housing united the final report of the lPPR Forum on the Future of Social Housing lnstitute for Public Policy Research 30-32 Southampton Street London WC2E 7RA Tel: 020 7470 6100 Fax: 020 7470 6111 [email protected] www.ippr.org.uk
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The lnstitute for Public Policy Research is an independent charity whose purpose is to contribute to public understanding of social, economic and political questions through research, discussion and publication. It was established in 1988 by leading figures in the academic, business and trade-union communities to provide an alternative to the free market think tanks. 1PPR's research agenda reflects the challenges facing Britain and Europe. Current programmes cover the areas of economic and industrial policy, Europe, governmental reform, human rights, defence, social policy, the environment and media issues. Besides its programme of research and publication, lPPR also provides a forum for political and trade union leaders, academic experts and those from business, finance, government and the media, to meet and discuss issues of common concern.
trustees
Lord Eatwell (Chairman] Professor Anthony Giddens Gail Rebuck (Secretary] Jeremy Hardie Lord Gavron (Treasurer] Lord Hollick Lord Alli Jane Humphries Professor Tony Atkinson Professor David Marquand Professor Kumar Bhattacharyya Frances O'Grady Rodney Bickerstaffe Chris Powell Lord Brooke Jan Royal1 John Edmonds Baroness Young of Old Scone
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@ lPPR 2000 housing united
foreword preface acknowledgements executive summary introduction
1 meeting need, sustaining communities: 1 9 Summary lntroduction The need for community housing Breaking down tenure and sector boundaries The vision for Community Housing A range of options Access to Community Housing Building sustainable communities Fitting with wider housing objectives Conclusion
Tenant's views
2 vision into practice - community housing organisa tions: 42 Summary lntroduction Common values and a focus on outcomes Size and diversity of providers Owning and managing Community Housing Wider roles for community housing organisations Conclusion
3 promoting sustainable policies: 60 Summary lntroduction Joining it up vertically Joining it up horizontally A stronger strategic role for local authorities The role of the planning process Future regulation and funding routes Conclusion housing united 4 community housing in a business framework: Summary Introduction The purpose of the housing finance system Investment New financial structures for council housing Social housing grant Availability of private finance Conclusion
5 reforming rents and benefits: Summary Introduction Problems with the current system A sustainable method of setting rents Achieving affordability Housing benefit - short to medium term Housing benefit - long-term reform Conclusion
appendices: Written and oral evidence Forum publications Forum outreach visits Forum sub-group membership Forum biographies foreword
I would like to dedicate this report to all those people who have been denied access to one of the most basic requirements of human life and the basis for civil society - decent housing. Too many people are living in conditions that are unacceptable and whose lives are blighted, not just by the conditions in which they live but by the fact that they have no choice over where they live. This leads to stigma and, in my view, it is this stigma which can and does drive the factors that lead to deprivation and social exclusion.
My approach to taking on the chairing of the IPPR Forum was to start with a fundamental decision about what part Social Housing should play in the future of British society. The conclusion that I came to was that housing policy in this country can no longer be allowed to separate the haves from the have-nots. This report is based on an understanding that the future of Social Housing is linked to the future of society, and I believe that society will demand choices about where and how individuals will live and that communities will demand housing free from stigma.
At the launch of the Forum, Baroness Dean, Chair of the Housing Corporation, drew our attention to the words of Lloyd George - he wanted 'homes fit for heroes'. This was a post-War vision designed to capture and respond to the demands of society at that time. The Forum's vision aims to respond to the needs of the 21st century - a society much changed but still facing the challenges of poverty and homelessness. And as I witness every day, it is a society still failing to meet the demands of young people to a secure home in a stable community.
I expect that the Forum's work will be reviewed critically and so it should be. However the costs of debating without doing will be high. Our recommendations are firmly based on many excellent and inspiring examples of current housing policy and practice throughout the country. We have no excuse not to start making these pioneeriqg developments widespread.
The report's timing could not be better. The Housing Green Paper has established the need for a future vision of Social Housing. The National Strategy for Neighbourhood Renewal has illuminated the multi-faceted problems and outlined proposals to turn around our most deprived neighborhoods. I hope this report takes this agenda forward and provides a link between housing and successful neighbourhoods and communities.
Indeed, I believe we will have failed in our task if this report does not establish the need to put housing at the heart of the debate about the future of our society. Housing is critical to wider social and economic outcomes, and critical to how our communities develop and are sustained. Public policy on housing must no longer be viewed as an add- on to support the homeless and hopeless - but as core to the development of community. Our vision for social housing is about a united approach - housing unitedacross tenure, landlord, individual and community. The vision incorporated in the name 'Community Housing' describes what we as the Forum are passionate about creating for, and with, future generations.
Victor Adebowale CBE Chair of the IPPR Forum on the Future of Social Housing Chief Executive of Centrepoint housing united
preface
IPPR established the Forum on the Future of Social Housing in July 1999. The Forum's task was to carry out an independent inquiry into the future of social housing, to promote an open and inclusive debate and to develop a consensus on the way forward for social housing. 'The Forum aimed to describe a vision for social housing in the future which will act as a guide for the development of housing policy and practice.
This publication is a report of the Forum's findings. It sets out a long-term vision for social housing, together with detailed proposals for who it should be for, how it should be financed, and how it should be owned and run. The vision also describes the contribution that housing can make to the success of local economies and communities, and in ensuring everyone has a decent home in a safe and pleasant environment.
The work of the Forum took many forms. There was an enormous amount of interest in the project and many people took time and trouble to contribute to the debate. Our contributors showed a tremendous capacity to think long term and with passion beyond the immediate concerns.
A consultation paper was issued at the launch of the Forum and a wide range of responses were received from people working and living in social housing, from representative bodies, from local and national organisations, and from individuals.'rhe responses were invaluable in developing the vision described here.
Four working groups were established, which included Forum members but also individuals with additional expertise. The themes and membership of the working groups are set out on page 106.
The Forum undertook ten outreach visits around England and details of these visits can be found on page 105. An extensive series of meetings and seminars were also held around the country to discuss specific issues, and a joint conference was held with the Tenant Participation Advisory Service.
Informal discussions on emerging issues took place with Nick Raynsford MP, the Minister for Housing and Planning, and with officials from the Treasury, the Department of Social Security, the Department of the Environment, Transport and the Regions and the Housing Corporation.
Many organisations and individuals have also contributed to the body of existing research and practice on which the Forum has built its recommendations.
MORl were commissioned to undertake a poll at the start of the Forum to gauge people's housing aspirations and views on social housing. Four focus groups were carried out by the Office of Public Management on behalf of IPPR to gain a better understanding of people's attitudes and housing aspirations. Summary findings are set out on page 23.
The Forum's emerging findings were discussed at four tenant workshops. Their comments fed into the final recommendations and will be very useful in further policy development. See page 41. preface
The Forum also published five discussion papers. These were very important in helping us develop our ideas and to stimulate debate. We are grateful for the time and effort put in by individuals who wrote these papers; the full list of authors and titles is on page 104.
The Forum itself met six times and held an awayday to pull together all of the evidence into a core set of conclusions. In addition, individual members took part in and spoke at many events throughout the year, opening up the debate and collecting ideas. All Forum members served in a personal and unpaid capacity; the full membership is listed below.
The Forum was serviced by an IPPR Secretariat which included Carey Oppenheim (Director of Research until December 1999), Sue Regan (Senior Research Fellow), Helen Graham (Researcher) and Sophie Atkinson (Administrator).
The project was steered by a planning group comprising Victor Adebowale, Steve Hilditch and John Perry. 'The report was written by Sue Regan and Steve Hilditch with contributions from Helen Graham and many members of the Forum.
This is the final report of the Forum. It sets out a vision for the future of social housing which is supported by all its members.
members of the forum Victor Adebowale (Chair) Chief Executive of Centrepoint Cora Carter National Secretary of the Tenants and Residents Association of England Professor Steve Hilditch University of Westminster and Partner in Paddington Consultancy Professor John Hills London School of Economics and Director of the Centre for Analysis of Social Exclusion Yvonne Hutchinson Ripleyville Tenants Association and member of Housing Corporation Board Mark Johnson Reader in Primary Care at De Montfort University Ged Lucas Director of Community Services for Stockport MBC Duncan MacLennan Special Adviser to the First Minister at the Scottish Executive's Policy Unit Richard McCarthy Chief Executive of the Peabody Trust. Mike Ockenden Director of Barclays Direct Channels Carey Oppenheim Director of Research at IPPR (until December 1999) John Perry Director of Policy for the Chartered Institute of Housing Rosemary Radcliffe Chief Economist at PricewaterhouseCoopers Carol Radmore Chief Executive of Family Housing Association Gurbux Singh Chief Executive, Haringey Council, Chairman of the Commission for Racial Equality (from May 2000) Bill Stevenson Deputy Chairman of The Bellway Group of Urban Renewal Companies Danielle Walker Director of Policy and Practice at the Joseph Rowntree Foundation Michael Ward Director of the Centre for Local Economic Strategies Peter Williams Deputy Director General of the Council of Mortgage Lenders
patrons of the forum Sir Christopher Howes 2nd Commissioner and Chief Executive of the Crown Estate Jon Snow Broadcaster. Channel 4 News housing united
acknowledgments
We are very grateful to the following organisations for funding the work of the Forum: Barclay Card Services, the Council of Mortgage Lenders, the Crown Estate, the Housing Corporation, the Joseph Rowntree Foundation, the National Housing Federation and Pinnacle Housing Ltd .
We would like to thank the additional members of the four working groups: Chris Holmes, Chris Wood, Alan Murie, Peter Redman, Jim Coulter, Paul Lautman, John Swinney and Jeff Zitron.
The outreach visits were made possible by the support of many individuals. Many thanks go to Eamon Boylan, Derek Martin, Mike Simpson , Tom Manion, Alan Slater, Steve Robinson, Liam Black, Brian Seddon, Dave Swale, Matt Herbison, Graham Marshall, Matthew Gardiner, Brian O'Doherty, Jon Watson, Gary Black, Nic Bliss, Terry Edis, Judi Watkinson, Simon Scott, David Thompson, Polly Hudson, Barbara Brownlee, Robert Brewer, Steve Stride, Anne Matthews, Martin Ling, Neil Litherland, Judy Wilson, Martin Lippitt and Anil Singh.
Many thanks go to all the tenants and residents who took part in our focus groups and workshops. We would also like to thank the people who helped set them up: Warren Evans, Chris Wood, Madeline Glaisher, Adrian Greenwood, Dave Brown, Bill Lacey, Alastair Graham and Lisa Foulkes.
We are also grateful to Phil Morgan of TPAS and his team for organising the joirit IPPRITPAS conference.
Thanks also go Chris Holmes, Chris Wood, Lisa Harker, Peter Robinson, David Cheesman, Jeff Zitron, Phil Morgan, Jim Coulter, and John Swinney for their comments on the draft final report and Helena Scott IPPR for her work on the manuscript. executive summary
Our task
The task of the Forum was to look 20 years ahead and set out a vision for social housing to guide the development of housing policy. Our role has been to look beyond immediate debates and uncertainties. We have sought to take a long term view on issues such as whether social housirlg will be needed in future, who it should be for, how it should be financed, how it should be owned and run, and how it should contribute to the success of local economies and local communities.
Our vision
We believe social housing should be reinvented as a sector of choice rather than stay a sector of last resort. Itshould become a mainstream choice, not an evermore-residualised symbol of failure. The sector should retain its remit to provide for those people who could otherwise not afford good quality housing, but do this in the context of providing for a wider range of income groups. It should offer a more diverse and flexible range of options to meet the modern needs of individuals and communities.
One of our key ambitions is to break down the barriers between tenures and sectors. We want people to be more able to move between tenures of equal esteem and to vary their equity stake to suit the stages of their life cycle and to suit their preferences. The long term pattern of tenure should be an outcome based on opportunity and choice.
Social housing should become an independent sector, straddling the boundary between the public and private sectors, operating in a commercial way in the wider housing market but with a social purpose. We call this vision Community Housing.
Better housing, better lives
A safe, comfortable, affordable and appropriate home is one of the cornerstones of a decent and rewarding life. In the early 21st century, it is something which is taken for granted by the majority, but an unsafe, squalid, expensive or unsuitable home, or no home at all, blights the lives of a sizeable minority.
The quality of housing and the quality of the neighbourhood are significant factors in determining mental and physical health, educational attainment, safety and security, access to opportunities, productivity and community cu1ture.A~a society we pay hugely, and in so many ways, for failure in housing.
Some people argue that housing should only be provided in a free market, with prices and rents determined by supply and demand, and that people on low incomes should housing united be given flat-rate cash benefits to enable them to afford reasonable housing. We do not accept this view because it would exacerbate poverty and unemployment traps and reinforce social polarisation.
We believe that it is necessary to have a sector which provides housing at affordable rents in order to achieve sufficient housing of adequate standard and to sustain communities. We also believe that such a sector provides the best structure within which to provide support and care for vulnerable people to enable them to live independent lives.
Sustainable communities
Housing strategies need to take a much more comprehensive view across tenures. Areas with high concentrations of very poor and vulnerable people are unlikely to work. Local authority and Community Housing strategies should ensure all areas have a mix of incomes, through mixed tenure and widening access to Community Housing.
Existing social landlords should diversify their current stock to cater for wider needs through encouraging sales in some areas, buying on the open market, and refurbishing property for subsidised renting, market renting or sale. They may start off with homogenous stocks of rented housing, serving mainly people without jobs, but they would aim to diversify over, say, a ten year period into catering for wider needs - without losing their original market.
Community Housing has a central role in tackling social exclusion and creating a sustainable future for communities, through developing mixed income communities, adopting wider social and economic development activities and working in partnership with other agencies. Housing management is in a strong position to be partners and leaders in neighbourhood renewal.
Community Housing: a new model
Over the next twenty years, we see Community Housing, whether it started out as council housing or as Registered Social Landlord housing, providing a more diverse set of products and services under a converging set of institutional and financial arrangements.
Diversity also enables specialisation: community housing organisations would have housing at their core but would operate flexibly as regeneration, social care or community development agencies.
Community housing organisations would be defined as businesses with a social purpose. This means that:
@ They would be committed to core social purposes:
s Meeting housing requirements through a diverse range of options, with a primary focus on people who cannot compete in the housing market without assistance.
Helping to create neighbourhoods that work for people, in sustainable urban and rural communities. executive summary
Contributing as full partners to the development and implementation of effective housing, social care, neighbourhood regeneration, environmental, and economic strategies.
Managing their affairs in a transparent and participative way, welcoming fair regulation and accountability.
They would be run commercially, and would be: Business-like in their operations and structures and independent in their day-to- day management.
Continuously seeking best value in the use of publicsubsidies, both historic and new, and in the use of consumers' rent and service charges.
Users of both private and public investment finance.
Attuned to local housing markets and opportunities.
Responsive to customers, offering choice from more diverse products at a variety of subsidised and market rents.
Pro-active in the face of new opportunities and challenges.
Free to participate in joint ventures, borrow and redeem debt and to buy and sell property in accordance with a business plan, subject to prudential controls.
Community Housing should have the clear aim of empowering tenants and potential tenants individually and collectively so that they have much more choice in where they live, what service they get, what level of involvement they have, and who their landlord is. This will involve:
Being much more flexible about the ownership and management of housing stock so that large-scale monopolies can be broken up in some areas and ownership rationalised to better meet the needs of communities in others.
Replacing 'allocations' with access policies which give people more information and allow them to make informed choices over where they live.
A common platform of core rights across Community Housing, to which landlords and tenants can add to by contractual agreement, to include strengthened collective rights to take over management and to trigger a process to change landlord.
Clear policies for tenant participation and consultation, building on the current compact approach.
Community Housing should also develop ways of increasing the commitment of residents to their community. 'This could be through 'contracts' between landlords and tenants which promoted good behaviour, with rewards being fed back to individuals or to the community.
Community housing organisations should be more proactive in sharing facilities with other providers in the area to benefit everyone in the community. This would include offering services to other community landlords, to private sector landlords and to other agencies. housing united
All community housing organisations should undertake equality audits which identify the possibility of institutional racism and other forms of discrimination, and adopt pro- active strategies to promote equality of opportunity.
Owning and managing Community Housing
We are not recommending one model of ownership and management over others. 'What counts is what works' and different models will work in different places at different times. Producing the outcomes that tenants desire will be best served by public policy facilitating a plurality of ownership and management models, promoting a measure of managed competition and fostering a climate of innovation and accountability.
Not-for-profit organisations remain best suited to the community landlord functi0n.A diversity of ownership and management models is however recommended and this will include using a variety of public and private bodies to undertake different roles.
The clear separation of the strategic and the provider roles of local authorities is needed to strengthen both. Together with the need for financial independence, this means that all housing should be managed at arms-length from the local authorityas a housing or tenant management organisation, an arms-length company or a Registered Social Landlord.
The future of council housing should not be pre-determined by national targets, but by requiring all local authorities to undertake a fundamental review of their stock along Best Value principles. Balloting over issues of ownership and management should be extended and become a positive feature of Community Housing.
All community housing organisations should operate as sustainable businesses. In the long-term this means all community housing organisations will have full financial autonomy similar to current Registered Social Landlords, and operate outside of the current credit approval and Housing Revenue Account subsidy systems.
The transfer of council housing to other bodies should be used as an opportunity to break up large-scale monopolies and limited to 12,000 homes under one management organisation.
Making decisions
Housing policy at all levels needs not only to keep up with but get ahead of and anticipate demographic, social, economic and technological change, to develop comprehensive strategies and to develop choices for people which match modern needs and aspirations.
Housing policy needs to be as sensitive as possible to the growing variations in conditions between and within regions. As many decisions as possible should be made as close as possible to the community they affect; a 'community-upwards' approach to housing strategy and decision-making is needed. At local level, housing management should be a core element of neighbourhood management.
Local authorities would have clear responsibility for providing strategic leadership in their area. They should have the key task of developing strategies across all housing executive summary tenures and sectors which are genuinely 'joined-up' with local social exclusion, economic development and other strategies.
A new range of legislative duties and powers is needed to define the strategic role and ensure that it is carried out. This might include a duty to assess overall housing demand, a duty to ensure integration of housing and planning strategies and a duty to consider the quality and management of the private sector stock.
The local authority strategy should sit within a stronger sub-regional as well as regional framework. At sub-regional level, roughly equating to housing market areas, authorities and the major housing players should have a more formalised structure for discussing issues. At regional level, Regional Housing Strategies are the missing link between national policy and effective local delivery.
The role of central government should be more about providing an effective policy framework within which everyone else works: setting housing standards, core housing rights and responsibilities, legislation, finance, inspection, regulation and the best value regime. It should be a system through which the government can set out its priorities but which is only prescriptive where it needs to be.
Investment needs
There needs to be a step change in the level of housing investment to meet strategic housing objectives for additional affordable housing, renovation to modern standards and regeneration.
To achieve projected numbers of new affordable housing will require additional capital spending of €921 million [for 80,000 homes) and €1,686 mlllion [for 107,000 homes per annum). A relatively modest increase in investment will be needed to tackle the social housing repairs backlog, in the region of €300-€500 million per annum.
Planning policy has an important role to play in the delivery of affordable housing and the creation of mixed communities. Local planning authorities should be given more control over defining type and size of housing.
The Forum believes better use can be made of the capital markets to access private finance. This could be through a new housing bond, securitised against future income streams, to support investment by community housing organisations. In the longer-term it would be possible to create a retail version of the housing investment bond to allow personal investment so that the benefits of property investment could be separated from home ownership.
Maintaining quality and standards
Community housing organisations should manage their businesses in a transparent, accountable and participative way. Tenants should be as heavily involved as they wish to be through a variety of mechanisms from local to Board level, negotiated through a landlordltenant compact. Having tenants on the board, whilst a welcome step, should not be seen as a substitute for other methods of involvement.
Regulation should be by one national body, which builds on the Housing Corporation's strengths in the Registered Social Landlord (RSL) sector and the Audit Commission's housing united
strengths in the local authority sector. All community landlords should have to meet comparable standards of service.
Reforming rents
Over the next twenty years, we anticipate that Community Housing will provide a more diverse set of products and services under a converging set of institutional and financial arrangements. On these grounds, but also on the grounds of efficiency and equity, we support a common framework of rent setting driven by a common set of principles.
Our preferred option, the 'running costs' option, would involve rents being designed to cover:
management and maintenance costs
an allowance for depreciation and major repairs
a modest and variable amount related to achieving a rate of return on the capital deployed.
Thissystem requiresa lower rate of return on higher capital values, providing a de facto link with affordability while preserving a national system and concentrating subsidy where it is needed most, in high value areas.
We recommend that a set of measures need to be developed which provide a benchmark for affordability against which actual changes in rent and incomes can be measured over time.
Supporting those on low incomes
The Forum recommends that simplification of Housing Benefit should be taken forward as a priority, with for example, benefits being set for a longer period of time. An immediate and targeted approach to the poor administration of Housing Benefit is needed. Government should use its powers to remove Housing Benefit administration from councils, with the poorest track record, who have failed to bring about improvement within acceptable timescales.
Our overall approach in favour of blurring of tenures, together with the current bias in the system against low income home owners, would support the introduction of a flat- rate housing allowance available across tenures. A housing tax credit should be introduced for people in work.
We also support a move in the long term to the introduction of a 'shopping incentive' into housing benefit, but pilots should be run to gain a better understanding of outcomes and how it affects the behaviour of individuals and landlords. executive summay
Housing united
The transformation of social housing into Community Housing is vital to meet needs better, to provide more choice and opportunity and to respond to people's aspirations. Community housing organisations will be sustainable organisations with a positive public profile, financially independent and able to encourage investment, diversity and innovation. Communities will become more diverse and sustainable, housirlg management will be integrated into neighbourhood management and barriers between tenures will be reduced.
Everyone will reap the benefits of investing in success rather than funding failure by Community Housing underpinning advances in educational attainment, preventative health care, community safety, social inclusion and economic development. We believe it is possible to achieve this vision within 20 years. It will require a common sense of purpose and commitment, locally, regionally and nationally - in short, housing united. housing united
Social housing today
For many decades of the 20th century, social housing was a huge success story. It transformed the living conditions of millions of people, and broke the automatic link between poverty and bad housing. It offered good quality homes at affordable rents and met the needs and aspirations of a wide range of people.
Nearly ten million people live in social housing today, and most are happy in their homes, but the sector is now associated with the most visible failures of housing policy and with some of the most pressing problems affecting society today.
Social housing has become residualised welfare housing for the poorest in our society and is now heavily stigmatised. In the public perception it is commonly regarded as part of the problem not part of the solution.'
Social housing is associated with areas of concentrated deprivation and failing communities. Other sectors and tenures are clearly suffering from social exclusion, but many of the worst estates on which the Social Exclusion Unit has focused are dominated by social housing.
Social housing suffers from both low and excess demand. In some areas, social housing providers are competing with each other for tenants, as well as other forms of tenure, and may find it impossible to let properties. Landlords struggle to manage areas with high turnover rates and many boarded-up homes. In other areas, homelessness is rising and use of bed and breakfast accommodation is reaching record levels.
Social housing is log-jammed; - people cannot get access to the homes they need and many existing tenants live in inappropriate conditions because they cannot get a transfer.
Social housing has a backlog of disrepair of some f l9bn. This means millions of people are currently living in poor conditions. The Government's commitment to tackle this within ten years is very welcome but we must ensure the resources are there to make it happen.
Social housing rents are based on an array of historic policy reforms and mean that rents are unfair - tenants pay different amounts for the same thing and rents do not relate to the efficiency of landlords. On top of this, the way Housing Benefit works traps people into dependency.
Of course, the media image of social housing, which focuses on the most severe examples of failure, is not a balanced picture. For every notorious 'problem estate' there SociaLHowingintje21aCenm~- are several well-run, popular estates. Many tens of thdusands of people on waiting lists The Key Questions Steve Hilditch andTomFranklin,~~~~,,999 feel their lives would be improved if they could get a council or housing association introduction home, and many existing tenants simply aspire to a larger, better or more appropriate home in the same sector.
Many social housing landlords have grappled with a lengthening agenda of social, economic and environmental issues whilst improving their performance of basic housing management functions. With few additional resources, the sector has coped with seismic social changes, such as the explosion in homelessness in the 1980s, and huge policy shifts, such as the care in the community policy. In a little over 20 years, there has been a major shift in the population of social housing, with far fewer people in work, more elderly tenants, and many more tenants who are vulnerable or deprived. Housing is a vital piece in the social exclusion jigsaw.
These are some of the reasons why the Forum was set up, and some of the issues we have tried to tackle throughout our work. But we have also tried to look beyond the immediate debates and uncertainties and looked 20-30 years ahead to set out a vision to guide the future development of housing policy.
The world in 2020
The world in 2020 will be very different from the world today. While the demographic timebomb may have been exaggerated, we do know the population is ageing. Over the next twenty years, there will be a decrease in the proportion of the population under 25 and a large increase in the middle-aged and the over 65s. By 2025,22 per cent of the population will be over pension age. In 1950 this was around 10 per cent.
An ageing population together with changing family structures (continued high divorce rates, the 'churning' of partners and more people remaining single) all mean a big increase in single person households. 'This feeds into the overall household projections, which anticipate 3.8 million new homes being needed over the period 1996 to 2021. There is likely to be continued disparity between regions, with household growth expected to be far higher in the South East, South West and East Anglia.
Employment patterns are expected to continue to change. A continuing decline in manufacturing and manual employment and growth in predominantly service and information-based industries is predicted. Part-time work, flexible working patterns, short-term contracts and self-employment are expected to be a strong feature of the world in 2020.
Over the next twenty years, people are likely to be more prosperous but inequality may or may not grow. The population will continue to become ethnically more diverse. We will continue to be influenced by globalisation and developments in information and communications technology will challenge the way we live and work, and the way public services are delivered. Through new technology, there will be scope for people to live, work, care or be cared for, shop, be educated and entertained in the same space. Environmental concerns could move up the agenda with wider awareness of the need to respond to current trends - especially the need for additional homes and increasing energy consumption - without compromising future generations. The trend towards people seeing themselves as consumers rather than passive receivers of services will continue, posing serious challenges to the way social housing is provided, managed and charged for. housing united
Why housing matters
In developing the context for future housing policies, it is necessary also'to assess why housing matters. The current government's commitment to tackle social exclusion in a comprehensive way has brought housing policy generally, and social housing policy in particular, to the centre of domestic policy debate.
Housing matters because a safe, comfortable, affordable and appropriate home is one of the cornerstones of a decent and rewarding life. It is something which is taken for granted by the majority, but an unsafe, squalid, expensive or unsuitable home, or no home at all, blights the lives of a sizeable minority.
Bad housing is a systemic failure which undermines the ability to deliver, and increases the cost of, other key social and economic programmes. The quality of housing and the quality of the neighbourhood are significant factors in determining mental and physical health, educational attainment, safety and security, access to opportunities, productivity and a community culture. Better housing means better lives.
Terms of reference
This context has set the framework for the Forum. The terms of reference which have guided our work are described below:
To stimulate a wide ranging debate on the future direction of housing policy in England and in particular to seek to identify a consensus on the way forward for social housing
To clarify the relative functions of social housing and the private housing sectors and identify the most appropriate future roles of social housing
To identify ways of overcoming the residualisation and stigmatisation of social housing
To reflect on the developing social exclusion agenda as it impacts on the poorest neighbourhoods
To analyse options for the more effective use of public subsidy to support affordable housing
To identify ways of improving the management of social housing and involving tenants and residents in a more meaningful way
To analyse options for generating the required level of capital investment in affordable housing and creating opportunities for willing investors to engage with the existing social housing sector
To understand and learn from models of affordable housing in other countries. 1 meeting need, sustaining communities
Summary
Social housing should be reinvented as a sector of choice rather than stay a sector of last resort. It should retain its remit to provide for those people who could not otherwise afford good quality housing, but do this in the context of providing for a wider range of income groups. 'This vision is 'Community Housing'.
Community housing organisationsshould offer a more diverse and flexible range of options, responding to the needs of individuals and communities. This will include more flexible forms of tenure, such as the ability to move between renting and owning whilst staying in the same house, part-ownership and equity shares.
Developing successful, sustainable communities involves a number of factors being brought together. Areas with high concentrations of very poor and vulnerable people are unlikely to work. Local authority and community housing organisation strategies should ensure all areas have a mix of incomes, through mixed tenure or widening access to Community Housing.
Community housing organisations should develop ways of increasing the commitment of residents to their community. This could be through 'contracts' between landlords and tenants which promoted good behaviour, with rewards being fed back to individuals or to the community.
Community Housing should have a clear aim of empowering tenants and potential tenants. This means allocations policies should be replaced by access policies which enable people to make informed choices over where they live. This includes community housing organisations working together and using information technology to aid mobility.
A common platform of core rights, to which landlords and tenants can add to by contractual agreement, should be introduced. This should include strengthened collective rights to take over management or trigger a process to change management or landlord.
Existing social landlords should diversify their current stock, over a 10-year period, to cater for wider needs through encouraging sales in some areas, buying on the open market, and refurbishing property for subsidised renting, market renting or sale.
