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UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 46-i House of COMMONS MINUTES OF EVIDENCE TAKEN BEFORE OFFICE OF THE DEPUTY PRIME MINISTER: HOUSING, PLANNING, LOCAL GOVERNMENT AND THE REGIONS COMMITTEE
Tuesday 9 December 2003 MS SARAH WEBB, MR ANDREW GRIFFITHS and MR PETER BROWN MS JENNY SAUNDERS, MR RONALD CAMPBELL, MS GEORGIE KLEIN and MS JILL JOHNSTONE MS MARIE PYE, MR PAUL GAMBLE and MR JOHN STEWART MS ANNE KIRKHAM, MR NEIL McDONALD and MR JEFF HOLLINGWORTH Evidence heard in Public Questions 1 - 166
USE OF THE TRANSCRIPT
Oral Evidence Taken before the Office of the Deputy Prime Minister: Housing, Planning, Local Government and the Regions Committee on Tuesday 9 December 2003 Members present Andrew Bennett, in the Chair Mr Clive Betts Chris Mole Christine Russell Mr Adrian Sanders ________________ Memoranda submitted by Chartered Institute of Housing (CIH) and Chartered Institute of Environmental Health (CIEH)
Examination of Witnesses
Witnesses: MS SARAH WEBB, Director of Policy, Chartered Institute of Housing (CIH), MR ANDREW GRIFFITHS, Principal Policy Officer, MR PETER BROWN, Chartered Environmental Health Practitioner and Manager of Private Sector Housing, Croydon Council, Chartered Institute of Environmental Health (CIEH), examined. Q1 Chairman: Can I welcome you to the Committee and to our first session in our inquiry into the Decent Homes target, and could I ask you to introduce yourselves for the record, please? Ms Webb: My name is Sarah Webb. I am the Director of Policy at the Chartered Institute of Housing. Mr Griffiths: Good morning, Chairman. My name is Andrew Griffiths. I am the Principal Policy Officer at the Chartered Institute of Environmental Health. Mr Brown: My name is Peter Brown. I am a Private Sector Housing Manager at Croydon Council. Q2 Chairman: Thank you very much. Does anyone want to say anything by way of introduction or are you happy for us to go into questions? Mr Griffiths: Very briefly, if I may, Chairman. Our main concern about the Decent Homes Standard is that it appears to be a bolt‑on as far as the private sector is concerned. We are principally concerned about the absence of enforcement powers for applying key aspects of the standard and the issue of whether or not enforcement action should be taken against owner‑occupiers. As far as the owner‑occupied sector is concerned, many of the problems relate back to the old concept of an Englishman's home being his castle and that historic concept pervades a lot of this. The only alternative to dealing with this is incentives and many incentives in local authority areas are no longer available. We think in some aspects the Decent Homes Standard is a retrograde step because it will be a distraction for local authorities and divert effort away from the worst properties, and there are also far too many vulnerable people in multi‑occupied properties that will not benefit from the standard. Chairman: Thank you very much. Q3 Mr Betts: Do you think the Decent Homes Standard is sufficiently broad in its definition and, if not, what would you like to see added in? Mr Griffiths: I do not believe it is, Chairman. Some of the factors in the definition are not prioritised in any way and we think they should be prioritised, for example it is technically possible for a house with an external WC to be considered "almost decent". I accept that the issues around the fitness standard and so on do affect that, but we think careful thought will need to be given to the various criteria that are in there. It refers to the current minimum standard and obviously that was framed with the proposed health and safety ratings system in mind, but of course the ratings system is a system and not a standard, so there will need to be some thought given to the way in which that is applied. Many parts of the Decent Homes Standard are not covered by the health and safety ratings system and therefore there are no powers to enforce it and there are no powers to deal with outdated building components, for example the age of bathrooms and so on. Our key issue is around thermal comfort and the fact that there is no reference in the standard to affordability and fuel poverty is not acknowledged at all. The standard for loft insulation, for example, is only about 16 per cent of the proposed Building Regulations Standard and we think that if there is to be intervention to improve energy efficiency, the way that should be dealt with is with a SAP value for intervention and a target SAP value for any improvement to be made. Our last point would be that so far as common parts are concerned, it talks about the arrangement and the size but not the condition and for many tenants particularly the key issue is the condition of the common parts over which they have very little control. Ms Webb: From a CIH perspective, we would echo the points particularly about fuel poverty that Andrew has just made. We know you are going to hear later from people who are concerned about accessibility particularly for disabled people and we would echo and support that. Our other main points that have not been covered would be about liveability and sustainability. In terms of liveability, when landlords ask tenants what it is that they would like scarce resource spent on, it is sometimes not the kind of work that is required to bring houses up to the Decent Homes Standard, it is on wider environmental work and quite often the measures are about crime reduction and the fear of crime reduction and those are not included. There are also some situations where just spending money on bringing homes up to that minimum decent standard will not produce in any way what we call sustainable communities. Q4 Mr Betts: Do you think that the standards on the issues which are covered are sufficiently high, and is it reasonable to draw comparisons between building regulations and requirements for new homes and those which are going to be required by existing homes up to a legal standard? Mr Brown: I think it is reasonable to consider the building regulations as the basic standard and particularly with energy efficiency and with the Warm Front grants and other local authority initiatives we are looking at loft insulation to meet the building regulations requirements, so I think that is quite important, whereas the standard is rather retrograde in looking at only 50 millimetres rather than the 300 plus millimetres that is required now. That is one example where I think the building regulations are the better standard and we should try and deal with that even with older properties. Q5 Mr Betts: Is it realistic? Is it not much more difficult in some respects to get an existing home which may be many decades old brought up to the exact same standard as a new home? Loft insulation would be fairly easy, you could just improve the insulation of the loft. Are there not other things which are much more difficult and very expensive to do in an older property? Mr Brown: Some things are challenging. Take a house with solid brick walls, it is costly to bring that up to a higher thermal insulation standard and that would be expensive. The question is where do we want to go, are we trying to improve the housing stock and improve energy efficiency or are we going to sit back and say it is too expensive so we will not even try and challenge it? Ms Webb: If you look at where people are housed, self‑evidently the vast majority of people are in existing housing and if you overlay the vulnerability aspects you are going to have more vulnerable people in older private sector housing where we really need to be providing some support to help them bring their houses up to a Decent Homes Standard. Those vulnerable people will not be the people who are going to end up in the new homes by and large. Mr Griffiths: I think we would say that the Decent Homes Standard is not sufficiently challenging. I accept the points of expense and maybe in some situations the Building Regulations Standard is not appropriate in all areas. We think that the Building Regulations Standard is sufficient as far as thermal efficiency is concerned, but I think that the Decent Homes Standard should be made more challenging. Q6 Mr Betts: I want to ask how you measure some of these things because in the end we will have to have a fairly simple system of measurement to decide whether we are actually hitting the targets. On issues like liveability, how on earth do you begin to measure things like that in any meaningful way where people can objectively say that the standard has been met? Ms Webb: I think you can come up with liveability indicators in terms of defensible space for example. Some of the things that are excluded in terms of that liveability agenda to do with environmental factors, fences and defensible spaces, gateways over alleys and that kind of thing are quite sensible things and would not be hard to measure at all. Q7 Mr Betts: And words such as reasonable and adequate that are mentioned throughout the Decent Homes Standard measurable in any way? Mr Griffiths: They are probably not measurable specifically and this is a part of any kind of aspirational standard. The key here is going to be guidance because environmental health officers regularly have to enforce legislation which uses words like reasonable, appropriate, best practical means and so on. Q8 Chairman: Those are often challenged in the courts, so you end up with a ruling in the courts. This process is not going to be challenged in that way, it is only going to be guidance from the Department, is it not? Mr Griffiths: Indeed, Chairman, I would accept that, but that does bring us to the point that there are so many aspects of the standard where there are actually no powers to require them to be raised and in the absence of those powers I think the achievement of the standard is going to be very difficult. Q9 Chris Mole: I think some of you have given evidence to us in an earlier inquiry into the Housing Health and Safety Rating System. Do you think that is going to help at all in achieving the Decent Homes Standard? Mr Griffiths: It will go some way towards it, but there are these gaps and many of the issues around outdated building components will not be covered by the ratings system. If the Government is serious about increasing the number of vulnerable people who live in decent homes, that will not be achievable or measurable without specific powers to require this to happen. The other issue is that many people living in non‑decent homes actually own their own homes and are equity rich and cash poor, with the result that the only way in which they can be encouraged to make the necessary improvements to update their bathroom facilities would be by incentives through different forms of grants. The Regulatory Reform Order that came out recently had given local authorities far more flexibility in offering financial assistance, but the problem is that in many local authority areas that assistance is not being given, the local authorities are exercising their prerogative to decide on where the money should be spent and that is an entirely reasonable concept, but with the scarcity of resources money is not being made available in the private sector in many cases and if equity release is to work then it has to be used in such a way that there are directives for people to improve the aspects of their properties that need improving. Many people will want to use equity release, if they use it at all and it is often difficult to persuade them to make cosmetic improvements to the property and not on issues that actually affect the decency of the home. Ms Webb: We would echo that point. I would just add that that is even harder for local authorities now as a result of the introduction of Regional Housing Boards and the single regional pot because "hit" money that local authorities had to direct some of their spending towards the private sector has now gone into the single regional pot and there are no guarantees of them getting that money back. Q10 Chairman: There is no guarantee that they will not, is there? Ms Webb: No, there is not any guarantee. Part of what we are all about is making sure that the Regional Housing Boards that make those determinations understand the problem of non‑decency in the private sector. Q11 Chris Mole: Just concentrating on the environmental health perspective for a moment, you told us in your memorandum that the HHSRS will be ineffective, if not irrelevant, in reducing the aim of the number of vulnerable people living in non‑decent homes in the private sector. Is this still your view or, if not, can you explain why? Mr Griffiths: Yes, it is. The issue is going back to building components and the lack of any relevance of the ratings system to that, because the ratings system is about identifying hazards to health and it is an evidence‑based system and it is designed to be able to demonstrate that particular issues that exist in a property represent a hazard to people's health and that hazard should be removed and the evidence to say that, for example, a bathroom of more than 30 years old is a hazard to someone's health is just not there. Q12 Chairman: What is wrong with a bath that is more than 30 years old? Mr Griffiths: I am not sure I could answer that, Chairman. That is the core of the issue, identifying exactly what is wrong with the bathroom fittings, if they are all complete and working. There is very little evidence to show that that is in any way a hazard to people and should be replaced, however desirable that may be. The bathroom in my own home is approximately 30 years old anyway so I am in danger of living in a non‑decent house. Q13 Chris Mole: The National Housing Federation has expressed concern in this area about a lack of clarity around the concept of modern facilities. Is that something you both share a concern about? Mr Griffiths: