|
UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 46-ii Session 2003-04 House of COMMONS MINUTES OF EVIDENCE TAKEN BEFORE office of the deputy prime minister: housing, planning, local governmEnt and the regions committee Tuesday 16 December 2003 MR ROY IRWIN, MR ROGER JARMON, DR NORMAN PERRY and MR COLIN MEECH, MR ALAN WALTER and MS EILEEN SHORT CLLR RUTH BAGNALL, MR MIKE ATHERTON, CLLR GRAHAM CHAPMAN, MR NIGEL BROOKE, MS FRANCES MAPSTONE, CLLR STEPHEN COWAN, Evidence heard in Public Questions 167 - 304 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 16 December 2003 Members present Andrew Bennett, in the Chair Mr Clive Betts Mr David Clelland Mr John Cummings Chris Mole Christine Russell Mr Adrian Sanders ________________ Memorandum submitted by the Audit Commission Examination of Witnesses Witnesses: MR ROY IRWIN, Chief Inspector of Housing, MR ROGER JARMON, Strategic Policy Advisor, Audit Commission, DR NORMAN PERRY, Chief Executive, MS CLARE MILLER, Director of Regulation Policy, and MR ROGER JARMON, Strategic Policy Officer, Housing Corporation, examined. Q167 Chairman: Good morning, may I welcome you to the second session of this inquiry into decent homes and ask you to identify yourselves for the record. Ms Miller: I am Clare Miller. I am Director of Regulation Policy, Housing Corporation. Dr Perry: Norman Perry, Chief Executive of the Housing Corporation. Mr Irwin: Roy Irwin, Chief Inspector of Housing for the Audit Commission. Mr Jarmon: I am Roger Jarmon, Strategic Policy Advisor at the Audit Commission. Chairman: Is there anything you want to say by way of introduction, or are you happy to go straight to questions? Straight to questions. David Clelland. Q168 Mr Clelland: Do you feel the Decent Homes Standard is sufficiently broad. Is the level required by the standard high enough? Dr Perry: On behalf of the Housing Corporation: the Decent Homes Standard itself was set by ministers and the exact dimensions they use are clearly a matter for them. Q169 Mr Clelland: Yes, but you must have an opinion. Dr Perry: When housing associations are investing in the Decent Homes Standard, by and large they are improving their homes to a higher standard than the Decent Homes Standard requires. Q170 Mr Clelland: So you do not believe it is high enough. Dr Perry: It is not a very demanding standard. Q171 Chairman: Did you make representations to government to tell them that they should set a higher standard? Dr Perry: No, we have not. Mr Irwin: I think that, given where social housing has come from, it is quite a demanding standard relative to resources, but, in terms of a market position, in terms of what people would aspire to, it might be seen as acceptable just about in 2003 but by 2010 it will be seen as old hat. Q172 Chairman: Which bits particularly are wrong with it? Mr Irwin: The energy efficiency issues will be seen as out of date. Not just from a heat perspective, but, depending on which way you think the climate is going to change, it is also about protecting people from excessively hot weather as well. So issues like insulation, over time; issues around water supply and how that will be managed over that long period of time; and also probably issues around electronic communications being a standard part of how any house will be seen to be meeting any normal market standard, so internet connection. Q173 Mr Clelland: Do you think the standard as defined is sufficiently clear? Is there adequate methodology for measuring compliance? Mr Irwin: I would have thought there is room for people to misinterpret the standard, either to over-interpret it and do more and think they have only just hit the target, or for people to do less than required and hit the target. It is not target specified. I am not advocating that it should be, but there is room for interpretation. Dr Perry: The definition, as Mr Irwin says, is not absolutely rigid, but there are common understandings of how it should be measured - indeed, there need to be, otherwise we would not be able to gather the statistics. Q174 Mr Clelland: Is it feasible to make changes to the breadth or the level of the Decent Homes definition at this stage? Dr Perry: My own view is that it would not be wise to do so. In terms of being able to monitor the performance against the standard, you are talking about several hundred local authorities and a couple of thousand housing associations, and it has taken quite a big effort to get them all pointing in the same direction in terms of collecting data and submitting that on a regular basis. To change now, I think, would have a time lag for the quality of data. Q175 Mr Clelland: On issues like accessibility and neighbourhood requirements, is there room to improve the definition, by giving definitions of the standards we require in this area? Dr Perry: I think there is a distinction between what we are trying to do and what decent landlords, social landlords, are trying to do in their neighbourhoods and on their estates. There is a distinction between that and the precise definition of Decent Homes in order to meet the public service agreement standard agreed between the Treasury and ODPM. Q176 Chairman: You have told us it is a fairly pathetic standard and yet you do not think it is worth "ratcheting" it up at all. Dr Perry: The reasons for not wanting to change the actual definition of the standard is that it would then take a couple of years at least to sort out how one measured it and what the quality of the data was that was coming through. By that time you would be getting close to 2010. If a government were to set another higher standard, say, for 2015, then there would be the lead time necessary to make the necessary changes, but, at this precise moment, I think yourselves as a committee in about three or four years time would be puzzling over what the data meant if there had been changes in the definition during that period. Mr Irwin: In terms of business planning for those local authorities and housing association and the point about decent neighbourhoods, it does seem to me for both housing associations and local authorities that in this context of being the landlord, whatever setting it is, it is a business. It must be around supply and demand; it must be around making returns to reinvest in your stock. In terms of making decisions about investment, it has to be in the context of: Is that piece of our real estate sustainable? Otherwise, you are just throwing good money after bad. I would expect the business planning for organisations to think through the issue of: Is investing in decent homes in this locality actually going to bring us a long-term return? Is it going to add value to that asset? Is there going to be future demand for tenants to live there? And therefore it links up to transport, crime issues and education. If you want to invest in housing, you make sure the education is good, because then there will always be demand for people to live there with families. It seems to me that business planning needs to be in that context rather than narrowly saying we have to technically get property to this particular standard irrespective of how the market place is. Most associations and most local authorities are switching on to the fact that they need to have sustainable businesses and that links to a broader canvas rather than just decent homes. Q177 Mr Sanders: Dr Parry, one of he Housing Corporation's main objectives is to encourage housing associations to provide decent homes. How are you setting about achieving this? Dr Perry: We do this primarily through our regulation of housing associations as social businesses. We require them - and have done for three or four years now - to satisfy us that they have proper asset management strategies. For housing associations, the main pathway through which they are going to achieve the Decent Homes Standard is through the proper management of their asset base and demonstrating to the regulator that they have a strategy in place. We do not do this primarily by giving money. The amount of money that we give in major repairs grants to housing associations is very small in relation to our current investment budget. We rely on social businesses to invest in their property according to an asset management strategy using the resources that they can generate internally. Q178 Mr Sanders: You are also developing a risk register for registered social landlords. This is supposed to be complete by the end of the year, which, of course, is only two weeks away now. Could you give us some indication as to its outcome? Ms Miller: We have been looking at the data that housing associations have been sending in, both their financial information and statistical information about their stock condition. From that we have identified those associations which appear to have the biggest task to do between now and 2010. We have identified around about 50 associations which will receive in-depth regulatory follow up from the statistical information that we have. Q179 Chairman: Wait a minute, let's just put that into plain language. There are 50 that are failing, is that it? Ms Miller: There are 50 who, on the information we currently have, appear to have the biggest challenge to deliver decent homes by 2010. Q180 Chairman: Could you let us have that list? Dr Perry: We would prefer not to, Chairman, because, if you like, the regulatory engagement between a regulator and associations has a degree of confidentiality in it. I am happy to go back and take some further advice on that, and, if we can send it to you, then we will. Chairman: All right. Q181 Mr Sanders: The number of non decent homes according to ODPM in the social sector as a whole has declined by about half a million between 2001 and 2004. Do you know what the breakdown is of the 500,000 properties between local authorities and RSLs? Dr Perry: Yes, we do. Ms Miller: We know that the number of housing association homes failing at March 2003 is around 250,000. That is split between over 2,000 different landlords. If you look at the failure rate for traditional associations versus the newer LSVTs (which have come across with more of a problem in terms of achieving decent homes), then the failure rate for traditional associations is running at about 19 per cent of their stock and for LSVTs it is running at about 40 per cent. Q182 Mr Sanders: Could you give me that figure again. Ms Miller: Yes, 2,500 homes in the sector at March 2003. Dr Perry: Chairman, that was in the ODPM written evidence. If you strip out the transfer associations, which by definition have a higher proportion of non decent homes, it is coming down in the traditional housing association sector by about 10 per cent a year. Q183 Chris Mole: Mr Irwin, the Audit Commission, through your inspectorate, have been inspecting local authorities and ALMOs, and, since April, housing associations as well. What is your overall impression of the relative performance so far of the different bodies in meeting the standard? Mr Irwin: Our experience in dealing with local authorities is more substantial because we have been inspecting them for a longer period of time - in practice, we started in July 2000. Our observation about their performance, in the context of landlords to start with, has been disappointing. Their performance as landlords has been not particularly strong on repairs and maintenance but has given value for money on procurement issues, and they have not been making the right kind of strategic decisions around how to invest in their own stock. That has been captured in terms of the overall performance of upper tier authorities in last year's comprehensive performance assessment, which was done for all counties and single tier authorities. That showed, across all the key services (education, social services, the environment, housing, benefits) that housing was probably as weak as any of the other services in that context. That is to be re-announced, in terms of changes since last year, on Thursday this week, and I cannot tell you what the position is in that sense. In terms of district councils, we have not done as much work as we have on upper tier authorities, although the comprehensive performance assessments now are working on district councils, as you are probably aware. The first results from looking at decent homes where authorities have not transferred stock have been quite positive. The reparations the district councils have been making, having learned from watching how other authorities have or have not done their jobs properly, have been quite encouraging. The number of authorities who are getting positive scores out of CPA for their housing work for districts is actually higher than I would have anticipated. That is a good sign. We are actually witnessing some learning across local governments about how to do things better, which is really what is important. In terms of Arm's Length Management Organisations, when the initiative first started back in 2001 and when people put their names forward, to an extent I think there was a degree of self-selection: by the organisations putting their names forward, they must have thought they had a fighting chance of actually achieving what, when the programme started, was a three-star rating. As the programme has progressed, we have seen authorities which, for whatever reason, have chosen to go down that route where their performance is more mixed and therefore actually they will find some of the achievement issues in terms of standards will be difficult in the short time that they have. It is encouraging those organisations, both as local organisations and ALMOs, actually now recognise their housing responsibilities and performance as really important. I think that is a significant shift. In terms of housing associations, we have only been inspecting for, in effect, seven months, although we benefited from seeing the inspection that the corporation did beforehand. The picture is mixed. I do not think we have a clear view of exactly how performance