The Charter for Social Housing Residents: Social Housing White Paper - reshaping regulation

Posted: 18/11/2020

Yesterday’s publication of The Charter for Social Housing Residents: Social Housing White Paper (the white paper) comes over two years after the Social Housing Green Paper (the SHGP) and nearly three and a half years after the Grenfell Tower fire. It’s been a long time coming and sees some extensive reforms proposed.

The white paper proposes a significant change to consumer regulation and focuses on the accountability and transparency of landlords to residents.

We consider below the seven ‘chapters’ in turn and the key points coming out of each.

Chapter 1 - to be safe in your home

The first chapter concentrates on building safety, fire safety and engagement with residents on these issues. Driven directly by the failings highlighted by the Grenfell disaster, the chapter highlights what the Government has already done including publication of the Building Safety Bill, plans for a new Building Safety Regulator and making £400 million available to remove and replace unsafe cladding of aluminium composite materials on social housing dwellings over 18 metres. Further measures proposed in this chapter include:

• explicitly incorporating ‘safety’ within the Consumer Regulation objectives of the Regulator of Social Housing (the RSH). This will include the RSH preparing a Memorandum of Understanding with the Health and Safety Executive to ensure effective sharing of information with the Building Safety Regulator. We discuss further proposed changes to the RSH’s consumer regulation role later in this article;
• requiring social landlords to identify and make public a nominated person responsible for complying with their health and safety requirements – this ties in with proposals included within the Building Safety Bill to have an ‘Accountable Person’; and
• launching a consultation on requiring smoke alarms in social housing and introducing new expectations for carbon monoxide alarms so that the safety measures are consistent with the requirements of the private rented sector. There will be a separate consultation on measures to ensure that social housing residents are protected from harm caused by poor electrical safety.

Chapter 2 - to know how your landlord is performing

Here the white paper focuses on redressing the balance between landlords and residents and ensuring transparency and accountability, including:

• implementing a proactive consumer regulation regime with access to clear, comparable tenant satisfaction measures. The RSH is tasked with developing a process for collecting and publishing a core set of tenant satisfaction measures. The white paper sets out some draft tenant satisfaction measures which largely follow familiar themes of building safety, properties being in good repair, tenant engagement and effective handling of complaints but acknowledges that further work is required to finalise and embed them within the regulatory system. It is worth noting that it is also confirmed that the measures, alongside objective quantitative measures, should include tenant perception measures;
• the introduction of a new access to information scheme for social housing tenants so that information relating to the management of social housing is easily available. Local authority providers are already subject to the Freedom of Information Act (FOIA) and there have been calls from the Information Commissioner for private registered providers to come within the remit of FOIA; these measures, if implemented, would go some way toward this for tenants;
• ensuring that tenants have access to information regarding how their landlord is spending its income. Landlords will be expected to publish three financial measures containing information on how much they are spending on administrative costs and executive remuneration. However, it should be noted that a number of registered providers already publish information on asset management costs and executive remuneration (and this was previously a requirement under the National Housing Federation Code of Governance); and
• requiring accountability from landlords through the identification of a senior person who will be responsible for ensuring that the organisation is complying with the consumer standards – this is regardless of the size or type of landlord. This seems to be at odds with the co-regulatory expectation that boards and councillors are responsible for ensuring compliance with all of the regulatory standards.

Chapter 3 - to have your complaints dealt with promptly and fairly

Effective resolution of complaints takes centre stage in the third chapter. Lots of the detail ties in neatly with the strengthened Housing Ombudsman Scheme and corresponding publication of the Complaint Handling Code. The white paper enshrines the importance of speedy and satisfactory complaint resolution through:

• noting that the Housing Ombudsman’s powers will be kept under review with reference to the possibility of putting the Complaint Handling Code on a statutory footing;
• stating that, in light of increased resources being made available to the Housing Ombudsman, it is expected that this will support improved complaint handling by landlords and resolve a greater number of formal complaints quickly. In turn, landlords are expected to provide necessary information to the Housing Ombudsman in a timely manner to allow for prompt redress of complaints;
• confirmation that a communications campaign will be launched to ensure tenants know how to raise complaints and have confidence in the system; and
• strengthening the existing Memorandum of Understanding in place between the RSH and the Housing Ombudsman through legislating to ensure clear co-operation between the two bodies.

We’ve previously considered the new Complaint Handling Code and updated Housing Ombudsman Scheme in an article which can be found here.

Chapter 4 - to be treated fairly and with respect, backed by a strong consumer regulator for tenants

Most of the reforms in the fourth chapter will require primary legislation “as soon as parliamentary time allows” before any meaningful change can take place. This is because the RSH’s current Consumer Regulation objectives are set out in the Housing and Regeneration Act 2008 (as amended). The proposed changes (informed by the review of social housing regulation and the Call for Evidence) include:

