Facilitated By: Sarah Seeger, Curo Housing

Is the 30 year business plan broken? The impact of the Housing Benefit cap to LHA rate on the Welsh social housing sectorThe following paper summarises the discussions that took place at Community Housing Cymru’s One Day Conference on 21st April 2016. Over 100 delegates participated in various discussion topics which centred around the impact of the UK Government’s plans to cap Housing Benefit to the LHA rate. The actions that will be taken forward as a result of the discussions can be found at the end of each section.Discussion topic: Passport to Housing; providing pre-tenancy support to ensure sustainable tenancies Facilitated by: Sarah Seeger, Curo HousingCuro Housing is a stock transfer RSL located in Bath with 13,500 homes in 6 local authority areas. The Passport to Housing scheme was developed as a result of the UC pilot. 196 general needs Curo tenants participated in a UC pilot and 80% of these were in arrears. The UC collection rate was 96.4% compared to 101.9% elsewhere. Curo therefore identified that they needed to understand their customers better and send out a strong message about paying rent. Curo identified that they needed to work with people that were on the housing register to identify if they needed financial support and they subsequently stopped offering tenancies to those who had more outgoings than incomings. These people were then referred onto the Passport to Housing programme to provide financial inclusion support and advice on sustaining tenancies. The project has led to some fantastic outcomes with one customer being £152 per week better off at the end of the programme.This discussion largely focused around delegates asking questions about the project itself, and ideas were also floated around how a similar scheme could be replicated by Welsh HAs. Key points that were raised on the Passport to Housing project: 1.5 full time equivalent members of staff supported the project and 1/5 customers go through Passport.  If Curo identified that someone was not suitable for a tenancy, they do not say ‘no’ - just ‘not yet’. The individual is then referred on to Passport to assist them with gaining the skills to manage their future tenancy. Only 58 out of 1000 individuals were told ‘not yet’ in the last year.  Curo is not licenced/regulated so they work closely with Stepchange and the National Advice Line to provide advice. They are currently looking at becoming licensed to provide advice.  The length of time that a person is involved in Passport depends on the individual and their needs.Ideas on RSLs running a similar project here in Wales: Should LAs contribute to funding this type of project?  Richmond offer 5 year tenancies and put tenants through a programme so that they do not need their tenancy after 5 years. This could be replicated elsewhere.  Collaboration is needed between HAs to understand the previous circumstances of tenants.  One account manager to manage all new tenants is beneficial in order to flag up issues sooner.  Can you make this type of support mandatory? How truthful would people be if it was forced on them?  The challenge is partnership working between LA and RSL. LAs tend to be process driven whereas HAs are focused on sustaining tenancies. How do we come together? Action: CHC will circulate the report findings of Curo’s review of their ‘Passport to Housing’ project when released in Summer 2016. This month, Curo will undergo the full digital service for Universal Credit for tenants in Bath. There was a lot of interest in learning from this and CHC will invite Curo to Wales to run a session on their experience. Discussion topic: Is social housing ‘affordable’ in Wales? Facilitated by: John Puzey, Shelter CymruThe majority of attendees indicated that social housing will not be affordable for many people in Wales in the future, particularly those that are under 35 years of age, single and those between the ages of 18-21 claiming housing costs within the Full (digital) Universal Credit system.The reasons for unaffordable social housing included: The increasing build standards, both for space and Welsh housing quality, with some referring to social housing as a ’gold plated’ new property.  Uncertainty around rent policy for the next government. One table discussed the definition of affordability and whether this should be defined around an individual’s ability to afford/pay rent or a set figure.The majority of attendees quoted similar comments on the need for greater Social Housing Grant and lower standards to deliver properties with lower rents. There was also discussion around Welsh Government allowing RSLs to potentially set their own rent levels to meet need and demand.Other views included:  Local Authorities to support RSL decisions on future lettings.  Adoption of ‘maximum occupancy’ criteria.  Trial of conditional tenancies for young people until April 2018.  Define supported housing within Wales and ensure that costs are reflective of the core services available.  