Social Housing and the impact of the Coronavirus
Like many other sectors of the UK economy, the social housing sector is finding times particularly difficult during this COVID-19 lockdown. The outbreak of a pandemic would not have been a feature on many registered provider’s risk registers in the past but this will definitely be a key consideration in the future together with the operation of disaster recovery plans.
Difficulties currently being faced by social housing organisations are both operational and financial. From an operational perspective, it is crucial that emergency maintenance is continued. It is likely to be difficult to organise how this can be completed by maintenance teams whilst maintaining social distance and whilst also coping with possible staff shortages due to the illness or childcare logistics. It is really important to ensure annual gas safety checks, fire safety checks and lift maintenance checks are still carried out where it is possible to access the property and maintain social distancing.
The Regulator of Social Housing has written various updates since 26 March providing guidance to the sector. This includes confirmation that some reporting requirements are reduced, extension of submission deadlines for certain reports and the pausing of in-depth reviews. In the update on 17 April, the regulator asks for any registered provider which is being overwhelmed by the impact of Coronavirus to operations to contact them as a matter of urgency. The regulator is also requesting monthly survey data to be completed to help identify the challenges facing the sector. All relevant organisations should use the NROSH+ to complete their submission.
During this time the sector is also likely to be dealing with the financial challenges of deteriorating arrears positions, potentially without being able to pursue usual collection routes due to the changes introduced by the Coronavirus Act 2020 and higher void levels due to the difficulties of moving a new tenant into property during this period of lockdown. Registered providers, who are also providing care services or support in relation to homelessness in the communities they serve, will be coping with additional challenges including the need to source essential PPE equipment and provisions of more safe accommodation for rough sleepers.
Financial modelling will be more important than usual and cashflow forecasts should be updated to factor in the potential impact of the crisis. Stress testing should then be carried out to consider various scenarios. Some organisations will have sufficient reserves to allow them to react comfortably to the current situation whilst for many others this could have an unsustainable outcome.
There is financial support available to the help deal with these difficulties. This is part of the package of support provided to the whole economy by the government. The key measures relevant to the sector to consider are:
- Coronavirus Job Retention Scheme – organisations should consider placing on furlough those staff who can no longer carry out their roles, however care is required where the organisation is also supported by state aid as access to this support is restricted
- VAT payment deferral – VAT payments due to be made between 20 March 2020 to 30 June 2020 may be deferred without any application process to HMRC. Any deferred amount will not have to be paid until the end of the current tax year although you should be aware that VAT returns do need to be submitted within the usual deadline
- PAYE payment support plan – you may be eligible to receive support with your PAYE liabilities through HMRC’s Time to Pay service
- Statutory Sick Pay (SSP) – organisations can have the current rate of SSP paid to employees who are sick due to coronavirus repaid by the government
- Support from your bank – you should speak to your bank and see what measures they are able to offer to support you. Your organisation may not be eligible for CBILS but there may be an alternative the bank can offer
If you need any more details in relation to these support measures then please contact us. We are working with our clients to ensure they are in the best position possible to emerge from this crisis.
Related news and insights
Subscribe to our newsletters
Our complimentary newsletters and event invitations are designed to provide you with regular updates, insight and guidance.
You can unsubscribe from our email communications at any time by emailing [email protected] or by clicking the 'unsubscribe' link found on all our email newsletters and event invitations.