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UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 1 House of COMMONS MINUTES OF EVIDENCE TAKEN BEFORE NORTHERN IRELAND AFFAIRS COMMITTEE (NORTHERN IRELAND AFFAIRS SUB-COMMITTEE)
Social Housing Provision in Northern Ireland
Wednesday 24 March 2004 MR KIERAN WALSH, MR TONY RUDDY and MR JOHN PERRY Evidence heard in Public Questions 1- 52
USE OF THE TRANSCRIPT
Oral Evidence Taken before the Northern Ireland Affairs Committee (Northern Ireland Affairs Sub-Committee) on Wednesday 24 March 2004 Members present Mr Tony Clarke, in the Chair Mr Roy Beggs Mr Stephen Hepburn Mr Iain Luke Mr Stephen Pound The Reverend Martin Smyth Mr Hugo Swire Mark Tami ________________ Memorandum submitted by Chartered Institute of Housing in Northern Ireland Examination of Witnesses Witnesses: Mr Kieran Walsh, Director, Mr Tony Ruddy, Chairman, and Mr John Perry, Consultant, Chartered Institute of Housing in Northern Ireland, examined. Q1 Chairman: Gentlemen, you are very welcome. We have a number of questions. Obviously we are delighted that you have been able to join us to talk through your views on Northern Ireland's housing needs. This is the first formal evidence session that we have taken. For the record, on the first occasion you speak, would you give your name. I will begin by asking some general questions. At the moment, Northern Ireland uses the net stock model for looking at the demands for social housing. How robust do you think that net stock model is? Mr Walsh: My name is Kieran Walsh and I am the Director of the Chartered Institute of Housing in Northern Ireland. John Perry is a policy adviser with the Institute and Tony Ruddy is the Chair of the Northern Ireland Board and Policy Board but is also Director of our housing association and that is the delegation before you this morning. The net stock model is a model that was developed by the University of Ulster in 1994. It is really a projection of household formation against population size and an over-arching figure on the number of social housing properties that are required. The net stock model has been re-evaluated quite recently by a team from the University of Ulster, the Queen's University Belfast and the University of Cambridge, and assessed against the most frequently used model here in England and indeed Wales which is the headship tenure model which is based on average age quartiles against population projection as well. Those two models actually show that there was great consistency and the figures came out at around 1,400/1,500. There are a number of people who would suggest that the net stock model is not a correct and useful model bearing in mind that, three years ago, the application of the same model suggested that, in Northern Ireland, we needed 2,100 units and the population has in fact increased from there. So, there are a number of assumptions that have to be made. The recommendations from the report recently suggested that it needs to be reviewed every two years and I think that is a way of keeping on top of how relevant the over-arching figure is. The most important thing is the bottom-up approach to local housing need is and how it dovetails with the over-arching figure and both of those elements would in fact lead to a robust assessment of what the actual figure would be. We are suggesting that that need is about 1,750 to 2,000 units per year within the next ten years. Q2 Chairman: You are correct in saying that, if you look at the original model and even that that was reassessed, the difference in housing need changes from, say, 1,500 to 2,000, but you also may be perhaps not surprised that, when you asked tenants bodies and community groups, there is a feeling that that is an under-estimate and that the net stock model does not recognising housing stress and does not recognise the true level of need and does not recognise overcrowding and the need for particularly young families to move into their own accommodation. Do you think that the recent re-examination took some of those issues into account or do you think there continues to be a difference of opinion between the net stock model's count and the expectation of the community? Mr Walsh: I think the real issue here is the short-term needs that there are within individual communities against what the net stock model is trying to do, a long-term projection of what the need would be and whether it is achievable over a period of time. If you look at the actual waiting list for accommodation, it is 27,000 of which over half are deemed to be in housing stress, then it is very easily argued that the actual need is to find accommodation for 16,000 people who are now assessed or families that are assessed to be in need, but how that is going to be achieved over a period of time to meet continued need based on the population projections is the responsibility of both the department and the Housing Executive. I would support some of the reservations that many of the (?) groups and tenure groups would have because there are a number of assumptions that have to be made in the application of the model because it is not an exact science. As I say, the application is both the top-down approach through the model approach, both the headship tenure model that is used in England with the net stock model plus the bottom-up local community needs which I think is in fact hitting a balance. When the various community groups and others were invited to contribute to the research because there was a semi-structured interview process as part of the university's research, some people raised criticism of the model. Very few people actually came up with any alternatives that would in fact give a better application of what in fact would be the projected need over a period of time and, in the absence of something much more robust, I would have thought that the decision to both apply the net stock model and the headship tenure model on the top-down approach with the bottom-up local community is the best we have thus far. Q3 Chairman: Even taking into account that very short discrepancy between 1,500 and 2,000, what we do know is that, whatever the need is, the repeated failures year on year to meet social housing building targets is putting a lot of stress on the waiting lists. What is your view about that repeated failure? Who is at fault? Mr Walsh: A decision was taken back in 1997 that the new-build providers of new social housing in Northern Ireland would be the housing association movement and the point we have made in our summation is that it is not because the association movement had asked for that or that anybody believed that the associations could deliver that programme better than the Housing Executive was the reasoning behind that. It was solely because the housing association movement, because of the structures and organisation and how they were able to access private moneys but with the way in which the Housing Executive is established, any private funding it would have to raise would reflect in the public sector borrowing requirement. Therefore, this was purely to enable the public sector allocation of capital moneys for new build to be stretched further because the associations have been able to bring in private finance. Last year, for example, the new-build programme was £60 million. The associations were able to levy in a further £35 million. The department would not have had the £100 million to allocate to the Housing Executive to enable that to happen. It would require a change in the structure and the make-up of the Housing Executive to enable that to happen. That is a piece of work that we have been looking at in the past and my colleague, John Perry, had in fact presented to the DSD Committee a number of delivery options that could in fact look at how the new-build programme could in fact be delivered outside of that narrow constraint over the Housing Executive or housing association. Mr Perry: I am John Perry from CIH. Before coming on to that, I just want to make a point about housing investment levels generally. It is interesting to compare the trends in Northern Ireland with the trends in England. Until the last three years or so in England, the trend level of public investment in housing has been going down very sharply, right from the mid-1970s to the end of the last century, if you like. Whereas, in Northern Ireland, housing investment kept up at high levels throughout the 1980s and it was only then that it started to decline. That is why the Executive was able to build a lot of houses and meet the housing need during that period and, to some extent, why the capacity has fallen off since then, the investment levels have not been high enough to sustain the programmes that are