GWSF response to Scottish Housing Regulator’s
discussion paper on Appealing Regulatory Decisions
October 2015
Introduction
GWSF welcomes the opportunity to respond to the Regulator’s discussion paper. We
welcome too the informal meetings we have had with SHR and other representative
bodies prior to, and during, this initial consultation over the key principles governing
appeals.
Whilst seeking reconsideration of a regulatory decision is not something most
housing associations would do lightly, having a robust, trusted process in place is
clearly important for the sector.
A key hope within the sector is that in the knowledge that its decisions can be more
clearly challenged, SHR will take particular care to try to ensure that its decisions
and actions are as fair and proportionate as possible and based on meaningful
assessment of real risk, so that there is rarely any reason for an association to
mount a challenge.
Regulation Plans
The document proposes that the issuing of a Regulation Plan (RP) should be able to
be reviewed but not subject to appeal. We imagine that the SHR’s thinking here is
that (a) the issuing of a RP can be based on a number of criteria, some of which are
not about ‘fault’ – e.g. having subsidiaries, being an active developer, and (b) the
issuing of a Performance Improvement Plan is proposed to be subject to appeal as
this is a statutory intervention.
However, GWSF members have expressed the strong view that issuing of a RP
should be able to be the subject of an appeal. A number of reasons were cited:

RPs are issued with very little notice and after little or no engagement with the
association
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They are perceived as being the result of a tick-box exercise rather than a
genuine, case by case assessment of real problems or risk: this is particularly
so in relation to the assessment of Charter KPIs such as SHQS compliance
They are sometimes perceived to be left in place for too long, relative to the
issue in question
They can have serious implications in terms of an association’s borrowings,
as well as how they might be viewed by staff and committee members,
tenants and others such as the local press.
Whilst GWSF continues to have a helpful, ongoing dialogue with SHR over the
annual assessment process, and we hope to see appropriate changes in the coming
years, in the meantime we would strongly assert that the issuing of a Regulation
Plan should be subject to appeal and not just review.
Reviewing a decision
GWSF is broadly happy with the principle of a relatively simple and speedy process
for reviewing a regulatory decision. However, the expectation among members is
that a decision would rarely be overturned by a more senior manager, and so this
process will be perceived as being of somewhat limited value.
That said, it will nonetheless be helpful to have a clear system by which a decision
can be reviewed, and we look forward to commenting on the detail of the review
process in the coming months.
For a number of categories of regulatory decisions/actions, the review will effectively
be the last line of redress under the proposals, as appeals are to be limited to a
narrower range of categories. On top of our call for Regulation Plans to be subject to
appeal from the outset of the new system, GWSF would urge SHR to revisit the
criteria for reviews and appeals at regular intervals to see whether, in the light of
experience, a broader range of decisions and actions should be able to be appealed
and not just reviewed.
On a point of detail, the reference (in the first dot point of para 16) to a ‘statutory
regulatory decision’ should be clarified – we imagine this is meant to refer to
statutory interventions such as the appointment by SHR of managers and board
members.
Appeals - an independent process?
GWSF recognises that the appeals process proposed in the document appears to be
as far as SHR can go under the existing legislation. In hindsight, it seems puzzling
that the issue of an external appeals mechanism was not raised by anyone in the
housing sector when the regulatory framework was being developed in advance of
the 2010 Act, but that is the position we are now in.
We accept too that in setting out a requirement for all Scottish regulators to have an
independent appeals mechanism, the Scottish Government’s Code of Practice did
not define ‘independent’. What is key here is the perception of independence among
those most affected: the SHR believes that an appeal can be ‘independent and
impartial’ if the final decision is independent of those who made the original decision,
but GWSF would assert that for the great majority of associations, independent
means independent of the organisation.
This is not, as such, a criticism of SHR but simply a recognition that no
organisation’s appeals process is likely to be seen as independent or impartial if the
final decision remains within the organisation.
We look forward to considering the detail of how a more limited appeals process can
be introduced in April 2016 under the current legislation, but will call for a properly
independent process to be introduced at the earliest opportunity in the new
Parliamentary session after the Election.
It has been suggested that the Scottish Government may be hesitant about
introducing such legislation for one regulator as this may point to the need to do
likewise across all regulators who do not have an independent appeals process. It
will be for each regulatory framework to be looked at separately, as each will have
different issues and circumstances: we can foresee a position where an independent
appeals process for SHR may be deemed a greater priority than for some other
regulators.
Some members have questioned whether there might be scope, before the law can
be changed, for some kind of advisory panel which would consider an appeal and
make a recommendation to SHR – i.e. the panel would not have any decision
making power but could potentially add an element of independence into the
process. Such a panel could be the precursor to the fully independent panel
established through an eventual change in the law.
On points of detail:

GWSF would suggest a further ground for appeal, along the lines of ‘the
decision was disproportionate in relation to the scale and nature of the issue
in question’. The intention of being proportionate is a central tenet of SHR’s
objectives and so it would make sense to be able to appeal where an
association feels SHR has not acted proportionately

Para 21 could helpfully be amended to read ‘An appeal would not normally be
[rather than ‘is not’] a fresh consideration of all the evidence…’
The role of complaints
Whilst the document helpfully attempts to show where complaints – either to SHR
itself or, ultimately, to SPSO in certain circumstances – fit in, GWSF believes the role
and status of complaints has been overstated, leading to potential confusion.
A complaint should not be used simply as a further stage of an appeals process, i.e.
it is not for a complaint to be made as an expression of general dissatisfaction with a
review or decision, in an attempt to overturn a decision. A complaint should be
narrower – used, for example, in relation to something specific about the process
that led to the final decision, or where someone’s conduct has caused concern.
Hence in para 45 it seems inappropriate to state that a complaint can be about
‘disagreement or dissatisfaction with a certain decision’ as this makes it sound like a
further stage post-review or appeal.
Similarly, recourse to the SPSO after an unsuccessful appeal should be seen as an
exceptional event, used not simply to question the decision but rather as a complaint
about a specific aspect of the process which led to the decision. This clarification
would seem especially important given that, as the document states, SPSO cannot
in any event overturn a regulatory decision.
Next steps
GWSF would be happy to discuss any aspects of this response with SHR and looks
forward to meeting with SHR again after the end of the consultation period.