SHAC activists can be rightly proud of their campaigning on service charges which has forced one of the biggest associations in Britain to change the way they charge tenants (renters) and residents (leaseholders and shared owners) for services.
But the battle is not over yet. Voluntary reform is always unstable and easily eroded. We need to press ahead for stronger legislation and more powerful regulation to embed permanent change and to end service charge abuse.
Southern’s Clean-Up Operation
Housing Today’s article Southern Chief Executive Announces Overhaul of Service Charges covers this major landlord’s plans to reduce the amounts being paid in charges by its tenants and residents.
Amongst the measures being introduced are annual reviews of actual cost changes rather than just applying inflationary uplifts. The law says that charges should reflect actual costs. We know that they don’t. The change announced by Southern will mean more accurate, and therefore more legally compliant bills because whereas inflation reflects an average rise in prices, this can be dramatically different from the rise or fall in the cost of individual items.
Southern also announced that there will be a new team of staff dedicated to managing the managing agents. These are the ‘middlemen’ companies who provide services on behalf of landlords. It is a multi-million-pound industry. One of the biggest complaints from SHAC members in relation to their service charges is that even the most blatantly inaccurate charge from a sub-contractor or managing agent is passed onto tenants and residents with no apparent checks from the landlord.
Finally, Southern plan to move away from taking on the management of housing on behalf of other developers (known as Section 106 contracts) and replace them with more direct contractual arrangements which provide Southern with more control over services and costs.
SHAC Activists’ Role
Carl Brown, the article’s author, draws two direct links between Southern Housing’s moves to clean up its act, and SHAC’s End Service Charge Abuse campaign.
As the article explains, in April 2024, George Howarth MP sent an open letter to Michael Gove, Secretary of State for Housing, calling on him to introduce regulation, new legal protections and improved enforcement in relation to charges. It was co-signed by 34 other MPs from the Labour Party, Plaid Cymru (Wales), The Green Party, the Democratic Unionist Party (Ireland), and several independent MPs. The letter had been drafted by SHAC in consultation with our members.
As a result of the letter, housing associations were for the first time forced to make a public statement on service charges (although we’ve yet to see an apology for all the inaccuracies). The rebuttal was penned by L&Q chief executive, Fiona Fletcher-Smith, who leads the ‘G15’ group of large, London based housing associations. As expected, she denied that housing associations make a profit from service charges, although in the non-profit sector, these are of course described as surpluses instead.
The Housing Today article also points to a major piece carried on Sky News featuring SHAC member Michael Savell who reclaimed £318,000 on behalf of his Southern Housing estate in overcharged fees. It was a major public embarrassment for Southern and no doubt helped focus the executive hive-mind on the need for change.
L&Q’s Shocking Service Charge Admission
Coincidentally, just as Housing Today was running its piece, The Guardian featured a story about how L&Q forgot it had installed a brand new water pump which was far cheaper to run and maintain than the old one. As a result of this amnesia, it increased water charges to tenants and residents by 378%. When The Guardian began investigating, L&Q suddenly spotted its ‘error’ and reimbursed the money.
Staggeringly, L&Q has now said that it will take ‘infrastructure upgrades’ into account when calculating service charges across its estate, which means that they haven’t done so in the past, which means that others have been massively over-paying too. The article does not indicate whether these historical overcharges will be similarly reimbursed (L&Q Sees the Flaw in its 80% Price Rise).
Lessons for the Future
These developments demonstrate two important points for SHAC members and other housing activists. The first is that pressure can bring about change, contrary to the ‘you are powerless’ narrative constantly fed to us by those in power.
Secondly, when those same powerful organisations feel that your message is getting through and tough action might be on the horizon, they will act pre-emptively hoping to reassure politicians that legislative change is not needed, and that self-regulation is adequate. It is surely no coincidence that Southern’s sudden clean-up operation is happening on the eve of a new government.
SHAC protestors make their point outside the 2024 Social Housing Finance Conference
We must not therefore relax our endeavours. If we do, we will be left with the same inadequate protections, lack of accountability, and feeble enforcement that we have now. If you pay service charges, join the End Service Charge Abuse campaign and help us make sure that this legalised extortion racket is ended for good.
1 July 2024
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EXCELLENT by SHAC – You have our full suppport as always.
We are engaged with an even bigger scandal with Social Landlords.
Akin to the Post Office Scandal.
Legitimate UK Social Landlord Housing tenants – terrorised by their landlord by whatever means and for however long it takes, under everyones noses.
The targeting of innocent tenants with terror campaigns by social landlords to silence innocent tenants from speaking up about anything the social landlord bully does not want to deal with/heard.
Anchor Hanover Group (Anchor) have been targeting us for 4 years – to have us illegally evicted and criminalised – using fabricated neighbour disputes, fabricated anti-social behaviour orders and multiple Enviromental Health Officers trying to build up false reports of illegal dumping, illegal drug manufacture, running illegal businesses amongst other things.
It seems there is no depth that Housing Assopciations will not sink to – to cover their tracks and smash innocent contract holders (renters/residents/tenants) into homelessness, sickness, joblessness, prison and worse – to cover for their service charge abuse – and their abuse of tenants for fabricated illegal eviction.
John and Linda
Anchor/Anchor Hanover Group tenants.
this is Southern Housing’s current service charge correspondence to tenants, https://x.com/bamboozlynne1/status/1840750310312018252