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Housing Ombudsman should be able to award £25k in compensation to tackle poor complaints handling, MPs say

The Government should legislate to allow the Housing Ombudsman to award up to £25,000 in compensation to social housing tenants, a new report from the Levelling Up, Housing and Communities (LUHC) Committee has recommended.

The cross-party committee's Regulation of Social Housing report, which found that many tenants are "living in uninhabitable homes and experiencing appalling conditions and levels of disrepair", also recommended a number of reforms to the Regulator of Social Housing.

The committee said that the average compensation awarded by the Ombudsman of £260 "clearly does not come anywhere close to reflecting the detriment to tenants".

"Significantly increasing levels of compensation should also help to concentrate the minds of boards and senior management teams on improving service standards," the committee added.

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As such, it called on the Government to amend the Social Housing (Regulation) Bill to give the Ombudsman the power to award compensation up to £25,000.

To improve how providers handle complaints, the committee recommended that the Ombudsman "more proactively monitor providers' compliance with the complaint handling code". This would fight against the "inefficient and obstructive" complaint handling processes of some providers, the report noted.

Alongside this, the report recommended either that the Government legislate to require providers to self-assess against the code and to implement complaint handling processes in line with it, or that the Regulator of Social Housing introduce a new standard to the same effect.

A number of possible improvements to the regulator were also suggested, including a call for the regulator to require providers to routinely audit the condition of their stock.

The committee welcomed the Government's commitment to repealing the 'serious detriment' test, which it said is "universally accepted" as preventing the regulator from regulating the consumer standards. However, it also called for the Government to reconsider the interpretation of the 'systemic failure' test, which also governs the regulation of the consumer standards.

It said: "Under the 'systemic failure' test, the regulator only intervenes where there is evidence of systemic failure within the organisation concerned. This is perhaps the most passive interpretation of its statutory duty imaginable and has resulted in providers that are responsible for serious mismanagement affecting dozens of tenants nonetheless being found compliant with the standards. It has also introduced a regulatory gap between the regulator and the Housing Ombudsman."

On levels of disrepair in the sector, the committee concluded that most social housing in England is of a decent standard, "but that the condition of some homes has deteriorated so far as to be unfit for human habitation".

It is clear that some providers have contributed to disrepair by managing their housing badly, the report said. "In particular, too many are guilty of not responding quickly enough to requests for repairs or investigating the structural causes of disrepair; preferring quick fixes over proper remediation work; neglecting sites earmarked for regeneration; and relying too heavily on tenants to report problems, rather than proactively monitoring the condition of their stock".

Other recommendations made by the committee include:

  • to reduce the stigma and discrimination of social housing tenants, providers should ensure their boards and senior management teams better reflect the diversity of their communities, and the regulator should incorporate this requirement into its revised consumer standards.
  • to strengthen tenant voice, through a requirement from the regulator to force providers to support the establishment of tenants and residents associations that are led by tenants and residents and not unduly influenced by providers.
  • the establishment of a permanent national tenant voice body to send the clearest possible signal that it intends to involve tenants in the conversation about how to drive up standards in social housing.
  • to reverse the trend of some providers becoming too remote, the regulator should strengthen the wording of its tenant involvement and empowerment standard to require providers to deliver housing services that are genuinely local and tenant centred.

Clive Betts MP, Chair of the Levelling Up, Housing and Communities Committee, said: "Too many social housing tenants are living in uninhabitable homes and experiencing appalling conditions and levels of disrepair, including serious damp and mould, with potential serious impacts on their mental and physical health."

He added: “The poor complaint handling of some providers not only adds insult to injury but the resulting delays in resolving tenant complaints actively contributes to the levels of disrepair. Sadly, beyond the distress of experiencing poor living conditions, it is undeniable that tenants also face poor treatment from providers who discriminate and stigmatise people because they are social housing tenants.

“This must change. Providers need to up their game, treat tenants with dignity and respect, and put tenants at the centre of how they deliver housing services, including by regularly monitoring the condition of their housing stock. Where they fail, providers should face the prospect of tough action from a more active regulator. Given the financial loss, inconvenience, and distress caused to tenants from serious cases of disrepair, the Government also needs to equip the Ombudsman with the power to award far higher levels of compensation to tenants when there has been serious service failings.”

Adam Carey

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