At the start of a new decade, significant universal challenges - including climate change, Brexit, cyber security and now COVID-19 - will be at the forefront of many board meeting agendas. Our report looks at how these issues will impact the housing sector.
Despite the circumstances, housing sector associations will continue to do what they do best: provide support to the most-vulnerable members of our society. However, social distancing and staff absences have made achieving their aims harder. We have identified some of the key challenges in our report along with the potential knock-on financial and regulatory impact.
Associations are navigating housing-sector-specific developments, with new building safety guidance, the 2020 Rent Standard and the introduction of universal credit, along with other key challenges, including climate-change and Brexit. All these issues are likely to have a significant impact on most associations and, therefore, it is expected that these will also be reflected in annual reports, particularly narrative reporting. The challenges are accompanied by changes in financial reporting, with the new Housing SORP and Accounting Direction, however we don’t expect these to have a significant impact for most associations.
Climate change and Brexit
With increasing reporting requirements for those entities incorporated under the Companies Act, there is additional onus to address climate-related issues. Although these requirements are not mandatory for all associations, many stakeholders will be looking for the sector to provide concrete action and direction on climate change. We expect reporting in this area to increase significantly, whether required by legislation or through best-practice reporting.
While we have now left the EU, the impact of this decision is still unclear, and therefore, it is advisable that housing sector associations continue with their contingency planning, both in the short and long term. We recommend a particular focus on the impact Brexit may have on funding, employees and other key stakeholders.
The housing sector has a number of challenges to navigate through this coming year, however, we hope that our sector developments publication, together with the Housing model accounts, will give you some effective tools to tackle your financial reporting preparations in this difficult time.