Flight of freedom

On the face of it, the new social housing rulebook published last week represents something of a fairytale ending for social landlords.

After almost a year of consultation, Peter Marsh, chief executive of the Tenant Services Authority, stepped into the role of Prince Charming,
promising to free providers from a lifetime of drudgery by slashing red tape. The worst performing landlords can expect a harder ride, he suggests. But the rest can fly off unencumbered by petty bureaucracy.

The sector has been holding its breath ever since Professor Martin Cave’s 2007 review of social housing regulation, suggested a new independent
regulator for all social landlords. And, even though the TSA opened for business almost 12 months ago, it has kept providers waiting as it consulted on just how it might achieve Cave’s recommendations.

Fairytale ending?

So have housing providers themselves bought into the TSA’s fairytale or do they feel the end result is something altogether more Grimm? And,
on a more practical note, how different will the world of regulation look next year?

‘This has been a long time in the making,’ admits Richard Moriarty, executive director for market development at the TSA.

‘And if anything, we have been accused of over-consulting over the past few months. I think that’s unfair, as many people now feel they have
ownership of the standards.’

The new regulatory framework contains six standards that landlords will be expected to meet, including governance and fi nancial viability
and tenant involvement. But they will be able to work with tenants to draw up local standards that will determine how they will be judged on the ground.

Richard Capie, director of policy at the Chartered Institute of Housing, is certainly impressed.

‘I think if there were any surprises in this, then people would have been disappointed,’ he states. ‘We are very positive about it: it has been thinned
down to smaller, more focused standards, which are clear and focus on outcomes, not process.’

Key to the new standards was a reduction in the overall regulatory burden. Professor Cave had criticised the ‘excessive burdens’ the current
system placed on providers.

Hugh Laird, director at the Board Development Agency, says that the reduction represents something of a ‘leap of faith’ for the regulator. For the first time it will not be telling landlords what they should be doing, he states. Instead, it will say ‘show us what you have achieved, how you have met the service standards and we will give you a free hand in how you go about meeting those standards’.

This might not be an altogether comfortable experience for all social landlords, he suggests.

‘Our experience of talking to organisations is that they have liked the comfort blanket of having to comply with a pre-defined code. Now they will be forced to review the organisation’s governance to determine which code is right for them.’

Room for improvement

Certainly, while they accept the need for local standards, some landlords are concerned they may find it difficult to develop these effectively if they own stock in different areas of the country.

Bruce Moore, group chief executive at Hanover, says: ‘The only slight concern is really the local standards and because we are a national provider, we prefer to set priorities for our individual blocks rather than by a local area.’

Allowing landlords to reach the six standards in their own way has largely attracted widespread praise from the industry. The National Housing Federation, housing associations’ guard-dog, was largely effusive. But it does believe there are some changes that can be made. It thinks the value for money standard, which requires providers to demonstrate how they have sought best value for their housing services, needs further revision.

‘It seems to us that the question of value for money is a question of process,’ says John Bryant, policy leader at the NHF. ‘We are not saying that it is not important, but it is not the purpose of the regulator, which wants to test what the outcomes are.’

Others feel it also needs to do more to ensure smaller providers, who will see the regulatory burden lift quite considerably, are still held adequately accountable.

Lara Oyedele, chair of representative body BME National and chief executive of Odu-Dua Housing Association, says: ‘It is great that we are being given more freedom, but the regulator needs to ensure smaller providers do not drift without it being picked up.’

Ms Oyedele is also concerned that including equality and diversity as part of the ‘tenant involvement and empowerment’ standard - rather than as a requirement in its own right - could mean that tenants with particular needs miss out in other areas. ‘For example, will landlords make adequate provision within the ‘home’ standard for orthodox Jewish families whose beliefs mean they cannot switch on their lights on the Sabbath?’ she asks.

One of the more controversial parts of earlier consultation documents was a suggestion the TSA could allow landlords to drop universal lifetime tenancies. In June it released a document which said: ‘The use of less secure tenancies may be justifiable in areas where demand for homes significantly outstrips supply, and the use of other tenure options may be more appropriate to meeting housing need and creating mixed income communities.’

Tenant involvement

Tenants’ groups reacted angrily, saying they would actively campaign against the TSA unless the line was removed. The wording has certainly been watered down but still appears to offer providers substantial room for manouevre. It now states: ‘Registered providers must offer and issue the most secure form of tenure compatible with: the purpose of the housing; the sustainability of the community.’

Nigel Long, head of policy at the Tenant Participation and Advisory Service, is concerned some providers may use this as an opportunity to offer less secure types of tenancy, justifying it as being in the interests of a ‘sustainable community’.

‘We are not convinced that there is a strong case for any erosion of security of tenure: it seems a backward step,’ he says. ‘John Hills [author of an influential report about the future of social housing] was quite clear in his report that changing security of tenure would damage sustainable communities.’

However, the framework also states: ‘Security of tenure is a matter for government policy and the TSA’s intention is not to introduce any change in setting out new standards.

Tenants should also be reassured by the focus on involving the consumers of social housing. The very first standard relates to tenant involvement and empowerment, and means providers must give their tenants opportunities to influence decisions and scrutinise their performance.

The document says: ‘Registered providers must design and deliver housing services that tenants can access easily.’ But how easy is it for a tenant to access the framework itself?

Piali Dasgupta, policy consultant at the Local Government Association, thinks the TSA needs to work harder: ‘The standards amount to nine pages of A4: I would argue that we could just get those standards over two pages of A4 so that a tenant can just look at it.’

The TSA has also acknowledged the difficulties in collating information that tenants can compare between providers. Mr Moriarty says: ‘I think there is an inherent difficulty with comparing like for like. By definition, what works in one area will not work in another.’

So will social landlords wake up on the morning of 1 April 2010 and suddenly find themselves in a very different regulatory landscape? Not really, according to Nigel Minto, head of sustainable communities at London Councils. He says the ongoing review of council housing finance will have as much of an influence.

The Conservative Party has also been a long-standing critic of the new regulator. It remains to be seen if the framework has won over shadow housing minister Grant Shapps.

For the moment, housing providers seem to have got their fairytale ending. But, with a general election looming next spring and the standards yet to be finalised, they will have to hope that any sequel provides a similarly comfortable read.

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