required. Q4 Reverend Smyth: You did say that it was to free up the Housing Executive because they were not in a position to borrow, but how far was it also to try to do away with the combining of some of the smaller housing associations which would not have been in a position to do that? Mr Walsh: I do not think that that in fact has happened because we still have 38 housing associations operating within Northern Ireland. These associations have not in fact amalgamated to any great extent. There have been a number but they tend to have been local community based where there has been an ongoing association where economies of scale have been able to meet. This was not part of an agenda to try and drive down the number of associations to 10 or 12 or whatever. We still have 38 associations but each of the associations had to decide whether or not they want to play the new game by the new rules and many of the associations decided that they no longer wished to compete in the private sector new build to take on board that development role. Others actually decided that they would remain with the special needs niche, for example a number of the homeless housing associations, but we have a situation where around 12 or 15 associations did in fact then decide that they wanted to be part of the development programme and they wanted to be in a position to bid for new-build schemes and those new-build schemes were, for many of the associations, outside of their normal geographical area of association. So, if there was some unwritten policy direction that this would lead to an amalgamation or group structures being formed by associations, that in fact has not been the experience and we still have 39 housing associations operating in Northern Ireland. Q5 Reverend Smyth: Some of them have grown. Mr Walsh: Yes because a number of them have actually shown that they have been able to participate in a new-build programme with gusto and have developed those skills to enable them to do that. If you look at the scale, we are talking about in total, the 38 housing associations have a stock level of less than 25,000, so the average amount of stock is less than 500. There are only six associations that have more than 1,000 units and more than 60 per cent of the stock is held within the five largest associations. So, they would have the knowledge, skills and wherewithal to be involved in much more of the development process than many of the locally based ones that would not necessarily have the skills. Q6 Reverend Smyth: Have any of them been using the DSD and others, encouraging the private sector through the PFI to build substantially new housing? Mr Walsh: Any of the individual associations? Q7 Reverend Smyth: Yes. Mr Walsh: PFI is one of the options that associations have. Q8 Reverend Smyth: What I am getting at is, is that being done through the Government or through the Housing Executive which is not supposed to be involved in that sort of building or is it the housing associations? It is usually PFI and I am thinking of that particularly in South Belfast. Mr Walsh: The new-build programme is led out by the Housing Executive deciding what that programme of need would be because of the net stock model, what the local demand would be and setting out a programme. One of the deficiencies of how this was done in the past is that it was a three-year programme and that three-year programme meant that, when there were difficulties with land acquisition, availability and cost, the lead-in times to actually start on the site meant that there were slippages outside of that programme which has led to a reduction in the number of starts in any particular year. The Housing Executive then determined that it was up to the department to then agree that programme and they then give it out to the associations. There has, as the Chairman has rightly said, been a number of difficulties in relation to achieving the target, particularly since 2000 where the number of completions have dropped significantly from the early years because the associations delivering the programme have very much achieved the target. However, I have to say that the problem is not simply because of a single issue in relation to the associations not being up to it. The department, the Housing Executive and the housing associations have got together as a tripartite group to identify the difficulties and one of those things is to extend the rolling programme to five years to allow slippages and to allow advances within a programme because the short three-year timeframe was in fact causing a difficulty. Q9 Mr Pound: My question follows on from what you were just saying. I think it was back in 1996 that I was part of the policy review that decided to step back from new build and vested that responsibility with RSLs, housing associations. I appreciate the point you have just made particularly with regard to perceptions that they may or may not be up to it, but are you absolutely confident on the record that housing associations, RSLs, can actually meet the demand for just under 2,000 units per annum in the future? Mr Walsh: As a professional housing body where our membership base is individuals within Northern Ireland, it is not for us to suggest that the Housing Executive is a better model for delivering than the associations. The most important thing for us is that the number of properties are delivered in the most cost-effective way providing value at a time that meets the needs of the community. So, I am not here to articulate that the housing association is a better delivery model, but what we have done, which is why I was bringing John in, is that we have suggested to the department that there are ways and options of changing the structures with the Housing Executive that would allow it to borrow and would allow it to actually have access to private moneys without unduly sacrificing, which is why we believe Northern Ireland to have been one of our successors within the last 30 years of the troubles within our own community because of the developments vested in the Executive as a strategic housing authority which has very largely depoliticised housing as an issue, but the existing rules do not allow the Executive to have access to the private funding without impacting on the overall borrowing. Q10 Mr Pound: I appreciate that and it very much parallels the situation in the rest of GB where it was felt in many cases that local authority housing providers were not so cost effective, there were cost overruns, you know the story, and that RSLs were better at commissioning and better at keeping to timetables. I think we have moved a way from then and you are in a unique position from where the three of you are sitting. Are you able to say in your opinion whether you feel that social housing provision should, at least in part, revert to the Northern Ireland Housing Executive? I appreciate that is a political rather than a professional question. Mr Perry: I think when we tried to open up the discussion about the future of the Executive about three years ago, what we had in mind was more of a mixed economy for housing investments in the Province because it seems to make sense to make use of the expertise in the Executive as well as the expertise that resides in these associations rather than to have either one or the other and, as Kieran was explaining, one of the difficulties with the associations is that only a handful really have the capacity to undertake new development. So, given that you have quite a sizeable job on your hands and limited capacity, it would seem to us that it would make sense to try to use all of the mechanisms that are available rather than just one. Q11 Mr Pound: Who has responsibility for strategy oversight and Province-wide policy formulation at the moment? Does anyone? Mr Walsh: Policy formulation rests with the department, but the Housing Executive have an overall responsibility in tackling housing need. So, they have to bring forward a programme that the department then agree and then allocate and issue and monitor with the associations. Each of the associations is actually going to the private market to borrow to supplement the actual capital grant, but they are actually going with limited appeal to lenders because their stock levels are quite small. If the Housing Executive with a stock base of just less than £100,000 was actually going to the market with that asset base to be able to borrow to complement an overall strategy for Northern Ireland, I think more attractive rates of interest would be forthcoming that would allow the development to happen and even the allocation and building could in fact continue with both an amalgam of the associations with their local community involvement and