Social housing regulation: the risks of the HCA putting a hex on the finances of housing associations

This week social housing has been in the news. The government – or at least Conservative component – charged into battle against the UN rapporteur who dared to come from Brazil (where some people live in favelas) to the UK to question the “bedroom tax” – which the Conservatives describe as an end to a “spare room subsidy”. (As entertaining backstory the Daily Mail reported that the Brazilian academic dabbled in witchcraft – even going so far as to making an animal sacrifice to get Karl Marx to leave her alone.) Against this the House of Commons’ Communities and Local Government select committee had little hope of getting much press coverage for its own report on social housing regulation. (Only the BBC and Guardian seem to have given it any profile outside the housing and public finance media.)

The CLG select committee report (pdf available) may not have much witchcraft or sorcery but it is an interesting survey of economic and consumer regulation of social housing by the Housing and Communities Agency.

The committee report was highly critical of how the HCA rates the financial viability of housing associations.

It has now emerged that the Regulator is unable to use his statutory powers or provide a frank assessment of concerns about a provider’s financial viability fearing that it might trigger a re-pricing of the provider's debt and therefore undermine its viability. Instead, rather than use his financial viability ratings to convey his assessment of financial viability, the Regulator uses the governance ratings to signal concerns about financial viability. This approach lacks openness and is confusing.

The committee noted that the social housing regulator had admitted that a “handful” of providers that are of concern to the regulator and a “small but steady flow of problem cases”, no provider has yet been graded as having “financial viability [which] is of concern”. Less than 1% of ratings were V3 or V4 – the two lowest. The only V4 rating was awarded after Cosmopolitan Housing Association was on its last legs.

The committee’s solution was simple and straightforward:

Ratings published by the Regulator should be reliable and capable of being understood at face value. The practice of using governance ratings to signal concerns about financial viability lacks openness and is confusing. It is misleading to the taxpayer and tenants, and potentially also to lenders who, it appears, are expected to understand the coded message from the Regulator. We conclude that the practice should cease. We recommend that the Regulator publish accurate financial viability ratings.

How practical are warts-and-all viability ratings? Might they actually be self-fulfilling in terms of financial weakness?

Transparency is important. But might narrative opinions be better than the pass/fail simplicity of ratings?

Governance of social landlords – themes in a tagcloud

Since the Homes and Communities Agency (HCA) has taken over social housing regulation, there have been some eye-catching Regulatory Judgements (RJs). In seven cases social landlords have been graded as weak with a G3 or G4 (see Footnote).

Hopefully in there will be detailed work on these and other social landlords in with governance difficulties. In the past there was the Problem Cases trilogy – research by the Housing Corporation and consultancy CampbellTickell on housing associations who had been placed in regulatory supervision. Perhaps in the age of austerity there will be no funding for looking at case studies of failure.

While we wait for more detailed research we might be able to visualisation techniques to pull out some of the themes from the first seven social landlords to get G3 or G4 in their RJs. With a population of seven, the statistical significance will be limited. Nevertheless, the TagCloud does highlight issues like development. Also, the TagCloud shows the importance of frameworks for risk management and assurance for governance. As the HCA churns out more RJs, TagClouds may prove more instructive.

Footnote:

G3 = The provider does not meet all of the requirements on governance set out in the Governance and Financial Viability standard. There are issues of regulatory concern and in agreement with the regulator the provider is working to improve its position.

G4 = The provider does not meet the requirements on governance set out in the Governance and Financial Viability standard. There are issues of serious regulatory concern and the provider is subject to regulatory intervention or enforcement action.

The Public Accounts Committee report on the oversight of schools – and changes in the regulation of academies

It has been good to see that Friday’s report on oversight and accountability for the schools sector by the House of Common’s Public Accounts Committee got some media coverage even if it was a little under-analysed.

For those who did not see the reports on the BBC or elsewhere, these were the main findings:

1.  The Department for Education's draft Accountability System Statement (the Statement) describes arrangements for providing assurance on regularity and propriety, but does not provide us with assurances that the systems being established will achieve value for money across the sector.

2.  Much of the Department's assurance on regularity, propriety and value for money comes through oversight by other bodies which are subject to major resource pressures.

3.  The Department is relying on the availability of transparent, comparable information to drive value for money across the schools sector. However, incomplete and inconsistent data currently make it difficult to compare all schools on their academic performance, funding received, and use of resources.

