Local Authority Registered Providers – the health and safety challenge
The Social Housing White Paper issued last year set out the Government's intention to introduce a significantly different, and in particular a much more proactive, regulatory regime.
The chief executive of the Regulator of Social Housing (RSH), Fiona MacGregor, has been engaging with local authority registered providers (LARPs) about the changes to consumer regulation. These include the overall aim of putting safety at the heart of social housing regulation. We now await the implementation of those changes, including legislation; but for some time the RSH has shown itself ready to take a tough line, especially on health and safety.
The regulatory standards include wide-ranging obligations. The Home Standard requires that landlords "meet all applicable statutory requirements that provide for the health and safety of occupants in their homes."
Those statutory requirements are many and various, but LARPs can expect their compliance to be judged especially by the following legislation:
- Fire safety – Regulatory Reform (Fire Safety) Order 2005 – as recently amended
- Gas safety – Gas Safety (Installation and Use) Regulations 1998
- Electrical safety – Landlord and Tenant Act 1985 – fitness for human habitation
- Asbestos – Control of Asbestos Regulations 2012
- Water safety – Control of Substances Hazardous to Health Regulations 2002 – legionella
- Generally – Health and Safety at Work etc. Act 1974
Regulatory notices so far
The RSH has served 'breach' notices against the following local authorities:
- Arun (August 2018) – for health and safety (i.e. fire and water) breaches
- Gateshead (April 2019) – for a range of health and safety breaches [by its ALMO]
- Canterbury, Dover, Folkestone & Hythe and Thanet (September 2019) – for a range of health and safety breaches [by their jointly owned ALMO]
- Runnymede (October 2019) – for health and safety (i.e. fire and electrical) breaches
- Lambeth (November 2019) – for health and safety (i.e. fire, gas and asbestos) breaches
- South Kesteven (February 2021) – for (inter alia) health and safety breaches
How is the Home Standard regulated?
The RSH is essentially concerned with corporate failings i.e. where assurance mechanisms and decision-making have failed.
It is important to appreciate how the RSH gains or gathers information. In the case of health and safety matters, it currently depends on self-referrals or on 'external' sources, including resident or councillor complaints, whistle-blowers or the national or local media.
The White Paper commitments, however, included the introduction of routine inspections for landlords with over 1,000 homes – which will cover almost all LARPs.
The RSH then has to decide whether and how to investigate.
In relation to the consumer standards, it is currently constrained by the legislation that prevents it taking action unless satisfied that there is actual or potential "serious detriment" to residents. (The RSH currently interprets this to mean "serious actual harm or serious potential harm to tenants".)
But the White Paper promises to remove this test – though we anticipate that it will still be required to act proportionately.
The RSH expects LARPs to be open and transparent with it. If the RSH hears of a breach directly from the LARP, that helps reassure the RSH that the LARP has the capacity and willingness to sort out problems. If the RSH only discovers the breach some time later, this undermines the RSH's confidence that the LARP can be trusted to resolve this and other problems.
The RSH publishes summaries of cases dealing with the consumer standards. They indicate how the RSH assesses "serious detriment". As the list above shows, all LARP regulatory notices have involved or included health and safety matters, where the serious detriment issue is usually clear-cut.
It will be noted that some notices served on LARPs have involved ALMOs. The RSH holds LARPs responsible for their ALMOs or other contractors. It is important to bear in mind that the Grenfell Tower was managed by Kensington & Chelsea’s ALMO. Some ALMOs are RPs. The RSH will resist the suggestion that a local authority is entitled to rely on its ALMO's RP status as providing assurance that the ALMO was complying with the Home Standard. In the White Paper the Government promises to render void provisions in ALMO (or TMO) contracts which hinder the exercise of the RSH's powers.
How should a LARP react to problems?
The initial questions are obvious. What are the regulatory standard requirements applicable to the situation? Have they been breached – and if this is not clear, what do any advisers say? Is the breach 'material' (given its impact, breadth and longevity) and/or systemic in nature? The answers will determine how to investigate it – either internally or with external support.
LARPs can inadvertently create liability for themselves. Reports can exacerbate risks. It is important to take account of the rules on disclosure and the duties owed to any insurers who may be involved. If experts are instructed through lawyers then the LARP may be able to argue that the report is subject to legal professional privilege – a directly commissioned report is not.
There is a tendency to acknowledge fault and create future legal and regulatory difficulties. A carefully drafted brief and a disciplined process can avoid those difficulties, without preventing the facts from emerging and solutions being found.
When and how the RSH is informed and engaged depends on the type and seriousness of the breach. Openness and transparency are obviously important, but the RSH will also expect the LARP to get to grips with the situation and identify the extent of the problem itself. The LARP must exercise judgement in deciding when it has sufficient information to alert the RSH and have a sensible discussion with it; but delay should be avoided. The RSH always prefers to be informed and kept informed.
What should LARPs be doing now?
LARPs have all been focussing closely on health and safety and may well believe they are compliant; but is that in fact true and, even if it is, can it be evidenced? Can the current procedures and systems cope with future pressures? What assurance regime is in place? Can it be strengthened, for current and future requirements?
LARPs will be conscious that formal standards are not everything. Tenants will judge them by other 'standards' too. This is not easy and will be burdensome – but avoiding or mitigating the impact of a regulatory intervention saves a great deal of time and effort – as well as all the other benefits.