The Boards of registered providers are responsible for ensuring the sufficient management of risk. The Sector Risk Profile, released by the Regulator of Social Housing on 11 October 2018, sets out actions that all registered providers need to take in order to mitigate sector risk. Despite 20 areas of risk management being summarised in the report, the Regulator identified three risks as growing in importance.
1. Health and Safety Risks
Board members have the responsibility for the safety of all tenants and customers and should therefore have the appropriate safety measures in place to mitigate all risks. In the aftermath of Grenfell, providers have been made aware of several areas where health and safety measures are inadequate and notified of areas where improvements need to be made. The Board therefore needs to appropriately action these changes, to ensure full compliance is achieved. The recent announcement from the government regarding the prohibition of the use of combustible cladding must be reviewed by all Boards to assess how this effects their business. Board members need to plan how the required changes to their high-rise buildings will be implemented and the implications this may have on budgeting for other planned repairs in the future
2. Reputational Risks
The social housing sector is under more pressure than ever before to increase the standards and volume of social housing produced and managed. The additional pressure from stakeholders in light of recent events such as Grenfell, make decision-making processes more important than ever before. The Board need to be transparent in all of their actions as these will be scrutinised by government, media, tenants and investors, now more than ever. Most importantly, Boards need to give regard to the implications their actions may have on the Social Housing Sector.
3. Sales Risks
Sales income makes the largest contribution to registered providers development programmes than ever before and so the risks associated will reliance on this stream of income need to be regularly reviewed by the Board. The Regulator predicts that revenue from sales will increase by £2 billion from 2018/19 to 2019/20. Consequently, the Regulator has identified this as an area where risk needs to be addressed as a record number of providers are diversifying to this form of income. Relying on surpluses from sales for investment in social housing means that providers need to mitigate the risk of reduced sales and this is the responsibility of the Board to take all risks into account.
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