Sector Risk Profile Review - Scary Stuff

Sector Risk Profile Review – Scary Stuff!

by Harriet Rushton

This is one of my favourite times of year; not just because I am firmly a snuggly jumper and fan of blustery and snowy days over hot sun, but because this is the time of year that we start preparing for what is to come in the next year and we get the release of Regulator of Social Housing’s (RSH) Sector Risk Profile.

As I sat reading the latest release, I was struck by how sombre it was. This reflects the wider political and economic uncertainty but it is also an indicator of the level of concern the Regulator must currently have in regulating a sector increasingly impacted by events it cannot control but which is expected to deliver on some of the larger political promises and requirements on housebuilding, energy efficiency, building safety and transparency.

The concern will be on how we deliver for our residents, and our staff, whilst upholding the obligations at the heart of the Standards without compromise as we look seriously at what can still be funded in our budgets. The Standards are now almost a decade old and written for a world which no longer operates in the same way which gives many providers headaches.  Of course, like winter, the new RSH Standards are coming, and this will change how the sector operates completely. 

The risk profile this year reads as a plea to take on board the changes and requirements coming now, before the Standards are put in place.  We are being (quite rightly) moved into a place where good governance, compliance and accountability are no longer words just for the annual report.  The serious pieces of legislation designed to prevent another Grenfell type tragedy are live, the promises in the Social Housing White Paper are being written into legislation and debated in the Houses of Parliament, the Professional Standards are being discussed seriously throughout the sector and the Tenant Satisfaction Measures (TSMs) are beginning to be collected.

The risk profile is always released to coincide with the annual budget setting process, and far enough in advance of the financial year end so that social housing providers can review their risks and priorities and ensure that the awareness raising discussions are held at Board level and that the right levels of deliberation can be included within the process.  After all, there is little point in setting ambitious development targets which do not include consideration of revised Building Safety Regulations, supply chain difficulties or the potential that no one can afford a mortgage to utilise those market rent or shared ownership opportunities.

Aside from the legislative and regulatory impacts, the Sector Risk Profile reminds us again of the importance of data protection and data integrity, making the most overt statement to date about the impact of not taking this seriously at Board level.

All the risks discussed in the Profile are large and complex and as we go through them one by one to align them to our risk maps from an assurance perspective we should not forget that the point of these profiles is to engender discussion and challenge from Board to Executive Teams and vice versa; this is a key point in the year to ask: “have we got this right”; “do we understand our risk exposure”; “is our appetite right for this environment” and: “can we do more?”. For the risk and governance professionals amongst us this is one of the biggest points to exert positive influence on the discussion and on the risk culture within the business; seize it, embrace your inner three-year-old and ask “why?”