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Memorandum from the
Summary of Newham's response to Reform of Council Housing Finance London Borough of Newham welcomes the opportunity to submit evidence to the Committee as part of its examination of the proposed reforms to council housing finance. We provide answers to specific questions on Decent Homes below, but would also make some more general points as follows:
· We welcome the changes in council housing finance, noting that reforms will affect Newham after it has completed its Decent Homes Programme. · We particularly welcome the principle of increased devolution to local authorities, which we hope will enable us to take a longer-term view of housing stock and shape it in line with our overarching vision for the development and regeneration of the area. · The increased focus on management and maintenance of properties rather than simply internal renovation is also to be welcomed. Communal areas have as much impact on quality of life in an area as internal factors and we are pleased this is being recognised. · Proposals to adjust debt levels should take into account the previous borrowing of local authorities and should not unfairly disadvantage them. · We welcome proposals to allow local authorities to keep capital receipts and this will incentivise building of council properties. However, we would like to add that we cannot "build our way out" of problems. We want greater powers to purchase street properties, as well as build new developments, in order to facilitate mixed communities. · We believe there should be a focus on neighbourhoods, not just units. We want to create communities mixed by class, ethnicity and tenure. · Local authorities should be enabled to take a leading role in shaping the private sector market. Private sector housing standards could be improved if local authorities were allowed to link the value of housing benefit to the conditions of a property. · We believe housing policy can have a positive impact on employment through flexibility in allocations at a local level. · Where council housing is greatly oversubscribed, allocations should be based as much as possible on waiting times to ensure the system is transparent and fair.
1. What are the implications for decent housing standards of the Government's proposal, currently out for consultation, to move to a devolved system of council housing finance?
1.1 We welcome the proposals to introduce a more transparent basis for funding council housing in the future.
1.2 Newham is due to complete its Decent Homes programme by 2012, and the current implementation date for the new funding regime is 2012/13. The new funding regime will therefore impact on the Borough post-Decent Homes.
1.3 We particularly welcome that the Government has recognised within the consultation document the need to increase Management and Maintenance and Major Repairs Allowance to consolidate the improvements being made as part of the Decent Homes programme.
1.4 Previously, Decent Homes has been too focussed on internal features - such as kitchens, bathrooms and weather-proofing - to the neglect of vital external features such as lifts, entrances and communal areas. Such external features often have a role in determining whether housing is perceived as safe and as an attractive place to live; and consequently have an impact on quality of life in an area.
1.5 The new changes should allow the Council to maintain existing stock to the same or a higher standard once the Decent Homes standard has been achieved.
1.6 The proposals to adjust the debt levels are necessary to achieve the Government's objectives; although the Council is keen to ensure that the adjustments are based on the actual costs facing the Council in respect of factors such as debt profiles and interest rates.
1.7 This should recognise that authorities hold a proportion of the debt with private institutions, not just the PWLB, and that the terms may differ between authorities. Authorities should not lose out financially under the proposals on the basis of past borrowing policies.
1.8 We are supportive of the proposals as drafted, and would welcome clarification on their technical aspects and further detail.
1.9 We would envisage a need to maintain and improve the quality of the Council Housing post-Decent Homes, and the greater freedoms that appear to be part of the proposals should help to facilitate this.
1.10 The proposals to allow councils to keep the rent and capital receipts from all new build council properties is welcomed and is an incentive towards provision of new council houses. Newham has an ambitious housing strategy, of which future council housing provision is just a part.
1.11 Instead of focusing merely on accommodation units, we want to build communities in which there is a mix of class, ethnicity and tenure. We hope the Government will support further devolution to local authorities and enable us to achieve this.
1.12 We recognise that we cannot build our way out of our current housing problems. That is why we want to use housing funding to purchase existing street properties rather than simply to build new estates. This will help to create mixed communities as there will be council properties in areas which are currently dominated by owner-occupiers.
1.13 We want housing policy to encourage, incentivise and enable people to seek, find and keep work. We believe this can be done by having an allocations policy that prioritises those who are actively seeking work. Instead of becoming trapped in workless communities, housing can be a force for good to help people secure work and improve their lives.
