Select Committee on Communities and Local Government Committee Minutes of Evidence


Examination of Witnesses (Questions 540 - 559)

THURSDAY 19 APRIL 2007

YVETTE COOPER MP, MS TERRIE ALAFAT AND MR PETER RUBACK

  Q540  Martin Horwood: One of the problems is that local authorities do not have the ability to do that at the moment.

  Yvette Cooper: I suppose you probably would come up against the same issues around the nature of housing associations' ability to borrow compared to local authorities' public sector borrowing. It might also have implications for some of the self-financing pilots, although I have not really thought that through.

  Martin Horwood: It would be a good thing.

  Q541  Emily Thornberry: When there were questions being asked about housing associations and their stock, I was thinking that there is increasing alarm, is there not, that some housing associations, again particularly in inner London where there is so little land, seem to be selling off their properties, seem to be selling off some of their land, indeed as are local authorities selling off housing that they simply cannot afford to do up so they sell that on and are selling off land too. As housing is so limited is there any way in which that can be restricted or regulated?

  Yvette Cooper: There are restrictions and regulations around what properties can be sold off and the Housing Corporation has a role to play in this. We did some analysis of what kinds of homes were being sold off by housing associations and some of them were properties that might have been built by housing associations as a part of mixed communities, so it was always intended that these particular properties would be sold off on a full market basis. Some were also properties that had been built particularly for students, for example, where there was always the intention to pass it on to a university. There were some specific examples like that which seemed completely legitimate. Where it raises concern is where you have street properties particularly, the properties that are genuinely a part of mixed communities, that end up being sold off because they are more expensive to manage than those on estates, but they might also be more important properties in terms of maintaining mixed communities. We have asked the Housing Corporation to keep a close eye on this. There will be times when there are financial decisions that housing associations need to make to keep their overall programme viable, nevertheless you want to avoid decisions that end up undermining mixed communities where they are not necessary.

  Q542  Mr Olner: Minister, can I say that over the last couple or three years I have noticed that more and more people, particularly young people, are having a great deal of difficulty in getting onto the housing list at all. In my authority the housing list has grown bigger and bigger. What incentives can we immediately offer local authorities to start to address that by building more council properties? I mentioned earlier about the small amount of build you could do with factory produced housing and whatnot. I think most housing authorities need that sharp injection to get the top of the housing waiting list out of the way.

  Yvette Cooper: What they should certainly be doing is looking at the wider level of housing that is needed in the area, so what is needed in terms of market housing share, shared housing and social housing, making sure the planning system is supporting that. Secondly, they should be working with housing associations on what additional social housing is needed. Because of the ability of housing associations to lever in additional private sector borrowing that is clearly often the most effective way to deliver additional housing. In addition, I would urge them to look at the pre-prospectus recently published by the Housing Corporation that looked at other ways in which councils might be able to directly build themselves if they have got their own assets that they could put into the process as well. Part of this is about additional funding, which is what we have been putting in over the last few years as part of the Spending Review and we have said it is a priority for the next Spending Review. Your local authority, probably like mine, is one where they could probably do with some more of this, to look at further contributions from section 106 where they may not have been doing as much as they could have been in the past because that might also help them with the provision of social housing.

  Q543  Mr Olner: I think they have squeezed a fair bit out of that. It is this initial incentive to be able to build blocks of ten, 20, 30 houses or whatever. It has been a long while since I have been on the housing authority but it seems to me that there is not the specific grant of money there available for them to do it. I wondered whether you could lever some money into first and new build.

  Yvette Cooper: The pre-prospectus is part of doing that.

  Q544  Chair: Minister, can you expand on that as to how you can help local authorities where they are providing new housing to diversify the size of unit that they build.

  Yvette Cooper: You mean by that more family homes, do you?

  Q545  Chair: Yes.

  Yvette Cooper: This is a particular pressure obviously in London but it does raise issues in other parts of the country now as well.

  Q546  Chair: Because of the right to buy having largely got rid of all the family housing.

  Yvette Cooper: The Regional Housing Board in London and the Mayor now have specifically looked at increasing the proportion of family housing as part of the way in which the social housing budget is spent. Other regional housing boards would probably be wise to look at the same issue.

  Q547  Mr Hands: We have got a little bit of time to look at the Hills report and the creation of mixed-income neighbourhoods, which we have already alluded to. How much of a role can social housing play in meeting the wider objective without reducing the overall supply of social rented homes? Hills makes a strong case for landlords to diversify stock through selective sales, offset by spatially diverse purchasing. Do you support this approach? I guess tied to that, going back to London again, I am afraid, when you get an approach where the Mayor of London sets in stone that all boroughs should build 50% social housing on all new projects, does it make sense to have the same rules for, say, the London Borough of Bromley as for the London Borough of Tower Hamlets, one which has a very low proportion of social housing and one which already has a very high level of social housing? Would it not be more appropriate to have some greater flexibility there for individual councils within their area rather than this fixed centrally driven 50% target?

