SHR Board Meeting Minutes - 29 March 2022

Present

Apologies and declarations of interest

GW welcomed all present.  SHR Board member Bob Gill (BG) submitted apologies. 

There were no declarations of interest. 

Consent Agenda

The Board noted and approved the consent agenda items including:

• minutes from 22 February 2022 Board meeting;
• a matters arising report; and
• an ARAC update.

MC confirmed that work is ongoing with legal advisors on SHR-related housing legalisation and there is no firm timescale in from Scottish Government on the forthcoming Housing Bill. 

Chair's report

GW updated the Board on work to identity a candidate to recommend to Scottish Ministers for appointment as SHR’s Deputy Chair.  He explained the context as well as the process to develop a new profile in consultation with members and seek interest from the Board.  GW welcomed that two SHR Board members had expressed an interest and following discussion he proposed that AW is recommended to Scottish Ministers for appointment as Deputy Chair.  The Board considered and approved the proposal. 

The Board noted that SW and GW are discussing future ARAC membership with an eye to succession planning and that ARAC is likely to consider this formally in September 2022.  It welcomed that LP and MD will have an opportunity to observe a forthcoming ARAC meeting. 

Action: GW to work with RH to recommend AW to Scottish Ministers for appointment at SHR’s Deputy Chair. 

Chief Executive Report

MC presented on issues and developments that impact regulated bodies, the wider housing environment and SHR.  

MC explained that Scottish Government has contacted SHR as a statutory consultee seeking final comments on the revised Social Housing Charter.  The Board considered the Charter and discussed:

• the standard on value for money, agreeing that it is pitched as an outcome rather than a measurable standard; and
• the importance of retaining in the Charter aspects of what tenants can expect around the quality of housing, especially around minimum standards, level of cleanliness etc and ensuring the wording is tight around this. 

The Board asked MC to respond to Scottish Government with its feedback. It noted that work is still ongoing around EESSH and there is also some Scottish Government work on a common understanding of affordability.  The Board noted that the Charter would be reviewed again in five years and that this final phase of the current review is expected to be concluded quickly.   

MC explained the proposal to procure a new support contract for the National Panel of Tenants and Service Users in 2022/23.  He also explained that as this would involve a three-year contract, which requires Board approval because of the cost over the contact period.  The Board considered the proposal, discussed the format of the work with the panel and noted  a wish to continue to include a mix of survey, face to face and in-depth targeted work.   The Board agreed it was a valuable engagement tool and welcomed opportunities for CS and HTT to become more involved in work planning for the Panel and SHR’s new Tenant Advisors.  The Board approved the procurement of a new contract to support the Panel during 2022/23 and to incur spend in the following two years. 

MC set out proposals for participation in the CIH Housing Festival on 19 and 20 May 2022. The Board agreed expenditure allowing SHR to exhibit, host a leaders’ lunch and send Board and staff delegates.  It noted that delegates will join CIH and have access to a year of events.  The Board also agreed to gather in-person on the evening of the 19 May 2022. 

The Board considered and noted the remainder of the Chief Executive’s report.

Actions:

• MC to response to the Scottish Government consultation on the Social Housing Charter setting out feedback from the Board.
• IM to procure a three-year contract for supporting SHR’s National Panel of Tenants & Service Users
• MC to arrange for SHR’s participation in the CIH Housing Festival 2022
• RH to organise a Board gathering on 19 May 2022.

Update on SHR’s regulatory risk assessment

HS presented an update to on the ongoing regulatory risk assessment.  She explained the implementation of the methodology that the Board approved in October 2021 and some of the challenges in delivery.  HS set out the key messages expected at the end of March around governance, health and safety, asset management, service quality and set out the expected outcome in terms of regulatory status for RSLs. She also set out plans for engagement with Local Authorities.   The Board welcome the update and discussed:

• stock quality and the use of abeyances and exemptions, noting how this was covered in the risk assessment and the plans to engage with a number of landlords on stock quality and investment programmes;
• plans to look at performance around service quality, being mindful of the impact of the pandemic, welcoming further information on this and other post-pandemic themes in May;
• the relationship between the risk assessment outcome and SHR’s new Strategy, noting the priorities set out in the strategy inform the assessment and engagement focus; and
• the expected uplift in the overall number of landlords that SHR will be engaging with, noting the potential impact on SHR’s resources and that there is potential for engagement levels to increase further as landlords and tenants face significant challenges.

The Board noted the update and that it would spend further time considering the outcome in May 2022. 

Our Strategy

MC presented a new Strategy to replace SHR’s 2019-22 Corporate Plan, which sets out SHR’s high level priorities and objectives.  He set out the Strategy, highlighting that this will roll forward from the Corporate plan and cover only 2022/23, instead of the traditional three years.  MC explained that this reflects the position at SHR and for those that it regulates in terms of an uncertain operating environment and a desire to retain flexibility as events such as the war in Ukraine unfold. 

The Board considered the proposed Strategy and discussed:

• references to ESG and other tools that organisations may use to gain assurance and attract investment, agreeing it would be useful to reference these;
• how SHR’s engagement with lenders and investors is reflected in the Strategy, noting the provision in the Regulatory Framework for organisations that are judged to be not suitable recipients of private or public funds;
• empowering tenants, agreeing this should cover both scrutiny and development of services;
• human rights and the importance of up to date information on tenants;
• the context on how SHR will work, agreeing further context would be useful;
• how SHR will know if it has been effective, including how protecting the interests of tenants by prevention of failure through regulation can be set out; and
• some presentational reflections.

