How do stricter compliance regulations affect asset management professionals?

No more leniency……. Is the message from Julian Ashby, Chair of the HCA regulation committee towards social landlords who are struggling to achieve compliance. So what does stricter compliance regulations mean for asset management professionals?

In the article published in Inside Housing on 28^th April 2017, there were a number of key messages to asset managers, namely:

• That the regulatory changes introduced just over 2 years ago were aimed at maintaining providers long term viability through improving stress testing, risk management and mapping of assets and liabilities.
• The time for leniency in assessing compliance is at an end. No longer will ‘working towards’ compliance be accepted.
• Weaknesses in asset mapping were not uncommon.

So what should the diligent asset management professional be doing? In our experience of working with social landlords across a range of compliance related matters, the top 5 learning points would be:

1. To forensically map your property related assets and liabilities. Your property register is the start, followed by sound stock condition data. The production of stock sustainability analysis for each property using net present value (NPV) techniques overlaid with locally relevant social, economic and environmental factors is essential if social landlords are to properly understand the risks that property assets and their associated liabilities represent.
2. Mapping and assessing the risk associated with each maintenance or works contract and the supplier. All too often we see contracts that are not procured in compliance with the public procurement regulations that are not meeting the organisations needs or where the supplier represents a significant risk. It’s vital that suppliers engaged in delivering property compliance related maintenance activity hold the appropriate accreditations and demonstrable competence. While contractors may have been fit for purpose when they were originally procured and assessed through the tender process, on-going review and audit activity is required to ensure that they remain so.
3. To understand where your organisation is in respect of compliance with property related health and safety matters. Typically this means the ‘big five’ areas of gas, electrical, asbestos, fire and water but for some organisations with more diverse stock portfolios it will also include risks associated with things like playgrounds, lightening conductors and private sewage and water supplies. As a consultancy we’ve conducted strategic health checks for a large number of social landlords to help them assess their level of compliance and identify both the technical and the organisational strategy issues that need to be worked on to improve.
4. Time is of the essence. Organisations need to work out where their gaps are and more importantly take action – quickly. Critical gaps in compliance need to be plugged straight away.
5. Leadership is the key. Rarely in our experience are weaknesses limited to a particular service area, contract or team. We usually find that there are common themes that run throughout the organisation that are fundamentally to ‘blame’ for weak compliance. Blaming the IT system, or the ‘poor’ but now former property manager or ‘dodgy’ contractor might seem convenient, but rarely is it the real reason. In ‘excellent’ organisations we find absolute clarity about what the objectives are, that compliance ‘really matters’ to the organisation and is on the strategic radar and that leaders take responsibility for solving problems, collaboratively with others, including external suppliers.

Our housing consultancy team at Pennington Choices provide a range of advisory and support services to help social landlords of all types ensure compliance. Procurement, compliance and repair health checks and stock sustainability assessments are in high demand at present. Our technical experts in the ‘big five’ areas of property compliance (gas, electrics, asbestos, fire and water) work with our clients to ensure that they are on the right track in these areas.