Pinpoint support to those who are most in need, for example, employment opportunities, financial inclusion, digital inclusion and energy advice aimed solely at those in need.  Exempt HMO properties from Council Tax.Some discussions points that were not agreed included:  A subsidised SHG based on the rental return or applicable LHA rate.  Waiting lists not reflecting the true demand for social housing.  The responsibility to develop strategy should lie with Welsh Government, RSL and Local Authority.  Reduce core costs to maintain an appropriate rent and maximise the Supporting People Fund for additional services.  Introduce a Pay to Stay type of rent policy. Action: CHC will continue to lobby for continued Social Housing Grant and has expressed concerns to Welsh Government on how increased standards imposed on the sector are impacting on the viability of new developments. Please see CHC’s National Assembly for Wales Election Manifesto and our recent consultation response to the Welsh Government’s review of the Mandatory quality standards for new and existing homes for further information on this lobbying activity.Discussion topic: How could a Living Rents model work for Wales? Facilitator: Brian Robson, Joseph Rowntree FoundationAs poverty used to be rife amongst older people and it is now higher among working people, a low cost, low-rent social housing model is needed to overcome this problem. Subsequently, the changing face of poverty and social housing rents has driven research into a new rental model.JRF has worked with the National Housing Federation and Savills to develop a costed framework for low cost housing which aims to be affordable for both tenants and providers. The model is based on the annual survey of hours and earnings and uses the lower quartile which is roughly equivalent to full time minimum wage. This is set at 28% of earnings for each LA which is then adjusted for larger properties. In comparison, the PRS is currently set at 55% of earnings so the Living Rents model is much more affordable. The model does, however, rely on substantial government subsidy.The discussions on this topic were focused around the current rent model in Wales and ideas were suggested on how the JRF’s Living Rent Model could be adapted and implemented in Wales. Issues discussed during this session: Need to ensure MPs/AMs understand the policy and its impact, including looking at how Living Rents look in comparison to LHA. CHC should work with JRF on some potential modelling. CHC should engage with WG on the LHA calculations & BRMA. What can we do within the current rent envelope? Is a new model needed? Living Rent model could work in some areas. Does the model work within a rural context due to the higher maintenance costs/dispersed properties/low wage economy? Adjusting LHA/LR in certain areas may force behaviour and movement into poorer areas. Affinity Sutton are an example of a HA that have developed a ‘two rents model’. What are the implications of the new National Living Wage?Action: CHC will meet with JRF and look at potential next steps to explore developing a living rents model in a Welsh context. Discussion topic: Service Charges Facilitator: Linda Whittaker, NPT HomesNPT Homes are looking at reducing service charges and have engaged with tenants in their sheltered accommodation to identify their needs and ideas on reducing service charges. Should service charges be standardised across Wales? Many were of the view that it should not be standardised because of the diverse nature of services and RSLs, and the different equipment that is used to cost service charges. Service charges should be made transparent. So, for example, ‘Tenant paying X because it costs the RSL X’. In some cases (Extra Care), service charges are higher than rent. Blocks of flats are an issue of high cost due to on-going health and safety charges.Can service charges be reduced to meet LHA? There is definitely some room for movement but ultimately this will require tenant buy in. It is difficult to identify what individual services could be lost as this will vary across RSLs and their schemes. How can service charges be reduced? Ask tenants to inform what service could be cut? Tenant consultation will allow you to identify what services are valued and what could be cut. Ask caretakers/scheme managers for their ideas on how costs could be reduced. Identify opportunities to cut costs, for example, using one scheme manager across several schemes. In one example, a HA found that most tenants wanted this.  How can closer working between Housing and Health lead to a reduction in costs? Continuously look to improve procurement routes e.g. Utilities Consider in detail at the design/development stage how to minimise service charges going forward and do not automatically assume that tenants want x,y,z services.  