North Yorkshire Council

Housing and Leisure Overview & Scrutiny Committee

10 March 2025

Consumer Regulation of Social Housing – Update and Improvement Plan Adoption

Report of the Corporate Director Community Development

1.0 PURPOSE OF REPORT

1.1 This report provides an update on progress made toward compliance toward the requirements on the Social Housing (Regulation Act) and an oversight of the Council’s Housing Improvement Plan in advance of it being considered by the Executive and seeks feedback from Members its content and format.

1.2 The report also provides an overview of a Lessons Learned paper. That paper examines the root causes behind the Councils non-compliance with consumer standards and is intended to inform future strategic planning. This report seeks the views of Members on that paper.

1.3 The report highlights key risks and issues identified within the Lessons Learned paper along with key challenges faced in relation to delivery of the plan, with particular focus on performance management information, data assurance and the capacity of the service and Council more generally to deliver the level of changed required at pace.

2.0 SUMMARY

2.1 Further to Local Government Reorganisation, the new North Yorkshire Council is a registered provider of social housing, with responsibility for the safe and effective management of nearly 8500 homes, inherited from the three former stock retaining districts of Harrogate, Selby and Richmondshire.

2.2 As a social landlord, the Council is currently non-compliant with the legal requirements placed on it through the Social Housing (Regulation Act) 2023. Following a self-referral made in May 2024, the Council is subject to a formal C3 grading from the Regulator for Social Housing (RSH), this means that ‘significant improvements’ are required.

2.3 This report provides an update on progress toward compliance, including an overview of work undertaken to date and of current performance. The report provides Members of Scrutiny with an early insight into the Councils Housing Improvement Plan in advance of it being considered for adoption by Executive and seeks feedback on that plan. The report also provides Members with early insight into a ‘Lessons Learned’ paper that highlights the reasons why the Council became non-compliant in the first place.

2.4 The report highlights a number of key challenges and risks associated with the plan that are highlighted within the Lessons Learned paper, including key challenges experienced to date around performance information, data quality and assurance, and the capacity of the service and the Council more generally to deliver the level of change needed and at the pace required.

3.0 BACKGROUND

3.1 In July 2023, the Social Housing (Regulation) Act passed. The new legislation brought in new requirements for social landlords and added more duties and powers for the Regulator of Social Housing (RSH). These took effect from April 2024.

3.2 The RSH has powers to issue performance improvement plans, issue unlimited fines, undertake management intervention, or enforce stock transfer. Previously the RSH had lesser powers, such as undertaking emergency repairs and issuing information publicly about the performance of registered providers (landlords of social housing).

3.3 The RSH has a new obligation to proactively inspect registered providers. This goes beyond desktop review of performance information. The inspection regime involves an on-sight inspection, whereby the registered provider gets notification of an impending visit and is obliged to provide a range of evidence, alongside opening its doors, and giving full access for interviews with stakeholders such as tenants, staff and senior leaders like corporate directors and elected members. The RSH publishes grades following such inspections, on a scale C1 – C4 with C1 indicating full compliance and C4 being the worst.

3.4 Although the RSH has these powers and obligations, it is adopting a “co-regulatory approach” whereby registered providers are encouraged to be open and honest about failings against the expected standards and work with the RSH on improvement plans, with enforcement action only being taken as a last resort.

3.5 The RSH does not look at individual complaints from tenants. This is the role of the Housing Ombudsman. However, the RSH works with the Housing Ombudsman as trends in complaints can signal more systemic problems. Aside from indicators from the Housing Ombudsman to get a feel for whether a registered provider is meeting the Consumer Standards, the RSH also scrutinises a set of performance indicators called the Tenant Satisfaction Measures (TSMs). These must be measured in a prescribed way at least annually. Achieving a good score in the TSMs alone is not sufficient to meet the Consumer Standards however the RSH uses the TSMs as an indicator for how a registered provider is doing

3.6 The content of the Consumer Standards falls into four themes:

• Safety and Quality

• Transparency, Influence and Accountability

• Neighbourhood and Community

• Tenancy

3.7 There are 20 separate requirements and each of these is broken down into more specific expectations with greater detail offered in a Code of Practice. Some of these requirements are an enhancement on previous requirements and some are new for example new obligations around domestic abuse and a requirement to undertake a rolling programme of stock condition surveys both inside and out on every individual property.

