How we will regulate RSLs, also known as housing associations, as a result of coronavirus.
At the start of the pandemic, routine regulatory oversight and the publication of regulatory judgements was suspended so RSLs could focus on continuing to deliver services in difficult circumstances.
Following consultation with the sector we are now introducing an Interim Regulatory Judgement programme.
There are two stages to the programme:
- a contextual assessment to determine when individual RSLs will be assessed
- a light touch interim regulatory judgement
The assessment is based on the following factors:
- organisational size
- development growth rate
- regulatory intelligence
- financial capacity and management
Assessment and judgement review
We recognise the operating environment continues to be challenging. Interim judgements will therefore be a “Confirmation Judgement”, confirming the previous judgement remains in place (or not) on the basis that no issues have come to light which materially change the risk profile of the RSL. Judgement reports will not be issued, but a short summary statement will be published on our website and RSLs are also required to publish the statement on their website.
The components of the judgement are set out below:
- existing judgement
- business continuity survey return
- “Self Certification” statement - governance/business objectives/tenant involvement
- regulatory intelligence
- financial resilience/viability - short financial return
Frequently asked questions
What is the contextual assessment used for?
The contextual assessment is a method to decide judgement reviews will be in which quarter. The principles have been agreed through various stakeholder discussions.
Can you tell us when we will receive a judgement as we may require Board approval for the “Self Certification” statement?
Each RSL will have different approval requirements for the statement in line with their governance arrangements. However, to assist with the planning of any approvals, RSLs to be assessed in Q3 will be contacted individually by a Regulation Manager early in November for a more detailed discussion and those in Q4 as soon as is feasible, but before Christmas.
What does a “Self Certification” statement look like?
As usual, we are not prescriptive in what a statement should look like or contain. It should highlight, in summary form, material changes introduced since April 2020 due to the pandemic (or other reason) to governance arrangements, business objectives and tenant involvement arrangements/outcomes.
We don’t need a compliance statement, but do need to be able to understand:
- the nature of any material changes (not the detail)
- that impacts were considered and mitigated where appropriate
- the necessary approvals were in place.
In other words, assurance that any changes have been made in a considered way with the appropriate governance. It should be possible to draw any such information from reports/minutes etc.
We will follow up individually if any more information is required in addition to the statement.
What if a material issue(s) has, in our view, changed the risk profile of an RSL?
The default position, in all but the most serious situations, is that we will work with the RSL to understand the issue and give the RSL the opportunity to respond. We will then decide whether a confirmation judgement is appropriate or if a revised judgement is required.