The IDA – When an inspector calls
In June 2015 the Homes and Communities Agency (HCA) set out its process for conducting the new ‘forensic’ in-depth assessments (IDA). The IDAs were billed as a ‘bespoke piece of work’ that would look at risk profiles, financial strengths and weaknesses and governance. As one of the first housing providers to have experienced the IDA - post-pilot phase - Bromford’s CEO, Philippa Jones, learnt a lot through the whole review. Here she shares her thoughts on the process and offers advice to others awaiting their call.
It was like any other Tuesday afternoon and then I got the call. Bromford had been chosen as one of the very first to receive a real IDA following the pilots. It was late August and of course both I and our Head of Governance were about to break up for holidays. Oh yes, and they wanted our initial documents submitted in ten days. And of course, like everyone else right then we were in the midst of revising our business plan to reflect the July Budget and rent cut. So I think we could be forgiven a degree of “why us and why right now!” as we launched into a new experience that, on reflection, wasn’t half as bad as I’d first imagined.
We’d already done a fair amount of prep ahead of our call. Our key documents were in order and we’d caught up with providers who’d already gone through the IDA in the pilot phase to get their take on the whole process. All of this groundwork really stood us in good stead during the IDA and it’s something I’d strongly recommend to other CEOs.
The whole process was much like the HCA had set out in their Regulating the Standards document, other than the notice period which was significantly shorter than the published six weeks. It was indeed six weeks between the call and interviews/board meeting attendance but closer to 10 days' lead time on submitting documents.
Our approach was to be as transparent as possible which led to us sending over 250 documents to the HCA, even though their initial list of requirements showed only 25.Where we thought the HCA would benefit from some insight into our particular approach, for example our risk appetite, we provided brief overview notes along with the supporting documents. The submission process was all electronic via NROSH which worked very smoothly. It was heartening to realise that our work wasn’t in vain – at interview stage it was obvious that someone at the HCA had clearly read everything we’d sent over as they subsequently asked questions from a definite position of knowledge. I think our approach of sending more detail rather than less helped minimise the amount of follow up requests.
Ahead of our IDA I’d personally been quite sceptical about the claim that the IDAs would be ‘bespoke’ and tailored to each organisation, but I have to say that is exactly what we experienced. And from speaking to another HA going through it at the same time I know their process was very different, so it clearly isn’t one size fits all. With this in mind I’d say it’s worth thinking about where the HCA are most likely to want to focus in your organisation and that it’s vital that both your executive team and Board completely understand the detailed legal structure and key risk areas of your business.
The non-executive team were a key part of our IDA and it felt at times that almost all roads led back to them. There was real scrutiny over how well they understood our business and also that they were fundamentally contributing to how it should be run, as opposed to the exec team leading them by the nose. The question “how do the Board know?” was without doubt the most frequently asked across a whole range of topics. Our Board certainly demonstrated their skills, value and how they fully understood our business and the risks we face throughout the process – for us reinforcing the importance of effective recruitment for non-execs.
Then came the result, confirming our G1 V1 as we hoped – phew!
My take away from it all? Don’t be afraid of the IDA. Yes, it feels invasive and yes it’s demanding and will probably come at the time you least want it, but it’s targeted, moving away from the broad-brush approach of the past. And this can only be a good thing for providers and the sector alike.