compares, but we have just announced a consultation paper that will give us some comparative data, comparative judgments, from 1 April next year. That will allow not only the Committee but everybody else to take a view about performance on service standards across all three sectors. Q184 Chris Mole: Having carried out inspections in the local authorities which have the majority of council houses in the country, you seem to be saying that you do not think they are going to meet the Decent Homes Standard. Mr Irwin: I think it would be unlikely that every authority would meet the Decent Homes Standard by 2010. I think there will be acceleration, both in terms of performance and the speed at which they achieve it, and the fact that people do programmes of individual bits of work rather than actually treating each house as a unique piece of real estate to get up to standard, but I think it would be unlikely by 2010. Q185 Chris Mole: What do you think is the main reason for that failure? Is it lack of funds, poor management and planning, a mixture or something else? Mr Irwin: I think it will be a mixture of all. I think by the end of 2010 it will be a lack of funds applied at that time, but I think there will be waste in the system in the intervening time. So performance will be better at that point but I do not think it will be good enough actually to recover from what will be lost time because we are already entering into year four. Q186 Mr Sanders: You mentioned about CPAs and district councils and their housing functions. Am I to take it from what you are saying that the performance of district councils is on the whole better than larger authorities? Mr Irwin: In terms of the initial results from, I think, five or six counties out of 33, the judgments around the housing diagnostic around decent homes shows that district councils are preparing to hit their Decent Homes Standard in a more effective way than upper tier authorities. Q187 Mr Sanders: Why do you think that is? Mr Irwin: It is probably a product of a number of things. One is scale. One is not using non traditional housing construction methods as much as urban authorities did. It may also be a product of having less deprivation to tackle. Therefore, they have a better product, with probably a more sustainable market place, which is more traditional to repair and therefore is less costly to repair, and therefore resources are more cost-effective. Q188 Chris Mole: We have spoken about local authorities. From your experience so far, are housing associations more or less likely to meet the target? Mr Irwin: I think they have a better chance to hit the target. First of all, they have the opportunity to be unfettered by PSBR requirements in terms of how they are borrowing. Secondly, the average age of a housing association property is probably 30 years younger than the average age of a local authority's property - because most housing associations, certainly in traditional associations, will have been building new property over the last 25 years, where local authorities have not been adding new stock, they have just had to manage their old stock. Thirdly, housing associations, far less than local authorities, went into non traditional forms of construction when it was untried and untested. I think those three different dimensions give them a far better opportunity to hit the standard by 2010. I think it would be unlikely that they would fail. Q189 Chris Mole: Should further options be available than the current four for local authorities in pursuit of the Decent Homes Standard in their stock? Mr Irwin: I think the answer to that must be yes. If you are asking what are the other options, then it is difficult to see at this stage but, if you go back four or five years, PFIs and ALMOs would not have been an option If you go back 15 years, transfer would not have been an option. So I think I would work it that new ideas will come into the frame over the next five years. Q190 Chris Mole: What do you think those options might be? Mr Irwin: There are discussions within the local authority sector around freedoms and flexibilities around performance, and the prospect of what is seen as prudential borrowing. But I do not think that is extended in the first phase to revenue account held properties. No doubt one would want to see how authorities respond to a prudential borrowing regime at a broader level. You could see that if that was successful, it may be extended, but there would have to be a trial period of two or three years before they actually extend it. Clearly, the nearer we get to 2010, the more dramatic something would have to happen to make an impact by 2010. Q191 Chairman: Do you think it is a good idea to separate out the strategic housing role of local authorities from the management role? Mr Irwin: I know this has been a view that ODPM and its predecessor bodies have had. I do not think there is any evidence to say that good landlords are good or bad at the strategic role and vice-versa. If you look at the performance of authorities and if you look at the last classification of housing strategy by government officers, which was last year, 2002, there is no indication that the 90 authorities who had sold their stock were better at strategic work than the ones who had not. Q192 Chairman: Tactfully: the Government has got it wrong. Mr Irwin: There is no evidence to support any particular view that connections between the two are automatic. There is a view that could be held, that, if you understand how the market place is as a landlord and you use that intelligence wisely, you can play your strategic role very well. But there is also evidence that, when people only focus on the landlord role, they do ignore the strategic role. Our research, which the Commission published earlier this year, in January, sadly showed that in lots of authorities who had sold their stock, the view of the authority at large was that they did not do housing any more. So there is every possible shade of opinion but I do not think there is any evidence to support the fact that splitting the roles guarantees better performance. Q193 Chairman: One of the comments earlier was on the relationship between education and housing, and the fact that if the schooling is good then the housing will tend to stand up pretty well. That does mean, in a sense, that the management of the housing is linked back to the other local authority functions. Mr Irwin: It certainly should be linked to all the public services that support the community, whether they are local authority functions or anybody else's functions, but you cannot see housing in isolation. People choose their neighbourhoods first and their house second; not the other way round. Q194 Christine Russell: The National Audit Office report on stock transfer claimed that stock transfer brings qualitative benefits, but it is quite costly. ODPM seems to support that point of view. What is your view on the qualitative benefits versus the cost of stock transfer? Mr Irwin: You are looking at the difference between what has happened for residents following stock transfer against a hypothesis of what might have happened if they had not transferred. That is going to be a different calculation in every setting, because it depends what would have happened next if stock transfer had not happened. I do not think the National Audit Office work was tailored to individual circumstances. I do not think I could be in a position to comment on what those circumstances would be. I would venture the view that in some places stock transfer would have brought forward real positive benefits for a whole community, a whole series of tenants, that would not have happened for perhaps ten or 15 years in another setting; there will be other occasions where it will be a lot closer call about whether those benefits are discernible and immediate. But I think you have to look at it on a case by case basis. Q195 Christine Russell: You cannot say overall. Mr Irwin: In order to get to a sensible position about overall what the benefits were, you would probably need to take 15 cases and look at how that worked out in practice and then you would have a view about what the overall position would be. Dr Perry: Could I be a little more positive than Mr Irwin on that, because I think there is very clear evidence of the benefits of transfer in the aggregate as you have mentioned. For example - and we are here talking about decent homes - in every case where there has been stock transfer, the repairs' promises to tenants have been delivered. Indeed, on behalf of the Public Accounts Committee we are currently doing a study to check that all the other promises have been delivered as well - and we will report back to the PAC on that. But, again, all the tenant satisfaction surveys show a clear, statistically significant improvement in tenant satisfaction on the whole across transfer organisations compared to local authority landlords. So we would say that there are very strong and demonstrable benefits to tenants from transfer, in addition to financial benefits for the transferring local authority of getting its stock repaired. Q196 Christine Russell: What about ALMOs, or do you think it is too early to comment? Do you feel the standard of the improvements that they are carrying out is perhaps lower than the standard of improvement that is being carried out by many of the landlords where the stock has been transferred? Dr Perry: The Audit Commission inspects ALMOs, so would be better placed to say that. I would say from our point of view that the main distinction between ALMOs and stock transfers is that with ALMOs all the money for repairs has to come from the Treasury and stays on the public sector balance sheet, whereas with stock transfer the money is fully funded by debt raised on the financial markets and paid back from the revenue stream. So from the macro-economic, national accounts point of view, there is a very clear difference between the two. Q197 Christine Russell: Mr Irwin, do you have any comments? Mr Irwin: I would say two things. First of all, it is a bit early in terms of elapsed time, because some of them have only been operating for about 15 months maximum. It would be easy to fall into either praise or criticism, but 15 months is not that long, in that sense. Over time we will be clearer about that, as we inspect those organisations. The second thing is the performance element, which is earned autonomy, in that sense, which is that there is some confidence around that they will use whatever resources they have as wisely as possible to try to make a real impact on their community. So, yes, the resources might not be as much or they may have more difficult stock to deal with than some of the other stock transfers, but that is not entirely the case, and I think that in two years from now you will have a clearer picture to compare and contrast with housing associations, because the four-year programme that most ALMOs are working on - slightly different but not massively different from the housing associations - would give us a picture of a before and after, and then you could compare it with stock transfer. Q198 Christine Russell: Do either of your organisations have a view on this idea of the replacement dowry? Do you think there should be a replacement for the Estates Challenge Fund to regenerate the wider area? Dr Perry: The Housing Corporation always thought that the Estates Renewal Challenge Fund was a very good instrument. We were sorry when it was wound up. If any government were to decide to bring it back, it would be a very good idea. Q199 Christine Russell: What about the specific dowry fund? Dr Perry: I am not sure I understand the precise concept, but, in general, yes. The idea that there should be some provision for replacing the stock at the time of redeveloping the estate is clearly a right one, because you cannot just say you will repair the existing stock and nothing else has to happen. For example, Sunderland, which was a very big stock transfer only two and a half years ago, has already refinanced part of what it is doing to allow it to redevelop some of the estates. Specifically, it is putting mixed tender into areas which have been completely mono-tender in the past, and early indications are that that is proving very, very popular with the people in Sunderland. Q200 Mr Betts: There is a category of local authorities where the finances for retaining stock simply do not add up. There is insufficient public money around, they do not have sufficient star rating to go for an ALMO, and therefore they are really left with no option at all. Mr Irwin: I think there is an option. Q201 Mr Betts: Apart from stock transfer. Mr Irwin: Yes. Q202 Chairman: There are places where people have voted down stock transfer. Mr Irwin: Yes. I was not implying that they had somewhere to go; that is, stock transfer. I have already said that I doubt if people would overall in the sector hit the 2010 target. It just seems to me that those places where, yes, their own resources as local authorities retaining their stock will not hit the target, their performance currently is not good enough, and it may be that their tenants do not want stock transfer - and those places exist - that something is going to have to give and I doubt if it is the tenants' views. It seems to me what will give over a longer period of time is either that resource levels for those specific authorities will have to be changed - perhaps some remodelling of the dowry approach - or - and this is not impossible and we would like to see this more often - their performance over a longer period of time does improve and their performance drives resources. I do not think that is going to hit the 2010 target but it will actually bring around better quality investment and better services for tenants and, if it does hit 2010, so be it. Q203 Mr Betts: At this stage those authorities would tend to say, "We'll go for stock transfer," if the value is insufficient to go for