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UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 1054-i House of COMMONS MINUTES OF EVIDENCE TAKEN BEFORE Communities and Local Government COMMITTEE
Monday 26 October 2009 DR STEPHEN BATTERSBY, MR ANDREW GRIFFITHS, MS SARAH WEBB and MR RICHARD CAPIE MR NIGEL LONG, MR MICHAEL GELLING OBE and MS TRISH CANHAM Evidence heard in Public Questions 1 - 65
USE OF THE TRANSCRIPT
Oral Evidence Taken before the Communities and Local Government Committee on Monday 26 October 2009 Members present Dr Phyllis Starkey, in the Chair Mr Clive Betts John Cummings Alison Seabeck Mr Neil Turner ________________
Examination of Witnesses Witnesses: Dr Stephen Battersby, President, and Mr Andrew Griffiths, Principal Policy Officer, Chartered Institute of Environmental Health; Ms Sarah Webb , Chief Executive, and Mr Richard Capie, Director, Policy and Practice, Chartered Institute of Housing, gave evidence. Q1 Chair: Can I welcome you to the first evidence session in our inquiry on Decent Homes. There are two of you from each organisation. I am hoping that we are not going to get both of you speaking on absolutely every point, that you will exercise some restraint, and if indeed the other organisation has said what you were going to say anyway, do not feel the need to repeat it, because we have a lot of questions that we want to try and tax you with, if I can put it that way. So my first question really is about the probability that there will be a backlog of non-decent homes still after 2010, particularly given that the Government itself has diverted some of the funding that was previously allocated to the Decent Homes programme to go towards new house building, and the strong possibility that there might be future cuts beyond 2010, whoever is in Government; and to ask you how satisfactory you think the arrangements are to manage and to fund Decent Homes after 2010. Ms Webb: Shall I start? I think we are concerned that the arrangements are not satisfactory beyond 2010. I will just give you a couple of specific examples. Firstly, we are concerned about ALMOs who are in the later rounds who have, as you have just identified, had their funding delayed beyond 2010. There are some ALMOs who may not have reached the two star standard required to unlock the additional funding required, who may similarly fall behind. There are gap-funded stock transfers that would be expected to use the gap funding to build up decent homes which have similarly had their money curtailed, and there are retention local authorities where we know already that some of them have plans that go beyond 2010. There is also a point about the private sector, but I will leave that for colleagues. Mr Battersby: Certainly so far as the private sector is concerned, almost certainly the vast majority of local authorities will be struggling, and certainly from our work, most local authorities are literally responding to complaint, and as the Audit Commission has pointed out, relatively few have really effective strategies, so the arrangements now are not exactly good, and certainly for the future are looking even bleaker. Q2 Chair: I guess the second question that I want to get into is whether you think the purpose of the Decent Homes programme is clear, and whether you think the focus in future should be on continuing to improve housing, or whether it should include broader social objectives. Mr Battersby: If I may come in on that one, I think one of the points that we have made is that to some extent, the private sector targets were something of an afterthought, and the purpose is not entirely clear. If the purpose originally was as a minimum standard to try and focus investment, and that is across the board, things have certainly moved on. We come from the perspective of the housing and health nexus and the impacts of housing on health, and as I say, if it is declaring an interest, I was actually part of the team that helped develop the Housing Health and Safety Rating System at Warwick University as well as being president of CIH, and certainly it is one of the things that we think and believe is actually missing. So there are health issues, and quite clearly with climate change and energy efficiency, there is some overlap there. But I know, looking at World Health Organisation work, and looking at healthy dwellings, their location is important, but to incorporate something like that would be difficult, because in the private sector particularly it is different to perhaps in the social sector where you have estates. In the private sector, it is problematic for a local authority to actually ensure there is a green space in that area, so to extend the Decent Homes standard beyond the immediate is very difficult in the private sector. Q3 Chair: We will be pursuing some of those questions in a minute, if we can just kind of park them for a second. Either Ms Webb or Mr Capie? Ms Webb: I think as the organisation that actually did the original work around the Decent Homes standard, we believe that the relatively narrow focus that it has had on bringing all properties up to a minimum standard has actually been very important. We might all wish that things went further, and certainly we would wish that things went further, but given the backlog that we had, the place that we started at, it certainly has been one of the most effective Government policies in terms of focusing the mind and focusing attention on some pretty poor standards, physical standards. Thinking from a tenant perspective, it has transformed the experience of many millions of tenants not far enough, but that focus has been important. I know you will come back on to how it might be extended, but that narrow focus has been quite important. We would not, for example, think that the Decent Homes programme carried forward is the panacea for everything that is wrong with housing and communities around, for example, social mobility, for example, so focusing it, retaining a focus on properties and the space in which properties are is, we think, valuable. Q4 Chair: Can I just pursue that issue slightly? Is the Decent Homes standard, as it is at present, sufficiently objective and clear for it to be being interpreted in the same way by different local authorities, housing associations and private sector landlords, so we all know what we are talking about when we talk about decent homes? Ms Webb: I think this is an issue of a big picture versus a detailed picture. At the margins, there will always be room for slight interpretation. There will always be examples that you can point to where somebody will say this bathroom officially needs to be replaced but actually it is fine, or vice versa, but at the level of the big picture, and fundamentally changing the standard of housing, then actually I think it has been well enough understood. That does not mean we cannot always improve the guidance that there is for local authorities, particularly around the private sector, I think there is more ambiguity around the private sector, but there is very little excuse for people to say that they have not done it because they did not understand it. That does not mean that we could not go further, but I do not think any failures have primarily been failures of misunderstanding. Mr Griffiths: There is an issue with an understanding of the process of category 1 housing under the Housing Health and Safety Rating System, whether in fact those who actually have to assess that fully understand the system. We have anecdotal evidence of a number of registered social landlords where the surveyors involved in this clearly do not fully understand the Housing Health and Safety Rating System, and therefore are not in a position to determine whether category 1 is present. In the training that we have carried out, I took a brief snapshot; over the last few months, we have had 55 delegates come to train, not one has come from a housing association. Q5 Chair: Where have they come from? Mr Griffiths: Local authorities. Q6 Chair: Would they be local authority officers in the housing department, or would they be environmental health officers generally who would be inspecting private properties as well? Mr Griffiths: They would be environmental health officers inspecting private properties in private sector housing services in local authorities, so they are dealing with it in the private sector. The training is available to all, but it is just not