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It‘s not easy being green: reflections on the Green Paper

26 March 2019 • Jo Loake

1. Decent and safe homes

In a nutshell

The green paper is geared towards ensuring that residents are provided with information about building safety and their responsibilities. This includes landlords liaising with residents to ensure that residents are able to identify and report any safety issues.

It is intended that new legislation will be introduced.

The Decent Homes Standard is to be reviewed for the first time since 2006 and this will also include consideration of whether the energy performance of social housing should be upgraded to Band C by 2030 (where practical, costs effective and affordable).

What it means for RPs

RPs will need to review what information they provide to residents and the way in which it is communicated. This may increase the volume of information provide and also result in better, more varied and more frequent, communication with residents.

There could be cost implications for RPs if social housing is upgraded to energy performance Band C, and RPs will need to consider the energy performance of their current stock and ascertain what would need to be done to improve it. The implications will vary across different stock type, as some older properties may not easily lend themselves to an upgrade, at least not one which is cost effective or practical. Regardless of the affordability of upgrades, there will be a cost to RPs in carrying them out, and the question will be where the funding comes from to do so.

However, any improvements should arguably have a positive effect for residents, as a reduction in energy bills, and perhaps this will assist some residents to more easily manage their incomes. Additionally RPs may see benefits from better performing properties, by reductions is repairs to heating systems or damp, to give examples.

Questions

Should the new safety measures apply to social housing as well as private rented?

RPs arguably adhere to stricter safety measures than the non-regulated private rented sector in any event, and are more engaged with residents, therefore are well placed to deal with the new measures, the issue is one of the potential strain on their resources. Private landlords may well be in a position to recoup some costs, whereas RPs will not be.

2. Resolving complaints

In a nutshell

The green paper intends to provide better access to redress for residents with complaints about their landlord. Currently the course of complaint is in house, MP or equivalent, Housing Ombudsman and, in some cases, the regulator (although this is more for corporate failures than tenant complaints). It is intended to increase the ways in which complaints can be made, including better opportunities for dispute resolution and mediation.

The paper also considers reducing the time a resident must wait between going through the in house route, and taking a matter to the ombudsman, from 8 weeks to 4, or removing the requirement for referral to a designated person in order to bring an unresolved complaint to the ombudsman (which would require a change to legislation).

The government wants residents to be aware of their options for escalation and redress, perhaps at the start of a letting, as well as ensuring they have access to the right independent advice.

The paper also makes a suggestion of the introduction of a code of practice by the regulator to include specific timescales for responding to complaints, in order to speed up the process.

It seems, overall, what is being asked for are ways in which complaints could be better handled within the existing regime, with potential changes coming in at a later date, in response to the strengthening consumer redress in housing consultation.

The paper suggests arming tenants with data about the performance of their landlord, presumably over and above what is already available, on the basis that tenants have indicated that the information is not always accessible. The intention is to allow tenants to make comparisons, however, it is not clear whether this is both against previous performance or other landlords.

Introducing a consistent approach to how RPs report complaints is mooted, to include matters such as how many complaints have been received, how many were resolved, how many were referred to the ombudsman.

It also suggest the introduction of KPIs for RPs, to be produced by the regulator and published as league tables.

The introduction of incentives and/or penalties is proposed, related to performance, with the proposal for these to be financial, as well as to influence the extent to which RPs receive government funding to develop new homes. The proposal is further expanded by the possibility of introducing a new criterion to the AHP that reflects residents’ experiences of their landlords.

What it means for RPs

If complaints processes are to be strengthened, this will inevitably impact on the resources of RPs, in particular if mediation and dispute resolution procedures are introduced, or if a code of conduct s issued by the regulator. This will include staff training, staff time and additional cost.

However, it could be that this results in fewer complaints, if residents feel that they have a robust system in place which will allow them to be heard, and their compliant dealt with at the earliest opportunity, ultimately saving costs and, one would hope, resulting in fewer referrals to the ombudsman. The slight danger here is of course that this all may then change again, with new procedures introduced, as a result of the strengthening consumer redress in housing consultation, which wold seem counter intuitive.

