 We bung hynny o blelw for ynglynch Cymru i ddefnyddio Restriustol Cymru yn 2015. Da�ifiwr y peth yn maes i'w siwゆ nov기에idd, jokeb, Furchys yn addallyw hollug y dyddol, ond mae ddefnyddio cine Fateffять y Fygin G exposed a phirbeidau tynnu a'r Gymraeg Hinoïdeineol hefyd ddydd, dar Runmarid gyma below histhfawr mael i bryddu'r llwyddol hefyd ac siw scandalu Blackados â nomru麼f yn mynd i hangennau mwy iawn gyda ond hefyd. Rwyf mwy iawn investirr ynglynch David Stewart sy'n digynbaru休u honno introduced. retrieve of the Workout underlying handports afterwards. Thank you, convener. I've got no relevant interest to declare. I'd also like to take this opportunity to thank the outgoing member of the committee, Mark Griffin, for his very worthwhile contribution to our work and to wish him well on his new committee. Agenda item 2 is the decision to signify business in private. Can I seek the agreement of the committee to take item number 4 in private? Agenda item number 3 is the Scottish housing regulator annual report, 2013-14. The purpose of this section of the agenda is to hear evidence from representatives of the Scottish Housing Regulator, focusing on its performance and annual report and accounts for 2013-14, as well as its approach to regulation. Unfortunately, the chair of the Scottish Housing Regulator is unable to join us today, as she is unwell, but on behalf of the committee I would like to wish her a speedy recovery. However, we are able to welcome Anne Jarvie, board member, Lisa Peebles, board member and Michael Cameron, the chief executive of the Scottish Housing Regulator. Can I invite you, Ms Jarvie, to make an opening statement? Thank you very much. Good morning. I'm making this statement on behalf of the chair, Cabe Blair, and I will convey your best wishes to her when I see her later today. Can I just start by expressing my thanks to the previous convener of the committee, Maureen Watt, for hosting the regulations, important stakeholder event that was held in this building in May of last year, and I think most of us that attended it and the feedback that we've had has been very positive about that, so thank you very much indeed for that. Through this introductory statement, I'd like to touch on some of the highlights of the past year or so, the value we add, our engagement with stakeholders and the success of our work on the charter. Since we last appeared at this committee, we've had a busy, challenging and we think successful year. The highlights have been our planned, risk-based and proportionate engagement with 61 RSLs and 15 councils, all with the single objective of protecting the interest of tenants and other service users. The launch of the charter landlord reports and easy use comparison tools has been well received. The new IT system, allowing landlords to submit information quickly and easily to us online, has been taken forward. The publication of our thematic inquiry report on housing options, our continued support to RSL board members, including through our governance matter events, and the first use of our statutory intervention powers in two landlords again to protect the interests of tenants. It is through this type of work and our effective regulation that we add value to social housing. Giving confidence to lenders and investors in social housing is hugely important. Over four billion is invested in social housing by private lenders and investors. Recently, one of the major lenders to this sector told us that our effective regulation has a value of around 115 basic points or 1.15% on lending to landlords. At current levels of RSL debt, that equates to a saving of around 40 million every year on the interest charges RSLs pay. That's a tenfold return on the cost of regulation and is a significant benefit to RSLs. We also add value in other no less important although perhaps less quantifiable ways. We empower tenants by giving them timely, accessible and comparable information on landlords' performance. We help to protect the hard-earned good reputation of those social landlords who provide good service and are well managed. We provide guidance and learning opportunities through our engagement case studies. We help landlords to improve by providing benchmarking information. We will build on the success of last year, including through the initiation of a programme of service-focused thematic enquiries. This includes one on gypsy travellers, something I know this committee has an interest in. This uses our analysis of the data which we collected for the first time through the 2013-14 annual return on the charter from the 20 social landlords who manage gypsy traveller sites. Our inquiry will look at the reasons behind significant variances in pitch rents and customer satisfaction levels and will highlight good practice we find and make recommendations on improvement. We expect to publish early this year. We place great importance in communication and engagement with our broad range of stakeholders. We are aware that effective regulation will mean that we are not always popular with all of them, but we value effective, respectful and professional relationships with our stakeholders. This year, we published independent research into how we communicate involving 270 of our stakeholder organisations. This found strength in our approach and areas that we can further enhance. It is important that we work with our principal stakeholders, tenants and service users to ensure that we understand their priorities. Last year, we published the second report on the views of our national panel of over 300 tenants and service users, and we conducted our separate research into the service priorities of registered tenant organisations in Scotland. We have established formal liaison arrangements with the regional network of RTOs, and we now meet regularly with them. And lay tenant assessors contributed significantly to our work last year. These engagements help shape what we do and we work with tenants to co-produce the landlord reports we published in August. We know that this committee will have heard a range of views about the regulator, including both praise and criticism. It is very difficult for us to respond to general criticisms, and I am sure you will agree that effective regulators are seldom popular with those they regulate. Indeed, an overly popular regulator may not be the one that is most fulfilling its responsibility and its role. Having said that, we are always very keen to hear feedback, either positive or negative. We have very positive relationships with many of our stakeholders, including with lenders, auditors to the sector and with many regulated bodies. That is not to say that we cannot improve, and we are always keen to listen to help shape even more effective regulation. We want effective dialogue to help us to understand stakeholders' views, and for stakeholders to understand how we work. To that end, we are working constructively with SFHA and Glasgow and West of Scotland forum. On an information note about how we apply in practice the policies in our regulatory framework on inquiries and interventions. In addition, we are keen to work with landlord representatives to drive good practice and encourage them to develop mechanisms to enable landlords to better support each other, especially where a landlord is experiencing difficulties. Leadership within the sector is very important and something we would like to see develop even further. Finally, I would like to say a little more on the very important and empowering landlord reports and online comparison tools we made available in August. I hope you have had the chance to look at these and the demonstration video we provided to the committee. We have received excellent feedback from stakeholders, particularly tenants, on how it helps users to compare and contrast landlords' performance. We will publish soon an insightful national report on our analysis of the charter and will make sure you receive copies of it. We would be happy to take questions on any of this or any other matter that you may wish to raise with us. Thank you for setting the scene with that opening statement, Ms Jarvie. Can you kick off our proceedings this morning by highlighting from the annual report and accounts what you think have been the main outcomes of the Scottish housing regulators' work and what the key achievements of the regulator have been over 2013-14? The major thing this year has been the work on the charter and, in particular, the platform that has been developed to enable the information to be returned to us with as much ease as possible. I think that the success of that was displayed by the number of RSLs who did, in fact, respond within the timeframe that they were required to do so. And also feedback to us not only did they find the platform very helpful but they also found our helpline that was there to help them to guide them through the process, particularly significant. I think that, in addition to that, we have worked hard with our stakeholders and, in particular, built increasingly robust arrangements to ensure that we involve tenants in as much as we possibly can all that we do. That is very much appreciated. I think that it is opening up the avenue for us to link with people that we were not meeting or seeing or hearing from in the past and that that can only be positive to the work that we do. After all, the reason that we are established is to make sure that tenants get a good deal in respect of their relationship with their landlords. I think that these are probably the two most significant things, but Michael, do you want to add anything to that? Perhaps the only thing I would add into that would be the publication earlier last year of our thematic inquiry report on housing options, which was a major publication for us, the first such report. It was well received, even though it was a challenging report for local authorities and for Scottish Government in terms of some of the recommendations that we set out there. That set a pattern for work that we will develop through the course of this year. As Anne indicated, one of the first ones that we will be bringing forward will be a thematic inquiry on gypsy travellers and the quality of site provision from social landlords that provide those sites to gypsy travellers. The biggest challenge facing the regulator will be in the coming year? I think that quite a bit of it is going to be more of the same. As the charter beds down, it is going to be really important that we keep the momentum of that going and that we encourage tenants to use the information that is made available to them so that they understand where their own landlord sits against the other landlords in the country. Equally, I think that we will assist them with some of the questions that they perhaps could and should be asking that may not have been doing so up until now. Increasingly, it is about building relationships. We have a job to do and we will do that and we will regulate and we will do it with the appropriate touch that is required in the given circumstances. The important thing is that we continually communicate with people so that they understand what it is that we are there to do, how we are going to be doing it and what contribution they can make to help us to do it as well as we possibly can. Key also in that respect is the whole issue about just making sure that we can deal with regulation in the most appropriate ways. We do talk quite a lot about proportionality and I think that is increasingly important and that we make sure that we only involve to a very high level with those landlords who need that amount of intervention and support and help. It is possible, although we have had to use statutory means over the past few months, but where we can do that, we will continue to do it without the need to resort to statute because it is much better to be alongside rather than being top down. From our experience, it works much better being alongside than being top down. I think that it is the increasing and the building of the relationships and the understanding of what we are here to do, why we are here to do it and what can be expected of us. My colleague Alex Johnson has some questions on the interaction with registered social landlords. Thank you very much, convener. Both in the opening statement and in the last answer, you raised the issue of proportionality. We have taken the opportunity to speak to a number of people who have caused the work of the regulator, including representatives of RSLs. We have been given the impression that some of them believe that you could be more proportionate in the way you approach regulation. How would you react to that suggestion? I think that I would be very surprised if some of them did not think that. It is always going to be the case that people feel that. It is really interesting because I have done quite a bit of ferreting around as I have been out and about just to hear where people are really coming from. It is interesting that those who have required assistance think that we are probably just about spot on with proportionality when they reflect back on it. I think that that is the important thing. It is always much more difficult to be as objective when you are going through a process as it is when you think, oh my goodness, thank goodness we have got to the end of this process and we are now in a far better place than we were. I would be surprised if some people were not saying it. I hope that the people that have been alongside us when we have been trying to assist them in order to overcome the problems that they have would be a little bit more understanding of what our proportionate approach is, but it is important that we continue to focus on that and that we only engage where absolutely necessary and that we do not add a resource and a problem to ourselves as well as to them that we do not need to and therefore we are proportionate. Would you like Michael to say something a bit more about that or are you content? It is entirely up to you to answer the question. I think that what it is worth saying is that our regulation engagements follow a well-established and transparent risk assessment process. That is the cornerstone of how we comply with our statutory duty to be a proportionate regulator. We then publish a regulation plan for every RSL or local authority called an assurance and improvement plan for local authorities following that risk assessment where we will have an engagement. We are very transparent about how we have arrived at the need for engagement and the form of engagement that that will be. It is absolutely the case that we would always look to be as proportionate as we possibly can or we will look to do what we need to do with as little intervention as possible. That is always what drives us. Critically, that is about ensuring