Examination of Witnesses (Questions 20-39)
MR ANTHONY
MAYER AND
PETER MARSH
21 OCTOBER 2008
Q20 Jim Dobbin: You used the phrase
"listening to tenants". My local authority, which is
Rochdale, has a long history of a very close relationship with
tenants. We have a very powerful tenants' resident movement, which
is well funded. What do you understand by the term "tenant
empowerment"?
Mr Marsh: The first thing is to
say is that a tenant is not just a social rented tenant. A tenant
includes the LCHO tenant and it includes the leaseholder. They
are all, in law, tenants. Different people like to use different
words, do they not? If we had Michael Gelling from TAROE, he would
tell me that everybody in social housing is a tenant first and
foremost. Others like to think of themselves as residents and
consumers. I think we need to be clear that nine out of 10 housing
association and local authority tenants quite frankly just want
to get on with their lives and really want the decent repair and
maintenance service that they think should come with the deal
of paying rent. I think the TSA, in designing its tenant engagement
standard, needs to recognise that different people have different
appetites for involvement, and it is about making sure that where
people want involvement, the involvement can take place without
forcing people to turn up to committee meetings or some survey
panels, etc. So far, since July, we have counted something like
29, at the last count, different forms of tenant engagement, from
your mystery shoppers to your tenant inspections. I am sure it
would be tempting to draw up a standard that says: Thou shalt
have 29 different forms of tenant engagement. When I have visited
different associations or different ALMOs, you can almost smell
or feel the difference between an organisation board and a management
team that believe that involving tenants is good for their business
and those that believe they should be doing it because the regulator
wants it. It is achieving that heart and mind shift from the sterile
conversation about tenant board members to demonstrating that
the more you involve tenants in their service delivery, the more
power you give them over the choices you are making on their behalf,
the more choice you offer them about how their rent money is being
spent and how their homes are being refurbished, the more pride
you get in local communities and the more empowered communities
you get. That was a rather long answer. I think this is as much
about philosophy as it is about a set of pre-set devices.
Q21 Jim Dobbin: May I add a personal
interest of my own? Where do you see housing co-ops fit into this?
Mr Marsh: The three tenant bodies
that we have been most heavily engaged with so far in the last
few months have been TAROE, TPAS and CCH. I think Nick Bliss is
a powerful voice in the property movement. Whether we are talking
about co-ops or new forms of TMO or about how committee land trusts
could become new forms of landlord, I think we need to recognise
that there is a place for small organisations and local management
and local oversight can often work very well. There is a question
about the cost structure that sits behind them and how those people
work in partnership with others to ensure that good service does
not mean expensive service. Absolutely, co-ops are part of the
portfolio.
Q22 Jim Dobbin: How do you think
you can work with the National Tenant Voice that has just been
set up? There is a challenge!
Mr Marsh: It is not a challenge.
The short answer should be "Well". If the National Tenant
Voice had not been set up by the CLG, I think the TSA would want
to establish a similar vehicle. It is difficult balancing a desire
to have a representative body formally of tenants in England whose
needs, wants and wishes are very different from West Kent to Rochdale
and from Islington to Cornwall. The NTV proposals at the moment
are doing a good job of reconciling what is a difficult task.
We have, as the TSA, a representative who has been working with
the NTV for the last three months, a gentleman called Richard
Sorensen from our Manchester office. I met with the NTV project
group four weeks ago and I outlined to them the mission and purpose
of the TSA and how we intend to take our work forward. The NTV
have welcomed our proposed informal national conversation with
tenants that we are thinking of for January. They want to work
with us to make sure that the questions we ask in that consultation
process are ones that they would want to see asked. I have offered
the NTV support in the form of the potential for them to use our
Manchester office for accommodation if they so desire it and also
to ensure that the NTV are one of the key stakeholders that we
involve in the consultation of our research programme, which I
think should be seen to be a programme that is responding to tenants'
needs. The NTV for us is a very good device to do that, but I
also think we need to make sure that our lines of communication
are open with tenants directly through all the various devices
that housing associations and local authorities have as well.
