1. Successful places with homes and jobs A NATIONAL AGENCY WORKING LOCALLY The (proposed) new regulatory framework and beyond Will Perry Assistant Director, Commercial & New Entrants, HCA

2. What is changing? Only changing what is necessary to ensure the regulatory framework stays effective in growing risk environment. Changes to:  Governance and Financial Viability Standard –Introduction of Code of Practice  Disposals regime  Rent Standard  Registration criteria

3. Governance and Financial Viability Standard Specific expectations:  Activities don’t put assets or viability at undue risk  Skills and capabilities of boards match activities  Active risk management and stress testing  Maintain records of assets and liabilities  Third party arrangements must benefit the PRP  Boards to certify compliance with the Standard

4. Code of Practice  Regulator committed to co-regulation  Not a return to guidance notes and circulars  Expands on G&FV Standard content  Aid to how compliance can be achieved  Regulator will have regard to the Code but enforce against the Standard  Boards will not have to certify compliance with the Code

5. What are we worried about?  Loss of social housing assets  Most egregious failure = insolvency…and lenders enforcing security  But managed loss of “public value” owing to poor management / commercial losses also a problem

6. Final thought Don’t despair!  We are not against risk, we are against undue risk and weak controls  A well-run social housing provider should not get into serious difficulties

7. Thoughts on the day

8. Key risks – sector risk profile  Interest rates / re-financing  Sales  Income / welfare  Cash flow  Complex finance / covenants  Commercial exposures  FRS102  Weak governance

9. Themes Risk Covenant Cyclicality Unknowns

10. Will Perry Assistant Director – Commercial and New Entrants 07769 927480 will.perry@hca.gsi.gov.uk