Consultation outcome

Directions to the Regulator of Social Housing on tenant involvement and mutual exchange: Government response to the consultation

Updated 23 June 2023

Introduction

1. On 16 February 2023, the Department for Levelling Up, Housing and Communities launched a consultation on proposed directions from the Secretary of State to the Regulator of Social Housing (‘the Regulator’), using powers under section 197 of the Housing and Regeneration Act 2008 (“the 2008 Act”). The consultation was on the revision of the existing directions covering tenant involvement and mutual exchange (PDF, 68.7 KB) to ensure they are suitable for the introduction of the new proactive consumer regulation regime.

2. See the consultation paper.

3. The consultation sought views on our proposal to:

• revoke the ‘Tenant involvement and empowerment’ and ’Mutual exchange’ paragraphs of the Directions on Regulatory Standards made by the Secretary of State on 1 March 2012; and
• direct the Regulator to set revised regulatory standards (and the content of those standards) on tenant involvement and mutual exchange, and to have regard to specified objectives when setting the tenant involvement standard.

4. The consultation closed on 30 March 2023.

5. We have considered all of the responses received. This document summarises the responses received and sets out the government’s response to the consultation.

6. We are grateful to organisations and individuals who took the time to respond.

7. Copies of this document are available via the html print button.

8. Enquiries about the document should be addressed to: socialhousingdirections@levellingup.gov.uk.

Summary of responses

9. We received a total of 109 responses to the consultation.

10. 21 responses were from individuals and tenant organisations. 74 were from Registered Providers of social housing (58 from Private Registered Providers (PRPs) along with 6 of their representative bodies and 16 from Local Authority Registered Providers (LARPs), along with 5 Arm’s Length Management Organisation Organisations (ALMOs) (and their representative body). The remaining responses were from other organisations.

11. The table below sets out a breakdown of the respondents.

Type	Number of responses
Individuals	11
Tenant organisations	10
Private Registered Providers (PRPs)	58
PRP representative bodies	6
Arms Length Management Organisations (and ALMO representative body)	5
Local Authority Registered Providers (LARPs)	16
Other organisations (including charities, consultancies and professional associations)	3
Total	109

12. For the purpose of this response, we have grouped the respondents into three categories:

• Registered providers of social housing (‘RPs’), which includes Local Authority providers (‘LARPs’), Private registered providers (‘PRPs’) and their managing organisations/representative bodies (85 responses)
• Individuals and tenant organisations (21 responses)
• Other organisations (3 responses)

Some respondents did not answer every question. As such, the number (and percentage) of answers to the questions often differ from the total number of responses received.

Responses to the questions

Question 1: Do you agree with the strengthened outcomes we are setting in the direction, as set out in paragraphs 18-22?

13. This question received a total of 107 responses, from 83 registered providers, 21 individuals and tenant organisations, and 3 other organisations.

14. There were 93 respondents that agreed with the strengthened outcomes set out in paragraphs 18-22, 6 respondents that partially agreed, 3 respondents that disagreed, and 5 respondents that did not express a clear view either way.

15. Some registered providers who supported the strengthened outcomes provided examples from their own organisations of how they were already involving and empowering residents with a wide range of meaningful opportunities in line with the objectives of the proposed direction. A number of those respondents noted that this led to mutually beneficial outcomes for landlords and residents.

16. Some registered providers had consulted with residents for their views on the direction to inform their response.

17. Many agreed that support should meet the diverse needs of residents, so they can engage with a range of opportunities. Some said that providing accessible support should include the timely provision of information and knowledge to facilitate, resident scrutiny and transparency in landlord decision-making. These respondents highlighted that support ought not to be restricted to more traditional support such as capacity building and providing places for residents to meet.

18. Some respondents asked that good practice be provided so that landlords and tenants are informed to know what good looks like.

19. Of the few respondents that commented on the Right to Manage and Right to Transfer content of the proposed direction, they agreed the Regulator must have regard to the need for registered providers to support tenants to exercise these rights or other housing management functions, where appropriate.

20. Of the 6 respondents that partially agreed, there was general support for the proposed direction being more outcome-focused. However they were concerned that some landlords could interpret the standard in a narrow way and seek to do the bare minimum required to achieve compliance with regulatory standards. These respondents indicated that greater levels of prescription within the direction would make the expectations clear to landlords and residents - for instance, being more explicit that RPs are required to demonstrate and publish the outcomes achieved because of the involvement of residents.

21. Some respondents argued that there is a need for the direction to go further by encouraging RPs to provide support specifically for democratically elected tenant associations.

Question 2: Do you agree with requirements that are being removed, as set out in paragraphs 23-24?

22. This question received a total of 102 responses, from 83 Registered Providers, 17 individuals and tenant organisations, and 2 other organisations.

