Social Housing Speed Read: Review of social housing regulation – your comments count

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Reviewing the regulator

In conjunction with the publication of the Social Housing Green Paper on 15 August 2018, the Government launched a call for evidence, focusing on three distinct matters in relation to the regulation of social housing:

• The relationship between social housing landlords and residents; ensuring residents feel empowered to hold their landlord to account if they are not receiving an acceptable standard of service;
• The governing and financial viability of private registered providers;
• The tools available to the Regulator of Social Housing (“the Regulator”) and ensuring a clear distinction of accountability between the Regulator and Parliament.

The Survey consists of seven substantive questions in addition to a final opportunity for participants to provide any other suggestions for improvement of the regulatory framework not captured elsewhere in the Survey.

We briefly consider each sub-category of the Survey below.

Principles of regulation

The Regulator is an independent body whom aims to ensure public and private investment in the sector to further the Government’s aim of delivering 300,000 homes per year. The Regulator also exists to protect tenants and ensure they are receiving an acceptable standard of service from their landlords.

The Regulator’s enforcement powers allow them to carry out inspections, hold inquiries and issue an Enforcement Notice to both private registered providers and local authority landlords if they believe that there has been a breach of standards. The Regulator possesses further enforcement powers in relation to private registered providers only, including ordering compensation payments, suspending and removing officers, and appointing managers.

Regulation currently operates on a “regulated self-assurance” regime, currently only intervening when there are concerns that a landlord is consistently under-performing, in order to allow providers an appropriate level of autonomy.

The Survey asks for opinions on the current objectives, monitoring and enforcement powers of the Regulator, and whether the sector considers “regulated self-assurance” a constructive approach.

Economic regulation

Registered providers must publish annual self-assessment reports confirming that they are complying with the Value for Money Standard (published in April 2018). They must also meet the Governance and Financial Viability Standard, ensuring they are delivering the intended outcomes for residents in an effective manner. This allows registered providers to invest in a risk-based manner in order to safeguard financial viability, but is subject to restrictions to ensure that there is not an inappropriate level of risk. Registered providers must also charge rent which reflects Government framework for social housing.

The Survey requests feedback on the current level of economic regulation, and encourages participants to note any deficiencies in the framework which may not account for new business models and trends in the evolving sector.

The regulatory system as a whole

This aspect of the Survey has been included to address consumer issues within the sector, following feedback from a significant number of residents that felt they were not receiving an adequate service from social landlords.

To further the aim of strengthening the relationship between landlords and residents, the Survey asks for information on any specific issues which participants feel should be focused on throughout the review. There is also a question relating to any potential risks which may arise from improving the enforcement mechanisms available to ensure compliance with consumer regulation.

Relationship with the Hackitt Review

As the industry is aware, the devastating event of the fire at Grenfell Tower has strengthened the focus on social housing. The Hackitt Review (the “Review”) was published in May 2018 and examined building and fire safety regulations, and recommended a new regulatory regime for tower blocks.

The Review suggested that if private approved regulators are used, builders should be unable to select their own inspectors to ensure an independent and transparent assessment. The Review also recommends a new body, the Local Authority Building Standards, which would be able to proscribe builders from continuing with building work and demand that changes are made.

The Survey invites participants to comment on the proposals set out and the risks identified in the Hackitt Review, due to the inevitable influence it will have on social housing regulation.

Where possible, registered providers and local authorities should seize this opportunity to provide insight and feedback in relation to the regulation of social housing. An effective regulatory mechanism will be of considerable benefit to both social landlords and residents.

If you have any questions on the above and how it will affect social housing providers, or any other questions as a social housing provider, please do not hesitate to contact John Murray or a member of our expert Social Housing Team.