About this thematic review
Each year social landlords need to tell us if they meet the regulatory standards and requirements. They do this by submitting an Annual Assurance Statement (Statement) by the end of October each year.
In this thematic review we set out our findings following our recent visits to seven Registered Social Landlords (RSLs) and two local authority landlords to find out more about the self-assurance work they did to enable them to submit their Statement in October 2025.
On the visits we focused particularly on how landlords assured themselves about meeting their tenant and resident safety duties and for RSLs, their approach to monitoring and reporting on compliance with their financial covenants. We set out further information on what we covered during the visits in Appendix One.
What is an Annual Assurance Statement?
The Statement is a way for governing bodies and committees to assure themselves and their tenants, people who are homeless or threatened with homelessness, Gypsy/Travellers, other service users, and us that they comply with regulatory requirements, or to disclose areas where they need to improve.
Statements should be made and submitted by the RSL’s governing body, or the relevant local authority committee which has been delegated authority to complete the Statement by the local authority.
We set out the requirements for the Statements in our guidance on Annual Assurance Statements.
Landlords have a range of ways through which they assure themselves that they meet appropriate regulatory requirements, including their legal obligations on housing and homelessness services, equalities and human rights and tenant and resident safety. This will include internal and external audit, feedback from tenants and service users, and in some cases, independent specialist advice.
The Statement is the outcome of that self-assurance. We worked with landlord representative bodies to produce a Toolkit to support landlords’ self-assurance. This work was led by the Scottish Federation of Housing Associations (SFHA).
We assess each Statement as part of our regulatory risk assessment and publish an engagement plan for each landlord at the start of April. For Registered Social Landlords (RSLs) the engagement plan includes a regulatory status.
The Statements
- 154 landlords (97%) submitted their Annual Assurance Statements by the deadline on 31 October.
- The remaining 5 landlords (3%) submitted within 10 days of the deadline.
- 9 landlords (6%) disclosed what they judged to be non-material non-compliance with regulatory requirements.
- 12 landlords (8%) disclosed what they judged to be material non-compliance with regulatory requirements.
The reasons for the material non-compliance reported by the 12 landlords include failing to comply with homelessness duties, tenant and resident safety duties or regulatory requirements.
Landlords continue to engage positively with the Annual Assurance process, and many have told us that it is valuable in providing them with necessary assurance.
The common causes cited for late submission related to IT issues when uploading the Statement and/or staffing issues. One Local Authority cited the scheduling of committee meetings to approve the Statement as the cause of late submission. It has been a regulatory requirement that landlords submit the Statement by 31 October each year since 2019, and it is important that landlords factor this into their planning processes. We will consider any necessary engagement following any late submissions.
We reviewed all Statements as part of our annual risk assessment of all social landlords and reflected the outcome in engagement plans published at the beginning of April 2026.
The Visits
Many of the landlords we visited said they have incorporated their process for completing their statement into their annual cycles as with other regulatory returns, and we observed evidence of an extensive, comprehensive, and robust process being in place for most of the landlords we visited.
Some landlords acknowledged that whilst ongoing self-assurance can be resource intensive, the robust processes and procedures which they have implemented provide governing bodies/committees with assurance on their compliance with regulatory requirements.
A number of the landlords we visited said that they utilise the SFHA Toolkit and find this a helpful framework for their self-assurance work. Some landlords also told us they considered our publications and thematic reports as part of their assurance process.
Tenant and resident safety was considered a key priority by all of the landlords we visited. Many landlords described the processes they had in place to assure themselves about their compliance with their tenant and resident safety duties. These included robust recording and reporting mechanisms, dedicated roles to monitor compliance, and seeking independent expert advice.
Across all the RSLs visited, the evidence we saw demonstrated that each had appropriate arrangements in place for monitoring, reporting on and ensuring compliance with lender covenants and treasury management thresholds, with all organisations meeting the requirements of this area.
All of the RSLs we visited recognised the importance of governing bodies reviewing the assumptions underpinning sensitivity analysis and stress testing to ensure they remain current, reasonable, and reflective of prevailing economic conditions.
Areas for improvement
In the vast majority of landlords we have visited this year and in previous years, we have observed the use of detailed evidence banks which provide easy and direct access to key information to governing body/committee members.
In a small number of landlords, we saw that some governing body/committee members could not easily access information when undertaking their self-assurance process. In one landlord, the governing body did not have direct access to information, requiring them to have to request specific documents from staff. In another landlord, governing body members required to attend offices in person to review information, as the landlord could not provide remote access to its systems.
A small number of landlords that we visited reported to us that they do not currently incorporate into their self-assurance processes any tenant and service user feedback about the services that they deliver and the quality of their homes. Those landlords confirmed they are actively seeking out opportunities to incorporate such feedback into their future process.