the ALMO - and the tenants may not want that either - then the Decent Homes target is really not going to be achieved. Mr Irwin: I do not think it will be achieved, no. Q204 Mr Betts: In terms of the freedoms around ALMOs, even ALMOs do not have the right to borrow against their rental stream. Mr Irwin: No. Q205 Mr Betts: Which is a big restriction on them. Mr Irwin: Yes. Q206 Mr Betts: Is the Audit Commission looking at whether there should be a relaxation, for local authorities and ALMOs to borrow against their rental stream? Mr Irwin: We are looking at that. We understand that ODPM and the Treasury are looking at that and it may well be an issue that is picked up in the comprehensive spending review 2004, Q207 Mr Betts: You are evaluating the impact of recent changes generally. Mr Irwin: We are undertaking a piece of research which we hope to publish early next year, probably by February or March time. Q208 Chairman: Is there any chance of us having a look at a first draft? Mr Irwin: I think we would want to be mindful of our independence. Like Dr Perry, I would like to take advice on that and I will come back to you. Q209 Mr Betts: Looking at the problems of hitting the Decent Homes Standard, do you have any idea of the funding shortfall which you think exists in the system generally that would cause problems in achieving that target? Mr Irwin: No, I do not think so. I think there are considerations. One is around the quality of data held by local authorities and housing associations, although I think the quality held by housing associations is likely to be better because their average stockholding is smaller and their stock is on average newer. There is also quality of data about how good are current properties at hitting the standard and whether their definitions are accurate. The second issue is about the value for money over procurement within any resource level. The third issue is increases of local and national building costs. The fourth issue, if you have looked at all those, is: if that is working as well as expected, is the amount of resource actually available? I think at the moment the value for money issues at a local level are not sufficiently explored by our work or by the authorities themselves, to get to the position of knowing that you cannot get more cost-effective. The piece of work we are aiming to do over the next two years is looking at cost-effectiveness of procurement in local authorities. Q210 Mr Betts: When will you be in a position to answer the question? Mr Irwin: I think we are going to be in a position to answer that question - Is the system in receipt of resources using those resources as wisely as possible? - probably about this time next year but with further evidence coming out the year after. Q211 Mr Betts: That will lead you to be able to say what the shortfall is in funding for decent homes. Mr Irwin: Yes. Q212 Mr Betts: You also express some views about the role of regional housing boards in allocating funds for the large catch-up repairs which some authorities need. Do you want to say a bit more about that? Mr Irwin: Two things. With the single capital pot within each local authority obviously there is a political decision about how that is used. Therefore, irrespective of how that is allocated to the authority, trying to track what happens to that is not always clear, and does not always give rise to what might be seen as the PSA target of decent homes or other PSA targets all competing for the same amount of money. The second issue is just the change issue. The regional housing boards have only been operating for eight months. They have written their first strategies, governmental decisions, to be announced over the next x weeks, therefore there is a question mark in the system: How does this compare with what went before? Obviously, if that comes out in a way that is helpful and you can track the money, then you can work out whether that is making an impact. But I think at this stage it is just question mark that nobody can answer. Dr Perry: If I may add to that. The regional housing boards themselves have taken a strategic view. As Mr Irwin says, it was their first go, and it has just been announced by ministers that it will be 2005 for their next strategy, so they will develop their analytical and methodological tools. But it did take a strategic decision between the amount of money they felt in their region was needed for repairs to local authority housing and the amount that should be allocated to new build. Those decisions and those resources will flow. As Mr Irwin says, you then have the problem that when money reaches local authorities there is discretion for members to decide how to spend the capital resources that they get, so there is no guarantee that resources allocated by regional housing boards for the improvement of local authority housing will be spent that way. It just replicates the problem of how do you know that money allocated to schools gets to schools and so on. I would not want to overdo it and say that local authorities take housing money and deliberately spend it on something else, but, from the point of view of being able to track the system, we do not have any certainty that you can at the moment track the money right through to the final destination. Q213 Mr Betts: Do you think with all this change going on that ODPM is actually meddling too much in financing, and it means that local authorities are looking at financial systems all the time rather than delivering services and long-term planning becomes impossible because they have no idea from one year to the next what the situation is going to be. Mr Irwin: I think the introduction of business planning for housing revenue accounts, in attempting to replicate, not exactly, but what housing associations do as a matter of course, is a very sensible move. It is slightly "over-technicalised" and therefore is the preserve of accountants rather than managers, but there is probably how organisations work. Q214 Chairman: Is that because the civil servants got their hands on it, and it would not have been better just for government to give broad guidance? Mr Irwin: I am trying to cast my mind back to when this was introduced and what form it was in. When it was introduced, it was quite simple. It has probably become a bit more sophisticated since. It was introduced before Decent Homes, so it was business planning in a context of just making the best use of resources. The Decent Homes was not a target when it was introduced. It has become more complicated since, but, as I am no longer a practitioner in those fields, it is difficult to judge. But business planning makes sense, because it is a business and therefore making it work is important. Therefore, understanding your local operating environment is really important. Unfortunately, part of the system which is different between local authorities and housing associations is the subsidy and management of maintenance allowance arrangements - which are incredibly complicated and which part of our research is trying to look at - does mean that there are two levels of operating environment. There is the real operating environment of the market place, the state of your stock and the resources. Secondly there are the overall national arrangements and how they play out within the notional housing revenue account. Those are very complicated things. So the business plan is trying to second-guess two things when actually second-guessing the first is tough. I think that is the difficulty for authorities. Q215 Mr Betts: Is that a plea to leave things as they are? Mr Irwin: I would suggest simplifying the system, leaving authorities to business plan within their resources, trying to give them some continuity of resources and kicking them hard if they do not perform within those resources. At the moment, the rules and the arrangements change so quickly, that their business plans which have a five-year and 30-year lifecycle in practice probably have a 12-month lifecycle. That is not practical business planning. Dr Perry: I would support that. We have learned in the corporation that requiring social landlords to have a business planning framework is good; trying to tell them exactly how to run it is not a very good idea. We have gone right back from doing that over the past three to four years. Q216 Mr Betts: There are some concerns, with all these great targets we have got for getting standards in by 2010, that the building industry will not be able to deliver, either because of shortage of capacity or because that shortage of capacity will force prices up so we will get less value for money with the money we do have. Mr Irwin: I think DTI is concerned around the infrastructure - replacement, updating and new infrastructure, in both the public and private sectors - about how attractive the construction industry is as a place of employment, and the rate at which people are leaving the industry versus the rate people are joining the industry. The Parker Review that was published last week touched upon construction industry issues. Although they are often seen in these tower-crane settings, in the context of decent homes it is carpenters and plumbers that are the issue. Over a longer period of time there is a query: will the skill base be there to do these works and to do them well or will it start to attract increasing premium? As disposable income for owner-occupiers increases - and it has increased - do they start to buy in DIY services rather than doing it themselves? That puts more pressure on the market place. I am taking a longer term view about whether the construction industry will be able to sustain massive private and public sector investment over any period of time. Q217 Mr Clelland: Mr Irwin mentioned earlier the importance of maintaining a good general environment, a decent neighbourhood, in order to justify the investment in maintaining decent stocks. Of course there are other reasons for doing that, not least the welfare and wellbeing of the people who live there. Is there a danger that by prioritising resources in order to meet the decent homes target that we will actually end up neglecting the neighbourhoods themselves? Mr Irwin: There is always that risk, that an organisation makes a wrong purchasing decision. It is about understanding how the customers feel about their neighbourhood. Given that the money for local authorities is ring-fenced to housing revenue account functions, therefore it is around maintaining tenancies both as a mandatory task and also as an investment task, the skill for the organisation is to link it with other funding streams which are not housing revenue account but lift the neighbourhood. Therefore, it is not always the choice between spending the rent money and however it is financed on the neighbourhood or the house; it is spending the rent money on the neighbourhood and general fund money on the house because council tenants pay council tax. It is not always a straight choice between the housing capital programme invested in new street lights, better pavements, more security arrangements - although, if it is in the stock, then that clearly is a decision - it is about coordinating council action, so that the streetlight programme and the housing investment programme and the education investment programme all link together and local transport makes a real difference. Q218 Mr Betts: Do you think there is sufficient coordination? Mr Irwin: There are some excellent examples of how it works and some appalling examples of how it does not. Local government is spending on many different things. There will always be exceptions to any standard. I think authorities now are understanding the issues. They know what the questions are. Not everybody has discovered the answers but they understand how sustainable communities need to be either attained or maintained. Chairman: At that point we must finish this session. Thank you very much. Memoranda submitted by Unison and Defend Council Housing Examination of Witnesses Witnesses: MR COLIN MEECH , National Officer, Unison, MR ALAN WALTER, member of DCB National Committee, and MS EILEEN SHORT, member of DCH National Committee, Defend Council Housing, examined. Q219 Chairman: May I welcome you to the second session this morning and ask you to identify yourselves for the record. Mr Meech: My name is Colin Meech. I am National Officer with Unison. Mr Walter: Alan Walter from Defend Council Housing. Ms Short: Eileen Short. I am a tenant in Tower Hamlets and part of the National Committee, Defend Council Housing. Q220 Chairman: Does anybody want to say anything by way of introduction or are you happy for us to go straight to questions? Ms Short: May I say very briefly that we urgently need help to defend the right of tenants to have a real choice in the process of what is going on on our estates. In order to have any kind of choice we have to have some kind of level playing field, with a real option of investment in council housing. It is what we do not have at the minute. We also need your help to highlight and to put an end to the abuse of what is supposed to be local democracy that is going on at the moment in order to lever tenants out of council housing. Chairman: Thank you very much. Christine Russell. Q221 Christine Russell: Could I ask you at the outset to comment on the Decent Homes Standard and whether or not your two organisations believe it is an acceptable benchmark to deliver decent homes in Britain. Ms Short: We are very clear, tenants want whatever improvements we can get. There is a real backlog of them, there is a lot of urgent work that needs doing. Decent Homes, on the one hand, does not sort out the lifts or the estates or the paths. On the other hand, it has sometimes been used to force people to have new bathrooms when they are perfectly happy with the ones they have. We think the problem is that it is being used as a big top-down stick instead of being applied locally. Q222 Christine Russell: You think it is