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A new deal for housing? Long-awaited Social Housing Green Paper published today

The Social Housing Green Paper, A new deal for social housing, has finally been published and will be open for consultation until 6 November 2018. Andy Lane and Dean Underwood from the Housing and Public Law Teams at Cornerstone Barristers, highlight the Paper's main features.

The Secretary of State for Housing, Communities and Local Government, Rt Hon James Brokenshire MP, has today launched the Social Housing Green Paper heralded in his Department's press release as a "new deal for social housing residents". The Paper comes some 18 months after the Housing White Paper pledged to fix the "broken housing market".

Unlike the White Paper, which focused on encouraging the supply of new homes in England, this latest expression of Government policy and intent focuses on the role of social housing (i.e. 3.9 million households) in the wider market.

Putting aside political commentary on whether the Paper delivers on either its own stated aims or England's housing needs, what does it actually propose?

Main proposals

1. Improved tenant involvement and complaints procedure – Tenants should have a greater say in their landlords' decision-making and access to a more effective complaints process.
The Green Paper acknowledges that the Regulatory Framework's Tenant Involvement and Empowerment Standard already requires landlords to consult tenants at least once every three years about the best way to involve them in the governance and scrutiny of their housing management services; and to demonstrate how they respond to tenants' needs in the way they communicate and provide services. It questions, however, whether the Framework's expectations require clarification, to ensure greater transparency and consistency nationally; whether the measures currently in place to promote tenant engagement and scrutiny are effective; and whether there is a case for greater tenant representation at a national level, on an "independent platform for tenants".

The Paper also seeks views about measures intended to give tenants a greater say in the way their homes are managed: a programme to promote the transfer of local authority housing to community-based housing associations, for example; a programme of trail-blazer landlords to develop and encourage options for greater resident leadership in the country's social housing; and a review of Tenant Management Organisations ('TMOs'), their effectiveness and possible alternatives, to give tenants greater choice and control over the services they receive from landlords.

The Government is considering how it might improve the mediation services available to tenants, after initial attempts at dispute resolution have failed; and whether it should remove or reduce the 'democratic filter' to an Ombudsman complaint, i.e. the need to channel a complaint through a designated person – a local councillor, MP or tenants' panel – or wait eight weeks before referring it to the Ombudsman. The filter may, it is suggested, be hindering the prompt and effective resolution of tenants' complaints.

In the meantime, the Government also wants to consider how it can ensure that 'designated persons', introduced by the Localism Act 2011, fulfil their role effectively; how it can raise tenants' awareness of the best forms of redress for their complaints and accelerate the resolution of complaints by both landlords' internal procedures (including introducing a procedural timeframe in a regulatory Code of Practice) and the Ombudsman.

2. Tougher regulation - The Regulator of Social Housing ('RSH') should be given greater powers to intervene in the affairs of social housing providers, to ensure proper management.
The Consumer Standards of the RSH's Regulatory Framework set out the minimum levels of service that social housing providers in England are expected to deliver to their residents. They comprise four separate standards: the Tenant Involvement and Empowerment Standard; the Home Standard; the Tenancy Standard; and the Neighbourhood and Community Standard.

The Green Paper notes that tenant dissatisfaction with the provision of landlords' services may stem from the adequacy of the Consumer Standards themselves, from the way in which they are enforced, or both. It questions, therefore, whether any of the Standards should change, to ensure that landlords provide a good consumer service, in accordance with proposed key performance indicators; and whether the RSH should be given power to issue guidance in Codes of Practice, so that landlords and tenants alike are able to recognise the hallmarks of good service.

The Government is also considering reforms to enable the RSH to take a more rigorous and proactive approach to the regulation of Consumer Standards. Presently, the RSH's ability to enforce Consumer Standards is limited by the prerequisite of "serious detriment" to existing or potential tenants – i.e. serious actual harm or serious potential harm to tenants as a result of the breach of a Standard. Its role is also reactive: the RSH responds to consumer issues as they emerge and does not proactively monitor landlord performance.

The Paper questions, therefore, whether "serious detriment" is the appropriate threshold for RSH intervention; whether the RSH should adopt a more proactive approach to consumer regulation, using key performance indicators to identify landlords' shortcomings; whether existing enforcement provisions are adequate; and what further powers the RSH might need to hold organisations such as TMOs to account.

3. Fixed term tenancies – Local housing authorities will be encouraged to give the victims of domestic violence lifetime tenancies in new homes, but the Government will not, at this time, make the grant of fixed-term tenancies to local authority tenants compulsory.

Since April 2012, all social landlords have had the flexibility to grant fixed term tenancies of two years or more, as well as existing, so-called 'lifetime' tenancies.

The Housing and Planning Act 2016 enacted changes that would have restricted the use of lifetime tenancies by local authority landlords. When brought into force, they would have required local authorities generally to grant fixed term rather than periodic tenancies; and to review them towards the end of the fixed term period to decide whether to grant the tenant a further tenancy.