being taken up by RSLs. Q7 Chair: So would some of the properties they are inspecting, for example, be houses in multiple occupation? Mr Griffiths: Yes, they would. Q8 Alison Seabeck: What do you think are the most important changes that are needed to the current Decent Homes standards in order to continue to make improvements? You have talked about it needing to be a narrow focus. What changes would you like to see? Mr Capie: I think we have to look at the existing Decent Homes criteria and actually be very clear about what its original purpose was. As Sarah said, our priority at this moment in time should actually be focusing on delivering the existing commitments we have. A detraction from that, in particular given the challenges we have around funding, would not necessarily be particularly helpful. I think we should also be using this time to actually be thinking ahead about where we want to go post 2010. We almost have to separate two issues out, retain a short, narrow focus at this moment in time to ensure that we actually deliver on our existing commitment, but also be thinking about what the next steps might include, and that is where we would probably be looking at again a wider range of more ambitious targets. This is where we can actually start to bring in some of those questions around, for example, the carbon issues that we have been focusing on. I think one of the most important things that we also need to do is understand where we are at at this moment in time. There is a gap, and it is something the CIH has called for in our written evidence, to actually undertake an audit of where we are at this moment in time, and what shortfall we may face by 2010, and actually have some explicit commitments to set out what we are going to do to tackle that shortfall and plan how we address that. Ms Webb: Assuming that we can talk about Decent Homes 2, if you like, as a concept, then clearly our main asks would be to include something about environmental areas, to include something about eco standards, carbon footprint, and to include something about fuel poverty. Q9 Alison Seabeck: Thank you very much. A nice concise answer. We have touched on carbon reduction targets. Clearly from what you have said, you believe that the Decent Homes programme is one of the ways of dealing with the problem we have in that area, and tackling it. Ms Webb: I think yes and no. The figure that is widely used for the CO2 emissions that come from housing is 27 per cent of the total CO2 emissions, so it is absolutely clear to us that we will not deal with generally our CO2 emissions in this country if we do not deal with the existing housing stock. Clearly, if we are going to invent Decent Homes 2, which we would argue we should, then eco standards should be part of that. However, the vast majority of stock in the country are not social houses, they are private houses. The Decent Homes standard does not cover the majority of private sector houses, so whilst thinking that there is a clear place for adding eco standards into any Decent Homes 2, we would not miss the opportunity to say that there needs to be a separate programme for bringing all housing in this country up to a better eco standard. Chair: It might be useful if Dr Battersby or Mr Griffiths came in in relation to the private sector. Alison Seabeck: I was going to come back on that. Q10 Chair: Whether Decent Homes is a useful vehicle or not. Mr Battersby: The problem in the private sector, apart from the obvious, is fuel poverty; excess cold is the most serious hazard and the greatest cause of ill-health and death. With excess winter deaths it is a fundamental issue. As I say, that is the rating system which will be used there, whether it is in HMOs or whether it is elsewhere, but again, the problem is that local authorities have not been able to develop effective strategies to address this. Certainly, the CLG did issue advice in November last year on excess cold, but that is the main focus, and indeed, the truth is that it is entirely possible to actually have a home that actually, on the face of it, meets thermal comfort criteria of the Decent Homes standard, but could still have a serious health risk and a hazard of excess cold. Chair: I think the question we are asking though is: is the Decent Homes programme, in relation to the private sector, an effective way of improving the energy efficiency of that sector, and if not, what is, rather than going to the reason why we need to do it. Q11 Alison Seabeck: If I can add to that, we talk here about the role of local authorities, clearly with a strategy role in all of this; can they cope? They are not enforcing the HMO regulations. Mr Battersby: They cannot cope. Ms Webb: And they cannot cope -- Q12 Chair: Hang on a minute, we still do not have the answer. Is the Decent Homes programme an effective vehicle within the private rented sector for delivering improved thermal efficiency to help us meet the 27 per cent target or not? Mr Capie: I think we have to look at what Decent Homes -- sorry. Mr Battersby: Well, yes, I mean, the short answer is that the rating system will be the focus for intervention, not Decent Homes, and by accident it may address the category 1 hazards. Mr Capie: If we knew what we know now about Decent Homes, we would have probably done it differently from the outset, and we would have actually looked at some of the broader issues around CO2 reduction as part of that. Where we need to get to in relation to carbon reduction is something quite significantly different from what we are trying to achieve with Decent Homes. One of the things we would say is a forward looking programme has to actually be tender blind, and it will obviously be a lot more ambitious than what we have needed to achieve with Decent Homes. The other thing we have to actually do is look at how we reconcile some specific targets around housing with actually some of the wider issues we will be taking forward, for example around the thermal insulation and efficiency of public buildings. If we are going to achieve some of this stuff, it is going to require scale, and we will not necessarily be able to do that just in housing, but in housing we know that the impact we can have on reducing CO2 in housing is an area where we can make some real inroads, because the technology is out there, the big issue remains funding. Q13 Alison Seabeck: I will move on to lessons to be learned or not from Scotland and Wales. We have a different scale in England of the problem, are there lessons that are transferable from Scotland and Wales, are the English guidelines simply too weak? National Energy Action think they are too weak, in their evidence. Ms Webb: We think there are some lessons; they have had the benefit of coming after England, and therefore they have learnt lessons. One of the clear lessons they learnt was to build in slightly stricter standards around some of the eco stuff and environmental stuff, which they clearly learnt by talking to us and saying, if we had had our time again, that is what we would have built into ours, so I think that is one lesson. I think similarly they have been able, partly due to scale, but partly also by observing us to build in more local variations, and in particular to talk to local tenants and residents and build that in from the start. Again, I think they are better than us on that. The third thing which particularly relates to Scotland is the financial freedoms which their local authorities have, which is one of the ways in which we would see Decent Homes being funded in the future, around HRA reform, which you might come back to, so I will not talk about that now. Q14 Mr Betts: Moving on to ALMOs, it seems this is probably a success story to come out of the Decent Homes programme. Are they a success simply because they have had a lot of money thrown at them, or is there some benefit proven from detaching the strategic housing functions from housing management? Ms Webb: From our perspective, the single most important thing that they have done is focus on the services that matter most to tenants, and you can argue that they did that because there was money attached to them being excellent, but actually, in a way, it does not matter, that is what they have done. In a way that the TSA is now encouraging all landlords to do, they got early on the fact that the core services that matter to tenants are around repairs and maintenance, quality of services, those