3.8 There are also some significant changes of emphasis. The most notable of these, running right across the themes, is the obligation to consider diverse needs and vulnerabilities of tenants when delivering the service. This is not as simple as conducting an equalities impact assessment when changing a policy. The previous standards focused on repairs being “right first time,” but this has been removed in favour of differential targets for different tenant needs. This is a fundamental change and impacts upon a range Council functions (not just housing!) and has implications for the Councils relationship with various contractors. There is also a strong emphasis on transparency across all the themes, sharing performance and other information with tenants and wider stakeholders.

4.0 ASSESSMENT OF COMPLIANCE, SELF REFERRAL TO THE REGULATOR AND THE C3 REGULATORY GRADING

4.1 In advance of LGR, limited preparatory work was undertaken to ensure compliance against the new consumer standards. Despite a lengthy lead in period, little work appears to have been done to either assess compliance against existing standards or to develop and implement improvement plans. This was a significant omission that has left the new Council vulnerable and needing to change and develop plans at pace.

4.2 Post LGR, a gap analysis to identify compliance against the standards was undertaken. This was a detailed piece of work that involved reviewing the standards, line by line, understanding, what they mean and what they are trying to achieve and for officers to assess where we currently are, what information and data do we hold (or not hold) and how reliable is that data, what we need to change going forward. This was a lengthy but important piece of work, the findings of which were triangulated with external feedback from Tenants (via the TSM survey) and in addition external consultants were also used to undertake a ‘health check’ on the Councils preparedness for the new regulatory standards. Whilst this was a light touch exercise (it was not a mock inspection) the outcomes from this very much supported the conclusions of the gap- analysis that the Council was non-compliant against the consumer standards in several key areas.

4.3 Further to the conclusion of that self-assessment, the Council referred itself to the RSH. Following that referral, the RSH made a responsive regulatory judgement on the Council - see Appendix A. In this judgement the RSH concluded that ‘there are serious failings in the landlord delivering the outcomes of the consumer standards and significant improvement is needed’. Whilst the judgement credits the Council for its openness and commitment, it also highlights that significant improvement is needed in relation to the Safety and Quality Standard, the Transparency Standard and the Influence and Accountability Standard.

4.4 Based on this judgement the RSH gave the Council a C3 Grading. This means that there are serious failings in meeting the consumer standards and that the Councils current arrangements are not strong enough to put them right.

4.5 Further to this judgement the Council is subject to significant and intensive monitoring and scrutiny from the Regulator including monthly performance review meetings. The C3 Grading will not be upgraded until the Council demonstrates compliance, which is most likely to be through a full regulatory inspection.

4.6 Since the introduction of the new standards, many Councils have received judgements, either because of a self-referral or following a full inspection. Over the first 6 months of the new legislation being in place a reported 42 judgements were issued, ranging from C1 (compliant) to C4. Most judgements made to date have been a C3 Grading.

5.0 HOUSING IMPROVEMENT PLAN

5.1 A detailed improvement plan has been developed to support the Council on its journey toward compliance – see Appendix B.

5.2 This improvement plan provides the broad strategic framework for change and is split into 7 separate workstreams that focus on:

· Governance and Oversight

· Understanding Stock Quality

· Keeping Homes Safe and Compliant

· Understanding Tenants and Responding to Diverse Needs

· Effective Repairs and Maintenance

· Working with other to ensure safe neighbourhoods.

· Allocating homes fairly and Managing Tenancies

5.3 Within each theme there are a range of key actions and behind many of these there are comprehensive management plans to take them forward. Each workstream has an allocated lead officer and working groups have been established. Timescales for delivery are prioritised, and progress is being monitored through the Councils Housing Management Team and through a newly established Housing Improvement Board, chaired by the Director for Community Development and providing wider corporate oversight.

5.4 It is recognised to support the delivery of the Improvement Plan, additional resource is needed. This may include staffing resource for certain roles, specialist external support, additional contractors, and new IT systems. To support this £2M headroom has been built into the Council approved Housing Revenue Account Business Plan. Whilst this level of investment is temporary and needs to be reviewed on a year-on-year basis it is essential to the delivery of the plan.

5.5 In line with the Governance and Oversight theme within the Improvement Plan, going forward it is intended that updates from the Board (tracking both progress against the improvement plan and performance more generally) are provided to the RSH monthly. Similarly, the same progress reports shall feed into the Councils Housing and Leisure Overview and Scrutiny Committee, feed into newly established arrangements for tenant oversight and feed into the Councils broader corporate performance reporting to Executive.

5.5 In advance of the Improvement Plan being considered by Executive for adoption in April, Members of Scrutiny Committee are invited to provide feedback on the content, format, timescales, and actions within the plan, along with views on reporting arrangements to help inform next steps and the final recommendation.

