“We’re looking at charging fees for the regulatory function and my message to registered providers [of social housing] is: ‘You should be championing that’,” he said. “You should want to have a well-resourced, well-funded regulator that is growing as the market becomes increasingly complex, because it provides confidence to investors and you need those investors for your market development.”
The government agreed in June to let the HCA, which oversees housing associations and handles funding for social housing, charge fees to regulated organisations. Rose said this reflects the fact that as the HCA’s grant funds give way “recoverable or returnable investments”, social housing providers are using “more complex sources of money to fund future business. So there’ll be market rents, market sales, diversifying into different activities, for-profit entities coming into the market.”
The HCA, Rose said, needs to “recognise how the market is changing and becoming riskier, and make sure the regulator is fit for purpose in an increasingly risky market – because it is unambiguously the case that it’s becoming riskier.”
The HCA’s approach looks out of kilter with the government’s messages about reducing the burdens on business – exemplified by the Red Tape Challenge and the ‘one-in, two-out’ rule on new regulations – but Rose argued that in fact effective regulation will help registered providers by “providing confidence to investors.”
“I don’t view it as a burden on business,” he said. “It’s about making sure you have an environment where long-term capital from institutional investors flows into the sector, which is absolutely critical to a healthy market.” Rose also pointed out that “as a public body we have a duty of care around public assets and value for money, so it’s not just about that market’s functioning” but also about protecting public money invested in housing schemes.
Asked how the HCA’s plans fit with the government’s rhetoric about civil service red tape, Rose replied: “I don’t think of myself as a traditional civil servant: more as a market practitioner coming into government – no disrespect to any civil servant. I think about how [regulation] will impact the market… and this is to protect and encourage the market, not to put an unnecessary burden on it.”
See also: our interview with Andy Rose