What landlords told us worked well for them and supported them in submitting their Statement
Getting Assurance and Preparing the Statement
Cairn Housing Association develops an action plan each year to inform its ongoing assurance process, culminating in the drafting and submission of the Statement. Cairn designates a group of three Board members who are responsible for undertaking a detailed reviewed of the organisation’s evidence bank, who compile a report and present it to the Board setting out the level of assurance that has been obtained. The report is then considered and discussed by the full Board, allowing for all members to check and challenge the information.
Cassiltoun Housing Association holds workshops for Board members prior to approving the AAS. Board members volunteer to attend the workshops, and each workshop considers specific sections of the regulatory framework. This enables Board members to review the self-assurance evidence document and consider the evidence in place to support its compliance. Attendees will give consideration to the level of assurance available and ask any questions of senior staff who also attend.
Falkirk Council has a multi-layered scrutiny process, whereby it continually quality assess its approach via a variety of internal and external sources. This includes the Council’s internal audit team, British Standards Institution (BSI) accreditation teams and, periodically, associate consultants from Scottish Housing Network (SHN).
Kingdom Housing Association promotes an organisation wide culture of compliance and assurance that it seeks to integrate within its teams including frontline staff. A dedicated Audit & Risk team form a ‘second line’ of internal assurance by regularly reviewing and reporting on performance. Self-assurance is a year-round process with oversight, scrutiny and challenge provided by regular reporting to the governing body.
Kingdom also identifies independent audit and review as being key to its overall self-assurance process. It operates a rolling internal audit programme which prioritises areas for review, such as tenant and resident safety performance. Independent review of Kingdom’s governance processes, measured against the regulatory standards of governance and financial management, also supported the self-assurance process during 2025. Kingdom further completed a post-submission review and mock ‘visit’ with another RSL to capture learning and strengthen future AAS preparation.
Shire Housing Association utilises a dedicated assurance map to assess and ensure compliance against all regulatory requirements, with direct links to relevant policies, procedures, and/or relevant information which evidence compliance with each individual regulatory standard or requirement. The map clearly sets out the level of assurance obtained for each area and any future actions which are required.
Yorkhill Housing Association introduced a reporting format, whereby at each committee meeting a different area of the business is highlighted. This reporting informs the committee of the current performance in that area, opportunities for further improvement, and how to mitigate any potential risks. This process allows the committee to consider the level of assurance the organisation has in this area. Areas Yorkhill highlighted included financial health and controls, data protection and information security and equality, and component date of homes.
Tenant and Resident Safety
Cassiltoun provides its Board with quarterly reports on its health and safety compliance. The quarterly reports are supplemented by a compliance report card, which was developed by an external consultant. The report card indicates compliance through Red, Amber, Green (RAG) ratings for eight areas, including Asbestos, Electrical Safety, Fall Equipment, Fire Safety, Gas Safety, Lifts Inspections, Smoke Vent Systems and Water Hygiene by their Requirement for Completion. This Requirement for Completion is categorised as either Regulatory/Legal, Accepted or Best or Good Practice or Approved Code of Practice.
Tenant Participation
Drumchapel Housing Co-Operative share a draft copy of its Statement at the Co-operative’s Annual General Meeting, providing tenants and members an opportunity to provide feedback. Drumchapel also held a dedicated session with their Tenant Panel, whereby they shared the draft Statement, providing an opportunity for panel members to provide feedback and ask any questions about the Statement and the process undertaken to produce it.
Shire engages its Tenant Scrutiny panel, consisting of 13 tenants, in its self- assurance process. The panel is directly involved in the regular review of policies, including maintenance and damp and mould, providing direct feedback on the association’s performance, including on timescales for completion of repairs. The panel prioritises areas where there may be risk and/or challenges for the association to consider, such as impacts of legislative change on policy.
South Lanarkshire Council’s Annual Return on the Charter (ARC) is considered by its Tenant Participation Co-ordination Group (TPCG) prior to its submission to the SHR. This allows the group to compare its performance with other Local Authorities and informs the development of the Council’s customer scrutiny programme. This had led to scrutiny activity by the group on the Council’s approach to tenant and resident safety issues, including Reinforced Autoclaved Aerated Concrete (RAAC) and damp and mould.
Covenant Compliance
Ayrshire highlighted the value of clear and accessible quarterly management accounts and supporting reports, which provide detailed covenant monitoring by lender, covenant type, and performance against agreed thresholds. Board members also benefited from budgeting papers presented in a clear and straightforward format, alongside regular bite-sized briefings on key financial topics, helping to strengthen understanding and support effective scrutiny and assurance.
Drumchapel’s management accounts provide clear evidence of compliance with covenant requirements at each quarter-end and at year-end. Variances from budget are clearly explained, with timing and volume-related factors clearly identified. This supports effective Board oversight and monitoring of covenant compliance throughout the year.
