Memorandum by Shelter (THC 12)
Shelter is a national campaigning charity that
every year works with over 100,000 people. Shelter has two aims.
One is to prevent and alleviate homelessness by providing information,
expert advice and advocacy for people with housing problems. Our
second aim is to campaign for lasting improvements to housing-related
legislation, policy and practice.
In 2003, Shelter advised over 5,000 housing
association tenants experiencing housing problems. We therefore
welcome the opportunity to submit evidence to this inquiry. Our
evidence focuses on the effectiveness of the Housing Corporation's
regulation of housing association management practice and its
investment priorities.
We have also published research into issues
relevant to this inquiry. This shows that social landlords' practice
in managing rent arrears relies too heavily on taking possession
actions—often resulting in homelessness—that might
otherwise be avoided if alternative approaches to addressing the
problem were taken (House keeping, 2003).[1]
We have also conducted research into the impact of stock transfer
on homelessness. This found that in some areas where stock transfer
has taken place, problems can arise where the transfer housing
association's allocations policies frustrate the local authority's
attempts to discharge their statutory duties to assist people
who are homeless (Out of Stock, 2001).[2]
THE EFFECTIVENESS
OF THE
HOUSING CORPORATION'S
ROLE IN
ENSURING HOUSING
ASSOCIATIONS ARE
PROVIDING HIGH
QUALITY HOUSING
AND CATERING
FOR DIVERSE
HOUSING NEEDS
On the basis of our research and our experience
as a provider of advice to people in housing need, there are three
key areas where housing association practice can be poor and it
is essential that the Housing Corporation exercises more effective
regulation:
— lettings policy, particularly in
relation to applicants nominated by local authorities as being
in priority housing need;
— management of tenancies and the need
to pursue all other avenues before seeking possession; and
— balancing business case decisions
on management issues with the needs and circumstances of individual
residents and potential residents.
The Housing Corporation's new regulatory code
and guidance, which was introduced in April 2002, sets out the
fundamental obligations of housing associations. The code and
guidance introduced some welcome expectations in relation to management
practice. However, we are concerned that those arrangements currently
in place to monitor compliance with those expectations are inadequate
and that in the areas outlined above, enforcement action to remedy
non-compliance is rarely taken. In our view, although the system
for monitoring and enforcing compliance may be well suited to
addressing issues of financial viability and governance, it is
less effective for "soft" management objectives such
as those that relate to lettings policy, tenancy sustainment and
other management issues.
Rent arrears
For example, under section 3.5c of the regulatory
guidance, housing associations are expected to only seek possession
action as a last resort. However our experience is that in many
cases possession action is initiated too early and insufficient
steps are taken to ascertain the reasons for a tenant getting
into rent arrears. This can include making use of the mandatory
grounds for possession in cases of rent arrears,[3]
where the court has no discretion other than to grant possession
if more than eight weeks of arrears are owed.
The financial cost to local authorities of evicting
tenants for rent arrears is high. At the very least, there will
be the costs of unrecoverable arrears, court costs, housing management
time, maintenance, void and re-let costs of eviction common to
all social landlords. In addition, tenancy failures also result
in greater demands upon other local authority services. If a household
that is made homeless is in priority need, they are likely to
be accommodated under the homelessness legislation and placed
in temporary accommodation.
The number of social landlord possession actions
doubled between 1994 and 2001 and now stands at around 150,000
per annum. However, outright possession is granted in only around
30,000 cases, suggesting that many of them could be dealt with
more effectively without recourse to the courts. Shelter has proposed
arrears resolution services would work with landlords and tenants
to stabilise arrears by resolving benefits issues, implementing
a repayment plan, providing debt counselling and advising tenants
on their rights and responsibilities. Social landlords should
offer tenants with rent arrears these kind of services before
embarking on possession action. We would like to see the Corporation
champion a more preventative approach that focuses more on resolving
rent arrears problems than possession action.
Citizens Advice has recently called for the
ODPM and Housing Corporation to draw up a statement of practice
on preventing and recovering rent arrears for all social landlords.
Compliance with the statement of practice would be a key part
of inspections by the Audit Commission/Housing Corporation. Such
a statement is routine among other lenders, including mortgage
lenders. Shelter strongly supports this proposal.
CASE STUDY
A single parent with three young children contacted
Shelter because her landlord, a local housing association, was
taking a possession action on a number of grounds associated with
non-payment of rent, including ground 8. She was claiming housing
benefit but there had been problems with her claim which had not
been paid. She had also been struggling to overcome a drug problem.
Shelter contacted the association and confirmed
that a possession order had been granted and a bailiff's warrant
had been issued. We negotiated an agreement that the association
would drop the mandatory ground 8 action and suspend any further
action for three months. We also attended a court hearing at which
the warrant was suspended and contacted other agencies to ensure
that she was given enough support to be able to keep to the terms
agreed with the association.
Lettings
Shelter has also been concerned about the impact
of social landlords policies on lettings, which can exclude people
from access to social housing for a number of reasons including
previous rent arrears, anti-social behaviour and previous convictions.
