 Good morning, and welcome to the 33rd meeting in 2022 of the Local Government Housing and Planning Committee. I remind all members and witnesses to ensure that their devices are on silent and that all other notifications are turned off during the meeting. The first item on our agenda today is to decide whether to take items 4, 5, 6 and 7 in private. Our members agreed. We now turn to agenda item 2, which is to take evidence on the Scottish Housing Regulator annual report and accounts 2021-22. We are joined by Michael Cameron, who is the chief executive, and George Walker, who is the chair of the Scottish Housing Regulator. I welcome our witnesses to the meeting, and I invite George to make a short opening statement. Thank you very much, Arianne. So, convener, committee, thanks very much for inviting us to present the regulators and your report and accounts for the year 2021-22. We published that in October this year, and as you'll likely remember, we last met you in March, and we're very happy to be back today in person to update you on our work and what's happened since then. By way of reminder, back in March I updated you on our priorities, including those things. A strong focus on the quality and safety of tenants' homes, paramount, for gypsy travellers to sites that meet the standards determined by the Scottish Government, landlords meeting the needs of people who have experienced homelessness, with a particular focus on landlords' provision of temporary and settled accommodation, affordability and value for money being mindful of the huge cost pressures that tenants and landlords are experiencing right now, and for ourselves to be underpinned by effective governance and financial health. There's a but, and that but is that much has changed since we last saw you in March, as I don't think I really need to tell you. We're facing the most challenging economic context in a generation, and there's no doubt that tenants and social landlords are facing some of the most difficult financial challenges that they've ever had to meet. And so increases in the cost of living certainly means that tenants are finding it more difficult to afford the cost of renting and running a home. But social landlords are also considering the implications of the Scottish Government's emergency legislation on rent increases and what a possible extension of the provision might mean for rent levels next year. Those decisions might impact their ability to invest in tenant homes and to deliver key services to tenants and other service users. Now, as you know, rents, along with some public subsidy, are social landlords' principal source of income. It's also worth me just pointing out that social landlords continue to be asked to respond to the climate emergency, decarbonisation in heating homes, while dealing with the problems of supply chains rising business costs and invest to protect from increasing incidents of cyber attacks, which is significant. Quality and safety of existing homes is, of course, vital in the recent coroner's report on the very tragic death of Awabishak, highlighted just how important that is. We do know that resilient organisations cope better, and we encourage landlords to build and test their resilience. We continue to keep focus on our priorities while trying to remain agile and responsive to the volatile and uncertain operating environment that we all know we're in. Most recently, on 30 November, we published information about the focus of our landlord risk assessment for this year and into next. That takes account of the resources that we expect to have available to regulate effectively in the future years and will publish the outcome of that work at the end of March. Of course, we'll share that with the committee. That will include plans for engagement that we will have with all landlords during 23-24 years. To the cost pressures that I've referred to, of course, they also apply to the Scottish housing regulator as a small public body. That said, our funding for next year does give us what we need, and we can now proceed to recruit to the posts that we've been holding vacant. Indeed, I think that we told you about when we last saw you. We'll recruit to those posts. We had held those vacant because of the uncertainty that there had been around next year's budgets. That puts us in a good place ahead of our review of the regulatory framework that will initiate next year, and that's a big piece of work. We'll continue working closely with our stakeholders to support social housing and deliver shared goals. We'll, of course, keep you updated on our work plans at the committee, particularly around homelessness, where we have increasing concerns. There are real issues emerging, so because of that, we will publish a significant report on homelessness early in the new year, after a period where we've engaged with every single local authority across Scotland on this key issue. I'm sure that the committee will understandably have lots of questions for us, so I'll hand back to you and we're happy to discuss any aspects of our annual report or anything else that you'd care to raise. Thank you very much, George, for giving us a bit of an overview. I'll open the session to questions. I'll begin by focusing on staffing pressures. When the regulator last spoke to the committee, you were concerned about delays in recruiting, and you've touched on that a little bit, because the pressure of the Scottish Government's shared recruitment service. Can you update the committee on the latest staff position, whether vacancies are remaining, and if the recruitment process has improved? I'll maybe start on that and then get Michael to comment. We've been in a slightly unusual position, convener, asking whether the process has improved. There were some challenges at the time. My understanding was that there was work going on to improve that as we emerged from the pandemic and so on. However, it's difficult for me to comment too much on whether that process of staffing has improved, because we have been holding on to vacancies. We currently have, I think, I'm right, saying five vacancies, Michael, that we've been holding for some time, and that was about the uncertainty post the spending review and what our financial settlement would be for next year. We felt that we should do the responsible thing and be quite cautious. Recruitment has been paused, save for some work on a more junior role. I can make some more comments, if you'd like, on the fact that we will now be starting to recruit, given that we were the financial settlement that we've received. Michael, I don't know if you could add anything on the process around recruitment. To add to what Georgia said, we have had very limited exposure to the new, improved recruitment process that the Scottish Government has put in place, because we have been holding those post-vacant. However, where we have engaged with Scottish Government human resources around recruitment, we have noticed that there have been improvements in that process. The new system, while it's always challenging to work with something new, particularly in the IT front, we've seen that there has been a streamlining of the process that has allowed us to move through the various stages of recruitment. It is albeit with the caveat that Georgia has set out that that has been relatively limited so far. That's helpful. It sounds like good news. We're keen for streamlining and getting more efficient. That's really helpful. I'd like to move on to the budget and the somewhat good news in that respect. Your annual report notes that 