| Introduction
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| 1. | We have throughout our inquiry continually returned to the same fixed point: the supply of homes is insufficient. If the recommendations we make here have a common theme, it is that all the actors—central government, local government, housing associations, and the private sector—need to redouble their efforts to increase supply. (Paragraph 3)
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| The experience of tenants |
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| Perceptions of rented housing
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| 2. | One key objective of any further reform of the private and social rented sectors has to be to challenge the unhelpful perception that renting is always second best. Whether from necessity or choice, significant numbers of people are and will continue to rely on the rented sector. Their needs and aspirations are every bit as important as those of homeowners. (Paragraph 19)
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| Mixed communities |
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| 3. | We found a widespread degree of consensus among our witnesses that more effort must be put into creating mixed communities where the most vulnerable households and those on the lowest incomes are not concentrated into ghettos of deprivation, but live side by side with more affluent households. The need for more mixed communities has significant implications for the future delivery of the supply of rented housing. The creation of mixed communities to reduce social polarisation should pervade all spatial and housing policy; local authorities must be allowed the necessary freedoms to pursue this aim. We look for confirmation by the Government, and action on the part of local authorities to demonstrate, that mixed communities are being pursued as a long-term objective, and are not merely a desirable by-product of other means of dealing with the housing shortage such as infilling and the use of s.106 planning obligations. (Paragraph 24)
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| Quality in the private rented sector
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| 4. | We welcome the fact that the Government is to review the private rented sector, reversing a previous statement to us. The Government and the private rented sector itself need to face up to the poor quality and management of too much of the private rented stock. Tenants in the private sector can too easily be mistreated by their landlords, and a minority of private landlords are not fulfilling their obligations to their tenants to provide a decent home. The Government must address the bad practices of some landlords and letting agents by strengthening the regulatory approach to the private rented sector. Achievement of the aim of a decent home at an affordable price for private tenants depends on significant improvements in standards of management in the sector. (Paragraph 31)
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| Housing benefit |
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| 5. | Refusing to accommodate people just because they use housing benefit to support their needs is wrong. We recognise the problems landlords have faced when rent, through housing benefit, is not paid. CLG and DWP must monitor the implementation of the Local Housing Allowance very closely and address problems with delays in administration and payment rapidly to promote confidence within the private sector. If councils pay housing benefit promptly, it will remove all justification for discrimination by landlords against benefit claimants in the provision of housing. (Paragraph 35)
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| 6. | The complexity of the benefit system, especially as it operates during the transition into work, contributes to the creation of a poverty trap, and exacerbates the fears that people have of being unable to climb out of it. In areas where rents are high, this problem becomes particularly acute. There is an urgent need, as identified by the Freud report, to provide clearer guidance to benefit recipients about the network of benefits and credits that alter with income, and to ensure that they receive the necessary advice about the effects of increasing their income from work. But the operation of the various systems must also be better coordinated and made more flexible to take account of changes to individual circumstances, as well as to changes in the local housing market. We recommend that the Government take immediate steps to address these problems. (Paragraph 42)
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| 7. | The single room rate effectively bars young people, many of whom have no hope of accessing social rented accommodation, from any real choice within the private sector either. We recognise that there would be a cost to removing the cap on housing benefit represented by the single room rate, but current policy is having a pernicious effect on many vulnerable young people. The Government must undertake further reform to the single room rate so that if the local housing market is such that a young person's needs cannot be met through shared accommodation, there is flexibility for increasing their housing allowance. (Paragraph 44)
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| Overcrowding and family homes
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| 8. | We expect the Homes and Communities Agency, when it takes over from the Housing Corporation, to continue the Corporation's policy of placing a particular financial emphasis on building and acquiring family homes. As many new social rented homes will be built through planning agreements, the HCA must support local authorities at all stages of the planning process to ensure that adequate family-sized homes are built. (Paragraph 47)
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| 9. | Welcome as measures to address overcrowding are, they will not be successful unless the Government addresses the issues of supply considered elsewhere in this Report. (Paragraph 48)