Yes. Ms Webb: Yes. Mr Brown: We are particularly concerned about that element of the Decent Homes Standard because it appears that if the property can meet three out of the six then it will be a decent home. There is a lot of concern with unmodern kitchens, unmodern bathrooms and noise installation as to exactly what we are trying to achieve under the Decent Homes Standard with that sort of criteria where you can pick and mix to see if the house meets the standard and we would like to see some sort of a priority rating on those criteria and that particular element of the standard. Ms Webb: I think the approach we would like to take is guidance rather than being over‑prescriptive because there is overlaid with all of this, as I said at the start, the issue of what tenant preferences are. Tenants, for example, might be quite happy to live with a 30‑year old bathroom and prefer some other work being done to reduce their fear of crime or whatever and we need some flexibility to allow landlords to respond to that. Q14 Chris Mole: Sub‑tenants will be concerned about the age and condition of their bathroom. Is it not useful to have something that enables them to point a finger and say, "My bathroom is 30 years old and not looking very decent so I want it replaced"? Ms Webb: I am not an expert on baths, but it seems to me the most important thing is not the age of it but whether it is accessible, whether you can keep it clean, whether you have got hot water to fill it, those kind of issues, not just that it is 30 years old. We could spend an awfully long time defining every single element of a bath and listing it, but I am not sure that is the most effective way to go. In particular, social landlords, local authorities and housing associations will be able to make quite sensible judgments about whether a bathroom is or is not fit for purpose by today's standards. Mr Griffiths: Where facilities are shared in multi‑occupied properties, this sort of accommodation is often occupied by people who are inherently vulnerable and they are not going to be covered by this standard and I think that is the extent to which we believe it is a retrograde step. Q15 Chris Mole: Moving on to look at whether we can change things now that we are part way into trying to deliver on decent homes, you have both just said that you would not mind seeing the breadth of it changed in order to take on board things like accessibility and having a decent neighbourhood. Is that practicable at this stage of the programme? Ms Webb: Obviously you cannot just introduce that and leave all the targets as they are and the funding. Every time you change the standard to make it harder to reach you have to recognise that it is going to take more time and more money to deliver. I do not think local authorities and housing associations would necessarily mind that providing there is clear guidance on what the changes are and there is recognition of those two factors. It is quite a difficult tension to keep your foot on the pedal of decent homes because it is surely right that everyone should have a decent home and making sure that you are not sacrificing delivering proper sustainable communities by taking a bit longer to get to a more sensible standard, I think there is an adult debate to be had about that, it is not just that one option is automatically right, but for me that is the key decision, yes, we might want to take a bit longer to get the right outcome in terms of sustainable communities and sustainable decent homes rather than push for the existing definition where that will not produce sustainable communities. Mr Brown: I think this could be an opportunity to widen the standard for the private sector and leave the social sector as it is because that is going to cause a lot of problems. If you widen and change the standard then all the work that has been done already in the social sector may have to be revisited and I do not think that is really what we want to do at this stage. Of course in doing that the standard would no longer be tenure neutral, which I know is one of the concepts, but I think that one way forward would be to concentrate on the private sector and perhaps just change the standard there. Q16 Chris Mole: Would you support a move to include something on noise insulation in the Decent Homes Standard to assist people with noisy neighbours? Mr Griffiths: In terms of noise installation, yes. The standard refers generally to where noise is a problem, but I think that having a standard will be a positive step forward. Generally speaking noise installation is not well covered in the legislation and I think we would want to see that being firmly included in the standard. Q17 Chris Mole: It talks about external noise, not noise between flats. Mr Griffiths: I am thinking of noise external to the individual dwelling, I do not mean outside the building. Q18 Chris Mole: I think this is the problem, is it not, that the Decent Homes Standard talks about aircraft noise, road noise and factory noise but not the people in the flat next door? Mr Griffiths: Yes, that was the point I was meaning to make, that noise outside of the individual dwelling could be within the building itself. I think inadequate sound installation where people feel they do not have control over their own environment is a great stressor and one that should be properly addressed. Q19 Christine Russell: I would like to ask questions about the Decent Homes Standard in the private sector. It is only homes that are inhabited by so‑called "vulnerable households", is that right, that will come under the target? Do local authorities actually know which properties vulnerable people are living in now? Mr Griffiths: I do not think most local authorities do know that. They will have some idea from Census data and other local knowledge, but I do not think they will know categorically where all their vulnerable people are in the private sector. Q20 Christine Russell: Do you agree that the fact that the target may not be met one day but will be met the following day is actually going to mean it will be quite difficult to determine whether or not there is any progress? Mr Griffiths: I think it is very difficult in that we have these inspirational targets to work to, but there are no local targets which can make it very hard for local authorities to know that and work towards achieving some sort of improvement in the target. Q21 Christine Russell: Could it be a double‑edged sword for vulnerable households in that certain landlords will decide that they are not going to rent property to vulnerable people? Mr Griffiths: I think that depends on what incentives there are locally for local landlords. When local authorities undertake local condition surveys one of the conditions is the anonymity of the individuals concerned and that does not help in identifying the location of vulnerable people. Q22 Christine Russell: Finally, you said there were concerns about the targets and HMOs. Would you like to comment on the problems that will be encountered particularly in HMOs? Mr Brown: There are a very wide number of property types which can be classified as HMOs. Our particular concern is where you have got people living in bedsits or rooms and sharing facilities, bathrooms and kitchens and how the Decent Homes Standard is going to improve their position. Q23 Christine Russell: So it is where there are communal kitchens and bathrooms? Mr Brown: Yes. Q24 Christine Russell: Have you anything you wish to add? Ms Webb: The most important problem in all of this is not that the standard has been extended to the private sector but that local authorities cannot match their information about non‑decency in the private sector with their vulnerable private sector tenants or owners. Q25 Mr Sanders: Mr Griffiths, you mentioned at the beginning that there is no mechanism for enforcement. What mechanism would you like to see? Mr Griffiths: The mechanism that we would like to see would be one that identifies ways that local authorities could require owners against their will, which is the nub of the issue, to carry out work to bring a property up to the standard, that is if the Government is serious about achieving the standard, because it is fine to have an aspirational standard and we want to see progress towards it, but in our view local landlords and owner‑occupiers are going to be reluctant to carry out this work in the absence of financial incentives and local authorities having the finance to offer those incentives, so in that situation the only way forward is having powers to require people to replace out‑of‑date facilities. That might seem excessive, it might seem intrusive, but if the Government is serious about achieving the standard and increasing the number of vulnerable people in decent homes, that is the only way it will be achieved in practice in our view. Ms Webb: We would support that. You can look at carrots and we have talked about equity release schemes and ways of encouraging private vulnerable owners to bring homes up to the Decent Homes Standard. We already have care and repair initiatives and home improvement agency work and they do not necessarily target their work at the Decent Homes Standard. In terms of private landlords, if you are talking about the worst landlords and the worst conditions and the most vulnerable people, it seems to us the only way to tackle that seriously is to give local authorities more powers to require landlords to bring homes up to the Decent Homes Standard, particularly where they fail on a number of the areas of the Decent Homes Standard. Q26 Mr Sanders: What if you made the Decent Homes Standard a condition at the point of sale in the private sector, would that be helpful? Ms Webb: I think in our evidence on the Housing Bill we did talk about making a link between the Decent Homes Standard and the seller's home information pack. I think it would be quite hard to make it a requirement in reality. I think there are six million non‑decent, private sector homes in the country based on the English House Condition Survey. If you made it a requirement tomorrow that you could not sell any of those until they were brought up to the Decent Homes Standard we might solve the house pricing increase problem but I do not think that would be realistic. Q27 Mr Sanders: Do homes for rent turn over as quickly as other homes in the private sector? Ms Webb: I do not know the answer to that. Mr Brown: On the whole with the shorthold tenancies homes turn over fairly quickly in the private rented sector, although you do have some regulated tenants who obviously will stay there for life. Q28 Mr Sanders: I meant in terms of ownership, do landlords who own for rent sell them on? Mr Brown: Some do at the periphery, but some will keep their properties many years. If you are relying on the sale of properties and on the scale we are talking about here, it is going to take a long time if you just use that mechanism to bring properties up to the proper standard. Many vulnerable people tend to remain in their homes for many years and do not sell and move up. In Croydon locally we estimated from last year's Condition Survey that eight per cent of properties were unfit and that 53 per cent failed the Decent Homes Standard, which gives you some idea of what we are talking about and the enormity of the issue here. Q29 Mr Sanders: What is the justification for taxpayers' money being used to help private owners improve their property when the value of that property seems to be rising faster than the amount of extra money that goes into public services? Why should taxpayers' money be used to help private landlords who own the property and get the benefit of that rise in property value? Mr Griffiths: If we are talking about the private rented sector where you have tenants, whether or not they are vulnerable and therefore are not in proper control of their own environment, there is an argument that would justify a taxpayer using their resources to provide incentives for landlords to raise the living standards of people who otherwise would not have that control. The other issue is more difficult to address in terms of owner‑occupiers particularly because many of them could realise equity on their properties, but local authorities know from practical experience how exceedingly difficult it is to persuade people to realise that equity when they want to pass it on to their families. Even if they do realise equity, what they tend to do is to spend it on cosmetic improvements. Q30 Chairman: Presumably if we got licensing of the landlords enforced then a condition of giving someone a licence could be that the property met the Decent Homes Standard. Mr Griffiths: That could be a requirement, yes. Q31 Mr Betts: Do you think there are the resources and the enforcement powers to deliver the Decent Homes targets in the way that the Department has laid down? Do you think there is a danger that concentrating on this particular issue may divert resources and attention away from other important priorities such as dealing with housing in multiple occupations? Mr Griffiths: Absolutely. That is the way in which the Decent Homes Standard is a retrograde step because it will distract local authorities, depending on how the achievement of the standard is going to be measured, away from dealing with the worst properties where the issue is not about the age of the bathroom but more about multiple occupation and stability, the lack of facilities, means of escape from fire and so on, which are the worst problems. The Decent Homes Standard is a fine aspiration but will actually be a distraction. Ms Webb: Were you referring simply to the private sector? Q32 Mr Betts: No, generally. Ms Webb: I think you do need to separate out the issues. Although there is a huge attraction in applying the Decent Homes Standard across tenures, there are different issues in terms