Opinion: Are regulation fees just a tax on the number of homes we own?
Published by Jon Land for 24dash.com in Housing
Opinion: Are regulation fees just a 'tax' on the number of homes we own?
Andy Ballard is a lawyer, an independent housing consultant and chair of Herefordshire Housing, a stock transfer organisation based in Hereford and Ross-on-Wye owning and managing 5,400 homes.
First and foremost, keep it simple. The role of the regulator is to regulate. As such they must make sure that registered providers do what they are supposed to do, remain well-governed and financially viable. If all registered providers do that, organisations, customers, service users and stakeholders win.
The regulator quite rightly points out that they have a 100% track record. No funder has lost money lending to a registered provider – so far! As such the regulator argues the cost of borrowing has been maintained at a manageable level. Think of the numbers. Funders have so far invested £50 billion with registered providers to date.
Over the next 10 years a further £20 billion will be invested with us. One estimate says that without regulation the cost of borrowing could go up as much as 100 basis points. I’ve not worked out the numbers, but on £20bn; that sounds like a lot sum of money. Imagine what that number would look like if funders re priced your back book!
If all of that is correct, the case for strong robust regulation that gives confidence to funders, the government, tenants and other stakeholders is well made.
That leads to the question what type of regulator do you want? The HCA is an emanation of statute. To a degree therefore what it does is dictated by statute, albeit how it does it is a matter for the regulator. Should they be dynamic? Should they give good guidance? We used to have that – it was called the Housing Corporation. Should those who pay the piper call the tune? We have all read about self-regulation – see the PCC. Would the regulator have teeth? Would regulation change?
The real issue is that the regulator usually arrives after the event. When things go wrong the regulator sorts them out. Would a better funded regulator have discovered Cosmopolitan before it happened?
The best form of regulation must be good governance. It is a matter for your board. Does your board know what the organisation is doing and how it is doing it? Is it diverse? Can it effectively challenge? Is it robust and strong?
Fees may generate income for the regulator, but will anything really change? If not, fees are merely an opportunity to raise funds. A “tax” on the number of homes an organisation owns.
Some will say the regulator will lose its independence as it dances to the tune of the registered providers who fund it! A very dangerous place to be.
But I guess it will come. Registered providers are stuck with it.
The key to success is good governance not the imposition of a “tax”.