We must talk about proper regulation
Open letter to housing minister Grant Shapps: options for social housing regulationI know you are now actively engaged with the Communities and Local Government department and sector stakeholders in looking at options for replacing the Tenant Services Authority and I realise decisions are likely to be taken quickly in order for proposals to be drafted into the Localism Bill. We clearly need to re-open the debate about the most appropriate form of regulation ...
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We were happy with the final outcome of the TSA regulatory framework and welcomed the focus on co-regulation based on boards working with their customers to establish appropriate local service standards. However, if we are now in a different place, it’s worth revisiting the fundamentals. For us there are two essential principles: to ensure robust regulation of governance and financial viability to satisfy the lenders; and to have a regulator who is clearly independent of ministerial control so that our status as non-public sector is not threatened.
There are, then, a number of additional issues on which the sector did hold strong views but which should now be negotiable. For instance, we fought hard for a standalone regulator for all social housing. In the current economic context, it would now feel unreasonable to demand that our regulator must have a separate infrastructure if it could, instead, be housed within another organisation. With the likely limitations on councils building their own homes, the competitive drivers for cross-domain social housing regulation are significantly diminished.
We should now question again the need for regulation of service standards to protect our customers. If the new government is serious about the ‘big society’ and is looking to free organisations from bureaucratic control, there is an opportunity for us to make the case that boards must be in control of service quality. Provided that high standards of governance are well regulated, boards should be trusted to ensure their organisations deliver for their customers. We have an ombudsman to pick up where this fails.
Similarly, any widespread inspection regime adds high costs for relatively little proven service improvement. If an association habitually lost ombudsman cases, this evidence of systemic weakness would show a failure of governance and the regulator should step in.
Finally, we have considered the thorny issue of paying for regulation. While we clearly do not want to add to our own costs, the sector should be prepared to consider paying a modest contribution to the cost of the sort of essential and independent regulation described above, just as we pay for the ombudsman. We would expect that such an offer would be welcomed by CLG.
I hope this outline of our thinking is helpful.
Mick Kent, group chief executive, Bromford Group