The Social Housing IT Timebomb
The Social Housing (Regulation) Act went ‘live’ this month and represents the greatest change to regulation in decades, both in its requirements and the increasing level of scrutiny. Many organisations fear they will struggle to comply.
The vision behind the new regulations is simple:
“Tenant’s will live in safe homes and their relationship with their landlord will be one of respect” Regulator of Social Housing (RoSH)
They come at a time of poor perceived sector performance, with maladministration findings up 323% in 2023 and compensation payment orders having doubled. Poor knowledge and information management (KIM) is seen to be at the heart of the problem. In May 2023, the Housing Ombudsman’s Spotlight Report stated:
“poor information management is such a strong and reoccurring theme across service areas that it is the closest thing the sector could get to a silver bullet. I urge the sector to digest the learning from this report and create a KIM strategy.”
Pilot inspections in preparation for the new regulatory standards revealed that too often organisations weren’t able to evidence the policies and processes they claimed to have, so the Regulator will now be requesting evidence-based outcomes of compliance, rather than submitted policies and procedures.
Which brings us to the social housing IT timebomb
I.T. stands for Information Technology, but too many have focused on the technology element, rather than the information. Ask most ‘IT’ Departments, and they will tell you that their focus is technology and that integrity of information is not their responsibility.
It is normal for landlords to be data rich, but insight poor. Performance data is often spread across disparate IT systems and spreadsheets, without checks on data integrity. Most sector analysts will tell you that they don’t have complete faith in the data they use for reporting purposes and that they spend too much time trying to collate data before they can do any analysis. This creates enormous inefficiency and presents a considerable threat to governance, risk and compliance. This is the timebomb I am referring to and is already resulting in increasing level of data-related regulatory downgrades. This will now be further compounded by the introduction of the new 4th regulatory grading level. RoSH has stated that achieving a top level 1 grading will be more difficult.
Defusing the IT timebomb
The first step is for social housing leaders to accept accountability for KIM strategy, ensuring that the right skills and resources are in place. This journey to data maturity is well trodden. You assess your starting point and draw up your plans for improvement, prioritising those data areas where there is greatest risk to your tenants and your organisation. Two fundamental principles need to be applied:
- Appropriately qualified C-level accountability for KIM
- The use of technology to support information integrity assurance
I would add to this the need for a level of external assurance due to issues arising from organisations ‘marking their own homework’. In a recent “Interview with the Regulator” hosted by CIH, it was stated:
“We would ideally like to see independent external assurance to support any internal audit”
The business case for external assurance, rather than internal, the ‘Fractional Executive’, is compelling: lower cost; no recruitment; turn on and off as required; less management time; no training; cover should an individual be unavailable; and often a breadth of knowledge that’s drawn from across the sector. I suspect it won’t be long before most landlords are accessing such support to help ensure good governance. Indeed, if high regulatory gradings are to be achieved, it is likely to be required, just as it is for financial information.
Combine a Fractional Exec with data error detection software and you have much of what you will need to defuse the IT timebomb, not just improving KIM and good organisational governance, but supporting the culture change needed to become a truly effective and data-driven business.
The first judgements against the new regulations will be released in June/July 2024. They will give us an indication of what the future holds. I believe that those landlords that embrace the new regulations, defusing the IT timebomb, will be those that flourish. The financial and reputational penalties for those that don’t could threaten the future of the organisation. There are over 1,500 social landlords in the UK, which many say is far too many.
“It is not the strongest that survive, nor the most intelligent, but the ones most responsive to change.” Charles Darwin