About this thematic review
All social landlords are required to submit to the Scottish Housing Regulator an Annual Assurance Statement (Statement) about their compliance with regulatory requirements. Landlords submitted their most recent Statement to us by the end of October 2022.
In this thematic review we set out our findings following our recent visits to landlords to help us understand their approach to preparing the Statement and how they had assured themselves about compliance with Regulatory Requirements. On the visits we focused particularly on how landlords assured themselves about meeting their tenant and resident safety duties and how they ensured the accuracy of data submitted to us in their Annual Return on the Charter (ARC).
We also set out the findings from work carried out by our Tenant Advisors to review a sample of landlords’ Statements. We asked our Tenant Advisors to tell us how easy the Statements were to find on the landlord’s website and how informative and helpful they found them. You can find out more about our Tenant Advisors here.
What is an Annual Assurance Statement?
The Statement is a way for governing bodies and committees to assure themselves and their tenants, people who are homeless or threatened with homelessness, Gypsy/Travellers, other service users and us that they comply with regulatory requirements, or to disclose areas where they need to improve. We set out the requirements for the Statements in our guidance on Annual Assurance Statements.
Landlords have a range of ways through which they assure themselves that they meet appropriate regulatory requirements, including their legal obligations on housing and homelessness services, equalities and human rights, and tenant and resident safety. The Statement is the outcome of that self-assurance process. We worked with landlord representative bodies to produce a Toolkit to support landlords’ self-assurance. This work was led by the Scottish Federation of Housing Associations (SFHA).
We consider each landlord’s Statement as part of our annual risk assessment. We then publish the outcomes of this in engagement plans at the end of March. For Registered Social Landlords (RSLs) the engagement plan will include a regulatory status.
What we did
- We visited 7 RSLs and 4 Local Authorities to find out more about the self-assurance work they did to enable them to submit their Statement.
- Our Tenant Advisors reviewed 15 Statements and gave us their feedback.
Further detail is set out in Appendix One.
The Statements
- Around 96% (158) of landlords submitted their Annual Assurance Statements by the deadline on 31 October.
- The remaining 4% (6) submitted within a few weeks of the deadline.
- Around 16% (26) of landlords disclosed what they judged to be material non-compliance with Regulatory Requirements.
- Around 37% (60) landlords disclosed what they judged to be non-material non-compliance with Regulatory Requirements.
Landlords continue to engage positively with the Annual Assurance process, and many have told us that it is valuable in providing them with necessary assurance.
We reviewed all Statements as part of our annual risk assessment of all social landlords and reflected the outcome in engagement plans published at the end of March 2023.
The Visits
A number of landlords we visited said they have built on the foundations they put in place following the introduction of the Annual Assurance Statements in 2019, with the process now embedded in their regular annual cycle.
Some landlords acknowledged that whilst the process can be resource intensive, it provides governing bodies with welcome assurance on their compliance with Regulatory Requirements.
A small number of landlords did not submit both a signed and unsigned version of the Annual Assurance Statement by the end of October, but quickly did so when we asked them to.
A number of the landlords we visited said that they utilise the SFHA Toolkit and find this a helpful framework for their self-assurance process.
Tenant and resident safety was considered a key priority by all of the landlords we visited. The landlords described the processes they had in place to assure themselves about their compliance with their tenant and resident safety duties, and many of them told us of the work they have undertaken to review their processes to ensure their tenants’ homes are not affected by mould and damp. Most of the landlords had updated their policies and procedures to ensure they had proactive systems to identify and deal with any reported case of mould and damp timely and effectively.
All of the landlords we visited discussed the processes and procedures they have in place to assure themselves around the accuracy of the data they submit in the ARC; which included one or more of the following;
- Internal verification process
- Internal and External Audit
- Additional independent verification.
What landlords told us worked well for them
Atrium Homes operates a short life working group of governing body members to undertake a comprehensive review of compliance over the reporting period, with the group comprising a range of skills, knowledge and experience. The landlord found the self-assurance process initially time consuming at the introduction of the Statement in 2019, but over time it has streamlined its process. The landlord told us the work carried out by the short life working group, which is presented to its governing body members, is invaluable together with use of the SFHA toolkit, in providing additional assurance to the board.