that we do what is necessary to protect the interests of tenants and other service users. That is our sole objective when we engage with landlords. On the subject of transparency, some RSLs have suggested that they would benefit from greater transparency around your decision making process and the way in which you engage with RSLs on an informal basis. We believe that the majority of our RSLs have well developed understanding of our role, so we start with that premise. Sometimes we discover that people are less knowledgeable, but on the whole we think that they are very well established in that respect. We have been working constructively with the Scottish Federation of Housing Associations and the Glasgow and West of Scotland housing forum to produce an information note about how we apply and practice the policies that are set out in our regulatory framework about inquiries and investigations. We are working on that currently and that will be being discussed further in the next few months and then will be going out for consultation. We hope that that will help to open up the debate and encourage people to ask us questions if there are parts of it that they do not understand. We have listened carefully to the allegations that we are not transparent. We think that we are transparent. There are times when it is difficult to be as transparent because there are times when we may be working in a way that we have to maintain a bit of confidentiality until we get further through the programme, but we hope that this information note that is being developed with others will help to take us one stage further in convincing people about our transparency. Do you believe that you have the balance right between formal and informal engagement? I think that we regulate in accordance with the powers and duties that are placed upon us by the Housing Scotland Act. Everything that we do is based in those statutory duties and powers and we set out how we apply those powers and duties in our regulatory framework. The vast majority of our regulatory engagement, as I have said, follows a well-understood risk assessment process and is communicated through the publication of the regulation plans. We believe that it is very important that we are transparent in how we regulate and that all stakeholders, tenants, service users, landlords and others understand how we work and importantly what they can expect. It is also important that, within the statutory framework that this Parliament has set for us, we are able to use our judgment, make decisions and operate in the most effective way to ensure that we can protect those interests of tenants and service users. Sometimes, as Anne has already suggested, sometimes that means we will have to conduct engagements in confidence, at least until the regulatory concern has been addressed or we have had an appropriate level of assurance. That is also about protecting the reputation of social landlords. It is appropriate for us to have a full understanding of the situation before we would necessarily go public on what our engagement has been. As Anne has said, despite all that, the majority of landlords that we engage with have a clear and full understanding of how we go about our business. Some RSLs have suggested that there is room for a more consistent and collaborative approach. How would you react to that? We think that our approach is consistent. That is not to say that we do the same type of engagement with every landlord. The type of engagement that we have is very much dependent on the risks that are evident to us following our risk assessment and is proportionate to the scale of the risks and the issues that we find. It is not the case that we apply a one-size-fits-all approach to regulation. It is very much determined by those risks, the nature of the organisation and the nature of the issue that we are addressing. I think that it is important that we work with those that we regulate to ensure that there is mutual understanding of roles and responsibilities, that there is a good understanding of what our regulation is there for, how it operates, what it is seeking to achieve. It is relevant that we have, first and foremost, regard to our statutory objective, which is to protect the interests of tenants and other service users. That is what determines the nature of engagement that we all have with landlords. Having said that, we have very good working relationships with the majority of our stakeholders. We have also been working constructively over the last period with the Scottish Federation of Housing Associations in the Glasgow and West of Scotland forum to look at ways in which we can improve on transparency and help people to better understand what our role and responsibilities are. We heard from some RISLs that they believe that there may be a certain lack of trust in the relationship between the regulator and themselves and that this may in some cases cause them to be less keen, reluctant perhaps to seek advice from the regulator. Do you believe that that situation exists and have you any course of action that is designed to improve the level of trust where it may be below what we would expect? Part of the difficulty is that we do not actually, people make statements but they do not always back it up with evidence and that makes it very difficult for us to analyse that and understand where they are coming from and what it is that we could do that would make it different. Trust is a really interesting thing because it is two ways, isn't it? We can be sitting having a discussion, a conversation with a group or with an individual and think that things are moving in the right direction and they are going well. At a later stage, that is not the case. I think that both parties need to work hard at the trust relationship if we are ever going to move this forward. We have certainly, particularly over this last year, year and a half, put a lot of effort into trying to engage with more and more people so that we can demonstrate that we are open, that we are listening, we are a listening organisation and we want to move forward in a learning mode. We have a job to do and we have a job to regulate that sector and that is always going to, I think, put attention potentially into our relationship. Even when we can put half a tick in a box, we will still have to go back and think when can we get to the complete tick because I don't think this will be repaired if repair is the word that's necessary in a day. It will be, if you just stop thinking about it, then you may just slip back again if that's the stage, but we are absolutely hoping and the board have discussed this frequently and are determined that we are going to try and dispel this view, whether it's right, wrong or indifferent, but work hard at trying to dispel it. We're on the case, I think, that's probably the best way to describe our current position. I want you to come back to the proportionality and the perception of proportionality in your dealings with RSLs. I suppose it relates directly to a comment that you made about, in hindsight, people tend to say that the degree of regulation was proportionate. Do you have an ongoing process of review after you have been through a process with an RSL? Do you have a method of reviewing how successful or not successful or if there was something different that you could have done? If you do have that, how do you build it into your ongoing regulation? I'll just make an opening statement on that and then, because Michael is much nearer the detail of it, I did mention in the response to the last question about trying to be a learning organisation. As a board, we do ask for feedback. We do ask for an analysis of cases as they've been taken forward. Indeed, at our last meeting, we had one of the regulator managers attend the meeting and give us a case study of her involvement in regulating that particular RSL. That really brought it all to life. It made it vivid for me anyway. I much prefer to hear and see pictures rather than to read and that really made it absolutely vivid. Can I say that the degree of tension in any relationship when things are not 100% right and somebody is trying to help you to make it a bit better is on both sides? I came away and I reflected on what that manager had been through with that organisation. It must have been quite traumatic at times and it would have meant a huge discipline to be able to hold back from wanting to say things that they ought not to be saying. Is a tense situation at the beginning? I think that once relationships are formed, once it's crystal clear that things are beginning to move in the right direction, then people can relax a little bit. But I'll let Michael go on a bit more because he knows the detail. It's worth saying that following every major regulatory engagement that we have, we have a formal lessons learning exercise that is built back into how we approach subsequent engagements that may be of a similar nature. That's a standard practice that we employ throughout our organisation. The annual risk assessment process that we go through is a constantly evolving and developing process, both to reflect the changing risks that there are in landlords operating environment but also to build on developments that there may be in regulatory approaches. We also publish through the governance matters series of reports case studies of significant engagements that we've had with landlords, principally as a way for other landlords to have access to information that may enable them to consider their own situation, whether there are lessons to be learned for them out of that. I'm aware that there's been some comment on the tone of governance matters publications, but I directly have had very positive feedback from a large number of landlords who say that they do make use of governance matters as very much a review tool for how they are operating themselves. So, when you go through the feedback process and there is a review, and if you recognise that there are perhaps things that you could or should have done differently, is that then communicated back to the organisation or person that you were involved in? Are they aware that you have taken on board what's been said and you are going to make changes? It's very important that they realise that any comments that they make and any feedback that they give is taken on board and if you believe you should make changes that you do it. There's probably not a formal process where we have that kind of feedback because I think where you're having that type of regulatory engagement, it's not necessarily the right vehicle to have that kind of dialogue and the kind of lessons that we would look to learn are very much around whether in those particular circumstances the right tools were used, the right approach was used, whether there were ways we could have done it to achieve the same outcome. So, there are not necessarily those obvious straightforward feedback processes to the organisation involved. It's an interesting point you're raising and we'll give some thought to whether there are ways that we can make more widely known the types of changes that we might bring into how we operate as a consequence of some of that. We do a wee bit of that through the governance matters publications but we'll give some further thought to that. From the very basic level of building trust, if the people you're involved in can physically see that you have made changes that would help to build trust and remove some of the uncertainty and concerns that they have. To go back to the proportionality aspect of it, a number of the RSLs talked about you sometimes focusing on micromanagement rather than considering the big picture. Can I ask a couple of things first? Do you understand why they would think that? Do you recognise that it may be an issue and if so how could you either change it if it is an issue or change their perception if you consider it's not an issue? I think Michael, because he's nearing that process. It's certainly not the case that we are here to micromanage and I would be extremely concerned if I thought that we were using the limited resources that we have to do that. It's not for us to run RSLs businesses, that's for the RSLs, in particular it's for the governing bodies of the RSLs to ensure that they are operating in a way that means that they are financially healthy and that they are delivering for tenants and other service users. We will always look to engage in the most proportionate way that we possibly can, in a way that ensures that the organisation itself is given the opportunity to address any issues that we find. We have very limited resources, we focus those on the key issues, the major risks that are done through, as I said, a very well understood annual risk assessment process. I have said that I wouldn't recognise the reality being that we are involved in micromanagement. It came from more than one RSL, which is why it's clearly an issue of perception if not reality. Is there some way that the regulator can try and ease the concerns of some of the RSLs? Clearly, this would be based on, I suspect, personal experience. Tackling perceptions is always a difficult issue and it's very difficult to comment when there's not specifics. I don't know the nature of the concern that's been expressed, therefore it's quite challenging to discuss that. As Anne has already touched on, where organisations have been through a regulatory engagement with us and resolved the situation and moved on, you'll often get a very different set of messages back from them. Whether some of the concerns are based on direct experience or whether it's part of the noise that you hear within the sector, without specifics, it's very difficult to comment more on that. On the question of popularity of a regulator, if you were very popular, maybe perhaps you'd question what you're doing. On the other hand, we have received a level of concern about the regulator's activities approach, tone, attitude, those kind of things. Could I ask a question about the composition of the board and, indeed, your officers, if you like, in terms of their experience of the sector and how many have actually been actively engaged in RSLs, so that the sector would recognise that these are people with us who have had a long-running sense of responsibility? That's a very interesting comment that you make, and I think that we would all probably have different views. We'll give you the composition, but there is an issue about being too close to a sector if you are a regulator and, therefore, you don't see the wood for the trees and you may not then be as open minded in your judgment as you would be otherwise. I'm fair to say that the board is comprising of both sites of the coin, if you like. Lisa will say something here, because she is a tenant