On 1 December 2020 the Court of Appeal handed down judgment in Pimlett v Curo Places Limited EWCA Civ 1621 where prior judgments in the First-tier Tribunal and the Upper Tribunal were overturned.
Delayed since Spring 2020 as the Government tackled the Covid-19 crisis, Tuesday 17 November saw the publication of the Social Housing White Paper, setting out the future regulation of the social housing sector.
As trailed by the Housing Secretary in September, it formalises the Government's response to the Grenfell Tower tragedy including, we were told, “measures to further empower tenants and boost the supply and quality of social housing with greater redress and better more meaningful regulation of the sector".
The White Paper outlines a new Charter for residents of Social Housing, with 7 headline promises;
- To be safe in your home - we will work with industry and landlords to ensure every home is safe and secure.
- To know how your landlord is performing - including on repairs, complaints and safety, and how it spends its money, so you can hold it to account.
- To have your complaints dealt with promptly and fairly - with access to a strong Ombudsman who will give you swift and fair redress when needed.
- To be treated with respect - backed by a strong consumer regulator and improved consumer standards for tenants.
- To have your voice heard by your landlord - for example through regular meetings, scrutiny panels or being on its Board. The Government will provide help, if you want it, to give you the tools to ensure your landlord listens.
- To have a good quality home and neighbourhood to live in - with your landlord keeping your home in good repair.
- To be supported to take your first step to ownership - so it is a ladder to other opportunities, should your circumstances allow.
In this briefing our Housing Management, Housing Litigation, Governance and Commercial, Construction and Regulatory teams consider the key proposals, the answered questions and the issues that social housing providers will have to consider in anticipation of legislative reform.
1. To be safe in your home
The White Paper does not introduce any new construction or maintenance obligations for providers. Instead, it provides a summary of the wider regulatory changes that have been introduced by the Government, including:
- The Building Safety Bill;
- The Fire Safety Bill; and
- A consultation on extending the requirements for smoke and carbon monoxide alarms.
There is also an indication that the Government will consult on further measures to ensure electrical safety standards are met, indicating a likely extension of mandatory 5-year electrical safety checks already imposed on the private rented sector.
Providers will already be considering how best to prepare for the Building Safety Bill and Fire Safety Bill becoming law, and those preparations should continue.
However, the White Paper makes clear that safety will be given increased regulatory scrutiny with the promise of legislation to include an explicit obligation to ensure residents’ safety within the Regulator of Social Housing’s Consumer Standards. The consequences of this change are considered in more detail in section 4 below. The Regulator will be supported in scrutinising the safety performance of providers through the establishment of a Memorandum of Understanding with the Building Safety Regulator, to ensure the effective sharing of concerns and evidence of safety related failings.
The key message from the White Paper, within a maintenance and construction context, therefore is not that providers need to do more than they are already doing but simply that the consequences of failing to discharge their regulatory obligations are likely to be much more severe. With this in mind, providers should continue to prepare for the Building Safety Bill and Fire Safety Bill, with a view to these areas being subject to increased scrutiny moving forwards.
The White Paper also introduces further “roles” to which providers must appoint a suitably competent and experienced person:
- A nominated person responsible for compliance with health and safety requirements; and
- A person responsible for ensuring compliance with the Consumer Standards (which will also include safety).
The proposed responsibilities of those roles include a welcome emphasis upon promoting a positive safety culture, with a need to ensure visible support for safety issues from senior management alongside effective engagement with residents and the employees engaged in providing safe services and homes.
However, the creation of additional safety related roles and positions will need to be managed carefully. One of the criticisms of the present Fire Safety regime is that confusion over roles and responsibilities can result in a lack of action. The Regulatory Reform (Fire Safety) Order places duties on the “Responsible Person” as well as any other persons with an element of control or responsibility for fire safety compliance, and the Building Safety Bill in its current form requires an “Accountable Person” and a “Building Safety Manager” to be appointed. The cross over between the roles outlined in each piece of legislation is not clear and the uncertainty as to how each role should interact with the others at present risks miscommunication and confusion, which may undermine one of the key aims of the reforms in the Paper – resident safety.
2. To know how your landlord is performing
‘To know how your landlord is performing’ is all about transparency and accountability. It emphasises that residents must have easy access to a range of information (including how money is spent) about their landlord, particularly acknowledging that private registered providers are not governed by Freedom of Information Act 2000.