All community housing organisations should undertake equality audits which identify the possibility of institutional racism and other forms of discrimination. housing united
Introduction
'This chapter sets out a vision for social housing which is more responsive to meeting individuals' changing needs and aspirations, increases choice and which actively develops sustainable communities. We call this long-term vision for social housing - Community Housing. The development of this new sector is set within an approach to wider housing policy which is ambitious in seeking to break down tenure and sector barriers.
-The work of the Forum has focused on 'social housing' - defined as housing provided by Registered Social Landlords (housing associations) and Local Housing Authorities. However, to distinguish the role and future of social housing, the Forum has looked at housing as a whole and the options that are available across tenures and sectors. The vision of Community Housing has emerged as an independent sector operating in the wider housing market. It is a more diverse and forward-looking sector than the current social housing sector, providing a range of choices for a more diverse and wider range of individuals. What this means in practice for how social housing needs to change is described below and in subsequent chapters.
Throughout our consultations, people have raised concern that the term 'social housing' has become a symbol of the stigma which is attached to the sector but have maintained that a change of name is meaningless without a change in social housing itself. 'The name itself is very much a secondary issue, but we have found it helpful to draw a line under the past, and feel that changing the name demonstrates a new start for the sector. We also agree that a new name can help reduce the stigma attached to the sector and is therefore necessary.
The need for Community Housing
One of the early tasks of the Forum was to question the very existence of social housing, and to explore alternative methods of supporting people who cannot afford appropriate housing in the market. In our view, a system based wholly on market rents, where low income households are given flat rate cash allowances to pay for their housing costs, would lead to a number of undesirable outcomes - even if it was varied by region. It would clearly make rents less affordable, and deepen poverty and unemployment traps. It would also exacerbate the process and problems of social polarisation by making it impossible for people on low incomes to live in high cost areas. The Forum believes that in order to achieve a defined standard and sufficient supply of housing, and to create and sustain communities, a sector providing housing at affordable rents is necessary.
Moreover, social housing plays a major, and often unrecognised, role in meeting the needs of vulnerable people in our society - people who require care and support, sometimes long term, and people who are unable to meet their own needs appropriately in the market. The 'social' element of social housing would be lost moving to a purely market system. Our vision for Community Housing therefore builds on the strengths of social housing and makes it fit for modern needs and aspirations.
The crisis facing social housing is not short-term and major changes in public policy are needed to restore public confidence. We may soon reach the point where problems seem insurmountable, and investing the resources which are badly needed starts to look like pouring good money after bad. The Forum has therefore concluded that social housing must be reformed to offer a range of options attractive to a wider range of people - it must become a sector of choice, not a sector of last resort. Our vision is ambitious, but meeting need, sustaining communities
is firmly based in developments which are already being pioneered by some social landlords.
Reforming social housing as a sector of choice has clear advantages in helping reverse the residualisation of social housing, and in meeting needs that are currently not being well met. Moreover, it will be a key part of ensuring the sustainability of communities, of tackling the geographical concentrations of poverty which already exist, and of preventing future social polarisation. Community instability of course exists within the private sector and in mixed areas, which is why we see an important role for local authorities in developing their strategic influence across sectors. Housing policy in the past has tended to segregate rich from poor - into different tenures, different sectors and different areas. The Forum's vision for Community Housing aims to reverse this.
Breaking down tenure and sector boundaries
Public and private sectors - the barriers fall 'The clear distinction between public and private sectors which has begun to disappear in areas like health care and roads is now also much less clear in housing and has been for several years. There are many examples. Since 1988, housing associations have borrowed more than €15 billion from private lenders. Stock transfer has moved more than 400,000 homes out of council ownership, mainly to take advantage of private funding. Some Associations now provide market rented schemes as well as subsidised housing, sometimes within the same development. Many also provide for shared ownership and may take part in initiatives to house key workers. Many are now also part of wider group structures, some arms of which might be commercially-oriented. Remuneration of board members is on the agenda.
Even on 'traditional' counc~lestates, things are changing. Experiments (like that in Hackney) have allowed private companies and Registered Social Landlords to manage the houses in place of the council. Eight Private Finance Initiative 'pathfinders' (see page 82) are in train, and they will show how private funding and expertise can be brought in, even while houses stay in council ownership. 'Best Value' will encourage comparison with the private sector and perhaps lead to new partnerships with the private and Registered Social Landlord sectors.
The Government's concern to achieve Quality and Choice (the title of the Green Paper published in March 2000) already envisages tenants having more say in where they live, more diversity in who owns social housing, and rents which are determined in a more market-like way. Also floated is the idea of 'shopping incentives' within the benefit system to put tenants more in touch with the price of the housing they receive. Councils will now have to follow Registered Social Landlords in preparing Business Plans for their housing, and arms-length management companies are also to be promoted.
These are just some of the ways in which social housiqg providers are becoming more market oriented, and the boundaries between public and private becoming blurred. The Forum believes this should be taken further. Our vision for Community Housing is of a sector operating in the wider housing market, straddling the public and private sectors in how it is financed, how it operates, and in the markets it develops and the customers it serves. Mixing public and private approaches to ownership, management and funding are covered in subsequent chapters. housing united
Lessons from Europe A change of direction of this kind would be in step with much of what is happening in the rest of Europe. In virtually every Western European country the purpose and future of social housing is being questioned to some degree.'
Tenure and ownership are not so clearly defined and are much less significant issues elsewhere in Europe. Housing directly provided by municipalities is rare, and 'social housing' might be owned by public companies, co-operatives, housing associations or even (as in Germany) by private companies receiving subsidy. Social housing may not even be rented housing; it might be a form of home ownership [as in Spain and Germany).
The norm outside Britain is for social housing to be provided by independent not-for- profit bodies. They act more commercially, under pressure to secure their long-term financial independence from state subsidy. One common feature is that social landlords have more control of their asset base than their British equivalents, buying and selling property and raising finance securitised against their future revenue streams.
Elsewhere in Europe the ability to retain people on a range of incomes is evident. In Denmark, for example, tenants carry out improvements to their homes and claim a share of any increase in value. In countries like Sweden, Denmark and the Netherlands the process of residualisation never went as far as in Britain so the task is easier. Indeed, the danger [already apparent in Sweden) is that social landlords start to differentiate within their stock, restricting access to parts of it to better-off tenants in order to retain as many as possible.To sustain demand and encourage social housing as a tenure of choice, social landlords in the Netherlands have moved away from the 'food parcel' way of allocating housing [ie you get what you are given) to a process with some market characteristics - the 'Delft' modeL2
Nevertheless, to argue for a more independent not-for-profit sector, which operates in a more commercial way and has a wider client base, with less clear-cut divisions between tenures, would be to fit into a broader pattern of developments which is becoming Europe-wide. The challenge is to do this and not lose sight of social objectives.
The vision for Community Housing
What would such a change look like in the British context? Existing social landlords would be progressively transformed into a new Community Housing sector. The new sector would retain its remit to provide for those who could not otherwise afford good quality housing. But it would aim to do this in the context of catering for a range of income groups, whether through housing for sale, market rent or subsidised rent. Equally importantly, providers would seek to diversify their existing stocks of housing by encouraging sales in some areas, buying on the open market, and refurbishing property for market renting, sale and subsidised renting. They may start off with homogenous stocks of rented housing, serving mainly people without jobs, but they would aim to diversify over, say, a ten year period into catering for wider needs - without losing their original market. 1 Mike Oxley Social Housing in the 2lst Century: Learningfim Europe (IF'PR, 2000) The new agencies would have to be constituted so as to use public and private funds, and be able to manage their asset base in ways that best suited their objectives. They 2 The Delft Model refers to the Dutch model of social housing could meet needs in the market place that are not currently met - for example, they allocation which takes into account could sell houses with long-term maintenance packages attached to them, they could the characteristics of the dwelling and the applicants preferences. See do 'private' renting with good quality management and repair services. This 'big Michael Oxley (IPPR, 2000) picture' vision is discussed in more detail below. meeting need, sustaining communities
A fresh approach to tenure Owner occupation is the tenure of choice for most people. The MORl poll commissioned at the start of the Forum, reflected this, with 89 per cent of a national sample highlighting a preference for owner occupation for both their children and grandchildren. Although varying with the peaks and troughs of the housing market, this strong preference for home ownership is consistently reflected in other research3. However, home ownership will not be the best option for everyone. The financial advantages (with the abolition of mortgage interest tax relief) are now much less strong, and people seem to be making more considered choices about entering home ownership4, yet evidence does point to continuing strong demand for home ownership.5
Box 1 : MORl Omnibus Survey - key findings 89% hoped that their children or grandchildren would own their own home. 47% would rather live in an area where there is a mix of renter and owners; 47% where most people own, and just 6% where most people rent. 66% considered social housing should be available to anyone who prefers to rent. 73% thought government ought to do more to improve the quality of social housing. 91% thought social housing 'should be available to someone like me should I ever need it: 42% disagreed that social housing was in 'bad' neighbourhoods, 33% agreed. 39% agreed, 42% disagreed that the government should subsidise people on low incomes to become homeowners.
These headlines reveal very strong aspirations of home ownership in tandem with strong support for social housing. Breakdown by age revealed that young people were more open to living in the rented sector and more open to living in mixed areas, yet their perceptions of the social rented sector were worse than the sample as whole.
Age clearly plays a part in the desire for home ownership. People in their middle years will often to best placed to own their own home, but younger (more mobile people) should not be pushed into home ownership prematurely because of lack of an alternative. Older people should also not feel they have to hang on to their home if they no longer want the responsibility.
The Forum also commissioned some qualitative research which sought to gain a better understanding of why people hold these aspirations and what motivates them to make their housing decisions. Asummary of the findings is in Box 2. The research highlighted that individuals perceive both owning and renting haviqg a number of clear advantages and disadvantages, and were reluctant to prioritise owning and renting. Participants liked the freedom and flexibility of renting, but felt paying rent was 'money down the drain'. Owner-occupation was thought to give more scope to control your own home, but associated with greater financial risks particularly if interest rates go up or income goes down. This information is valuable in thinking around creating new options which might better meet people's aspirations and needs. In particular, it illuminated the polarisation of tenure choices (between renting and owning) and suggested the need for more flexible tenure options which better reflect modern lifestyles and aspirations.
The Forum does not think that government policy should aim to promote one tenure over another, the way owner occupation has been advocated in the past. Renting is a good option for many people. Rather, it should promote quality across all tenures, and 3 Summaryofattitudinalresearch allow the pattern of tenure to be a product of demand and choice. This could be ~~~;~$&*PRb~Mfhsalter described as a more tenure-neutral approach to housing policy, and supports achieving 4 MacLennan D et a1 Fixed a more consistent treatment between tenures in terms of tax, subsidy and benefits in Commitntntts, Uncaa,nIncomer: the long term. Sustainable Ovmer Occupation and tl~e Economy Uoseph Rowntree, 1997) Although focusing on social housing, we have had to look at options across all housing ~,"~~,'bf~~,"~~~~U~~~h", in defining a future role for social housing. We have not, however, been constrained by I~~OS(CML,2000) housing united
these options. Indeed, we believe that many of the problems experienced within the housing sector are due to the limited nature of current options. In particular, the polarisation of tenure between renting and owning leads many people to opt for a housing solution ill-suited or inappropriate to their means, needs and aspirations. The Forum therefore sees merit in an expanded strategy of housing choices, which blur the distinctions between renting and owning.
Box 2: Public attitudes to tenure Focus groups were held in Lewisham and Blackburn, with a mix of homeowners and social and private renters, to explore attitudes to tenure. Participants were very conscious of the enormous variation which exists in any single sector, and loathe to prioritise one type of tenure over another. Owner-occupiers in both groups felt they had greater freedom of choice to secure a home which lived up to their expectations. However, those in Lewisham were particularly conscious of the fact that even as homeowners they were severely constrained by the affordability of property in the area. Those who lived in council properties both in Lewisham and in Blackburn felt that choices open to them in terms of where they could live were extremely limited. Paying rent was seen as 'money down the drain' whilst owning meant that you had 'an asset at the end of the day.' Private renting was considered more flexible than other tenures, and because 'state benefits will pay most of the rent', less financially risky than owning. Key disadvantages of private renting were seen as increasing rents and lack of security of tenure. Owning was associated with more freedom to control your own home, and with the perception that owner-occupiers were seen by others as'better citizens'. The key disadvantage was seen as up- front and ongoing financial commitments. Social housing was associated with the advantages of low rent, no responsibility for repairs and security of tenure. The key disadvantages were largely in relation to the perceived environment of social housing - anti-social behaviour and a poor quality environment.
Flexible tenures and low cost home ownership As described in the introduction, employment patterns are less secure than in the past and people are much more likely to experience changes in their circumstances through relationship breakdown and new household formation. This raises important questions for the housing market generally and the future of social housing.6 Flexible mortgages (which now represent around ten per cent of all mortgages) are a clear illustration of the market responding to consumer demand and the changing financial needs of individuals over time.
Community Housing should provide options which are flexible in dealing with changes in financial circumstances. For example, some housing associations already allow tenants to 'staircase' up and down ie move between owning and renting as household circumstances change. Participants in the Forum's focus groups were enthusiastic about the ability to move between owning and renting.The Forum believes Community Housing should embrace this demand for flexibility, evident in the growth of flexible mortgages, and replicate it in the sector. The opportunity to switch between rental, part ownership and full ownership (or staircase between renting and owning) as household circumstances change (and without having to move) is attractive to individuals, and also contributes to the stability and sustainability of communities.
Currently tenants usually have no equity interest in their home, or else own (or have a mortgage to cover) a 100 per cent ownership stake. Shared ownership schemes have been around for many years but are still few in number. The cost of shared ownership (with rent and services charges added to mortgages costs) can make the option seem like poor value -total outgoings can be 80 per cent of the costs of full ownership but with Rache'TeqChangingHouring only 50 per cent equity. Its limited success can also be attributed to complicated leases Markets: the case forfixihk tenures O\JFHA/CMLI~~~)and the fact that the market is still immature. This means finding another shared meeting need, sustaining communities
Box 3: Mixed and flexible tenure - New Earswick, Joseph Rowntree Foundation The village of New Earswick operates a mixed and flexible tenure scheme across all its properties. The village was built to create a balanced community, with good standard accommodation for those on low incomes. Since 1995, all residents have had the choice of full rental, shared ownership (where they can purchase a 25 per cent, 50 per cent or 75 per cent share and can staircase up to full ownership at 100 per cent), or buy out right at the outset. Residents also have the option to sell back to Joseph Rowntree Foundation a part or all of the equity (ie to staircase down) if their circumstances change. Since flexible tenure was introduced, 96 residents have entered into shared ownership: 14 of these have staircased up to own a greater share, and 17 have staircased down to a lower share. 81 properties are currently in full ownership.
A residents' association and a community association support the community of New Earswick.The New Earswick Residents Forum is an elected body and is the recognised body with which the landlord consults and negotiates on housing management issues. New Earswick Community Association has responsibility for developing community activity and events. It is a membership-based organisation; any resident or group which lives or operates in the area can become a member. The structure of the association is designed to encourage as wide an input from local people as possible. ownership home elsewhere in order to move is difficult. The 'Homebuy' scheme, which cuts out the rental element in shared ownership, reduces costs and could provide a better future option. Landlords hold the remaining equity (say 25 per cent) and are in a position to recycle the grant when the property is sold.
As well as being useful in areas where a better economic mix is needed, Homebuy and other forms of fixed and shared equity schemes would be particularly useful in high cost areas (although a lower equityshare than 75 per cent would be needed in high cost areas to achieve affordability). 'The growth of house prices is such that in some areas home ownership is beyond the reach of many people, and the demand is such that needs cannot be met by current social housing agencies. 'There are opportunities for Community landlords to fill an important gap.
Equity shares As a means of extending the range of choices available to people, we wish to see the distinctions between tenures grow more blurred. As well asshared ownership and flexible tenure schemes, we are keen to test the idea that tenants who rent should be able to build up an equity share.
There are many ways it could work. It could build on flexible tenure schemes, but be available to anyone who rents from a community landlord. It could also be seen as a reward for conscientious rent payment [building on the Gold Service scheme -see Box page 32), or for taking good care of the property and undertaking improvements. It could be a premium payment or, at its simplest, a rent reduction. If a bond was in place, it could be a share in the appreciation of the value of the bond. It could be a stake which is 'cashable' for prescribed uses or at certain times, such as on retirement7
Clearly such a system would have to be sustainable for landlords, and the costs would have to be built in throughout the tenancy. If it was successful in changing behaviour, it might pay for itself. It could be introduced gradually, or be restricted to new tenancies. It is interesting to note that the question of incentivising tenants to protect the value of the stock was an issue which was raised with enthusiasm by lenders during our discussions. We think it is an idea with exciting possibilities which deserves further research.
7 These ideas link with early policy development on asset-based welfare. See Gavin Kelly and Rachel Lissauer Ownerrhipfor All (IPPR, 2000) housing united
A range of options
Meeting more diverse and wide-ranging needs The social housing sector is at a crossroads. Either it continues down the road of further residualisation, only catering for the poorest and most vulnerable people in society, or else it reinvents itself and turns into a tenure of choice for a wider range of people whilst protecting those most in need. The Forum believes it should take this latter route.
There is a number of reasons for this approach. The sustainability of the sector itself is in threat; it must reform to secure the future support of the public and politicians. Representing a wider range of groups will help reverse this trend. Moreover, there are needs which the market is failing to meet (such as accommodation for key workers in high cost areas) where government has a responsibility to respond, and which represent an opportunity for Community Housing. And crucially a better economic mix within Community Housing will help create a better economic mix within neighbourhoods and deliver a key objective of sustainable communities.
Two product streams and a diversity ofproducts The Forum has asked, 'who is social housing for? Many of the consultation responses called for social housing to be available to anyone who wanted it. However, what distinguishes social housing from other types of housing is that it is publicly subsidised housing, and the Forum recognises that there will be a continuing need to ration subsidised housing.
The Forum has explored whether it made sense to have a direct link between receipt of a subsidy and the economic circumstances of households, in order to target public subsidy on those who most needed it. Ideas such as taxing subsidises, or gradually removing a rent subsidy as incomes rise, were floated. This approach has been rejected. The Forum was firmly of the view that any extension of mean-testing, and its associated work and unemployment traps, should be avoided; that layering means-testing of rent subsidy on top of the means-testing of Housing Benefit would be a disaster. It was also thought very important, in the interests of community stability and sustainability, not to create incentives which might encourage individuals to leave an area once their incomes increased.
An alternative approach has been developed which divides the products offered by community housing organisations into two clear streams. As well as offering subsidised housing on a rationed basis, which would remain the core product, organisations would be encouraged also to offer unsubsidised housing on an un-rationed basis. This means that community housing organisations could offer a range of options which would come under two streams: subsidised products with controlled access, and unsubsidised products with open access. In effect this is what some social landlords already do by offering housing at market rents as well as subsidised rents.
A condition of receipt of public subsidy would be that the community housing organisation would have to offer a certain number of subsidised properties in specified locations. Access to unsubsidised market renting would be through market mechanisms; people would not have to be in defined housing need.
Existing landlords would be progressively changed into a new Community Housing sector. The new sector would retain its remit to provide for those who could not otherwise afford good quality housing. But it would aim to do this in the context of catering for a wider range of income groups, whether through housing for sale, market renting, renting at cost to groups such as key workers or subsidised rent. Whilst pursuing this new approach, Community Housing must not lose sight of its social objectives of securing good accommodation for the homeless and those most in need. meeting need, sustaining communities
Rented housing on a long-term, secure basis is likely to remain a core product offered by community housing ~r~anisations.Over time, community landlords should offer a range of products to meet different needs of individuals and local communities. As discussed above, this will include market renting as well as subsidised housing, shared or part ownership schemes and the ability to staircase up and down between renting and owning. It should also include furnished or part-furnished properties. There is also scope for Community Landlords to offer services, such as repairs and maintenance, to home owners and private landlords and help alleviate the significant state of disrepair in the private sector. Community landlords will continue to play a significant role in care and support services for vulnerable people, and for many providers this will remain their dominant business activity.
Community housing organisations should aim to provide a range of products within a neighbourhood - straightforward renting together with much wider use of equity- sharing arrangements. As floated in the Green Paper, we also believe there is merit in
, Community Housing offering a short-term assured tenancy, and perhaps other specialist tenancies as required. This new option would be available to people whose need for social housing is likely to be temporary, for example young people entering the labour market. It reflects individual's changing needs and aspirations, and will help enable community housing organisations to manage their stock well. Those people who have a long term need for social housing should be protected, and further work needs to be taken to limit when short-term tenancies are offered.
It is important that Community Housing is not identifiable by virtue of poor design and construction. We need excellence in community housing design and construction. Given the ultra conservative approach of existing house builders towards better housing design (such as advanced building techniques, much greater energy efficiency, lifetime homes, smart home technology) the new agencies should also open up a new market for people with needs and desires that are not being met. It is possible to envisage a community housing sector leading the way in design, and offering options not normally offered by the market. The sector should champion the reforms in the construction industry heralded by the Egan report's Construction Task Force.
Access to Community Housing
Even in the long term, access to Community Housing or 'allocations' policy will be a compromise between the rights of people in need, the principle of choice, and the needs of communities.
Reforming access policies is one - but only one - mechanism by which we can pursue the Forum's overall vision for social housing as an increasingly diverse sector which contributes to the development of successful and sustainable neighbourhoods and meets the housing needs and preferences of a wider range of people. Changes are needed to give applicants for social housing greater choice in where they live, increasing their commitment to the neighbourhood and their sense of belonging.
Surprisingly little is known about the impact of access policies and the level of latent demand for social housing8 especially in the new context of wide disparities in supply and demand in different parts of the country. It is now a commonly held view that it is the emphasis on re-housing people according to need that has destroyed the social viability of council housing, and that Registered Social Landlords are increasingly caught up in the same process because their intake of tenants mirrors
that of council housing. Of course, no-one knows what would have happened if 8AlanMurieAllocatiaspolicies:facts different policies had been pursued over the last 20 years - at its simplest, if different andfantasies(Axis,May2000) housing united
people had been re-housed, where would those in need have gone? It is arguable that an even worse outcome would have resulted.
figure 1 What might the housing system look like to people wanting existing or a new home? prospective tenant
arms-length housing independent housing temporary housing company advice and support if reyired 1 I
management one stop housing agency integrated database managed normally by the local authority registered all community landlord rented and shared ownership property plus agreed nominations to commercial sector t supported open to anyone to register (including out of area] note The context is now changing as vacancies advertised more resources come into housing local policies transparent and published and as the financial and social costs to commercial of neighbourhood breakdown are priority for people in urgent need /' landlords realised and addressed in a moss-cutting way. 1
The implications of high and low demand In high demand areas, especially in London, the current level of supply means that it is very difficult to reconcile conflicting demands. There is a record number of households in temporary accommodation, many existing overcrowded tenants who need to move to more appropriate accommodation and a growing number of 'key workers' and others in work who cannot afford to access the private housing market. 'There is a growing demand for housing resources to 'decant' tenants from estates undergoing major regeneration, and a demand for mobility from people who would move into high demand areas to take up work opportunities.
All of these needs are real and genuine priorities, but they cannot all be satisfied. The shortage is becoming an increasingly important constraint on economic growth and the ability to regenerate the poorest parts of the capital. A major boost in the supply of decent temporary accommodation and permanent affordable housing will be critical to resolving the conflict between the aims of 'meeting the greatest needs' and 'widening access:
The issues are different but not necessarily easier to deal with in low demand areas. The map of low demand is also the map of industrial decline - which is not confined to the north of England - and as yet there are few signs that policies will be developed that could ameliorate the underlying economic conditions. Even in areas experiencing low demand, the picture is not uniform and it is certainly not confined to social housing. The 'better' areas are still popular, and the abandonment of the least popular areas is not necessarily linked to the quality of the housing but the real or perceived reputation of the area, especially in relation to crime levels. People have some choice and they are using it, and rapid movement of tenants can also destabilise communities. Streets and estates can depopulate very quickly in response to anti-social behaviour.
There are major strategic issues to be faced about how to bring about regeneration whilst also bringing supply and demand more into balance. Because there are other housing options available - low cost home ownership can be as cheap as renting - widening access may only create a marginal additional demand from people in work. meeting need, sustaining communities
These are still early days in terms of developing responses to low demand. Recent researchg has identified a wide range of measures being taken by landlords to try to deal with the problem, including better marketing, more generous size-matching, easy access routes, furnished lettings, community lettings and targeted investment (eg in security.) Methods also include more intensive housing management on particular estates, offering re-housing to private tenants living in poor accommodation, and entering agreements to accept nominees from high demand authorities or through the asylum- seekers dispersal programme. Many authorities are pursuing regeneration options which include demolition and replacement by new areas of mixed tenure housing.
Box 4: Home for Rent hotline, Manchester City Council Manchester City Council, like many other authorities, has experienced a decrease in demand for some properties, an increase in the number of voids and the stigmatisation of certain areas. The council has used a 'positive images' campaign to challenge the negative views of council housing. The Home for Rent Hotline aims to generate enquiries from new markets and direct potential customers to low demand properties. Callers respond to advertisements, hear through word of mouth or are referred from other agencies. Basic details are taken from callers who are then matched up via the Housing Departments' central database to properties available across the city. Prospective tenants can view as many properties as they like without obligation. The Hotline scheme offers people looking for accommodation in Manchester a single access point for information on currently available council homes. Not only does the scheme help reduce voids, it has helped increase the number of economically active council tenants and increased the number of people living in the city.
Extending choice There is much benefit to be had from individuals rather than providers being the key decision-makers in deciding who lives where. Even in current circumstances much more could be done across the country to improve the operation of access policies and to increase choice. Information is often poor, consumer preferences about location (for example, near a specific school or close to family) are often seen to be too difficult to take into account and trade-offs (such as waiting longer for a preferred area) are seen as being too difficult to manage. Choices are not offered to people even when they exist. The Forum strongly supports introducing lettings systems which allow tenants to make informed choices about where they live.
Trials are taking place in some areas with the 'Delft model' of advertising vacancies. We welcome these pilots because the system.is based on enabling people to take initiative for themselves and to go for properties that reflect their preferences or 'felt needs' best. People's understanding of the housing market and their options is increased, and those who are successful are more likely to be satisfied and committed to their new home. The outcomes of the pilots will inform who might gain and who might lose if the Delft model wasapplied in the English context and how socially excluded and vulnerable people will be supported to enable them to participate. Early findings from these trials look encouraging.
There are significant signs that authorities are seeking to improve their customer responsiveness. One of the most pressured boroughs, Haringey, is looking at radical options for increasing choice by making simultaneous multiple offers to qualifying applicants, an innovative half-way house towards the Delft model. Other social landlords are experimenting with ways of improving movement within the stock, because tenants' inability to get a transfer is a major source of dissatisfaction. Better information about tenants' preferences allied to information technology make it possible to be more proactive in matching households (including across landlords and across areas) whilst maintaining the flow of properties to new entrants.
To make faster progress, it may be necessary to rebalance housing management 9Lmvdemandhowingandunpopular priorities. The high priority given to controlling vacancy periods can mitigate against ~~~"'~~t~~'!$?~~~~I making the best letting or enabling choice. It is often the driver behind punitive policies @ETR 2000) housing united
of making one offer only to homeless people, often on the least popular estates. The pressure to make 'the most efficient use of the housing stock' can mean failing to take account of wider factors - eg individual flats are let to the maximum even if child density is too high on the estate as a whole. Compared to standards in the owner occupied sector, the 'bedroom standard' which is commonly applied is outdated, with no allowance for a spare bedroom or for home-working and often inadequate allowance for households with occasional care (as with a divorced parent with overnight access arrangements).
Although clearly more difficult, there is still scope to increase choice even in high demand areas. Even hard-pressed councils can develop an element of choice in lettings but significantly increasing choice in some areas will only be possible with an increase in supply. It is a challenge that must be faced or Community Housing will have a limited shelf life even in these areas, if people continue to get access on a 'take it or leave it' basis.
We have explored how housing need might be 'redefined' to consider not only the needs of individuals but also the needs of communities.This means looking at what individuals can contribute to their neighbourhoods.This approach involves an assessment of what households need in terms of support, proximity to services, type of housing, alongside a consideration of their financial circumstances, and allowing some recognition of the contribution that individuals can make to the community. One of the Forum's outreach visits was to Byron Street estate in Bradford where Manningham Housing Associatio~? is pioneering a similar approach through the practical application of Mutual Aid ideas.
Box 5: Mutual Aid - Manningham Housing Association The re-creation and creation ofcommunity with mutual aid being the kernel of community, is the overarching purpose to which housing policy should be marching. The communities we hove lost and con regain Young and Lemos (1997)
Mutual Aid is essentially the reciprocity between individuals. All residents have signed Mutual Aid Compacts which encourage positive support between neighbours; obligations are mutual and undertaken voluntarily. The compacts include commitments to create and sustain community through helping neighbours with practical support. To work, the strong commitment of a number of individuals is needed and inevitably some individuals contribute more than others do but this does not seem to have threatened the sustainability of the scheme. The scheme is very much in the hands of residents with support from the housing association. 'Our job is to facilitate their efforts to help themselves and to help each other, ' Anil Singh, Chief Executive, Manningham Housing Association.
