Housing watchdog proposes 40% hike in fees

The Housing Ombudsman has proposed increasing the fees it charges housing providers by 40%, from £5.75 per unit in 2023/24 to £8.03.

The fee change was originally set at £9.16 per unit. However, due to the Housing Ombudsman’s inability to fill all the anticipated positions in the current fiscal year, the proposed fee has been lowered to £8.03.

The Ombudsman is also considering a potential change to its fee regime, proposing a “polluter pays” model to drive better landlord complaint-handling behaviour.

The proposed model would require housing providers to pay both a membership and a cost per case fee. Alternatively, it may involve higher charges for those with the highest maladministration rates and who use the service proportionately more.

However, the Ombudsman noted that any change to its fee regime would need to be approved by the Secretary of State and the Treasury.

In the watchdog’s draft business plan published today, the Housing Ombudsman, Richard Blakeway said he recognises financial pressures in the housing sector, but states that “while demand continues to increase exponentially, we will require more resource to meet this”.

The document says that the fee has been calculated to support increases in its caseworker headcount and to deliver more determinations on complaints. It also notes that the Social Housing (Regulation) Act has given the Housing Ombudsman Service new powers, including overseeing adherence to the complaint handling code from the beginning of the new financial year. 

This will be done through returns from landlords, which will include their self-evaluations, in addition to insights from HOS casework.

The Ombudsman has reported that demand for the service has grown beyond its forecast, exceeding 78% in the first nine months of 2023/24, and is expected to be significantly above the 30% increase previously modelled for 2024/25. It expects the growth in cases received to continue at between 50%-80% in 2024-25, above the 30% previously modelled.

The consultation on Ombudsman’s draft 2024/25 business plan will be open until 5 April.

The Ombudsman has reported an increase in levels of maladministration to 72% in the cases it has investigated this year, up from 59% in the year 2022/23.

The report states that the Ombudsman has ordered housing providers to pay a total of £3.7m in compensation this year, compared to £1.1m the year before.

Additionally, the Ombudsman has had to correct more than 14,000 issues following their investigations, compared to 6,500 in the previous year.

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Richard Blakeway, the Housing Ombudsman, said: “With an ever-increasing volume of complaints, we are using this business plan to look at how we can drive more learning and improvements in complaint handling.  

“This would help landlords resolve more complaints within their own complaint processes – providing residents with earlier resolution and improving relationships between landlord and resident. With a range of new statutory powers this year, we are considering how we use these to improve landlords’ services and culture”.

The fees that the Regulator of Social Housing charges will increase by 1.5% from April, but the regulator plans to double its fees subject to the outcomes of its consultation and approval from the Secretary of State. 

This would involve charging social landlords with more than 1,000 properties between £9 and £10 per social home they provide, almost twice the current fee of £5.40 per home.

Housing associations with fewer than 1,000 social homes would still be charged an annual flat fee, but this is set to double from £300 a year to between £600 and £700. The RSH will also charge local authorities that own more than 1,000 homes for the first time.