DTP are pleased to share our latest DTP Briefing which we prepare on a quarterly basis. The aim of our briefings is to provide useful updates on relevant sector content, highlight where DTP can assist in providing support and advice on any issues arising from these and to publicise recent DTP social media activity, future events and content. The briefing is shared with our clients, on our website and via our email footer. As always, we welcome feedback and suggestions for future content – please email s.jackson@dtp.uk.com with any thoughts or suggestions.
Our aim is to ensure that our updates reach every relevant individual within your organisation, allowing us to share more social housing sector knowledge. To add a colleague to our mailing list, please visit our website home page and sign them up via the link at the bottom of the page https://www.dtp.uk.com/
Finally, we would like to thank our clients for their ongoing support, we look forward to continuing to work with you and your team.
If you are reading this briefing and are not currently a client, we are happy to have a short call or virtual meeting on a gratis basis, to discuss any challenges you may be experiencing and explore how we could support you. Please contact a member of the team for an informal discussion.
It has been a very busy and interesting few months, particularly with the announcement of the General Election and, as was widely anticipated, the UK awoke on the 5 July to a new Labour Government. What does this mean for the sector? What can we expect to be their priorities? We unpick and reflect on the manifesto pledges made below. Angela Rayner is our new Deputy Prime Minister and in England, Secretary of State for Housing, Communities and Local Government, Matthew Pennycook is the new Housing Minister, previously Shadow Housing Minister since 2021, and Jim McMahon Minister of State. Phrases from the Conservative Government such as ‘levelling up’ have gone and Labour has made a commitment to ‘grown-up politics’ and ‘governing in the national interest’. In Scotland, new First Minister John Swinney retained Paul McLennan as Minister for Housing when he took office in May. Welsh First Minister Vaughan Gething stepped down from his post on the 16 July and we await the outcome of a further election for news on his successor.
A ‘Change’ for Housing
Following the election of the Labour Party to Government, here is a reminder of the manifesto pledges which we can expect to see being developed over the coming months:
Delays and cancellations in house building starts have been widely reported and, although the new government is determined to drive a reversal to this trend, there remain significant pressures on business plans. We are seeing some Registered Providers struggle to get schemes to ‘stack up’ due to rising costs, with schemes often needing to be appraised over longer periods of time which can increase risk. If changes in government policy make it easier and more attractive for private housebuilders to develop, social landlords may face increasing competition and rising land costs, adding yet more risk to new development. We are anticipating that providers will no doubt want to review development strategies and associated risks in light of government changes. If you have any questions or queries, DTP can offer support in this area, please contact:
Senior Consultant Andy Chapman – 07974 766723 or a.chapman@dtp.uk.com
Managing Director Andy Roskell – 07977 464459 or a.roskell@dtp.uk.com
We understand that the Charted Institute of Housing, National Housing Federation and Local Government Association have already written to Angela Rayner urging swift action to address the housing crisis and enormous under-funding of the sector, and we await to see the early steps the new government will take, with the Autumn Statement pivotal in setting out their intentions.
Keep a look out for DTP blogs and podcasts that we will release as future policy and regulatory direction unfolds further.
Assets and Liabilities Registers – what you need to know
Assets and Liabilities Registers (or ALRs as they are more commonly referred to) are a fundamental requirement of the Regulator of Social Housing’s (RSH) Governance and Financial Viability Standard and something that all Registered Providers should have in place. They are a working tool, something providers can use to support the business in a variety of different ways. Marcus Evans (Senior Consultant) will be releasing a podcast and blog on this subject very soon – keep a watch on our social media channels and website to find out more about:
For any advice or support in this area, please contact:
Senior Consultant, Marcus Evans – 07977 690455 or m.evans@dtp.uk.com
Regulatory Judgements overview and lessons learnt from downgrades
Overview
The RSH regularly updates its regulatory judgements and enforcement notices table which is available to download here:
Regulatory judgements and enforcement notices, and gradings under review – GOV.UK (www.gov.uk)
We’ve provided a summary of the most recent regulatory judgements/gradings published by the RSH during the Quarter Four 2023/24 (Jan-Mar 2024) below and encourage all Boards and Executive Teams to keep abreast of the learning arising from these judgements and gradings.
There were 37 judgements published during the quarter four period:
The outcomes of those 37 judgements on gradings were as follows:
The RSH is currently investigating one small provider in relation to potential failings in delivering the outcomes of the Governance and Financial Viability Standard.
Consumer Standards Gradings
The first publications of consumer gradings were announced recently, resulting from reactive engagement rather than planned inspection.