2022-23 budget increased but is still likely to see pressures on budgets caused by rising inflation, increased employer costs and centrally negotiated pay rises. First, how does your likely expenditure for 2022-23 compare to the budget? Have you experienced any particular pressures? Secondly, will the recently announced budget for 2023-24 be sufficient for you to be an effective regulator? If I start first then on the current year, certainly we are seeing cost pressures. It's probably worth pointing out though, as a regulator, we're really a people business ultimately. Depending on exactly how you count it, about 80-85 per cent of our budget is spent on people, both staff costs and indeed board costs. Because of that, in fact, we were in the enviable position of being able to hand back some budget to the Scottish Government this year. The reason for that was because we were holding on to the vacancies that we've discussed. Our spend beyond people is relatively modest. Although, yes, we're seeing cost pressures with only about 15-20 per cent of our spend on non-staff issues, this year we will end the year in an okay position having handed back due to the vacancies. If I come on to the budget, you'll likely be aware that our funding for next year for the Scottish Housing Regulator was set at £6 million. That comprises in round numbers £5.3 million for revenue, £200,000 in non-cash and about £400,000 of capital that we requested. That's up from a total of £5.3 million in the current year. That gives us what we need and we can now proceed, as I mentioned earlier, to recruit to those posts, which we really do believe are very important to fill because we've already undergone some restructuring in the business and we believe we're already quite efficient and we do want to fill those vacancies. Obviously, that puts us in a good position for next year, I should say. Obviously, there's still uncertainty and funding beyond that year, just the same as everyone else, and we accept that. But it puts us in a good place ahead of our regulatory framework review, which we come up to the six-year review of that, and that's an important and resource intensive piece of work that we'll initiate next year. That budget was the figures that we gave to the Scottish Government in the business case that we made for what we would need to fund our current structure and to put us in a position to move forward with a regulatory framework while covering pay rises. I'm curious a little bit about the fact that you didn't have five vacancies that you held on to, but you also talked about doing some work in terms of streamlining your own workflow. Do you feel like that pressure on not having those five positions filled forced you into really looking at how you do the, as you say, people business? And then that's to set you up well in terms of staffing going forward. I think that there's some truth in that. The work we had done was in advance of that, was some time ago where we went through a restructure. We certainly did have to pull back on some of the work we've done through the pandemic. The big area of where we were just unable to deliver was on thematic work that we do, although we have started to pick that up again, so there was a gap in that. We just weren't. We were having to focus on other things as we touched on through the pandemic, and so that meant a resource diversion from that. So, certainly there were things we would have liked to have done that we didn't. However, in terms of how that position does, I'll maybe hand to Michael. He may have some more detailed comments on the operational aspect. I think through the course of this year, with us holding five post-vacant, we have had to reprioritise a number of our activities. George has already mentioned that we had hoped to restart our programme of thematic work this year. That was delayed. We've started to do a wee bit around that, although it's not a full programme that we've initiated during this financial year. However, now that we know the position next year, as George said, we will be taking forward a review of the regulatory framework, which we're obliged to do every five years. Within that, we will look at how we can re-establish some of those areas of work that we've had to put on hold because of the vacancy position that we were carrying. I want to ask a couple of questions specifically with regards to risks that are being identified. In your opinion, what are the main risks for the social rented sector currently and how are you working to help mitigate those? Interesting one. I don't think that those risks will likely surprise you. Let me give you a little background and then I'll come on to our risk assessment work and tell you a little bit about that. It's just started for the coming year and that will set the approach that we will take with landlords in the new year. Key risks. We published some information on that at the end of November. In summary, I suppose, the strategic context and landscape for landlords is volatile and unpredictable, as we know. The things that we highlighted in November were cost of living, certainly rent affordability, which applies to tenants and landlords, of course, delivering that. Issues around RSL finances and, in particular, business planning, which I'll comment on further in a second, decarbonisation, provision and the quality of temporary accommodation for homeless people—that is an issue, an emerging one—and issues around tenant and resident safety. It's fair to say that we're certainly seeing landlords dealing with increasing interest rates, high inflation, costs of energy, all those things that others are dealing with, as well as their obligations around net zero and rent affordability. Of course, the Scottish Government will announce its rent policy in mid-January next year. The tenants, too, are facing significant challenges. Let me come to how we approach that. In our risk assessment this year, we will be taking all those challenges into account. We'll take into account aspects of the economic environment and the Scottish Government's rent and evictions policy, of course, as you'd expect. By way of example, we'll pay very close attention to affordability for tenants, planned rent increases and levels of arrears. How do we go about doing that? Well, again in that piece of work in November, we published a summary of the risk that we would focus on next year, when all the data and all the information that has already flowed into the regulator. What would we focus on? Let me quickly—I won't speak about each of these, but I'll quickly give you the list. Homelessness, performance in delivering services, stock quality, tenant and residence safety is a significant one. Development and those RSLs are developing new homes, financial strength of RSLs and good governance of RSLs. How do we go about mitigating those things to answer that part of the question directly, Mr Briggs? First, by setting out what it is that we will focus on in our risk assessment, we find that that draws landlords' attention to those areas. They know what we're going to focus on, they're further paying attention to those, and that's part of the mitigation strategy. Crucially, two key things are ensuring that RSLs are well run and have good governance in place. I don't think that there's ever been a time when that good governance matters so that they are able to make the best decisions they can. The second thing that I'll highlight is about their financial health. Much in the mitigation is about RSLs putting themselves in a position where they can be as financially robust