Report on regulating social housing
Select committee report on regulating social housing: six key recommendations
The Levelling Up, Housing and Communities (LUHC) Committee first launched an inquiry into the quality and regulation of social housing in England on 16 November 2021.
This followed the ITV News investigation that revealed some appalling conditions faced by social housing tenants across the country, as well as the Social Housing Regulation Bill aimed at improving social housing standards.
The inquiry’s oral evidence sessions heard from housing associations and councils, tenants and their representatives, the Regulator of Social Housing (RSH), the Housing Ombudsman, and rough sleeping and housing minister Eddie Hughes.
It also surveyed tenants to get their views, receiving 628 responses.
Inside Housing has gone through the detail of the report and outlined six of the committee’s key recommendations.
The report says that the level of disrepair in some parts of the social housing sector “can undoubtedly be attributed partly to the age and design of the housing stock, some of which was never built to last and is now approaching obsolescence”.
“For this, some blame must attach to successive governments for not investing enough in new social housing or providing funding specifically for regeneration,” it adds.
At present the government does not provide funding for the replacement of homes demolished through regeneration.
Such schemes are explicitly excluded from the terms of the Affordable Homes Programme (AHP), although some funding is available where regeneration results in net additional affordable homes.
The committee recommends the government should introduce funding specifically for regeneration that does not require the delivery of net additional housing and for it to deliver on its commitment to increase the supply of homes for social rent.
Stock condition sureys
During the inquiry, the LUHC Committee heard that social landlords need to be “more proactive in monitoring or auditing the condition of their stock”.
According to the report, Savills, which does surveys on behalf of social landlords, agreed with this approach.
It said providers could “avoid serious deterioration in the quality of their properties and can be assured about the quality of residents’ homes if they undertake regular inspections of stock condition”.
Therefore the committee recommends social landlords put in place systems that regularly monitor the condition of their stock, rather than relying on tenants to report problems.
It also suggests the RSH should consider amending its Home Standard to place a specific requirement on providers to regularly monitor their stock.
This follows several housing associations recently announcing that they will be doing full stock condition surveys to tackle disrepair and decarbonisation.
The committee says there is a power imbalance between tenants and housing providers, describing it as “one of the biggest problems facing the social housing sector today”.
It suggests that one of the most effective ways of empowering tenants is through the establishment of tenants and residents associations, led by tenants themselves, with which housing providers “must engage first and foremost when consulting tenants”.
The committee recommends the English regulator to amend the Tenant Involvement and Empowerment Standard to require social landlords to “support the establishment of genuinely independent tenants and residents associations”, including by providing the necessary funding.
The committee also suggests that the government keeps the new Social Housing Quality Resident Panel on a permanent basis as the national tenant voice body.
Tenants have long been calling for a national representative body. The government first proposed the idea of a resident panel in March, which is to be made up of around 250 social housing residents from across the country and is expected to meet at least six times to discuss measures to improve the quality of social housing.
Housing Ombudsman compensation
When the Housing Ombudsman finds a social landlord guilty of maladministration, it can order the association to compensate tenants for financial loss and avoidable inconvenience, distress and detriment.
The report highlights that the average level of compensation awarded in 2020-21 was just £260.
“This clearly does not come anywhere close to reflecting the detriment to tenants,” according to the committee.
New rental reforms in a white paper proposed that rogue private landlords could be ordered to pay up to £25,000 in compensation to tenants by a new private rented sector (PRS) ombudsman.
The LUHC Committee therefore recommends that the government must commit to ensuring social housing tenants get the same level of compensation it has said tenants in the PRS will be entitled to under its proposals for a new ombudsman.
It should do this by amending the Social Housing Regulation Bill to include provisions that enable the ombudsman to award compensation of up to £25,000.
If not, the government should publish its justification for treating social housing tenants and PRS tenants differently.
Systemic failure test
The regulation of the consumer standards is governed by a ‘systemic failure’ test, under which the regulator only intervenes when there is evidence of systemic failure within the organisation concerned.
The report describes this as “perhaps the most passive interpretation” of the RSH’s statutory duty “imaginable” and has “resulted in providers that are responsible for serious mismanagement affecting dozens of tenants, nonetheless being found compliant with the standards”.
The report gives the example of Clarion and the issues faced by its tenants on the Eastfields Estate in Mitcham, south London. Dozens of families were living in damp, mouldy and rodent-infested homes.
Residents accused their landlord of ignoring their complaints for years. Clarion apologised to residents in response. Despite this, the regulator found no systemic failure and that the landlord had not breached any standards.
The LUHC Committee recommends the RSH should scrap the ‘systemic failure’ test and report back on how it plans to change its approach.
Mandating registration with the regulator
Registering with the RSH is mandatory for local authorities with housing stock, but is voluntary for private providers.
The committee says it heard strong support for requiring all providers of social housing to register with the English regulator.
For example, Midland Heart said it was “vital” that all providers of social housing be “subject to the same regulator, regulations and requirements… regardless of size and scope”.
It said this would “help protect the reputation of the sector” and argued that some smaller providers were “less able to deliver effective financial covenants” or were “prone to more governance failures” and that without proper regulation, “organisations may go under the radar”.
However, the Chartered Institute of Housing (CIH) and the National Housing Federation raised some concerns about mandating registration.
The CIH called it “an area that warrants further consideration”, but said that requiring all providers to register could “force some out of the market due to the regulatory burden”.
It also said that most non-registered social landlords with fewer than 2,000 homes were subject to some form of social regulation already, for example by the Care Quality Commission.
Jonathan Walters, deputy chief executive of the RSH, said mandating registration might result in the Office for National Statistics (ONS) reclassifying the sector as belonging to the public sector and therefore its debt as part of the national debt.
The LUHC Committee recommends the government to invite the ONS to make a public announcement on whether requiring all social housing providers to register with the RSH would prompt a reclassification.
If the conclusion is that it would not, the committee suggests the government amends the Social Housing Regulation Bill to mandate registration “through whatever mechanism it deems most appropriate”.
By Grainne Cuffe