The Regulation of Social Housing in Scotland

A Consultation

© Crown copyright 2011

ISBN: 978-1-78045-192-3

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Any enquiries regarding this document/publication should be sent to us at:

Scottish Housing Regulator

Highlander House

58 Waterloo Street

Glasgow

G2 7DA

Telephone: 0141 271 3810

Fax: 0141 221 0117

Email:

website:

APS Group Scotland SHR177904 (08/11)

Chair’s forewordiv

Introductionvi

How to participate in this consultationviii

Part 1

Section 1The Scottish Housing Regulator1

Section 2How we will regulate6

Section 3How we will monitor the Scottish Social Housing Charter15

Part 2

Section 4The Register of Social Landlords23

Section 5Regulatory Standards of Governance and
Financial Management28

Section 6How we will use our powers on inquiries and information44

Section 7How we use our intervention powers51

Section 8How we will consent to constitutional and organisational change and disposals57

Appendices

Appendix 1Regulatory guidance69

Appendix 2Equalities impact assessment70

Appendix 3Consultation questions74

Appendix 4 Glossary77

Chair’s foreword

I am delighted to introduce the consultation on our new regulatory approach. This consultation represents the start of a new era for the independent Scottish Housing Regulator and for social housing regulation in Scotland.

Social housing plays a vital role in building sustainable communities, providing good quality homes and protecting some of the most vulnerable people in our society. I want to see a vibrant and successful social housing sector in Scotland. We have a statutory objective to safeguard and promote the interests of tenants and others who use social landlords’ services.
Good outcomes for tenants will be critical. We will use all the tools available to us – including, where necessary, our intervention powers – to drive good performance. The new statutory framework for housing regulation gives us a firm basis for delivering tenant-focused, intelligent and proportionate regulation. The Scottish Social Housing Charter will also help shape our approach to improving tenants’ experience.

We will build on the successes of social housing regulation over the last thirty years. Our proposals also represent an opportunity for change, a chance to introduce new tools and approaches to deliver good outcomes and strengthen landlords’ performance. This consultation allows us to test our proposals with tenants, landlords and other stakeholders.

A set of core principles underpin how the Regulator will operate. We will be efficient in our use of resources and have an effective regulatory toolkit. We will be expert in our field, knowledgeable about the sector and analysis-
driven. We will be evidence-based in our decisions; fair, but firm when we need to be; aware of the need to manage and mitigate risk; and professional in all of our work. We will be an intelligent regulator, with the right balance between proactive and reactive regulation. We will not be afraid to challenge where we see areas of weakness. Our role will differ between registered social landlords (RSLs) and local authorities, reflecting the different scrutiny arrangements in place for each sector and the different challenges we face.

We will streamline the requirements we place on social landlords where
we can. With this in mind, we are proposing a more straightforward approach to regulatory consents for RSLs and an appropriate reduction in our regulatory guidance.

We will focus on significant risks and effective governance. We have no role in dealing with complaints from individuals, but we do have a new remit to respond to concerns raised with us by tenants about significant performance failures. We will not micro-manage social landlords as it is the responsibility of regulated bodies to manage their organisation.

I know from my early dialogue with tenants and landlords that the sector recognises the complex, challenging and critical role of a strong and effective regulator that adds value for its key stakeholders. Through our regulation of individual social landlords we will help create the environment for a sustainable and successful sector.

I encourage everyone interested in social housing regulation to consider our proposals and respond to this consultation before 25 November 2011. We want to hear your views and suggestions.

Kay Blair

Chair, Scottish Housing Regulator, September 2011

Introduction

Housing is hugely important in society.

The quality of where a person lives – and the effectiveness of the services associated with it – has a very direct, immediate and lasting impact on the person’s quality of life and life chances. One in four households in Scotland rents a house from a social landlord, and nearly sixty thousand people each year seek help because of homelessness.

This is the context for the work of the new Regulator for social housing in Scotland.

The new Regulator is created by the Housing (Scotland) Act 2010 (the Act). The Act sets out our statutory objective, functions, powers and duties. It establishes us as an independent regulator directly accountable to the Scottish Parliament. You can read more about us by looking at our website1. Our sole objective is to safeguard and promote the interests of tenants and others who use the housing homelessness services provided by local authorities and registered social landlords (RSLs), collectively known as social landlords. Our first line of sight is to the 600,000 tenants and all the other people who use housing services in Scotland.

We will regulate nearly 200 RSLs and the landlord and homelessness functions of 32 local authorities. RSLs are independent housing associations and co-operatives – many of them registered charities – and local authorities have a set of local democratic accountabilities. Both are responsible for their own performance and management. However, Scottish Ministers have recognised the unequal bargaining power of social tenants and others, such as homeless people, in relation to their landlords and to homelessness authorities, and have established a new regulator to protect the interests of tenants and others.

