Serious detriment

The Localism Act 2011 places a restriction on the Regulator’s ability to use its powers in relation to a provider failing to meet a consumer standard.  The HCA's regulatory and enforcement powers may only be used if we think that a standard has been failed and there are reasonable grounds to suspect that:

• The failure has resulted in a serious detriment to the provider’s tenants (or potential tenants) or
• There is a significant risk that, if no action is taken by the Regulator, the failure will result in a serious detriment to the provider’s tenants (or potential tenants)

This is the basis of what is called the ‘serious detriment test’. In defining ‘serious detriment’, it is clear that the threshold for regulatory intervention is intended to be significantly higher than that in relation to the economic standards. Failure to meet one or more of the consumer standards does not in itself lead directly to a judgement of serious detriment by the Regulator.

We will therefore judge whether actual or potential serious detriment exists depending on the circumstances of each case, based on an evaluation of the harm or potential harm to tenants.

The main sources of intelligence about potential cases of serious detriment will be information referred to us by third parties.

In considering whether failure of a consumer standard has or may lead to serious detriment, the regulator is obliged to have regard to information received from a number of authorities, representative bodies and individuals that are specified in the Localism Act. These include the housing ombudsman, tenant representative bodies, MPs, local authority councillors, the Health and Safety Executive or a fire and rescue authority.  Information received in this context from these specified bodies are known as statutory referrals.

There is more information on this in chapter 5 of the Regulatory Framework.