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SHR Blog Updates on Regulatory Framework Review

Michael Cameron has written a blog summarising the discussion at its most recent working group meeting with a group of volunteer RSLs.

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The full blog is below:

We are currently working with a group of volunteer landlords to develop our thinking on the Annual Assurance Statement. The group had its second meeting in mid-June. We covered a lot of ground and made good progress. Thank you again to everyone involved.

The group reflected on how the Statement would support a culture of assurance and openness within each organisation. It would be a way to ‘sum up’ and consolidate the work that landlords already do to get assurance and drive improvement. The group also talked about the audience for the Statement. They agreed that primarily, RSL governing bodies would use it as a tool to ask questions and assure themselves that they are well-run and delivering the right things for their tenants. In turn it would give them confidence to assure their tenants and other stakeholders.

We then started to get into the detail of the requirements that landlords would assure themselves against. These would centre around the Standards of Governance & Financial Management for RSLs, and the Charter for all landlords.

The group agreed some key principles for how the requirements should be framed. They need to be all in one place, but kept to a manageable size. They need to be clear, so that governing bodies can answer the question “do we comply?”. They also need to focus on the things that landlords “must do”. So it will be important to distinguish mandatory requirements from “expectations” and “should dos”. And there should be a clear line of sight to delivering for tenants, as that is what it’s all about. 

The group talked about the place of advisory material, like our current recommended practice publications and recommendations from thematic work. They agreed that it is useful for landlords to consider this as part of their assurance processes, as it gives advice on how to comply and good practice. We need to give more thought to how we make the right links between advisory guidance, the requirements and Assurance Statement guidance. The group expressed an appetite for SFHA, GWSF and SHR to explore ways for the sector to develop and share more good practice material.

We also considered the multiple, routine sources of assurance that landlords can use as evidence to support their Statement. We’ll use these discussions to inform some illustrations for the Assurance Statement guidance.

Discussion then turned to what would happen next, once a landlord has sent in its Assurance Statement and SHR has completed its risk assessment. Our current thinking is that SHR will produce an Engagement Plan for each landlord, setting out how we will work with the landlord and what we require from it.

The group discussed how SHR might express its regulatory judgement of each RSL alongside the Engagement Plans, moving away from current engagement levels which we define as high, medium and low. This could be expressed as a ‘regulatory status’ using terms like ‘compliant’ and ‘non-compliant’. The group suggested using positive language like ‘working towards compliance’. We think there is mileage in this suggestion.

We also talked about timing, and how SHR might roll out its new approaches during 2019- with the new Framework and Engagement Plans in April, the first Assurance Statements by October and ‘regulatory status’ judgements following after that.

There’s lots still to consider and work through, ahead of consultation on the new framework in the autumn. The group will meet again to continue these discussions in early August.