Scottish Housing Regulator to boost treasury scrutiny

The regulator itself is “building capacity” in its finance team, with two new hires and an intention to have “a much closer look at treasury risk”, Mr Brennan said.

“I think it’s fair to say that we will be more actively monitoring treasury management arrangements as a result of not just the changing face of finance but also the abolition of the consents regime. [We already] have an increased focus on financial forecasting when an organisation is likely to go to market.”

Asked where overseas finance fits into this – weeks after Social Housing revealed that First Abu Dhabi Bank had entered the English sector – Mr Brennan said RSLs should be aware of the risk of currency exposure.

“Whenever there is an overseas investor involved we are keen to understand if there is any exchange risk to the RSL and I think from the work that we’ve done, the exchange risk is pretty limited.”

He also emphasised that the regulator does not guarantee the protection of private finance.

“[In Scotland] nowhere in our [regulatory] objectives does it say that we protect private capital – what it says is that we protect and safeguard the interest of tenants and service users.

“But clearly part of protecting the interest of tenants and service users is protecting the ‘no loss’ status of the sector.”

Scotland is unlikely to follow in the footsteps of England in seeing the arrival of for-profit registered providers, according to Mr Brennan.

“It is very difficult, if not impossible, to see how a for-profit provider could ever reach our registration criteria.”

Hear Ian Brennan and other expert panellists speak about the outlook for the sector at this year’s Social Housing Scottish Annual Conference, on Thursday 5 September 2019 in Glasgow