as they possibly can. Part of that has been and will be us encouraging them to look forward and revisit their business plans. Of course, some business plans will be knocked off course by the pandemic so that they can establish themselves as being in the best place for the future. Finally, if you'll indulge me, I'll maybe comment a wee bit on homelessness because that's an important area for us. If you like, what we will focus on there in order to mitigate will be how local authorities deliver services for people who are threatened with or indeed are experiencing homelessness. That includes understanding the homelessness journey and the four steps within that homelessness journey. In particular, this year we'll be paying a lot of attention to the increased demand for temporary accommodation and permanent accommodation that local authorities and RSLs provide. I hope that that gives you a little bit of a flavour of the risks that we see, the risks that we flag to landlords and some of the approaches that we'll take to help, if you like, guide landlords towards the best mitigation they can. That's very helpful, thank you. I think that, especially what you've outlined with regards to homelessness and temporary accommodation, I raise it regularly in this committee with regard to the situation here in my own area here in Edinburgh. I look forward to seeing that report in the new year. At the previous committee when you attended, we heard that some of the work that you were looking towards was around resilience work. You've obviously said that we are living in a changed environment since you were last at committee. What sort of conversations have taken place around business planning, given the cost of construction, given the rent controls, most housing associations are reporting their redrawing up their future build plans because of income projections now? Is there resilience going on around that and can you outline what that's looking like? I'm happy to pick up on that. Over the past couple of years, we've been highlighting the importance of landlords enhancing and safeguarding their organisational resilience and the resilience of the communities that they serve. That's an important focus for most social landlords. George has already set out in a bit of detail the current context in that economic volatility and uncertainty. If anything puts even further emphasis on the importance of landlords building and testing their organisational resilience. By that, we mean understanding their capacity to handle unexpected events while continuing to deliver those core critical services that their tenants and communities rely upon. We see those as ever more important, ever more critical elements of leadership in business planning. It's hugely and increasingly important for landlords to understand what it will need to sustain that resilience and build that resilience given the context that we see in it and the reality that that context looks like it's going to be with us for some time. To that end, we've been promoting the importance of landlord stress testing, their business plans, considering a range of different scenarios, to help them to understand at what point their businesses start to come under pressure and then they can start to think about the mitigations round about those pressure points. We've also started to give some thought to a more structured regulatory focus on resilience and what that might look like. In June, we hosted a two-day programme on resilience and social housing, which was delivered by Cranfield University School of Management. We invited the chief executives of the Scottish Federation of Housing Associations, the Glasgow-Escotland Forum, and the Association of Local Authority chief housing officers to attend that so that we could have that sector-wide conversation. We'll be using the learning from that to consider the place for resilience within our work and we'll explore further, with the sector, what the concepts and principles of a resilience framework would be, and we'll do that as part of the review of the regular framework that George has already touched on. As we all know, the Scottish Government will announce by mid-January its approach to the social sector rent for 2023-24, whether rents will be frozen or increases are limited. What impact might a rent freeze or a cap rent increase have on social landlord responsibilities regarding their business plans and their tenants? It's worth noting that the rent freeze, which is currently in place, doesn't have an immediate or direct impact on almost all social landlords in Scotland who apply rent increases from 1 April. As you point out, the Scottish Government will announce by 14 January its intentions around the emergency legislation and the potential continuation of a rent cap. It's safe to say that that's generated a lot of work by social landlords. It's resulted in significant reviews of business planning. Of course, social landlords are already in the process of consulting with their tenants around rent increases for next year. That reality is part of the conversation that is going on. It's appropriate for landlords to be having those conversations with their tenants now, because if a landlord is in a position to increase its rent on 1 April, it will have had to have had those structured consultations with their tenants. We've done some initial forecasting around the potential impact next year of a rent freeze across all social landlords in Scotland. In the basis of a natural freeze, not a cap beyond 0 per cent but a freeze, our estimation is that it would take at least about £60 million out of the business plans of RSLs. We suspect that that would be a similar figure for local authorities. I say at least, because that assessment is based on the business plans that landlords submitted to us at the end of the last financial year. They will have had significant changes to their business plans since then as a consequence of the context that we've already touched on. It's possibly the case that a rent freeze could have a larger impact than that figure of £60 million. If a rent freeze is capped or increased for social landlords, how might that impact your regulatory approach? There are a couple of elements to that. If landlords are under a statutory obligation not to increase their rents, then it's appropriate for us as a regulator to have regard to that and to have a clear understanding that landlords are meeting their statutory obligations in that regard. Where, therefore, it takes us as a regulator would be understanding for every landlord what that means and for the tenants of those landlords what that means. We would be looking to ensure that landlords are setting their business plans in such a way that they can accommodate that. That would be extremely challenging, particularly for some landlords. We would also be looking to ensure that they continue to deliver on those core requirements for tenants' statutory requirements, including the outcomes and standards that are set out in the Scottish social housing charter. Your recent published report on RSL financial forecasts showed that RSL financial performance should remain robust, but the outcome continues to be challenging, as you've already mentioned. Can you say any more about the financial challenges that RSL faces and how you will be working with them in attempts to take those challenges forward? Why don't I pick that one up? That's been quite a significant piece of work recently. As you said, we just published a significant report, and that is the five-year financial projection forward