Chairman worried by financial checks on housing providers

Sheffield MP Clive Betts.
Sheffield MP Clive Betts.
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A House of Commons committee chaired by a Sheffield MP has criticised ratings used to assess the financial viability of social housing providers.

The Communities and Local Government Committee has voiced concern the sector’s regulator is reluctant to reduce ratings in case there is an impact on companies’ debts.

Clive Betts, Labour MP for Sheffield South East, who chairs the committee, has spoken out.

He said: “We were amazed to learn – despite acknowledging the finances of some social housing organisations give him concern – the Regulator is reluctant to give them lower financial viability ratings, fearing that doing so might trigger an upward re-pricing of their debt.

“Instead, the regulator uses governance ratings to signal concerns about financial viability.

“Committee members thought the Regulator’s practice was quite extraordinary.”

Mr Betts said: “What next? Will Ofstedinspectors criticise the school uniform rather than downgrading the performance assessment on the grounds that the latter would damage a school’s reputation?

“Will the Rail Regulator comment on the quality of the sandwiches, as an alternative to reporting on track safety?”

“As it stands, if a housing association was in serious financial difficulty, nobody would have a clue.

“The housing regulator’s current approach about financial viability lacks openness and is confusing.”

The report’s findings will be passed to the Government.