Hansard

Thank you very much, convener. I might take a minute or so more on my opening statement this time than I have done previously, because so much has gone on since we published our annual report. I hope that that is acceptable to the committee. I promise that I will not drone on for too long. Thank you so much for inviting us to present the annual report for 2022-23. As you will know, we published it in October, but so much has happened since March—the end of the period that the report covers—that we want to draw your attention to some of those important developments. I will start with homelessness, before sharing some analysis on new build and what is happening there. I will also update you on reinforced autoclaved aerated concrete—RAAC—which is an issue that is pretty hot off the press. We have previously spoken about homelessness. In February, in “Homelessness services in Scotland: A thematic review”, we said that, for some councils, there was “an emerging risk of systemic failure.” That was a significant statement. Since then, the Scottish Government has published statistics that show an increase in the number of homelessness applications. As we sit here, the number of people in temporary accommodation—including children—is the highest on record, and they are spending longer in temporary accommodation than they did in the past. Our on-going engagement with councils on the delivery of services for people who are homeless has found that breaches of statutory duties are now a regular occurrence in some councils. In the annual assurance statements that have recently been submitted to us as the regulator, 14 local authorities state that they do not always fully comply with their duties, and some acknowledge that they are not always able to meet their duties to people who are homeless. Our analysis of registered social landlords’ recently submitted annual returns on the Scottish social housing charter has identified that fewer existing homes are becoming available and that, when they do, they are staying empty for longer. The net effect is that fewer homes are available to let. In addition to the issue of people who are already in temporary accommodation, some councils are concerned that there will be additional demand for homelessness services as a result of the Home Office’s initiative on streamlining the asylum process. We see that, in some areas, the demand now certainly exceeds the capacity to respond. We are now of the view that there is a systemic failure in the services that are provided by some councils, and that there is a heightened risk for other councils. We will, of course, continue to monitor, assess and report on homelessness, but we recognise that systemic failure requires an intervention beyond the regulatory powers that have been given to us by Parliament. Yesterday, we published a statement updating our thematic review to reflect the current position with regard to systemic failure in some of the homelessness services that are provided by some councils. We, of course, stand ready to work with the Scottish Government and stakeholders to address the acute issues that we see in homelessness. We were very aware of Parliament’s recent debate on housing. Our view is that the context for tenants and social landlords has never been more challenging, but social landlords have worked hard and have kept rent increases in the past few years to levels below the prevailing rate of inflation. That has undoubtedly been of immediate help to tenants who are struggling to manage household finances. However, rent arrears are at the highest level since the introduction of the charter, and landlords are facing real pressures in funding future investment in their tenants’ homes and in services. Related to that, I want to highlight our recently published analysis of registered social landlords’ five-year financial projections up to 2027-28. In that, we can see a reduction in the number of new homes that RSLs will build and in the number of RSLs that plan to build. That is due to cost increases in construction and the impacts of the cost of borrowing for RSLs. They are also planning to cut back or delay investment in existing homes, which is troubling. Those same organisations are halving expenditure on non-core activities, which include things such as the provision of welfare and energy advice. The halving of expenditure on those non-core activities is significant. The impact on current tenants and people who are experiencing homelessness could be very significant. That is further evidence of the significant pressures that tenants and landlords are having to cope with. As you know, convener, we discussed RAAC when we last met. We have been working with stakeholders to establish the extent of RAAC in social housing in Scotland. From our on-going data collection, which we started in October, we know that nine social landlords have a total of 953 homes with RAAC. We will continue to update those figures as landlords conclude their on-going investigations into possible RAAC, and, of course, we are engaging with those landlords that have confirmed the existence of RAAC in homes to get assurance about their plans to deal with managing it. Finally, I want to report that we are progressing well with the review of our regulatory framework. We started that in June with a discussion paper, and we used the feedback from that to develop specific proposals that we are consulting on. That consultation closes on 15 December. We will consider and cogitate on the feedback from that, and we will produce a final framework in February, for implementation in April. Alongside that, we are revising our corporate strategy, which will also start from April. I am happy to say that the feedback has been broadly very supportive. There is a clear sense that the sector wants stability and that the existing framework has been working well. We agree with that: the existing framework has been working well. At present, although we are engaging with a number of landlords, I am very pleased to report that we have no statutory interventions under way. The main proposals that we have made are around allowing for us to ask for further detailed information on emerging topics, such as damp and mould, in the annual landlord assurance statements and to seek clarification on regulatory status based on feedback from tenants and, importantly, lenders to the sector. We will also do a comprehensive review of the annual charter return. Part of that is safety related—we want to collaborate with the sector to develop key measures around safety issues such as damp and mould. That is complex, so a collaborative approach matters. We will wrap that up with work on the indicators that we will use to monitor landlords’ achievement of the newly proposed social housing net zero standard, and we will do a further combined consultation towards the end of the year. Of course, throughout the process, we will be happy to keep the committee updated on our work, via the clerks or by coming to visit, should that be needed. I am sure that you will have questions for us, so I will hand back to the convener. We will be happy to answer any questions or to discuss anything that members would like to discuss.