A good regulator...

…will show its teeth, says the housing association chief executive

A good regulator must be willing to show its teeth without intervening for the sake of it, says David Montague, chief executive of London & Quadrant Group. ‘Light touch is not an easy touch,’ he says. ‘You should expect it to take action where necessary.’

Mr Montague is keen on the system of co-regulation proposed in the Cave review and adopted by the Tenant Services Authority, placing more emphasis on landlords and other housing providers scrutinising themselves in conjunction with residents.

But providers are also aware that TSA chief executive Peter Marsh has promised swift and radical intervention if standards drop. ‘He has made it clear that the emphasis will be on [tackling] poor performance,’ says Mr Montague.

The new system, he adds, is a vast improvement on the more prescriptive style of regulation practised by the Housing Corporation, the TSA’s predecessor. ‘Telling people what to do destroys innovation. Co-regulation places responsibility with the provider,’ he says.

A ‘relentless focus’ on viability and governance, as well as service quality, is vital to ensuring success in the sector. ‘Too much emphasis on one of those three could lead to failure,’ says Mr Montague.

…will listen hard, says the tenant

Tenants – or consumers – should be given more opportunity by regulators to decide what they wish to scrutinise, says Ernie Hemsley, chair of Dorset County Tenants Federation. While scrutiny has become a buzzword in housing, too many providers want to take the lead themselves. ‘I don’t feel they’ve quite grasped it,’ he says. ‘We are told “this is what we need to scrutinise” when we should be able to turn around and say “we want to scrutinise that”.’

Mr Hemsley, a tenant of Sovereign Twyneham HA, is optimistic the TSA will champion the empowerment of tenants and incorporate it into the new regulatory system, but adds that not all tenants fully understand the regulator’s role. ‘They are still in the dark, even though we’ve had all these conventions and camper vans going around.’

The Housing Corporation, he adds, tended to ‘side quite strongly’ with housing associations and often ignored tenants’ views when it took decisions over issues such as mergers. ‘It’s all about listening. Unfortunately, a lot of organisations don’t have a culture to listen.’

…should have a clear vision, says the board member

Regulators should be clear what it is they are regulating and how the law says they should go about it, says Zena Atkins, chair of the Places for People group. More often that not, she says, regulators stray into other areas and take on the role of inspectors by focusing on quality as well as compliance.

‘A lot of regulation is contradictory,’ she adds. ‘They can get into micro-management which is none of their business. They don’t just say what the outcome should be but how they expect you to do it.’

Places for People is regulated by more than 10 bodies, including the education inspectorate Ofsted, an organisation chaired by Ms Atkins. In addition to its inspection role, Ofsted also regulates nurseries run by the housing group.

All regulators should be well informed about the sectors for which they are responsible and be willing to look ahead as well as back. ‘Most regulators understand what happened yesterday,’ says Ms Atkins. ‘They have little idea about what’s going on today and no idea about what’s going on in the future. They become a barrier to progress.’

The Tenant Services Authority, she claims, ‘lacks a vision of what would make the sector effective’ and, so far, has failed to get away from the bureaucratic ‘tick-box culture’ that exists in many areas of regulation. 

…should be flexible and light-touch, says the local councillor

There should not be a one-size-fitsall approach to regulation, says Maria Caulfield, cabinet member for housing at Brighton & Hove Council.

‘What works in Brighton and Hove is different to what works in somewhere like Manchester,’ she says. ‘Housing is different from local authority to local authority. A bit of flexibility and common sense would be a breath of fresh air from a regulator.’

The Tenant Services Authority, she adds, should focus on issues facing councils, such as the reform of housing finance and, if appropriate, feed their opinions back to the government. It is unfair for any regulator to compare councils with housing associations when the latter has such immense resources. ‘It’s not a level playing field,’ she says.

Ms Caulfield welcomes the concept of co-regulation and says her authority regularly seeks the views of tenants. ‘It’s their homes at the end of the day,’ she says. But she is sceptical about the extent to which ‘light touch’ regulators avoid hands-on scrutiny: ‘They might say they’re light touch, but it doesn’t always feel like that.’ 

…must be transparent, says the ALMO chief exec

Regulatory frameworks must be transparent and seek to drive up standards, says Bill Fullen, chief executive of Gateshead Housing Company.

Along with other arm’s length management organisations, Gateshead was required to satisfy Audit Commission inspectors that its standards were high enough to gain a government grant for decent homes work.

‘So long as standards are maintained, there is some merit in regulation being softer. But to drive standards up initially, it was right that housing regulation was quite tough,’ he says.

Regulation and other scrutiny is a ‘fact of life’ for ALMOs, he adds, partly because of the management agreements signed with their parent councils. ‘It’s something we have lived with and, across the sector, has improved services for tenants.’

But regulation should be appropriate to the risk involved, and may therefore increase as local authorities and ALMOs start to build new homes again. ‘We have to make sure that we manage those risks effectively,’ says Mr Fullen.

He is keen on developing local standards with tenants that can be measured against a national framework. ‘Tenant regulation is probably as rigorous as any other form of regulation,’ he adds. 

…should protect investment, says the lender

Regulators should work in tandem with the organisations they regulate to deliver the best quality services, says Steve Amos, head of social housing at Barclays.

‘We want housing associations to be well run, deliver value for money and provide new housing supply for future generations,’ he says. ‘We expect the regulator to oversee the financial well-being of housing associations to protect our investment in the sector.’ 

…must be proportionate and clear, says the lawyer

Regulation must avoid being overprescriptive while still providing assurance to those with an interest in the organisations that are being regulated, says Emma Tarran, a partner at law firm Trowers & Hamlins.

In the case of housing, this means striking a balance between the degree of intrusiveness and the need to assure private lenders that the sector is a safe investment. ‘You have to make regulation proportionate, otherwise it will be stifling,’ she says.

Ms Tarran, a partner in her firm’s governance and charities team, says there must be clarity over the areas that a regulator oversees, and what it is looking for. ‘It should be clear about what it’s looking to achieve and clear about how it’s achieved.’

Where organisations such as housing providers are regulated by a range of bodies, they have a right to expect different regulators to co-operate with one another so that the overall burden is controlled. ‘Each regulator needs to think about proportionality and take a global view so that it [regulation] doesn’t become unmanageable,’ she adds.

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