Now that the Grenfell Inquiry has delivered the findings of its Phase Two report, we turn our attention to implementing its recommendations. There are very few that relate directly to the management of social rented housing, largely because the government has already introduced a number of changes to the way the sector is regulated through the Social Housing (Regulation) Act, a statutory complaints handling code, revised consumer standards and the new Building Safety Regulator.

And there is still more to come, including a new competence and conduct standard, Awaab’s Law and a revised Decent Homes Standard.

However, the inquiry was scathing in its criticism of both Kensington and Chelsea Council and the TMO, finding lots of evidence of poor governance. The TMO’s board had not been kept informed about potential failings in fire safety compliance, and the relationship between the Council and the TMO was very distant. Neither the board nor the executive team listened to residents, and they did little to resolve some of the conflicts and tensions that existed between residents and their landlord over many years.

Governance lessons

So, let’s focus on governance in social housing and what lessons boards should take from this terrible disaster.

There are different governance models across our sector. While housing associations will typically have a board largely made up of non-executive directors, councils have more variation depending on whether or not they directly manage their stock or have delegated delivery of their housing management services to an ALMO or a TMO.

When looking at potential learning points I would start with whether or not there is a clear board structure in place. This will cover most housing associations and ALMOs. boards have a number of key responsibilities, including business planning, signing off key strategies, ensuring compliance, and overseeing all aspects of financial management and risk assessment.

For all the above to be delivered effectively, there are a lot of vital ingredients: boards need to be the right size; have the appropriate skills mix; receive regular updates on policy changes; attend training sessions and ‘away days’ to network and learn; have an appraisal process in place; and occasionally bring in external parties to scrutinise governance arrangements and follow up on any recommendations for change. Board members also need to find the right balance between supporting and challenging their executive team.

The resident voice

Most important of all is whether boards can demonstrate that the resident voice plays a key role in their decision-making. Board members should be asking questions like:

• What are the Tenant Satisfaction Measures (TSMs) and complaints data telling us?
• How can we demonstrate that we are listening to residents?
• Have residents been involved in formulating the recommendations put to us?
• Can we show that residents’ concerns are being noted and acted upon?
• How do we know if our residents are living in safe, good-quality homes?

Board members should be asking all these questions in order to comply with the consumer standards and be ready to be cross examined should you they be inspected by the Regulator of Social Housing or have to respond to an enquiry from the Building Safety Regulator. They are also the right thing to ask in order to improve services.

The right structure

We are seeing an increase in the number of councils setting up housing improvement boards whose membership can include independents, residents and council nominees.

For ALMOs and housing associations there are some benefits in having a clear governance structure with a board. First, residents can be given a place on the board. At least a third of ALMO board members will be residents and we are seeing housing associations starting to bring residents back onto their boards, reversing the trend of previous years.

Secondly, boards have a number of independent members who add value through their specialist skills and experience in housing management, finance, governance, legal matters, risk management and development.

Thirdly, ALMOs and housing associations are used to having their performance scrutinised. ALMOs went through Audit Commission inspections up to 2011 and HAs have had their finance and governance arrangements scrutinised by the regulator for many years.

For councils who directly manage their stock, governance may appear more straightforward, but there are a number of challenges to overcome.

First, is there a governance structure in place and how does housing fit into it? Ultimately, decision-making rests with the full council which can have dozens of councillors on it. However, most councils delegate responsibilities for housing matters to the cabinet and further down to a portfolio holder. There are no places for residents or independents on a democratically elected council.

Council chief executives and leaders are waking up to the fact that they no longer have the freedoms given to them with the Localism Act and the coalition government’s ‘bonfire of the quangos’. They now face being inspected and have to answer media enquiries or questions from opposition councillors when they have a poor set of TSM scores or a low Consumer Standards grading.

Housing improvement boards

Councils therefore need to look at alternative arrangements to ensure the resident voice is heard and a common response is to set up scrutiny panels. We are also seeing an increase in the number of councils setting up housing improvement boards (HIBs), whose membership can include independents, residents and council nominees, similar to an ALMO board. Whilst HIBs cannot make key decisions, they can oversee the delivery of improvement plans and ensure residents have access to councillors and senior officers. The challenge for HIBs is that they need to have clear governance arrangements with terms of reference, defined roles and responsibilities, and good communication channels with their council landlord.

Summary – the resident voice is central to good governance

In summary, we have a variety of governance models and all of them can work effectively. However, in the aftermath of Grenfell, every landlord needs to review their oversight of landlord services and ensure they have arrangements in place that are fit for purpose – ensuring the resident voice is heard loud and clear.