not flexible. Ms Short: Yes. Q223 Christine Russell: We have had evidence from groups representing people with disabilities that there are no proper access standards incorporated. Ms Short: I think that is what you get if you do not talk to people locally in the right way and allow local democracy to work with tenants and say what they need. If you apply top-down standard, you must do. Mr Meech: I think that is the real issue. The real issue is that tenants are being railroaded into making decisions without having effective local independent support to understand what is required to improve their home to a reasonable standard, and then, above that, what they consider they want extra. Too often we see consultants and local authorities pushing tenants down a particular route in order to achieve a particular investment outcome. Lots of local authorities we believe have undertaken stock transfers, for example, simply to gain a capital receipt, not to improve tenants' homes. That is one of the real issues. Q224 Christine Russell: Surely the reality is that those tenants' homes have been improved. Mr Meech: Where is the evidence to suggest that is the case? Q225 Christine Russell: We have received plenty of evidence that the landlords have delivered on promises. Mr Meech: That is not what the National Audit Office said. As far as we are concerned they saw intangible benefits, they said that tenants were paying a high price for that investment in higher housing benefit costs and higher service charges and a higher cost to the tax payer in housing benefit. Q226 Christine Russell: Could I ask you about Unison's definition of a decent home. It does not actually include the current fitness standard. Mr Meech: With all due respect, we are not that technical an organisation. We are an organisation that represents workers at the work place and, from a citizenship point of view, policy issues. We believe tenants should determine what a decent home is within civilised parameters, particularly the ones that support their educational and health attainment. Q227 Christine Russell: Therefore, you are saying that if someone wants to live in a slum, that is their right, to live in a slum. Mr Meech: No, we never said that at all. Q228 Christine Russell: Even though that may have a detrimental effect ---- Mr Meech: We never said that. Q229 Christine Russell: You are. Mr Meech: No, we are saying that tenants should decide the quality of their homes with guidance from their local authority. Mr Walter: It is pretty amazing that top-down standard has been applied to council tenants, when, with respect, I do not think government would be walking down the leafy streets in the suburbs and applying a similar top-down mandatory standard to home owners. I think there has to be a question about why one gets treated one way and one gets treated the other way. Tenants are capable of making real judgments about what is important to them. In all of these issues there is more than just whether you have a new bathroom. There are bigger issues involved. The trouble is that tenants are being force-fed in one particular way and that is not choice. Q230 Christine Russell: You do not think in any way it reflects the aspirations of tenants. Mr Walter: I think if you asked tenants on a particular estate what they wanted you would end up with a list of demands and there would be a significant overlap with Decent Homes. When it is then put into the equation that as a condition of Decent Homes you will not have stock transfer, you will probably find on most estates that the response you get completely changes. There is not the subtlety for tenants to be able to decide what they can have without the penalties of privatisation. That is just a monolithic blackmail which is not necessarily in economic terms, and you have to ask the question why has it happened in political terms. In terms of bathrooms, whilst tenants want nice bathrooms (my bathroom is 20-odd years old and there is no problem, the bath is not cracked, the tiles are not cracked) - and it may be that the building industry would rather strip out bathrooms than put in bathrooms wholesale - tenants who have got perfectly good bathrooms might be quite happy to keep them and have some other improvement externally. Then they want to know what is the price in terms of the other bigger issues. Q231 Mr Sanders: If tenants are not satisfied that their current landlord can deliver decent homes by the target set - accepting it is a top-down target, nevertheless that is the target that landlords have to meet - should tenants not be given the choice of another landlord if their existing landlord is failing to meet their targets? Ms Short: Actually that is not the choice we face. I live in Tower Hamlets. We are being told that because of the pressure of Decent Homes you have to go through the stock transfer process. The borough has been split into 84 areas and replaced up to 60-odd stock transfer ballots, and the borough will not meet Decent Homes. Partly what we have come to bring urgently to your attention is that there is a game going on outside, on the estates - and it is not just in Tower Hamlets or Camden, it is all over the country. In Wakefield and Grimsby, where I was last week, tenants are being told - or not being told - "The council can meet Decent Homes Standards but we have upped the standard. You cannot meet that, so you need a stock transfer." We are being levered with using Decent Homes target as the stick. Mr Meech: We can give many examples of that situation. I understand in Sedgefield, where 96 per cent of council tenants had registered satisfaction with their landlord, the local authority has still taken a decision against their wishes to explore stock transfer - against the express wishes of the tenants, 96 per cent. If tenants had a level playing field, if they had equality of information available, independent information - not from consultants employed by the local authority to give a particular direction or from tenants' friends who are employed by the local authority to give a particular direction, but thoroughly independent analysis - with different investment vehicles in front of them, and they knew the consequences of taking each investment vehicle, then I think we would be hard pressed to say that tenants were not right in choosing a type of landlord. But it is not the case. Q232 Mr Sanders: The ODPM specialist and independent advice should have been made available to tenants in these circumstances. You are saying that is not the case. Mr Walter: No, it is not the case. The record is that you have, as Colin has said, a consultant who is employed by the local authority. There is a very small number of them and it is a very internalised and monopolised market. They are neither independent - because they are paid by the council and I have not yet met one who is a tenant - and they are not friends, in the sense of being invited by tenants into our homes or into our area. Usually tenants are given a choice of two or three by the local authority. In my authority, Camden, we have just been going through an ALMO ballot and tenants' representatives in the official tenant forum voted democratically to ask the council to employ an independent financial expert of our choice to model the council's existing finances and what the various different government proposals might mean. The council refused that. You have to ask why that is. There is a very proud tradition in the tenants' movement of tenants fighting for repairs and improvements to their homes. We are not inundated with lots of examples of lobbies at town halls and demonstrations on estates with tenants demanding that councils do something. That is not to say there are not problems, because there are, but this whole process has been driven by a government which wants to privatise. That is a very different context. Q233 Mr Sanders: Do you think the Government's prioritisation on the Decent Homes target is actually diverting attention away from other important housing issues such as estate and neighbourhood management? Ms Short: Just by sending out one email to the tenants' organisations on our list saying that we were coming here today, we were sent tons in response, tenants pleading really with the arguments they want to put in front of you. I will give you a copy later, but I think it just touches the surface of the need that is out there. The example I would like to put is Birmingham, where the tenants overwhelmingly said, "We do not want stock transfer." This year, because the Audit Commission is breathing down their necks, money has been put into the repair budget to address what they call a stack of 48,000 or 49,000 outstanding repairs, and they are saying that money has been taken away from the money put aside to do Decent Homes. To me that says that the Decent Homes part of it and doing repairs have become two different things. What does that mean? Does it mean that tenants cannot have taps fixed or running overflows sorted out because the money is in another pot to do Decent Homes? That is madness. Q234 Christine Russell: You have just mentioned taps. You talk about the "gold tap effect" in your submission. Could you explain what you mean by that? Ms Short: I am using it as a shorthand. Stock transfer targets investment fairly randomly, I would say. Where you get a yes vote, it targets a concentrated amount of investment for which, because it is privately financed and because the people who lend it want their return copper bottomed or gold tapped or whatever, they set quite high standards on the amount of money which has to go in, in order to make their asset effectively pay back in a fixed, short period of time. Q235 Christine Russell: When my local authority transferred its stock - and that was done seven years ago - there have been a number of assessments done since and they have honour their pledge to tenants to do worst first, upgrading properties. You are saying that Unison have evidence from around the country that that has not happened. Ms Short: I am definitely not an expert on this. Q236 Christine Russell: You have put it in your submission that this is what happens. Ms Short: I am saying two things. One is over the country the greatest need has not been addressed first. Where I live ------ Q237 Christine Russell: Give us some examples. Ms Short: In Tower Hamlets there are families of eight and ten living in two bedroom flats. Q238 Christine Russell: And they have transferred their stock? Ms Short: No, they have not transferred their stock. Q239 Christine Russell: Give us examples of where it has happened. Mr Meech: I can. Ms Short: Could I just make the point that areas of greatest need are not only within where stock has been transferred. We are talking about council housing as a national asset, and some sane, rational decisions taken about where investment is needed. Q240 Christine Russell: You are talking here of what could happen. Ms Short: No, I am not. I am talking about what has happened. Mr Meech: We asked a parliamentary question to find out where stock transfers had taken place in respect of the deprivation units. We found that transfers done from January 1997 to July 2002, 38 stock transfers, took place in authorities with a deprivation index of 158, which suggests to us that most of the stock transfers are taking place in authorities with very good stock because that retains a high capital receipt. I have been present at a district council housing meeting where the local council clearly took a decision to have a higher Decent Homes Standard than was necessary. They agreed that they had the capital resources in their housing revenue account to achieve the Decent Homes Standards but they went for a "gold tap" standard, they went for a higher standard, which meant they could only use stock transfer, which meant they got capital receipt, and we believe that was used to keep the council tax lower. So you can actually see that most of the stock transfers since the Labour Government came to power have taken place in shire and district councils when we believe that was not necessary. The inner city boroughs and the metropolitan areas which are struggling with high debt because of the '60s and '70s, which are struggling with high levels of deprivation, are unable to access stock transfers because tenants will not accept it, and the deprivation is continuing because the Government refuses to introduce options under the prudential framework. Q241 Christine Russell: You are not arguing that once stock transfers take place then resources are spent on properties that are perhaps in less need than others. Mr Meech: I would not like to say yes or no because I do not have the evidence in front of me. Q242 Chairman: You are not giving us an answer to that because you do not know. Mr Meech: But ----- Chairman: I am sorry, we are going to have to move on because we are a bit short of time. Q243 Mr Betts: Clearly one of the reasons for stock transfers is to bring some extra funding in to improve the state of housing. No one could question that as a general objective. What is the answer if you do not have stock transfers? You have to raise the money from somewhere. You were suggesting borrowing against future rental stream was the way forward. Mr Meech: As an organisation we have made several representations, both through formal consultation machinery, through our own instructions through the Labour Party and to ministers, on why the option considered in the Way Forward for Housing Capital Finance, the investment allowance - which "would provide headroom within the HRA which an authority could use to take advantage of the new prudential borrowing regime" - has not been explored by any government in any real detail. We have done preliminary figures that show, on a modest investment allowance as a subsidy through the RHA in 2004/5, a modest allowance of £150 million would yield about £2 billion worth of investment. We believe this is the most sensible solution. It is the