We fit within a broader scrutiny and regulatory framework for Scotland. We are the lead regulator for RSLs and work closely with the Office of the Scottish Charity Regulator and Social Care and Social Work Improvement Scotland. We work through the joint scrutiny framework for local authorities with our scrutiny partners and deliver through the shared risk assessment for all councils.

We will use our first year, 2011/12, to develop and consult on plans for a new regulatory framework for social housing in Scotland. During this year, the Scottish Housing Regulator Executive Agency will continue to regulate social landlords on behalf on Scottish Ministers until we assume our full powers on 1 April 2012. At that time the existing statutory regulatory framework from the Housing (Scotland) Act 2001 will cease. The existing Agency will no longer operate and staff will transfer to the new Regulator.

1

This document sets out our proposed framework for the regulation of social landlords from April 2012. It meets our statutory duties to consult under sections 4(4)(b), 25(2), 26(2), 28(4), 35(4), 36(4), 50(4), 51(4) and 54(4), of the Housing (Scotland) Act 2010.

This consultation

We welcome responses to this consultation from everyone with an interest in social housing, and we are especially interested in the views of tenants and people who are homeless or use the housing services provided by social landlords. It is also important to us that we understand the views
of local authorities and RSLs.

The diagram below summarises the timetable for this consultation. It also sets out the timetable for our separate consultation on how we will measure social landlords’ achievement of the Scottish Social Housing Charter, relative to the timetable for the Scottish Government’s consultation on the Charter outcomes which started in August 2011.

How to participate in this consultation

Structure of this document

This document explains how we will work with all of the regulatory powers and duties in the Act. As a result, it covers a range of diverse issues. We have presented the consultation in two parts, each with a number of sections. Part one sets out our purpose, regulatory principles and how we will involve tenants and others and how we will work with other stakeholders. It also explains our overall proposed approach to regulation and sets out how we propose to monitor landlords’ performance against the Scottish Social Housing Charter. We think that tenants, all social landlords and others will be interested in Part one. Part two covers in more detail how we will work with specific powers and duties in the Act. Sections six and seven in Part two are relevant for all social landlords; the other sections are directly relevant to RSLs but not to local authority landlords.

Consultation questions

To help you to respond we have gathered all the questions contained within the consultation document into Appendix 3. We think tenants and others who use housing services may be particularly interested in questions 1 to 12, which relate to Part 1. Of course we welcome feedback from all respondents on any aspect of this consultation.

We will hold a series of consultation events across Scotland and promote the consultation by attending conferences and meetings held by other organisations. These will be opportunities to hear more about our proposals and to discuss them with us. You can find more information about these events on our website.

You can respond in writing to the consultation by completing the enclosed Consultation Feedback Form. Alternatively, you can respond by using the electronic Consultation Feedback Form available at our website. We are inviting responses to this consultation paper by 25 November 2011. Please send your response to:

If you have any queries contact us on 0141 271 3827. or write to:

Consultation Team
Scottish Housing Regulator
7th Floor, Highlander House
58 Waterloo Street
GlasgowG2 7DA

website:

Handling your response

We need to know whether you are happy for your response to be made public. The Consultation Feedback Form includes questions on how you wish your response to be treated.

The Scottish Housing Regulator is subject to the provisions of the Freedom of Information (Scotland) Act 2002 and will therefore have to consider any request made to it under the Act for information relating to responses made to this consultation exercise.

Next steps in the process

Where respondents have given permission for their response to be made public, and after we have checked that it contains no potentially defamatory material, we will hold copies of the responses and will publish them on our website.

After the consultation closes, we will review all the formal responses we receive and then publish an analysis report.

We will then finalise our guidance, taking account of the responses to this consultation. We will issue the final version of guidance early in 2012, before the new powers and duties are switched on in April 2012

Comments and complaints

If you have any comments or would like to make a complaint about how this consultation exercise has been conducted, please send them to:

Head of Policy and Corporate Services
Scottish Housing Regulator
7th Floor Highlander House
58 Waterloo Street
GlasgowG2 7DA

Part 1

Section 1:The Scottish Housing RegulatorOur purpose, regulatory principles, how we will involve tenants and others and how we will work with other regulators, landlords and sector interests

Section 2:How we will regulateHow we propose to regulate social landlords in Scotland in line with the framework of duties and powers in the Act

Section 3:How we will monitor the Scottish Social Housing CharterHow we propose to monitor and assess landlords’ progress towards or achievement of the outcomes in the Scottish Social Housing Charter

Section 1:
The Scottish Housing Regulator

Our purpose

In this section we set out our2 purpose, regulatory principles, how we will involve tenants and others3 and how we will work with other regulators, landlords and sector interests.

1.1The Act sets our regulatory objective to safeguard and promote the interests of current and future tenants, homeless people and other people who use services provided by social landlords4.