4.  Governing bodies are central to effective oversight of all schools, but the quality of governance varies. We are concerned that weak governance in some schools is leading to inadequate scrutiny of, and challenge to, school leadership.

5.  We are concerned about the Department's ability to pick up warning signs of improper spending or poor value for money for the taxpayer. It is not clear whether existing monitoring and accountability mechanisms do enough to flag up concerns that should be investigated.

6.  The Department has only a limited understanding of why some local authority maintained schools are persistently in deficit or surplus.

It is inevitable after the Priory report that the regulation of academies will draw attention – as seen in BBC coverage.

By 2015 almost all secondaries and many primaries will be academies. Will the DFE have the resources to regulate this sector?

The report noted:

the YPLA [sic] will have to oversee growing numbers of academies in the coming years, and we have early warning signs which raise concerns about whether it has enough capacity and skilled staff to do so effectively.

The DfE is staffing up with accountants. It will need to.

Unless the DfE via the YPLA’s successor, the Education Funding Agency, is able to detect weaknesses in academy chains and individual academies before they fail, there could be a lot of parents and children left in a bad place. This could be a ticking time-bomb under Michael Gove.

On the “major issue” of recruiting and training of governors with relevant financial expertise, the report notes:

The Department and the YPLA consider the main incentive for schools and academies to improve governors' skills to be through their aspiration to score well in the Schools Financial Value Standard and Financial Management and Governance Evaluation assessments.

It is ironic that there is now talk that the requirement of a FMGE self-assessment will be dropped for all academies apart from new ones. (The EFA is proposing that the parallel  Financial Management and Control Evaluation is abolished for sixth form colleges.)

While schools may have suffered in the past from excessive control, the baby of effective regulation should not be thrown out with the bath water of red tape.

Almost time to party – the ONS deciding on how to classify colleges

Today’s announcement that the Office of National Statistics is re-classifying FE and sixth form colleges out of the public sector is good news.

The change in the ONS position reflects changes ushered in by the Education Act removing various regulatory powers from Whitehall, the Skills Funding Agency (strictly speaking part of the department for Business, Innovation and Skills) and the Young People’s Learning Agency. The ONS ruling does not grant independence to colleges – it merely recognises the new freedoms granted to college corporations. (Those freedoms may have downside when a college stumbles or banks “re-price” the risk associated with lending to colleges.)

The bunting should be strung up as the ONS was threatening a tangle of new red tape. However, before the flags come out we should note that the financial memorandum will have to change. Tucked away at the foot of the BIS press release was a note:

This reclassification is provisional upon ensuring that there are no other public sector controls in other documentation, such as the funding agreements, and keeping under review the use of remaining government powers within legislation.

Nevertheless, the SFA is promising a new financial memorandum “very soon”. Presumably – and hopefully – the YPLA is also treating the issue with urgency. Before 1 April these will be handed down – probably well before then as a consultation draft. The timescales are somewhat tight.

There might be some other footnotes in the full ONS judgement when it is published. (The latest ONS press releases include bed blockers and breast enlargement but nothing appears to be there on the status of colleges.)

Whilst not wanting to be a party pooper, it is also worth remembering that the National Audit Office will have to consider a similar issue – whether the accounts of all the English FE colleges should be consolidated into the accounts of the SFA. The ONS announcement makes it easier for the auditors to say that consolidation (and all the returns which would be required of colleges to make it possible) is not necessary. The NAO will be applying financial reporting standards but the same kinds of issues of control are in play. So before long we should be able to toast the auditors as well as the statisticians.

The SFA’s qualified accounts, colleges and red tape

Over the summer the annual accounts of the Skills Funding Agency (SFA) were published. If anyone was interested in them, they would have read that these accounts were qualified by the SFA's auditors - the National Audit Office. While generally in life qualifications are something to be sought, qualified accounts are a bad (and unusual) thing.

The NAO judged in its qualified audit opinion: “the financial statements do not give a true and fair view of the state of affairs of the Skills Funding Agency and its subsidiaries as at 31 March 2011”

The auditors believed that financial reporting standards required that the SFA should have “consolidated” the accounts of further education colleges as "subsidiaries" into the agency’s own accounts because the SFA has control over colleges. (That control is in the form of the borrowing consents which otherwise independent corporation have to seek.)

The SFA declined to do this given the practical challenges of incorporating the accounts of every FE college for the year to 31 March 2011 – a task further complicated by colleges accounting to the 31 July each year on the basis of a different set of reporting standards.

