Social housing funding and regulation in England
Last updated 06/01/2009: any recent updates in this colour.
This page contains information about the following:
Overview
In 2007 the government initiated two reviews of social housing (Hills and Cave) as well as publishing a housing green paper. This led to the introduction of the Housing & Regeneration Act 2008, which received Royal Assent in July 2008, making provision for:
- setting up of a new Homes and Communities Agency (HCA) with a national role as the investment vehicle for affordable housing and regeneration; and
- establishment of a new regulator, the Tenant Services Authority (TSA), and a new regulatory framework which allows the scope to include both housing association and local authority owned stock.
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Tenant Services Authority (TSA)
An independent review of social housing regulation commissioned by government and led by Professional Martin Cave was published in June 2007. The Cave Review proposed a new system for the regulation of social housing that should, where possible, apply across all providers of social housing. CML provided evidence for the review and responded to the subsequent Department of Communities and Local Government (CLG) consultation paper.
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The new regulator, the TSA, was formally established by December 2008 but will initially use existing, 1996 Act, powers to regulate the housing association sector. The chair is Anthony Mayer and Peter Marsh is the new chief executive, with a board and senior team having been recruited in the latter part of 2008.
The next milestones for the TSA after its launch in December 2008 include consulting on the development new national standards and operating framework by summer/autumn 2009.
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The Cave Review of social housing regulation recommended a single regulator for both local authority, including Arms Length Management Organisations (ALMOs), and housing association sectors. This was accepted by the government and included within the Housing & Regeneration Act 2008 with a view to having cross domain regulation operational within two years of the establishment of the TSA. A review by Professor Ian Cole was published in September 2008 identifying the practical issues involved in a single regulatory framework. A CML summary is available for members. Spring 2010 has been set as the target date for inclusion of local authorities in the system.
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As a result of a changed external environment for the sector with housing market and economic downturn and the first insolvency in the sector of Ujima Housing Association the present regulator, the Housing Corporation, has taken action to strengthen its focus on financial viability. Many of the larger housing associations have a business model based on cross subsidy from sales and have increased reliance on shared ownership in particular. The funding liquidity issues have affected both corporate funding to housing associations but also mortgage availability for shared ownership / equity.
The report into the Ujima insolvency case highlighted several areas where regulation needs to be updated and in particular increased powers for enforcement. The Housing & Regeneration Act 2008 sets out new powers and changes to the insolvency process as a result of the inquiry and feedback from CML and lenders. A summary of the review report and responses is available for members.
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Homes and Communities Agency (HCA)
As well as deciding upon a single regulator the government announced their intention to separate affordable housing investment from regulation and to bring it together with regeneration investment in a single 'super' agency. The HCA brings together the role of both English Partnerships and the Housing Corporation investment activity.
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The HCA is working towards the same timetable as the TSA and so was formally established by December 2008. Key appointments have been made with Robert Napier as chair, Sir Bob Kerslake as chief executive and corporate and regional directors appointed from a range of organisations.
The new agency has taken on existing programmes such as the National Affordable Housing Programme (NAHP) and the decent homes programme as well as developing new tools and stimulating both supply and demand of the market.
The HCA has a role in bringing forward private sector funding and will work with the banking and financial sector as well as new investors to develop new public private finance models.