1.2We will achieve our objective through effective and intelligent regulation of RSLs and local authorities which will aim to:

  • ensure the continuing provision of good quality social housing, in terms of decent homes, access to good services, and financial viability; and
  • help maintain the confidence of funders and lenders.

1.3To achieve this we will focus on ensuring that social landlords deliver:

  • strategic and effective management of housing assets (councils
    and RSLs);
  • effective governance and continuing financial wellbeing (RSLs only);
  • strong, responsive customer services and achievement of the Scottish Social Housing Charter (councils and RSLs); and
  • equality of opportunity for all (councils and RSLs).

The Act introduces a regulatory framework that covers RSLs and local authorities but also recognises the differences in the two sectors. Our focus reflects those differences.

1.4We will monitor, assess, compare and report on social landlords’ performance of housing activities and RSLs’ financial well-being and standards of governance. We will intervene, where appropriate, to secure improvement and protect the interests of tenants and others.

2 When we refer to ‘us’ or ‘our’ we mean the independent Regulator established by the Housing (Scotland) Act 2010. When referring to the existing Scottish Housing Regulator we will describe it as ‘the existing Agency’.

3 We will refer to tenants and others throughout this document to describe current and future tenants, homeless people and other people who use services provided by social landlords.

4 The 2010 Act defines a social landlord as a registered social landlord, local authority landlord or a local authority which provides housing services.

1.5We will keep a register of social landlords and publish it to give access to accurate and transparent information about the social landlords registered and regulated by us. We will approve which organisations can be listed on the register and so can access the benefits and responsibilities that come with registration. We will also remove RSLs from the register under certain circumstances, for example where they no longer operate as a social landlord.

Our regulatory principles

1.6The Act places a duty on us to perform our functions in a way that reflects best practice in regulation. The principles set out below will underpin the way we regulate:

  • Independence – making sure we exercise regulatory judgements impartially, without fear or favour.
  • Public focus – making sure the perspective of tenants and others is at the heart of our work.
  • Accountability – for the conduct of our work, our impact, costs and decisions.
  • Transparency – being open about how we regulate and the decisions we make.
  • Targeting – making sure we focus on areas of performance, risk and service delivery that are important to fulfilling our regulatory purpose and objectives.
  • Consistency – in how we apply our regulatory approach, while recognising that landlords’ different risk profile, local context, organisational set up and performance outcomes will mean that we engage at different levels and in different ways.
  • Proportionality – matching our response to the nature of the issue, the level of risk and the regulated body concerned.

Principles into practice

1.7By reflecting these regulatory principles in our day to day work, we will deliver our objective by:

  • identifying the issues that are important to tenants and others;
  • scanning the sector, market and environment that social landlords operate in to identify emerging risks;
  • directly holding landlords to account for their performance and use of resources;
  • giving tenants the information they need to understand and compare their landlord’s performance and to hold them to account;
  • focusing on good outcomes for tenants and others;
  • looking ahead to anticipate risk to RSLs’ financial wellbeing;
  • enabling responsible and effective innovation;
  • basing our engagements on our assessment of risk and ensuring that our engagement is proportionate to the risks;
  • asking only for information that we need; and
  • having constructive relationships with landlords and challenging them where appropriate.

How we will involve tenants, homeless people and those who receive housing services

1.8Tenants and others are at the heart of our work. Engaging with tenants and others will be key to effective regulation, and will help to make our work accountable, relevant and targeted. The groups we identify as service users are people who are or may become:

  • tenants;
  • homeless;
  • gypsies/travellers; and
  • owners and occupiers who receive factoring services from a local authority or RSL.

1.9There is a long track record of involving tenants in the regulation of social landlords. For example, tenant assessors5 have had a role in inspections for a number of years, bringing a valuable service user perspective and a real insight into tenants’ priorities and expectations. Registered Tenants’ Organisations (RTOs) and other residents’ groups have been engaged during inspections, and groups of tenants have provided advice and feedback on the approach to regulation and policy development.

1.10The Act requires us to consult and involve bodies who represent service users in our delivery of our general functions. The Public Services Reform (Scotland) Act 2010 also places a duty of user focus on us.

1.11All of our Board members are focused on protecting the interests of tenants and others. Two are tenants, ensuring tenant experience is embedded at the highest level of our decision-making. We will develop and publish a strategy by April 2012 for consulting and involving tenants and others, and their representatives, in our work. We will build our strategy so that we will:

  • recognise the value of effective tenant input to regulation, and develop tools to ensure we get this – this can include continuing and developing the role of the tenant assessors;
  • always engage with tenants and others when we are directly scrutinising their landlord’s delivery of tenant outcomes;
  • engage with the regional networks of RTOs on issues of strategic importance; and
  • develop a mechanism to facilitate the input of tenants and others – and their representatives – to the development, review and evaluation of our regulatory framework.

1.12There are a number of ways we can achieve this final objective. We are keen to hear views on the most effective and sustainable way for us to involve tenants and others in our work.