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HCA regulation restructure: 'Protecting our assets and maintaining the right conditions for new supply'

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HCA regulation restructure: 'Protecting our assets and maintaining the right conditions for new supply'

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Published by Jon Land for 24dash.com in Housing

HCA regulation restructure: 'Protecting our assets and maintaining the right conditions for new supply' HCA regulation restructure: 'Protecting our assets and maintaining the right conditions for new supply'

The Homes and Communities Agency (HCA) is seeking to make fundamental changes to the way it regulates providers, from a wide-ranging review of the Regulatory Framework to the recruitment of senior level professionals to lead on frontline casework. Here Matthew Bailes (pictured), the HCA's director of regulation, explains why the changes are necessary and outlines the key priorities in making the HCA fit for the future.

The pace of change in the social housing sector in recent years is unprecedented. The providers that we regulate are exposed to more risks, and are becoming increasingly complex through the diversification of their business models, structures and financing arrangements.

Alongside this we are seeing the emergence of new entrants to the sector from a ‘for-profit’ background, which is new territory for the regulator. We need to regulate all providers effectively and at the same time consider our strategy for dealing with them in future.

It is in this context that the HCA Regulation Committee is clear that we must make some fundamental changes; to the Regulatory Framework through which we operate, and also internally, in the way we are structured and the places in which we focus our attention.

We are already underway with a discussion around changes to the Regulatory Framework. It’s fair to say our thinking around ring-fencing of social housing assets, capturing the public value of asset disposals, and living wills is provoking the debate intended. It is right that the sector should have a full say and we will look carefully at initial responses before formal consultation later this year.

But our internal organisation is a matter for us alone. We must make the best use of resources and join up our approach to frontline regulation, with a seamless regulatory strategy and clear accountability.

In essence this means three things. Firstly, focusing more on the most complex and risky providers; those which are most likely to fail and those where the impact of failure would be greatest. Secondly, strengthening our skills – particularly financial skills at a senior level – and capacity to deal with complex and increasingly commercial providers. And thirdly, enhancing our capacity to deal with complex cases that have progressed beyond early warning signs of underperformance and have the potential to require the use of our statutory powers.

These changes will be supported by a hard look at the risk and complexity of providers, which will help us determine where we want to spend more, and less, resource in future; and a streamlining of reactive work such as consents to minimise resource, while continuing to fulfil our objectives.

It’s a challenging agenda, but at the same time is a fascinating opportunity to help shape the future of the sector. We’ll be looking to attract a number of senior level candidates with the financial and business skills necessary to deal with increasingly complex providers. We have seen enough examples of regulatory casework recently to know that these roles are not for those who want a quiet life. But they are very important.

The people we appoint will be at the forefront of our work to ensure we continue to protect social housing assets and maintain the right conditions for new supply.

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