06 January, 2009
The start of the New Year will also see the beginning of a new system of regulation being created for social tenancies. Introduced on December 1 2008, the Tenant Services Authority (TSA) replaced the Housing Corporation in overseeing the governance of the provision of social housing in the UK. With the tag of being the 'New Independent Watchdog' for tenants and possessing authority for ensuring fairness for over 4 million homes, the importance of implementing an equitable and simple system is obvious.
In mind of this, the TSA will spend the first part of 2009 in consultation with affected groups and individuals to develop these new powers. The new framework is expected to be coming into operation for housing associations in December 2009 and in March 2010, local authorities and arm's-length management organisations should also expect to come under the regulation of the TSA. The breathing space offered by the consultation period should allow interested parties to get up to speed with the powers and authority of this new body.
It should be noted that whilst the TSA is in consultation, it will operate on the basis of the Housing Corporation's powers before it was terminated. Therefore, it is important that housing professionals use this discussion phase to engage in the process in order to better understand the implications of this new organisation and what it will mean for the overall effectiveness of the sector.
Upon its introduction, references were made to the intended aims of listening to tenants' concerns, using powers to ensure a good service for all, cutting red tape for high-performing Registered Social Landlords and taking action where tenants have not been provided with a good deal. How this will be achieved is largely dependent upon the new powers supplied to the TSA.
The Housing and Regeneration Act 2008 has given the TSA a broader array of powers than those enjoyed by the Housing Corporation. However, this new authority is subject to compliance with the new set of standards imposed upon it. The Corporation's authority to undertake statutory inquires and powers related to insolvency will remain available to the TSA. The new body will also have more 'intermediate' rights not previously available.
Essentially there are two main methods by which, it is expected, these new powers will be implemented. Firstly, the TSA is able to accept a 'voluntary undertaking' in respect of any matter affecting social housing by a registered provider. Arguably this indicates that for all but the most serious incidents, there will be a procedure of the TSA investigating and identifying the problem in question and asking for assistance from the parties concerned to resolve it. Secondly, for the more severe offences, the TSA will also be permitted to serve enforcement notices in a wide range of situations to remedy specific problems. The wording of the Housing and Regeneration Act 2008 suggests that these notices can also be used for instance in significant instances of mismanagement by landlords.
Should a landlord not act in the manner prescribed by the notice, the TSA has the capability to take new and substantial action against them. It has the power to impose fines of up to a maximum of £5,000 or require the registered provider to pay an appropriate level of compensation to those tenants who have suffered as a consequence of this failure. Additionally, where a registered provider has failed either to meet the necessary standards or has mismanaged its affairs, the TSA has the authority to appoint a manager to resolve the situation or it can require them to put out to tender the management of its social housing properties.
These enforcement powers currently apply to both housing associations and private organisations. Currently no decision has been taken regarding the applicability to local authorities. Nevertheless, because of the logic of all providers being subject to similar penalties, all members of the social housing sector should be aware of the authority of the TSA. This is particularly so given that the only recourse available would be a costly and time-consuming appeal to the High Court for a review of the case.
The TSA is under an obligation to be proportionate in the use of its powers and there is a range of considerations which must be taken into account when they are used. The intention is to prevent action being taken which is hasty or which has the effect of undermining the independence of housing providers.
Under the Housing and Regeneration Act 2008, when the TSA is considering using its powers it must take into account the desirability of registered providers being free to choose how to provide services and conduct its own business, whether the failure or problem concerned is trivial in nature or more serious, whether this failure or problem is recurrent or is an isolated episode and the speed in which the failure or problem needs to be dealt with.
Arguably despite this making the use of regulatory powers more transparent and clear than at present, it could also potentially raise the likelihood of an increase in the number of legal challenges to the decisions of the TSA. This in itself could create further problems in the future that may need addressing to prevent the process becoming protracted and inefficient.
One of the key aspects of the Housing Corporation's abilities was the capacity to manage difficult situations by using its role in funding to influence housing associations. This flexibility will not be enjoyed by the TSA.
Instead, it has the power (provided it has appointed board members, if there is to be a statutory inquiry, or insolvency measures will be taken) to direct the Homes and Communities Agency to suspend any financial assistance for social housing. It is anticipated that any decisions taken regarding funding will be employed in a more flexible manner that the one previously stated, through instruments such as the memorandum of understanding between the two organisations. It does nevertheless show the potential power of the TSA and how their decisions can affect other organisations.
The anticipated new powers of the TSA could see a real change in the regulation of social housing. The penalties that may be imposed have the potential to sharpen the minds of registered providers to ensure that all tenants are able to enjoy a good standard of property. Many of the successful elements of the Housing Corporation like statutory inquiries and suspending financial assistance are also retained by the TSA.
Conversely, when these penalties are enforced, they expose some of the possible weaknesses of the new system. The flexibility which was used by the Housing Corporation is lacking within the structure of the TSA. This may make it unable to react to situations that are factually unique or 'outside' of the frameworks in place. The new transparency that this framework gives makes the decisions of the TSA more vulnerable to challenge in the High Court.
The social housing sector will have to wait for the outcome of the consultation period to determine whether this represents a new, or false, dawn in regulation.