the Housing Executive, but there has been a central pot actually established on the basis of the collective asset that would allow borrowing to be much more attractive rather than individual associations competing for individual schemes. Q12 Mr Pound: I think you mentioned 38 associations. Mr Walsh: Thirty-eight associations, yes. Q13 Mr Pound: Is there an approximate average for the number of units in management and ownership in each of those or do they vary massively and dramatically? Mr Walsh: The largest five account for 60 per cent which is 25,000 units. Mr Perry: May I just add something to your question about the strategic role because, as somebody based in England rather than in Northern Ireland, it does seem to be an interesting issue for the Committee to investigate. The Executive has built up a strong knowledge base, probably stronger than its equivalent bodies in England, Scotland and Wales. So, I do think there is an issue about where the strategic responsibility lies in practice. It seems to be determined quite strongly by the Executive because of the research work and policy work that they do. Q14 Mr Pound: Is the Institute drawn into this process? As the practitioners and professionals, are you involved in consultation on policy formulation? Mr Walsh: Yes, we are and, in the past, we have given evidence to the Social Development Committee as well as working on particular projects for the department and others over specific matters, but we are an honest broker in that process in that we are not in one particular camp or another but the important thing is the well being of our community and that is the overriding mission that drives the individual members of the Institute, which is an individual professional body, it is not organisational, so it is not as if the Housing Executive or individual associations join the Institute, members of those organisations join and that is what the strength of the Institute is. Q15 Chairman: Mr Perry, it was mentioned that you made a number of recommendations to the department. Of course, the department is not in a position to respond to those at the moment but could we ask for those to be repeated to us in order that we can put those to ministers as part of our inquiry. Mr Perry: What would probably be helpful is if we arrange to send you a copy of the paper that we produced at that time. What we were really trying to do was to open up the discussion about the future of the Executive because it was known that, at that time, the Executive itself had commissioned studies looking at options, which I do not think were ever made public. So, we were trying to draw them out, as it were, and have a debate about the future of the Executive really looking at it in relation to the sorts of models that were being examined not just in England but in Scotland as well and seeing whether any of those models might be appropriate in the Northern Ireland context. Chairman: That would be very helpful. Q16 Mr Beggs: Are there any short-term measures that could be taken to address the need for social housing? Mr Walsh: I have to say that the housing segment of the department and the associations coming together have endeavoured to address those short-term measures. One of those has been the introduction of the acquisition of satisfactory housing scheme which has allowed the associations to go into particular areas of high demand to acquire properties which has been able to tackle local need to supplement the shortfall in the new build. In our paper, we have suggested that that has been useful and welcome but we view this only as a short-term solution because it could have long-term impacts for issues of affordability and indeed mixed tenure in certain areas. I have to say that the department, the Executive and the associations coming together have very clearly identified what the shortcomings have been in relation to land cost, land availability and long lead-in times that have led to the current crisis in the number of completions in any particular year. Action has been taken across a wide range of areas. For example, the Housing Executive's role in land assembly, the longer lead-in time and the roll-on programme etc which I think will ensure that, over the short term, the associations will get back on track about delivering the number of properties that the programme and the funding is there for. Q17 Mr Beggs: In April 2001, the Institute urged the Northern Ireland Housing Executive and DSD to publish the consultant's report of a jointly commissioned research project examining the future options for investment and management of social housing in Northern Ireland. Almost three years later, are you concerned that a report, that was the HACAS Chapman Hendy report, looking at this vital area has still not been published? Mr Perry: Yes. That is what I was referring to earlier. We tried to draw them out with the paper that we published. We suggested that there were five or six different options for the future of the Executive, not that necessarily any of them was a particularly better option than retaining the status quo, but we felt that they were worth examining to see if there were pros and cons about heading in different directions. I think we regret the fact that there was not a debate about it, that this consultancy report was done but that there was not a subsequent discussion. Q18 Chairman: Did they give you reasons why they were not willing to put it in the public domain? Mr Walsh: No. Q19 Reverend Smyth: You have already outlined the reason for changes from the Housing Executive funding in the past, but I want to press you. Is a traditional model of direct public intervention more likely than the current mixed funding regime? Is that more likely to ensure that social housing new-build programme targets are hit? Mr Perry: In a sense, yes, but only if you assume that there are no constraints on public expenditure and this is the difficulty, is it not? In the English context where housing associations have engaged in quite serious volume in new build and are building far more than they were prior to the introduction of private finance in the late 1980s, they have now drawn in over £30 billion worth of private finance to supplement the public finance that they can get. You can have an argument about whether the division between public and private finance is right but, given the framework that applies across the UK, there is no doubt that more houses are being built with the available money through that model than would have been the case otherwise and the same applies in Northern Ireland. Mr Walsh: Could I add that we are also in a situation where, because of the robustness of the house sale scheme that the Housing Executive operated for some years, they were able to ring-fence that money to be redirected into their own budget but, over the last number of years, that has not been the case. So, it is interesting, for example, that the Housing Executive returned £35 million back into the Northern Ireland public expenditure purse for allocation across other departments and that is the same level of funding that the associations have had to pull down for private finance. That money has in fact been lost to housing per se. It is still being used in other parts, in hospitals, in schools and there is still an issue there, but that there is still the equivalence up to the level of funding we have had to acquire private funding for. Unless you are in a situation that we were able to say that the public funding was going to be there to offset the requirements that are needed for new-build capital improvements and other expenditures, then, unless there is some sort of supplementary private finance coming in, I do not think that we would see a return to those days that the public purse on its own could support the social housing provision. Q20 Reverend Smyth: I take it that the social housing provision see the public sector and rents have been applied back in maintenance grants, improvements, repairs and so on or has that also been siphoned off? Mr Walsh: No. The Housing Executive have to put forward their own plans of what their budget requirement is on maintenance and repairs and other revenue costs. On capital costs, they actually need to pull down moneys from the allocation that they get from the department and from Treasury and therefore the Housing Executive's overall spending plan, both revenue and capital, is supplemented by the income from rents but also from, on the capital side, the house sales but also the sale of other properties and land that go to supplement that. There is an assumption on the number of properties that are going to be sold by the Housing Executive in any one year that will be ploughed back. Any