Sector bemused by plan to grade their performance red, amber or green
Housing associations are to be graded by the Housing Corporation in a system similar to the Audit Commission's comprehensive performance assessment of local authorities.

The bold move by the corporation comes only weeks before it formally relinquishes its role as inspector of housing associations to the Audit Commission on 1 April.

It was interpreted in some corners as a "last throw of the dice".

The surprise announcement of the Housing Corporation Assessment – or HCA as it is likely to become known – will see associations ranked in one of three categories using a "traffic light" system of red, amber and green.

These colours will apply across four categories: governance, viability, management and development performance.

The corporation predicts around 95% of associations will get "green" ratings.

The system will replace the cumbersome performance assessment and investment summary that was previously calculated by the Housing Corporation on an annual basis.

The announcement, in a letter to associations last week, came on the back of consultation paper from the corporation into the checking of data collected by associations, such as lettings and rents.

It is understood that this will form a crucial part of the corporation's move to flex its regulatory muscles, aimed at ensuring the accuracy of information on which, ultimately, investment decisions are based.

The move to the new assessments has angered some in the sector, as there was no chance to respond to the proposals outlined in a letter to chairs and chief executives from the corporation's regional directors of regulation and best value.

One sceptical housing association chief executive said: "This means the corporation's judgement must be pretty good – especially across different regions.

"The timescale for it is also short and it just sounds like another thing associations will be required to do."

Anthony Hardy, head of lead regulation support at the Housing Corporation, defended the new system: "Associations aren't going to have to do an awful lot," he said. "We will send through our assessment, they can comment on it and that will be that. I can't see it adding any real burden.

"The production of performance assessment and investment summaries was a massive annual exercise for us and for associations.

"Now, it's a rolling programme to take account of the changing circumstances of associations."

He said the overall aim was to produce clearer regulation to benefit tenants, lenders and the corporation's own investment and regulation teams.

Hardy said it was "coincidence" that the Audit Commission was due to take on the inspection of associations so soon.

On the subject of potential incentives to perform, Hardy said: "There will be no direct carrots, although we will still be investing in the best. If someone is amber or red I can't see us investing in them.

"However, just because everything may be green in an association's garden doesn't mean we'll be ignoring that association for years to come."

He added that updates would come as and when there was a change in the information concerning an association arising, for instance, from an Audit Commission inspection.

Hardy denied that the move to traffic lights was an attempt to introduce league tables of associations and said that the corporation was only interested in seeing which associations were red and amber.

The corporation's regional regulation teams will churn out the HCAs in a series of tranches, the first of which will be released in April.

Do you give it the green light?

Donald Hoodless
chief executive, Circle 33 Housing Association “These regulatory tools are very often more useful to the regulator, so I’m not sure it’ll particularly benefit our business.” John Belcher
chief executive, Anchor Trust “I feel quite indifferent about this. It’s a shame if we’re moving in this direction of traffic lights. Hopefully, common sense will prevail and we’ll work out what green, amber and red actually mean.” Tom Manion
chief executive, Irwell Valley Housing Association “It’s absolutely fantastic. There’s been about three to four judgement systems, but we need to agree what the assessment criteria are for. I’d actually be more concerned whether tenants gave us red, green or amber lights.”

Source

Housing Today