The consequence of these policies can be that people in significant
housing need are unable to access affordable housing. Recent measures
in the Homelessness Act 2002 have tightened up the legislation
that applies to local authorities.
However, in spite of the new Regulatory Code
and guidance introduced by the Corporation, we are aware of inconsistencies
in practice by housing associations. This includes cases where
clients have been accepted as being homeless and in priority need
by the local authority, but the duty cannot be discharged because
they are excluded by the housing associations in the area. The
Housing Corporation has commissioned its own research into these
issues which suggests that, on the whole, the number of people
excluded by housing associations is small.[4]
However, it also found that there was an absence of reliable record
keeping on this issue which makes it difficult to draw firm conclusions
about the scale of the problem.
Vulnerable households deemed too risky to house
In our housing aid centres, we advise some very
vulnerable people deemed "too risky to house" being
passed from agency to agency without receiving housing or support.
This is an area where local authorities and housing associations
are failing people in the greatest need. Housing associations
often raise concerns about the lack of information provided to
them by local authorities, the lack of a support package and an
alleged lack of communication between the council's nomination
section and other departments, especially social services. The
absence of appropriate support is a common reason for the failure
of a nomination from a local authority to a housing association.
The lack of effective joint working leaves some very needy people
at risk of street homelessness or in inappropriate temporary accommodation
for long periods.
A number of associations have little regard
to these aspects of the regulatory expectations that the Housing
Corporation places on them. Indeed, we are concerned that the
regulatory approach of the Housing Corporation is geared too far
towards "hard" management objectives such as the reduction
of rent arrears, and does not adequately address softer management
objectives such as the provision of debt counselling as a preventative
tool in rent arrears management or inclusive letting policies.
This can have the effect that some aspects of management practice
are seen as more imperative than others. Housing association management
of rent arrears is measured using a performance indicator for
current tenant arrears, which can have the effect of encouraging
housing associations to evict tenants with arrears in order to
get their arrears off the rent account rather than identifying
the reasons for tenants getting into arrears and reaching sustainable
agreement to repay the arrears.
Over the last 10 years, many associations have
adopted stricter arrears regimes in response to the more competitive
financial environment in which they have to operate.[5]
In our experience, many associations take a blanket approach to
lettings and evictions based on minimising perceived risks to
their rental income. Clearly, associations have to balance their
social and business interests. But research by Shelter, Citizens
Advice, the Audit Commission and the Department of Constitutional
Affairs (DCA) suggests that a "one size fits all" approach
is neither cost-effective nor fair.[6]
As housing associations become the majority provider of social
housing, pressures through new development and stock transfer,
tensions can only increase. It is imperative that the Housing
Corporation's regulatory approach acts as a counterweight to these
pressures and ensure that housing associations fulfil their function
of providing affordable housing for those in greatest need.
The Housing Corporation is currently looking
at additional regulatory requirements in these areas. However,
even with these additional requirements we would remain concerned
about how compliance with these provisions would be assured.
The regulation and accountability of housing
associations inevitably leads to questions about their legal status.
Although associations are largely taking over the social landlord
functions of local authorities, in law they are private bodies.
This issue has been considered by the Joint Committee on Human
Rights which has been looking at the meaning of the term "public
authority" within the Human Rights Act 1998. It is our view
that although housing associations are private bodies, their housing
management functions are of a public nature and should be subject
to human rights protection.
Houses in multiple occupation
The introduction of the Housing Bill into Parliament
raises a further issue about the scope of the Housing Corporation's
regulations. The Bill will require specified larger houses in
multiple occupation (HMOs) in the private sector to be licensed.
This is in recognition of the particular health and safety risks
in such dwellings and additional requirements to manage them effectively.
HMOs owned or managed by housing associations are exempt from
the definition of an HMO contained in the Bill and therefore the
mandatory licensing scheme. While we do not believe that housing
association HMOs should be required to be be licensed, specific
regulatory requirements need to be introduced to ensure they are
maintained to the same standard as HMOs in the private sector.
THE HOUSING
CORPORATION'S
INVESTMENT PRIORITIES,
ITS BALANCE
OF FUNDING
FOR SOCIAL
HOUSING TO
RENT, SHARED
OWNERSHIP AND
LOW COST
HOUSING FOR
SALE AND
ITS POLICY
TOWARDS DIVERSIFICATION
The shortage of affordable housing—which
is most acute in London, many parts of southern England, high
demand hotspots and rural areas—has reached crisis point.
This is reflected in record numbers of nearly 95,000 homeless
households living in temporary accommodation and high levels of
overcrowding.
Despite the growing housing crisis for those
in most acute need, recent debate has largely focussed on the
difficulties faced by key workers in accessing affordable accommodation
in high demand areas. In response to this, larger portions of
public subsidy than ever before have been directed towards meeting
intermediate housing shortfalls.
Whilst we support efforts to improve the intermediate
market and welcome the move away from indirect subsidy through
the Starter Homes Initiative for this group, we are concerned
by the limited scope of key worker definitions and the extent
to which public subsidy is being re-directed away from meeting
the more acute housing needs of homeless households.