moneys that are gained over and above that figure are ploughed back into the Central Treasury. That figure last year amounted to £35 million, over the last number of years, has amounted to about £150 million pounds. Q21 Reverend Smyth: Would I be right inferring that you would argue that there is a case for ring-fencing capital and rent to maintain a vibrant social sector? Mr Walsh: The Housing Executive, unlike many of the local authorities in England during the same period of time, were able to benefit from ring-fencing that capital allocation, if we were able to return to that, and I do not believe that there is a will within the Treasury within Northern Ireland to allow that money that has now been used for other areas of social provision like hospitals, education etc, that they would want to lose that windfall that helped supplement other areas of need and I cannot believe that the Department of Social Development would win that argument of finance. Q22 Reverend Smyth: I understand that answer but that was not the question that I asked! Mr Walsh: I think there are some things that are worth fighting for with the likelihood of winning, but I cannot see that we would win that, no matter how much we would like to be able to say that that should be ring-fenced. I think realistically, in the climate we are operating from, that money would simply not be ring-fenced for housing alone. The argument has already been lost in England where many of the local authorities where maybe there was not a demand but the capital values of the properties were not able to simply hold on to that money but it had to go back for reallocation. I cannot imagine that the situation in Northern Ireland would be allowed to be different when that windfall from house sales can help supplement other areas of need. Mr Perry: There is an argument in England for doing what is done with capital receipts because you are robbing Peter to pay Paul. You are redistributing whereas the big advantage in Northern Ireland is that decision-making is centralised. It is a disadvantage in some respects but, in this respect, it is an advantage. I think what we would advocate is at least transparency, so that if a certain level of receipts is coming in that is being used for other purposes, then that is an explicit decision rather than just something that is fudged, which is the case both across the other side of the sea and on this side of the sea. Q23 Reverend Smyth: I am thinking of one particular contract going on at the moment, or at least I hope will be going on at the moment, and, in that contract, they refer to 20 per cent for social housing. In the light of your understanding, is that something that the Housing Executive has had placed upon them because they were building on land owned originally by the Housing Executive or is it window dressing for the good in the knowledge that, in the end, the properties are going to be developed? Mr Walsh: I do not know the specific scheme but I would have to say that it would be incumbent on the Housing Executive to try and make best value of the assets that they have. For example, if they had land in an area where they did not necessarily have a social housing need but there was a private developer who was able and willing to come on to develop, for example, owner-occupied properties and there was some sort of planning gain in that, as part of that development, 20 per cent of the number of properties would be allocated to social housing and, by doing that, that would not affect the capital funding from the department to the associations to deliver that and if this is packaged in such a way, I would have thought it would be good practice on the Housing Executive to make best use of the land where they could in fact do that by looking at mixed tenure, mixed community and maybe mixed household types. Q24 Reverend Smyth: Of course, you did use the qualification if there was no social need. The issue of course, as your long-term experience would know, is that you do not have housing waiting lists because there is no availability of housing and there is no point in people putting themselves on that waiting list when they know there is no housing. Mr Walsh: Yes. Reverend Smyth: We have been in this world for a long time and we know the issue. Can I press you a little further. What opportunities exist for private finance to contribute to addressing the demand for social and affordable housing in Northern Ireland? I take, for example, my own constituency where some of the housing costs have gone up tremendously and young professionals find it difficult to even get on the first rung. What do you think might be done to help through private finance? Chairman: Mr Walsh, we are going to leave you to ponder that answer! The Committee suspended from 4.16 pm to 4.37 pm for a division in the House Q25 Chairman: Mr Walsh, when we were rudely interrupted, the Reverend Martin Smyth had just asked you what opportunities existed for private finance to contribute to the demands for social and affordable housing in Northern Ireland. Mr Walsh: I think the Reverend Martin Smyth was referring to the escalating property values within his own constituency in South Belfast that is putting those properties outside of the normal mortgage and mortgageability of young people to get a first step on the home ownership ladder and it still remains the preferred option and aspiration for most people to become a home owner. There has been a scheme in Northern Ireland that has been in operation for some 25 years now that has aided some 18,000 people to gain a first step on the road to owner occupation through the co-ownership scheme. As I have said, they have helped 18,000 people, bearing in mind that 38 housing associations have a total stock of just over 23,000. One housing association, the co-ownership association, has in fact helped 18,000 people who otherwise would have no other recourse but to apply to the Housing Executive for social housing accommodation. It works as a part-buy/part-rent scheme. There are maximum property values and, within Belfast for example, the maximum property value is £102,000. The average purchase price throughout Northern Ireland is now peaking at over £100,000 for the first time and, in your constituency area, Reverend Smyth, many of the properties are much, much higher than that. There needs to be an opportunity to amend those property values to more accurately reflect local markets and not just the wider council area markets. For example, if there are hotspots within particular councils, like in areas of South Belfast, there could in fact be a point at £140,000, for example, which would allow some of the people in your particular area to have access to accommodation to remain within the community in which they are currently based. That ownership scheme can be made more strategic. I think it is one way that will allow people to get access to owner occupation who otherwise will add to the pressure for our waiting list. Q26 Mr Hepburn: Is 100 per cent of the capital received reusable? Mr Walsh: No, up to a particular level. I am sorry, are you talking about co-ownership? Q27 Mr Hepburn: No, I am talking about the money received from the sale of social housing. Is 100 per cent of that capital received reusable? Mr Walsh: In the past it was but, over the last number of years, they have put down a marker of how much they would hope to achieve through house sales and anything over that which is a capital gain above that particular target is actually ploughed back in. Q28 Mr Hepburn: Is it 100 per cent of the sale of the property? The council sell social housing and an individual house is worth £50,000. If they sell that, does that £50,000 get used immediately, all 100 per cent of it? Mr Walsh: Yes, up to the cap that they have. If £50,000 is the value of the property that has in fact been sold, depending on whatever discount the tenant has been entitled to because the discount in Northern Ireland is £34,000, which is only capped from two years ago and, prior to that it was 60 per cent and there have been occasions where properties have been sold by the Housing Executive to sitting tenants that were valued at over £300,000 because of the land around the particular property and the development potentials but people were entitled to discount. All that money is ploughed back into the capital allocation up to a certain cap. So, if it is anticipated that there will be 4,000 house sales that will generate £30 million, then that £30 million is deemed to be part of the allocation that is going to the Housing Executive for that year. Anything above that which is the capital gain above that - more than 4,000 properties have been sold, last year there were nearly 6,200 