Consumer regulation unpacked

Regulatory changes

The impending regulatory changes underscore a holistic transformation in regulatory expectations initiated in the aftermath of the Grenfell Tower and Awaab Ishak tragedies and to deal with the problems they highlighted.  Focusing on safety, transparency, energy efficiency and customer satisfaction, these changes herald a new era of accountability and responsiveness towards customers and their needs, across the social housing sector.

Consumer standards

Renamed for clarity in some cases and bolstered by a swathe of additional requirements, the new consumer standards emphasize accessibility, transparency and accountability. Tenants can expect comprehensive information about their rights and their landlord’s obligations and performance. It’s intended to foster a more informed and empowered community of residents able to hold their landlords to account more directly under the co-regulatory system.

Regulatory approach

From 1 April, in-depth assessments will be replaced with inspections. For large RPs (above 1000 units) these will be routinely scheduled. For small RPs, they will be reactive. Inspections will include scrutiny of how RPs deliver against the consumer standards (as well as the economic ones for private RPs) and tenants will be involved.

The RSH’s remit is expanding in other ways too. For the first time, local authority RPs (LARPs) will become directly regulated by the RSH for their compliance with consumer standards. They will be subject to inspections (as all RPs will be) and, for large ones (above 1000 units of housing stock), a regulatory grading.

The RSH will have more extensive enforcement powers against RPs including imposing performance improvement plans, a more formal form of the much-used voluntary undertaking and action plan. The cap will be removed from the current low limit on fines for non-compliance and we can expect the RSH to use them to send clear messages out to the sector about the financial consequences of non-compliance.

Regulatory gradings

All RPs can receive a regulatory judgment under the new system, with regulatory notices being phased out. Large RPs (both LARPs and private RPs) will receive a consumer rating from C1 to C4. C1 rated landlords will demonstrate good compliance and an appetite and ability to address individual failings effectively, using learning loops to drive continual improvement. C2 rated landlords will need to work on their weaknesses and devise and publish an improvement plan to get to C1. C3 and C4 rated landlords will have to have a plan too and the RSH will engage heavily to ensure this is delivered. Transparency with tenants is key.

Regulatory breaches

The RSH expects RPs to be open and transparent with it and with their customers when things go wrong. But with so much more regulation to comply with and the removal of the serious detriment test, RPs will be faced with difficult choices about whether to self-refer. Guidance issued by the RSH into its decision-making will help and we are working with the NHF Governance Forum to publish a toolkit to support RPs in assessing breaches and near-misses (contact us for more details). Meanwhile, organisations need to adopt a consistent approach and should take advice where they think they may be in breach.

Helping RPs to compliance – our five top tips

Data and compliance

The pivotal role of data in ensuring and demonstrating compliance with the new consumer standards cannot be overstated. From housing conditions to tenant satisfaction and hazard management, data-driven approaches are key to meeting the RSH’s requirements.  Many RPs are finding their data is scattered, incomplete and inaccurate and are investing in single-platform ‘one truth’ systems to address this. RPs need to ensure they understand the condition of their homes, their investment needs and the vulnerabilities of their customers so that they can make sure their needs are met effectively.

The route to C1

All RPs must strive to be C1. RPs that are rated C1 are not perfect, but when things go wrong, the RSH is confident they can address issues effectively and appropriately and learn from their experiences to improve for the future. To get to C1, RPs must be able to identify compliance breaches quickly when they arise, proactively and effectively remedy them and use the learning they gain to prevent the same things from happening again.

Transparency

Transparent governance is foundational to regulatory compliance and underpins two of the three limbs of the co-regulatory structure the RSH has adopted: the ability of tenants to hold their landlord and its performance to account and the RSH’s assurances on the RP’s compliance. The Transparency, Influence and Accountability Standard now requires tenants to be given information about their landlord’s legal obligations relating to their homes and services including decent homes, health and safety legislation, tenancy rights, notices in respect of repairs and rights for disabled tenants to have reasonable adjustments made.

Tenant influence

Co-regulation is about empowering your tenants and customers to influence the organisation so its services and homes meet their needs. You need to show how you are involving your tenants in making key decisions and setting strategy, how you change your plans based on their feedback and how this results in better outcomes for customers. You need to keep records to show your tenants, the regulator and other stakeholders how the tenant’s voice is heard and acted on throughout the organisation.

Leadership and culture

These bookend your ability to comply with the regulatory standards and deliver good outcomes for customers. Leaders need to set and drive through the organisation a culture that is open and transparent, tenant-centric and invested in continual improvement.

Summary

As the social housing sector prepares for regulatory upheaval from 1 April, a proactive and informed approach is indispensable. By embracing transparency, accountability and tenant-centric practices, RPs can navigate the evolving regulatory landscape with confidence, ensuring the well-being and satisfaction of their customers remain at the forefront of their endeavours.

In the journey towards regulatory compliance, collaboration, innovation and a steadfast commitment to customer welfare will be the cornerstones of success.

For further information and support around compliance with the new consumer standards and other changes to housing regulation, please contact Victoria Jardine, partner, Catherine Simpson, senior associate, Peter Hubbard, managing partner or Sarah Patrice, partner.

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