Tackling homelessness In 1996 the homelessness duty established by the 1977 Act was reduced; approved households no longer had a right to a permanent home but only to a two-year period in temporary accommodation. One of the first actions of the new Government was to ensure that local authorities were required to give 'reasonable preference' to homeless people in their permanent allocations. The Government has a manifesto commitment to extend the protection offered to homeless people and there is a strong case for extending the safety net, for example to 16 and 17 year olds.
The debate about homelessness goes much wider than gate-keeping access to social housing. Increasingly it is about developing a strategy that tackles the underlying causes that lead to homelessness. There could be:
more support to help people access housing alternatives (rent deposit schemes, nominations to private rented accommodation, mortgage advice) meeting need, sustaining communities
more emphasis on prevention (eg debt management in cases of mortgage and rent arrears), and improved advice services (work with private tenants, housing options for non-priority people)
better education of young people about housing choices
more support to help people to sustain their tenancies to avoid the 'revolving door' of failed tenancies and repeated homelessness.
Mobility The current institutional arrangements for mobility are extremely weak. People do not have a right to apply for housing in an area where they do not live, even if they have strong work or family reasons, and even if they want to move from a high demand area to a lower demand area. This restriction also means that in many areas the local housing register does not reflect the true demand in the area. Mobility is currently organised through a national agency, HOMES. Participation is voluntary although all but three local authoritiesand all but the smallest Registered Social Landlords are members. HOMES is largely a landlord-used system and suffers from the two general problems facing mobility:
demand is not equal in all directions (there are long lists of people wanting to move to good retirement areas and a strong imbalance north to south)
the strong culture of 'our homes for our people' seems to persist everywhere even in areas with a small housing register.
Looking at the housing market as a whole, the continuing polarisation of house price movements between North and South is affecting labour mobility. It is becoming increasingly difficult to move from the North to the South, and companies in the South East are having difficulties recruiting and retaining employees because of housing costs. Measures to tackle this go beyond the scope of social housing, but there is clearly a very important role for the Community Housing sector to play in facilitating mobility.
Tenants' inability to get a transfer is a major source of dissatisfaction with social housing. The Forum believes community housing organisations need to be much more proactive in working with organisations and improving mobility. Currently nearly all transfers rely on an initial void being created and the number of mutual transfers between tenants is very small. Better information about tenants' preferences allied to information technology should radically improve this and make it much easier for tenants to move. This would need to be tied in with the proposals to allow tenants to make informed choices over where they live. An ambitious community housing sector could enable people to move to a house or flat they want, faster than they could through buying and selling, and with a better quality guarantee than in the private rented sector.
Building sustainable communities
Defining sustainable communities Community sustainability is a central objective of Community Housing. There has been consistent concern expressed throughout our consultations about the extent of social polarisation, which is a feature of our towns, cities and rural areas, and the contribution that social housing makes. Areas that are dominated by people on very low incomes is not a problem specific to social housing: there are areas of owner-occupation and private renting which exhibit the similar characteristics of social exclusion found in many of our council estates. The answers to tackling concentrated areas of social housing united
exclusion are not exclusively in the hands of social housing landlords. 'The local authority strategic role will have to tackle this issue across all tenures and sectors. But many of the areas are doininated by social housing so it is very relevant to the future of community housing policies and the actions of community housing organisations.
It is very clear when a community or neighbourhood is not working, but there is no universal solution to what makes a community work. Different approaches work in different places. There are some key conditions which, through public policy intervention, we can try to replicate in all our communities. The Forum believes a key factor in successful communities is avoiding high concentrations of very poor people and we therefore advocate policies which create a mix of incomes within an area. Large estates fail because policies over time have led to high concentrations of economically inactive people, often accompanied by high child density and many vulnerable people.
Given the current tenure polarisation, mixed tenure is a good proxy for achieving a mix of incomes within a community.The IPPR MORl poll revealed an interest in mixed tenure areas (both amongst homeowners and renters) with 47 per cent of respondents saying they would rather live in an area where there is a mix of renters and owners. (This compared with 47 per cent who would prefer to live in an area where most people own their own homes, and just 6 per cent who would prefer to live in an area where most people rent.)
Ben JU~~'s'~work explored the attitudes and experiences of people currently living in mixed tenure estates. This research found that most residents are neither particularly worried nor inspired by the mixed nature of their estates; only about a quarter perceived any benefits, and a quarter any problems associated with mixing. He found there was very little mixing between residents of different tenures, especially where different tenures are in separate streets or blocks but more contact and social mixing developed as time goes on. Although this outcome seems rather negative, we need to remember that our key aim in developing mixed tenure areas is not to create social networks or foster mutual support between economic groups (however desirable these may also be) but to avoid high levels of economically inactive people. Because people are not talking to each other should not be interpreted as a failure of mixed tenure areas.
Mixed tenure makes an assumption that more economically active people live in owner-occupied and less in social housing - a correct assumption. Part of our vision is also to have more of a mix within community housing itself. Mixed tenurelincome is a contribution to balanced communities, not a panacea. Communities will only be successful if all the factors are brought together and this will include not only a mix of people, but also ensuring the area is not over-burdened by vulnerable people and that child densities are lower in some areas. Other factors also play their role - lower crime, better schools, better youth facilities and capital investment. Relying on any one factor will not work.
To ensure a better mix of incomes, we are not advocating heavy-handed or prescriptive social engineering. We are recommending that community housing organisations over time diversify their products and widen their client base to include more people in work, whilst not losing their original market. This together with local authority strategies and planning reforms which aim to promote areas of mixed tenure will help ensure all people live in successful communities.
This is not just about reforming allocations policies, although this is part of the solution. Social housing has not reached the acute levels of residualisation exclusively because of ~oliciesto target entrv on those most in need. Wider social and economic 10 Ben Jupp Living together: trends have been important and the Right to Buy has had an effect. In some areas, the community life on mixed tenure estates (Demos, 1999) Right to Buy has contributed to stabilising communities but in others, the tendency for meeting need, sustaining communities
households to move out as circumstances improve, has de-stabilised communities. If public policy does not encourage people to leave an area as their circumstances improve, then communities will remain stable and a level of economic mix will develop over time. As described above, flexible tenures could be one means of developing a better mix and contributing to community stability by allowing people to stay in their home and community as their incomes change.
The long-term sustainability of neighbourhoods and areas has not been a strorrg driver of housing policy in the past. This is changing with much wider awareness of why communities fail, and the social exclusion consequences of community failure. Clearly this is not just about housing, but is a complex issue spanning social and economic policies and influences, and the extensive work of the Social Exclusion Unit has been looking for solutions to regenerate neighbourhoods. Monitoring community stability must be a central objective of all community housing organisations, and a key element of a strengthened local authority strategic role.
It is clearly important to disti~guishbetween how to tackle polarisation in existing estates and how to achieve a better mix in new estates. Existing estates are certainly more problematic, but the proposed range of products available to community housing organisations should provide a tool to tackle this. If we are to achieve a balance on existing estates, emphasis must be placed on landlords diversifying their stock. Community housing organisations would seek to diversify their existing housing by encouraging sales in some areas, buying in the open market, and refurbishing property for market renting, sale and subsidised renting. In new build development, a mix of incomes will be achieved through mixed tenure and through community landlords offering product options attractive to a wide range of people.
Community housing organisations must ensure that their homes are in places where people want to live, which will often require pressure to secure improvements to community facilities such as schools, and to contribute to local authority services to the private sector such as housing renewal.
Black and Minority Ethnic (BME) communities The Housing Corporation launched a new BME housing policy in 1998 to aim to bring all Registered Social Landlords up to best standard in delivering services which integrate and meet the needs of BME communities. The Home Office, as part of its response to the Lawrence report, is also proposing to establish a set of race equality indicators to measure government's performance in delivering racial justice. An indicator specifically for Registered Social Landlords is expected to be included, which will take data from the Housing Corporation's CORE system (Continuous Recording of lettings and sales) and will track lettings to BME households. Not all local authorities have equivalent data available.
The Forum would want all community housing organisations to monitor their record on BME households, irrespective of whether their roots were in the Registered Social Landlord or local authority sector and provide an audit on race equality issues. Community housing organisations should meet the needs of all their tenants, and this will mean being responsive to race and cultural differences and giving BME communities fair and appropriate services. Under Community Housing, all landlords should be using the same data and monitoring trends to identify the possibility of institutional racism (and other forms of discrimination) using the information actively to inform their policies and procedures. On behalf of the Housing Corporation, De Montfort University has developed a 'toolkit' to help Registered Social Landlords strengthen Corporation regulation, undertake equality audits and to implement and monitor service delivery to BME communities within the Best Value framework. We would welcome such an approach across the Community Housing sector. housing united
Care and support needs For communities to work, the needs of everyone in that community must be met. A failure to integrate housing, care and support needs will mean the continued exclusion of vulnerable groups. Strategies for neighbourhood renewal and for developing community sustainability must consider and engage this section of the community. Empowerment rather than increased choice is perhaps more relevant to people with care needs. This will require more information to be made available on the range of care and support options.
Care and support services cater for a very wide range of people and needs, from the elderly to ex-offenders and drug addicts. The key issue is how to provide appropriate support to people who need it, some of who are potentially disruptive to community life. Care in the community was a disaster for many social housing estates because it led to vulnerable people being re-housed without sufficient support, having the same effect on neighbourhoods as anti-social behaviour. It is vital that proper support is given.
The government's new policy and funding framework for support services - Supporting People - aims to create a more coherent system to deliver support to vulnerable people in different types of accommodation and tenure. It aims to put on a secure and legal footing the funding that was formally delivered in an ad hoc way through Housing Benefit and other budgets. It also aims to create a coherent structure for decision- making and management of funding in the overall umbrella of services for vulnerable people provided by the Government.The proposals are to be implemented in full by April 2003, with a transitional scheme now in operation. The proposals under Supporting People are widely regarded as being right in principle; the test will be whether they work in practice and whether the necessary resources will be there.
Care and support policy is clearly a highly complex, multi-service issue. Policy crosses many spheres of responsibility at a national and local level, and requires co-operation of many parties. By giving housing, social services and probation services a joint role in applying the resources, the government's Supporting People proposals should help provide the necessary integrated approach to decision-making at a local level.
The interface between health and housing is particularly important; the two areas often fail to work together to produce the best outcomes. Multi-agency working will be a key role of all community housing organisations irrespective of whether they provide care and support service themselves.
It will be important to make sure that the system recognises that not all care needs are neatly packaged and not all needy groups will be seen as a priority when scarce resources are allocated. Groups that might miss out include 'difficult' groups like substance abusers, or people who move in and out of needing support (eg young, first-time tenants.) Housing providers need to have continuing flexibility to meet these needs and continue their wider support role.
Concern has also been expressed that Supporting People plans have the potential for reinforcing the status quo. Local authorities are unlikely to want to upset key partners such as housing associations by withdrawing the revenue support for their schemes, and this tactical granting of funding could get in the way of looking at innovative ways of new funding. meeting need, sustaining communities
Anti-social behaviour
'The term 'anti-social behaviour' covers a range of behaviour from littering to serious harassment. The work of the Policy Action Team which looked into anti-social behaviour revealed the multi-causal nature of the problem. Anti-social behaviour is fuelled by wider social exclusion forces including poverty, family stress and drug dependency. Problems are not confined to particular areas or types of housing.The PAT report1' shows that anti-social behaviour is more prevalent in deprived areas and in inner cities, but problems can emerge anywhere. Racially-motivated incidents are a significant and widespread problem.
It is difficult to underestimate the effect that anti-social behaviour can have on individuals and an area. It destroys quality of life and pushesstruggling neighbourhoods over the edge into abandonment.
The causes are complex and so the solutions are complex, requiring a wide range of agencies locally from landlords to police to employment services. There is a raft of legislation dealing with many facets of this problem. The PAT report set out a detailed strategy and action plan of activity at national and local levels to tackle anti-social behaviour. We would endorse this much more comprehensive and joined-up approach than the rather limited ideas that ended up in the National Strategy for Neighbourhood ~enewa1.l~
Because anti-social behaviour is prevalent across sectors and tenures, an overarching strategy is needed and indeed there seems much concern that effective action is rarely taken against private tenants or owner-occupiers. Community housing organisations do clearly have a strong role to play in tackling anti-social behaviour - through 'prevention, enforcement and resettlement' and this requires close working with many agencies particularly with crime prevention partnerships. The PAT report on this issue sets out many examples of successful working practices.
No landlord can afford to ignore the problem and, for some, it is the dominant issue in their daily housing management work. Experience shows it takes very few 'problem' households to cause massive losses to the landlord through increased turnover and increased difficulty in re-letting properties as well as the associated problems of vandalism and crime.
Anti-social behaviour orders (ASBOs) were introduced in the Crime and Disorder Act and the Forum welcomes current Home Office and Local Government Association work on developing good practise guidance on how to use ASBOs. This is needed. Very few ASBOs have been secured nationally and they are time-consuming to carry through.
The Forum endorses the use of active housing management and neighbourhood wardens to monitor and trigger early intervention. The Forum believes the focus of tackling this serious problem must increasingly be on tackling the underlying causes of anti-social behaviour, and on prevention. To coin a phrase, 'tough on anti-social behaviour and tough on the causes of anti-social behaviourl Effective ways of changing behaviour patterns are needed otherwise there is a danger of transferring the problem. It therefore supports the use of tenancy agreements for Community Housing which set out very clearly tenants' obligations and responsibilities. 11 Policy Action Team report on anti-social behaviour, Social Tackling race and other hate crimes has been a high priority for social landlords, and Exclusion Unit (Cabinet Office, following the Stephen Lawrence report, there is renewed commitment to dealing with 2000) these extreme problems. The Lawrence report recognised that there were models of 12 Social Exclusion Unit Natiaal good practice but pressed social landlords to become less bureaucratic in their Strategy for Neighbourhood Renewal: afiameworkfor consultation (Cabinet methods, to adopt a multi-agency approach, and to be more vigorous in the pursuit Office, 2000) housing united of perpetrators. 'The inclusion of the number of racial incidents as an Audit Commission performance indicator will encourage all authorities to give higher priority to this work.
Tenants' rights and responsibilities One of the Forum's outreach visits was to lrwell Valley Housing Association where they operate Gold Service, a scheme which aims to reward tenants who pay their rent on time, and maintain their tenancy agreements, with a series of incentives and enhanced services. This includes financial bonuses as well as discounts on insurance and household goods and services (see box below). 'The results have been improvements to rent arrears, together with reductions in voids and security costs. The savings which are made are put back into the community.
The Forum believes this general approach could be expanded and replicated throughout Community Housing, and ways explored in which incentives could be created to increase the commitment of residents to their community and respect for the rights of others. During our tenant workshops (see Box 7) in principle this was thought a good idea, but there was concern it might be divisive, and that it might disadvantage those struggling most. Most of the concern was around using rent payments as a key condition, especially when many tenants have their rent paid directly through housing benefit. Other suggestions were made. These included looking after gardens and the outside of properties, or getting involved in community activities or educational courses. We believe there is much scope to develop these ideas.
At present, there are few policies which incentivise people to stay in communities. There is scope for rent structures which could reward loyalty as well as good behaviour. Rent structures could be developed which gave reductions for long-established tenants. These ideas could be incorporated into the equity share ideas discussed above.
Tenancy rights The Forum's vision for Community Housing is of a re-shaped social housing sector which aims to cater for a wider range of income groups, with less rigid boundaries between owning and renting. This greater diversity clearly has implications for tenancies, and in particular questions the feasibility and desirability of a single social
Box 6: lrwell Valley Gold Service Our Gold Senice initiative tries to promote responsibilities as well as rights. Tom Manion, Chief Executive, lrwell Valley Housing Association.
Tenants who have a clear rent account for six weeks, or maintain a rent repayment agreement, and do not breach other conditions in the tenancy agreement are eligible to join the Gold Service. Tenants then have access to a wide range of services including An individual bonus of f52 per year for all members A Charter on repairs A low-cost home contents insurance scheme Discounts on household goods and services Discounts on healthcare Education Grants and scholarships a Access to training and work opportunities with the housing association and their contractors a Priority to transfer to other property owned by lrwell Valley Housing Association
Since its introduction in October 1998, 72 per cent of tenants have joined the scheme. There has been a 13 per cent reduction in rent arrears, a 24 per cent reduction in voids, and security costs have been reduced by 27 per cent. All of the savings have been put back into the community. The scheme is partly funded by the Housing Corporation, through an Innovation and Good Practice Grant, who are monitoring the scheme. meeting need, sustaining communities tenancy. The original case for a single social housing tenancy made by the Chartered Institute of ~ousin~'~described a set of core rights (drawn from both secure and assured tenancies) which should be established in statute to create a common tenancy, with additional contractual rights and obligations added locally by agreement. In Scotland, the housing bill includes a single tenancy; the main reason for this being a much stronger push towards stock transfer, and the desire to meet tenants' objections to this policy. The Forum supports the establishment of a platform of core rights, and welcomes the Green Paper's commitment to explore this issue further.
A future of greater flexibility in social housing tenancies does have an impact on the Right to Buy, which is currently only attached to secure tenancies (except where assured tenants have the preserved Right to Buy.) There has been renewed political interest in the Right to Buy. This is particularly true in Scotland where the Scottish Executive has proposed extending the right to 43,000 tenants of non-charitable housing associations through the creation of a single tenancy.
The Right to Buy was introduced in the Housing Act 1980 and gave secure tenants of councils and non-charitable associations the right to purchase the freehold or leasehold of the property they occupied at a discount, dependent upon certain conditions. Some 1.5 million dwellings have been sold, but sales are now running at a lower level of around 28,000 per year.
With the introduction of assured tenancies under the Housing Act of 1988, and the introduction of the Right to Acquire under the Housing Act 1996, the picture of eligibility for Right to Buy is now highly complex. The main recent changes, under the current administration, have been to reduce the discounts available.
The main disadvantages of the Right to Buy are the high subsidy involved through discounts, the eventually reduced supply of rented housing in high demand areas, and the inability of landlords to do anything about this (eg by reinvesting receipts in new properties, or varying discount rates). In some cases, such as some villages, the Right to Buy has resulted in loss ofall the rented homes and massive gains for the individuals who bought them.
At the other extreme, sales on estates which have become unpopular have sometimes blighted the area, especially if houses have been sold on to absentee private landlords. The main advantages might be summarised as keeping tenants in social housing areas (if not in tenure), the fact that it brought variety and some new investment to those areas, and that it could be seen as a redistribution of wealth. Most importantly, it has of course allowed 1.3 million people to realise their aspirations for home ownership.
The Right to Buy remains a politically sensitive issue, and any loss of 'rights' might be challenged under human rights legislation. Changes might have to be 'grandmothered' in for new tenants or tenancy changes. Logically, landlords should be able to manage the Right to Buy as part ofthe overall asset management of their stock. This might mean cutting discounts in areas where (say) the majority of rented housing has already been sold, whilst increasing incentives to buy in areas of surplus. Landlords should perhaps also have the ability to impose conditions on resale that would enable them to intervene to prevent ex-Right to Buy properties becoming a liability to an area in the hands of an absentee landlord.
In twentv, vears', time. if the vision advocated bv the Forum has been realised. the Right to Buy could become an irrelevance. All community landlords will have active !g~~a~~!~~~a~~J?&~-a mixed income/mixed tenure policies, in which they will be selling but also buying (CM, 1998) housing united properties, and tenants will all be able to 'staircase' in and out of full ownership, or gain equity stakes. A blurring of tenure in this way makes the Right to Buy redundant.
Fitting with wider housing objectives
Our overall housing aims In setting goals for the next 20-30 years, if we are too constrained by present circumstances and problems then we will fail to produce the vision that will shape our thinking about what might be achieved over this period. Our approach has therefore been to set ambitious goals, then try to reflect on what obstacles there are to achieving them, and how they might be removed. In setting these goals, we have also looked first at the housing market and how government intervenes in it as a whole, not just at social housing.This is because a new vision for social housing only makes sense if it based in this wider context and its relationship with other tenures is clear.
If we relate our goals to the traditional 'bricks and mortar' aims of government policy, then we can set out some very basic objectives for housing that are virtually beyond dispute:
a housing stock reflecting modern standards of space, design, accessibility and construction
sufficient houses to meet demand and allow for mobility
houses at affordable costs, in relation to incomes
sufficient choice between renting and buying.
But even these objectives, though not yet achieved, are too limited. To give them more meaning and make the goals for housing more dynamic, we must think in terms of the kind of housing market we want to create, not simply aim to achieve bricks and mortar targets by a given point in time. We also have to set housing within a broader social and economic context, because it affects and is affected by so many other important aspects of society that are changing around it. Finally, housing is not an isolated part of government policy but is integral to other objectives to do with employment, social exclusion and welfare. It is part of the solution.
To put housing in its full context, we have adopted 'sustainability' as the key aim of 'where we want to be', and we define sustainability to include a range of important characteristics of the whole housing market and of government intervention in it that we want to work towards. Here are our goals for a sustainable market and for government housing policy. meeting need, sustaining communities
Policy goals for a sustainable housing market
Sufficiency the housing market should operate efficiently overall and in such a way that all needs are met there must be an adequate supply of housing to avoid homelessness and overcrowding, and provide for future requirements as they emerge there must be enough affordable housing for those on low incomes
Quality the housing market should provide a defined quality of housing stock, and should ensure that it continues to be of good quality, responding to changing social requirements and expectations housing is not a stock of fixed assets with an indefinite life, and there must be adequate levels of renewal to maintain the agreed quality standards new housing should be built efficiently
Economy housing must contribute to economic prosperity and stability, improve job prospects, facilitate mobilityand help to reduce rather than exacerbate differences between regions housing systems should have as much flexibility as possible to cope with changing economic circumstances (both generally and for individual households) housing finance should be a mix of private and public funds public subsidies and taxation in housing should have clear purposes
Combating poverty and disadvantage the housing system must help to prevent the poverty trap, reduce inequality and ensure that those whose financial circumstances change do not lose their access to good housing housing should help to combat discrimination and tackle disadvantage suffered by particular groups the way housing is provided should not stigmatise people and should be free of overt and institutional discrimination people who need support in order to stay in their homes should get it
A healthy, secure, sustainable environment housing should be environmentally sustainable, in terms of how and where it is built, how it is used and how it relates to transport systems housing should provide an environment in which adults and children take pride in their home, feel secure and can lead independent lives
Choice and accountability there should be as much choice as possible within housing - people should feel that they have chosen where they live, and whether they buy or rent (and who they rent from) - and be able to move between renting and buying and vice versa housing providers should empower the customer - both individually and collectively, with the right balance between the two, and between the power of the customer and of the provider
Community sustainability through housing we should aim to reduce segregation of rich and poor, and build sustainable communities which are likely to be viable in the longer term without high levels of public sector intervention housing should be part of properly planned neighbourhoods with adequate local facilities such as schools, shops and public transport the ways in which housing is provided and run should be open to community accountability where this is required housing united
We offer these broad goals as a more comprehensive set of aims than the eight 'key principles' which the government sets out in its Green paper14 although the one set is not incompatible with the other. We suggest that the task of government is to decide when, how and to what extent to intervene in the housing market to achieve the goal of sustainability. Governments are able to influence the market in a range of ways - through taxes, subsidies and regulation, for example -as well as by direct provision. In future, government intervention should support this wider aim of sustainability rather than act in support of a particular tenure. But this report is primarily about the future of social housing - housing provided with public subsidy. It is the role of this sector in achieving goals of sustainability in housing that is our primary concern, and what we have tried to describe in this report.
Conclusion We need a new kind of housing market, where local authorities have the key strategic role, where mixed income developments become the norm (not merely something imposed), where there is an explicit objective over a 20-30 year period to break the links between location and tenure, and as far as possible between location and income. In low demand areas, councils will need new skills and wider powers to tackle deficiencies in the housing market and get it back into balance. Partnerships with the private sector to achieve these objectives should be the norm. Greater flexibility will be needed in how public subsidy is used to plug gaps in the market or stimulate change. Better powers will be needed to allow councils to buy land and assemble sites to secure the right kinds of development. Much closer integration of housing strategies and the planning system is required - with affordable housing and mixed communities as much the aim of the planning system as of housing providers.
Community housing agencies cannot on their own achieve the goals of sustainability in housing that we have set. Other government action will be needed, not least in ensuring that the public element of the finance that they will need is actually available to them. But we would argue that by aiming to recreate existing social landlords in this new form, there is the potential over a 20-30 year period to produce a new kind of agency. These organisations will play a much more proactive role in the wider housing market in pursuit of the goals we have set out. The combination of 'top down' government policy and 'bottom up' action by community housing organisations could go a long way to ensuring that housing becomes sustainable.
14 Choice and Diversity - a decent home for all (DETR, 2000) meeting need, sustaining communities
Box 7:Tenant's views As part of the work of the Forum, we ran a seriesof workshops with tenants to get their views on some of the key elements of the emerging vision. Workshops were held with tenants from Newham Borough Council (London), Maritime Housing Association (Liverpool), Oldham Metropolitan Borough Council (Oldham) and Bethnal Green &Victoria Part Housing Association (London). We would like to thank all those tenants who contributed, and to the Joseph Rowntree Foundation for additional funding to undertake this work. The tenants' ideas and concerns have been incorporated in to the Forum's recommendations. The views and concerns described here will also be very useful in further policy development.
Flexible tenure Generally the idea of moving between renting to owning was thought to be a good option for people to have, but some people felt it was more relevant to younger people who are working.There were clearly concerns that it might be complicated and that clear information would be needed to ensure it was fully understood. Some people did not want to take on the additional financial responsibility it would involve.
'I have no interest in buying part of my home; I'm happy renting.' 'You'd have to get a mortgage and you'd be paying rent at the same time ...they'd be money going in all directions.' 'There wouldn't be any housing stock left if everybody was given the option to move from renting to full owning, unless the money was used to buy more homes.' 'I don't see how landlords could offer such flexibility; they just about manage to put a roof over our heads:
More choice in lettings and mobility People were clearly positive about having more choice with some not understanding why choice was currently so limited. Some people thought however that tackling disrepair and anti-social behaviour should take greater priority.
'It's important for people to have more choice, particularly in terms of what schoolsand jobs are around.' 'More choice should be given to tenants in where they live. There doesn't seem to be good reasons for not giving us some choice: 'The worst thing about social housing is not being able to move; you feel stuck: 'What really matters is just getting social housing brought up to a decent standard - in termsof repairs and modernisation:
Rewording good tenants Generally it was thought that rewarding good tenants was a good idea and could lead to a number of good outcomes for the community generally. The idea appealed to a number of tenants but there were concerns about it being divisive. There were a number of suggestions for how a reward scheme might work.
The best way to reward tenants is to reduce their rents.' 'Rewards should be given to the community not individuals, like providing a minibus or a playground' 'People would have to come and inspect your home, all sounds a bit too big brother.' 'It's toughest for those bringing up families with lots of different demands on their money - I wouldn't want to see them disadvantaged' 'Paying rent on time should not be the condition. It should be looking after your garden, or getting involved in community activities: 'I'd like to do my kitchen up, but there's not much point is there? I don't get anything for it.' housing united
2 vision into practice - community housing organisa tioiis
Summary
Social housing should be transformed into an independent sector, straddling the boundary between the public and private sectors. Community housing organisations should operate in a commercial way in the wider housing market, but with a social purpose.
Community housing organisations need to be attuned to local need, offering a diverse range of options but with a primary focus on people who cannot compete in the housing market without assistance.
Community housing organisations should all have clear policies for tenant participation and consultation, building on the current compact approach, and should manage their businesses in a transparent and participative way.
Local management, local accountability and local partnerships are paramount. All community housing organisations should critically examine and be more flexible about their ownership and management of stock. This means large-scale monopolies should be broken up in some areas and ownership and management rationalised to better meet needs of communities in others.
The transfer of council housing to other bodies should be used as an opportunity to break up large-scale monopolies and limited to 12,000 homes in one area under one management organisation.
Community housing organisations should be more proactive in sharing facilities with other providers in the area to benefit everyone in the community. This would include offering services to other community landlords, to private sector landlords and to other agencies.
Not-for-profit companies remain best suited to the community landlord function. A diversity of ownership and management models is however recommended and this will include using a variety of public and private bodies to undertake different roles. This will promote a measure of competition and foster innovation.
The clear separation of the strategic and the provider roles of local authorities is needed to strengthen both. Together with the need for financial independence, this means that all housing should be managed at arms-length from the local authority as a housing or tenant management organisation, an arms-length company or a Registered Social Landlord. vision into practice - community housing organisations
The future of council housing should not be pre-determined by national targets, but by requiring all local authorities to undertake a fundamental review of their stock along Best Value principles. Balloting over issues of ownership and management should be extended and become a positive feature of Community Housing.
Diversity also enables specialisation: community housing organisations would have housing at their core but would operate flexibly as regeneration, social care or community development agencies.
