Category Archives: Legislation

All on Board: Delivering Good Governance in 2019

By Roger Jarman, HQN Associate

HQN is running a series of events which are putting governance under the spotlight.

I attended the first in the series in London on Wednesday 27 February. The event was largely attended by officers rather than board members, although some delegates wore two hats – being officers of a particular housing association and board members of another/others (like me).

Peter Walters ran the half-day session. He has a wealth of experience in the management of housing associations, both as a chief officer and as a board member too. Most recently, he fashioned the merger that created VIVID Homes in Hampshire.

His style encouraged discussion and participation from the delegates who were keen to share their experiences of the governance issues facing their own organisations.

There is a lot packed into a three-hour session. I came away with some pithy headlines that helps to encapsulate what governance means for housing associations today.  Remember – as I will – the ‘five Ss’. These are:

  • Strategy – for the short and long term
  • Scrutiny – formal oversight of the decisions made by the executive team
  • Stewardship – being aware of the board’s role as a custodian of the assets and values of an association
  • Support – constructive challenge of the executive as well
  • Stretch – being ambitious but also managing risk

There are also the four ‘sights’ – Oversight; Insight; Foresight; and Hindsight.

Board members should bring these matters to mind as they work with their executive teams to ensure their organisations achieve their aims and objectives.

We heard what a good board looks like – and a poor board too. We looked at structures, the recruitment and retention of board members, appraisal systems, induction methods, the residents’ voice, the effectiveness of board meetings, engaging board members between meetings, and the role of the Regulator (including preparation for IDAs).

This is not rocket science. But getting it right is not easy. Peter’s inclusive style and wide ranging knowledge will help executives and board members alike get to grip with the governance of their organisations in these challenging times.

Places remain on each of our ‘All on board: delivering good governance in 2019’ events taking place across the UK. Links to all the upcoming dates can be found below:

Are you meeting the VfM standard? You can use the Global Accounts from the RSH to check!

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By Alistair McIntosh, HQN CEO

You’ve got to be on top of VfM. Ask anyone that’s been through an IDA. It’s top of the agenda. You will get a grilling on:

  • Your understanding of your own costs
  • Making sure you are spending the right amount on keeping the homes safe
  • Knowing who your peers are and why costs differ
  • Taking steps to save money without putting safety at stake
  • Whether you are building as many homes as you can.

Your board need to have the facts and figures at their fingertips. The answers to many of these questions can be found in the Global Accounts.

Does it look like you are spending more than others on managing the homes? Do your repair costs seem very low? You will be asked to justify these. So, you must get ready for this.

It could be that management costs are high because your tenants need more care. Or your stock survey may say you need to do less work than others. But you must be precise in what you say. If your figures look odd, you will be asked why.

Ian Parker, Lead Associate of the HQN Housing Finance Network, has taken the Global Accounts data from the RSH and turned it into an easy to use model. You can see at a glance:

  • Where you sit on all of the VfM metrics against the entire data set
  • How you compare to any group of peers you choose
  • Graphs and charts of these comparisons that can go straight into board reports and your accounts
  • A breakdown of your cost per unit across – for example – management, maintenance and service charges
  • Your rates of building social and non-social housing versus others.

This will give you a great start on getting to grips with your VfM. It will also help with preparing for the sorts of league tables that are mooted in the Green Paper. (Do take care though. The costs for this year are worked out on a different basis than before. The RSH asked you to exclude leasehold homes sold through the RTB or 100% staircasing this time around. All things being equal this will lead to some higher costs per unit.)

Ian’s model also lets you compare and contrast key data from the financial statements you send into the RSH. The VfM Code of Practice says you do need to consider whether you are better off standing alone or merging. And this is one way of starting to think about the pros and cons. You can see whether there is any scope to do more if you pooled your financial strength and asset base.

These new models are available to members of The Housing Finance Network – if you’d like to join, or simply would like more information on these models or the network, then please visit the website here or get in touch: hqn@hqnetwork.co.uk / 01904 557150

Over 630,000 living in ‘hazardous conditions’, report

A major report has revealed that 631,000 people in England are living in ‘hazardous conditions’.

In response to 2017’s Grenfell Tower disaster, and commissioned by homelessness charity Shelter, ‘A Vision for Social Housing’ consulted over 31,000 people from across the country and brought together 16 commissioners from across the political spectrum.