from the end of the march this year that sets that out. That data all came into us in April this year, and it looks forward to 2027 to give you a sense of that in the next five years. What did that show as well? I guess that several key factors that are affecting business plans, certainly the Scottish Government's intervention and rent setting, is in mind. There's no doubt about that. The increasing requirements to address the quality of homes and on energy efficiency and decarbonisation is right there and live. Along with the on-going uncertainty and the lasting impact of Brexit in Covid-19. As we highlighted those things, it means that the current context for RSLs might mean that they will have made significant changes to those plans, since they submitted all that data to us back in April. We know what's going on in the committee, and I know that it's very tapped into that. To give you some of the highlights of that, it's just reading it in that context that the highlights I'm about to give you are based on data from April. To give you those highlights, you're right. We did say, I think, that the language of use is that RSL finances look robust, and we hope that that will continue. What does that mean? Well, it means that most RSLs are continuing to show a more de-surplus of rents versus expenditure. They expect turnover to increase by a little shy of half a per cent over operating costs over the five-year period. They expect to see their asset-based growth. There's a but, and certainly one of the things that I highlighted is currently a significant but reducing cash reserves, to give you an idea of how that looks. At the end of this march, the cash reserves of roughly £819 million sense a significant amount of money, but they will drop to closer to £500 million by the end of the five-year period. That, of course, means that, although interest rate cover remains healthy, it is declining, so that's worth paying attention to. What the report also showed is that landlords expect rent arrears to peak in 2022-23. That was an interesting finding. The predictions are that it would peak at around 4.7 per cent in round numbers before returning to more normal historic levels of 3 to 3.5 per cent rolling forward. That's probably quite good news. What it also showed is that landlords will continue to spend significant amounts of money investing in their tenants' homes. About £1.7 billion over the five-year period is a significant amount of money. That works out at about £5,000 per property, roughly. Finally, the expectation is that 30,000 new homes would be built by landlords. That's up 1,000 from the previous cycle. That, of course, is supported by funding from the Scottish Government of roughly £4.5 billion, but also private finance. Bairing in mind, I guess, that those projections were done a wee while ago now and things might have changed. Nevertheless, we think that it puts landlords in a pretty strong position. The other, I suppose, fly that's in our outment, if I can use that term right now, is increasing interest rates. Landlords are having to deal with that. To give you an idea, every 1 per cent increase in interest rates will take, in our estimation, about £13 million extra cost in debt servicing for landlords each year. That's not an insignificant amount of money. It's against that context, if you like, that landlords are looking to deliver and they're looking to deliver against the building safety requirements, decarbonisation or stock quality commitments, as well as continuing to invest in new homes. The one thing that we're mindful of is that that reduction in financial headroom that I touched on, the cash reserves falling, there's just a wee thought in the back of our minds, if I can say, that that might well reduce headroom and therefore the capacity to respond to any other external shocks that hit and that are unanticipated. That's nice by saying what we said in the report, but based on what we know, finances are in a reasonably robust position as we sit here today. That's really helpful information. Thank you very much. I'd like to bring in Willie Coffey. Thanks very much, convener, and good morning to you both. I wanted to ask you a couple of questions around overall quality of the housing stock and so on and to touch on the issue about dampness, condensation and mould that you mentioned in your opening remarks. Firstly, there seems to be a little bit of a dip in the numbers of properties that meet the quality housing standard of SHQS down from 87 per cent to 85. Could you give us a little flavour of why you think that is and what the reasons behind that may be? I'm happy to pick that one up. From our monitoring of landlord's compliance with Scottish housing quality standard, we have seen that dip in the number of properties that meet the standards. To a degree, we expected that, and much of the decrease related to delays in carrying out electrical safety inspections, the requirements on the installation of interlinked smoke detectors and heat detectors, and also a range of upgrades to energy efficiency, which all have now become part of the Scottish housing quality standard. That has been in part a consequence of some of the delays and challenges that landlords experienced during the pandemic in terms of getting access to tenants' homes, but also in securing the necessary materials and labour and skills to undertake the necessary work. We are working with all the landlords that have indicated that they have not met the Scottish housing quality standard, where there have been these failures. We are looking at the plans that they have in place to address those, and many of them are hopeful that they will be able to deal with those issues during the course of this financial year. Landlords are projecting a 90 per cent compliance with the Scottish housing quality standard by the end of this financial year. As George has already touched on, we are aware that there is a significant programme of investment of around £1.7 billion that landlords are anticipating over the next five years, in part to address some of those issues. Does any of the houses that do not meet the standard are in the category of dampness condensation? Are there reasons that they do not meet the standard because of their structural condition in terms of condensation, dampness or mould, or are all the functional things that you were mentioning earlier, Michael, about electrical installations and upgrades and so on? Do any fall into that category? It is almost entirely the issues that we have already touched on. It is difficult to quantify the incidence of dampness mould. It does not form a specific element of the Scottish housing quality standard in that way, and there are not any national measurements or indicators of reports of dampness. It is difficult to put that quantification on that challenging issue. That would not necessarily translate into a failure to achieve the Scottish housing quality standard unless there were some component elements that delivered inadequate heating systems, for example. That would be how it would be flagged rather than as an issue of dampness mould. That is something that we are giving some thought to, particularly in terms of our review of the regulatory framework, as to whether we need to bring forward a series of measures to try to capture both the scale of the issue with dampness mould, but also to understand how landlords are responding effectively to any reported incidence of dampness mould. You mentioned the tragedy of the wee boy in rock still that lost his life, directly attributable to mould growth