Association of Retained Council Housing criticises plan of regulator to move to full recovery of regulatory costs

It is unacceptable for the Government or the Regulator of Social Housing (RSH) to move immediately to full recovery of regulatory costs through fees charged to housing providers, the Association of Retained Council Housing (ARCH) has said.

In its response to the RSH’s consultation on charging local authorities £7-8 per property to cover regulatory costs, ARCH said this “imposes an unacceptable burden that falls ultimately on council tenants”. 

ARCH said passing on the full increase would in practice mean this was paid through tenants’ rent.

“At no time have local authorities or, as importantly, their tenants, been given the opportunity to scrutinise or comment on the staffing necessary to operate the new [RSH] regime or its detailed cost implications,” the response said.

“If local authorities and their tenants were to be expected to pay for the new regulatory regime, they should have been offered a say in its design and cost. Since this never happened, it is not acceptable for the Government or RSH to move immediately to full cost recovery through fees.”

It backed a call from the Local Government Association for a zero-based review of the RSH budget to identify what funding was needed and to consider “whether there is excessive overlap between the work of the Regulator and the Housing Ombudsman”.

ARCH generally welcomed the new consumer standards proposed by the RSH, but was again concerned by costs.

Although the RSH had issued a draft regulatory impact assessment ARCH said this had been “a largely pointless exercise in attempting to distinguish the specific impact of amending of the consumer standards from that of other elements of the new regulatory regime, such as the regulator’s new inspection and intervention powers and related Government policies whether or not yet reflected in directions to the regulator”.

It said many potential costs were described in the assessment as “impossible or disproportionately difficult to assess [and] as this unsatisfactory outcome could easily have been foreseen at the outset, we would have hoped that the regulator would adopt a different approach”.

ARCH said it ought to have been obvious that complying with the new consumer standards would impose increased costs on councils that still own homes and it had “become abundantly clear that many local authorities have underestimated the proportion of their stock which is non-decent or failed to keep up-to-date with health and safety checks on their stock.

“As regulation becomes more pro-active and is no longer constrained by the serious detriment test it seems inevitable that more examples of non-compliance will come to light.”

ARCH said: “There is no avoiding the conclusion that substantial additional resources will be needed to deliver the service outcomes demanded by the new standards.”

Mark Smulian