Dowry Funding
183. An issue which concerns specifically stock transfer
Registered Social Landlords (RSLs) is the provision of so-called
dowry funding. Previously, under the Estates Renewal Challenge
Fund programme, grants were available from central government
as 'dowries' to RSLs for taking on properties with a negative
value. However, this scheme has been discontinued without a specific
replacement.
184. The resulting situation impacts not only on
transfer RSLs, but also on Local Authorities who may find it more
difficult to find RSLs willing to take on very poor stock. The
Chartered Institute of Housing (CIH) warned that
"
there is a real problem in that the Government
has made it easier for local authorities to parcel up their stock
and do partial transfers and partial ALMOs which we are supportive
of, but if you do not solve the problem of how local authorities
tackle their worst stock with a negative value I think there is
a fear that they will be put in a position where they will have
to sell the best stock, the one that they can get a receipt for
and keep the worst stock, which is not necessarily a sensible
outcome."[167]
185. However, whilst Dr Perry from the Housing Corporation
told the Committee that he had:
"
always thought that the Estates Renewal
Challenge Fund was a very good instrument. We were sorry when
it was wound up. If any government were to decide to bring it
back, it would be a very good idea."[168]
ODPM officials were not willing to make any specific
commitment to a centrally determined and Government funded dowry
scheme. [169]
186. The ODPM submission to this inquiry acknowledged
that "dowry funding" will be necessary in the event
of the forecast receipt from rental income over the following
30 years being less than the cost of improving and maintaining
the dwellings over the same period. Potential sources, according
to the ODPM, include the Local Authority, the new landlord, the
Regional Housing Board or some other source such as, in certain
cases, the New Deal for the Community.[170]
187. The Committee is concerned that the absence
of a scheme to replace the Estates Renewal Challenge Fund programme
will result in Local Authorities being unable to transfer their
worst stock, having transferred the remainder to RSLs. In that
scenario, Local Authorities could end up owning and managing the
stock most in need of large amounts of investment, but with no
resources to invest in it at all. We therefore recommend that
the Government replace the Estates Renewal Challenge Fund with
a similar system of dowry funding.
Demolition and sale as a means
to achieve the target
188. The Committee is conscious that social homes
in some instances get demolished or disposed of on the private
market as part of a policy to eliminate non-decent homes.
189. As acknowledged by Sunderland Housing Group
when giving evidence, many transfer RSLs (Registered Social Landlords)
are now demolishing properties.[171]
In many cases, this happens entirely legitimately as part of
a Pathfinder programme in areas of low demand, an example of which
is Liverpool:
"Liverpool is included within the Merseyside
HMRI pathfinder. There are more than 76,000 properties included
within the Liverpool boundary and 85% of the properties are in
private or RSL ownership. The HMRI programme, over a 15 year period,
is intended to restructure what is currently an unbalanced housing
market. This will require clearance of approximately 15,000 dwellings
during the period to tackle the low demand, obsolete and unsustainable
stock. It should be recognised therefore that the decency standards
should only apply to sustainable stock across all tenures."[172]
190. The Sunderland Housing Group is an example of
an RSL which is proposing to demolish 6,000 homes that it has
deemed to be unsustainable. The Group Strategic Executive, Mr
Craggs told the Committee that:
"It is a massive issue for us because although
we have got the money, we have only got it once and so we cannot
afford to waste it. We have used the neighbourhood assessment
matrix tool to look at issues of sustainability. It looks at the
private sector, it looks at crime, it looks at education, it looks
at all of those peripheral issues which are so important. Our
144 estates have been ranked from top to bottom and we look at
demand and Right to Buy levels and we have concluded that to pour
money into certain estates ain't going to work. There are legacies
of local authorities all over the country who have done that."[173]
191. The Committee fully recognises that there
are circumstances where demolition of social housing stock is
the best available option. However, the Committee is concerned
that some social housing providers may see the demolition, or
in high-value areas such as London, the sale of properties as
the easiest and most cost-effective way of achieving the Decent
Homes standard. We recommend that the Government puts guidelines
in place preventing the social housing stock from being unnecessarily
eroded through sale or demolition.
