4 Consumer regulation
The Regulator's role
38. When in 2012 the HCA Regulation Committee
replaced the Tenant Services Authority (TSA), the regulatory role
changed.[76] In its written
evidence TPAS, a membership organisation representing over 1,800
tenant and resident organisations, told us that since "2012
there has been an opinion that TPAS hears very often, from its
members and other people in the industry, that the regulator has
withdrawn from its role in regulating the consumer standards".[77]
The Regulator explained that:
The power to collect information about performance
was revoked as part of the abolition of the TSA. There is no proactive
monitoring against consumer standards because the Localism Act
[2011] determined that that is not the role of the regulator [...]
It has left us with two specific roles: one to set standards and
the other, which is described as a backstop role, to take action
where there may be systemic breaches leading to serious detriment.[78]
The Regulatory Framework states that "the regulator's
assessment of serious detriment is based on the degree of harm
or potential harm that may be caused to tenants by a breach of
standards".[79]
We note that there is no requirement for the breaches to be systemic
for the Regulator to take action and we are unclear why this test
has been introduced.
39. The Regulator told us that "there are
at present four consumer standards" and he added that "although
we set the consumer standards, in three of them they are the substantial
result of Government directions".[80]
This answer suggested to us that the Regulator regarded consumer
regulation as an external imposition.
Tenants' understanding of the
system
40. The intention of the Government is that tenants
and landlords resolve routine problems between themselves, within
a more "localist" approach than previously;[81]
there is then a 'democratic filter' which aims to encourage local
resolution via a designated individual or body, such as a tenant
panel, Councillor or MP. If that fails, the next step would usually
be to pass a complaint to the Housing Ombudsman, the role of which
is to "resolve disputes involving members of the Scheme,
including making awards of compensation or other remedies when
appropriate, as well as to support effective landlord-tenant dispute
resolution by others".[82]
41. Despite this, many tenants still make complaints
to the Regulator. In 2012-13, 421 complaints relating to consumer
standards were submitted. No cases of serious detriment were identified
and therefore the Regulator did not act on any of them.[83]
When we asked why this was the case, the Regulator explained that
roughly three quarters of the complaints did not relate to breaches
of the standards and therefore were not within his remit. However,
111 cases did relate to breaches of consumer standards and were
referred to the Consumer Regulation Panel. Of these, 20 were investigated
in further detail, but no cases of serious detriment were identified
in 2012-13. Of the 111 complaints not a single case of serious
detriment was found and we have to accept the Regulator's judgement.
A question about his operation of the procedure was, however,
raised by a reported comment by a senior manager in the HCA. In
April 2012, Ralph Smale, Strategic Regulation Manager at the HCA,
was quoted by Inside Housing as saying that the consumer
regulation system "puts us in an unfortunate position, we
will be spending resources putting in place evidence to justify
why we haven't acted".[84]
42. It is not our job to review the individual
cases which have been made to the Regulator. Parliament and the
Government have given the Regulator certain responsibilities for
consumer regulation. It is our job, however, to consider whether
the Regulator has systems in place to carry out those responsibilities
and that, prima facie, he is operating them effectively.
Having reviewed the evidence
we are not completely assured that the Regulator is discharging
his responsibilities as we would expect. First, he has interpreted
his remit as narrowly as possible. In responding to our report
we request that he explain and justify his application of a test
that breaches of standards should be systemic when he assesses
serious detriment caused to tenants by a breach of consumer standards.
Second, we formed the impression that the Regulator has treated
consumer regulation as a distraction from his main job, economic
regulation. In these circumstances we
consider that a new arrangement needs to be developed to give
the public and Parliament the assurance that the Regulator is
meeting his consumer regulation remit and, if not, suggest improvements
and changes. We recommend
that the Regulator, working with a body such as the British and
Irish Ombudsman Association, bring forward arrangements for an
annual evaluation of the Regulator's handling of consumer complaints
by an external, independent reviewer to ensure that it meets the
criteria of independence, fairness, effectiveness, openness and
transparency and accountability. The reviewer should be appointed
by the end of this year and complete the first evaluation in time
to publish it no later than Easter 2014.
43. In the first year of operation,
310 complaints were wrongly directed to the Regulator, who then
advised tenants of the correct channel. This is not only a waste
of the Regulator's time and resources, but frustrating for tenants.
We recommend that the Government, working with the sector and
the Regulator, should clearly publicise the correct complaints
procedure regarding consumer standards to avoid misdirected complaints.
76 Q 79 Back
77
Ev 35; see also Ev 31 (Residents' Network, paras 19-23. Back
78
Q 81, 83 Back
79
HCA, The Regulatory Framework for Social Housing in England
from April 2012, March 2012, para 5.15 Back
80
Q 80 Back
81
DCLG, Review of social housing regulation, October 2010 Back
82
"Housing Ombudsman Service Scheme", The Housing Ombudsman,
February 2013 Back
83
Ev 61 (HCA Regulation Committee), para 19 Back
84
"HCA panel rejects all calls for consumer regulation",
Inside Housing, 27 April 2012 Back
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