There could however be some benefit to a code of practice, insofar as it would represent a streamlined complaints procedure for all RPs, and whilst this may not apply in every scenario, because each RPs’ residents and stock differs, it would provide continuity for both staff and residents. This may also then go some way to addressing the issue of safety concerns being handled swiftly within the existing regime, if it was able to be issued quickly.

KPIs

RPs will be expected to provide information to tenants on KPIs such as:

  • Keeping properties in good repair
  • Maintaining the safety of buildings
  • Effective handling of complaints
  • Respectful and helpful engagement with residents, and
  • Responsible neighbourhood management, including tackling anti-social behaviour.

Arguably this is information tenants are provided with already and so perhaps this could be tackled by making that information more easily accessible. There is also a question as to whether RPs should have to report performance against the KPIs each year, although this would seem to be part of the VfM statements RPs are required to provide in any event.

Complaints

There could be some benefit to a consistent reporting mechanism, as it may provide continuity for both staff and residents, as well as provide a benchmark procedure for RPs against future years. This may also then go some way to reducing the number of complaints longer term, although, as with the introduction of any new regime, there will likely be an impact on resources, at least initially.

Further thoughts

Whilst tenants should be provided with information about their landlord’s performance, arguably the suggestion of the introduction of a test, similar to the NHSs’ friends and family test, asking whether they would recommend a service provider, may not address the concerns. Tenants of RPs are not in a position, more often than not, to simply vote with their feet and move if they are unhappy with their landlord, and nor are they in a position to recommend a landlord to many people, given the various restrictions on RPs, such as charitable objects, nominations arrangements, tenure demographics, stock type.

Essentially the proposal is that the regulator prepares the KPIs and publishes league tables. The concern here has to be the usefulness of league tables in the sector, given the points made above about choice. RPs and tenants alike do not necessarily have the ability to choose; they are governed by the regulatory framework, charity law, geography, funding arrangements, nominations arrangements, grant funding, to name but a few. This makes one wonder what they gain from league tables, as it may be that there are certain KPIs which they are expected to improve upon but which they cannot. It may be useful to have comparative data available, for the purpose of RPs and tenants being able to see where improvements could be made, in an effort to improve service or accountability, but within the sector, one size does not fit all. This opens the possibility for caveating such information, which could make it unwieldy.

It is, for similar reasons, hard to see how a consumer rating (similar to the governance and viability rating) system could be introduced that would be both meaningful and address the differences between RPs, noted above.

If incentives and/or penalties are introduced into the AHP, clearly this will only affect RPs who bid for AHP funding. This would not ensure a consistent approach across the sector, because not all RPs bid, for many reasons, often geography, land availability and size. It may also create situations where RPs with the development capacity could be precluded from AHP if they are penalised, and there may not be other RPs who are able to step in, because they do not have the capacity. It is easy to see the thinking behind the proposal, assurance that RPs are both good landlords and good developers, however, it seems a little nonsensical to penalise RPs at a time when they are expected to develop. Precluding RPs from obtaining funding would seem counter intuitive and would slow down progress in addressing the housing crisis. Equally, incentivising RPs may not have the desired effect, depending on their individual development capability, but this is certainly something that could be seen as desirable. If an RP is not meeting expectations, improvement could be introduced as a condition of grant funding.

The other problem here is of course how one measures resident’s experiences, as much will depend on the services they receive and their particular needs, again within a service that is not one which is a ‘buyer’s market’ as it were. The complexity and nuances of a new criterion would likely outweigh the benefits. If it were to be introduced, it would perhaps be easier to link to KPIs, or ratings (existing or new).

3. Empowering tenants and strengthening the regulator

In a nutshell

It is not just about better handling of complaints, it is also about better engagement with tenants on improving services, listening to tenants and using customer feedback, including finding ways to engage vulnerable or isolated tenants. Coupled with this is a desire to see tenants given more choice over services, by way of allowing tenants to have input into, or being able to take over the function of managing, the services.