Shared services, for example, combining the services provided (with LA possibly) such as grounds maintenance and reduce the costs through collaboration. A co-operative housing model is one solution. At Cadwyn’s Ely Farm cooperative, tenants help supply services including cleaning, grounds maintenance and volunteering to ensure minimal service charges. This can create learning and employment opportunities. Need to consider equitableness across tenants and ensure that services provided are of a suitable standard. Another issue to consider is if tenants agree at the outset but change their minds down the line and then RSL have to pick up the costs.  Coastal Housing run an ‘apprentice to Full Time Caretaker’ route.  Solar Panels can be used to fund communal areas lightingWhat can be done to ensure that service charges are fair and transparent? They can’t be anything else other than fair and transparent given the legislation, but perhaps we need to ‘demonstrate’ the fairness/transparency.  Ensure that tenants are informed in sufficient time and ensure clear dialogue and communication (legislation dictates this). When Universal Credit comes in, tenants will feel that they can challenge service charges (perhaps more so than rents).Action: CHC will produce a briefing to share data, information and examples of initiatives that are taking place across the sector in which service charges have been reduced. Discussion topic: Given the restrictions imposed on the sector by the LHA cap and welfare reform, what can IT offer to shape future business plans for housing associations? Facilitator: Neil Jones, Newport City HomesEffectiveness and efficiencies are more important than ever and, when IT is done well, it can improve every part of an RSLs business. Improving the ability to collect and access residents’ data will be key to determining the impact of the LHA changes and this requires a channel shift to encourage tenants to interact whenever possible and improve in-house services. Common issues raised during this discussion: Large amounts of data, and often more time is spent sorting through and gathering information than is spent interpreting data.  Outdated/hard-to-update data and concerns surrounding data cleansing.  Repetitive process of updating separate programmes with the same information.  Concerns over digital inclusion including broadband and Wi-Fi accessibility and provision/availability of hardware. Swathes of Wales are without reliable Wi-Fi and/or broadband.  Lack of specialist IT knowledge within the sector and new starters unlikely to receive substantial training.  Perhaps not enough focus on how tenants can be included in newer technologies.  The sector is often victim to the big companies which hinders efforts for collaboration between systems and RSLs.  Lack of integration due to large varieties of software/applications/programmes.Potential solutions that were identified: Many RSLs are moving or considering moving to cloud-based storage and technologies which allows for more effective and easy agile working and saves costs in terms of being paperless and saves space in the removal of hosting a server room.  Greater emphasis on digitally engaging tenants including utilising SMS, Live Chat, Whatsapp, etc. in place of the traditional methods of phone and email.  Incentivise the take up of paying rent by Direct Debit. One RSL gave an example of a discount of 10% to those who sign up to DDs.  Explore offline solutions to mobile working in areas with poor connectivity. For example, this might be a programme which saves work so that work won’t have to be duplicated once back online.  Be more flexible in offering digital inclusion solutions to tenants. For example, communal Wi-Fi hubs, PAYG internet usage, or set up deals with broadband providers to bring costs down. Some RSLs provide tenants with tablets to encourage the use of new technology.  Embrace and utilise new technologies. Several attendees reported that upwards of 80% of their tenants had access to the internet due to the wide ranging accessibility and affordability of smartphones. Apps are a fantastic way to take advantage of smart phone accessibilities – think of how companies such as Amazon and Ebay operate.  Joint procurement of systems and technology to take on the big companies in a united front.Action: CHC and the IT network will explore creating a directory of the systems and technology being utilised across the sector. This will enable our members to identify opportunities for collaboration or joint purchasing. Discussion topic: What can we learn from the private rented sector (PRS) in our approach to working with the LHA cap? Facilitator: Doug Haig, Residential Landlords AssociationDoug Haig, Vice-Chairman and Director for Wales’ Residential Landlords Association discussed his views on how the social housing sector could learn from the experience of the private rented sector on rent collection, arrears and property management. Doug also provided his thoughts on how both sectors could work together.How do we house young people who can only access the shared accommodation rate of Housing Benefit? Shared housing is a growing market within the PRS as more young people are finding it too expensive to rent on their own.  