By Roger Jarman, HQN associate

It might seem like an eternity but the changes in consumer regulation promised since the Grenfell Tower tragedy in 2017 look as though they will be delivered within the next 15 months. We know this following today’s publication by the Regulator of Social Housing (RSH) of its implementation plan ‘Reshaping consumer regulation’.

The plan covers familiar ground for those that have tracked the development of this policy over the last five-and-a-half years. However, the regulator’s thinking on several issues has changed over time and these are spelt out in the plan. We are also given an indicative timetable about the plan’s implementation which will see a lot of consultation exercises initiated both by the regulator and by government in the next year or so.

The starting point is the Social Housing Regulation Bill. The regulator anticipates that the bill will soon gain Royal Assent and become law. The RSH’s plan acknowledges that the bill changes the regulator’s objectives with a new focus on safety, transparency and energy efficiency. Enforcement powers will be enhanced and standard-setting powers will be extended. The regulator will also be expected to work closely with the Housing Ombudsman protecting tenants’ interests in the sector.

Following the passage of the legislation, the government must issue directions to the regulator spelling out specifics ministers want to see in the new standards. These directions must be subject to consultation. It is only after this process is completed that the regulator can consult on the proposed standards. The code of practice linked to the new standards will also be subject to consultation.  It is expected that consultation on the standards will begin in the summer.

Additionally, the plan indicates there will be a consultation process associated with the introduction of the regulator’s strengthened enforcement powers.

Plainly, providers and their representatives will be spending a lot of time in the coming period digesting both the government’s and the regulator’s proposals on consumer regulation and responding accordingly.

But that is not all. The regulator is looking for pilots to help test its proposals on its new tools and methods including processes and systems linked to the introduction of the new inspection regime.  Providers should seriously consider helping the regulator with this preparatory work as those offering to be pilots will gain an invaluable insight into RSH thinking on the implementation of the new consumer standards.

Although the consumer standards will not be subject to consultation until the summer, the plan reiterates the areas that the standards will cover as set out in the RSH November 2021 publication ‘Reshaping consumer regulation: our principles and approach.’

Safety, Quality, Neighbourhood, Transparency, Engagement and Accountability and Tenancy will all feature. But the plan appears to give more prominence to meeting diverse needs and treating tenants with respect.

The plan states that landlords must deliver fair access to services, as well as equitable outcomes for their tenants. The regulator comments that accessibility to services can be an issue for some groups. This can revolve around physical access, limited ability to access digital communications and/or barriers around language and literacy.

Linked to this new emphasis on tackling discrimination and promoting equality, the regulator is proposing to ask the following questions of providers:

• Do landlords know what outcomes are achieved across the diverse spectrum of their tenants?
• What data do landlords have access to?
• Does everyone get fair access to and receive good services?
• How do landlords know?

This is a laudable approach given evidence that some minority groups have difficulty engaging with providers. But it is therefore puzzling that the tenant satisfaction measures (TSMs) do not include any performance statistics on EDI.

The plan outlines the RSH approach to regulating the new consumer standards. This, as expected, focuses on co-regulation and the adaptation of the in-depth assessments (IDAs) to fit with the consumer regulation regime. Consumer inspections will look at new sources of evidence and assurance, including information from tenants, to ensure landlords are delivering the outcomes expected by the regulator. For example, the RSH will seek feedback from tenants, consider a wide range of board reports on service performance, evidence from the TSMs, and evidence from the Housing Ombudsman. Admittedly these are only examples but there would appear to be scope for more on-site work to ensure that inspections can reveal more fully the day-to-day experience of tenants receiving services from their landlords.

Consumer inspections will be targeted on the key areas that are judged as needing regulatory assurance. This will be informed by what the RSH knows from previous regulatory engagement, any ongoing monitoring, the TSMs and referrals from the Housing Ombudsman or tenants.

Housing associations should note that the regulator plans to carry out IDAs covering economic and consumer standards at one and the same time. As the plan states: “This will ensure that where consumer issues are arising because of governance failings or financial problems these can be addressed in the round”.    As local authorities are not subject to economic regulation, inspections of their services will focus on consumer standards only.

The plan confirms that there will be regular inspections of larger providers (with over 1,000 homes) but that there will not be proactive inspections of smaller providers.

The regulator will publish the conclusions of individual inspections. There has been speculation that the reports will mirror those associated with the IDAs that focus on economic standards. The plan does not confirm this approach but instead the RSH is looking to ensure the reports are “transparent, accurate and effective”. 

The plan reminds providers that TSMs need to be collected from April this year and that the regulator will have enhanced enforcement powers to ensure compliance with the new standards. Under the new regime, providers will be subject to unlimited fines if they fail to meet the standards set (where the breaches are deemed serious enough).

Finally after a section setting out the regulator’s plans to deliver the new framework of consumer regulation, providers are advised that they are likely to face an increase in the fees charged by the regulator.  Currently, the RSH is funded by a combination of grant and fees collected from regulated bodies.  Providers are warned that in future all funding will come from fee income.

Given the enhanced responsibilities of the regulator and changes in the funding mechanism, providers can expect a significant hike in the fees paid for regulation. But in line with much associated with the implementation of the consumer regulation framework, at least these changes will be subject to (yet more) consultation.