6.0 LESSONS LEARNED REPORT

6.1 The proposed Improvement Plan has been informed through an analysis of the reasons behind the Councils non-compliance. A Lessons Learned, root cause analysis has been undertaken - see Appendix C. This work, which is a requirement on the Council to complete and was developed with the help of external consultancy support, is important as it provides the Council with the insight needed to ensure that future improvement planning is robust and sustainable, and that historical mistakes and failings are not repeated.

6.2 The report groups the root causes behind non-compliance into three time periods, the first two of which present the legacy situation inherited by the new Council from the former District Councils. These include the time prior to the decision on LGR (up to 2021) and the two-year window in between the decision on LGR and vesting day (2021-23). The final period (post LGR) examines the learning to date from the establishment of the new Council along with some of the challenges faced. In summary these include on-going issues and challenges around the accuracy and accessibility of management information and data, continued capacity gaps within the service and the Council more generally and an initial lack of understanding (both within the service and more corporately) around the scale of the challenge ahead the level of improvement needed.

6.3 In advance of the Improvement Plan being considered, Members are invited to comment on the conclusions of the Lessons Learned report to help inform next steps.

7.0 KEY ISSUES HIGHLIGHTED

7.1 Systems, Data and Performance Reporting

As highlighted within the lessons learned report, a key challenge post vesting day has been around the accessibility and quality of data, with key information held on various systems and in various formats. At times it has been difficult to establish any firm or accurate baseline position. There are gaps in some of the data because it was simply not collected by the districts and lack of assurance around the validity and accuracy that is held. Each of the former districts used different systems to manage the housing stock plans and whilst plans are in place to converge systems, oversight and progress post vesting day has been significantly impacted and hampered by issues relating to accessibility of information held on different systems currently.

7.2 In addition, each former district was historically doing things very differently with different processes and policies in place, different information captured in different formats with different measures in place to track progress. Overall, there was insufficient oversight within the former districts with no benchmarking of performance against national criteria or other councils. This has made demonstrating compliance in respect of many national standards problematic. These issues have inevitably been compounded further as the Council has been through a significant period of structural changes with many individuals who may have had an in-depth knowledge of each system or process moving onto new roles or leaving the Council, however in many instances the new Council has needed to start from scratch.

7.3 The current situation regarding the use of multiple systems and processes is unsustainable and has significant implications for the service. It impacts on the level of resource needed to input and retrieve basic management information and creates additional risk to the Council around the assurance of data recorded and captured.

7.4 The difficulties associated with data quality and assurance, along with the impact this has had in establishing a clear baseline position has been the number one challenge post vesting day and in recent weeks has culminated in the Council being warned by the Regulator that it shall be subject to a C4 Judgement should the situation not significantly improve going forward and at pace. Additional mitigation is needed in a number of areas, where for example the Council has gaps in its data concerning health and safety requirements, additional steps or interventions are needed to protect the safety and wellbeing of tenants.

7.5 Within the Improvement Plan, it is recognised that moving away from several different management systems needs to be prioritised. The Council is on track to implement a new asset management system called Planon, which shall be rolled out in phases, phase one being the repairs element from April 2025. We are also in the early process of scoping the project for a harmonised tenancy management system.

7.6 Issues around data capture, quality and reporting are however more fundamental than the introduction of a new IT systems solution. Various other important work is needed and underway including the development of a data management plan, the consolidation and development of various processes and policies, checks around the integrity of historical data held and additional assurance being built into processes, for example by using external audit as required to check gas safety records or to quality control the validity of fire risk assessments being undertaken.

7.7 In 2024 the new Council signed up to ‘Housemark,’ a performance management tool used by most social landlords nationally to help benchmark performance against a core and standardised set of measures, and this has provided a useful initial framework to monitor performance. A framework for future performance management information is being developed and an initial set of key indicators and measures that focus in on the key areas of scrutiny by the Regulator have been established - see Appendix D. Whilst it is too early to track progress and trends in several areas as the baseline position is newly established, the approach taken within the Performance Monitoring Report is to Risk Rate both performance against areas of non-compliance and levels of assurance with the data and information held.

7.8 Going forward, progress against these indicators shall be reported monthly to the Housing Improvement Board and the Regulator, with performance being tracked through the Scrutiny Committee and feed into wider corporate monitoring arrangements.

8.0 General Capacity to deliver improvement at pace

As highlighted within the Lessons Learned Report, a key area of risk relates to the capacity of the service and the Council more generally. Competing priorities across the whole Council during a period of continued and significant change is a very real issue that could hamper the Councils ability to improve from a C3 Grading and worse could tip the Council towards C4 as per the warning being given by the Regulator.

