Death of a watchdog

The announcement of the planned abolition of the Tenant Services Authority came out of the blue for some of the regulator’s staff.

Opening their copies of Inside Housing last Friday, they learnt, for the first time, that the government was planning to press ahead with the long-rumoured axeing.

Housing minister Grant Shapps confirmed that he wanted to ‘delete’ the regulator, using the 2010 decentralisation and localism bill, and split its role in two. The Homes and Communities Agency will regulate governance and viability and complaints will escalate through councillors or MPs and on to the Housing Ombudsman Service as a last resort.

Although TSA staff might have been shocked that the end is coming so soon, the sector at large is hardly surprised. But this is the first glimpse of the brave new regulatory world. So are housing providers happy, or are these plans just too brave? And what do they think the TSA has offered tenants and providers so far?

Over before it began

There’s a certain amount of frustration that a regulator which has only just gone live is doomed so early, particularly on the side of tenants. Cora Carter, chair of Tenants and Residents’ Organisations of England, says: ‘We are seriously concerned that the removal of the TSA will involve greater self-regulation that removes tenants from this process.

‘Further regulatory upheaval is also likely to bring more distractions from what we need to be focusing upon - delivering greater quality services for tenants.’

Professor Martin Cave, who’s influential review of housing regulation in 2007 prompted the creation of the Tenant Services Authority, says he has serious questions about the change of direction.

He says: ‘I am disappointed because I feel it will leave tenants and groups of tenants without the protection they need against incompetent landlords.’

Richard Capie, director of policy at the Chartered Institute of Housing, warns that coalition government means there is a shared responsibility for what happens next.

‘First of all, we would need to accept that whatever is taken forward, there has to be shared responsibility across the coalition for this,’ he says.

This is something that Liberal Democrat MPs are going to have to agree on as well.’

End the uncertainty

One of the key worries for many housing associations is that scrapping the TSA could upset the banks that have lent the sector almost £60 billion at low interest rates. John Bryant, policy leader at the National Housing Federation, adds: ‘I think any fundamental regulatory change is likely to result in a bit of uncertainty, and any uncertainty is potentially damaging. What is important is that the uncertainty should be brought to an end as quickly as is possible.’

A spokesperson for the Council of Mortgage Lenders is hardly reassuring. ‘Lenders want to support social housing but the current risk-averse climate means that until they are confident that the new regulatory regime will work effectively, the uncertainty surrounding the decision to replace the TSA with the HCA and the HOS may discourage them from doing so.’

It isn’t just lenders who are unhappy with the new arrangements mooted by Mr Shapps. Professor Cave describes the plan to hand tenants’ complaints to the housing ombudsman as ‘my worst fears realised’.

He says: ‘The ombudsman deals with individual cases and I’m not sure whether he can deal with a landlord that is failing across the whole of its estates.’

Ruth Lucas, policy consultant at the Local Government Association, says: ‘We will need to ensure that the housing ombudsman has the suitable powers and the suitable resources to expand to take on the new regulatory role from the TSA.’

Shadow housing minister John Healey says he cannot see ‘the ombudsman nor the HCA being able to take this forward with the same energy.’

Complaints aside, there are also fears that abolishing the TSA will mean tenants have less everyday influence over their landlord’s performance.

Gwyneth Taylor, policy director at the National Federation of ALMOs, says: ‘We would be concerned if the tenant role was in any way diminished because a lot of work has gone into trying to develop that role, particularly in terms of developing the local standards. We would be concerned if any of that was lost.’

But Alistair McIntosh, director of consultancy Housing Quality Network, believes that the commitment to localism may help tenants become more powerful. ‘In a curious sort of way we could see these standards being enforced more rigidly by tenants,’ he says.

‘And one of the big implications in terms of saving money is that people can no longer justify spending in fear of a big bad ghost, whether it is the Audit Commission or the TSA.’

A false economy?

Saving money is one of the main reasons given by ministers for scrapping the TSA. But it isn’t quite clear whether this will actually happen or whether the government is embarking on a PR exercise which involves axeing quangos. The regulator cost £42 million to set up, and the early closure may mean that much of that cost is never justified.

Mr Bryant says: ‘I think that this is not just about saving money. I think a lot of the TSA’s expenditure has already happened. The TSA kept many Housing Corporation staff, and we will need many of them where-ever the regulation is.’

That might be some comfort to those staff below senior management who are now wondering what is going to happen with their jobs, but cold comfort to a sector which desperately needs to retain its good relationship with lenders when central government finance is drying up. Grant Shapps has much convincing to do before many people will embrace his brave new world of regulation.