herself. As well as being a board member, I'm a long-term tenant of social housing. In fact, I've only ever lived in social housing my whole entire life, so I feel that as a recipient of services from several social landlords, I've probably got as much experience as anybody. Also, having been a community activist, I understand the wider role social landlords often provide as well. I think that we have got a pretty good balance of skills within our board. It's not always necessary that people have been the recipients of services, but, in fact, if there's comparable organisations or sectors that people have worked within, that they can bring those skills to our organisation, then that can often be just as good as that. We also had another tenant board member who, unfortunately for personal circumstances, left us in December. Obviously, we will consider when key is in a position to do what should happen as far as that's concerned. I think that it's also worth saying that the Parliament set the regulator up as an independent body, independent of the Scottish Government, but also independent of the sector that it regulates, recognising the importance of the board being able to bring an objective perspective to that regulation. That said, there is some experience of social housing on the board, but there's also experience of other relevant disciplines that enable us at a board level to have a broad perspective on those organisations that we regulate. Our staff are drawn from a number of disciplines, many of them from social housing itself. Many of our staff members have worked in social landlords or worked in social housing in various different ways. A number of them have also come from other regulated fields and bring skills sets that are critically important to the job that we do that aren't necessarily directly from social housing. Finansial analysis skills, for example, and others who have worked in other regulatory bodies. We want to ensure that we have a broad range of skills that enable us to do the job that Parliament has set us to do. He works very closely with social housing and social housing issues, so he brings a different take on the housing position, if you like, and how we can best regulate it. My own background is health and civil servants. In that context, I have played take, if you like, around the housing sector all my life, although I have not directly worked in it before. Quite a number of us have had that kind of exposure. Notwithstanding what you say about the independence of regulators, I do think that this is an issue that does need to be addressed because quite a number of the people that we have been in contact with don't wish to remain anonymous. I don't think that that's a particularly healthy situation for us to be facing and perhaps moves in this direction that I'm suggesting ought to be considered to try and address that situation. I did touch on the fact that we very seldom are given evidence to back up either the things that we're told about perception or whatever. That makes it really difficult for us. If things are done anonymously, which is another way that information can come to us, you can't actually speak face-to-face to the individual or the individuals and get clear indication from them exactly where they're coming from and what the things are that are concerning them. I can absolutely guarantee that the board is committed to working alongside all our stakeholders, whoever they may be, and to try to get them to understand us better and us to understand them better and to try to build that mutual trust that I was talking about because it is two-way. Mr Cameron, you spoke earlier and said that it wasn't for the regulator to run and micromanage the business of the RSLs, but clearly there's a desirability for landlords to achieve the outcomes and standards set out in the social housing charter and a specific role that you have to monitor and report on landlords' performance and achieving those standards and outcomes. Can you tell us how that process is working? I'm conscious that we're into the first year of the annual returns on the charter, and I would be grateful if you could update the committee on how that process is progressing. I also highlight any feedback that you've had from landlords, tenants or service users about the usefulness of the annual charter returns. I'm going to ask Michael just to kick off and then I'm going to bring Lisa in because Lisa has been very close to having a look at the information and has got some examples of how things are being handled out in the real world, if you like, with the RSLs. Well, this was an important year for the Scottish Social Housing Charter in that it's the year in which landlords provided us with the first set of information and data returns and then we analysed that information and pushed that back out so that tenants, other service users, landlords themselves and anyone with an interest in social housing was able to look at landlord performance. It's been a significant year in that regard. The tools that we've put out there, the information that we've published, has been almost universally well received, in particular by tenants. We also undertook a survey of social landlords earlier last year to assess how they found the new tools that we've put in place to enable them to provide us with information back. Again, we've got a very high satisfaction level back from those landlords, but I'll perhaps ask Lisa to come in. Well, as Michael has said, last year was really important. We launched the landlord portal, which was an online facility that allowed landlords to deliver their data directly to us online. As well as being a process that allows us to extract information really easily, it was also important that it was an easy system for landlords to negotiate their way around. Certainly, all the feedback that we've had in the surveys that we've done around 90%, 92% of the respondents have said that it was a very positive experience being able to use that. The other significant thing around the charter that we've done is to produce the landlord reports. The landlord reports were seen as a way of providing tenants with a snapshot of how well their landlord is performing. Alongside that, there's the comparison tool, which I hope that you've had a wee chance to look at. That comparison tool allows you to benchmark your organisation against any other organisations in the country. What's really interesting about that is that it's not just an opportunity for tenants to say, why is my rent so high and why do my repairs take longer? It actually provides a wee bit of clarity because people can often see that the services that they're receiving are really good in comparison to other landlords. That whole process of developing those charter tools was very, very important. We have had... Do you think that their own individual experience had not been as good or had been better than the returns that are available in the reports? All the data is probably going to produce averages. As a tenant, you might find that you took two weeks to get a repair that's on average. It's done much quicker and that's something that they can take up with their landlord and say, what was the actual process? Did something go wrong there? What was peculiar to my situation? Again, it empowers tenants to target their questions in the most appropriate way. Overall, we've had really positive feedback for tenants. Although our systems are online, we require landlords to provide those landlord reports to their tenants. It's usually done through newsletters and certainly only yesterday I was looking at a Glasgow-based association's winter newsletter and not only did they publish their own information but they had published the comparative information for all the surrounding landlords. That was incredibly useful and takes into consideration the fact that nobody is online. People don't always have broadband. People don't always have the facilities or the technology to be able to access that. It's a kind of built-in braces approach that we've got, the online services, but we've also got that backed up by the requirement for the landlord to actually provide it as well. Over the next few years, what we're going to do is have more of an emphasis on things like service quality, value for money, rent affordability. All of that becomes an awful lot easier as an organisation for us to do with these tools that we've spent an awful lot of time investing in. As we've already mentioned, the information and the data that we get from it informs how we go forward. Again, it informs the nature of the thematic inquiries that we'll do. The first is the information that we've got on Gypsy Travellers. Certainly, there's been some huge variation within the data that we've got back about what services people are getting within sites and the rents that are being charged. We've now got an opportunity to dig down into that and find out exactly what's going on. You mentioned the need to raise awareness amongst tenants. You mentioned an example of that in the form of newsletters. You also highlighted the digital exclusion that applies to some tenants who don't have access to the internet. How should we be addressing both of those points? If it's raising our profiles and organisations with tenants, we've done that in quite a lot of ways. The previous incarnation of the regulator was incredibly innovative in using tenant assessors. We've continued to use tenant assessors, although the system that they're working within is slightly different. We have established a national panel of tenants and service users, which is sitting somewhere around 300, which is quite a significant amount of people. We use that in order to sense check our regulatory objectives and see how what we're doing impacts the tenants. We continue to engage through the RTOs and the defined networks that are there. Something simple like our branding being on those newsletters against the landlord report informs tenants that we exist. Often tenants will passively receive services. If things are okay, why would they know that there's a regulator? Now that we're able to get a wee bit more access to tenants, it's a good opportunity to raise our profile and let them know that we're there in order to protect their rights. Sorry, I've forgotten the second part of your question. Digital exclusion? Digital exclusion is a huge issue for every organisation, and that's why it's really important to not provide this information just through one mechanism and to have that backed up through other ways. We know that landlords often go above and beyond when it comes to how they support their tenants to access information. I would expect that most good landlords, if a tenant came in and said, I want more information than you've provided me, but I don't have access to the internet, I suspect that most landlords would facilitate that. It's not necessarily a requirement, but landlords understand the needs of their tenants. Can I ask you, Mr Cameron, how you're using the information in the charter returns to develop your approach to empowering tenants, as Ms Peebles mentioned, and your approach to risk assessment? For example, will it lead to more targeted intervention? There's a number of ways in which we're using the information from the annual returns on the charter. We've already touched on being an important way for us to understand where the key issues may rest in social housing and target our programme of thematic studies to look at those issues. It drives that programme. We are very much about getting that information as widely available in as many usable forms as we possibly can, very much to encourage tenants themselves to start to hold their landlords to account for their performance. Importantly, we will also use the information that we now have in our annual risk assessment processes for both local authorities and RSLs, so that, as Liz has already touched on, service quality, rent affordability, value for money have become much more central to the work that we'll be doing over the next three years. The regulator is responsible for monitoring social landlords' progress towards meeting the Scottish housing quality standard. Compliance has gone up. It was 82 per cent in April 2013. There are 10 landlords that have reported that their houses may be at risk of not complying by 2015. Why are those landlords at risk of not complying with the SHQS? What work is the regulator doing to help them to comply? Michael Russell is going to take that because he's got the details. Our analysis has found that there are 20 landlords, 19 RSLs and one local authority that has reported through their annual returns in a charter that, in total, just under 3,000 houses in Scotland would not meet the SHQS at 31 March 2015 target date. That equates to around about 0.5 per cent of all social housing in Scotland that falls within the scope of SHQS. At this stage, we've had assurances from 11 of the 20 around the reasons for why they're not able to meet it by that deadline and also on the plans that they have in place to address that shortfall. We're also following up with a further nine landlords that have indicated that they won't be able to meet the standard. Six of those have fewer than 80 houses that wouldn't meet the standard, so we'll engage with them in a proportionate way reflecting the scale of the issue. Of the three remaining landlords, we anticipate at this point that the two of them will be able to provide assurances that we need, and we're continuing to work with them to get those assurances. One landlord, we have an intensive engagement at the moment with, and our concern is that they are only at this point undertaking a stock condition survey to properly identify the level of compliance or non-compliance with the standard, and we're engaging with them on a number of other regulatory issues and concerns. Where a landlord doesn't meet the standard or doesn't continue to meet the standard after the 2015 deadline, we will consider the use of our statutory powers, and in particular we are looking at the role of enforcement notices as a way to address some of these concerns that might come through around non-compliance. Can I just be clear how many landlords then are at risk? Well, 20 have indicated, but we have assurances from 11 of those that they have appropriate and deliverable plans in place that won't meet the SHQS, perhaps not by 31 March, but fairly quickly thereafter. Laws are in place that they will meet the standard fairly soon. You would monitor that? Yes, absolutely. Is it in a particular area in Scotland, or is it right across Scotland? No, it's fairly geographically spread. The other factor that's in play here is the role of exemptions and abeinces. The Scottish Government put in place a framework where landlords could claim exemptions