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| 10. | While we welcome the Government's commitment to reviewing the definition of overcrowding in 2009, amendments are long overdue. We recommend that when drawing up revisions to the overcrowding definition, CLG and the Homes and Communities Agency adopt an approach similar to that taken by English Partnerships, by establishing minimum space standards and measures such as Lifetime Homes for all new homes, especially if built for, or used by, the social rented sector. (Paragraph 51)
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| Tenant involvement |
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| 11. | Greater involvement of tenants in the management of their homes has significant potential to improve the experience of tenants and to contribute towards the wider aim of community empowerment. We recognise the progress which CLG, the Housing Corporation and social housing providers have made in this area. We recommend that the Government continue to extend the aim of tenant empowerment, which is one of the goals of its policy of stock transfer, across the whole of the social rented sector. In particular, we recommend that CLG undertake further investigation of the potential further to develop models where tenants jointly own the land and buildings around their home. Meanwhile, we encourage private landlords to continue their efforts to improve their relationship with tenants and to root out bad practice. (Paragraph 58)
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| Social renting |
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| Declining stock and increasing backlog
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| 12. | The recent upturn in completions of social rented properties and increases in funding are welcome. However, the result is still below the level of 50,000 per year which is needed to reduce the backlog significantly. The Government must be more ambitious in its delivery of new social rented homes by giving sufficient encouragement, resources and flexibility to all providers of social homes to increase supply. This includes measures to get better use out of the existing stock. (Paragraph 63)
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| Funding social rented homes
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| 13. | We welcome the Government's financial commitment to build more social housing. The sums announced are close to some independent estimates of the sums needed to meet additional demand for social rented housing. However, those funds will be spent not only on social rented housing but also on other forms of non-market housing. Consequently the Government is unlikely to be able in this spending period to reduce the backlog in need for social rented housing, and may not even be able to meet new demand. We recommend that the Government monitor the effect of its planned expenditure on the supply of social rented housing and be prepared to raise investment still further if, as we expect, it proves necessary. (Paragraph 68)
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| 14. | The removal of the restrictions on the use of social housing grant is one example of how opening up the sector to new and innovative practices involving a range of housing developers and providers can increase the supply of badly needed affordable housing. We recommend that the Government seek more ways of encouraging "entrepreneurial organisations" from all sectors, including local authorities themselves, to strengthen this trend. (Paragraph 72)
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| 15. | If the supply of new housing is to be maximised, it is vital that the public sector achieve the best possible value for money. The new Homes and Communities Agency will have a vital role to play in ensuring that this is the case. We recommend that the HCA monitor the construction costs for new social housing and take all possible action to minimise cost inflation, to avoid social housing providers competing for scarce labour, and to prevent the sector being held to ransom because of the extent of the need for social housing. (Paragraph 76)
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| 16. | The lack of a sufficient skilled labour force within the construction industry could restrict the construction of new homes for social and private rent. Urgent action is necessary to mitigate this risk. We support, in particular, the recommendation by the Callcutt Review that the HCA, central and local government and their agents should, when disposing of land for housebuilding, stipulate training conditions on main and sub-contractors in the terms of sale. (Paragraph 78)
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| 17. | We recommend that the Homes and Communities Agency, once established, make it an early priority to establish a monitoring programme to examine the elements behind regional differences between unit costs of social rented homes more closely. By separating out the broad costs of development and then examining regional differences, the HCA should be able more effectively to anticipate future costs and examine the financial benefit that s.106 agreements provide. (Paragraph 82)
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| Increasing use of planning obligations
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| 18. | The use of planning obligations for delivering affordable homes has resulted in more affordable homes built as one-or two-bed flats rather than accommodation suitable for families, even though family accommodation is the stock for which there is the most significant unmet need. New supply has thus not been meeting the greatest housing need. We welcome the Government's recognition of this trend and the steps which it has so far taken to counter it. We recommend that the Government continue to monitor trends in the construction of new social rented housing and be ready to take further action if the trend towards the construction of smaller flats rather than larger units continues. Efforts to secure more affordable housing will be wasted if they are not directed at the areas of greatest need. (Paragraph 90)
