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White paper: RSH to take up consumer regulatory function that is ‘proactive, proportionate, outcome-focused and risk-based’

News17 Nov 2020Sarah Williams

The government’s long-awaited Social Housing White Paper has outlined a host of changes to the regulatory regime within which social housing providers operate, revolving around a new consumer regulatory function to be delivered by the Regulator of Social Housing (RSH).

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Social Housing White Paper: RSH to take on consumer regulatory function that is “proactive, proportionate, outcome-focused and risk-based” #UKhousing #SocialHousingFinance

Government will legislate “as soon as parliamentary time allows” to remove @RSHEngland’s ‘serious detriment’ test, in favour of new proactive inspections of landlords #UKhousing #SocialHousingFinance

White paper: new consumer regulatory regime “will build the links between economic and consumer regulation – giving the regulator a full, rather than partial view of the landlord” #UKhousing #SocialHousingFinance

Published today, the white paper outlines the government’s long-overdue follow-up and response to its 2018 green paper, A new deal for social housing, and subsequent consultation.

The document, titled The Charter for Social Housing Residents, sets out that a new consumer regulatory regime should “hold landlords to account” and “build the links between economic and consumer regulation – giving the regulator a full rather than partial view of the landlord”.

Establishing the new consumer regulatory function within the existing regulator is therefore seen as the “best approach” to delivering the changes required by tenants while avoiding confusion and complexity, the white paper states.

Key changes to consumer regulation outlined will see the RSH’s role expand so that it “proactively monitors and drives landlords’ compliance with improved consumer standards”. This will include the government legislating “as soon as parliamentary time allows” to remove the serious detriment test through which the RSH currently uses its powers to tackle a breach of consumer standards.

The test means that currently the regulator can use its powers to tackle a breach of consumer standards only when it has reasonable grounds to suspect that the failure has resulted in serious detriment to tenants – or, if no action is taken by the regulator, that there is a significant risk that it will result in serious detriment.

Instead, routine inspections every four years will be introduced for landlords with more than 1,000 homes, as well as specific reactive inspections or investigations where systemic issues of concern are brought to its attention by tenants, their representatives, the Housing Ombudsman or others.

“Proactive, proportionate, outcome-focused and risk-based”

The regulator will be given the power to publish a ‘code of practice’ on the consumer standards to be clearer on what landlords are required to deliver. The government will also strengthen the RSH’s enforcement powers to tackle failing landlords, including by removing the cap on the level of fines it can issue.

The report describes the envisioned new consumer regulatory regime as being “proactive, proportionate, outcome-focused and risk-based”.

New proactive powers will include a reduction in the notice period the RSH must give a landlord to survey the condition of properties from 28 days to two days, likely to be primarily used in “emergency situations”.

It will also enable the RSH, after completing a survey, to arrange for emergency repairs to be carried out where there is a clear systemic failure by the landlord, with legislation to follow to ensure the regulator can recoup these costs from the landlord.

A previous “unnecessarily bureaucratic” requirement for the regulator to seek approval from the secretary of state before employing its own staff to carry out inspections for breaches of the consumer standards will also be removed.

This will see legislation to strengthen the relationship between the Housing Ombudsman and the regulator as established in the existing memorandum of understanding (MoU) between the two bodies to ensure they can “exchange information quickly and effectively to provide better protection for tenants”.

The ombudsman will become a “statutory consultee” for any proposal concerning changes to the RSH’s economic and consumer standards, while the RSH will likewise become a statutory consultee for changes to the Housing Ombudsman scheme.

Social landlords will need to identify a ‘senior person’ in their organisation responsible for ensuring they comply with the consumer standards set by the RSH.

Landlords will also need to appoint a person responsible for compliance with statutory health and safety responsibilities who is “visible and accessible to tenants”.

The publication adds: “As such, we will legislate to require landlords to identify and make public a nominated person responsible for compliance with their health and safety requirements.”