Whilst landlords are already required to publish information, it is acknowledged that the format and content can vary significantly with little prospect of comparing performance between landlords. The White Paper requires the Regulator to develop measures for collecting and publishing core ‘tenant satisfaction measures’ to enable tenants to review landlords’ performance, following the themes set out in the social housing Green Paper. These themes are, around properties being in good repair, building safety, engagement and neighbourhood management including measures on anti-social behaviour, but also to have access to key financial information with three draft financial measures noted, to include detail of management costs and executive remuneration, separate to the Consumer Standards.
The Regulator is tasked with engaging with tenants and landlords, to finalise the draft tenant satisfaction measures contained, which focus on keeping properties in good repair, maintaining building safety, effective complaints handling, respectful and helpful engagement, neighbourhood management, and then embedding those measures within the regulatory system. There are also some overarching draft measures set out, including the introduction of a new ‘Access to Information Scheme’ for social housing tenants, measures required for ensuring landlords provide a clear breakdown of how their income is being spent and a requirement for landlords to appoint a senior person within the organisation identifiable to tenants, the Regulator and the Housing Ombudsman who is responsible for ensuring compliance with the Consumer Standards.
Whilst the White Paper acknowledges that there is more work to be done by the Regulator regarding the content and level of detail provided to enable tenants to access, understand and challenge how funds are spent, the White Paper also places responsibility for ensuring accessibility and makes specific reference (on a few occasions) to the use of apps for making information more accessible to tenants, which may or may not be more inclusive, depending upon the tenant demographic.
It is also worth noting that the ‘Access to Information Scheme’ is expected to extend beyond the information provided through tenant satisfaction measures, to include information related to the management of social housing held by their landlord and also relevant information that may be held by sub-contractors, including time limits for providing the information requested. Although there had previously been draft legislation that would have made providers subject to the Freedom of Information Act 2000, it appears that this scheme will achieve a broadly similar outcome, as the White Paper notes that this will set out the circumstances in which a landlord may refuse to disclose information and that such will be broadly aligned with the exemptions from disclosure under the Freedom of Information Act 2000.
It may be the case that publishing information will reduce the need for requests under the scheme or enable a relatively swift response (e.g. by reference to a published document), it is also to be noted that such requests would need to be considered and responded to, which could be time and labour intensive, with proper consideration as to whether or not an exemption applies. A tenant will also be able to challenge a decision to withhold information if they feel their landlord has unreasonably withheld such; a two-stage review process is proposed, with the Housing Ombudsman required to determine cases that have not been resolved at the first internal review stage and who will also refer suspected systemic breaches of the scheme to the Regulator, as it does on other matters. This again is a new role to be developed for the Housing Ombudsman with remit and responsibilities to be agreed.
3. To have your complaints dealt with promptly and fairly
The Paper builds upon the developments from earlier this year in respect of the Housing Ombudsman: its updated scheme, new Complaint Handling Code and closer working with the Regulator under a Memorandum of Understanding.
The White Paper sets out the intention to give the Housing Ombudsman greater and stronger powers and to move some of the recent changes (e.g. links with the Regulator) onto statutory footing to ensure clear co-operation between the Housing Ombudsman and the Regulator, and essentially the Housing Ombudsman will get more teeth to hold landlords to account more effectively when things go wrong.
From a resident’s perspective, they should have easier access to make a complaint, with the democratic filter removed, be made more aware of the right to complain and how to do so, as the White Paper notes that an awareness campaign is to be launched so that residents are informed of their rights, the routes for complaining and how to escalate such if needed.
Residents will also have more visibility of the complaints that have been made, as the strengthened Housing Ombudsman Scheme also includes new requirements on landlords to publish their complaints procedures on their websites and in correspondence to residents. From March 2021, the Housing Ombudsman will also publish the details of cases it has determined on its website, supporting the tenant satisfaction measures on complaints handling.
4. To be treated with respect
Placing resident safety at the core of social housing regulation, the White Paper outlines the Government’s plans for strengthening the Regulator’s approach to consumer regulation.
The Regulator will now have a mandate to proactively monitor providers' compliance with the Consumer Standards to achieve parity with its approach to regulation of the Economic Standards, with a new regime of inspection and strengthened enforcement powers.
In addition to the introduction of an explicit obligation to ensure resident safety within the Consumer Standards, the Government also propose to remove the “serious detriment” test. This significant shift will allow the Regulator to intervene where there have been breaches of the Consumer Standards at a much lower threshold, rather than having to wait until tenants are at risk of serious harm.
