Greg Campbell 26 April 2013

How should housing providers

manage risk?

Campbell Tickell

• Multidisciplinary management consultancy; working UK

wide; fifteenth year in operation; over 500 clients

• Principal areas of focus: housing, social care, regeneration

• Clients have included: DCLG, HCA, TSA, Charity

Commission, NHF, NCVO, councils and ALMOs, housing

associations, care providers, charities, developers and

housebuilders, maintenance contractors, solicitors

• Specialist areas include: governance, strategy, business

planning, business assurance, performance, new business

There’s a lot of it about…

• Financial capacity risk

• Liquidity risk

• Diversification risk

• Lack of diversification risk

• Development risk

• Growth risk

• Stagnation risk

• Regulation risk

• Demand risk

• Supply risk

• Sale and leaseback risk

• Reputational risk

• Business continuity risk

• Health and safety risk

In all sectors….

• Cosmopolitan Housing

• Winterbourne View

• Mid-Staffs NHS Trust

• RBS, HBOS, PPI

• Lakanal House

• Connaught, ROK, Kinetics

• KPMG

• Horsemeat

“The good old days”

• A simpler environment

• Housing providers (relatively) straightforward

• Big = 15-20,000 homes

• Inspection

• Prescriptive regulation

Traditional approaches to risk

• Risks? To be avoided! Leave risk to the auditors

• Remember the Corpy risk list…

• For instance - 1/3 of your business in supported housing…

• Focus on internal controls

• Focus on operational

assurance – “Are we

doing things right?”

But now…

• Diversification - range of business streams

• Commercial competition; for-profit providers

• Non-RP parents

• Care and support, social enterprise

• Market renting, market sale

• New partners

• Joint ventures

• Different kinds of housing animals

And what’s more…

• Regulation more hands-off

• Albeit now more complex

• No inspection

• Increasing focus on governance

• Greater onus on Boards

The big question for Boards and Execs

How do you know

you’re any good?

Comprehensive approach

• Shift towards strategic assurance – “Are we doing the

right things? Have we identified the right risks?”

• Board oversight

• Inputs from:

Executive and middle management

External audit

Internal audit

Resident scrutiny

Specialist support

Challenges

• Keeping it strategic

• Keeping it rigorous

• Keeping it manageable

• Keeping it proportional

• Balancing delegation with

accountability – Board to

Exec to middle managers

• Incorporating into individual

targets, appraisals

Example -

• Comprehensive risk matrix

• Interlocking ‘patchwork’ of assurance

• Input from all levels of the organisation

• Responsibility:

Head of Business Assurance

Reporting to Group Chief Executive

Reporting to Audit & Assurance Committee

• Joint procurement with GreenSquare Group of internal

audit services and specialist reviews

Risk matrix overview (extract)

Example -

• Quality Assurance and Service Improvement Programme

• Three year programme of service reviews

• Six reviews a year in risk assessed priority areas, e.g. -

Gas safety

Income management

Resident involvement

Voids and lettings in older peoples’ housing

Fire safety

Estate services

• Staff and residents members of review teams

Example –

• Aim for wider range of assurance than traditional auditing

• Cut out duplication between external and internal audit;

external auditor to review internal financial controls

• Business Assurance Service to provide enhanced strategic

assurance to Boards and Executive:

Review business plan and strategies and support Executive

in identifying and assessing corporate risk

Independent oversight of management assurance activities

and oversee procurement of other independent assurance

Review the assurance framework

Business Assurance Strategy

Example –

Example –

Getting a handle on best practice

• HouseMark Business Assurance Club - to be launched in

June (inaugural meeting in London 19/6/13)

• To support HM members and key personnel interested in

ensuring robust business and effective risk management

• Meetings 3/4 times a year to:

Share common issues and problem solve

Hear good practice examples/case studies

Gain business insight into emerging policy/regulation risks

Understand changing role and nature of governance in a

more commercial world

• Membership at Director/Head of Service level

greg.campbell@campbelltickell.com

www.campbelltickell.com

020 8830 6777

0793 048 0244