Examination of Witnesses (Questions 167-179)
16 DECEMBER 2003
MR ROY
IRWIN, MR
ROGER JARMAN,
DR NORMAN
PERRY AND
MRS CLARE
MILLER
Q167 Chairman: Good morning, may I welcome
you to the second session of this inquiry into decent homes and
ask you to identify yourselves for the record.
Mrs Miller: I am Clare Miller.
I am Director of Regulation Policy, Housing Corporation.
Dr Perry: Norman Perry, Chief
Executive of the Housing Corporation.
Mr Irwin: Roy Irwin, Chief Inspector
of Housing for the Audit Commission.
Mr Jarman: I am Roger Jarman,
Strategic Policy Advisor at the Audit Commission.
Chairman: Is there anything you want
to say by way of introduction, or are you happy to go straight
to questions? Straight to questions. David Clelland.
Q168 Mr Clelland: Do you feel the Decent
Homes Standard is sufficiently broad. Is the level required by
the standard high enough?
Dr Perry: On behalf of the Housing
Corporation: the Decent Homes Standard itself was set by ministers
and the exact dimensions they use are clearly a matter for them.
Q169 Mr Clelland: Yes, but you must have
an opinion.
Dr Perry: When housing associations
are investing in the Decent Homes Standard, by and large they
are improving their homes to a higher standard than the Decent
Homes Standard requires.
Q170 Mr Clelland: So you do not believe
it is high enough.
Dr Perry: It is not a very demanding
standard.
Q171 Chairman: Did you make representations
to government to tell them that they should set a higher standard?
Dr Perry: No, we have not.
Mr Irwin: I think that, given
where social housing has come from, it is quite a demanding standard
relative to resources, but, in terms of a market position, in
terms of what people would aspire to, it might be seen as acceptable
just about in 2003 but by 2010 it will be seen as old hat.
Q172 Chairman: Which bits particularly
are wrong with it?
Mr Irwin: The energy efficiency
issues will be seen as out of date. Not just from a heat perspective,
but, depending on which way you think the climate is going to
change, it is also about protecting people from excessively hot
weather as well. So issues like insulation, over time; issues
around water supply and how that will be managed over that long
period of time; and also probably issues around electronic communications
being a standard part of how any house will be seen to be meeting
any normal market standard, such as internet connections.
Q173 Mr Clelland: Do you think the standard
as defined is sufficiently clear? Is there adequate methodology
for measuring compliance?
Mr Irwin: I would have thought
there is room for people to misinterpret the standard, either
to over-interpret it and do more and think they have only just
hit the target, or for people to do less than required and hit
the target. It is not target specified. I am not advocating that
it should be, but there is room for interpretation.
Dr Perry: The definition, as Mr
Irwin says, is not absolutely rigid, but there are common understandings
of how it should be measured—indeed, there need to be, otherwise
we would not be able to gather the statistics.
Q174 Mr Clelland: Is it feasible to make
changes to the breadth or the level of the Decent Homes definition
at this stage?
Dr Perry: My own view is that
it would not be wise to do so. In terms of being able to monitor
the performance against the standard, you are talking about several
hundred local authorities and a couple of thousand housing associations,
and it has taken quite a big effort to get them all pointing in
the same direction in terms of collecting data and submitting
that on a regular basis. To change now, I think, would have a
time lag for the quality of data.
Q175 Mr Clelland: On issues like accessibility
and neighbourhood requirements, is there room to improve the definition,
by giving definitions of the standards we require in this area?
Dr Perry: I think there is a distinction
between what we are trying to do and what decent landlords, social
landlords, are trying to do in their neighbourhoods and on their
estates. There is a distinction between that and the precise definition
of Decent Homes in order to meet the public service agreement
standard agreed between the Treasury and ODPM.
Q176 Chairman: You have told us it is
a fairly pathetic standard and yet you do not think it is worth
"ratcheting" it up at all.
Dr Perry: The reasons for not
wanting to change the actual definition of the standard is that
it would then take a couple of years at least to sort out how
one measured it and what the quality of the data was that was
coming through. By that time you would be getting close to 2010.
If a government were to set another higher standard, say, for
2015, then there would be the lead time necessary to make the
necessary changes, but, at this precise moment, I think yourselves
as a committee in about three or four years time would be puzzling
over what the data meant if there had been changes in the definition
during that period.
Mr Irwin: In terms of business
planning for local authorities and housing associations—and
the point about decent neighbourhoods, it does seem to me for
both housing associations and local authorities that in this context
of being the landlord, whatever setting it is, it is a business.
It must be around supply and demand; it must be around making
returns to reinvest in your stock. In terms of making decisions
about investment, it has to be in the context of: Is that piece
of our real estate sustainable? Otherwise, you are just throwing
good money after bad. I would expect the business planning for
organisations to think through the issue of: Is investing in decent
homes in this locality actually going to bring us a long-term
return? Is it going to add value to that asset? Is there going
to be future demand for tenants to live there? And therefore it
links to transport, crime issues and education. If you want to
invest in housing, you make sure the education is good, because
then there will always be demand for people to live there with
families. It seems to me that business planning needs to be in
that context rather than narrowly saying we have to technically
get property to this particular standard irrespective of how the
market place is. Most associations and most local authorities
are switching on to the fact that they need to have sustainable
businesses and that links to a broader canvas rather than just
decent homes.
Q177 Mr Sanders: Dr Perry, one of he
Housing Corporation's main objectives is to encourage housing
associations to provide decent homes. How are you setting about
achieving this?
Dr Perry: We do this primarily
through our regulation of housing associations as social businesses.
We require them—and have done for three or four years now—to
satisfy us that they have proper asset management strategies.
For housing associations, the main pathway through which they
are going to achieve the Decent Homes Standard is through the
proper management of their asset base and demonstrating to the
regulator that they have a strategy in place. We do not do this
primarily by giving money. The amount of money that we give in
major repairs grants to housing associations is very small in
relation to our current investment budget. We rely on social businesses
to invest in their property according to an asset management strategy
using the resources that they can generate internally.
Q178 Mr Sanders: You are also developing
a risk register for registered social landlords. This is supposed
to be complete by the end of the year, which, of course, is only
two weeks away now. Could you give us some indication as to its
outcome?
Mrs Miller: We have been looking
at the data that housing associations have been sending in, both
their financial information and statistical information about
their stock condition. From that we have identified those associations
which appear to have the biggest task to do between now and 2010.
We have identified around about 50 associations which will receive
in-depth regulatory follow up from the statistical information
that we have.
Q179 Chairman: Wait a minute, let's just
put that into plain language. There are 50 that are failing, is
that it?
Mrs Miller: There are 50 who,
on the information we currently have, appear to have the biggest
challenge to deliver decent homes by 2010.
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