On Friday 10th July, SHAC received fresh communication from the National Audit Office (NAO), for the first time concurring with SHAC that there is a serious gap in regulatory oversight when it comes to service charges paid by councils using Housing Benefit, although they do not agree with all our conclusions.
For some tenants, the cost of service provision such as communal cleaning, lift maintenance, and communal gardening are billed separately by landlords alongside the rent demand. Housing Benefit (HB) can cover both rents and service charge demands, and is often paid by councils directly to the landlord.
The council processes for checking the validity of the bills presented by landlords is largely based on a misunderstanding of the role and powers of the Social Housing Regulator. Recognition of this by the NAO It marks an institutional milestone in our fight to End Service Charge Abuse.
All councils check whether the items listed in the demand are theoretically eligible according to HB rules, but the vast majority do not check whether the services are actually provided, or that they are provided at a reasonable cost. Nor could they – the resource demand for such checks would be enourmous. This leaves a black hole in public spending oversight.
Concurrently, campaigners from Viridian Apartments in Battersea, London, a Notting Hill Genesis (NHG) estate have won a landmark Upper Tribunal ruling confirming that housing associations cannot legally force residents to pay for services they are physically barred from using.
Because the ruling was in the upper court, it creates a precedent that others similarly affected can use to support their own challenges against this widespread practice.
SHAC protestors highlight housing injustice
A Significant Drain
For years, social housing tenants and leaseholders have known that the service charge system is fundamentally broken. Our members routinely open letters demanding arbitrary, inflated fees for services that are poorly delivered or entirely non-existent. We have consistently argued that this isn’t just an individual tenant grievance but also a significant drain on the British taxpayer.
Now, the UK’s independent public spending watchdog has stepped into the fray. In an official response to formal representations made by SHAC, Gareth Davies, the Comptroller and Auditor General of the National Audit Office (NAO), confirmed that the watchdog has:
- Officially reviewed SHAC’s research and survey evidence;
- Formally recognised the severe limitations in current oversight arrangements;
- Discussed these issues directly with central government officials; and
- Challenged the responsible government departments to explain how they intend to safeguard public money.
While the NAO stops short of explicitly endorsing SHAC’s campaign conclusions, this formal intervention shatters the government’s long-standing narrative that service charge disputes are simply private, isolated disagreements between landlords and residents. Also, that it is an exclusively leaseholder problem that will be addressed by leasehold reform. The impact on tenants has been a persistent and frustrating Government blind spot.
Multi-Agency Pass-the-Parcel
SHAC’s multiple research reports, alongside our recent mass national surveys, have consistently exposed a cynical regulatory chasm. Currently, accountability is passed around in circles by public bodies operating in total isolation:
- Local Authorities approve welfare payments, assuming the Regulator of Social Housing (RSH) oversees how landlords compute their bills.
- The Regulator of Social Housing flatly refuses to audit billing, explicitly stating that service charge disputes belong strictly within the jurisdiction of the First-tier Tribunal.
- The First-tier Tribunal can retrospectively slash individual bills, and indeed, our data shows tenants win reductions or removals in 73% of tribunal cases, but it has absolutely no legal power to correct systemic landlord failures or force housing associations to refund other unrepresented tenants. Nor will it address overcharging of Housing Benefit.
Central Government sits at the top of this broken pyramid, admitting it has made no formal assessment of the problem while blindly writing the cheques. This total regulatory vacuum leaves ordinary families trapped in an exhausting war of attrition against corporate landlords and housing providers.
The Nonsense of ‘Ghost Billing’ Exposed: The NHG Landmark Ruling
The pure absurdity of this unmonitored system is perfectly illustrated by a landmark victory won by shared ownership leaseholders at Viridian Apartments in Battersea against Notting Hill Genesis).
In a case stretching back over a decade, the housing association systematically hit residents of an affordable housing block with exorbitant service charges for luxury facilities they were banned from entering.
The block had its own separate entrance, meaning residents were entirely locked out of the development’s communal gardens, gym, concierge service, and main blocks. Despite this total lack of access, NHG ignored the text of the residents’ leases and passed on the bills for maintaining these restricted areas. The charges included communal electricity, garden maintenance, and concierge staffing.
In a desperate attempt to defend the practice, the housing association argued in court that residents still “benefited” from a well-kept estate simply by looking at it. Dismissing this argument as “deeply unattractive,” Judge Elizabeth Cooke at the Upper Tribunal threw out the landlord’s appeal on all grounds.
This corporate financial abuse carries a devastating human cost. Service charges for a two-bedroom flat at Viridian skyrocketed by 265% over fifteen years, peaking at around £6,200 annually for homes explicitly bought because they were marketed as affordable housing.
While the ruling protects future bills, years of past overcharges remain legally unrecoverable under current rules, leaving exploited tenants thousands of pounds out of pocket.
The Need for Urgent, Fundamental Reform
The scale of financial exposure uncovered by SHAC’s End Service Charge Abuse campaign is staggering. We have collated a mountain of evidence submitted by members or collected through surveys and research projects. They have shown that overcharging is routine, widespread and difficult to recover for individuals paying charges directly.
Now we have opened the lid on the impact on Housing Benefit and Universal Credit. Inquiries triggered by our work reveal that the Department for Work & Pensions (DWP) pays out an estimated £39.9 billion in housing support annually through Housing Benefit and Universal Credit. Unbelievably, the state does not even separate basic rent from additional service charges within that multi-billion-pound welfare budget, and cannot therefore account for each independently.
Taken together, these different strands of enquiry by SHAC and the NHG campaigners’ victory against one of the UK’s largest landlords underscore the need for urgent and fundamental reform.
Taking the Fight to Westminster
The NAO confirmed that they will be writing directly to both the DWP and the Ministry of Housing, Communities & Local Government (MHCLG). They will press both departments to outline concrete steps to protect residents and reduce the obvious financial risks to public funds.
On the back of the letter, SHAC has already written to Steve Reeed, Secretary of State for HCLG, and to Housing Minister Matthew Pennycook asking for an urgent meeting .
We have also written to two Parliamentary scrutiny bodies – the Public Accounts Committee and the Housing Select Committee – asking for fresh inquiries to be launched.
Multiple independent strands of evidence now point to a single conclusion: the status quo is untenable. This is a profound public spending and regulatory failure that simultaneously exploits vulnerable tenants and fleeces the taxpayer.
Later in the year, we will be calling on Members of Parliament from all parties to join us in an upcoming cross-party discussion. The government can no longer hide behind retrospective tribunal loops. We need robust, proactive regulation to close this multi-billion-pound loophole once and for all.
If you are experiencing unfair or inflated service charges, you are not alone. Read your lease carefully, check what facilities you can actually access, and join SHAC (free here) today to build collective tenant power.
A Call to Action: Sign Our Petition!
SHAC’s Parliamentary petition calls for government to make it possible for tenants and leaseholders to pay disputed service charges to a court. The funds will then only pass to landlords if they can prove the charge’s legitimacy within a set timeframe. Otherwise, the money returns to the tenant or leaseholder. Please sign here and share via Facebook, Instagram, Twitter and Bluesky.
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14 July 2026
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