Tenant satisfaction: is it still relevant?

Given this shift in emphasis, how much attention is paid to how content existing tenants are with their landlord’s performance?

Some social landlords are “reflecting on the way they do business”, says Melanie Rees, head of policy at the Chartered Institute of Housing (CIH). This includes looking at ‘channel shifting’ (changing the means by which services are delivered) and getting tenants to ‘self-serve’ – for example by accessing services via smartphone apps (see box). “I think there are opportunities to improve customer service but also to achieve some efficiencies out of that without necessarily reducing the quality,” she says.

Ms Rees adds: “Customers are your eyes and ears. They can tell you where you are wasting money and doing things you don’t need to do and things they don’t necessarily value.”

In some cases, landlords are “redefining their relationship” with tenants, says Ms Rees, making them aware of their responsibilities and offering rewards or enhanced services to those who keep up their side of the bargain. In April, 8,500-home RHP made changes to its provision of services for new general needs tenants, which includes an essentials-only repairs service during the five-year fixed tenancy and £1,000 cashback to help tenants move on.

Sinéad Butters, chief executive of 9,000-home Aspire Group and chair of Placeshapers, a network of more than 100 housing associations, admits that, where organisations previously did as much as they could for customers – sometimes for free – a necessary “rebalancing” is taking place. “That doesn’t mean we are not putting customer service and tenant satisfaction at the heart of what we do,” she adds.

In April, Aspire reduced its traditional tenant involvement team from five to two staff members, halving the £500,000 cost, and is instead using “creative on-the-ground ways” of engaging with more residents through existing resources. “Some of the old guard aren’t very happy to be honest because their power base has been disrupted, but it’s in the interest of a broader cohort of tenants,” says Ms Butters. “We need more people involved.”

“Some of the people living in our homes are choosing whether to heat or eat.”

Alison Inman, chair, Broadland Housing Group

Aspire and Orbit are not the only ones arguing for more tenant involvement when it comes to services. Tenants themselves have realised the potential impact of the annual 1% rent cut revealed in last July’s Budget, says Jenny Osbourne, chief executive of tenant empowerment body Tpas. In some organisations, she says, they are helping make the “difficult decisions”.

“Tenants are realists,” says Ms Osbourne. “They are not asking for the world and are keen to work with their landlords quickly to find ways to save the money. [They are] as keen as landlords are.”

Alison Inman, chair at 5,000-home Broadland Housing Group and CIH vice president, says tenants are the best people to talk to about making money stretch. “Some of the people living in our homes are choosing whether to heat or eat,” she says.

She adds: “I think where things go badly wrong is where landlords make these decisions [about changing services] without talking to the residents.”

Enhanced services

Nonetheless, it is not clear that landlords will automatically see the value in keeping tenants satisfied, especially in the absence of regulatory requirements.

“Some of the old guard aren’t very happy because their power base has been disrupted.”

Sinéad Butters, chief executive, Aspire Group

While the HCA does require social landlords to meet a tenant involvement and empowerment standard as one of its ‘consumer’ regulatory standards, there is little doubt what is more important to the regulator. When the HCA carries out an in-depth assessment of a housing association, its primary focus is “on compliance with the requirements on the economic standards”, a spokesperson for the regulator says.

“Issues relating to customer service would be addressed through our reactive consumer standards work, in accordance with the serious detriment threshold,” he adds. In other words, the HCA intervenes only where failure to meet the consumer standards has caused, or could have caused, serious harm to tenants. It’s a high threshold for how wrong things need to go before the regulator takes notice – and this shift in priority has already had an effect.

“A huge amount of tenant engagement and tenant involvement has been withdrawn right across the country by landlords,” says Michael Gelling, chair of Tenants’ and Residents’ Organisations of England (TAROE). He blames former housing minister Grant Shapps for taking “the momentum away from tenants to engage” by closing the Tenant Services Authority in 2012 and quango National Tenant Voice in 2010, while cutting funding to organisations like TAROE. He says the new regulator has taken its eye off the ball when it comes to customer service.

Landlords need to know what tenants are saying about the services they are delivering, he argues. “The issue is social housing is supposed to bring… something special,” he says. “It’s supposed to engage.”

If organisations don’t want to know there is less satisfaction, they won’t ask about it, he concludes.