Community Housing has a central role in tackling social exclusion and creating a sustainable future for communities, through developing mixed income communities, adopting wider social economic development activities and working in partnership with other agencies. Housing management is in a strong position to be partners and leaders in neighbourhood renewal. housing united
Introduction
Empowering tenants and potential tenants individually and collectively so that they have much more choice in where they live, what service they get, what level of involvement they have, and who their landlord is, is central to the delivery of the Forum's vision. This will result in a radical restructuring of the sector over time. It will mean being much more flexible about the ownership and management of housing stock so that large-scale local monopolies can be broken up in some areas and ownership can be rationalised to better meet the needs of local communities in others. Improving quality will require more investment, from public and private sources, and more innovation in using existing resources. Social inclusion will need to be tackled by closer working between housing and other agencies, with housing providers being partners and sometimes leaders in developing and carrying through strategies to tackle areas of deprivation.
The Forum believes that the powers, financing, structure and culture of the sector need to be modernised if we are to create the desired outcomes of increased choice, an appropriate supply of good quality well managed housing, and socially inclusive and sustainable communities. Existing landlords will need to be progressively transformed into a new Community Housing sector.
The Forum believes that all existing council housing and housing associations should develop as businesses with a social purpose. What changes this will require from the housing finance system and in the financial structures of organisations is discussed in chapter 4.This chapter sets out what these organisations will look like, what the shape of the sector will be and what it will mean for current social landlords.
A value-based ethos and a focus on outcomes
We are not recommending one model of ownership and management over others. In the consultations we have undertaken, the prevailing view was that who owns and manages community housing should become less important than the quality of accommodation and management, and that different models will work in different places at different times. A plurality of owners and managers, responsive to local need, which allows tenants and prospective residents to exercise choice, was generally regarded as desirable.
The Community Housing sector should be shaped by common values and a focus on outcomes. These values should include a commitment to affordability, equity and equality of opportunity. Community housing organisations should also be committed to involving tenants, to public accountability and to using public monies efficiently and effectively. Outcomes will include delivering sufficient and good quality accommodation in the right places and developing communities which work well for people. This requires all providers to adopt a more business-like approach that will deliver defined social outcomes. It will mean giving community landlords the powers and autonomy to offer choices defined by individuals and to develop strong communities within a clear local and regional strategic framework. The Forum believes public policy through facilitating a plurality of ownership and management models, promoting a measure of competition and fostering a climate of innovation, will better produce the outcomes that tenants desire. vision into practice - community housing organisations Social businesses
In our vision for Community Housing, we challenge the widespread perception that Community Housing should be about providing welfare housing for the poorest. Our view is that Community Housing should be seen as a financially robust and viable going concern, with allCommunity Housing developing as businesses with a social purpose. Many current social housing landlords already exhibit the core characteristics needed to fulfil this vision; the Forum's vision builds on and extends these developments across the whole of Community Housing.
As organisations with a social purpose, all community housi~gorganisations should be committed to the following core purposes:
meeting the housing requirements and aspirations of people on below average incomes through a diverse range of housing products, with its primary focus on people who cannot compete in the housing market without assistance.
helping to create sustainable housing in sustainable neighbourhoods that work for people.
contributing as full partners to the development and implementation of effective housing, social care, neighbourhood regeneration, environment, and economic development strategies.
managing their affairs in a transparent and participative way, welcoming the full involvement of tenants, fair regulation and accountability.
As businesses, all community housing organisations should be:
business-like in their operations and structure and independent in their day-to-day management.
continuously seeking best value in the use of consumers' rents and service charges and the public's subsidies, both historic and new.
linked to both private and public investment finance.
responsive to customers, offering more choice and more diverse products.
attuned to local housing markets.
pro-active in the face of new opportunities and challenges.
free to participate in joint ventures, borrow and redeem debt and to buy and sell property in accordance with a business plan, subject to prudential controls.
be influenced by market factors in their rent setting even though rents are not at market levels.
Not-for-profit landlords
Under the last government, proposals were put forward to allow for-profit companies to become Registered Social Landlords and qualify for grant assistance. These were not proceeded with, and the long-standing principle of social housing landlords being housing united
not-for-profit still remains intact. In other countries, most notably Germany, social housing is defined by a form of finance, rather than linked to ownership. Private for- profit companies and public sector bodies, for example, receive preferential loan arrangements to provide housing which meets defined quality requirements and is rented at affordable rents to households with incomes below particular levels.' For-profit private companies do already provide services within social housing and throughout other public services in this country.
The Forum thinks it is important to distinguish between owning and managing Community Housing, and indeed sees merit in organisations differentiating the ownership and management functions with a variety of public and private bodies undertaking different roles (see page 52). However, the Forum feels that not-for-profit organisations are probably better suited to the social landlord function and better placed to undertake the community agenda we have described. The regulation that would be required to safeguard assets (for example, in future takeovers) is also likely to act as a disincentive for private for-profit companies. We would not exclude in the long term for-profit organisations taking on the landlord role and accessing grant assistance, once safeguards had been put in place to guarantee tenure for tenants and maintain the long- term use of the asset for a 'social' purpose.
Size and diversity of providers
During our consultations, two connected issues about the future size of community landlords and the implications for service delivery and accountability were raised -the need to tackle monopoly provision in some areas and concerns about the increasing size of landlords.
It is becoming more commonly accepted that monopoly provision stifles innovation and choice for individuals and that the lack of real competition or comparators can lead to inefficiency. To exercise choice, tenants need to be able to make meaningful comparisons between different landlords, and tenants and landlords together need to be able to make meaningful comparisons between managers. In many areas, local authorities are still the dominant providers of social housing, and there is a danger that large-scale monopolies will survive transfer into new structures in the future. In reviewing their stock, authorities will need to consider how they can move towards a future of diversity and a plurality of providers.
The danger comes when several neighbourhoods or an entire town or city, are joined up under one dominant provider, not when there is a single landlord in one neighbourhood. To exercise choice, tenants collectively need to be able to look around them and to compare performance and tenants individually need to be able to choose between different providers in different neighbourhoods and between different products in the same neighbourhood.
There is also concern about the size of some providers and that their regional or national coverage can be at odds with the requirement of sensitive local management and community engagement. The twelve largest Registered Social Landlords already own 25 per cent of all housing association stock, and there is a continuing tendency to merge and to form group structures. With transfer and their own development, some Registered Social Landlords now have stock that matches the size of large councils, and the continuing trend is for Registered Social Landlords to merge and form group structures. Larae size can act aaainst effective tenant involvement and can lead to d d lMichaelOxleySociaLHowingin distant and unresponsive management. Bureaucratic remoteness has been a significant the 21st Century: Learning frm Evrope (LPPR, 2000) barrier to community development and local accountability in the past. vision into practice - community housing organisations
The Forum has taken the view that these dangers exist, but that large landlords do not necessarily have to be remote managers. They do have to work harder to avoid the dangers of centralisation, and have to ensure that management and budgets are genuinely devolved to the appropriate local level. There also needs to be a very clear understanding about the level of discretion, autonomy and accountability which is exercised locally.
The scale of operations which works for day-to-day management is clearly smaller than the scale which is efficient for other purposes.2 Larger scale organisations have clear advantages in raising finance, managing capital programmes, long-term financial security, and spreading overheads.
The Forum has concluded that there is no need to prescribe an overall limit to the size of community landlords, but that there is a need to ensure that in every area there is a diversity of provision, devolved budgets and management, local accountability and community engagement. The safeguard should be the tenants' right to take over management or to trigger a process leading to a change of manager or landlord.
Our future vision does not however envisage only a few large landlords, even if management is devolved to a local level. It is an attractive feature of the sector, which we wish to retain, that it ranges from small tenant management organisations and co- operatives to large organisations with the capability of delivering major development programmes. We need to be careful that the pursuit of desirable objectives, such as affordable rents, are fully thought through and do not have unforeseen outcomes such as forced mergers.3 A healthy balance is needed which is a combination of diversity, scale, competition and efficiency.
Encouraging diversity and competition does not mean that there should be a free-for- all. Concern was expressed in our consultations that too much diversity would cause fragmentation ofservice delivery, confusion and overlap and that localised monopolies are able to achieve coherence in management. In some areas as many as nine or ten RSLs, plus the local authority, might own stock in a single ward. In many areas, associations operate and work well together, information is shared and there is good communication and co-ordination. Having several social landlords working in an area allows tenants to make the comparisons between providers which is central to the more choice-orientated approach of Community Housing; taken together, they may provide the range of services and products that meets the needs of a particular neighbourhood. One-stop shops may also help alleviate the detrimental side effects of having multiple landlords, and investment in technology will facilitate a higher level of co-ordination.
There is no universally applicable answer to the question as to how many social housing providers should operate in a single defined area. However, fragmented ownership can mean that no one organisation has the critical mass to implement local management, and that no one agency has enough of a stake in an area to become an active partner in neighbourhood regeneration or management. It can also lead to unproductive competition where different landlords compete with each for development sites, pushing up the price. In any one area there should be a choice between at least two medium-sized landlords who are big enough to deliver a range of services and compete for each other on value for money terms. This is probably preferable to a proliferation of landlordslmanagers which may create neither the value added not the effective competition that would drive up standards and create real choice. 2 John Hills Reinventing Social Housing Finance (JPPR, 2000) All providers should be using Best Value review techniques to examine critically both ,Foranexaminationoftheeffect their ownership and management of stock. This might mean seeking to rationalise O~RPI+0% rent capping and low ownership, subject to tenants' agreement, and this process would be facilitated ~~",~s~s~~$~~i~ nationally by removing disincentives to rationalise stock and allowing stock to be more (HACAS/CIH, 2000) housing united
easily swapped.This could also mean community housing organisations examining their management operations, and rationalising who provides management services in areas. Local management, local accountability and local partnerships are paramount.
Community housing organisations should be much more proactive in sharing facilities with other providers in the area to benefit everyone in the community. 'This would involve sharing facilities and offering specialist services to other organisations. For example, Black and Minority Ethnic housing associations could act as advocates for people in accommodation proved by other organisations. Organisations offering care and support services could also be more active in offering these services to the wider community.
Owning and managing community housing
The future of council housing The issue that has prompted most debate and concern, particularly among tenants that we have consulted, is the question of who should own and manage council housing. This was fuelled by extensive coverage of the Government's escalating transfer programme and ongoing uncertainty about genuine alternatives. The Green Paper has calmed this debate a little, particularly in offering an arms-length local authority option as one way forward for the future of council housing.
There were clear divisions of view amongst those that we consulted, and some differences of emphasis amongst Forum members. Virtually everyone thought that council housing in the current framework was unsustainable and that major changes are required. At one end of the spectrum, some thought that the complete transfer of council housing to new bodies was essential to achieve the step change in quality which is needed. At the other end others took the view that the sector had been starved of resources for many years and had been set up to fall; council housing should be given a proper chance.
The Forum has taken the view that in the long term what matters is not who owns and who manages community housing but that all community housing organisations in the future hold the values and produce the outcomes described throughout this report.
The Forum has taken the broad view that most council housing will, and should, move into new forms of ownership through arms length companies or transfer. However, there will continue to be a need for a model which meets our general objectives for community housing whilst the stock remains in council ownership. There are a number of reasons why homes will remain in council ownership. e First, we respect the outcome of the ballots that have taken place and the judgement of many tenants that they want to stay with the council in some way. There is too much of a tendency for people to imply that the tenants have 'got it wrong' when they refuse to transfer. Tenants who vote no to specific proposals should not be left in a state of limbo with no viable future except to 'get it right next time'. We would firmly oppose the view that the solution to this difficulty lies in removing the right to a ballot, indeed we believe the concept of balloting over issues of ownership and management should be extended and become a positive feature of Community Housing. It would be perverse to have a system which emphasises the importance of tenants views except on the decision that matters most. Tenants views cannot be wished away. Many tenants desire, and feel secure in, council owned housing, although there may be generational differences in people's views. Rightly or wrongly, some tenants are suspicious of the alternatives, vision into practice - community housing organisations
and there are a number of cases where tenants havevoted against transfer of their homes despite having major improvements on offer. This is not just a case of 'better the devil you know'. Despite severe constraints, many Local Authorities run their housing well and meet the needs of their communities.
Second, there is an enormous amount to do in the next ten years to meet the target of giving all social housing a viable future. The transfer programme and the new programme of establishing arms length companies are bold and ambitious and great efforts will be needed to achieve them. It does not make sense to put further strain on our overall capacity to deliver these programmes by forcing councils into these options when they can achieve viability through the major repairs allowance and some additional flexibility on raising capital finance.
Third, we are not convinced that whole stock transfer will achieve the degree of diversity and choice that is needed. More authorities may need to consider mixed solutions which involve some transfer and some retention of ownership, and some authorities might wish to retain stock which is already subject to successful devolution to a tenant management organisation.
Fourth, in some investment models, including PFI and the securitisation model being developed by some authorities, the local authority retains long term ownership of the stock and a structure is needed to deal with this.
Where stock is retained in council ownership, we are convinced of the need for financial independence and for management to be moved to arms-length. There are two main reasons for this:
First, we want all community housing organisations to operate as financially sustainable businesses. Registered Social Landlords already operate under a financial regime which encourages long term planning for the maintenance of the stock, and we want all existing council housing to move onto a similar financial footing. This involves the full implementation of resource accounting and budgeting, and the ability to make commercial decisions (eg to develop, to buy and sell property and, when Treasury rules allow, to borrow when it is prudent to do so).
Second, consideration of the future of council housing cannot be separated from debates on the modernisation of Local Government and more specifically the community leadership role that Local Authorities will need to play in ensuring the social, economic and environmental well-being of their areas. One fundamental aspect of this will be to secure a decent home for all, irrespective of tenure. Council housing is not immune from key aspects of the Local Government modernisation agenda, such as moving the focus of activity away from direct provision towards enabling and strategic responsibilities. A stronger strategic overview across all housing is needed and Local Authorities are the obvious and most appropriate candidates to fulfil this role at a local level. The elements of this revised strategic role are discussed in more depth in Chapter 3. The Forum has concluded that the clear separation of the strategic and the provider housing roles will serve to strengthen both of these crucial functions.
Together with the need for financial independence, this means that all housing should be managed at arms length from the local authority as a housing or tenant management organisation, an arms length company or a Registered Social Landlord. housing united figure 2 What will happen to council housing in England? housing or tenant management
council arms-length 3.2 million Best Value council homes Fundamental L- 1 Review I transfer to new m 7 PFl arrangement
A comprehensive best value review
The Forum believes that in ten years' time it should be possible to say that all 3.2 million council homes are subject to a clear business plan which gives them a viable future, with no investment backlog and sufficient resources to meet future maintenance and reinvestment needs.
The ten-year target to tackle the backlog in repair and maintenance is unlikely to be reached if the authorities with the biggest investment requirements are left to last. Yet that is a possibility under current proposals because they are not targeted at the authorities with the greatest investment needs. 'The current transfer and Private Finance Initiative processes operate on a self-selecting first-come, first-served basis, and the Green Paper restricts access to the arms-length company [and their borrowing freedom) to councils which are the best performers through the housing inspection process.
To achieve the ten-year target for dealing with the El9 billion backlog, the Government will need to ensure that at least one of the options will work for every council with a backlog of repairs. It will be necessary to ensure that every council considers the available options rationally and pursues the best available option for its circumstances. It would therefore be logical to require every council to undertake a comprehensive review of the options available to it, using Best Value principles, and to develop a plan for the future of its stock. Although it is not a Best Value requirement, some councils are already using Best Value methods to review their long term stock ownership. The Government could ensure that the review programme is geared to ensure that authorities with the greatest investment needs are not left to last. Indeed authorities with the greatest investment needs, which might take the longest time period to develop and implement their proposals, should be dealt with in the early stages of the programme of reviews.
This Best Value review should look at the big picture. It would need to take account of a range of issues such as how the options would promote (or otherwise) the social, economic and environmental well being of the community, as well as the value of the stock and its long-term investment needs. Consideration would also need to be given to how stock ownership issues relate to proposals for estate or neighbourhood regeneration (ie not simply taking a view on the need for housing investment), for neighbourhood management and the need for diversity of provision. The views of tenants and residents with their preferred level of involvement in the ownership body would be central to this process together with the views of other stakeholders, including national government. The Government would need to provide clarity on the likely resource backing for the different options. vision into practice - community housing organisations
As with Large Scale Voluntary Transfers, there should be a limit (currently 12,000 homes) on the number of properties which are controlled by the same managing body. This would require larger councils to split up their housing into smaller management units. This would help meet the aim discussed above of a range of community landlords operating within each area rather than there just being one dominant landlord as there is now in many areas.
This process would go beyond the options appraisals which councils are currently undertaking and beyond what is currently being asked of councils in their business planning for resource accounting. An accountancy-driven approach is not sufficient to determine what in reality is a major strategic decision. The Best Value approach could be taken forward in tandem with staged moves to arms-length arrangements, as described by John ~ills,~and set out in more detail in Chapter 4.
The most favoured option arising from the review should be subject, as now, to a tenants ballot, but the process would guarantee the involvement of tenants from the beginning and would therefore be less likely to lead to dispute at ballot stage.
Central government will be able to influence the shape of the Community Housing sector through a variety of mechanisms and policy levers. It will be appropriate, for example, for it to set limits on the number of houses in any one management unit or other conditions which will ensure a measure of choice in an area.
Local authorities will also need a different relationship with their arms-length companies than with the Registered Social Landlords in their areas. If not, the fact that they own the arms-length company becomes meaningless. Local authorities should set the broad strategic goals and policy parameters, as, for example, the Swedish municipalities do in relation to their wholly-owned housing companies.
Co-operatives and Tenant-managed Housing There is much to learn from the co-operative movement both here and from abroad. Elements of the vision described throughout this report are taken from the co- operative approach which has consistently been about meeting the needs of individuals within a community framework, and about local people taking community responsibility for their environment. In Scotland, housing co-operatives and small community based housing associations are common. In England, there was increased interest in tenant co- operatives in the 1970s and there has been a renewal of interest through the development of Tenant Management Organisations in the 1990s.
As the UK Co-operative council5 have said themselves 'Housing co-operatives are clearly only worthy of support if they work in practice and are an effective means of managing social housing: The 1995 Price Waterhouse ~e~ort~showed housing co-operatives to be highly effective managers of social housing, delivering services as good as or better than the most professionally run housing associations and providing better value for money together with additional personal and social 'Housing Plus' benefits. The recent Office for Public Management study also concluded: 'Resident control brings clear benefit in terms of better housing management, capacity building and community sustainability:
Advocates of co-operatives put the lack of growth of the co-operative movement primarily down to an investment and regulatory regime which favours paternalistic 4 John Hills op cit housing providers and discourages tenant control. There is also the view that few people 5 Co-operative Homing - realising the have the will or the time to devote the huge amount of voluntaty input that co- potential (The UK Co-operative operatives can require. The new regulatoty regime described in Chapter 5 aims to be Council, 1998) more flexible and appropriate for different forms of ownership and management, and 6 Price Waterhouse Coopers the Best Value review process an opportunity for tenants to consider tenant Tenants in control: an evaluation of tenant-led housing management management and ownership. organizations (HMSO, 1995) housing united
Box 8: Burrowes Street Tenant Management Organisation (TMO) There had been very little investment in the stock on Burrowes Street since it had been built and tenants were dissatisfied with the level of service being provided by the council. A small group of residents joined together to form the Burrowes Street Tenants and Residents Association. They carried out a door to door survey on the estate to gather information on the problems caused by disrepair and on what could be done to improve the environment. A residents' steering group was formed within the Association to explore an estate-based management service which would take on responsibility for repairs and decoration, caretaking, cleaning, and employing staff. The local authority would retain responsibility for structural repairs and rent collection. The TMO was established in 1994 and is run by a management committee who are unpaid volunteers resident on the estate. These are re-elected each year. Paid worken employed by the management committee include an estate director, estate manager, administrative assistant, YTS trainee, an electrician, a plumber and caretakers. Collectively these look after the day to day running of the estate.
Unlike most high-rise estates, we've turned ours around so that we have a waiting list ofpeople who want to come and live here. We feel this could only have been achieved through tenant management. (Estate Resident)
The Forum is agreed that tenant ownership and management should be an option, and adequate information provided for tenants to realistically assess it as an option. Crucially tenants should be given the ability to choose the level of involvement they have in managing their own homes. This means extending the Right to Manage to all tenants whether currently in the Registered Social Landlord or Local Authority sector, and allowing them to set up a Tenant Management Organisation. The rent reforms recommended in Chapter 4 are significant here; if tenants are being charged more than their guideline rents would suggest, this gives tenants an exit route. In whatever circumstance, there would clearly need to be strong tenant support for tenant management organisations and co-operatives and not only the support of a small number of very enthusiastic individuals.
All community landlords should widen their horizons and see developing the skills and capacity of their tenants as an integral part of their role. Over time, this will allow tenants to create and control their own sustainable housing environment.
Box 9: Paddock Housing Co-operative Paddock Housing Co-operative was formed in 1983 by a small group of council tenants. All of Paddock's members took part in an extensive training programme before they began the project to equip them to run the co-operative. The homes are fully owned and managed by the co-operative, with all members contributing in some way. The members arrange all their own day to day repairs and directly control all services they receive. Participation and shared responsibility are key aspects of the co-operative's existence. As a result of experience gained during the process, three members have become housing mangers, one a neighbourhood officer and many have part time jobs with the Birmingham Co-operative Housing Society.
Splitting the landlord and manager roles The historical growth of social housing has always seen the role of landlord and manager as one and as a result residents have had little choice in their manager- it comes with the landlord. Furthermore because the process of changing landlord is both difficult and lengthy, residents have had to live with their manager irrespective of the quality of service provided. Council housing management under Compulsory Competitive Tendering was a failure because it sought to impose a highly prescriptive bureaucratic model on unwilling landlords and tenants without considering how a real market might be developed.Voluntarism, and the driver of Best Value, is now starting to produce more strategic and innovative approaches to procurement based on partnering.
John swinney7 has highlighted the emerging market which is being created by councils 7 John Swinney Choice and Diversizy ~PR,2000) which are interested in separating the owner and manager roles. In the Hackney model, vision into practice - community housing organisations the owner retains responsibility for rent levels, tenure arrangements, investmentlregeneration strategies and asset management; the manager delivers the day-to-day housing management service to at least the standards set by the owner. The partnership also involves exploring new ways of attracting investment into the stock and building innovation into the way services are provided.
A number of London Boroughs now have partnering arrangements or management contracts, mostly with housing associations. To date, few Registered Social Landlords have introduced such arrangements for their own stock, but the spread of the Best Value approach has started the debate. But it is still very early days. 'There is growing recognition that having different providers within one local authority can have real and positive impact on overall performance. The Forum believes it is a positive step for community landlords to seek diversity in local service provision, giving residents more choice. In the longer term, raising residents' aspirations and building capacity in each community will enable them to have the power to decide.
The practice of separating the landlord and management roles is currently very limited but the market is growing and success will dictate the spread of the practice. It is clearly not a panacea but needs to be considered; the Forum sees exploring this approach as part of the overall Best Value review process.
New constitutional structures It is widely accepted that the formal constitutional structure of Registered Social Landlords is at best something that they have to work around and at worst an impediment to proper management, innovation and accountability. Jeff Zitron's recent report8 for the Chartered Institute of Housing has comprehensively covered this ground.
Current Registered Social Landlord structures - Industrial and Provident status, a mix of charitable and non-charitable limited companies - seem inadequate to meet the needs of the sector in the long term. In practice, both traditional and stock transfer organisations identify a conflict between the requirements of accountability in their board membership and the skill requirement of managing large and complex organisations. Particularly in larger organisations, the need for accountability to stakeholders and the efficiency of management is seen to easily conflict. The related issue that boards operating on a voluntary basis will find it increasingly difficult to attract the skills required also leads to the need for having some board members paid.
The sector must in the future continue to be locally accountable and properly regulated, but with new and diverse needs, current structures seem ill fitted for the job. Certain elements of the Forum's vision will require changes in the structures of Registered Social Landlords. A more business-like sector will need new structures that allow providers to operate in a more commercial way. A more focused approach to the needs of communities will be helped through structures that are transparent and seen to be accountable to those communities.
Jeff Zitron's work suggests a new type of organisation based on the Company Limited by Guarantee model, which he refers to as Registered Housing Organisation model which would be designed to meet the needs of larger, more complex organisations that are operating as diverse social businesses. Specifically this challenges whether the ownership or board structure need be the means of accountability. Company Limited by Guarantee bodies are easier and simpler structures and have in recent years been more popular than the traditional Industrial and Provident status structure.
Because Registered Housing Organisations would undertake a diverse range of activities, ~~r~~~~a~~~~~~- the board would need to include a range of people with high skill levels. The board being changingworld(CIH, 2000) housing united essentially skills based would not have room for particular stakeholders. Tenant members would be there for their expertise and perspective rather than as representatives. In the Registered Housing Organisation model, payment to board members and both executive and non-executive directors would be allowed.
The Forum supports drawing a distinction between skills and accountability objectives of board members. Membership of the board is by no means the only means of accountability. Accountability needs to be strengthened in new ways if community housing organisations are to meet the needs of individuals and communities. Tenant board membership alone is not sufficient to ensure accountability. Through supporting various means of tenant involvement, or through surveys and performance reporting, community landlords will be held accountable to tenants. Giving tenants more choices about switching landlords (not just from councils) will also enhance accountability.
The Forum agrees that tenants on a board should not been seen as representatives. As board members, they are legally obliged to act in the best interests of the company and this may not mean the best interests of tenants. Tenants should be on boards for their skills and experiences, and for the perspective they bring as a tenant.
Debate on whether or not to pay board members has involved weighing up the advantages of a voluntary ethos with the need to attract the high level and range of skills needed in running a complex business. 'The Charity Commissioners are currently reviewing the payment of members of charitable boards and it will be interesting to see their conclusions. Our majorityview is that payment of board members will probably be necessary as the independent sector grows, and this will become more evident as boards find it increasingly difficult to recruit suitable people. Those in favour of paying board members think it should be in similar terms to National Health Service trusts where payment is a fixed amount rather than a salary.
Tenant involvement in decision-making One of the current Government's strongest commitments on housing has been to bring about a major improvement in tenant and resident involvement. This is a central feature of the Bestvalue Housing regime and the requirement of all housing authorities to have now negotiated local Tenant Participation Compacts. The new compacts have been widely welcomed and cover authority-wide and local arrangements for tenant associations, service level agreements, and management partnerships and tenant management organisations.
The involvement of tenants through various mechanisms has become a necessary element of social housing. With little ability to vote with their feet, tenants can only exercise influence through involvement processes. There is a view that tenant involvement has gone too far, and it has been argued that efforts to involve tenants and the pursuit of tenant management and control is a legacy of the 1980s backlash. It has been suggested initiatives such as tenant compacts are shades of a new paternalism intended to replace old paternalism. We, however, disagree.
The social housing sector however is not a free market. Social housing exists and as Community Housing should be maintained because we believe the free market would not produce the best social outcomes. The Forum is advocating a more business-like sector with rents set on a more market-like basis. Even in a sector where tenants have more choice, formal methods of accountability and tenant involvement are still very important. Unless rents are at market levels and rationing ended these approaches are needed to compensate for lack of tenant exit power. The Forum believes policy will need to take two tracks - increasing individual and collective choice and improving service quality, whilst maintaining accountability and involvement through a variety of locally- determined mechanisms. vision into practice - community housing organisations
Jeff zitrong has emphasised the importance of distinguishing between the rights of tenants as consumers and their right of empowerment and decision-making.
As consumers, tenants have the right to information and clear expectations from their landlords. In relation to empowerment, tenants should have the opportunity to become involved in managing their homes and environment.
He also stresses the importance of the empowerment aspect of the tenant-landlord interaction. As some community housing organisations will become regeneration agencies or take up leadership roles in regeneration partnerships, empowerment [and being responsive to what the communities themselves want) is central to how regeneration should be achieved.
The most success may be achieved bysocial landlords, for example, sponsoring childcare, training initiatives and the development ofsocial entrepreneurs - thus allowing tenants to start making their own choices on how they spend their time rather than in promoting their own participation schemes.
For residents, housing is only one part of the picture. It is not axiomatic that empowering communities will lead to tenants wanting to be involved in managing their housing. On some estates, active community organisations pursue a wide range of interests, setting their own priorities. Often these include crime and policing, child care, facilities for the elderly, facilities for youth. It is not unusual for some of the most active communities to avoid detailed involvement in housing management structures because it would bog them down: they might take the line that they just want the landlord to provide a good service. On other estates, the focus of community organisation is very much on housing issues, especially repairs and anti-social tenants. Real community empowerment is not neat and tidy and local groups do not always want to fit into the structures that the public sector and landlords create. It is also part of the territory that local groups come and go or vary in strength from year to year.
The demands being made on community organisations are now very great.Almost every Government initiative targeted at deprived local areas or zones requires the establishment of a partnership and community involvement. Looked at from the bottom up, there is a bewildering array of participation structures, which are hardly joined up at all. All too often, there are only a few active people in the area or on the estate who are trying to respond. They have little support and only rarely do they have any resources and yet they are expected to undertake the impossiblejob of representing their community, consulting their constituency and speaking on behalf of tenants or residents. Never has so much been asked of so few for so little, and the mystery could be why people continue to put in so much effort.