of resources and powers in all tenures. We have not talked very much about the Decent Homes targets in relation to social rented housing, but there are concerns about the resources and the options available to local authorities and housing associations to deliver the Decent Homes Standard in those sectors. In relation to the private rented sector, I think at the far end there are some really problematic properties and we need to make sure we do not deflect attention from that. In terms of owner occupation, I think there are vast numbers of very vulnerable and elderly people living in owner‑occupied housing and we have not collectively solved this equity release problem and turning equity release into ways of helping owner‑occupiers bring their homes up to a decent standard, but there are lots of people living in pretty shabby, non‑decent housing for which we do not have a solution and I would not want to see us moving away from that problem. Q33 Mr Betts: You referred to the issues over funding. One of the complaints that have come to us generally from tenant groups is that there is not a level playing field when authorities come to look at the options available to them in terms of getting to the Decent Homes Standard. Do you think that is a reasonable situation? Do you think there should be a level playing field? What are your concerns over what exists or do you support it? Ms Webb: I think the level playing field argument is very difficult because it is uneven, but it is uneven in so many different ways across the options that it is actually quite hard to see that you could bring them altogether. I will give you one example that might not be the one you would expect me to give. If you are going for the transfer route and lots of tenants would say there is not a level playing field because transfer is encouraged, then everybody has to have a vote and it cannot go ahead unless you have a vote. If you go through the PFI route there is no requirement for a vote. That is an example of an uneven playing field that might be more problematic for transfers than it is for another option. I think the biggest problem in this is how you balance the requirement for a local authority to bring all its homes up to a decent standard with the aspiration to empower tenants to make a choice about what option they want. There are local authorities out there who have gone through very rigorous option appraisal exercises, who have had tenants, juries and symposiums and all sorts of good practice mechanisms, but the tenants have concluded at the end of the day that they want option A and that has not been deliverable for the local authority. An example would be a three star authority who cannot meet the Decent Homes Standard through its existing resources but whose tenants want to retain the stock themselves or a local authority whose tenants choose the ALMO route but who do not have enough stars to make that a realistic option. On the one hand you have asked tenants and on the other hand you have said "I'm sorry, we can't deliver the one you chose". Q34 Mr Betts: What options should there be for a local authority where the tenants are saying they want option A and the resources are not there? Should the local authority be given the freedom to borrow, as an ALMO would? Is there any other option that you think should be available as well as the four options that currently exist? Is there something that can be done there to enable that to be worked through? Ms Webb: I think probably a little bit of all of those because one of the things that are going to make this work is a maximum number of options for local authorities and for their tenants. I am not an expert in the whole local authority private borrowing side and whether we should redefine the borrowing requirement rules, but for a long time cleverer people than me have failed to win the argument that we should change the borrowing requirements to allow local authorities to borrow. There was a debate last year known locally as the Blue Skies debate as to whether ALMOs should be given more powers to borrow and more freedoms to borrow and we were very supportive of mechanisms to allow them to do that. We understand why there is a link between good practice and excellence and stars and the ALMO route, but we think there is probably more that could be done to help local authorities get their performance up to a better standard to enable them to take advantage of the existing options rather than reinvent another suite of options on top of that. Q35 Mr Betts: If they want to stay with the local authority where do they go to? Ms Webb: If you have asked tenants what they want, if you have got an excellent performing local authority, it has got three stars so everyone agrees it is performing really well and the tenants want to stay with the council, it seems counter‑intuitive to make them go somewhere else, but we have to balance that against the reality of what resources are available and we cannot just magic up extra resources for local authorities to enable them to deliver the Decent Homes Standard. Q36 Chairman: If we changed the Treasury rules there would be no problem. Ms Webb: Indeed. If you can help achieve that then it would be helpful. Q37 Chairman: It might be helpful if you just spelt out that it is stupid Treasury rules that make us have that problem. Ms Webb: I am happy to do that. A general comment about the distribution and attention given to the two sectors. I do not think you will ever get to a level playing field because there are too many issues and concepts around that which will prevent that being achieved, but our general view is that, for whatever reason, and some of the reasons may be understandable, the amount of resources and attention and effort that is given to the social sector, which comprises less than a quarter of the total housing stock, is out of all proportion to the needs of the private sector. Q38 Mr Betts: It seems the Government is absolutely determined to take out the strategic role of local authorities more than the responsibilities of the private sector from their responsibilities for housing management. Is that justified or can authorities do both together reasonably well? Ms Webb: I think it is possible for a local authority to do both together. The trouble is they have not been good historically at doing that partly because we have not necessarily required them to be very good as strategic neighbours and we have not given them very much guidance. I am absolutely clear that local authorities as good strategic enablers need to be looking at the big picture, the long‑term vision and across tenure, not just at the houses that they manage. Part of the reason for that separation is because when they manage houses they are pushed towards only looking at their own stock and not seeing that cross‑tenure picture. However, there is nothing theoretical about a local authority which says they cannot take that cross‑tenure perspective and also have houses in ownership. It is about good practice as a strategic enabler, not a model that says you can or cannot. Q39 Mr Betts: Do you think the desire to separate out has led to the push for stock transfers as a way of absolute clear separation when in fact the National Audit Office findings have shown that perhaps, in terms of value for money, stock transfers have not necessarily delivered what they were supposed to do? Ms Webb: I would not agree with that. I do not think that the push for transfers had very much to do with the separation of strategy and landlord functions, I think that is a post justification for some transfers. There are lots of reasons why you might consider transfer, of which the most obvious one is that of all the options it is the one that is most likely to secure the most amount of money. So if you need to spend a lot of money on restructuring your housing stock rather than just bringing it up to a Decent Homes Standard you may want to think about the transfer route and it does deliver the separation, but I do not think the separation was the reason. On the NAO Report, yes, it did show that transfers were not value for money or less effective as an option, but I think you also have to be aware of what actual resources there are. We could all say would it not be wonderful if every single local authority did not have to transfer because there was money for them all to retain their stock, but that is not where we are unless we can achieve changing the Treasury rules about borrowing. Q40 Mr Betts: There has been some concern expressed amongst some London authorities in particular that the change in the management and maintenance allowances will make ALMOs in those areas less viable because it will shift those resources to northern authorities and for those authorities who are losing money under these new arrangements, it will tip them back in favour of stock transfer in terms of the resources necessary. Is that an issue that has been raised with you and have you similar concerns? Ms Webb: The difficult issue is that there are some local authorities in the north who have benefited from increased M&M and who are now not thinking about transfers and ALMOs and thinking that they will be able to retain their stock. That is a very good example of a plea for a bit of stability because it is very difficult to put tenants through a complex option appraisal process and have the goalposts continually moving. Mr Betts: So the monies moved to the north should stay and we should not revert back to the old system? Chairman: A smile does not go down on the record very well. Q41 Mr Sanders: Is there a tension between the Decent Homes Standard and broader housing policies such as the sustainable communities plan? Ms Webb: I do not think there needs to be but I fear that there is. There are a number of local authorities who have reported to us that they would have, on the one hand, a Decent Homes Standard and an amount of money required to bring their houses up to a Decent Homes Standard but over here they would have a plan to deliver sustainable communities and they are not the same and they would rather deliver the plan that is going to deliver them sustainable communities. I will give you a practical example. If you are a large metropolitan authority with some very poor quality tower blocks on the periphery of your urban area, with no facilities at all, high levels of anti‑social behaviour and crime and the fear of crime, drug problems, no community facilities, pretty shabby houses, you may be able to deliver the Decent Homes Standard by putting plastic windows in the tower blocks but what you need to do is completely restructure those communities. You may want to demolish the tower blocks and provide a mix of rented and owner‑occupied housing of the kind that we would all be happy to live in, but the Decent Homes Standard is channelling you towards spending a smaller amount of money to tart up the existing stock you have rather than restructure it and that is our main concern with the conflict between the sustainability agenda and the Decent Homes agenda. Q42 Mr Sanders: Would it be feasible to integrate them? Ms Webb: I think it would. It requires a bit more trust of local authorities to actually determine what is required in their area. To go back to the previous question, making them good at that strategic work allows them to look at the housing in the round and say in that particular peripheral estate our problem is that that market needs to be restructured and these are the things we want to do to restructure it. So it is about more trust being given to local authorities and more resources to local authorities to take that sensible long‑term approach. Mr Griffiths: One quick observation about the difference between the social and the private sector. Within the social sector there is an element of people's choice or democracy, however imperfect it may be and the problems associated with it, but that does not exist in any shape or form in the private sector and in order to achieve anything remotely approaching that local authorities have to put in a lot of time, effort and resources because promotion and education is very resource intensive. Q43 Mr Sanders: One of the conflicts here is that the Government is telling local authorities and agencies what to do. At the end of the day should it not be the individual communities who should decide between the investment priorities on whether homes are up to a decent standard or whether it is about improving communities? Ms Webb: I have talked about that tension before. Good practice in all areas of our lives is that we empower local people to make decisions about what they want in their community. There is a tension between the needs of existing tenants and existing residents to make it non‑tenure specific and future tenants and residents and local authorities and housing associations do take very seriously their responsibility to maintain a decent stock of social housing for the next generation of tenants. So elderly people, in particular, may not want a five‑year intrusive modernisation programme, but if the local authority does not do the work required to stop the roof leaking then in another five years time it will cost twice as much money and the house may need to be demolished. There are some difficult issues but they can be worked through if you allow the local authority time to talk to the community in a local way. We are supportive of the standard and the target because you need to incentivise people to bring their houses up to a Decent Homes Standard. CIH was arguing for the Decent Homes Standard a long time ago but not at the expense of short‑term fixes that will not solve the problem properly. Q44 Chris Mole: Is there not another manifestation of exactly that point in that existing tenants might be persuaded to vote to achieve decent homes but would not vote to achieve enough capital receipts in order to build new homes for future generations? Ms Webb: Yes. Interestingly enough, I do not think many tenants have been swayed one way or the other in transfers by the argument that new social housing will be provided. In some areas there is an argument for saying we should have been saying to them you need to know that one of the benefits of going down the transfer route will be increasing the housing supply. The real problem for me is that the worst condition houses, the ones we really should be prioritising tackling are the ones most likely to have a negative value. So the issue of any kind of a receipt and what you might do with that is actually irrelevant because a local authority is not going to have any money. I fear 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. Chairman: On that note, can I thank you very much for your evidence. Memoranda submitted by National Energy Action and National Consumer Council Examination of Witnesses