The removal of the “serious detriment” test raises the important question of what standard will be applied, for example in relation to the proposed requirement to ensure resident safety and the existing obligation to “meet all applicable statutory requirements that provide for the health and safety of the occupants in their homes”. The Covid-19 pandemic has reinforced the point that defining ‘compliance’ is not easy. For example, while a landlord has an obligation to complete an annual gas safety check, there will be no breach of that requirement if they have taken all reasonable steps to complete the check. What is reasonable in that context has been accepted to include the need to balance the competing risks posed by Covid-19. A clear, realistic and objective standard will have to be established, against which compliance can be measured.
The proposals set out in the White Paper will prompt systemic changes and a move towards the proactive regulation of service delivery that we see in other sectors – most notably, the type of regulation conducted by the Care Quality Commission for the health and social care sector. As part of its new proactive approach, the Regulator will make routine inspections of the largest providers (every four years), undertake desktop reviews (of tenant satisfaction and evidence of systemic issues raised by residents) and undertake reactive inspections where systemic issues of concern are brought to its attention. It is also proposed that the Regulator’s enforcement powers will be enhanced; for example, the cap on the level of fines the Regulator can impose will be removed and the Regulator will be empowered to require Performance Improvement Plans from providers who fail to comply with the Consumer Standards.
Whilst all of this will be welcome news for residents, who have all too often felt ignored when raising concerns, it is critically important that the revised Consumer Standards and any new code Code of Practice (designed to amplify the Consumer Standards) are sufficiently detailed to ensure that any changes to consumer regulation are meaningful and enforceable. The proposed inspection regime will need a clear framework to be supported with guidance on the areas the inspection will cover, how the inspection will be conducted, the input providers will need to have before and during the inspections, the publication of reports and an effective and efficient right of review.
Rather than establishing a new “Regulator of Consumer Standards” it is proposed that a new consumer regulation team, staffed by individuals with consumer regulation experience, will be housed within the Regulator. There was concern that the introduction of a separate regulator responsible for monitoring compliance with the Consumer Standards would cause confusion for stakeholders and residents. Furthermore, the Regulator often interprets the failure to comply with the Consumer Standards as an indication of wider governance weaknesses/failures, flowing from a lack of board oversight, which in turn can result in breaches of the economic standards (i.e. the Governance and Financial Viability Standard) and lead to regulatory downgrades. On that basis monitoring compliance with both the Consumer and Economic Standards and how they both can impact on one another will remain within the Regulator’s remit.
However, it is unclear how the rigorous inspection regime proposed can be resourced, at a time when the Building Safety Regulator is struggling to recruit experienced inspectors. In order to complete effective inspections, regulators require significant resources, appropriate levels of staff and the requisite level of expertise. The inspections may need to cover a wide range of areas – including health and safety compliance, building repair and maintenance, anti-social behaviour, the allocation of housing and consumer engagement and service delivery. Each of these areas requires specific expertise but also there are well-known shortages of experts, especially in relation to building and fire safety. Though the White Paper gives the assurance that the Government will enable the Regulator to hire “senior leadership and staff with the right expertise in consumer regulation”, there may be a significant challenge to recruit individuals with the necessary competence to conduct effective inspections.
The Government will also legislate to require the Regulator to set up an Advisory Committee to provide independent advice to the Regulator on how to discharge its functions in relation to both consumer and economic regulatory matters. It is also worth noting that the Government has been keen to assuage concerns that increased focus on consumer regulation will divert resources away from economic regulation and it will be interesting to see how these are balanced and resourced going forwards.
Although there are no proposals to make any significant change to the economic regulation of providers, the Paper states in paragraph 88 that the Government will:
“Tighten the definition of ‘non-profit’ in relation to the registration of private registered RPs to ensure landlords are properly classified and treated – for example, to ensure that the regulator properly designates RPs, and that bodies really operating for profit do not attract the more favourable housing benefit status for supported housing.”
This is very much in line with the approach we are currently seeing from the Regulator and some Housing Benefit departments, taking a much closer look at service charges in supported housing.
Paragraph 88 also includes a proposal to:
Introduce a ‘look-through’ power that would enable the regulator to follow money paid to bodies outside of the regulated sector and who are therefore not directly regulated.
This power will enable the Regulator to “follow the money” for example considering the merit of providers entering into lease backed housing schemes as a means of raising funds.
The White Paper also states that any contractual relationship between a Local Authority and its ALMO and/or TMO must not hinder or fetter the Regulator’s regulatory powers and any provisions which do so, will be rendered void by forthcoming legislation. Local authorities will be required to review contracts here. Alongside this, the Paper also notes that the statutory Right to Manage guidance is to be reviewed and that an expert steering group ‘of those with knowledge of the sector’ is to be created to support. Alongside this, it is important to note the planned extension to local authorities of the expectation to self-report issues of concern to the Regulator.
