Examination of Witnesses (Questions 120-139)
MR DAVID
CROTHERS, MR
BILLY GRAHAM
AND MR
JEROME BURNS
30 MARCH 2004
Q120 Chairman: Gentlemen, please accept
my apologies for the lateness. I wish there was somewhere exotic
I could tell you we had been. It was the Dargan Road Landfill
Site that kept us from you. This is our third formal evidence
session. We have spoken at great length about the Department's
work. We do not wish to substitute the Department's work but merely
supplement it and hopefully ensure that during the suspension
of the Assembly much of that work can continue and that Ministers
in Westminster take seriously the needs of the community here
in Northern Ireland. Can I start by asking the first question,
which revolves around the use of the Net Stock Model in estimating
demand for social housing. The recent examination by the University
of Ulster, the University of Cambridge and Queen's University
could lead to significant changes in the model if the Department
so wished, so can I ask you how useful you think the Net Stock
Model is in estimating demand for social housing, whether or not
you see that there is a need for any significant change and whether
you accept criticism from some of the community groups who feel
that demand for social rented Housing is not best measured by
the Net Stock Model?
Mr Crothers: Thank you, Chairman.
The Net Stock Model is a useful tool from the point of view of
providing an indication of the level of new build social Housing
required across the Province as a whole, but it is based primarily
on demographic trends so it can do no more than provide a base
line. It requires then to be augmented by other information and
that other information is to be provided by the Northern Ireland
Housing Executive. The Net Stock Model is very much a top-down
approach providing no more than an indication across the Province
as a whole. It is not area specific or site specific and that
information is dealt with from the information provided by the
Northern Ireland Housing Executive. There was concern about the
Net Stock Model and just how robust it was, and it was for that
reason that the University of Ulster and the University of Cambridge
carried out a review which essentially confirmed that the figure
was more or less right, in other words, about 1,500 new units
were required annually. In some respects I can understand why
there might be criticism of the model in that it is simply a model.
It is not identifying that there are particular needs at particular
locations; that information is derived from another source.
Q121 Chairman: What you are saying is
that it is a useful indicator but you would always expect it to
be supplemented with additional information on the ground?
Mr Crothers: Indeed. The Northern
Ireland Housing Executive is the sole arbiter of Housing need
in Northern Ireland and it is to it that we would look to provide
the information that is required at particular locations.
Q122 Chairman: You have spoken about
the difficulties in estimating need across the geographical area
because of the obvious existence of hot spots but there is another
level of need that can be identified, and that is trying to compare
Housing stress in terms of the need for family homes against the
fact that we have many more single people who wish to enter into
the social Housing sector. Does the Department agree that many
of the single people who apply for social Housing should be dealt
with in a different way or are you happy that they are still regarded
as being in need because you are talking about two very different
needs, are you not? You are talking about a change in demographics
which brings about more single people wanting social housing,
you have lots of families in Housing stress and yet they are both
measured against the same model of need.
Mr Crothers: Indeed, and that
is a difficulty. Single people make up the largest percentage
of the waiting list, some 44%, but it is by its very nature a
transient market in that there are people who come on to the waiting
list and there are people who go off the waiting list. There are
those indeed who would put their name down almost speculatively.
I am thinking in terms of elderly people who may wish to put their
name down for sheltered accommodation, so it is a difficult market
to cater for and to respond to, but from the Department's point
of view, from the point of view of the social Housing programme,
we factor into it that our concern centres around general family
housing, which makes up about 70% of the programme, and the rest
would be for singles, for sheltered accommodation, for the disabled
and other groups with special needs.
Q123 Mr McGrady: Looking at the statistics
of the social Housing build programme 1998-99 to 2002-03, there
has been a singular failure to deliver that programme to the extent
that in the last year, 2002-03, you were only building slightly
over one third of what was built in the years before that; in
other words 55% delivery, 45% shortfall. Who is to blame for that
failure?