23. There were 87 respondents that agreed with the requirements being removed set out in paragraphs.23 and 24. 8 respondents partially agreed and 5 respondents disagreed. 2 respondents did not express a clear view.

24. Some of the respondents that welcomed the removal of the annual report requirement did so because they said it was a ‘tick box’ measure and constrained their ability to exercise flexibility for the benefit of their tenants. These respondents saw the change as allowing RPs to provide information in ways which are responsive the specific views of their residents received through internal customer feedback. Some respondents said there was the potential for information to be more regularly updated or provided in real time.

25. Of the few respondents that commented on the removal of tenant cashback from the direction, they said tenant cashback had not achieved its intended impact, or it was not clear whether it delivered substantial benefits for residents.

26. Of those that partially agreed, there was general support for the removal of tenant cashback from the direction. However, a number of these respondents expressed concerns about the removal of the annual report and performance information requirements given the focus on greater transparency of performance information. Some said that tenants find the annual report a useful document and that it allows for comparison across providers or with reports from previous years.

27. Respondents that did not agree with the requirements being removed suggested that these requirements would support residents to hold their landlords to account, facilitating greater transparency in the sector.

Question 3: Do you agree with the additional requirement to offer support to tenants who would otherwise be unable to use the mutual exchange service, set out in paragraphs 28-29?

28. This question received a total of 102 responses, from 82 Registered Providers, 17 individuals and tenant organisations, and 3 other organisations.

29. 1 respondent disagreed with the additional requirement set out in paragraphs 28-29, while 92 respondents agreed, 5 respondents partially agreed, and 4 respondents did not express a clear view either way.

30. Overall responses indicate broad approval, with many highlighting the importance of helping tenants to access and use mutual exchange services.

31. Several responses expressed the view that this requirement is a sensible change which reflects existing practice across the sector, with many alluding specifically to the provision of support to tenants who struggle to access or use the internet.

32. Over 25% of respondents noted that RPs already take steps to support tenants in this area, such as providing digital support and drop-in services; physical ‘hub’ spaces with access to computers to use online platforms; tailored support such as provision of lists of suitable matches to customers without internet access; and detailed guidance/signposting.

33. A number of comments noted that there would be a positive knock-on impact if more tenants are able to list their properties on mutual exchange platforms - specifically a larger number of tenancies being listed as available for exchange resulting in a higher rate of successful matches.

34. A small number of comments highlighted the need to consider the financial capacity and resource constraints faced by RPs if they are required to spend more money on supporting tenants in this way.

Question 4: Do you agree with the proposed approach to remove procedural details, as set out in paragraph 30?

35. This question received a total of 99 responses, from 80 Registered Providers, 16 individuals and tenant organisations, and 3 other organisations.

36. 6 respondents disagreed with the removal of procedural details set out in paragraph 30, while 86 respondents agreed, 3 respondents partially agreed, and 4 respondents did not express a clear view either way.

37. Many of the respondents who agreed with this change suggested it was unnecessary for the direction to encourage registered providers to subscribe to a provider within the Nationwide Homeswap Programme, since the number of providers and websites offering mutual exchange services has increased significantly since the drafting of the original direction in 2012.

38. Some responses emphasised that this change moves away from a prescriptive approach and could encourage RPs to exercise greater flexibility to suit the specific needs of their tenants. For example, some respondents suggested that customers may enjoy greater success in finding matches for exchanges using alternative channels such as social media groups.

39. Several respondents suggested that removing these procedural details would be a positive change within this context, facilitating increased freedom of choice and encouraging RPs to select services from a wider proliferation of options. A number of responses suggested that this would promote competition in the market for these services, and could result in better value for money for RPs and their tenants.

40. Fewer than 10% of tenants argued that the direction should direct RPs to promote a single channel for mutual exchange amongst their tenants. The majority of these responses suggested that this would make the mutual exchange process simpler for tenants, and that without a requirement to encourage tenants to use the Nationwide Homeswap Programme there is a higher likelihood that tenants will need to list their premises and search for prospective matches across multiple platforms as a matter of course.

Government response to the consultation

41. We are grateful for the 109 responses received to this consultation. We have considered the comments and additional evidence provided. Our response is set out below.

Question 1: Do you agree with the strengthened outcomes we are setting in the direction, as set out in paragraphs 18-22?

42. We recognise concerns raised regarding the risk of RPs exploiting reduced prescription. However, we believe that being more prescriptive would undermine our aims for an outcome-focused model.