Given concerns expressed about the impact of fixed-term tenancies on tenants' security and community stability, the Government does not propose to bring these changes into effect at the present time. Social landlords still have the discretion to grant such tenancies and, in that context, the Paper encourages local authorities to give careful consideration to the safety and welfare of victims of domestic abuse in particular by ensuring that, when they are offering further tenancies to lifetime social tenants as a result of domestic abuse, such tenancies are granted on a lifetime basis.

The proposal dovetails with the Secure Tenancies (Victims of Domestic Abuse) Act 2018 which received Royal Assent on 10 May 2018 but is not yet in force. The 2018 Act contains measures to ensure that lifetime tenants of social housing, who are victims of domestic abuse, are granted a further lifetime tenancy where either a) they need to leave or have left their home to escape domestic abuse and are being re-housed by a local authority, or b) where they are a joint tenant and wish to remain a tenant of their home after the perpetrator has left or been removed and the local authority decides to grant them a further sole tenancy in their current home. It remains to be seen, therefore, whether the proposal will add significantly or at all to existing protection for domestic violence victims.

4. Greater access to shared ownership – This proposal, such as it is, recognises that the minimum 10% staircasing requirement, mortgage and legal fees, and rising valuations can all prove inhibitors to shared ownership.

The proposal aims to assist tenants, previously unable to purchase a 'share' in their home, to place a first foot on the property ownership ladder. While it advances the Paper's political intent, to empower the occupiers of England's social housing, it remains to be seen whether it will be attractive enough to outweigh the proprietary and legal difficulties inherent in the concept of shared ownership.

5. Accountability – There is support for "clear, regular and consistent" data and a league table approach to monitor landlord performance to this end, though this is not the only idea under consideration. As para. 56 says: "For residents to be empowered they need good information on how their landlord is performing compared to others. While landlords have to provide residents with annual reports on their performance, residents told us that these were not always accessible to use or easy to compare."

The Government wants to reward good performance as well as "deter the worst performance". That all brings into question not just the nature of any financial measures to this end, but also the reliability and fairness of the data collected. This is especially so when consideration is to be given "to link Affordable Homes Programme funding to the Regulator's governance rating as well as the viability rating".

Tenant input is a fundamental issue running through much of the Green Paper, not least Chapter 3, and at para. 81 it will be noted that the Government is considering a new stock transfer programme "to promote the transfer of local authority housing particularly to community-based housing associations", as referred to above.

6. New borrowing capacity for local authorities – The provisions set out in the Housing and Planning Act 2016 (sections 69 to 79) to allow for the funding of the voluntary right to buy by means of the sale of higher value vacant council stock has been dropped (and will be repealed), and rather will be left to local discretion. The Green Paper also talks, at Chapter 5 when addressing the need to increasing the supply of housing, about "unlocking" additional supply through company land trusts and local housing companies.

The sale of higher value properties was the means by which the voluntary right to buy for housing association properties was to be funded. It must cast doubt on the Government's intentions in relation to this policy, though it is also true to say that a Midlands pilot scheme was mentioned in the Autumn budget last year and guidance produced in May of this year in support of it. In addition, there is a brief public expression in this Green Paper of continued support for the policy (para. 190).

The Green Paper also expressly acknowledges the role of local authorities in building more (council) housing and is looking again at the borrowing cap, presently set at £29.8 billion, particularly to try and ensure capacity is located in the areas where it is most needed.

It is especially interested in whether the right balance has been struck between grant funding for housing associations and housing revenue account borrowing. This will be an evidence-based "review" of current measures, against the backdrop of needing to "drive down public sector debt".

Finally, the Government remains keen to ensure that housing companies are not seen as a "way around" the right to buy and provides at para. 156: "Where our consent is required for schemes to go ahead, local authorities should explain how they plan to make a home ownership offer to tenants of any new affordable homes."

7. Housing Association funding – The Green Paper proposes to help the supply of affordable homes by providing funding certainty and by means of an extension of the "strategic partnership" approach.

The Government is looking at extending the funding certainty that currently applies to existing strategic partnerships for a period beyond 2022 and is keen to know what impact that would have on the level of affordable housing that could then be made available.

The consultation on the Green Paper will run until 6 November 2018.

Alongside the Green Paper, the Government has announced two reviews:

  • Looking at the use of proceeds from right to buy sales (such as extending the time a local authority can keep such receipts from the current 3 years) with a view to helping local authorities replace properties they have sold.
  • Reviewing Social Housing Regulation in the context of both the economic regulatory regime and consumer regulation. As part of this review, the Government will be looking at how the former can "continue to provide lenders with the assurance they need to invest in new affordable homes".

The Cornerstone Barristers Housing Team is able to provide the expertise to support those responding to this consultation. Please contact clerks@cornerstonebarristers.com for more information.