properties sold - that money actually goes back. So, it is 100 per cent up to that level that is taken to be the capital receipt. If, for example, next year there were only 3,000 but it was anticipated that there was going to be 4,000, it would be interesting to see whether or not the DSD would be able to give additional funding to allow you to enhance the level of funding because of the shortfall. Q29 Mr Luke: Just to pick up on some of the issues which Stephen has raised, one area of housing that is controversial on both sides of the water is the whole issue of the house sales scheme. I understand that the Executive has sold more houses than are being built and you have mentioned the figure of 6,000, so a housing area district every year has been sold off. You have made 11 recommendations to the Committee about changes relating to the reform of the house sales scheme. Is there any evidence that the changes you are proposing will have a significant effect on addressing this lack of social housing or the real need and the growing need for social housing that there is in Northern Ireland? Mr Walsh: I think the obvious answer to that is "yes". If you are losing 6,000 units of accommodation each year at a time when you are building 1,000 units, the net loss is 5,000 units. It is not rocket science to then recognise that if the Housing Executive has an asset base of 95,000, if they continue to lose 5,000 units a year, in ten years, their stock level is 4,500 units. We cannot continue to run a scheme whereby there is a net loss to the social housing provision at a time of escalating waiting list. We have been arguing that it becomes much more strategic in that it is used as a way to develop mixed tenure, it is used as a way to retain particular types of accommodation that are in short supply in areas of high demand and it will encourage people who want to exercise their right to buy to maybe move out and buy another property in the private sector, but leave the social house, leave the Housing Executive or housing association house, for allocation to someone in need, someone who is in a hotel or in some other temporary accommodation who are homeless. I think that if we continue to simply argue that it is equitable to give all tenants a right to buy, the consequence of that policy is that we will no longer have provision to actually meet those needs. The home ownership taskforce that was established by the Office of the Deputy Prime Minister under the chairmanship of Baroness Dean recognised the shortcomings that there were in relation to house sales scheme, the issue of demand, how it needs to be linked better in to the rent(?) acquired that is available to housing associations and how they need to look at other ways of trying to develop mixed tenure in areas. For example, equity loans. One final point I would make is that the Institute in its presentation to the Department for Social Development Committee made the recommendations into the changes and the review of the house sales scheme that would be required in Northern Ireland. In the report from the DSD Committee, they commented that a review should be undertaken in line with the recommendations made by the CIH. In the second reading of the Housing Bill in July 2002, the then minister, Mr Dodds, actually again made reference to the recommendations that the Institute had made to the Committee contained as part of that report for the requirement for review of the house sales. While we have heard that this review is due, we do not know when it is likely to happen, what the brief is going to be and who else is going to be involved in that, but we welcome a strategic look at how house sales will impact on the future demands. Q30 Mr Luke: Is it your belief that this policy of promoting home ownership has been done at the expense of ruining the social housing in the Province? Mr Perry: The difficulty is really this blanket approach, whether it is this side of the Irish Sea or your side of the Irish Sea as it were, and what we are advocating is a much more selective approach. There is nothing wrong with selling houses to sitting tenants but you need to do that in a more strategic way, decide which areas would benefit from mixed tenure and which areas would be under such intense pressure for social housing that there ought to be an embargo on further sales. There is also the argument from supporters of right to buy that the people who are buying would stay in those properties anyway, so they would not really become available for letting to the Executive, but the fact is that some people would buy elsewhere and those that would stay would eventually move. So, if you are pursuing a right to buy policy over a long period of time, you do lose real potential re-lets and now, as it were, the chickens are coming homes to roost. Mr Walsh: This was also a policy issue for the Scottish Parliament in that the house sales were a particularly emotive issue in Scotland and it ended with a capping of the level that was seen to be not a capital gain at around £12,000 and excepting geographical areas on the basis of the map and therefore looking at how the roll-out has been strategic, to encourage it in areas where you are looking to increase mixed tenure but to prevent it happening in areas where particular properties are in short supply. In Northern Ireland, they are arguing about extending and including in the Housing Order the right to buy to housing associations on the basis of equity that, if you are a social housing tenant, you should have the same rights. It is interesting that, under the existing scheme, properties that have been built or allocated exclusively to elderly people are exempt from the scheme. So, you cannot argue that it is going to be equal for everybody but not elderly people. You need to actually have a fundamental look at what all the issues are on a scheme that is applicable. We also have to recognise the sensitivities that there might be in the operation of the scheme in Northern Ireland because, in areas of higher demand, it could in fact be Catholic areas and Protestant areas and you may in fact be developing a policy that might be seen to give undue bias towards one section of the community against another. So, the equality issue has to be very much to the fore whichever scheme is actually brought forward. Sometimes it is easier to be seen to fair to everybody rather than have something that is strategic that is going to be in the long-term good to all of us. Q31 Mr Luke: On the point you made about the actual resale, it is my understanding that 25 per cent of the social housing has been sold on and that has an impact on what can be seen as affordable housing stock. Mr Walsh: Yes, that is right because of the resale of properties that have already been bought. It does deal with affordability in certain areas because of the resale value but there are ways of actually looking at other models that would allow that to happen through transferable discount to enable a person to actually move out in order that you retain the particular property for allocation. It cannot be one policy, it has to be strategic on the basis of how that would benefit our whole community rather than just small areas. Q32 Mr Hepburn: I will ask you these questions en bloc because I am conscious that there could be a vote at 5.15. As far as the Northern Ireland Housing Executive is concerned and the sale of properties which is obviously causing some concern, what implications does it have on the role of the management in general of social housing and what effect on the role does it have on the Northern Ireland Housing Executive? Also, traditionally, I believe that the Northern Ireland Housing Executive had a role in community development in tackling anti-social behaviour; how has it affected that particular situation? Of course, like everywhere, I am sure that a greater number of houses have been purchased rather than flats; what sort of effect has that had on rehousing of families? Mr Walsh: My understanding of the impact in losing that stock so that they are no longer within the control of the Housing Executive in overall issues of community development and anti-social behaviour within those communities. The Housing Executive as the strategic regional housing authority for Northern Ireland still retains that responsibility beyond simply the management of single units of stock, so it has a much more wide-ranging role and responsibility than simply a housing management function. As part of that, the Housing Executive has a very serious role in both community development, producing balanced communities and responding to the need and it also now has the responsibility through its cross-tenure role on strategic responsibility for