Recommendation 34

HM Government Not Addressed

In resolving a dispute, it is an Ombudsman’s role to put the complainant back in the position they would have been in had the service failure not occurred. We therefore firmly believe that non-financial remedies, as well as financial, are an important aspect of an Ombudsman’s toolkit. This includes ordering meaningful apologies, repairs or other actions to put something right, alongside changes to prevent service failures being repeated with other residents. This breadth to an Ombudsman’s remedies distinguishes it from the courts. These remedies will also reflect the individual circumstances of each case. This includes financial remedies where the impact of something going wrong will differ depending on the circumstances of the complaint and their household. In addition to specifying compensation, the Ombudsman may also order that the landlord reviews any costs incurred by the household because of service failure and makes a payment to compensate for this. Our calculation of financial compensation does not include the impact of these orders. Where the Ombudsman awards compensation, it is not intended to be punitive, as may be the case with the courts. Nor is it a regulatory fine, the scale of which may be relative to the organisation. We welcome the Committee’s recognition of the context in which compensation is ordered, as this is an area that can be misunderstood. We also welcome the Committee’s recognition that the Ombudsman’s approach has evolved significantly over the last three years with the level of compensation doubling. However, we do not believe the £25,000 threshold is required in legislation to develop the Ombudsman’s approach to compensation. There is no legislative cap to the level of compensation the Housing Ombudsman can award which means social tenants are not disadvantaged. The Ombudsman has recommended remedies that could arguably exceed the cap, such as consideration of whether a shared owner could reverse staircase, and we would not want our levels of compensation to be restricted. Furthermore, the government is legislating to remove the cap on regulatory fines within the Social Housing Regulation Bill so a cap on compensation would be inconsistent. Instead, there are other ways we would like to develop our approach on financial remedies. We will shortly publish updated remedies guidance that will include a new tier of compensation for severe resident detriment. It will also clarify where we may determine compensation levels relative to rent paid during the period of service failure, and be explicit that compensation should not be offset against rent arrears. The Ombudsman plans a further review of its remedies guidance during 2023–24 that will look at the compensation bands, with the intention that the amounts ordered within these bands will increase. A key aspect of this review will be ensuring landlords recognize distress and disruption in their own awards of compensation, and use their discretion in their complaints procedure. Furthermore, the Ombudsman will consider how its assessment of compensation can be further explained in our investigation reports. This will include loss of earnings where the Ombudsman orders compensation for inconvenience if there are repeated failings, for example, missed appointments. This would support transparency around our decision- making – a key focus for the Ombudsman – and provide an important learning resource for landlords. Notwithstanding our view on the compensation limit, we agree with the Committee that it would be wrong for divergent approaches to redress because of tenure, which is why we strongly believe there should be a single housing ombudsman with universal powers to ensure consistent and fair redress across the housing market, regardless of tenure or provider.