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The final item of business is consideration of a response from the Scottish Housing Regulator following the committee’s scrutiny of its annual report for 2013-14. Members will recall that the committee wrote to the regulator, and a letter has been received from it that provides a detailed response on the issues that the committee raised.
The letter highlights action that is being taken to address concerns that have been raised and areas in which further work is required. It also highlights areas in which further consultation and dialogue are required with stakeholders, including the Scottish Federation of Housing Associations and the Glasgow and West of Scotland Forum of Housing Associations. For example, it outlines that, to address concerns about proportionality, the SHR will publish more information on how it conducts its assessments and the outcomes of those assessments. It will also look at ways in which it can further improve the transparency of its operations.
The SHR supports the introduction of an appeals process, and it plans to consult on how an appropriate independent and proportionate system can be developed and implemented. It is working with stakeholders on a publication about how it applies the policies that are set out in its regulatory framework to cases in which serious concerns are raised.
In April, the SHR will issue updated information leaflets about whistleblowing and what will happen if concerns are reported. The content of those leaflets is being discussed with the SFHA and the GWSF. The SHR will work to improve the tone of its publications and will aim to include more positive examples in future editions of its “Governance Matters” and “Performance Matters” publications. It proposes to change and clarify the requirements for dealing with notifiable events, such as when a senior officer leaves a registered social landlord. It is exploring the potential to develop a framework agreement that the SHR and registered social landlords can use to appoint consultants who may be required to support RSLs that are experiencing challenges.
12:15On the appointment of contractors, particularly in rural and island areas, the SHR explains that landlords can use the comply-or-explain principle to deal with challenging situations. It will continue to work with the Scottish Federation of Housing Associations on its proposed model payments and benefits policy.
That is a summary of the response that we received from the regulator. I invite comments from members on it and on any further action that the committee should take.
I feel unsatisfied with the response in a number of areas. My particular concern relates to the purchase by governing body members or staff of goods or services from RSL suppliers or contractors, which you touched on, convener. The SHR seems to have responded in terms that are almost identical to its previous response. I am not satisfied that it understands how burdensome and difficult the situation is for housing associations in rural areas. The problem affects not only members and staff but their families. In limited local economies in rural areas, it can be almost impossible to operate under the current conditions. Equally, it would be hugely burdensome to create explanations case by case for what are sometimes fairly trivial purchases.
I am aware, from certain housing associations that have been in touch with me, that the issue has been going on for some years with no apparent resolution. I hope that the regulator can respond to us in more concrete terms, along with a timescale for how it proposes to deal with the matter.
The committee can write to the SHR again to raise any specific points—such as the one that you have just raised—on which members feel that further action is required.
I invite further comments.
Instead of having an interchange of letters in which we reply in like terms, would it be possible for the SHR to come back to the committee to discuss some of the issues further?
That is a good suggestion, and we can certainly progress it. Do any other members have a view on that?
I agree.
It is a good point.
If there are no other comments, does the committee agree to note the response that we received and to invite the SHR—and perhaps social housing sector stakeholders—to appear in June, before the summer recess, to provide an update on the progress that has been made?
Members indicated agreement.
Do we agree that we will—Mike MacKenzie’s comments notwithstanding—write to ask the SHR to provide us with an update in advance of that evidence session and perhaps to prioritise progress on areas that have been highlighted in the correspondence? I am thinking of the appeals process in particular.
Members indicated agreement.
We now move on to a related issue. Members will be aware that submissions have been received from Dumfries and Galloway Housing Partnership and Dumfries and district trades union council. The submission from the trades union council covers a petition that calls for a judicial review of what it considers to be a failure of the SHR to apply due diligence in the award of a £77 million contract to R&D Construction, which subsequently became insolvent. Members will wish to note that the petition did not come via the Parliament’s public petitions process.