the private rental sector. So, for example, in the 2003 Housing Order, a mandatory licensing scheme for housing in multiple occupation falls to the Housing Executive to run out this mandatory scheme which is there to improve fitness levels and management standards within that particular sector and it has been rolled out by the middle of this year that that becomes mandatory. From the Institute's perspective, the Housing Executive's proposals for the management of the private rental sector are somewhat passive in that we feel there is an opportunity in Northern Ireland for regulation of the whole sector through licensing for the whole private rental sector but, rather than targeting HMOs about their standard level of fitness and, more importantly, management standards, what is the difference between a two-storey house with three people sharing and an elderly person living next door who is not getting the same level of fitness or work carried out or management of that by the same landlord? Licensing is going to be applied to one and not the other. I think within Northern Ireland we have an opportunity because of the size of the sector to look at mandatory licensing for the whole private rental sector that will be a kite mark of quality for the people who are letting those properties who want to provide a quality product of fit accommodation, a decent home and it will manage that property and part of that management of property is that they accept responsibility for the behaviour of their tenants. The issues of anti-social behaviour that impact on the community that are outside of the actual landlord responsibility that the Executive would have but could be controlled by the removal of a licence to say, "We will no longer kite mark the services you provide and indeed we will no longer pay housing benefit for your continued occupation of tenants in that particular property because of the issues." One final thing I would add is that, again the 2003 Housing Order introduced some new measures in tackling anti-social behaviour but they fell short of what the CIH and others were calling for because the debate on anti-social behaviour had moved on in England and elsewhere from 1996 from the housing policy review that the member referred to earlier on and what we actually have in Northern Ireland were the changes that were being introduced in England in 1996. So, anti-social behaviour orders and, I believe more importantly, acceptable behaviour contracts which is not about exclusion but about trying to get responsibility of young people to give a contract to not repeat the bad behaviour are not available in Northern Ireland and I think extending those to Northern Ireland will increase the range of options that the Housing Executives, councils and others would have to tackle the very serious issue of youths causing annoyance and antisocial behaviour. Mr Beggs: For the record, the minister did give his assurance that these orders would be application by the end of the summer in Northern Ireland. Q33 Chairman: Not a day too soon! Mr Walsh: The one comment I would make is that because of the procedures that operate because we do not have devolution, such measures would have to be brought forward as an order in council which means that having been brought forward as an order in council, until we actually see the detail, we either have to accept the whole package or nothing and, while we can be assured that the minister has in fact made this commitment to actually do this, really unless we are in a position to scrutinise how in fact that is going to work, I think we are in a situation of jumping quickly without looking at the detail. Q34 Reverend Smyth: You will have had the opportunity to study the low cost housing survey which was published in November. Which, if any, of the options there might actually help provide social housing in Northern Ireland. Mr Walsh: Is this the Baroness Dean's home ownership taskforce? Chairman: The Barker review. Reverend Smyth: The Barker review is later. Q35 Chairman: Yes, it was Baroness Dean's. Mr Walsh: Yes, we have had an opportunity and in fact our Director of Policy at the Institute was a member of the taskforce and we are very pleased to be involved at the centre of rolling that out. There are a number of the recommendations within Northern Ireland that we believe should be Northern Ireland proof and should be looked at as to how applicable they could be in Northern Ireland. Co-ownership is the most successful shared ownership scheme in the UK. We have one national organisation responsible for running out the scheme. The deficiencies that were recognised by Baroness Dean and that taskforce showed that there was not a critical capacity/critical mass in many of the smaller schemes that were operated by associations here because it was peripheral to their overall business which was managing units of social housing to deal with people in need and they tend to be an add on to the shared ownership scheme. In Northern Ireland for the last 25 years, we have had one organisation dealing directly with lenders, legal people etc that have simplified that. The difficulty is that there are other shared ownership options that we do not currently have available in Northern Ireland that could be looked at and the co-ownership needs to become more strategic in that, rather than it being a demand-led product because somebody who wants to apply for co-ownership actually comes in though the front door and it should in fact be made to try and tackle the housing need for people who are currently on the waiting list to look at areas of affordability, hotspots etc and they need to look at the application of the home buy scheme and other products that may in fact be of benefit if applied in Northern Ireland. The strength is that we have one organisation doing that and we do not have a plethora of different organisations and there is a strength in asking that organisation to evaluate how these products could be applicable in Northern Ireland. Q36 Reverend Smyth: Reference has been made to the Barker review which was published last week; have you had an opportunity to look at it at all? Mr Perry: The main strength we drew from the Barker review was the prominence which Kate Barker gave to the need for more investment in affordable housing and she was talking in the English context because part of her review was just concerned with England but some of it with the whole of the UK but, as we have been discussing, a similar review applied to Northern Ireland would reveal an extra need for affordable housing there too. The problem was that Kate Barker found that she could not cope with dealing with the whole of the UK even though it was her original remit, so she focused very much on dealing with England and the demand area that was part of England. It would be very good if the Barker review could be revisited to look at how it applies in Northern Ireland and indeed in Wales and Scotland and see whether the measures advocated would apply there and, if so, in what particular way they would be of most value in Northern Ireland. Mr Walsh: There are a number of specific proposals and recommendations that have been made about trying to speed up the overall planning process about the roles of councils and councillors having made the decision, so that schemes do not have to go back to the revisited. Some of those issues would be very important in trying to move forward the planning process and therefore cut the delays and lead-in times about getting schemes on the ground in a timely fashion and I think that a number of those recommendations would have implications for the most speedy delivery of social housing and indeed private sector housing and low-cost affordable housing in Northern Ireland. Mr Pound: Is it possible, for the record, to flag up that fact that John Perry gave us because I think it is crucially important? Chairman: The Barker review being balanced against Northern Ireland. Mr Pound: I would not say it was balanced against Northern Ireland, I would say it concentrated almost entirely on the south east of England but, because of some of the fiscal mechanisms proposed in there, I think it is something we should urgently consider in the context of Northern Ireland and I think that perhaps a note from the Committee is something we should consider afterwards and I am simply putting up a marker at this stage. Forgive me for interrupting. Q37 Chairman: Mr Walsh, you very timely moved us on to the issues of planning. We have focused so far on the Executive and on housing associations but the planners themselves and the planning system can inhibit developments. Are there any changes that the Institute would like to see made to the planning system in order