North Yorkshire Council
Housing & Leisure Overview & Scrutiny Committee
11th June 2025
Draft Compensation Policy
Report of the Corporate Director Community Development.
1.1 PURPOSE OF REPORT
1.2 The purpose of the report is for Members of the Overview and Scrutiny Committee to consider the draft Tenant/Leaseholder Compensation Policy, intended for implementation to manage compensation claims, ensure compliance with legal standards and provide clarity for housing tenants, leaseholders and officers of North Yorkshire Council.
1.3 Members are also specifically asked to consider the proposed discretionary compensation matrix, which sets out indicative payment amounts based on levels of impact and responsibility, and to provide feedback on whether these amounts are appropriate and proportionate.
2.0 SUMMARY
2.1 This report highlights the need for North Yorkshire Council (the Council) to adopt a single unified Compensation Policy to govern the Councils approach to compensation claims for housing tenants and leaseholders. The introduction of a single Compensation Policy will promote consistency across the County and ensure that all tenants are treated fairly and equitably, regardless of locality.
2.2 The policy has been developed with reference to the former Selby District Council and Harrogate Borough Council policies, alongside best practice examples from other local authorities and guidance from the Housing Ombudsman.
2.3 The purpose of the report is to seek the view of Members in order to inform the final version of the policy and shape the recommendation to the Executive Member for adoption.
2.4 The draft policy introduces a unified approach to statutory and discretionary compensation, supported by a structured matrix that guides the calculation of discretionary payments based on impact and responsibility. It includes clear exclusions while allowing flexibility to consider individual tenant circumstances. Developed using best practice from other authorities and shaped by tenant feedback, the policy aligns with national regulatory standards and aims to ensure fairness, transparency, and consistency across the Council’s housing services.
3.0 BACKGROUND
3.2 Work is underway to harmonise policies across the Housing Revenue Account functions. Transparency in decision-making around those policies is central to the revised Consumer Standards, as data-based decision making is a critical tool in the Council’s ability to demonstrate service improvement and delivery being driven by the specific needs and vulnerabilities of its tenants.
3.3 Following Local Government Reorganisation in North Yorkshire in 2023, the new unitary authority inherited responsibility for approximately 8,500 council homes previously managed by the former stock-holding authorities of Selby District Council, Harrogate Borough Council, and Richmondshire District Council. Each of these authorities operated different approaches to tenant and leaseholder compensation, resulting in a fragmented and inconsistent system across the county.
3.4 Selby District Council had in place a formal and comprehensive Housing Compensation Policy, which provided clear guidance for both staff and tenants. Harrogate Borough Council had a limited compensation framework, applying only to tenants affected by issues related to ground source heat pump systems. Richmondshire District Council, by contrast, had no formal policy, and compensation was issued on a discretionary, ad hoc basis without standardised procedures.
3.5 As a result of these differing approaches, tenants across the county have experienced varying levels of service and approaches to redress.
3.6 The Housing Ombudsman’s Complaint Handling Code requires social landlords to have a clear and accessible compensation policy that promotes fairness and consistency in addressing service failures. In response to these requirements and the need to harmonise practices across the new authority, a draft Housing Compensation Policy has been developed.
3.7 This draft policy draws on the legacy Selby policy, incorporates relevant aspects of Harrogate’s previous framework, and reflects best practice from other local authorities. It sets out transparent processes, decision-making criteria, and indicative compensation levels to ensure equitable treatment for all tenants and leaseholders across North Yorkshire.
4.0 COMPENSATION POLICY
4.1 The policy applies to all tenants and leaseholders living in council-owned housing. It covers both statutory and discretionary compensation. Statutory compensation includes payments required by law, such as home loss and disturbance payments. Discretionary compensation may be awarded in a broader range of circumstances, including temporary loss of amenities (such as heating or hot water), delays in repairs or service delivery, missed appointments, and poor complaint handling. The Policy sets out a clear, structured approach for awarding compensation in instances where there have been service issues or disruptions. This includes both situations where the Council is at fault and those where compensation may be appropriate despite no direct fault, e.g. Home Loss Payments due to regeneration works.
4.2 To support fair and transparent decision-making, the policy introduces standard compensation categories and indicative payment ranges. These are designed to ensure consistency across cases while allowing flexibility based on individual circumstances.
4.3 The policy also sets out clear exclusions where compensation will not be paid. These include, but are not limited to situations where the issue was caused or worsened by the tenant’s own actions or inaction, where there is no evidence of a service issue or disruption, or where the loss of supply of gas, electricity or water that is outside of the Council’s control, such as a failure by the utility provider. However, in applying these exclusions, the Council will take into account the diverse needs, vulnerabilities, and individual circumstances of tenants that may have influenced the tenant’s ability to act or respond.