Witnesses: MS JENNY SAUNDERS, Director of Communications, MR RONALD CAMPBELL, Information Officer, National Energy Action, MS GEORGIE KLEIN, Senior Policy Officer, MS JILL JOHNSTONE, Head of Policy, Research and Strategy, National Consumer Council, examined. Q45 Chairman: Can I welcome you to the second session this morning and ask you to introduce yourselves for the Committee? Mr Campbell: I am Ronald Campbell. I am an Information Officer at National Energy Action. Ms Saunders: Jenny Saunders, Director of Communications at National Energy Action. Ms Johnstone: Jill Johnstone. I am Head of Policy Research and Strategy at the National Consumer Council. Ms Klein: I am Georgia Klein from the National Consumer Council. I am a Senior Policy Adviser on consumer disadvantage and utilities. Q46 Chairman: Does anyone want to say anything by way of introduction or are you happy for us to go straight to questions? Ms Saunders: Our interest is in the thermal comfort criterion and how that is going to help deliver the Warm Homes and Energy Conservation Act and its total inadequacy to achieve that. Q47 Mr Betts: Do you think the definition of Decent Homes as provided is acceptable and if you have got concerns or things that you want to see altered, are they concerns about the breadth of what is not included in the definition or the actual standards of things that are included in the definition? Ms Saunders: From our point of view, we want both. We would like to see better standards and better insulation but also other things that are not currently covered which would be helpful to improving homes. We want to see the insulation and heating standards that are defined within the criterion being in line with the building regulations. At the moment the standards are below that and there is no reason why they cannot be changed in our view. Mr Campbell: The thermal comfort criterion is intended to be the element by which the requirements of the Warm Homes and Energy Conservation Act and the UK Fuel Poverty Strategy are met. We were quite supportive of the idea that they should adopt a measures‑based approach to implementing energy efficiency improvements in social housing. We realise the difficulty of attempting to use a fuel poverty formula in assessing the degree of fuel poverty across the entire housing stock. The proxy was a perfectly acceptable alternative. Unfortunately, in our view, the proxy that was adopted is completely inadequate for the purpose. We can go into some detail about the failings of the proxy. I do not know how technical you want us to be in that respect. Q48 Chairman: We do not want you to be particularly technical but we want to understand the issues, so can you simplify it for me? Mr Campbell: There are two basic components to the thermal comfort criterion. One is the thermal installation of the property and the other is the standard of the heating system. In our view both of these are completely inadequate. With reference to thermal installation, there is an option - in this case we are speaking about local authority housing or social housing - to install either 50 millimetres of loft insulation or cavity wall insulation. Fifty millimetres of loft insulation was the Building Regulations Standard in 1975. Nearly 30 years on, this is what is being suggested as an adequate standard for contemporary housing. On the heating systems themselves, there is no requirement that they provide whole house heating, there is no requirement that they be modern, there is no requirement that they be efficient, the simple requirement is that they be controllable. Obviously fuel poverty is a devolved issue and perhaps we ought not to get into what happens in other administrations, but there is no reason why we should not adopt the best practice from other parts of the United Kingdom. The Scottish social housing standard and the Welsh housing quality standard are infinitely superior to what is being suggested for England. Ms Saunders: There is no requirement for properties that are deemed hard to heat. For example, if there is no cavity wall or if there is no access to the loft the property could be deemed, in theory, to be of a decent standard. There is no provision whatsoever for those harder to heat properties. Q49 Chairman: I can understand the argument that you want to have better loft insulation, but what in cash terms is the benefit of moving up from 50 millimetres to 250? What sort of percentage cut in my bill would I get as a result of that? Ms Saunders: That is a difficult question to answer. Q50 Chairman: Is it good value for money or not? If you are doing a new building, it is pretty easy to put in the thicker one rather than the thinner one and that makes sense, but if you have actually got to take the slates or stuff off to get the extra cavity in then you have got to have some indication that it is good value for money. Ms Klein: If you take the example from Warm Front and the grants available for vulnerable households to improve insulation there, the standards in Warm Front exceed those in the Decent Homes Standard. That is taxpayers' money going towards lifting people out of fuel poverty and I certainly do not think they will be spending money ineffectively in that area. Q51 Chairman: But you cannot actually give me a figure or a percentage? Mr Campbell: It is cost effective to install. Obviously it is most cost effective where you are installing insulation in a zero rated loft, but it is also economical to top up and that is why various grant programmes for the last 20 years or so have permitted top‑up grants. I cannot put a figure on the amount of money you would save, but I think it would be in the region of £200 a year. Q52 Christine Russell: I think you have probably answered this already because you are saying that the standards are totally inadequate. Does that actually mean that they will not achieve affordable warmth? You would be warm in the loft and not the living room, is that what you are saying? Ms Saunders: That is right. It is a difficult thing to measure fuel poverty because there is that balance between the housing standard and the heating standard and the cost of energy, and prices rose again just yesterday. I think what we are concerned about is there is so much that we can do in terms of maximising incomes for people or getting them on better tariffs as energy prices are due to rise, but the only long‑term solution is through having a higher thermal efficient property and you can do that through various technical measures, but that is what we need to do if we are going to meet the requirements of the Warm Homes and Energy Conservation Act. Ms Johnstone: As Jenny has said, some houses will get missed altogether because of what is not in the standard. Q53 Christine Russell: I want to ask you a related question about the Warm Front programmes. What do you think of the eligibility criteria for that? Ms Klein: Quite clearly there have been National Audit Office Reports into that and about the poor targeting of homes. The debate is whether you target for the vulnerability of the person or whether you target it towards household condition. It seems to me that there is a consensus growing on targeting towards household conditions overall and this would make far more sense. What we want to see is an energy efficiency programme that combines all these different elements together. A one-survey approach would be far more efficient and in that way any grants system could feed into that and the grants could then be targeted towards the vulnerability factor and go towards costs. Q54 Christine Russell: How integrated are all these different energy efficiency programmes that we have at the moment? Ms Klein: They are not. If we take the Warm Front programme, which is the main Government programme to tackle fuel poverty, in the owner‑occupier and private rented sector we have got the energy efficiency commitment with targets to reduce carbon emissions and it is not a fuel poverty strategy, but because suppliers have to make half their reductions in vulnerable households they have been working to put their funding into Warm Front, because Warm Front is specifically targeting those vulnerable households and they have also been targeting house associations, social housing providers in order to meet those targets, so there is a natural incentive for suppliers to do that. There has been this integration in spite of the design and the funding mechanisms and quite clearly that is an opportunity. The energy efficiency commitment is basically the biggest pot of money available that could help to achieve the Decent Homes Standard and the integration of these more formally in terms of guidance for local authorities to seek out funding from suppliers would be very welcome. Q55 Christine Russell: So you think that at an administerial level there needs to be more joined up thinking between Defra, ODPM and DTI? Ms Klein: Absolutely. I think the point is that the target, although they are looking to achieve the same thing, is on energy improvements in people's homes and in particular vulnerable people's homes, but the energy efficiency commitment does not have that as a target. You do not want three different surveys coming into your home because there are three or more strategies for energy efficiency, it does not make sense and it is not cost effective and there are not enough people to deliver it, so you need to combine these resources. Q56 Chris Mole: The ODPM defence of its minimum standards, presumably exampled by the 50 mm insulation, is that it is there to trigger action rather than to be a standard to which to aspire. If that is the case, presumably once you are putting the loft hatch in or taking the roof off, you are going to go for the full whack, are you not, rather than just stick in 50 mm? Mr Campbell: Where any kind of renovation or new works are being carried out, that probably will be the case: they will install insulation to the current standard. I believe Warm Front in October raised the standard to 250 mm. It was suggested earlier that the current building regulations are 300 mm. I am sure that as and when local authorities do carry out these works, they will be carried out to that kind of standard. The main problem is that there are any number of properties in the social sector currently who comply with the standard, despite the fact that they have 50 mm of loft insulation, despite the fact that that may have been installed 30 years ago, despite the fact that it may have been messed about by electricians and other people working in the loft. The difficulty is with those who are currently deemed to satisfy this minimal and miserable standard. Ms Johnstone: We tend to think that the ODPM has overestimated the extent to which the market is likely to raise above these standards. In most situations the demand for housing exceeds supply. There are not pressures there. I am sure that when renovations are happening they will happen to current standards, but a lot of property simply will not get there. Q57 Chris Mole: What is your view on whether it would be better to use the SAP rating to determine the minimum standard for level of comfort. Mr Campbell: We are supportive of the idea of a SAP rating. SAP ratings will be part of the Welsh housing quality standard. An NHER rating will be used in Scotland. I am afraid to say that England is a wee bit out of step in this respect. It is a good, substantial and objective measurement of the energy efficiency of the property and we would recommend SAP rating. Q58 Chris Mole: Could I ask the NCC why you suggested that DEFRA should put in place this whole-house treatment concept. What exactly do you mean by this? Ms Klein: The whole-house treatment concept refers back to what we were saying about the inadequacy of the Decent Homes Standard anyway; the fact that, for instance, the heating system can be a boiler in one room and a heater in another room and that is considered a central heating system. This is about not just heating one room; it is about heating the whole house; it is about the adequacy and the range of energy efficiency measures that can be put in. Here we have two things: a heating system and insulation, limited types of insulation. There are things like secondary glazing and connection to the gas network which would actually be far more efficient in terms of lifting people out of fuel poverty. It is about actually going into the household and asking what is the potential range of measures that could be installed that would achieve the objective of improving energy efficiency and making it a warm house. Q59 Mr Sanders: A very large number of properties in the private sector failed the thermal comfort component of the Decent Homes Standard. If a higher standard were applied to the private sector, who would bear the cost of a higher standard being applied to the private sector over and beyond the grants that are