East Kilbride set up a live, electronic document to hold evidence of compliance with each of the individual Regulatory Standards and Regulatory Requirements. It updates the information contained within the electronic document regularly throughout the year, with its Board being directly involved in reviewing the evidence and seeking additional assurance where required. It sets up separate working groups each year to review different Regulatory Standards, with any concerns regarding potential non compliance then reported to and considered by its full Board.
Elderpark used a collaborative peer-review approach to review governance, working in partnership with four other RSLs to commission a Collaborative Governance Project in 2021. The project included reviews of governance policies, self-assurance approaches and compliance with Regulatory Standards and Regulatory Requirements. This approach ensured that the partner RSLs identified and shared areas of good practice, whilst also acting as a benchmarking exercise on governance arrangements.
Fife Council involves its tenants in its self-assurance process via its Tenants Forum which is made up of tenants from three Tenant Federations. Fife also meets bi-monthly with the Tenants Forum to get feedback from tenants about its performance.
Key ensures that accessibility is built-in to its AAS process. It fills two Board places with service users from a charity run by and for disabled adults. Key’s Participation and Inclusion Manager works to ensure that discussions and materials help these board members to participate fully. This includes working to ensure Board reports have accessible language and presentation before meetings, that members feel comfortable in raising questions and supporting them at meetings to fully engage and contribute in the self-assurance process.
Midlothian Council established a new Estate Safety and Maintenance Group in accordance with the council’s health and safety policy to provide additional assurance. The group’s remit includes monitoring how the council discharges its health and safety duties, investigating and reporting on health and safety concerns, monitoring and ensuring that appropriate training takes place and promoting awareness of health and safety across the council. The group was responsible for setting up a dedicated team to manage reports of damp and mould from report to resolution.
Paisley uses a range of expert, independent advisers and actively reviews its performance to ensure that the advice provided to the Board to support its self-assurance is robust and reflects good practice. Through its membership of FLAIR (the Federation of Local Housing Associations in Renfrewshire), Paisley also shares information and good practice with other local RSLs, both at executive and non-executive level. This includes information on producing the Statement, consideration around materiality, service delivery, and tenant and resident safety and affordability, which provides a further layer of external assurance.
Riverside Scotland are utilising our advisory guidance ‘Conducting Reviews of Compliance with the Regulatory Standards of Governance and Financial Management – Lessons Learned’ to support its compliance review as part of its self-assurance process. In particular, Riverside Scotland are using the guidance to increase the Board’s ownership of the overall process.
Rural Stirling developed a standard table for the end of all its Board Reports which details whether there are any implications or considerations relating to Regulatory Standards and/or Regulatory Requirements, including the self-assurance process. This supports year-round consideration of compliance within the general cycle of Board Meetings. It also helps Rural Stirling to effectively update and record its evidence base on an ongoing basis.
Rural Stirling also told us about its plans for the 2023 Statement which include introducing a separate evidence table for tenant and resident safety to supplement its existing evidence framework and use of risk management software to evidence compliance with Regulatory Standards and Regulatory Requirements. Currently, it distributes tenant and resident safety considerations over several evidence tables related to the Scottish Social Housing Charter, legal obligations and regulatory requirements. In having a sole focal point for monitoring, Rural Stirling aims to ensure it has assurance on compliance across all its tenant and resident safety duties.
Tenant Advisor Exercise
The exercise completed by the Tenant Advisors included a review of Statements of 15 landlords and found;
- Fewer than half (7) of the 15 Statements reviewed were easy to locate and/or access on the landlord’s website;
- the majority (11) of the 15 Statements reviewed were easy to understand;
- the majority (10) of the 15 Statements reviewed made clear what the landlord’s current level of compliance is;
- the majority (10) of the 15 Statements reviewed made it clear that the landlord has, or is, in the process of implementing an effective approach to the collection of equalities information and are considering how it can adopt a human rights approach to their work.
Recommendations
- A number of the landlords we visited told us they are considering methods to better incorporate tenant and service user feedback into their self assurance It is important for landlords to consider feedback from tenants and other service users as part of their assurance framework.
- The level of governing body involvement in the self-assurance process varied in those landlords we visited, with some landlords considering how they can better implement a governing body or committee lead approach. Landlords can get advice on governing body involvement in the self-assurance process in the SFHA Toolkit and in our advisory guidance ‘Conducting Reviews of Compliance with the Regulatory Standards of Governance and Financial Management’.