It is common now for Government initiatives to include some funding for community capacity building, but it is still rare to have long term commitment to community development. There is clearly a lot of good work going on in supporting organisations and tenants, and the tenants that get involved enjoy doing so and can find it a real opportunity to make things better. But clearly without a sea change involving sustained commitment and better resources at the grass roots, community and tenantslresidents organisations will be further threatened. Community landlords should also not see involving the community as a requirement to satisfy regulatory responsibilities, but about affecting change that the community wants.
New technology and housing management The role of technology in facilitating choice and improving service will grow in significance. Community housing is at the core of services provided to inner city communities. There is scope for 24-hour electronic monitoring and reporting of 9ibid housing united
problems -from repairs to nuisance - as well as the concept of self-service.'rhe internet will also allow these communities to have access to a far wider range of job opportunities. CVs, skills and language profiles and individual advertising could all be on a local 'community extralintranet: This will make projects aimed at stimulating the local community easier to get off the ground. John swinneylo has also stressed the 'unique opportunity through innovative partnerships with the private sector to embrace the electronic revolutionl
There are however a number of dangers to be guarded against. One is that new technology will narrow and not extend choice because it is seen as a means of improving services whilst also cutting costs. Banks, retailers and even supermarkets see on-line access as a means of containing or reducing their front-line costs (in running banks and shops). Closing bank branches in rural areas is controversial enough, but what are the parallels for Community Housing? A tenant might be happy to report repairs through a call centre or on-line, but they are not good mediums for discussing your debts or your medical condition or your problem with a neighbour or the fact that your children have been taken into care. Many aspects of housing management, especially for more vulnerable people, are a personal service, where the quality of the service depends on talking directly to your named housing officer who knows your case and knows your street. Community landlords, especially those that are geographically wide spread, may miss the point if they see call centres and on-line facilities as an efficiency gain.
A second danger is the potential for the further exclusion of the poorest and most vulnerable people. We have a long way to go before services can be designed on the assumption that everyone has a means of access. Technological advances are however increasing the potential for universal access - services can now be delivered through television, mobile phones as well as a home computer. The challenge is to ensure that new technology enhances choice rather than restricts it. For example, the London Borough of Hammersmith and Fulham is currently exploring the opportunity for reinventing its housing services. The concept is one of a technology-enabled operation which can deliver services in a way that allows each customer to access the service however they want - at a local office or housing shop, in estate surgeries or in the home, over the phone or internet, or through the television. By creating transparency across services and breaking down once and for all the barriers of departmentalism, joined-up management and integrated service delivery could become a reality.
Wider roles for community housing organisations
Tackling social exclusion No one now disputes that the causes of social exclusion must be tackled systematically, comprehensively and over the long term. Bad housing undermines the success of social and economic programmes. We will not succeed if the importance of housing investment, a good external environment and links with other services, such as the police, are not fully recognised. Local authority strategies which cover all housing are discussed in more detail in Chapter 3. Here we discuss what community housing organisations should be doing to tackle social exclusion in their neighbourhoods.
The work of the government's Social Exclusion Unit has illuminated the extent, causes and possible solutions to the areas of concentrated poverty that have emerged within our towns and cities. Deprived neighbourhoods, many but by no means all dominated by social housing, have become areas of risk and insecurity where local education, health and leisure facilities become unstable and shops, banks and post offices have all but fled. 10 John Swinney Choice and Diuenity(LPPR, 2000) Unemployment, high crime rates and child poverty characterise these areas, each of vision into practice - community housing organisations
them feeding off each other to exacerbate the poverty trap. Insubstantial economic resources and fragmented opportunity networks germinate a culture of poverty where it is almost impossible to escape; those that do simply intensify the powerlessness of those left behind. Housing has a key role to play in tackling these problems.
The New Deal for Communities developed by the Social exclusion Unit, the Department of the Environment, Transport and the Regions and other Whitehall departments is an example of a shifting focus away from undertaking physical renewal on its own to a more profound, sustained and long-term social and economic renewal. The New Deal for Communities is aiming for flexibility to allow tenants and communities to become active participants.11 Current barriers to community involvement and tenant management and control such as the cost of childcare and transport, language barriers and fear of losing benefits through voluntary work are being addressed by the Home Office'sVoluntaty and Community Unit. There is evidence that those living in the most deprived areas are less than half as likely to volunteer as those living in the most affluent ones.12
Housing policy is not responsible for the multi-dimensional deprivation evident in many areas of Britain, but neither is it blame free. Housing policies in the past have contributed to social exclusion through the process of residualisation and the subsequent problems brought on by concentrated poverty and deprivation. As part of the problem, it also means that in housing policy lies part of the solution. There are a number of ways in which housing policy and practice can directly help tackle social exclusion:
through implementing policies which develop mixed income communities
through adopting wider social and economic development activities which look beyond housing to tackle issues like education and training.
through working in partnership with other agencies to tackle social exclusion together
Moreover, as described in the Introduction, housing is central to outcomes in other spheres of life, most notably in health and education. Housing can create a real link between social and economic policy.
Housing policy has a direct role in the development of successful neighbourhoods and through neighbourhood management. By creating areas of mixed income, and by introducing policies of mixed and flexible tenure, housing policy has the potential to dissolve the geographical and stigmatic boundaries which currently reduce the life- chances of social housing tenants in deprived areas. Housing can also act as a real catalyst for the involvement of tenants in community activities. Chapter 1 sets out the importance of developing and sustaining communities in housing policy, and the role that more flexible forms of tenure can play in helping create a better mix of incomes in an area. Housing strategy needs to be integrated with wider economic and regeneration programmes to successfully deliver socially inclusive policies. This is covered in more detail in Chapter 3. 11 Social Exclusion Unit Bringing Britain Together: a national strategy Skills and responsibilities ofhousing professionals for neighbourhood renewal (Cabinet Office1998) We think the Social Exclusion Unit's National Strategy for Neighbourhood ~enewal'~ 12 Housing in England 1996-7: failed to reflect fully the role that housing policies can play and the strengths of housing Survey of English Housing providers at a local level in contributing to tackling social exclusion. (ONS/DETR, 1998) 13 Social Exclusion Unit National Housing agencies often employ dedicated tenant participation officers whose jobs blend Strategyfor Neighbourhood Renewal: a framework for comltation (Cabinet into wider community work. Over the coming years there is both a challenge and an Office, 2000) housing united
opportunity for housing agencies because they are often the only public service with a visible neighbourhood base in deprived areas. Housing professionals are often the first to admit that wider action is needed in their area, but may themselves lack the resources and skills to address issues that overlap with the responsibilities of other agencies. One fear is that the introduction of more broadly based neighbourhood management and community development will be achieved at the expense of core housing services, which will also need to be improved. When resources are available, specialists employed by housing agencies can be very effective in economic and community development.
Housing manggers are under conflicting pressures because improved outcomes are expected across a very wide spectrum of activity - not only rent collection and repairs, nuisance and tenancy breaches, estate cleaning and services, but also social support, estate development, neighbourhood management and tackling social exclusion. If these dilemmas can be addressed housing management is in a strong position to provide the leadership required for cross-agency, community-based neighbourhood management to become the norm.
The government has advocated the extension of responsibilitiesfor housing professionals in terms of the non-housing needs of communities and allowing them 'to fully engage in the government's wider social agenda.' (Hilary Armstrong, Minister for Local Government and the Regions) But such a change generates questions as to the ability of the existing body of housing practitioners to take on these substantially augmented responsibilities. Estate manager's responsibilities and abilities to communicate with other local bodies such as the police, education and health authorities is vital to the successful execution of 'joined-up' housing strategies.
Community housing organisations should be developing the skills and confidence of local people to be more closely involved with (and employed by) community landlords. Management should be shared increasingly with the community, and local residents should be seen as a resource to recruit additional management staff.
Professionals in community housing will need the skills to adapt to the more business- like approach set out in the Forum's vision. They will also need to adapt to become agents who are better able to tackle the social exclusion agenda and to work in partnerships with many other groups on the ground. In our consultations, many people thought that current housing professionals did not have the necessary range of skills to take on this wider role. There is also the concern that skilled resources will be further stretched with the increase in transfer and the development of arm-length companies. This will need to be addressed, whilst recognising that housing professionals should not try to be all things to all people - the focus should remain on housing and the skills developed to allow partnership working with health, education and social service workers.
Conclusion
Community Housing has a central role to play in social exclusion and neighbourhood renewal strategies. The local focus of community housing agencies makes them well placed to undertake wider roles, although the sector will need to expand its skills to be fully effective. Community housing agencies need to be outward looking and attuned to local housing markets, as well as forward looking to anticipate change and develop policies which promote social inclusion in the long term. vision into practice - community housing organisations
Producing the outcomes that tenants want will be best served by public policy facilitating a plurality of ownership and management models. All community housing organisationsshould critically examine and be more flexible about their ownership and management of stock. This means large-scale monopolies should be broken up in some areas and ownership and management rationalised to better meet needs of communities in others. Local management, local accountability and local partnerships are paramount. housing united
3 promoting sustainable policies
Summary
Housing policy needs to be more sensitive to the growing variations in conditions between and within regions. As many decisions as possible should be made as close as possible to the community they affect; a 'community upwards' approach to housing strategy and decision-making is needed.
Local authorities need to have clear responsibility for providing strategic leadership in their area. Their role is central to delivering 'the social, economic and environmental well-being' of an area.
A new range of legislative powers and duties is needed to define the strategic role and ensure that it is carried out. This might include a duty to assess overall housing demand, a duty to ensure integration of housing and planning strategies and a duty to consider the quality and management of the private sector stock. Government should assess local authorities' performance in their strategic role against these (and other) duties.
Local authority strategies should sit within a stronger sub-regional as well as regional framework. There should be a more formalised structure of sub-regional or conurbation 'housing strategic management groups' and Regional Housing Strategies should provide the missing link between national policy and effective local delivery.
Neighbourhood management should be implemented in areas of social exclusion; housing providers and housing practitioners have a key role to play in delivering successful approaches.
Planning policy should be much more proactive in helping deliver affordable housing and mixed income communities. Local planning authorities should be given more control over the type and mix of properties.
6 Regulation of Community Housing should ultimately be by one national body, which builds on the strengths of the Housing Corporation and the Audit Commission. As the Community Housing sector changes, consideration should be given to devolving regulatory functions and funding for new housing to local authorities. promoting sustainable policies
Introduction
Effective strategies and appropriate regulation at different levels of operation will be essential in putting a vision for Community Housing into practice. Many of the 'failures' of housing policy in the past can be attributed to poor strategy, whether this be failure of local or national government strategy or the lack of strategy of individual landlords.
The Forum believes that the new strategic approach will involve much more outward and forward looking policies than in the past. This will require government at all levels and community housing organisations to be responsive to changing circumstances, looking across tenures, learning how housing markets work and crucially making the links between housing and economic and social policies. It will require all community housing organisations to look to the future to anticipate changing needs and demands, and contribute to partnerships at different levels of activity and governance. And it will require government at different levels to work with rather than against each other.
Joining it up vertically
If housing strategies are going to be effective, co-ordination between the different levels of decision-making is essential, and co-ordination will be much more effective if roles are clearly defined. We believe the development of strategy must start with the needs of tenants and residents and work up to a national framework of enabling policy.
Housing issues are much less 'national'than they have been before.Variations between and within regions and areas are growing ever more important and housing policy needs to be as sensitive as possible to local conditions. In the current housing system, decisions are not always made at the right level and too many things are decided centrally. In future, as many decisions as possible should be made as close as possible to the communities they affect. The principle of subsidiarity should apply in making all housing-related decisions. In practice this means that a 'community upwards' approach to housing strategy and decision-making is needed.
The management of Community Housing should be organised at the most local level which is viable and with clearly devolved powers and budgets. As discussed in Chapter 2, the overall size of community housing providers will be less important than ensuring that management is visible and accessible at a local level. This is essential even if new technologies such as call centres are deployed for routine functions such as repairs reporting. Estate managers need to know their areas well if they are to relate directly both to tenants and residents groups and to other local services such as police and education.
In priority areas, where full-scale neighbourhood management is needed, housing should be a focal point for and an integral part of the new structure. As described in Chapter 2, of all the services, housing managers tend to have the most face to face or other direct contact with the most local people and to have a good knowledge of the community. Even in non-priority areas, a more comprehensive and holistic approach to tackling community issues through better 'joined up' management and inter-agency working will have benefits. Different solutions will be needed in different circumstances and for different landlords, and policies will need to be implemented in areas of private housing and mixed tenure as well as areas where social housing currently predominates.
Neighbourhood Management is increasingly being advocated as the best structural means of tackling particular concentrations of problems and helping to build stable communities. The Social Exclusion Unit defines the role of neighbourhood management housing united
as being 'to help deprived communities and local services improve local outcomes, by improving and joining up local services, and making them more responsive to local needs:' 'The five key principles of neighbourhood management are:
someone with overall responsibility at the neighbourhood level;
community involvement and leadership;
the tools to get things done;
a systematic and planned approach to tackling local problems; and
effective delivery systems.
'The Forum strongly supports the implementation of neighbourhood management in areas of social exclusion, and stresses the key role that housing providers and housing practitioners should be taking in delivering successful approaches.
A key aim of our vision is however to ensure housing estates can no longer be ghettos of poverty and economic inactivity. We want to see a mix and a balance of people in all areas and aspire to a future where there will be no need for the intensive neighbourhood management that is required in current areas of social exclusion.
The strategic role of local authorities is central to delivering 'the social economic and environmental well-being' of the area. The local authority strategic role will need to be much wider and stronger than in the past. The local housing strategy should still be the key detailed plan guiding local policies and investment, but the role of the local authority needs to be expanded to develop the council's community leadership role in housing. This role is pivotal to ensuring 'a decent home for all' and is discussed separately below.
The local authority strategy should be developed within a stronger sub-regional and regional framework. There should be a more formalised structure of sub-regional area or conurbation 'housing strategic management groups'to discuss issues at a level that might roughly be equivalent to a housing market area - eg a conurbation or the hinterland of a town. The key aim should be to ensure that housing authorities are working together strategically. Activities at this level might include housing market research and analysis, joint activity around strategic development opportunities or regeneration plans that affect more than one local authority area. The role could also involve resolving conflicts between local strategic objectives and it could provide a point of contact with strategic agencies which operate over several local authority areas, such as the National Health Service, the new skills agencies or police authorities. This role would be important in dealing with boundary issues and cross-authority mobility.
It is clear that the regional agenda will grow in importance over the next two decades. Much more needs to be done at regional level if national economic prosperity is not to be held back by the costsof overheating in some regions, and areas within regions, and the costs of decline in others. Housing is the mirror reflection of the two speed economy, excessive demand in some areas and over-supply in others, rocketing house values in the hot spots and collapsing house values in the weakest areas.
Regional Housing Strategies are the missing link between national policy and effective 1 NationalStrategyforNeighbourhood local delivery; they should establish the regional context in which local housing RenmalReportofPolicyAction authorities develop their detailed strategies and all housing providers develop their Team 5 : Housing Management (DETR,1999) business plans. 'They should take an overview of the social, economic and promoting sustainable policies
environmental context for housing policy, demographic changes, housing market changes, supply of and demand for affordable housing, capacity issues (land, construction industry, professional services), and resources [for housing and regeneration). They should establish the basis for the distribution of grants and subsidy to support investment.
This structure of responsibilities implies that at the national level there should be national framework of policy rather than a national housing policy. The Government should however retain responsibility for setting housing standards, core housing rights and responsibilities, legislation, finance, inspection, regulation and the best value regime. It should be a system through which the Government can set out its priorities
but which is only prescriptive where it needs to be. and allowing local discretion on how {~~~m~~.~~~~~~~~~~~ to deliver. 2010?
function right to manage right to change manager or landlord
cross-cutting neighbourhood Lrneighbourhoods management where appropriate local sewice delivery neighbourhood cross-cutting links with local regeneration agency management stakeholders if applicable community development facilitate resident involvement
local housing strategy distribute local funding local authority manage access to community housing cross-cutting links to other strategies, stakeholders Etsewices 24regionallsubregional community landlords
v research and intelligence on subregional planning1 local housing market coordination forums co-ordination of local housing housing market area strategies facilitate join initiatives
prepare regional housing strategy cross-cutting link to economic regional assembly development and other strategies distribute regional funds
national housing agency national framework of policy determine statutory duties, national government rights and powers determine capitallrevenue subsidy set national regulatory system housing united
Joining it up horizontally
Employment, crime, health, social services, education and housing have historically been treated as separate issues and the lack of co-ordinating department or recognisable individual in charge at a local level to counter this separatism has stalled the capacity for joined-up thinking. Central to much of the work of the Social Exclusion Unit has been the need to get out of policy and service delivery compartments and look at how to work across functions to produce better outcomes for communities. 'The National Strategy for Neighbourhood Renewal sets out a framework for how social exclusion in the poorest communities might be tack~ed.~However, despite housing issues being central to a number of the Policy Action Team reports, the consideration of housing policies and housing providers in the national strategy is rather limited.
Good housing enables people to be more productive at work, encourages educational attainment and reduces the public expenditure cost of poor health caused, for example, by living in cold and damp conditions. Good housing encourages people to stay in a neighbourhood even when their circumstances change and contributes to community stability. Good housing can help cut crime and the fear of crime and can help reduce the pressures on family life. None of these factors seem yet to be fully recognised, particularly at a national policy level. This may be because of the lack of research which explores these connections, and the inherent difficulties of quantifying such connections. However, the success of the Social Exclusion Unit's work is that it has established the credentials of those who want to tackle community issues in a comprehensive way and develop services in a cross-cutting way, nationally and locally. One difficulty is that these approaches are unlikely to be cheaper in the short run.
With the establishment of Regional Development Agencies, the government has started to acknowledge the importance of regional strategies to the success of regional economies and to the economy as a whole. Regional housing strategies will need to be closely tied into regional economic and environmental strategies. Initially, these should be developed jointly by a number of key parties, regional agencies such as the Regional Assemblies, Housing Corporation Regional Offices, Government Offices for the Regions, regional planning bodies and the Regional Development Agencies. An open consultation with individual local authorities, all community housing organisations active in the area, tenants and residents and community organisations would be the first step in developing the regional strategy. Ultimately the Regional Housing Strategy should be a core responsibility of elected regional assemblies.
At the sub regional (or city or conurbation) level, Local Authorities need to establish effective partnerships with the public, private and voluntary sectors as a way of levering in private finance and the range ofskills required to deliver complex city-wide
Box 10: Liverpool Vision Liverpool Vision is a new vehicle for city centre regeneration. The organisation will pioneer a new approach to regenerating cities by bringing together representativesfrom the major regeneration players from central and local government agencies and the private sector. It is the first pilot urban regeneration company as recommended by the Urban Task Force.
Liverpool Vision's aim is to boost wealth creation and investment and to establish sustainable job creation in the city. To make this happen the organisation recognises that the quality of the environment and the public realm need to be dramatically improved. The strategic direction and hands on approach will inject a stimulus to the renaissance of the economy and environment of Liverpool and the surrounding area.
Liverpool Vision will be supported by the City Council, English Partnerships and the North West 2 Social Exclusion Unit National Development Agency and will lever in public and private investment to oversee a comprehensive Strategy for Neighbuurhood Renewal : afiamewwk for consultation (Cabinet development strategy which will employ a range of marketing techniques to raise the profile of the city. Office, 2000) promoting sustainable policies regeneration strategies. Some model structures have emerged which are based on dedicated arms-length organisations with a remit to co-ordinate the regeneration of neighbourhoods in accordance with strategies being developed at the regional and local levels.
At a local level, new organisational models are being explored to aid cross-sector working. Cross-sectoral programme design at a local level, together with more flexible processes to deliver accountability and value for money in the use of resources will be key elements of a successful community approach. How long will it take before local authorities move outside the conventional organisational box and create contracts which include the management of social exclusion?This will require strategic alliances between a variety of providers. It will also require fresh thinking, constant innovation and new investment.
A stronger strategic role for Local Authorities
'The roles and responsibilities of local authorities are changing and will need to change further. Promoting the social, economic and environmental well-being of their areas and taking on the community leadership role involves wider and more far-reaching responsibilities than the management of services which have historically been attached to the local council. In housing terms, in some local authorities this means being much less closely involved in the day-to-day management of council tenancies, and taking a much broader, strategic and enabling view of housing issues in the area.
There are few councils which have yet developed their strategic role to the extent we envisage. We believe that councils need to research, understand and decide their role in the whole housing market in their areas, assessing the full range of needs and demands and shaping housing provision in all sectors. We are concerned that this role is developing very slowly, and we would like to see a new range of legislative powers and duties which would help define it and ensure that it is carried out. They might include:
a new duty to develop, implement and monitor a sustainable housing strategy for their area, based on the goals set out in chapter 1 (see page 39)
a duty to assess overall housing demand, the balance between demand and supply, and how deficiencies (or surpluses) might be addressed
a duty to ensure integration of housing and planning strategies for the area, to ensure that there is sufficient affordable housing, to promote mixed communities and to enable greater mobility between tenures
a duty to consider the quality and management of the private sector stock, particularly to ensure that there are strategies for the renewal of the older stock, demolition of surplus housing, means of tackling empty properties and incentives for good management of the private rented sector
a duty to ensure that, in partnership with housing providers, the goals of sustainability, choice and meeting housing need are met through the way Community Housing is provided and let
a duty to collaborate with neighbouring authorities to ensure that these aims are met across the whole housing market area housing united
a duty to work in partnership with all relevant housing 'stakeholders' in the public and private sectors.
Government should assess local authorities' performance in their strategic role against these duties, and with a number of key factors in mind, which might include the interaction between tenures, scope for the private sector to meet needs and measures to improve the efficiency and effectiveness of the market.
Local authorities therefore need to develop comprehensive housing strategies which are genuinely 'joined up' with local social exclusion, economic development and other strategies, and which look at trends across the tenures. They need to be pro-active in developing policies to deal with the major issues identified. It should include considering the need for private sector home renovation, equity release schemes, private rent deposit schemes or tackling the worst houses in multiple occupation. It might include developing schemes to ensure 'key workers' can find accommodation in the area. It should look at how private landlords can contribute to providing good quality accommodation to meet housing need. For example, Newham are developing their approach which combines regulation and support for private landlords. They aim to drive out the worst landlords by enforcing legal requirements and strongly supporting tenants, whilst developing a package of support for all those willing to be good landlords. This includes offering advice and assistance on tenancy matters, targeting funding at responsible landlords and offering repair services.
Local authorities should also be developing strategies to address low demand issues across sectors and whether, and how, to deal with surplus stock. There is a current concern about the balance shifting away from clearance in the private sector towards the social housing sector and whether this makes sense given that social stock is generally newer and in better condition. An active, comprehensive local authority strategy should consider this and similar issues.
The most appropriate role for Community Housing in the area should be identified. In cities suffering low demand, the long term emphasis of the strategy will be on quality and regeneration rather than quantity, and in some cases a careful programme of demolition may be justified. In high demandlhigh value areas where house purchase is out of reach for many people, an expansion in Community Housing provision may well be necessary, and the council should be examining all of the resources that might be available to help meet the demand. As housing issues get more and more localised, and generalisation about housing need less meaningful, it is vital that each local authority has a clear and unambiguous focus on the needs of its area at a strategic level. /" promoting sustainable policies
3 The role of planning in delivering strategies
There continues to be disagreement as to the extent to which the planning process can deliver additional community housing for rent or part ownership. The 1994 Joseph Rowntree Inquiry into Planning for Housing raised doubts as to the importance which can or should be given to planning in solving housing problems. Similarly the conclusion of the 1999 Shelter inquiry, An Urban and Rural Renaissance: Planning for the Communities of the Future, is that there are limits to the potential influence of planning: 'Improvements to the Planning system could boost the provision of affordable new homes but the key issue is finance. The prime responsibility for ensuring that adequate funding is available rests with the government: Shelter's Housing Investment Project found that over 80 per cent of authorities had a formal policy to seek affordable J housing provision through planning gain, and that most sought between 25-30 per cent of affordable housing on sites in their areas. However, the theoretical potential of these policies - if 30 per cent were achieved nationally, that would produce over 30,000 affordable homes each year - is not being realised. For several reasons the system cannot be relied upon to deliver at this level. They estimate a likely benefit from planning gain of around 15,000 units a year, mainly in the south, but only if some subsidy is made available to oil the wheels.
Some of the reasons for not achieving more through planning gain include
The use of a wide definition of 'affordable' housing, including cheap home ownership provided at very low space standards; housing which is not normally targeted to meeting local needs CI_
The fact that some planning authorities have higher priorities in practice than achieving affordable housing, and that some do not wish to have social housing mixed with prestige private housing
Too many small sites which fall below the threshold of 25 units (15 in London) and are not subject to negotiation -
'The widespread acceptance of 'cash in lieu' of planning gain by authorities
The fear that developers will walk away from marginal projects, especially brownfield sites with high costs, if the demands are too high
On many sites additional subsidy is required to make the project work, and it is not always possible to find a Registered Social Landlord partner with available social - 5 housing grant.
Whilst recognising these limitations, planning still has many tools which could make a significant contribution to achieving the Forum's vision. There are three key aspects of the Forum's vision which are relevant here. The first is ensuring sufficient affordable housing is provided in the right places. The second is securing effective integration of affordable and market housing with the aim of creating mixed income communities. The third is facilitating the 'blurring' of tenures which could include allowing people to swap between renting and owning whilst staying in the same property.
Sufficiency Local planning authorities are required to prepare development plans which should include policies for meeting the housing requirements of their areas. Where there is a demonstrable lack of affordable housing to meet local needs, local plans should include policies for seeking an element of affordable housing on suitable sites. 'The Department of the Environment, Transport and the Regions has commissioned research into how housing united
different planning authorities are implementing this policy at present. Currently planning policy encourages rather than requires local planning authorities to consider the need for affordable housing. As a first step, we believe this should be made a requirement.
The current definition of 'affordable housing' includes subsidised housing and low cost housing for sale. Including low cost housing in the definition leads to a number of outcomes contrary to achieving affordability. As the National Blueprint has highlighted,
this definition leads to developments of:
a smaller housing for sale at full market prices, or
a housing which is clearly not affordable to local people even though it is less expensive than other housing on the site, or
a housing which is sold at full market price on resole which therefore loses the benefit of any discount and loss of any discount over future occupants?
To create and sustain more locally affordable housing, we believe consideration should be given to revising the definition to exclude the provision of low cost housing for sale in the open market. It would then only include home for rent or ownership at below market level or partlshared ownership schemes provided by social landlords or under a planning agreement where the discount remains available in perpetuity to people identified as in housing need, ie to separate market from non-market housing.
A second and related issue is that planning cannot currently be involved in defining tenure, and that defining tenure would serve a useful function in contributing to the delivery of affordable housing in mixed communities. We don't accept the purist argument that planning has nothing to do with tenure, but we have failed to overcome the objection that it is difficult to specify tenure in perpetuity. There is concern that if a housing association defaults, there will be no saleable asset if planning consent is restricted to sub-market renting. Also an element of our long-term vision is the 'blurring' of tenure and allowing people to move between tenures as their circumstances change - restricting tenure through planning would work against this objective.
Sufficiency will also be better addressed through an integrated hierarchy of national, regional and local affordable housing targets, with responsibilities being clearly defined at each level.Affordable housing targets should be set at all levels. Regional and County structure plans should provide the strategic framework and clear targets for meeting housing requirements; including affordable housing. 'These regional plans need to be linked with the regional housing strategies mentioned earlier. Overall housing requirements should be based on the latest Office for National Statistics household projections. Local Plans should reflect these targets and be based on local housing market appraisals and needs assessment giving clear targets and strategic indicators to monitor the delivery of general market and affordable housing.
If there is an identified need for affordable housing but funds not available at that point in time, then planning authoritiesshould also be obliged to designate and hold land until funding becomes available. There is currently a lack of integration between expenditure- based plans and land use plans and no requirement to providelforecast numbers of affordable housing in land use plans at all. Both land use plans and spending plans should reflect housing need. Planners and the planning system need to understand that
3 See National Blueprint: The they are part of the delivery mechanism for affordable housing and achieving deliv~lyof@~~dablehmesthrough sustainable communities, and this is not a responsibility that they can duck or avoid theplanningwemjoindy because of resource issues, or because it makes the brownfieldlgreenfield problem more formulated by CM,NHF, Room and Shelter (1999) complicated. promoting sustainable policies
Generally, it seems planning could be a lot more positive. Procedures and practice could be geared up to promote more actively a broader affordability and community agenda. Planning could be better linked with the more positive tools of compulsory purchase and land assembly. Good practice guidance could be issued to demonstrate how the planning system can address housing need. Planners need to be signed up to the sustainability goals set out in Chapter 1.
Planning and the development of mixed communities To contribute more effectively to the delivery of mixed communities, planning authorities need to be able to set conditions about the type and mix of properties within a development, to be agreed and subject to planning permission.
