The government have recently reviewed the Homes and Communities Agency (HCA) and has recommended that the regulatory and investment functions separate. This would result in the creation of a new standalone social housing regulator.
The review, which started in March, was launched following growing concerns about the potential conflicts of interest caused by the Homes and Communities agency carrying out both regulation and investment activities. Over the past few years, the HCA has been increasingly providing loans to housing associations as opposed to grants. The HCA also administers the government’s Affordable Homes Guarantees Programme. This meant that the HCA was regulating housing associations that, in some cases, they were also lending and investing in too.
In a written statement issued by Gavin Barwell, housing and planning minister and minister for London, he states that his department and the agency are working closely together and have developed a timetable for implementation of the recommendations.
According to Barwell, the creation of this stand-alone regulator is set to be a purely administrative change and will not affect the regulators powers or operations He added that the change won’t affect the existing government budgeted spending. This news comes amidst plans for increased sharing of back office functions across the Department for Communities and Local government.
A number of recommendations to improve efficiency, effectiveness and governance of HCA have been made off the back of the review. These recommendations are aimed at improving stakeholder engagement, reducing bureaucracy and ensuring that the agency has the right set of skills.
According to the communities secretary Sajid Jarvis, the agency must have a clear principal objective of delivering housing. He said that the review’ signals significant change and a corresponding leadership challenge for the new chair and his team’. The regulator recently issued a consultation on introducing fees for social housing regulation. According to Barwell, ‘taken together, these changes will ensure the regulator remains independent and retains the powers and resources needed to maintain the confidence of the sector and lenders’.
Since 2010, the government has delivered almost 900,000 new homes, including 293,000 affordable homes. However, many more homes need to be built to create a housing market that works for everyone. The HCA will play a vital role in building this housing market, as it is the national housing, land and regeneration agency and the regulator of registered social housing providers in England.
The review concluded that functions exercised by the HCA are required, and, with the exception of social housing regulation, should continue to be performed by the HCA in its current form as a non-departmental public body (NDPB). The review also recommends that the agency’s regulatory function should be established as a standalone NDPB, reaffirming the government’s commitment to a strong, independent regulator for social housing.