PRS landlords do not take on tenants without some sort of guarantor and a bond and are exclusively renting to a certain demographic or to a particular clientele. Experience from the PRS is that a number of younger tenants have some parental support to pay rent.  Rent levels within the PRS can be charged at any margin, optimising the rent depending on the property. The PRS removes the risks of rent arrears by asking for a guarantor and is not regulated by right to repair statutory requirements that RSLs have to bear. This is more difficult within the social rented sector where need and demand depends on the housing waiting list.Can RSLs continue to provide services at the current rate? Participants agreed that, despite changes, RSLs have a moral duty to house people in need. Third sector support services were considered to be even more critical and Supporting People should be about providing that extra service.General issues identified: At the moment there is little appetite among HAs to provide shared accommodation.  Shared accommodation is high risk and difficult to manage as it can require intensive management, especially for particular groups of people with extra requirements where there can be issues or challenges.  Availability of accommodation in some areas is an issue e.g. small 1 bed flats are more prevalent in some areas. Security of tenure is a major drive for people wanting to secure a property in the social rented sector. Organisations may need to go back to basics and strip away extra services that they provide to concentrate on the provision of housing. However, RSLs also fear that if they stop providing certain services they will become less socially responsible. The challenge is that there is no expectation of sharing within the social rented sector and the expectation from tenants is that they will get their own property. How can the services we offer to tenants change in the future? This requires a culture change within RSLs and also for tenants and calls for a reframing and resetting of relationships. Mitigate problems through pre-tenancy work and tenancy engagement including employment training and ensuring that people are engaging with the process.  How do we provide furnished accommodation and stay within LHA limits? Common Register currently looks at housing people in priority need and there may be a need to see how best to work within the register while giving people the opportunity to choose sharing partners. Involve people in choosing whom they share with. Perhaps create an app when people join the waiting list and people can identify others to share with through the app.  Look at schemes from within PRS which have had an impact e.g. rewarding the right behaviour through competitions. Education and training to accredit tenants could work both within PRS and social rented sector. There is a requirement or need for a change of mindset within LAs so that they can provide a facilitated process to support people in accessing, larger properties where they can rent out rooms.  Look at leasing properties from PRS and sublet to young people.  Work with third sector organisations to provide the other servicesAction: We’ve had great feedback from this session on the insight into the PRS. We’ve built up a good relationship with the RLA through the Homes for Wales campaign and will continue to work with them where relevant to identify if there are any lessons or practice that the sector can adopt, or to see if there are any potential collaboration opportunities in the form of a pilot model. Discussion topic: How can supported housing adapt to the potential changes to LHA? Facilitator: Auriol Miller, Cymorth Cymru and Dave Tovey, Coastal HousingIs the supported housing model itself relevant and fit for purpose, particularly at a time of increased funding pressures? It is time to take a fresh approach to look at need and then develop innovative solutions. These discussions looked at the benefits of devolving enhanced housing benefit to Wales and the potential solutions to developing a sustainable supported housing model.Devolving budgets and financing supported housing Devolving budgets will be beneficial to allow Wales to respond to the local problems we face.  As many players as possible need to be involved to influence how it is spent. If LAs decide on how it is spent, it may be taken up to deliver other statutory services.  The Nat Fed supported housing model is based on the English sector, but perhaps the sector in Wales operates differently? How can we influence their thinking around a new model?  Tenants heavily rely on DHP at present but we cannot continue to rely on it.  We need to consider pooling resources and pots of funding that tackle wellbeing in order to deliver a holistic approach. What external funding is available to support this?  