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Here we go again with a new independent social housing regulator

For the past five years the social housing regulator has been embraced by the Homes and Communities Agency, but a forthcoming review is likely to change that – Phil Morgan offers his take on the background to that change

 

UNTIL 2008 social housing regulation had been effectively split, with the Housing Corporation regulating housing associations and the Audit Commission, through the Housing Inspectorate, inspecting both housing associations and local authorities as a quasi-regulator.

The Cave Review, which reported in 2007, had recommended a new independent regulator covering all social housing and working through a series of standards. This was captured in the Housing & Regeneration Act 2008, which set up a new regulator called the Office for Tenants and Social Landlords (which for fairly obvious reasons was not called OFTENANT and instead called the Tenant Services Authority).

The Tenant Services Authority (TSA) carried on with the regulation of housing associations during the financial crash and consulted, successfully, on a series of standards captured in the Regulatory Framework issued in 2010.

The Homes & Communities Agency (HCA) was also set up by the 2008 Act and some simple protocols were put in place between the TSA and HCA where their interests in regulation and funding overlapped.

Grant Shapps, having been appointed as Housing Minister in 2010, then decided to follow up his five-year mission to cull quangos, announcing that the TSA was “toast”, and steering through the Localism Act 2011 which cleaved regulation into economic and consumer.

Economic regulation was proactive and focused on governance and viability. Consumer regulation was reactive and subject to a “serious detriment” test.

The social housing regulator became a part of the HCA, operating through a regulation committee, with its non-regulatory activities (offices, HR, etc) run by the HCA. The regulator, within the HCA, became more active from 2013 onwards, issuing a series of regulatory downgrades primarily on economic regulation, but with a number of downgrades and regulatory notices following failures on consumer regulation (mostly but not all health and safety related).

Pressure on the current approach to regulation came from the ONS reclassification of housing associations as public bodies, with a number of deregulatory measures put in place around consents and mergers.

Likewise the growing move to devolution, with elected mayors due in 2017, brought into question the need for an investment body such as the HCA.

In addition the social housing regulator has been unusual in that its funding has come solely from Government.

Most other regulators bring in at least some income from charging those they regulate. There is undoubtedly pressure that goes with Government being the sole funder. Social landlords benefit financially from having a regulator in place. Payment of fees would ensure more accountability of the regulator to the sector, as well as more independence from Government.

So what will a new independent social housing regulator look like? Well it won’t be the Tenant Services Authority reincarnated. The ‘serious detriment’ barrier will continue to restrict its ability to regulate tenant involvement and services.

Likewise the response to the ONS reclassification saw a further move away from the extent of regulation in place, and there will be further pressure from larger associations for greater flexibility in exchange for more development. There is also an opportunity to place tenant scrutiny within governance to cement tenants’ co-regulatory role.

There will undoubtedly be some wry smiles too, as the second independent social housing regulator in seven years is unveiled. Some of us have been here before.

 

Phil Morgan was executive director of tenant services at the TSA from 2008 until 2010. As a leading authority in tenant and resident involvement, he now works as a consultant, commentator and speaker

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