in the house that he lived in. That story is not a new one. For me, being an elected member for many years, it used to be the bane of my life. Tenants asking for help about condensation and dampness and mould growth in their houses. My experience was that housing officials regarded it as a lifestyle issue for the tenants that lived in houses rather than a structural issue for the home that they lived in. Do you think that we are getting a bit more informed about that issue now? The tragic incident helped us along that pathway. I know that you have written to social landlords asking them to conduct a survey or to be aware of that issue. I would like to know if I was a tenant taking up a local authority house, whether the house was damp or not. I would like the local authority to tell me that in some sort of register or other. Are we heading in that direction? Is that a good thing to be working on in the future? We wrote to all social landlords on 1 December to highlight the importance of them having robust procedures for managing reports and instances of mould and dampness. That followed the publication of the coroner's report on the tragic death of Awabishak. That was very much about a condition that related to mould in his home. We are working with the Scottish Federation of Housing Associations, the Chartered Institute of Housing and the Association of Local Authority Chief Housing Officers to identify and promote good practice in the management of reports of mould and dampness. That has been given a significant priority by all those parties. We aim to see a series of good practice guides for landlords and a series of events to highlight the importance of having those robust procedures in place. One of the things that we have already done is that we have highlighted the publication that the English Housing Ombudsman put out back in 2020. I have a lot of resource there for landlords to help them to consider best practice. Within that, there is a strong message about landlords being responsive and not adopting a position of blame around what is happening within a tenant's home and considering the complex interplay of heating, ventilation, structural challenges and how the property is used. All those elements have to be considered when a landlord is responding to any instance. Critically, it is about dealing with the issue, resolving the issue rather than trying to suggest that there is any kind of blame on the part of the tenant or their household. Do you think that we will see, ultimately, a register or whatever you want to call it, of local authority properties, landlords' properties and how they comply with the standard? Do you think that the dampness condensation mould issue should be part of the standard, ultimately? Having something like dampness mould as part of the standard is quite challenging, technically, to define how you would measure that. That is why, at this point, our principal focus is ensuring that landlords fully understand their responsibilities around addressing any reports that they have from tenants around mould and dampness and that they are properly equipped with the right ways to respond to that. So that the situation is dealt with quickly and effectively. Thereafter, we can give some consideration to whether there is a way to start to capture an understanding of the scale and extent of that so that, for no other reason, we can then start to see how we can address that and reduce the level of incidents of dampness mould. I think that that is quite important. One is that Michael and I sat in meetings with, as he said, SFHA and others that we are working with around this. Probably what I want to say to the committee is that I came away from that with a very clear view that when we were discussing this, it was raised by both parties in those regular meetings that we have. It was very much an open door and it was very much a nuanced approach, in particular, Mr Coffey, to the point that you made about the lifestyle issues, where it is all too easy to jump to that conclusion. There was a nuance and an understanding, I felt, from the organisations around those issues and a sensitivity to it, which I think was quite helpful. The other thing is that we move into revisiting our regulatory framework next year. That clearly gives us an opportunity to start a discussion about how we might react. That is about changing how we regulate going forward, how we adapt, how we regulate. That, of course, puts us in a discussion to bring this important subject into that regulatory framework discussion and consultation. I do not want to prejudge because I do not know at the moment, to be honest, how we will do that. Next year, when we start that work, it gives us an opportunity to think that through and engage with the Scottish Government, other stakeholders and landlords around that important issue. Just lastly, not to labour the point, but do you not think that tenants have a right to know that the house that they are about to live in is free from dampness, condensation and mould and for an authority to tell them that it is before they take up a tenancy? I think that any tenant should be able to be clear that the house that they are dating is fit to live in. Thank you, Willie. That has been a really important part of the conversation this morning. I also just, George, with your identifying the potential for revisiting the regulatory framework and potentially seeing where you could bring that into... ... so that we can be monitoring the dampness and mould, because it certainly is a massive issue in Scotland and obviously has a knock-on effect in terms of people's health and therefore our health service. We can tackle this. I think that it is a really important one to do. Having recently worked on the situation case work in my region where it got pushed into the lifestyle aspect and it felt very much like the landlords were digging their heels in there and very disheartening to hear of a family that is really struggling with health issues because of the housing situation. I think that it is a really important one that we need to pick up and work on together. I will be looking forward to hearing how you take that forward with this opportunity. I am not going to bring in Mark Griffin. Thank you. Good morning. You touched, George, on your earlier answers just about the risks and costs and concerns associated with landlords' commitments to achieving decarbonisation and net zero. At the last session, you talked about not necessarily seeing the risks and risks identified in the association's business plans. I wondered if that has changed, if those business plans are starting to recognise more and more the costs that the funding will have to be identified and set aside for that. I do not know how the regulator is supporting landlords to go down that path. I think that there remain a number of challenges for social landlords around putting in place a clear and funded programme of work to achieve energy efficiency of homes and the decarbonisation of heating in homes. The first one of those challenges is uncertainty. The Scottish Government is now reviewing the energy efficiency standard in social housing. It is established a working group to do that. We are part of that working group. It is issued interim guidance to landlords, which in effect puts on hold the targets, the milestones for the energy efficiency standard that were in place for 2025 and 2032. Last thing stands, social landlords do not yet have clarity on what it is that they will be asked to deliver around the new standard when it emerges. The Scottish