INCREASING THE
SUPPLY OF
AFFORDABLE HOUSING
Our submission to the Communities Plan welcomed
the £5 billion package to increase the supply of affordable
housing which largely focused on three priority regions: London,
the South East and the East of England. However, we raised concern
about the extent to which resources prioritised the needs of key
workers and intermediate housing. One billion pounds has been
outlined by the ODPM for allocation and delivery for this group
over the next two years to be focused on London and the South
East. We also note that, following intervention by ODPM, the investment
strategies of the new London, Eastern and South Eastern Regional
Housing Boards were revised in favour of an increased proportion
of funding for key worker accommodation.
DISTRIBUTION OF
INVESTMENT
We believe the housing needs of homeless households
and other low income households, including essential workers—such
as administrators, porters and cleaners—should not be overshadowed
by the emphasis currently being placed by government on meeting
intermediate housing requirements for particular "key workers"
such as teachers, police and nurses.
Shelter is also concerned that policies introduced
to address the housing needs of key workers are reducing the share
of resources going to people with the most urgent housing needs.
For example, in 2001-02, 77% of the Housing Corporation-funded
homes built in London were for social renting. However, in the
current year only 54% of the homes funded by the Housing Corporation
will be socially rented, because of a significant shift to providing
more low cost homeownership and rented housing for key workers.
Whilst key worker housing will increase by over 200% compared
to last year, the output of social rented housing will only increase
by 40%.
Housing Corporation Investment in London
Numbers of Units
Year
| 2001-02 | 2002-03
| 2003-04 |
Social housing for rent | 5,198 (77%)
| 5,019 (72%) | 7,100 (53%)
|
| Low cost home ownership | 1,541 (23%)
| 1,970 (28%) | 4,735 (35%)
|
| Intermediate rent | 0
| 0 | 1,538 (12%)
|
| Total | 6,739 | 6,989
| 13,373 |
Figures for 2003-04 include 6,617 homes funded through the Challenge Fund.
| | | |
Resources (£m)
Year | 2001-02
| 2002-03 | 2003-04
|
Social housing for rent | 431.0 (87%)
| 456.3 (84%) | 626.99 (71%)
|
| Low cost home ownership | 61.7 (13%)
| 89.5 (16%) | 198.91 (22%)
|
| Intermediate rent | 0
| 0 | 57.86 (7%)
|
| Total | 492.7 | 545.8
| 883.76 |
| |
| |
Figures for 2003-04 include £300 million of additional
resources allocated through the Challenge Fund.
KEY WORKER
VERSUS OTHER
HOUSING NEEDS
There is no definitive research that identifies the relative
types of housing needed overall or which type of affordable housing
is required for different groups of people. However, the following
points are relevant in this context:
— The requirement for affordable housing for rent,
as demonstrated by homeless households in temporary accommodation
& social sector tenants in overcrowded conditions, combines
housing and financial need. There is no comparable data that looks
at the housing needs of specified "key worker" groups;
— As the overall balance between housing demand
and supply improves, households who can afford to access the "intermediate"
market will increasingly be able to meet their own housing requirements
in the open market. By contrast households on the lowest incomes
will continue to need subsidised housing;
— In London, for example, many households who are
categorised "key workers" with "intermediate"
housing needs, may require housing at social housing rates but
are unable to access it due to the shortages in social housing
provision. This includes, for example, households that are living
on the income of a nurse or police officer at the start of their
career;[7]
— Research is required to determine the underlying
causes of recruitment shortfalls in the public sector.
Shelter is concerned that the investment priorities set out
by the ODPM in the Sustainable Communities Plan and being delivered
by the Housing Corporation are dedicating disproportionate resources
to intermediate housing needs. These decisions have been taken
without a robust assessment of the relative needs of different
groups and without any assessment of where resources for housing
investment will have the greatest impact.
Audit Commission/Housing Corporation (2003) Housing association
rent income, London: Audit Commission/Housing Corporation, Neuburger,
J. (2003) House Keeping: Preventing homelessness through tackling
rent arrears in social housing, London: Shelter, Phelps, L &
Carter, M. (2003) Possession action: the last resort? London:
Citizens Advice.
1
Neuburger, J (2003) House keeping: preventing homelessness through
tackling rent arrears in social housing, London: Shelter. Back
2
Bennett, J (2003) Out of Stock: stock transfer, homelessness and
access to housing, London: Shelter. Back
3
Ground 8, Part 1 of Schedule 2 to the Housing Act 1988. Back
4
Pawson, H & Mullins, D (2003) Changing places: housing association
policies and practice on nominations and lettings Bristol: The
Policy Press. Back
5
Ford, J & Seavers, J (1998) Housing associations and rent
arrears, York/Coventry: JRF/CIH. Back
6
Kempson, E & Dominy, N (2003) Can't Pay or Won't Pay-A review
of creditor and debtor approaches to the non-payment of bills,
London: Lord Chancellor's Department/HMSO. Back
7
See recent work by Keep London Working at the Peabody Trust, London. Back
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