The Regulator of Social Housing (RSH) published its annual Consumer Regulation Review 2019/20 in September. This showed a substantial rise in local authority referrals to the regulator, resulting in nearly half of all the most serious cases. As a result, the regulator has some particular messages for local authorities, which we will explore here.
First, some background. At present, the regulator's consumer standards apply equally to private registered providers and local authorities. The four, short, outcomes-based standards comprise:
- Home: Keep homes safe, decent and in a good state of repair
- Tenancy: Let homes and manage tenancies in a fair, transparent and efficient way
- Neighbourhood and Community: Keep the wider area clean and safe, help to tackle anti-social behaviour and promote community wellbeing
- Tenant Involvement and Empowerment: Understand and respond to the diverse needs of tenants, provide choice and opportunities for involvement, resolve complaints fairly and promptly
Don't wait to act
The current remit of the RSH means regulation of the consumer standards is on a reactive basis from cases that are referred to it. Any breaches of regulatory standards then have to meet the high ‘serious detriment' criteria, which are deemed to mean when there is risk of, or actual, serious harm to tenants. For this reason there were just 15 regulatory notices issued in total in 2019/20.
However, the long-awaited Social Housing White Paper is due to be published by the end of this calendar year at the latest, and there are very strong signals that proactive consumer regulation will be established. Accordingly, the message from the RSH is that registered providers ‘should not wait for the White Paper before taking steps where they need to, to improve areas of their service where they need to, or their engagement with tenants'.
This year there has been a significant increase in the number of referrals relating to local authorities (up 76% on the previous year), and serious detriment by local authorities was found in breaches of the Home Standard in seven of those cases. This is almost half of all cases of serious detriment.
The most common route of referrals regarding local authority compliance comes from ‘third parties' i.e. whistleblowers concerned about safety. Following the Grenfell Tower fire in June 2017, the awareness of fire risk in local authorities has increased, along with a general reduction across the housing sector in assurance on what is ‘compliant' in terms of building safety.
Ensuring tenants are safe in their homes is a fundamental responsibility of social landlords. Being unable to demonstrate appropriate action on any of the six key areas of statutory property compliance (fire, legionella, electric, gas, asbestos, lifts) – whether that information is in the public domain due to a regulatory notice or not – should keep councillors awake at night.
Common themes
Yet the review highlights a common theme that local authorities have failed to understand what is required of them to ensure tenants are safe in their homes. The RSH says: ‘In a number of cases in 2019-20, we have found a breach of the Home Standard where registered providers and local authorities have either not understood the legislative and regulatory requirements, or where they have not understood their role in delivering a compliant outcome.'
Another key theme is weaknesses where housing management services are delivered by a third party. This has occurred in cases where local authorities have contracted out their housing management service to an arm's-length management organisation (ALMO). The local authority landlord cannot contract out the responsibility to ensure compliance with the Consumer Standards, nor to ensure tenants are safe in their homes. It is for local authority councillors to ensure arrangements deliver compliance, and that speedy action is taken if not.
From Savills' risk-based reviews of compliance with housing Consumer Standards, we find that councillors are often not receiving routine property compliance or even exceptions reporting to enable sufficient strategic oversight and challenge on this key risk area. If your organisation hasn't recently had this discussion at leadership level, it would be worth reviewing compliance with the RSH Consumer Standards in readiness for the White Paper and the expected increased regulatory focus.
Kelsey Walker is a director at Savills Affordable Housing Consultancy
