- January 18, 2018
- Posted by: Zina Smith
- Category: CT Blog
The Housing sector must not wait to be told what to do next, writes Greg Campbell.
Seven months on from the Grenfell Tower fire, we have seen tens of thousands of words written about the tragedy, and four inquiries and reviews commenced. Government has promised a Green Paper on social housing, and the Housing Minister is touring the country meeting tenants.
How Grenfell will affect the delivery and management of social housing longer term remains as yet unclear.
The interim report of the Hackitt Review of building regulations and fire safety was published last month, and is covered elsewhere in this issue. There are signs too of more Grenfell-related reviews. London Councils for instance are commissioning a survey of tower block tenants on communications from and to their landlords. The scale of the tragedy and the breadth of its ramifications mean that it could be years before all the reviews and inquiries have been concluded, never mind how long it takes to implement the findings. The Lakanal House inquest for instance was not completed until nearly four years after the 2009 fire.
How should social landlords respond? Plainly they cannot afford to wait indefinitely for all the lessons to be published. New homes need to be built to address housing need; existing homes need to be maintained; and tenancies and leasehold services need to be managed.
Initial emergency steps have already of course been taken by many landlords with high rise blocks, especially those with the offending cladding. It is self-evident that resident safety must be the number one priority, but concerns have been raised about whether in some cases a knee-jerk approach was taken in stripping off usable cladding that appeared to have been properly installed. It is important to recognise that cladding has been fitted to blocks not for cosmetic purposes, but to provide insulation. Remove that layer, and there will be implications in terms of energy costs (potentially worsening fuel poverty for many), condensation, and residents’ health, for example.
Some have suggested that dealing with Grenfell is about focusing on cladding and fire risk assessments. Plainly these are important elements. In reality though, the implications stretch far wider. The slide below gives an indication of the range of areas that are material to landlords, whether they have tower blocks or not.
The financial aspects are, as ever, fundamental. Removing and replacing cladding, and making other changes such as installing sprinklers in blocks is expensive – according to Local Government Chronicle and Architects Journal fire safety improvement works are expected to cost London Councils alone over £400 million. This money will have to be found from somewhere, at a time when many councils are struggling with continuing budgetary cuts, given the continuing reductions in Revenue Support Grant (for example).
The cost of fire safety works will impact in other areas too, for all social landlords. Where funds are being diverted to these areas, these will commonly come from planned and cyclical maintenance programmes, leading to refurbishment cycles being lengthened, and in due course impacting responsive maintenance, as additional short-term repair requirements emerge.
As regards new development, for some organisations there may be capital funds previously designated for new build that are diverted to remedial works. In other cases, valuations could be affected, if market demand for high rise properties falls. At this point, it is hard to judge how serious this factor is, but valuers have highlighted concerns. This could further impact on loan security, and potentially even give rise to impairments in particular cases.
What’s right for residents
We can expect a shift in the focus of social housing regulation. Under the Localism Act 2011, the Homes & Communities Agency is required to “perform our functions in a way that minimises interference and is proportionate”. In relation to the Consumer Standards (as distinct from the Economic Standards), this means in practice that the HCA will use its regulatory and enforcement powers only where it believes there has been or may be a serious detriment to tenants. A number of housing providers have of course attracted regulatory attention, either governance downgrades or regulatory notices, in relation to service failures, but these have normally been on the basis of governance weaknesses, typically in terms of data integrity. Proactive consumer regulation has been largely absent over recent years, and very limited in the case of local authorities.
Social landlords that have received downgrades or regulatory notices in relation to service failures since the Localism Act 2012:
- Arches Housing
- Bolton At Home
- Circle Housing
- First Wessex
- Gallions Housing Association
- Guinness Partnership
- Luminus Group
- Manningham Housing Association
- Merlin Housing Society
- Orbit Group
- Paradigm Housing Group
- Redditch Borough Council
- Rochdale Boroughwide Housing
- Severn Vale Housing Society
- Vincent’s Housing
- Symphony Housing Group
- Westward Housing
- Yorkshire Housing
Strictly speaking, the regulator cannot change the basis on which it regulates the Consumer Standards without a change in legislation. In practice, we may expect to see greater attention paid to these areas, and an increase in dedicated resourcing.
Alongside the de facto deprioritisation of consumer standards, since the Tenant Services Authority was merged into the HCA, there has been much less attention paid to the views of residents, nationally and often locally. Government cut funding to tenant-focused bodies such as TPAS and TAROE. And many social landlords have moved away from or downgraded the active involvement of residents in their governance structures or in relation to service delivery. Grenfell has served as a catalyst for disaffection here, and there is an increasingly widespread sense that landlords must find ways of listening to their residents. Alok Sharma’s ‘roadshows’ are an indication that government is taking this matter seriously, and social landlords can be expected to pay greater attention to resident engagement in customer services, estate improvements and regeneration.
Overall, the prime message to Boards and executives must be: do not wait for all the inquiries and reviews to complete, and do not wait to be told what is the right way forward. Rather you need to be in the driving seat, working out what are the risks and how to manage them, and what is the right way forward for your residents.
To note: a shorter version of this article first appeared on Social Housing website 10th January 2018.
Greg Campbell is a Partner at Campbell Tickell. For more information or to discuss this article, please contact: firstname.lastname@example.org