23 July, 2009
The Department for Communities and Local Government has recently commenced a consultation seeking views on the draft directions to be given by the Secretary of State to the Tenant Services Authority (TSA), the social housing regulator, under the Housing and Regeneration Act 2008.
This consultation, which began on 17 July 2009, may have significant consequences for the entire social housing sector and therefore landlords and practitioners alike may wish to be involved in the process.
The 2008 Act brought the TSA into existence and on 1 December 2008 all of the regulatory powers of the Housing Corporation were transferred to it. The 2008 Act also permits the TSA to set standards for 'registered providers' as to the nature, extent and quality of accommodation, facilities or services provided in connection with social housing. It may in particular require registered providers to comply with specified rules on a range of issues, including levels of rent, maintenance and methods for consulting and informing tenants. The TSA may also set standards for registered providers relating to the management of their financial and other affairs. When setting these standards, the TSA must have regard to the desirability of registered providers being free to choose how to provide services and conduct their business.
It is these powers which are the subject of this consultation and whether the proposed directions are workable and would assist in achieving the social housing policy aims.
The main issue to be considered by the Government and by contributors to the consultation is what issues should be subject to direction from the state and which the TSA would have no discretion over. The options forwarded are:
It can be seen from the options that the Government seeks opinions on what level and how often should directions be given: from a relatively laissez-faire approach through to one where there is a considerable amount of state involvement.
The intended effect of the directions is to set parameters on rents, decent homes and tenant empowerment policies, permitting the TSA to set standards ensuring policy continuity on these key issues, but allowing flexibility and independence for the TSA on most aspects of standard-setting.
The only policy change required by the directions is a proposed change to the formula for rent setting by housing association landlords to incorporate a minimum rent level ('rent floor') for one year from April 2010. The purpose is to eliminate the effect of any deflation over and above 2.5 per cent on landlords' rental income and reduce the chances of associations having to cut back on development and ongoing maintenance.
The intention is for the consultation period to last for 12 weeks and is due to end on 9 October 2009. Following this deadline, the responses and the final directions are expected to be published on the Department's website later that month.
This is scheduled to be followed by a consultation by the TSA on the standards and the guidance on how the powers will be used in autumn 2009 and it is anticipated that the new regulatory regime will begin in April 2010.
Due to the potential consequences of the consultation upon the TSA, and in turn landlords, those involved in social housing may wish to consider whether they wish to provide a response.