Examination of Witnesses (Questions 340-359)
MR PETER
DIXON AND
MR JON
ROUSE
5 MAY 2004
Q340 Mr Cummings: Would you challenge
that?
Mr Dixon: I am surprised it did
not make reference to the work of the Housing Partnership which
exists to do just that.
Q341 Mr Cummings: Do you challenge the
Audit Commission?
Mr Dixon: I am surprised at the
comment. I would not use the word "challenge". I would
say that there is an answer to it in that that is precisely what
we are doing.
Mr Cummings: Thank you.
Q342 Andrew Bennett: Over the years,
and I suppose we should say centuries now, the role of the Housing
Corporation has been a bit ambiguous: It could be a champion for
housing, it could be a placebo for the lenders or it could be
a pretty complacent government department, which one do you see
it really ought to be?
Mr Dixon: None of the above I
think is the first answer. We do have a variety of roles. I know
there is a view that we should be the champion of the Housing
Association sector. I think that is a role for the National Federation
not for us quite frankly. I believe we should be an efficient
procurer, an effective regulator and a sensible investor. I think
if we do those things well we will have done pretty well. Going
on from that I would say that we should be a more effective contributor
to policy and I believe the way to contribute to policy is probably
not to grab the headlines every other week in Housing Today
by making an outrageous statement, which I do tend to do occasionally,
but I try not to. I do not think that is the way to be effective.
I think the way to be effective is to demonstrate that we are
delivering what ODPM wants and we are a reliable procurer for
them. I think in that way they will listen to us when we talk
about policy and when we give them advice on what will work and
what will not work. I believe those should be our roles.
Q343 Andrew Bennett: Is it not important
that you take Treasury on and really fight very hard for more
resources in the present Spending Round for housing if the Decent
Homes target is going to be achieved; if the demands for housing,
particularly in the South East, are going to be met and if the
problems in the pathfinder areas in the North are going to be
sorted out?
Mr Dixon: There are a lot of "ifs"
in there. We discussed Decent Homes when I appeared before you
some months ago. We still believe we can meet the Decent Homes
standard within the RSL sector without further investment from
ourselves, that is still our position and that is still our belief.
That will not require more resources therefore we do not have
to ask for that.
Q344 Andrew Bennett: There are going
to be quite a few areas which might or might not come within your
sector, are there not, the question of what happens to a lot of
the local authority stock?
Mr Dixon: If there are more transfers
into LSVTs then we will expect those business plans to demonstrate
they can meet Decent Homes without recourse to grant.
Q345 Andrew Bennett: You do not see your
role in championing those houses irrespective of whose ownership
or control they are in?
Mr Dixon: It is not part of our
role to champion Decent Homes standards in local authority housing.
I think it would be inappropriate for us to do so and it would
make us very unpopular, and I do not think that would benefit
anybody. We clearly have an interest in establishing more resources
for affordable housing and we are going to be going about that
in what we think is the most effective way.
Q346 Andrew Bennett: In terms of unpopularity
you are talking about 49% of your spend this year going into system
built housing, is that reasonable?
Mr Rouse: Let us be clear about
terminology, we said modern methods of construction, which is
not all systems built. There are all sorts of different methods
which fall within that definition. Let me go back to what I said
earlier, one of the things we must do—in fact we received
a paper on this at our Investment Committee yesterday—is
think about how tenants are built into the decision-making process
and the types of home they will occupy in the future. We have
to respect and reflect their aspirations in terms of the type
of home they want to live in. That is a somewhat separate issue
from how you then procure those homes in terms of how they are
built. I could take you to housing in both the market sector and
the affordable sector round the country which from the outside
you would not have a clue whether it was systems built or traditionally
built because from the outside they look exactly the same, town
houses, terraced houses, bungalows, detached houses, semis, etc,
etc. Systems built does not have to mean eight storey units made
out of pods.
Q347 Andrew Bennett: I accept that but
do you think the Deputy Prime Minister is a bit over-ambitious
about the number he thinks can be built in this way?
Mr Rouse: I think it depends on
how you define modern methods of construction.
Q348 Andrew Bennett: At the end of the
day you square the circle with the ODPM on the basis of definitions
rather than actual reality.
Mr Rouse: Let me put it this way,
what are we actually searching for here? What are we seeking?
We are seeking greater value for money for the public purse; we
are seeking a lower rate of defects so that tenants are not occupying
home that are hard to maintain or which do not give them good
life chances and we are looking for greater speed because we need
to build more affordable homes. If a method of construction achieves
those three objectives then for me it is a modern method because
it is meeting the outcomes which we desire as a housing corporation.
Q349 Andrew Bennett: Do you think the
Deputy Prime Minister agrees with that definition?
Mr Dixon: I hope so. From our
conversations with the Deputy Prime Minister he is a sensible,
pragmatic man. He has some very firm views, which we respect,
I think he would agree with that definition.
Q350 Andrew Bennett: When you talk about
defects I can see the advantage that you bring the whole kitchen
in and you do not have to do the snagging on it. In the 1960s
lots of those schemes existed and they provided excellent houses
for the first 10 or 15 years and then the faults started to develop.
Are you confident that all of these new methods are not going
to run into those same snags?
