Co-regulation – cutting the red tape?

Published by Hannah Wooderson for 24dash.com in Housing

April Fool’s Day is perhaps not the most auspicious date to welcome in a new era for social housing. But on April 1 this year, the Tenant Service Authority’s new regulatory regime for all social housing providers came into force. Kate Murray puts the new stream-lined system into perspective.

After more than a year of debate, some 27,000 responses from a “National Conversation” with tenants, thousands of pages of consultation papers and a touring pink camper van, the TSA will finally take on the responsibility for ensuring all social housing providers deliver quality services to their tenants. So what can we expect from this brave new world?

The TSA says its new regime has tenants firmly at its heart. There will be new freedoms for landlords, in return for greater openness, accountability and genuine tenant involvement. Landlords will have to meet a set of six national standards, and, just as crucially, will be expected to draw up their own local standards with their tenants to address local concerns.

Not everyone is convinced. The TSA might have only months to prove itself, if comments by shadow housing minister Grant Shapps are anything to go by. He’s been less than impressed by what he calls the TSA’s “slow progress” and has already warned that the current set-up might not survive under a Tory government.

But if TSA chief executive Peter Marsh is worried that the regime his team has taken so long to establish is under threat even before it launches, he’s not showing it. “If you ask ‘does the political uncertainty make the job easier?’ the answer is probably no,” he admits. But he adds: “Given that the framework we have spent a lot of time on has such universal acceptance and will become applicable from April, my strong advice to boards is don’t wait until the outcome of the general election before you take it seriously.”

“What has been very welcome is that people are now saying we have got to the right place,” he insists. “This is not about the TSA as an institution, it’s about the need for a regulator to stand up for consumers and stand up for public and private investment. Those two fundamentals stand irrespective of the name above the door [at the TSA offices] in Manchester or Maple House.”

Despite the political pressure, many in the housing sector have been won over by the TSA’s vision of “co-regulation”, where landlords will be subject to fewer top-down rules and regulations and will work with their tenants to improve the services they offer.

David Orr, chief executive of the National Housing Federation, insists it would be a “monumental shame” to dismantle the TSA just when it’s ushering in a positive new regime for social housing providers. “I think it’s a major step forward and I’m not convinced people have understood the extent to which what is being proposed is a pretty fundamental change,” he says.

The federation is particularly encouraged by the TSA’s decision to scrap a whole set of rules, which under the old Housing Corporation housing providers were expected to follow. “From 1 April, 54 guidance notes will fall,” says Mr Orr. “How absolutely absurd to have 54 guidance notes that people are meant to be following. That’s a huge burden that will go. The previous regulatory regime had put the regulator in the position of making decisions that should have been made by boards. We have now won that argument of ideas.”

Debbie Larner, head of practice at the Chartered Institute of Housing, is similarly upbeat about the new regulatory environment. She says the TSA has been “really brave” in ditching the top-down approach, but warns that some landlords will need extra support without so many rules in place to tell them what to do. “The lack of prescription is spot-on,” she says. “But there is a bit of a fear that, although that is OK for the high-performing landlords who aren’t scared of being outcome-focused, there are others who will need more help.”

“We like the standards they have come up with,” she adds. “It shouldn’t be scary for landlords to demonstrate their achievements against them.”

Yet despite the welcome for the TSA’s overall approach, there are still some issues to iron out. Smaller landlords, with fewer than 1,000 homes, still don’t know whether all the requirements of the new regime will apply to them. There’s still uncertainty, too, about the place of inspection in the new regime. And one of the big changes – the fact that the regulator will now oversee local authorities as well as housing associations – brings its own challenges. Councils and ALMOs will not have to meet the same requirements in some areas, particularly on governance and viability, raising questions about whether the new regime really can offer all tenants the same deal. “We still have concerns about two-tier elements in the system,” says Ms Larner. “It shouldn’t matter who your landlord is.”

The National Federation of ALMOs, too, has concerns that there should be more of a level playing field. And it says there are also worries about whether the regulator knows quite enough yet about the local authorities and ALMOs it is to oversee.

“It has very few staff who understand anything about the local authority sector, let alone the ALMO sector,” says NFA policy director Gwyneth Taylor. “You are looking at quite complex training to get up to speed. That is not an easy task if you have always dealt with the housing association sector - the governance, finance and legislative issues are so different. It is going to take time.”

Time, however, is in short supply for a regulator which needs to prove itself with a general election in the offing. But as April 1 looms, some are convinced that once the new regime is in place, it will begin to prove itself. “There’s a big shift coming,” says David Orr. “We need to see the thing come into place, and then people will begin to feel the difference.”

Are you up to speed with the new regime?

