SHR Blog Provides Update on Assurance Statements
Scottish Housing Regulator Chief Executive, Michael Cameron has written a blog outlining their initial thinking on Annual Assurance Statements. This blog acts as a note of a recent Working Group meeting that small group of SFHA and GWSF members attended, to feed in thoughts about broad principles to underpin the assurance statements.
The full blog is below:
We are proposing a future Regulatory Framework which is centred on landlord self-assurance. Almost all of our stakeholders support this, and the idea of using Annual Assurance Statements to help build a culture of assurance and openness. But we know, and landlords have told us, that the devil is in the detail!
So with this challenge set, we have enlisted the help of the SFHA, GWSF and a group of volunteer landlords to work through how we can make this meaningful in practice. We had our first working group meeting at the end of May and gained some really useful insights. Thank you to all those involved.
We discussed the purpose and value of the Assurance Statement and the importance of being clear about this in the guidance we will produce. The group agreed that the Assurance Statement is a way for each landlord to confirm it meets Regulatory Standards and requirements, or set out what it is doing to fix any instances of non-compliance. The Statements would be approved by each Registered Social Landlord’s (RSL) governing body or the appropriate Committee of the local authority. SHR would use the Statements in the risk assessment of all landlords.
We want the Statement to be a useful tool for RSL governing bodies and local authority committees, to help them consider the questions to ask and the assurances that they need. It’s about landlords assuring themselves that they are well-run organisations, and so can deliver what tenants need and want at a price they can afford to pay.
We know many landlords have frameworks that give them this assurance already. So the Statement should be about summing this up in a straightforward, transparent way. The group also recognised the potential added benefits that the Statement could bring for landlords, in terms of enhancing credibility and trust with tenants and other stakeholders, including investors. It could also be a welcome opportunity for each governing body to reflect on all that it has achieved.
The working group agreed some key principles for the Statement. It should be short and succinct, and contain a core set of statements with some prescribed wording. Any more detailed narrative should be by exception, to set out any areas of non-compliance and what the landlord is doing to fix them.
So with this challenge set, we have enlisted the help of the SFHA, GWSF and a group of volunteer landlords to work through how we can make this meaningful in practice. We had our first working group meeting at the end of May and gained some really useful insights. Thank you to all those involved.
We discussed the purpose and value of the Assurance Statement and the importance of being clear about this in the guidance we will produce. The group agreed that the Assurance Statement is a way for each landlord to confirm it meets Regulatory Standards and requirements, or set out what it is doing to fix any instances of non-compliance. The Statements would be approved by each Registered Social Landlord’s (RSL) governing body or the appropriate Committee of the local authority. SHR would use the Statements in the risk assessment of all landlords.
We want the Statement to be a useful tool for RSL governing bodies and local authority committees, to help them consider the questions to ask and the assurances that they need. It’s about landlords assuring themselves that they are well-run organisations, and so can deliver what tenants need and want at a price they can afford to pay.
We know many landlords have frameworks that give them this assurance already. So the Statement should be about summing this up in a straightforward, transparent way. The group also recognised the potential added benefits that the Statement could bring for landlords, in terms of enhancing credibility and trust with tenants and other stakeholders, including investors. It could also be a welcome opportunity for each governing body to reflect on all that it has achieved.
The working group agreed some key principles for the Statement. It should be short and succinct, and contain a core set of statements with some prescribed wording. Any more detailed narrative should be by exception, to set out any areas of non-compliance and what the landlord is doing to fix them.
The group agreed that the Statement should confirm compliance at the point of signing. It’s not about a historic look back on the previous financial year. It’s about saying “we have seen enough evidence to be assured that we comply right now”. Landlords would then notify SHR during the year if anything changed significantly.
This is about having a continuous, rolling approach to self-assurance. We wouldn’t expect landlords to feel the need to carry out a big one-off exercise each year, or to present a huge bundle of material to their governing bodies and committees at the point of signing the Statement. It should be about looking across all of the sources of assurance and evidence that they have seen throughout the year, as part of routine performance reporting, assessment and policy development. And considering this alongside independent assurances from Internal Audit, external sources, and importantly feedback from tenants, other services users, staff and stakeholders. The group suggested that we give some illustrations of how landlords might approach this in the guidance on the Annual Assurance Statement. We’ll look at how we can best do that.
The method and processes by which a governing body gets assurance - and the reality that it gets assurance - would be as important as the Assurance Statement itself, if not more so. We wouldn’t want landlords to send us all the evidence to support their Statement, but we would expect them to have it. The type and amount of evidence should be proportionate to the organisation and its business and context. It would be for each governing body and committee to decide what it needs to be assured. The group agreed that it will be important the Assurance Statement is owned by that body.
We also talked about other areas that the Assurance Statement guidance might cover, including how tenant scrutiny can be part of the process and the timing for signing the Statement. The group thought there could be advantages in aligning the Statement with the timescales for performance reporting to tenants. So perhaps a window for signing in the lead up to October each year.
We recognise that the guidance may also need to say something about materiality, and the judgements that landlords, and SHR, will need to make about any reported non-compliance. We recognise that landlords may not comply with every aspect of every requirement at all times. We want to encourage self-awareness and openness, so we will need to reflect this reality when we decide whether, when and how we engage with landlords.
We plan to meet as a group again over the summer, to continue this discussion and consider more of our proposals. We will also engage with local authority landlords, to ensure that the Assurance Statement and guidance works for them too.
We’ll continue to use blogs like this to keep you updated, ahead of consultation on the new framework in the autumn.
Michael Cameron
Chief Executive