available to some households? Ms Saunders: There is an argument for extending the grants to a wider range of people to take on board the fact that not just people currently eligible are in fuel poverty and require help. One way which we would be recommending to DEFRA in their review of the Warm Front scheme is to extend eligibility beyond those currently able to access grants. Through the proposed new rating scheme, Health and Safety Rating Scheme, we think there ought to be a burden on private landlords under a licensing scheme, and that would be the only way to regulate to make sure that they comply with better standards. Mr Campbell: The reason why we concentrate on the social sector is because this was the context in which the Decent Homes Standard was first devised, and, because of the significance of the Decent Homes Standard in compliance with the Warm Homes and Energy Conservation Act, it is the fuel poverty aspect of it. This is the means by which the Government is to meet its obligations under that act in the social sector. There are different plans, different strategies outside the social sector. This is the reason why our emphasis is on RSLs and local authority housing. Q60 Chairman: You are in danger, are you not, of letting the Government off the hook? Because if you push the targets up and make them more demanding, then the Government has an excuse for not achieving them. Ms Saunders: We do not think so. We think there is already a requirement on government to take people out of fuel poverty by the year 2016. We have said that rather than complying with the 2010 date for social housing that it set itself, we would rather see the standards higher and extend the period up to 2016. But there is no requirement within the act for failure due to a lack of resources. They are bound to find the resources. Q61 Chairman: Is it not important to have the milestones, so that you actually get some of that fuel saving in place in the next few years rather than in 2015/6? Ms Saunders: That is certainly what we are proposing, that there are new public service agreements which are linked to taking people out of fuel poverty, rather than, as is currently the case, the number of households treated or assisted. Chairman: On that note, could I thank you very much for your evidence. Memoranda submitted by the Disability Rights Commission, Joseph Rowntree Foundation, Habinteg Housing Association and the UK Noise Association Examination of Witnesses
Witnesses: MS MARIE PYE, Head of Policy, Policy Analyst, Disability Rights Commission, MR PAUL GAMBLE, Habinteg Housing Association and MR JOHN STEWART, Chair, UK Noise Association, examined. Q62 Chairman: Could I welcome you to the third session this morning and ask you to identify yourselves for the record. Mr Stewart: I am John Stewart. I chair the UK Noise Association. Mr Gamble: I am Paul Gamble from Habinteg Housing Association. Ms Pye: I am Marie Pye, Head of Policy from the Disability Rights Commission. Q63 Chairman: Do any of you want to say anything by way of introduction, or are you happy for us to go straight to questions? Ms Pye: May I say something very briefly? Q64 Chairman: Yes. Ms Pye: Habiteng Housing Association and the Disability Rights Commission are here primarily because we have a concern that the Decent Homes Standard just does not address issues around accessibility for disabled people. The only mention we can find of accessibility within the guidance comes under the heading "Work outside the standard". We feel very much at the moment that is where disabled people are sitting. We feel we have a tool kit of well developed standards that are tried and tested that we hope very much could enhance Decent Homes Standard and bring about some improvements in accessibility. Q65 Christine Russell: Would you like to expand a little bit more on what you have just said. Why should accessibility be one of the standards? Why do you feel so strongly about it? Ms Pye: We have a situation where we have at least 8.5 million disabled people in this country. That is one in five of the adult population, so this is not a minority issue. Over 40 per cent of social housing tenants have a disability but four out of ten disabled people in recent research said their housing situation was making them more dependent on others. That is not a situation that we think it is acceptable to continue in the long term. Added to this, we have a rapidly aging population who are increasingly finding their housing inaccessible. Simply building new homes for all those people is not an economic way forward, and a lot of those disabled people do not require new, completely wheelchair accessible, all singing, all dancing housing; they merely require where they live at the moment to have some basic accessibility standards built into it. The Government are clearly addressing access and housing issues through a mainstream approach. That is very much focusing on new build and we are keen to see what progress can be made when looking at refurbishment and improving housing, linking it in with things like the Lifetime Homes Standard and the British standards. Mr Gamble: I would add that in terms of actually who lives in social housing, the statistics are very clear. The housing association says that 42 per cent of households contain a member with a disability or a long-term illness. Q66 Christine Russell: You are saying that, of the people living in social housing, a far higher percentage have mobility problems of varying levels through age or disability or whatever. Mr Gamble: That is right. It is quite reasonable to say that, of the future generations of people who are likely to live in social housing, because of the relationship between poverty and disability it is likely to increase. Q67 Christine Russell: Mr Stewart, are there any omissions in the standards to which you would like to draw our attention? Mr Stewart: Yes, very much so, particularly on some of the noise issues. There is stuff in the standards about external insulation; that is protecting homes from outside noise (effectively, traffic noise) where that need arises. But we are very concerned that there is nothing whatsoever in the standards to require local authorities or others to improve the internal insulation; that is, the sound insulation between properties. A substantial number of people, particularly in the socially excluded groups in the population, are affected by poor sound insulation. It is not because their neighbours are being unnecessarily noisy - although in some cases it may be that - but they are just going about their day-to-day business and, because of the poor sound insulation in the homes, they are hearing everything their neighbours are doing. Q68 Christine Russell: Is it the noise of voices and hi-fis or is it plumbing noises? Mr Stewart: It can be plumbing noises. In the worst situations it can be every single noise. It can be plumbing, but I think probably more irritating is the noise of voices and particularly the noise of music. That can go on for a long time. Dodgy plumbing in somebody's bathroom or something is just occasional. I think the real problem is hearing your neighbours, and hearing your neighbours' television or loud music which of course can go on for hours on end. Q69 Christine Russell: Are your laudable aims and objectives not actually going to increase the costs? Have you done any costings for the higher standards that you would like to see. Mr Stewart: We have not. We are in the process of doing so at the moment. I am afraid our report probably will not be available in time for your report, it will not be available until next year, but we do have some resources now to do exactly that work. We think that is the work that government has not done and that government needs to do. It needs to look at the costing but it needs to go further than that. It needs to look at the cost benefits, because, certainly so far as noise is concerned, there are social costs in terms of people's health: getting stressed out, sometimes not being able to go to work and so on because of the noise. That needs to be factored in to a cost-benefits analysis, which is what we are in the process of beginning to do. Q70 Christine Russell: What about the access standards? Mr Stewart: We think there will be some significant cost benefits to increasing the standards in terms of the related reduction in expenditure on adaptations. Currently, the rough figure is an annual spend on adaptations of around £330 million. There is now quite clear evidence that adopting the Lifetime Home Standard reduces the long-term costs of adaptations. There is a range of other issues which are now coming to light. Lifetime housing criteria from studies in Northern Ireland suggest potential savings associated with reduced accidents in the home and also aim to look at the targets on things like delayed discharge in hospitals, and obviously there is a huge issue about accessibility issues in homes there. In terms of the overall costs in terms of new build, the increased costs for having lifetime housing features work out at around £165 to £500 if they are incorporated in new build properties. Obviously that is not directly applicable to refurbishment of existing properties but the cost benefit issues have been addressed in terms of new build. Ms Pye: Could I add to that? We are suggesting you take a pragmatic approach, which in some ways is slightly different to the Decent Homes Standard. You would not necessarily say every home is a "decent home" if it meets a certain access standard. We would say that when through the Decent Homes Refurbishment Programme you are addressing a particular feature within a property, you ensure that that feature becomes accessible. Therefore, if you are undertaking a programme to replace all the windows in a block, you buy in the kind of window openings that meet the British standard in terms of accessibility so that when an old or disabled person is living in that home, maybe today, maybe next month, maybe next year, they can actually open the windows, and then when that person is living there you do not suddenly have to spend another £1,000 replacing all the windows just because the windows that were replaced under Decent Homes did not have the right fasteners on them. It is those relatively simple measures that would achieve an incremental improvement in access. They are not going to change the world overnight, but they are going to mean that an old or disabled person is not trapped in a home where they cannot open the windows or turn the tap on. Q71 Mr Betts: There are a number of ways you can approach the whole issue of accessibility in terms of homes. You can either say that every home by 2010 has to be made accessible as part of Decent Homes Standard; or that a percentage of homes have to be, because you have given the figures on the percentage of people who have disabilities that do require some adjustment to the criteria; or - which is what you just said - that where work is carried out, that work should be made to an accessible standard; or that you simply respond to the particular needs of individuals as and when they need it. There are obviously enormously different resource implications to those different ways of proceeding. The idea of doing every home to an accessible standard, which is what I thought was being argued for to begin with, would almost be prohibitively expensive, would it not? Are the other options ones which perhaps might be more viable? Ms Pye: I think that is why I am saying we are taking a pragmatic approach. As you can imagine, ideally we would love to have every home in the country at an accessible standard by 2010, but realistically that is not going to work: it would be fairly expensive and we do not think that is something that local authorities are themselves able to take forward. At the moment we are at the other end of the spectrum, where all that happens is people's individual needs are responded to, which means you get hospital discharge delays, you get a huge adaptations bill, and that just does not really make sense when you have over 40 per cent of social housing tenants who have a disability, when we have a rapidly aging population. That is why we are proposing this very pragmatic and relatively cost-free approach of ensuring, when you address a particular feature, that it meets either British standards or it tries to move itself more towards Lifetime Homes Standards. Mr Gamble: There is another significant issue. We seem to be experiencing, anecdotally, that the implementation of Decent Homes is actually worsening access standards as well. Because access does not feature at all in terms of the guidance or the detail, we are seeing anecdotally, for instance, that measures to put in a uPVC doorstep are actually creating a threshold to the property where one did not exist previously. Because that is not addressed in broader policy terms or within the detail, we are actually in the rather bizarre situation of spending very significant sums of taxpayers' money in worsening access. Q72 Mr Betts: You have explained how you think it might operate in the social housing sector but can your proposals be applied to the private sector? If so, how would you enforce them? Ms Pye: I think the private sector is much more problematic, to be honest, which is why we are focusing these proposals on the social housing sector. Our main priority within the private sector is the issue around adaptation but, to be honest, even that system is not working at the moment because a landlord can withhold consent for adaptation on any grounds they wish to. The Disability Rights Tax Force, when it reported nearly four years ago now, requested that the Government ensure that landlords could not unreasonably withhold consent for adaptations. That has yet to be implemented, unfortunately, although we now have government agreement to it. One