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| 19. | The absence of public funds to support the purchase of homes delivered through planning agreements will tighten profits available to developers. Two consequences flow from this. First, there is a greater risk of protracted discussions between local authorities and developers, lengthening the time taken to approve applications and slowing the delivery of urgently-needed homes. Secondly, a continued squeeze on public subsidy for homes built through s.106 agreements will result in increased numbers of low-cost home ownership and other "affordable" homes which may not meet real housing needs. CLG and the Homes and Communities Agency must not lower the amount of social housing grant to support developments on s.106 to such an extent that developments which include the right proportion of social housing for the area are made unviable. We recommend that the HCA undertake regular regional reviews of the level of support provided for social homes built on s.106 sites and be flexible in its approach towards the level of grant provided in respect of individual sites which are critical to addressing local housing needs. (Paragraph 93)
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| 20. | We recommend that CLG issue guidance on when commuted payments are appropriate and in what circumstances the funds so raised may be used to support projects that do not fund the construction of affordable homes. (Paragraph 96)
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| 21. | Local authorities must ensure that commuted payments are not used simply as an excuse to avoid mixed tenure in new developments. (Paragraph 97)
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| 22. | There is no excuse for authorities taking commuted payments and then not spending the money on affordable housing. We recommend that CLG undertake further analysis to investigate the reasons for failures on the part of local authorities to spend commuted payments. We also recommend that local authorities not spending such payments and without an adequate expenditure strategy for the funds that they hold be obliged to pass on the funds to support other projects within their region. (Paragraph 99)
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| 23. | We are concerned that the Housing Strategy Statistical Appendix might be inaccurately recording the level of commuted payments. We recommend that the Government undertake, as a matter of urgency, a more accurate investigation into the amount of money held by local authorities from commuted payments. (Paragraph 101)
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| Regional pattern |
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| 24. | The Government has prioritised the areas which it perceives to be in greatest need; but thus far the investment it has allocated to these areas is not achieving a commensurate increase in supply. Meanwhile, significant "hotspots" of need remain in areas from which funding has been redirected: areas where it may be possible to deliver more, more quickly, with the money. We recommend that the Government, assisted by the Homes and Communities Agency, place more emphasis on deliverability when setting funding and completion targets. This can only be carried out through closer engagement with the local agents involved in delivery. (Paragraph 110)
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| Effects of Right to Buy |
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| 25. | The Government has acknowledged that receipts from right-to-buy sales need to be reinvested into new homes. Although those receipts are returned to housing through the national housing revenue account system, there does not appear to be a willingness from Government to allow receiving councils themselves to use those receipts to fund the construction or acquisition of new social rented homes. We urge the Government to make reforms to allow right-to-buy receipts, and any borrowing taken against this income, to be easily and rapidly used by councils to build much-needed homes. (Paragraph 114)
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| 26. | We support the aims of the right-to-buy policy, which has enabled many families to get on the housing ladder who would not otherwise have been able to do so. We are deeply concerned, however, about the impact on community cohesion in some areas of the country of the number of former council-owned homes which are now being rented privately, and about the effect of such sales on the availability of social rented housing in those areas. We also note that, in areas where rents are high, many former council homes are being rented at very high rates back to councils to house the homeless. We recommend that the Government review the effect of right to buy on neighbourhoods and on the councils which have sold their houses under the policy, with a view to bringing forward further measures which will mitigate the adverse consequences of an otherwise successful policy. The review should also consider the extent to which the right to buy, if it is more prevalent on the more popular estates, can reduce rather than increase community and tenure diversity. (Paragraph 120)
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| 27. | With the sector facing such acute shortages, particularly for houses for families, the right to buy (or acquire) should be tempered further. We recommend that the Government examine the adoption of an approach similar to that which we saw in the Netherlands, where social housing providers and the local authorities agree housing strategies including the volume of social rented homes to be sold within neighbourhoods. Such an approach should include an investment strategy for making the best use of capital receipts gained by building new properties and buying back those previously sold. Any restriction on sales must be clearly backed up by evidence that it will contribute to the aims envisaged and that it is supported by the communities concerned, and should be specifically targeted at the relevant property type or area under significant pressure. (Paragraph 124)
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| 'Pepper-potting' |
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| 28. | Pepper-potting within existing areas should be promoted more widely, but must be seen as a long-term plan and carried out in an open, planned and transparent way. We recommend that the Homes and Communities Agency take the lead in promoting this approach to pepper-potting. The Agency should assist the development of pepper-potting projects by local authorities and housing associations by devising ways of countering the potential adverse effects of buy-to-let and by monitoring the expeditious replacement of 'pepper-potted' social rented stock. We also recommend that guidance be issued to local authorities ensuring that new social and affordable housing built under s.106 agreements is mixed within developments and built to the same standards, not pushed away to discrete areas of larger sites. (Paragraph 131)