Government is hoping that it will complete the review in the summer coming summer next year. As a consequence of that, we have paused our collection of data around the energy efficiency standard. We will revisit that as part of the regulatory framework review in terms of ensuring that we have appropriate performance indicators for landlords in that regard that reflects the outcome of the Scottish Government's review. In the meantime, we are not stepping away from that important issue, but what we are doing is focusing on the importance of the quality of landlords' housing condition information and the effectiveness of their asset management strategies. The biggest challenge for landlords—you have touched on that—is the funding of the investment that is required. It will be required until we get clarity on what landlords are expected to deliver. It is difficult to get a precise quantum of that investment. We have seen a range of estimations around what will be required from about £1.5 billion up to about £6 billion to £7 billion, which are figures that have been spoken about. As George says, we know that social landlords have a significant investment programme over the next five years of £1.7 billion into existing homes, but that is principally for investment other than on energy efficiency and decarbonisation. When we last looked at the business plans of social landlords, there were still not full costing out of what it will require to achieve whatever emerges out of the Scottish Government's review. At the moment, we are still in a position of uncertainty. How would you characterise that as? As well as the fairly huge cost burden, speaking to individual RSLs, they have concerns that they have properties in their books that no matter how much money they spend on them, they will never bring them up to the standards. I know that the standards are up for review at the moment, and that is because of a range of issues such as multi-tenure, blocks of flats and things like that. What view is the regulator taking on properties that RSLs deem impossible to bring up to standards? We do not want to be in a situation where our stock is decreasing. What is your view on how that process is managed on properties that RSLs take the view that they cannot spend money to bring them up to standards? The first one is that it will be important to see what comes out of the Scottish Government's review around exemptions. As they are currently for the Scottish Housing Quality Standard, there are a range of exemptions that can be applied by social landlords. Certainly one of the exemptions that has been mooted is around the kind of economy of undertaking works on properties where it may be extremely difficult. That raises the second element, which is landlords making some potentially difficult decisions about whether it is possible to bring all properties up to the appropriate standards and whether those properties therefore do not have a longevity of life. That is challenging and difficult because, aside from anything else, those are people's homes that we are talking about. Most landlords are looking at how they can achieve the type of works that might be necessary in a different range of properties. One element of the work that is going on with the review group is to look at different archetypes for different property types so that social landlords are equipped with the best knowledge of what type of solutions are appropriate in different type of properties. However, there will still potentially be some very difficult decisions to be made about the feasibility of continuing to invest in certain homes. That might lead us to a conversation, including with the Scottish Government, about whether investment is necessary and about reprovisioning of particular properties over and above the work that is already going on in terms of the development programmes that George has spoken about. I think that there are some very big issues there, where we are focusing particularly at the moment, as I said, on the effectiveness of landlords asset management strategies, picking up on some of those very issues. Much of that depends on having good quality information about the properties that they own and manage, including the condition of those properties and whether they are going to be straightforward and more challenging to carry out the necessary investments for energy efficiency and decarbonisation. I am just curious to know if you are aware of best built environment smart transformation. They used to be called the Construction Scotland Innovation Centre. They seem to be doing a lot of very good work, not just with new build but also retrofitting and helping land ownership. As you said, do you understand the assets and what they could be doing to decarbonise? We are aware of that work and that work is certainly in front of the working group that I mentioned in terms of the Scottish Government. There are a range of very significant projects that have happened or are planned to happen to test out the most effective ways to carry out retrofitting. There was an important one done in Glasgow around the retrofit of traditional sandstone tenements that has been illustrative of the challenges but also the possibilities for landlords. All that information is critically important to be available to the group that is looking at the review of the energy efficiency standard in Scotland, because that will help to drive the type of improvements and investment that is needed. Some members went to that project. I cannot remember earlier this year or last year, but it is an absolutely fantastic example of what can be done. It is heartening that those pilots are out there so we do get a better understanding. I am going to bring Annie Wells in. She is joining us online. I am going to touch on homelessness. I know that it was mentioned previously in today's meeting, but one of the priorities set out by the regulator back in March 2022 is landlords' discharge of their duties to people who are or have experienced homelessness, with a particular focus on duties to provide temporary and settled accommodation. However, we have found the most recent national report on the charter that the number of times households experiencing homelessness were not offered temporary accommodation by local authority roads. How can you assure myself and the committee that you are taking appropriate action to improve the situation? I will pick that up. I think that this is a great question and an important question. If the convener indulges me a little bit, I will give a long answer to this, because there are some complexities. I know that the committee understands that, but I will take you through systematically some of the things around homelessness if that would be okay. I just want you to flag that, because there will be a little bit of detail if you work. Ms Wells, you are absolutely right that it has been a priority for SHR. For some time, indeed, we can absolutely continue to highlight that in our corporate strategy. It is a subject that I can tell you very dear to my own heart as chair. A key element of our statutory objective is to safeguard and promote the interests of around the 40,000 people and families who experience homelessness and seek help from local authorities. That is writ large in our statutory responsibilities. We do that in a number of ways. We monitor, assess and report against the range of duties and obligations that are placed on local authorities by legislation, as you might expect, and through the statutory guidance that would be issued. An example of that is the