Company Secretary Snapshot - January 2025

Table of contents

• Introduction
• The Economic Crime Levy (ECL)
• Housing Ombudsman: Learning from Severe Maladministration
• Regulatory Grades
• RSH's Fire Safety Remediation Report
• RSH publishes analysis on tenant satisfaction in the social housing sector
• RSH's Global Accounts 2024
• AOB & forthcoming events 

Introduction

A very happy New Year to you all and welcome to our first snapshot of 2025! Our monthly snapshots bring you a summary of the key developments and current affairs shaping the housing sector over the previous month.

2025 looks set to be a busy one for housing and this edition covers the impact of the Economic Crime Levy on housing associations and the latest Housing Ombudsman learning report on severe maladministration. It also highlights several updates from the Regulator of Social Housing (the RSH), including new regulatory judgements, recent reports on fire safety remediation and tenant satisfaction measures (TSMs) and its 2024 global accounts.  

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The Economic Crime Levy (ECL)

On 1 April 2022, the ECL came into force under section 53 of the Finance Act 2022 (FA) and the Economic Crime (Anti-Money Laundering) Levy Regulations 2022. Its purpose is to pay for initiatives to tackle money laundering and strengthen the UK’s financial systems against economic crime. 

The ECL applies to all organisations that are supervised for money laundering regulations (MLR) by HMRC; the FCA or the Gambling Commission with a UK revenue of equal to or greater than £10.2m in the financial year. 

The ECL applies to credit institutions, financial institutions, auditors, insolvency practitioners, external accountants and tax advisors, independent legal professionals, trust or company service providers, estate agents and letting agents, high-value dealers, casinos, auction platforms and art market participants, cryptoasset exchange providers and custodian wallet providers. 

The ECL can also apply to local authorities/housing associations, where it operates an estate agency business part of their business.

If a housing association carries out shared ownership resales, i.e. where it acts as a sole agent for the co-owner on a shared ownership re-sale, which will then fall within the definition of estate agency business, which is a regulated activity. 

Local authorities/housing associations may also be captured if they offer debt advice or provide lending facilities to their tenants, or broker financial deals. 

The ECL is paid as a fixed fee, the amount of which is determined by revenue. It is important to note that this is based on the overall revenue and not just the revenue derived from the regulated activity i.e. estate agency.

The amounts payable are as set out in the table below:

Size	Revenue	ECL to be paid
Small	Under £10.2m	None – exempt
Medium	£10.2m - £36m	£10,000
Large	£36m - £1 billion	£36,000
Very Large	Over £1 billion	£250,000

 

The ECL can impact housing associations, especially those with limited revenue from re-sale activities. The levy to be paid may exceed the revenue generated from these activities, making in-house resales financially impracticable. To mitigate the amount payable under the levy, some housing associations have considered outsourcing their re-sale functions, or operating them through separate subsidiaries within the group.

Checklist for housing associations to establish if the ECL is payable: 

Questions for housing associations to consider	Yes/No	Outcome
1. Are you supervised for MLR by HMRC or FCA?		If yes then you may be liable to pay the ECL if the other conditions are met (as per questions 2 and 3 below).
2. Do you carry out any estate agency function, offer debt advice or provide lending facilities?		If yes then you may be liable to pay the ECL if the other conditions are met (as per question 1 above and 3 below).
3. Do you have revenue that is equal to or greater than £10.2m?		If yes then you will be liable to pay the ECL levy provided the previous questions were answered yes. The sum payable is detailed at paragraph 1.8 above.
4. Do you outsource any of the functions, which are regulated activities, detailed at question 2?		If yes then you may be exempt from the ECL.

 

If you are supervised by HMRC for MLR and the ECL is payable, then you must register using the HMRC online ECL Service. You only need to register once but each year by 30 September you must submit a return. The return must report, the length of the relevant accounting period , the UK revenue for that period, whether you stopped or started MLR-regulated activity in the previous financial year and the ECL band and amount due. You should submit returns on a yearly basis even if you do not meet the threshold to pay the ECL in that year. 

If you are supervised by the FCA for MLR you should receive a FIN074 form,  which asks for your revenue in any given financial year. If you receive a FIN074 form but do not met the minimum revenue threshold (£10.2m) then you will be required to complete the form but the ECL would not be payable. A failure to submit the form on time may result in a £250 administrative fee, payable to the FCA. If the minimum revenue threshold is met then you will be required to pay the ECL to the FCA, who will normally invoice you the relevant sum payable in accordance with the table at paragraph 1.8 above.  

If you have any further queries in respect of the ECL and whether it applies to you please contact Louise Adams (louise.adams@bevanbrittan.com).  

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Housing Ombudsman: Learning from Severe Maladministration

The Housing Ombudsman published its latest report on severe maladministration in December 2024, which looks at different hazards social housing residents face, including pests, excess cold or heat, hygiene, asbestos and carbon monoxide. 

The report comes ahead of the implementation of Awaab’s Law, which is expected to be enforced this year. Awaab’s Law will require registered providers (RPs) (amongst other things) to investigate and fix hazards within strict timeframes. The Ombudsman encourages RPs to assure themselves that they can deliver robust action on hazards now so they are well prepared to implement the new legislation. 