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| Role of social renting within an ageing society
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| 29. | Downsizing is an important component of the policy of using the stock more effectively, but any programme must treat each individual with the utmost care. While progress towards reducing under-occupation should be monitored, no local or national targets should be set. We recommend that the Government provide local authorities with more resources to offer a package of measures to support tenants who would consider downsizing, including adapting homes to suit tenants' needs. We also recommend that all local authorities include provision for downsizing amongst the preferences which may be expressed in their allocation schemes for social housing; and that the Government press on urgently with the work which it is undertaking on national, regional and sub-regional mobility schemes, ensuring that those schemes include provision for downsizing. (Paragraph 135)
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| 30. | The publication of the Government's strategy for housing in an ageing society demonstrates that the Government is taking account of the need for the social rented sector to provide different forms of care for more people as demographic patterns change. The social rented sector will have an important role in implementing the strategy. In developing the strategy further, and in particular when allocating resources, including from non-housing sources, for its implementation, we recommend that the Government take particular account of the distribution of the ageing population, for example in coastal and rural areas: demographic pressures are not uniform across the country. (Paragraph 138)
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| Conclusion: the role of social renting
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| 31. | The Government therefore faces a stark choice: does it retrench, leaving social housing as the sector of last resort; or is it prepared to make the investment and policy commitment necessary for social rented housing to play a full role in the creation of truly sustainable communities? (Paragraph 143)
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| 32. | The Government and the wider social rented sector must reach a conclusion on whether social renting is to provide accommodation only for those who need it the most or whether the sector should be available to a wider range of people. For our part, we consider that social housing has a vital role to play in the creation of mixed and sustainable communities. Current Government policies and spending plans are insufficient to allow it to do so. There is no short-term fix to the current situation: sustained and substantial increases in spending, together with a firm policy commitment to the creation of mixed communities, will be needed over the medium to long term if social rented housing is to fulfil the aims envisaged for it. (Paragraph 144)
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| Private renting |
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| Role of the private sector
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| 33. | The state of the housing market is such that we consider that there is a need to develop incentives for private sector landlords to offer longer tenancies to their customers. (Paragraph 150)
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| 34. | The Government needs to recognise the benefits to both individuals and communities of offering more variety in the length of tenancies, and address the need for households in the private as well as the social rented sector to have stable homes provided through secure tenures. We recommend that the Government urgently undertake further work on developing secure tenures for the private sector. It should base this work on that already done by the Law Commission (Paragraph 151)
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| 35. | We are disappointed by the length of time it has taken CLG to address the findings of the Law Commission, particularly with regard to changes to the private rented sector. While the review of the private rented sector will be useful, it should not be used as an excuse for stalling further work on tenancy reform. (Paragraph 155)
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| 36. | We are attracted to the Law Commission's proposal for tenancies based on mutual rights and obligations, which would offer scope for longer-term tenancies in the private sector. We recommend that the Government undertake further work on tenancy reform, building on the Law Commission's proposals, without further delay. (Paragraph 158)
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| Growth of private renting and buy-to-let
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| 37. | The increase in the stock of private rented accommodation through buy-to-let investment has benefited the sector. However, this investment has had a small but nonetheless significant upward effect on house prices; and appears to be concentrated within markets in which first time buyers tend to compete. A better understanding of its effects will greatly assist the development of housing strategy and policy in the private rented sector. We recommend that CLG commission further research into the impact of buy-to-let on local housing markets, particularly where there has been a concentration of activity. (Paragraph 164)
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| 38. | We recognise that the investment made through buy-to-let mortgages has helped to increase supply, but Government policy must reflect the fact that buy-to-let and other investment activity does not always benefit the aims of mixed communities. Following on from the experience of English Partnerships, we recommend that the Homes and Communities Agency consider how the use of its own resources, and those of other public sector bodies, can be used to encourage private investment to accord more closely with the aims of mixed communities. (Paragraph 166)
