Clause 5 - Relationship between regulator and housing ombudsman

Social Housing (Regulation) Bill [Lords] – in a Public Bill Committee at 10:45 am on 29th November 2022.

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Question proposed, That the clause stand part of the Bill.

Photo of Matthew Pennycook Matthew Pennycook Shadow Minister (Levelling Up, Housing, Communities and Local Government)

I will be brief, but there is an issue that we want to highlight in relation to clause 5, which is about the relationship between the regulator and housing ombudsman. Clause 5 amends the Housing and Regeneration Act 2008 and the Housing Act 1996 to add measures on the relationship between the two bodies, so that they can exchange information quickly and effectively to provide better protection for tenants, all of which is entirely to the good and uncontroversial. However, consideration of the clause provides me with an opportunity to seek clarification from the Minister about the precise role of each body in the reformed regulatory regime that the Bill establishes.

Taken at face value, the role of each body is clearly delineated: the regulator regulates registered providers in England, while the housing ombudsman seeks to resolve complaints from individual residents about their registered provider. The regulator operates on a top-down basis, and the housing ombudsman operates on a bottom-up basis. However, when one considers how the reformed regulatory regime will operate in practice, things start to appear somewhat more complicated.

First, if my reading of the Bill is correct, the regulator appears to be able to intervene in individual complaints. Clause 31, for example, enables the regulator to arrange for an authorised person to take emergency remedial action in respect of individual premises following completion of a survey. Presumably, it is therefore necessary for the regulator to receive a complaint from a tenant who fears they are at risk of an imminent serious health and safety risk. Otherwise, how could the regulator order the necessary survey of a given premises? It may be that that is not the case, and it will be for the ombudsman to refer an individual complaint to the regulator to allow them to make use of the provisions in clause 31; if that is the case, it is not clear from the Bill.

Secondly, following revisions to the housing ombudsman scheme enacted in September 2020, the ombudsman has a responsibility to publish a complaint handling code, enjoys a new power to issue complaint handling failure orders that can relate to a landlord’s overall complaint-handling policy and, crucially, has the ability to investigate beyond an initial complaint to establish whether evidence might indicate a systemic failing by a registered provider. It may be that the ombudsman can address such systemic failings on the part of registered providers on the basis of suggested changes to their policies only with the regulator responsible for exploring whether changes to their systems are necessary, but again that is not immediately clear in the Bill.

Photo of Eddie Hughes Eddie Hughes Conservative, Walsall North

I understand the point that the hon. Gentleman is making, but it is based on the premise that these bodies operate in a completely siloed fashion. The relationship between them is a fluid one; they speak regularly and consider complaints and points that have been raised, which come to them from either direction. They work in a collaborative fashion and are then able to identify who should best proceed with a particular case. Obviously, it is governed by a memorandum of understanding, but it is a much more fluid and collaborative arrangement than that.

Photo of Matthew Pennycook Matthew Pennycook Shadow Minister (Levelling Up, Housing, Communities and Local Government)

I thank the hon. Gentleman, and I fully understand his point. I met with senior staff from the housing ombudsman yesterday, and we were talking precisely about the ways in which the respective roles operate and how they could be clarified. What these examples seek to illustrate is that there is still an obvious risk of overlap and duplication of roles in respect of these two bodies. One could argue, as the hon. Gentleman just has, that those issues can be resolved by means of updating the non-statutory memorandum of understanding that already sets out the functions of both organisations and how they work together, but that throws up two distinct issues in and of itself.

First, is it appropriate for us to leave these matters to the two bodies themselves to resolve, rather than clarifying on the face of the Bill the precise role of each body in the new regulatory regime, so as to avoid the duplication of functions and potential gaps in coverage—even if only in the short term, before they update that memorandum of understanding to reflect the new regulatory system of proactive consumer regulation?

Secondly, I am sure that hon. Members have been contacted by tenants who are aware that the Bill is progressing through the House. The expectations around the Bill are such that, after it receives Royal Assent, tenants who feel that they have not secured appropriate redress by means of a standard complaint to their landlord and believe that their grievance might be systemic in nature will understandably be uncertain about whether they should approach the ombudsman or the regulator with their complaint. I appreciate that the Department is alive to the risk, has produced guidance in the form of a fact sheet and is apparently delivering a communications campaign to tenants so that they know where to go and are well informed but, without greater clarity prior to Royal Assent about the precise roles of each body in the regime established by the Bill, I fear that neither will be sufficient to prevent a large degree of confusion. When debating this matter in the other place, Baroness Scott of Bybrook conceded that fears about confusion of the kind that I alluded to are legitimate, and that greater clarity is required as a result; yet, despite her promise to take the matter back to the Department, the Government are not amending the Bill to provide greater clarity or committing to take any further concrete steps—that I am aware of, at least—to ensure that confusion will be avoided.