of our main stumbling blocks is that issue at the moment in terms of private sector. Q73 Chairman: You have just been making the case so far as the household is concerned and the ability for the householder to be able to use the facilities. What about the issues around visitors? How important is it to make sure that more of these houses are suitable for people with disabilities to visit? Ms Pye: If we are talking about housing as being part of the community, then if your role in the community means that you can only get into your own property there is obviously an issue. To a certain extent the Government has accepted that within the building regulations, which now require all new-build properties to be visitable by disabled people although not necessarily immediately liveable in. I do think it brings us into that whole wider issue around the Sustainable Communities' Agenda and what happens in the wider framework. Mr Gamble: If we look at the field of commercial property or issues in new buildings, both residential and non residential, it is quite clear that the wider governmental agenda is about inclusion and about access and recognising that disabled people live in families, visit people and are not isolated individuals whose needs need to be addressed in one specific sense. Again, it is wishing to see that broader agenda applied to this very significant programme and significant investment within Decent Homes, which should have similar issues to do with the fact that it is a right for people to be able to visit their neighbours as well as being able to have an environment within their own home which they are able to enjoy and in which they are free to move around. Q74 Chairman: Perhaps I could just turn to the noise issue finally. You want to see these standards applied both in the public and the private sector. Is that right? Mr Stewart: Yes, we do. We want to see the standards for modern build - new-build, as they say - actually to be applied to all properties. As I said in my written evidence, one of the key problems is that at present both public and private landlords, if they have properties built before 1985, are not under any legal obligation to improve the standards. There would need to be legislation to change that - crucially, if we had some law in place either separate from or related to the Decent Homes Standard which required public and private landlords over a period of years to bring their property up to the required standard. We firmly believe that legislation needs to be in place. Q75 Chairman: That is private landlords. What about private owner-occupiers? Mr Stewart: We would argue that as well. Q76 Chairman: How do you do it, then? Mr Stewart: By making a requirement. You take the new-build standard - of which there are some criticisms but I think it is the obvious one to take - and require, over a period of years, through the law, that all landlords or owner-occupiers - and it can be the same law, the same procedure - are required to bring their properties up to the required standard. Clearly we would say - and we have said in our evidence - that we do not expect this to happen overnight but we do expect it to happen over a period of years. Q77 Chairman: Do you expect it to be part of the target for the Decent Homes Standard? Mr Stewart: Yes, we would. Q78 Chairman: What about an elderly couple who are deaf: why should they have to put noise insulation into their property, when they have limited means, for the benefit of the people next door? Mr Stewart: I think you have to start not with the elderly couple but with the people next door. You have to start with the noise sufferer and the potential noise sufferer. Q79 Chairman: But, in a lot of semi-detached and terraced houses, unless you do something to both properties you are not going to get value for money, are you? Mr Stewart: This is absolutely right. This is why we think there should be no exclusions over a period of years from proper sound insulation in all properties. Q80 Chairman: You also put the boot into housing associations. Mr Stewart: Yes. Q81 Chairman: Why do you put the boot into housing associations? In your view they are particularly bad? Mr Stewart: They can be. They can vary, of course, and there are some very good housing associations, but the feedback we get from many of the tenants - and I appreciate that the tenants who come to us are just those with noise problems - is two-fold. One is that they do not feel they have the same redress they might have had when local authorities had the properties. Secondly, many of the housing associations are, quite understandably, following the guidelines set out in the Decent Homes Standard - in a sense, one would expect them to do nothing else - and that comes back to my original point, that because the internal sound insulation is not adequately covered in the Decent Homes Standard then housing associations are simply applying those standards. Q82 Chairman: Are housing associations not pretty daft about this because they must spend a huge amount of time on neighbour disputes and an awful lot of neighbour disputes are based on noise nuisance. Mr Stewart: You are absolutely right. This is where we are really quite critical of the approach of the Government generally regarding noise. This is a very good example of it. It has not been integrated into other policy areas, into the anti-social behaviour and so on. Scotland in their bill regarding anti-social behaviour have made an attempt to do this, but there is very little attempt done in England. I would entirely agree with what you have said there about housing associations. Q83 Mr Sanders: Is there not a role for building regulations to be improved in relation to noise? That would actually have the greatest impact in the long term. Mr Stewart: The building regulations for new properties of any sort are a lot better than they have been in the past. We are saying that you have to take a standard - you are right - of building regulations. We would go for the new-build regulations. If all property owners or landlords were required in due course to bring their properties up to those standards, that is the way forward. But, you are absolutely right, we do need those firm regulations as the target which everybody should reach. Q84 Chairman: On that note, may I thank you all very much. Memorandum submitted by Office of the Deputy Prime Minister Examination of Witnesses
Witnesses: ANNE KIRKHAM, Head of Decent Homes Finance and Co-ordination, MR NEIL McDONALD, Director of Housing and MR JEFF HOLLINGWORTH, Head of Private Sector Renewal Branch, Office of the Deputy Prime Minister, examined. Q85 Chairman: May I welcome you to the final session this morning and ask you to identify yourselves for the record, please. Ms Kirkham: I am Anne Kirkham. I am Head of Decent Homes, Finance and Coordination Division, at ODPM. Mr McDonald: I am Neil McDonald and I am Director of Housing at ODPM. Mr Hollingworth: I am Jeff Hollingworth and I am Head of Private Sector Housing Renewal at ODPM. Q86 Chairman: Can I go straight to questions or do you want to say anything to start with? Mr McDonald: Straight to questions. Q87 Chris Mole: The PSA Plus review did not really pick up on any additional changes to the definition of Decent Homes. Is the Department still really comfortable with the current definition as an adequate and worthwhile benchmark for delivering Decent Homes? Mr McDonald: I think the point to make on this is that in fixing any definition of "decent homes" government has to trade off between the benefits of setting a higher standard and the practical issues of deliverability and affordability. The standard, as we have it, is as a result of quite a lot of careful weighing of the different options, and the Government is, by and large, happy with it as it stands. Q88 Chris Mole: We have been looking at some of the evidence that accessibility things could be done at relatively low cost. Mr McDonald: The standard is a minimum standard. It is trigger to action by landlords, by local authorities and RSLs. If a property is beneath that standard we expect them to take action. We do not expect them just to improve up to the standard. For example, if the property is built below the standard required for insulation, we do not expect them just to raise the level of insulation up to the minimum required. It would often be cost-effective for them to put in a higher level of insulation, but that is something that we leave to the landlord and government does not prescribe. Q89 Chairman: Do you think you have got that message across? Mr McDonald: There is always more that can be done to make sure that those messages are properly received. Q90 Chris Mole: Do you have any evidence that that is likely to happen? Ms Kirkham: I think we are conscious that there is more work to be done in terms of making sure all stakeholders responsible for implementing the standard fully understand how it should be interpreted. We are currently revising the guidance that supports the definition and using that to try to emphasise such matters as the minimum. It is a trigger standard. It is a minimum level. Q91 Chairman: When will that guidance be available? Ms Kirkham: We had hoped to have the guidance out towards the end of last month, but it will certainly be out in time before the Committee finishes its evidence sessions. Q92 Chris Mole: People really seem pretty unhappy with this thermal standard. The prospect of there continuing to be a whole range of properties out there with just 50 mm of insulation - the standard set in the 1970s, which will meet the Decent Homes Standard - is that really acceptable in a world when new-build is 250 mm? Mr McDonald: It is an issue of what you require and what can be afforded. The Committee, I am sure, will be aware that in 1997 it was assessed that to bring all social stock up to the Decent Homes Standard an expenditure of £19 billion would be required. Obviously government has to weigh the benefits of going for a high standard against the costs involved. There was also the practical issue of the amount of work that needs to be done Ms Kirkham: We do emphasise in the guidance we provide that, in carrying out works, one should be looking to go above the 50 mm. Also, if you are carrying out related works, for example, if you are repairing the roof, then, even though the house may meet 50 mm insulation levels, use that as an opportunity to increase the insulation levels rather than as part of another programme of work. Q93 Chris Mole: What about this idea of looking at the whole house rather than one feature at a time? Ms Kirkham: I think, to do that, you would be requiring a complete change to the definition. That implies having much higher levels built within the definition. If you went to, for example, 200 mm for all properties, the vast majority of social housing would fall below that standard. We would be saying local authorities would have to do that work. If you get into that position, then you are looking at trade offs between other work which you may find it equally important to do. Q94 Chris Mole: You talk about the cost to government. There is a huge cost associated with neighbour disputes arising from noise. Would it not have been sensible to build noise insulation into the standard and try to tackle it at source rather than have the housing associations and local councils spending tens of thousands of pounds ----- Mr McDonald: But, again, it is a question of how much do you require and how much do you leave to the discretion of the landlord. Noise may not be an issue on every estate. To require every estate to be brought up to a higher standard of noise insulation may not be cost-effective. Q95 Chairman: You are telling me that people can live on an estate and they can enjoy having noise from their neighbours. Mr McDonald: No. I am suggesting that, on some estates, noise is not a serious problem that would be the top priority on which to spend for a landlord with resources to improve their property. Q96 Mr Sanders: Why do you just think it is a problem on estates? Mr McDonald: It is not. You are quite right, it is not just a question of estates; there are plenty of social properties that are not on estates. Q97 Chris Mole: Are you edging towards suggesting that the tenant should have some choice as to whether it is noise that is tackled or the environment or the physical condition? Mr McDonald: We very much advocate that all landlords consult fully with their tenants about improvements that can be made to their properties. Q98 Mr Sanders: Whether it is tenants who ought to have a greater say, the Department has emphasised tenants' choice in relation to the options for implementing the Decent Homes Standard, yet the Committee has received evidence from tenants who say that they are dissatisfied that the standard falls below their expectations. How would you respond to that criticism? Mr McDonald: I think, again, it comes to the question of the minimum standard the Government sets as a trigger a level below which action must be taken, and then a question of landlords consulting with their tenants about what action above that minimum standard if worthwhile and affordable in that particular situation. Q99 Mr Sanders: It comes down, basically, to resources, does it not? You set the standard according to the resources. Therefore, the idea that this is about emphasising tenants' choice is in reality not true. Mr McDonald: There is always a certain amount of discretionary investment that landlords undertake. It is in that area that tenants' choice can be most effective. There are also issues about how the standard is achieved, and we would expect tenants to be fully involved in those discussions. Q100 Mr Sanders: That is slightly different. Are you satisfied that the assistance provided through the Warm Front scheme is adequate to meet the requirements of thermal