kinds of things, and they put all their energies into being excellent at those things, and I think that is one of their key successes. They also had, from the word go, an ethos around sharing of best practice, which I think is to be commended across the sector. They have worked together as a collective to make sure that they were always working to the standards of the best thinking, rather than the lowest common denominator thinking, and that has been one of their key successes. They have not been in competition with one another in a negative way, but they have worked collaboratively together, they have worked together very well, and I think that the strategy versus landlord function is an interesting one. Do you want to pick up on that? Mr Capie: I think we certainly see that ALMOs in some ways have taken an awful lot of lessons from the CPA and the local government performance framework and the progress there, and also looked at the really positive things that have been happening in the RSL sector, almost drawn on the best of both worlds in some ways. As Sarah said, I think one of the things that has been fundamental to them has been that right from the outset, they have had a firm commitment on core services, and involving tenants and shaping those core services. Obviously the carrot of two stars, you get your funding, is a very, very strong driver for those businesses as well. We would certainly maintain that all local authorities should have an absolutely fantastic and 100 per cent committed strategic housing function. It does not matter if you have retained stock, it does not matter if you have an ALMO, it does not matter if you have transferred, the debates and arguments should be about how we make sure that all local authorities are delivering that service as well as they should do. I think the Audit Commission's report Building Better Lives has kind of highlighted some of the issues around that, but it is not a case of being good at delivering the strategic function or being a good landlord, we do not see that as being incompatible. As far as we are concerned, you should be able to do both where that is the case, but you should be 100 per cent committed to whatever function you are fulfilling, whether it is delivering landlord services to a tenant population, or being a strategic enabler across a wide range of providers. Ms Webb: I mean, there are retention local authorities that are good at strategy, and retention local authorities that are not good at strategy; same for ALMOs. Q15 Mr Betts: A lot of authorities now have ALMOs and there is some concern about what happens after 2010, in the sense that some ALMOs have not finished their programme. Around six ALMOs that have two stars or are about to get them are now being told that they are not going to get any money for the next 12 months or so, and will it then come at all? I suppose there begin to be concerns there. For others who have done a lot of work on the programme and see it coming to completion, what happens to them after that time, in terms of their structures, I mean, do you have any thoughts on that? Ms Webb: Yes, I think those are exactly the concerns that we have. If you are a tenant in an ALMO that has been working towards the promise of money, what has happened in the most recent housing pledges is bad news for you. We have believed and have been arguing, I think, as far back certainly as 2005, that there should be an opportunity to allow ALMOs to borrow off balance sheet from the public sector. We have been working on a way in which that could happen, we think that is a very important piece of work. It has been slightly subsumed by the work that has gone on around the HRA reform, but we think it is a fundamental thing to the success of ALMOs going forward, that we look at enabling them to stay as public sector owned assets, but allowed to borrow privately off balance sheet. You get the best of both worlds, the best of local authority owned stock and of private borrowing that housing associations enjoy. We think there are solutions around that, and we are hoping that CLG will be prepared to work with us on looking at those solutions. Q16 Mr Betts: Can I just push you on two aspects of that? Firstly, if you cannot get the National Statistics Office to redefine what is public borrowing and what is private borrowing, I think it is actually their responsibility in the end, then you are going to be stuck with some changes to the ownership arrangements of ALMOs which I think were suggested to get the percentage of council ownership down. Does not that then rather take away the fundamental principle that people voted for ALMOs by and large because the houses remained in local authority ownership? Ms Webb: No, you are right about the ONS, although we have been talking to them since 2005 about this, so we are not suggesting anything that we do not think they would agree with. It might sound like semantics, but I think it is actually very important semantics, that our proposition is that the local authority stock is retained in ownership by the local authority, but the ALMO, as an entity, is not owned by the local authority. So what you might have to have, and the statistics people have been listening to us, is the ALMO run by a group of people where the local authority had 49 per cent of the seats on that ALMO, so the stock ownership absolutely categorically stays with the local authority, and that is the fundamental principle. Q17 Mr Betts: Well, is it? Because if the borrowing was going to be allowed under those rules, then it would be the ALMO who would have to do the borrowing. Could the ALMO realistically borrow and get the funding unless the ALMO actually had assets to borrow against and control the rental stream in the future? Ms Webb: Absolutely, it is one of those things about stock transfers that actually most lenders lend on the value of the rental stream anyway. They might talk about the value of the assets but they are actually lending against the value of the rental stream, so they would carry on lending against the value of the rental stream. What you then have to do is balance the length of time that you give them that rental stream borrowing for against the Treasury's rules about risk, and that is exactly the same debate as you have with PFI, and it is the same thinking as PFI. Q18 Mr Betts: Would not the ALMO need to control the rental stream? Currently it is the local authority who fixes the rents, is it not? Ms Webb: It is, yes, but I think that would easily be possible to arrange. Q19 Mr Betts: You would have to transfer the responsibility for rentals to the ALMOs and give them a long-term contract. Ms Webb: Yes but that is no different from PFI. It is exactly the same thinking as you have in PFI. Q20 Mr Turner: The Government has given you a rent rise of minus 2 per cent; do you think that puts the rents out of sync with achieving the Decent Homes standard? Ms Webb: It is our firm belief that the time has come for a major rethink on rents generally. We think that there was a strong case for arguing for the rent convergence policy that we have had over the last ten years, but as with all ten year policies, we are getting to the point of having done that, we have reached that point, and we now need to rethink rents. Rather than just sort of comment specifically on the minus 2, I mean, we do have a view on the minus 2, but it is more to do with the fact that actually, we need a fundamentally new way of looking at rents which allows local authorities, ALMOs and housing associations to reflect local variations and local differences and local offers with tenants in a more, I do not know, what do I say, adult way than is currently the case. We do believe that you need to protect affordability as part of all of that, which is unfortunately why we needed rent convergence in the first place, so there was a bit of a sense that it did not matter how you put the rents up, housing benefit would always pay the bill. Clearly, that is unsustainable, but we have rent levels at the moment in some places with which you struggle to see how any landlord is supposed to make sensible investment decisions going forward. As the professional body, we can encourage landlords to be better at asset management, to fund decent homes going forward, and we do and they have got better, but in any other business, your rental income would be a major determinant of how much you could invest in your