The report reveals that 3.1 million people in England need a social home – and of the 1.27m in greatest need: 631,000 live in hazardous conditions; 240,000 live in overcrowded accommodation; 194,00 live with ill health or disability; 128,000 are rough sleeping and hidden; and 79,900 are homeless and in temporary accommodation.

Asking ‘what is the future of social housing’, the authors state that the country is ‘feeling the effects of 40 years of failure in housing policy’ and specifically blame:

  • A failure to build enough homes. Over the past five years, housebuilding has averaged 166,000 a year, yet government wants to deliver 300,000 homes a year
  • Huge waiting lists for social homes. Today, 277,000 people are homeless
  • The explosion in the numbers renting privately, unable to buy or access social housing
  • Huge rises in welfare costs to government, driven by more people renting privately at higher costs

According to the report, if the crisis is to be solved, 3m new social homes must be built over the next 20 years.

The commission warns that without a ‘radically different approach’ the country faces a future in which:

  • A generation of young families will be trapped renting privately for their whole lives, while more and more will face living in dangerous accommodation or going into debt
  • By 2040, as many as one-third of 60-year-olds could be renting privately, facing unaffordable rent increases or eviction at any point
  • £billions more in welfare costs will be paid to private landlords due to a lack of more affordable social housing
  • Over the next 20 years, hundreds of thousands more people will be forced into homelessness by insecure tenancies and sky-high housing costs

Nadine, a private renter who contributed to the report, lives with her teenage daughter and works two jobs – yet still struggles to keep up with the rent. She said: ‘My rent is over half my monthly income, so that’s where most of my money goes. It’s hard to afford other things we need. I am cutting back and doing the best I can, but there are times we can’t live on the money we’ve got.

‘We budget on our food and it’s very rare that I buy anything full price. I shop around to take advantage of all the vouchers and deals I can get.

‘No one should have to spend more than a third of their income on rent. If they are going to set a minimum wage, then there should be places you can afford to rent on that income – how can it be a living wage if you can’t find anywhere to live on it?’

One of those who contributed to the report’s recommendations on reforming social renting was Rob Gershon, Lead of the HQN Residents’ Network, who said: ‘I’ve always thought of myself as incredibly lucky to be a social housing tenant… On the two occasions I’ve come to rely on social housing, it has been there to make sure my family has had somewhere to live.’

The commission recommends:

  • Setting clearer standards
  • Ensuring speedier redress for individual complaints
  • Proactive enforcement of regulation to protect social renters
  • Giving residents a voice in landlord governance and decision-making
  • Giving residents a voice in decisions made by national, regional, and local government

Click here to download the full report.

Government to investigate fire door industry

Image of circular blue Fire Door Keep Shut safety sign

The fire door industry is to be investigated by the UK government, following concerns about product consistency within the sector.

In the wake of 2017’s Grenfell Tower disaster, the Ministry for Housing, Communities and Local Government (MHCLG) has said that nothing is more important than making sure people are safe in their homes, and that property owners should ensure that products used in their buildings meet the required standards.

In the meantime, in cases where doors have failed safety tests, building owners should contact either the contractor responsible or the supplier, and also review their building fire risk assessments to determine how quickly the doors should be replaced, the MHCLG says.

Currently, as soon as a door fails a government-commissioned safety test, the supplier is informed and asked to remove the product from the market. The company should then investigate the reason for the failure to understand what action needs to be taken.

At the same time, the government will inform National Trading Standards who will ensure local investigations are carried out to determine if and when the fire door concerned can return to market. They will also inspect the supplier’s operations and commission further investigations into other fire doors produced by the supplier as appropriate.

Advice to occupiers

The MHCLG says that in the event of a fire, residents and guests should follow existing fire procedures, and that ‘fire doors are specially engineered doors designed to contain fire for a period of time,’ that ‘work as part of a layered fire protection system within a building’.

The ministry adds that, while its ‘investigations may suggest a particular fire door might not perform to the required standard, all doors can provide protection in a fire when closed’.

Meanwhile, ‘building owners and residents should ensure all fire doors are kept in good condition and the self-closing mechanism working correctly. Deficiencies should be reported to the landlord or managing agent. Doors and the self-closing mechanism should not be removed as this increases the safety risk. Occupiers should test their smoke alarms regularly.’

Read the complete guidance here.