TSA’s former executive director tenant services talks about the Government’s decision to axe the regulator

Former chief executive of TPAS Phil Morgan talks to Housing Excellence about the Tenant Services Authority (TSA) review. Morgan, who also had a stint as executive director tenant services at the TSA, is now an independent consultant, speaker and commentator on tenant and resident involvement.

Morgan expressed his surprise at how much of the regulatory framework was set out in the review, “given the antipathy by Shapps to the TSA and the announcement that it was ‘toast’ before announcing the review into its future”.

He said: “So there is still a regulator that sets standards, that advocates co-regulation, that has the same role on governance and viability for housing associations and uses inspection and enforcement powers where there are serious breaches of standards.”

Morgan acknowledged that Shapps has always said that he agreed with the overwhelming majority of the regulatory framework.

Looking more closely at what the review recommends and what it means in reality, he said: “Firstly the TSA as an entity is ‘toast’. The regulator will exist as a legally separate Statutory Committee within the HCA appointed, as with the TSA Board, by the Secretary of State. Shapps gets his bednotch of one less quango whilst the legal requirements to maintain a separate body are maintained.

However ‘many of the fundamental building blocks of the current regulatory regime should remain in place’.

“This includes: one regulator, standard setting as its prime route of regulation, the same limited power of direction by the Secretary of State, registration, governance and viability of housing associations, approval to stock disposal and enforcement.

“Of particular note is that co-regulation is not only maintained but strengthened. This was the approach adopted by the TSA, and supported throughout the sector, and its continuance is a major acknowledgement that the TSA ‘got it right’.

“This means that: landlords are responsible for delivery, they are accountable to tenants, tenants should have access to information, landlords should use self assessment to gauge how well they are doing, landlords should set out how they will meet the standards and local offers should continue.

“There is greater emphasis given to being clearer about the role for tenants, although this already exists, and reinforcing that intervention is justified and proportionate, as now. There’s a clunky commitment to there being an overarching duty to minimise ‘interference’ given that no regulator would see that as their role.”

He said that there’s a lot on handling complaints, arising from the original approach whereby consumer regulation was to be left to complaints without a role for regulation.

“The problem with this is that complaints are handled with varying degrees of success and poor landlords are worse at handling complaints. Without some role for either the ombudsman or regulator complaints ran the risk of being marginalised precisely where the need to resolve them was the greatest.

“Fortunately sense has prevailed and as a result a far clearer approach is set out. In fact given the approach to minimise interference there’s a lot of detail mapped out to resolve this point. The starting point is to support local resolution, as now. However there is an additional role for representatives – MPs and councillors – and for tenant scrutiny panels.

“Currently there is a general recognition of advocates but the review goes further. Likewise the ombudsmen have an enhanced power to make recommendations to landlords where standards have not been complied with when considering a complaint. Although not explicit it’s clear that this would be shared with the regulator.

“The review proposes that the provision for the TSA to consider complaints is removed – the reality is that the TSA has already tightly defined what complaints it will deal with in light of the roles of landlords and the respective ombudsmen.”

On tenant scrutiny he said that there is “a gentle acceptance of local offers”, which he described as “odd given they surely represent localism in practice”.

He said: “The TSA’s role is seen as ensuring compliance, as now. The review simply repeats what is there now – that the regulator should set expectations, intervene if there is a serious failure, ensure engagement with local authorities through the Local Area Co-operation standard and require landlords to provide information to support tenant scrutiny.

“Tenant scrutiny will be backed up by minor changes through a Secretary of State direction. The review claims a major step by removing the power of the regulator to demand an annual report and instead this be for tenants. In practice the regulatory framework already sets out the annual report is to tenants. The review also accepts that whilst tenant scrutiny may be best served through panels it is best not to prescribe the precise way this should work, as now.”

He described the principle set out by the review – that the regulator should only intervene where there is a serious detriment to tenants – as “clearly trying to restrict the potential call for the regulator to intervene on consumer regulation.”

He continued: “However the review also sets out a list of information the regulator should take into account – complaints, performance information, local intelligence, evidence from expert bodies and whistle blowing that reflects what is currently taken into account. It also sets out who the regulator ‘must’ take account of in raising or responding to serious concerns – the ombudsmen, local authorities, MPs and councillors, tenant representative/scrutiny bodies and the Secretary of State. The ability for tenants to raise concerns will enhance their interest in engaging the regulator about non-compliance.

“Apart from spelling out more, not less detail, enforcement remains as now – all enforcement powers remains as does voluntary undertakings, intervention is responsive rather than pro-active scanning and there is an additional duty, albeit one kept already, on the regulator to feedback where tenants have raised concerns. Inspection will be commissioned on the same grounds as now – where there is serious cause for concern although the regulator will no longer offer the Audit Commission first refusal but will instead procure inspection.”

He said that following the intervention by the Treasury and substantially backed up by the Council of Mortgage Lenders economic regulation will remain, with a little emphasis added to value for money, adding: “Although it’s unlikely any landlord would not pay heed to value for money at present.”
He said that the TSA’s “rather limited” role on good practice is wiped out and a more modest approach to tenant empowerment is being taken, awaiting the outcome of the separate Tenant Empowerment Review.

“The first has been long sought by the NHF and CIH although the sector will need to be more pro-active than at present in leading good practice with no core funding. The second does also open up the need to ensure tenant empowerment in the co-regulation/consumer regulation model does gain support from the likes of TPAS and TAROE, again posing the question of funding.”

Morgan concluded that it has been “interesting watching the fees debate switch given the prospect of the regulator’s role becoming less independent” and said there has always been a case for doing so when considering how other regulators are funded, adding: “The need to preserve the independence of the regulator makes the case for at least partial funding, of what will be a far smaller regulator, more compelling.”