Yorkhill includes calculations for covenant ratios in quarterly reports for the Board, providing a clear position and an indication of performance in relation to headroom that is available. This, combined with a formal budget review at the mid-year point, enables any material variations to be discussed in detail by the Board and allow any required changes to the Association’s plans to be approved.
Recommendations
- Landlords should seek and consider feedback from tenants and other services users as part of their assurance framework.
- Landlords should ensure that governing body/committee members have appropriate access to allow them to review information and evidence as part of the self-assurance process.
- Whilst the vast majority of landlords submitted their Statements by the deadline, landlords must continue to ensure their governing body/committee meeting dates allow for the Statement to be considered and submitted on time.
- Governing bodies should continue to review the assumptions underpinning sensitivity analysis and stress testing to ensure they remain current, reasonable, and reflect prevailing economic conditions.
Appendix 1: How we did the visits
The landlords we visited
To help ensure a good mix, the landlords we visited are located across Scotland, and are of different sizes, structures, and level of complexity. We also selected the landlords to reflect the different types of Statement that were submitted.
Who we visited
- Ayrshire Housing
- Cairn Housing Association
- Cassiltoun Housing Association
- Drumchapel Housing Co-operative
- Falkirk Council
- Kingdom Housing Association
- Shire Housing Association
- South Lanarkshire Council
- Yorkhill Housing Association
What we discussed with landlords
In advance of the visits, we requested that landlords provide us with the following information.
Tenant and Resident Safety
- The evidence and information the Management Committee/Governing Body or Local Authority Committee saw to assure itself about compliance with requirements on tenant and resident safety, this could include:
- Management Committee/Governing Body/Committee reports and minutes.
- Evidence from independent sources such as internal audit, consultant work and/or your corporate risk register.
Ensuring Covenant Compliance (RSLs Only)
The evidence and information the Governing Body saw to assure itself about its approach to monitoring, reporting on, and compliance with any covenants it has agreed with funders. This could include:
- Governing Body reports and minutes relating to;
- Budget setting and projections;
- Management accounts and in-year monitoring and management of covenants /treasury thresholds; and
- Covenant arrangements and negotiations with lenders.
- External/specialist advice and reports relating to the planning and monitoring of compliance with loan covenants and treasury management thresholds.
General Process for completing Statement
Questions for Senior Officer/Staff
- Talk us through the association’s AAS Process
- What resources are required for the process?
- Have the resource demands increased/decreased as you become more familiar with the overall process?
- Did you use any consultants? If so, to what extent? i.e. for the AAS as a whole or particular areas?
- Do you involve tenants? How/and is this for specific parts of the AAS? Do you have any feedback from tenants about their involvement in the process?
- Did you do anything especially innovative?
- Did you have any issues with getting your AAS in by the deadline?
- Do you use the SFHA toolkit to inform the process? If not, what alternative process is used?
- Did you consider SHR publications and thematics, such as the previous AAS visit reports, to inform your approach to self-assurance?
Questions For Chair/Committee Members
- To what extent are committee involved in the process?
- Do you have any feedback from committee about their views about their level of involvement in the process? What was your involvement in the process?
- Did you feel the process was led by the committee? If not, why?
- Did the committee ask any questions when presented with the AAS to sign and, if so, what questions/queries were there?
Tenant and Resident Safety
- How do you gain assurance that the organisation’s overall safety compliance regime meets legislative and regulatory compliance? E.g. internal advice, independent advice, internal/external audit.
- How do you gain assurance that your organisation’s working practices ensure the robust implementation of your safety compliance strategies, policies, and procedures? E.g. internal advice, independent advice, internal/external audit.
- How regularly are policies and procedures reviewed to ensure they comply with legislative and regulatory requirements?
- How do you test the validity of your information relating to tenant and resident safety?
- What assurance did the association obtain in relation to compliance with gas safety, electrical safety, lift safety, legionella, asbestos, fire safety, damp & mould?
- What assurance did the association obtain in relation to compliance with the completion of the new requirements of smoke and heat detectors and Electric Installation Condition Report (EICR) checks?
- Did either of these identify any elements of non-compliance? If so, how was this addressed?
- What assurance did the association obtain to ensure adequate funding is in place to ensure you can meet your obligations? E.g. planned/reactive maintenance costs.
Financial Planning and Assumptions (RSLs Only)
- Thinking about the regulatory financial returns submitted to SHR, for example the five-year financial projections, how does the governing body assure itself that it has evidence the financial data in the statutory and regulatory financial returns has been completed accurately and submitted on time?
- What is the role of the governing body in approving the returns?
- How does the governing body ensure financial forecasts are based on appropriate and reasonable assumptions and information?
- What sources, and/or specialist external advice is sought and is appropriate sensitivity analysis/stress testing around increases to inflation and interest rates for example undertaken and considered by the governing body?