Response to Consultation – Feedback

Response to Consultation – Feedback
Regulation of Social Housing in Scotland
February 2012


Paragraphs 13 – 21


13. There was strong support for our proposed regulatory standards. There were, however, some reservations about our proposal to develop a model code of conduct for governing body members. RSLs and their representative bodies clearly see this as their responsibility. Our objective in this regard is to ensure that there is a clear model that RSLs value and that meets our regulatory needs. In response to the confidence expressed by RSLs and their representative bodies that they are best placed to deliver an appropriate model, we have decided not to progress this at this time. We will work with RSLs and their representative bodies to have our regulatory requirements accommodated in a model code that they will produce.


14. A number of respondents also expressed concerns about elements of the proposed guidance on the standards and felt that the guidance was too prescriptive in places. A number of respondents disagreed with the proposed constitutional standards and felt that they had the potential to limit landlords’ independence.


15. We have decided not to commission model constitutional clauses. This means that individual RSLs must ensure they have a constitution that meets our requirements. We have also amended our proposals on Constitutional Standards and have replaced these with a set of core constitutional requirements. We will have regard to these requirements when assessing applications for entry to the Register of Social Landlords and applications from RSLs for our consent to changes to their existing constitutions. We will work with RSLs and their representative bodies to ensure that model rules meet our requirements.


16. The Housing (Scotland) Act 2010 removed the legislative prohibition on benefits and payments to RSL governing body members. There was a strong view, primarily from RSLs, that this new freedom threatens the voluntary ethos of the sector and could lead to ‘two-tier’ governing bodies. We are neutral on the payment of governing body members and will neither promote nor discourage this; the permissive framework established by the 2010 Act gives RSLs the discretion to pay governing body members if they so choose. Where they choose to do so, we will require RSLs to have a clear policy framework on remuneration, be guided by established good practice and have transparent reporting of remuneration.


17. There was strong support for the principle of regular renewal of the membership of governing bodies of RSLs. Our proposals on term limits were supported by the
majority of tenant groups and local authorities that responded, but there was also significant opposition, primarily from RSLs.


18. The proposal started an important debate about effective governance. We welcome this debate, as we view good governance as vital to the delivery of good tenant outcomes. It will be a major focus for our regulation of RSLs over the next three years. We hold firmly to the principle that regular governing body renewal is essential for continued effectiveness in terms of sustained objectivity and independent challenge.


19. Most respondents supported this principle. We will build on this support and have decided not to introduce a mandatory framework of time limits at this time. We will look to RSLs to embed this principle in their governance and to build strong and effective governing bodies that deliver sustained challenge.


20. Our regulatory standards highlight that RSLs should have a formal, rigorous and transparent process for the election, appointment and recruitment of governing body members. RSLs can best achieve the most appropriate balance of skills and experience by ongoing performance evaluation, effective succession planning and active engagement in the election process. We will require governing bodies to be assured that any non-executive member seeking re-election after nine years’ continuous service can demonstrate their continued effectiveness with regard to their independence and objectivity. Our use of nine years aligns with most RSLs’ use of three year terms and reflects the position in recognised good practice in governance. We now emphasise the importance of RSLs having good induction and ongoing support programmes for governing body members to ensure they are, and can remain, effective. We have introduced a transition period meaning RSLs have until April 2015 to demonstrate compliance with these requirements.


21. We will monitor and regulate this aspect of governance. We will do this through analysis of information landlords will give us, periodic reviews of RSLs’ compliance with the Regulatory Standards, and in particular the effectiveness of succession planning, induction and training, and performance evaluation. We will publish the overall findings from these reviews and following up actions with individual RSLs as necessary.


See Full Response here