The King is dead. Long live the King?

The internet is getting increasingly littered with dead websites from now defunct social housing regulators. The Tenant Services Authority closed on 31 March and its functions transferred to a new Committee of the Homes and Communities Agency (HCA).  Its website remains as a record of activity, just as the Housing Corporation’s web content remains online following its demise back in November 2008.

Another king is dead, long live the new king, this time the snappily titled HCA Regulation Committee, whose new regulatory framework for social housing came into effect along with other Localism Act changes on April 1st.

In his first statement as Chair of the Regulation Committee, Julian Ashby emphasised the importance of having strong management boards because ‘the operating environment has clearly changed and will get more challenging’, continuing:

‘The capacity and appetite of lenders to offer low margins and long-term debt has diminished, while Providers will need to manage the impact of changes to the welfare system and an increasing reliance on private finance placing more stress on their balance sheets. Many are diversifying and becoming more complex – potentially generating additional capacity – but also taking on more risk.’

The new framework tries hard to retain some of the language of the TSA’s now repealed framework and to emphasise the principle of ‘co-regulation’ – a strong regulator with extensive powers, clear standards for the organisation to deliver, and a key role for tenant scrutiny at all levels.  But the fact that the regulator has a new statutory duty to ‘minimise interference’ is worrying, with the implication that the Government sees regulation in a wholly negative light.  Equally worrying, the focus of the new regime is on economic regulation and value for money with only a backstop role in relation to consumer regulation; as the framework documents points out: ‘Under the Localism Act, the regulator no longer has an active role in monitoring providers’ service performance.’

Despite the inclusion of a new Tenant Involvement and Empowerment Standard, it is hard not to be cynical about the Government’s claim to be promoting tenant scrutiny.  Tenants at local level are often isolated and lack resources and have to be really good at what they do to provide an effective challenge to management.  Too many social landlords are not ‘transparent and accountable’, which is rightly seen as being ‘central to co-regulation’.

The framework states the principle that ‘tenants should have opportunities to shape service delivery and hold the responsible boards and councillors to account’ but we have all seen how easy it is to give the impression of involvement, and even to engage in frenetic activity, whilst all the key decisions are made without tenants in the room.  The new Committee will need fast feet to find ways round the rule that the regulator should only get involved in consumer matters if ‘serious detriment’ can be demonstrated.

Which brings us back to boards.  My experience of housing associations is that boards are being increasingly professionalised with a preponderance of people with business, financial, and development skills.  It is good that they want to give their time and I do not criticise those who are involved – indeed I welcome the way they have helped improve performance in these areas.  But too often the balance is wrong and it may get worse as associations move into riskier financial territory.  A quick whizz round a few association websites reveal few people with a real background in social housing, very few consumers, and even fewer representatives of local communities.

In the past, the strengthening of regulation and the introduction of inspections exposed too many organisations talking a good job but not performing one, leading to significant improvements.  The danger is that the pressure will come off service delivery to tenants and residents, things will slip back, and no-one will be watching.

So strong boards, yes, but getting the balance of boards right is just as important.

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