Beyond Decent Homes - Communities and Local Government Committee Contents

2  The Decent Homes programme

The target

9.  In 2000 the Department for Environment, Transport and the Regions (DETR) published its Housing Green Paper, Quality and Choice: A Decent Home for All. It stated: "We aim for a step change in the quality of the stock and the performance of social landlords and are committed to ensuring that all social housing is of a decent standard within 10 years".[12] In 2000, DETR set the following objective:

Objective II: offer everyone the opportunity of a decent home and so promote social cohesion, well-being and self-dependence.

Ensure that all social housing meets set standards of decency by 2010, by reducing the number of households living in social housing that does not meet these standards by a third between 2001 and 2004, with most of the improvements taking place in the most deprived local authority areas as part of a comprehensive regeneration strategy.[13]

Following the Spending Review in 2002, the objective, now led by the Office of the Deputy Prime Minister (ODPM), evolved to include the private sector:

Objective III: deliver effective programmes to help raise the quality of life for all in urban areas and other communities.

By 2010, bring all social housing into decent condition with most of this improvement taking place in deprived areas, and increase the proportion of private housing in decent condition occupied by vulnerable groups.[14]

In 2004 this was reiterated:

Objective V: Ensuring people have decent places to live by improving the quality and sustainability of local environments and neighbourhoods, reviving brownfield land, and improving the quality of housing.

By 2010, bring all social housing into a decent condition with most of this improvement taking place in deprived areas, and for vulnerable households in the private sector, including families with children, increase the proportion who live in homes that are in decent condition.[15]

The Comprehensive Spending Review in 2007 set Departmental Strategic Objectives (DSOs) for what was now the Department for Communities and Local Government, for the period 2008-11. These included:

DSO 2: To improve the supply, environmental performance and quality of housing that is more responsive to the needs of individuals, communities and the economy.

2.7 Percentage of non-decent homes in the social sector

Measure of success: To reduce the percentage of non decent homes reported by Registered Social Landlords (RSLs) and local authorities, from the baseline of 21.8 per cent as at 1 April 2007.

2.8 Percentage of vulnerable households in decent houses in the private sector.

Measure of success: To increase the percentage of vulnerable households in private sector decent homes, from the baseline of 59 per cent in 2006.

While the target has remained in substance the same since 2000, its status has changed. Until 2007 the target was a Public Service Agreement. It then became a Departmental Strategic Objective. We discuss later in this Report the evidence we have received on the significance of this transition, particularly in relation to the part of the target that deals with private sector housing.

10.  In order to implement the policy goal, a definition of decency was drawn up: the decent homes standard. The criteria defining decency require of a home that:

a) It meets the current statutory minimum standard for housing;

b) It is in a reasonable state of repair;

c) It has reasonably modern facilities and services; and

d) It provides a reasonable degree of thermal comfort.[16]

We discuss the detail of each criterion later in this Report.

11.  The standard has evolved slightly over the ten years of its existence. The criteria against which 'decency' is measured were set early in the programme and were changed in 2006 by the introduction of the Housing Health and Safety Rating System (HHSRS) under the Housing Act 2004. Absence of Category 1 hazards under the HHSRS became the test of criterion (a), replacing the previous statutory 'fitness' standard. CLG believes that "the tough new statutory assessment of housing standards raised the bar to drive further housing improvements [and] also led to an increased number of homes that could be considered to contain hazards".[17]

12.  In addition, the method of measurement of progress towards the target in the social sector changed half-way through the policy timeline. Originally, data from the English House Condition Survey were used to assess progress; CLG also collected self-reported data direct from local authorities. However, CLG told us in evidence "we reported in the 2007 Autumn Performance Report that the two data sources were showing significant differences—both in the number of non-decent homes and in the rate this was reducing".[18] A project to discover the reasons for this disparity demonstrated that landlords, following guidance provided by CLG, were following a different definition of 'decency' from that used by the EHCS. In particular, decent homes guidance, unlike the EHCS, allows for the reporting of a dwelling as 'decent' if the tenant has been offered and refused work to improve the home; and allows non-decent homes scheduled for demolition to be recorded as 'decent'.[19] The result of this work was that CLG decided to abandon the EHCS as a method of measuring progress against the target. CLG told us:

Both measures have their own strengths and weaknesses, but the EHCS, for valid reasons, will not be able to demonstrate delivery of Decent Homes as defined by our guidance to social landlords. There is also a two-year time lag in the reporting of the EHCS data which would not be helpful in demonstrating progress over the current Comprehensive Spending Review period.[20]

13.  The implementation of the decent homes programme involved significant change to the landscape of the social housing sector, as we shall go on to discuss. Local authorities were invited to complete the improvement works by either transferring ownership of the stock to the housing association sector ; retaining ownership but setting up an arms-length management organisation (ALMO) to carry out the works; or using a private finance initiative to contract out the work. Local authorities could also retain both ownership and management of the stock themselves. The targets were incorporated into the performance management framework and inspection regime for local authorities and into the regulatory code for housing associations. In the private sector, new regional housing boards were established with responsibility for regional housing strategy and new powers given to local authorities to disburse funds for improvements of private sector stock.