8.1 The capacity gap within the Council spans across the whole Council. Within the housing service, there remains a staff vacancy rate of around 23% within the housing standards team (repairs and maintenance) this has improved from around 67% at the point if restructure, there are still key gaps identified in certain roles, including technical surveying roles, specialist roles along with gaps in several key maintenance roles such as electricians, joiners, plumbers etc. In addition, post restructure, managers responsible for core repair and planned maintenance programmes including workforce and contract supervision, health and safety compliance and complaint handling are struggling to sustain workloads. Delivering the service and ‘business as usual’ at the same time as driving forward transformation and change and whilst working within the context of some of that data and systems issues as highlighted above is extremely challenging.

8.2 In order to provide more resilience within the service proposals are being worked up to plug some of these capacity gaps, including additional emphasis on asset management roles that are not encumbered by the pressures of day-to-day service delivery.

8.3 In addition, it is also clear that the Council shall continue to need to utilise external support and, in some areas, increase the level of external support provided via contractors and providers of other specialist services. Slippage is already appearing against some elements of the improvement plan. For example, a target is in place to have undertaken stock condition surveys in 50% of all homes by March 2026 and 100% by September 2026. To date 448 surveys have been undertaken, a new IT solution via an App has been developed to enable information derived from the surveys to feed into the new Plan on system once in place. 11 additional surveyors have been recruited in-house and further recruitment is on-going and Align Property Services commissioned to help kick start the programme of proactive and planned surveys.

8.4 Whilst 448 surveys have been undertaken to date, progress is not happening as fast as anticipated and around 600 homes should have been surveyed by this point in time. The majority of surveys undertaken to date having been done in response to a complaint raised by a tenant or within a home when it becomes void, only 39 out of 120 proactive/ planned surveys have been undertaken. Newly appointed in-house surveyors are focussing on complaint resolution such as the increased reports of damp and mould and have insufficient capacity to deal with the proactive surveys needed. Other areas at potential risk of slippage against key milestones include the electrical inspection programme and fire risk assessments. Whilst an on-going and long-term programme of staff recruitment and development is essential in addressing the capacity gaps, in the short term it is clear that more external specialist support is required.

8.6 Similarly the capacity of the Council to respond quickly and address matters found when undertaking its new inspection regimes is a key risk. Whilst much work has been undertaken to bolster capacity through both the recruitment of staff and the procurement of new service contracts. Overall, there remains a real risk that the Council will not be able to respond to the additional works needed within required timescales without more contractors or skilled staff to undertake the work. Further strategic planning is required around the Councils overall procurement plan and strategy for the service to ensure that procurement activity is prioritised, efficient, targeted, and consolidated. Support has already been offered by the Head of Procurement to assist the development of this plan.

8.7 It is also clear that more corporate support is needed now for the service to help drive forward the pace of change required. This includes dedicated and robust project management support along with technology and transformational support as needed. The delivery of the Improvement Plan toward a C2 Grading and the on-going convergence of the service and this significant undertaking. The scale of this challenge was not recognised pre-LGR by the district councils. It was not given sufficient focus in the two-year window prior to vesting day. Significant focus and prioritisation is needed going forward along with a degree of flexibility and pragmatism to ensure change is delivered at pace.

8.8 Overall the provision of quality services to Councils tenants must be the focus and demonstrable improvements are needed quickly. Delivery of these changes must be prioritised and cannot be met by the service alone. Whilst it is recognised that the Council corporately has a range of competing needs and demands, these cannot be to the detriment of progress of the implementation of the housing improvement plan. Where the Council is corporately unable to respond to the needs of the housing service alternative solutions will need to be found and prioritised.

9.0

9.1

RECOMMENDATION(S)

The Committee is asked to consider:

i) The draft Housing Improvement Plan in advance of its recommended sign off by Executive and provides feedback on the content and format along with proposed oversight arrangements.

ii) The Lessons Learned Paper and provide feedback and views on that Paper to help inform the Improvement Plan and Next Steps.

Nic Harne - Corporate Director Community Development

County Hall

Northallerton

11 February 2025

Report Author – Andrew Rowe, Assistant Director Housing

Presenter of Report – Andrew Rowe, Assistant Director Housing

BACKGROUND PAPERS: None

APPENDICES:

Appendix A – Regulatory Judgement

Appendix B – Housing Improvement Plan

Appendix C – Lessons Learned Report

Appendix D – Performance Update

Note: Members are invited to contact the author in advance of the meeting with any detailed queries or questions.