Examination of Witnesses (Questions 100-113)
SIMON NUNN,
HELEN SCADDING,
KAREN STALBOW
AND DAL
WARBURTON
8 JUNE 2009
Q100 Mr Drew: Is there not another
group that we should consider—a group that has not had the
opportunity of getting into housing? They are often in relatively
cheap private rented accommodation, are in unstable jobs, and
are certainly in unstable relationships. The recession has put
them so far down the pecking order in their opportunity to get
a house, a job and a relationship that will last that it is quite
worrying. They may come to you for advice, but the reality is
that you can't do much for them.
Karen Stalbow: Generally, in terms
of Shelter, people in the private rented sector tend to come to
us for advice if they are facing eviction or if they have problems
with the condition of their property. The private rented sector
is a mixed bag. For some people, it operates an incredibly good
housing option and enables them to have the mobility of moving
about between high-paid jobs. I don't necessarily know that everybody
is experiencing poor conditions or a poor relationship. On the
other side, the private rented sector is increasingly used for
households experiencing, or at risk of, homelessness; they approach
their local authority for advice and assistance and sometimes,
if in priority need, are offered the private rented sector as
a housing option. To a certain degree, yes, there are people in
there, but whether they are untouched by the recession I would
not be able to say specifically. I certainly know that there are
households that are using the private rented sector as a consequence
of having been in housing need.
Helen Scadding: It is also about
outreach. Increasingly, it is important that we look to provide
services outside our traditional venue. It is about partnership
working. We could deliver financial capability sessions or advice
surgeries in a children's centre or in a community centre where
some other activity is taking place. I have talked about working
in the area where people are directly employed; that is a critical
area for us to move into. It is another important way for you
to do more preventive work. Rather than seeing us as somewhere
that people come to when they hit a moment of crisis, you use
your advisers and your volunteers and you move into the community.
You work with community organisations and, for example, in partnership
with the local authority.
Q101 Chairman: Thank you. May
we move on to the range of measures that the Government have brought
forward to offer support to different groups, and whether you
believe they have been successful? This might seem a little unfair,
but some of you may have been around during the last recession
in your particular field. Some of you clearly may not have been.
Do you have a sense that some of the measures introduced this
time around have taken up some of the lessons learned from previous
recessions? If not, why not? Clearly, the take-up of mortgage
rescue schemes so far has been minuscule—a handful of people.
Why is that? Is it simply that the scheme was slow getting off
the ground, or are we not getting the message across clearly enough
to the organisations that need to hear it? Do you have a view
on that?
Simon Nunn: On mortgage rescue,
take-up has been small. There are a number of reasons for that,
including the fact that the criteria for people being eligible
are drawn narrowly and that the Government obviously have finite
resources. If you look into our submission, you will see the current
figures for the south-west. On the more positive side, when you
look at the figures provided by the Department for Communities
and Local Government, the vast majority of people who have applied
to local authorities in relation to mortgage rescue schemes are
referred on by local authorities to other sources of advice, as
they are not eligible for the scheme. The figures for people approaching
local authorities are positive. I would encourage people to go
to local authorities. They get signposted to other mechanisms
which, hopefully, result in their home not being repossessed.
There is a big time lag as well. There is a delay. It is a long
process from becoming eligible for mortgage rescue, going to the
local authority, being assessed and then being referred to the
registered social landlord. There is a waiting period. I think
we will see take-up increase in the mortgage rescue scheme as
we go forward.
Q102 Dr Naysmith: Could that bureaucracy
be cut a little bit? Can the long drawn out process be shortened
and simplified?
Simon Nunn: It could be, but you
have to go through certain processes. The Government would be
criticised far more if they were seen to be bailing out people
who were perhaps not seen as deserving it, rather than going through
quite a comprehensive system.
Helen Scadding: It still feels
to me—I don't know whether you agree with this from a national
perspective—that it is rather early days. I know there is
talk that the recession might not be as long and as deep as people
thought, but from our perspective it feels like it is very early
days. We only saw in the last six months these really big increases
in inquiries. Looking at the summer and then the autumn will be
more critical, when people see the impact of some of the changes
that have happened at work trickling down and impacting on their
rent, their housing and their mortgage. I'm not sure we've reached
that stage yet.
Q103 Chairman: Do you have the
sense that the task group, which some have criticised as being
particularly business led—obviously, you are part of the
wider economic task group—should shift its emphasis away
from business concerns through to issues of inclusion? Do you
think there should be a shift of emphasis in that body?
Helen Scadding: I think it needs
to do both. I am sorry that that is rather hedging my bets, but
obviously it is critical that the agencies look at supporting
business in the south west and look at the south west as a whole,
as a region, and at regeneration and investment inwards. But we
see little emphasis on the issue of vulnerable clients and financial
inclusion for everybody. There is no emphasis on that. One of
the reasons is that we are working with a regional development
agency that does not see—I meet officers who tell me this—removing
barriers to employment, to financial inclusion and to mobility
as a key priority area for its work. That is not really what we
are here for. We are here to promote business, and making that
link between the client journey—particularly the client
journey of the most disadvantaged, and large swathes of the population
like women returners, women with children or people with caring
responsibilities—for us is critical. That is critical not
just for Citizens Advice, but for lots of voluntary sector organisations
who have been working closely with those agencies to say, "Yes,
let's look more strategically at broader issues such as barriers
to employment and reducing financial exclusion." These are
critical to the well-being of the south-west as a whole.
