Board 15 March 2016
YHN Deregistration as a Social Housing Provider Report by Head of Finance and Company Secretary For Decision
1.
Background information
1.1 This report recaps the original reasons that YHN registered as a social housing provider with the Homes and Communities Agency (HCA), outlines the current obligations connected to registration and sets out a case to deregister. 1.2 Initial Registration When Leazes Homes was set up to deliver new build housing with HCA grant funding, following advice it was decided to register as a charity and then register as a registered provider (RP) with the HCA. There were significant delays with the Charity registration and therefore to expedite building, YHN registered as an RP with the clear intention that as soon as Leazes had its full registrations the building, grants and loan funding would all be transferred to Leazes Homes. YHN was to be a temporary ‘incubator’ for Leazes development. This transfer happened in full in February 2013. Since then YHN has no social housing properties in its ownership. 1.3 Other Registrations Newcastle City Council (NCC) are registered as a social housing provider with HCA and grant applications are made in their name for the new build YHN oversees in the HRA capital programme. 1.4 Business Strategy 2016-2020 The new business strategy has no objectives or targets that are dependent on HCA registration for YHN. Indeed the strategy makes no reference to a desire to own housing stock within the YHN group.
1.5 Process of Deregistration
From HCA Guidance: Any private registered provider can apply to the regulator for de-registration at any time, as long as they have grounds to do so under the Housing and Regeneration Act 2008(the act). There is no restriction on when a deregistered provider can re-apply for registration. Section119 of the act sets out the grounds on which a private registered provider can apply to the regulator to be de-registered. These are that the private registered provider: 1. No longer is or intends to be a provider of social housing in England, OR 2. Is subject to regulation by another authority whose control is likely to be sufficient, OR 3. Meets any relevant criteria for de-registration set by the regulator YHN would apply for de-registration under criterion 1 above. YHN ceased to provide social housing in 2013 when all housing stock was transferred to Leazes Homes (February) and Byker Community Trust (July). There is an application form to complete but as we have no social housing assets or liabilities this looks to be reasonably straight forward. Documents which must be appended include: • •
2.
Signed Board minute giving approval to application for de-registration Lender agreement to de register and confirmation of continuation of existing facilities. NCC is our lender and shareholder.
Issues and concerns
2.1 HCA Feedback The HCA has been approached to understand their views on our registration. They confirmed that they periodically review the register and ask non active providers to deregister. They indicated they would actually welcome an approach from such a provider in advance. They indicated on the facts discussed that they would see deregistration being very straightforward. 2.2 Administrative Burden There is an administrative burden as a result of YHN’s registration. This falls into two categories: •
NROSH: NROSH is a statistical data set which includes: 30 year financial plans, stock, annual audited accounts, Audit Management Letter and condition data etc. as applicable.
•
Additional disclosures as set out in the Housing SORP. Officers do not believe this impacts on transparency to tenants overall (see section 2.3)
This burden equates to approximately £2.8k of officer and director time (94 hours). 2.3 Transparency Our statutory accounts are produced and filed at Companies House. The narrative reporting included in the statutory accounts contains significant non Companies Act disclosures as a result of our status as a Registered Provider. In addition since 2010 we have produced an Annual Review, focusing on the review of the year, how we performed and what we achieved. The information disclosed is in areas such as repairs and maintenance, neighbourhoods, value for money, the Board, corporate governance and the executive team. This document is publically available on our website and a summary is sent to all tenants. There is a duplication of information to tenants in the Statutory accounts and Annual Review. There are some exceptions. An example is the analysis of the number of staff paid above £60,000. This would include all emoluments such as redundancy payments so for this year there would be an increase in the numbers of staff included. This disclosure could still be made although there would be no statutory requirement. The main advantage to the disclosure is the commitment to transparency that would be demonstrated. The figures would need to be accompanied by an explanation, as they were last year. Board is recommended to disclose these payments. 2.4 NCC Consultation We have consulted NCC as our shareholder and lender to ensure we have their support for deregistration, and this has been confirmed. 3.
The possibilities
3.1 The possibilities include: 1. Deregister and reregister in the future if necessary 2. Retain Registration
4.
The Appraisal
4.1 Deregister and reregister in the future if necessary Advantages • •
•
No longer having to fulfil NROSH requirements on an annual basis. Reduction in duplication of reporting to tenants as much statutory accounts information represented duplication with the Tenants Annual Report. In line with HCA expectations
Disadvantages It may be that in the future there is a decision to develop properties within YHN however: • There is no mention in the Business Strategy other than in the HRA • There is no restriction on when a de-registered provider can re-apply for registration.
4.2 Retain Registration This is basically the opposite of the advantages and disadvantages set out in 4.1
5.
The Business Implications
5.1
Mission and Strategic Objectives: The Business Strategy does not include any objectives for housing stock ownerships
5.2
Value for money/efficiencies: A saving in officer time of approximately £2,800 per annum would be achieved.
5.5
Impact on services/performance: Back office functions will be able to concentrate on other more value added tasks.
5.6
Outcomes for tenants/leaseholders: There should be no impact as overall transparency is not being affected.
5.7
Risk (reputation, relationship): This could improve our relationship with HCA.
5.8
Environmental: None
5.9
Legal: Future decisions regarding company structure would definitely no longer require HCA approval.
5.10 Equality and Diversity and Community Cohesion: None 5.11 Stakeholder Involvement/consultation: Discussions with Tony Kirkham (NCC shareholding representative) have taken place as described in 2.4 above.
6.
Conclusion and recommendations
6.1 As YHN has no short or medium term plans to act as a social housing provider but stills bears the administrative burden set out above, it is recommended that:
7. 7.1
•
YHN deregisters as a Registered Provider of social housing with the HCA
•
YHN continues to report emoluments over £60k in the interests of transparency, with explanatory narrative.
Implementation •
Application to HCA immediately following this meeting including the Board Minute approving
•
YHN Statutory Accounts for the year ended March 31 2016 will be prepared without reference to the Housing SORP.
Contact Officer: If you have any questions about this report that you would like clarifying before the meeting, you can contact Lisa Forrest by telephone on 0191 2778 8616 or email lisa.forrest@yhn.org.uk