Earlier this month I attended the Scottish Federation of Housing Associations (SFHA) Finance Conference, an annual event which looks at the important role of housing associations and other Registered Social Landlords (RSLs) in managing accommodation for more than 285,000 households across Scotland. 

As someone representing a firm that audits more RSLs than any other in Scotland, it was unsurprising to hear much conference discussion about the current legislative challenges facing Scottish housing associations. This includes mandatory energy efficiency improvements, as well as a requirement to replace RAAC and, in some cases, dangerous cladding in some properties. 

While no one within the sector questions these key environmental and safety areas will need to be addressed, there are huge concerns about how this can be done in the absence of any additional support from government. These additional measures, which carry a significant financial burden, come at a time when RSLs are already under major strain leaving many unable to invest in new homes while demand for housing is on the rise.

Given the ever-present squeeze on public finances, it’s unlikely that the sector can expect significant additional resources from government anytime soon. There are however some measures which some of Scotland’s housing associations could consider to mitigate some of the impact of these measures starting with a review of their operational efficiencies. 

For those which have yet to embrace digital transformation, an investment in technology can create huge benefits in streamlining administrative processes, improving tenant communication, and enhancing property management. This could involve adopting cloud-based systems, data analytics, or AI to predict maintenance needs, all of which can save both time and money in the long term.

Creating joint ventures and strategic partnerships with private developers, local authorities, and other organisations to share costs and risks is another means that RSLs can improve their finances, especially with large-scale housing projects. Housing associations, particularly smaller cooperatives, can also consider forming consortia to access shared services such as maintenance, procurement, and insurance to drive down costs. 

Reviewing and managing existing housing stock can be another important aspect of improving a housing association’s financial position. Some properties may no longer be viable for long-term social housing, and strategically selling or redeveloping these assets could help free up capital for reinvestment.

These cost-saving measures would deliver benefits to some of Scotland’s RSLs, but the sector cannot continue to meet the growing demand for its services without government support. Despite having limited financial resources at their disposal, there are ways the UK and Scottish Governments can help. 

An ideal starting point would be for governments to reduce the level of regulatory burden. Simplifying or adjusting regulations to allow RSLs to focus more on delivering affordable housing, rather than spending excessive resources on compliance and reporting, would really benefit the sector. Regulations imposed by government should be clear and aligned with the needs of the sector, without stifling innovation. The introduction of more flexibility around operational decisions, such as rent setting and tenant management, would also enable RSLs to better adapt to local needs and market conditions.

Increasing access to affordable finance through government-backed loan guarantees would also help the sector by reducing financing costs and allowing RSLs to borrow more cheaply for development projects. Providing low-interest loans to help housing associations refurbish and retrofit existing housing stock, improve energy efficiency and extend the lifespan of older properties could also be hugely beneficial.

Further legislative measures where governments could help housing associations are to simplify planning processes, by reducing delays and making it easier for RSLs to develop new homes quickly, and supporting the sector through streamlined identification and acquisition of land for new housing projects. 

As was clear from the mood at this year’s SFHA Finance Conference, RSLs cannot continue to meet the increasing demands for social housing in isolation. While there are operational measures that can help housing associations reduce some of their costs, financial and legislative support from both the UK and Scottish Government remains essential if the sector is to continue delivering for the thousands of families in Scotland which rely on their services. 

• Stuart Beattie, is a director and head of RSLs at accountants CT