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| 39. | We recommend that the Government investigate what fiscal measures would provide an incentive to property owners not to leave their properties empty for long periods. In the meantime, CLG must support local authorities in their efforts to prevent and reduce the incidence of buy-to-leave through investigating how they can better use their existing powers to bring empty dwellings into use, by providing additional funds to local authorities to target the worst-affected areas, and by ensuring that the information necessary to take action—on ownership, for example—is readily available. (Paragraph 173)
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| Effect of students and migrants
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| 40. | The Government needs to be alive to trends in buy-to-let investment and to their implications for housing policy. (Paragraph 177)
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| 41. | We recommend that the Government undertake further research on the trends, patterns and needs of students and of migrants to better inform regional and local housing strategies. We welcome the recently-announced Government review "aimed at improving the management and conditions of people living in Houses in Multiple Occupation", which will have a particular focus on areas with a high concentration of HMOs housing students, but note that the focus of the review is narrow and will be insufficient of itself to meet the need for information which we identify. (Paragraph 182)
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| Licensing of houses in multiple occupation
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| 42. | The Government failed to ensure consistent approaches from local authorities when it introduced measures to control HMOs. It also failed to ensure that local authorities were in a position to use the system effectively. Local authorities appear to have ended up concentrating their efforts on simply administering the licensing system, rather than using it effectively to tackle the most problematic landlords. We recommend that CLG assist local authorities in developing a more targeted approach which ensures that resources are focused on tackling the worst cases. (Paragraph 186)
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| 43. | We favour extending the requirements of the HMO regulations to cover a wider variety of houses in multiple occupation. Meanwhile, the Government must give local authorities the easiest possible access to the tools they need to do the job of regulating the worst examples of HMO abuse, particularly by streamlining the process of applying for extension of their discretionary HMO licensing powers. (Paragraph 188)
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| Regulation |
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| 44. | There is a yawning gap between the rights of consumers who are purchasing a property through estate agents, and tenants of private landlords. Prospective and actual tenants in the private rented sector can face discrimination, retaliatory action, and general poor management of their home. A good basis exists in existing regulation, local authority accreditation schemes and the activity of trade bodies to introduce a system of accreditation similar to that which exists for estate agents, devised by trade bodies but reinforced by the involvement of local authorities, with the ultimate oversight of Oftenant. We recommend that the Government work with organisations in the private rented sector to develop a robust scheme which will enable tenants to gain redress against poor landlords. (Paragraph 195)
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| 45. | We recommend that the Government's review of the private rented sector consider and report on the merits of establishing an accreditation system under which letting agents, private landlords and housing associations would register the extent of their private property portfolio with the relevant local authority. Such a system would assist local authorities' strategic housing and regulatory functions. The enforcement function would also rest with the local authority but only insofar as it was necessary to oversee how registered bodies process complaints, or how individual unregistered and unaccredited landlords manage their stock. (Paragraph 197)
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| 46. | The review of the sector should also consider the establishment of a new regulatory system based on a carrot-and-stick approach which rewards responsible landlords with fewer repetitive regulatory hurdles and greater financial incentives such as rewards for investment in maintenance and energy efficiency. Landlords should have the choice whether they wish to use letting agents, which under our previous recommendation would be accredited and under the ultimate oversight of Oftenant, or similar management companies including housing associations; or undertake their own marketing and management and then be directly regulated by the local authority. Whichever route the landlord took, new properties would be required to be registered with the relevant local authority when a tenant was found. (Paragraph 198)
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| 47. | Efficiencies have been introduced into the social rented sector; but these efficiencies have thus far been concentrated in the construction and refurbishment of homes, rather than in their use. The Government cannot build enough homes to meet the demand in the short term. We therefore endorse the conclusions of the Hills and Cave reviews that better management which uses the existing stock more efficiently is needed. (Paragraph 202)
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| Housing providers |
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| Social renting |
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| 48. | The quality of the social rented stock cannot be detached from the question of overall supply. If no one wants to live in a home because of its poor physical or environmental quality, then it is not contributing to the overall supply. The Government is to be commended for introducing the Decent Homes programme and for the substantial progress which has been made on the programme, but an ongoing programme of maintenance and improvement of the social rented stock is still needed. Long-term funding for maintenance must be secure if the good work of the Decent Homes programme is not to be undone. We will be monitoring carefully the successor to the Decent Homes programme, both to ensure that the original objective of the programme is met and to see how the Government proposes to ensure the long-term high quality of the social rented stock. (Paragraph 207)