real solution. It reinvests the money captured by the Treasury in the amount of services that the Housing Revenue Account historically has maintained and continuously maintained. We are not asking for new tax money, we are not asking for new borrowing; we are asking for tenants' legitimate rent money to be used effectively and efficiently for the benefit of them, their communities and, just as importantly, the taxpayer - because we have seen that the taxpayer has been subsidising stock transfers and current borrowing regimes. Q244 Mr Betts: In your memo you say this revenue stream can be used to finance borrowing. Now you are saying there will not be any increase in borrowing. Mr Meech: I am saying there is enough revenue money in the Treasury that they would not have to include extra borrowing. The new subsidy, the investment allowance, would not have to come from new borrowing or new government money. It is already in the system. Yes, local authorities would be able to do the borrowing, but that is what is being allowed under the prudential framework. Mr Walter: In terms of giving councils level playing fields so that councils can borrow as other types of landlords do, and we have to ring-fence the national Housing Revenue Account so the Government is not siphoning money out of council housing. If we were to get Government also to put into the pot the amount of public subsidy they are using to write off overhanging debt to subsidise privatisation, then we would be quids in. An example is the money that is made available for ALMOs. For 20 years council tenants have been told, "There is no money for council housing," and more recently it has been "unless you use stock transfer." Now, suddenly, there is extra money there for councils, for council housing, but only if the councils set up an ALMO. If the money is there, why can that money not be made available to the councils directly for what tenants want? Q245 Mr Betts: You state that "stock transfer is inherently more costly than local authority retention and renovation of council housing." Are there not inefficiencies in local authority maintaining its stock? Mr Meech: Part of the inefficiency is to do with the lack of investment both in the infrastructure and in the workforce. That is one of the real issues. Local authorities have shown that where there are incentives they are performing. That is what the ALMO issue is. There are incentives. This, again, is apparently a stick approach. It is not a sensible approach. It is not one conducive to the tenant sitting down with the local authority and the workforce to discuss how best it can be achieved. I would have thought Hammersmith and Fulham is a prime example: the local authority and its tenants and its workforce sat down and came out with a clear statement about what it wanted to do - and it was a high performing authority, the best performing authority in the country - and it was denied legitimate access to money and had to go through the hoop again. And that has delayed the investment in Hammersmith and Fulham. Chairman: On that note, thank you very much indeed. Memorandum submitted by Local Government Association, Examination of Witnesses Witnesses: CLLR RUTH BAGNALL, Chair of the LGA Housing Executive, MR MIKE ATHERTON, Head of Housing and Consumer Services, Telford and Wrekin Council, Local Government Association, CLLR GRAHAM CHAPMAN and MS LYNNE PENNINGTON, Corporate Director of Housing, Nottingham City Council, MS MARIA O'BRIEN, Divisional Manager for Housing Strategy and Investment, and MS SUE MANSFIIELD, Housing Investment Manager, Liverpool City Council, examined. Q246 Chairman: May I welcome you to our third session this morning and ask you to introduce yourselves for the record. Mr Atherton: Mike Atherton, Head of Strategic Housing Services at Telford and Wrekin Council. Ms Pennington: Lynne Pennington, Corporate Director at Nottingham City Council. Cllr Bagnall: Ruth Bagnall, Chair of the Housing Executive of the Local Government Association. Ms O'Brien: Maria O'Brien, Divisional Manager for Housing Strategy, Liverpool City Council. Ms Mansfield: Sue Mansfield, Housing Investment Manager, Liverpool City Council. Q247 Chairman: Thank you very much. Is there anything you would like to say by way of introduction, or you are happy to go straight to questions? Cllr Bagnall: May I have a starter, and only a very quick one. I know we will be talking in a lot of technical detail about Decent Homes as such, but I think it is important that we do see that within the context, embedded as it is now, in the overall approach to housing in the Sustainable Communities Plan. The whole commitment to Decent Homes has put a lid on the state of council housing: it showed the amount of investment which was going to be necessary. But when you look at it embedded now in the documentation for Sustainable Communities, I think our sights have been raised since that first commitment to Decent Homes, particularly in council housing. Standards have been raised and expectations have been raised, so what we are looking to achieving out of the Sustainable Communities Plan goes quite a lot further, in the sense of expectations and aspirations, than the strictest definition of Decent Homes. I think it is important to see it in that context, as well as what it is in terms of PSA targets and whether we are going to meet them. Chairman: Thank you very much. Q248 Mr Clelland: Is the Decent Homes Standard sufficiently broad and is the level high enough? Ms Pennington: As Corporate Director of the Housing Department in Nottingham City Council, a lot of what we have heard today reflects where we are up to. We are currently going through major organisational change. Major programmes have been set up for consulting tenants across the city on the range of investment options and clearly the Decent Homes Standard is part of that debate. It is very clear from the tenants that it is decent homes and decent neighbourhoods that are important to them. Nottingham has a very successful track record of maintaining decent neighbourhoods. In terms of our evidence, the tenants have very strong views about the Decent Homes Standard and the need for decent neighbourhoods, and of the need for a level playing field to enable them to exercise informed choices that are not dictated by linkages with options. In terms of the Decent Homes Standard, whilst we do not have a problem with the minimum standard, we do think it is a minimum standard. We are one of the authorities that will be struggling to meet that, and we are clearly looking at options for meeting that gap, but actually what is important for us is the decent homes and decent neighbourhoods' gap. As an example, our decent homes and decent neighbourhoods' gap is £141 million but for the Decent Homes Standard it is £36 million. Ms O'Brien: From Liverpool's perspective, I would agree with a lot of what has been said. Some of the stock we have within the city is probably in the worst condition but is actually in our most sustainable neighbourhoods. Liverpool is one of the low-demand pathfinders for the housing market renewable initiative. Fifty per cent of council stock is in that area where there are issues around the sustainability of that stock. If you just look at Decent Homes as a straightforward number basis - which is really how it is applied - some of that stock is not sustainable even though it meets Decent Homes, because it is in an area that is in a low-demand pathfinder and therefore is unpopular and in unpopular neighbourhoods. Cllr Bagnall: Your question was whether the definition was broad enough or high enough. I think it depends on: broad enough or high enough for what? In terms of very basic asset management it probably is, and it is probably achievable, but in terms of sustainable communities it probably is not. Q249 Mr Clelland: Do you think the standard is defined sufficiently clearly? Is there adequate methodology for measuring outputs? Cllr Bagnall: My guess is yes. I personally have not gone through in any detail the acres of guidance that go to my offices and the offices of other councils. I would expect there is every bit as much as is needed, if not more so, just in terms of definition of the standards. There will still be people who interpret those standards flexibly, people who are very keen to be seen to meet the targets, who will maybe do a job of work on a particular estate which another authority or even another estate might not see or feel is meeting the targets. I think there is always going to be some local flexibility, local interpretation and local understanding of what it is that people are trying to achieve even with a full set of guidance. Q250 Chairman: An awful lot of the evidence which we have received, which I assume you have had a look at, makes it quite clear on a whole broad range of things that people are dissatisfied with the standards. Cllr Bagnall: When you start talking about minimum standards, it is a gloomy thing. In principle, it is quite a good thing, because it is a basic level beyond which you aspire and the level at which no one should be suffering from standards below that minimum, but it allows people to say there must be something better beyond this. A tenant, a housing officer, a councillor would be able to identify what beyond that minimum they aspire to from day one. I think that is the way that minimum standards work, and so I would expect there to be a whole long list of things to which people would immediately want to aspire, once they have a confidence, which I think people are gaining, that the very basics will be met. I now have very few people coming to me personally, as a councillor, who are anxious about when their plastic windows will be replaced because they can see the substance of the resource is double what it was five years ago. It means that programme will be out of the way and they can think about something which is perhaps a bit softer, perhaps a bit more to do with the environment and social issues. But, on the basis of the minimum standards being met, then they will have higher aspirations. I think that is right and that is the way minimum standards work. Mr Atherton: Could I endorse that. We carry out a biennial survey. Consistently at the top of that list are issues of crime and issues of the fear of crime, issues around neighbourhood management. Issues around the quality of the housing and the affordability of housing sit right the way down the list. People's perceptions are not necessarily focused on housing conditions. Q251 Mr Clelland: Would you think it is feasible to make changes to the breadth and the level required by the standard to include things like decent neighbourhoods and accessibility? Mr Atherton: We would very much welcome that. Cllr Chapman: I think you have a problem ---- Q252 Chairman: I am sorry, you were not here at the beginning. Would you like to explain why not and introduce yourself? Cllr Chapman: Yes, I will do. Midland mainline: a 50 minute delay from Nottingham. I apologise. Graham Chapman. May I continue? Q253 Chairman: Yes. Cllr Chapman: Thank you. I represent a ward which is probably one of the toughest in the East Midlands. We are beginning to turn that ward around. The reason we are turning it round is to do with some sensitive environmental work as well as a very tough attitude towards anti-social behaviour. My problem with the Decent Homes Standard is that it is not giving people what they want; in fact, it may be diverting resources from what they want. In the hierarchy of needs, a top hierarchy of need is to do with security before it is to do with plastic windows. My worry is that it is actually diverting resources from where it should be going. The difficulty is the ODPM have no real idea of how much it does cost to provide decent environmental support for housing. It is a very expensive business. There are two separate types of council estates on the whole: those built in the '30s, which were not made for cars particularly - so you have very difficult problems with roads - and those in the '60s which were open plan. In both cases you are going to need quite a lot of structural reorganisation, which is a very expensive business, but that is the sort of thing that people want, because very often you cannot let some homes because you cannot put your car anywhere near your home. Q254 Mr Clelland: Are you suggesting the Government has its priorities wrong? Cllr Chapman: Yes. Q255 Mr Clelland: And what we ought to be looking at is decent neighbourhood standards before we go on to decent housing standards? Cllr Chapman: There is a simple test. Any person in the private sector would go for a house in a decent area before it went for a decent house in a poor area. I think that is the ultimate test. It is the same with the council tenants, it is probably the same for any other tenant. If we are not making the areas decent, we are going to end up with a lot of homes which are very well appointed but not lettable. There are examples throughout the country - and I can give you examples of parts of Hull that I know very well, where they have spent a lot of money on the houses and they cannot let them because they are in the wrong area. So the priority has to making the area decent first. Q256 Mr Clelland: Could I just turn to another issue, having listened to what you have said and having some sympathy with it; on the other hand, we are looking at housing standards. The Government intends to replace the Fitness Standard with the Housing Health and Safety Rating System. Do you think this is going to improve the Decent Homes Standard? Ms Pennington: To a degree, but it is marginal. If this is about the quality of life for people in neighbourhoods, it is more than just a bricks and mortar standard. Councillor Chapman has made it clear that our tenants have articulated very, very strongly and through 18 months of intensive consultation that what is important to them is the quality of life. They are no different from owner-occupiers. Q257 