What about enabling tenants to purchase shares in supported or extra homes schemes? There are examples where this is already offered but generally there is low take up.Cross sector partnerships The number of people that will be affected by these changes is marginal but they will be the ones that are at most risk of homelessness, deaths etc. It will therefore impact on a number of institutions and requires a cross-sector approach to mitigate.  The regional partnership boards that come from the Social Services and Wellbeing act may be an opportunity to influence health and social services. However, does this duplicate the RCC model?  Further collaboration is needed with health to utilise health budgets. It is traditionally very difficult to engage with health but perhaps we need to clearly demonstrate how housing can benefit the health sector and make the case for it. What is our collective offer to health? How can this be demonstrated at a high level and then cascaded to the rest of the sector?  Improved communication is needed between LAs, Social Services and WG with clear lines of responsibility.Physical development of supported housing accommodation Supported accommodation developments for young people, such as the traditional hostel model, is not sustainable to maintain.  Increased housing standards make it even more difficult to make schemes viable. Do we require more flexibility on standards for supported accommodation?  We need to look at physical development solutions to house those that require supported housing. Perhaps high density “bedsits” for under 35s which are small units designed for a transitionary group of people? Quality and service based on need How do we manage and maintain quality of service? How do we provide personalised services without skewing costs?  Can we scale down and restructure staffing in order to mitigate the impact of funding cuts?  Fixed accommodation is very expensive so there is a push towards floating support, but does this address need? LA and WG strategy There is a drive from LAs for general needs development, particularly for shared accommodation or one bedroom properties, but very little request for supported housing. Action: CHC will organise a meeting to consult on the findings of the ‘DWP and DCLG Supported Accommodation’ Review. In addition to this, CHC is working closely with the National Housing Federation to consult on a new supported housing model and we will organise a meeting to discuss this model in a Welsh context. Discussions from this event will help shape and feed into these discussions. CHC and PHW are also continuing to work in partnership to improve collaboration between housing and health. A report on the progress of the work undertaken by our joint-post will be circulated to members in June.Discussion topic: How can we provide housing solutions for young people under 35? Facilitator: Andrew Heywood, Cambridge UniversityCommunity Housing Cymru and the Welsh Local Government Association have commissioned Cambridge University to undertake research into the potential housing solutions for single people under 35 who are affected by the changes to Housing Benefit.These discussions provided an opportunity to gather views and ideas on potential solutions. All tables were presented with 6 options as to how to deal with the issues presented by these age groups. These options were: 1. Carry on as before, relying on DHP to meet any shortfall2. House people in the PRS3. Shared housing (to be provided by LAs or HAs)4. Development of purpose-built young people’s accommodation (like university halls of residence, for example)5. Social tenants to take in lodgers6. Anything else1. Carry on as before, relying on DHP to meet any shortfall(Andrew noted that this will cost £9.8m a year)The general feeling was that, given the size of this fund and its discretionary nature, this was neither sustainable nor practical. People said that it would be deferring the problem and not solving it. Others noted that it is already needed to mitigate the ‘bedroom tax’ so the fund will be too stretched. The aim of this policy is to achieve behaviour change around employment but this will not follow if there is a reliance on DHP.2. House people in the PRS Overwhelming concern about the PRS’ capacity, willingness and suitability to house young people who might otherwise have looked to the social housing sector. Concern among some groups about vulnerable tenants being inappropriately housed in the PRS because support needs will not be addressed. Cadwyn Social Lettings (Can Do) have to work hard to get the LA to support those people in PRS The PRS is expanding rapidly and, according to the RLA, there are high levels of satisfaction. In Cardiff, the average single room amount claimed by PRS landlords is £75. However, is the sector expanding at the same rate in rural communities? LAs’ homelessness duty means they can discharge straight into the PRS – is this sector becoming the sector of choice or last resort? Could LAs offer housing management services to PRS? In Cardiff, LAs provide floating support which is available to PRS (and others are looking into this). Can more HAs explore the Social lettings model? Can Do, Adore, etc. had subsidy from LA, but this has been withdrawn. Arrears are higher in this model so more time is being spent collecting rent, rather than adding value. Would WG consider the introduction of a Kitemark for PRS landlords who meet quality standards? Will PRS landlords be turned off the idea of taking benefit dependant people altogether in years to come? House prices are going up and reluctant landlords are selling. Cadwyn has lost 100 landlords in a year because of this.  