I see the NTV as a key partner but not the exclusive one through
which the TSA will hear those concerns and respond to their needs.
Q23 Jim Dobbin: You have just mentioned
housing associations. How do you see them expanding their role
or expanding the services they provide to their tenants? Do you
think there is a need for that?
Mr Marsh: One of the objectives
that we have in the Act is to consider the wider role of associations
on the well-being of local communities. I think it is probably
fair to say that the TSA has said that, certainly in our first
18 months, the work we need to do on tenant engagement, setting
standards of service delivery, even with the credit crunch, the
TSA, for the moment does not have a huge appetite for setting
a standard which should apply everywhere for that sort of activity.
We observe some excellent practice where associations are involved
in a wide variety of community activities from cre"che work
to training, acting as a signpost to other statutory services.
We observe other places where the landlord is merely a front-door
service provider. I think it is a question of what works best
in local communities. This therefore is a question for local strategic
partnerships and to ensure that RSLs and other clients continue
to take their place around those tables and respond to local needs.
There is also a question that Martin Cave set out in his report,
which is the extent to which tenants' money should be spent on
activities other than bread-and-butter services. There is an issue
but we need to make sure we get management and maintenance right
before we do too much in relation to non-core services.
Q24 Jim Dobbin: Tenants generally
suggest that they should have some choice in the services that
are provided for them. How do you think you could develop and
ensure that that choice is there, even including choice of tenancy?
Mr Marsh: The whole question of
choice of tenancy is a matter that I want our board to have a
discussion about in due course. They have not yet met. I think
I would be doing our board no service if I speculated on what
their position might be. It is a key and important issue 60 years
on from the original Bevan Act. Choice can be operated at a whole
number of different levels, can it not? Even on a fixed rental
system, you can have choice about how that rental money is spent.
In thinking about the tenancy in the Estate in Islington, I am
sure—
Q25 Emily Thornberry: I never said
that.
Mr Marsh: I know you did not say
that. It is well recorded and Councillor George recently made
a visit and said things have improved. I think I shall mention
it.
Q26 Chair: Especially that things
have improved.
Mr Marsh: Yes. I am sure the pressure
helped enormously. Tenants on an individual estate would obviously
make a different choice about the priorities of their money and
what it is spent on. Just the process of saying, "Before
we let a contract for your particular estate, we should think
about what you want out of that contract" is an example of
choice. At the other extent, there are questions about how much
more people would want to pay for a different level of service.
When I attended the TPAS conference in July, I spoke at the main
conference and stayed overnight and spoke at a discussion the
following day where we had a clever little device and the tenants
vote "yes" or "no". One of the questions we
asked was: would tenants be prepared to pay a higher level of
rent for a higher level of service? I think the assumption of
the panel was that 70% would say "no". Actually, 55%
said "yes". Therefore there is a debate about how you
provide that choice in the regular system. These are complex issues
that also impact on service charges, on DWP and housing benefit.
Mr Mayer: This debate has been
going on for years in terms of trying to get a higher level of
service to tenants, both in community facilities as well as let
us say a new bathroom or a new bedroom, etc. In terms of community
facilities, we are way off the days of the Dutch where it is standard
practice. The problem, the sticking point, where once again we
need a debate, is of course if you say to some tenants, "Right,
your rent is going up £3 a week", they will be paying
it from their own pockets; others of the tenants will be receiving
extra housing benefit and getting it for nothing. How do you square
that circle? I think once again we need to be much more imaginative
in terms of trying to achieve the implicit objective and saying,
"You are setting objectives they strongly agreed with",
without splitting the groups of tenants into those who are paying
from their own pockets and those who are not. We need a bit more
policy, I think.
