Treasury "blocked" abolition of TSA: report
The fate of the Tenant Services Authority remains in the balance amid reports that the Treasury blocked plans of ministers at the Department for Communities and Local Government to abolish the organisation.
The Financial Times said Danny Alexander, Chief Secretary to the Treasury, had warned ministers in a letter that scrapping the TSA would be “precipitate” and could put the financial capacity of housing associations at risk.
In his letter, which the FT said it had seen, Alexander wrote that:
- there was nervousness among lenders and rating agencies of further change to the regulatory arrangements for the sector, and there was a risk of downgrades to housing association credit ratings
- An £80m pension liability could be triggered if the TSA was wound up, and
- A review of the TSA should form part of the autumn spending review.
Housing Minister Grant Shapps announced later at the Chartered Institute of Housing annual conference last week that he was reviewing the TSA’s role and purpose and the best framework of regulating social housing.
He told delegates he was “far from convinced that a large national quango is the best way” to achieve tenant empowerment. Shapps added that it was “no secret” he had been concerned for some time about whether the TSA offered value for money.
The FT said Shapps seemed to have modified his stance, with the DCLG saying afterwards that while the TSA was under review “it is not just simply a case of saying we are abolishing it now”.
Meanwhile, in a letter to registered providers sent on 1 July, TSA chief executive Peter Marsh said: “Although the government has not yet announced further details of the review, we were pleased the Minister stressed the importance of continued economic regulation and tenant empowerment, as well as clear support for our regulatory standards.”
Marsh added that the TSA has “an important job to do”, pending any new arrangements being implemented following the review.
“The provisions of the 2008 Housing and Regeneration Act remain in force and we are committed to ensuring we deliver its objectives in relation to our role in economic regulation and consumer protection,” he said.
The TSA chief added that it would continue to regulate on the basis of the TSA’s regulatory framework and expect all registered providers to operate on this basis.
“In practice this means you should continue to meet the obligations set out in the TSA’s standards, which came into effect on 1 April 2010,” he said, adding that the authority would continue its close oversight of the financial risks impacting on the sector.
Marsh said providers should continue to prepare their annual report for tenants and develop their local offers by 1 October, and have local offers in place by April 2011.
“You should respond to any regulatory requests made by the TSA, and submit financial and other data returns on a timely basis,” he added.