housing. It is exactly the same debate as the water companies make about investing in water, et cetera. So there is an argument for looking at rents, but we would not suggest doing it just simply for the benefit of Decent Homes. Q21 Mr Turner: Really it is coming back to the point that we were talking about in the previous two questions, about the housing revenue account and the reforms to that. Do you think the Government is going about that in the right way? Mr Capie: We have been really pleased with the level of engagement we have had with the CLG and with Government on the HRA reform. I think we are very, very clear and we have been calling for reform of HRA for a very, very long time, as I know other people have, and I know there is a real appetite out there in local government to see this happen. There is a huge amount of support for this reform, I think that is the starting point. I think we have seen arguments out there suggesting that all the existing debt should be written off. I do not think that will necessarily be the case, I would say that is extremely unlikely. But we want to see a settlement which is based on fair redistribution of the debt, which is, you know, there is sufficient headroom in that for councils to actually look at the sustainability of their stock going forward. So it is not obviously just about where we are at this moment in time, it is about putting forward a solution which enables genuine self-financing going forward. I think we want to make sure that we do not see a situation where additional debt, for example, is done and loaded in as part of that deal, we want to see a fair settlement where the existing debt is redistributed in a fair way that actually provides that certainty and provides that platform for local authorities to make sensible investment decisions going forward. Q22 Mr Turner: Is not the problem at the moment that the Treasury takes a dowry off the rents of about £300 million, rising up to £1 billion, and they want to see that that is going to be maintained in the future, and the way they are going to do that is by making sure that the transfer of debt is actually higher than what is variously reported as £15-20 billion that is either actual or on the book at the moment? Ms Webb: I think we understand that discussions are ongoing between the Treasury and CLG officials about how to make this work. The single most important thing for us is that a deal is done that enables HRA reform to happen, and to happen ideally in this Parliament. We think that that is fundamental to the housing futures of a lot of local authorities, and to the Decent Homes programme going forward. In an ideal world, it seems very -- I would struggle if I was asked to sell a deal that involved a higher level of debt than is currently in the system. If I was asked to sell that to tenants locally, I struggle with how I would do that. Q23 Mr Turner: Have you actually done any work on what you think the amount -- I mean, there are two things here. Obviously there is the principle that you would not want to take that to tenants, saying that they should pay more than is actually in, and that is a moral stand, if you like, but have you done any work on what is the impact of something more, where that level would come, that would make the whole rent structure incapable of ensuring that you get the Decent Homes standards and possible new building in as well? Mr Capie: There is a lot of different ways that you can model those going forward, in terms of the numbers. There is about £17 billion worth of debt already out there, and then there is the round 1 and 2 ALMO debt on top of that, so about £20 billion. Depending on the different costs and assumptions that you put in there around management costs, around major repairs going forward, you can end up with different numbers. There has been quite a lot of technical modelling done, both by ourselves, as putting ideas and thinking into the mix, in terms of the work we have done with the department, work we have got ongoing with individual local authorities, there are different calculations that you could do which would in effect end up with a different number, plus from that £20 million, depending on how you did it going forward. I think the key starting point for us in looking at what is sustainable going forward is to end up with something which, as you said, enables that level of investment, enables a settlement where local authorities are not finding themselves in a position where they have debt that they cannot, in effect, service going forward, in a way that actually gives them the flexibility to address many of the issues that we have touched on here today, around the quality of housing, not just in terms of what is needed at this moment in time, but in effect some of those fundamental questions about some of the challenges we know we have got to tackle in the not too distant future as well. Ms Webb: There are very few issues that I can think of where everybody involved agrees that change is needed, and there is nobody that I know that defends the current HRA funding system for local authorities, and the way that we are going to fund housing, whether it is private housing or affordable housing or social housing going forward, it has to be a mixture of lots of different mechanisms, because we need large amounts of money, and there is not one place they can all come from, but in that mix is HRA reform. If you did nothing else other than allow local authorities to organise their funding on a 30-year business plan way, even if you did not put any more money into the system, just allowing them that flexibility to behave like other organisations behave, allows them to make better use of their existing resources. Chair: We are pushing up against time, and we need to get on to the discussions about the private sector, which John is going to deal with, and maybe Mr Battersby and Mr Griffiths can respond to. Q24 John Cummings: In your evidence, and this question is primarily to the Chartered Institute of Environmental Health, you tell the Committee that targets should not be set relating to vulnerability of occupants as this can be as much a reflection of changing economic circumstances as changes in housing condition. So how likely is significant progress in the private sector during the current economic climate? Mr Battersby: If I can sort of start off on that, I think the point that is being made is in fact, without any change in housing condition, unlike the social sector, you could theoretically at least meet the target if people moved off benefit. Q25 John Cummings: Can we not talk about theoretics? Mr Battersby: Okay. In reality, local authorities are struggling to meet the targets anyway because of lack of resources. In the main, they are responding rather more to complaint or, if possible, ground inquiry but, of course, local authorities have a mix, they may be giving grants, or grants and loans, and of course at this stage loans are not particularly attractive, so the real difficulty is that for many local authorities, they are not either being able to assess effectively how far they are going along to either meet the target or exceed the target. Q26 John Cummings: So having identified the problems, Dr Battersby, what do you think could be improved in the way in which central government deals with decent homes in the private sector? Mr Battersby: I think part of the problem, we have also said in the evidence, is there is a need for CLG to give a clearer indication, and indeed use section 3 of the 2004 Act to make it absolutely clear the way local authorities should record their information and make the information available. We are, to a large extent, working in a vacuum, because that information is not out there. We have looked at the level of enforcement, and so that is how we have determined, as has already been referred to, there are HMO licence issues, but in the main, it is a matter of responding to complaints. The private rented sector, in many respects, is being left untouched. Q27 John Cummings: What do you think the Government should be doing to rectify this? Mr Battersby: Well, the CLG could be using section 3 to give the direction to local authorities as to the way they should be developing the housing strategies, in fact more explicit guidance to local authorities on developing effective private sector housing strategies, and indeed, how they should be monitoring their progress. Q28 