Praise for the programme

14.  We have received evidence from councils, housing associations, arms length management organisations, tenants' and residents' groups, professional organisations and charities. Almost all parties have had something positive to say about the social sector programme, whether or not this is mixed with criticism of other aspects. The praise has highlighted three areas: the internal logic of the policy programme led by CLG; the impact of the programme on the physical condition of housing stock; and the spin-off effects of the policy on communities.

15.  On the coherence and effectiveness of the policy, the Chartered Institute of Housing, the body for housing professionals with over 22,000 members, told us that "the setting of the standard, the ten-year target, the allocation of the resources and the near achievement of the target can be regarded as a major success story".[21] Hyde Group, a housing association that owns or manages over 40,000 properties, stated that "the Programme had clear, achievable targets on a realistic timescale"[22] and Sheffield City Council said the programme was "properly launched and quickly built momentum". It said:

It was helpful to have a clear financial model and be able to plan for a long programme which is affordable and won't change. Most 'rules' were understood by all parties.[23]

16.  As for the effects on housing stock, the National Housing Federation, which represents 1,200 not-for-profit housing associations, said that the programme has "undoubtedly helped to raise the quality of homes benefiting millions of tenants".[24] Bolton at Home arms-length management organisation said in evidence that the "decent homes programme provided an absolutely essential influx of resources to reverse the under-investment on public sector stock that had occurred over the previous decades".[25] The Energy Saving Trust stated that the programme "has worked—as a result of the programme, social housing is now the most energy efficient part of our housing stock".[26]

17.  Witnesses flagged up a wide range of other areas on which, they told us, the programme has had a beneficial effect. One area is the improvement of asset management skills by landlords. Circle Anglia, which manages 51,000 general needs, sheltered and supported homes, stated that:

many social landlords now have excellent information on their stock condition. This now allows very accurate long term refurbishment planning.[27]

Property consultants Ridge and Partners echoed this, saying "the Decent Homes Standard has successfully brought a new focus onto effective asset management, including the value of robust asset data (intelligence), sustainability assessment (viability), effective procurement and resident involvement".[28] Another area is the effect of work programmes on local economies: Fusion 21, a "social economy business" working with social landlords to generate cost savings, said that "skills training and job creation has been one of the major successes through certainty of construction activity".[29] The Hyde Group stated:

A whole supply chain developed capacity to deliver the Programme, providing employment for thousands of people. A number of maintenance contractors transformed their businesses on the back of the Programme, forming a mini-economy with suppliers of new kitchens, bathrooms and windows.[30]

Stockport Homes told us that GM Procure, a consortia for social housing providers in the North West of England, had generated annual savings for Stockport of between £1.2m and £2.8m per year, which had been recycled back into the decent homes programme.

18.  Evidence also testified to a range of positive effects on lifestyles in areas where stock had been improved. Bolton at Home told us that, as well as improving housing stock, the programme "provided the potential for community engagement, community cohesion and socio-economic development".[31] Sheffield City Council judged that the work "gave confidence to Council tenants that they were valued and could have pride in their homes and communities".[32] The National Federation of ALMOs attributed to the programme a list of positive effects including improvements to health, reduced crime rates, reduced poverty and greater civic pride.[33]

19.  The decent homes programme has had a dramatic, positive effect on the living conditions of almost all social housing tenants by putting very significant resources into tangible improvements to social housing. We applaud the Government, local authorities and their partner organisations for the tenacity with which they have pursued the ten year goal and the results they have achieved. The decent homes standard is, nonetheless, a low standard, which makes it all the more shocking that nearly 40% of social homes were below that level in 2001; and all the more encouraging that so many landlords have gone beyond the standard in the improvements they have carried out.

20.  As we shall go on to demonstrate, however, there have also been wide-ranging criticisms of the programme. Those criticisms apply to aspects of the social sector programme but also to the programme in the private sector, which is widely recognised to have been less successful. In combination with recognition of what has been achieved, these criticisms point the way to ongoing improvements in the future.