or abeinces against a set number of criteria. Now, in particular for abeinces, that's not a continuous or unending ability not to meet it. That's to recognise that there are circumstances where achievement of the target by 31 March may not be possible for justifiable reasons and will continue to monitor those situations as well. How many houses, how many properties of exemptions do you have an exact figure? I don't have an exact figure here. We have figures based on the returns that came to us on 31 March, but the figures are likely to change before we get to the 31 March 2015 date. What we can do is provide the committee with that information. The regulator also monitors the energy efficiency standard for social housing. Could you explain a bit more about how you monitor and report on the new efficiency standards? From 2015-16, the next financial year, we'll monitor and report on social landlords' compliance with the energy efficiency standard for social housing. We've already published technical guidance, which sets out information on the approach to monitoring compliance, the arrangements for landlords reporting data to us on an annual basis. The actual indicators that we will gather information on will make up that annual return. Social landlords will be working to achieve that standard by 2020. Landlords should give us their first return by 31 May 2016. We'll use that data in the same way as we use the data from the annual return on the charter. We'll assess the risks of non-compliance with that standard and determine what regulatory engagements are appropriate on the back of that assessment. Before I ask the question, I should say that I have a pretty good understanding of part 6 of the building standards, which is that you'll have no deal with energy efficiency. I have had concerns raised with me from a number of social landlords saying that the concern is that some significant proportion of the work that they have done in order to reach the energy efficiency standards part of the 2015 standard may have to be ripped out and redone to meet the next standard, which will obviously be higher. Insulation is just about thickness in these times of slender resources. It would be difficult to justify expenditures beyond the 2015 standard when they're trying to meet that. There is a concern that a lot of work will have to be effectively just redone to meet the next standard. You mentioned technical guidance. Do you have any thoughts on this concern? My understanding of the energy efficiency standard is that it builds on the requirements that are set out in the Scottish housing quality standard, specifically with the aim of avoiding the potential for there being any situation where you would have to effectively undo work that had already been done to achieve this standard. Having said that, we're also aware, in this relates to some of the situations around exemptions or abeyances, or indeed some of those landlords that won't meet the Scottish housing quality standard by 2015, because they had recognised that it would be more advantageous to their tenants and also make greater economic sense for them not to do the work to achieve the Scottish housing quality standard. Instead, they reshift their focus to the energy efficiency standard and therefore have plans in place that will deliver that sometime after 31 March 2015, and therefore technically they wouldn't be meeting the standard that is obliged to meet at that point. It's with a very good reason, with an eye on the energy efficiency standard. We're trying to be as pragmatic and proportionate in how we respond to those situations. As I understand it, the Scottish Government very much had in mind when they were developing the energy efficiency standard that it shouldn't result in situations where there was in effect work that was therefore redundant having been done under the Scottish housing quality standard. Can I ask you about the national panel of tenant and service users? It gives you a mechanism to engage with people through surveys and focus groups and telephone interviews. Can you explain to the committee in detail how that works and how you reach out to encourage people to engage? I'll ask Lisa to make another question, because she was involved in helping to set up that arrangement and she meets with the people also. The national panel is a really important part of our suite of tools that we can use to engage with people who are not already active within tenant movements. It was important for us to continue to engage with tenant activists through the defined RTOs but also to try and get out into the wider tenant sector. We can speak to them about their experiences and perhaps not having been activists. Recently, we've just published the findings of our second survey about how they feel about what the priorities should be. Some of the things that has come up through that research are things that you probably won't be surprised about. The priorities for them are how quickly can I get my repairs done, maintenance, how can my landlord see me as an individual and can he respond to me as an individual. Those are the kind of things that we have used, the panel, to find out and clarify. Being able to identify what tenant priorities are, informs how we then go forward and where we focus our regulation because there's no point in us spending a lot of time and resource looking into things that actually don't matter to tenants. At the end of the day, we are here to protect the rights of tenants and service users. It's still very young, we're still figuring out how we can use it going forward, but thus far what we've found out is what are the priorities for people. As I say, it informs how we go forward. Are the people on the tenant panel a fixed group of people? There are a fixed group of people in the sense that as long as they are willing to be involved, they are there. I think that when we started off, we initially got somewhere around 350 people to sign up to it. I think that there was a drop-off of, it never fell below the 300, but when some people get involved in it, they maybe weren't exactly clear on what the expectations were going to be. It's fluid in the sense that people can participate in it or not, but for us it's a fixed and significant resource for us to actually use in different ways. We can use it to do broad surveys, but we can also use it to drill down into specific groups. If we had worked in a particular, if we wanted to find out what older people feel, for example, then we can extract the information on who the older members of the panel are and target them in a much more significant way. It's there to be used in a flexible way, but we think that it provides really interesting information. How do you engage with people that aren't part of your panel? One of the concerns that's been raised at the informal meetings that we've had is that you speak to the usual suspects and you don't speak to anybody else. How do you engage with people that are not part of the panel? A lot of people are unaware, a lot of tenants are unaware of the panel and unaware of the work that the panel does. How do you reach those people? The first thing I would do is hopefully provide you with some assurance that the national panel is not the usual suspects. It was specifically set up to identify people who are receiving services from either as tenants or other service users and get beyond the usual suspects because we understand that sometimes you can go from one organisation, one tenant group to another and it's the same people. Although those people are incredibly knowledgeable, we need to have as diverse a pool as possible. As far as getting our message out beyond the tenant panel, that's something that we're really learning about just now. I think that things like the Landlord report being published and going out through all the newsletters that Landlords are providing actually lets people know that we exist and that we're an organisation that can be engaged with should they wish to. Although there is sometimes some confusion because people often get in touch with to find out because they have a specific issue with their Landlord, that's not for us to deal with as a different process there. We are always looking to get out into the sector and especially as board members we've got an opportunity to go out into the public and actually tell people about what we do, what this organisation does. How do the tenant panel engage with the harder to reach tenants because there is also a concern that the tenant panel are, to use the phrase I used before, the usual suspects and those usual suspects would use their usual suspects to get information. So how do you widen that out? When we were setting up the tenant panel we were aware of the potential for the tenant panel to be very quickly filled up by people who are already being engaged with and the mechanisms that we used. People had in the applications process, people were asked where they were already engaged in the tenant movement and that was not to exclude people. We don't have a situation where we have a tenant panel where there are no people who are already involved but we wanted to provide some sort of balance. That went back to the actual application process in the very beginning. I think that we can always do more. There are always hard to reach groups that doesn't matter whether you're a Scottish housing regulator or a public bodyer. There are always underrepresented groups and we seek to raise awareness. For example, we used positive action housing to try and raise our profile within the BME community so that people could understand that there was a service here that we were working to protect their rights. As much as any organisation can, we have identified where there are gaps in our tenant panel and we try very hard to fill those gaps in the most appropriate way. I think it's work in progress. We've started somewhere that's much wider than the usual suspects and as somebody that's not been with the regulator for terribly long, I was very aware of the people that I would have then put into the category of the usual suspects and people who, this was exciting because it was the first time they had come along to something and this was really important. The list isn't closed. Let's put it that way. This is work in progress and as we learn from this experience and if we can find other ways of attracting people to volunteer because it is important that it's volunteers not conscripts and that they can be invited to volunteer, then we would look at what size the panel is because we can use the panel in different ways. We don't need a room to allow 500 people to gather together necessarily at the one time, so it's to be flexible and don't close the door. If somebody came forward and said that they wished to be a member of the panel, they would be assessed and judged and offered the opportunity. You have more or less answered my next question, which was, do you have some sort of review process of how well the panel is working? My experience with previous panels, it takes time for this to bear down and it is excruciatingly difficult to reach some people. For example, in most other types of panels I have been involved in, to get young people can be really difficult unless you press the right button that then suddenly makes it exciting for more than just one. Those are the kind of things that we are all bringing, the experience that we have of different panels to bear on what we are trying to do with the regulator and see if we can get it better, but if you have any tips. In terms of this whole role of current engagement and engagement with the wider community, one of the statutory objective of the regulator is to safeguard and promote the interests of current and future tenants, homeless people and other people who use services provided by social landlords. So far no one has mentioned homeless people, so could you tell me if there are any ways to recognise, as I am sure the committee does, that this is a hard to reach group, any ways in which you are engaging or seeking to engage with homeless people, perhaps those who are in temporary accommodation, and how you meet your requirement as a statutory objective to promote the interests of homeless people more generally? We were very conscious that we maybe had not put as much of our attention on homeless people as we have on the other parts of our regulatory business, so we did do the thematic study which has now been published and has gone down very well and is now helping to form our thinking around how we take our activity associated with homelessness forward. Michael, is there anything specifically that you would like to add to that? I think that you are right that it is very difficult to engage with that particular group. We work with representative bodies, such as Shelter, and we have regular liaison with them at both a strategic level but also at a level where we look to obtain information and intelligence from them. We have the charter information, which includes a range of performance information and data on landlords' delivery of services to homeless people. We undertook the thematic inquiry, and it is likely to be a vehicle that we look at again in terms of how we deal with homelessness. We are exploring further the quality of services that are delivered to this particular client group. Where we engage directly with a social landlord and it will tend to be a local authority in this regard, it is at that point that we will look to access where we possibly can any existing ways to engage directly with homeless people, including as you touched on those that might be resident and temporary accommodation at that time. That tends to be around a particular regulatory engagement with a particular landlord. It is what, six months since that report was published, what has actually changed since the report was published? Positively, the Scottish Government and the Association of Local Authorities Chief Housing Officers and COSLA undertook to develop guidance on the delivery of housing options, which we saw as a major necessary development. That is progressing. We are not directly involved in that. We will look at a further review of housing options and how it is being delivered at an appropriate time in the future that would enable us to understand whether any guidance that has come forward has been effective in addressing the issues that we raised through that thematic study. Ms Jarvie, you will know from your previous life how slowly sometimes the wheels of government can turn. Thank you for reminding me. Can you shed any light on the progress that has been made in terms of publishing the guidance? I think that we are working with others. This is where stakeholder involvement is even more important because we do not deliver the service ourselves, so we