John Cummings: Have you any idea as to why the Government is not implementing section 3? Mr Battersby: Not at this time, no. John Cummings: Any ideas at all? Q29 Chair: Would it put additional costs on local government if they implemented section 3? Mr Battersby: In what way? Q30 Chair: A possible reason why Government might not wish to do it is because if Government puts additional duties on to local authorities, it is generally expected to cough up the money required. If the Government did what you asked, would it be putting additional duties on local government, and would Government therefore be expected to come up with additional money? Mr Battersby: It would not put any additional duty, the duty is already there in the 2004 Act, it is just the way that that duty is being met or not. Q31 Chair: Thank you. Can you just clarify, in your first answer to Mr Cummings, I think you said if people got off benefits, because they would no longer be vulnerable, is that what you are saying? Mr Battersby: Yes, then you move them out of vulnerability. Q32 Chair: But it would not actually alter the state of the housing stock. Mr Battersby: No. Q33 Mr Betts: On the issue of resources, I have a suspicion that there is a power to licence private rented property which has not been taken up very widely by local authorities, it seems to me that there are a lot more problems out there than are being recognised, and that surely is a resource issue. A lot of authorities do not want to go down the route of getting involved in things like licensing because it is quite expensive for them to do. Is that a fair point? Mr Battersby: HMO licensing -- if you are talking about the national mandatory licensing regime -- Q34 Mr Betts: There is mandatory, but very few authorities have gone for more than that, and very few have gone for general licensing in areas of all private rented accommodation. Mr Battersby: And there are very few that have gone for selective licensing. Selective licensing areas are those where all private rented would have to be licensed. I mean, there clearly are resource issues, and that probably is a disincentive. Q35 Chair: But it would have the effect of putting the cost on to the landlords. Mr Battersby: To an extent, I mean, with all licensing, and even the proposed -- a simpler way would be to proceed with the registration of all landlords, and taking up what was suggested in the report from Julie Rugg, that would be better in many ways, because it would not put the resource pressure on the local authorities. The landlords would have to register as part of that registration process, so that would be one way forward of addressing the issue. As I have said in meetings in CLG, local authorities still have to use their enforcement powers, because the less responsible landlords will not register. They have to be found, and the powers have to be used. Mr Griffiths: Just to make the point that a lot of local authority resources have been spent dealing with good landlords who are playing by the rules and are coming forwards for licensing if they have an HMO that is eligible for licensing, and the ones that need more attention inevitably slip through the net, so I think there has been a lot of wasted resources in HMO licensing, plus the fact that an awful lot of authorities still have some way to go, and it would be better actually if attempts were made to improve conditions in the private rented sector by more strategic use of the Health and Safety Rating System. If there was clear guidance from CLG to help local authorities to do that, that would actually remove the temptation to have a reactive approach, which is not actually addressing the needs, because all it does is address the needs of those who shout the loudest -- Q36 Chair: There is nothing to stop local authorities just taking the initiative to have a more reactive approach, they do not need guidelines from CLG telling them to do it. Mr Griffiths: Indeed, I think the problem is most local authorities simply choose to ignore their statutory duty under section 3, but if it was actually made explicit, what is required of them, and there was guidance given as to the best way to do that, that would actually make them use the resources they have much more effectively. Ms Webb: Could I just throw in, just moving on from private rented sector to private sector more generally, and just point you in the direction of some very good examples where health and housing have come together, talking about where you might secure additional resources to help very vulnerable particularly older people in privately owned, non-decent housing? In Sandwell, for example, the PCT is funding a number of pieces of housing work that are specifically aimed at using PCT resources to improve non-decent homes of vulnerable older people. Q37 Chair: We are having evidence from Sandwell later on, so we are not yet aware of it, but we know we are going to be made aware of it, if I can put it that way. Mr Battersby: There are one or two PCTs where that is happening, but again, they are good examples, but they are still a handful. Q38 Chair: Thank you very much indeed, I think we need to move on to the next set of witnesses.
Examination of Witnesses Witnesses: Mr Nigel Long, Head of Policy, Tenant Participation Advisory Service; Mr Michael Gelling OBE, Chair, Tenants and Residents Organisations of England; and Ms Trish Canham, Communications Officer, National Organisation of Residents Associations, gave evidence. Q39 Chair: Same rules as before, do not feel obliged for each of you to answer every question, otherwise we will never cover the ground, and it is up to you to kind of volunteer, but if I think somebody is hogging it, I will obviously intervene. The first question really is about whether, from your point of view, you think that tenants are being kept informed about and involved in plans to manage the Decent Homes backlog after 2010. Mr Gelling: I would just like to say, in opening, Decent Homes has been a great success for promoting tenants' involvement and engagement, and Decent Homes has triggered ALMOs to improve management. Some of the most successful ALMOs are tenant led, for example Cora Carter, my secretary at Kirklees; Alf Chandler, the previous chair of TARO from Hounslow Homes; and Juliet Rawlings, of course, from Kensington and Chelsea TMO, the best formal tenant management organisation that there has been in this country, in my opinion, but that is just me. All have improved their services and management, most have extended the Decent Homes programme to encompass worklessness, for example Nottingham City Homes, chaired by Janet Storar, a tenant, has a programme of One in a Million, so for every million pounds that is invested into a contractor, a trainee apprentice has to be taken on and employed. Currently, there are 200 new apprenticeships, so far 40 have been taken on, covering plumbing, plastering and electrics, joinery et cetera. Q40 Chair: So the answer to the question: have tenants been kept informed and been involved in plans to manage the backlog after 2010, Mr Long? Mr Long: I think the answer to that, Chair, is that yes, the Decent Homes programme has been an incredible success, and there are lots of examples of tenants being involved in ensuring it is delivered effectively on the ground, and I think people are aware of the funding constraints, and that is why I think there is a big push towards the setting of local priorities. So for TPAS the debate would be how you move towards more local prioritisation, tenants making decisions on the ground, and therefore how they can access the funds through their landlords to actually deliver the next stage of Decent Homes. I think the previous speakers are right, we really have to think about Decent Homes 2, son and daughter of Decent Homes, but for us at TPAS the key thing is how we can build upon what has been the real success of tenant involvement in the first phase of Decent Homes, and ensure that takes us forward in the second phase of Decent Homes to deliver value for money again, but the answer to your question is yes, I think people are aware of constraints, but they are keen to address the challenges in the next phase. Q41 John Cummings: TARO tells the Committee that Decent Homes standards are relatively weak. You also tell the Committee that you feel that steps should be taken to improve upon these, so that the national acceptable minimum standards across the sector