Does any of this matter? Not too much in itself – but it does highlight a wider issue and a potential threat.

In his report on Internal Control, Geoff Russell, as SFA’s chief executive’s noted how the accounting treatment of colleges poses an “unexpected risk” threatening “to contradict the Government’s simplification and cost reduction policy”. This arises both from international financial reporting standards and from last October’s designation of colleges as public sector bodies by the Office for National Statistics (ONS).

While Geoff Russell does not spell it out, what that means in practice is that in the future FE colleges might be asked to provide the information necessary for the SFA to consolidate all those figures into its own accounts. This would mean a Spring return in addition to the Finance Record and the Financial Plan returns. Inevitably there is a compliance cost for colleges as well as a resource required at the SFA where presumably a shrinking staff could be doing something more useful than chasing accounts and crunching numbers. In terms of cost-benefit analysis, there is no benefit to colleges from such a return to balance the cost.

Similar issues are posed for Sixth Form Colleges although the ONS classification treated them as local government bodies as, until the Education Bill becomes law, councils grant borrowing consent. That difference meant that the Young People’s Learning Agency avoided the embarrassment of qualified accounts.

The DfE and BIS are promising to deal with these issues but the promised “freedoms” may not be enough to remove threat of some more new red tape.

PAC on academies: some thoughts on governance and regulation

Today is a big-ish day for education policy. At 11.30am Michael Gove published his Education Bill although the contents are previewed in parts of the media. Until then we can read about the cross-party Public Accounts Committee report on the Academies programme.

The parliamentary PAC report expresses concern over financial control in the academies sector. Unfortunately the headlines have overlooked the good news in the report’s Executive Summary:
sponsored academies… have performed impressively to date, achieving rapid academic improvements and raising aspirations in some of the most deprived areas in the country. In many cases this has been achieved through high-quality leadership, a relentless focus on standards, and innovative approaches to learning and to the school timetable.

However, the Summary goes on to make serious criticisms:

Many academies have inadequate financial controls and governance to assure the proper use of public money, and the Department and Agency have not been sufficiently rigorous in requiring compliance with guidance. In developing a new financial handbook and governance framework, the Agency should make it compulsory for all academies – sponsored and converter – to comply with basic standards of governance and financial management. This should include segregation of key roles and responsibilities, and timely submission of annual accounts.

Academies will have to consider and act on the concerns raised in relation to governance:

We heard evidence of non-separation of roles, for example the chair of the governing body also being the chair of the finance committee, the responsible officer also chairing the governing body, and the responsible officer also chairing the finance committee. All of these roles should be clearly separated. There was further evidence of a shortfall in financial assurance and challenge owing to academies not having audit committees – against Departmental recommendations and Charity Commission good practice. We also heard that not all academy finance directors are CCAB-qualified accountants, again counter to recommendations in the Academies Financial Handbook.

Quite a few academies may not like all or some of these criticisms. It is a fair point that academies may struggle to arrange their governance structures with a standalone audit committee when so many claim that they have difficulty recruiting one governor who is an accountant or auditor. If academies do not move on these issues, they will find that they are censured by the YPLA auditors.

Even without the PAC report, there was a strong case for academies to review and strengthen their governance and financial management. They are high-profile and publicly funded organisations with their reputations at risk if they do not demonstrate compliance with high standards of governance.

(I should declare an interest: I work with academies and provide Responsible Officer services – the quasi internal audit of basic financial controls mandated by the Academies Financial Handbook.)

The report touches on the nature of regulation for the academies sector:

In future [sic] there must be greater clarity about what is required as opposed to what is recommended. Too much in the current framework is permissive, and there is insufficient mandated practice to prevent individual academies adopting practices which do not comply with basic standards of good financial management and governance.

I would agree that there is a need for a clearer distinction between “must” and “should”, particularly in the Academies Financial Handbook. However, I believe that academies should be encouraged and cajoled individually and collectively to raise their standards of governance so that regulatory input can be focused rather than broad-brush and heavy-handed. For a long time I have argued for a code of governance agreed by and for the academies sector leveling-up standards with a “comply or explain” approach. It works in other sectors.

