Memorandum by the Peabody Trust (DEC 64)
INTRODUCTION
Peabody Trust whole-heartedly supports the principle
of setting a minimum standard for social housing and welcomes
the Government's determination to improve the quality of existing
social housing. Peabody Trust has a substantial stock of some
20,000 homes in London many of which are over 100 years old and
in need of considerable and continuing investment.
In our view, the key issues are:
— the scale of investment required
to meet the standard within the prescribed timescale;
— the inconsistent approach to funding.
THE STANDARD
The Decent Homes Standard is not comprehensive
enough
Crime and fear of crime are regularly identified
as a concern in social surveys and our tenants consistently prioritise
security as their top concern but the Decent Homes Standard does
not reflect this. Another high priority for tenants is sound transmission
between dwellings which is particularly relevant for tenants living
in flats. While this can be addressed reactively by Environmental
Health Officers through the Environmental Protection Act,
it is disappointing that it is not part of the Standard. Another
omission is the provision and quality of external spaces around
the home, particularly significant for tenants who live on estates.
The proposed Housing Health and Safety Rating
System, which will eventually replace the statutory minimum standard
criterion in the Decent Homes Standard, will broaden the scope
of the standard to include some elements of the above and this
is welcomed. However, we do have concerns about the administrative
burden that this will place on housing providers since it will
require further data to be collected and further changes to information
systems.
The Standard does not make use of existing methodologies
and tools
Over many years, housing providers and their
professional consultants have developed standard methodologies
for stock condition surveys and energy profiles. The standard
approach for measuring stock condition is the residual life of
components which is understood across the industry. It is difficult
to understand the added value of the approach used by the Decent
Homes Standard to measure reasonable state of repair which
is defined as a function of the age and condition of components.
And while there appears to be no added value in using a different
methodology to measure stock condition, there is a real cost to
housing providers to convert their existing datasets to this new
format. There may also be unnecessary costs incurred in replacing
components in good condition, purely on the grounds of age alone.
Similarly the criterion for reasonable degree
of thermal comfort has not made use of the industry-wide Standard
Assessment Procedure [SAP] for assessing energy performance of
housing. Again, housing providers already have SAP profiles of
their stock since this is required for the annual Housing Energy
Conservation Act [HECA] returns by local authorities and Regulatory
and Statistical Returns [RSR] by housing associations. The methodology
taken by the Decent Homes Standard appears less sophisticated
than SAP [and certainly the National Home Energy Rating System—which
could have been a viable alternative] and again, there is a real
cost to housing providers to convert their existing datasets to
this new format.
Parts of the Standard are still open to interpretation
The Standard is a strange hybrid of very prescriptive
criteria, eg a kitchen installation will not be considered modern
if it is older than 20 years, and criteria that are open to subjective
judgement, eg adequate insulation from external noise. On the
one hand, it could be argued that terms such as adequate
and reasonable enable housing providers to exercise some
flexibility, within the spirit of the Standard, in their assessments
of Modern Facilities. However, the reality is that in order to
make this assessment, housing providers have to define the parameters
for these criteria and collect data. Peabody Trust has invested
considerable time and resources working on these assessments in
conjunction with its consultants and to the best of our knowledge,
we have made more progress here than most. We have worked closely
with our IT system provider to clarify exactly what constitutes
adequate space and layout. However, this activity is being
duplicated by other housing providers which is an inefficient
use of scarce resources for the sector as a whole. Additionally,
the Government and its Regulators should be concerned that the
parameters adopted may vary from provider to provider.
SCALE OF
INVESTMENT REQUIRED
Fifty-nine per cent of Peabody's stock presently
meets the Decent Homes Standard, leaving some 6,400 properties
which require investment in order to meet the standard by 2010.
We have calculated that this will cost £153 million.
Peabody's stock is unique in terms of age, design
and location. Over 5,700 properties were built before 1900 and
2,300 of these were built before 1875. They were not generally
purpose built as self-contained accommodation but as lodging rooms
off corridors in stone-floored walk-up tenement blocks, with WCs
and running water on staircase landings and communal baths and
laundries. Very basic modernisation was undertaken in the1950s
and 1960s to create self-contained flats with private kitchens
and bathrooms, but to a standard that now appears very low. For
example, it did not include sound insulation between dwellings
nor good means of escape in case of fire. Accordingly the Trust
began a comprehensive modernisation programme in the early 1990s
and has succeeded in modernising some 2,000 homes to a high standard
since that time, in addition to its planned maintenance programmes.
There remains a significant quantum of work
to be carried out to the remaining unmodernised properties. In
2000, the Housing Corporation was briefed on the scale of investment
required to bring the remaining sub standard properties up to
standard at a cost then estimated at £220 million. The work
required far exceeds the current Decent Homes Standard which appears
to be geared around low-density post-war housing. The Trust and
its tenants consider that improving sound insulation between dwellings
is a high priority, particularly given the high density of our
stock. We also consider that improving means of escape in case
of fire to modern day standards is a high priority and installing
lifts in blocks of 5+ stories. Given the disruptive nature of
this type of work, we would aim to carry out work at the same
time as undertaking the more modest improvements required to meet
the Decent Homes Standard. For many of the Trust's properties,
improving a property to the Decent Homes Standard will not be
cost-effective if that property is on the fifth floor of a block
with no lift access, with noise transmission from the flat above
through the hollow timber floors insulated only with lath and
plaster, and with means of escape that requires the occupant to
escape from their property in a fire by travelling through a series
of habitable rooms to get to their front door.
It is a dilemma whether to reduce the scope
of our current modernisation programmes in order to achieve the
Decent Homes Standard within the Government's timescale and then
return after 2010 to carry out more comprehensive works to our
own standard, or whether to retain our existing standard and accept
that not all our properties will have been modernised within the
next 7 years, not least because of the need to decant residents
to carry out the works.
We have calculated that to improve our stock
up to a realistic modern standard, taking into account its unique
design, will cost in the order of £212 million (inclusive
of the £153 million above) by 2010, with significant further
investment required beyond that date.
FUNDING FOR
DECENT HOMES
The Government has established a funding regime
for local authorities to meet the Decent Homes Standard in the
form of stock transfers and Arms Length Management Organisations.
No funding has been made available for housing associations to
meet the Standard. Yet most local authority housing stock was
built after the second world war and is less likely to have a
problem meeting the Decent Homes Standard than the older housing
Trusts much of whose stock was built in the century before last.
The Trust has a unique portfolio of social housing
in central and inner London. We are determined to improve our
housing stock to a high standard, beyond that of the current Decent
Homes Standard. However, we cannot afford to fund even the level
of investment required to meet the DHS by 2010 without new funding
streams. We are constrained from increasing rents beyond the current
Government rent restructuring formula, notwithstanding that our
rents are low. We have exhausted our capacity to raise private
finance since we are already servicing loans of £175 million
taken out over the last 15 years to fund previous investment in
our existing stock. That leaves property disposals or grant funding.
In the absence of grant funding, we have calculated
that in order to fund our Decent Homes programme within the required
timescale, we will have to dispose of around 1,000 homes. These
homes would be permanently lost to the social housing sector.
This appears to conflict with the interim findings of the Barker
Review of Housing Supply which has highlighted the need for more
affordable housing.
If the Government is serious about improving
both the quality and supply of social housing, it needs to provide
funding to ensure that its target can be met and the existing
supply of social housing in areas of high demand is conserved.
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