need to speak to those who do deliver services for these people. We have been doing that. It will take a while, but I interacted with Shelter just the other week to see how it is. It will take a while. I was afraid that you would say that. It is a difficult area. It is local authorities by and large who have got this responsibility. Linking with them is what we do. We assess them in the same way as we assess the RSLs. In that context, we pick up whether there are issues. If there are issues, we interact with them. Last year, I think that there were some hiccups around the provision of housing, particularly as we moved towards the winter and the festive period. The dialogue was very effective and fruitful, and those particular situations were resolved for then. We are on the case. It is really important. That thematic study gave us the momentum that we needed in order to think through how to take this forward. In your report, you said that most RSLs are well-governed and financially healthy. Could you expand on how well the RSLs are governed and the state of the financial health? I think that we should deal with that. The answer is yes. The number that we interact with are few compared to the overall number of RSLs. On the whole, it is good. It is healthy. It is robust. I suppose that what we would like to see more of is those who are doing a really good job being seen as doing a good job by other RSLs so that, if they begin to falter in any way, they perhaps seek some kind of relationship and link with another RSL that is doing their business efficiently and effectively, and get the support that they need before it becomes a regulatory matter. Is there a role for you in the kind of sharing of best practice? Yes, and we do that. We do distribute best practice. Those are all things that we are thinking to develop further as we begin to get better at communicating. I think that it is worth saying that our view is that social housing is a generally stable sector with many strengths, including in the areas of governance. Where we find that there may be governance issues that we have to engage with the landlord, most landlords work with us cooperatively to address those issues. In terms of the dissemination of learning out of that, our governance matter series of publications is an important way for us to help RSLs understand where some of the pitfalls may be and to enable them to look to themselves and understand whether they are well placed to deal with those types of issues and risks that might emerge. I think that we are encouraging other bodies to be more prominent in the provision of good practice in this area and also to encourage them to look at what mechanisms they can put in place to offer peer support to organisations that may be experiencing difficulties so that it is not necessarily the case that that will then become a regulatory matter. Can I just take you on from something you said about challenges that RSLs are facing? You are engaging with an increasing number of RSLs, I believe, according to the report. Could you tell me what specific challenges are RSLs facing that maybe they weren't facing a couple of years ago? I think that the environment that RSLs are operating in is undoubtedly becoming more challenging. We have, which I am sure is well understood by the committee, the developments in welfare reform, which present many challenges for social landlords. Pension liabilities are an increasingly significant issue that landlords are having to deal with and present a regulatory concern. I am looking at some of the requirements around achieving standards, both in the Charter, the Esch, the Scottish High Quality Standards, and bringing additional requirements on landlords. Looking at that altogether, it is undoubtedly the case that there will be a need for landlords to have a constant eye to their costs, to their efficiency and their effectiveness. That is why, as I think one of my colleagues mentioned earlier, we will have an increasing focus over the next few years around value for money. As then you brought up the issue of welfare reforms, what sort of impact are you seeing that having on rent areas for RSLs? We undertook some research last year on welfare reform and we did see that there had been an early impact. I think that the actions by the Scottish Government around discretionary housing payments has definitely had a mitigating effect on the impact on social landlords. Of course, that is only in relation to those elements of welfare reform that I have currently brought in. We are looking further ahead in asking landlords to look at their business plans with an eye to the types of pressures that will come when the full range of welfare reforms start to impact on them, and in particular the direct payment element of universal credit. What role would you have in that in trying to assist the RSLs to deal with the impact? I know you cannot assist them financially, but in trying to help them to prepare for the impact of universal credit. As I believe there was a letter from the Housing Association's tenants organisations, I went to the Secretary of State for DWP opposing that. Would you say that that is a universal position for the RSLs? In general, RSLs and local authority landlords would look at welfare reform as a development that is not necessarily helping them to deliver services to their tenants. They recognise the challenges that there will be around rent collection, ensuring that they have that well-established income stream that enables them to then go on and deliver for their tenants. Certainly, from my experience, it is fairly consistent the feedback that we would get from landlords in that regard. Thank you very much. I note from your annual report that financial health is a key priority for you, but why are you saying to social landlords that above inflation rent increases are sustainable? First of all, I would say that we have not said that above inflation rent increases are not sustainable. What we have done is called for a national debate on rent affordability. That recognises that landlords until very recently operated in a world where incomes rose and the benefits and taxation system provided a certain safety net for tenants incomes, but that world is changing and it is imperative that landlords reflect that that world is changing and the new pressures and risks that it brings. The new context and the findings from our analysis of financial projections provided by landlords mean that rent affordability is already unlikely to become ever more so a key issue for tenants. We have called for that national debate around the sustainability of current rent increase assumption in landlords business plans, the majority of which our assessment showed that two thirds of registered social landlords have a rent assumption of RPI plus one for the foreseeable future. We have challenged landlords to consider if they are content to allow costs to tenants to continue to increase above inflation year on year. Does that risk locking increasing numbers of tenants into a reliance on benefits? Are they content that they have done everything they possibly can do to minimise any increase that they ask of tenants? Do they give tenants genuine options and choices during rent consultations? Have they had a mature dialogue with their tenants about costs versus service levels and are they clear on what they would consider affordable rents in their set of circumstances? We expect landlords to consider tenants' ability to pay rent and to keep paying rent over the longer term when they are looking at decisions on rent increases. That call for a debate has generally been well received and indeed the Chartered Institute of Housing had taken forward the progressing of that discussion and debate. Surely social landlords are in the best position to make these decisions. You said earlier in evidence that it's not for us to run ourselves businesses, but surely that's what you're doing if you're dictating effectively what the rent levels above inflation are to be? For the avoidance of doubt, we are not dictating rent levels. We are not suggesting what those rent levels should be. What we are asking landlords to do is to consider tenants' on-going ability to pay rent when they are determining what rent levels they set in their business plans. But surely that's obvious and any social landlord worth its salt would do that. They are closer to the tenants than you are. What we found through our analysis is that two thirds of them have assumptions that they will deliver RPI plus 1% rent increases for the foreseeable future. We are asking them to reconsider that and to determine whether that is sustainable. Was that given to technical discussion? Clearly RPI is not the index that many organisations will now use. CPI is the normal index for pension increases. Is that a technical discussion that you've had with social landlords? We've had a discussion of the divergence between RPI and CPI and whether landlords will need to adjust their thinking on which index they actually use as their starting point. Not least because benefit increases have shifted to CPI, although now they're coming under even more pressure in terms of the increases that are happening in that area. So we're saying to landlords, look at the sustainability of the assumptions that you're making around rent increases. We've not gone beyond that because, as you say, it's quite right that it's for landlords to determine in dialogue with their tenants what appropriate rent levels should be. That opens up a broader debate that needs to be had around value for money and the level of services that tenants would expect for an appropriate amount of rent that they're paying. I'm not doubting your statutory obligation as a regulator. I'm merely making the point that surely any social landlord would want to discuss tenants before they look at rent increases. Most social landlords do, but what we have found is that two thirds of them have a locked down RPI plus 1% rent assumption in their business plans. What we're saying at this point is that we think they need to have a think about that, a discussion with their tenants about whether that is sustainable. There's simple arithmetic in play here. If tenants' incomes are not increasing significantly, if they're not increasing above RPI and rent assumptions are increasing at RPI plus, then rents will become less affordable. On to your second question. You'll know that we've had some evidence on your governance matters publications for something that's been through recently. One view is that they present a perception sector that they would seek to avoid and they're consistently negative. How would you respond to that? I hear what they're saying and understand what they're saying. I think this is part of the earlier dialogue we had about tone, about getting closer to people, getting to understand people better. That is something that we're looking at as far as our publications are concerned. It's really interesting that the feedback about the events around governance matters that were put on for the board members or management team members were very, very positive. Some of our board members attended some of those. It was quite an interesting and enlightening experience. It's not about what we're trying to do around governance matters. There's some disparity between what they think we do with the written word versus what we do with the spoken word. I think we are paying particular attention to that at the moment, not just to do with the governance matters publication, but all our publications in general. That's why, of the things that are going to be going out in the first part of this year, we're in a consultation exercise about that and it is about have we got the tone right. Is the message being conveyed in the correct way? So we're on the case. That's good to hear, because I think you made rightly the point earlier that you require some evidence. I'm giving you some evidence from what we've received. Is there certainly a view that it is an unduly negative tone? Perhaps, if you could look at that, that would be very helpful. We're already on that case. The final question, convener, is why is there a requirement for an option appraisal when a senior officer is leaving retiring from a retro to social landlord? We've actually been doing quite a bit of work this year, and much of it has been listening activity. We are very, very clear that there are things that we would like to phrase differently, that we would like to give the message. We have a different twist, if you like, and we are consulting on that. In particular, we are working with the Federation and the Forum, trying to get our documentation around this more appropriate, shall we say? Read into your civil service speak on this one. You are reviewing this with the possibility of changing this. I think what will come out of this is that we will be looking at the business plan, and if the business plan is robust, well thought through, then we would expect that everything that's in that plan will be enacted at the time that somebody moves on. That seems to be certainly a very sensible approach, irrespective of a director of a retro to social landlord leaving. If the business plan is intact and doesn't really matter at one level, it takes over. That's certainly very positive. The final point, convener, is that I was very surprised to hear that you suggest that certain consultants be used to create this option appraisal. Again, that seems to me quite top-down centralising. Could you explain why this has been suggested? In the review, is it a possibility that this could be removed and leave it for ourselves themselves to decide which consultant to use it as a free market, after all? Special managers provide an invaluable service to organisations that are experiencing some difficulty. They can stabilise the organisation, they can keep businesses as usual going for tenants and other service users, and they can also lead the rescue of the organisation from within the RSL. It's probably worth looking at the numbers that we're talking about here. Since April 2012, 11 RSLs have commissioned or appointed a special manager, so we're looking at probably less than five a year where this happens. We work cooperatively with those organisations, and where they recognise the need to appoint a special manager, we can assist them with the provision of names of individuals that we are aware have had a track record in delivering that type of service, and where we are and where time allows us to provide more than one name. It's not the case that we would require those organisations to take a particular consultant, but what we will look for is where we are engaging with them because there's a regulatory concern. We will want to have assurance that the individual being employed has