SHR Board Meeting Minutes - 28 March 2023

Present

Welcome, Apologies and Declarations

GW welcomed all present including guest speaker JM from UK Finance.

The Board noted apologies from Board member Siobhan White (SW).  It also noted that it was the last meeting for Board member BG who retires at the end of March 2023.  The Board welcomed the reappointment by Scottish Ministers of EF, HTT and CS for a second term with SHR Board. 

There were no declarations of interest.

UK Finance

JM presented to the Board on UK Finance’s current advocacy priorities and workstreams.  He also set out some feedback from UK Finance on SHR’s role and highlighted current and emerging issues in the social housing sector.  JM explained some of the housing policy and strategy that impacts UK Finance’s work and provided some early thoughts on SHR’s forthcoming review of its Regulatory Framework.  

The Board and JM discussed:

• legislation controlling rents in Scotland;
• SHR’s Regulatory Framework review, the self assurance approach, thematic work and the regulatory status placed on RSLs;
• ESG, noting this is already embedded in financial investment decisions and a previous presentation to the Board on work that some RSLS are doing in this area;
• how UK Finance is structured, noting the committee for social housing chaired by JM;
• investors and funders newer to the social housing sector;
• recent messages from the Bank of England on the banking sector and forthcoming new consumer duties for lenders;
• the importance of ensuring that governing bodies understand and manage the risks attached to any lending;
• stock quality issues and how improvements/demolition and redevelopment as well as net zero retrofit work will be funded, noting that successful technology or building solutions to invest in, are not yet readily available;
• the place of innovative funding, noting funding gaps and how stock quality and value can dictate future investment or redevelopment decisions;
• UK Finance advocacy planning in the run-up to elections;
• private sector regulation, noting debate around layering more regulation and the importance on clarity of output and proportionality; and
• Housing to 2040 and the new Strategic Board.

The Board thanked JM for his time.  It noted the presentation and welcomed the follow up discussion. 

Consent Agenda

The Board also noted and approved the consent agenda items including:

• Chair & Member activity report;
• minutes from 28 February 2023;
• the matters arising report; and
• a draft minute from the ARAC meeting on 14 March 2023.

Chief Executive Report

MC presented on issues and developments that impact regulated bodies, the wider housing environment and SHR.  MC highlighted the emerging agenda on public service reform and the Board noted the lack of detail to date and that the Scottish Parliament Finance Committee is doing some work on this just now.

The Board considered the full CEO report and discussed:

• reaction to SHR’s recent publication on rent increases;
• an appetite for members to visit some social landlords, especially those who joined SHR Board since the pandemic, noting future opportunities through SHR’s landlord forums and the forthcoming Regulatory Framework review;
• Housing to 2040 Strategic Board meeting, noting the first meeting has taken place, which was focussed on introductions, terms of reference and key challenges. It also noted that CS is attending the Strategic Board in his Regional Network role;
• the Regulatory Framework review, noting the project management provisions now in place and the timetable for delivery; and
• regulatory status of RSLs, agreeing based on feedback from stakeholders it would be important to explore what more can be done through the review to provide further clarity.

The Board noted the Chief Executive’s report.

Draft Strategy 2023 – 2024

MC presented proposals for SHR’s Strategy 2023/24.  He explained that SHR’s current strategy covered 2022/23 and that given it was reviewing the Regulatory Framework a further one-year strategy is proposed with a longer-term plan to follow from April 2024.  He also highlighted messages around achievable priorities at a sustainable pace for social housing. The Board considered the draft Strategy and discussed:

• pressure on tenants, agreeing it is important to place this at the fore;
• ongoing National Panel work, noting this includes direct work with people who are experiencing homelessness;
• homelessness prevention duties, noting ongoing discussions with Scottish Government and expected future clarity and that for now the critical priority is temporary accommodation and movement through that;
• if there should be more focus on resilience reflected in the welcome message;
• measuring and demonstrating effectiveness and progress against the Strategy, noting the performance reporting structure in place including SHR’s annual report and accounts that are scrutinised by the Scottish Parliament. It discussed the challenge of reporting on the aspects of SHR’s work that is about the prevention of failure.  The Board agreed to discuss this in further detail when preparing the longer-term strategic plan for implementation from April 2024;
• consistency in references to the Regional Network SHR Liaison Group; and
• future strategic plans, agreeing to reference that a longer-term plan will follow this one-year strategy.

