Decision

Cambridge City Council (12UB) - Regulatory Judgement: 9 July 2024

Published 9 July 2024

Applies to England

Our Judgement 

	Grade/Judgement	Change	Date of assessment
Consumer		Not assessed yet
Rent	Our judgement is that there have been serious failings in the landlord delivering the outcomes of the Rent Standard and significant improvement is needed	New judgement	June 2024

Reason for publication 

We are publishing a regulatory judgement for Cambridge City Council (Cambridge CC) as we have concluded that there have been serious failings in how Cambridge CC has delivered the outcomes of the Rent Standard and we do not have assurance that it was previously compliant with the Welfare Reform and Work Act 2016 (the Act). This judgement is based on responsive engagement carried out following a self-referral from Cambridge CC.  

Summary of the decision 

There have been serious failings in how Cambridge CC has delivered the outcomes of the Rent Standard and we do not have assurance that the council was previously compliant with the Act. Cambridge CC has overcharged about half of its tenants as a result of errors that it has made in setting rents over a prolonged period. 

How we reached our judgement 

We began our responsive engagement with Cambridge CC when it made a self-referral to us in December 2023. It had identified issues relating to rent setting. Our engagement with Cambridge CC focused on understanding the nature of errors that it had made in setting rents and the actions it is taking to address the issues.  

Our responsive engagement with Cambridge CC about these issues included reviewing documents and data provided by Cambridge CC, with follow up meetings and discussions with Cambridge CC. Our judgement is based on all the relevant information we obtained from Cambridge CC during the responsive engagement process. In making our decision, we have considered how well Cambridge CC is delivering against the outcomes of the Rent Standard and whether it was previously compliant with the requirements of the Act.  

Summary of findings   

Rent – Serious failings in delivering outcomes – June 2024 

The self-referral from Cambridge CC in December 2023 related to a potential failure to deliver the outcomes of the Rent Standard and potential failure to comply with the legal requirements of the Act, in particular: 

a) failure to apply the 1% rent reduction required under the Act between 2016/17 and 2019/20 on about 300 affordable rent properties, and 

b) a rent policy put in place since 2004 that de-pooled service charges for gas and mechanical maintenance erroneously from rents with the result that a significant number of tenants have been overcharged in the subsequent years. 

The failure to apply the 1% rent reduction on some affordable rent properties was a failure to comply with the legal requirements of the Act. Cambridge CC estimates that the scale of the refunds required is around £1m, although it needs to complete detailed case-by-case analysis to determine the final figures and to ascertain the impact per tenant.  

In 2004, Cambridge CC adopted and applied a policy that de-pooled charges for gas maintenance and mechanical maintenance into separate charges from the rents for tenants living in general needs, sheltered and temporary accommodation. Earlier this year, Cambridge CC identified that where it had added the charges on top of rent, it had overcharged tenants since April 2004 as those services should have been included in the rent to meet legal requirements.   

Cambridge CC has advised us that about 3,600 current tenants have been financially impacted by this error (i.e. about half of all of Cambridge CC’s tenants). Cambridge CC has advised us that the total overcharge resulting from this error is around £3.2m. 

Taking into account the extent of these issues and potential impacts on tenants, we have concluded that there have been serious failings in how Cambridge CC has delivered the outcomes of the Rent Standard and we do not have assurance that it was previously compliant with the Act.  

Cambridge CC has been transparent in its approach and is engaging constructively with us. It has sought appropriate external advice in respect of the errors and has written to affected tenants to make them aware of the issue. It has rectified its rents from April 2024 and has developed a detailed plan for how it is going to calculate and make refunds to tenants. 

We are engaging with Cambridge CC as it continues to address the issues that led to this situation. Our engagement includes ongoing monitoring of how it is delivering its plan. Our engagement with the landlord will be intensive and we will seek evidence to give us the assurance that sufficient change and improvement is being made. Our priority will be that any relevant risks to tenants are adequately managed and mitigated, and that affected tenants have appropriate redress.  

Background to the judgement 

About the landlord 

Cambridge CC owns about 7,300 social housing homes. 

Our role and regulatory approach 

We regulate for a viable, efficient, and well governed social housing sector able to deliver quality homes and services for current and future tenants.  

We regulate at the landlord level to drive improvement in how landlords operate. By landlord we mean a registered provider of social housing. These can either be local authorities, or private registered providers (other organisations registered with us such as non-profit housing associations, co-operatives, or profit-making organisations).  

We set standards which state outcomes that landlords must deliver. The outcomes of our standards include both the required outcomes and specific expectations we set. Where we find there are significant failures in landlords which we consider to be material to the landlord’s delivery of those outcomes, we hold them to account. Ultimately this provides protection for tenants’ homes and services and achieves better outcomes for current and future tenants. It also contributes to a sustainable sector which can attract strong investment.  

We have a different role for regulating local authorities than for other landlords. This is because we have a narrower role for local authorities and the Governance and Financial Viability Standard, and Value for Money Standard do not apply. Further detail on which standards apply to different landlords can be found on our standards page. 

We assess the performance of landlords through inspections and by reviewing data that landlords are required to submit to us. In Depth Assessments (IDAs) were one of our previous assessment processes, which are now replaced by our new inspections programme from 1 April 2024. We also respond where there is an issue or a potential issue that may be material to a landlord’s delivery of the outcomes of our standards. We publish regulatory judgements that describe our view of landlords’ performance with our standards. We also publish grades for landlords with more than 1,000 social housing homes. 

The Housing Ombudsman deals with individual complaints. When individual complaints are referred to us, we investigate if we consider that the issue may be material to a landlord’s delivery of the outcomes of our standards. 

For more information about our approach to regulation, please see Regulating the standards. 

Further information

• Regulating the standards

• Regulatory standards for landlords