Clearly caution needs to be exercised in putting too many requirements on developers. New building must be financially viable or else it won't happen. Greater control over type and size from planning authorities must take into account the business considerations of developers. However without these extra controls, local authorities will not have sufficient powers to stabilise and regenerate existing communities nor to create new balanced and sustainable communities.
Planning decisions need to be made within an overall planlvision of an area. Local authorities are being required to produce a 'community plan'which is drawn up by key agencies responsible for the promotion of community well-being. It includes a common vision for the area and discussion as to how the vision is to be achieved. Within this framework, planning and other groups could make their decisions, could help to provide a common goal and improve the coherence of the different strategies.
Box 12: Planning and fixed equity schemes The Peabody Trust Home Equity Scheme provides a route into low-cost home ownership for social housing tenants. The scheme exists within a private development and was the result of negotiations between the Local Authority (Hackney), the Housing Association (Peabody), and the private developer (Lemonland). This secured a Section 106 agreement which made provision for 25 per cent of the housing development to be for social housing purposes. The discount negotiated in the purchase price means the scheme has been implemented without the use of a public grant.
The flats are aimed primarily at first time buyers and those on lower incomes. Prospective tenants must be able to show that they are in housing need (i.e referred from a council or RSI. list) and be able to demonstrate that they can meet the monthly repayment required (ie they have to have been engaged in regular employment and be able to provide references).
Home Equity is a fixed equity scheme, one of a range of low-cost home ownership products.
Planning and blurring of tenure The Forum's vision includes expanding the options that community housing organisations offer. As discussed in Chapter 1, these new agencies would offer accommodation at subsidised rents, market rent, for sale and part rentlpart sale, and with fixed or flexible equity shares. They would use both private and public funds and have the freedom to manage their asset base in ways best suited to their objectives. Within this, the planning system would determine the proportion of housing developed either by or on behalf of a community housing agency. In the longer term, community housing agencies would then become the bodies which manage the tenurelincome mix through a variety of flexible tenure products.
Greater integration and a partnership approach At a seminar which we held to discuss the role of planning in helping deliver our vision, one tangible outcome was the benefit of getting planners and housing practitioners in one room together. The separation of the housing and planning functions at an housing united
operational level, must be tackled if planning is to contribute effectively to delivering affordable housing and mixed communities. Formulation of planning policy seems to be conducted separately from housing policy. On the ground, there seems little dialogue between local authority planning and housing functions.
There is clearly a need for greater integration horizontally of development plans, housing strategies, economic development plans, transport plans etc. Community Plans are expected to help provide an umbrella function. Similarly there is a need for regional, strategic and unitary, and local plans to more clearly reflect and feed into each other.
The adversarial nature of Section 106 Planning Agreements could also be replaced with a new culture of partnership working with owners and developers.
Future regulation and funding routes
Local Housing Authorities have been regulated mainly through financial controls through Housing Revenue Account regulations, the Department of the Environment Transport and the Region's 'levers' on funding distribution, and external audit. They are now subject to the emerging best value process with a set of Performance Indicators plus the requirement for best value fundamental review of services. They will be inspected from time to time by the Housing lnspectorate based in the Audit Commission and will probably be subject to special inspections before being able to establish arms-length companies.
Registered Social Landlords are regulated by the Housing Corporation. The current objectives of the Housing Corporation regulatory system are to ensure that Registered Social Landlords:
Manage their affairs effectively
Maintain high standards of housing management and service delivery
Operate to high standards of probity, make reasonable use of public resources and fulfil the housing priorities for which they were intended, and
Sustain a reputation for sound management and financial strength so as to ensure that they continue to attract private funding for investment.
The Housing Corporation has developed proposals for managing greater diversity amongst Registered Social Landlords to enable them to engage more effectively in regeneration and social care work.The Housing Corporation faces a major challenge in trying to adapt a regime based on allocating public funds and monitoring detailed processes. Registered Social Landlords often see regulation as too detailed, too concerned with process, too inflexible in current market conditions, and unsuited to the diversity of size and function that the sector now represents. There is recognition that the Housing Corporation has moved some way and that it is less process driven than it once was and there are signs that this will continue. It has also been moving down the best value route, bringing Registered Social Landlords more in line with Local Housing Authorities.
Regulation remains vital to demonstrate accountability for public funds, to guarantee probity, to give private lenders confidence, and to encourage quality and performance. The challenge is to design a regulatory system which can respond to the changing pattern of ownership and management of the sector and to the changing nature of housing organisations as they diversify into commercial housing operations, regeneration promoting sustainable policies
and social care. In 20 years'time we could be talking about an additional 2-3 million dwellings being managed in the independent housing sector which will need to be regulated in some way.
Dealing with more diversity Our vision has many implications for the way in which the sector will need to be regulated. As described in previous chapters we envisage a situation in which (over 10 years) all community housing is within commercially-viable autonomous bodies. There is already the potential for conflict and confusion between the regimes for local authorities and for Registered Social Landlords. Although the Housing lnspectorate and the Housing Corporation have developed a co-operative relationship, these conflicts need resolving. All landlords in the community sector should have to meet comparable standards of service and be subject to the same regulatory regime.
Issues of social justice and equal opportunitiesshould also become a more integral part of the regulatory process. Following the MacPherson report, we should be entering an era where we are much more overt and explicit about race and other issues such as human rights, gender and disability. These issues need to be mainstreamed in to the monitoring and regulatory processes and not an add-on.
New institutional forms will also be needed to encourage investment and innovation - including regeneration companies, special purpose vehicles, arms-length local authority housing companies, and modernised constitutional arrangements for Registered Social Landlords. This will add to the challenge for the regulators.
In the short term, having two housing regulators is perhaps proving beneficial and is encouraging fresh thinking about the nature of regulation and even creating an element of competition. However, in the medium term this is not appropriate and will eventually become a barrier to the development of a coherent community housing sector where it becomes increasingly irrelevant if the antecedents were in the Registered Social Landlord or the council sector. We do not see it as an issue of one regulator winning over the other. Indeed the strongest option would be to establish a new body which builds on the Housing Corporation's strengths in the Registered Social Landlord sector and the Audit Commission's strengths in the local authority sector.
The method of regulation will also change. We could speculate that regulation would have to cover bodies ranging from 500 to 50,000 homes and it has been argued that the same regulatory method would not be suitable for both. Most existing Registered Social Landlords are small and 74 per cent of associations with self-contained stock operate in a single council4. Only seven per cent of associations operate in more than ten council areas and only one per cent operate in more than 50. A case has been made that some of the regulatory functions (such as base-line monitoring and data collection) should be devolved to Local Authorities, and that in the longer-term, local authorities could take over the full regulatoryfunction of those small community housing organisations that operate in one council area.
The case has also been made for local authorities taking over the capital funding role. In Scotland, capital funding is being devolved to those local authorities who are transferring all their stock. A similar approach could be taken in England with local authorities gaining the predominant capital funding role once all of its stock is at arms- length.
There are however two main concerns with local authorities taking on regulatory functions and control of fundinq.- Some believe that the requlatow- 'clout' of the Housinq- Corporation is closely linked with its funding responsibilities; diminishing its funding role ~~~s~~~$o~?&~~r~~r$~ would weaken its regulatory powers. Although direct comparisons cannot be made, the Source 34 housing united national regulators of other sectors do not however fund as well as regulate and do not seem to lack power or effectiveness because ofthis. The second reason is a concern held by some that local authorities are not geared up to take on these additional roles. Others see it as a necessary element of an effective strategic role.
The recent review of the Housing Corporation concluded that there should not be a direct role for local authorities in regulation, and that funding for new build should also be kept with the Housing Corporation. Looking long term, as the community housing world changes and as the size and complexity of the independent sector grows, further consideration will need to be given to devolving regulatory functions and funding to local authorities.
Conclusion
The development of strategies must start with the needs of tenants and residents and work up to a national framework of enabling policy. Local authorities need to change if they are to provide the strategic leadership that is needed at a local level to tackle poor housing conditions - across all sectors and tenures - and ensure all communities are places where people want to live. Local authoritystrategies should be integrated with local social exclusion, economic development, planning and other strategies. 4 community housing in a business framework
Summary
The balance must continue to shift from short-term financial management to long- term sustainability.
All community housing organisations must operate as sustainable businesses. In the long-term this means all community housing organisations will have full financial autonomy, similar to current Registered Social Landlords, and operate outside of the current credit approval and Housing Revenue Account subsidy systems.
It follows that arms-length companies should be allowed to operate as independent businesses with full control over their assets, with similar borrowing powers to existing Registered Social Landlords and the ability to seek social housing grant for new homes.
More investment will be needed to ensure the housing stock is put in good condition, that sufficient affordable housing is provided and that housing makes an appropriate contribution to regeneration efforts. Under-investment in housing is the most expensive option of all if the housing and social costs of failing to meet housing requirements are taken into account.
A relatively modest increase in investment will be needed to tackle the social housing backlog, in the region of €300-€500 million per annum. To achieve projected numbers of new affordable housiqg will require additional capital spending off921 million (for 80,000 homes) and €1,686 million (for 107,000 homes per annum).
Better use should be made of the capital markets. This could be through a new housing bond, securitised against future income streams to support investment by community housing organisations.
A retail version of the housing investment bond could be developed to allow personal investment, and to separate the benefits of property investment from home ownership. housing united
Introduction
A comment was made at one of our discussions that it often seems that housing policy has been the mechanism for delivering the Treasury's housing finance objectives rather than the other way round. In this chapter we take an overview of the housing finance system, focusing on its impact on the community housing sector, and set out our conclusions for medium and long term reforms which we believe will help deliver our vision for Community Housing.
Housing, in terms of credit approvals for council housing and social housing grant for Registered Social Landlord development, has suffered greatly from short-termism and the failure to generate sufficient capital investment. Like transport, housing has a high requirement for capital investment. It has been dominated by a public expenditure control system which has constrained essentially self-financing capital investment. It has focused on annual cash flows rather than the net present values of cash flows over the lifetime of the investment, and on the Government's annual external financing limit rather than long term investment planning'. Housing has much to gain from the Chancellor's commitment to increase the level of capital investment within public expenditure and to improve access to private investment finance. Shifting the balance from short-term financial management to long-term sustainability is crucial not only in terms of housing supply and housing quality, but also in terms of the achievement of more balanced and sustainable communities.
The purpose of the housing finance system
In our view the housing finance system as a whole should seek to achieve the following aims:
To generate a level of investment, public and private, which issufficient to meet the requirement for additional affordable housing, to keep the housing stock in good condition through adequate levels of maintenance, renovation and replacement, and to make housing's contribution to urban and rural renewal.
To enable households on low incomes to afford decent housing standards.
To encourage choice and achieve reasonable equity and fairness between households in similar circumstances.
To empower consumers by providing a level playing field between alternative community housing providers and more consistent treatment between tenures in terms of tax, subsidy and benefits.
To contribute to meeting wider social and economic goals, such as environmental sustainability, regeneration, movement into work, and social inclusion.
To achieve housing goals as effectively as possible within a prudential framework for the overall management of the public finances.
Despite the huge degree of change over the last 20 years, the housing finance system is not meeting the objectives set out above effectively. In our view the housing finance system:
fails to generate the level of investment that is required 1 Gerald Holtham (ed) Freedom with Responsibility: can we anrhnckle 1998) does not enable enough choice for people on low incomes community housing in a business framework
does not empower tenants as consumers
fails to prevent social and area polarisation
creates inequitable outcomes in terms of what people pay for what quality of housing
fails to deliver sustainability
often delivers the poorest services to the poorest communities
does not encourage a holisticview to be taken of the contribution that good quality housing makes to other social objectives in the fields of health, education and community safety
is hidebound by outdated notions of the boundary between the public and private sectors and between public and private finance
is not sufficiently linked to the benefits and tax system as a whole
Our vision is in line with what is happening in other northern European countries, where the social sector already competes with private sector providers and serves the needs of a wider range of income groups than is the current position here2. In countries where the tradition is for community housing to be provided by independent bodies, there is a more established tradition of acting commercially. Agencies aim to secure greater long- term independence from general state subsidies and spread their overheads and risks over a more diverse range of products and activities. They are more in control of their asset base (buying and selliqg property to meet changing needs) and more flexible in being able to exploit new methods of obtaining private finance in the market, such as securitisation. Of course, experience abroad does not automatically read across to England. In particular, the process of residualisation, although experienced in other countries, has not gone so far. It will take considerable commitment over a decade or more to achieve a similar model here.
Moving existiqg council and Registered Social Landlord housing towards this model is crucial to our vision. But we should emphasise that becoming more self-sufficient businesses is not incompatible with the receipt of subsidy. Many other businesses, including wholly private companies from farms to corporations such as Rover or Railtrack, receive direct subsidies and tax breaks which are used as levers by Government to deliver particular aspects of economic or social policy. As a business, Community Housing will have a need for and will consume housing subsidies, but as far as possible these should be targeted to deliver specific goals, like investment or intensive housing management in high priority areas, so as to minimise the long term need for general subsidies. Here, we are not referring to housing benefit, which we see as a personal subsidy that is available to tenants across the rented tenures, which would have to exist even if the community housing sector did not.
Investment
There is no avoiding the bald statement that the current level of investment is inadequate to ensure that the existing housing stock is put into good condition within a reasonable period of time, that sufficient additional affordable homes are provided to meet the needs of the people, and that housing makes an appropriate contribution to ~h~~2~2~~~~n~72in regeneration efforts. Europe ~PR,2000) housing united
This is a long-term feature of the housing finance system. The Joseph Rowntree Foundation has estimated that gross social housing investment fell from over €10 billion in 1979 to under €4 billion in 1999 (at 1997198 prices) as subsidies have been switched from bricks and mortar to personal support. Since 1997 there has been a welcome increase in investment - around €5 billion over the life of the Parliament through the comprehensive spending review and the capital receipts initiative. Most of this'has been released through local housing authorities to be spent on renovating existing council housing (around 90 per cent of capital receipts initiative credit approvals). Despite this boost, investment remains at historically low levels, and the number of new starts by Registered Social Landlords has remained in the doldrums.
How much investment is needed? The Forum asked Graham Moody Associates (GMA) to advise on the requirement for investment, both to meet the Government's commitment to bringing the social housing stock up to standard within ten years and to meet the need for additional affordable housing.3 We have also noted the extensive research undertaken by the University of Cambridge for the Shelter Housing lnvestment ~roject.~
GMA estimated the resources required to eliminate the backlog of disrepair and modernisation in existing council housing by developing a financial model that takes account of the Government's proposed transfer programme of 200,000 units per annum and their proposals for social housing rents. The key conclusion is that GMA calculate that the relatively modest amount of a further €300 million per annum is required in order to eliminate the backlog in financial year 2010-11. Indeed, because of the way that the proposed local authority rent increases are 'crystallised' into higher capital values at the point of transfer, the total increase in Central Government budgets may be very small indeed. The downstream savings brought about by the additional investment means that expenditure might decline in the long term.
An alternative scenario of 150,000 council homes transferring each year, perhaps a more realistic target given the likelihood of a proportion of failed ballots, results in an additional €500 million per annum being required. While expenditure would need to increase in the short term, the same pattern of reducing expenditure over the long term is apparent.
The Shelter Housing lnvestment Project has produced a detailed set of estimates on the need for additional affordable housing. They have estimated a long term need for new affordable housing of 107,000 homes per annum from 1999 to 2016 to meet newly arising housing need and to reduce the level of current unmet need by two-thirds.Their analysis shows that the requirement for additional homes is heavily skewed to the south of the country.
GMA's analysis affirms the broad conclusions of the Shelter research, but also examines the implications of alternative scenarios based on the lower estimate of housing requirements made by the Select Committee of the House of Commons (a projection of 80,000 homes per annum), and the Green Paper's proposal that RSL rents should be capped at the level of the retail price index (which will have consequences for the amount of private sector debt that can be funded from the net rental stream). The original Shelter projections, together with the modifications following from the above variances, are set out below. 3 Graham Moody Investmentfor a Decent Hmnefor All (IPPR, 2000). Availab1eatwww.ippr.0rg.uk On these assumptions, achieving the rate of provision projected by the Select 4 see the fourreportsintheseries, Committee would require additional capital spending of €921 million per annum, and summarisedintheconcluding achieving the Shelter projected total would require additional capital spending of report Buildingfor the Fume Nicola Bacon (Shelter, 2000) f 1,686 million. community housing in a business framework
Scenario 1 Shelter 107,000 homes pa I HoC 80.000 homes pa 1
Cost
Tenure I 80°/, 2Oo/0 20°/0 end shared rzz shared 1 ownership ownership
Grant cost
Total grant
less 2001102 ADP budget
less planning gain
less LASHG additional capital expenditure I additional HE3 I f130m I f85m I I no real rent incraw I f482m I f360m I Total annual increase f2.298m € 1,366m I tdblt: I The cost of delivering additional affordable housing
Where will investment come from? Setting out the requirement for investment is not just a crude bid for more public spending, it is an appeal for more rapid action to overcome the historic bias against public investment and to remove barriers to private finance.The Chancellor's June 1998 fiscal strategy identified housing as one of 4 key areas where under-investment needed to be addressed, an important step even if housing was generally seen as the fourth of the four behind education, health and transport. Movement to give more commercial freedom to public corporations has largely been at the discretion of the Treasury, with different solutions being proposed for different sectors (eg Post Office, Municipal Airports, Air Traffic Control). Council housing's ability to get on this agenda has been constrained by the belief that housing investment is not 'self-financing' because housing benefit underpins future rental streams. 'This is not a view we share because the call on housing benefit takes place irrespective of whether the investment is by a public or private body.'rhere would be no call on housing benefit if all the homes were let to people with incomes above eligibility levels. And a wholly private sector solution to getting additional investment would make the same or a greater call on the social security budget.
Although there are differences in efficiency, whatever mechanism is used to finance additional investment (Private Finance Initiative or Registered Social Landlord borrowing or traditional public borrowing), funding is in one of two ways: through higher rents (partly paid for by housing benefit) or through higher levels of subsidy. Either way, public spending will rise and we accept that there is an opportunity cost associated with this. However, just as a growing number of children requires education expenditure to increase, and a growing number of elderly people requires social sewices and health spending to increase, so an increasing number of households unable to afford adequate housing in the private market requires housing expenditure to rise. If these volume increases are not matched by additional funds, the consequence is that conditions deteriorate.
Paying for success and not for failure Frequently, the focus of debate is on the cost of taking action, in this case building and improving more homes. It is much harder to identify the costs of failing to tackle under- investment, but it is clear that 'doing nothing'is not a cost-free option. Indeed, under- investment in housing could be the most expensive option in the long run if both the housing and thesocial costs of failing to meet housing requirements are taken into account: housing united
The Social Exclusion Unit has argued that the long term decline in neighbourhoods has helped create high levels of benefit dependency, the erosion of social capital, high levels of crime, and has exacerbated inequalities in health and education and, in many areas, racial inequalities as well. These problems have created financial as well associal costs, which are only identifiable if a more holistic view of the totality of public spending in an area is taken. The costs of putting things right is also high - to revive local economies, to empower local communities, and to improve key public and private services. Improving housing conditions (whatever the tenure distribution of the area) will be an important part of the mix of successful regeneration. Capital investment is not the whole answer, but it can be transforming if it is delivered at the right time and it can undermine all other efforts if it is not available when it is needed.
The Rogers Task ~orce~highlighted the fact that the failure to invest in the infrastructure (including housing) of our urban areas has been an important contributory factor in the flight from the cities, which has been a major factor in the decline of northern and midland cities. Better housing with more choice, meeting new demands, is a vital part of the urban renaissance.
The failure over a generation to invest adequately in the council housing stock, to bring it up to modern standards and to put it in a good state of repair, has allowed a major community asset to dwindle in value and has contributed to the neglect of many council estates as neighbourhoods. Disrepair does not go away, it merely accumulates. The Government has shown that it understands the long term processes involved. The need to properly plan, manage and maintain the council housing stock with a long term perspective is being addressed through the development of Resource Accounting and Budgeting for the Housing Revenue Account. We strongly welcome the Government's acknowledgement of the scale of the repair backlog problem - around €19 billion - and the bold commitment to overcome this within ten years.
Failing to provide sufficient additional affordable housing in the areas of high demand, whether through new building or conversion, will lead inexorably to higher rates of homelessness, involuntary sharing, overcrowding, immobility and the use of expensive forms of temporary housing. In some high demand areas, especially in London, vast amounts have been wasted on temporary housing for more than a generation, resources which would have been far more productively deployed supporting the provision of additional permanent housing. This is not a problem that will 'solve itself - on the theory that shortage will mean that fewer households will form. In actuality, newly formiqg households with higher incomes will access the housing market; and in areas of high demand this will squeeze out lower income households. Inadequate provision will generate high costs in future.
New financial structures for council housing
As we argue in chapter 2, we see the future of council housing in arms-length arrangements or transfer, with the most suitable set of arrangements for any authority being determined by a Best Value review process. Although there are many social and economic issues to be considered in making a Best Value decision, the financial balance will vary from area to area and possibly from estate to estate. This will depend, for example, on the assessment of future demand for the housing, the need if any for selective demolition (with or without replacement), the availability of regeneration funding, the level of investment needed to bring the stock up to modern standards, and 5 Urban Task Force Report Towards an Urban Renaissance(DETR, 1999) the availability of private and public finance. community housing in a business framework
For many years now, council housing has stagnated with no certain future direction and inadequate funding. There has been continuous speculation about the future options that might become available to enable investment. If authorities are to make a best value decision on the future of their stock, they need to be able to look at a spectrum of options which could range from 100 per cent public to 100 per cent private finance. No single option is likely to be a best value choice for every authority, and for many authorities a mix of solutions may work best.
Local authority ownership with resource accounting The Government is introducing resource accounting into the Housing Revenue Account from 2001-2002. This more business-like approach is an important and encouraging step and should enable authorities to plan and manage their assets better. A Major Repairs I council housing modernised use private finance
resource arms-length PFI partial accounting companies transfer
retain stock mixed strategies transfer stock figure 4 The spectrum of options
Allowance will help maintain the stock. It is indicated that the allowance will be set at a level which would enable the stock to be maintained at its current level, with authorities relying on a more uncertain level of credit approvals to deal with the backlog.
These reforms make it possible for some authorities with a relatively small backlog to see a viable and sustainable future for their stock in council ownership for the first time in many years, as Box 13 illustrates.
Box 13: HRA Housing under resource accounting: an example Following a stock condition survey, one northern authority identified the following requirement for spending:
Years Amount (Em) 1-5 12.5 6-10 11.5 11-15 9.0 16-20 6.0 21 -25 7.0 26-30 7.0
The authority's current capital programme is €4.5 million, which includes a Elm revenue contribution to capital. If the authority's major repair allowance is set at €500 per dwelling, this would equate to €6.7 million per annum. The authority assumes that it will lose credit approvals for the council as a whole of about €5 million as a result. The authority traditionally splits its housing capital equally between public sector and private sector.
For public sector housing, the authority is assuming that it will have €1 million in capital plus another €1 million revenue contribution, plus the €6.7 million Major Repairs Allowance, which makes around €8.7 million available. Over the long term, the authority is getting fairly close to achieving the on going level of investment that is required.
There are also signs of change in Government attitudes towards local authority borrowing which may have implications in the future. The welcome given by the Government to the joint DETR/LGA/CIPFA/Audit Commission capital finance review housing united
indicates further movement away from the rigidity of the current public borrowing regime and a more flexible attitude to prudential local government borrowing. The report6, based on research by PriceWaterhouseCoopers,examines the scope for replacing the existing system of borrowing controls with a prudential system which would allow local authorities to borrow freely for capital investment. The objective would be to abolish credit approvals without risking prudent macro-economic controls over public sector debt and without putting council taxpayers at risk of a council borrowing more than it can prudently afford. Additional objectives would be to produce a system which is more transparent, to enhance local decision-making and local accountability, and encourage efficient and effective capital spending by removing artificial constraints over borrowing. The report states that:
The clear conclusion of our work is that it is possible to devise a prudential system which is technically robust and meets the objectives.
The report proposed that there should be a small core of primary legislation, including the power to borrow, plus a largely self-regulatory framework, backed up by a series of prudential indicators, strict professional codes of practice and a revamped requirement on local authorities to make a balanced budget. The report identifies the need for further consideration of the impact of the proposals on housing, and makes a strong case for continuing and strengthening the Housing Revenue Account ringfence. In particular, additional revenue subsidy would be needed to fund the extra investment if this could not be met through increases in rents. Even so, the report states that:
nothing had been identified which suggested that a prudential borrowing regime could not operate alongside the existing Housing Revenue Account ringfenced finance regime.
If the prudential borrowing option is introduced, and applies to the Housing Revenue Account, we consider that the social business of managing the housing should still be placed at arms-length from the remainder of the council within a strong ringfence. This will achieve the necessary separation between the housing strategy and management functions, but it will also benefit tenants by preventing the 'border raids' into the Housing Revenue Account to fund other services which have been such a feature over the years. And in the long term, our vision for Community Housing involves all community housing organisations operating as sustainable businesses. This would mean moving out of the annual subsidy system altogether. There is then no reason in principle why housing management organisations should not qualify to seek social housing grant for new development and borrow under the umbrella of the local authority.
This would equate to the three stages as described by John ~ills'to move council housing onto a more business-like footing. This would acknowledge that it is not possible for all authorities to transfer stock at once and that there needs to be options for those authorities whose tenants reject transfer at the ballot.
The three stages are:
Stage 1 is underway under current Government proposals, and involves establishing a proper ringfenced landlord account, run on the principles of resource accounting and stripped of any need to subsidise rent rebates. The Major 6 Capital Programmes Working Repairs Allowance is set at a level sufficient to enable the council to maintain Party The Capital Finance Report: a nmprudatial system (DETR, 2000) the current stock, but they would have to seek credit approvals to tackle the backlog. 7 John Hills Reinventing Social HowingFinance WPR, 2000) community housing in a business framework
Stage 2 would apply to councils which had largely cleared their repairs backlog. It would allow landlords to become autonomous although still eligible for subsidy to deal with historic loan costs.
Stage 3 would take landlords outside the current Housing Revenue Account subsidy system altogether into full financial autonomy, with their debt adjusted to ensure that their costs of management and maintenance, provision for major repairs, and debt servicing could be covered by rents at an appropriate level. This might require central subsidy (similar to grants to Large Scale Voluntary Transfer authorities with overhanging debt) but would 'set up' a sustainable independent organisation at arms length from the council. It would then be able to borrow for future investment in the same way as a traditional housing association or Large Scale Voluntary Transfer association can.
Arms length companies Since Gordon Brown became Chancellor, the Government has introduced more flexibility into the treatment of public corporations and its general stance, through the 'Golden Rule' and the 'net sustainable investment' rule, has been to create more room for capital spending whilst delivering stable public finances. It has also de-emphasised the Public Sector Borrowing Requirement (or Public Sector Net Borrowing since 1998) as the primary control measure. Because the Government has been operating well within the Golden Rule and the net sustainable investment rule, some public corporations, including for example financially robust municipal airports, have been given more room to borrow within a prudential framework, although the borrowing counts against Public Sector Net Borrowing.
The Green Paper now cautiously extends this principle to council housing through the creation of arms-length companies (ALCs), which will be able to retain and use more of their rental income to finance additional borrowing for investment in stock improvements. ALCs place the local authority in a position analogous to shareholders, determining the overall strategy and direction of the company without being involved in the day to day management of it.
The Government has proposed that ALCs will only be formed in a small number of high performing local authorityareas. We see little logic in this and think the option should be more widely available because movement into an ALC should, like stock transfer, be seen as an opportunity to achieve a step change in performance, setting new standards and expectations.
We would like to see ALCs evolve quickly into bodies that operate as independent businesses with full control over their assets, with similar borrowing powers to existing Registered Social Landlords and the ability to seek social housing grant to build new homes.
Stock transfer Stock transfer has come of age as a viable solution. Up to now, 74 English councils have transferred all of their stock (leaving 270 which have not). A further 8 transfers are in process and 22 have been proposed for next year. In the past twelve years, whole or partial transfers have led to almost 400,000 homes moving out of direct council ownership, peaking at 115,000 homes in the latest year. Although there have been 'no' votes in some areas, most transfers have gone through with big majorities and impressive turnouts.
'The programme has very successfully generated a great deal of building work and created new homes, and the initial evidence is that tenants who have transferred are highly satisfied with the experience. The Government is now making additional subsidy available to make stock transfer a more viable option in urban areas. It is now housing united
being considered by most big city councils although some remain unwilling to go down this route. It is seen as the option in Scotland. Stock transfer will continue to grow, and the Government is making financial provision for a rate of up to 200,000 units a year.
The Forum believes that stock transfer, whether to an existing Registered Social Landlord or to a newly formed local housing company, will make a critical contribution to tackling the backlog of repairs. Adjustments to the programme may be needed if it is to make the biggest possible contribution. Longer lead-in times may be necessary to prepare transfers in inner city areas, and more planning may be needed to ensure that the capacity exists to undertake the higher level of transfer and to manage the stock once transferred (for example the availability of suitable staff and board members). Our proposed Bestvalue process should also ensure that tenants are involved and consulted from the beginning and that a wider consensus exists that transfer is the best option. This should help avoid transfer becoming a political battlefield when proposals go to ballot.