As Shelter and others have argued, it is essential that the roles of the regulator and the housing ombudsman are clearly defined, that tenants and tenant groups understand the appropriate way to make complaints and that any complaints process or system is easy to use, accessible and effective. I would be grateful if the Minister provided greater clarity today and, if not today, in writing. I hope that, in general terms, she will assure me that the issues that I have highlighted will be both considered and acted on by the Department before the Bill receives Royal Assent.

Photo of Dehenna Davison Dehenna Davison Parliamentary Under Secretary of State (Department for Levelling Up, Housing and Communities)

I am grateful to the shadow Minister for raising his concerns and giving me the opportunity to provide some clarity. We will take it from the experience of one particular tenant, if we may. If a tenant has a complaint, they should first go to their landlord but, if that complaint cannot be resolved between tenants and the landlord, it can be escalated to the housing ombudsman to investigate individual complaints from tenants. If the ombudsman’s investigation finds instances of maladministration on the part of the landlord, the ombudsman can issue orders to that landlord to put things right for the complainant. That can include requiring the landlord to pay compensation to the complainant or to undertake repairs.

If an investigation raises a potential breach of a regulatory standard or there is evidence of systemic failure by the landlord, the ombudsman can refer the matter to the regulator. In situations where the regulator has concerns that the provider is failing to maintain the premises in accordance with the regulatory standards, it can conduct a survey and, following the implementation of this Bill, arrange for emergency repairs to remediate the issue in cases where there is a risk of serious harm to tenants that is not being addressed by the landlord.

Photo of Matthew Pennycook Matthew Pennycook Shadow Minister (Levelling Up, Housing, Communities and Local Government) 11:00 am, 29th November 2022

That is useful clarification. If I have correctly understood what the Minister is saying, emergency remedial action under clause 31 of the Bill stems, in the first instance, from a referral from the ombudsman. Let us think about that process in detail. To get to the ombudsman, a tenant would have to exhaust all stages of their resident provider’s internal complaints process, which is three stages in most cases. It takes about a year to get through it. They would then have to go to the ombudsman, who has a huge backlog. Clause 31 is about emergency remedial action that poses an imminent threat to health and safety. I urge the Government to think again about how, in particular, clause 31 operates because tenants will need to give notice to the regulator about specific clause 31 failures far quicker than the process she has just described.

Photo of Siobhain McDonagh Siobhain McDonagh Labour, Mitcham and Morden

The situation gets even more complicated when a tenant exasperatedly says, “I want to go to a lawyer” and then the whole thing closes down.

Photo of Matthew Pennycook Matthew Pennycook Shadow Minister (Levelling Up, Housing, Communities and Local Government)

We are testing the patience of Sir Edward and the rules, but the point my hon. Friend highlights is a genuine one about the complication of legal matters and whether tenants abandon complaints at whatever point, which I hope adds to the weight of the point that I have just made. It is not immediately clear, and we have to be clear with, most importantly, tenants once this Bill is in force about where they go and how they can seek redress under the provisions of the Bill as quickly as they need to. As I said, in the case of clause 31, the process the Minister has described does not seem like it is fast enough to ensure that emergency remedial action of the kind provided for by clause 31 will happen. I hope the Government will take this and those other points away.

Photo of Dehenna Davison Dehenna Davison Parliamentary Under Secretary of State (Department for Levelling Up, Housing and Communities)

Again, I am grateful to the shadow Minister and to the hon. Member for Mitcham and Morden. On the shadow Minister’s point about communications ensuring that tenants know where to go and how this process works, we have been working with organisations that represent landlords, social housing residents and the housing ombudsman service. We delivered communications and marketing campaigns in 2021 and this year to ensure that social housing residents were aware of how to make a complaint and how to seek redress where appropriate. We are putting in the work through communications to ensure that tenants understand the process, but I have heard his points on timeliness and I will endeavour to take that away.

Question put and agreed to.

Clause 5 accordingly ordered to stand part of the Bill.

Clauses 6 to 9 ordered to stand part of the Bill.