Lessons from the first round of Annual Assurance Statements

About this report

From April 2019 all social landlords are required to make an Annual Assurance Statement about their compliance with regulatory requirements. Landlords submitted their first Annual Assurance Statement to us by the end of October 2019.

In this report we set out the lessons learned from the first round of Annual Assurance Statements, with a particular focus on the things that landlords told us worked well for them.

What is an Annual Assurance Statement?

The Annual Assurance Statement is a way for governing bodies and committees to assure firstly themselves and then tenants, people who are homeless or threatened with homelessness, Gypsy/Travellers and other service users that they comply with regulatory requirements, or to disclose areas where they need to improve. 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. The Annual Assurance Statement is the outcome of that self-assurance process. 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.

We consider each landlord’s Statement as part of our annual risk assessment. We then publish the outcomes of this in engagement plans at the end of March. For RSLs the engagement plan will include a regulatory status.

What we did

  • Analysed the Annual Assurance Statements submitted by all landlords.
  • Visited 10 landlords to find out more about the self-assurance work they did to enable them to make their Annual Assurance Statement.
  • Listened to feedback on the Annual Assurance Statements from individual landlords and their representative bodies.

What we found

The Statements

  • 179 landlords submitted their Annual Assurance Statement by the deadline on 31 October – that’s 95% of landlords.
  • A further seven submitted within a few weeks of the deadline.
  • Glasgow City Council has not yet submitted its statement and we are engaging with the council about this.
  • Over 80% of Statements were on one A4 page.
  • Around 20% of landlords disclosed what they judged to be material non-compliance with regulatory requirements.
  • A further 10% disclosed what they judged to be non-material non-compliance.
  • Many more landlords highlighted in their Statement areas for improvement they had identified when preparing the Statement.

 

Landlords have engaged positively with the Annual Assurance Statement process, and many have told us that it has added value to their existing assurance frameworks.

Most landlords used their existing assurance arrangements to provide them with the necessary assurance to produce the Statement. Some landlords told us that in preparing the Statement they had identified gaps in their assurance framework and were putting in place new ways to get the necessary assurance.

A small number of landlords did not plan meeting cycles and dates to allow them to have their Annual Assurance Statement considered by their governing body or committee in time to submit the Statement by the end of October.

A number of landlords adopted a “stocktake” or “baseline” approach to producing the first Statement. These landlords undertook a one-off comprehensive assessment of their compliance with all regulatory requirements. Many of them told us that having taken this approach they expect the process for subsequent Statements to be less resource intensive. A small number of landlords pointed out that the Statements had come at a time when there were other issues that required their attention, such as the extension of Freedom of Information obligations to RSLs.

Some landlords found the approach to self-assurance they had taken had been a positive learning experience for governing body members, committee members and staff, that had helped to deepen knowledge about regulatory requirements.

Many landlords found that the process had increased their level of self-assurance, particularly on tenant/resident safety and affordability. It had also led to improvements in how they operate even where they had full compliance. This “improvement focus” was a feature of the approach taken by many landlords.

Landlords adopted varying approaches to using external consultants to help them produce the Statement. For example, some landlords took an early decision to undertake the work without any external support. In some of these cases the landlord’s internal audit then reviewed and validated the approach taken. Other landlords had external support either throughout the process or in the initial phases of the work only and prior to the Toolkit being published.

 

Things that landlords told us worked well for them

Western Isles Council (Comhairle nan Eilean Siar) was initially uncertain how to approach the process given that it provides a homelessness service only. The Toolkit and Frequently Asked Questions we provided on our website helped the Council to clarify the requirements. Western Isles’ focus on homelessness meant elected committee members had good knowledge and assurance of this area.

Easthall Park Housing Cooperative already had a well-established and effective governance self-assurance process in place which formed the basis for its approach to producing the Statement. Easthall Park planned well in advance of the Statement submission date including training for the governing body, information sharing with other RSLs, reviewing available guidance such as the Toolkit and FAQs, and making adjustments to their existing processes to ensure they met our requirements. Easthall Park’s early planning also helped to ensure the work for the Statement was integrated with its annual strategic planning, business planning and risk management processes.

Linthouse Housing Association had undertaken an independent review of compliance against Regulatory Standards, following a period of significant change and restructuring. It had used this experience to put in place an annual assurance improvement plan which it used as the starting point for the Statement process. Linthouse now uses this as a critical working document to provide real time assurance of compliance with the Standards, and to deliver on-going improvements. It reports the outcomes from the plan quarterly to its Audit and Assurance sub-committee.