5. To have your voice heard by your landlord.
Much of this section of the White Paper seems lifted in tone and subject from the NHF’s Together with Tenants initiative and particularly its Charter and its six commitments for housing associations, which already has wide buy-in across the housing sector. It is also aligned with the ‘See the Person’ campaign and other initiatives promoting and recognising effective resident engagement and leadership in resident management of housing.
We have seen the Regulator’s focus shifting in the direction of the tenant voice since Grenfell, and this element of the White Paper chimes to a narrative which ebbs and flows throughout the governance of the sector, as reflected in the NHF Code of Governance 2020 which was published fractionally before the White Paper itself. The White Paper acknowledges the concerns by residents feeling patronised, ignored or treated with disrespect and tasks the Regulator with seeking out best practice examples of resident engagement, referencing recent successful responses to Covid-19 in respect of resident wellbeing including loneliness campaigns.
The Regulator will also be requiring providers to show how they have sought out and considered ways to improve tenant engagement and a review of professional training and development will be established to consider the appropriate qualifications and standards for social housing staff in different roles, including senior staff, seeking to ensure that residents are treated with courtesy and respect considering also best practice for providing mental health support.
A new empowerment programme for social housing residents is to be delivered, with an ongoing commitment for ministerial engagement and a new opportunities and empowerment programme open to all social housing residents created to support more effective engagement between landlords and residents, and to give residents tools to influence their landlords and hold them to account, in addition to the tenant satisfaction measures and Housing Ombudsman increased access, referred to above.
Overall, there is nothing in here that will come as a surprise to the sector, which is already heading down the path of many of the initiatives mentioned in this section of the White Paper. It will have Regulatory clout behind it now, although it is frustratingly quiet as to whether there will be any new funding to the Regulator to support its expanded role here and elsewhere under the White Paper.
6. To have a good quality home and neighbourhood to live in.
The Decent Homes Standard will be reviewed so as to set a higher standard of quality, it is currently regarded as a minimum quality standard and therefore providers can expect more will be imposed on them in order to provide better homes. Particular points of potential review are likely to be better support for decarbonisation and energy efficiency of social homes and improved communal and green spaces. The Government will also however consider how it can be used to design out crime and help tackle anti-social behaviour (ASB).
Agencies’ roles in tackling ASB is to be clarified so it is clearer who residents should contact (Landlord? Police? Local authority?). There is no suggestion that powers that are presently limited to e.g. police and local authorities such as closure orders and CPNs should be extended to providers however, so this appears to focus on signposting.
New tenant satisfaction measures will also be created to measure how providers tackle ASB.
The much under-used and often hidden community trigger will be better advertised with providers perhaps acting as an advocate to support residents to use it.
County lines gangs and drug dealing, and “cuckooing” are mentioned in the context of ensuring landlords monitor and support their vulnerable residents at risk, taking a multi-agency approach.
The White Paper states it will expect the Regulator to review and amend its regulatory standards to make clear landlords should have a policy setting out how they should tackle issues surrounding domestic abuse. Whilst many providers already have such policies, this express recognition in the standards may lead to providers who do not have such policies or fail to properly enforce them facing increased scrutiny and potential enforcement action from the Regulator.
Other specific housing management points include:
- Allocations evidence is to be reviewed to ensure that housing is allocated in the fairest way possible. It is reasonable to expect that there may be revised guidance in due course. Might the reference to “best outcomes for local places and communities” mean a much larger cohort of persons may have the right to be allocated a home?
- All landlords should allow the keeping of pets depending on location providing they are looked after and do not adversely affect neighbours, as part of the drive to improve residents’ mental and physical wellbeing.
7. To be supported to take your first step to ownership
The White Paper also outlines proposals that have been announced previously as well as the importance of good design and the link with opportunities under the Planning for the Future White Paper. This includes:
- Changes to the Shared Ownership scheme to allow a smaller initial purchase and 1% staircasing increments;
- Right to Shared Ownership for new grant funded homes;
- Whilst evaluation of the pilot Voluntary Right to Buy is referenced there are no promises about extending the VRTB for now; and
- Leasehold reform – including limitation on ground rents, extension of rights of variable service charge payers to freehold owners paying charges, and easier, wider and cheaper access to lease extensions and enfranchisement and the Right to Manage.
Given that some of these proposals have been discussed for a number of years, it will be interesting to see the timescales for implementation of these proposals moving forward.
For more information
For further information in relation to any of the above, please contact your relevant ACS contact or for:
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