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99% of housing associations hit HCA deadline

Almost all housing associations have hit the deadline for submission of their revised business plans to the regulator following the government’s rent reduction announcement.

The Homes and Communities Agency (HCA) set a deadline of 30 October for associations to provide it with new financial forecast returns (FFRs) to reflect the rent cut and other reforms such as the lowering of the benefit cap.

A spokesperson for the HCA said: “We have received more than a 99% response and will be reviewing the returns over the coming weeks.”

The rent cut – a reduction of 1% a year for 4 years – and cuts to the benefit cap from £26,000 to £20,000 (£23,000 in London) were announced in July’s Budget.

In the same month, HCA chair Julian Ashby wrote to chief executives and chairs of the 255 English housing associations that own 1,000 or more homes to ask them for updated financial information. He said the rent and benefits cuts would have “a substantial impact on most associations’ business plans”.

In the letter Mr Ashby warned that failure to provide accurate FFR returns “will give rise to cause for regulatory concern”.

“It is for you to decide whether and how you will need to reconfigure your business in the light of these changes,” he wrote.

“We anticipate that most associations will wish to look at their cost structure and consider areas where it is possible to re-prioritise expenditure.”

He also urged associations that felt they could not adapt to the changes to contact the HCA straight away. The HCA has not commented on what will happen with relation to the small number of associations which have not responded.

The HCA wanted to check associations understood the scale of the changes in the budget, had remedial plans in place to deal with them, had considered ‘all relevant issues’ and have fully stress tested business plans.

In his letter, Mr Ashby said agency would use the revised FFR along with accounts to carry out each organisation’s first stability check.

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BDC 316 : May 2024