Corporation staff cuts ‘could damage regulation overhaul’

Job cuts in the Housing Corporation’s regulation and investment teams could put its plans to slim down regulation under threat.

The corporation has begun the process of shedding 50 to 70 posts in its frontline regulation and investment staff as part of the government efficiency drive (HT 26 November 2004, page 9).

It has been suggested that offices could lose about 15% of their local teams, although an official breakdown has not been published.

However, plans announced on Monday to give lighter-touch regulation to associations deemed to be a low risk could flounder if there are fewer local regulators, a number of former corporation sources said.

Frontline teams are well connected locally and often detect problems others would not.

One source said: “It’s quite risky. There have been more high-profile cases where the Housing Corporation assessment sees no problem but then it turns out there is a major problem. I get the feeling it’s been thought through from an efficiency point of view but not an operational reality on the ground.”

He added that the new posts created at the corporation’s London headquarters over the past few months could improve its relationship with government but would not balance out cuts in local regulation posts.

Bob Dinwiddy, assistant chief executive for regulation at the corporation said: “Given that we have identified 200 associations that we can bother a lot less, we need less people. There’s still the question of how we keep tabs on risk, but we won’t be doing all the activities we were involved in previously.”

About 500 associations across England this week received letters from the corporation telling them whether they are low risk (more than 200), medium risk (110) or high risk (100). The new process will be implemented from April.

Under the risk-based scheme, a low-risk association is deemed well run and any problems would have a low impact, whereas a high-risk association would have a complex structure or receive large amounts of funding, so the consequences of management problems would be more severe.

The principle of reducing regulation was welcomed by many in the sector but the way the corporation defined risk was queried.

Jim Coulter, chief executive of the National Housing Federation, said: “The corporation needs to take into account associations’ ability to assess and manage their risks. I am not sure to what extent this has been done.”