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Regulator of Social Housing publishes Sector Risk Profile 2022

The Regulator of Social Housing (RSH) has published its Sector Risk Profile (SRP) 2022 which, as in the previous year, encompasses strategic risks, operational risks in relation to existing stock, service delivery and development, and finance and treasury management risks.  The SRP sets out the RSH’s view of the most significant sources of risk to providers’ ongoing compliance with Regulatory Standards, with a particular focus on the Economic Standards, stressing that “It remains the responsibility of board members and councillors to ensure providers meet all of our regulatory standards and to determine how this is done” and “Boards must ensure that their organisations remain compliant with the requirements set out in legislation and in our regulatory standards, prioritising safety and essential services”.

Looking at the operating environment, the RSH writes:

“The UK has faced a sequence of severe and ongoing macroeconomic shocks over the past three years, including from Brexit, Covid-19, and resulting from Russia’s invasion of Ukraine. Providers continue to face an extremely uncertain operating environment. High inflation, a tight labour market, and the residual impact of the pandemic on supply chains have increased costs for providers. Providers are also facing higher borrowing costs, both from substantially rising interest rates and from widening spreads on debt. At the same time, income streams are facing greater than usual uncertainty, with significant headwinds in the housing market and the government consulting on capping social housing rents increases. There remains a possibility of further unexpected shocks”.

The RSH identifies several general themes which are likely to be key areas of focus both for Boards and the RSH as they go about their work:

  • Strategic direction
  • Macroeconomic risk and viability
  • New supply and development
  • Stock decency and safety
  • Service deliverability and accountability and
  • Reputation.

Boards of providers are advised to review the SRP 2022 and to ensure that they are taking account of the key sector-wide risks in their risk management arrangements.  If we can help you with that please get in touch with us.