Q104 Chairman: Are you surprised
at the RDA's response?
Helen Scadding: I think it is
changing and I think we have seen real change over the last two
or three years. My own view is that it is still quite slow. I
don't know about others, but despite being on a number of forums
and being possibly quite actively involved in regional social
policy development with a number of Government agencies, I still
find it quite hard to engage in clearly identifying what the priorities
are and how our evidence and our data can have an impact. We have
a lot of data and a lot of social policy evidence.
Q105 Chairman: One of the RDA's
drivers, in terms of putting funding into different areas, is
the number of jobs created, and clearly some of the issues you
have raised suggest that because it is not engaging with your
sector particularly well, it does not therefore understand how
to get some of these people back into work in a way that is positive.
Do you agree?
Simon Nunn: In general terms,
we commented in our submission. Post-SNR structures and other
things have come up at an unfortunate time, when there is a need
for co-ordinated activity across the region around economic growth.
There needs to be a culture shift in the RDA in the south-west.
There is still a boom time mentality, which saw economic growth
in the south-west being achieved through raising productivity,
rather than making job creation a key part. That culture is quite
entrenched in the RDA. There are initiatives whereby you can join
up all those things. We were calling for huge investment in social
housing, but in terms of regenerating the south-west economy,
you can link in all those things, which will be about supporting
the construction industry, increasing the supply of social housing,
helping people access work—where you have social housing,
it is easy to have things such as training schemes to get tenants
into work—and building capacity in the south-west around
green technologies. It will be a win-win-win situation if we have
that kind of investment. We have not yet seen that kind of co-ordinated
approach emerging.
Q106 Dr Naysmith: Has anyone suggested
that to the RDA, or submitted things to say that that is what
it should be doing? What has been the response? Does it just say
that it is its job to stimulate more housing, and it doesn't matter
what sort it is?
Simon Nunn: Our two organisations
have been pushing the matter nationally rather than locally.
Q107 Mr Drew: None of you specifically
mentioned the rural perspective of the south-west. We are one
of the most rural parts of the UK. Is there a rural dynamic? We
know that there is in terms of housing, but in terms of the nature
of the problems that people face, rural isolation adds to it.
Is there a sense that people are increasingly being driven to
urban areas if they are of lower means, because they just can't
afford some of the offset of costs of their current situation?
Helen Scadding: There has always
been an issue in the south-west about what we call the finance
gap, which is the combination of relatively low wages—a
factor of rurality—high housing, utility and transport costs.
Some services are high-cost as well, which leads to that finance
gap. We have relatively good, high employment—that has always
been the issue for the RDA. Unemployment is actually very low.
There is quite a lot of employment that is low-paid, seasonal
or temporary—those are the key issues in some of the more
rural areas. There are issues around service delivery as well.
One of our key concerns is that increasingly for the voluntary
sector, it is extremely difficult to provide the type of face-to-face
services with the capacity you need to be a voluntary sector organisation
in very small communities. You cannot run a voluntary sector organisation
on a turnover of £50,000, £60,000, £70,000 or £80,000,
even with volunteers. Increasingly, the voluntary sector is facing
that difficulty, whereby it is having to retrench, to a certain
extent, to larger agencies and rely more and more on telephone-type
services. That is another area we will see in rural areas. People
will find it more difficult to see a person face to face and get
face-to-face support in the long term for issues of concern. I
think there are many rural issues. We make reference to the Commission
for Rural Communities—it has just issued a big, detailed
report about the financial crisis and rurality, to which we contributed
a great deal of evidence.
Q108 Mr Drew: Housing—does
anyone want to comment?
Simon Nunn: One factor linking
the rural housing issue with the economic situation is that evidence
shows that the exodus of younger people from rural areas is larger
in the south-west than anywhere else in the country. It is younger
people of employment age who are driven out of rural communities
by high house prices and lack of affordable housing. In the medium
to long term, that will have disastrous economic consequences
for rural communities.
Q109 Kerry McCarthy: What is happening
in the buy-to-let market? Are you seeing any impact from measures
such as the easy-buy and shared ownership schemes? Is pressure
growing on the social housing sector, owing to insufficient availability
of private rented accommodation and people not choosing buy-to-let?
On the other hand, are more people able to get on to the housing
ladder because of the shared ownership schemes?