Strangely the report is out-of-date on one issue before it is published when it states:

From January 2011, all academy trusts became exempt charities. This means that the Secretary of State for Education has replaced the Charity Commission in the role of Principal Regulator, and academy trusts submit their accounts to the Department only

Due to delays, the Charity Commission is - for now – the Principal Regulator. Hopefully, when there is a new Principal Regulator (presumably the YPLA and then its successor the EFA), they will use the right mix of regulation, self-regulation and governance to strengthen internal financial control across the academies sector.

Academies: the significance of numbers and the future of regulation

So one in ten English schools are now academies – marking a doubling of academy numbers. I do have some sympathy with commentator Conor Ryan’s tweet that:

It is not the number of academies, but their contribution to school improvement that matters most.

As a former advisor to the last government Conor Ryan blogs:

it is simply ridiculous to claim that the marginal governance and financial changes involved in converting an outstanding school to an academy are in any way comparable to the huge task involved in gaining secure sponsorship and leadership for a new academy in a tough area or an academy replacing a failing school.

The setting-up of academies planned by the previous government and the conversion process allowed by the current government mean that there is a significant challenge and workload associated with regulating them. (On top of that free schools are in the pipeline.) It is therefore ironic that a fog of uncertainty has descended on the future regulation of the academy sector since the regulatory changes planned for 1 January appear to have been postponed. The Young People’s Learning Agency is funding and overseeing the sector, but Third Sector reported yesterday that it has not formally been made the new Principal Regulator to replace the Charity Commission.

Post-16 alphabet soup – who survives and how?

Maybe I was naive but I thought we might learn today something of the new regulatory landscape in post-16 education. However, today's quango hit list merely notes on the Young People’s Learning Agency:

Under Consideration - Subject to education structural reforms

I thought that the Skills Funding Agency and Higher Education Funding Council might merge. It was in the Liberal Democrat manifesto. But according to the Times Education Supplement this is now unlikely. Vince Cable has changed his mind. On today’s list HEFC survives as a quango.

So maybe the YPLA and the SFA may merge? The SFA was not mentioned on today’s list as it is an Executive Agency rather than a quango.

TSA (and other quangos) - fate announced

It was not a very well-kept secret after being leaked in Inside Housing. But the Cabinet Office list is out (pdf available) and it officially announces the Tenant Services Authority is being scaled back and absorbed into the Homes and Communities Agency.

The list says:

No longer an NDPB - Abolish body. Regulatory functions passed to Homes and Communities Agency. Independent economic regulation safeguarded. Consumer regulation slimmed down

While a focus on financial viability and governance is welcome, there will need to be adequate safeguards for residents.

KPMG on the college sector, financial health and “infrastructural change”

I am currently reading KPMG's report for the Learning and Skills Council, Delivering Value for Money through Infrastructural Change. The report was published recently by the LSC's successor, the Skills Funding Agency. It is more interesting than it sounds - at least to those working in the college sector. It reviews the FE sector, current delivery models and potential institutional change.

(I will forgive the report's use of the American term "organizations" and the misspelt reference to the "Robins Report" [sic] on Higher Education in the 1960s.)

While a wake-up call to colleges should not be necessary the Executive Summary warns:

The financial health of the FE sector is in general deteriorating rapidly, and requires urgent action.

The report provocatively notes:

Some Governing Body members may tolerate a more relaxed view of deficit and insolvency than in their day job in the private sector.

The report also believed that the regulatory framework was such that:

... there appears to be implicit in these statements [by the LSC about intervention], and the actions that have followed, the view that some degree of failure is to be tolerated and there are no immediately dire consequences of delivering a deficit budget; instead, a protracted period of dialogue with the LSC is envisaged. In our experience, the consequence of the time this process takes for some LSC’s and Principals and Governing bodies is that one or both may be complacent for too long, or strive to elongate the dialogue, before robust remedial action - by which time it is often too late to salvage the college. The option of closure for a failing college is not seriously contemplated by colleges as a consequence because it has happened so rarely.

The report goes on to suggest that the current regulatory arrangements also hinder new ways of working and structuring institutions in the "FE system".

Tenant Services Authority – stay of execution?

Today’s Financial Times reports that the Coalition is having second thoughts about abolishing the Tenant Services Authority.

The report indicates that practical problems are causing anxiety for the Treasury. There are worries about crystallising a £80m pension shortfall. There is also a risk that £50bn of housing association borrowing could be placed on the government balance sheet if the arms length regulator disappears.