requirement of local authorities to provide temporary accommodation to those who need it. I will come back to that temporary accommodation in a minute. Of course, there are relevant standards in the Scottish Housing Charter that you rightly referenced. There is a good number of them. That starts with our annual risk assessment. It has been part of the annual risk assessment that we have implemented this year and the one that we are doing now to implement next year. What do we focus on there? We focus on the four key parts of the homelessness journey. What I mean by that is that we assess the access to service, the assessment of application, the provision of temporary accommodation and the outcomes for households. The annual risk assessment informs how we approach all of that. To give you a flavour of where we are right now, we are engaging with more than half of local authorities across Scotland on at least one of those four stages that I have highlighted. Right now, we are engaging with three local authorities on all four stages. They are East Lothian, Fife and Glasgow. We are most commonly engaging with local authorities about the assessment stage and the outcome stage of that homelessness journey, although they do not stand alone. That is significant for us. We also engage with all local authorities across Scotland in the last year to get a better understanding of the extent and impact of the pandemic on that. It may be the best way to describe that. We did that through a series of structured conversations right across the local authority landscape. Those conversations with local authorities helped us to really understand the pandemic impact. The things that came out of that were that bed and breakfast accommodation and hotels provided temporary accommodation at the start of the pandemic, a vital element of that, and through the later lockdowns. That meant that we probably had too many people left in those types of accommodation, sadly. There was certainly evidence that we were hearing from landlords that family breakdowns and domestic abuse led to an increase in homelessness presentations for landlords during the various lockdown periods. There is no doubt in our minds that some landlords are having real challenges in providing a sufficient quantity of temporary accommodation during the pandemic, and that has continued. It is continued now, shall we say, that there are still a number of landlords struggling with that. It is absolutely true for us to say that some landlords outlined the challenges that they have in complying with the Government's unsuitable accommodation order in the short and medium term. Those are the issues that emerge from those structured conversations. If I move forward a wee bit, we are currently speaking to all local authorities about the homeless services. I would describe it as we see three major strategic challenges for local authorities in this. The first, dealing with a significant number of people currently in temporary accommodation, principally as a response to the pandemic as I have highlighted, and the hangover from that, if I put it that way. Secondly, maintaining a sufficient supply of appropriate temporary accommodation, and finally, ensuring access to the number of permanent homes that are needed for those that become homelessists. I am kind of stating the obvious, but that is alive and well. Those are the challenges, and there is a but. The but, of course, is that homelessness obligations on councils are statutory, irrespective of the strategic context in the environment within which local authorities operate. Local authorities must do everything within their control to comply. I would sum that up by saying that, because of those challenges and the struggle at times that some local authorities are having to rise to that challenge. In practice, that might mean that we have to accept that there is some degree of non-compliance in one or more statutory obligations, where we recognise that local authorities are trying to do everything that they can within their control to improve and to meet their statutory requirements. Where we see a system issue, we recognise that as a primary cause of non-compliance, and we will say so in engagement plans for that given local authority. It is for those reasons that I highlighted earlier that we will publish a major thematic report on homelessness in the new year. We hope to have that out, I think, by the end of January, Michael, if I am right. That will be informed by those discussions with local authorities, but what it will also be informed by is an event that I hosted two weeks ago in Edinburgh with various advice agencies and advice bodies. That was sobering, because I sat in front of them with a group of colleagues from SHR to hear from the advice agencies saying that they have never seen it as bad in terms of the challenges of temporary accommodation, access to temporary accommodation. I was hearing stories of, in some cases, gatekeeping being alive and well in some places. I suppose that the key theme that came out of that—I will not go through all the detail—was to a person in that meeting. I was being told, as chair of the regulator, that they had not seen it as bad. It was as challenging as they had seen it. Certainly that would square with our own concerns. There is no doubt that social landlords, local authorities and ourselves are working really hard on that, but that was sobering to hear that. Let me wrap up with some statistics for you, just as a reminder. There were 35,230 homelessness applications in 2021-22. Of course, we will not finish the current year. That was an increase of 3 per cent, but it was, in fairness, still down in the peak of 37,000. There were 28,000 households assessed as homeless or threatened with homelessness, and there were a total of 26,000 open homelessness cases at the end of March last year. Let me just end on touching on the temporary accommodation issue, because that is quite significant. There are currently 13,945 households in temporary accommodation at the end of March. That is a 4 per cent increase on the year before and more on 2020. What troubles me is that there are 8,635 children in temporary accommodation, and some of those will be sitting in hotels or bed and breakfast as I commented on earlier as being one of the consequences from the pandemic. The other worryingly, for us as a regulator, is that the average time spent in temporary accommodation has been going up. If you look at that in totality, in 17-18, the average time in temporary accommodation was 175 days. I won't bore you with every single year, but by the time we get to 21-22, that's up to 207 days, and that's a lot of days. The most significant times in temporary accommodation were in Edinburgh, where it increased to 449 days, and that means 449 days, and in Stirling, where it's up to 323 days in the last year. Those are long times, especially for families to be sitting there. You can see where that will be a significant part of our focus as we move forward and why we will publish our report on the new year. We are hearing from some social landlords that they are struggling to meet their obligations. You might require more and follow up questions, but I will pause there to give you a sense of the issue. That is why it has been, and that is why it will remain an important part of our risk assessment. As I've said, it's part of our risk assessment right now for the coming year, during which we'll assess which landlord we engage with and how and on what parts of the journey. I'll pause there to see if that answers your