Key learning from the report includes:

• Risk assessment and communication: effective triage and risk assessments should be implemented, as well as maintaining clear and consistent communication throughout the repair process. There should be a more proactive approach to identifying potential hazards and consideration of temporary relocations when properties become unsafe or uninhabitable, as well as improvements to record keeping and monitoring. Better coordination with contractors and other agencies is needed to ensure effective resolution of complex issues.
• Roles and responsibilities: the report highlighted there is a disconnect between the respective responsibilities of landlords and local authorities – landlords are responsible for ensuring a home is free of hazards and local authorities are responsible for enforcement action.
• Looking ahead to Awaab’s Law and a new Decent Homes Standard:  whilst measures like Awaab's Law and a new Decent Homes Standard were welcomed by the Ombudsman, the report stressed that there are already sufficient statutory measures in place which should be preventing the conditions highlighted in the report. 

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Regulatory Grades

The RSH’s publication of regulatory judgements continues this month. Recent key themes include: 

• Safety and Quality Standard:
  • Weaknesses in the provision of repairs and maintenance, particularly remediation of damp, mould and condensation;
  • More active approach to anti-social behaviour required;
  • Backlog of medium priority fire remedial actions;
  • Delays in delivering stock condition surveys; and
• A need to improve risk management and control framework to align strategic risk.
  • Transparency, Influence and Accountability Standard:
  • Improvements required to the complaints services to evidence they are handled fairly, effectively and promptly.
• Rent Standard:
  • Tenancies not complying with the rent standard as a result of:
    • Rents set higher than formula rent ceiling;
    • Rent increases exceeding RSH limit;
    • Rents set higher than fair rent determination; and
    • Affordable rents set incorrectly at tenancy commencement.
• Consumer Standards:
  • Two local authority landlords received a C3 grading, meaning there are serious failings how they meet the outcomes of the consumer standards. Key themes were issues around inaccurate and out-of-date data on stock quality and decency, a lack of stock condition surveys, overdue disrepair cases and poor repairs services.

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RSH’s Fire Safety Remediation Report

In December, the RSH published a report on the latest findings from the Fire Safety Remediation Survey (the FRS). As part of the Government’s focus on building safety, the FRS is a quarterly survey by the RSH on the fire safety of the buildings over 11 metres which RPs are responsible for. 

Key findings for this quarter include:

• Fire risk assessments have been undertaken for 99.2% of the buildings reported on in the survey. 
• 11.5% of buildings were reported as having a life critical fire safety defect relating to the external wall system. Of these, only 7.2% have had remediation works completed.
• 69% of relevant buildings with a life critical fire safety defect are expected to be remediated within five years. However, challenges remain in providing specific timelines for remediation. 

Boards and councillors were reminded of their responsibilities in relation to building safety. This includes seeking assurance that legal obligations are being met and that any identified risks are promptly managed and mitigated.

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RSH publishes analysis on tenant satisfaction in the social housing sector

At the end of last year, the RSH published a report on its analysis of the first year of Tenant Satisfaction Measures (TSMs), as well as the results of its National Tenant Survey.

The report found that repairs and maintenance is the biggest driver of tenant satisfaction. Over 70% of social housing tenants reported being satisfied with their landlord's service, feeling their homes were safe and well-maintained, and that they were treated with fairness and respect. However, significant areas for improvement were identified, including:

• Approximately 20% of tenants were not satisfied with their landlord's service;
• Only one-third of tenants who made complaints were satisfied with how they were handled; and
• Shared owners showed notably lower satisfaction rates, with only around 50% satisfied with overall service

The report emphasised that RPs should already be using the TSM results them to make improvements to their services.  

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RSH’s Global Accounts 2024

The RSH has published its 2024 Global Accounts, which provide a financial overview of private RPs for the year up to 31 March 2024.

The accounts show that there was “record” spending by RPs on existing homes, on measures including fire remediation, building safety and energy efficiency. RPs spent £8.8bn on repairs and maintenance, 13% more than the previous year. However, spending on development also increased, with £15bn spent in the last year, 10% more than the previous year. 54,000 new social homes were delivered, an increase of 3% on the previous year.  

The report explained that spending on existing homes has weakened the sector’s financial position, which can also be seen in a number of recent regulatory judgements. Many RPs are scaling back their development ambitions due to the need to invest in existing homes.

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AOB

Our October Snapshot discussed the Law Commission’s consultation on changes to co-operative and community benefit society law. We submitted our response to the consultation and are actively engaged with the Law Commission on the proposals. If you would like a copy of our response, please contact Rose Klemperer.

Forthcoming events

Company Secretary Webinar – 26 February – Virtual

In the rapidly evolving landscape of UK housing, it is essential for Company Secretaries to stay ahead of governance issues and hot topics. 

Join us for this session where we will be discussing topics including: 

• G1 upgrade process
• Finding issues post-merger
• Building safety compliance
• Views from a board perspective
• Learnings from inspections by the Regulator.

Register here. 

Senior Independent Director Network – 6 May – Virtual 

Is your SID part of our network? If not, please email Rose Klemperer for more information.  

Register here. 

In-House Insights

We are delighted to announce our programme of webinars for the 2025 edition of our In-House Insights series.

For more information, please click here. 

Recent articles that may be of interest

Employment Eye – A look back at 2024 
Immigration Update - New Year Sponsorship Changes 
Government releases its Competitive Flexible Procedure template 

The Procurement Act  

On 24 February 2025, the Procurement Act 2023 will come into force, marking the most significant overhaul of procurement law in recent memory. While some of these issues are complex, we’re committed to helping clients navigate this new landscape. To support organisations, we’re excited to launch ProAct 23, a set of resources designed to assist with understanding, preparing for, and complying with the Act in England and Wales. ProAct 23 gives practical, scenario based guidance on safe and effective procurement. Through Masterclasses (on-demand videos), topic guides and online resources (including a workbook), your clients will have a guide at their fingertips for the whole organisation.

For more information, please click here. 

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