The Coalition had already said that it recognised that independent economic regulation of social housing is essential for housing associations continuing to be considered low risk (and worthy of cheaper borrowing). Maybe the TSA will be kept as such a regulator.

Stakeholders, politicking and elections

Next week the election will almost definitely be called. Whoever wins in May, there will be a huge influx of new MPs as so many are retiring at the general election. Alongside the political turnover and maybe change, there are major developments in the regulatory landscape: in post-16 education there are new quangoes plus changes in the role of local authorities; in social housing a nearly-new regulator is introducing a new set of standards. All this poses opportunities and threats.

With all this going on, have the leaders and managers in public services been thinking about stakeholder management? Probably not in many cases. Even if you are busy, it is helpful to identify and strengthen critical relationships.

Last month Inside Housing had a excellent article on navigating relationships with national and local politicians successfully. It has relevance well beyond social landlords.

The TSA and co-regulation – reasons to be cheerful?

At one of plenary sessions at the National Housing Federation’s National Board Members’ conference at the weekend, the delegates were asked to put up their hands if they were optimistic about the future for housing associations in the brave new world of the Tenant Services Authority.

The TSA’s new approach to “co-regulation” (neatly described as self-regulation with a backbone of intervention in the Cave review of social housing regulation) is a new departure. The TSA is having a bonfire of over 50 pieces of regulatory guidance.

From now on housing associations will be regulated on the basis of “outcome” rather than “process”. It’s not a new idea – “by their fruit you shall know them” has been around almost 2000 years. It may be more tricky in practice for regulators to sit on the hands and await outcomes – especially if things go wrong elsewhere and fear of blame fosters risk aversion. Moreover, it is worth noting that a good process is not guarantee of a good outcome even with effective risk management – we live in uncertain times meaning that bad things happen to good organisations and vice versa.

All this may be academic - the TSA may well end up slung onto its own bonfire by a quango-culling Conservative government.

Nevertheless, a more targeted approach to regulation must be a good thing for housing associations – especially as it is associated with a re-orientation towards customers through resident scrutiny. As well as a welcome development, it does pose challenges – grown-up governance requires an end to clinging to regulatory guidance as a substitute for serious thinking.

So I did put my hand-up. I hope my optimism is not misplaced.

Going Dutch – self-regulation and the problems of housing associations in the Netherlands

The Conservatives’ plans for social housing will re-open the debate over regulation: if the TSA is abolished, many in housing associations (and certainly the National Housing Federation) will advocate self-regulation on the Dutch model. Meanwhile the housing associations in the Netherlands are having some problems.

Last week it was reported that Dutch housing associations had posted an average loss of €1.2m - the first time the sector has failed to make a profit in well over a decade. This will put under strain the sectors own arrangements to rescue troubled associations. While the financial problems may be largely outside the control of the associations, the self-rescue and the self-regulation arrangements tend to support each other.

Catchup - the Conservatives and regulation of social housing

Life has been busy - mostly working with organisations in the overlap of the public, charitable and education sectors. This month I will try to reserve more time for this blog.

This weekend I have been catching up on last month's issues of Public Finance. It was disappointing to see that the Conservatives appear to be planning to re-arrange the regulatory landscape for English social housing as part of the crusade against quangos. If the Tenants Services Authority is doomed, there will have to be a new regulatory regime otherwise lenders will be wary of lending to housing associations - or, if they do, it will be at higher margins.

Regulation, governance and social housing: moving from self-assessment compliance to continuous improvement

A couple of flights across Europe offer the opportunity for catch-up. I used some time to read Governance: A discussion paper published last month by the Tenant Services Authority. The paper asks how the TSA should regulate governance on a cross-domain basis for all social housing providers – i.e. “across whole entities for not-for-profit registered providers and across the housing activities of for-profit providers”.

The discussion paper clearly sets out the issues and recognises the diversity of providers in a potentially mixed social housing economy. However, I am not convinced it faces up to the challenge of the kind of rigorous but focused regulation needed when addressing not-for-profit and for-profit providers. (I would argue that the financial turbulence buffeting social housing recently requires regulation targeted at promoting tenants interests and protecting public investment – which is not the same as more prescriptive or interventionist regulation.)

The discussion paper describes the current regulatory arrangements and notes that the self assessment compliance statement is “a key and significant part of our regulatory engagement”. The first question asked by the discussion paper is:

What elements of the existing approach to the regulation of governance should the TSA carry forward?

