Housing associations are expected to go further with their value for money (VfM) reporting this year, including looking beyond the core metrics required by the social housing regulator in the 2018 accounts.
Simon Dow, interim chair of the Regulator of Social Housing (RSH), told the Social Housing Finance Conference last week (9 May) that “the bar has moved upwards” on VfM reporting – and he expressed concern that “where the regulator is going with VfM is not as well known as it should be”.
Mr Dow was updating an audience of 350-plus senior finance people on how housing associations had addressed the seven VfM metrics the regulator has adopted from the Sector Scorecard and required providers to publish with their audited accounts.
He reminded delegates that the regulator had signalled that expectations would increase in year two of the standard, which is the 2018/19 financial year.
“There’s an expectation of boards not only to publish how they measure against our seven metrics, but also the metrics to show they are doing the jobs they set themselves.”
This means setting out bespoke metrics and ways of measuring them, followed by an “honest appraisal of whether you’re hitting them”.
Mr Dow said “we build trust” with tenants and others by reporting the bad and the good, adding that the regulator’s data specialists had found an “implausibly large number of first-quartile performers” in the last round of VfM reporting, and described the results as “slightly more than can be mathematically defended”.
The regulator suggested that some organisations are not being completely transparent while others are misunderstanding the metrics.
“The bar has moved upwards. Although consumer regulation is very much the talking point, VfM is an area we’ll be looking at very closely in the next few months.”
He also said re-let standards “may not have had the attention they need” in recent years, adding that simply re-letting to meet demand is not good enough and that quality standards need to be met.
Meanwhile, asset and liability registers and asset management data is “not as good as it should be”.
Speaking in the context of a renewed political focus on tenant engagement following the Grenfell Tower disaster in 2017, Mr Dow, who took over as interim chair last year, added that consumer regulation by the RSH has been largely reactive to date, and that it does not have comprehensive data on tenant services.
But he highlighted that MPs and politicians were receiving “worrying feedback” about how some housing associations handle complaints.
He added: “Consulting on and explaining your choices is a key element of the co-regulatory settlement.”
Mr Dow also spoke of the potential for a new standalone consumer regulator.
He said: “We know where out heartland is, and our heartland is ensuring we have viable, liquid and solvent organisations that can have debates about customer services, asset management and community relations, which you can’t have if you’re in the process of going bust.
“It will always be our top priority to make sure organisations are financially effective.”
Mr Dow described the Social Housing Green Paper as a “big fork in the road” for the sector.
He said it has been an opportunity to better meet residents’ expectations, which have “not always been met”.
The chair said the timeline for consumer regulation is unknown due to government’s preoccupation with broader political activities, but added there is an opportunity for housing associations to “try to frame the debate”.
He suggested the consumer focus means there “may be another regulator of some sort on the landscape”, adding that the RSH’s “stock in trade is financial regulation”.
That means its focus is primarily to ensure housing associations are viable and have the finances “to make sure residents are safe in their homes”.