Private Finance lnitiative [PFI) On a net present value basis, whether the Private Finance lnitiative represents good value for money depends critically on whether the cost of transferring risk to the private sector - normally a higher cost of capital - is outweighed over time by the benefits of efficiency and the reduction of long term operating costs. Recent research has shown that, even if all Private Finance lnitiative schemes had been delivered through conventional public borrowing, the Chancellor would still be meeting the Golden Rule and the 'Sustainable Investment Rule' - Private Finance lnitiative was not therefore necessary to deliver the Government's definition of stable finances8.
However, for individual authorities, the Private Finance lnitiative looks likely to be able to offer a route to additional investment finance, notably where the requirement for investment is matched by the availability of long term contracts for repair or other services. The Private Finance lnitiative in housing is still at pilot stage, with a mix of authorities with a mix of dwelling types acting as pathfinders. The authorities are entering contracts under which an operator will undertake significant capital refurbishment and ongoing management maintenance and programmed renewal services, with payment linked to performance under an output specification. Tenants 8 peter ~obinsonand john remain the tenants of the authority and the property remains in council ownership. From Hawksworth The Private Finance the early evidence, it seems likely that the Private Finance lnitiative will become a viable Initiative: saviour, villain or irrelevance? (PPR, 2000) option for Some estates. community housing in a business framework
Box 15: PFI Pathfinders Camden Camden council's rigorous options appraisal led to the conclusion that the Private Finance Initiative scheme was the best value solution to secure the long term sustainable improvements to the 1960s high rise Chalcott Estate. The proposal's aims are to challenge the long term decline in popularity of the estate, tackle structural and design problems, improve heating and energy efficiency, restore and improve the asset value of the estate, and provide a quality long term repairs and maintenance service. The options appraisal concluded that 'do nothing', 'do minimum', and 'demolish and rebuild' were all unviable and that the Private Finance lnitiative represented the best value option.
Ardwick The Plymouth Grovelstockport Road Estate was selected as a PFI pathfinder in November 1998. The estate is in a poor state of disrepair, but is in a strong location, close to the city centre of Manchester, close to major employers like universities and hospitals and has good transport links. The PFI project aims to provide high quality homes of all sizes and tenures in an attractive desirable area where people want to live. They plan to demolish 40 per cent of the stock. On the land created by demolition, new private homes for sale will be developed and a limited number of new homes for rent by a registered social landlord. The remaining housing stock will be substantially remodelled to improve living conditions. The PFI project is part of a wider programme which is addressing environmental quality, dealing with social exclusion and generating economic opportunity.
Meeting the ten-year goal To meet the Government's target, 3.2 million dwellings have to be put on a sound and sustainable footing within ten years. The Green paper is unclear whether the target is to bring all of the housing up to the desired standard (ie with the works completed) within ten years or, more modestly, to ensure that a viable plan exists for all the stock within ten years. This matters because most Large Scale Voluntary Transfer bodies have adopted five-year renovation programmes after transfer. On this basis, to achieve the ten year profile of expenditure assumed in the GMA model quoted above, the movement of the stock into new bodies would need to be undertaken within the first five years. Given the complexity involved in setting up the new arrangements, there is a real risk that bottlenecks will be created and that the programme as a whole will slip to a 15 or 20 year timescale rather than 10.
'This is one of the key reasons why we wish to see all of the possible 'solutions' - transfer, Arms-length companies, Private Finance Initiative, and housing management organisations, being exploited to their maximum potential.
Social housing grant
Most of the discussion in the chapter has focused on the need to resolve the financial future of council housing, trying to place the sector on a similar financial footing to existing Registered Social Landlords. Once arms length arrangements or transfer have been achieved, a level playing field should be created in terms of access to social housing grant for new development.
Since 1989, Registered Social Landlords have had access to private finance and have been supported by capital subsidy by way of Social Housing Grant from the Housing Corporation or local authorities, to cover a proportion of their capital costs up front. The Housing Corporation's headline rate of Social Housing Grant has declined over the years since 1989 from over 70 per cent to 54 per cent, making Registered Social Landlords more dependent each year on raising private finance for development, and raising outcome rent levels. The new Government has stabilised but not reversed this long-term decline in the grant rate, but is also ending the system by which rents increase automatically above the rate of inflation. housing united
Overall, the Social Housing Grant arrangement has worked well. A study by Alan Holmans and Christine Whitehead concluded that:
the Social Housing Grant capital system is robust, delivers value for money to government, helps draw in private finance and optimally manages risk both for the private finance sectors and registered social landlord^.^
The level of new output by Registered Social Landlords is well below what is necessary to deliver the additional affordable homes for rent and shared ownership that studies suggest are necessary. If output is to increase significantly, spending on Social Housing Grant will also have to rise significantly, even after taking account of a rising contribution from the planning process. A separate question arises as to the appropriate rate at which Social Housing Grant should be set. In relation to Registered Social Landlords which are undertaking new development, the rate of Social Housing Grant is the policy lever which can help resolve the tension between greater investment and affordable rent levels. The Government and the Housing Corporation are introducing changes in the method of distribution of Social Housing Grant to enable it to be deployed in a more flexible and strategic way. Given the growing variation in regional and local housing circumstances, we support these initiatives.
Studies tend to suggest that the impact on public spending of higher and lower grant rates are marginal1' and that deploying higher grant rates would have a beneficial impact on affordable rent policy. Holmans and Whitehead's analysis assessed the implications of varying levels of Social Housiqg Grant. They concluded that higher grant rates could have a strong effect on affordability, without adding greatly to the overall public spending cost. Indeed they found that a grant rate of 70 per cent probably offers best value for money. It would add less than 1.5 per cent to the total cost of the programme but could lower rents for new developments by up to one quarter. They counsel, however, that the outcomes are highly sensitive to the assumptions used, especially about interest rates.
Although some concern has been expressed about the implications of the new rent regime for Registered Social Landlords, they are generally in a healthy financial position and broadly have the financial capacity to continue to meet development priorities. The Large ScaleVoluntary Transfer sub-sector is looking particularly strong in the long term with a great deal of potential to undertake development."
The post 1989 financial regime for Registered Social Landlords requires them to make provision for maintenance and long-term re-investment in their stock. A significant amount of pre-1989 stock, especially the older acquired properties which were not always improved to a high standard, will require further investment, and the financial ability of Registered Social Landlords to deal with this varies. The principle of self- financing re-investment is an important one, but in the new era of rent restraint, a small number of Registered Social Landlords may begin to face difficulties in affording the required rate of reinvestment. The difficulties facing Registered Social Landlords operating in low demand areas may be compounded by a rising vacancy rate and reducing rental income. Some Registered Social Landlords with an older stock in high 9 Alan Holmans and Chistine Whitehead Funding Affordable Social cost areas meet their requirement for re-investment through asset sales. Where there Housing: capital grants, revenue is high demand for community housing this may have the effect of reducing supply subsidies and subsidies to tenants unnecessarily. (NHF, 1997) 10 Angus Freeman, Alan Holmans and Chistine Whitehead One way of easing the burden at a macro level would be to reduce VAT on repair work, Evaluating housing afirhbility but there may also be a need for the introduction of some flexible support against strict (CIH/LGm, 2000) criteria for Registered Social Landlords which are unable to self-fund reinvestment. It 11 HACAS Consulting Housing is imperative that Registered Social Landlords avoid cutting down on their investment Associations - a viablejinancial jiiture? (CM, 1999) programmes and start to slip downhill as local authority housing has in the past. community housing in a business framework
Will private finance be available?
It is a feature of western society that as it has grown more affluent it has generated increases in savings and investment resources. In recent, low inflation times, these funds have been chasing a limited variety of investment vehicles, evidenced by some strange behaviour in the financial markets, especially the tendency for stock prices in some sectors to surge ahead, making them appear over-valued in terms of their economic fundamentals.
During our consultations, we have had a number of discussions with private finance institutions. The broad picture that has been painted is that the private sector would be able and willing to lend for housing to a significantly higher level than is currently the case, and will need to doso if the stock transfer programme is to be fully financed, but that new institutional arrangements are required to encourage and enable the development of new market in liquid, tradable, housing-backed securities. The Forum believes that it important that this option is explored.
One recent qualitative study12 interviewed a cross section of the top 35 LIK financial institutions, including 50 per cent of the top ten, and led to the following conclusions:
Apart from those already heavily engaged, institutional investors' knowledge and understanding of the social housing market is incomplete or distorted. Some major investors said they had not had not studied the market since the early 1990s.
Traditional funding (banks and building societies) margins are considered to be low and may not be sustainable long term.
There is some conservatism in the market - both lenders and borrowers - which might impede the entry of new products into the market.
There is a perceived need for Government to raise the profile of social housing and to express stronger support for the long term future of the sector if the number of lenders interested in the market is to be expanded. Many institutions were unaware of Government's intentions to expand the stock transfer programme or of the movement of RSLs in to regeneration.
Many were concerned that there was a political risk that there would be a long term deterioration in housing benefit as an underpinning mechanism.
Most were strongly reassured by the presence of the Housing Corporation as regulator and its ability to intervene if things go wrong.
'There was a majority view that credit rating would enhance the confidence of the market.
There is an expectation that investment in the social housing sector and the requirement for private finance will expand over the next 5 to 10 years, but that the speed of growth may depend on produciqg simple financing structures for both the equity and the bond markets. Deal size will be critical to gaining new entrants to the market.
There is a strong supply of funds available to new investment vehicles and various financial institutions have attempted to create new vehicles to attract these resources. However creating a new market is not easy or risk-free. In the housing arena, for example, the development of equity release schemes and shared appreciation mortgages ~~~?a~~~~~~o~~~~~'o~ has not taken off as was hoped. This was not because the products were particularly minnirutiomlinvestors(2000) housing united flawed but because individual financial institutions have not been prepared to accept the risks associated with generating a sufficient volume of assets. Investment managers wish to see volume and require liquidity - the ability to buy and sell the asset - before they are likely to commit to becoming expert in a new market and providing the large sums of investors' funds which are necessary.
New housing-backed securities or housing bonds could be issued, securitised against future income streams, to support investment by local authorities (subject to Treasury rules), by local authority-influenced companies, and by Registered Social Landlords. Subject to volume and liquidity, investment managers would see such securities as an attractive element in a balanced investment portfolio.
One difficulty is that the value of the security or bond would need some form of underwriting. In the US, this nut was cracked fifty years ago where the government provided insurance through agencies such as 'Ginnie Mae' and 'Fannie Mae: Effectively this insurance guaranteed mortgage borrowing by individuals or social housing agencies provided certain conditions were met. 'The institutions now provide trillions of dollars of loan finance to low income home owners and rental housing, yet no government funds have ever been called in. Although the arrangements in the USA are not immune from criticism, we believe that there are important lessons to be drawn and ideas which should be fully explored.
Similar institutions could be developed in this country or the government could provide the 'insurance' by underwriting the value of the assets supporting the bond. The insurance would attract a premium which would be paid from rental income and would create a reserve in the extremely unlikely event that a claim is made. At present in the UK such an insurance scheme would be difficult to establish, partly for regulatory reasons and partly because the whole amount of the guarantee would be counted as public expenditure rather than the cost of premiums or an estimate of the possible call on public funds, as happens in the US. However, this would seem to be a way of encouraging the market to do what it does best whilst using public funds to prepare the ground and take the risk that no-one else will.
The investor community increasingly can only deal in what seem to the lay person to be extremely large volumes, say a €2-3 billion market over two years, because sufficient volume is essential to create liquidity and a secondary market in these bonds. Housing bonds would be likely to provide a rate of return for the investor more attractive than gilts, less volatile than stocks and shares, and, with Government insurance, well priced with a triple A rating.
If such bonds were primarily pointed at existing local authority housing being transferred to arms-length companies or to RSLs, then it might be possible to foresee sufficient capital being available to renovate and regenerate the existing council stock over the Government's target ten-year period.
In the longer term, should this market develop, it would be possible to create a retail version of the housing investment bond to allow personal investment to make the benefits of property investment, currently enjoyed by home owners, more widely available.
Conclusion
The introduction of Resource Accounting and the Major Repairs Allowance for council housing illustrates a welcome shift in policy from short-term financial management to community housing in a business framework
long-term sustainability. Our vision involves all community housing organisations having financial autonomy, and this will require continued commitment of resources from central government to deal with the backlog of repairs. Council housing and the people who live in it have suffered greatly over the last two decades from a lack of investment and an uncertain financial future. Putting all council housing on to a sustainable financial footing is a challenge, but will be a huge and very welcome achievement. housing united
reforming rents and benefits
Summary
A common framework of rent setting is needed driven by a common set of principles. The preferred option, proposed by John Hills, would involve rents being designed to cover: management and maintenance costs, an allowance for depreciation and major repairs, and a modest and variable amount related to achieving a rate of return on the capital deployed.
This system would require a lower rate of return on higher capital values, providing a de facto link with affordability whilst preserving a national system and concentrating subsidy where it is most needed - in high cost areas.
A set of measures needs to be developed which provide a benchmark for affordability against which actual changes in rent and incomes can be measured over time.
Simplification of Housing Benefit should be taken forward as a priority, with for example, benefits being set for a longer period of time.
An immediate and targeted approach to the poor administration of Housing Benefit is necessary. Government should use its powers to remove Housing Benefit from local authorities with the poorest track records, who have failed to bring about improvement within an acceptable timescale.
A fixed rate housing allowance across all tenures should be introduced. This supports our overall approach in favour of blurring tenures and would help correct the current bias against low-income homeowners. A housing tax credit should be introduced for people in work.
The introduction of a 'shopping incentive' or 'consumption incentive' into Housing Benefit should be a long term objective, but pilots should be run to gain a better understanding of outcomes and how it affects the behaviour of individuals and landlords. reforming rents and benefits
Introduction
The way we pay for community housing and help those who live in it with their housing costs has a direct effect on more than a quarter of the population and a quarter of the national housing stock. As the households in the sector are drawn disproportionately from the poorer sections of the population, changes to the system have important distributional consequences, notjust in financial terms but also in terms of the choices and opportunities open to people.
The Conservative Government shifted the burden of housing costs away from general subsidies onto housing benefit, believing that this would be a better targeted use of public funds by directing resources to the poorest, and enabling housing provision to be more determined by market factors (for example, by reviving the private rented sector). For many years rents were increased faster than inflation, moving them towards market levels, although the policy was reined in during the mid-1990s as the full cost in housing benefit terms was realised.
In our view, a system based on market rents where low income households are given flat- rate cash allowances would be unsustainable. It would lead to unaffordable rents for those not on 100 per cent housing benefit, it would be unlikely to meet the core aim of supporting people on low incomes to afford a decent standard of housing, and it would continue the process of social polarisation.
Since 1997, the Government has moved to restrain the rate of increase in rents across tenures. In social housing, increases are being slowed to the rate of inflation for Registered Social Landlords a little above the rate of inflation for Local Housing Authorities. Although these formulae are crude and freeze relative rents in their historic position, the policy recognises the growing concern about affordability, and the implications of high levels of benefit-dependency for individuals and geographic communities.
'The Government is broadly committed to retaining community housing rents at 30-40 per cent below market levels and at the same time making the structure of rents more market-like in the way that they reflect the location, quality and size of dwellings. It will be crucial to get the mechanism for setting rents right to avoid rents falling to unsustainable levels in some places and rising to unsustainable levels in others.
The Conservative Government's treatment of housing benefit subsidy within the local authority Housing Revenue Account has sown confusion about the function of different types of subsidy. Tenants' rents, instead of helping to pay for repairs, have been used to contribute towards the housing benefit costs of their neighbours, in contradiction to the principle that essential social security benefits should be funded through national taxation. We are pleased that the Labour Government is committed to ending this practice, and we sympathise with the views of tenant campaigners that billions of pounds have been lost from the HRA over the years, money which, if it had been properly applied, would have helped address many of the problems that council housing now faces.
What are the problems with the current system?
In his discussion paper for the Forum, John ~ills'identified a range of issues with a financial element which needed to be tackled in community housing. In summary, these included:
1 John Hills Reinventing Social Hmuing Finance ( IPPR, 1999) housing united
Social and geographic polarisation with concentrations of tenants on low incomes and high levels of worklessness.
Restricted choice for community housing tenants compared to the rest of the population over where they live.
Poor quality and reputation, in part related to the repairs backlog and to the lack of adequate long-term maintenance and a failure to look after a large public asset.
Conflicting principles underlying the setting of rents, creating a lack of equity between tenants and no connection between rent and landlord efficiency.
A housing benefit system which does not encourage tenants to seekvalue for money in their consumption of housing and does not support the development of more choice.
Polarisation between renting and owning with few choices in between.
Community housing rents are subject to a bewildering array of conflicting principles and historic practices which bear little relationship to the value of the services or housing being provided. At least seven different underlying financial principles can be identified:
Guideline rents for council housing are based on a combination of relative capital values and regional earnings levels.
Movement towards these guidelines has been subject to complicated damping arrangements, so in practice the key influence for many rents is what they happened to be in the late 1980s.
More recently, rent caps, designed to limit rent increases, depend on what rents happened to be in March 1996, so that a council charging high rents at that time has had more freedom of manoeuvre than one charging lower rents at that point.
Housing association tenants in place by January 1989 have fair rents set by rent officers under guidance from central government.'rhe Government has adopted a formula to limit increases in fair rents.
Later association tenants have assured tenancy rents set by the associations themselves, reflecting their financial history. These rents are generally higher than fair or council rents. In parts of the country they are close to private rents.
However, associations have also been subject to rent capping recently, with maximum increases linked to the RPI, thereby freezing relative rents where they happened to be in 1997.
Finally, Large Scale Voluntary Transfer associations generally offered their existing tenants a guarantee on future rents from the point of transfer. New tenants after transfer may pay different, normally higher, rents.
In consequence, the amounts paid by two tenants in identical properties run by landlords with identical efficiency can be very different, an accident of history. Rents are not only inequitable between tenants, but they also fail to reflect in any real way the relative efficiency of landlords.
The housing benefit system is now much criticised but it is important to separate the current high profile problems of administering an extremely complex scheme from the reforming rents and benefits underlying principles. Both need to be tackled. When rents were low and a larger proportion of tenants were in work, most people could be expected to be able to afford their rent, and rent rebates were a top up system helping a small proportion. However, as the sector has changed, with higher rents, the ageing of the tenant population, and a growing proportion of tenants not in work, housing benefit has become of critical importance to the ability to pay of the majority of tenants.
Housing benefit is not just a complex and expensive add-on to the welfare state, it is a vital component in enabling millions of people to have an adequate standard of life.The system has a number of advantages - in particular it takes fully into account the wide variations in rents between different regions and localities and it minimises the risk that tenants' income after housing costs might fall below income support levels. The availability of housing benefit means that, in the community housing sector, people on low incomes can always afford a tenancy. The rapid rise in the total cost of housing benefit is often portrayed as meaning that the system is 'out of control'. The rapid increase in spending during the 1990s was mainly a direct consequence of government policies on private rented sector deregulation and social housing rents, which brought many more people into eligibility during a period when unemployment was also high. Expenditure currently has levelled off, a reflection of the 1996 restrictions in the private rented sector and the new Government's policy of slowing the rate of increase in rents. However, the household projections over the next few years imply, other things being equal, that housing benefit will continue to rise as a result of increased caseload.
The set of policies towards social housing which was in place under the last Government - targeted towards the poorest, rents rising towards market levels, and the consequential high level of benefit dependence - has a strong downside. In this context, housing benefit:
makes a major contribution to the poverty and unemployment traps because it is withdrawn at a rapid rate (the 65 per cent taper) as income rises.
is not well understood as a benefit which is also available for people in work.
is vulnerable to fraud and error.
is operated under increasingly complex national rules and regulations which, when combined with a variable standard of local administration, provides a poor service to landlords and to tenants and leaves many people unclear about their entitlement.
is increasingly paid direct to landlords and not to tenants, reducing the contact between landlord and tenant and the tenants' feeling of responsibility for paying their rent.
is adjusted automatically as rents increase, so that for people on 100 per cent benefit rent variations are entirely offset by changes in benefit.
contains no incentive to enable people to choose to pay more for more or less for less.
A sustainable method of setting rents
The Government sets out a number of aims for the future level and structure of community sector rents. These include:
holding rents at affordable below-market levels housing united
making rents fairer and less confusing
providing a closer link between rents and the qualities which tenants value in their homes
greater choice
greater coherence between council and housing association rents, and
the encouragement of better management.
We welcome the new emphasis on affordability and endorse these broad aims.
' Over the next 20 years, we anticipate that community housing, whether it started out as council housing or as RSL housing, will provide a more diverse set of products and services under a converging set of institutional and financial arrangements. On these grounds, but also on the grounds of efficiency and equity, it makes sense for there to be a common framework of rents, driven by a common set of principles. However, the system should not be overly prescriptive. The purpose of having a national system for rents is not to tell individual landlords what rent to charge for each of their properties (because they need to have operational independence and a measure of flexibility]; it is to set targets or guideline rents on which subsidy would be based.
John Hills' proposal, which is the Forum's preferred option, would involve rents being designed to cover:
management and maintenance costs
an allowance for depreciation and major repairs
a modest and variable amount related to achieving a rate of return on the capital deployed.
This is not, in fact, so different from the position of existing housing associations, who receive a percentage grant toward their capital costs but no subsidy for other costs.
The advantages of this proposal are that:
it would produce rent variations which are market-like, but with a much smaller degree of variation than would occur with capital or market rents;
the factors involved would be relatively straightforward to estimate (rebuilding costs to calculate depreciationlmajor repairs costs; market values of untenanted property to give the capital element);
it would produce rents which always exceed the landlord's actual (non-capital] costs but which also reflect comparative efficiency;
it would build on the current experience of calculating capital grant requirements for new property and market value in transfer deals; and
it would be consistent with the moves towards resource accounting proposed for council housing and existing RSL practice.
The link with affordability in this system is indirect. Capital grants would be used as a lever to control the overall level of rents, especially in high cost areas and in new reforming rents and benefits developments, and housing benefit would continue to provide the link with incomes. Because running costs are fairly flat across the country, the variation between regions and areas would be much less than under a system based on capital or market values. 'The proposal could involve a lower rate of return on higher capital values, providing a de facto link with affordability, while preserving a national system and concentrating subsidy where it is needed most, in the high value regions.
In low demand areas, there is a possibility that any rent-setting system (including the current one) will lead in actuality to a level of rents which is above local market levels. In practice, landlords will have considerable operational flexibility but market levels do have to be a constraint, whatever the rent-setting formula says. Setting rents above market would only be possible with the support of housing benefit. This may be justifiable in the short-term or in the context of a specific plan for regeneration of an area, but in the long term it would be an inefficient way of using resources and would simply hide the real issue that the sector is not able to let property at rents which cover running costs. In such circumstances, more fundamental questions have to be asked.
The relatively long time scale proposed by the Government for the implementation of rent reform leaves plenty of scope for experimentation with and evaluation of flexible local policies designed to support local strategies and neighbourhood regeneration. To date, there is little evidence that reducing rents below running costs might be an effective element in a strategy to revitalise neighbourhoods; if it is, the 'losses' will have to be met in some other way.
Linking rents to costs raises the problem of what should happen to rents on high cost estates, such as a high maintenance cost system-built estate. In a market, the capital value of the estate would fall to reflect the high costs. Because capital values feed into rents in a limited way under the Hills proposal, some of the special costs of managing system built estates could be left out of the running cost element in the rent calculation although still retained in the calculation of subsidy.
One of the Government's aims for rents is that they should reflect the qualities which tenants value in their homes, a feature which might produce different results from a market value approach. There is some experience from abroad in this regard, for example the Swedish housing companies who negotiate the structure of rents directly with tenants' organisations, so that the weightings given to various factors (such as size, location and facilities) directly reflects the views of tenants without affecting the average rent charged or the total income of the landlord. Such a system has attractions and could be compatible with the Hills proposal, although there is a genuine dilemma in that different outcomes in different places might simply produce a new set of anomalies.
Achieving affordability
The Green Paper argues that there is no case for a significant increase in average community housing rents, and no case for a significant reduction either. It seems just a little too convenient to argue that by an accident of history we have ended up in exactly the right place. We find that the argument against significant overall increases is more persuasive. It would make more people dependent on benefit, it would be a deterrent to taking work and it would tend to push more economically active people out of community housing just as we are developing policies to encourage more balanced and mixed income communities. We believe it would yield little by way of public spending savings. housing united
One of the imponderables in this discussion is the likely movement in the incomes of the poorest quarter of the population over the next 20 years, and whether an optimistic scenario - that they will experience a real and a relative increase in their incomes - will improve the ratio between earnings and housing costs so that there will be an underlying 'natural' improvement in affordability and people's ability to pay their rent. The pessimistic scenario, which might see higher minimum income guarantees for the very poorest but a widening spread of incomes generally, will lead to a declining ability to pay compared to property values and rents (especially if values are a significant driver of rent levels). There is also uncertainty about the degree to which regional disparities in economic activity and incomes will be addressed. As Building Industry Link Up expressed it in their submission:
The only way to resolve the dilemmas ofHousing Benefit is to ensure that many fewer people require it. The key condition for this is a less polarised pattern of economic growth, but an increased supply ofaffordable housing would in itself contribute to reducing Housing Benefit 'dependence' and make for more socially efficient labour market outcomes.
Throughout our consultation exercise, there was strong support for a shift back towards 'bricks and mortar'subsidy and away from personal subsidy. This was widely seen to be the most effective way of boosting affordability and reducing benefit dependency. The Green Paper assesses the impact of a 25 per cent across the board reduction in community housing rents and argues that it would cost around €700 million a year and would not benefit the poorest tenants, whose housing benefit would reduce pound for pound with the rent. However, no assessment is made of more selective approach which would aim to make rents more affordable through an increase in the rate of social housing grant. In tandem with his proposal for 'target rents', John Hills proposed a mechanism which could allow for a higher rate of subsidy in the high cost areas. In his preferred model, the required rate of return on capital deployed could be lower for higher valued properties (or possible higher cost areas) giviqg most help in the areas where there is greatest need.
An increase in the rate of social housing grant and/or additional support for reinvestment plans may also be the most effective way of easing the tension between the desire for affordability and business plan assumptions that rents would increase faster than inflation.
Underlying this debate is the Government's legitimate concern to minimise the public spending costs of subsidies and housing benefit. Higher rents mean lower subsidies and grant levels and so save public spending. But they also mean higher benefit spending, and draw more people into the benefit system.'rhey also increase the RPI, with knock- on effects on spending on things like index-linked bonds and benefit levels. Complex calculations - unrelated to any rent-setting or benefit payment principles - are made to determine which combination of factors leads to the lowest public spending total.
In their work for the National Housing Federation, Alan Holmans and Christine Whitehead conclude that the public sector financial trade-off between supply and means-tested subsidies tends to favour lower supply subsidies. However, 'if policies aimed at reducing the impact of poverty and employment traps and generating more balanced communities are seen as of particularly high priority, the trade-off tilts further towards capital grants.'
How to define affordability is not straightforward. A recent study2 suggests that in order 2 Christine Whitehead et al EvaluatingHourinrrAffbrdabilitv" " ,, to ..OroOerlv , evaluate the affordabilitv outcomes of reforms to rents and benefits. 'it is watioM~Houc;hgFederadon~Loca~ necessary to measure rent to income ratios, residual income and benefit dependency. Government Association, Chartered 1999) Assessment of policy changes using a single measure could hide more than it would reforming rents and benefits
reveal'. There was a common assumption amongst the respondents to our consultation that many Registered Social Landlord rents are at a level which is no longer affordable and that this applies to many local authority rents as well, but these views were not based on a particular definition of affordability. The study referred to above stressed the importance of affordability measures in helping to achieve the objective of providing a decent home for all at an affordable price. The Forum believes that the Government should develop a set of measures which would act as a benchmark for affordability against which actual changes in rents and incomes can be measured over time. Whether overall higher levels of Social Housing grant are needed is difficult to determine without this information.
Housing Benefit - short to medium-term reform
There was a strong consensus in the responses to our consultation that much more could and should be done to simplify the housing benefit system and to improve its administration. There is some frustration that the Government has looked at fundamental reform of housing benefit on several occasions since the Election, and has backed away each time, and that a similar amount of effort put into the simplification project could have produced more significant results. Instead, changes such as the new verification procedures have made the system more complex, not less. The Forum believes simplification and tackling poor administration should be an immediate priority.
A wide range of suggestions has been made to simplify the system. All of these reforms carry a cost but they are all worthy of further consideration to improve the housing benefit scheme in the short to medium term.
We support the proposal that housing benefit customers should be guaranteed payment for a longer period. To run in parallel with the arrangements for the Working Families Tax Credit, a target of six months would seem appropriate.This would also help reduce the administrative burden of frequent repeat claims. It would be especially beneficial for people whose earnings are erratic or variable. In some other European countries, housing allowances are set annually on the basis of the previous years' income. Moving away from frequent adjustments of benefit would also introduce a very modest shopping incentive, in that a move to cheaper accommodation would bring about a temporary financial gain.