After 2010: going beyond the Decent Homes programme

21.  Our inquiry has focused on the question of what should happen to the decent homes programme after 2010 and many of our witnesses have made recommendations for how a "decent homes 2" programme should look. However, when we questioned the Minister he was ambivalent about framing policy after 2010 in these terms, saying "to describe anything as a 'successor programme' is probably misleading".[34] He described the decent homes programme as driven by the need to overcome the backlog of disrepair which existed in 1997, and maintained that since policy after 2010 would be about maintaining standards, rather than dealing with a backlog, it would be a different kind of programme. As described below, the decent homes standard seems likely to be subsumed into a wider regulatory framework set by the recently-created Tenant Services Authority rather than continuing as a discrete policy instrument. Work to maintain minimum housing standards may not necessarily take place under the 'decent homes' banner in the future, even if the standard—or a successor to it—is ultimately used to make regulatory judgements about landlord performance.


22.  The Tenant Services Authority (TSA) was launched on 1 December 2008 under the Housing and Regeneration Act 2008, inheriting regulatory powers from the Housing Corporation. The TSA is empowered to regulate registered providers (the housing association sector) and should Parliamentary approval be granted to the necessary secondary legislation will extend its remit to local authority landlords from April 2010, making it the single regulator for the social housing sector. Section 86 of the 2008 Act defined the TSA's objectives.[35] In November 2009, the TSA published its statutory consultation on a new regulatory framework for social housing in England. The consultation closed on 5 February 2010. The Authority proposed in its consultation a framework comprising both national and locally-negotiated standards. The proposed national standards cover six areas: Tenant Involvement and Empowerment; Home; Tenancy; Neighbourhood and Community; Value for Money; and Governance and Financial Viability. The proposed Home standard includes a Quality of Accommodation requirement, as follows:

Registered providers must ensure tenants' homes either: meet the Decent Homes Standard […] or meet the standards of design and quality that applied when the home was first built, and were required as a condition of publicly funded financial assistance, if these standards are higher than the Decent Homes Standard.[36]


23.  The future of the Decent Homes programme is irrevocably linked to the future of the funding mechanism for local authority housing, the Housing Revenue Account (HRA) system. Each council with housing stock uses its HRA to record all income and expenditure relating to that stock, under the 1989 Local Government and Housing Act as amended by the 2003 Local Government Act. Income to the Account includes rents and service charges and the Major Repairs Allowance (MRA); expenditure includes the costs of servicing housing debts and loans, and the cost of management, repairs and maintenance of stock. A subsidy mechanism redistributes resources between those councils in housing revenue account surplus and those in deficit. Each year, the Government makes a notional assessment of councils' income and outgoings, and awards to each council either a positive subsidy to meet a shortfall, or a 'negative subsidy' to be redistributed to other authorities.

24.  On 30 June, the Minister for Housing and Planning made a Written Statement in which he announced the conclusion of a review of council housing finance conducted by CLG and HM Treasury. The Government's intention is to dismantle the Housing Revenue Account subsidy system and replace it with "a devolved system of responsibility and funding"[37] to "provide more flexibility in finances and more transparency in the operation of the system […] to devolve control from central to local government […] to increase local responsibility and accountability for long term planning, asset management and for meeting the housing needs of local people". CLG published a consultation on the proposed reforms on 21 July, which closed on 27 October. An announcement about the next stage of reform is, at the time of agreement of this Report, expected very shortly.

25.  The review of the Housing Revenue Account—on which we took oral evidence from the Housing Minister on 13 July 2009—and, in particular, the subsidy system which it provides for is directly relevant to our discussion below of the funding of minimum standards of social housing beyond 2010. [38] We consider it in more detail in that section of our report below.


26.  On 29 June the Prime Minister made a Statement to the House announcing £1.5 billion to build 20,000 new affordable homes over 2009-10 and 2010-11.[39] The funding for the pledge was drawn from various sources, including the deferral of some decent homes funding to outside the 2007 Comprehensive Spending Review period. Rt Hon John Healey MP wrote to our Chair on 17 July explaining the policy. He said:

I have reprofiled funding over a longer period for those ALMOs that have not yet met the Audit Commission's two-star standard […] reducing planned funding in 2010-11 by £150 million to £609 million […] My decision means the ALMOs affected will more likely receive the investment they need for their decent homes refurbishments in 2011-12.[40]

In addition, £75 million allocated for improvements in private sector housing was also re-programmed to build new homes. This deferral of funding has had an inevitable effect on the timescale of achievement of decent homes improvements, as we discuss in more detail below.