comfort? Could I ask Anne to respond on that. Ms Kirkham: The Warm Front scheme only applies in the private sector. They are currently reviewing how the Warm Front grant is targeted. As I understand it, it has a range of measures that can be completed within the Warm Front scheme: it can provide insulation; it can provide heating. Insulation and heating are the two means of most effectively improving thermal comfort of property. Q101 Mr Betts: Essentially, what the Decent Homes tells us is: Look at how much money we have got and then we will devise a standard to fit in. Mr McDonald: Whenever governments make decisions in spending reviews, they have to look at the cost of various things that are worthwhile and sort relative priorities. Q102 Mr Betts: So that is a yes. Mr McDonald: I am saying that in SR2000, when the Decent Homes Standard was set, ministers took a view as to the standard that could be afforded within the likely level of public expenditure. Q103 Mr Betts: So, yes. A nod of the head is a yes, is it? Mr McDonald: Yes. Q104 Mr Betts: What progress are we actually making towards both the 2010 and the 2004 target? It seems as though we are not really getting there. Are we? Mr McDonald: Tremendous progress has been made. Since 1997 about one million homes have been brought within the Decent Homes Standard. The number of non decent homes has been reduced by about one million. Between March/April 2001 and April 2004, we expect there to be a reduction of about 500 million in the number of non decent homes. The third reduction that was set as a milestone we expect to be achieved during 2004. Q105 Mr Betts: But the rate of progress has not improved, has it? About 500,000 properties have been taken out of the non decent homes' category between 1997 and 2001, and for 2001 to 2004 probably a similar number, but a massive injection of funding since 2001 does not actually seem to have increased the pace at which homes have been brought up to a decent standard. Ms Kirkham: From 1997 to 2001 there were 500,000 over four years. The 500,000 between 2001 and 2004 will be over three years, so there has been an increase in the rate at which is being carried out. Q106 Chairman: But how does that relate to the amount of money that has been available or has been spent? Surely the spend of money has gone up dramatically and the outcomes have not moved that dramatically. Ms Kirkham: There are two reasons behind this. Firstly, in terms of tackling the decent homes problem, there is some evidence that landlords would have looked for some of the easier and cheaper areas of work to tackle in the first instance, moving on later to the more difficult and the more expensive. At any point in time your mix of work that is being carried out can be quite different, so the number of homes you would make decent would depend on the nature of the work that local authorities are actually tackling. Q107 Chairman: So it is going to get more and more expensive as we get nearer to the target date. Mr McDonald: One would expect the cost per unit to change over the time, yes. Q108 Mr Betts: How much was the spending increased during the two periods, 2001 and then 2001/2004? You are saying a lot more resources have gone in, so what is the percentage spending increase during that period? Mr McDonald: It is not a straightforward question, because some of the resource went into transfer (and transfer to date has brought in £12 billion worth of investment); some of the resource has come in through ordinary local authority investment funded under the HIP programme; some of the extra resources ------ Q109 Mr Betts: Fine. How much? There must be an amount of money. Mr McDonald: There is an amount of money. I cannot give you the numbers now for the two periods. Unless you have it, Anne? Ms Kirkham: I do not have the figures with me. We can provide them to the Committee. Q110 Mr Betts: And the relevant number of houses that have actually been improved to the Decent Homes Standard in those periods as well. Ms Kirkham: Yes. Q111 Mr Betts: In terms of the houses in the most deprived areas, you seem to be indicating that those have been left until last and almost forgotten about as we get the easier ones. To what extent are you trying to ensure that they are being brought up to a standard that is part of a comprehensive strategy to improve the whole community? The Prime Minister keeps going on about sustainable communities, quite rightly. How far are we linking that attempt to build sustainable communities in with bringing houses up to a decent standard? Ms Kirkham: Just to pick up on the point about the more deprived areas being left until last, I was not talking about difficult necessarily in terms of the nature of the area, I was just talking about difficult in terms of the nature of the work to individual property. The target that we have set does say that we should be doing the majority of the work in areas that do suffer from multiple deprivation, and the way the resources are targeted does allow for more resources to go to those areas. They are not being left until last; the work is carrying on in parallel with work to less deprived areas. Q112 Mr Betts: One of the comments made to us earlier on this point was that the standard itself was slightly narrower. The Chartered Institute of Housing made the point and said that it excluded "liveability issues". How can you be committed to this wider strategy, this comprehensive approach, when those sorts of issues are actually excluded from the target. Mr McDonald: We are saying to local authorities - and I think this comes out quite clearly in the revised guidance - that we expect a Decent Homes strategy to be set in the context of a wider strategy to do with neighbourhood renewal where that is appropriate. Q113 Mr Betts: Why not include that in the target itself? If it is important that there is a liveable community for these homes to be located in, why should it not be the target? Why separate them? Mr McDonald: The target basically draws a line between being all-encompassing and, query, not affordable, and being reasonably clear and simple and not covering quite as wide an area. Q114 Mr Betts: So technically you can have a decent home in an appalling environment - and you could tick the box then. Mr McDonald: No, we are making it very clear that we regard decent homes and sustainable communities as being ------ Q115 Mr Betts: But you can have a decent home, according to your standard, in a poor environment. Mr McDonald: We would not approve ----- Q116 Mr Betts: No, but you can have it, can you not, with those criteria? Mr McDonald: You could have it, but, if such a strategy were put forward for approval by the government office, approval would not be given. Q117 Mr Betts: But you would still meet the standard, would you not? Mr McDonald: You could meet the standard but the option appraisal would not be approved. Q118 Christine Russell: Mr Hollingworth, could I ask you some questions about the standard in the private sector. Why is the target different for vulnerable households in the private sector, where it is only 70 per cent, but it is 100 per cent in the public sector. Mr Hollingworth: Let me say briefly that this is a new target that we have introduced for the first time this year. We do think that the Decent Homes standard is applicable as a target for which to aim in the private sector. The problem is that the fundamental principle is that owner-occupiers and private owners should be responsible for maintaining their own properties and it is only the responsibility of government to intervene and deal with vulnerable households. That is the way we have set the target. We have established a baseline, using the 2001 English House Condition Survey. We think that 57 per cent of vulnerable households in the private sector now live in decent homes. The target is to try to gradually expand that, but because we are targeting on vulnerable households and not stock, not dwellings, I do not think it is ever feasible to expect that we will reach 100 per cent. The level of non decent homes in the private sector is very large. A total of five million homes are non decent in the private sector. We are focusing on a narrow target of the one million most vulnerable households. Over time we want to make progress, but we think that vulnerable households will change and they might appear in non decent homes. It will only be possible to get to 100 per cent decent homes if we deal with the whole five million non decent homes in the private sector. That is an enormous target and we have to be realistic about the progress we can make because of the cost of this. Q119 Christine Russell: How concerned are you - indeed have you given it any thought whatsoever - that there may be a temptation from some private landlords not to let to vulnerable tenants because they are worried that the environmental health officers are going to come knocking on the door? Is that a concern that you have thought through in the Department? Mr Hollingworth: No, I do not think so. Well, we have thought of it. We have an enforcement regime and the enforcement regime is basically the fitness standard. With the housing bill published yesterday we will be moving to the rating system, which will focus on hazards and hazards which are affecting the most vulnerable people. Q120 Chairman: You do not have the vulnerable people in your properties - do you? - and then you are okay. You keep them out. Mr Hollingworth: That is a possibility but this is a market system. If people are in the private rented sector, they will be wanting to let their properties. Q121 Christine Russell: Can you see why we are asking the questions? Vulnerable people could perhaps be marginalised because private sector landlords will just not want to let their properties to tenants who may attract an interest from the local authority. Mr Hollingworth: We have to strike a balance between providing accommodation, providing a viable private rented sector, which is important, and protecting the most vulnerable tenants. That is the balance we have to strike, with an enforcement procedure which is valid but flexible and also, through the system of assistance from local authorities which can be provided to encourage standards, policies to improve standards. We have given local authorities wide-ranging new powers to provide assistance in any form they see fit, in terms of grants or loans. So it is an option for local authorities, according to their local priorities, to provide financial assistance through grants and loans to support a private rented sector at the same time as enforcing the minimum standards. We do not have enforcement in the private sector to deliver decent homes. We have enforcement powers through the rating system to deal with hazards, and, at the moment, with unfitness. The whole of the Decent Homes agenda in the private sector is a matter of taking it forward through agreement. Q122 Christine Russell: Do you think there should be more enforcement powers? Only three of the four criteria are eligible for enforcement. Mr Hollingworth: Yes. Well, again it is a balance to be struck. If we go for overzealous enforcement, we will lose the sector, and we have to get a balance between providing a sector and dealing with the worst hazards. The Housing Health and Safety Rating system is a step forward. It is a step forward because it goes beyond the current unfitness standard and it is dealing with some of the other issues such as unsafe layout of houses and energy efficiency. It is a very big step forward and will help to enforce standards. Also in the housing bill we will be bringing in licensing of high risk housing, multiple occupation. That, again, will be a new way of enforcing standards. Q123 Chairman: You are bringing in licensing for multiple occupation and you are also going to license in areas of market weakness, are you not? Mr Hollingworth: Yes. Q124 Chairman: In those areas of market weakness, a condition of the licence could be that it needs to be of Decent Homes Standard. Mr Hollingworth: That is not really what is envisaged at the moment. The importance of standards through the private rented sector will be through the Housing Health and Safety Rating System. The idea of selective licensing in low demand areas is to do with undesirable landlords or social problems. Q125 Chairman: Surely a landlord who will not bring their property up to decent standards is not exactly desirable, is he? Mr Hollingworth: I think it would be desirable if they brought it up to decent standards, yes. Q126 Chairman: Yes. I am saying to you that you would not give a licence to a landlord who failed to bring their properties up to the Decent Homes Standard. Mr Hollingworth: Under the current bill, as drafted, the licence conditions will not relate to standards ----- Q127 Chairman: Why should they not be? Mr Hollingworth: Because that will be enforced through the Housing Health and Rating System. The licence will be given as a condition that the landlord is a fit and proper person and, in particular, of HMOs, that the HMO is fit for the number of tenants. The local authority and licensing must have regard to the housing health and rating system which will be the enforcement standard for all private rented properties. Q128 Mr Sanders: If I want to start a car hire firm, if I have a car that has failed its MOT I cannot rent it out. Why do we not apply the same principle to private sector housing and link the licence to the Decent Homes Standard? Mr McDonald: The equivalent in this case is the Fitness Standard, which will be replaced by the Housing Health and Safety Rating System not the higher standard of Decent Homes. Q129 Chairman: So you are saying that you will not be able to enforce the Decent Homes Standard but the local authority would be able to enforce ----- Mr McDonald: The lower standard. Q130 Chairman: