Those residual risks considered to be Red or Amber are summarised below:
Residual
Risk
risk score
Local Authority budgetary pressures leading to loss of income from care contract renewal/ funding
resulting in increased financial pressure on Care & Support services. 15
Potential care and support quality management failures leading to regulatory action resulting in reputational
damage and decreased income. 20
Non-compliance with standards in Regulated Services (Homes England/Regulator of Social Housing/Care
Quality Commission) leading to regulatory ratings impacting on reputation and financial performance or
business development. 15
Data protection - unauthorised access/ transfer of electronic or physical data leading to breach of legislation
(GDPR) or business disruption resulting in associated penalties or reputational damage or financial/data loss. 16
Failure to understand changing customer requirements due to Welfare Reforms, Local Housing Allowance future
funding for sheltered and supported housing, resulting in increasing arrears/ decreasing income collection
performance leading to additional resource requirements and associated costs. 12
Implementation of Voluntary Right to Buy (VRTB) leading to potential depletion of housing stock resulting in
potential reduction of income. 12
In addition to Accord’s key risks outlined above, wider risks facing the sector include:
Pension scheme liabilities
Under the new SORP it is likely that past service deficit contributions in respect of defined benefit pension funds for multi-employer
schemes will be required to be brought ‘on Balance Sheet’. The economic performance of pension assets has deteriorated due to the
downturn in economic conditions, resulting in pension scheme liabilities exceeding the value of these assets significantly. In addition,
movements on pension valuations could potentially create a degree of volatility in surpluses reported in the Statement of Comprehensive
Income.
Compliance
There has been a growing trend of regulatory action and intervention where providers are not fulfilling their legal obligations with respect
to matters of health and safety related legal compliance. To manage this risk effectively it is essential Providers have reliable and robust
data and reporting systems and clearly communicate performance information to the Board.
Value for Money
There is a clear and ongoing expectation from the Regulator of Social Housing that Providers clearly demonstrate value for money which
is clearly linked to corporate objectives and return on assets. The effective and transparent application of finite resources is increasingly
important under the current regulatory focus.
Financial Statements 2018
29