• transforming the RSH’s Consumer Regulation objective to a proactive one (in line with its role in regulating the economic standards). In line with this, a new consumer regulation function will be established within the RSH;
• the removal of the “serious detriment test” and the introduction of routine inspections for providers with over 1,000 homes every four years. The system for routine inspections will be based on a risk profile, to ensure that landlords at greatest risk of failing, or where a failure might have the greatest impact for tenants, are subject to greater oversight. Inspections could also be more frequent where there is a breach or a significant risk of breach of the standards. Specific reactive investigations or inspections could also occur where tenants or the Housing Ombudsman reveal a serious potential compliance breach or the RSH decides to carry out bespoke inspections;
• strengthening the RSH’s powers in relation to the economic standards, including tightening the definition of “non-profit” registered providers (to ensure that landlords are properly classified), a new requirement to notify the RSH where there is a “change in control” of a provider and, notably, a new ‘look-through’ power that will enable the RSH to follow money paid to bodies outside of the regulated sector (and which are therefore not directly regulated) and identify where transactions may inappropriately advance third party interests.
• a review of the consumer standards and the inclusion of a requirement for local authority providers to self-refer breaches of the consumer standards (at present this is only included in the Rent Standard);
• giving the RSH the power to publish a Code of Practice on the consumer standards. This will complement its ability to publish Codes of Practice for the economic standards;
• strengthening the RSH’s enforcement powers, including removing the cap on fines, introducing performance improvement plans and introducing a new power to arrange emergency repairs; and
• making it explicit that provisions in contracts between local authority providers and managing agents would be deemed void if they attempted to hinder the RSH in the exercise of its exercise of powers. There will also be a review of the statutory Right to Manage guidance.

Chapter 5 - to have your voice heard by your landlord

As with the focus on complaints, following the Grenfell tragedy, the SHGP focused on how tenants’ voices are heard by their landlord. We have already seen moves in the sector to address this, including in the new National Housing Federation Code of Governance and Together with Tenants. This chapter discusses resident engagement and sets out:

• that the RSH will require landlords to demonstrate how they have sought out best practice and are continually engaging with residents;
• the intention to deliver a new opportunities and empowerment programme aimed at supporting more effective engagement between landlords and residents; and
• a proposed review of professional training and development in the sector, aimed at ensuring residents receive a high standard of customer service, as well as considering appropriate qualifications for social housing staff.

Chapter 6 - to have a good quality neighbourhood to live in

Decent and safe homes was one of the central principles of the SHGP and design was one area noted with a role to play in reducing stigma. Whilst the sixth chapter contains some of the less tangible statements it does confirm:

• there will be a review of the Decent Homes Standard in 2021, including how it can better support the decarbonisation and energy efficiency of social homes, and improve communal and green spaces;
• that the Government welcomes the report of the Building Better, Building Beautiful Commission. The report openly challenged some Government policy (for example, it recommends that the Government should stop the sale of public land to the highest bidder) and voiced support for sustainable, affordable and high quality over quantity developments;
• tenants will be informed who is responsible for action and who can support and assist them if they are faced with anti-social behaviour;
• the re-affirmation of the plans to scrap Section 106 agreements contained in the white paper ‘Planning for the future’. The alternative proposed, a new infrastructure levy based on the overall value of a development which will be paid into a pot to fund local infrastructure, has been met with criticism; and
• providers will be required to have a policy setting out how they should tackle issues surrounding domestic abuse.

The review of the Decent Homes Standard is linked to the introduction of the UK’s legally binding target to produce zero net greenhouse gas emissions by 2050. This has also seen environmental, social and governance (ESG) matters moving steadily up the list of priorities for housing providers. We’ve delved into the detail of the opportunities and challenges posed to boards by ESG in a separate article, see here.

Chapter 7 - to be supported to take your first step to ownership

Expectedly, the white paper emphasises the Government’s commitment to home ownership via the Right to Buy, the new Right to Shared Ownership for new grant funded homes and changes to the Shared Ownership model. No new investment is included within the white paper for socially rented housing. Other notable points from this chapter include:

• encouragement for local authorities to “make the most” of removal of local authority borrowing caps in order to build more affordable homes;
• a reference to the Community Housing Fund, but no confirmation that it will be extended, just that the Government “will consider how best to maintain that support going forward”; and
• a commitment to the controversial new shared ownership model discussed in the SHGP where residents are able to purchase as little as a 10% stake in their properties and then continues to staircase in increments as small as 1%. There is a real concern from housing associations that this will impact upon their ability to use shared ownership receipts to cross subsidise affordable rented homes. Linda Storey, head of the social housing team, discusses these proposals in greater detail here.

Comment – does the white paper level up?

“We’re levelling up this country, making it fairer for everyone – and that includes making sure social housing tenants are treated with the respect they deserve.”

The Prime Minister’s opening lines in the document repeat the Government’s well-worn phrase “level up”. The white paper is a sign of the times. Refining the definition of non-profit providers and the introduction of a ‘look-through’ power for the RSH to enable it to track money paid outside of the sector recognises the evolved nature of today’s social housing sector – in part a direct product of a number of tumultuous political years and policy announcements. The complexities contained within the sector are vast; however, the white paper refocuses on residents and this is undoubtedly important.

Whilst it contains no promises for new investment in social housing, it reiterates that the Government expects both local authorities and housing associations to build more homes. The sector will need to carefully assess how it rises to this challenge and how development activities can be funded especially as the efficacy of the cross-subsidy model continues to come under strain.

In strange and difficult times, the publication of this long-awaited white paper is welcome and its undeniably far-reaching proposals could signal a positive opportunity for the sector to shape what the future of regulation will look like. Social residents are, rightly, central to many of the proposals; however, given the breadth and extent of many of the proposed changes, and acknowledging the fact that the parliamentary agenda is likely to be fully booked for a while, it may well take time for enacting legislation to be implemented. In the interim, the sector must take steps to prepare itself for forthcoming changes, take action where it identifies existing issues and engage fully with the consultation to help shape a truly fair regulatory regime.

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