Get the basics right
Good governance and meaningful tenant engagement are key. TSA chief executive Peter Marsh says: “If we are going to make the new settlement work with a significant reduction in red tape, we need to ensure two vital ingredients are in place. We have got to have strong governance where board members and councillors own the vision and work with the executive to make it happen and effective tenant involvement and scrutiny. I urge people to start with those basics and everything will flow from that.” The National Housing Federation says there are ‘huge opportunities’ for boards to become the ‘custodians of the values of the sector’. “It’s very important that people pick up the opportunity and run with it,” says NHF chief executive David Orr.

Know your tenants
“One of the fundamental requirements is that you have a good knowledge of your tenants and of your properties,” says West Kent Housing Association chief executive Barbara Thorndick. “You should be making sure your services are what tenants want. If you can’t open yourselves up to your customers telling you what they like about what you are doing and what they don’t like, then what the hell is wrong with you?” The CIH’s Debbie Larner says: “You should know who your tenants are and what their aspirations are. If not, you need to be doing some serious work around customer profiling.”

Be honest
Social landlords will be expected to produce an annual report to their tenants showing just how well they are doing. Glossy PR documents won’t cut it: providers will need to involve tenants in checking how they perform.

Landlords which are already involving tenants in monitoring performance say honesty has real benefits. Kate Russell, director of policy and performance at Metropolitan Housing Partnership, says the tenant inspector team at MHP specifically looks at areas where there is resident dissatisfaction or poorer performance. “That’s the real mindshift – being open about things that are not going so well as well as the things that are,” she says. “Residents know, you can’t hide it from them, so much better to engage them in improving things.”

Reach out beyond the “usual suspects”
Traditional methods of tenant involvement are no longer enough. Social landlords will need to work hard to engage more of their tenants – and to give them real power and influence.

Debbie Larner says: “You need to think about your engagement and reach people you don’t normally talk to.” MHP”s Kate Russell says broadening the approach to tenant engagement benefits the whole organisation. “For us it’s been a win/win. People had been used to working with residents in quite a traditional way. It does open eyes, when you as an organisation have a mirror held up to you by residents.” And Juliet Craven, corporate services director at Wakefield and District Housing, says: “It is very important that our engagement structure involves all sectors of the community, not just the usual people, and that we actively ensure that we engage with those groups that are hard to reach.”

Think local
Reflecting tenants’ priorities is crucial to the new regime. Pilot projects to develop local standards are already underway but all landlords need to be thinking now about their own agreements, which will need to be in place by April 2011. The TSA will not be prescriptive about what “local” means: standards could cover a neighbourhood or a group of neighbourhoods, or they could be agreed by residents with distinct needs across a wide geographical patch. Barbara Thorndick, whose association is one of the local standards pilots, says: “Some people have got a false idea of what local standards are - they think it means lots of negotiating with local authorities. It doesn’t. It’s about a dialogue you have with your tenants.”

“At the heart of the change are local standards”

"There has been much criticism in recent months of the new housing regulator. A common cry is 'What’s changed? We didn’t need a national conversation and a pink camper van to tell us that repairs and anti-social behaviour are important to tenants!' But take a closer look at the TSA’s new regime and you’ll see that things really are changing. At the heart of the change are local standards - which will fundamentally affect the way housing providers approach both resident involvement and performance management.

"Local standards - the service level agreement (or agreements) negotiated by a landlord and its tenants – are all about delivering what tenants want. They are the cornerstone of the TSA’s co-regulatory vision. Effective co-regulation means, ultimately, that the TSA is able to step back and only intervene when absolutely necessary. Meanwhile, empowered tenants and boards occupy the regulator’s former territory – self-regulating through enhanced monitoring, scrutiny and oversight.

"Landlords will firstly need to have a strategy for how they are going to approach the whole area of local standards. Then they and their tenants will need to determine what tenants want – which are the most important services, which elements of a particular service are critical and what is the desired standard of service. Once this has been agreed, performance measures must be mapped and targets set.

"It is important to take a snapshot of performance against the measures you have chosen before you introduce the changes you need to deliver on what you have promised. Tenants should have an ongoing role in monitoring the landlord’s performance coupled with powers of redress where performance is poor.

"HouseMark has developed a new service to enable landlords and tenants to set up and monitor their local standards. The local standards tracking service is an online system, into which performance information can be entered and progress monitored and even benchmarked with other landlords. The system is flexible enough to deal with the expected diversity of local service offers, and is currently being tested by a number of the TSA's local standards pilots. It will be launched in April and will be free to HouseMark members.

"So, perhaps instead of being critical of the TSA, we should all look more carefully at its new framework and recognise the changes and challenges that it contains. We need to think now about how we are all going to deal with these challenges in order to deliver a better deal for tenants AND to improve our own performance."

Samantha McGrady
Deputy Chief Executive, HouseMark