to facilitate development of more social and affordable housing? Mr Walsh: The changes we in fact propose is the speedy implementation of planning proposal Statement 12. It has been made and brought forward as part of the regional planning strategy with the requirement to look at housing in settlements rather than looking at housing being tenure based, tenure driven and social housing or whatever. PPS12 will have significant implications for the development of mixed tenure in balanced communities in Northern Ireland. It has been consulted upon. It was expected to be introduced in September 2003; it has still not come out of the machinery which is the relevant departments, so the Department of Regional Development at the DoE, and I know that the DSD have been calling for this because they wanted the implementation of this because they recognised that it will mainstream some of the issues that, for example, Martin Smyth has been calling for about targeting low-cost home ownership and about issues of affordability and, rather than these being incidental to the overall picture of what our housing requirement is, it mainstreams across tenure what the needs are in particular communities. My understanding is that there are difficulties as to how that would be implemented and that the Housing Executive, who will have some level of responsibility in the production of interim housing need statements, have moved on this but that it is elsewhere, outside of the DSD and the NIHE, that there are blocks in the formal implementation of PPS12 and we would strongly recommend that that be introduced as a matter of urgency. Q38 Mr Pound: Within GB, virtually every UDP has now been reconfigured in the context of the new HRH densities. I appreciate that density is not such an issue for your part of the world but do you have concerns because this is the key issue in housing provision in GB at the moment? Mr Walsh: As regards density issues in Northern Ireland, we would have concerns on the basis that, if you looked at the increasing numbers of waiting lists, they tend to be singles and therefore, if you are simply driven on that narrow focus to try and provide enough one-bed flats in a certain area to meet the current short need of an increasing number of single people who want to have their own properties to set up home at an earlier stage. Density is actually controlled by the planning authority; they actually determine the number of properties within a hectare. Q39 Mr Pound: The Chairman was asking if you had any views on current planning legislation and whether you felt that a similar move would be helpful. Mr Perry: I do not think that you have the same high-pressure situation that applies. Obviously in London, that is a very critical issue and in parts of the south east, but I do not think in England it is that critical an issue outside the south east, except for some patches of Belfast, that you would not really have a need to go for very much higher density. Q40 Mr Pound: You have talked about the waiting list and is that about 28,000? Mr Walsh: Yes. Q41 Mr Pound: Do you know what percentage of those are single-person households? Mr Walsh: I believe 44 per cent. Q42 Mr Pound: I gave you no notice of that question! Those 44 per cent would probably not even feature on a GB housing waiting list or certainly not in London. Mr Walsh: No, but in other areas of England they would where there is abandonment or no waiting list. They would because you can take the position that it is better to have someone in a house than allowing it to be left abandoned and causing a blight. Q43 Chairman: Are those waiting lists disproportionate across community? Mr Walsh: Yes. The highest demand areas would tend to be in North and West Belfast and around Londonderry, but the biggest growth on the waiting lists over the last couple of years in actual need tends to be in the areas of South and East Belfast and around the conurbations. So while there is a need in many Catholic and Nationalist communities, that is very difficult to be met because of land available; the increasing need is in many of the Protestant areas in communities in South and East Belfast - Antrim, Bangor, Holywood, et cetera. Q44 Chairman: In the Republic, Part V of the Planning and Development Act allows for local authorities to designate up to 20 per cent of all new housing for social and affordable. Would you support a similar percentage rule in Northern Ireland? Mr Walsh: No, I would not. I do not believe the Institute would support a percentage gain, development gain, to be applied somewhere without looking at what the local community need would be. The experience in Dublin is that many of the developers decided not to develop if they had to develop 20 per cent social housing. With the escalating value of land they sat and did nothing, which meant the programme actually reduced. They also said, "We want to build nice, high quality, private sector housing in this location, we will give you our 20 per cent over here", which is not within easy reach or whatever. Chairman, the link is PPS 12. PPS 12 allows the local tenure needs in local areas to be addressed and what the requirement would be for new build housing, owner occupation, private rented sector, low cost ownership, social housing, so it is targeted on particular needs in local communities, and that is a better way than some sort of artificial target imposed from on high. The DSD have looked at the planning gains and other schemes in the Republic of Ireland, and I know they believe this is not the time to be fettered to percentages without any thought of what the future is going to be. Chairman: The Committee has heard loud and clear your comments regarding PPS 12, rest assured we will make enquiries ourselves as to why that still has not been published. Q45 Mark Tami: In Wales and England there are decency standards for housing, and Scotland is moving the same way. Do you think Northern Ireland should adopt this and, if so, what do you see as the likely impact of that? Mr Walsh: Yes, Northern Ireland has to adopt the quality standards they have in Scotland and the decent homes standards, because we need to make like-for-like comparisons. We have a house condition survey which looks at fitness levels, et cetera, which on the face of it shows that the fitness level in Northern Ireland is below 5 per cent for the first time in 30 years. That does reflect very significant developments which have happened in Northern Ireland during that period of time. If you then compare the ten point fitness standard with the targets to achieve decent homes in England and the financial resources required to achieve that, then you are comparing apples and pears. The 2001 House Condition Survey in Northern Ireland also applied as far as possible as part of that process what the decent homes standard would mean in Northern Ireland, because it is wider than simply the narrow fitness standard - it looks at adaptations, thermal heating controls, et cetera - and it was found a very high percentage of the properties within Northern Ireland would fail the decent homes standard, including 70,000 Housing Executive properties, mainly on thermal heating. I think it is important that we apply the same level of standards so the allocation can follow the greatest need. But more importantly, which has not happened with the fitness standard, the target is put in place to show you are aiming to achieve a target, that a date is put in time so you can be assessed against whether or not you have achieved that. There was never any target to reduce unfitness. There was a review every five years to come back and see whether or not you had improved, but there was no target saying, "We hope to achieve a reduction in five years down to 4 per cent or 3.5 per cent or whatever." We need decent homes and we need a target. Q46 Mark Tami: If the Lifetime Homes standard was applied to the private sector, how would that impact on affordability? Mr Walsh: Lifetime Homes and affordability are not the same issue. The Institute of Housing in Northern Ireland along with the Joseph Rowntree Foundation carried out an evaluation of Lifetime Homes which was introduced by the Department for Social Development in 1998 for a social housing programme. We did an economic appraisal of what the cost would be to apply the 16-point design standard which is Lifetime Homes. In actual fact in Northern Ireland it is a 17-point standard. We found the actual cost per property can be achieved at a cost of £165 to a maximum of £500-and something per property. That is what you are talking about to achieve Lifetime Homes. The difficulty is that if we continue to allow properties to be built today which we know will not meet the changing