What it means for RPs

Involving tenants meaningfully in the management of their homes could prove to be effective, as who knows better what is happening in the areas in which they live than the tenants themselves? However, there is the question of how the feedback is obtained and used. Each tenant has different needs and RPs house such a wide ranging demographic of people that it could prove unwieldy to try to take into account the needs of each individual household. The proposed NHF Charter could go some way towards achieving this. One also has to keep in mind that RPs are businesses and need to run as such, however, they are not profit making businesses and have limited resources and objects.

The paper also makes reference to a stronger regulator, although this appears to be linked to a more proactive regulator when it comes to consumer standards. It considers removing the serious detriment test from the framework, if in fact the test is preventing the regulator from taking a more proactive approach. It then asks what an alternative threshold should be for intervention.

A further reference to KPIs is made too, in a bid to identifying and tacking poor performance and tables the possibility of providing the regulator with more enforcement powers, as well as making the regulator more accountable to parliament.

Thoughts

Whilst there is undoubtedly a case that tenants know their community better than anyone else, the suggestions of transferring responsibility to TMOs or community based models must be carefully considered, particularly in light of Grenfell. There is a difference between knowing what a community needs and being able to manage contracts for that community. One must also consider whether allowing for local communities to manage the services actually clashes with the proposals for allowing for accountability of landlords. It is hard to see how there can be continuity in service provision or management if each community is responsible for its own needs. Perhaps the answer is indeed in a new stock transfer programme allowing for community based model RPs, or perhaps existing RPs could consider making changes to a community or co-operative based model. There needs to be a middle ground which allows RPs to continue the great work they do managing housing and providing tenants with an influential role.

Whilst the consultation asks the right questions, what it arguably does not do is promote any form of landlord and tenant engagement about the matters it attempts to address. Again there needs to be a balance between what communities want and what RPs can do to help; it is an age old issue that whilst continuity in the sector can be helpful, there is no one size fits all answer.

The paper addresses an issue which is to welcomed, the need for consistency across the sector in respect of standards of service, resident engagement and intervention to address any issues arising. However, there is perhaps a larger issue to be determined, that of the role the regulator is to play and the role of the government. It must be remembered that RPs are private organisations, and the more they are regulated and are subject to government intervention, the higher the impact on matters such as funding. It was not that long ago that they were classified and reclassified, and certain powers of the regulator removed, in order to ensure that they remained private and had continued access to private funding.

4. Tackling stigma, ensuring thriving communities

In a nutshell

The paper recognises the stigma that some social housing tenants face, and asks how that can perhaps be addressed. It asks for ways in which the good work of RPs and the positive tenant experiences can be promoted, as well as encouraging more community initiatives.

The paper also asks questions to address good customer service and neighbourhood management. This includes giving residents a voice in the planning and design of new developments in the areas in which they live.

What it means for RPs

It is a fact that RPs do great work and it does need to be promoted, however, it is not always easy to find the time. RPs perhaps need to think about their media strategies and social value and how this can be used to better promote their achievements.

One of the questions is how the government can help and perhaps the answer is to work more closely with RPs to see first-hand good work being done, to provide funding or resources for community events, encourage positive news stories in the media and encourage more close working between RPs and local authorities about local communities.

Customer service is something which is constantly changing and the use of technology and social media has improved to enable residents to contact RPs in a number of ways. One way to tackle improvements to by getting to know the demographic, so that there can be a variety of options for tenants to suit their needs, such as those who are at work during the day, those who have large families, those who are single parents etc,. that way a more tailored service could be provided. Whilst this may take up resources, it may also have benefits, such as reducing missed and rearranged appointments.

In relation to good neighbourhood management, this is more tricky. Community events cost money and that is not always something which RPs have, plus different communities have different needs. Whilst it may be helpful for residents to have a set of neighbourhood management KPIs, neighbourhood management includes areas which are difficult to measure. Tenant satisfaction varies depending on tenant needs. The paper asks whether landlords should report on social value, to evidence the good work they do, but of course RPs already do this as part of the VfM statement.