We also think more can be done to extend continuation payments, so that housing benefit would continue to be paid at the full rate for a longer period after taking a job (the Government has recently extended these payments to four weeks). This would be a well targeted incentive to people to take work even though they are uncertain about the effect of the employment trap, and, if marketed strongly, could have a significant impact on people's understanding that housing benefit is also an in-work benefit.
There are also potential advantages in increasing the earnings disregards, across the benefit system, which have fallen in value in real terms.This would enable people to earn more from part-time or casual work without being heavily penalised through loss of benefit. Given the nature of the job market, where part-time and casual jobs are now common, and the fact that part-time or casual employment is often the first step back into full participation in the job market, this would seem desirable. Getting people off Housing Benefit should however be the priority.
We also believe that there would be advantages in introducing a more generous scheme for making deductions from benefit when there is a 'non-dependent' person housing united living with the claimant household who is assumed to make a contribution towards housing and other domestic costs. The deductions apply whether or not any payment is actually ::*ade. Reform might simplify one of the more complex and less well understooa elements of housing benefit.
Reducing the housing benefit taper from the current 65 per cent would reduce the poverty trap effect of increasing earnings, and would align housing benefit more closely with Working Families Tax Credit. However, the overlapping tapers with Working Families Tax Credit mean that a reduction in the taper would make people eligible for housing benefit at higher income levels. Relying on housing benefit alone to achieve affordability inevitably involves a compromise between the severity of benefit , withdrawal for individuals as their Incomes rise or they move into employment and the drawing of more people into the net of means testing higher up the income range. Reducing tapers to the degree that would be required to have real impact would be expensive to implement, and we would prefer progress to be made on the introduction 1 of a housing allowance or a tax credit.
The administration of Housing Benefit received much criticism in the responses to our consultation. One person described the system as being in a state of melt-down in some places, and several people felt that the system was so prone to delay and error that it undermined responsible landlord-tenant relationships and the ability of many tenants to manage their budgets. Since its inception, the requirement to recalculate benefit whenever there were changes in circumstances, and the frequent and detailed changes to regulations (81 Circulars alone in 19991, have made the benefit a nightmare to administer. Software houses r. 3ducing the computer programmes that administrators rely on have found it difficult rr, keep them up to date.
The Local Government Association has had long-standing concerns about the inadequacy of central government support for administrative costs and what it sees as the steady transfer of administrative and programme costs to local authorities in contradiction of the initial principles of the scheme that the costs of alleviating poverty should be borne by the national purse.There are no easy solutions but progress can only be made through simplification of the benefit itself and better management. Experiments with externalisation have not produced the desired step improvement in performance, suggesting that the administrative burdens are integral to the way the system is specified nationally and is not simply a function of poor delivety. Having said that, delivery is very poor in too many places.
Some respondents to our consultation thought the administration role should be removed from local authorities, and perhaps be given to the Benefits Agency or its successor. Opinion is divided as to whether this would make things better or worse, but any major change would have to be based on a clear plan to overcome disruption during the transition. Some in local government would be relieved to hand it over and watch someone else struggle to cope. At the minimum we would support a more targeted approach with firmer action being taken to remove benefit administration from those councils with the poorest track record who have failed to bring about improvements within acceptable timescales. We also support new service concepts such as 'One', which seeks to provide a single point of contact for adults of working age to claim a range of benefits.
We would also favour some relaxation of the rules for recovety of overpayments from individual applicants who find themselves owing money due to an error on the part of the administration rather than a failure to provide correct details themselves. Given the complexity of the scheme, it is unreasonable to expect claimants to pick up on errors and they should not be penalised to the same degree as they would if they had incurred a voluntaty debt. reforming rents and benefits
Long-term reform
There is a strong case for developing a set of reforms which aim to reduce dependence on housing benefit, alleviate the poverty and unemployment traps, enhance personal choice and responsibility, encourage a direct link between the benefit system and housing consumption, and bring greater simplicity to the administration of housing support.
The Government has expressed interest in introducing a housing tax credit to replace housing benefit for people in work and there have been various proposals for flat rate housing allowances to be introduced (often as a precursor to introducing 'shopping incentives' or 'consumption incentives'). The introduction of the Working FamiliesTax Credit, welcome in' itself, complicated the arguments made previously for a reduction in housing benefit tapers. Instead, commentators began to raise the advantages of integrating support for housing costs into the tax credit system.3
Delivering a credit through the tax system would seem to have a number of advantages over the current system of delivering a means-tested benefit through local government upon application. It would integrate the tapers to a single consistent rate and it would increase the number of low income households in work who would receive help with their housing costs. If extended to low income home owners in work it would also improve equity across the tenures. The downside would be the possibility that there would be an additional barrier facing people who are moving into and out of work, moving from one system to another. Even so, integration through the tax credit system would seem to us to be the best long term option for people in work. It is also in line with the general direction of future social security policy. The integration of the tax and benefit systems is progressing. In 2003, the Working Families Tax Credit will be replaced with an integrated child credit and an employment credit. The shift towards minimum income guarantees and integration of the tax and benefit systems should make the current work disincentive effects of Housing Benefit far less of a problem.
There are many possible variants of possible housing allowance schemes. The most commonly discussed, often referred to as a 'housing gap' scheme, involves a cash sum (which could be paid as a partial tax credit for people in work and as a standard addition to income support and job seekers' allowance) would be paid to all households, from which they would be expected to make a contribution to their housing costs.'rhe scheme could apply to all renters or to all tenures. The allowance could be a standard national sum for each household size or it could vary regionally or area by area to reflect real variations in housing costs. Means-tested housing benefit would be available on a proportion of actual housing costs.
The most commonly discussed scheme would have the allowance set at 20 per cent of average rents with housing benefit being assessed on 80 per cent of actual rent, but the proportions could change over time. The scheme would introduce a 'shopping incentive' whereby 'gainers' would have more benefit than their current rent and would be incentivised to trade up, and 'losers' would have less benefit than their current rent and would be incentivised to trade down4. One variant on the basic proposal, which might be more sensitive to local variations in practice, would be to fix the allowance steveWilcox Unfi,,ishedBwiness: nationally and to vary the proportion of rent which is eligible for housing benefit howingconsandtherefornzofwelfnre locally5. benej%Housing, (Chartered 1998) Institute of
4 Peter Kemp Shopping Incentives 'The introduction of a flat rate housing allowance would seem to have significant andHowingBenefitR+maoseph advantages even if it was not linked to the shopping incentive reform, because it would RowmeeFoundationand Chartered Institute of Housing, float some people off benefit altogether, making it unnecessary for them to claim the ----,,,, means-tested element. It would begin the integration of housing benefit into the tax JohnHills ReinuentingSocinl and Social security System, one step towards an important long term goal. Housing HousingFinance@PPR, 1999) housing united
benefit would fill the whole gap between the allowance and the real rent, leaving most renters in the same position as now. We believe that this is a reform which should proceed anyway, although it has the added advantage of providing the platform for the eventual introC rtion of the consumption incentives. Staging would however have to be carefully co, Jered to ensure that those who benefited from the introduction of the flat rate did not lose out in moves to a consumption incentive.
There is little evidence to show how consumption incentives might work in the English context. We have referred before to the fact that one of the key obstacles to major reform is that the basic level of income support in England is lower than in many other European countries. People are at the absolute margin of poverty and any scheme which increases the risk of people falling below the basic income support level would have dire consequences. A household which became a 'loser' under the proposal, but could not reasonably move to cheaper accommodation (perhaps for family reasons or because there was no supply) would have little option but to fund the difference from their other limited means, or fall into rent arrears. Some relevant research from which lessons can be drawn has been undertaken in the private rented sector on the experience since the single room reference rent and the local reference rent schemes were introduced!
Tenants had responded to their shortfall in a variety of ways. The majority of tenants, when surveyed, were paying their shortfall either out of their income or by borrowing ... whilst others had slipped into rent arrears.
Although there is no automatic read-across from behaviour in the private sector to behaviour in the community sector, this evidence does suggest that other improvements in the operation of the sector would have to be achieved before the reform could be introduced without risk to the poorest people in our community.
One response to this difficulty has been to argue that additional funds should be put in to ensure that the reform can be implemented with a minimum of losers, achieving the reform by ensuring that most households gained. This would certainly oil the wheels in that it would minimise the possibility that a household might be forced below income support levels because of its housing costs. However, there is an opportunity cost to using additional public spending in this way, and buying out losers would be likely to cost many hundreds of millions of pounds.
During our consultations and within the Forum opinion has differed on the introduction of consumption incentives. There are two broad stances.
The first is that without a consumption incentive, choice within community housing will remain very limited. In the current system where tenants are allocated homes and have limited choice over where they live, and there is no ability to shop around, a 100 per cent Housing Benefit does not matter. But in a system that has more options and lettings policies empower people to make informed decisions over where they live, a 100 per cent Housing Benefit makes little sense - people need to have a means of making financial trade-offs.
The second view is that there is very little currently known about whether people are motivated to change their behaviour by small amounts of money, and that choice and 100 per cent Housing Benefit are compatible on the grounds that people will make non-financial trade-offs. Although the possible benefits of a consumption incentive are recognised, it is thought that introduction nationally should be contingent upon significant progress being made in the following areas:
6 Hawing Benefit and the Private an improvement in housing supply in high demand areas, without which the Rented Sector London Research Centre (DETR, 1999) shopping incentive would be highly inappropriate; reforming rents and benefits
implementation of a more coherent rent structure;
the successful implementation of choice based allocation systems;
substantial improvements in the arrangements for mobility; and
tackling many of the most deprived estates to reduce the risk that consumption incentives would lead to the poorest people 'choosing' the poorest and cheapest estates, increasing polarisation.
The Forum thinks it is right to proceed with caution, but to see consumption incentives as an important long term reform. To get real experience of the changes in behaviour and other outcomes that might result, the Forum would be enthusiastic in support of pilot projects which tested the working of the scheme.
Rent direct The joint response to our consultation from the UK Co-operative Council and the Confederation of Co-operative Housing emphasised that: 'It is not uncommon for tenants on housing benefit to believe that they don't pay the rent. Divorcing housing benefit tenants from the realities of rent payment encourages the dependency culture and a lack of individual responsibility:
The practice of paying benefits direct to landlords is not common internationally, and here it has grown from an occasional practical arrangement for a particular tenant into a system which applies to complete categories of people. Part of the drive has been to simplify administration of housing benefit for council tenants and to keep collection costs down - as both the rent and the benefit were administered by the same authority (much lessso now), there seemed little point in making payments to tenants just to collect it back again. All social landlords have been under pressure to bring arrears down, and rent direct was a helpful and convenient step and offered a better guarantee of payment. Housing benefit departments have seen direct payment as a way of controlling the risk of fraud.
There are many circumstances where a rent direct arrangement is justified, for example where the tenant does not have the capacity to manage the transaction, or where there is a history of rent arrears and rent direct is the only practical step to take to avert eviction. However it has become too automatic and too routine a practice to be healthy and we believe that the blanket application of rent direct should be ended in favour of a system which is based more on individual circumstances. We do not think this is an easy or straightforward step to take. For many people living on very low incomes and possibly facing a number of debts, using the money for purposes other than rent is easy to do and hard to recover from. No one wants to see a rise in arrears or a rise in evictions, but both are likely outcomes if rent direct was crudely limited or if there are bureaucratic obstacles to getting back onto rent direct when it is justified.
Conclusion
Throughout our consultations, rent and Housing Benefit reform were the areas where people probably had the strongest and most divergent views. Everyone agrees that the status quo is far from desirable, but opinion is split on whether something else would be better or even if it was better, if the journey to get there would be worth the pain. The introduction of shopping incentives into Housing Benefit was thought to be either essential or disastrous depending on who we were consulting. Then there were those of housing united
us who would agree with Mr Arabin from The arch ester ~hronicles,~that 'I find myself able to argue diametrically opposed points of view with complete vigour and commitment'
The Forum has concluded that it is necessary and possible to make significant reform to rents and Housing benefit. Rents in the future must be based on a coherent set of principles and not be the outcome of historic policy changes. Housing Benefit simplification must be taken forward as a priority, and longer term reform - the introduction of a housing credit and a flat-rate housing allowance across tenures - should be developed and implemented, with shopping incentives piloted to learn more about the effect on people's behaviour and the possible outcomes.
7 Thanks to Phil Morgan from TPAS for the quote. written and oral evidence
Many organisations and individuals have contributed to the work of the Forum, some by submitting written responses to the consultation exercise (marked*), others by preparing papers, attending seminars or meetings. We are extremely grateful to them all.
Terrie Alafat, Director of Housing. Kensington and Chelsea Judith Allen, Principal Lecturer, University of Westminster Amicus Group ' Hilary Armstrong MP, Minister for Local Government and the Regions Association of Direct Labour Organisations' Mark Bannister, Wealden District Council Jim Barnes, Shelter Richard Bate. Partner, Green Balance John Belcher, Chief Executive, Anchor Trust Bethnal Green &Victoria Park HA' Mark Bevan, Newcastle University Gary Black, Leaders Rental Agents Liam Black, Furniture Resource Centre Blue Hill Lane Tenants Association Eric Bowen, Director of Housing, Leeds Eamon Boylan, Director of Housing, Manchester City Council Mike Breheney, University of Reading Robert Brewer, Head of Commissioning H Partnership, London Borough of Hackney Barbara Brownler. London Borough of Hackney Karen Buck MP Building Industry Link-Up' Fran Button, Consultant Cllr Steve Cook, St Edmundsbury Chalcotts Estate Tenants Et Residents Association Cllr Pete Challis, Greenwich Cllr Fiona Chapman. Mid Bedfordshire Chartered Institute of Housing, North-East Branch ' Chartered lnstitute of Housing' David Cheesman, The Housing Corporation Majorie Cleaver ' Confederation of Co-operative Housing' Martin Cooper, Essex County Council Helen Cope Jim Coulter, Chief Executive, National Housing Federation David Curry MP Keith Darvill MP Brenda Dean, Chairman, The Housing Corporation David Dickman, Chief Executive, UK Co-operative Council Simon Dow, Acting Chief Executive. The Housing Corporation Steven Duckworth, National Housing Federation Terry Edis, Chair. Burrowes St. Tenant Managed Organisation Warren Evans, London Borough of Newham Cllr Graham Facks-Martin David Fotheringham, Chartered lnstitute of Housing Rupert Fowden, Assistant Director, Retail Financial Services, Barclays Bank plc Cllr Mike Fowkes, Cannock Chase Tom Franklin Mike Gahagan, DETR Matthew Gardiner, South Liverpool Housing Barry Gardner MP Madelaine Glaisher, Bethnal Green H Victoria Park HA Dr Andrew Golland, Nottingham Trent University Robina Goodlad. University of Glasgow Adrain Greenwood, Chief Executive, Bethnal Green H Victoria Park HA Cllr Margaret Hall, North Warwickshire housing united
Hammersmith and Fulham Private Tenants and Rights Project ' Sinead Hanks, IPPR Harding Housing Association ' Cathy Havel, Centrepoint Matt Herbison, Liverpool JMU Cllr Tom Hogan, Kingston upon Hull The Home Group ' Nick Hooper, Housing Services, Bristol City Council The Housing Quality Network ' Roger Howard, DrugScope Sir Christopher Howes, Second Commissioner, The Crown Estate Brian lddon MP Owen Inskip, JSS Pinnacle Michael I~ine,Director of Housing, Southwark LBC Cllr Paul Jenks, Southampton Pavillion Housing Association Lynn Jones MP Ella Joseph, IPPR Favin Kelly, IPPR Liz Kendal, IPPR Cllr Terry Kendellen, Chairman, Room David Kidney MP Sarah Kincaid, Senior Policy Officer, Shelter Kingston Upon Hull City Council ' David Kirkpatrick. Director, Quintain Estates €t Development PLC Cllr David Lancaster, Salford Cllr Charlie Lant, Wealden Paul Lautman, Local Government Association Martin Ling, Camden Borough Council Martin Linton MP Martin Lippitt, Camden Borough Council The Earl of Listowel Neil Litherland, Director of Housing, Camden Borough Council The Local Government Association ' Local Government Information Unit" London Tenants Federation Forum ^ Andrew Love MP Mark Lupton. Chartered Institute of Housing Tom Manion. Chief Executive, lrwell Valley Housing Association Maritime Housing Association " Maritime Housing Tenants Association Graham Marshall, Liverpool Vision Derek Martin. Manchester City Council Anne Matthews, Poplar HARCA Anthony Mayer Siobhain McDonagh MP Kelvin McDonald, Director. Room Members of TPAS Cllr Trevor Miller, Chelmsford Graham Moody, Graham Moody Associates Margaret Moran MP Phil Morgan, TPAS Penny Morley. TEtG Jon Morris. Focus Housing Association Liverpool Housing Action Trust ' Alan Murie, CURS, University of Birmingham Darren Murphy Max Nathan, Centre for Local Economic Strategies The National Housing Federation" Notting Hill Housing Trust Brian O'Doherty, Newcastle City Council Oldham MBCTenants' Borough Panel Oldham Metropolitan Borough Council' Steve Ongeri, Senior Policy Analyst, The Housing Corporation Professor Michael Oxley, Nottingham Trent University Paddock Housing Co-operative Cllr Michael Palmer, Ipswich Taunton Deane Borough Council " Cllr Mike Phillips, Allerdale Kerry Pollard MP written and oral evidence
Liz Potter, Director of Policy, National Housing Federation Dave Power, North British Housing Association Bert Provan, DETR Bill Rammell MP Nick Raynsford, MP, Minister for Housing and Planning Pete Redman. Chief Executive, Notting Hill Housing Trust Peter Robinson, IPPR Steve Robinson, Liverpool City Council Co-operative Development Society Nigel Rogers, SlTRA Peter Roycroft, Serco Miffa Salter, Office for Public Management Cllr Richard Samuels, Sevenoaks Lawrence Santcross, Stonham Phil Saunders. Rough Sleepers Unit, DETR Simon Scott, Peabody HomeEquity Harry Seaton, Director of Housing, Salford Brian Seddon, Riverside Housing Association Rachel Sharpe, DETR Jonathan Shaw MP Shelter Joanna Simons, Director of Housing, Greenwich Mike Simpson, Manchester City Council Anil Singh, Chief Executive. Manningham Housing Association Alan Slater, Liverpool City Council Chris Smith, Camden Borough Council Dave Smith, Eastleigh Housing Association Cllr Andy Snowden, Middlesborough Springboard Housing Association ' Sean Stevens, Council of Mortgage Lenders Steve Stride, Chief Executive, Poplar HARCA Dave Swale. Riverside Housing Association John Swinney, JSS Pinnacle Cllr Rita Taylor, Bromsgrove Gwyneth Taylor, Local Government Association Tenant Participation Advisory Service Tenants of Bethnal Green €t Victoria Park Housing Association Tenants of lrwell Valley Housing Association Tenants of Manningham Housing Association Tenants of Newham Borough Council Robin Tetlow, Director, Oldfield King Planning Cllr Richard Thompson, Nottingham David Thompson, London Borough of Hackney Paul Thompson, IPPR Andre Thomson, University of Delft Clare Tickell, Stonham Housing Association Steve Truman. 4P's Dennis Turner MP The UK Co-operative Council Nicholas Waloff, Associate, Quintain Nigel Waterson MP Judi Watkinson, Joseph Rowntree Foundation Lynn Watson, Pathways Project Steve Webb MP Cllr Brian Weekes, Chair of Housing, Camden Borough Council David Wells, Director, Barclays Capital Sharon White, Policy Unit, 10 Downing Street Steve Wilcox Cllr Margaret Wills. City of Worcester Council David Wilson, Special Advisor, DETR Judy Wilson, Camden Borough Council West Wiltshire District Council " Ian Wilson Wiltshire Rural Housing Association Chris Wood. Director of Housing. Newham Borough Council Ron Wyatt. The Crown Estate housing united
forum publications
Social Housing in the 21st Century: Key questions Steve Hilditch EtTom Franklin July 1999 ISBN 1 86030 102 9
Social Housing in the 21st Century: Your views Sue Regan January 2000 ISBN 1 186030 115 0
Reinventing Social Housing Finance John Hills February 2000 ISBN 1 186030 11 6 9
Choice and Diversity: An end to monopoly in social housing John Swinney March 2000 ISBN 1 186030 11 7 7
From Public to Community Housing: Scottish experiences and prospects Robina Goodlad May 2000 ISBN 1 86030 122 3
Social Housing in the Future : Learning from Europe Michael Oxley June 2000 ISBN 1 86030 127 4
Social Housing in the Future : A rural perspective Mark Bevan July 2000 ISBN 1 86030 124 X
Available from Central Books, 99 Wallis Road, London E9 5LN tel020 8986 5488 fax 020 8533 5821 email [email protected] forum outreach visits
The Forum made 10 outreach visits to 25 projects or organisations in England.
Manchester Manchester City Council : Homes for Rent Hotline, Moss Side 8 Hulme Partnership Ardwick PFI Pathfinder lrwell Valley Housing Association
Liverpool Liverpool City Council Riverside Housing Association Furniture Resource Centre Liverpool Vision South Liverpool Housing
Newcastle Newcastle City Council Home Group Limited Paramount Homes
Birmingham CASPAR, Joseph Rowntree Foundation Optima Community Association Burrowes St Tenant Managed Organisation Paddock Housing Co-operative
Yo rk Village of New Earswick, Joseph Rowntree Foundation
Hackney, London Royal View, Peabody Trust London Borough of Hackney Hackney Building Exploratory
Camden, London Chalcotts Estate, London Borough of Camden
Bromley by Bow, London Poplar Harca
Bradford Manningham Housing Association
Leeds Leeds Federated Housing Association housing united
forum sub-group membership
Objectives €t Need Peter Williams, Council of Mortgage Lenders [chair) Victor Adebowale, Centrepoint David Cowans, North British Housing Association Chris Holmes, Shelter Richard McCarthy, Peabody Trust Alan Murie, University of Birmingham Carol Radmore, Family Housing Association B~llStevenson, Bellway Group
Finance Mike Ockenden, Barclays (chair) Rosemary Radcliffe, Price Waterhouse Coopers John Hills, London School of Economics John Perry, Chartered Institute of Housing Peter Robinson, IPPR Peter Redman, Notting Hill Housing Trust
Ownership, Governance H Management Steve Hilditch, Paddington Consultancy Partnership (chair) Cora Carter, TAROE Jim Coulter, National Housing Federation Paul Lautman, Local Government Association Ged Lucas, Stockport MBC Gurbux Singh, Haringey Borough Council John Swinney, JSS Pinnacle Jeff Zitron, HACAS
Local Economies and Communities Carey Oppenheim, IPPR (chair July-December 1999) Sue Regan, IPPR (chair Jan-May 2000) Danielle Walker, Joseph Rowntree Foundation Michael Ward, CLES Mark Johnson, De lblontford University Liz Walton, Social Exclusion Unit Chris Wood, Newham Borough Council Yvonne Hutchinson, Ripleyville Tenants Association housing united
Duncan Maclennan Duncan has been employed at the University of Glasgow since 1978 and presently occupies the Mactaggart Chair of Land Economics and Finance. Prior to taking up his present post he was Director of the ESRC Research Programme on 'Cities'. In June 1999, Duncan was seconded from the University of Glasgow to work in the Scottish Executive's Policy Unit as a Special Adviser to the First Minister. He was made a CBE in the Birthday Honours List of June1 997.
Richard McCorth y Richard became Chief Executive of the Peabody Trust in June 1999. Prior to joining Peabody, Richard was Group Chief Executive of the Horizon Housing Group [formerly the South London Family Housing Association Group]. Richard is currently a member of the National Housing Federation's National Council and Chair of the NHF's Investment and Regeneration Committee and a former Chair of Care and Repair, the national organisation that promotes and supports home improvement agencies.
Mike Ockenden Mike is Director of Direct Channels at Barclays Plc. Mike joined Barclays in 1972. For 19 years he was based in branches around the world, including spells in Asia, America, New Zealand and the Middle East, and undertook a variety of roles including operations, corporate and people management. During this time Mike was involved in the opening of new Bank operations in three different countries.
John Perry John is Director of Policy at the Chartered Institute of Housing. Previously he was Assistant Director of Housing at Leicester City Council, responsible for inner city renewal, housing associations and voluntary organisations. As Director of Policy, he has taken the lead in developments such as Local Housing Companies and research questioning the impact of public borrowing rules. He is currently involved in developing the Institute's policies on issues such as housing investment, social exclusion and welfare reform.
Rosemary Rodcliffe Rosemary is PricewaterhouseCoopers' Chief Economist in Europe. She is a highly sought-after commentator on European economic issues and has written and spoken widely on public policy issues. She is currently a member of the Government's Competitiveness Council and of the Steering Group for the Review of Company Law. She was awarded the CBE in January 2000 for services to business competitiveness.
Carol Rodmore Carol has been Group Chief Executive of Family Housing Group (one of the largest developing associations in London) for the last five years. Previously, Carol spent 18 years working in local government during the last five of which she was Director of Housing at London Borough of Croydon.
Gurbux Singh Gurbux was Chief Executive of Haringey Borough Council until April 2000. He took up his appointment as Chairman of the Commission for Racial Equality on 15th May 2000. He has chaired a number of national working parties commissioned by Government departments and is currently a member of the Home Secretary's Race Relations Forum. He was also an advisor to the Association of London Government.
Bill Stevenson Bill is Deputy Chairman of The Bellway Group Urban Renewal Division and was previously Managing Director. His work extends throughout the U.K. involving joint ventures with Local Government and Government Agencies. These joint ventures are forum biographies
Victor Adebowale Victor is currently Chief Executive of Centrepoint Homeless Charity. Victor began his career in Local Authority Estate Management before joining the Housing Association movement. He is a member of the government's New Deal Task Force advisory group and a member of the Social Exclusion Unit's Policy Action Team on Young People. Victor was awarded a CBE in the 2000 New Years Honours list.
Cora Carter Cora is secretary of the Tenants and Residents Organisations of England (TAROE), and has been involved in the tenant movement for 14 years. She was co-founder and Treasurer of Kirklees Federation of Tenants and Residents Associations and is a member of the Governments Best Value in Housing panel.
Steve Hilditch Steve is a Partner in Paddington Consultancy and was formerly Assistant Director of Housing for Haringey and Head of Housing Policy for Shelter. He is a member of Nick Raynsford's Housing Sounding Board, visiting Professor at the University of Westminster, and a committee member of Notting Hill Housing Trust and Brent Private Tenants Rights Group.
John Hills John is Professor of Social Policy and Director of the ESRC Research Centre for Analysis of Social Exclusion at the London School of Economics. He was previously Co-Director of the LSE's Welfare State Programme. John has worked for the House of Commons Treasury Select Committee and the Department of the Environment.
Yvonne Hutchinson Yvonne is a tenant of Bradford €t Northern Housing Association and founding member of the Ripleyville Tenants' Association. She is a Board member of the Housing Corporation, and a member of the Social Exclusion Unit's Policy Action Team on Neighbourhood Management. Yvonne was elected Vice Chair of the New Deal for Communities Pathfinder for her area.
Mark Johnson Mark is Reader in Primary Care, and Associate Director of the Mary Seacole Research Centre, De Montfort University, Leicester. He has developed a substantial body of research and publications relating to multi-agency health and welfare service delivery sensitive to ethnic and cultural diversity, and barriers to access.
Ged Lucas Ged has been Director of Community Services at Stockport since February 1997. This grouping of services includes, housing, all leisure activities, Welfare Rights and Community Development. Prior to taking up this post Ged was in main line housing for over twenty years, predominantly in large urban local authorities. He is an advisor to the LGA Social Exclusion Panel and a member of the LGA Housing Advisors Group. forum biographies predominantly in difficult brownfield locations, and many provide between 500 -5,000 homes with extensive related facilities.
Danielle Walker Danielle is Director of Policy €t Practice Development at the Joseph Rowntree Foundation. Previously she was acting Head of Policy at the National Lottery Charities Board with responsibility for research and strategy. She has been a senior member of Research and Policy teams of the Law Society of England and Wales; the London Borough of Islington; the Commission for Racial Equality and London Research Centre.
Michael Ward Michael has been director of the Centre for Local Economic Strategies (CLES), a national public policy, research and consultancy organisation, based in Manchester, concerned with regeneration, employment policy and regional development, since 1987. He was previously a member of the Greater London Council. He also worked as a Senior Housing Researcher in local government and chaired CHAR, the campaign for single homeless people. Michael was appointed Chief Executive of the London Development Agency in June 2000.
Peter Williams Peter is Deputy Director General of the Council of Mortgage Lenders, a position he took up in January 1997. He joined the former BSAICML as Head of Research and External Affairs in January 1994. He has overall responsibilityfor housing policy issuesat the CML and is a regular contributor to conferences along with frequent media comment. He has had a long involvement with housing policy and practice in the UK and abroad and was Deputy Director at the Chartered Institute of Housing.