Welsh Government Housing Directorate Regulation

Transcription

1 Welsh Government Housing Directorate Regulation Regulatory Assessment Report NPT Homes Limited L154 March 2015

2 Regulatory Assessment Report NPT Homes L154 Welsh Government Regulatory Assessment The Welsh Ministers have powers under the Housing Act 1996 to regulate Registered Social Landlords (RSLs) in Wales in relation to the provision of housing and matters relating to governance and financial management. Part 1 of the 1996 Act is amended by Part 2 of the Housing (Wales) Measure 2011 ( The Measure ) and provides the Welsh Ministers with enhanced regulatory and intervention powers concerning the provision of housing by RSLs and the enforcement action that may be taken against them. The Welsh Ministers are publishing this Regulatory Assessment report under section 33A of the Housing Act The work undertaken follows the risk-based approach to regulation and seeks to identify strengths and areas for improvement in meeting the delivery outcomes (standards of performance) set out in The Regulatory Framework for Housing Associations Registered in Wales ( The Regulatory Framework ). This report sets out the Welsh Government s Regulatory Assessment and is designed to provide the RSL, its tenants, service users and other stakeholders with an understanding of how well it is performing, at a specific moment in time, against the delivery outcomes relating to: Governance Financial management Landlord services Housing Regulation Team Welsh Government Housing Division Merthyr Tydfil Office Rhydycar CF48 1UZ e mail: housingregulation@wales.gsi.gov.uk WG23910 Digital ISBN Crown Copyright 2015

3 Overall Conclusion The Regulatory Assessment of NPT Homes (the Association) has been undertaken in accordance with the risk-based approach to regulation. A risk assessment, undertaken using information and knowledge from regulatory engagement and up to date information provided by the Association, has identified four material risks which are considered in more detail within this report. NPT Homes Self Assessment has been developed in accordance with Welsh Government guidance and provides evidence to demonstrate performance against delivery outcomes. The Association s Self Assessment currently includes limited outcomes information to evidence performance. It has plans to review and improve its Self Assessment, to include a wider range of robust outcomes information and to link it to ongoing work on wider performance monitoring and corporate planning. The Association s Board Members and staff demonstrate clear adherence to the principles of co-regulation. The Board has adopted the principles set out in the National Housing Federation s Code of Governance. It intends to adopt Community Housing Cymru s Code of Governance ( The Code ) on publication and to formally assess its governance against the provisions of The Code thereafter. The Association is using Board recruitment, appraisal and training to build an appropriate mix of skills and experience on the Board. The Association s governance promotes equality of opportunity by monitoring the diversity of its Board and staff. The Board currently has 10 members out of a possible 12; 30% of whom are female. NPT Homes agrees that it needs to improve some aspects of its governance. Improvements are underway in a number of areas, including a balanced scorecard approach to provision of performance information to the Board. Further work is needed to ensure robust Board scrutiny, increase feedback from, and involvement of, the wider body of tenants, provide assurance on staff culture and morale and put in place a strategic approach to value for money. The Association has a strong focus on risk identification and management and recently reviewed and refined its approach to make it clearer and more user friendly. This improved approach is still bedding down. The Board needs to more clearly define its general risk appetite and ensure effective risk identification and management is embedded across the whole organisation. NPT Homes has developed plans to meet the Welsh Housing Quality Standard by 2017 and is on target to achieve it by that date. The plans are informed by stock condition survey information. The Association acknowledges that it needs to obtain further assurance as to the quality of its stock condition survey and work is planned to achieve that. The delivery programme includes significant increases in capital investment over the next two years. The Association is developing a more robust, strategic approach to asset management, to inform future stock investment decisions. Our judgement of the Association s financial viability remains unchanged from last year. As at 27 February 2015, the judgement is Pass. 3