The submission from DGHP covers a communication to its tenants that is intended to provide clarification of its position following recent media scrutiny relating to the concerns raised by the trades union council. It indicates that payment was made only for works that R&D Construction carried out and completed. As part of managing risk, DGHP has stated that it also retained moneys, which acted as its insurance against any future losses that it might have incurred. The money that was retained covered the cost of having to retender the contract after R&D Construction ceased trading. DGHP has suggested that there was no loss of public money. Funds for the regeneration work came from the Scottish Government, Dumfries and Galloway Council and DGHP’s private finance.
DGHP says that all that funding is accounted for and has been audited each year by DGHP’s external auditors as part of the preparation of its annual accounts. DGHP points out that, when the Scottish Government, Dumfries and Galloway Council and DGHP undertook the regeneration programme back in 2009, a detailed tender process was undertaken in accordance with procurement law. DGHP states that
“R&D’s tender was scored by all parties to be the best”;
that it carried out detailed financial testing to ensure that all tendering contractors were financially stable enough to carry out a contract of such a size; and that R&D passed the financial tests at that time. It further states that
“these financial tests were recently reviewed—through an investigation carried out by a respected firm of auditors—and it was found that DGHP acted correctly by appointing R&D.”
On the specific point about its involvement in the management of contractual matters by RSLs, the SHR’s response is that RSLs are independent businesses and it is for landlords to manage their affairs, including their responsibility to ensure that they are financially healthy and delivering good outcomes for their tenants. The SHR makes it clear that it is each landlord’s responsibility to ensure that it meets all relevant legislation, regulatory standards and good practice in relation to all its business decisions, including procurement decisions on the award of contracts to build new houses or to maintain existing homes. It is important that the point is made that the regulator has no role in the individual business decisions or due diligence undertaken by social landlords, and nor is it the committee’s role to be directly involved in determining individual RSLs’ contractual arrangements.
Members will be mindful of the strength of feeling that has been expressed by Dumfries and district trades union council and the supporters of its petition. However, in deciding what action it would be appropriate for the committee to take, we need to give due consideration to the context of our role and remit as a committee, so I will refer briefly to the legislative position. Beyond the fact that section 19 of the Housing (Scotland) Act 2010 requires the regulator to lay its annual report before Parliament, the Parliament is given no specific powers in relation to the SHR’s activities. In particular, the Parliament is given no power to adjudicate on complaints that are made about the regulator or to act as an appeals forum.
Given all that, I invite members to express their views on the issue and how we should respond to the Dumfries and district trades union council petition.
For the record, I draw members’ attention to the fact that, in the mid-1980s, I was a member of Dumfries and district trades union council, but I have not been in touch with the council for a number of years and I have not spoken to Mr Dennis about the issue specifically.
Members will know of my interest in petitions as the ex-convener of the Public Petitions Committee. The Parliament generally gets a lot of international recognition for the work that it does on petitions. I understand that there might be admissibility issues, but my advice to the committee is that we try to get an admissible petition from the trades union council so that the Public Petitions Committee can consider it.
I understand that the petition might well end up back with us, but nevertheless we have to give regard to the fact that the Public Petitions Committee is set up to look at such issues. I recommend that we ask officials from our committee and that committee to work with Mr Dennis to produce an admissible petition so that the committee that is set up to look at petitions can formally consider the issue.
If there are no other views, do we agree that officials of this committee will contact Dumfries and district trades union council and suggest that it pursues the route of submitting a petition formally to the Public Petitions Committee?
Members indicated agreement.
Do members also agree that we will write to Dumfries and district trades union council formally?
Members indicated agreement.
Thank you, colleagues. That concludes today’s committee business. There is no meeting on 25 March—the next committee meeting will be on 1 April.
On Monday 23 March, I, along with Mike MacKenzie, will visit Skaraborg logistics centre in Falköping in Sweden, and the port of Gothenburg. David Stewart and James Dornan will visit the Binnenstadservice in Nijmegen in the Netherlands and a nearby port.
Meeting closed at 12:25.Previous
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