4.4 Discretionary compensation is assessed using a structured matrix based on two key criteria: the level of impact on the tenant (None, Low, Medium, High) and the degree of responsibility accepted by the Council (None, Partial, Full). The matrix below outlines the suggested payment amounts:
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Impact |
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Responsibility |
None |
Low |
Medium |
High |
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None |
0 |
0 |
0 |
0 |
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Partial |
0 |
50 |
100 |
500 |
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Full |
0 |
75 |
250 |
750 |
4.5 This matrix provides a proportionate and transparent approach to calculating discretionary payments. For example, a case assessed as having “Partial” responsibility and “Medium” impact would result in a suggested payment of £100. A case with “Full” responsibility and “High” impact would suggest a payment of £750. This approach ensures that compensation is aligned with the severity of the impact and the Council’s level of accountability.
4.6 The policy includes clear guidance on the process for submitting and assessing compensation claims. All decisions will be made in a timely, proportionate, and evidence-based manner. The policy is aligned with the Housing Ombudsman’s Complaint Handling Code and supports the Council’s broader commitment to improving housing service standards and responsiveness.
4.7 The policy also includes a clear process for tenants to appeal compensation decisions. Where a tenant is dissatisfied with the outcome of their claim, they may request a review. This ensures that all claims are handled fairly, transparently, and with appropriate oversight, reinforcing the Council’s commitment to accountability and tenant rights.
4.8 Once adopted, the policy will be applied consistently across the Council’s housing portfolio. This will provide clarity for tenants, leaseholders, and staff, and reduce the risk of inconsistent or inequitable outcomes. Managing a single, unified policy also improves operational efficiency, simplifies staff training, and enables quicker resolution of claims.
4.9 The introduction of a clear and consistent compensation framework contributes to improved service delivery. It ensures that where service issues or disruptions occur, they are addressed fairly and transparently, reinforcing the Council’s commitment to accountability and continuous improvement.
4.10 To maintain public confidence and improve service delivery, the policy will be regularly reviewed and updated in line with legislative changes, best practice, and feedback from tenants. It also links closely with other key documents, including the Repairs Standard and the Complaints Policy, to ensure a joined-up approach to tenant services.
5.0 REGULATOR OF SOCIAL HOUSING CONSUMER STANDARDS
5.1 The draft Compensation Policy has been developed in alignment with the Consumer Standards introduced by the Regulator or Social Housing in 2024.
5.2 In particular, it supports compliance with the Transparency, Influence and Accountability Standard, which requires registered providers to be open about services, ensure fair treatment and offer clear routes to redress where service failures occur.
5.3 By providing a structured, consistent framework for addressing compensation claims, the policy ensures that tenants and leaseholders are treated equitably, that service failures are acknowledged and rectified and that the Council is accountable for the quality of its housing services.
5.4 The policy also promotes learning from complaints and compensation cases, helping to drive continuous improvement and meet the Regulators strengthened focus on proactive consumer regulation and tenant satisfaction.
5.5 It also aligns with the Quality Standard, by reinforcing the Councils responsibility to maintain homes and housing services to a high standard; where this fails, the policy provides a fair and consistent route to compensation.
5.6 The Tenancy Standard is supported through the policy’s role in ensuring tenants are treated and with respect throughout the management of their tenancy, particularly when issues such as disrepair, missed appointments or delays in service arise.
6.0 TENANTS VOICE
6.1 It is a requirement of the Regulator of Social Housing Transparency, Influence and Accountability standard for a Registered provider, ‘to take tenant’s views into account in their decision making about how landlord services are delivered and communicate how tenant’s views have been considered.’
6.2 Consultation has been undertaken with tenants in the form of a Tenant Focus Group which was held on the 27 May 2025. Four involved tenants attended, and they were provided with an opportunity to engage directly with the draft policy, understand its implications and contribute their perspectives to ensure the final draft is both effective and accessible. Tenants were encouraged to share their overall impressions of the policy, suggest any changes or additions and to raise any issues not covered in the structured discussion points.
6.3 Tenants examined the three main types of compensation covered by the policy—statutory compensation, quantifiable loss payments, and discretionary compensation for service failures. The group also looked at proposed policy exclusions, the appeals and review process, and how compensation decisions would be communicated and monitored. Tenants were asked to consider the clarity, fairness, and accessibility of each section, and to provide feedback on payment amounts, timeframes, and how the policy could better reflect real-life tenant experiences.