4 Regulatory Assessment Report NPT Homes L154 Overall Conclusion (continued) The Association monitors its levels of tenant satisfaction via post service surveys. These, generally, have low return rates and therefore limited reliability. As a result, it is difficult for the Association to evidence the quality of its services to tenants. This is acknowledged by the Association, which agrees that it needs more reliable information on tenants views to form a robust understanding of tenants experience of, and satisfaction with, the Association and its services. The Association has robust information on tenant satisfaction with Welsh Housing Quality Standard works and satisfaction levels are generally high. Tenant profile information is currently low, at 33%. The Association has prioritised work to increase this and to use it to tailor services to meet the needs of individual tenants. More needs to be done to involve and increase feedback from the wider body of tenants, including involvement of a wider range of staff and better coordination between teams organising tenant participation activities. Further development of service standards, with tenant involvement, is planned. 4

5 Introduction NPT Homes Limited (NPT Homes) NPT Homes was created following a large scale voluntary transfer from Neath Port Talbot County Borough Council in March It is a Community Housing Mutual, owned by its members and registered under the Co-operative and Community Benefit Societies Act 2014, with charitable rules. NPT Homes owns and manages over 9,000 homes, including more than 500 sheltered homes, and provides services to 600 leaseholders, within Neath Port Talbot County Borough. Scope This Regulatory Assessment has been undertaken in accordance with the risk-based approach to regulation set out in The Regulatory Framework and associated guidance Improving the implementation of the Regulatory Framework: a risk-based approach to regulation and Sector risks facing housing associations in Wales. The risk assessment has been carried out using information and knowledge from regulatory engagement and up to date information provided by the Association. The risk assessment identified a number of material risks, set out below, which we have considered in more detail: Material risks which are part of this Regulatory Assessment Sector risks Governance Risk management Existing stock Service risks Risks considered non material and not part of this Regulatory Assessment Sector risks Income Welfare reform Managing a housing development programme Diversification Community decline Liabilities (new and existing debt) Accounting issues Costs Pension costs Differential inflation rates Overstretch and stagnation Collaboration and partnership working 5

6 Regulatory Assessment Report NPT Homes L154 Governance and Financial Management Governance NPT Homes Self Assessment has been developed in accordance with guidance issued by the Welsh Government and currently provides limited evidence to demonstrate performance on delivery outcomes. The Association continues to review its approach to self assessment. This will include more robust evidence gathering to demonstrate outcomes and integration of the Self Assessment into its wider performance monitoring and corporate planning system, to improve its use as a live business tool. The Association s Board members and staff have clearly demonstrated adherence to the principles of co-regulation. NPT Homes has adopted the National Housing Federation s Code of Governance as its standard for governance. It has not evaluated its performance against that Code. It intends to adopt Community Housing Cymru s Code of Governance ( The Code ) on publication and to formally assess its performance against The Code thereafter. The Association has acted to ensure that the Board has an appropriate range of skills and expertise. An independently facilitated whole Board appraisal is about to commence. A skills matrix is used to identify skills gaps within the Board, with individual Board member appraisals identifying training and development needs. The Board owns and monitors the Business Plan delivery and progress against the Association s Offer Document promises. The Board has clear ownership of all key corporate plans and strategies and sets the strategic direction for the organisation with the senior management team. The Board has a positive relationship with its senior management team. It could do more to scrutinise and hold staff to account for delivery. The Association has a clear focus on outcomes for the people who use its services. It has made some progress in the measuring and recording of outcomes but needs to further develop this. It is improving its approach through a new balanced scorecard to report performance and delivery of the business strategy to Board. The Association is accountable for the quality of services delivered, open about its activities and publishes balanced performance information. It encourages complaints, manages them well and there is evidence that it analyses and learns from them. NPT Homes staff and culture encourage early tenant involvement in shaping and reviewing services and the Association has sought to give tenants increasing involvement in organisational decision making over recent years. The Association recognises the need to increase its feedback from and involvement of the wider body of tenants. The Association accepts that it would benefit from an objective and comprehensive perspective on the quality of its staff culture and morale. A planned Investors in People accreditation will contribute towards gaining this assurance. Whilst Board members understand value for money, the Association would benefit from developing a strategic approach to value for money. This would help embed its approach to value for money throughout the whole organisation s operational and strategic decision making. 6

