1. The rationale for reviewing the Regulatory Framework
Summary: This chapter considers the rationale for changing the Regulatory Framework in the light of new risks facing the sector, and in particular diversification both in terms of the activities that providers undertake and their constitutional form. It also summarises the options for change, and explains where in the document these options are set out in more detail.
1.
If the Regulator is to meet its fundamental objectives2 it needs to protect social housing assets. This will help safeguard the investment made by taxpayers in these assets. It means that tenants will continue to be protected by regulatory requirements. It will set the pre-conditions for ongoing private sector investment in the sector on terms that enable providers to deliver new homes.
2.
TheRegulator’s role in protecting the assets and the public value in them is the cornerstone of this document.
3.
Threats to social housing assets can take a number of forms. If providers fail, lenders may enforce their security and the assets may be lost to the sector. There are also ‘slow burn’ risks, such as chronic under-investment in assets. By protecting public value we mean protecting the totality of public expenditure or benefits in kind that have been involved in the development of social housing on the assumption that the resultant units would be used for social purposes. We set out further in chapter 4 examples of the types of expenditure and benefits that we are concerned to protect.