Regulating the consumer standards – what it means for local authorities

1. Regulating the consumer standards – what it means for local authorities Jim Bennett Assistant Director, Policy and Communications

2. Outline of the session The role of the regulator The regulator’s consumer regulation function What should local authorities be doing? Key issues arising in consumer regulation Social Housing Green Paper Questions and discussion Regulator of Social Housing

3. The role of the regulator The Regulator of Social Housing regulates registered providers of social housing to promote a viable, efficient and well-governed social housing sector able to deliver homes that meet a range of needs. Economic regulation – focus on governance, viability and value for money (but not for local authorities), rents from 1 April 2020 Consumer regulation – aims to ensure tenants are safe in their homes, given appropriate degree of choice and protection, and can hold landlords to account (this does apply to local authorities) Regulator of Social Housing

4. Consumer regulation approach • Current legislation sets a high bar for regulatory action - focus on potential systemic failure. • Referrals from tenants, representatives, registered providers (including local authorities) and others. • We consider all information received to consider whether it represents a breach of our standards. But… • We do not seek to resolve individual complaints. That is the role of the Housing Ombudsman. Regulator of Social Housing

5. Our consumer regulation in 2018/19 • 502 referrals relating to the consumer standards • Looked in detail at 226 referrals • Investigated 124 referrals • Found breach and serious detriment in 6 cases • Summarised in our Consumer Regulation Review • Breaches relate to the Home standard… • Mainly health and safety compliance – fire, gas, water, electric, lifts • But also repairs and maintenance Regulator of Social Housing

6. Consumer regulation referrals Regulator of Social Housing

7. What should local authorities be doing? (1) • Complying with the consumer standards: • (1) Tenant Involvement and Empowerment Standard • Customer service, choice and complaints; involvement and empowerment; understanding tenants’ needs • (2) Home Standard • Quality of accommodation (Decent Homes Standard); repairs and maintenance; health and safety • (3) Tenancy Standard • Allocations and mutual exchange, tenure, tenancy law • (4) Neighbourhood and Community Standard • Neighbourhood management; local area co-operation; managing ASB Regulator of Social Housing

8. What should local authorities be doing? (2) • Ensuring compliance even when delivery is contracted out (for example to an ALMO or TMO). • Understanding what compliance looks like – across all areas, including health and safety. • Local authority councillors should seek their own assurance of compliance. • Hearing the messages tenants are giving them – being accountable. • And ensuring systems are in place to respond to tenant concerns. • Being transparent with the regulator when issues are identified. Regulator of Social Housing

9. Key issues arising in consumer regulation(1) Fire safety • Continues to represent a significant amount of our casework • Featured in five of the six cases where we found breach and serious detriment last year • Not the single presenting issue in many cases. • Saw issues relating to: • Issuing of fire enforcement notices • Failure to respond to fire safety defects in new build properties • Fire risk assessments not complete • Poor quality fire risk assessments • Outstanding high risk fire safety actions Regulator of Social Housing

10. Key issues arising in consumer regulation(2) Electrical safety • Issues related to: • Quality of electrical safety checks undertaken • Certification missing for a large number of properties • Failure to complete urgent safety actions arising from electrical safety checks. • The systems in place to manage electrical safety risk Regulator of Social Housing

11. Key issues arising in consumer regulation(3) Meeting all statutory requirements • Increasingly seeing that failures in one area of health and safety are rarely isolated. • Knowsley Housing Trust – presenting issue was fire safety, but internal audit concluded a lack of assurance with health and safety more broadly. • Kinsman – issues related overall to how it had dealt with defects including gas and electrical installations and the safety of the building. • Arun District Council – presenting issues were both fire safety and Legionella. • GreenSquare – issues related to gas and lift safety as well as fire safety. Regulator of Social Housing

