SHR Board Meeting Minutes - 6 December 2022

Present

Welcome, Apologies and Declarations

GW welcomed all present.  The Board thanked Creative Scotland for allowing them use its office for the meeting. 

The Board noted apologies from SHR Board member Siobhan White (SW) and that HTT will join virtually via Teams. 

The Board also noted plans for the Cabinet Secretary to join the meeting later, also via Teams. 

There were no declarations of interest.

Matters Arising & Consent Agenda

The Board noted that the matters arising report was omitted from the Board pack and circulated later on 5 December 2022.   It thanked GW for providing hard copies and agreed to consider it at the meeting.  It also noted proposals for future matters arising reports to be taken out with the consent agenda. It noted that IM will cover IT related demonstrations under a separate agenda item.  The Board approved the matters arising report. 

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

• Chair & Member activity report; and
• minutes from 4 October 2022.

Chief Executive Report

MC presented on issues and developments that impact regulated bodies, the wider housing environment and SHR.  MC highlighted and updated the Board on the emergency housing legislation and work that Scottish Government is doing with stakeholders including the related Task & Finish Group, which SHR is participating in.  The Board considered the update and discussed the complexities in forming future positions.  MC confirmed that SHR would treat any related statutory requirement like any other statutory obligation on social landlords. 

MC also reported that there was no further update on the Scottish Government’s spending plans at this point.  He confirmed that the budget is expected to be presented to Parliament by 15 December 2022. 

Finally, MC highlighted that SHR has issued a letter to all social landlords on mould and damp and explained that he will keep the Board updated on this important issue.  

IM updated the Board on SHR’s office accommodation.  He reported that SHR has now left Buchanan House and explained the arrangements in place ahead of interim and final office moves in 2023. 

The Board considered the range of Scottish Government short life working and standing groups that SHR participates in and discussed:

• how these are coordinated by Scottish Government;
• the resource input for SHR and the opportunity to gain understanding and influence;
• if the Board could help share the resource load, noting that there could be a role for GW around Housing to 2040 Strategic Board, which has not met yet, noting that the rest are more operational and Members would require SHR to resource briefings; and
• the UNCRC Strategic Implementation Board, noting this is focussed on United Nations rights of a child and that SHR was invited by the First Minister to participate in monthly meetings as a Corporate Parent.

CS reported that he also participates in some of the groups through his work with the Regional Networks. 

The Board considered the SFHA’s member survey on the Regulatory Framework in practice. It noted that the SHFA has shared the survey with its members and discussed:

• the partially available results, noting that SHR will consider the results further when a full breakdown of the questions and responses has been provided;
• participation levels;
• anecdotal feedback about the survey from some RSLs;
• SHR’s recent communications research;
• if any of the results bring potential risks for SHR; and
• findings around the value placed on SHR’s thematic and guidance work. It agreed this is subject to resource restraint and that it is important to emphasise that to the Scottish Government. 

The Board noted the Chief Executive’s report.

Board survey

RH presented proposals for the annual survey of SHR’s staff on the Board.   The Board welcomed the survey proposals.  It discussed:

• work that it has done to engage with staff during the year, agreeing this is especially important to continue while SHR does not have a permanent office base;
• post-board meeting staff briefing sessions, agreeing all members are willing to participate; and
• the importance of hearing broader suggestions from staff through the open narrative returns in the survey.

The Board approved the survey proposals and noted the associated timescales and reporting plans.

Action: RH to issue a survey to all staff from the Board and report back on the findings in early 2023.

Q2 Corporate Performance Report

MC presented the corporate performance report for quarter two of 2022/23. He highlighted:

• the additional of trend data around intensive casework; and
• a drop in long-term absence levels, confirming an increase in short term and work to support staff wellbeing.

The Board considered the report and discussed:

• continued pressure on staff; and
• the importance of the Board and staff in-person events, noting positive feedback from the first one and agreeing to prioritise further events in 2023.

