The Social Housing Reform Bill 2022

The Social Housing White Paper ‘The Charter for Social Housing Tenants’ (SHWP) was published nearly 18 months ago. Since then, we’ve witnessed a slow but steady procession of legislation before Parliament intended to implement the Government’s various commitments.

At the end of April 2022, the Building Safety Bill passed Parliamentary scrutiny and has since received Royal Assent, making it an Act (the Building Safety Act 2022), albeit we are still waiting for the timetable for implementation at the time of writing. The Queen’s speech in the second week of May trailed a new Renters Reform Bill and leasehold reform legislation, alongside a Social Housing Reform Bill (the Bill) the text of which had already been published at the end of March 2022 along with guidance (the Guidance) and ‘example’ legislative clauses on 29 March 2022.

The Bill provides the sector with the long-awaited insight into the legislative changes proposed to improve the way social housing is regulated (consumer regulation to be regulated proactively in the same way as economic regulation) and to encourage greater engagement with tenants. 

The Government’s announcement at the end of March included the following headlines:

• a new national resident panel,
• a factsheet about the Housing Ombudsman,
• a plan to name and shame non-compliant landlords, and
• draft legislative clauses (to introduce changes the existing legislation governing social housing regulation contained in the Housing and Regeneration Act 2008).

Unpacking the national residents’ advisory panel

Composition – The advisory panel will be comprised of a range of voices (250 from across the country) from across the sector, including tenants, landlords (including councils), the Greater London Authority, and secured creditors of registered providers (RPs). Tenant representatives have already raised concerns that this falls short of the level of representation that they had hoped for and it seems unlikely that funder representatives will rush to volunteer for the advisory panel. Concerns have been voiced about whether the advisory panel will be adequately resourced and funded, and given the necessary infrastructure to enable it to work effectively.

The Regulator of Social Housing (RSH) will refer to the advisory panel when it sees fit, but the advisory panel will also be able proactively to raise issues affecting social housing regulation with the RSH.

Remit – The advisory panel will scrutinise the various measures being put forward as part of the Government’s package of reforms. Whilst its remit is limited to the specific issues set out in the SHWP, it can advise the RSH of its own volition on matters, whether or not it has been asked to do so.  

Removal of the serious detriment test
The removal of the serious detriment test (for triggering regulatory engagement for breach of the consumer standards) will mean that consumer regulation will be proactively regulated in the same way as the economic standards. This means that the RSH will be able to intervene in consumer matters on grounds of a breach or potential breach of them, including where, if the RSH fails to take action, this could lead to a breach of a consumer standard.

The RSH will have several wider regulatory powers in relation to the proposed monitoring of the consumer standards. These will include much more detailed performance monitoring of RPs’ operations and being able to set relevant codes of practice to amplify the consumer standards. The RSH will also apparently have the power to impose emergency repairs on tenants’ homes if the RSH has evidence that the landlord has systematically failed to do so (or is not willing or able to) itself.

The RSH will set a new standard on ‘safety’.

Cap on fines to be removed
As promised in the SHWP, the cap on fines that the RSH can levy on non-compliant RPs will be lifted so that it can impose unlimited fines. This gives the regulator flexibility to determine the appropriate level of penalty, depending on the circumstances.

Naming and shaming landlords
Under the proposals, the Government will publish on its website and on social media channels the Housing Ombudsman’s findings of severe maladministration or when an RP breaks the regulator’s new consumer standards.  

However, commentators say that it is unclear what difference the Government’s plan will make, given that the RSH already publicises when its standards are breached, and the Housing Ombudsman has itself begun publishing a league table of the worst-performing landlords.

Draft legislative clauses – performance monitoring, surveys and performance improvement plans
The RSH will be able to require RPs to prepare and implement performance improvement plans (PIPs) and publish their performance improvement plans to all their tenants to improve direct tenant accountability. It is worth noting that the RSH has been doing this informally for years through the use of improvement plans with non-compliant RPs looking to regain a compliant G2/V2 grading – but this could apply to all RPs in the future, whether or not they are deemed non-compliant. 

The RSH will also have the power to authorise physical surveys of homes where it considers an RP is not maintaining conditions. It will also be empowered to appoint corporate (as opposed to individual) managers on behalf of failing RPs – these could foreseeably become ‘sanctioned takeovers’ of failing RPs and it will be interesting to note, for example, how funders will react to this threat (funding documents typically containing both restrictions on mergers or ‘arrangements having a similar effect’, and default events which include regulatory intervention) and whether in practice this will stay the RSH’s hand when it comes to using these powers, as has arguably been the case to date in relation to regulatory downgrades to non-compliant status.

Extension of who the RSH can request information from – ‘look through power’
The Bill broadens the existing power for the RSH to require third parties to provide documents or information that the RSH believes to be relevant to its regulatory functions. At present, the RSH may only require information from third parties if the RP they are linked to has failed to provide the information or documentation in question, or the RSH thinks the RP is unable to provide it. This change will enable the RSH to request information directly from third parties regardless of the RP’s willingness to provide information.

By broadening the existing power, the aim is to ensure the RSH is able to follow the information relating to funds or assets once they have left the regulated sector and is seen as a direct response to the challenges around the exempt accommodation sector in particular.

Requirement to appoint a health and safety lead
RPs will be required to designate a person to act as lead on certain functions relating to an RP’s compliance with its health and safety obligations towards tenants (known as the ‘H&S lead’).  The H&S lead will need to be identified to the RSH and will report to the board. The H&S lead will need to be either an employee or officer of the RP and will need to have sufficient ‘authority’ and devote a sufficient amount of time to this role.

Legal responsibility for ensuring compliance with relevant obligations in relation to the health and safety of tenants will remain with the RP and its board (i.e. it’s non-delegable) notwithstanding the appointment of the H&S lead.  

The H&S lead’s functions are to monitor the RP’s compliance with health and safety requirements, to assess risks of failure to comply, to notify the RP’s responsible body of any material risks or failures to this compliance, and to advise on steps to ensure the RP addresses these.

Failure to appoint an H&S lead would be grounds for enforcement action from the RSH and we would recommend that RPs start thinking now about who would be a suitable H&S lead within their organisation.

Standards relating to information and transparency
New powers in the Bill allow the RSH to set standards for RPs on the provision of information and transparency to their tenants and to the RSH, implementing the commitments set out in the SHWP. Whilst the detail on the ‘access to information scheme’ for tenants is scant at the moment, there will be requirements for RPs to provide their tenants with a set of financial metrics on how much they are spending on management costs and executive renumeration and to provide a clear breakdown of how their income is being spent.

We will continue to track the progress of the Bill through the legislative process and issue updates as appropriate.

For more information

If you have any questions about the Bill or any of the other aspects of this ebriefing, please contact Victoria Jardine or Catherine Simpson

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