the necessary skills, track record and experience to be able to deliver. So, if an RSL requires a consultant, they decide they're appointing their own consultant, you don't have any veto over this? If we aren't engaging with them on a regulatory concern, then no, and landlords will appoint consultants very regularly, and we will have no involvement in that process whatsoever. I was meaning if there's a regulatory concern. Well, if there is a regulatory concern and they look to appoint somebody and we are content that that individual has the necessary skills and track record to deal with the issue in hand, then no, we wouldn't have any concerns. Okay, so if there's a regulatory concern and a RSL appoint a consultant without reference to you and you don't think we've got the necessary skills, you do have a veto of the consultant? I wouldn't describe it as a veto. We would engage with the landlord and we would discuss what our requirements are as a regulator, very much again with that focus on protecting the interests of tenants and other service users. That's the sole basis on which we would engage with the landlord. We would happily go along with any consultant that a landlord was appointed where we were clear that they had those necessary skills and experience. If we weren't content on that, then we would have a further dialogue with the landlord. And if there's an in-pass on that dialogue, who has the final word on this? Well, at the end of the day, it's for landlords themselves to appoint these individuals. If we continued to have a concern and it was so significant and serious, then it may be that we would have to look at use of our statutory intervention powers. This is about not just business as usual, this is about when there are problems and so the track record is not about can you run a business, it's about can you run a business in trouble and turn it round. And so that's the really important thing that we need to get a mutual agreement about. James, you have a supplementary question. I completely accept what you're saying, Mr Jarvie, but the information we got last week is the exact opposite of what you've just told us just now. We were told that there is a set amount of consultants to pick from and that they have to pick from those consultants, name consultants, that they have to pick from those name consultants. And I've been informed since then by a number of RSLs that none of them are based in this country. That just seems madness because what we're looking for here are people who know the sector as much as anything else. Now, if what you said to David is correct that the RSLs can go and pick a consultant and they have to fulfil certain criteria, then that's fine. But the criteria must be wide enough that it doesn't just involve three companies. And it must be wide enough that there are people in this country that have the skills and experience to be able to do it. There is undoubtedly a reality that there isn't a very well-developed market in Scotland for people with these types of skills. We're aware of two or three individuals and they have been used and used quite extensively in this regard who are Scottish based. We would look at the sole criteria of do they have the appropriate skills and track record of working in an organisation that is in crisis and being able to take that organisation out of crisis. That's the sole criteria we would look to in terms of whether we were content that somebody had the right individual to take that organisation forward. We have that in the record now in the RSLs, can refer to that in the future. When you talk about an organisation that's in crisis, because one of the concerns that was raised to us last week is about a senior officer leaving and that being a notifiable event. We were certainly told last week that a well-run organisation, as a matter of course when a senior officer leaves, would review their business and carry out all the necessary reviews that they would need to do, which would mean that it would not be a notifiable event. There is a standard review of where the business is and what changes they need to make. The concern is where it is a senior manager that leaves and the business is not in any problem. There is no danger in the RSL. The RSL is not at risk and not at threat. That then becomes a notifiable event and they are then put in the position, as James rightly said, where they are given a list of consultants that they must pick from. They are not in crisis. A senior manager is left. That's not a crisis in every situation. Where an organisation is in a situation where a senior officer is leaving, our current guidance as it stands says that that's a notifiable event. That means nothing other than that they need to notify us that their senior officer is leaving. We need to then consider whether there is a basis in which we have to engage with that landlord. If we are content or satisfied that the landlord has good succession planning in place, has an appropriate up-to-date business plan, then that will be the end of the matter. It's where that's not transparent or clear that we would have further engagement. It's probably worth looking at the evidence in this. Over three years, 25 organisations have notified us of a chief executive's resignation. Following those organisations' consideration of their option, 18 of them have gone on to appoint a new chief executive. A fairly straightforward process in that regard. Seven decided at that point following their own delivered option appraisal that they would join a group structure of another RSL. Four of those because they identified that they didn't have a viable future in terms of their financial projections. I think that gives some sense of the scale and the outcomes that flow from those processes. Can I just reiterate that we are working on this with the Federation and with the forum? There will be guidance going out, information being distributed after we've deliberated this. That's very helpful. Thank you. Thank you, Mike. Before I get on to the questions, I would like to go back briefly to the discussion about sustainable rent increases. You mentioned two thirds of organisations are using RPI plus one, and you seem to suggest that that's a good thing. That raises some concerns with me, given that there's a great variation in local housing markets. Also, I can think of a number of areas in the region that I represent characterised by very low wages. Surely local flexibility is absolutely critical here, and I just wondered what your view is. Does your thinking incorporate a degree of flexibility? Absolutely. That's the very point we are making. I think that it's critically important that landlords don't use a very formulaic approach to increasing their rent. They look at it, they look at what tenants can afford, they look at their local market, they look at the rent level that they have at the moment. We don't have a single rent level in Scotland. Some landlords will have significantly lower levels of rent at the moment. Therefore, we will have more capacity to increase their rent than some other landlords. But what we are saying is, look at your assumptions, look at what your tenants will be able to afford over the longer term, and make rent decisions appropriately. Sorry to say, you worry me even further now just because historical rent levels have been low. There may be very good reasons for that. That does not necessarily imply huge latent capacity for increasing rent. It doesn't. What I'm saying is landlords need to look at this in the round. They need to consider all the information they have. They need to, in particular, and this is very much about our statutory objective to protect the interests of tenants. They must consider their tenants' on-going ability to continue to pay rent and use that as a clear factor in determining what rent level increases they should be applying. Thank you for that clarification. Are you able to comment in terms of giving an overview about the confidence of investors to invest in social housing? There has been quite a bit of interaction this last year, this last 18 months with lenders and others that produce funds, if you like, that our landlords can have access to. Michael has been involved in meetings with groups of these people, so he has the detail. Giving confidence to lenders and investors in social housing is one of our five key strategic objectives. That is recognising that there is over £4 billion of investment in social housing by private lenders and investors. Those lenders and investors are telling us that our effective and robust regulation is a critical factor in their decisions to lend and invest. The confidence that they currently have in the sector is, in part, a result of the approach that we take to regulation. Last year, we had the first-ever private placement by a Scottish RSL to the value of £45 million. We also had the first-ever one-name bond issued by a Scottish RSL. That is evidence of the confidence that lenders and investors have in the social housing sector in Scotland. Recently, as I touched on earlier in the opening statement, one of the major lenders to the sector told us that our effective regulation is worth around 115 basis points to the lending. If you extrapolate that across the total lending that is there for RSLs, that amounts to an annual saving of about £40 million to social landlords in terms of the confidence that lenders have in the sector. Part of that is the confidence that lenders have in our approach to regulation. That is obviously good news, but there is another side to that coin and I wonder if you are able to comment on it. It is something that I increasingly became aware after the credit crunch of what I would describe as very sharp practice on the part of banks when lending to this sector. Really sharp practice and I won't name the banks here today but I may consider doing so in the future. Do you have a view on that? I think it is almost certainly the case that the relationships that landlords have with their lenders are ever more important given some of the pressures that they are undoubtedly on lenders themselves internally in terms of what their own credit committees might expect from these. There is some pressure around repricing within the sector. Having said that, I think the key lenders to this sector are still there, still prepared to lend, are keen to work with the associations to get a sustainable position. That is our general experience today. It is probably worth saying that in the two statutory intervention cases that we have delivered over the last month or so we have worked very hard with the lenders involved. I am pleased to say that generally they have been part of the solution to those situations. They have worked effectively with us. Yes, there is some pressure in there but I think that sometimes it is overstated. Most landlords continue to have good working relationships with their lenders. You kind of anticipated my last question in this area when you talked about bonds. Obviously that is a very interesting development. Are you aware or are you trying to stimulate perhaps other potential sources of investment in social housing? We see things like crowdfunding in other sectors. I am often reminded that where we are now is reminiscent of the very early days of the building society movement and so on. Some of the social landlords we talked to last week complained to us that your effect was to prevent innovation in as much as innovative ideas that they were seeking to take forward and develop. You perhaps were not as open as you might be because you were perhaps a bit risk averse. Do you think that is a fair comment? If it is not, are you trying to develop and promote other innovative financial models? If I take the last point first, I think that if you refer to our annual report you will see some quotes from one landlord in particular around the role that we had in the first private placement that has happened with a social landlord in Scotland. If you also have reference to the published report by the ratings agency Standards and Poor on the first named bond issues by Scottish RSL, you will see the view of the regulator in that. I think that we all agree that RSLs have been among the most innovative of organisations over the last three decades and have been regulated throughout that time. Of course, there are many organisations out there innovating at the moment and we have a significant role in seeing what they do over considering business plans and looking to grant consent for work that they are looking to do. You will not be surprised to hear that I do not buy into the assertion that the regulator stifles innovation, nor should we apologise for undertaking the role that this Parliament gave us, which is to provide a series of checks and balances that ensure that the interests of tenants and other service users are protected at all time. We will always consider the business case provided by a registered social landlord when it is considering a new venture. Critically, it is important to remember that we, as a regulator, ask for nothing more than that organisation's own border management committee should be asking for. Thank you very much. You have reassured me. Thank you, convener. Could I ask you to outline the main findings from the communications research that you commissioned? You mentioned in your opening remarks, Ms Jarvie, and perhaps more to the point what changes you have made as a result of the report's recommendation. Please us on the case so that she will share her thoughts with you. Maybe if I just start with the piece of research that we did, which involved 270 of our stakeholder organisations, we wanted to find out how they felt about how we communicate, and we found primarily that stakeholders have a strong awareness of us, of what we do and the fact that we are here and the reasons why we do things. We found also that they were largely positive about the website, about our corporate publications and things like our regular electronic newsletter, the SHR update. They felt that our main regulatory publications were generally good and that we were covering the right topics. However, some had mixed views about some of the regulatory publications. What we did was use the results of that to understand the areas where we had strengths and areas where we could perhaps further enhance our approach. Some of the specific things that we have done as a consequence of that research are we have increased the frequency of our SHR updates. Also, when we have significant or relevant publications about to come out, we have trailed them, an awful lot better. That was one piece of communications research that we did. I touched on earlier the research that we did with our national panel. Again, the key findings were not surprising repairs, value for money, but also