The Board focussed on the level of intensive casework, noting this was rising and the implications in light of current and possible future resource constraints.   It discussed:

• the level of transfer work, noting the engagement with both the transferring and recipient organisation to protect the interests of tenants;
• the challenges and pressures facing governing bodies due to the current operating environment and the skills required to work through these and how SHR uses its risk assessment to seek assurance that key areas particularly safety and stock quality are being managed;
• the level of turnover of senior officers in RSLS and how engagement with SHR can evolve when a new senior officer takes over;
• SHR’s regulatory risk tolerance levels and how this dictates future engagement levels and could be adjusted for the current risk assessment ahead of considering changes to the Regulatory Framework. It agreed that the budget outcome will dictate this the need for this. It considered potential resource scenarios depending on the budget outcome;
• the impact of any new casework on work plans, as well as requirements to resource statutory requests under Freedom of Information and Data Protection legislation, which cannot be planned for;
• expected turnover of staff due to retirement, noting ongoing work around knowledge sharing;
• diversion of resources to work on topical issues for example mould and damp as well as input into Scottish Government working groups;
• importance of considering the risks of focusing or not on certain areas and the potential consequences; and
• SHR’s risk register – considering if scores association with risk R7 around resources should increase, noting that they had already recently, budget clarity is expected shortly and that there is scope to manage and flex the current Regulatory Framework.

The Board also discussed:

• the outcome of engagement on homelessness in Edinburgh and Glasgow, noting the focus on mitigating actions, the situation in Edinburgh and emerging key messages for SHR’s forthcoming thematic review of homelessness;
• arrangements for Ukrainians accommodated on ships, noting SHR has no regulatory locus, but that there are consequential impacts on the availability of accommodation in Scotland; and
• Significant Performance Failures, noting this is a statutory provision and that SHR does not receive many, but more submissions may be expected around damp and mould.

The Board noted the quarter two corporate performance report.  It welcomed the opportunity for a discussion around how SHR uses its resources, noting the timescale for the Scottish budget announcement.  It agreed that the level of intensive casework and the associated resources meant it was right to continue to review approaches and risk tolerances.  The Board welcomed the emerging messages from the forthcoming homelessness thematic.  It agreed to continue discussions in January.

HS updated the Board on engagement with Reidvale Housing Association.  She reported on work it is doing to consult tenants to inform a transfer prospectus and feedback from stakeholders including GWSF. The Board noted the update and the interim management arrangements in place at Reidvale.

Action: Continue discussions on SHR’s approach to regulation and how this is resourced in January 2023 following confirmation of the budget settlement.

Cyber Resilience

IM presented an update on work SHR is undertaking to minimise the risk of a cyber-attack and plans for responding and recovering from an incident should it occur.   He highlighted the potential impact on SHR, its partners and suppliers.  IM explained that it is more than a technical issue and staff awareness is key especially around phishing with ongoing awareness-raising and training.   He also highlighted the Scottish Public Sector Cyber Resilience Framework and forthcoming work on cyber by SHR’s Internal Auditors.

The Board welcomed the update and discussed:

• staff training and compliance levels, noting that SHR’s had made e-learning mandatory; and
• the Scottish public Sector Cyber Resilience Framework, noting the extensive requirements and how it relates to Cyber Essentials plus accreditation.

The Board meeting paused to allow for the meeting with the Cabinet Secretary.

Cabinet Secretary for Social Justice, Housing & Local Government

The Chair welcomed the Cabinet Secretary to the meeting.  GW highlighted his recent letter to the Cabinet Secretary about SHR’s resources.  GW and MC set out some areas of priority for SHR including:

• future approaches to regulation;
• systemic issues around homelessness, supply of temporary accommodation and SHR’s forthcoming thematic review;
• quality and safety of homes and Gypsy Traveller sites, including recent correspondence with landlords on mould and damp;
• landlord recovery from the pandemic and handling of backlogs;
• affordability and the impact of emergency legislation on landlords; and
• the importance of listening to and understanding tenants.

The Cabinet Secretary thanked GW and MC for sharing SHR’s priorities and also thanked GW for his letter about SHR’s resource position. She explained the very challenging budget situation, but also reported that Scottish Government recognise the value SHR brings and the importance of ensuring it is resourced to carry out its functions and protect the interests of tenants. 

The Cabinet Secretary set out some of Scottish Government’s priorities including:

• building as many new homes as possible, acknowledging the challenge of inflation levels;
• a continued focus on temporary accommodation, welcoming SHR’s forthcoming thematic and setting out some of the work with Edinburgh and Glasgow Councils to address supply and quality as well acknowledging the additional pressures relating to welcoming Ukrainians; and
• support for prevention-based solutions.

The Cabinet Secretary and the Board discussed the challenges faced by Glasgow and Edinburgh City Councils.  They noted the potential impact on demand that changes in local connections may have on the homelessness systems and the importance of mapping any unintended consequences.  The Board noted that the Cabinet Secretary is keen for locally sourced solutions and is open to ideas.  She welcomed the forthcoming thematic review from SHR and noted that SHR is meeting with Edinburgh each month while it works through an action plan.  HS confirmed her team will discuss how it is exploring all solutions with the Scottish Government. 