  Yvette Cooper: Well, the Mayor does not set a 50% target for social housing, it is a 50% target for affordable housing, which includes both social and shared ownership housing. What there is then the scope for is to have at individual borough level a debate as part of the individual plan as to how that borough should contribute to the city-wide strategy of a 50% affordable housing target. There is scope within the planning process to have that debate and to have that debate both with the Mayor but also through the examination in public as to what an individual borough's contribution should be towards that overall 50% target because it might vary from one area to another, but that is a matter to be looked at probably through the planning system, through discussions both with the Mayor and also examination in public of the individual borough's plan.

  Q548  Mr Hands: You are doing the opposite, without going back to our GLA Bill discussion, by concentrating the entire power with the Mayor who will set a policy across London. That is really doing the opposite. Would you be supportive, say, of councils which have an existing very high percentage of social rented housing not building any more on the basis of the Hills report to get mixed communities?

  Yvette Cooper: I do not think London boroughs can operate in isolation from what is happening elsewhere in the rest of the capital. That is why we have said it is the Mayor's role to draw up the regional housing strategy for London. What happens in one borough has a very big impact on what happens in a neighbouring borough. A lot of people move between different parts of London at different stages in their lives and I think it is wrong to see it as individual borough-based housing markets when that is clearly not the way in which London works.

  Q549  Mr Hands: That is not social housing. Social housing has very, very little mobility between boroughs.

  Yvette Cooper: That may be part of the problem. We think that they should be considering far more mobility. It has been a disappointment that some of the boroughs have resisted some of the cross-borough working around social housing and around choice-based lettings across borough boundaries. We think all boroughs should be contributing to delivering additional social housing and affordable housing that the city needs. Clearly it is important to do that as part of mixed communities and it is important for an individual borough's circumstances to be taken into account as part of their planning process, but they all do need to contribute and it would be better if some of the boroughs did a bit more to work across boundaries than they are currently doing.

  Q550  Chair: Minister, have you got any detailed information about how those schemes are or are not operating because it is an issue which has been raised with us in evidence and it would be useful to have the most up-to-date information?

  Yvette Cooper: Yes.

  Q551  Chair: Can I also ask you, you did not answer the first bit of Mr Hands' question which was about the Hills proposal on essentially selling off where you have estates, selling off some of the properties into the private market in order to achieve the tenant mix and then presumably using that money to provide some more social rented housing elsewhere. Does the Government support that approach or not?

  Yvette Cooper: We think this is a very interesting approach. There was a JRF development where they did this but, of course, they had more flexibility to do it on that particular development, according to my recollection, because the social housing in the area had quite high property values, the nature of the development, so it meant that it was easier than it would be in some areas to be able to sell off properties in a social housing area and then put the money into replacing the social housing in another area by buying back or whatever. Some areas will be easier to do that in than others. You have to take very seriously the need not to reduce social housing supply in areas where it is badly needed. Those are the constraints that you operate under. However, as an approach it is certainly a very interesting one if it would allow you to do more of that kind of mixed community. Where you have a new estate being built next to an existing social housing estate, for example, there are things that you might be able to explore in that area where you might be able to sell off some of the existing social housing but use the funds to pay for new social housing on the additional higher levels of social housing on the new estate being built so you can better mix both communities rather than end up having a polarisation between them. The economics matter and that is why we are still at an early stage of looking at this.

  Q552  Mr Betts: Can I just follow up that issue and then another one about Hills as well. It follows from the question Martin Horwood asked earlier. You answered about selling off and had the caveat about not reducing the supply of social housing in areas where there is a shortage, but is there not still an issue around the right to buy in some areas? In some areas right to buy is still making more mixed communities because the vast majority of housing in those areas is socially rented but in other areas where perhaps a very small proportion of the housing stock is socially rented the right to buy reduces the mix of the communities by simply making owner-occupation more and more the predominant form of tenure in that area. When we went to Holland to take some evidence about social housing there, they have something similar to the right to buy but in the end the social landlord, which is normally some sort of housing association in the area, can actually decide, according to the housing market in that area and the shortages of social housing, whether to sell. They look at the circumstances and if they have got a surplus of housing or a predominance of social housing they can sell but otherwise they can decide not to. Have we not got to move to something similar to that system if we are going to protect mixed communities in areas where there are very, very few social housing units?

  Yvette Cooper: As you will be aware, we did introduce different restrictions on the right to buy in particular areas, reductions and discounts in particular areas a few years ago as part of the previous Housing Bill. At this stage we are not looking at further restrictions or proposals to change that, partly because we think right to buy does play an important role. Right to buy for a lot of people at the moment is not affordable because of what has happened with overall house prices as well, so the impact that it has on different areas is very mixed. It is something that has played such an important role in giving people the opportunity to buy their own homes that what we are looking at instead at the moment is different ways of being able to provide additional social housing in an area or different ways of being able to have a social home buy approach to get the kind of mixed tenure rather than right to buy restrictions.

