RSLs in financial difficulties might be exempt from rent cuts, says TSA

30 Jul 09
Housing associations that can show their financial viability is at risk might be able to avoid cutting rents next year, it was confirmed this week
By Neil Merrick

30 July 2009

Housing associations that can show their financial viability is at risk might be able to avoid cutting rents next year, it was confirmed this week.

But Peter Marsh, chief executive of the Tenant Services Authority, doubted whether many association boards would choose to claim they were in such a serious situation that a 2% rent reduction threatened their future.

Last week, the government disregarded calls from the National Housing Federation for a rent freeze in 2010/11 and, depending on the retail price index in September, said rents might fall by as much as 2%.

‘It’s clear that a board’s fiduciary responsibility overrides all other responsibilities,’ said Marsh. ‘It’s not a dodge. It simply acknowledges that viability matters.’

Marsh was speaking as the TSA launched discussion papers on governance and viability ahead of this autumn’s wider consultation on the new regulatory framework for social landlords and other providers of affordable housing. Options include continuing with governance rules used by the Housing Corporation, introducing lighter-touch regulation or adopting the good governance standard for public services.

While the regulatory framework is almost certain to contain a discrete standard on viability, the discussion paper suggested cutting the number of bands used to assess providers from four to three, or even fewer.

Neither the governance nor viability standard will apply to local authorities, which will continue to be overseen by the Audit Commission.

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