MC reported that landlords are not planning to build new homes to the levels previously discussed due to capital supply.   He highlighted some sector discussions around reprofiling capital to spend on fabric first and other ideas being discussed.  The Cabinet Secretary acknowledged the issues around landing projects within budget.  She explained Scottish Government is keen to encourage new build and maintain momentum.  She also highlighted that it is open to solutions including off-market purchases, sales from private to social landlords and modular off-site building to allow for all year-round building.  

GW set out SHR’s financial situation for the Cabinet Secretary.  He explained the budget modelling SHR had been asked to do by Scottish Government and the impact this could have on ability to delivery and meet statutory duties.  He explained the relationship between risk tolerance, SHR’s approach to regulation and the potential consequences.

Finally, the Board and Cabinet Secretary discussed private sector regulation.  The Cabinet Secretary noted SHR’s willingness to discuss and share regulatory and public body knowledge.  The Board noted this is at an early planning stage and discussions will continue in 2023.  

The Cabinet Secretary thanked the Board for meeting and expressed her hope to meet again in person in 2023.    

Wrap Up Discussion

The Board discussed the meeting with the Cabinet Secretary.  It welcomed that she had addressed key areas including SHR’s resources and homelessness. It noted the particular issues in Edinburgh around land supply and discussed a mixture of potential approaches used elsewhere that could be explored by the local authorities and Scottish Government.

Cyber Resilience continued

IM continued to update the Board on cyber resilience.  He reported that SHR had gained Cyber Essentials Plus accreditation for the last three years and the forthcoming test will include a review of domestic Wi-Fi.  IM confirmed there are a range of accreditation schemes.  He also explained that while Cyber Essentials has a technical focus, the Public Sector Framework encompasses around 400 controls with a much wider scope and is expected to be relaunched with a revised a self-assessment for all public bodies during 2023. 

The Board discussed:

• Cyber Essentials Plus accreditation, noting that SHR’s IT suppliers have it; and
• access to training for SHR Board members, noting risk to SHR is mitigated as members do not have access to SHR’s systems.

The Board thanked IM noted the update.  It welcomed that he will provide general training resource links for the Board.   

Actions: IM to provide the Board with links to training information around phishing and cyber security.

Report on Statutory Intervention at Fairfield Housing Association

HS and CH presented a draft report on statutory intervention at Fairfield Housing Association.  HS explained that this is the last outstanding report on statutory intervention cases and the purpose is to share information on why SHR intervened and act as a learning resource for governing bodies.  She explained the engagement started via the risk assessment process around capacity to deliver an ambitious development programme.  HS explained that the RSL had no business plan in place to support the growth and as engagement continued allegations came forward. 

CH reported that Fairfield transferred to Kingdom Housing Association in December 2021 and deregistered the following March.  He set out plans for SHR to publish the report in January 2023.   CH walked the Board through the format of the report, setting out how others have been involved in drafting and summarised the overall resource input for the intervention.   He highlighted the governance and leadership weaknesses as well as mismanagement and conduct issues and reported on safety and data accuracy, explaining that governance and leadership failures can lead to failures across over areas. 

CH set out the support Fairfield received from Kingdom Housing Association and reported that he had met with the association last week, confirming that the transfer commitments to tenants are on schedule. 

The Board considered the draft report and discussed the:

• cost of the intervention, welcoming that this set out in the report;
• impact of inflation and emergency legislation on the transfer commitments;
• impact of the non-disclosure agreement on reporting;
• importance of governing bodies understanding their role as an employer;
• statutory managers, noting that SHR often involves more than one manager as a case evolves; and
• resourcing engagement around the transfer agreement, noting the peak point for support is in the run up to transfer.

The Board thanked the HS and CH for the presentation and all those involved in the intervention.  It welcomed the report and noted the timescales for publication in early 2023. 

AOB

There were no items of other business.

Effectiveness of meetings and papers

The Board welcomed the opportunity to meet with the Cabinet Secretary. It also welcomed having space for a longer discussion under the Corporate Performance report.   

The Board agreed it was very grateful to Creative Scotland for providing the venue supported the meeting.  

DONMs

The Board noted the forthcoming dates for 2023 and that some of these will be held remotely.  GW reported on work to secure external guests for some meetings.  It also agreed that it would seek to overall a meeting with a future all staff event to help with diary planning.  

The Board will hold a workshop on 31 January 2023 with the Management Team and the next Board meeting will be on 28 February 2023. 

Private session

The Board held a private meeting with the Chief Executive and Director of Regulation.