The Housing Corporation lasted more than 40 years. Its successor regulator, the Tenant Services Authority, may not manage as many months. And as for what may succeed the TSA, and for how long, the future remains uncertain. We do know that there will be some form of regulation, rigorous enough at least to satisfy private lenders that their investments will remain safe. But how might the next regulatory settlement go beyond that minimum to build on the achievements of the TSA, and add some real value for social landlords and their tenants?
The way into a new system could be around a new look at rent regulation - an area on which neither the corporation nor the TSA truly focused, relying instead on the government’s rent convergence and RPI-based formulas. For other utility regulators, in contrast - rail, water and telecoms, to name but three - price is the major emphasis of regulation. In this scenario, housing regulation would move in the direction of the utility comparators, and achieve a more modern approach to economic regulation. After all, social housing is in effect a utility, albeit one of key importance to the lives of its consumers.
The need for economic regulation is reinforced by proposed changes to the benefits system, which will give many tenants a far greater and direct personal interest in the level of rent they pay. Under the new ‘universal benefit’, housing benefit would cease to exist, and claimants would have a considerable incentive to seek lower rents and/or better services, whether from social or private landlords. In the absence of the ability of most tenants to ‘shop around’, this is where the regulator comes in.
At the core of price regulation is the notion of an intelligent conversation between the regulator and the service providers. In the case of housing, the conversation would - perhaps every three years - link rent levels with a range of factors, for instance:
- current rent levels and performance in service delivery, along with tenant satisfaction;
- whether additional services were provided, for instance to help unemployed tenants back into work, in line with government objectives;
- the level of planned reinvestment to keep properties to a high standard and achieve environmental goals;
- the level of planned investment in new homes; and
- the efficiency of the provider, and whether operational savings should be made over the plan period.
As with development currently, smaller associations would probably need to band together into area-based regulatory consortia, to avoid overloading the regulator’s capacity for engagement. Larger associations would have individual conversations. But the principles would be easily established, transparent and tenant-focused. Where landlords failed to deliver on their commitments, the regulator would have the ability to twist arms effectively.
James Tickell is a director of consultancy Campbell Tickell
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Readers' comments (5)
Sidney Webb | 10/09/2010 10:52 am
These would be the same utility companies that get away with overcharging, false selling, and poor customer service, at the same time as extracting ever higher profits to pay the international shareholders. I'm not sure this is the model we want for our housing. It's bad enough suffering the model for all the services and businesses already sold to foreign interest and profit by the last set of Tories.
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kass | 12/09/2010 2:46 pm
SOCIAL Housing is not the utility the article writer claims.
Utiltities companies in this country are subject to competition. SRLs do not compete against other SRLs in luring tenants to themselves.
social Tenants cannot shoparound and which to another landlords as they please.
Because in practice 99.99% of social tenants are in fact captive customers of their landlords they require extra-strong protection.
This can only be given by the governemnt creating a social tenants organisations run by representatives directly elected by social tenants.
Until then reckless abuse of social tenants from landlords will never really stop and social tenants will remain second class citizens.
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Junior | 12/09/2010 3:10 pm
Your right Kass reckless abuse of social tenants is right. I do believe should be treated has Service Providers and if not performing after x amount years that we can say sorry I want to change my Service Provider and put the Management contract out to be tender.
We are second class citizens and all these Housing Association want is a set of tenant's they can control its our way or nothing. All they want is a set of nodding dog's. God help you if you question leadership.
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| 12/09/2010 6:29 pm
Well, amazingly, PSR scores a bullseye and hits the nail on the head this time. It happen to happen eventually I guess...
When I saw the "Housing needs modern regulation in line with utility companies" strapline I nearly fell of my chair with laughter. What a joker this guy is. For regulation of the utility sector read no regulation at all. Ofgem in particular are a complete joke. Check out next week's LGC for a forthcoming story on a recent case that proves this. A spineless, supine and useless regulator that is so cowed by the power utilities it is supposed to regulate that it might as well not exist. It gave up it's power to set prices, it knows the these guys are a cartel, it knows the their prices are ridiculously higher than wholesale rates and they do nothing to reduce prices to the consumer when wholesale rates fall, and it knows they use the UK to subsidise the prices consumers pay in the their countries of origin. That (in Europe) do not have an unregulated foreign owned power sector. Only us English muppets bought into that piece of nuttiness. The rest of Europe didn't touch that idea with a bargepole as energy is essential for national security and you don't hand that over to foreign governments. Who are of course the ultimate owners of some of the big ones:
http://www.energylinx.co.uk/electricity_distribution_map.htm
I hope the taxpayer is not funding the dividends he doubtless pays himself from his directorship but not holding breath on that one...
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Sidney Webb | 12/09/2010 7:41 pm
Wow - I'm humbled and honoured all at the same time.
The same applies to the railways where fares accelerate faster than the trains, service fails to improve, and the government subsidy laundered through Railtrack to the train providers is growing beyond inflation and arguably costs more than the franchise income. On the Tube, improvements appear to amount to new fangled advertising mediums installed into stations and safety cutbacks are already causing trains to travel off of their own accord. And the regulator has done what - asked for fares to be easier to understand - I understand them I just can't afford them.
Privatised industry after industry can be pulled apart and described in this way. The toothless regulators operating in a free market, deregulated economy, were never meant to be anything other than a publicity exercise. There is no competition. There is not choice. There is not greater efficiency. There is simply higher cost and/or lower standards. This is not an acceptable proposition for our housing sector Mr Tickell.
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