The requirement for housing associations to have their performance reporting systems externally validated was stated in Circular 06/04 which was published in August 2004 along with the final framework and guidance.

Both documents declared the Housing Corporation's intention to make a firm statement concerning external validation for those housing associations with between 250 and 2,499 general needs dwellings in December 2004.

Our decision is that we will not require such housing associations to have their performance reporting systems externally validated by March 2006. We have made this decision as we are currently making significant changes to the regulatory regime and we need to assess their impact. Specifically our more formal approach to risk-based regulation will have a significant impact on the HA sector but has yet to take effect. We would prefer that smaller associations are not over stretched and instead are focused on engaging successfully with this new regulatory regime. Once the new regime is bedded in we can reassess the issue of external validation for this group, making a further announcement in a year's time.

This decision will also help us to consolidate the existing position in terms of collating the validation results of 2,500+ general needs dwellings group, due in summer 2005, before extending the threshold further; and allow for refinements to the validation framework and guidance, particularly as it applies to smaller associations.