Mr Crothers: I am not sure that
"blame" is the appropriate term. There certainly has
been difficulty in delivering the new build social Housing programme
and the reason for that is quite complex. In some respects it
goes back to the transfer of responsibility for new build from
the Housing Executive to Housing Associations. When the Housing
Executive was building it had a land bank for a large part of
the programme that it was taking forward. When that transferred
to Housing Associations, whilst there was land available there
was not a difficulty in delivering the programme but land and
site availability has been one of the major obstacles in developing
the programme in recent years. We recognise that in addition to
land there were process and procedural changes which obviously
took place in the transition but we have been endeavouring over
the last couple of years to address the problems associated with
the new build programme and we have been doing that with all the
key stakeholders. The Housing Executive has a key role to play
in this, as indeed have the Housing Associations themselves, so
in addressing the structural difficulties that we had with it
we have now reached the point where, whilst perhaps it is going
too far to say we have cracked it, this year, for example, we
aim to achieve our target or, if we do not, we will fall short
by a very small number. The reason why we are able to achieve
our target is that we have addressed all the issues that were
contributing to delays or problems in delivering the programme.
Q124 Mr McGrady: Are you saying that
there were unrealistic expectations when the transfer was made
following the 1996 review to Housing Associations with virtually
total responsibility for new social Housing build? Are you suggesting
that the upswing this last year, 2003-2004, is going to continue
into the ensuing years or do you think that the whole idea of
transferring from the Housing Executive to Housing Associations
is a bad idea and we should revert to those who delivered in the
past according to target?
Mr Crothers: We are optimistic
that from here on in we can and will meet the new build social
Housing programme. Any shortfall will not be due to problems with
the programme itself but rather with funding. For example, as
it stands at the moment we only have sufficient funds to start
1,300 units next year, but certainly on the basis of the programme
that we have now put together we are optimistic that we could
achieve that, if not 1,500 were we to be successful in bidding
for additional funds. In terms of whether or not it was appropriate
to transfer the new build function from the Housing Executive
to Housing Associations the point at issue at that time was private
finance and the ability or otherwise of the Housing Executive
to continue to build at 100% grant. The decision was taken that
Housing Associations, as has happened elsewhere throughout the
UK, have the ability to lever in private finance. Since 1991 they
have levered in £233.5 million and they have built something
of the order of 4,000 houses at no cost to the public purse. I
think we can draw our own conclusions from that despite the difficulties
that have taken place but, as I say, those difficulties hopefully
have now largely been addressed.
Q125 Mr McGrady: Could you confirm that
the annual target is currently running at or is supposed to be
hitting 1,750 social Housing new build, or is it 1,500, because
these two figures have been bandied about and we were informed
yesterday by the Northern Ireland Federation of Housing Associations
that the figure they had achieved was 1,331 or some such figure?
What is the Department doing to enable the Associations, they
having the responsibility, to meet their target? For instance,
the Department's public service agreement no longer contains any
specific target for building affordable housing. Why is that?
Mr Crothers: Part of the problem
is working on the basis of an annualised figure. With regard to
the 1,500, anyone who has been involved with the building industry
knows just how difficult it is to achieve a target like that and
in some respects it is a moveable feast from the point of view
that an individual scheme may start in one year and, as likely
as not, finish in another year, so we were particularly keen to
move away from the annualised programme. That is not to say that
we are ignoring it or trying by sleight of hand to avoid meeting
a particular target. Nonetheless, the objective is to move towards
a more realistic regime whereby we can achieve a social Housing
programme that meets Housing need. In terms of the 1,500 figure,
that was the figure that was produced following the review by
the two universities. As I mentioned, that figure is based largely
on demographic trends. It does not take account of problems in
specific areas or locations. If that is factored into the equation
the Housing Executive have come up with a figure of perhaps an
additional 250 units that would be required for any mismatching
that might take place. The reports from the universities and the
Housing Executive are currently with us and a decision will be
taken as to what is required in terms of future Housing provision.
Q126 Mr McGrady: The Housing Associations
have made the suggestion that if the Department were to reduce
the bureaucracy to which they are subjected the registered Associations
would have a much better prospect of achieving their approved
development targets. Have you any comment on that?
Mr Crothers: I have some sympathy
with that view. As part of my job I visit all Housing Associations
and certainly that is a message that comes across to me from time
to time, that we are over-burdening them with bureaucracy but,
by the same token, my Permanent Secretary is the accounting officer
for the grant that Housing Associations receive and I suppose
the trick is to ensure that the level of bureaucracy is commensurate
with the level of risk and responsibility. Certainly we for our
part will try to look at ways of reducing bureaucracy. But by
the same token the Northern Ireland Audit Office is there and
has the power now to follow public funding, to go into Housing
Associations to see how they are dealing with and spending the
money. It is important therefore that we have in place robust
systems and processes that stand up to scrutiny.
