You are viewing 1 of your 1 free articles
The roots of regulatory problems lie in weak governance
The Scottish Housing Regulator has published a document on lessons learned from cases where it has had to intervene due to social landlords failing to meet standards. Michael Cameron discusses the main themes
Good governance in registered social landlords (RSLs) protects them from the problems that can lead to intervention by the regulator.
That may seem obvious but it’s worth saying time and again.
It’s a key lesson from the Scottish Housing Regulator’s review of when we have had to use our statutory intervention powers. Our ‘lessons learned’ paper, published early in December, sets out the things we learned as well as the things social landlord can learn from.
Most RSLs in Scotland are well run and deliver good quality homes and services for their tenants and other service users.
But things can and do go wrong, and that puts the tenants’ interests at risk. Where we judge that an RSL cannot put things right itself, we will use our statutory intervention powers.
“In all of the RSLs there had been a failure of leadership”
We’ve done that in 12 RSLs since 2014. In all 12 cases, we intervened because the landlord failed to meet the standards of governance and financial management or other regulatory requirements. In each case, the landlord was unable or unwilling to remedy the failures without us taking action.
The root of the problems lay in weak governance. In all of the RSLs there had been a failure of leadership. The cultures in some of the organisations left them vulnerable to poor behaviours and incompetence that caused serious problems.
Some of those in leadership disregarded the controls that were there to protect the RSL.
We’ve found that board members did not know what they did not know – they were not provided with, did not ask for or failed to understand the information needed to carry out their role.
READ MORE
Most of these landlords had complex, significant and deep-rooted weaknesses. That means it takes time to identify and tackle everything that needs to be fixed.
The failures that lead to intervention have serious implications for an RSL.
There can be costs for the RSL, including the cost of any statutory appointments needed to fix the failures and from the risk of repricing or calling in of loans.
“Well-run landlords take quick and effective action to tackle any problems they find”
So it’s important that RSLs act to avoid the need for us to intervene, including engaging quickly and constructively with us when they find problems.
Talk to us early – that’s a major lesson. Well-run landlords take quick and effective action to tackle any problems they find.
They advise us when they find problems and tell us what they are doing to fix them. They have a positive and constructive relationship with us.
Where we have had to intervene, all bar one of the RSLs failed to recognise or tackle the problems they had and they didn’t engage with us.
Lenders, potential lenders and investors consistently tell us a positive and constructive relationship with the regulator is a key consideration in determining whether they’ll invest in an RSL.
Many of the interventions started with information being brought to us by whistleblowers.
These individuals felt that they did not have anyone to go to within their RSL to talk about their concerns. Some did not feel safe to raise concerns within the RSL.
Whistleblowing was often not viewed positively nor used constructively in the RSLs where we have intervened. This in itself can be an indicator of problems in the RSL’s culture.
“We’re aiming to make it as easy as possible for landlords to see what they need to do”
It’s important that RSLs have a positive approach to whistleblowing, making it clear to staff that the organisation will take seriously any concerns raised by them and they will be supported to do the right thing.
We’ve used the lessons we’ve learned from statutory interventions to help us form the changes we’re proposing to our regulatory framework.
We’re promoting a culture of assurance, openness and transparency, and we aim to support landlords to avoid getting to a position that would mean we have to intervene.
We want to help board members to get the assurance they need that their organisation is well run and so delivers good outcomes for tenants and others who use their services.
We’re aiming to make it as easy as possible for landlords to see what they need to do, and to assure themselves that they are doing it.
To that end, we’ll put all regulatory requirements in to one place and we’ll develop a toolkit to support board members to ask the right questions and get the assurance they need.
Michael Cameron, chief executive, Scottish Housing Regulator