- Landlords should consider their committee/governing body meeting dates and ensure the Statement can be approved and submitted on time.
- It is important for landlords to consider where the statement is placed on their website and ensure it is easy for tenants and other stakeholders to find and that the content of the Statement is clear.
Appendix 1: How we did the visits
The landlords we visited
To help ensure a good mix, the landlords we visited are located across Scotland, and are of different sizes, structures and level of complexity. We also selected the landlords to reflect the different types of Statement that were submitted.
Who we visited
- Atrium Homes
- Dumfries and Galloway Council
- East Kilbride HA
- East Renfrewshire Council
- Elderpark HA
- Fife Council
- Key HA
- Midlothian Council
- Paisley HA
- Riverside Scotland
- Rural Stirling HA
What we discussed with landlords
In advance of the visits, we requested that landlords provide us with the following information.
Tenant and Resident Safety
- The evidence and information the Management Committee/Governing Body or Local Authority Committee saw to assure itself about compliance with requirements on tenant and resident safety, this could include:
- Management Committee/Governing Body/Committee reports and minutes
- Evidence from independent sources such as internal audit, consultant work and/or your corporate risk register.
Data Verification
- Information relating to how you assure yourself around the accuracy of ARC data, this could include:
- Information regarding how data submitted in the ARC is verified, such as internal and external audit.
- Information regarding when/if the ARC has been independently verified.
We ensured a consistent approach to our visits by basing the discussions with landlords on the question template below.
General Process for completing Statement
Questions for Senior Officer/Staff
- Talk us through the association’s AAS Process
- What resources are required for the process?
- Have the resource demands increased/decreased as you become more familiar with the overall process?
- Did you use any consultants? If so, to what extent? i.e. for the AAS as a whole or particular areas?
- Do you involve tenants? How/and is this for specific parts of the AAS? Do you have any feedback from tenants about their involvement in the process?
- Did you do anything especially innovative?
- Did you have any issues with getting your AAS in by the deadline?
- Do you use the SFHA toolkit to inform the process? If not, what alternative process is used?
Questions For Chair/Committee Members
- To what extent are committee involved in the process?
- Do you have any feedback from committee about their views about their level of involvement in the process? What was your involvement in the process?
- Did you feel the process was led by the committee? If not why?
- Did the committee ask any questions when presented with the AAS to sign and, if so, what questions/queries were there?
Tenant and Resident Safety
- How do you gain assurance that the organisation’s overall safety compliance regime meets legislative and regulatory compliance? E.g. internal advice, independent advice, internal/external audit.
- How do you gain assurance that your organisation’s working practices ensure the robust implementation of your safety compliance strategies, policies and procedures? E.g. internal advice, independent advice, internal/external audit.
- How regularly are policies and procedures reviewed to ensure they comply with legislative and regulatory requirements?
- How do you test the validity of your information relating to tenant and resident safety?
- What assurance did the association obtain in relation to compliance with gas safety, electrical safety, legionella, asbestos, fire safety, damp & mould?
- What assurance did the association obtain in relation to compliance with the completion of the new requirements of smoke and heat detectors and Electric Installation Condition Report (EICR) checks?
- Did either of these identify any elements of non-compliance? If so, how was this addressed?
Data Verification
- How does the association assure itself that its systems and processes ensure the reliability of the ARC data it collects and submits?
- When did the association last independently verify its ARC information, if never, is this something you have considered/planned?
Appendix 2 : Tenant Advisor Exercise
We asked our Tenant Advisors to complete questionnaires relating to how readily available landlords’ Statements are on their website and whether the content of the Statement is informative and helpful. In total, our Tenant Advisors reviewed the statements of 15 landlords.
The questions we asked our Tenant Advisors are noted below:
- Is the landlord’s Annual Assurance Statement easy to locate and access on their website?
- Is the Annual Assurance Statement easy to understand?
- Is it clear what the landlord’s current level of compliance is?
- If the landlord identified there were areas of non compliance, was it clear what these were?
- If the landlord identified there were areas of non compliance, was it clear how and when it would make the necessary improvement to ensure compliance?
- Is it clear that the landlord has, or is in the process of implementing an effective approach to the collection of equalities information and are considering how it can adopt a human rights approach to their work?
- Is it clear what evidence the landlord has seen to assure itself about its stated level of compliance?
- Any general comments on the contents of the Annual Assurance Statement?