Q127 Mr McGrady: To achieve the new build
programme do you think it would be desirable to transfer a share
of the burden to other social landlords, such as the Northern
Ireland Housing Executive, or indeed Housing Associations from
Great Britain or the Republic of Ireland?
Mr Crothers: There are three key
players in the delivery of the programme: the Department, the
Housing Executive and Housing Associations. The success or otherwise
of delivering the programme is in no small measure due to the
contribution of each of those players. We have at the present
time I think 25 Housing Associations in the development programme.
Some might argue that that is too many for an area the size of
Northern Ireland given the scale of the new build programme. Perhaps
it would be inappropriate for me to comment on that but in terms
of adding to it I think I would have a view in that I do not feel
there is a need for any additional players to come in. We already
have Housing Associations here that have sister organisations
in GB Clanmil, Fold, Habinteg or Oaklee for example, which were
Housing Associations that perhaps started in England, so at this
point in time we are certainly not looking for any more players
to enter the development programme.
Q128 Chairman: Can I check on that? The
years when you were not meeting target, when 600 or 700 houses
were being built against a target of 1,500, and this year, when
you may reach 1,400 but you are still just under, have left a
sizeable backlog in the number of houses that should have been
delivered but which have not been. Are you saying that that backlog
will have to be met by an increase over 1,500 by Housing Associations
and, if so, will additional funding necessarily follow?
Mr Crothers: That is one of the
issues we are considering at the present time, but because of
the nature of the model, that it is based largely on demographic
trends, and also given the fact that there is such a high percentage
of singles on the waiting list, there is a debate in and around
the need for stepping up the programme and whether the backlog
can be calculated simply on a shortfall between what was delivered
and what the Net Stock Model was saying needed to be delivered.
The jury is still out on that issue.
Q129 Reverend Smyth: Can I press that
point again—the jury is still out? There are those who say
that some of the smaller Housing Associations who did meet their
targets because they were dealing with localised situations have
been cut out of the loop. If they were brought in again do you
think they would be more effective, bearing in mind that some
of the ones that you mentioned are fairly large Associations which
have a lot on their plate?
Mr Crothers: I am not sure that
community based Associations would be any more or any less effective
than the larger Associations. Obviously, we carefully monitor
and regulate all Housing Associations and assess their performance,
and indeed if they were not performing well they would not be
in the programme. I certainly would not be drawing a distinction
between a community or local based Housing Association and one
of the larger Housing Associations in terms of their performance,
and I do not think that the programme has been disadvantaged by
schemes being taken forward by either larger or smaller Associations.
Q130 Reverend Smyth: Would you confirm
or reject the suggestion that some of the smaller ones have been
cut out of the loop for providing social housing?
Mr Graham: David mentioned that
there were 25 Associations currently in the building programme.
If you take the five big ones out of that, 20 of the smaller Associations
who are currently contributing to the programme. Associations
are not generally taken out of the loop unless Audit has identified
a problem with them and then we hold them out of the programme
until such time as they get themselves back into favour, but I
do not think anybody has deliberately been cut out at the moment.
Q131 Reverend Smyth: There are those
who say there are some 39 Housing Associations, so that is 14
that do not seem to be involved. Is that right?
Mr Graham: A number of those Associations
would be focused on particular need groups and once they have
met that particular need they no longer need to build. They would
be Associations that have been focusing on people with learning
disabilities and so on. If they have met that particular need
then we would not expect to see them in the programme.
Q132 Reverend Smyth: As the Chairman
has pointed out, there seems to be unmet need from the past, no
matter what may happen with changing demographic circumstances
in the future. Are there any short term measures that could be
taken to address the need for social housing?
