Future regulation of social housing

The Department for Social Development has published its consultation on the future regulation of the social rented sector. This is the second in a series of consultations which form part of the Social Housing Reform Programme. Other areas still to be consulted on are:

• Social housing rent policy
• Social housing and local government
• Future structures for the delivery of social housing.

“In social housing...there is a need for regulation above and beyond the generic case. Amongst the recipients of all types of public services, social housing tenants have a particular need for regulation that protects and empowers them. Alongside social housing tenants, the rest of society needs social housing to be regulated as it so significantly contributes to the shared environment and social fabric.”  Proposals for a New Regulatory Framework for Social Housing Providers in Northern Ireland, page 11

Why change the regulatory framework?

The Department feels that the current regulatory framework needs to be replaced to take account of the changing environment in the social rented sector. The objectives of a new regulatory framework are to:

• protect and empower tenants
• ensure the continued provision of high quality housing services
• assure investors including the DSD and lenders
• be an example of ‘better regulation’.

New standards

The consultation proposes a number of new standards which social landlords will need to meet. Whilst the framework is not prescriptive in setting out how landlords should meet the standards; landlords will have to illustrate what they have done to comply and will have to provide evidence. Following on from its current consultation on tenant involvement, the Department hopes that the proposed new standards will lead to a much more consumer focused social housing landscape.

The three new proposed standards are:

• A consumer standard – with the focus on tenant involvement, complaints, services and understanding tenant needs.
• A governance standard – will look at the risk management processes.
• A financial standard – will look at the mechanisms which exist to protect the landlord’s assess and public funds.

Under this new regime, routine inspections will not be carried out. Instead, the emphasis will be on landlords' ability to prove that they are meeting the standards. Inspection will only be carried out if concerns are raised that landlords are not taking adequate measures to comply.

Compliance

Under the proposals, any feedback from the landlord on what action they have taken towards meeting the standards will also have to be signed off by their tenants. This could mean that tenants will have a role in scrutinising the work of their landlord and determining whether the landlord has met the standards. Again, this is part of the Department’s aim to have more of a consumer focused approach.

Once evidence has been submitted, landlords will be rated on a scale of 1-4 across the three standards, with ‘1’ meaning that they have met the requirements of the standard and ‘4’ meaning that they do not meet the standard and that there are “issues of serious regulatory concern”. Alongside the rating, the Regulator will also produce a report explaining the rating that has been allocated.

What it doesn’t contain

The consultation is restricted to how regulation will be carried out. It does not look at who will be the Regulator. The Department has confirmed that this will fall within the future consultation on the future structures of social housing. It also doesn’t cover the private rented sector or Supporting People.

Back in February, when the Department presented their draft proposals on regulation to the Social Development Committee, there were a number of questions and concerns from several Committee members that the proposed consultation does not address regulation of the private rented sector. The private rented sector is a growing sector of the housing market and yet is subject to very little regulation. One member of the Committee asked if there was not some urgency in looking at the private rented sector; considering that so many of the queries received from constituents are in relation to privately rented housing. 

Departmental representatives agreed that there probably was some urgency in looking at private rented regulation, but that this topic is being considered by another team within the Department and so is not part of the current discussions. It was pointed out that the current review of social housing is within the context of existing regulation and a current framework. With the private rented sector, any regulation would require the introduction of new legislation and if it was to be considered at the same time it would seriously slow down the review process.

The closing date for consultation responses is 10 June 2015.