7 The Association s governance promotes equality of opportunity. The Association monitors the diversity of its Board and staff. The Board currently has 10 members out of a possible 12; 30% of whom are female. A working group has been set up, tasked with embedding equalities within the organisation. Most parts of the organisation have tried to reflect equality and diversity within their procedures and day to day activities. Future regulatory engagement will focus on: quality of self assessment formal assessment of governance against The Code quality of Board scrutiny measuring and monitoring of outcomes robust and systematic feedback from, and involvement of, the wider body of tenants gaining assurance regarding staff culture and morale strategic approach to value for money gender balance on the Board Risk Management NPT Homes has a strong focus on risk, which has always been a key element of its reporting to Board. It has recently reviewed and refined its approach to risk management, so that it is clearer and more user friendly in terms of the policy and in the recording, scoring, prioritising, mitigation and monitoring of risks. This improved approach is still bedding down. The Board has a clear understanding of risk and takes ownership of the Association s risk register, which covers both operational and strategic risks. The Audit and Risk Committee scrutinises risks and mitigating controls. The Board is clear that its risk appetite is low to medium, as it is cautious but not risk averse. It would benefit from clarifying its risk appetite statement, for clear communication to staff throughout the organisation as a basis for decision making and planning. A limited number of staff at various levels have an awareness of risk. More needs to be done to embed effective risk identification and management across the whole organisation. Future regulatory engagement will focus on: operation, in practice, of revised risk management approach clarification of the Board s risk appetite statement development of a culture of risk identification and management throughout the whole organisation 7

8 Regulatory Assessment Report NPT Homes L154 Existing Stock The Association has developed plans to meet the Welsh Housing Quality Standard by 2017 and is on target to achieve it by that date. These plans are informed by stock condition survey information. The Association accepts that it needs to obtain assurance on the accuracy and sufficiency of its stock condition information. NPT Homes Welsh Housing Quality Standard delivery programme includes significant increases in capital investment over the next two years. Effective management of this much increased spend is key to the Association meeting the 2017 target date. The Association is developing a more robust, strategic approach to asset management, to enable well informed and evidenced stock investment decisions, moving forward. Adequate funding is in place to deliver both planned and reactive maintenance. The Association manages relevant health and safety risks appropriately. Future regulatory engagement will focus on: assurance of accuracy and sufficiency of stock condition information management of increased capital investment over the next two years further development of a robust, strategic approach to asset management Financial Viability Judgement Our judgement of the Association s financial viability remains unchanged from last year. As at 27 February 2015, the judgement is Pass the Association has adequate resources to meet its current and forecasted future business and financial commitments. The management of the level of capital investment in the Welsh Housing Quality Standard programme over the next two years, as well as the level of bad debts and voids are areas that will continue to be monitored, through ongoing regulatory engagement. Future regulatory engagement will focus on: management of the level of capital investment in the Welsh Housing Quality Standard programme over the next two years level of bad debts and voids Landlord Services The Association monitors its levels of tenant satisfaction via post service surveys, which have generally low return rates and therefore limited reliability. A full tenant satisfaction survey has not been carried out since the organisation s inception and the community focus groups which have since been undertaken have produced limited results. The Association accepts that it does not currently have a robust view of the quality of its services to tenants and of its wider tenants experiences and satisfaction with its services. It intends to address this to seek the necessary assurance. Tenant satisfaction levels with the quality and delivery of Welsh Housing Quality Standard works are generally very high. The Association recognises the need to improve its approach to dealing with tenants of sheltered housing regarding major works and service changes. 8