43. We want to see RPs promote a flexible, varied and accessible approach to resident involvement and empowerment that works for all residents rather than mandate the ways in which outcomes are achieved (which may not work for all tenants.) It is also important to note that while we are removing prescriptive requirements, through the Social Housing Regulation Bill we are giving the Regulator a power to publish a code of practice on consumer standards. It will be able to use this to clarify and amplify expectations in relation to these standards

Question 2: Do you agree with requirements that are being removed, as set out in paragraphs 23-24?

44. We believe that removing these requirements provides a flexible and accessible outcome focused model to resident involvement and empowerment without prescribing the approach.

45. It is important to note that while these prescriptive requirements will no longer be in place, RPs will still be required to give their tenants opportunities to scrutinise their performance but will be free to undertake whichever activity is best suited to meet the needs of their tenants. For example, where providers wish to retain elements such as annual reporting, they can choose to do so.

46. In line with the objectives of the new direction, we would expect RPs to engage residents to seek and consider their views in relation to strategic decisions affecting service delivery.

Question 3: Do you agree with the additional requirement to offer support to tenants who would otherwise be unable to use the mutual exchange service, set out in paragraphs 28-29?

47. Although the majority of responses were positive, we are aware that a small number of respondents highlighted the potential financial resource implications of introducing this requirement.

48. However, we have not been prescriptive on how support might be offered, ensuring RPs retain the freedom to determine the best way to provide appropriate support to their tenants, and how best to balance their spending priorities for the overall benefit of tenants. Additionally, the existing direction already requires registered providers to provide reasonable support for tenants who may not have access to the internet, and a substantial number of responses highlighted this as the area where tenants are most likely to require support.

49. Given this, and the fact that many RPs already provide such support, we feel that this additional requirement is a minor and proportionate extension to existing requirements which largely reflects existing practice in the sector, and has a low risk of causing detrimental impacts for RPs.

50. Ultimately, our view (supported by the responses to this consultation) is that this approach will support the direction’s intended outcome that tenants should be able to easily access the details of as many available matches as possible.

Question 4: Do you agree with the proposed approach to remove procedural details, as set out in paragraph 30?

51. We have taken into consideration responses advocating the retention of these procedural details, to encourage more tenants to use a single, large database of prospective exchange matches. While these procedural details are being removed from the direction, it is important to note that registered providers are still free to continue to recommend mutual exchange services to their tenants if they wish to do so.

52. As there are now a considerable number of platforms available for accessing mutual exchange services, RPs must be able to proceed in the way that best meets the needs of their tenants without unnecessary prescription.

53. It is also key that the direction is fit for purpose and reflects the reality of the operating environment it is situated within. In this case, our decision to remove these procedural details acknowledges the wider base of options for accessing mutual exchange platforms now available to customers in this area. The overwhelmingly positive response to this question within our consultation, and the perceived benefits of promoting choice and competition in this space, reinforces our rationale for removing these procedural details and instead allowing RPs to proceed in the way they feel is best for their tenants.

Other comments

54. One respondent noted that the directions should explicitly exclude charities, in case there are areas of conflicting priorities between the direction and an RP’s charitable objectives. It is important to note that RPs will only be directed by the RSH to comply with the relevant regulatory standards in relation to tenants who are potentially eligible for mutual exchange (and thus in accordance with relevant existing legislative provisions which affect eligibility of certain types of tenants.)

55. One respondent highlighted that more should be done to increase the availability of mutual exchange matches on a national level. This response suggested that while customers are likely to enjoy a greater level of success in finding suitable exchanges in areas like London, that there is a lack of choice for customers residing elsewhere in England. While this is outside the scope of the direction being consulted on, we will consider this in future policy development.

Summary

56. After carefully reviewing the responses to the consultation, the government has decided to proceed with its proposed approach to updating the existing directions from the Secretary of State to the Regulator for Social Housing on mutual exchange and tenant involvement, as outlined in the consultation document.

57. Government believes this approach will ensure that directions are fit for purpose and will support the overall reform objectives of the Social Housing Regulation Bill: to facilitate a new, proactive approach to consumer regulation so providers of social housing can be effectively held to account for the services they provide to tenants.

58. The revised direction on tenant involvement will assist tenants in being influential voices in the conversations and decisions taken about the strategies, service delivery, management of their homes and about the behaviours and values of their landlord.

59. The updated mutual exchange direction will help to facilitate the intended outcomes of mutual exchange schemes, enabling tenants to easily access the details of as many available matches as possible.

60. The proposed directions have no pre-determined end date but they may be subject to change or revision. Any further amendments or changes will require a further consultation.

Next steps

61. Alongside the publication of this response, the government is issuing the final directions to the Regulator.

62. These directions will require the revision of consumer standards which will affect registered providers and their social housing tenants. The Regulator will conduct a statutory consultation with tenants, providers and other stakeholders in 2023 on its revision of these standards.