Examination of Witnesses (Questions 420
- 433)
MONDAY 19 MARCH 2007
PROFESSOR JOHN
HILLS
Q420 Chair: Do
you have a view whether that was the sensible way forward, or
whether it might have been more sensible to go the other way?
Professor Hills: I think in the
long-term, particularly if one sees potential in some parts of
the country to move towards a system where we are closer to giving
people some kind of allowance from which they choose their housing,
it would be better if there was more variation in rents. If one
is thinking of some of the problems around how do we cope with
under-occupation, at the moment there is rather little gain. Sometimes
some local authorities offer a small cash incentive for people
to move but really there is rather little gain from somebody moving
to smaller accommodation if all the children have left home, whereas
for an owner/occupier there would be a rather large gain from
doing that. Part of that mix that would give a stronger incentive
could be if there were greater differentials in rent.
Q421 David Wright:
Did you give any consideration in terms of scale to RSLs? Clearly
you are talking this afternoon about asset management, portfolio
management basically, whether it be homes or other assets in terms
of organisations. Is there not a big issue here about scale? We
took some evidence recently from RSLs suggesting they could provide
an enormously comprehensive service of a range of social businesses
alongside their housing business, and clearly smaller RSLs are
not in a position to do that. Did you do any work on scale?
Professor Hills: No, I did not,
and in the work I have seen on this in the past—and I suggest
you might want to try, if you can catch him in the country, to
talk to somebody like Professor Duncan Maclennan who has done
work on this—I have not seen convincing evidence of economies
in scale in management once one has an organisation beyond 5,000
or 10,000 units. There are different issues about capital market
structure and the cost of borrowing and things like that, but
these do not necessarily have to go together and I am sure some
of the larger associations would argue that through their group
structures they simultaneously get the best of both worlds of
a decentralised local management system on a small scale and a
large financial institution able to borrow at low cost. I have
not seen evidence that tells us whether those propositions are
correct or wrong.
Q422 Chair: Can
I pick you up on a point you made about asset management and ask
you whether you have looked at models in other countries, and,
if so, whether you think there are some there that provide good
examples of asset management?
Professor Hills: I hope you will
appreciate that I had a really rather restricted time to do this
review and there were a lot of things I was not able to do. While
it would have been very nice to have looked at a lot of other
countries, I was not able to do that.
Q423 Martin Horwood:
You talk about tenant satisfaction quite a lot in your report
but since it has been published there seems to have been quite
a lot of commentary which suggests that the picture on tenant
satisfaction is quite complicated; that it relates, for instance,
to people's wider circumstances, that people might regard a landlord
who was efficient at collecting rents as one that they were unsatisfied
with. Do you think there is a straight relationship between supply
and demand, social housing and tenant satisfaction?
Professor Hills: No, I do not
think it is a straight relationship; it is rather a complicated
relationship, and the body of the report tries to bear out some
of the ways in which that relationship is complicated. I am aware
of one piece of commentary which I think was based on a slight
misreading of the summary of what I found on satisfaction in the
report. If you look in detail at what has been happening to tenant
dissatisfaction, which are the numbers I present in the report,
different aspects of that have moved in different directions over
time, but what is in common between different aspects of dissatisfaction,
whether it is with the landlord or the accommodation or the standard
of repairs and maintenance, is that those levels of dissatisfaction
are now higher within social housing than within the private rented
sector. The suggestion in the report is that that is a rather
disappointing result if, for many people, the whole point of having
social housing is to provide a better level, a better quality
of housing than one would get from particularly the bottom end
of the private rented market, but if you look in detail you find
that those differences particularly apply to younger households.
For instance, taking dissatisfaction with accommodation, it is
households under the age of 45 where you get a striking higher
level of dissatisfaction amongst social tenants than amongst private,
and I think that relates to some of the issues around the difficulty
of people moving that we were talking about earlier. If people
within the private rented sector and, indeed, within owner/occupation
have some prospect of being able to move on over time, the squeeze
on the ability of people to transfer, the squeeze on re-lets in
the last ten years, has made people more depressed about feeling
that they are stuck with what they have, and that is part of what
drives what we see.
Q424 David Wright:
Is that not a symptom of us continually telling people for twenty
years that social housing is for a particular segment of the market
and is a tenure of last resort that you must escape from in terms
of social mobility and extension of housing benefit regimes, et
cetera? Do you think that is the case?
Professor Hills: I do not think
that is the whole picture at all. Part of the stigmatisation of
the sector may be part of the people having overall dissatisfaction
with being a social tenant, but I do not think that explains why
people are dissatisfied with the repairs they receive and why,
when you look at people living in the same size of accommodation,
having the same space per person, you see higher levels of dissatisfaction
for social tenants than you do for private tenants, let alone
owner/occupiers, and I think that is to do with two factors. One
is to do with whether you have chosen a trade-off between space
and location, which you may well not have done with social housing,
and the other is this feature of feeling you are going to be there
for a long time.
Q425 Martin Horwood:
But could not the differences you are talking about between younger
and older households be also just a symptom of generational attitudes,
so that people who are now coming into the housing market regard
it as more of a stigma than older generations did? I am playing
devil's advocate here slightly because I think that tenant satisfaction
is very important and important to measure, but it is also important
to try and measure it in some kind of objective way. Are you satisfied
that the data you have seen on tenant satisfaction is sufficiently
objective and is not just reflecting changes in social attitudes
and changes in people's perceptions of their general circumstances?