Mr Graham: David has already referred
to the fact that the budget that we have is already being totally
used. We do not have any scope to be taking any new initiatives
to increase the numbers. In the previous years that you have mentioned
we spent our money to the full. Even though we only achieved 900
starts in 2002-03 the money was spent. In the current year we
are already up to over 1,400 and the money will be totally spent
this year. David mentioned that we might not quite achieve the
target but the money will be spent. We have introduced initiatives
such as buying existing satisfactory houses so those houses are
available immediately to put people into, but a factor that we
have not focused on yet is the waiting list and the fact that
on the Northern Ireland waiting list the average waiting time
is nine months for a house. That conceals the hot spots of people
who have been waiting a lot longer than that, but nine months
is not a long time to wait on average for a house.
Q133 Reverend Smyth: Members of Parliament
in Northern Ireland would say that a lot of folk are on for much
more than nine months.
Mr Graham: Yes, there are hot
spots, but the bulk of people are housed within a very short period
of time.
Reverend Smyth: In April 2001, as I understand
it, the Chartered Institute of Housing urged the NIHE and the
DSD to publish the consultants' report that had been commissioned
as a research project to examine future options for investment
and management of social Housing in Northern Ireland. You did
say earlier that the Department is considering something at the
moment but they have had this report for some three years now,
is that right, and it has not yet been published?
Q134 Chairman: That is the Chapman Hendy
report.
Mr Crothers: The Chapman Hendy
report has only been produced within the last couple of months.
The Chapman Hendy report looks at the various stock options available
to the Department in relation to the Northern Ireland Housing
Executive, looking at, for example, large scale voluntary transfers,
arm's length management companies, etc. It is a very technical
document. It was for that reason that we referred it to the Departmental
Economists and we are currently awaiting a response from them
to that report, following which it will be sent to the Department
of Finance and Personnel for them to consider, but I assure you
that we have not been sitting on our hands on this one. It was
only received within the last couple of months.
Q135 Chairman: Can we check those dates
because the report was commissioned in October 2000? This is the
report we are talking about?
Mr Crothers: I am not aware of
the exact date but certainly it has taken a long time to produce,
as much as anything because of the changing situation nationally.
We were anxious to ensure that all the models were taken into
account, so it did take quite a while to produce.
Q136 Chairman: The Chartered Institute
did urge in April 2001 for the report to be published, so it must
have been in a shape or form by April 2001 where the findings
could have been shared.
Mr Crothers: No, that is not the
case. I am just wondering whether we are perhaps talking about
different reports.
Q137 Chairman: This is the HACAS Chapman
Hendy report.
Mr Crothers: Various drafts have
been produced along the way but at no stage were we in a position
to publish a report or to issue a report for discussion or consultation
because it was still being worked up.
Q138 Reverend Smyth: Is that because
the Department were not happy with what they were reporting and
were asking them to go over it again? Could you tell us what are
the main conclusions that have been reached already because, although
it is going to the Department of Finance and Personnel to look
at you would at least know some of the main findings?
Mr Crothers: In no shape or form
was the Department trying to influence the findings of the report.
The Housing Executive was probably the main player in setting
the terms of reference and factoring in all the relevant information
to the report and to the various models that needed to be looked
at. As to what the main findings of the report will be, I can
say at this stage that it will be as likely as not the status
quo in that the Housing Executive is fulfilling an important role
in terms of both its strategic function and its landlord role.
The main reason for going down the large scale voluntary transfer
route and ALMOs was because of the condition of local authority
Housing stock, and I think it is generally acknowledged that in
Northern Ireland we are blessed with Housing stock which is in
good condition, so there is not the same pressure to go down the
route of, for example, a large scale voluntary transfer.
Q139 Reverend Smyth: Can I be clear that
you are saying that the Housing Executive, when the drafts have
come forward, have sent them back and the Department at no time
has seen them until they have been presented now?
Mr Crothers: No, I am not saying
that. We would be party to them and I have certainly attended
meetings at which issues have been discussed, but these were largely
technical meetings about the models to be looked at, about the
impact of various changes in government policy that need to be
factored into it. We are at one, I suppose, with the Housing Executive
on this, in that it is as much our report as it is theirs, so
if there is any blame in the delay we too would carry some of
the responsibility for that. It was not a concealing game. We
are not seeking to hide behind the delay in the production of
this report. There is nothing in it that would give us cause for
concern.
Reverend Smyth: I want to be clear because,
as I understand it, it is the Department's position to set the
policy. It is then up to the Northern Ireland Housing Executive
to implement it, mainly through the Housing Associations.
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