2. How should the Decent Homes target for private sector homes occupied by vulnerable people be taken forward?
2.1 We very much welcome the extension of the Decent Homes standards to vulnerable residents in the private sector. Although this will be more difficult to implement in the private sector, there are ways in which we can ensure standards are driven up for all vulnerable tenants.
2.2 Newham pays out £145 million in housing benefit to the private sector every year and we need to be certain that we are achieving value for money from this.
2.3 In Newham the private rented housing market comprises 21,000 dwellings (2005 ONS). It is the fastest growing tenure over the last 5 years and will soon provide 25% of all housing in Newham. Its growth has been led by the "buy to let" phenomenon coupled with new build supply dominated by private sector completions. Both trends are likely to continue with the latter expanding enormously as regeneration gathers pace.
2.4 Yet overall, private rented sector households are poorer and occupy the worst housing conditions (EHCS 2004) and in Newham 65% are still non decent (LBN condition survey 2004) despite the huge public subsidy being provided. The sector is one of "last resort" for many vulnerable and impoverished households: two thirds (14,000 households) are supported by state subsidy but housed "privately".
2.5 Our landlord accreditation scheme can only do so much and we seek new ways to engage with landlords and regulate the sector more effectively.
2.6 We believe local authorities could play a vital role in driving up standards and shaping the private housing sector if we were able to have more control over the allocation of housing benefit.
2.7 We want to link housing benefit levels to the condition of properties incentivising landlords to improve maintenance, management and tenancy agreements.
2.8 If local authorities had the right to link housing benefit to property conditions, landlords would have an incentive to bring their properties up to Decent Homes standards. By paying landlords what they deserve, private tenants would benefit from improved maintenance, management and tenancy agreements.
2.9 We would twin this with an enhanced service to good landlords that could include direct payment of housing benefit and assistance with tenancy problems.
2.10 We would seek to review the S106 definition of affordable housing in relation to private sector housing, particularly given our ambitions to deliver a more flexible housing system. We are piloting a Neighbourhood Improvement Zone in the North East of the borough, to improve neighbourhood management in areas where there are high concentrations of private rented properties; we would like provision for flexibilities regarding enforcement powers.
2.11 We could also contribute to the improvement of the condition of private sector tenants by paying a rent subsidy to those who want to take up work.
2.12 Local authorities should be able to extend housing benefit payments to those entering work or full time training, beyond the four weeks currently offered in most cases.
2.13 We could offer rental discounting: guaranteeing low rents for private sector housing tenants entering work. This would effectively create a social rent in the private sector and would allow people incrementally to improve their position, rather than remaining trapped in poverty, unemployment and poor housing.
2.14 Because of the predominance of Victorian and early 20th century terraced housing in the borough, we also want to extend housing in multiple occupancy (HMO) licensing to all HMOs, not just those of three storeys and over.
3. Are there any local examples of innovative best practice with wider post 2010 applicability?
3.1 Our
allocations policies in Newham are innovative and effective. As with the rest
of
3.2 The provision of public services must be fair but it must also be seen to be fair. Community cohesion can be undermined if people believe others are being prioritised or if they think recent arrivals are 'jumping the queue'.
3.3 In Newham we base our allocations policy- as far as is possible- on waiting time. This 'first-come, first-served' policy is transparent and demonstrably fair. Our policy was recently upheld in a House of Lords ruling.[1]
3.4 We want to expand how we can use allocations to support the community. We want housing to support employment by prioritising those who seek, find and keep employment. We also believe that there should be more flexibility in order to support people in work on lower wages through rent subsidies.
3.5 Currently, Our Mayor's Employment Project provides a guarantee for those going into work that they will be better off and we offer intensive help for jobseekers through Worklplace - our dedicated local employment service. However, housing is a vital service and could play a greater role in supporting such employment programmes to achieve long term outcomes.
September 2009
[1] R (Ahmad) v Newham LBC [2009] UKHL 14, 4 March 2009 |