The lower standard. Right. Is this 70 per cent target a national target or is each local authority going to have to make sure that within its area the 70 per cent is reached or aimed for? Mr Hollingworth: It is a national target which we will monitor nationally through the English House Condition survey. The guidance that Anne mentioned, which we will issue very shortly, will go into more detail about what we expect individual local authorities to do, but we are not minded to set individual local authorities a specific target. We want local authorities, given their new powers under the Regulatory Reform Order, to have an effective private sector renewal policy; that is, a policy offering forms of grant assistance and advice commensurate with the problem they have. We will monitor this through government offices. We will expect local authorities to make a contribution. We have said this in guidance (circular 05/2003) that we issued last year, that we expect local authorities to make a contribution to the Decent Homes Standard in their private sector renewal policies. We would expect them to aim to achieve the 70 per cent by 2010. We would expect them to get there. Part of the target is that there is a gradual improvement in this figure. We would expect local authorities which have already got to 70 per cent to carry on steadily improving. Q131 Mr Betts: You spoke to us earlier about the limited number of resources and how then choices have to be made about the setting of the standard. On the other hand, you have certainly been supportive of stock transfers and taking them away from local authorities and putting them into the RSL sector. The National Audit Office did a survey which showed that a refurbishment programme through the transfer mechanism was likely to cost more than 40 per cent additional to a similar refurbishment programme with the local authorities. Is that really good value for money? Is it a sensible policy to be pursued? Mr McDonald: The conclusion of the work that we did applying the most recent Treasury appraisal guidance, suggested that there was a considerable range of values depending on the assessment need put in for risk, and it is vital under the new Treasury guidance that one puts in a proper assessment for risk. You can have a situation in which it would cost less or more depending on the amount of ------ Q132 Mr Betts: But on average the National Audit Office found that refurbishment by the stock transfer route was more expensive. Mr McDonald: Only if you exclude the risk element do you reach that conclusion. The conclusion that ministers have reached is that, even in cases where, just on the basis of applying the appraisal mechanism, you get a figure that suggests it would have been cheaper to make the stock decent by retaining it within the local authority, there are other benefits that are not taken into account in the calculations that more than justify the extra cost. Q133 Mr Betts: Could you explain that, because you have lost me completely. Mr McDonald: Only certain factors get taken into account in the transfer calculation. For example, the benefit of greater tenant participation, benefits in terms of greater investment than might occur later. Those are not taken into account in the transfer calculation. Q134 Mr Betts: The idea that suddenly you get greater tenant participation from having a stock transfer I think is a complete piece of nonsense. There is no objective evidence of that whatsoever. It is a fig leaf to try to cover an additional cost of more than 40 per cent, is it not? Mr McDonald: No. I am afraid I cannot accept that. Chairman: Explain it, then. Q135 Mr Betts: Where is the evidence, then? Tell me the evidence that there is a better consultation in RSLs than there is in most local authorities. There is actually a statutory requirement in local authorities, is there not, which there is not in RSLs? Mr McDonald: We have conducted research comparing the post-transfer situation with the pre-transfer situation and that demonstrates that there are higher levels of tenant satisfaction post transfer than pre transfer. Q136 Mr Betts: But that is not the comparison, is it? The tenants presumably would have been a lot happier as well if they had had their homes refurbished by the local authorities. You are doing a comparison of tenants who have non-refurbished homes and refurbished homes after the transfer. That is true, is it not? Mr McDonald: Yes. Q137 Mr Betts: That is like asking: Are children happier before Christmas or after Christmas? Mr McDonald: We could also compare the generality of post-transfer cases with local authority retained stock. Q138 Mr Betts: But that is within the refurbishment. The National Audit Office did the comparison of the benefits of a refurbishment programme under local-authority-owned stock and transfer stock and concluded that for the same sort of refurbishments the local authorities could do them a lot cheaper. It was slightly above 40 per cent more under the transfer proposals. Then you go on and justify that by saying, "Actually tenants are a lot happier because they have got better consultation." In fact that is not generally true in terms of local authority comparisons. If you can produce a paper for the Committee showing that general local authorities are worse at consulting their tenants overall than RSLs are ..... Mr McDonald: Perhaps we need to provide to the Committee the note that we provided to the Public Accounts Committee, setting out the ---- Q139 Mr Betts: They did not accept it, though, did they? Mr McDonald: As far as I am aware, there was no problem with the ----- Q140 Mr Betts: But they concluded in the end that it was not good value for money. Mr McDonald: No, I think that is a misunderstanding of their conclusions. Q141 Mr Betts: It was not as good value for money. Mr McDonald: No, I do not think that is what they concluded. Q142 Mr Betts: You will produce some more evidence for us, will you? The other point you have made is about extra benefits in the future. Could you just elaborate on that? Mr McDonald: I am sorry? Q143 Mr Betts: You were saying that the extra benefits in the future from transfers were another reason why they were better. Mr McDonald: The appraisal can only take into account certain factors. In any judgment of this sort, you do the arithmetic, look at the numbers and then ask: What is not taken into account in the numbers? Q144 Mr Betts: You are really saying that RSLs can borrow more in the future to do even more improvements and local authorities cannot. Mr McDonald: Any surpluses that RSLs generate are reinvested by the RSL in those properties to deliver greater benefits to tenants. We are not talking about a situation where you have surpluses distributed to shareholders or anything of that sort. Q145 Mr Betts: Local authorities do not distribute surpluses to shareholders. Mr McDonald: No. I am sorry, I am not sure of the point you are making. Q146 Mr Betts: Let's go on and ask about the issue of "dowry funding" for partial estate transfers. I think you have accepted there may be a problem in some deprived communities. In the past we have had things like the Estates Renewal Challenge Fund. Are we going to see the introduction of dowry funds to replace that challenge funding? Mr McDonald: Following the PSA Plus Review, the Government has accepted that in certain circumstances it would be prepared to see some sort of dowry funding. Q147 Mr Betts: We do not have a scheme as yet, though. Mr McDonald: There are various potential ways of doing this. Q148 Mr Betts: What is likely to be the outcome? Mr McDonald: One possibility is that the regional housing board uses some of its funding to fund dowries. Q149 Mr Betts: Yes, but in terms of special funding pots for PFI and ALMOs, they have been introduced, have they not? Do we have a different way from treating transfers there to PFI /ALMO support? Mr McDonald: You are quite right, there are separate ring-fenced pots for PFI and ALMOs. In that sense, transfer is well provided for. Q150 Mr Betts: That is just an acceptance that there is going to be, again, a difference in the playing field. It is about these kinks in the playing field. Mr McDonald: We have said that this is an issue that regional housing boards should consider in looking at the overall housing strategy for their region in working out ----- Q151 Mr Betts: That is another yes, I think. Mr McDonald: -- how resources should be used. Q152 Mr Betts: Let's go to PFI funding. What role does PFI funding play in the wider strategy? Are you really, therefore, looking at PFI funding in terms of actually getting responsibility for the houses out of the local authority, as opposed to giving local authorities an additional means of raising funding to improve the stock that they continue to own? Mr McDonald: With the PFI route, the stock remains owned by the local authority. Q153 Mr Betts: There are slightly different PFI funding routes, are there not? You can also look at the PFI funding to provide new or refurbished up through an RSL as well as through the local authority route. Are you seeing PFI strategically being a major input into funding local authority improvements to their stock as opposed to building new homes or RSLs with their stock? Mr McDonald: We do see it as a significant contributor. Hitherto it has been significantly smaller than ALMO or transfer. Q154 Mr Betts: Can you name any schemes where it has been significant so far? Mr McDonald: There are 18 local authority PFI schemes. The total stock involved is something like 25,000 units. Q155 Mr Betts: Are those units to be refurbished, as opposed to those that have been refurbished? Mr McDonald: Those are units to be refurbished ------ Q156 Mr Betts: How much has been spent so far? Mr McDonald: -- over the 30 years of the contract. Q157 Mr Betts: How much has been spent so far? Mr McDonald: I do not know how much individual ------ Q158 Mr Betts: Would you let us have a note on that as well. Mr McDonald: We will let you know what we have. Q159 Mr Betts: Is there some evidence that the ALMO schemes are actually improving houses to a lower standard than RSLs, or they are not able to generate the same amounts of money per property? If so, is that a concern in the longer term? - when presumably we are trying to see Decent Homes Standards as only a minimum rather than the absolute end. Mr McDonald: In the latest guidance on ALMOs there is a provision for five per cent to be spent on things other than just achieving the Decent Homes Standard, so there is that element of leeway. But it is fair to say that, by and large, a transfer to an RSL releases greater resources from improvement of the stock and the surrounding ------ Q160 Mr Betts: Is that going back to an earlier point, that we could have property improved under ALMO to Decent Homes Standards, and, while they may not be set in an appalling environment with only a five per cent addition, they might not still be in a very desirable environment? Mr McDonald: But that is to look at Decent Homes as if it were the only government initiative. It does need to be seen alongside all the other initiatives that are part of the commitment to planning and taking the whole lot together. Q161 Chairman: Are the Decent Homes Standards and the Sustainable Communities programmes complementary or conflicting? Mr McDonald: They are very much complementary. The improvements to the Decent Homes Strategy were announced as part of the communities plan back in February. Q162 Mr Sanders: Are you saying that Sustainable Communities has equal value to Decent Homes Standard? Or should actually Communities determine what they think a decent home is? Should that override the Decent Homes Standard? If, through Sustainable Communities, the community believes that resources should be used a different way, should that not actually be more important than the Decent Homes Standard? Mr McDonald: For a community to be sustainable, all sorts of characteristics need to be present to a sufficient standard. There do need to be decent homes and there needs to be a decent public realm: decent public services, adequate transport - all sorts of things that go to quality of life. They all have to be there to an acceptable situation if a community is to be sustainable, and that means somewhere where people want to live and want to continue to live. In the Decent Homes Standard government has set a minimum standard - and I have not heard anybody argue that it is too high - that they believe is a reasonable expectation also for tenants to see in this day and age. Q163 Mr Betts: You gave us an additional memorandum on the progress to date on achieving the Decent Homes Standards. I think you expressed concern about lack of progress to some degree. You said there were two main reasons why progress had been slower than anticipated and went on to say that the local authorities had spent less but also had increasing problems in actually achieving the target in some cases. Then you went on to list a number of elements of work in hand that you were undertaking. Clearly the fact that you were undertaking that work indicates that you are not absolutely convinced at this stage that the 2010 target will be met. Mr McDonald: The 2010 target is a challenging one. We need to be constantly vigilant, following up what is going on and taking any corrective action right the way along the process. Q164 Mr Betts: You have concern that we will not meet it, do you? Mr McDonald: We are not complacent. Q165 Mr Betts: Do you have a risk estimate of what the possibility is that you might meet it or might not meet it? Mr McDonald: We do not have a formal figure that we can give you. Q166 Chairman: Is the Treasury one of the risk elements? Mr McDonald: Continued funding is vital if the Decent Homes target is to be achieved. Chairman: On that note could I thank you very much for your evidence. |