6.4 Overall, tenant feedback was generally positive. Tenants found the policy to be clear and welcomed the council’s efforts to formalise its approach to compensation. While tenants offered constructive suggestions for improvements, the general sentiment reflected support for the policy’s aims and direction.
6.5 However, a concern tenants had was that the policy lacked specificity in addressing ongoing complex issues with as damp, mould and the installation of unsuitable heating systems like ground source heat pumps. These issues were seen as a persistent problem, that the policy does not address.
6.6 Suggestions were also made to improve the accessibility and usability of the policy, particularly in its online format. Tenants recommended the inclusion of a search function on the council’s website to allow users to quickly navigate to specific sections of the policy. This was seen as a practical enhancement that would make the policy more user-friendly.
6.7 There was also discussion around the terminology used in the policy, particularly the inconsistent use of ‘calendar days’ and ‘working days’ across different policies e.g. the repairs standard using calendar days, and the compensation policy using working days. Tenants felt like a single, consistent approach should be adopted throughout the documents to avoid confusion.
6.8 Additionally, tenants proposed that the policy should be reviewed after its first year of implementation and then every three years thereafter to ensure it remains relevant and responsive to tenants needs.
6.9 On financial matters, tenants proposed that 28 calendar days was a reasonable timeframe for payments to be made. Concerns were also raised about the adequacy of maximum compensation amounts for discretionary compensation payments. The current maximum payment of £750 was seen to be too low, and it was recommended that both the amount offered, and the maximum cap be reviewed regularly to reflect changing circumstances and costs. Tenants cited issues such as Ground Source Heat Pumps as an example, stating that compensation costs for such issues may easily exceed the £750 maximum set.
6.10 Another important area of discussion was the section on exclusions. Tenants emphasised the need for clarity around situations where tenants may be unable to meet certain responsibilities due to personal circumstances and vulnerabilities. They recommended including a caveat that each case should be assessed individually to ensure fairness and avoid penalising tenants for inaction beyond their control. To reinforce this point, it was suggested that the policy should highlight the equalities statement throughout, particularly in sections dealing with policy exclusions and/or tenant responsibilities.
6.11 As a result of the consultation with tenants, several refinements have been made to the draft policy, to ensure it is more inclusive and effective. Clarifications will be made around terminology, such as the consistent use of calendar days and financial processes, including payment timeframes. The policy will also include a more flexible and case sensitive approach to exclusions, ensuring that individual circumstances are considered on a case-by-case basis, supported by a strengthened and repeated equalities statement. These changes reflect the council’s commitment to embedding tenant voice into policy development and ensuring the final version is both practical and equitable.
7.0 CONTRIBUTION TO COUNCIL PRIORITIES
7.1 The draft Housing Compensation Policy aligns closely with North Yorkshire Council’s strategic priorities as set out in the Council Plan. It supports the commitment to “Putting residents first” by ensuring tenants and leaseholders are treated fairly and consistently when service failures occur, providing a transparent route to redress that reflects the Council’s responsibility to deliver accountable, resident-focused services.
7.2 By introducing a unified approach across the county, the policy underpins the priority to “Deliver high-quality, efficient, and effective public services”, removing previous inconsistencies inherited from the legacy councils and improving the overall tenant experience.
7.3 In addition, the policy strengthens the Council’s commitment to “Being a well-run council” through the promotion of fairness, transparency, and good governance in housing service delivery.
7.4 By aligning with the Housing Ombudsman’s Complaint Handling Code and the 2024 Consumer Standards, the policy also supports ongoing service improvement and reinforces public confidence in the Council’s ability to learn from mistakes and act in the best interests of its residents.
8.0 ALTERNATIVE OPTIONS CONSIDERED
8.1 An alternative option would be to not create a single Compensation Policy and continue with previous procedures in place in the former localities. This is not recommended, as it would perpetuate inconsistencies in how compensation claims are assessed and awarded, potentially leading to perceptions of unfairness and inequality among tenants.
8.2 Without a unified policy, staff may apply different thresholds or criteria, which could undermine trust in the local authority and expose it to reputational and legal risks. A single, transparent policy ensures clarity, accountability, and equitable treatment for all residents, regardless of where they live.
9.0 FINANCIAL IMPLICATIONS
9.1 As presented above, the aim of adopting a single, unified Compensation Policy is to ensure consistency and clarity for our tenants, regardless of which area of the County they live. Therefore, is not expected that this policy will have a direct impact on increasing or decreasing the value or number of compensation payments awarded. Having clear policies in place is part of the overall service improvement plan covering repairs handling, tenant communication and a significant capital programme investing in our homes, which should ultimately result in fewer compensation payments being necessary.
