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Kensington Regeneration


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									                             Consumer Focus
            Piloting Reputational Regulation

Mojo Housing Consultancy Ltd

221 Allerton Road,
L18 6JL
 0151 475 0726
 07721 011276
E-mail: GJMartin@blueyonder.co.uk

As part of its assignment on “Empowering Private Sector Tenants” Mojo Housing
Consultancy were asked to suggest a research methodology for testing proposals to
introduce a system of reputational regulation for the Private Rented Sector.

The research and main report applied considerable effort to exploring the practicalities of
establishing such a scheme of reputational regulation, and identifying the features that such
a scheme would need to meet in order to be practical and to work.

At the time of the initial research it was unclear whether there would be Government support
for the establishment of a register of private landlords, and the research explored the
practicalities of establishing a system of reputational regulation both with and without the
existence of the proposed register of landlords. Government has now clarified that there is
no support for a landlord register, and the research methodology proposed reflects this.

In discussion with Consumer Focus it has been agreed that there would be little value in
retesting the findings of the initial research, and that the key priority was to design a pilot
which would either establish that a scheme of Reputational Regulation is practical and
workable, or would alternatively demonstrate that the various challenges and complexities
identified during the research are insurmountable or unaffordable, rendering the concept

In this proposal we set out our recommended approach to piloting a scheme of
“Reputational Regulation” for private sector renting.
Stages in the Pilot
The main report includes a chapter “Towards a Workable Scheme” which identifies the key
features necessary for a scheme to work, and how such a scheme could be designed and
then tested through a large scale pilot. The report concludes that:

A successful scheme of reputational regulation for private sector renting is likely to include
the following features:

          Be web based
          Apply to landlords (and preferably agents) only, but not to individual properties
          Protect the privacy of landlords, but ensure they are genuine
          Ensure anonymity of tenant/previous tenants providing feedback, but verify they
           are genuine
          Be linked to a large, existing database of landlords (such as managed by the
           deposit protection and dispute agencies, or just possibly to the large property
           web portals or Council Housing Benefit websites)
          Be endorsed and supported by Government
          Be adequately funded at start-up, including having adequate budgets for set-up
           costs, piloting, initial publicity and to manage legal challenges
          Have very low running costs
          Allow landlords to include a brief self-description and identify any accreditation
           schemes of which they are members, and allow for independent “star ratings” to
           be provided by appropriate, approved third-party agencies, and allow a web link
           (where relevant) to the landlord or agents website
          Allow applicants to easily find the feedback and other information about the
           landlord, along with simple “good practice” advice to tenants on what questions
           to ask, and what to think about, before agreeing to a tenancy
          Minimise administration and moderation costs through good design of the
           feedback site, including:
                   o Specific questions designed to capture the different areas in which a
                        tenant can rate a landlord’s services
                   o Multiple choice “ranking” answers
                   o Limiting ability to post free field responses
                   o Use of intelligent software to screen free field responses to minimise
                        number requiring judgement by a human moderator
          Maximise feedback, and optimise “dispassionate” feedback by proactively
           seeking tenants views at a specific point of the tenancy

The rest of the chapter set out the different stages and requirements needed to achieve a
successful pilot. These are now considered below in stages.

Firstly however it is necessary to consider a practical issue which emerged during the
preparation of the proposals for setting up a pilot scheme. In the work carried out in
preparing the proposals it became apparent that some of the key activities required
considerable work (by third parties) in order to provide a firm estimate of cost. Equally there
was a degree of nervousness in the current economic and political climate for potential
partners to invest significant cost and resources into costing and preparing for an exercise
which may be unfunded. Linked to this there is a degree of uncertainty as to the total budget
likely to be available to develop and fund a pilot.