Chairman: But we are on to a different issue, are we not? We are on to what is going to be in the housing bill that has been published. Ms Pennington: Yes, and it is welcomed. Do not get me wrong, a lot of government policy over the last few years is totally welcomed. ALMOs, performance focus, best value, they are all things that are welcomed. The Housing Bill and the moves to improve conditions in the private sector are welcomed. But our view is that they do not go far enough. Q258 Mr Betts: What do you think the main problems are with the current funding arrangements in place to try to address the Decent Homes Standard? Whether you think the standard is a right one, clearly we have to have more funding in. Do you think the funding arrangements are right at present or are there problems with it? Mr Atherton: I think there are a number of issues that are linked to funding. They are about the framework within which the delivery of decent homes is going to happen. I think they are about the timeframe, the achievability and a benchmark of where we are starting from, and of course resources come into that. I think it is dangerous to talk about resources in isolation, although my intuitive feel for the area for which I am responsible is that there are sufficient resources available to deliver the Decent Homes Standard in the timeframe we are talking about. Ms Pennington: Whilst, again, working in business planning, there has been help for local authorities and it has made us more transparent and accountable; on the other hand, it has not led to any greater degree of financial stability. If we just look over the last year, in terms of the moves from regional housing board, top-slicing, BCA, changes to housing benefits subsidy - and I am not saying we do not welcome those but there have been changes - in terms of management maintenance allowances and the fact that there is no clarity in terms of round 5 for ALMOs yet, it makes a great degree of uncertainty for our planning and for our consultation. If we are engaging tenants right from the beginning and the playing field is changing all the time, then it is hard to keep them on board. Q259 Mr Betts: Just coming to the LGAs, you said there should be other options than the four currently available. Indeed, you have been somewhat critical of some of the restrictions on local authorities, the restrictions on going for ALMOs, and said that there ought to be other alternatives. What is your view? Cllr Bagnall: A previous witness I thought gave a very good answer, which I will just steal, looking back over time about how options have developed and matured. There has been some creativity in the process: ALMOs have arisen and been put forward and people are taking them on board as a serious option, and, I guess, five or six years ago in Cambridge, my own council, stock transfer was the only kid on the block. To rule out definitively future uncertainty, I am sorry, I think dogmatically might be a problem, because there may be solutions which are generated out of discussion and debate and dialogue about what is achievable now. If anything new does come up, it will create enormous uncertainty and a huge amount of difficulty in terms of direct consultation with tenants because people will see the sands shifting and dig in, I think. That is an interesting observation we can make as new ideas arise - and securitisation is one of the suggestions that we have put forward as an LGA - that in a time of uncertainty people will dig into what they have. I think the downside of new models becoming available is that people will run away from the difficulties and the risks involved in taking a decision in a timely way because they are just waiting for the next thing to come along which might be more likely to be something they are in favour of. In the meantime the decision is not made, the investment is not made, and ---- Q260 Mr Betts: Was that a yes, there should be further options. Cllr Bagnall: In principle, yes, but I think there is a risk involved in putting a very big statement out saying there should be further options. The risk inherent in that is that people will back off from taking a necessary decision in a timely way. The problem that is being experienced in terms of people looking at meeting the Decent Homes Standard is that there is a tension between discussions and deliberations which are finance-based and the issue of governance which applies selectively to different options. I think people are really struggling with holding together finance-based decisions and governance-based decisions. That is really messing people's heads up when it comes to really trying to think about what is the best option long term for current tenants, future tenants, their children, our children, what have you. Certainly in terms of council housing stock, that is causing difficulties. Ms O'Brien: To add to that, local authorities have got to have the flexibility to look at the option that addresses also the wider regeneration programmes that are happening within the authorities and using the delivery vehicles that come from delivering decent homes to complement that regeneration. Sometimes, when you are going through where Liverpool has gone through, 11 stock transfers to registered social landlords, the flexibility of involving them in the wider regeneration programme is not always there. I think local authorities have to have some space to be innovative of how they use delivery vehicles in the future, not only to deliver the decent homes but also to complement the city's wider regeneration programme. Liverpool is going through a massive regeneration at the moment. Its one asset is land and it has to be able to use that land to complement what its regeneration programme is, and sometimes it cannot do that if land has been transferred outside to another organisation. Q261 Christine Russell: You have already transferred a lot of your stock to social landlords. In your memorandum you talk about your intention to transfer more. Are you only saying that because of the funding restraints? If you did not have the funding restraints, would Liverpool City Council actually want to retain what remaining housing stock you have? Do you see advantages? That is what I am asking you, because you are in between: you have transferred quite a lot and you still own quite a lot. Ms O'Brien: We have seen advantages in terms of the transfer of stock and what the new companies, in particular, the new social companies, have been able to contribute to the city's regeneration. If the local authority had the resources to meet not the Decent Homes Standard as it is at the moment but what tenants' aspirations are, then clearly I would say yes Liverpool City Council would want to retain its stock and be a landlord. But that is not an option currently available to us. Of the three options that are available, PFI and ALMO are not something that Liverpool could consider. Stock transfer is what would bring in the level of investment that is needed for the tenants and what tenants expect. It goes back to my original point, that we have to have a delivery vehicle that complements the regeneration of the strategy and not just meeting the Decent Homes, and sometimes that is too narrow. Q262 Christine Russell: So it is regenerating neighbourhoods, tackling antisocial behaviour, just as much as improving the bricks and mortar. That is your priority in Liverpool. Ms O'Brien: Yes. On our stock condition, not just meeting Decent Homes, the environmental improvements that we talked about earlier on would cost an additional £25 million. That is not even in the Decent Homes calculation. Q263 Christine Russell: Do you support what the Government is saying, in that there should perhaps be a separation between the strategic overview of housing and the day-to-day operation of housing management? Ms O'Brien: We would support that, but, again, it comes back to the position of what influence local authorities can have once they lose land controls and once they have lost the stock and understanding housing markets. There must be a much closer reliance when that happens around how business planning, particularly with the new companies, takes place to complement the regeneration strategy, and not just looking at a business plan that looks at improving their stock. It has to be much wider. Q264 Christine Russell: With hindsight, do you think you actually have too many social registered landlords in Liverpool? Ms O'Brien: It is not our view about whether there are too many. Our view is whether they are managing their stock correctly and whether they are managing the stock and complementing the city's regeneration. Q265 Christine Russell: Are some of the smaller ones really struggling to provide that range of management that you have said is necessary? Ms O'Brien: They will struggle, I think, in the context of Liverpool as a low-demand pathfinder. The impact of the loss of stock that is going to occur through clearance programmes clearly may impact on them as businesses and their business planning. Q266 Christine Russell: Could I turn to Nottingham. I think you said earlier that whilst you welcomed a lot of the Government's policies on housing, you do not think they go far enough. Forgive me, I do not know if Nottingham is a high performing authority. Do you know what your star rating is? Ms Pennington: No. Ask me tomorrow because our report is due out! Q267 Christine Russell: All right. Let's say you are going to get your three stars tomorrow. If you do, do you feel that authorities like Nottingham should be given the ability to go and raise private funds for housing. Ms Pennington: Yes. Q268 Christine Russell: As the higher performing ALMOs are given that facility? Ms Pennington: Undoubtedly. I support the LGA totally in that view. In terms of Nottingham we are on a high improvement curve in terms of our basic performance. It is almost a Catch-22 situation, in terms of: motivation to improve performance, resources that actually make your performance better, and not being able to access those until you are excellent. Therefore, in terms of the two prongs of best value, in terms of the star rating and the prospects for improvement, I would like to see some motivational reward linked to the prospects for improvement, to keep you going really. Q269 Chris Mole: The Government has extended Decent Homes to the private sector but only for homes inhabited by vulnerable households. The problem arises that a household may on one day have a vulnerable resident in it and on another day not. How is it possible in any meaningful way to measure and monitor progress against this target? Cllr Bagnall: I suppose you can start by saying more generic categories are vulnerable. So if you are looking at areas where you would expect there to be clusters of vulnerable groups, not doing it on a house-by-house basis necessarily, then you can start constructing arguments about groups of people who are likely to be in poor housing conditions, associated with vulnerability indicators such as minority ethnic status, low income households, or the income households living in high demand areas. You can start talking about groups and therefore investment in areas. Also, you can do selective identification of properties, where there are people whose home, if it is, say, either privately owned or privately rented, is clearly in need of investment in order to maintain that person's quality of life. Through, I guess, things like the Regulatory Reform Act proposals, councils are now empowered essentially to act on an individual basis, be it either tenancy or private owner occupation, and do it down to that very fine-grained level of individual tenancies or householders as well as more group related. Q270 Chris Mole: Does anyone want to disagree with that view? Mr Atherton: We have a concern that, if we are setting what we are describing as a minim standard for social rent, there is an acceptance that you can go below that standard in the private rented sector. Our view would be that the Decent Homes Standard should apply to all rented housing across the social and private renting sectors and should not be limited to vulnerable households. Ms O'Brien: I think your point really is one that we, as a local authority, would struggle with from the point of view of tracking. People move. As you say, they might be vulnerable one day, and then they have moved household the next. Trying to track that and keep that baseline of information would be very difficult. Q271 Chris Mole: The next problem is the Decent Homes Standard is not a statutory standard, some of the evidence we have received said there are no real enforcement mechanisms on the three or four criteria when applied to the private sector. What enforcement mechanisms would any of you propose? Cllr Bagnall: There are carrots as well as sticks and that is one of the helpful aspects of having the capacity to either use grant funding or equity release in having a relationship with private sector landlords or even householders in the same way as major repairs allowances enable councils to achieve decent homes, then having resources available to incentivise the development of property and the maintenance of property goes a long way towards improving standards. Q272 Chris Mole: Are these resources you have or new resources you wish to have. Cllr Bagnall: A bit of both. Q273 Chairman: Just give us one example of a local authority which is helping somebody in the private sector with an equity release scheme? Cllr Bagnall: If you wait until April then in principle the authority I am a member of should be working at that in practice. I am sure there are authorities which are further forward than my own is. Q274 Chairman: Perhaps you can give us a note Cllr Bagnall: Sure. Chris Mole: Is there a fear, would you see it as a genuine fear that some private landlords would try to avoid vulnerable households. We cannot get nods on the record. Chairman: Nods all along the line. Q275 Mr Sanders: Can I