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Memorandum from Foundations (BDH 29)
Background
1. This response has been prepared by Foundations, the national body for home improvement agencies in England. Foundations has held the contract as national body since 2000 and is appointed by Communities and Local Government to: · develop capacity and expand home improvement agency services · provide advice, training and support to home improvement agency staff · represent the sector in discussions with government and other stakeholders, and · promote and raise the profile of the sector.
2. Home improvement agencies are local, not-for-profit organisations dedicated to helping older people, people with disabilities, and vulnerable people to live in safety and with dignity in their own homes. Home improvement agencies are focused on ensuring that existing housing is fit for purpose and that vulnerable people, predominantly homeowners, are able to continue living independently as long as possible. Their work helps to achieve the objectives of Communities and Local Government, the Department of Health and other government departments.
3. There are currently 230 home improvement agencies in England providing services in approximately 90% of local authorities. Locally they may be known as Care & Repair or Staying Put agencies. The majority of agencies are operated by housing associations, a lesser proportion are provided 'in-house' by local authorities, while others are small independent organisations, usually with charitable status. Together home improvement agencies deliver services for around 240,000 people every year. This includes housing advice and information, practical help such as handyperson services, and the co-ordination of substantial repairs and improvements, many of which contribute to Decent Homes objectives for vulnerable households in the private sector.
4. In this response, we will focus on the Inquiry's remit in relation to Decent Homes in the private sector.
How should the Decent Homes target for private sector homes occupied by vulnerable people be taken forward?
5. Major repairs and other work to meet Decent Homes targets in the private sector account for approximately half of all HIA activity. In addition to major repairs, HIAs are involved in carrying out minor works using their handyperson services to remedy Category 1 hazards under the Housing Health and Safety Rating System. Agencies are also extensively involved in work to improve the energy efficiency of homes in the private sector.
6. Approximately two thirds of the HIA sector use a database managed by Foundations to record details of the work which they have undertaken and the value of work.
7. Our database records for this portion of the sector indicate that the number of Decent Homes cases undertaken by the sector has remained fairly stable over the last three years, however the average value of work has increased, from £1,589 in 2006/07 to £1,876 in 2008/09.
8. This corresponds with anecdotal evidence from the sector suggesting that the cost of remedying Decent Homes disrepair issues is continuing to rise at above inflation rates, also that the scale of remedial work required in individual cases is growing.
9. The English House Condition Survey has identified that private sector housing is nearly twice as likely to have Category 1 hazards as social housing (23.5% of all private compared with 13.3% of all social housing[1]) and the absolute numbers of private sector dwellings failing Category 1 hazards has increased slightly between 2006 and 2007.
10. Recognising that vulnerable households within the private sector should be of particular concern as they much more likely to lack the resources to rectify housing issues with state intervention, there are still more of these households than all social housing households living in non-decent accommodation (1,231,000 vulnerable private sector households compared with 1,138,000 social housing households[2])
11. Given that the issue of housing non-decency is at least of equal significance within the private sector as in the social housing sector, we welcomed the continuation of targets to reduce the percentage of non-decent housing for private sector vulnerable households, but given our knowledge of the cost of work, we would suggest that the current levels of funding for private sector renewal need to be at least sustained in order to address this issue.
12. Given this fact, we were very concerned by the recent ministerial announcement about a proposed transfer of funding away from Private Sector Renewal funding for 2010-11 into the provision of additional affordable housing. We have been advised that a reduction of £75m from the previously advised indicative budget will be made (which equates to a cut of 20 - 25% of the current year's forecast spend on private sector renewal).
13. The Regulatory Reform (Housing Assistance) (England and Wales) Order 2002 gave local authorities a great deal of flexibility and freedom in providing discretionary assistance for repairs and adaptations, including what form that assistance may take (e.g., grants, loans, equity release schemes etc). Research carried out in 2007 for CLG concluded that although a number of low cost loan schemes had been developed, the key objectives of levering in private finance and encouraging the use of property equity were still at the early stages of development.
14. The reduction of house values over the last years and the marked reduction in the availability of private finance, as well as a risk averse approach taken by lending institutions, has had the effect of inhibiting growth of alternative forms of funding for private sector renewal. We are not aware of any private finance having entered the market, and the only notable increase in activity has been in the development and take-up of property appreciation loans, which offer very good value in times of falling property prices. However, by far the most popular response by local authorities in this area has been the development of interest free loans, which obviously require continued public funding and are, in effect, another form of public subsidy.
15. Foundations has argued previously that low cost loans and various forms of equity release alone cannot meet the funding requirement to improve the private housing stock in England. There are many areas of the country which have not seen large rises in the value of housing stock, even prior to the recent housing price slump, and the cost of undertaking repairs to bring housing up to Decent Homes standards would require additional funds which cannot be obtained through equity release. However, more crucially, there are a large number of cases where loans are simply not a good 'value for money' option, simply because the cost of essential works are low (under £3000) and the costs of arranging loan finance for such small amounts are prohibitively high. In such cases, other alternatives (such as grant funding) are likely to be less expensive both the grant giving local authority and the older owner occupier.
Recommendations
16. We respectfully request that the CLG Committee urgently reviews the recent decision to divert funding away from private sector renewal, as we are concerned that this will have a major impact on the ability of many local authorities to support much needed work to improve housing decency for vulnerable private sector households.
17. We also request that the Committee consider the benefits of investing in research on the impact of the downturn in the housing market on the ability of local authorities to develop alternative forms of funding assistance for owner occupiers.
18. We would submit that the targets set within the Departmental Strategic Objectives DSO 2 document are more obscure and much less accessible to the public and professionals within housing as a clear statement of what has to be achieved. As a result, the whole issue of Decent Homes appears to have slipped well down in terms of priorities, and this was keenly felt by our sector even before the recent decision to transfer funding to new house building.
19. We would propose that more explicit targets regarding the reduction of private sector households in non-decent housing are communicated to local authorities. Past national targets (in percentage terms) set for social housing and the private sector within PSA07 had the effect of galvanising action in this area (and focusing public attention on the issue).
September 2009
[1] EHCS 2007 [2] Ibid |