Professor Hills: I do not want
to express any dissatisfaction with the satisfaction data but
I do think it would be helpful if somebody did more work on what
is driving it because I think it is more a complex factor. What
was very interesting right at the end of the work I was doing
was to try and break down some of these numbers by ethnicity,
and one of the well-known facts about dissatisfaction is that
tenants from ethnic minorities are more likely to report dissatisfaction
than other tenants. But when you look at it by age and ethnicity,
and it is only really possible to do this with large enough numbers
from the surveys in London, those differences tend to disappear,
so there is something that is driving it that is not what you
might see on the surface, which is that minority ethnic groups
are getting a particularly raw deal from social housing. What
you are seeing is a reflection of age structure and the general
problems that families in particular are facing within social
housing at the moment.
Q426 Chair: On
this issue about the analysis of your data, the striking fact
that we have all become aware of going around the place is that
it is extremely difficult to generalise from one region to another,
or even within a given region. You can have an area, as we saw
in Manchester, that you could argue nobody would want to live
in unless they had to right next door to one where people are
paying through the nose to live. How far can that sort of micro
variation by geography be detected within an approach such as
yours which, because it is statistical, seems to rely on large
numbers?
Professor Hills: If one is trying
to show broad trends about the sector as a whole one is inevitably
going to look at large numbers and use survey data, but I would
not argue for a moment that that is a substitute for social landlords
with detailed knowledge of an area having their fingers on the
pulse of what is going wrong in those areas at a micro level,
and one of the very obvious conclusions from the report is the
primacy of getting that landlord function right and the people
on the ground doing as good a job as possible. That is something
that you cannot do from Whitehall, and it is not something where
somebody like me can pinpoint which particular street is going
wrong, if you like. It is where the advantage of having quite
large numbers of housing providers comes in, that they have that
local knowledge.
Q427 Emily Thornberry:
Just going back to the question about satisfaction of tenants
and mobility, given the statement that you made, which I agree
with, was it based on any evidence that you received or is it
just a presumption on your part?
Professor Hills: Which statement?
Q428 Emily Thornberry:
That one of the reasons why tenants are not satisfied is that
they feel stuck and are unable to transfer once they have been
given a tenancy.
Professor Hills: It is a supposition
drawn from the combination of seeing this particularly high rate
of dissatisfaction amongst younger tenants in combination with
what appear to be the greater difficulties of existing tenants
moving, which was also reported to me in many of the consultation
meetings that I had that this was an increasing problem. As I
said, I think this is something that bears much more detailed
examination if somebody were to have the time to do that.
Q429 Emily Thornberry:
And one way in which the Government could release some of the
pressure on the social housing sector would be to invest more
time and effort into finding alternative solutions and increasing
the mobility for social rented tenants?
Professor Hills: I think part
of what we see is a reflection of policies which historically
have given people very little choice in terms of either where
they live or the way in which housing is provided, and that then
means that people are less likely, even within the limited resources
we have, to be put in the place that would give them the best
option for them. The very language we have always used of housing
allocations betrays precisely the way we have done this in the
past, and that does feed into some of these feelings.
Q430 Anne Main:
Regarding this dissatisfaction you have touched on regarding mobility
and in the younger age group, what came out quite startlingly
clear on the visits we have been on is that if you are overcrowded
and you would like to slightly ease that overcrowding by going
up to the next level, you are not allowed to do so because you
are still going to an overcrowded estate, so if you need a three
or four-bedroomed house and you are in a one-bedroomed flat you
are not going to be allowed to go into a two-bedroomed, and so
the dissatisfaction is that you are constantly missing out because
the dearth of housing is more than the choice. So eventually,
if you can stick it long enough and your family grows up or whatever
you can stay put and then you are not as dissatisfied as you were,
and some people are caught in the trap of never moving out of
their one or two-bedroomed unit because they cannot ever make
the transition to the bigger house they need on their family needs
assessment. So is it partly to do with what we are providing as
much as lack of mobility? The lack of mobility is not because
of the sheer numbers but we are providing units that do not fit
with lifestyle and families.
Professor Hills: Well, you are
writing the report on the supply of rented housing—
Q431 Anne Main:
Yes!
Professor Hills: The main focus
of my report was not on need numbers. My remit was not to second-guess
anything that had been done by Kate Barker or to come up with
prescriptions as to how many thousands of new social units we
needed each year. It was to take a rather more abstract look at
why we were doing this, where it was appropriate and how well
it was working. I think the kind of things one sees in terms of
the pressures on social housing, which I include in the report,
show the ways in which all of those things are becoming more difficult
and have become more difficult in recent years as the tenant population
has become less old than it was and therefore there are fewer
re-lets coming up as a result of people dying; the cost of alternatives
has increased so it is harder for people to move out into owner
occupation where real house prices have doubled, and all those
pressures impact back into the system, including the ability of
people to move on. Clearly those pressures would be relieved to
some extent if there was a greater supply available—
Q432 Anne Main:
I meant more diverse.
Professor Hills:—but obviously
the difficult issue is how long is a piece of string in terms
of how much can you relieve that pressure.
Anne Main: No. It was the diversity of
supply I was referring to, but thank you.
Q433 Chair: Professor,
can I thank you very much. You said at the beginning that you
were not into providing solutions but can I tempt you? If there
was one thing that the Government could do, what is it you would
want them to do?
Professor Hills: I think there
are many things it would be helpful for Government to do. One
of the most helpful things that could happen over the next six
months is for it to encourage housing providers and local authorities
as housing enablers to come forward with specific examples of
the kinds of things I am talking about in the report that have
worked and that could be spread as best practice elsewhere, and
to come forward with examples of where current rules and restrictions
stop them doing those things. So to encourage the provision of
more examples of barriers and opportunities that would then move
particularly in the four directions I identify at the end of the
report.
Chair: Thank you very much indeed.
| 