12. Key issues arising in consumer regulation(4) Local authorities • In the last year, regulator has found that six local authorities have breached the consumer standards. • Issue were breaches of the Home standard, in relation to health and safety compliance. • In one case, the local authority had failed to carry out fire risk assessments and water risk assessments on its general needs stock. • In another the local authority, through its ALMO, had failed to carry out FRAs on low rise buildings, and had not carried out asbestos or electrical checks. • In the remaining four cases the local authorities, through their ALMO, had failed to meet statutory requirements in relation to fire, electrical safety, lifts, water and gas safety requirements. Regulator of Social Housing

13. Key issues arising in consumer regulation(5) Consumer Regulation Review 2019 • Registered providers, including local authorities, must ensure the homes where tenants live are safe. • This requires robust reporting arrangements and effective oversight by boards and councillors. • Relies on good quality data – the cornerstone of any assurance • Must demonstrate compliance across all areas – including how they deal with neighbourhood issues, and how they engage with tenants. • Effectiveness of provider’s complaints handling affects trust and confidence tenants have in their landlord. • Transparency with the regulator is essential. Regulator of Social Housing

14. Social Housing Green Paper (1) • After the Grenfell Tower fire, we wrote to all providers of social housing (including local authorities) • Reminded them of importance of statutory compliance • And of duty to be transparent with the regulator. • Continue to consider all referrals in line with our consumer regulation processes. • Our role did not change…but providers did change • Health and safety as a key risk moving up risk maps • Significant investment in fire safety measures (including removing cladding) • Boards and councillors seeking greater assurance across range of health and safety areas. • And there is greater scrutiny over health and safety in the public domain. Regulator of Social Housing

15. Social Housing Green Paper (2) • Social Housing Green Paper: A New Deal for Social Housing, published in August 2018. Focus on: • Safety and quality of homes • Effective resolution of complaints • Empowering residents and strengthening the regulator • Tackling stigma • Expanding supply • Awaiting the government’s response to the consultation. Regulator of Social Housing

16. Key propositions for regulation • Key performance indicators (KPIs) and ‘league tables’ • Stronger regulatory expectations for resident engagement? • Do the regulator’s consumer objectives need to change? • Should the regulator be able to produce Codes of Practice linked to the consumer standards? • Reforming the serious detriment threshold for intervention in consumer matters? • A more proactive approach to consumer regulation linked to the KPIs? • A greater role for the regulator in scrutinising the performance of local authorities • Are changes needed to the regulator’s enforcement powers? • Are measures for LAs to hold ALMOs and TMOs sufficiently robust? • The regulator is accountable to Parliament, are further steps necessary? Regulator of Social Housing

17. Further debate and work • Organisational structure • Grenfell/Shelter proposals for a new consumer regulator • Some views expressed a preference for existing regulator enhanced role KPIs • 5 themes in the green paper- repairs, complaints, tenant engagement, safety and neighbourhood (including ASB) • Internal programme of work: Being prepared • Potential impact of a model of more proactive consumer regulation • Serious detriment test • Local Authorities • Providers with different business models • KPIs • Informing MHCLG policy development Regulator of Social Housing

18. Wider policy and regulatory context • Role of regulator in respect of local authorities’ housing functions – consumer and rents regulation • Focus on improving complaints handling and resolution – Housing Ombudsman • Hackett review implementation – new ‘protection board’ Regulator of Social Housing

19. What does the future landscape mean for local authorities? • Outcome of the GP isn’t known but that shouldn’t stop LAs doing the right thing • Obligation to comply with consumer standards remains • Landlords are responsible to tenants not the regulator • Political and media environment has changed • Increased scrutiny of local authorities’ housing functions • How do you assure yourselves that you are compliant? • Focus on building safety and quality of accommodation – how do local authorities have assurance homes are safe? • Focus also on improving complaints resolution – are local authorities’ complaints processes working effectively? • Tenant engagement – are you listening to your tenants and what’s the outcome? • It’s a co-regulatory settlement - importance of local authorities notifying the regulator Regulator of Social Housing

20. Questions and discussion Regulator of Social Housing