most tenants felt that they were well informed about how their landlords were performing and also they had a strong interest in continuing to receive, to be communicated with that information. We had a similar but separate piece of research with the RTOs. Again, not dissimilar to the national panel, service quality repairs and maintenance, these were the key areas that people were interested in finding out more information about. We use all of these pieces of communications research to help us shape, for example, the upcoming consultation on revisions to some of our regulatory guidance. Also, as a regulator, we want to communicate efficiently and effectively. If we are finding out that perhaps the people require some clarity when we are communicating, that is something that we take on board day-to-day and try to improve on. The communications research has been incredibly useful to give us assurance that most of the things that we are doing are correct, but we are a learning organisation. We would never assume that everything that we do is perfect or that we communicate in a perfect way. We always look to improve where we can. Thank you for that comprehensive response. Can I change the subject to the challenges that regulators are facing itself from a declining budget? Could you perhaps articulate some of those challenges for us? We recognise the challenges in the funding position. We are fortunate that, in this current financial year and next financial year, we have had a modest increase in our funding. Our funding position is still significantly below what it was three or four years ago, and we have effectively taken out about 40 per cent of the cost. We recognise that there will be continuing pressure on our funding over the next three or four years. One of the ways that we will respond to that is by continuously looking at ways that we can work smarter, more efficiently and more effectively. We also recognise that there is only so much that we can squeeze out of that approach. We will also have a very close eye to prioritisation and ensuring that our resources are going where they are most needed. We are clear that that may mean, on occasion, that we are not able to do everything that everyone would want us to do, but we will have to be very clear on the basis for that prioritisation. I hope that we will be able to, through the types of engagement that we have already touched on, be very clear on what our stakeholders' priorities are, and that they will try to marry those two positions up. We are very clear that this is going to be a challenging period over the next three or four years. Can I reassure the committee that the board is very aware that the situation is on the case and consider at every meeting if there are any proposals for things that should be taken forward or not? We are very clearly debated and decisions taken at the end whether it is affordable or not, and that will continue throughout the year. We are absolutely clear, and also we have already started thinking through what kind of priority list we would have if we really got to that point and that dialogue is ongoing. That 40% you talk about in terms of taking costs out, that obviously involved a reduction in the staffing resources available to you. Are you confident going forward that you can still achieve your mission, as it were, with the levels of staff that you have or are likely to have over the next period? We are reasonably confident that the level of resource that we have at this time enables us to address the priorities that we have set out in our corporate plan. We will renew our corporate plan in April, and we will have a clear eye to the resource position when we consider the priorities that we have set out then. At this point, as with every other part of the public sector, we are not aware of what the funding settlement is likely to be beyond the next financial year. It is quite challenging to have any more robust approach to financial planning in that regard. As things stand, we are confident that we can do the job that the Parliament has given us to do. We did a restructuring about 18 months or two years ago to help us to focus and to be able to do our business in a more efficient way. That is allowing Michael to make the statement that he has just made to you as far as the present time is concerned. When we hear what the next settlement is, we will be having another debate, I would imagine. Thank you very much for that. I will return to a theme of the earlier discussion, which was about trust, because there is no doubt about it in an informal session last week. I think all of us formed a distinct impression that there was certainly work to be done to improve trust. One of the things that was discussed was whether there are lessons from the justice system, so that the concepts like the presumption of innocence, the right to know what the complaint is, what the charge is, what you have been accused of, and one or two of the people pointed out that that might save a lot of time and resource. If RSLs being investigated knew what was concerning you, they might be able to supply perfectly reasonable answers very quickly. The whole exercise would consume less resource in both parties. I suppose the thing that seemed to have most traction was the idea that there ought to be some kind of appeal. I can see merits in that, not in a vexatious way, not in a way that is against interests of yourselves as regulators, but as a way that by introducing that moral hazard for your own people might help to drive your standards upward as well. How do you feel about the idea of an appeal? I think I should say first of all that we have a complaints procedure at the moment that can be used if people feel that they have got something about how we've gone about our business that they don't think was done either within our statutory framework or for whatever the reason, so they could use the complaints procedure. I think we would all applaud an appeal system. Providing, we have time to consider it seriously and that's the position the board's in at the moment because we do know that the code of practice for all Scottish regulators includes a requirement to have an appeal independent appeal process for a regulatory system, but it's quite broad brush the way it's stated and it doesn't give us a clear focus as to exactly what the expectation would be. So I think the important thing would be, and can I link this to the resource issue? Because nothing's without a cost unfortunately and time above all is a cost. So we would like to look at this and see what it means for SHR and what could we do that would be proportionate and would be meaningful. So we can say amen to the need for some kind of system, it's what the system would be that doesn't just cause further bureaucracy because you could end up having as many people disaffected with an appeals procedure as you've got currently saying one at the moment if we'd make it so cumbersome that they don't understand that we perhaps make too much of it or whatever. Absolutely accept these things have to be carefully considered that you're under resource pressure, but I'm sure it would be of interest to the committee that given that you seem to agree with the concept could you put a time frame on over what period would you like to consider this? It may be a report back to the committee when you'd concluded your consideration. Absolutely we could commit to do that. We are in dialogue with the Scottish Government at the moment around the time frames for the implementation of the strategic code of practice for all regulators and what the implications of that are in terms of putting in place the requirements set out in that code. The vast majority of which we already comply with and meet, but it does have this requirement for an independent appeal process, so first and foremost we need to understand what that actually means in terms of is it entirely independent of us and therefore it wouldn't be for us to take forward the delivery of that particular appeal mechanism. So there's some things we need to work through in that, but absolutely we can commit to the committee to come back with what the plan would be for the achievement of an appropriate appeal process in due course. Thank you. Sorry. Just to say that the board is committed to having a debate about this when Michael has finished his discussion with the Scottish Government and we know exactly what this is rather than sitting there worrying about what it might be, because it is important that we get clarity and we understand what the expectations are. I can just make a comment, Matt, if you don't mind. You know, as a regulator, our statutory objective is to protect the rights of tenants and other service users and our concerns would be around our ability to actually do that and I'm talking not about the day-to-day regulatory work that we do, but those significant crisis points. So any appeals process, we would not wish to be prevented from protecting those tenants in order to make interventions very quickly to save the organisations from, for example, becoming insolvent. So there's a balance in that there, although we completely understand the desire for organisations to have an appeals process, at the same time we must balance that about our ability to actually do the work that Parliament has asked us to do. I absolutely understand that, but thank you for explaining this nicely. My final question, you may be relieved to hear, last question, is on a different subject, but it's one that I think represents the Highlands and Islands is of concern and I'm sure it's of concern to Mr Stewart as well. And it's about concerns around the policy of not allowing RSL staff and board members to, for instance, use the same contractors as the RSL employs and a feeling that that's overly restrictive, particularly in rural areas. And I have also noticed in my case work that this is an impact on procurement and so on as well and that in rural areas you'll often find that everybody's somebody else's brother, cousin, friend, relative of some sort and these issues can be particularly difficult. You recognise that problem in rural areas, you feel that policies that might be perfectly appropriate and workable in urban and city areas may not work and cause real difficulties in rural areas. I absolutely empathise with what you're saying about rural areas. I know that in the past I used to go to various meetings and I kept bumping into the same people and yet I thought I was going to quite a different topic and about different organisations, so I recognise that, but Michael has got the history of this. I think it's important to start by saying that the hard-earned good reputation of social landlords has been built on decades of regard to the highest of ethical standards and that includes the effect of identification and management of conflicts of interest. So it's very much about tenant, public and political perceptions and the reputational damage that a poor perception can cause. So we believe that landlords should have clear and unambigused codes of conduct and policies on payments and benefits for governing bodies and staff that set out the highest of standards. We then think that landlords can use the complier explain principle to deal with situations that may be particularly individual to a locality or are unique situations. This is a well-used approach in many different sectors and it avoids the potential to have what might be viewed as overly relaxed provisions or set those standards at a much lower level while still accommodating the unusual or individual circumstances that you touched on. We have to recognise that board members and staffs in RSLs are in a position of influence and I think that we would all agree that it is important for the good reputation of the sector that they do not benefit personally or inappropriately from those positions. So we don't consider it appropriate for board members and staff members to make personal use of the same contractor or supplier that is used by RSLs. However, we recognise that there are particular circumstances for some rural and island RSLs and in exceptional circumstances we can see that the RSL would need to have a procedure or a process that accommodated the exceptions that might have to be made where there is a good reason for staff board members or connected persons using a supplier that is working with the RSL. So our position is that it would be improper for RSL staff and board members to benefit personally from their privileged position within the RSL but that in particular circumstances where there is that very limited pool of suppliers or contractors that the RSL should have a process to manage transparently that situation and that is absolutely where complier explain comes in. So set the highest of standards possible but then use complier explain to deal with individual circumstances. Is there in this, I mean I am not aware of this complier explain process but I haven't come across it but is there a, does it contain paragraphs of the shelf guidance is it where that could be used in type of circumstances I'm describing or can you provide a template policy guidance for RSLs that find themselves in this situation because it seems to me from those that I've spoken to them that I've spoke to a number on this issue that they're kind of at sea not just because they're islands but they're at sea in terms of how they deal with this. So surely this is something that you can provide more specific concrete guidance on that gives them some surety when they're trying to deal with what kind of difficult situations. Well we're currently in dialogue with the Scottish Federation of Housing Associations about its development of a model policy position. We're suggesting that it should be as I've set out set the highest of standards and that's what is in place for every landlord but that we utilise the complier explain principle that says where a landlord finds there are exceptional circumstances where it's not possible to comply with that high standard that it sets that out clearly explains it and it manages that situation very transparently. I think that gives us the best solution in these circumstances. Thank you. That work has already started with the Federation. Again then could ask you just to write to the committee and inform us when that works, come to fruition. Yes. Thank you. Excellent, thank you. Now Joan McAlpine has been waiting very patiently throughout our deliberations this morning and we'd invite her now to ask some questions. Thank you very much, convener. I'm going to go back to the issues of intervention that Mr Johnson and others raised earlier. I think it's important to make the point that the interventions are paid for by the Housing Associations whether or not they initiate them and therefore it's