How should social housing landlords change after Grenfell?

There are signs too of more Grenfell-related reviews. London Councils, for instance, is commissioning a survey of tower block tenants on communication from and to their landlords.

 

The scale of the tragedy and the breadth of its ramifications mean that it could be years before all the reviews and inquiries have been concluded, never mind how long it takes to implement the findings. The Lakanal House inquest, for example, was not completed until nearly four years after the fire in 2009.

 

Wider implications

How should social landlords respond? Plainly they cannot afford to wait indefinitely for all the lessons to be published. New homes need to be built to address housing need, existing homes need to be maintained, and tenancies and leasehold services need to be managed.

“Grenfell has served as a catalyst for disaffection, and there is a widespread sense that landlords must find ways of listening to their residents.”

Initial emergency steps have of course already been taken by many landlords with high-rise blocks, especially those with the offending aluminium composite material (ACM) cladding.

 

It is self-evident that resident safety must be the number one priority, but concerns have been raised about whether in some cases a knee-jerk approach was taken in stripping off usable cladding that appeared to have been properly installed.

 

It is important to recognise that cladding has been fitted to blocks not for cosmetic purposes, but to provide insulation. Remove that layer and there will be implications in terms of energy costs (potentially worsening fuel poverty for many), condensation and residents’ health, for example.

 

Some have suggested that dealing with Grenfell is about focusing on cladding and fire risk assessments. Plainly these are important elements. In reality though, the implications stretch far wider. The box above gives an indication of the range of areas that concern landlords, whether they have tower blocks or not.

 

Assessing costs

The financial aspects are, as ever, fundamental. Removing and replacing cladding, and making other changes such as installing sprinklers in blocks is expensive – according to recent reports in the trade press, fire safety improvement works are expected to cost London Councils alone more than £400m.

 

This money will have to be found from somewhere, at a time when many councils are struggling with continuing budget cuts, given the ongoing reductions in revenue support grant.

 

The cost of fire safety works will impact other areas too, with consequences for all social landlords. Where funds are being diverted to these areas, they will commonly come from planned and cyclical maintenance programmes, leading to refurbishment cycles being lengthened, and in due course impacting responsive maintenance, as additional short-term repair requirements emerge.

 

As regards new development, for some organisations there may be capital funds previously designated for new build that are diverted to remedial works. In other cases, valuations could be affected, if market demand for high-rise properties falls.

 

At this point, it is hard to judge how serious this factor is, but valuers have highlighted concerns. This could further impact on loan security, and potentially even give rise to impairments in particular cases.

 

What’s right for residents

We can expect a shift in the focus of social housing regulation. Under the Localism Act 2011, the Homes and Communities Agency (HCA) is required to “perform our functions in a way that minimises interference and is proportionate”.

 

In relation to its consumer standards (as distinct from the economic standards), this means in practice that the HCA will use its regulatory and enforcement powers only where it believes there has been or may be a serious detriment to tenants.

 

A number of housing providers have of course attracted regulatory attention, either through governance downgrades or regulatory notices, in relation to service failures, but these have normally been on the basis of governance weaknesses, typically in terms of data integrity.

 

Proactive consumer regulation has been largely absent over recent years, and very limited in the case of local authorities.

 

Strictly speaking, the regulator cannot change the basis on which it regulates the consumer standards without a change in legislation.

 

In practice, we may expect to see greater attention paid to these areas, and an increase in dedicated resourcing.

 

Alongside the de facto de-prioritisation of consumer standards since the Tenant Services Authority was merged into the HCA, there has been much less attention paid to the views of residents, nationally and often locally.

 

The government cut funding to tenant-focused bodies such as Tpas and Tenants’ and Residents’ Organisations of England (TAROE). And many social landlords have moved away from or downgraded the active involvement of residents in their governance structures or in relation to service delivery.

 

Grenfell has served as a catalyst for disaffection here, and there is an increasingly widespread sense that landlords must find ways of listening to their residents.

 

Alok Sharma’s ‘roadshows’ are an indication that the government is taking this matter seriously, and social landlords can be expected to pay greater attention to resident engagement in customer services, estate improvements and regeneration.

 

Overall, the prime message to boards and executives must be: do not wait for all the inquiries and reviews to be completed, and do not wait to be told what is the right way forward.

 

Rather, you need to be in the driving seat, working out what the risks are and how to manage them, as well as what is the right way forward for your residents.

---

Fire safety: the wider implications

• Cladding
• Energy costs
• Fireproofing
• Maintenance programmes
• Leaseholders
• Diversion of funding
• Effects on new build programmes
• High-rise demand
• Property valuations, impairments
• Insurance premiums
• Lenders and investors
• Consumer standards regulations
• Boards and compliance
• Sources of assurance
• Data integrity
• Resident engagement
• Regeneration programmes
• Local authority roles
• Government policies
• Government funding

---