In this briefing, I have set out some of the key proposals and issues that social housing providers will need to consider from a Regulatory perspective together with some thoughts from my colleague Catherine Simpson setting out some of the Governance concerns.

The Regulator of Social Housing will now have a mandate to proactively monitor providers' compliance with the Consumer Standards. In addition to the introduction of an explicit obligation to ensure resident safety within the Consumer Standards, the Government also propose to remove the “serious detriment” test. 

This significant shift will allow the Regulator to intervene where there have been breaches of the Consumer Standards at a much lower threshold, rather than having to wait until tenants are at risk of serious harm. The removal of the “serious detriment” test raises the important question of what standard will be applied. A clear, realistic and objective standard will have to be established, against which compliance can be measured.

The proposals set out in the White Paper will prompt systemic changes and a move towards the proactive regulation of service delivery that we see in other sectors – most notably, the type of regulation conducted by the Care Quality Commission for the health and social care sector. It is also proposed that the Regulator’s enforcement powers will be enhanced; for example, the cap on the level of fines the Regulator can impose will be removed and the Regulator will be empowered to require Performance Improvement Plans from providers who fail to comply with the Consumer Standards.

Whilst all of this will be welcome news for residents, who have all too often felt ignored when raising concerns, it is critically important that the revised Consumer Standards and any new code Code of Practice are sufficiently detailed to ensure that any changes to consumer regulation are meaningful and enforceable. The proposed inspection regime will need a clear framework to be supported with guidance on the areas the inspection will cover, how the inspection will be conducted, the input providers will need to have before and during the inspections, the publication of reports and an effective and efficient right of review.

It is proposed that a new consumer regulation team will be housed within the Regulator. There was concern that the introduction of a separate regulator responsible for monitoring compliance with the Consumer Standards would cause confusion for stakeholders and residents. Furthermore, the Regulator often interprets the failure to comply with the Consumer Standards as an indication of wider governance weaknesses/failures, flowing from a lack of board oversight, which in turn can result in breaches of the economic standards (i.e. the Governance and Financial Viability Standard) and lead to regulatory downgrades. On that basis monitoring compliance with both the Consumer and Economic Standards and how they both can impact on one another will remain within the Regulator’s remit.

However, it is unclear how the rigorous inspection regime proposed can be resourced, at a time when the Building Safety Regulator is struggling to recruit experienced inspectors. In order to complete effective inspections, regulators require significant resources, appropriate levels of staff and the requisite level of expertise. The inspections may need to cover a wide range of areas – including health and safety compliance, building repair and maintenance, anti-social behaviour, the allocation of housing and consumer engagement and service delivery. Each of these areas requires specific expertise but also there are well-known shortages of experts, especially in relation to building and fire safety. 

Though the White Paper gives the assurance that the Government will enable the Regulator to hire “senior leadership and staff with the right expertise in consumer regulation”, there may be a significant challenge to recruit individuals with the necessary competence to conduct effective inspections.

To see additional perspectives from our Housing Management, Housing Litigation, Governance and Commercial and Construction teams, please see our full ebriefing here.