The Board approved the 2023/24 Strategy subject to final amendments to take account of its discussions.  It agreed to delegate to final approval to the Chief Executive.

Action: MC to take account of feedback from the Board when finalising the Strategy and publish this in April 2023.  

Draft Operating Plan 2023 - 2024

MC presented SHR’s draft Operating Plan for 2023/24, explaining this is how SHR will take forward the Strategy and that it sets out work plans in more detail.  He set out how this covers routine work, specific tasks and the review of the Regulatory Framework.   The Board considered the draft operating plan and discussed:

• the importance of clarifying acronyms for all;
• how the thematic programme will be developed and proposed to the Board;
• public service reform, noting that this is included in the operating plan, but that there is limited information available from Scottish Government at this time;
• performance management in place to monitor progress and routine/responsive work noting how this is handled by Management Team and reported to the Board as well as via public body reporting submissions such as climate change returns; and
• workforce planning, noting work to date and that the Board will receive a full update in May 2023.

The Board thanked MC, it asked him to take account of the discussion as the plan evolves during the year and approved it for implementation.

Action: MC to implement SHR’s operating plan for 2023/24.

Draft Budget 2023 – 2024

SK presented SHR’s budget proposals for 2023/24.  He explained SHR’s settlement, highlighting some challenges and assumptions that have been made in forming the proposals.   SK set out proposals for SHR’s revenue budget of £5.318m and capital funding of £0.4m.  The Board considered the draft budget and discussed:

• likely spend areas for the research and consultancy budget heading, noting it was aligned to previous years and projects will be brought forward during the year, which could include further work relating to resilience;
• the pay settlement, noting the assumptions made and clarity sought on the impact of recent retrospective uplifts;
• spend plans related to the Regional Networks SHR Liaison Group, Tenant Advisors and other forums such as the auditor forum that SHR engages with;
• how training and development is distributed to allow for mandatory and whole organisation training, as well as people-specific costs, as well as how this will be incorporated into workforce planning to understand requirements;
• spend in relation to the review of the Regulatory Framework, noting this is mainly focussed on the consultation analysis and stakeholder engagement;
• ongoing recruitment, noting progress to date and that some staff acting up may return to substantive posts;
• office fit out, noting the basis of cost assumptions and potential challenges;
• scope for future all staff events, encouraging Management Team to take these forward; and
• contingency, agreeing this is the best way to accommodate any current budget flexibility.

The Board approved the budget for 2023/24 subject to SK taking account of feedback around contingency.

Action: SK to amend the budget to reflect the Board feedback on presentation around contingency.   

Annual report 2022/23 – draft narrative

RH presented the draft annual narrative for 2022/23 and highlighted the next steps ahead of audit in May 2023.  The Board considered the draft and agreed to provide detailed comments offline to RH.   It also discussed the profile of tenants in the welcome message and narrative.  

The Board thanked RH for her work on the report to date.  It noted next steps and opportunities for further input to allow the report to be finalised for audit.

Action: RH to take account of the Board discussion and circulate a further draft to allow members to provide final feedback ahead of audit. 

Updates to Fraud, anti-bribery and whistleblowing policies

IM presented updates to SHR’s Whistleblowing, Anti-bribery and Anti-fraud policies and  Anti-fraud response plan.  He highlighted that ARAC has already considered the proposed changes and is supportive.  IM explained how SHR liaised with Scottish Government, including the Internal Audit team, when carrying out the review.  He confirmed that there have been no incidents to date.  IM also reported on plans to roll out training for all SHR staff. 

The Board welcomed the updates and approved the policies and plan subject to correction of minor typo.  

AOB

The Board noted that guest speakers are lined up for all future meetings and workshops for the rest of 2023.  The Chair asked Board members to forward future speaker and agenda item suggestions for 2024 to RH. 

Effectiveness of meetings and papers

The Board welcomed the clear papers and some Members reflected on how this influenced the level of questions on the papers. It noted that there had been some noise disturbance adjacent to the meeting room and that this could feature as SHR continues to use external spaces for Board meetings.

DONMs & Agenda Planner

The next Board meeting will be on 30 May 2023.  

Briefings

Between 28 March 2023 and 30 May 2023, the Board was briefed or received updates on:

• Advisory guidance on effective recording of decisions and discussions by governing bodies
• SHR’s future office arrangements
• Work of the Scottish Parliament’s Local Government, Housing & Planning Committee
• SHR’s Strategy and work plans publication for 2023/24
• SHR’s publication on rent increases