Do you have any additional comments or evidence about the potential impact of the policy proposals as assessed in our impact assessment (Annex C)?
Government is currently introducing multiple changes over the next few years that will impact on the delivery of housing management services by registered providers of social housing. These include Awaab’s Law, a proposed new Decent Homes Standard, and new Consumer Standards, including the new Competence and Conduct Standard with the requirement for professional qualifications. We are asking Government to ensure that these changes are coordinated and introduced in a sensible manner so that landlords can review their housing management services and delivery models and respond to them in the round.
We are concerned that the cost impact assessment (direct costs of £130 million) fails to adequately estimate the cost of implementing the proposals within this consultation. The impact assessment itself points out that it has not monetised how providers will address short term gaps in provision to replace those undertaking the training, which is likely to be at least 1 day a week per individual. Providers may of course choose not to fill those short-term gaps in provision, but this is likely to impact on overall service delivery.
We are also concerned that some of the estimates have been drawn by a survey by the Local Government Association almost 12 months ago, when the full scope of the qualification requirements was still unknown and therefore the responses are unlikely to be a fair representation of the current situation. The survey also only had a 16 per cent response from relevant councils. We consider that an updated survey of councils should be commissioned (whilst recognising that some questions have been included in this consultation) and the impact assessment revised accordingly.
The impact assessment also does not take account the likely upwards pressure on salary costs that increased professionalisation is likely to bring, with increased expectation of an increased salary for roles that require specific qualifications. If these expectations are not met, it could lead to individuals leaving (or not joining) for better paid roles or not joining a local authority e.g. in the private sector. This will further exacerbate recruitment and retention challenges.
The proposed implementation of the proposals is likely to place an additional burden on local authorities in their role as registered providers of social housing. The LGA has repeatedly made both the Regulator for Social Housing (RSH) and Department for Levelling Up, Housing and Communities (DLUHC) aware of the significant financial income and expenditure pressures on individual Housing Revenue Accounts (HRAs) and the impact this is having on the ability to fund the vital investment needed to improve and regenerate existing stock and deliver effective social housing management services to tenants. The LGA welcomes the commitment that new burdens funding will be paid to local authority registered providers without an HRA but are concerned that those with an HRA (the vast majority) will need to fund the additional costs out of the income from tenant rents.
The LGA continues to urge DLUHC to urgently undertake an in-depth review of the future sustainability of HRAs given the cumulative impact of a wide range of competing income and expenditure pressures.
We do not consider that DLUHC has given sufficient weighting to the costs associated with the negative impact the proposals, particularly around the new qualification requirements could have on recruitment and retention in the social housing sector. In order to seek to mitigate this, councils need to have flexibility to determine their own transition period so that they can implement the changes in a way that does not impact on service delivery to tenants, minimises impacts on the recruitment and retention of the workforce, and that can be managed within limited financial resources, given that there will be no new burdens funding for those councils with Housing Revenue Accounts (HRAs).