113 ODPM: Quality and Choice: A Decent Home for All:
The Housing Green Paper; April 2000; para. 3.2 Back
114
Transport, Local Government and the Regions Select Committee,
2001-02, HC373-iv: Departmental Estimates and Annual Report
2001 and Recent Policy Developments: Q672, The Rt Hon Stephen
Byers, MP. Back
115
DEC01, para 7.1. Office of the Deputy Prime Minister (ODPM). Back
116
Q191 and Q192, Roy Irwin, Audit Commission. Back
117
Q38, Sarah Webb, Chartered institute of Housing. Back
118
DEC01, para 7.3. Office of the Deputy Prime Minister (ODPM). Back
119
DEC01, Annex B, Office of the Deputy Prime Minister (ODPM) ;
DEC49, para 2.1. Sunderland Housing Group. Back
120
DEC01, Annex B, Office of the Deputy Prime Minister (ODPM); DEC46,
para 7, Liverpool City Council. Back
121
DEC01, para 8.7. Back
122
Borrowing by Local Authorities contributes to the PSBR, whereas
borrowing by Registered Social Landlords does not. Back
123
Q438, Jim Coulter, National Housing Federation. Back
124
DEC21, paras. 7.1 - 7.3, The National Housing Federation. Back
125
NAO: Improving Social Housing through Transfer; HC496. March 2003.
Paras. 3.30 - 3.38. Back
126
DEC01, para. 8.12, Office
of the Deputy Prime Minister (ODPM). Back
127
DEC01, para 8.17, Office
of the Deputy Prime Minister (ODPM). Back
128
DEC01, Annex B, p 21. Office of the Deputy Prime Minister (ODPM). Back
129
DEC01, para 8.20. Office of the Deputy Prime Minister (ODPM). Back
130
DEC34, para. 3.2.Westminster City Council & CityWest Homes. Back
131
Q292, Nigel Brooke, CityWest Homes. Back
132
Q280, Steve Hilditch, Hammersmith
& Fulham Housing Commission. Back
133
Q289, Steve Hilditch, Hammersmith
& Fulham Housing Commission. Back
134
Q287, Steve Hilditch, Hammersmith & Fulham Housing Commission. Back
135
Q287, Nigel Brooke, CityWest
Homes. Back
136
Q153, Neil McDonald, ODPM. Back
137
Q154, Neil McDonald, ODPM. Back
138
DEC25, p2, City Of York Council Back
139
DEC03, para. 3.4, Unison; See also evidence provided by Hammersmith
& Fulham Housing Commission, and Defend Council Housing. Back
140
Q183, Roy Irwin, Audit
Commission. Back
141
Q183, Roy Irwin, Audit Commission. Back
142
Q183, Roy Irwin, Audit Commission. Back
143
DEC01(c), Office of the Deputy Prime Minister (ODPM). Back
144
Q206, Roy Irwin, Audit
Commission. Back
145
DEC03, section 3.3, Unison. Back
146
ODPM A way forward for
housing capital finance, paragraph 32 (ii) Back
147
ODPM: Review of the Decent Homes Target for Social Housing (PSA
Plus Review); March 2003; p23. Back
148
DEC01, para 7.3. Office
of the Deputy Prime Minister (ODPM). Back
149
Q33, Sarah Webb, Chartered Institute of Housing. Back
150
Housing Today, 26 September
2003 : 'Birmingham on the Brink' Back
151
DEC65(a), p1, Camden Council. Back
152
Public Finance, 19-25 March 2004, p13. Back
153
DEC65, para 12, Camden
Council. Back
154
The Guardian, January 19th 2004 Back
155
DEC52, p3. Back
156
DEC53, p3-4. Back
157
Q525, The Rt Hon Keith Hill MP, Minister of State for Housing. Back
158
Q159, Neil Mc Donald, ODPM. Back
159
Q159, Neil Mc Donald, ODPM. Back
160
See paragraphs 79 to 91
above. Back
161
Q33, Sarah Webb, Chartered Institute of Housing. Back
162
ODPM: A Guide to Social Rent reforms in the Local Authority Sector:
Chapter 2: Introduction. http://www.odpm.gov.uk/stellent/groups/odpm_housing/documents/page/odpm_house_609061-01.hcsp#P64_2520
Back
163
Q471, Danny Friedman, National Housing Federation Back
164
Q320 - see also DEC42, para 4. Back
165
Q321, Deborah Shackleton, Riverside Housing Group. Back
166
Q359, Andrew Taylor, Sunderland Housing Group. Back
167
Q44, Sarah Webb, Chartered Institute of Housing. Back
168
Q198, Dr Norman Perry, Housing Corporation. Back
169
See questions 146-148, Neil McDonald, ODPM. Back
170
DEC01, para 8.16, Office of the Deputy Prime Minister (ODPM). Back
171
Q374, John Craggs, Sunderland
Housing Group. Back
172
DEC46, para 21. Liverpool City Council. Back
173
Q363, John Craggs, Sunderland Housing Group. Back