Planning and design can play an important part in building communities and residents have said that their involvement is usually after a planning application has been made and the paper asks how this can be addressed. This seems really to be an issue for the planning departments of local authorities, in engaging both residents and RPs earlier, however, if RPs are to involve residents in the development of their schemes then there is a question as to how this could be resourced and managed. It could have an impact on the speed at which an RP can bid on a scheme or a land purchase, or engage contractors, which could be detrimental, especially if an RP is competing with private developers.

5. Expanding supply, supporting home ownership

In a nutshell

It comes as no surprise that the paper notes the lack of social and affordable housing available. The solution proposed involves the pulling together of RPs, local authorities, private developers and central government to increase the number of houses built. Some of the proposals are around the housing borrowing cap for local authorities and whether the balance is right between the provision of grant funding for RPs and the housing revenue account for local authorities. It is refers to the use of local housing companies.

Once again community led housing is suggested as playing a role in creating affordable homes as well as involvement in resident led estate regeneration.

The government also wants to give RPs more certainty to deliver affordable housing, including building on strategic partnerships and providing funding certainty over longer periods. As well as this, there needs to be a secure economic regime, to provide confidence to lenders and there is a call for evidence regarding the continuation of assurance for lenders which can be found at https://www.gov.uk/government/consultations/review-of-social-housing-regulation-call-for-evidence.

There is also a proposal to collect evidence in relation to certain matters, including how RPs work with local authorities in allocating social housing.

The voluntary right to buy pilot is being used to test how it work in practice within RPs. A new feature will also now be tested, using a ‘portable discount’ which allows a tenant to move their discount to a different property, where their home is not for sale. The focus seems to be ensuring that social housing is a springboard for home ownership, as well as developing new hared ownership products to address the barriers faced by current shared owners in staircasing.

What it means for RPs

The issues that RPs may face with community led housing are already addressed above.

The focus on home ownership is unsurprising. The proposals on funding new homes will help address this, however, the question remains as to whether this will address the issues raised by the RTB proposals and the loss of social rented stock. The paper overall discusses affordable housing, but, largely in relation to home ownership, and the fact remains that social rented accommodation is, and will always be, needed. The government must take care that in the focus on home ownership, social housing tenants are not overlooked and there is a supply of rented homes available.

In respect of home ownership, RPs, will need to think about the RTB proposals and how this will affect their stock levels, and what plans they may need to replace those properties. They will also need to think about ways in which home ownership can be achieved, and perhaps come up with new ways of doing so. One problem with home ownership is of course geography; what works in one area will not necessarily work in another and RPs will need to know their market, but the government will then need to ensure that it responds to the need, rather than offering a set number of initiatives which many RPs may not be able to make use of, due to their demographic.

Final thoughts

There is some, what we may regard as confusion in the green paper however. The paper refers to landlords as covering anyone who rents social homes to people (including shared owners and leaseholders). Therefore the paper does not recognise that much of what is put forward is already being done by RPs, nor does it recognise that RPs are regulated, unlike private landlords who may rent social homes but are not RPs. The only distinction made is that where a matter refers to RPs only, it uses the term tenants, rather than the term residents, which it applies to those living in social housing but whose landlord is not an RP.

The upshot of this seems to be that whilst RPs will be in a position to deal with whatever changes are implemented, no recognition is given as to the cost of that, or that the income of RPs is largely from public funding and/or funders, who act in the background as a quasi-regulator in many ways; they are not in the same position as private landlords, either in respect of needing to change their practices dramatically or in respect of funding those changes.

However, if changes are to be made, then be made they must, but the question remains how RPs are supposed to reconcile additional costs in doing so with the government’s position that RPs must also take responsibility for building more housing.

It seems that whilst the paper goes some way to addressing the very important issue of service standards and sanctions for non-compliance, the bigger questions are perhaps what is the government’s view of the role of RPs and the regulator.


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