are raised year by year. What specific elements of the current Decent Homes standards are weak, and what would you suggest we do to improve it? Mr Gelling: Well, the elements that are weak are the basic elements that tenants look at, so if you ask anybody, what would you class as a decent home, they would not say, well, if I had a modern kitchen at least 20 years old, that would be a decent home, and that is a standard with the Decent Homes. They would not say a reasonable modern bathroom, 30 years old or less, would be a decent home. Ordinary tenants are quite surprised when they see what a decent home standard is, because it is a very low bar. We would say that some of the best organisations that have gone down this road of Decent Homes have had Decent Homes Plus, because they have had tenant involvement, and they have added to those, those requirements of Decent Homes they have added to, so it has been a far more improved Decent Homes standard that they have signed up to. Mr Long: Could I just add to that, because I think Michael has made a very powerful point about initial standards, but what has come out of the consultations around the country is that often, Decent Homes standards themselves are not what is critical to people living on estates, hence the debate about the environment, and hence we have seen examples of landlords around the country not just delivering the Decent Homes, but improving the estates where people live as well, addressing anti-social behaviour, doing basic things, like actually it is much more important to get the security right first before you change the bathrooms. So the Decent Homes standards are weak at one level, and in the next stage of Decent Homes, what we have to do is not only, I think, address some of the low level standards, but address the wider issues, and I think the proposals around reforming the housing revenue account suggest that that might be being addressed. Ms Canham: I agree that the external environment is really important as far as the Decent Homes standards go. It seems that they are vital for people with physical and mental well-being, to have a good green environment, or access to a green environment. Locally where I come from, we have an officer who deals with something called local community action plans, so she visits all the communities to find out what they value most, and top of the list every time is access to green space, whether it is just a small patch locally, or somewhere larger. I think it is most important that that should be included. John Cummings: I would very much like to hear perhaps TARO tell the Committee what you think is good about the Decent Homes standard. Chair: I think we had that at the beginning, Mr Gelling outlined what he thought was good. Can I pick up -- John Cummings: I must have misunderstood there, Chair, because it did come across by Mr Gelling that there appeared to be nothing positive about the Decent Homes standards. I am perhaps mistaken in that assumption. Q42 Chair: I think at the beginning, in his introductory statement, he said a lot of good things about the Decent Homes programme. But the question I would ask is: I accept that tenants would suggest that the standard of Decent Homes is too low, but given that many homes were actually below even that very low standard, surely they do accept that it is a good idea to bring every home up at least to that low standard? Mr Gelling: I cannot object to what you are saying, but if you are living in a property that is below Decent Homes standards, I mean, why are you paying rent for that kind of property? That is the reality. But there is an expectation; if you empower people, if you involve people, as ALMOs do, as co-operatives do, as TMOs do, as some local authorities do, and as some housing associations do, and you raise their expectations, and they are involved in a Decent Homes programme, and the choices are there, as Nigel was saying, about the environment, and everything else is in that package, and how it is going to be funded, because it all should not come from housing either, the expectations have been raised. I am saying there are huge amounts of good work done under the Decent Homes banner, but the Decent Homes banner itself, in itself, by itself, is not a really high standard to achieve, but because of the involvement and the expectations and the work and the positiveness about doing work in a place, because we are investing in places, it is the additionality that goes with that that raises that expectation, and the quality of life for people in that environment. Q43 John Cummings: Have you drawn any general lessons about the best ways to involve tenants in the Decent Homes programme? Mr Gelling: If I had the template, I think I would be a millionaire, because what works for me as a tenant, with my landlord, might not work for you if you were a tenant with your landlord. Q44 John Cummings: How many landlords are you dealing with? Mr Gelling: Well, there are something like 2,300 housing associations in the country, there are 100 local authorities with retained council stock, there are 100 ALMOs, I think. Clive is far better briefed on that. Q45 John Cummings: What about private landlords? Mr Gelling: I do not know a great deal about private landlords, but in the 1996 Housing Act, when it set up the independent Housing Ombudsman, private landlords could voluntarily join. Q46 Chair: I think Ms Canham deals with private tenants, so it might be more appropriate for her to speak on that. Ms Canham: I do not have a lot of experience with private landlords, but I would like to say that according to the statistics, 80 per cent of the properties in this country are owned privately, and I would ask whether the Decent Homes standards actually is extended to that sector, because there are, I think, millions of vulnerable people living in private rented accommodation. Q47 Chair: Sorry, the Decent Homes standard is supposed to extend to the vulnerable people in private rented accommodation, so that is supposed to happen already. Mr Long: What is interesting is that all the landlords that have delivered most effectively in terms of Decent Homes, they have all worked with their tenants, they have all set up forums, forums that often have overseen the process of Decent Homes in their area, these forums have often set the priorities, so there is a lot of evidence that where landlords are committed to effective tenant empowerment and tenant involvement, they work closely with them, and that has led to the Decent Homes programme being more effective on the ground and we give a number of examples in our submission. The second area I bring out in terms of good practice is, if you like, the other party to this process is the contractors who do the work. Again, where you get effective contractors who are committed to resident involvement, and they are working with the landlords and they are working with the tenants, you get much better performance, and we have seen that with companies like Lovells, Mears and Frank Haslam Milan. We see really good practice. So it is possible to deliver really effectively on the Decent Homes, despite, if you like, the threshold standards, and it is possible to do that where the tenants and the landlord and the contractors are working effectively together. One of the things we would advocate, Chair, is the importance of contractor accreditation, ie the best contractors we would expect to show that they can deliver on resident involvement before they can actually undertake a contract. We think that is a very important part of the jigsaw. John Cummings: In view of what you have told the Committee, should tenant involvement be formalised still further? Q48 Chair: Yes or no I think is the answer to that. Mr Gelling: Yes, I would say. Mr Long: The answer is yes. Q49 Mr Betts: Coming on to the extra works that might be incorporated, and you have been making various submissions that environmental works ought to be part of bringing housing up to a decent standard, looking at community facilities, things like play facilities for kids, anti-social behaviour has been an issue, so maybe community wardens I know in some areas have been very popular, but are any of these functions really landlord functions as such when they are going to be carried out for the benefit of the whole community, not just those that pay their rent? Mr Gelling: I would say that a landlord does have a responsibility, as do others. I