small task.

That said, Ms MacGregor still has two weeks to go when Social Housing sits down with her over a video call. “Please don’t let everything go horribly wrong,” she says.

During the interview, we delve into what leading the regulator’s response to these priorities looked like from the inside, which economic episode proved the most testing and her reflections on resilience at a sector – and personal – level.

Our conversation also digs into the political positioning of regulation today and the path ahead for her successor – announced just days after our interview to be long-time colleague Jonathan Walters.

On top of that, amid growing calls for ‘new models’ of investment, Ms MacGregor tells Social Housing why she feels the RSH has been “badly misrepresented” on its appetite for innovation.

Always housing

Ms MacGregor’s arrival in housing came about by chance, when she found a role as a typist at a housing association in Edinburgh amid the recession-hit job market of the late 1980s. Back then, she says she “didn’t even know what regulation was” – but the sector would soon cast its spell.

“I knew that housing was where I loved it, right from the start,” she says.

In 1989, she moved to England and began work as an admin assistant at the Housing Corporation, which would later become the Housing and Communities Agency (HCA) and subsequently the RSH. 

That she would one day find herself the regulator’s chief executive was “completely an accident”, Ms MacGregor says.

After a few years at the Housing Corporation, she went to work in development at housing association L&Q for 10 years – up until 2002. She describes the decade spent there as “brilliant” and the experience gained on the landlord side of the sector as “utterly formative” to how she approached her regulatory career. 

“Regulation doesn’t get in the way of growth or shouldn’t – you have to apply it sensibly”

First, as L&Q’s head of development and supported by its financial leaders at the time, Ms MacGregor honed a strong focus on risk.

“Risk was everything, so you needed to understand the drivers; you needed to understand the impact,” she says. “And it wasn’t just theoretical. It was, you know, could you quantify it? What could you do to ameliorate it? So, a really deep understanding of risk management and seeing things through a development lens – it was very direct.”

Second, Ms MacGregor’s work on the tenant-facing element of regeneration and stock transfers, during ballots and consultations, showed her both the “positive impact on people’s lives of improving the quality of their homes” and the importance of listening.

“I loved working with the tenants. And they would tell you really sensible things about, ‘That design will never work,’ you know, ‘You need to think about this instead.’ And they were almost invariably right.”

A return to the Housing Corporation in 2002 to work on its London investment programmes as a deputy director came about because of “pull rather than push factors”, Ms MacGregor says. “[It] was the only job I would have left L&Q to do.”

Around four years later, she moved to work on the corporation’s national programmes. Then, as now, she was struck by “how different it is working in London and working anywhere else”.

By 2015, Ms MacGregor was working as executive director of programmes at the organisation she had first joined as an admin assistant, by then known as the HCA.

What happened next she wryly blames on her colleague (and, as is now known, her successor) – Mr Walters. “It’s completely his fault. He made me do it, and I mean literally made me do it.”

The HCA was looking for an executive director of regulation at a time that senior staff were going to have their hands full implementing the recent shock announcement on the rent cuts. 

After putting herself forward, Ms MacGregor became executive director of regulation in an interim capacity, which soon became permanent. As to how she felt at this point, Ms MacGregor answers simply: “Terrified.”

Chief executive

Coming just two years after housing association Cosmopolitan had been rescued from the brink of insolvency, the rent policy reversal stoked lingering fears around lenders’ confidence in the sector.

“We worried a lot about, ‘Does that count as a major adverse event? Does that trigger defaults?’” Ms MacGregor recalls. “Everybody was [thinking], ‘Can we get through this next storm?’”

The following year, another major ask landed on her desk, as the government’s ‘tailored review’ of the HCA would conclude that the organisation’s regulatory function needed to be split out from the national delivery function (what is now Homes England).

“This sort of dawning realisation that this [Grenfell] wasn’t a one-off, unique incident; it could happen elsewhere. And that leads to the change”

These recommendations would lead to the launch of the Regulator of Social Housing as a standalone body in October 2018. Getting there was a task that Ms MacGregor would have been “scared” to take on had she known about it in 2015. “I’d have thought twice,” she says.

However, in the event, it was a welcome challenge.

“I was surprised how much I enjoyed us becoming a standalone organisation. And having been pretty successful, I’m really proud of that actually,” she says – before, as she often does in our interview, redirecting the credit for the achievement to her team.

But there was another, bigger change to come: the introduction of the new proactive consumer regulatory regime. This formed part of the government’s response to the Grenfell Tower fire in 2017, in which 72 people lost their lives.

Grenfell

As Ms MacGregor told a recent sector event: “Grenfell changed everything.”

What did that look like at the regulator in the days and weeks following the fire, Social Housing asks.

Ms MacGregor remembers going into the RSH’s Marsham Street office, shared with what is now the Ministry of Housing, Communities and Local Government, and being struck by a “hush, which lasted for weeks”.

“To begin with, it was always, ‘How could this have happened? How could it have had such an impact?’’

“And then this sort of dawning realisation that this wasn’t a one-off, unique incident; it could happen elsewhere. And that leads to the change.

“And the biggest single change, quite rightly, is that focus on building safety across all tenures.”

She praises the work of Grenfell United and other survivor groups. “They’re angry, rightly angry, but not just anger being an end in itself but [saying], ‘How do we fix this and make sure it doesn’t happen again?’ They’ve been incredible.”

A new Building Safety Regulator was introduced in 2021, while the RSH’s remit to introduce a new “proactive” consumer regime was confirmed in the government’s Social Housing White Paper, published in November 2020.

This marked a key change from the RSH’s previous mandate to intervene only when there was a risk of ‘serious detriment’ to tenants.

More broadly, introducing the new consumer standards and the accompanying regime has “rebalanced something that really needed to be rebalanced”, Ms MacGregor states.

“What it’s done, and you can see this playing out across the sector, is that utterly salutary reminder that you must listen to your tenants and engage with them.”

Two years into the new regime, Ms MacGregor is “really pleased” with how it has gone, but again emphasises this is “because of the team”. She cites the interaction with local authorities, which now form part of the consumer regime, and tenants.

Regulation, reputation

The past few years may have seen the volume on consumer regulation dialled up, but it is only a decade-and-a-half since it was dialled down, when the Tenant Services Authority was scrapped. And while new regulations are still being ushered in under the current government, there are plenty of people in the sector who feel that regulation is a barrier to progress.

Social Housing asks for Ms MacGregor’s sense of the way regulation is regarded both in the sector and in Westminster. Is she optimistic that the case for co-regulation has been won?

The short answer, she says, is “yes”. “But you’re only as good as your last test.”

“You can go through periods that are articulated in different ways, from ‘ripping up red tape’ to regulation not getting in the way of growth and what have you,” she says. “Regulation doesn’t get in the way of growth or shouldn’t – you have to apply it sensibly.

“But as soon as something goes wrong, there’s a [question of], ‘Where was the regulator?’”

Therefore, the goal – and what she would advise her successor to strive for – is to avoid what she calls “mad, performative zigzagging all over the place”.

“Regardless of external circumstances, you’re trying to walk that kind of middle ground between preventing harms, but not stymieing innovation and progress,” she adds.