Funding cuts

The situation isn’t limited to housing associations. Councils have seen government funding cut 40% in five years, and “appear to be less concerned about tenant satisfaction than they were”, according to Eamon McGoldrick, managing director of the National Federation of ALMOs. Freed from providing annual data to the Audit Commission in 2011, he says some no longer collect data and others have reduced the frequency of collection. “It certainly feels like a good way of avoiding what could be some very difficult news,” he adds.

Moreover, if 92% of tenants are satisfied with a landlord’s services, he wonders whether the “law of diminishing returns kicks in”. This means the value generated by trying to increase those levels may not be worth the effort.

“Is it a price worth paying for keeping the budgets in balance and even [gaining] a revenue contribution to stock investment or the provision of new supply?” asks Mr McGoldrick.

Will landlords admit to making such a calculation, however? A Local Government Association (LGA) spokesperson says councils “are engaging with tenants positively, with customer service and tenant satisfaction key”.

Tenant engagement at 10,500-home arm’s-length management organisation (ALMO) Cornwall Housing includes a mystery shopper scheme, in which tenants help check customer care by ringing staff with test enquiries. Newcastle City Council launched Newcastle Independent Tenant Voice in April to increase engagement with 29,000-home ALMO Your Homes Newcastle’s tenants and leaseholders. The project aims to make better use of digital communication.

“It makes financial sense for councils to keep tenants satisfied,” says the LGA spokesperson. “It is always important to fund services and activities tenants want but it is imperative when budgets are tight.”

Social landlords lose focus on customer service at their peril, agrees Ms Butters. “Any business, even a social business, needs to understand the buying habits of their customers, the satisfaction levels of their customers, and shape their services around it.”

She adds: “I’d be really surprised if any social landlord chooses to not put tenant satisfaction high up in their priorities. Why would you want to be not valued for the services you provide? I don’t think any business would be successful in the long run if they are not valued for what they do by the people who receive their service.”

It is difficult to quantify whether social landlords are de-prioritising tenant satisfaction. Housemark’s most recent Survey of Tenants and Residents, published in April 2015, covered 2013/14. It found satisfaction remained constant at 87% between 2012/13 and 2013/14 for general needs tenants – but this was before the great upheavals sparked by the 2015 summer Budget.

Engaging positively

At Orbit at least, tenant satisfaction is seen as good for the wider business. Dean Ballard, head of performance excellence at Orbit Living, the housing association part of Orbit Group, explains: “Doing things right the first time is the cheapest way of doing it.”

If a customer calls and the organisation responds quickly in a satisfactory way, the customer won’t call back, reducing the cost to the landlord.

Orbit claims its new technology has helped it reduce its budget for customer service surveys by about 30%. But the landlord argues the main driver was to improve engagement among frontline staff, who felt disengaged from previous external phone surveys. Sickness has dropped from between 10% and 14% of the call centre workforce per month, to less than 5% since the launch of real-time feedback. Orbit puts this down to two daily team “huddles” that give staff a break from the phone, the introduction of incentives to motivate staff and the fact it is easier for workers to see positive feedback. Mr Ballard says the new system also fits with two Orbit goals: by 2020 to provide a range of services that satisfy 90% of customers and for 75% of transactions to take place online, which is cheaper and gives tenants more flexibility to do things at their own time and pace. It allows the association to contact more customers quicker, he adds, and so “temperature test” services across a wider range of people than the 500-600 of its residents that are actively involved with Orbit.

Others are also trying to move tenant satisfaction back towards the top of the agenda. Last month, Tpas launched guiding principles about tenant involvement – called the National Tenant Engagement Standards – covering issues such as community engagement, resources for engagement and engagement outcomes. Ms Osbourne would like to see “a bit more regulation” around tenant involvement, which she believes is “crucial” in ensuring an organisation is delivering value for money.

But the Department for Communities and Local Government puts the ball firmly in the court of social landlords. A spokesperson notes councils will have nearly £200bn from the government to spend on services including housing over this parliament, while housing associations had a combined turnover of £16bn last year. “We’re confident they can continue to provide a good level of customer service to their tenants while helping to build the homes this country desperately needs,” he adds. “Social housing rents have risen by 20% since 2010, more than double that of the private sector, so it’s only right we’ve taken action to protect tenants and taxpayers.”

Given the emphasis in England is on deregulating housing associations, further policy direction from Westminster seems unlikely. This leaves it up to housing associations to weigh up how important customer service is to them in changing times – and why.