mean, the police have a responsibility to be involved, the Primary Care Trust has an obligation to be involved, so it is not just about housing, it is about people's quality of life. A person who pays rent is no less a person than who owns their own property, and they have an investment in that community, so they would expect their landlord to engage with other agencies when that improvement is coming online to see whether or not the other agencies had resources to put in there to assist. Q50 Mr Betts: I was not in any way suggesting that tenants were lesser people, what I was suggesting maybe was if, say, a community warden service is provided, or there are general improvements to the open space in an area, and they are paid for out of tenants' rents, then tenants alone are paying, but the whole community gets a benefit. Is that not a problem, that we somehow -- maybe landlords are a good mechanism for dealing with this, but do we have to have the funding done by different means? Mr Long: I think there are two, possibly three issues here. The first is that most of the problems on the ground require a range of players to be involved, the landlords, the police, health and so on and so forth, probation and what have you. Clearly it is wrong for tenants to pick up the bill for funding the bulk of that activity, and I think one of the big debates that is taking place now around the reform of council housing finance is what should be charged to the tenants and what should be charged to the general taxpayer. I take the view that there should not be double taxation, and the taxpayer should pick up the bill for all things such as police, rather than things which are direct landlord responsibility, so I think that principle is probably quite clear. I think the third point though is what is becoming clear to me is that if there is not clarity over what should be charged to rents and what should be charged to the general fund, and there is not, but if there is to be clarity on that, then there has to be the acceptance of a role for the wider community, and there is a limited role for what tenants should pay so they do not pay twice, and that issue is still not clear in the current consultation on council housing finance reform, and there is still a debate to be had. I suppose the last point, the fourth point, if I may, Chair, is when local politicians are faced with a choice between funding a PCSO or funding something to do with health, and I think of Sheffield's sheltered housing schemes and the healthy eating programme on that, but when politicians locally are faced with that choice between funding that and not funding that, what they end up doing is trying to fund that, and that often does mean taking it from the housing revenue account when in principle it should come from the general fund. Q51 Mr Betts: Can I just move on to another issue, we have partly touched on it before. There is some fairly obvious belief that the Decent Homes programme, because the Government has laid down targets, has actually driven forward a national programme in a way that probably has not happened before in this field, but if we move on now into looking at the future, when you ask people, should all tenants across the country, irrespective of where they live, be entitled to the same standards that the Government is going to lay down that everyone has to deliver, people will probably say yes, of course they should. If we also say, should there be real emphasis on discussion and participation with tenants at local level, and their views taken into account, then of course they should. But what happens if tenants in different parts of the country have different views about what should be done? Mr Long: My take on that would be that the current move from the TSA towards local standards is so crucial, and that should be emulated in terms of Decent Homes, if a community wants to establish a higher standard, and they can find ways with their landlord to fund that, then that is for the tenants to make that choice, working on the ground. So local priorities is a really important thing for me, setting local standards is a really important thing for me. There clearly needs to be a minimum standard across the country, but above that, tenants should in their own communities set the standards. But then you come back to that fundamental issue: how do you pay for it? Mr Gelling: There is the other issue about empowerment, the TSA are looking at empowerment and what the empowerment standard is, and that will mean different things for different people, but as long as there is a core standard that you cannot come under, you can build on it, you can deal with it in different ways, and you can achieve it by doing different things, that should not be a problem, because you will always get diversity in this country; no matter where you live, you will get that diversity in reaching the same aim, and people will get there with different paths. You have to allow that flexibility. Q52 Mr Turner: When an ALMO or an LSVT comes along, the stuff that is put on in front of tenants is fairly good stuff, in the sense that you are going to get a lot of Decent Homes standards and all the rest of it. Why do you think tenants in some places do not take the advice of their local authority and approve it? Mr Gelling: Why does not the local authority take the advice of the people who elect them? At the end of the day, tenants live in a property, it is their home, the landlord, whoever the landlord is, and housing association tenants do not have that choice yet; it might be there, on a piece of paper, but it does not really happen with choice from tenants, but I think you have to look at the different circumstances of those organisations where tenants have decided not to transfer, and you have to go and talk to people about that, and maybe -- Q53 Mr Turner: Can I just interrupt, I was not just talking about LSVTs, I did mention ALMOs as well. Mr Gelling: Maybe people do not realise the value. It is about how you approach the subject with people, it is about what promises are going to be made, and can they be kept, and what promises have been made in the past and not been kept, so why should I trust you this time? You are going to transfer, I am going to have the best thing since sliced bread as far as my house is concerned, it has never happened in the past. I think there is a lot of trust and faith, and you just cannot turn a thing round in a couple of years and say this is going to happen. Mr Long: TPAS would take the view that it is up to individual tenants within their own landlord and on the ground to make a judgment as to what is the best way to generate the funding to improve their estate, so it might be that the best way to do it is through a stock transfer, it might be the best way to do it is through the ALMO route, they have to make that judgment on the ground, and my experience is they do make those judgments, which is why there have been a large number of stock transfers. I think what happens in some places is that tenants are just not convinced by the people pushing a particular course of action, and that tenants just do not believe the current director of housing, or the consultants who have come in. It has varied across the country, but often tenants have, perhaps against their better instincts, gone for some of the more radical options, the stock transfer options, because at the end of the day, they want to create decent homes, decent communities. I suppose in a sense it would have been better if right at the start, local authorities had been able to have access to the resources that you can only get at the current position in the private sector. Q54 Mr Turner: I think you were in the room when we were talking earlier with the other panellists about the Government's housing revenue account proposals for the changes there. How important do you think that is for tenants? Mr Long: I think it is crucial. I think I personally, TPAS personally, if I can say that -- Q55 Chair: TPAS can be personally, as an organisation. Mr Long: Yes, TPAS support the self-financing option, but clearly the issue of the debt needs to be addressed. Richard from the Chartered Institute of Housing was raising that issue, clearly the issue of debt needs to be addressed. We are coming to the conclusion that yes, writing off the total debt was unlikely, but we think there needs to be some balance between writing off debt and reallocating