Q27 Mr Betts: You were talking a
few minutes ago about action being taken in response to concerns
that have been raised by tenants, but is not one of the important
things that many tenants may have had such a bad service for so
long that they have come to accept that as the norm? Do you see
it as your role going out and saying, "Actually, we think
proactively that we should be helping as an organisation to drive
standards up, even though we are not getting complaints from tenants
because we can see that this particular association in this area
is not delivering what is being delivered elsewhere"?
Mr Marsh: It is a key issue for
us. Tenant satisfaction as an indicator is a useful one that we
will look at. I would like us to have a good, hard look at how
the current satisfaction measure actually operates. A status survey
is undertaken once every three years. I am not sure that gives
us the granularity of what people really feel at a local level.
If we believe some of the more intensive face-to-face work that
MORI has done on standards, there is a gap between satisfaction
levels overall of about 75% and what people actually really believe
if pushed hard and questioned about what they would desire. How
are we going to do this? One of the challenges for us in designing
a new Standards Framework is to avoid a "Whitehall knows
best" approach to performance indicators and avoid a threshold
"past this threshold and we will leave you alone" approach,
without being unduly heavy handed about the regulatory approach.
I think that means—and this is only thinking—that
we need to find what excellence can look like, what the very best
associations are already doing and what the very best bodies in
other sectors are doing in relation to tenant engagement and customer
service and ask boards, local authorities, ALMOs and housing associations,
to make their offer to their tenants on the basis of what the
regulator has developed as an excellence portfolio, listening
to what tenants want. Then we would make two judgments. The first
judgment we would make is the extent to which we think that offer
is stretching enough and the extent to which that offer has genuinely
been tailored to respond to what local communities want; and,
secondly, the extent to which the body is living up to the offer
that they have made. That would move us away from a 1980s or 1990s
style of regulation to one that is consumer-focused and a more
mature relationship between the regulated, their customers, their
tenants, and the regulator.
Q28 Mr Betts: There is one area you
may want to look at proactively. Certainly I can think of places
in Sheffield and I am sure they exist elsewhere—I know they
do—where you now have a few houses owned and managed by
one housing association and a few next door owned by another,
some owned by the local authority, and you have a complicated
allocation policy where people are filling in five or six different
forms to get on various waiting lists. Once they get a home, they
probably find that the other places are managed in a mish-mash
of different ways and to different standards. If they have a complaint,
they probably find that the association only has a few houses
in their area with their head office in another city somewhere.
Would you see as your top priority trying to sort out that sort
of situation?
Mr Marsh: I certainly think we
have a role here. When I moved out from Hackney last year there
were 27 housing associations operating within a square mile of
my house. I think choice is a good thing but I am not sure that
27 associations in the same street is the best way of doing business.
We need to be careful not to replace what used to be local public
monopolies with single private monopolies in particular areas.
Assuming the balance of what a healthy market in terms of housing
providers might look like is one that our board will need to consider.
I think we can and will make a difference here. Firstly, within
the first 18 months of TSA going live we will through our website,
which we need to have as a TSA website, enable tenants to log
on, enter their postcode and find out all the providers that are
operating in their locality and be able to compare those providers
on a satisfaction rating or a cost-per-home rating. I think it
is going to take some time to be able to do that on how those
providers that are operating in the locality but we will start
up with the national comparisons and then, over time, move towards
a local comparison. I know that if you can enable tenants to be
informed that their association is spending twice as much money
and delivering a worse service than the one next door, they will
be writing to their councillor; they will be writing to their
board members and saying, "This is not on". Whether
it is through the tenant trigger mechanism or through a naming
and shaming approach, I think there is a big question about what
a sensible stock rationalisation might look like, not just moving
the ownership of homes but a more sensible rationalisation of
the management. There are a few associations who began to think
that managing other people's homes is not a bad thing. It has
to be said that when we have conversations, particularly with
chief execs, they have not yet really grasped the extent to which
this is a big issue. There is an £8 billion annual spend
on management and maintenance. I think there is probably at least
£800 million, if not more, to be saved by managing these
services better. VAT is often used as an excuse. We are doing
a piece of work to scope out the extent to which that excuse is
real. My two initial observations are: if the cost difference
is 100%, then VAT is not enough of an excuse. The second observation
is that a significant amount of those contracts are already outsourced
in terms of management and maintenance contracts, and VAT has
already been paid on them. You can move the management of an association's
homes from A to B by just changing three or four individuals rather
than changing the entire staffing establishment, or just changing
who those individuals report to. I am not yet convinced that the
VAT excuse is a barrier to achieving a more sensible stock rationalisation
and a better deal for tenants at the end of the day.
