We’re pleased that slightly more boards will make further changes to their pension schemes in 2021. But the fact that two thirds won’t take any further action on pensions is worrying, given that the £1.5bn Social Housing Pension Scheme (SHPS) deficit shows little sign of improvement.
Despite the 65 per cent who are planning no further changes:
- 13 per cent expect to close defined benefit schemes to new members.
- 12 per cent expect to increase employee contributions (but only 8 per cent will increase their employer contributions).
- 16 per cent expect to transfer existing members to defined contribution schemes.
- 12 per cent expect to leave SHPS (falling to just 3 per cent for SHAPS in Scotland).
As we noted in our 2020 report, it’s possible boards feel they’ve done all they can to solve the SHPS/SHAPS problem. But employer and employee contributions will need to increase by around 50 per cent to make up the shortfall in SHPS, so it’s interesting that only a third are planning to act.
How will your organisation’s salaries change in the next 12 months?
Throughout the recession and rent freeze years, social housing organisations continued to raise their staff salaries. Our 2021 survey shows that neither Brexit nor coronavirus pressures will change this.
However, we’ve seen a big shift in the level of increases planned. Whereas in 2020 three quarters of respondents planned to raise their salaries by two per cent, in 2021 most social housing organisations are planning smaller salary increases.
Boards have got a difficult balancing act on their hands here.
On the one hand, the need to reward staff who’ve done a difficult job throughout the pandemic. On the other, restraint, in times of great difficulty for the national economy and the UK workforce over the last 12 months.
NHS staff won’t find out until May 2021 how much extra they’ll take home this year. How closely their increase aligns with the social housing sector’s anticipated one per cent rise may determine how well it’s received – particularly by frontline care home staff.
Have you suffered from a financial loss as a result of fraud in the last 12 months?
For at least the third year in a row, we’re a little stumped by the answers to our question on fraud. A quarter of respondents have been victims of fraud, but just seven per cent said they suffered a financial loss as result.
The figure for instances of fraud, one in four, feels consistent with our work in the sector. But the figure for financial loss, with 93 per cent saying they lost no money due to the fraud they experienced, is completely at odds with what we’ve seen.
The cyberattacks on Flagship, Red Kite, and the Chartered Institute of Housing are just some of the high-profile losses from fraud in the sector in the last year or so. And these are just the ones we know about.
The number of respondents who say they have been victims of fraud is in line with what we are seeing nationally but those suffering financial loss seems much lower. Currently, banks and insurers are being receptive to reimbursing loss, however it is not clear how much longer they will be supportive to victims of fraud. This emphasises the need to have well designed and operating controls in place.
Contact us for support and advice
Our social housing specialists can help you and your board decide how to tackle the big governance challenges facing your organisation
Contact Keith Ward, our Head of Social Housing, to discuss your challenges.