requirements of people in the future, you will have to come back and pay more expensive capital monies to improve the dwellings, to build downstairs toilets. We have building regulations - Part R of the building regulations which became effective in Northern Ireland from April 2001 - which make it a requirement that there is a downstairs toilet, but that downstairs toilet cannot be accessed by someone in a wheelchair without leaving the door open. Why do we continue to allow properties to be built which we know are not going to be habitable by people or visitable by someone in a wheelchair? If someone in a wheelchair were to go and visit someone in a property built tomorrow in Northern Ireland, they could not access the downstairs toilet. How long could they stay there? The biggest impact to the community would be by the extension of Lifetime Homes across the sector. At a cost of less than £500 you can achieve long-term savings because you will not need to come back to carry out expensive adaptations. How can we continue to allow properties to be built at a standard which we know will need to change? If we simply allow the financial argument to be dictated by developers, we would still be living in mud huts and caves because they would not be pushing out those standards. We can coerce and encourage the private sector to build the Lifetime Homes, and some developers have done that, but the only way to ensure it happens is by making it a requirement to have an amendment to Part R of the building regulations, to impose the standard as being the minimum standard, because otherwise they will not take it seriously. We certainly commend Lifetime Homes. Q47 Mark Tami: How well suited is the private rented sector, in your opinion, to meeting the needs of social housing and social need? Mr Walsh: The growth in the private rented sector in Northern Ireland over the last number of years has come about to a large extent from the house sales we talked about earlier, that people after three years have been able to re-let their dwelling, and, therefore, there has been a growth in the private rented sector. The private rented sector is reckoned to be 49,000 within Northern Ireland. Q48 Mark Tami: What do you think about the standards of those? Mr Walsh: The standards are mixed. The level of unfitness is highest within the private rented sector and more work needs to be done there. The other side of that is the value for money needs to be looked at, because there has been an escalating build for housing benefit over the last number of years from £85 million to over £110 million to help people remain in the private rented sector, and yet it is the part of the sector which is not regulated properly in relation to licensing, in relation to quality and, therefore, more needs to be done. We welcome the work which both the Department for Social Development and the Housing Executive have been doing about trying to develop a strategy for the private rented sector, and we hope to see the fruit of their labours during this year, and we are trying to move that forward. Q49 Mr Luke: This is a question on equality. There has been a suggestion, and we had discussions when we were last in Northern Ireland about this, that there are distinct different housing needs of the communities in Northern Ireland - Protestant and Catholic. In the Chartered Institute's view, to what extent has the Housing Executive been successful in developing an allocation policy for social housing in Northern Ireland which is fair and equitable in terms of access to the scheme, assessment of applicants and the allocation of accommodation across the communities? Mr Walsh: The Housing Executive's responsibility was to develop a scheme which was fair and equitable for all. The way to do that was to establish a standard base line for an assessment of the number of points, so everybody applying to the Housing Executive was on the same set of criteria and attracted the same level of points. People can point to the inequalities in that because allocations at the lower level of points are achievable in some communities rather than other communities, but you have to recognise if, for example, a Catholic family were applying for accommodation and knew they needed to have a certain level of points for their community, that was a choice they had made about where they wanted to go and, therefore, they are competing on the waiting list with other people in that community who have equally been assessed in the same way. If a lower level of points can get accommodation in a neighbouring community which is not Catholic, they are still going to be assessed with all the people looking for accommodation in that area, and allocations are still made on the basis of those in greatest need first. The Housing Executive and indeed Housing Associations have introduced a common allocation policy in Northern Ireland which is only aspirational elsewhere in the UK, where both the allocation of Housing Association and Housing Executive properties are made from the same level of assessment when a vacancy occurs. That is something which many local authorities can only hope to aspire to, that there is not a whole range of different allocation policies where people are appearing on different lists. The Executive have simplified that. I think there needs to be a review of how effective that has been and whether there are certain people with particular needs who under that scheme are not getting the level of priority they may attract because of the level of points, and I would like the review of the common allocation and common waiting list be done in an open and transparent way rather than an internal review. I also think there are opportunities to bring along the choice of allocation which has gained some momentum, particularly in other parts of the UK in the last couple of years. That is an area and an element which could be added to complement the common allocation list rather than purely and simply pointing to the next person on the list without also looking at elements of choice. I think there are ways in certain locations of balancing both of those things. Q50 Mr Luke: You spoke earlier about house sales and you rightly made the point that the Scottish Act allowed exemptions and there are specific areas where the councils can do that. Given there is a huge pressure of demand in certain communities in Northern Ireland, in Catholic communities, would it be the Chartered Institute's view that there should be restrictions on house sales in these areas so the social housing is kept intact? Mr Walsh: It is certainly not our view there should be restrictions in Catholic areas, that is not where we are coming from. It is our view that we should be looking at the strategic use of the house sales policy so if there are areas of high demand, those areas should not continue to suffer a net loss of stock where we do not have the ability to meet the existing needs let alone long-term needs. Therefore it needs to become much more strategic. If that means no more house sales in this particular area until we get into a situation where we can tackle the need for balanced communities, so be it. If we cannot meet existing needs, we cannot to continue to lose the stock and then point to the fact we have all these people on the waiting list. We need to be much more strategic on the application of the house sales scheme and we cannot simply do it on the basis that it is fair to everybody if they are always able to buy whenever they want to. The consequence, as I say, is over the next five years we will lose another 25,000 units and then where are the options for people? After all, that is what social housing is here to be, that is the safety net for the most vulnerable in our community. If we say we cannot meet their particular needs but we apply the scheme fairly to everybody, the net loss is not the equality of the existing tenants but you also have to recognise how equal is it to the people on your list that you continue to lose that level of stock. It is balancing their needs which is, I think, more important. Q51 Chairman: We have tried to be as all-encompassing as possible in our questions, is there anything in addition you would like to say to the Committee or areas we may not have touched on? Mr Walsh: No, Chairman. I would just like to thank you for giving us the opportunity today and I hope you have felt we have answered your questions in an honest and forthright manner. Q52 Chairman: Certainly we would welcome any supplementary material if you do think there is anything. On behalf of the Committee, can I thank you all for giving up your time and answering our questions so clearly. It will help our report once it is published. Mr Walsh: Thank you. |