Q29 Mr Betts: Your route begins with
housing associations; you are going eventually to move on to local
authority stock and ALMOs in a couple of years. What is your preparation
for that? Do you think it will bring a different set of challenges
and are there going to be some interim problems while we have
two sorts of regulation going on for houses that are often indistinguishable
and side by side?
Mr Marsh: We are working closely
with the Department for Communities and Local Government to ensure
that we bring the domain-based regulation into being as quickly
as we possibly can. We think it is possible to do this for April
2010, not that long away. Provided the Orders can be drafted and
the consultations with the LGA and others secured in the next
three or four months and secondary legislation laid before recess
next July, we would rather go out to statutory consultation on
the Standards Framework for TSA across local authority, ALMO and
RSL stock at the same time in the autumn of 2009, and turn the
2008 Act on for RSLs about a year from now, and then in April
2010 turn that Act on for ALMOs and local authorities. The reason
why I think it is important that we do that is twofold. Firstly,
I want to make sure that there is a level playing field, and a
single consultation on standards that involve local authority
tenants from day one in January is the best way of achieving that
level playing field. Secondly, I happen to think, in the context
of the review that is currently underway on the housing revenue
accounts, that on questions about the role of local authorities
as managers and developers and the position on ALMOs and local
authorities often as providers that are exceeding the standards
being met by other RSL providers in their neighbourhoods, the
one-way street of movement from local authorities to housing associations
under a revised regulatory regime becomes a two-way street. The
TSA should not be sentimental about the badge or the historical
nature of an organisation—ALMO or local authority over RSL;
it should care about the quality of the service delivery to tenants.
If that means ALMOs take over the management of homes that are
owned by an RSL and vice-versa, so be it, if it ends up
with the best offer.
Mr Mayer: There is an issue we
need to think about over the next year. I am quite clear that,
across domain regulation, means the same deal for tenants across
all landlords. This is about how you get there. It is really straightforward
for us if we get into extremis to appoint some statutory appointees
to the board of a housing association. It is probably a bit tricky
to stick a load of statutory appointees onto the housing committee
of a local authority. I think the issue is not the destination,
which is clear—the same deal—it is how you secure
that. Where I think we are going to have a lot of debate, and
I am sure you are going to be involved with that, is how you get
there, given the fact you have effectively four sets of landlords
and you might want to come on to this private sector landlords
with tenants on housing benefit; housing associations; ALMOs;
and local authorities managing their own stock.
Q30 Emily Thornberry: Can I ask you
again about your web page then? The idea of having a web page
where people can look up how good their housing association might
be is quite eye-catching. As I have already said, nationally I
do not think that necessarily gives you any information. Even
locally that would have some pitfalls obviously along the lines
I indicated in the previous question because the management can
vary so much from estate to estate. I suppose it brings up the
next question which is: how small can you drill down when you
just have two or three houses within a road that may be being
managed better than the two or three houses in the road behind,
both by the same housing association?
