Compliance, compliance, compliance

Our non-exec Director Gordon Parry recently commented in Inside Housing relating to emerging changes in regulatory standards. His full comment is shown below.

It seems to me that in the light of the Grenfell Tower disaster and the emerging changes in regulatory standards, there are three watchwords for housing association, ALMO, and all RP boards: compliance, compliance, compliance!

There will undoubtedly be a greater focus on consumer standards, and it’s not before time, some of us would say. In recent years many RP boards have been focussed on serious detriment, rather than comprehensive compliance with all the consumer standards.

Serious detriment for some has meant gas safety. We all know it is much wider than that and fire safety has just shot up the agenda, as has investment in existing stock.

While some in the sector call for the Homes and Communities Agency (HCA) to have a greater focus on consumer standard compliance, I say no. As a board member of two housing associations, I believe that compliance with consumer standards should remain the board’s job. We should be accountable to our residents for this, more so than the to the Regulator.

We shouldn’t be passing this buck to the regulator. It’s quite right that they should remain focussed on the governance and viability standards as key, but I’m sure there will be a greater focus on our asset management strategies too.

Perhaps a number of boards can admit to be more focussed on development at the expense of investment in existing stock. However, let’s not do a knee-jerk reaction and invest in everything, let’s only invest in stock that is sustainable. This will question the future of some tower blocks in fragile housing markets and demand some challenging decisions.

We also need to keep a look out for more comprehensive questions about asset management issues and consumer standard compliance emerging from Quarterly Return Requests from the HCA.

Do you as a board member know what questions are asked and if they are being answered in a timely manner and to the quality expected? As a former member of the HCA Regulators “Provider Panel” until a few months ago, I know that there was growing frustration about some RPs’ who didn’t give this the prominence they deserve. I suspect the HCA will be less patient in future, and rightly so.

So where should board members go for assurance – other than from your own executives? You could do no better than to look at the HCA’s recently published sector risk profile and recent regulatory judgements for clues.

You could also seek external assurance from organisations like ARK Consultancy whose board I recently joined, although similar advice is available from others!

Governance competence is essential and increased assurance should be sought by boards on any significant decisions, so external assurance and validation helps but doesn’t replace a questioning and constructively challenging board such as I was lucky to have when at Accent Housing. As we return to the board tables after summer, I am sure that ‘compliance’ will be a word often used, so let’s make its used robustly.

But do I have any other ‘c’ words to join compliance as other watchword for boards in this changing world? I have two more… consultation and communication. As we face difficult decisions about the assets we own, we must remember they are our residents homes. Effective communication and consultation will be more important than ever, however these are topics for another debate on another day.

To find out more about ARK’s approach please contact Gordon gperry@arkconsultancy.co.uk