Muirhouse Housing Association had several sub-groups leading different elements of its assurance work, comprising governing body members and staff members who then reported to the full governing body for further discussion and decision. This helped ensure a shared vision, understanding and ownership of the Statement process. Muirhouse plans to continue with this co-production approach and build upon it in future years.

Caledonia Housing Association operates a group structure and decided to create a Governance Working Group (GWG) which comprised of governing body members from Caledonia, Cordale and Bellsmyre. The GWG took the lead on the Statement process and provided reports to the governing body members at each of the group RSLs for debate and decision. Caledonia included a tenant scrutiny panel member on the GWG to ensure a tenant voice in the process.

Bield Housing and Care extended the term of its short life working group of governing body members, which had recently carried out a review of Bield’s compliance with Regulatory Standards, to own and progress the self-assurance process. Like Caledonia, Bield also had tenant representation on this group. The group then reported to the full governing body for discussion and decision. Bield developed a digital evidence bank to support and underpin the self-assurance process which it is updating and expanding as appropriate for the next Annual Assurance Statement.

Loreburn Housing Association also developed a digital evidence bank which details each regulatory standard and requirement, and Loreburn’s level of compliance with the necessary supporting evidence. This integrated evidence bank is now a live resource which Loreburn will review, update and report to its governing body on a quarterly basis to help ensure on-going self-assurance. Loreburn expects this approach to result in less resource being required for the Statement process in future years.

As part of its self-assurance process, North Ayrshire Council provided a refresher session to members of its Audit and Scrutiny Committee on the Council’s responsibilities to its tenants and other service users. The session reiterated to committee members their collective role, and the responsibilities they have to tenants and other service users. North Ayrshire also involved tenants in scrutinising the evidence that helped to underpin its Annual Assurance Statement. These approaches helped inform improvements to how North Ayrshire ensures tenant/resident safety and rent affordability. They also led to improvements to services for Gypsy/Travellers.

Highland Council considered the effectiveness of its existing internal scrutiny and reporting committee structures in 2019. The new Housing and Property Committee’s remit will help ensure greater scrutiny and assurance of the housing and homelessness service, support the consideration of the Annual Assurance Statement and provide a greater focus on all housing issues. Highland also considered the existing level of tenant scrutiny, and for future years it plans to establish a specific tenant focus group to input to the self-assurance process.

Argyll Community Housing Association (ACHA) had an existing assessment process which it was able to build on for the Statement. Its governing body led on this supported by the Governance Manager. The existing programme of internal audits helped provide assurance around key health and safety areas such as gas and electrical safety. ACHA has also used external resources to gain assurance on rent affordability. Its process for producing the Statement helped to assure ACHA that it has effective systems in place for these key business priorities. It also helped ACHA to identify where it could further improve. For example, ACHA now plans to do further work to improve the information it has about tenant incomes which will then inform its rent decisions.

Lessons for the future

  • Many landlords are in a good place to build on the firm foundation they have put in place in the first year of the Annual Assurance Statements.

  • Those landlords that missed the submission deadline should plan their consideration of the Annual Assurance Statement to allow them to submit it by the end of October each year.

  • Many of the landlords we visited stressed the importance of having appropriate ways to get tenant and other service user feedback on their performance and to use that as an important part of their assurance frameworks. Where appropriate landlords should consider how tenants can be involved in the assurance process in a meaningful way, including using existing tenant scrutiny approaches.

  • Effective year-round, on-going assurance is good governance and is what should enable governing bodies and committees to make the Statement, and avoid the need to complete a major exercise each autumn.

  • It is not possible for governing body members and committee members to have absolute knowledge of all aspects of compliance with every regulatory requirement and standard. The important thing is that they have enough assurance to have confidence to sign the Statement. This means seeing enough evidence, including independent assurance where appropriate, and have confidence in the landlord’s frameworks to oversee performance and its internal control systems. It is for each governing body and committee to determine what is enough assurance for its organisation.

  • A number of the landlords we visited involved their internal auditors in the annual assurance process. Landlords should consider including their annual self-assessment processes and outcomes within their internal audit programmes, to help identify any areas where their approach could be improved, or where further evidence might be needed to demonstrate compliance with Regulatory Standards and requirements.

  • A number of landlords said that having the Toolkit earlier would have been beneficial. It will help landlords to have any additional guidance or changes to the Toolkit available early in the year to allow it to be taken account of in the Annual Assurance Statement.

  • We will keep our FAQs under review to help ensure they remain relevant so that landlords have the guidance they need.

     

 

 

Appendix: 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 levels of complexity. We also selected the landlords to reflect the different types of Statements that were submitted. 