The Board thanked MC, it approved the Strategy and asked MC to circulate the final version with amendments to reflect the discussion tracked. 

Action: MC to incorporate the Board’s feedback into a final version of the Strategy and recirculate around the Board ahead of publication and promotion. 

Draft Budget 2022/23

CN presented the draft budget for 2022/23.  She highlighted that this was based on a Scottish Government revenue settlement of: £4.92m, £0.2m capital and a further non-cash sum of £0.2m for depreciation.  CN explained that staff costs are the largest element of the budget and the assumptions made around the pay settlement.  She also highlighted that the 2022/23 budget settlement was agreed by Scottish Government ahead of it applying an unexpected pay rise in February 2022 and explained the impact of this on SHR’s baseline costs and assumptions for 2022/23 budgeting, including the planning assumption of a 5% vacancy rate.

The Board considered the draft budget and discussed:

• changes in funding for research and consultancy between 2021/22 and 2022/23, noting the proposal to revert to more typical levels;
• thematic study work, noting these studies are primarily resourced in-house and delivered directly by SHR;
• the 5% vacancy rate, how it relates to previous experience - noting the recent actual rate was around 5% - and highlighting the potential impact for future years of relying on this level of vacancy;
• the fact that the proposals for the 2022/23 budget are based on the one-year settlement confirmed in February 2022 and that the expected turnover and vacancies during 2022/23 give some flexibility to respond differently in future years; and
• the likely pressures from the forthcoming three year spending review.

The Board approved the proposed revenue budget and the allocation of capital budget for 2022/23. It also noted some concerns for future budget planning around likely pressure on budgets beyond 2022/23 and vacancy assumptions.

Operating Plan

MC presented the draft operating plan for 2022/23, explaining how it flows from the Strategy, reflecting SHR’s priorities and resource position.  The Board considered the plan and discussed:

• presentation of tasks, how priorities are reflected, asking for further clarification;
• reference to the Strategy, agreeing more context would be useful; and
• the format of future quarterly monitoring reports to the Board, linking to the Strategy and risk management.

The Board approved the operating plan, subject to final tweaks to reflect its discussion and asked MC to recirculate it. The Board noted that an outward-facing summary will be published. 

Actions: MC to finalise the operating plan, recirculate it around the Board and publish a summary. 

Deregistration of Fairfield Housing Cooperative

HS introduced a proposal for voluntary de-registration of Fairfield Housing Cooperative.  She highlighted that this is the most recently completed statutory intervention case, which had commenced in 2018. 

HS explained the shared services relationship that had been in place with Kingdom Housing Association and that following a successful tenant ballot Fairfield had transferred to Kingdom in December 2021.  HS highlighted the benefits to tenants including investment and a rent freeze, as well as improved services.  She confirmed it met the criteria for deregistration. 

The Board considered the proposal, welcomed the information on benefits to tenants and suggested there could be value in a separate section on this in any future reports.  It also discussed monitoring of the transfer, noting that Kingdom is a considered to be a systemically important RSL.

The Board approved removal from the register of Fairfield and noted that SHR will write to advise Kingdom Housing Association.

Actions: HS to remove Fairfield Housing Cooperative from the Register and advise Kingdom Housing Association. 

First draft annual report

MC presented the first draft of the annual report narrative to the Board.  He explained this follows the prescribed format of the Financial Reporting Manuel and the structure previously approved by the Board.  MC highlighted the process for production and further Board input.   The Board considered the report and discussed:

• references to risks to SHR and SHR’s regulatory risk assessment and asked if these could more clearly differentiated;
• the summary description of SHR’s risk profile, agreeing this could be clearer;
• introduc some sub-headings and introductory lines; and
• the overview section, agreeing further links to publications would be helpful to raise awareness.

Action: RH to incorporate the Board’s feedback and circulate a second draft for further comment prior to completion for audit by 27 April 2022. 

Effectiveness of meetings and papers, AOB & agenda planner

External Audit

SW reported that Audit Scotland would be taking over the external audit work with SHR and the Board confirmed that this did not represent any conflicts. 

Temporary Accommodation Working Group

MC confirmed SHR is due to attend the working group during April and that he will update the Board following that meeting.

Tenant Satisfaction

MC confirmed that SHR is supportive of landlords seeking feedback from tenants at the point of receipt of a service and reporting on this, rather than relying solely on cyclical surveys. 

Tenant Advisors

HS confirmed that SHR had received a good breadth of applications from tenants to become Tenant Advisors and that the appointment process continues, with induction meetings involving CS and HTT planned.

Scottish Parliament’s Local Government, Housing & Planning Committee

The Board reflected on the recent meeting between the Committee and SHR Chair and Chief Executive.  It welcomed the opportunity to discuss SHR’s work in person and noted that stock quality had been a discussion theme.  The Chair reported that he would seek an informal meeting with the Convenor over the summer to keep her updated on SHR’s work.

Effectiveness of meetings and papers - The Board noted that it had spent longer considering the strategy than originally planned, but agreed this was worthwhile and allowed for a full discussion, which was particularly useful for newer members.

Observers - The observers thanked the Board for the opportunity and provided feedback on their observations. 

DONMs

The Board noted that it will next meet on 24 May 2022 and that the agenda planner would be further populated to reflect the new 2022/23 operating plan.  The Board agreed to aim to meet in person in May if possible. 

Private Session

The Board held a private session with the Chief Executive.

Post meeting notes

Between 29 March 2022 and 24 May 2022 the Board was briefed or received updates on:

• Analysis of the finances of RSLs
• CIH Housing Festival
• Updated factsheets on complaints and significant performance failures
• Outcome of the annual risk assessment