9 NPT Homes accepts the need to increase its tenant profile information, currently low at 33%, as a priority. The Association has plans in place to increase this information and use it more effectively to tailor services to meet the needs of individual tenants. The Association involves tenants in shaping and reviewing services through a variety of strategic and other engagement groups. It agrees that it needs to do more to involve and increase feedback from the wider body of tenants. This would be assisted by involving more staff in tenant participation and ensuring that the gathering of tenants views is better coordinated across the Association. Currently NPT Homes has limited service standards in place. It is about to start to further develop service standards, with tenant involvement. Anti-social behaviour is dealt with by generic and specialist staff using a variety of prevention, early intervention and enforcement means. The Association is able to demonstrate improvements to its approach to anti-social behaviour and a range of positive outcomes from such. Due to low return rates, tenant satisfaction with the anti-social behaviour service is unclear, so it is not currently possible to form a robust view of the quality of the service. The Association plans to address this, by various means aimed at increasing return rates for tenant feedback on this service area. The Association is currently working with partners to review its policies and procedures for preventing and tackling domestic violence. Following this review, domestic abuse awareness training will be put in place for all staff. NPT Homes makes a contribution to tackling homelessness which is valued by the Local Authority; rehousing homeless households and supporting the Local Authority in its duty to address homelessness at a strategic level. Equality Impact Assessments are carried out for all the Association s new and reviewed policies. The Association does not currently know the equalities outcomes of its services, but plans to undertake equalities monitoring of the outcomes of services and tenant involvement. Future regulatory engagement will focus on: seeking assurance regarding the wider body of tenants views and experiences of services in general improving approach to dealing with sheltered housing tenants regarding major works and service changes gathering more tenant profile information and increasing its use to provide tailored services involving and increasing feedback from the wider body of tenants involving more staff in, and better coordination of, tenant participation further development of service standards with tenant involvement increasing tenant feedback on the anti-social behaviour service review of domestic abuse procedures and all staff training equalities monitoring of service and tenant participation outcomes 9

10 Regulatory Assessment Report NPT Homes L154 Sources of Information and Regulatory Activity The scope of a Regulatory Assessment is to establish whether the RSL has met the delivery outcomes in connection with their functions relating to the provision of housing and matters relating to governance and financial management set out in The Regulatory Framework. The scope considers if the RSL is a well governed, managed and financially viable organisation against ten delivery outcomes, set out below. Governance and Finance We place the people who want to use our services at the heart of our work putting the citizen first We live public sector values, by conducting our affairs with honesty and integrity, and demonstrate good governance through our behaviour We make sure our purpose is clear and we achieve what we set out to do knowing who does what and why We are a financially sound and viable business We engage with others to enhance and maximise outcomes for our service users and the community Landlord services We build and renovate homes to a good quality We let homes in a fair, transparent and effective way We manage our homes effectively We repair and maintain homes in an efficient, timely and cost effective way We provide fair and efficient services for owners The following standard information, supplemented by other information as required, is received from Associations and reviewed by the Welsh Government: Audited annual accounts, including the internal controls assurance statement External auditors management letters 30 year financial forecasts Quarterly management accounts Private finance returns Medium term business plans Welfare reform data collection Internal audit reports Board papers, as requested Financial and risk management information collected through undertaking regulatory engagement 10

11 In addition to the above, the following specific activities are carried out: Regulatory activity, via a relationship management approach to regulation, including contact with tenants and service users, senior staff, operational staff, Board members, key stakeholders and visits to some key sites Review of the Self Assessment, key customer information and associated hard and soft evidence relating to the delivery outcomes Basis of Regulatory Assessment This Regulatory Assessment is based on information submitted by the RSL, the Regulator s knowledge and experience of the RSL. In preparing this report, the Welsh Ministers have relied on the information supplied by or on behalf of the RSL. The Directors of the RSL remain responsible for the completeness and accuracy of such information. This report has been prepared for the RSL as a Regulatory Assessment. It must not be relied upon by any other party or for any other purpose. Any other parties are responsible for making their own investigations or enquiries. 11