tenants who really pick up the bill for interventions in the end. Now you'll be aware of the stories in the press about your interventions with Lordburn Housing Association in Dumfries and Galloway and I have also, as a South of Scotland MSP, done quite a lot of work in this in the past and had been approached by people, former members of the board who were extremely concerned about the interventions. Now your interventions with Lordburn started in 2011. At that time Lordburn had satisfaction ratings amongst its tenants of 97%, which was one of the highest in the countries. In terms of benchmarking, which Lisa talked about earlier, against the peer group average, for example, emergency repairs, 99% of emergency repairs were met on time. So it was a very well performing housing association, didn't have any financial issues and no complaints from tenants. Your interventions started as a result of the board taking legal advice to remove three of its members. Your intervention has gone on for the last four years and has cost Lordburn Housing Association more than £400 million in consultants and legal fees. £400 million is the estimate of your interventions. Now that includes consultants who, contrary to what Mr Cameron said earlier, were imposed on the first consultant and Anderson Consulting was imposed on the housing association. They didn't have a choice, it wasn't put out to tender. Those consultants charge £900 a day, £1,000 a day. The housing association had no control over them. Now one of the consultants was based part-time in Singapore and the other consultant was based in Exeter. I would like you to tell me if you think that your actions in Lordburn were proportionate and whether you think that tenants have been given value for money in terms of your interventions in Lordburn? Can I say that yes, I think that your actions in Lordburn were proportionate and appropriate and have resolved what was a very challenging governance situation in that organisation. I think that if you speak to Lordburn today they would confirm that outcome for you. I think that in terms of the cost of interventions where an organisation is in crisis there will inevitably be a cost to tackle that. I could starkly put it as failure costs. It comes with a cost. But where we are involved in these organisations what we do see is that the cost of a special manager coming in, for example, is usually repaid quite significantly in terms of the savings that are generated to that organisation over the medium a longer term. How can a consultant based in Singapore manage a housing association in Dumfries and Galloway? Obviously it's difficult for me to talk about specific individual cases. I know that when that particular consultant was appointed by the association she was based in Scotland, she subsequently moved and then tailed off her engagement with the association and a new special manager came in. But what I would say, if the committee is concerned about the situation in Lordburn, I would perhaps suggest that they talk to Lordburn. As you'll be aware, there are a number of people who are so unhappy with your actions at Lordburn that they left the board and obviously we can't go into issues about individuals but you'll be aware that there have been changes in the staff as well at Lordburn. You talked about crisis and serious failings. If it was a serious issue and a crisis, why didn't you invoke your statutory powers? We will use our statutory powers where it's appropriate for us to use our statutory powers when necessary. The committee of that particular association was prepared to co-operate with us and work with us to determine a way through the difficulties that they were experiencing. It's appropriate for us to ensure that we use the most proportionate response possible to us. Indeed, that's a requirement placed upon us by the legislation passed by this Parliament that we do that. It's appropriate that we use, if you like, the lowest level of intervention possible by us to ensure that we are discharging that duty to be wholly appropriate where we proportionate in the work that we do. In this set of circumstances, it wasn't necessary for us to use our statutory intervention powers. We will use them where we consider it appropriate and necessary. Do you ever threaten RSLs with statutory intervention powers in order to get them to co-operate with you? We will set out for organisations quite rightly and as clearly as possible what the implications will be for them if they're not able to give us the level of assurance that we need that they're tackling the issues. That may mean that we have to say, if we can't get that level assurance, it may require us to start to use statutory interventions. We have those discussions as openly as we possibly can with landlords to understand the basis on which we are engaging with them and what we will require to see them do to ensure that we have an appropriate level assurance that the interests of tenants and other service users are being protected. Again, to go back to the issues of crisis and the serious nature of the situation, merited this huge amount of tenants' money being spent, Lordburn regulation plans say that your regulation plans say that the engagement level with Lordburn was only ever categorised as medium, not high. That's not a crisis, is it? The level of engagement in part reflects the level of co-operation that we receive from the organisation. In that set of circumstances, the committee of Lordburn Housing Association was keen to work with us. Therefore, we were able to engage with them at what we categorise as a medium level of engagement. You said in the press that you acted decisively, and you've said that you've resolved the issue. Could we really say that you'd acted decisively when it's taken four years and £400,000 to sort out what you'd perceived to be the problem? What we have done is engaged with the organisation. I'll flag first that the association itself approached us in terms of the difficult governance issues that it was experiencing. We engaged with them in a way that meant that we were working with the management committee to enable it to resolve the issues that it was experiencing. That's an approach that we will always take where we are able to as a proportionate regulator we will look to the organisation first to resolve the situation rather than use our statutory intervention powers at a very early stage, unless we thought the situation was so serious and the risks to the interests of tenants so significant that it merited us using our statutory powers quickly in that way. In those situations, I would say, look at the result, look at the outcome, the organisation has resolved. Without comfort tenants, I think that it now has an organisation that's considerably more better governed, it has a level of stability and it's an organisation that should be in a position to continue to deliver for its tenants. Colleagues mentioned the issue of consistency earlier. You'll also be aware of the Sunday Herald's article on your lack of intervention. I can only put it with Dumfries and Galloway housing partnership in the same area, which is a much larger organisation. Now, Dumfries and Galloway housing partnership has been outlined in the Sunday Herald, entered into a contract with a failing company and awarded it £38 million to build houses that subsequently collapsed. The house many houses were left in, complete many tenants were extremely unsatisfied with the quality of work and a huge amount of public money was wasted. Despite getting complaints from tenants, which you didn't get in the case of Lorburn, it took you two years to start an investigation into Dumfries and Galloway housing partnership. You didn't engage with tenants and you actually involved, allowed to Dumfries and Galloway housing partnership to conduct its own self-examination. There seems to be an inconsistency the way you've dealt with a smaller housing association having unspecified governance issues that don't actually affect the way tenants live. To this huge waste of public money where tenants have complained and they're not getting a good service, you seem to have had a very hands-off approach and it's been suggested in other witnesses that the committee's taken that Sunhouse and Associations are so big that perhaps that they're protected from your levels of intervention that have been experienced by, say for example, Lorburn. Why has Lorburn had to pay £400,000 for consultants when this big housing association that wasted huge amounts of public money has had hands-off approach? Can I say first and foremost that we have received no complaints from tenants of the houses involved in the situation with the GHP? That's first and foremost to say. We have engaged with the association in response to the media coverage that ensued and with received appropriate assurances around the situation and handling. There is not a regulatory issue here for us to become involved in. Can I also say in relation to the sense that there's some distinction drawn by us around organisations and their size? That's not the case. We are entirely neutral on organisational size, form, nature. Our sole objective in terms of the work that we undertake in any interventions we have is to protect the interests of tenants and other service users. Why did you allow the GHP to investigate itself? That's a common practice in many regulated sectors where you look for an internal investigation to be undertaken and if that provides you with appropriate levels of assurance then that's a proportionate response to any issues that come out and they were undertaken by their internal auditors and independent firm, discovered by a range of professional standards and requirements placed upon them and we take assurance from that. This is a landlord who hired a builder which had a poor credit rate in which anybody who had checked and got into any level of scrutiny would have seen had serious financial problems. They made a major mistake which resulted in huge amounts of public money being wasted and you don't think that they are merit the level of scrutiny that smaller societies do? All I can restate is that we don't make a distinction in terms of the approach we take on the basis of size. What about the waste of public money and a serious failing? I would have said that's a very serious failing. Can I say that the Scottish Government who were one of the significant investment partners in the project of advice is that there's been no waste of public money in this regard. The houses have been delivered. We've got assurance that the level of tenant satisfaction with those commercial properties is very much at the level of the normal industry standards in this regard. Again, I have to stress that there has been no basis for us to undertake a regulatory intervention in this situation and indeed, I think, had we done so in response to media noise, then we would, quite legitimately, have been open to criticism of being reactionary and being heavy-handed and being disproportionate in the approach we took. I can assure you that there's a great deal of tenant dissatisfaction with their houses and they've been going to their elected representatives of all parties to complain about that. I would be very surprised if that dissatisfaction from tenants hadn't reached you. Finally, in the course of these interventions in Lorburn, a number of people came forward to offer support. One of them was a former board member of your organisation, Alex Conde. Mr Conde resigned from your board in 2012 because of this issue of proportionality. You felt that you had damaged Fifehousing Association with your interventions there and you could have caused serious problems to a well-functioning organisation. The committee is obviously hearing from people who now share Mr Conde's concerns and it's become a big issue. Surely Mr Conde's resignation, which was outlined in considerable detail to you at the time, surely that should have run alarm bells with you that your interventions were actually harming many well-performing social landlords? Again, in that regard, I would perhaps direct the committee to discuss the reality of the situation with Fifehousing Association. Take it from the horses mouth rather than from ourselves. I would be very careful in the comment that I would make about the resignation of a former board member, but the basis of that resignation, my understanding of it, is not what you have set out. Mr Conde wrote to the House. Do you have a final question? My final question would be, you have referred us back to the housing associations who you believe will validate what you have said here today. The committee has taken quite a lot of evidence that suggests that there is a climate of fear amongst housing associations so that there are very few housing associations who would speak out against the regulator. Does that concern you that you are presiding over that climate of fear? When the Federation conducted a survey of its members, many asked to remain anonymous. Does that concern you? I am not aware that there is a climate of fear. My direct engagements with social landlords, of which I have many, do not demonstrate to me that there is a climate of fear. I have very open and frank discussions with a large number of associations, both at officer and board level. The engagements that we have had with board members and committee members of housing associations directly through things like the Governance Matters events, which 70% to 80% of associations attended, did not give us any indication that there was this climate of fear. Clearly, it is a concern if there are perceptions out there, and we would want to work with the relevant stakeholder organisations, the relevant representative bodies, to address those kinds of concerns and issues. First and foremost, we will look to our statutory objective that has been given to us by this Parliament to ensure that everything that we do is about protecting the interests of tenants and other service users. Thank you very much. We have had a very full session this morning. I am very grateful to you for coming before the committee and for the constructive and transparent way in which you have engaged with all members of the committee and with other members present this morning. We may have some issues that we wish to follow up on with the chair of the Scottish Housing Regulator, and indeed, as you have suggested, with individual housing associations, so we will reflect on that as a committee. I think that you have been very helpful in informing our understanding of the issues. We have an opportunity next week to raise some of those with the Minister for Housing and Welfare who will appear before the committee as part of a general housing update. Once again, thank you very much, and we now move into private session.