Newsflash: Consumer regulation review 2019-2020

Posted: 23/09/2020

Yesterday, the Regulator of Social Housing published its Consumer regulation review 2019 to 2020. The last review was published in July 2019 when the world and sector looked very different; however, consumer regulation has remained in the spotlight for the sector. The review covers the four consumer standards, namely:

• the Home standard;
• the Neighbourhood and Community standard;
• the Tenancy standard; and
• the Tenant Involvement and Empowerment standard.

This review reports 15 cases of breaches of the consumer standards and serious detriment, with seven of these breaches relating to local authorities. The Regulator confirms that this is the highest number of breaches to date and includes the first breach of the Tenant Involvement and Empowerment standard. The review confirms that changes are anticipated in terms of the Regulator’s role and remit in relation to consumer regulation.

The review contains some recurring themes that the sector will be familiar with, including ensuring tenants’ safety in their homes, the importance of effective assurance and the need for transparency in order for co-regulation to work. There is also a specific focus on the relationship with tenants (including shared owners) – the review states that “the quality of a registered provider’s relationship with tenants underpins the trust and confidence that tenants and stakeholders have in the organisation.” There is a focus in the review on treating tenants with fairness and respect, as well as dealing with complaints effectively. Interestingly, the review confirms that under the Home standard, the majority of potential breaches in 2019/20 related to electrical, fire and asbestos safety and not gas, where the sector seems to be making good progress.

Key themes

These include:

• understanding the legislative and regulatory requirements when it comes to ensuring tenants are safe in their homes. Evidence of things going wrong is often based on inadequate understanding of the requirements relating to health and safety compliance. The review emphasises the need to seek external evidence if organisations are unclear regarding their responsibilities (including on what to do if risks are identified);
• reaffirming that demonstrating evidence of compliance with health and safety requirements through accurate and up-to-date record-keeping is an important part of meeting an organisation’s health and safety obligations;
• an emphasis on the importance of transparency (particularly for local authorities) and the review states that transparency will be taken into account when the Regulator is considering regulatory engagement;
• a reminder that contracting out delivery of housing management services does not contract out the responsibility of registered providers and local authorities to ensure compliance with health and safety and other regulatory requirements. Lease-based providers are specifically mentioned here and a case study is included in relation to local authorities and ALMOs;
• a reiteration of the importance of the critical role good governance plays in managing risks effectively and the pivotal role good quality data also plays in informing decisions and offering assurance of compliance;
• the requirements under the Tenant Involvement and Empowerment standard to take tenants into account is the minimum providers are expected to deliver in the course of a well-run business; and
• the impact of failing to handle complaints in a prompt and effective manner is emphasised including the potential reputational impact and the Regulator’s corresponding view of a provider’s governance grading if failings are identified.

Local authorities

Several case studies contained within the review relate to local authorities, highlighting the significant increase in referrals relating to local authority compliance with the consumer standards. Seven local authorities were issued Regulatory Notices in 2019/20.

Breach of the Tenant Involvement and Empowerment standard

The review includes a case study detailing the first breach of the Tenant Involvement and Empowerment standard, for which a Regulatory Notice was issued in April 2019. The case study demonstrates the importance of taking the diverse needs of tenants into account, treating all tenants with fairness and respect and demonstrating that the different needs of tenants are understood. The case study concerns Westmoreland Supported Housing, which failed to consult tenants and provide appropriate advice and assistance to vulnerable tenants before or after issuing eviction notices.

Conclusion

In a year where the world as well as the sector has faced unprecedented challenges, the review is a pertinent reminder about the key responsibilities that arise out of consumer regulation and the corresponding standards for registered providers and local authorities. It is also potentially the last report to be issued by the Regulator under its current remit and role in relation to consumer regulation ahead of anticipated changes coming out of the White Paper, which is expected by the end of this calendar year. However, as the review stresses, registered providers should not wait for the publication of the White Paper to address identified weaknesses in their organisation.

We are jointly hosting a webinar alongside Savills on local authorities’ obligations under the Regulatory Standards. If you would like find out more and to sign up, please click here.

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