questions or if there's anything else I can help with. Michael, do you have anything that I've missed that you'd like to add? No, thank you, Mrs Walker. That was very comprehensive. Thank you, convener. That was actually very helpful and very much worth going into the detail. Miles, would you like to come in? In terms of that line of questioning, Shelter Scotland has called on the Government to declare a housing emergency, and especially hearing Edinburgh, that's something that I've been calling on the Government to do. You've outlined what is an unacceptable situation now in Edinburgh. Do you think that that's what we need to see and why is that not currently taking place when we're talking about the numbers where they are? A temporary accommodation, when you look at some of the options available to councils, those are condemned buildings, sometimes, for my guest houses, which aren't really suitable for families to be living in. Would you agree with that call from Shelter Scotland? I think that there's no doubt that we're in a very difficult situation. Actual language about emergencies and so on is probably not for me to say it's chair of the regulator on that specific language. I met with Shelter very recently, they were part of the advice agencies group that I referred to, and Michael and I have sat with the chair of Shelter Scotland and the director again quite recently, so we have a lot of engagement. There is no doubt that we are in a difficult situation, and I think that it's around the two things that I highlighted, Mr Wigg, the issue around temporary accommodation, it's writ large in Edinburgh. I know you'll know that as a local MSP, and indeed the regulators come to the meeting with Edinburgh, I think, I'm right in saying monthly on this subject, Michael, to look at that in some detail. Temporary accommodation is writ large, where it is very difficult to secure, I think, in particular in Edinburgh for a whole host of capital city reasons, and as I've said, that means that the second part of that is a supply issue. What it means is that the statistics would tell us, in fact, that there are more people going into temporary accommodation than come out the other end. The gap in the last year was about 2,500, more went in and came out, so that shows you the supply issue at the other end. You might add to that that at the moment we're not seeing much or any impact yet of the Ukraine situation, because we know what's happened to people hosting folk from Ukraine and the cruise ships that are, I guess, a very welcome addition to give people. I suppose that, certainly, as chair of the regulator, I would worry that, as those very needy people from Ukraine, if they start to exit host families and cruise ships and so on, could that add to the demand? So I wouldn't want to downplay it at all that there is a really significant issue, and that's why we've highlighted it and why we'll publish what we'll publish in the new year. I hope that that helps. We're just going to continue a bit longer. I'm going to bring in Paul McClellan with some questions. Thank you, convener, and good morning, panel. It's really just asking a little bit more around about the whistleblowing policy of the CHR. I mean, I was contacted by an MSP colleague just touching on a case, and it's really around about what the procedure is, if there's an allegation made to yourselves about an RSL, what the procedure is, in terms of that. I understand that there's a full independent investigation that's conducted after that. I'm just wondering what the process is and how many whistleblowing allegations there have been in probably the last two or three years. Shall I start with that one then? Michael, you might have something to say as well. I think that I might know the scenario that you're talking about, Mr McClellan. In terms of whistleblowing, let me separate those two things. In terms of whistleblowing, there is a robust process in place. I'll maybe let Michael take you through the process. I'll maybe start at the high level in place where a whistleblower from within an organisation or an organisation were to come through and make issues. I think that if it's what I'm guessing the scenario that we're dealing with and engaging with one of your fellow MSPs on, that actually isn't one of whistleblowing, that's one of complainants. It's one where there are complainants who are raising issues due to statutory action that we took. There's a separation between whistleblowing and complainants who are unhappy with things that we do. It's a very clear whistleblowing policy. Michael might want to comment more, but also for those who have complaints with a very clear complaints approach, which escalates through a number of levels within SHR. A complaint can escalate to the board of SHR, which has only happened once, at least in my time as chair. I think that it's only ever happened once. Of course there's a... Excuse you. There's finally the ombudsman that can go to you. Sorry, I won't go into specifics, but there's a very clear distinction between whistleblowing and complainants. The two are a bit different. Michael, would you have anything to add specifically? Probably just to emphasise that point. SHR is a prescribed person under the whistleblowing legislation. That's the Public Interest Disclosure Act. Whistleblowers can make disclosures to us. During 2021-22 whistleblowers contacted us on three occasions, although none of those qualified as protected disclosures. Having said that, we took action in all three cases. In one case, we gathered information before deciding what the next steps were. In two other, we worked with the landlords in question to establish the facts. We'll continue to engage with those landlords during this current year to attain assurance that they're addressing the issues that were raised. Since April 2020, we've required through our regulatory framework all social landlords to have effective arrangements and a policy for whistleblowing by staff and for governing body members, elected members, so that it can make it easily available to those individuals and ensures that it's promoted widely to its staff and to its governing body members. During this current year, today we've been contacted twice and they're still working their way through and we'll report on them in our current annual report for the current financial year. That concludes our question. I think that it's been a very useful conversation this morning, so I really appreciate you coming in to give evidence and now suspend the meeting briefly while our witnesses leave the room. The third item on our agenda today is to consider two negative instruments, building Scotland amendment number two regulation 2022 and building Scotland amendment number two regulations 2022. As those are both negative instruments, there is no requirement for the committee to make any recommendations on them. Members will note that the Delegated Powers and Law Reform Committee reported the building Scotland amendment number two regulation 2022 to the Parliament for breaching the 28-day rule. The Delegated Powers Committee also drew our attention to correspondence from the Government explaining the reasons for this breach, which is annexed in the report. Do members have any comments on the instruments? No comments. Is the committee agreed that we do not wish to make any recommendations in relationship to these instruments? Agreed. We agreed at the start of the meeting to take the remainder of our agenda items in private, so as we have no more public business today, I now close the public part of the meeting.