Mr Marsh: If we required a landlord
to break down its performance into units of two or three, or even
20 or 30, I am not sure—there must be a reasonable threshold
by which you need as a business to understand how your customers
are responding. We need a debate about what the level is. As a
regulator, the Corporation, and the CLG as the regulator of local
authorities, holds vast amounts of information. It is quite difficult
for a tenant to find that. If we can find a way of opening up
that information source from day one, even those tenants who log
on and enter the name of an association that happens to be that
landlord in their area and they say "That statistic bears
no resemblance to my experience", I do not think that is
a bad thing. If that then enables them through the tenant engagement
process to say, "Why are we not getting the deal that tenants
around the corner are getting", or conversely "why are
we getting such a better deal than appears to be the case across
the norm", then that conversation between tenants within
the same landlord can help drive up their performance across the
board. It provokes the question and information provoking the
question I think is a useful tool.
Emily Thornberry: Only if the tenant
is prepared to accept the information as being accurate. Is it
not normally the case that if you read something which is contrary
to your experience, you just therefore do not accept the information
that is in front of you. Certainly in my experience of tenants,
when you are trying to engage someone and you start giving them
information which is contrary to their experience, they will just
back off and say, "There is no point in talking to you because
you do not understand. You are not on my side".
Q31 Chair: Have you thought of making
the website interactive like restaurant reviews and things where
the tenants could actually post up their remarks about a housing
association and have a debate through your website?
Mr Marsh: That is an idea we should
take away, Chair. There can be dangers about how open you want
those conversations to be and the damage that can be caused to
reputations. In terms of the role of the NTV, then I do not see
why that sort of interactive forum should be a bad idea. Whether
or not it sits on the front page of the TSA's website, I think
we should consider further.
Q32 Andrew George: It is not your
role to regulate the private sector?
Mr Marsh: No. The current Act
does not give TSA a duty to regulate the private rented sector.
Correct.
Q33 Andrew George: The Act in section
86, and I quote, first says, "to encourage and support a
supply of well-managed social housing of appropriate quality sufficient
to meet reasonable demands". First of all, you need to consider
what the demand in any particular area may be. Secondly it says,
"to ensure that actual or potential tenants of social housing
have an appropriate degree of choice and protection". A lot
of those potential tenants who need protecting will be existing
in private rented and pretty insecure accommodation. How are you
going to discharge that particular duty?
Mr Marsh: The wording of that
particular clause in the Act is one that could give you significant
sleepless nights. I do not think the TSA alone, despite our ambition
and passion, is going to ensure that there is adequate choice
of supply, but I think we do have a role in, if you like, thought
leadership about what the current problems are, where public expenditure
is currently being targeted in regard to social rented tenants
in relation to LCHO and where public expenditure could play a
role in providing other solutions for people. Let me quote some
statistics for you. The average weekly wage of a social rented
tenant allocated a new home in 2006-07 was £185. The average
weekly wage of somebody being allocated an LCHO home was £385.
There is a big gap between those two figures. Yes, there are social
rented tenants earning £400 a week or more, but there is
a question about what a mixed community looks like, how the allocation
process operates, what the role of registered social landlords
and local authorities might be in both the social rented sector,
the intermediate sector and the full market rented sector and
how we might see that market develop over the next five or 10
years. This is a debate that the TSA should not have on its own
but needs to have in partnership with the CLG and with HCA. I
think, if we look at one of the other objectives in the Act in
relation to encouraging investment in new housing, there are conversations
that we could have with institutional investors (pension funds)
about how a new model of intermediate and social rented tenure
could create genuinely mixed communities being owned by a social
landlords, irrespective of their heritage.
Q34 Andrew George: In protecting
potential tenants, in protecting their interests, it comes back
to erstwhile tenants again, does it not, those who are on the
waiting list, that you have to have some consideration for them
as well. It is not just the supply of affordable rented housing
for them, but it is also the manner in which the associations,
the local authorities, manage their allocations policy, for example.
How do you discharge your duty with regard to the allocations
policy to ensure that that is undertaken fairly and appropriately?
