Between the lines

It’s the regulatory equivalent of asking, ‘does my bum look big in this?’.

The Tenant Services Authority is in the throes of rewriting the rule book for English housing providers. Last year the watchdog asked landlords and tenants to appraise its proposed new regulatory framework, including local and national standards which landlords must get to grips with over the next 13 months. TSA staff have just finished trawling through almost 500 responses from across the sector (see pie chart) and later this month the regulator will announce how its new regime will look.

Richard Moriarty, executive director for market development at the TSA, says the sector’s reponses back the general thrust of its proposals. These include new local and national standards, to promote landlords and tenants influencing regulation - labelled ‘co-regulation’ - and will see the TSA regulating local authority housing departments for the first time.

‘There was a high degree of support and consensus for the broad principles we have established,’ he says. ‘We have seen two in 491 [consultation responses] that were opposing our general drift.’

Beyond that, Mr Moriarty identifies several key trends within the responses, including clashes over the watchdog’s use of the word ‘local’, and worries that the new system will not treat all types of landlords equally. Others queried the changes that will be made to the inspection process, on which the TSA will launch a separate consultation this month.

Ahead of what undoubtedly constitutes the greatest change many working in housing today will ever experience, Inside Housing has done its share of trawling the consultation responses too, randomly selecting and reviewing a quarter of them in line with the mix of providers which responded. Here we compare our take on what the sector thinks of the proposed changes with what Mr Moriarty and his team have picked out. No doubt change is afoot. But with the devil, as ever, in the detail there’s plenty still to iron out.

Trend one

Going local

What it’s about
The TSA wants landlords to develop local standards in conjunction with residents, which will be up and running by November.

What the TSA read
‘Local came up as a big theme. Not so much as, “we don’t understand what you’re saying” but, “we are concerned about the expectations of other partners,’ says Mr Moriarty.

‘Some [housing associations] were concerned that local authorities would see local as [meaning within] their boundaries. Some councils were concerned that housing associations would see local connection within particular [wider] areas. We obviously had a bit of tension come through in the responses.’

What Inside Housing read
Providers don’t understand what ‘local’ means. ‘We look forward to a definition of what is “local” especially where a provider has geographically dispersed stock,’ says Rooftop Housing Group, not untypically.

Some larger associations wonder how ‘local’ can apply to their whole stock satisfactorily. One Housing Group, for example, questions the extent to which services to its 12,000 households can be ‘genuinely local’. In addition, it identifies a challenge in ‘balancing the requirements’ of tenants and partner local authorities, all of whom wish to have a say in defining local.

Vicinity Housing reckons it has the solution: ‘Differences in approach will be inevitable; the challenge for everyone is being able to understand and respect these differences.’

Conversely landlords with fewer than 1,000 homes have their own quibbles, including West Wiltshire Housing Association which suggests: ‘Local standards will be difficult [for the TSA] to assess for obvious reasons and should therefore be excluded from regulation.’

Sparks could well fly over this point. Tenants and residents, by far the group most critical of going local, say regulating local standards is non-negotiable. The Tenants’ and Residents’ Organisations of England umbrella group goes as far as arguing ‘it is not for landlords to decide how “local” is defined’; and Leeds-based Harehills and Chapeltown Residents Network brands the TSA ‘completely out of touch with reality’ over the plans.

The bottom line
‘A bit of tension’ is a polite way of putting things. This is the most contentious area of the plans which needs serious TSA attention to prevent going local sending the sector loco.

Trend two

Co-regulation - love it or hate it?

What it’s about
Moving away from top-down regulation, with rules shaped by landlords and tenants as well as the TSA.

What the TSA read
‘A lot of people told us that they would support co-regulation but it would take time to develop.’

What Inside Housing read
Mr Moriarty isn’t wrong: the principle is welcomed. But caveats and suggestions are the bread and butter of consultation responses, and this is what you get on co-regulation - along with a mix of sycophantic comments and distinctly put-out remarks.

Warnings range from advising that implementing co-regulation may require extra resource. ‘Cost… is a very significant restraining factor,’ offers Freebridge Community Housing, while One Housing Group adds ‘providing new services, initiatives and approaches is likely to be constrained by the expected public funding cuts for several years’.