Simon Nunn: On shared ownership,
which I mentioned initially, our evidence is that, because of
the lack of take-up, the Government and CLG are starting to question
whether shared ownership products are valuable. As a sector, we
would say, "No, no, no, it is a valuable product." Universally,
when I speak to housing associations about shared ownership products,
they say that the demand is there, but lender behaviour is holding
it back: they just will not lend to low-income families. That's
the real problem. The Government really needs to focus on lenders,
either using Northern Rock or, where they have nationalised banks,
by moving in and creating some specialist lending vehicles for
shared ownership. That would help massively. I don't think there
is any evidence of a lack—the private rented sector is not
contracting at the moment; I don't see that at all.
Karen Stalbow: We have evidence
from our Bristol advice centre that Bristol city council has been
inundated with private landlords looking to rent their property.
They are actually in a position where they are not able to sell
it, so it's an opportunity for them to be able to generate an
income by renting it. As far as we understand, the council has
taken on a third deposit bond scheme worker to deal with the increased
demand.
Q110 Kerry McCarthy: In Bristol,
I am observing an increasing number of people buying up family
homes and turning them into flats. To some extent, they are managing
to squeeze a huge number of properties out of them. I accept what
you say about accommodation being available and that people are
telling the council that they are looking for private rented tenants,
but does the accommodation tend to be flats? Is there a shortage
of family homes? With the demographics in Bristol, the demand
for quite large family homes has increased in recent years.
Simon Nunn: I can only speak from
experience of living in Bristol and what I see around me, but
I think that you are absolutely right. Family home rents in Bristol
are still very high. Retrospectively, there has probably been
over-development in Bristol down by the water and around the docks—all
one and two-bedroom flats. That is the key for housing association
purchases. I know that housing associations have bought some flats
in Bristol. They have bought some good properties in Bristol.
However, the real shortage facing our sector is of family homes.
People are saying that there is a big opportunity out there, with
lots of privately built properties in Bristol just sitting there.
They could be got on the cheap, but they are neither use nor ornament
to many housing associations that need to house families.
Q111 Chairman: In evidence from
AdviceUK, a series of proposals were made. You comment that a
relatively small amount of funding will have a significant impact
on the ability to meet increased demand. What is a relatively
small amount of funding from your perspective? What numbers are
you talking about?
Dal Warburton: Centres with three,
four or five caseworkers might want to expand their capacity.
I think that the figure was included in the report. However, you
could immediately increase your capacity and see a further 200
clients a year by employing a further worker. I think that the
figure quoted was about £58,000 in terms of full-cost recovery.
Q112 Chairman: The most optimistic
scenario is that it could be a blip with a tail that will go into
your sector for about six months. Is the money therefore best
targeted at that type of support, or should it go elsewhere? The
situation is difficult to read.
Dal Warburton: This is one of
the issues related to the question of how you respond to demand.
You need to look for ways to respond flexibly to demand, and to
be able to do that you need to have organisations that have a
relatively strong centre, to be able to recruit extra staff and
to monitor their work.
Q113 Chairman: Are there enough
skilled staff out there to recruit?
Dal Warburton: The information
that we are getting is that recruitment is increasingly difficult,
although people in our membership are saying that they are advertising.
Helen Scadding: I think our service
is slightly different because we have a national training programme
for all the volunteers involved with Citizens Advice. To a certain
extent, many volunteers see it as a route into employment—more
than 30% of them move into paid employment, either within the
service, within other advice agencies, or in a different field
altogether. To a certain extent, we are "growing our own"
continuously Returning to the FIF (Financial Inclusion Fund) model,
which I commend, one of its beauties is that it is based on a
full-cost recovery model, which I think our agencies would very
much support, so it has an aspect of sustainability. Another unique
aspect of the model is that it looked to recruit apprentices who
would train for eight or nine months to become financial inclusion
advisers. The first three-year funding package was targeted in
that way; it was very front-loaded towards the first year, where
there would be a lot of training and recruitment. In fact, that
has led to an influx across the country of trained financial inclusion
workers, of which there are about 18 in the south-west region.
We want to see an increase in that model and we are hearing some
good news in that area. For us, that is a critical campaign. One
of our points is that, increasingly in today's society, small
voluntary sector organisations struggle, because they have to
have a broader core capacity around them to provide. That is particularly
the case in relation to contracts; the main way in which voluntary
sector organisations that provide a front-line service are going
to survive is by winning contracts to deliver services. This is
also a rural issue—going back to Helen's point about rurality—because
what we are seeing more and more is a kind of M5 corridor to funding.
It is going to become increasingly difficult to get funding outside
that corridor, particularly from major private sector contractors,
who are winning. They want to put the funding in the main centres,
where they think they can get away with serving the most clients.
Karen Stalbow: Shelter is keen
to see legal aid availability extended. Numerous clients who come
to us with mortgage arrears problems are not eligible for ongoing
free legal aid funding. That can be true even if they are thousands
of pounds in arrears, which severely constrains our ability to
help borrowers or to engage in casework before a crisis point.
In order to be able to have the early intervention that we have
been talking about, extending legal aid availability for a time-limited
period, and specifically for homeowners who are at risk of repossession,
would be really important.
Chairman: Thank you. We will take that
away and consider it. Thank you all very much for coming and giving
evidence; we very much appreciate your time.
| 