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| 49. | Arms length management organisations have performed well in contributing to the implementation of the decent homes programme. There is now potential for them not only to build on these improvements by investing long-term in maintenance, but also to contribute to the addition of badly-needed new supply. We recommend that CLG retain and enhance this management model and confirm the future of ALMOs as soon as possible. (Paragraph 209)
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| Regulation of social housing
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| 50. | Significant amounts of public and private money are channelled into social housing, and effective regulation is essential both for proper democratic accountability and to retain the confidence of investors. All housing providers must recognise and account for the steps they take individually towards shared policy objectives. Nevertheless, there is scope for reducing the burden of regulation and freeing up housing providers' resources for the vital task of improving supply. For this reason, we welcome the introduction of Oftenant, particularly the potential for domain-wide regulation and the explicit objective which it has been given to regulate in a manner which minimises interference. When forming the new regulatory framework, we expect Oftenant clearly to state and to consult on how its regulatory approach will achieve this objective. (Paragraph 217)
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| 51. | If Oftenant becomes the domain-wide regulator, there should be the same single agency dealing with complaints from tenants of housing associations, currently subject to Housing Ombudsman oversight, and local authorities, which are currently under the oversight of the Local Government Ombudsman. With greater interaction between local authorities and housing associations, an efficient dispute resolution system will be required. (Paragraph 218)
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| Role of local authorities |
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| 52. | We do not expect local authorities now suddenly to become major developers of housing, but given that many remain as landlords, will continue to do so into the foreseeable future, and may want to build on land that they own, there should not be any impediment to them to doing so. (Paragraph 227)
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| 53. | We recognise that the Government has taken some steps towards breaking down the barriers which prevent local authorities from building new homes. However, the "strategic" housing role which it chiefly envisages for local authorities, though important, does not address the desire within local authorities to enlarge the supply of council-owned stock and thereby give tenants a real choice of landlord. We recommend that CLG and its agencies take further steps to support and enable local authorities, in their place-shaping role, to add to the supply of social rented homes. In addition to the reform of the HRA for which we call elsewhere in this Report, such steps might include allowing councils to bid directly for social housing grant, the establishment of local housing companies, and ensuring the long-term future of ALMOs. In particular, the HCA will have an important role in promoting best practice and the development of these and other mechanisms to support and enable local authorities to add to their own housing stock. (Paragraph 230)
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| 54. | The national Housing Revenue Account system creates uncertainty and resentment and does not reward best practice. There is widespread consensus that the system is not working. We welcome the Government's attempts to investigate reform and look forward to seeing the results. We recommend that reforms to the system focus not only on removing from it the perverse incentives resulting from the subsidy system, but also on enabling councils to use the system either to build directly or to fund the construction of more social rented homes. (Paragraph 239)
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| 55. | We recommend that guidance on the appropriate development of infilling schemes be made widely available to local authority planners. (Paragraph 245)
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| Coordinating management of homes
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| 56. | A consistent approach to the management of homes and surrounding facilities is needed. All local authorities should review the management of homes in their areas to draw upon efficiencies and improved processes that could be derived from better coordination. We recommend that CLG provide clear and appropriate guidance to authorities on reviewing management, and provide support to local authorities throughout this process. In addition, we recommend that a review of the principle of charging VAT for management services be undertaken, with a view to lowering the rate. (Paragraph 248)
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| Role of housing associations
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| 57. | We recommend that CLG ensure that, through the rent restructuring process in particular, rents allow housing associations to devise and, more importantly, to implement viable new housing schemes. Oftenant and the Homes and Communities Agency must work very closely together to ensure that the rents are affordable to tenants but also economic to social housing providers. To this end, we recommend that they jointly publish an annual report on how they have coordinated rents and the level of subsidy for building new social rented homes. (Paragraph 252)