come back to Ruth Bagnall, you picked up a comment earlier, what you seem to be arguing for more than anything is stability in funding steams, not more choices but actual certainty that the choices which exist at the moment are there for the long term. Is that somebody that everybody agrees with? Cllr Bagnall: I think I was unhelpfully ambivalent on that, if the impression I gave was crying out for stability - that is perhaps sympathy for you more than anything - I would not want to get locked into what is currently available and lock out something which may come forward in the future. I think there are risks and costs involved opening up to future flexibility. Q276 Mr Sanders: You were concerned about local authorities not taking decisions now because they hoped things would change in the future. Cllr Chapman: Can I just come in here, I would like to go back a few years to when we had estate action, you knew then that you could roll out your estate action from estate to estate and to some extent it gave certainty to the tenants so when you tried to distribute the goodies they knew at a certain point it was their turn. Secondly, it allowed you to manage contracts far better, allowed you to get a system of consultation working, it allowed you to get economies of scale because you managed your contracts better. What we do not have is any systematic way of dealing with environments on estates and it is that ability to plan in advance which saves money, creates certainty and creates goodwill of the tenants. For me that is utterly lacking. I think we got rid of a lot of that when we got rid of estate action, which was not perfect by any stretch of the imagination, but that is something that ought to be looked into. I am not sure that the Government is radical enough in its approach to council estates generally. Some of these estates are monocultures, certainly in Nottingham we have monoculture. Eventually what we need to do for the sake of our schools and the sake of our community is to break up some of the estates and get some social mix. There is no way through the current funding mechanisms we well be able to do that, so you need to restructure estates, you need to break some of them up, you need to rebuild and you need to get a social mix for the sake of your schools, for the sake of the education system, for the sake of the community and I do not see any mechanisms in the current strategy to enable us to do that. Q277 Chairman: What proportion of your stock has been sold off? Cllr Chapman: I would say we have got rid of about 45%. Q278 Chairman: Does that not mean that what appeared to be mono-culture estates are not any longer because in some cases 50% or more will have been sold off? Cllr Chapman: No, because the people you are selling to are still part of that mono-culture and because of the house prices. What you are fortunately getting, and the advantage of selling off is we are now getting some ethnic mix into some of the estates and I very much welcome that. You are not getting the mix in the schools that you require and that is the basis of government policy, to try and improve the education system. It is actually mitigating against what the Government is trying to do very laudably. Cllr Bagnall: On that note can I thank you all very much for you evidence.
Witnesses: MR NIGEL BROOKE, Chief Executive, City West Homes, MS FRANCES MAPSTONE, Chief Housing Officer, Westminster Council, COUNCILLOR STEPHEN COWAN, Chairman of Housing, BRENDA McLEAN, Tenant Representative and MR STEVE HILDITCH, Chairman of Hammersmith and Fulham Housing, Hammersmith and Fulham Council, examined. Q279 Chairman: Can I welcome you to the last session this morning. Can you identify yourselves for the record? Mr Brooke: Nigel Brooke, Chief Executive of City West Homes that is Westminster's ALMO. Ms Mapstone: Francis Mapstone, I am the Chief Housing Officer at Westminster Council. Cllr Cowan: Stephen Cowan, Chairman of Housing, Hammersmith and Fulham Council. Ms McLean: Brenda McLean, tenant representative Hammersmith and Fulham. Mr Hilditch: I am Steve Hilditch, Chairman of Hammersmith and Fulham Housing Commission. Q280 Chairman: Does anybody want to say anything by way of introduction? Mr Brooke: Can I make one very quick comment, we are now two years into being an ALMO nearly and I wanted to say as part of that we have had a very focused decent homes programme on our estates. I wanted to put on record the very positive impact that has had with our residents and they welcome the standard but see it as the starting point for us only. Mr Hilditch: If I can say, the Government for a long time said that what matters is what works and in Hammersmith and Fulham the Housing Commission came to the view that council housing worked and the Three Star authority have a very good partnership between the council and tenants and the tenants were very upset not to be allowed loud to pursue their first option. Having said that we then depart from the view that ALMOs are privatisation and the tenants have now constructively engaged with the council in establishing the ALMO and getting on with it. Q281 Mr Sanders: We are here really to discuss the Decent Homes Standard, and of course there are related issues to that, do you think the Decent Homes Standard is sufficiently broad and is the levy required by the standard high enough in your opinion? Mr Brooke: In our experience we find that the standard is too generic and does not take into account the nature of the flat stock, which is very different from ordinary estates and street properties. Our residency whatever is within the confines of their block and has lived with common law areas and common law facilities, they do not have gardens, they are all very important parts of their home and they would like to see the standard widened to incorporate those aspects. Secondly, I think from my own perspective in terms of experience I think there is a danger in making the standard too prescriptive, it should be seen as a minimum standard that authorities must, and hopefully private landlords, must attain but then allow local discretion as to whether the standards should be enhanced. Mr Hilditch: In Hammersmith and Fulham the tenants agree broadly with that view. It would lead to a different pattern of investment from that which would be achieved if the council were given resources and then consulted with tenants about what to do with the money. The idea of a minimum standard was very highly welcomed. The main criticism from tenants was the lack of any estate-wide aspect to the standard, especially things like entry-door systems, estate improvements, lift standards, that kind of thing, that should be added to the standard because tenants care about what happens outside their front doors as well as what happens inside. Q282 Mr Sanders: As agreed it is not broad enough, is the standard too low? Should it be raised or should that be a local matter? Mr Hilditch: That depends whether it is a minimum standard that every home must be raised to, which is seen as a reasonable concept. The way that the funding might work is that it will become the prescriptive standard, you cannot go higher and you cannot go lower. This is the standard and that is where the inflexibility will come through because the standard will dictate how the money gets spent. I think it is the lack of flexibility and the fact that it will be both the minimum and the maximum standard in practice. Mr Brooke: Following the Chairman's comments in terms of the practicality of delivering a decent homes programme, we have tried in our pilot schemes to go into a property and do everything that was required at the same time and we found that we have perhaps over-prescribed in those circumstances, things like bathrooms can be left, it is kitchens that residents need and perhaps want more. After our experience we have actually slowed down some elements of the decent homes programme at this stage to be able to focus in on what matters to residents most. Too prescriptive a standard would mean that we were perhaps doing work that was considered to be lower priority and not yet necessary. Q283 Mr Sanders: The Government is intending to replace the fitness standard with the Housing Health and Safety Rating System, do you think this will improve the Decent Homes Standard? Mr Hilditch: It was not something that we have considered as part of the commission because the health and safety system has come out since. I would have thought that people would be happy as long as it is closely integrated with the Decent Homes Standard and there is not confusion between the two. I would have thought that it is likely to reinforce the Decent Homes Standard and make is stronger. We are in favour of the health and safety rating. Our concern is that we have already found that the basic definition that there can be a wide interpretation between surveyors and we feel that the health and safety system must come with a lot of training and consistency because we are talking about individual risk assessments out on site and that needs to be taken into a definition that can be applied across the country. Q284 Mr Sanders: There are two slightly different views here, it seems to me that the Decent Homes Standard needs to be broadened to incorporate certain areas that are not included, it is too narrow, it is too top-down, you seem to be arguing that the homes standard ought to be broadened to include other things like neighbourhood renewal and other initiative packages, better and safer communities, et cetera. Is that fair? Mr Brooke: I think that is right. Tenants took the view that good kitchens, good bathroom and good thermal insulation are very important things but if the money is only spent on that and not spent on improving lifts and the estate environment, play areas, and all of the things that make living there decent then it will not achieve an improvement in the quality of life, so people will have better kitchens but will not feel better about the place they live. Ms Mapstone: Can I really endorse that that is very much the view of our residents, that it is the bigger picture, it is the day-to-day quality of life issues which are absolutely key. The ALMO programme in terms of beyond decent homes has been very much welcomed by residents. I think the approach that has been taken by the ALMO working with the other RSLs locally in terms of an approach to neighbourhood management is really the way that we would like to see that work taken forward. The Decent Homes Standard is at the heart of that work but it is not the only part. Q285 Mr Betts: What are the major problems with the current funding arrangements which you replaced to try and achieve a decent homes target? Mr Hilditch: For me long term certainty. We are trying to take economies of scale where we can do with our new partners and constructors and we are finding that short-term funding arrangements could be troublesome. If we are to deliver our residents need to know we are going to be able to get to the end of a long programme and not just work to the two to three year horizon at all times. Cllr Cowan: I think from Hammersmith and Fulham's point of view the council believes that it can achieve decent home standards subject to resources and we are hopeful that setting up the ALMO will achieve the resources that are needed to do that. I think the disappointment in a way is that we could have been spending the money this year to start achieving decent homes but have spent a year or two going through an options appraisal process, setting up an ALMO, going through the bureaucracy of achieving all of the approvals before we get the funding that then enables us to achieve decent homes. As a Three Star authority with a good track record at a strategic level and a service delivery level it feels like the mechanism has slowed things down rather than help speed things up and for a high performing council that is disappointing. Q286 Mr Betts: What changes will you want to see which will allow you to proceed with the council housing rules. There have been proposals from the LGA about borrowing against future rent streams, from Unison about investment allowances, being able to pull more capital in more quickly, do you have views on those or any other ideas? Cllr Cowan: Firstly we do not want to get away from the fact that it is excellent news that so much money is going into our housing estates and the Government has prioritised that. In terms of the tenants choice, which was recommended in the Housing Commission the only change we would like to see is at the in-house ALMO. There is a lot that is extremely good about ALMOs but some of the discrepancies in terms of separating strategy and tactics and separating the executive from the day-to-day management of the organisation do not necessarily need to be there when you already have a high-performing authority. I think if we could have had a shorter fast-track to getting many of the benefits of the ALMO without having to spend a year setting it up then we would have been spending money now and delivering on the Government's decent standard a year earlier than we are going to do. Q287 Mr Betts: On the PFI you rule that out as a way forward yet you accepted that PFI had been successful in non-housing schemes in the borough, you were not happy with it. Mr Hilditch: The Housing Commission kept the door open on PFI and said that it is not a solution for the whole stock. There are some opportunities for example on existing council estates where new homes could be built, where PFI might become a reasonable way to proceed. The excitement for the Housing Commission was that it actually opened up the possibility of building council houses in the borough for the first time for many years. PFI was not ruled out it was kept as something that needs to be further investigated but it did not provide a whole stock solution for the borough. Mr Brooke: Can I comment on PFI, in terms of limitations revolving round having to hand over the management