Mr Marsh: In our view, the allocation
system and the allocation process is far more significant in terms
of meeting housing need than the question about new supply. New
supply matters, and the panel will know of the work that I was
involved in on the CSR and the targets that Kate Barker has set,
which were generally accepted. I do not have any easy answers
on the allocation question at the moment. I am meeting with a
group of tenants in Devon and Cornwall on 31 October. I suspect
that actually if we engaged directly with tenants and asked them
the questions about the allocation system—whether the allocation
system is operating to best effect, recognising that there is
a rationed supply here and hard decisions need to be made—the
tenants themselves, when they think about the impact of the allocations
process on the ability of their sons and daughters to get into
decent homes, the unnecessary loss of young people from communities
and the impact that has on their health and vibrancy and local
schools, etc, we would probably be involved in a more interesting
and intelligent debate about options for allocations and options
for tenure than is currently taking place in the trade press itself,
but I do not want prematurely to speculate on the scope of that
discussion.
Q35 Andrew George: Does that also
apply to transfers? Presumably the way in which transfers are
managed, in the same way as allocations, is something which falls
within your brief, does it not?
Mr Marsh: It does. You can see
some examples of where choice-based letting makes a significant
difference. One of the things that I have witnessed recently with
a large provider in London is a system whereby with every new
void that comes up that is not subject to a nomination right tenants
can express a desire to move home through a web-based system,
which is far more effective than having to go down to the local
housing office and sit on a waiting list. That for us is allowing
the more rational use of stock where it is encouraging people
to downsize from a larger family home to a smaller home because
they are making the choice about where that home is and that then
frees up properties for families in housing need in other places.
Q36 Chair: Although we have been
given evidence in the past as a committee about how that system
really does not operate where you have a huge excess of demand
over supply because people say they want a property but in reality
they have a minimal chance of that being fulfilled.
Mr Marsh: Absolutely. The sheer
numbers, particularly in central London, are such that CBL is
not going to be the answer, but what I did observe with this web-based,
choice-based approach of this large association was that what
you tend to find is that these are properties in the suburbs or
satellite towns. People are choosing to move out of London because
they are making that choice themselves, almost operating as they
would do if they were buying a home and looking on the estate
agent's website, and encouraging that sort of movement frees up
stock in London itself which helps address the more acute housing
need in the capital itself.
Q37 Andrew George: You must see there
is a potential for making a rod for your own back here, particularly
with MPs listening with lots of casework in this area as well.
Do you not see that you could have a role, in terms of dealing
with complaints and arbitrating, where there are complaints about
the way in which either local authorities or the housing associations
are discharging their duties with regard to allocations and transfers?
Mr Marsh: It is going to be a
difficult challenge for our board to define a set of standards
that begins the sort of transformation that we have been discussing
today and not find TSA at the centre of a dispute between tenants
and a landlord. It surprised me when I visited a large association
that had 50,000 homes how many calls they had on a daily basis
to their customer contact centre.
Q38 Chair: You were surprised how
many?
Mr Marsh: How many, yes.
Q39 Chair: Much more than you expected?
Mr Marsh: Much more, yes. This
association that owns about 50,000 homes had more than 30,000
calls a month to its help desk, and that is an association whose
tenant satisfaction and our general view of them are good and
positive. I currently have three members of staff in an inquiry
team in Leeds. They could not possibly deal with that volume of
correspondence. We are going to staff that team up from December
but we need to achieve a settlement that accepts that it is the
landlord's responsibility to deal with complaints. There is a
housing ombudsman that we will work with but what we need to do
is to hear where we have serial complaints that give us an insight
into more endemic issues in the provider. I think our website
could be an important tool for that, but the TSA is not here to
fix every problem directly. It is here to say, "These are
the standards that you should expect of the tenant", and,
"These are the standards that you should expect in having
your complaint dealt with", and we need to get that message
very carefully across. I have to thank colleagues in TAROE and
TPAS and the NTV who are entirely understandable about that issue
and want to work alongside the TSA to make sure that tenants understand
what our role is and what their role is in advocacy as well.
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