Three local authorities and one housing association were assessed as C3 in relation to the Safety and Quality Standard with issues concerning significant volumes of outstanding repair work, failure to meet required timescales for repairs, insufficient assurance on stock condition data and high levels of non-compliance with statutory health and safety requirements. One of the local authorities was also assessed as non-compliant with the Tenancy, Influence and Accountability Standard after failing to submit the TSM return for 2023/24.
We expect that the outcomes of the first round of ‘Inspections’ including gradings for the new consumer standards will be known by August 2024.
There are a number of lessons learnt which DTP can support organisations with to assist in meeting regulatory requirements.
Governance Downgrades
From recent downgrades in Governance gradings, we have identified several themes including poor risk management, weak internal controls and insufficient assurance frameworks (including inadequate reporting to Boards), all of which has resulted in providers being exposed to a greater degree of risk and some key risks materialising. Incorrect classification of stock resulting in poor/inaccurate data used by Boards in decision making/rent setting and regulatory reporting also feature in the recent judgements. The presenting issues, which range from health and safety compliance through to financial management, all stress the importance of accurate data, robust reporting and strong Board oversight from an interested and engaged Board. DTP has a strong track record in supporting organisations in addressing non-compliance, strengthening governance and ensuring remedial action is appropriately embedded to evidence real change.
Viability Regrades
The sector is used to seeing changes to viability gradings, in particular from V1 to V2. The main consistent reason identified across recent viability regrading is the weakening of overall financial performance, headroom, and loan covenants due to development activity reducing the financial capacity to deal with adverse effects.
Other Regulatory Judgements and notices
The RSH has also published notices relating to breaches of the Safety & Quality Standard due to overdue compliance works and high number of unresolved damp, mould and condensation cases.
In the notices, the RSH identified concerns with one local authority’s health and safety compliance data on review of their fire remediation survey.
Through subsequent responsive engagement, it was identified that the local authority could not provide sufficient assurance across electrical safety, smoke and carbon monoxide alarms, asbestos surveys or fire safety for a significant proportion of homes.
The same local authority had limited up to date stock condition survey data and a very high number of open damp and mould cases and outstanding reactive repairs.
Another local authority was found to have high levels of outstanding repairs, overdue planned works and insufficient assurance on stock condition data and a third was found to lack consistent processes and reliable data to ensure compliance with key health and safety requirements.
The actions required to address these issues include the need for accurate stock data, effective compliance systems, robust senior oversight, appropriate investment planning and a governance framework that ensures the Board is fully sighted on these critical areas.
Responsive engagement by the RSH has also led to a finding of “serious failings” against the Rent Standard for one local authority provider. The Regulator determined that the local authority had overcharged about half of its tenants as a result of errors in rent setting over a prolonged period.
Whilst the learning points in this section are specific to each social landlord, they all reinforce the need to ‘get the basics right’ and for regular assurance at Board level based on accurate and comprehensive data.
DTP can offer support and advice on any area of regulation, strengthening compliance and providing appropriate assurance on compliance for Boards. For further information in this area please contact:
DTP Director Angela Lomax – 07702 213809 or a.lomax@dtp.uk.com
Consumer Regulation Review
The RSH has just published its annual review of consumer regulation work for 2023-24 providing essential learning for social landlords and reinforcing the need for landlords to adhere to the regulatory standards. As the report relates to work in 2023-24, it references the previous consumer standards, but the learning applies directly to the current standards.
The Consumer Regulation Review confirms that Regulator received 986 referrals in relation to the consumer standards in 2023-24 – a 5% increase on the previous year. All cases were assessed and 217 were investigated with 9 landlords found to have failed to meet the consumer standards.
The report summarises the learning into four key themes that landlords must meet:
The report emphasises the overall requirement for landlords to meet the required outcomes of the new consumer standards and to refer themselves to the RSH when they find a material issue, or potential material issue, so it can be resolved promptly if required. For further reading please use this link:
Consumer regulation review – GOV.UK (www.gov.uk)
Regulator of Social Housing Inspection
DTP has worked with six clients in the quarter one inspection programme and we continue to work with several more scheduled for quarter two. We understand from our clients that the process has been comprehensive and robust, but also undertaken in a collaborative and positive manner which has added value to the organisation. At DTP we have welcomed the opportunity to support our clients through this process and thank them for the mutual learning derived from this process.
DTP offers a range of flexible support to ensure that executives, non-executives and customers are well prepared and confident in understanding of the process and their respective roles. Our support ranges from reviewing key documentation which will be submitted to the regulator during inspection, coaching of colleagues and Board members, undertaking meeting observations and providing feedback and guidance for strengthening governance. We seek to add value to your own preparations and to draw upon our extensive experience and continued learning. To learn more, have a look at our DTP Blog: Inspections and beyond: Embracing the new regulatory regime in social housing, listen to our recent podcast (https://youtu.be/S52AxO527d8) or contact:
DTP Director Angela Lomax – 07702 213809 or a.lomax@dtp.uk.com
Tenant Satisfaction Measures (TSM) Results
Tenant Satisfaction Measures (part of the Transparency, Influence and Accountability Standard) aim to give tenants clear, comparable performance information to help them understand their landlord’s performance and hold them to account.