of stock to a third party, it is almost like a stock transfer in terms of there is a 25 to 30 year arrangement quite often. As an ALMO we would welcome the ability to go into individual Pies for components of our stock, for instance lifts, communal heating systems where we can go into a 25 to 30 year arrangement but not necessarily have to hand over the management of the stock to a third party. Cllr Cowan: We would endorse that in principle. Q288 Chairman: Fulham and Hammersmith is a Three Star authority, how many stars would you award the Department of the Deputy Prime Minister? Cllr Cowan: I think I would say three stars as well. I was on a housing estate just the other week and in terms of talking to tenants there is extremely welcome news about the significant amount of money that is being put into the estates. Q289 Chairman: I thought you were implying that you had trod water for two to three years almost as a result of uncertainties from the Department, is that true? Mr Hilditch: I think it has led to significant delays in spending the money. If the money had been made available to the council within the existing structure and the effort that had gone into the options appraisal and setting up the ALMO had instead gone into setting up the programme it could have been delivered much more quickly, yes. Q290 Chairman: You are not as generous with your stars. Mr Hilditch: He employed me I cannot disagree with him. Q291 Christine Russell: Can we just stay on the stars, Councillor Cowan, given a choice without all of the undoubted financial constraints that your authority has do you not believe it would have been better for a high performing council like Hammersmith and Fulham to be allowed to have gone and raised money privately in order to have retained your housing stock in-house? Cllr Cowan: Yes. Q292 Christine Russell: That is good. Can I move on and ask you Mr Brooke, with hindsight can you see any huge advantages in ALMOs? What are the advantages of ALMOs, are there any? If you had also been permitted to retain your stock in-house and gone out and been able to raise the money privately would there have been an advantage in doing that? Mr Brooke: I will answer the former, I think the big advantage of an ALMO is that it is the most resident-friendly approach to managing housing, it allows residents to get involved right at the core of their properties in terms of looking at what we are going to deliver on their estates. We have area boards and they have made a tremendous difference to our decision-making process and residents have reacted very positively to that. It has allowed us to concentrate on the decent homes programme rather than being bothered about tenure issues, which I can see has slowed some authorities down. We were lucky, we were able to go into round one and have benefited now, and we are £20 million worth of ALMO investment already into the programme. I think our residents can see the real benefits to that. Personally I would argue having worked in housing for a number of years that it does give the ALMO management a very strong focus on the ALMO role and it does enable the council - Ms Mapstone may want to comment - the ability to take a very strategic view. Q293 Christine Russell: Are you going to welcome ODPM's decision to separate out the strategic and the management role for local authorities? Ms Mapstone: What made the ALMO such an attractive proposition to us was the position that we were in two years ago was that we had taken a big bang approach to best value inspections, all housing services have gone in in year one, we had come out very positively through that process working very closely with residents. We were in an unusual position in that we were already pretty much there in terms of the strategic operational split with only two assistant directors, in terms of London you will quite often find five or six. We were able to respond very quickly to the opportunity presented by the ALMO. In terms of the experience from the local authority perspective it has been extremely positive. I think there was already a clear strategic approach but that is now much more corporately integrated. I think what has happened is that the ALMO in perhaps the first six months of its life broke away from the council, there was a very strong drive to assert themselves and with their own independence and their own identity. Inevitably that led to some anxieties but they have now come back and reengaged with the departments' right across the piece in the local authority I think in a far more constructive way directly to the benefit of their residents. Q294 Christine Russell: What is the perspective from Hammersmith and Fulham? Ms McLean: We are very lucky in Hammersmith and Fulham that for many, many years we have had a great working relationship between members, officer and tenants and although we were all very reluctant to move away from the council as our landlord we have all thrown ourselves wholeheartedly into this project to go along the ALMO route. I think that with continued hard work there is no reason why we should not have the best darn ALMO in the whole of the United Kingdom. Q295 Christine Russell: Are you convinced or have you convinced all of your fellow tenants of that point of view? Ms McLean: A good many of them, yes. We had an 83% yes vote in our ballot. Q296 Christine Russell: What were the arguments put against it by the other 17%, political dogma ones or --- Ms McLean: A lot of people did not vote and a lot of people were frightened out of voting by the no-vote team. Cllr Cowan: There was a belief which has been ill-founded, and I am absolutely convinced it is ill-founded this was privatisation, and that was part of the campaign put out by the no vote team. One of the things that our tenants have done in here Housing Commission was make it very plain that they did not want to go anywhere near privatisation there was some confusion about what it actually meant. To get 45% of people taking part in the vote and then to get 83% endorse it means I think people end up coming to the right conclusion. Q297 Christine Russell: As the one elected member how do you view the separation of the local authority's role now as a strategic role rather then a day to day management role? Do you welcome that? Cllr Cowan: I think it is probably needless. There is a lot I welcome about ALMOs and I endorse what was said about putting more tenants and leaseholders on our housing board, that is one of the things I found really encouraging, it is their homes. I do not see why I as the executive member should be devoid of conversations on day-to-day housing management issues, it seems to me not necessary. Mr Hilditch: The tradition in Hammersmith and Fulham of tenant participation is they are involved in all of the services on the estates not just housing management. There was a fear that any change from the current system would lead to tenants being less engaged on things like refuse collection, social services or education issues to do with their estate. Because they felt integrated in the whole council process and the whole range of services we have to make sure that the ALMO can engage not just with housing management issues but can also be a partner across all of the issues that affect estates in the borough. Q298 Chris Mole: Miss Mapstone, I think you were the first witness to state clearly you thought the separation was going to be positive to have the focus on strategy, do you think that can be sustained over the longer term if that group of employees working on strategy do not have their connections back into the management of the service? Ms Mapstone: If the ALMO do not have the connections back in? Q299 Chris Mole: If the people within the local authority who remain focused on strategy. Ms Mapstone: I do not see that happening. We have maintained a pre-existing structure of housing panel, which is our statutory means of consultation, and you will find the discussions at the housing panel are the same as they were pre ALMO and it is very much the new cleansing contractor coming along to do their presentations, inevitably it is housing benefit contractor as well and a whole range of social services and health speakers coming along. At the area boards and the main board for the ALMO there is a much clearer focus on the housing management and finance issues. I think one of the things that was pulled off very deftly was to retain that housing panel structure as quite independent from that which sprung up through the ALMO boards and that you do not have duplication of memberships on those two. Q300 Mr Clelland: Can I just return to the question asked by Chris Mole to the last set of witnesses about the private sector, as only those inhabited by vulnerable households are going to come under the target and as that can change from day-to-day and week to week is there really going to be any meaningful way we can monitor progress towards the target in the private sector? Ms Mapstone: I very much share some of the concerns that were raised by the previous delegation, as you have mentioned that can move from week to week and month to month. However, certainly in the Westminster context there are clear geographical areas where vulnerable people are more likely to be living in the private rented centre and there is a very clear link to housing benefit entitlement. There is a way of targeting that work which has been our approach for the past ten years through our environmental health inspections which are far more proactive in those areas than in others which we know are low risk. I can perhaps understand why there is an initial focus on vulnerability but I do think there are going to be some very real issues about tracking that and evidencing that you have made a difference. I would also very much echo that I think there is a real risk that landlords will not want to engage with that particular client group in future. Q301 Mr Clelland: Given the fact these are three of the four criteria not statutory requirements what sort of enforcement mechanisms would you suggest? Ms Mapstone: The kind of enforcement mechanisms we have been using for quite some time including the most onerous being compulsive purchase orders. Westminster does more compulsory purchase orders than the rest of London put together, which is perhaps a surprising statistic to people. We will go from that end. Again there is the carrot and the stick. We also have a very high level of statutory homelessness, we have approaching 3,000 units of temporary accommodation. A lot of the work that we are doing in those geographical areas is trying to procure good quality temporary accommodation. With the use of targeted grants we have been able to improve those properties and secure nomination rights for five years for the statutory homeless. There has been a range of tools we have been able to utilise. Q302 Mr Clelland: If enforcement works and landlords think that they are going to be obliged to put their own money into improving properties because they are housing vulnerable tenants does this not mean they will avoid housing vulnerable tenants? Ms Mapstone: It is very much linked to the market. One of the interesting things that has been happening in the central London market over the last two years which has had the by-product of allowing us to make very good progress on the bed and breakfast target, to get families out of B&B, has been the change in the market, particularly with those who are entering buy to let and they are very keen to work with local authority, they see that as a very secure way of retaining a guaranteed income. The market has allowed us to get into parts of the borough that we have not been able to previously. My concern would really be that if there is an upturn and it is back to company lets as being standard then that is going to be a very different market to intervene and manage. Mr Clelland: Thank you. Q303 Chairman: Can I put one witness final question to both of you, the Local Government Association when they were giving their evidence did not appear to be very concerned about the Decent Homes Standard in terms of heating, access and noise, do you think that most of your properties will actually be able to meet much higher standards than the Decent Homes Standard by the time we get to the target date? Mr Brooke: As part of our decent homes programme we are carrying out with the Primary Care Trust a health impact assessment on our spend to make sure we get the best out of it. The highest priority was overcrowding, the second highest priority was noise pollution. For a flat in stock the Decent Homes Standard is not really that appropriate and certainly it will be hugely expensive for us to put in noise reduction into all of our present properties. I think it will be difficult for us and will require much higher levels of investment if the standard was raised in that area. For flats in stock certainly things like the cavity wall insulation and roof insulation is less important than perhaps some of the communal heating systems that we would like to improve the standards overall. Cllr Cowan: I do not think I would detract from that. It would be useful to extend the Decent Homes Standard in any way that gives greater flexibility to tenants to decide what is appropriate in their area. I do not believe adding those --- Q304 Chairman: You do not think problems of noise and heat are ones which the Decent Homes Standard does not really address at the moment and really would be ones that your tenants would give particularly high priorities to? Cllr Cowan: Any metropolitan area is bound to give those issues priority. I think it comes back to what Steve said earlier, the Decent Homes Standard is an extremely good start but it does need to have wider breadth and there should be more powers delegated to tenants in local areas to decide what is right for them and their homes. That would be my answer to that. Chairman: On that note can I thank you very much for your evidence. Thank you. |