  Q553  Mr Betts: Would you be prepared to look at extending the restrictions that you have already brought in to more areas because currently they only apply to some areas, do they not?

  Yvette Cooper: I do not think we have been at the moment but I do not know whether we have had any approaches from any areas to do so.

  Q554  Mr Betts: But you would listen to approaches if they were made?

  Yvette Cooper: We always listen to local authorities if they ask us things but it is not something that we have been looking at ourselves.

  Q555  Martin Horwood: In your opening comments you linked worklessness and housing tenure and Hills makes the same connection and makes quite a radical argument that one of the purposes of social housing actually is to improve the employment and the income of tenants. I would like to ask do you agree with that vision and would you agree with some of the ideas that he has to reduce the separation between local authorities and Jobcentres? In my experience even the employment aspect of Jobcentres is becoming more remote even from local Jobcentres let alone local authorities or social housing providers. Do you think that might be one example of a policy tool or are there others that might fulfil that vision of Hills on work and social housing?

  Yvette Cooper: We are very interested in this aspect of the Hills review and have a programme of work looking at this in the Department at the moment as to what more could be done—working with DWP as well around what more could be done—to help people in social housing into work. Obviously part of what is happening is that social housing inevitably is also more likely to include people who will struggle to work, so people who have got serious problems with incapacity or invalidity are also more likely to end up in social housing, so the figures are quite complex in terms of what they show. However, we would like to see more being done to help people in social housing into employment. Some of that might involve closer working with Jobcentres. There are some interesting programmes that some housing associations do run about job advice or very localised employment advice and help. I think the Notting Hill Trust do quite a bit of work around helping tenants into training or employment. Interestingly, some have set up as part of the Decent Homes schemes, both local authorities and ALMOs and some stock transfer programmes, quite substantial training schemes as part of the repair and refurbishment work for local residents and tenants as well.

  Q556  Martin Horwood: Hills was quite complimentary about some of the initiatives of housing associations and the Housing Corporation in terms of added value, but can we narrow it down on to that Jobcentre and local authority issue, that you are in favour of a closer relationship between the employment function of Jobcentres and local authorities?

  Yvette Cooper: I think we are keen to look at it. What we do not want to do is to try and simply replicate what Jobcentres do by housing associations because it is not the housing associations' core purpose, so there is no point in getting that duplication, but we are looking quite extensively at exactly that relationship between local authorities, Jobcentres and—

  Q557  Martin Horwood: He was not talking about duplication, he was talking about bringing the functions back together again because they have become too distant.

  Yvette Cooper: We are looking at John's proposals and the important thing is to make sure that we do not end up duplicating or changing the function of either housing associations or Jobcentres but can look at much closer working between them.

  Q558  Mr Betts: Can I just come back to another recommendation of Hills, and this is the use of assets by social landlords, particularly the fact that many of them are locked into very blinkered needs-based letting systems which simply look at the person on the waiting list with the greatest need and give them the house that comes up. In parts of London that may be essential because of the chronic housing shortage but in other areas we have seen a substantial reduction of transfers within the housing stock. I think Hills points out that there is a lot more scope to get people who are living in three-bedroom properties and want to trade down into smaller properties, people who want to be moved near grandparents so they can get childcare which enables them to go back to work, and those sorts of factors ought to be built into the systems wherever possible. Are we going to get some reflection and guidance from the Department to local authorities and others about it?

  Yvette Cooper: I think probably one of the most striking elements of the Hills review was the analysis he set out which showed how little mobility there was within social housing. John talked particularly about mobility for work but you might also think around mobility for overcrowding or other reasons as to why people should do more moving within the stock. We have been looking particularly around mobility for work reasons and how you should do more to support people who might want to be able to take up a job somewhere to be able to move within the stock. That includes across local authority boundaries as well which can sometimes be more difficult. We are also looking at it as a part of overcrowding allocations. We do get anecdotes of larger properties being allocated to someone who is currently in temporary accommodation who might be happy in a smaller property where a family in a smaller property who were overcrowded could have moved into a larger property and effectively you then open up their home which the family in temporary accommodation could have moved into. There are some anecdotal examples of the allocations process not working intelligently enough around overcrowding. That is one of the things we have been looking at already as part of the overcrowding programme. Again, it does particularly affect London but it could apply more widely. We are also looking very closely at the broad mobility issues that John raised in terms of work as well.

  Q559  Mr Betts: Have you got a timescale for when you are likely to come back on those matters?

  Yvette Cooper: We are trying to do the work as rapidly as possible because we also want to be able to take account of it as part of the Spending Review considerations as well. We are working on it quite intensively over the next few months.


 
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