The regulator will also be expected to sign an MoU with the Health and Safety Executive to ensure “effective sharing of information” with the new Building Safety Regulator once established.

Tenant satisfaction and transparency

The white paper also sets out seven expectations that social housing residents should have of their landlords (see box, below).

It says that a list of “tenant satisfaction measures” for landlords will be created, with the RSH to develop a process for collecting and publishing a core set of these metrics for all social landlords.

“These should follow the themes set out in the Social Housing Green Paper, widely supported by tenants, around properties being in good repair, building safety, engagement and neighbourhood management, including measures on anti-social behaviour. They should include both objective quantitative measures and tenant perception measures,” the publication states.

Alongside this, a new “access to information scheme” for social housing tenants will enable them to access information (in an equivalent form to Freedom of Information Act requests made to local authorities) relating to the management of social housing held by their landlord, and “relevant information that may be held by sub-contractors”, as well as time limits for doing so. This it said will be “broadly aligned with the exemptions from disclosure under the Freedom of Information Act 2000”.

Landlords will also need to provide a clear breakdown of how their income is being spent, the paper states. “Social landlords should welcome scrutiny of whether they are using resources in the most efficient and effective way, including in their approach to executive remuneration and employment costs,” it reads.

Referring to past criticism of some housing associations for “excessive administration costs and executive pay”, the white paper states that it is seeking to “redress that balance and recreate strong connections between landlords and tenants”.

The government will make sure landlords provide a “clear breakdown of how their income is being spent, including levels of executive remuneration, to be published alongside their tenant satisfaction measures”.

Landlords will be required to report to every social housing tenant on such matters “at least once a year, if not continuously, using technology”, the white paper states.

A draft set of tenant satisfaction measures outlined in the publication, which the regulator is expected to further develop in consultation with tenants and landlords, includes a measure for the effective handling of complaints.

This involves metrics pertaining to the “number of complaints relative to the size of the landlord”, the percentage of complaints resolved within an agreed timescale, and “tenant satisfaction with [a] landlord’s complaint handling”.

A new ‘charter’ for social housing residents

Outlined in the white paper is the government’s new ‘charter’ for what every social housing resident should be able to expect:

To be safe in your home. We will work with industry and landlords to ensure every home is safe and secure.
To know how your landlord is performing, including on repairs, complaints and safety, and how it spends its money, so you can hold it to account.
To have your complaints dealt with promptly and fairly, with access to a strong ombudsman who will give you swift and fair redress when needed.
To be treated with respect, backed by a strong consumer regulator and improved consumer standards for tenants.
To have your voice heard by your landlord, for example through regular meetings, scrutiny panels or being on its board. The government will provide help, if you want it, to give you the tools to ensure your landlord listens.
To have a good quality home and neighbourhood to live in, with your landlord keeping your home in good repair.
To be supported to take your first step to ownership, so it is a ladder to other opportunities, should your circumstances allow.

Effective leadership

The white paper sets out the government’s desire that the new “transformed consumer regulatory regime”, should be established within the existing RSH.

“Creating a separate regulator would not be as effective, preventing failures on the consumer standards feeding into wider governance standards and creating a more complex system”, it writes.

However, effectively delivering the new consumer role will require the regulator to “broaden the skills mix and diversity” of its board members, ensuring that more of these have consumer regulation experience.

The government will also work with the RSH to “make sure it is resourced and able to recruit the right new staff with diverse backgrounds and skills, including at senior levels”, it says.

And it will legislate to require the RSH to set up an advisory committee to provide “independent and unbiased advice to the regulator on discharging its functions”.

Commenting on the publication, Fiona MacGregor, chief executive of the RSH, said: “We welcome the publication of the white paper and its vision for a social housing sector which values and responds to the voices of tenants.

“We will maintain our robust approach to economic regulation and look forward to working with tenants, landlords and other stakeholders to implement the changes to the consumer regulation framework.”

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