9.2 It is acknowledged that that the Committee had an interest in undertaking a detailed review of the Compensation Policy, and the value of such scrutiny is recognised in terms of ensuring the policy is robust, fair and aligned with both tenant expectations and organisational priorities.
9.3 However, due to the urgent need to harmonise compensation practices across the authority, it is necessary to implement a revised policy framework without delay. This proactive step has been taken to reduce the Council’s exposure to inconsistent practices and to ensure a more equitable and defensible approach to compensation.
9.4 To provide some context on scale, awards of £39k were issued during 2024/25. It is proposed that a comprehensive review is scheduled for 12 months post policy implementation. At that point, the committee will have the opportunity to assess how the policy is operating in practice, supported by a full year of implementation data, including detailed financial reporting, performance trends and tenant feedback. This will enable a more informed and meaningful evaluation of the policy’s effectiveness and impact.
10.0 LEGAL IMPLICATIONS
10.1 Considered within the body of the policy and elsewhere within this report.
11.0 EQUALITIES IMPLICATIONS
11.1 An Equalities Impact Assessment Form has been completed and reviewed internally, which has identified that the proposal will have no negative impact on anyone with any protected characteristics.
11.2 Mitigation will be taken through robust governance assurance on complaints, led by a quarterly complaints report.
11.3 A key consideration is the accessibility of this policy, and it is proposed that the policy be publicised via the tenants newsletter, and available on the website. A hard copy of the policy will be provided to any tenant upon request and in other formats as required.
12.0 CLIMATE CHANGE IMPLICATIONS
12.1 A Climate Change Impact Assessment (CCIA) screening form has been completed, which has concluded that the policy results in no positive or negative climate change impacts.
13.0 PERFORMANCE IMPLICATIONS
13.1 Although compensation performance indicators have not been routinely reported in the past, this is being addressed as part of the Performance Framework for the Housing Revenue Account that is currently being drafted. As part of this framework, Tier 2 performance dashboards are being developed for both the Housing Standards and Housing Management and Landlord Services. These dashboards will include key metrics related to compensation, enabling more consistent tracking, analysis and reporting of performance in this area moving forward.
14.0 POLICY IMPLICATIONS
14.1 The new Compensation Policy will replace any former Compensation Policies and procedures in place across the County.
14.2 The Housing Service will adopt the policy following approval.
15.0 RISK MANAGEMENT IMPLICATIONS
15.1 The Council risks reputational damage in a situation where there is no single Compensation Policy for tenants and leaseholders to refer to. Claims need to be managed effectively, quickly and robustly with a published procedure that is clearly communicated. Without this, it would be difficult to manage the expectations of tenants who are in the process of a compensation claim, potentially leading to negative perceptions of the Council.
15.2 The Council is also at a financial risk where there is no single Compensation Policy in place as there is then no consistency in compensation amount that are being paid, and these could vary greatly across the county. The new Compensation Policy will allow for compensation payments to be paid consistently and monitored.
16.0 REASONS FOR RECOMMENDATIONS
16.1 A unified Compensation Policy is essential to ensure fairness, consistency, and transparency in how compensation claims are handled across North Yorkshire Council’s housing services.
16.2 The policy addresses inconsistencies inherited from former councils, aligns with regulatory standards, and introduces a clear framework for assessing both statutory and discretionary compensation.
16.3 The policy reflects best practice and incorporates tenant feedback, ensuring the approach is both equitable and responsive to residents’ needs.
16.4 Adoption of the policy will reduce reputational and financial risks, improve service delivery, and support the Council’s commitment to accountability and continuous improvement.
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17.0
17.1 |
RECOMMENDATION(S)
The Committee is asked to consider:
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i) The draft Compensation Policy in advance of its recommended sign off by the Executive Member and provide feedback on the content.
ii) The compensation amounts set in the Discretionary Compensation Matrix detailed at paragraph 4.5 - feedback is sought on whether the suggested amounts are appropriate, proportionate, and reflective of the Council’s commitment to fairness, accountability and service improvement.
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Nic Harne
Corporate Director Community Development
County Hall
Northallerton
2 June 2025
Report Author – Imogen Downie, Housing Policy and Strategy Officer (Service Improvement)
Presenter of Report – Vicky Young, Service Improvement Manager
BACKGROUND DOCUMENTS: None
APPENDICES:
Appendix A – Draft Compensation Policy
Appendix B – Equalities Impact Assessment
Appendix C – Climate Change Impact Assessment Screening Form