Announcement

Localism will drive up standards in social housing

This news article was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

Housing Minister Grant Shapps today set out how a new era of regulating social housing at the local level will deliver better homes for tenants…

Housing Minister Grant Shapps today set out how a new era of regulating social housing at the local level will deliver better homes for tenants, whilst at the same time ensuring lenders continue to invest in the sector.

Following the announcement last week that the Tenant Services Authority (TSA) would be abolished, a comprehensive report published today explains how stronger powers for tenants will drive up the quality of their homes. Tenants can now expect local solutions to local problems - they will be able to set up local panels and call on their councillors and MPs to hold landlords to account to help resolve disputes.

The report, which follows a wide-ranging review of the TSA commissioned by Mr Shapps in June, also sets out how a new independent committee within the Homes and Communities Agency (HCA) will continue the economic regulation of social housing. The committee will make sure public spending on social housing is delivering value for money and lender confidence is maintained, ensuring that housing providers continue to secure significant private investment for affordable housing.

Mr Shapps said that following the abolition of the TSA, consumer protection and economic regulation of the sector would need different levels and styles of regulation, not a cumbersome bureaucratic approach directed from central Government.

Housing Minister Grant Shapps said:

Social tenants know when things are going wrong with homes in their area. And when this happens, they want to be able to fix the problems quickly and easily, not sit around waiting for a remote inspection regime run from Whitehall.

That’s why we’re changing how this is done. Consumer protection is going local - tenants will now be able to hold landlords to account with the help of their local representatives, and though panels that they set up and control themselves.

At the same time the vital economic regulation of the sector as a whole will continue. The new regulator will be able to focus its energies on ensuring that taxpayers’ money spent on social housing goes further, and give lenders the confidence they need to invest funds in building more social homes.

In future locally elected representatives will have a much stronger role in regulation. Where tenants are unhappy with the way a complaint has been handled by their landlord, MPs, councillors and tenant panels will be able to scrutinise the performance of landlords, and help tenants secure better services.

Landlords will need to make a wide variety of information that tenants can use to assess their performance readily available. They will also be expected to work with tenants to set up systems, such as tenant panels, where their performance can be scrutinised and disputes resolved. If these local systems don’t resolve the issue there will be the option to refer the complaint to an ombudsman.

The current economic regulation of the sector will be transferred to the HCA, but to ensure there is sufficient separation between the regulation of social housing and investment decisions, an independent Regulation Committee will be set up within the HCA with its membership appointed by the Secretary of State.

The committee will have a greater focus on ensuring value for money and driving efficiency in the sector - vital activities in the current economic climate to squeeze as much value as possible out of every taxpayer’s pound. The role of the committee on consumer regulation will be limited to setting overarching standards of service for landlords and addressing serious failures where local measures have not a provided a solution.

Notes for editors

1. The Tenant Services Authority (TSA) was created by the Housing and Regeneration Act 2008 and is the regulator for nearly 1,800 social housing landlords, including housing associations, councils and co-operatives in England. On 1 April 2010, the TSA commenced regulation with its new powers and based on a common set of standards applicable to social housing landlords.

2. The TSA cost £40m in its first year of operations, and its budget for 2010-11 is approximately £33 million.

3. In June 2010 Grant Shapps MP announced a review of the role and purpose of the Tenant Services Authority (TSA) and the framework for social housing regulation. A report of the review can be found at: www.communities.gov.uk/publications/housing/socialhousingregulation.

4. The review was set in the context of the following published Government objectives:

  • reducing the number and cost of quangos

  • reducing administration costs and ensuring value for money of public investment

  • cutting unnecessary regulation and inspection

  • ensuring there is a robust, transparent and independent framework of economic regulation for social housing

  • ensuring there is a regulatory environment that ensures housing associations continue to command the confidence of lenders and can continue to attract investment at competitive rates

  • supporting a supply of affordable housing

  • ensuring social housing tenants are adequately protected and empowered.

5. Summary of review findings:

  • The Tenant Services Authority (TSA) should be abolished and its economic regulation and backstop consumer regulation functions transferred to the Homes and Communities Agency (HCA), generating efficiency savings in back-office functions and exploiting synergies across investment and regulation.
  • In order to ensure the continued independence of regulation, these functions should be vested in a statutory committee within the HCA, legally separated from HCA’s investment functions and with its membership appointed by the Secretary of State.
  • The role of consumer regulation should be refocused on setting clear service standards for social landlords and addressing serious failures against those standards, with a higher legal threshold for regulatory intervention.
  • Greater onus should be placed on local mechanisms to address routine problems and to enable tenants to hold their landlord to account and press for better services. There should be a clearer role in the complaints process for locally elected representatives and tenant panels in advocating for tenants.
  • In order to maintain lender confidence and protect taxpayers, proactive economic regulation of housing associations should continue as now but with more focus on value for money for the taxpayer. 

6. To facilitate setting up local tenant panels, the Government will discuss with the four National Tenant Organisations (NTOs) ideas for:

  • developing a framework, which is owned by the tenant sector, and sets out what an effective tenant panel might look like. This would provide assurance about the credibility of the Panel and would be key to landlords recognising local panels;
  • training and support to help tenants fulfil their role on the tenant panel.

This will be underpinned with a Direction to the regulator to ensure that, as part of a revised Tenant Involvement and Empowerment Standard, landlords will be expected to provide a range of opportunities to influence and participate in the scrutiny of landlord performance. This will include the formation of tenant panels.

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