All large social housing landlords (and some small landlords) have now collected data for the first full year and provided their results to the RSH. Most have also now published results on their websites.
It is worth noting that there will be variation in results through landlords utilising different collection methods and as a result of factors such as tenure type, tenant age, ethnicity, accommodation type and geographical location of tenancies. Many landlords have also faced data quality challenges and although they will have worked hard to address these over the past year, it is probably fair to say that there will be further data refinement to come. All of this means that the TSM results should be seen as a useful tool to prompt questions, rather than as a definitive set of comparable results.
So, with that said, what do we know so far? In June, Housemark published a report that noted a downward trend in overall tenant satisfaction with challenges around how landlords are handling communication, complaints and ASB issues with satisfaction in complaint handling being the lowest scored area. Housemark data showed that fewer than 60% of respondents to the TSM questions felt satisfied with the way their landlord listens to tenants and acts on their views. The data also showed a clear correlation between satisfaction with repairs and maintenance services and overall satisfaction.
Key to driving improvement in TSM results is an understanding of how the principal outcomes required by the Transparency, Influence and Accountability Standard are woven through the other Standards and need to be woven through the way that a social landlord operates. Treating tenants with respect, understanding their diverse needs, acting upon their views, ensuring that communication is clear and timely and that processes are designed with customer outcomes in mind should be the objectives of all teams across all areas of the business. Boards will want to seek assurance that collaborative working is effective within and outside of the organisation and the Regulator will expect to see evidence that the Board is aware of the specific challenges faced by their organisation and is tracking the progress of improvement plans. It is also important that landlords communicate with tenants their plans around addressing areas of underperformance.
DTP colleagues have had the privilege of being able to support landlords across the UK with the identification of key issues and development of improvement plans to help strengthen compliance with the consumer standards and drive customer satisfaction in the right direction.
We can provide advice and support in a variety of areas including the approach to data collection for TSMs and the interpretation of the RSH’s requirements, scrutinising the completion of self-assessments against the consumer standards, preparing for RSH inspection as well as undertaking tailored governance and service area reviews. If this is an area that you would like support or advice in, please contact:
Senior Consultant Diane Carney – 07588 849784 or d.carney@dtp.uk.com
Senior Consultant Mags Pearson – 07857 371923 or m.pearson@dtp.uk.com
You may also find our recent podcasts useful which provide insight into the use of data and the consumer standards more generally.
If you would like to discuss anything around rent setting and the Rent Standard, please contact:
DTP Director Sarah Jackson – 07983 523574 or s.jackson@dtp.uk.com
Senior Consultant Keith Edwards – 07894 009815 or k.edwards@dtp.uk.com
DTP continues to support a range of clients who are going through or considering merger. We have seen a steady rise in interest in merger activity generally, with providers also asking for support in reviewing their ‘merger appetite’ and the production of merger appetite statements. Our services in this area include facilitating Board workshops, undertaking due diligence and project managing merger activity. To find out more, please contact:
DTP Managing Director Andy Roskell – 07977 464459 or a.roskell@dtp.uk.com
New Appointments
DTP has welcomed three new team members,
All three appointees also hold non-executive roles, further enhancing our team’s diversity and expertise. If you would like to get in touch with Marcus, Mags or Kate, you can find all of their contact information via our website Teams page https://www.dtp.uk.com/team/
DTP offer a range of training and workshops for Boards, Committees, Executive Teams and colleagues which can be tailored to your individual requirements:
If you would like to find out more about any of these, please contact s.jackson@dtp.uk.com
We’ve released a variety of podcasts since our last briefing, with links provided below, all aimed at providing valuable insight and sharing good practice.
The Regulator of Social Housing’s Consumer Standards – Initial Impact
The New Inspections Regime Explained
The Data Advantage – Achieving Compliance in the New Regulatory Regime
Business and Financial Planning for Small Housing Associations
All of our podcasts are available on our YouTube channel here DTP – YouTube
We regularly post a variety of DTP views and updates via our social media activity. If you have not already had chance to review these, please follow the links below:
Inspections and beyond: Embracing the new regulatory regime in social housing
Key considerations for social housing providers under the Regulator’s new Consumer Standards
You can also ‘follow us’ on LinkedIn by using this link DTP LinkedIn
We hope that you’ve enjoyed our most recent briefing, don’t forget, feedback as always is greatly appreciated – please contact s.jackson@dtp.uk.com if you have any feedback that you would like to share.