Who we visited

  • Argyll Community Housing Association
  • Bield Housing & Care
  • Caledonia Housing Association
  • Comhairle nan Eilean Siar (Western Isles Council)
  • Easthall Park Housing Cooperative
  • Highland Council
  • Linthouse Housing Association
  • Loreburn Housing Association
  • Muirhouse Housing Association
  • North Ayrshire Council

What we discussed with landlords

We ensured a consistent approach to our visits by basing the discussions with landlords on the question template below. 

Landlords' experiences of producing the first AAS

Questions for the senior officer / head of service

What was your initial reaction to having to submit an AAS?
How did you feel about the AAS process before you started?
What approach did you take to producing the AAS?

  • Ask about the resources required. Too much? About right? Worthwhile?
  • Did you use any consultants? Why?
     For the AAS as a whole?
     For tenant/resident safety?
     For affordability?
  • Did you incur any additional costs (we are interested in costs not already incurred as a matter of course prior to the AAS requirement coming into play)? Are you able to quantify how much you spent in total on getting to the point of being able to issue your AAS?
  • Did you involve tenants? Why?
     On the AAS as a whole?
     On tenant/resident safety?
     On affordability?
  • Did you involve your lenders? Why?
  • Who else was involved? Why?
     On the AAS as a whole?
     On tenant/resident safety?
     On affordability?
  • What problems did you encounter along the way? How did you resolve?
  • Did you do anything especially innovative?
     On the AAS as a whole?
     On tenant/resident safety?
     On affordability?
  • How did you feel about the process once the AAS was complete?
  • How did this process compare to what you had done before?
     On the AAS as a whole?
     On tenant/resident safety?
     On affordability?
  • Any sense of how your process compares to what other landlords are doing?
  • Do you have greater self-assurance now than before they started? 
     On the AAS as a whole?
     On tenant/resident safety?
     On affordability?
  • What did you find out about yourself as a result of the process?
  • Did you have any issues with getting your AAS in by the deadline?
  • Did you have any issues getting your AAS signed by the appropriate person?

In addition for the chair/convenor only:

  • Did you feel the process was led by the committee? If not why not?
  • Was the committee’s level of involvement about right, too little or too much?
  • Did the committee ask any questions when presented with the AAS to sign off and, if so, what questions/queries they had?
  • Was the committee engaged in the process?
  • What was your involvement in the process?
     On the AAS as a whole?
     On tenant/resident safety?
     On affordability?
  • What was your personal experience of the process?
  • Do you think the committee has greater self-assurance now than it did before this process?
     On the AAS as a whole?
     On tenant/resident safety?
     On affordability?
  • Has the committee learned anything about itself during the process?

Positive Practice

Questions for the senior officer / head of service

  • Is there anything that you did throughout the process that you think worked really well?
     On the AAS as a whole?
     On tenant/resident safety?
     On affordability?
  • What made you take that particular approach?
  • Is there anything you ruled out at the beginning?
  • Did you borrow any ideas from other landlords?
     On the AAS as a whole?
     On tenant/resident safety?
     On affordability?
  • Did you do anything that wasn’t in any toolkit that you thought worked well?

In addition for the chair/convenor only:

  • Anything that the committee did that worked especially well?
  • Anything that you did that worked especially well?

Lessons learned

Questions for the senior officer / head of service

  • Is there anything you would do less of next time?
  • Is there anything you would do more of next time?
  • Is there anything you think didn’t work well?
     On the AAS as a whole?
     On tenant/resident safety?
     On affordability?
  • Is there likely to be less work in year 2 and thereafter given this was the first year?
  • What would you do differently?

In addition for the chair/convenor only:

  • Anything that the committee did that did not work especially well?
  • Anything that you did that did not work especially well?
  • Anything that you or committee would do differently?

Information for the risk assessment

Questions for the senior officer / head of service

  • Did you identify any areas for improvement in producing the AAS?
     On the AAS as a whole?
     On tenant/resident safety?
     On affordability?
  • Did you regard these areas material / not material / minor / major? How did you make that determination? Was it contentious?
     On the AAS as a whole?
     On tenant/resident safety?
     On affordability?
  • Are you undertaking any improvement activity as a result of the AAS?
     On the AAS as a whole?
     On tenant/resident safety?
     On affordability? 

Feedback on toolkit and other guidance

Questions for the senior officer / head of service

  • Did you use any sources of guidance? If so which ones? Did you use the SFHA toolkit?
  • How useful did you find the guidance used?
  • Did you find one piece of guidance particularly helpful? If so, what was it about this guidance that you found useful?
  • Were there any that were less useful?
  • What improvements would you like to see made to the guidance?