To address these very real practical points this proposal is divided into a number of
sequential modules, to allow funding to be approved in stages, and to allow maximum
progress according to available funding (and also to allow early cut off of the project in the
event of the pilot exercise demonstrating that a full National Scheme is impractical).
Initial Preparatory Work
The work envisaged at this stage would be:

    The establishment of an advisory group to provide guidance to the project, and to
     ensure that key stakeholders are represented.
    Work with tenants (with some input from web-designers) to develop the multiple
     choice questions which would populate the tenant feedback screens
    Identify the route to obtaining a sufficiently large pool of volunteer residential
     landlords for the pilot to have “critical mass”.
    Obtain detailed costings for software writing, web design and web-hosting for the
     subsequent “live” stages of the pilot.
    (If required) Obtain the agreement of an external body (e.g. University) to provide
     independent evaluation of the pilot
    Engaging a legal advisor able to quantify the detail and cost of the legal advice
     needed for the subsequent delivery of the “live” pilot stages.
    Provide firm costings for the next stage, and appropriate progress report.

It is hoped (and anticipated) that the Deposit Protection Service would be willing and able to
provide the route to both volunteer landlords and detailed costings of software and web-
hosting. However this is not a firm assumption and so for simplicity and neutrality the rest of
the proposal will use the term “Landlord Hub Provider” to cover this role.

Piloting Tenant Response
This stage would cover the development of a “Live Feedback Website”, and the piloting of
tenant feedback. Key work elements would be:

    Working with the “Landlord Hub Provider(s)”, and web designers to develop a fully
     working “feedback capture” hosted website
    Working with the “Landlord Hub Provider(s)” to:
        o Obtain the agreed participation of substantial numbers of landlords on a
            volunteer basis
        o Develop a protocol (compliant with data protection rules) for contacting
            tenants and inviting them to provide feedback on their landlord
        o Pilot the protocol for contacting tenants, and explore the cost and efficiency of
            different methods of obtaining feedback from tenants. This would include
            testing the use of:
                  Email contact
                  Text messaging
                  Semi-automated tele-calling
                  Direct mailing
                  And checking the enhanced return obtained from individual reminders
                    and generalised publicity
    Analysing the results
    Exploring the practicalities of using “intelligent software” to moderate “free field”
    Sharing – as appropriate – anonymised results with participating landlords, and
     assessing support for voluntary participation in the final stage of the Pilot
    Appropriate reporting to and engagement with Advisory Group (and independent
    As appropriate prepare firmly costed proposals for final stage of pilot
    Write up interim report of experience of pilot at this stage, including a
     recommendation as to whether to proceed to the final stage
Piloting Tenant Feedback and Live Applicant Access Pilot
This final stage (if implemented) would be to allow and enable “live” use of tenant feedback
by potential applicants for accommodation.

Key elements of work would be:

    Design of “applicant facing” website, and consultation on details of display and
    Agreement with volunteer landlords to use data from stage 2 of pilot to populate
     website (where forthcoming)
    Decision on “target locality” for pilot
    Develop protocols to allow applicants to easily identify properties advertised by
     participating landlords
    Recruitment of enhanced pool of landlords
    Development of protocols and procedures for responding to complaints from
     landlords about postings
    Legal advice on nature of postings to be allowed and compliance with Freedom of
    Modelling cost of a full National rollout of scheme, and preliminary exploration of
     commercial and other potential funding sources, and explore different “hosting”
    Survey of users (applicants) to obtain customer feedback
    Survey of participating landlords to obtain provider feedback
    Appropriate reporting to and engagement with Advisory Group (and independent
    As appropriate prepare costed proposals for establishing and running a National
    Write up final report, including a recommendation as to the practicalities and balance
     of benefits for the establishment of a National Scheme.

Detail and Costings
The above summary points are now expanded with indicative costings.
At this stage Mojo would be willing to run the preliminary stage of the piloting exercise for
the costs identified. Costings for the subsequent “live” stages are illustrative and subject to
significant variation. However it is clear that key partners are only willing to cost up the
detailed requirements of the “live” stages if they have a clear expectation that firm funding is
available for at least the “Piloting Tenant Response” stage – subject of course to fair scrutiny
and normal due diligence of the final proposals and costs.

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