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| 58. | The Housing Corporation has been right to expect housing associations to use their built-up surpluses as effectively as possible to build more homes and increase the supply of social rented housing. Following passage of the Housing and Regeneration Bill, Oftenant and the Homes and Communities Agency will need to work very closely together to undertake effective monitoring of the financial capacity within housing associations. We recommend that these agencies seek not only to ensure that surpluses are used effectively, but to persuade housing associations which are not using their assets in the most efficient manner to work towards a position where they, too, can help to meet the urgent need for more housing stock. (Paragraph 255)
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| 59. | The Government is right to encourage housing associations to diversify into other private and social enterprises. Additional income can support the construction of new homes, and housing associations can make a vital contribution towards making communities more sustainable. There is plenty of room for further and wider development of this activity, building on the strengths of each housing association. We recommend that Oftenant, the Homes and Communities Agency and the Government all take further steps to encourage housing associations to diversify from their core programmes. At the same time, the risks involved must be closely monitored. We therefore further recommend that the Government examine the viability and benefit to social housing providers of the introduction of financial guarantees such as are offered in the Netherlands, to mitigate the risks involved in investment in non-core and income-earning activities. The provision of such backing should be dependent upon a satisfactory assessment of the quality of management of the housing association concerned. (Paragraph 266)
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| Worklessness, benefits and the role of social landlords
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| 60. | Worklessness is a complex issue and it will need intervention from a wide variety of different bodies if it is to be tackled successfully. Social housing providers can and should play their role in this, but it is crucial that they be able to focus on their core tasks of making better use of the existing stock and constructing badly needed new homes. (Paragraph 271)
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| 61. | Social housing providers should be mindful of the negative consequences of polarising worklessness and deprivation within their housing, and should take whatever steps they can to address or avoid them. In particular, their allocation schemes should be designed so as to enable the movement of tenants who are making a genuine attempt to become more engaged in employment, including self-employment. We recommend that CLG enable housing associations and local authorities to trial alternative weightings within allocations and choice-based letting schemes designed to increase mobility in employment. We also recommend that CLG ensure that other relevant government departments, notably the Department for Work and Pensions, support that process. We would not, however, support any change which made security of tenure conditional on seeking employment. (Paragraph 273)
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| Choice-based lettings |
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| 62. | We recommend that CLG take steps to demonstrate that it is treating the improvement and development of choice-based letting schemes to a national level as a high priority. (Paragraph 281)
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| Temporary-to-settled schemes
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| 63. | Necessary though they may be, reforms of the housing benefit system must not result in, as one of our witnesses put it, "throwing the baby out with the bathwater" when it comes to temporary-to-settled schemes. We recommend that, in implementing those reforms, the Government ensure the continued viability of temporary-to-settled schemes and the opportunity which they represent to use public funds which would otherwise only benefit a private landlord to increase the supply of social rented homes improved to a decent standard. We recognise that it is a costly approach, but so is paying for private accommodation for homeless households. (Paragraph 300)
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| 64. | Meanwhile, we emphasise once again the importance of increasing the supply of social rented housing. Only by increasing that supply can the huge long-term costs of housing benefit, not to mention the misery of households forced to live in poor quality temporary accommodation, be reduced. (Paragraph 301)
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| Private rented sector |
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| 65. | Complaints about the burden of regulation on investment in the private rented sector are understandable, but we are not convinced that the effect of regulation is to disadvantage larger institutions, either by comparison with other investors or by comparison with alternative investment possibilities. Nonetheless we recommend that, when reviewing the future of regulation of the private rented sector, the Government investigate the potential for improvements to the regulatory process to encourage further investment from larger institutions to improve supply. (Paragraph 304)
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| 66. | The tax system should not impede or deter any housing provider from taking the steps necessary to improve the supply of rented housing. We recommend that CLG investigate, in cooperation with the Department for Business, Enterprise and Regulatory Reform and the Treasury, reforming the taxation system and introducing other measures:
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- to promote greater institutional investment in the private rented sector;
- to encourage higher standards of maintenance and responsible management of homes;
- to promote greater investment in energy efficiency; and
- to enable the greatest possible amount of money to be available for improvement of the supply of rented housing, including abolishing corporation tax on cross-subsidy deals by housing associations where it can be demonstrated that the proceeds are being used for the provision of affordable housing. (Paragraph 308)
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