Mr Rouse: The important point
is that it is not just us who are worried about that; it is also
the lenders and the insurers. What we must do is work together
to work out what safeguards and even maybe certification or kite
marks are required to give us assurances over not just the immediate
quality of those dwellings but also their longevity or durability.
I think it is a very serious issue and I think you are absolutely
right to raise it and I take it very seriously as well.
Q351 Christine Russell: Over recent years,
and I accept it is not your fault because you are new guys at
the helm, the performance of many housing associations has actually
deteriorated rather than improved. What plans do you have to improve
the overall performance of individual associations?
Mr Dixon: I am not sure that it
is fair to say that the overall performance has deteriorated,
there may have been some instances of that but I have not seen
evidence that there has been an across the board deterioration.
I think it is holding up. Where there are serious issues then
we engage and as you know we regulate in order to improve. We
do not just say, "this is wrong, somebody has to do something
about it". We say that "we will do something about it"
and, by and large, we fix it. I think that we can be relatively
proud of the record of the corporation in the past under our predecessors
in terms of what they achieved. Going forward I think we have
to do more. We are in no sense complacent about it. I think part
of the requirement on the regulatory front going forward is to
secure better performance. It is better performance in terms of
housing management as well as better performance in terms of procurement.
The work that the Audit Commission are doing on inspections is
very valuable, it contributes to our regulation. I am very happy
about having independent inspection, I think that is going to
be one component of improvement. We are looking at some sort of
efficiency index which is being developed at the moment by Indepen
who did the work on our regulatory review. I think we will be
doing a certain amount of naming and shaming to demonstrate who
does things well, who does not do things quite so well in order
to drive up standards across the patch. We have also recently
introduced a new policy on tenant engagement which I think has
been broadly welcomed. We shall be expecting RSLs to take note
of that and to learn from it. I think that the spur of appropriate
tenant engagement and involvement will help to drive standards
up further. Those three things together will have the effect of
improving performance and at the end of the day giving tenants
a better deal.
Q352 Christine Russell: Is there a particular
category of association that causes you the greatest concern?
Mr Dixon: In the past I would
say that it has been co-ops. I think statistically there have
been more problem areas among co-ops than else where. Whether
or not that will be the case going forward is another matter.
We are entering into a more difficult period in some respects
because some of these organisations are becoming extremely large,
extremely complex, they are sophisticated organisations with hundreds
of millions of pounds of assets and they require us to develop
our processes and our procedures to make sure that we stay ahead
of what they are doing and make sure they do not get themselves
into difficulties. I think we are going to be looking at a slightly
different landscape in future.
Q353 Christine Russell: Can I ask about
whether or not you feel that you have paid sufficient attention
or whether you need additional drivers, whatever you want to call
them, to assess the actual delivery of service to tenants. You
seem to have good systems in place for appraising the financial
competence of associations but you seem to be either less interested
in or less involved in the actual service delivery to tenants?
Mr Dixon: I would not accept we
are less interested in it. Inspection is the main vehicle there
and that is relatively recent. We started doing inspection three
years ago and a year after that it was transferred to the Audit
Commission so it is relatively early days. I think that will be
the main driver for the delivery of improved tenant services.
I think it has always been the priority for the Corporation and
I think it always will be. My personal belief is that we have
to be much slicker and much sharper around housing management
generally in the context of sustainable communities. It is all
very well having appropriate building standards and appropriate
everything else but if we do not get the housing management of
those new developments right, including the mixed development
we have a problem. It just as important across a mixed development
as it is in a social housing unit.
Q354 Christine Russell: Tell us briefly
how you respond to an Audit Commission criticism on performance
of an individual association? What steps do you immediately put
in place?
Mr Dixon: We would look at the
detail of that report with our lead regulators and we would typically
agree with the associations a programme of improvements. We would
expect that programme of improvement to be delivered. At the end
of the day if it is not delivered then we will be looking towards
some form of supervisory action.
Q355 Christine Russell: Do you have the
resource to do that monitoring?
Mr Dixon: Yes, we do.
Q356 Chairman: The new initiative is
about looking at the whole issue of housing management as a model
for tenant consultation, which implies that has not been high
up the agenda in the past.
Mr Dixon: All I am suggesting
is we need to take it further. I think it has been high up the
agenda.
Q357 Chairman: Not high enough.
Mr Dixon: Times move on.
Mr Rouse: I have been doing some
research in terms of moving into the job on what the Corporation
has been doing in the last five to 10 years, it has done an extraordinary
amount through its Innovation and Good Practice Programme on these
issues. What it has not been so good at, and this is something
we need to correct, is disseminating its findings in a form which
housing associations and local authorities and other housing providers
can use on an accessible basis. That is something that we need
to correct.
Q358 Chairman: That seems to say that
a lot of associations have not taken any notice of the best ideas
which have been round.
Mr Rouse: Some associations have.
What we need to do more in future is benchmark performance so
there are very few hiding places.
Q359 Chairman: To make sure those that
have not in past may do so in the future.
Mr Dixon: Encouraged to do so.
We have to confess, we do not have direct levers to make people
do things. A lot of it is by encouragement, by engagement rather
than by saying "do this". We do not have those powers.
| 
