Government’s Decent Homes Standard impact assessment slammed as ‘not fit for purpose’

The government’s impact assessment for extending the Decent Homes Standard to private landlords has been slammed by an independent committee as ‘not fit for purpose’.

The withering condemnation of the Ministry of Housing, Communities and Local Government’s (MHCLG) proposals has been made by the Regulatory Policy Committee (RPC).

The aim is to bring private landlords under the same updated DHS rules as social housing providers by 2035.

But the committee warns that the government is avoiding discussion of viable alternatives.

Critically, the committee warns that the MHCLG hasn’t put forward a sound business case for extending the DHS to the private rented sector.

Alternatives not examined

In a series of criticisms, the RPC says the impact assessment jumps straight to a single preferred option without properly weighing alternatives.

It states: “In the absence of structured comparison, the IA (impact assessment) cannot demonstrate that the preferred option outperforms alternatives for cost-effectiveness, compliance, risks or sequencing.”

The watchdog has now ordered the department to produce a full shortlist appraisal in line with the Treasury’s Green Book rules before proceeding.

It is also critical of how benefits have been presented, pointing out that the government has not consistently applied the same ‘additionality’ logic to claimed health and wellbeing gains as it has to costs.

Landlords paying for regulations they already face

There are also major issues with the £6.5 billion price tag for implementing the DHS across both private and social housing sectors.

Crucially, 82% of the costs to private landlords are not additional because they are already being driven by pre-existing legislation such as the Homes (Fitness for Human Habitation) Act 2018.

Other laws affecting costs include the Housing Health and Safety Rating System (HHSRS), and tighter EPC standards.

The committee is sharply critical that the benefits side of the equation has not been calculated on the same basis.

It warns that many claimed tenant gains are being presented as if they are all brand new.

Uncertainty over work

For England’s 2.3 million private landlords, the report highlights continued uncertainty over exactly how much work will be required.

Around 48% of PRS homes are expected to fail the new standard, mostly due to disrepair, but also tighter rules on thermal comfort, damp and mould, and facilities.

Despite the RPC’s damning verdict, the government is still expected to push ahead using secondary legislation powers in the Renters’ Rights Act.

The impact assessment says it will draw on local authority enforcement data and wider housing quality monitoring to measure how the policy performs in practice.

But the RPC makes clear that clearer detail on metrics, accountability, timing and data flows, alongside formal evaluation questions and feedback routes for councils, would provide far stronger reassurance that the real-world impact is being properly tracked.

Disappointing news for government

Goodlord’s director of landlord experience, Emily Popple, said: “This will be disappointing news for the government at a time when it’s overseeing the most seismic set of PRS reforms in a generation.

“You’d be hard pushed to find reputable landlords and agents in the PRS who don’t support higher housing standards.

“But any new regulations must have a robust and economically sound policy base underpinning them.”

She added: “This week’s report undermines the government’s position and will make it harder to garner goodwill amongst an industry who are already grappling with a wide range of new costs and regulations.

“The government must address these concerns properly, otherwise it risks raising wider questions about regulatory oversight and cost-benefit discipline at a time when tensions in the markets are already high.”