The PRS will have to accommodate this group because the development process among HAs is too slow to accommodate them. 3. Shared housing (to be provided by LAs or HAs) Responses to the idea of HAs providing shared accommodation were overwhelmingly negative. Many had tried it and none reported long-term success. Other points that were made: Are we at a stage where self-contained doesn’t stack up and shared doesn’t work, so we don’t provide housing for young people in this situation in future?  How could Enhanced Housing Benefit be used to manage shared accommodation? Pressure on SP has been such that, in future, many supported housing schemes will be remodelled; what will we do with, say, 8 bed hostels for homeless people that become available when support provision stops because it’s no longer viable to provide support? Could these blocks be used for young people’s shared housing? Shared Accommodation Management can be outsourced.  Landlords can carry voids for a while to give tenants the chance to find housemates; however, this is not sustainable if it happens in every case. The sector is regulated on a risk basis and the highest turnover is vulnerable people in one bed properties. Is the risk of turnover in shared housing too high to take on?  Allocation policies will have to change to allow a flexible approach to matching tenants. 4. Development of purpose-built young people’s accommodation (like university halls of residence, for example) Innovative designs are needed to make shared accommodation more attractive. YMCA’s Y-Cubes was given as an example. One person noted that land is too expensive in Cardiff to do this (between £1m and £4m an acre), though it might work elsewhere. Small units like this won’t receive grant funding. 80-100% grant is needed.  This type of accommodation cannot be developed currently due to standards. A legislative direction of travel needs to change to produce exemptions for this group. 5. Social tenants to take in lodgers At best this is a marginal solution and it raises some safety issues. The ‘bedroom tax’ hasn’t seen a move to this, so it is unlikely that this policy will change that. Some RSLs already promote this and signpost to Houseshare Wales, but take-up is not great. Other points raised:A point raised throughout the discussion was that the answer to all of these problems is for young people to diminish benefit reliance by entering work. Whether this is the place of housing associations was a point for debate. For those of the opinion that this is the case, a number of ideas were provided:  Apprenticeships and build your own projects; could we look at this from a different angle? This will help young people to reach the position of being able to afford the homes. Look, for example, at the Community Self- build scheme for veterans that First Choice HA run.  Conditionality of tenure: you could look to offer tenancies to young people only if they’re taking part in an apprenticeship scheme or similar.Action: CHC is undertaking a piece of research with WLGA and Cambridge University to identify potential housing solutions for young people. Andrew, who is leading the research from Cambridge University, led one of the sessions at the event and has fed back that he found conversations extremely beneficial for his research. The report and recommendations are expected to be received in the Summer and will be shared with the sector.Other thoughts on the impact of the Housing Benefit cap to LHA that was captured across all tables Impact of LHA: The LHA impact is different for community based/LSVT organisations and those operating on a regional basis Rent is subsiding building, so if we cut the rent we can’t build. How do we justify tenants subsidising the building of homes for other people? Or do we resolve by changing the grant regime which is variable across regions/LHA areas? Richmond HA reduced services to tenants and used savings to build new homes. Does LHA mean WG should keep out of rent setting? We’ve got our own cap now. What implications are there for regulation? What impact will Local Government restructure have on BRMA? Big enough impact to change them? A better understanding of the BRMAs needed, both their designation and the Rent Officer data collectionFor further information on the content of this document, please contact Hayley MacNamara, Policy and Programmes Manager at Community Housing Cymru, on [email protected].

Facilitated By: Sarah Seeger, Curo Housing

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