I would suggest that the self assessment compliance statement should be rejected or , at least, radically re-cast. I think it encourages a tick-box compliance mentality rather than fostering self-reflection. The TSA should ask where they see weaknesses and areas for action rather than requesting a “compliance statement”.

A document based on identifying scope for improvement should then be validated against an organisation’s financial and operational performance – internal and external audit reports, audited financial performance, reported operational performance indicators, etc.

The TSA says:

We are considering applying a range of assessment methodologies including:

- self-assessment by registered providers’ boards

- feedback/assessment from residents

- and stakeholders

- benchmarking and peer review

- independent validation/audit of a particular function/s

- accreditation

- the TSA’s assessment of certain key indicators of good governance

If that is focused and rigorous validation of performance about ensuring that governance is delivering for customers and protecting the public interest, I am in favour. But social housing providers do not need a paper chase.

Latest instalment at Glasgow Housing Association

The situation appears to be worsening at the Glasgow Housing Association (GHA). It appears as if the Scottish Housing Regulator (SHR) is about to step in triggering a loan covenant default. (This isn't a good thing when such breaches lead to increased financing costs.)

The GHA with over 100,000 customers was created through a huge stock transfer.

We'll soon now more about what is going on when the SHR issues its new report on the association. One lesson that I think we’ll learn when we look back on this stock transfer is that changing a huge local authority housing department into a housing association in a big bang poses certain problems. Big is not always beautiful.

Mutual interest: government may back mutual banks and building societies

It was interesting and welcome to read that the government is thinking about supporting mutual savings banks and building societies in next month’s white paper the UK financial system. This may involve creating (or re-creating) mutual organisations.

Hopefully backing for mutualism will be seen in public services too.

Learning from the credit crunch: a series of unfortunate incidents (and examples of bad governance)

There’s lots of food for thought around risk, governance and regulation in the revelations from the former chief risk manager at HBOS, Paul Moore.

For people looking for some analysis about the lessons for governance arising from the credit crunch, I would particularly recommend a couple of documents.

There was an interesting article about Flaws at the top in the December issue of the Institute of Directors’ magazine The Director. The article quotes one observer as noting:

Corporate governance itself hasn't failed—the banks have failed corporate governance by not complying with it.

There certainly appears to have been a lack of challenge (and maybe understanding) of the risks that some of the banks were running.

A fuller survey of governance, regulation and the credit crunch was published by the Association of Chartered Certified Accountants (ACCA) in November. While a lot of the analysis was of an accounting technical nature and sometimes banking-specific, Corporate Governance and the Credit Crunch (pdf available) made points of wider relevance to boards in all sectors.

The ACCA made the general observation:

Many of the causal factors seem to be inextricably linked to a failure in corporate governance. Regulatory boxes may have been ticked but fundamental principles of good governance were breached. There should be more emphasis in the performance of corporate governance than with its regulatory compliance.

My personal view is there can be a sense that governance can become ritualistic as an unforeseen effect of rigid and poor regulation.

On the issue of risk management, the report noted:

Risk should have been more fully taken into account when making decisions about strategy or operations. Risk management tools have not always been fit for purpose.... More use should have been made of scenario planning as a risk tool. The risk management function needs to earn, and be accorded, higher status.

I would concur although it is worth remembering that the best sensitivity analysis and scenario modelling would not have necessarily factored in some of the arguably unforeseeable events that have come to pass.

The report links matters of risk to the ever-present fact of life whether we are talking about multi-national banks or community groups: the information imbalance between executives and non-executives. It usefully re-states the obvious:

There is a temptation for managers to make sure that information prepared for non-executive directors does not raise too many difficult questions. A partial explanation for boards not understanding their organisations’ risks is that information is sanitised by the time it reaches them.

It may not be much of a silver lining but hopefully board members will learn some lessons from what lay behind the current financial crisis.

Welcome to short notice inspection?

This year lots of providers of social housing (as we will soon be calling housing associations, ALMOs and council housing departments) will be getting a call from the inspectors. With the completion of the Short Notice Inspection pilots, its time for the real thing.

As SNI involve only a couple of inspectors on site for about three days, inspectors go a lot further. However, the good news from those that have been inspected is that SNI appear to be a step forward. For a start, there isn’t the months of inspection preparation (and distraction). The short, sharp shock of SNI would certainly appear to reduce compliance costs.

Perhaps there might be some more good examples of regulatory reform in 2009. I certainly hope so.