debt, and we think perhaps the key factor there might be some resources have got to take account from what it is like to deliver services in the longer term in high cost areas. It is one thing to move to self-financing in a relatively low-cost area, but to move to self-financing in Islington or Kensington and Chelsea where I used to work, or Westminster, is a very different thing. So it might be that actually one looks at some combination of debt write-off and debt reallocation, but the debt issue has to be addressed, and I think the high cost of the service issue has to be addressed. Q56 Mr Turner: NORA states that in principle, the provision of social housing should be devolved to a local level, however there needs to be a system of allocating funds to deprived regions where tariffs or section 106 funds may be inadequate. I wonder if you could just expand on that, and tell us what you mean. Mr Gelling: We support the proposal, but it is about local authorities having the ability to do a 20-30-year financial business plan, so people know exactly what the game is that is being played, and how the investment is going to roll out. I think also I would say this. I used to sit on a local authority, I used to be on the housing committee, I think you cannot ringfence enough the money around housing revenue account, because that is so vital that it is not leaked anywhere, because that is one of the major problems in the past why we were left with properties that needed so much more investment in them at this current time. There is an asset here, and it has to be looked after properly, but local authorities have to have the ability to plan that financially, so there has to be some kind of continuity; even if Government changes, even if ministers change, there has to be some continuity with that kind of financial business plan, to make that happen. Ms Canham: I think talking about section 106 contributions, I have heard and had experience of local authorities who, despite having the chance to collect considerable amounts of money during the housing boom, have not actually been very efficient about collecting these amounts of money, and in some cases, they have been totally lost, and I think there actually needs to be in place some sort of method of ensuring that local authorities are collecting these amounts. Q57 Chair: Can I just clarify, Ms Canham, do you actually have knowledge of the private sector, the private rented sector? Ms Canham: It is mainly only owner occupied, rather than rented. Q58 Chair: So not private rented sector? Ms Canham: No. Q59 Alison Seabeck: Finally, the newly set up TSA have been out having a national conversation, as they called it. How impressed have your organisations and your tenants been, and indeed the landlords you have had contact with been with that process? Mr Long: TPAS are very supportive of the TSA. We think in its short life, since last December, it has made some significant progress. In the first phase of its national conversation, it got responses from 27,000 tenants, which is pretty impressive. In the second phase of its consultation, it has now had responses back from around 700 stakeholders. TPAS has undertaken some of the consultation on behalf of TSA, so I need to be open about that. We think it has made real progress, and we are really looking forward to the publication of the next set of standards, the statutory consultation phase that TSA is going to go through, so I think the answer is it has shown so far a real commitment to tenant empowerment and tenant engagement, and that is really to be welcomed. If it has a weakness at the moment, I would say it is in danger of overegging the pudding a bit, and it must not claim too much progress, but I think its general philosophy and the way it is going, and its commitment to involvement, has been very successful. There is still a way to go. We did a whole bit of work around BME communities on behalf of the TSA, and I think it was interesting that perhaps the TSA has not reached out enough into both the vulnerable, the communities of vulnerable people or into the black and ethnic minority communities, and I think that is a further piece of work, but I think as a general rule of thumb, I think the TSA has done very well. Mr Gelling: I would endorse everything Nigel has said, but there are other things that happen outside of the formal consultation that TSA went down, and many tenants in our organisation, we have a structured organisation of currently about 5 million people, they have had their own consultation, they have been talking to their own landlords for the very first time, some of them, so real meaningful conversations have taken place between landlords and tenants that has never happened before. Q60 Alison Seabeck: It has been a catalyst for discussion? Mr Gelling: If nothing else, the TSA has done that, and you will find that a lot more tenants now are a lot more streetwise about regulation and expectations. Q61 Alison Seabeck: Can I say, I was really encouraged by what you were saying, but how much of the new engagement is with people who are within the private sector, private sector tenants and their landlords? I mean, it is largely social, housing associations? Mr Gelling: We have not a membership with any private tenant but we do meet private tenants at many of the conferences that we go to, because they come along, and it is like a second class citizen as far as rented accommodation are concerned. They do not have the same regulation, they do not have the same accountability with their landlord, or their landlord has to them; the regulation is not there. So it is a different world, and people actually aspire to be in our sector. Q62 Chair: Final, final question: Ms Canham, are you suggesting that the Decent Homes standard should be extended to owner occupiers? Ms Canham: Yes, most definitely. Q63 Chair: How would you see that working? What if an owner occupier is living in a home below a decent standard, is it to be declared unfit? Ms Canham: I know this is not easy, but I think it should probably be extended through the planning system. We hear all these stories that have been in the press recently about rabbit hutch Britain, the smallest new build in the whole of Europe. I think we have a generation of young people who are going to be condemned to living in the most -- Q64 Chair: So are you suggesting it is new homes that vulnerable people are living in that are below decent standards? Ms Canham: No, there are two issues here. There are the older homes which are obviously unsuitable, the owners cannot afford to repair them, there is a large proportion of those, but also if we think about decent homes as a vision for the future, I think somewhere it needs to be incorporated that we need standards that will prevent slums of the future being built privately, because there are huge estates being built over the past few years where people do not have the basic space. I mean, the Government has regulations, for instance, for recycling, but there is nowhere within these tiny pods, as they are called, where you could possibly do things like that, where young children have no room to study, to do their homework. Q65 Chair: That is hugely beyond the Decent Homes standard. Ms Canham: Yes, I know what you are saying, but in a way, the vision that is encompassed in Decent Homes should perhaps be incorporated into something else which covers what we are building in this country for the future. Mr Long: Could I just add something on owner occupation, because, of course, what has happened is demographic trends are having a major impact upon owner occupiers, because we have got an increasingly elderly owner occupier population, and that throws up a whole series of big policy issues, and that is where this whole relationship between health and housing, the strategic role of housing is so important. My take on this would be that we have to ensure that by Decent Homes in the owner occupied sector, we are talking about increasingly making sure those properties are accessible and remain mobility friendly as people age, another huge issue around low income BME owner occupiers and how we address their needs, but it is to do with the aging population, and the fact that owner occupation has taken in a bigger number of lower income households. That has to be addressed at some point, but I think that is probably beyond your remit. Chair: I think it is. Thank you very much indeed. |