Overview
Housing associations/organisations and housing companies are independent, private and not-for–profit. There are 2, 200 housing associations in England. Their goal is to provide homes for people with housing needs while operating for a communal benefit. Housing associations can be a charity, a trust, a company or an Industrial and Provident Society ().
Social landlords are considered as housing organizations. When they register to Housing Corporation under Housing Act 1996, practically, they will become registered social landlords (RSLs) with a full registry maintained for inspection by Corporation’s Maple House office in London (The National Affordable Homes Agency).
Further, there are ten types of RSL namely: 1) abbeyfield, 2) almshouse, 3) co-operative, 4) co-ownership, 5) hostel, 6) letting/hostel, 7) letting, 8) sale or lease, 9) stock transfer and 10) YMCA/YWCA (The National Affordable Homes Agency). In general, all RSLs are run by a Board of Management which includes Council nominees, residents and community members and regulated by the Housing Corporation ( ). Since RSL is basically a business which operates on the basis services and finances, RSLs are needed to be regulated, registered, governed and monitored.
RSL Regulation
The Housing Corporation is the statutory regulator of RSLs (2005). Their main responsibility is to assess the RS compliance with the Regulatory Code and Guidance as mandated in Section 36 of the Housing Act (). The corporation, in lieu, monitors the performance and funding use of the housing associations through a risk-based regulation approach. The Housing Corporation Assessment (HCA) is the key element of the regulatory approach (). To comply, the RSL are require to submit self-assessment compliance statement, annual accounts including internal controls assurance statement, auditor’s management letter, five year financial forecast (FV5) and Regulatory and Statistical Return (RSR) ().
Moreover, non-compliance and underperformance will be subjected to corporation’s supervision, either intervention or enforcement, depending on the materiality of the problems identified (p.13). The corporation, in connection, also regulates on viability of the business based on a traffic light system: green – the RSL meets the expectations set in the Code though it might be vulnerable to deterioration, amber – the RSL’s financial viability is a concern and red – the RSL’s financial viability is of serious concern (2005). The corporation requires a submission of the documents such as accounts (FVA), FV5 and the Private Finance Regulatory Return (Form PFRR) ().
Governance is also regulated by the Corporation through the requirements of the Code to: operate according to the law and constitutions, be headed by an effective board with expertise and leadership and control capabilities; maintain highest standards of probity; protect public investment; seek and be responsive; deal with the Corporation in an open and co-operative manner; demonstrate commitment to equal opportunity, equitable approach to the rights and responsibilities of individuals and promote good relations and operate a framework of effective identification and management of risks (2005).
The Code also requires management regulations including: setting of rents that reflects size, property value and local earnings; having management arrangements, resources, skills and systems; delivering continuous improvements and value for money; developing and managing of good quality homes; providing of good quality housing services and working with local authorities (2005).
RSL Registration
Section 5 of the Act sets out different registration criteria for organisations who wished to be a RSL (2004). The three main criteria to register are viable, properly governed and properly managed. Registration requirements for viability are financial planning and funding, demand and stock condition, risk management and financial control (pp. 9-10). For governance, the requirements include constitution and control, board composition, executive and skills, probity, protect public investment, tenant involvement and equality and diversity (). Management requirements are rents, management structures and systems, best value and continuous improvement, stock condition, asset management and new development, housing services, local authority relationships and strategic housing roles ().
Whereas, the registration process follows nine major steps as: 1) consideration of the registration criteria and registration requirements, 2) confirmation of the association as eligible for RSL status, 3) completion of preliminary application form, 4) agreeing on a timetable, 5) completion of a pre-registration assessment period, 6) completion of a more detailed formal application form, 7) arrange for a final compliance review visit with a regulator, 8) pre-registration assessment reports and recommendation and the formal application for registration and 9) confirmation and notification of RSL registration number ().
RSL Governance
Essentially, good governance will sustain the status of RSL in Europe. The Housing Corporation conforms to the Good Practice Notes in maintaining governance of RSLs’ performance. In Scotland, the governance is guided by ethical standards (2005) and the Good Governance Standards for Public Sector or the Langlands principle ().
There are instruments to measure governance in general. According to (2003), these are specify governance arrangements as a communication tool for stakeholders while protecting the integrity and the basic purpose of the organisation; require public reports for transparency, efficiency and effectiveness; leverage financial in undertaking programmes, joining collaborations and decision-making and set and inspect standards to ensure developmental functions, identify weaknesses and transfer of good practice (). In effect, RSLs must be nagged in statutory and regulatory reporting requirements such as Rent Surplus Fund (RSF), Accounting Order, Code of Audit Practice and reports on tax relief grants ( 2001).
RSL Monitoring
The monitoring processes conform to statute’s requirement to produce accounts in a particular form and have it audited. Copies of accounts and the auditor’s report will be submitted to the Housing Corporation along with business plans, financial performance reports and responses about audit and monitoring reports ( 2000).
In England, regulation and monitoring are largely carried-out by the Corporation through a regular inspection is conducted by the Audit Commission and the monitoring for local housing authorities are done by the Department of Environment, Transport and the Regions (DETR) (2000). Still, a Housing Inspectorate is a body appointed by the government in-charge in monitoring the performance of local authorities and the RSLs (2001).
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