Meanwhile Coast & Country Housing Association is not alone in suggesting co-regulation could be insufficiently robust in parts, requiring strengthening ‘to ensure confidence across all stakeholders’. The point is literally on the money when it comes to ensuring continued confidence from the lenders. The Council of Mortgage Lenders’ requested to ‘discuss in further detail with the TSA the impact of the removal of its regulatory circulars and guidance notes … to support the sector in ensuring financial viability and good governance’.

The most stinging rebukes are from tenants, with TAROE warning that co-regulation ‘is not proven in practice’ and poses ‘key risks for tenants’. Amicus Horizon’s residents have a more straightforward quibble: ‘too much jargon’.

No such upset from Alistair McIntosh, responding to the consultation in a personal capacity. The inimitable Scot and chief executive of the Housing Quality Network says ‘co-regulation is spot on’ and ‘a huge leap forward from the somewhat clannish days of [TSA predecessor organisation] the Housing Corporation’.

Gosport Council is also encouraging, claiming co-regulation ‘is focused on outcomes, allowing organisations to be flexible’.

The bottom line
Few dispute that co-regulation sounds great in theory - in practice it will take a deft hand to implement.

Trend three

Levelling the playing field

What it’s about
From 1 April the TSA becomes England’s first housing regulator to govern both housing associations and councils

What the TSA read
‘There was some talk in the housing association comments about a level playing field and how local authorities had a lighter regime than housing associations.’

What Inside Housing read
For many landlords, the move to regulate both associations and councils is not a big deal. ‘Reasonable’ crops up with more than reasonable frequency in the responses.

Several take a harder line over the regulator’s intention to apply different rules to different landlords in select areas, such as exempting local authorities from some governance and viability scrutiny. ‘We see no justification for excluding authorities from many of the penalties and enforcement measures that will apply to other providers,’ rails Notting Hill Housing.

On the local authority side, Epping Forest Council advocates safeguards to minimise increased bureaucracy as a result of the changes.
There is also concern over the TSA’s relationship with arm’s-length management organisations, which will only receive watchdog oversight in so far as their parent landlords will be TSA-regulated. Rochdale Council argues there is not ‘sufficient clarity’ on the TSA’s intentions for ALMOs, adding its tenants ‘have a very direct relationship with [ALMO] Rochdale Borough Homes… and it would be reasonable for them to expect a regulator who is looking out for their interests to deal directly with RBH also’.

Gloucester City Homes meanwhile labels the ‘arm’s-length’ regulation it will receive ‘a retrograde step’.

The bottom line
Some ironing out to do in general, but the treatment of ALMOs will provide the watchdog’s biggest headache.

Trend four

Annual report anxiety

What it’s about
The TSA wants landlords to produce an annual report for tenants and the watchdog, assessing how they think they’ve measured up to the new national standards, which launch next month. Each landlord’s first report must be filed by 1 July 2011.

What the TSA read
‘[On] the idea of this annual report where a provider sets out their stall and sets out how they comply with the standards… [many tenants] have said we need to be more prescriptive about that so we can compare [landlords’ performance].’

What Inside Housing read
There’s a fair amount of enthusiasm for this measure. Some landlords echo the notion of introducing a benchmarking element which Mr Moriarty raises above. Suggestions include the TSA publishing its view on each annual report, along with other regulatory data on the provider. ‘Some [landlords] may need this external challenge as they may not be sufficiently mature or experienced enough to do it themselves,’ offers Accent Group.

By far the greatest concern, which peppers responses, is the timetable for producing reports. Several suggest shifting the due date to the end of July, though Rooftop Housing Group’s suggestion that this is ‘still very tight’ is shared.

More popular is a more radical change, outlined here by Wiltshire Rural Housing Association: ‘These reports should be required by October each year to coincide with [existing] published accounts and annual reports.’

Meanwhile smaller landlords, such as 356-home Hull Churches Housing Association, question their ability to report annually at all. ‘This is an issue of capacity, not capability,’ it argues.

The bottom line
Pushing the reporting date back to the autumn could be a quick win in the TSA’s bid to keep landlords on side

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