27.  The Department for Energy and Climate Change and CLG published a strategy for improving the energy efficiency of homes on 2 March.[41] The timing of our inquiry has not permitted us to take evidence on the strategy but its content is very relevant to our conclusions and recommendations. The strategy envisages, by 2020, the installation of loft and cavity wall insulation in all homes and an "eco-upgrade" such as the installation of solid-wall insulation for 7 million homes. By 2030 all households will have received assistance to improve energy efficiency. Local authorities will have a strategic role to play in coordinating and leading the implementation of the programme. Finally, the strategy proposes a new Warm Homes standard to complement the decent homes standard in the social sector and the improved regulation of standards in the private rented sector.[42]


28.  In January 2008, CLG commissioned Dr Julie Rugg of York University to conduct a review of the private rented housing sector. The terms of reference of the review were broad, and included an analysis of the characteristics and structure of the sector including tenant and landlord experiences, likely future demand and supply pressures, policy actions required to stimulate the market to respond to the quality and quantity demands, and the role of regulation in improving the management of the sector. The review was published in October 2008, coming to a range of conclusions, some of which are relevant to the pursuit of decent homes improvements in the private sector, as we discuss in the relevant section below. In February, the Government published its response to the review.[43] We discuss its policy implications in the section of our Report on decent homes in the private sector.

12   Department of the Environment, Transport and the Regions, Department of Social Security, Quality and Choice: A Decent Home for All, April 2000, p. 11. Back

13   HM Treasury, 2000 Spending Review: Public Service Agreements White Paper, Chapter 4, available at Back

14   HM Treasury, 2002 Spending Review: Public Service Agreements, Chapter 5, available at Back

15   HM Treasury, 2004 Spending Review Stability, Security and Opportunity for All: Investing for Britain's long-term future, Chapter 5, available at Back

16   CLG, A Decent Home: Definition and guidance for implementation, June 2006 - Update, June 2006, pp. 11-12. Back

17   Ev 165 Back

18   Ev 165 Back

19   CLG, Decent Homes in the Social Sector: Statistics Reconciliation Project 2008, January 2009. Back

20   Ev 165 Back

21   Ev 145 Back

22   Ev 129 Back

23   Ev 275 Back

24   Ev 155 Back

25   Ev 271 Back

26   Ev 151 Back

27   Ev 86 Back

28   Ev 118 Back

29   Ev 111 Back

30   Ev 129 Back

31   Ev 271 Back

32   Ev 275 Back

33   Ev 281 Back

34   Q 355 Back

35   Housing and Regeneration Act 2008, section 86: "To encourage and support a supply of well-managed social housing, of appropriate quality, sufficient to meet reasonable demands; ensure that actual or potential tenants of social housing have an appropriate degree of choice and protection; ensure that tenants of social housing have the opportunity to be involved in its management; ensure that registered providers of social housing perform their functions efficiently, effectively and economically; ensure that registered providers of social housing are financially viable and properly managed; encourage registered providers of social housing to contribute to the environmental, social and economic well-being of the areas in which the housing is situated; encourage investment in social housing (including by promoting the availability of financial services to registered providers); avoid the imposition of an unreasonable burden (directly or indirectly) on public funds; guard against the misuse of public funds; and regulate in a manner which (a) minimises interference, and (b) is proportionate, consistent, transparent and accountable". Back

36   Tenant Services Authority, A new regulatory framework for social housing in England: A statutory consultation, November 2009, p. 48. Back

37   HC Deb, 30 June 2009, cols. 7-10 WS, [Commons written ministerial statement]. Back

38   Uncorrected transcript of Oral Evidence taken before the Communities and Local Government Committee on 13 July 2009, HC (2008-09) 915-i. Back

39   HC Deb, 29 June 2009, cols 21-24, [Commons Chamber]. Back

40   Communities and Local Government Committee, Third Report of Session 2009-10, Communities and Local Government's Departmental Annual Report 2009, and the performance of the Department in 2008-09, HC 391, Ev 35. Back

41   HC Deb, 2 March 2010, cols 101-2 WS, [Commons written ministerial statement]. Back

42   Communities and Local Government and Department for Energy and Climate Change, Warm Homes, Greener Homes: A Strategy for Household Energy Management,2 March 2010. Back

43   CLG, The private rented sector: professionalism and quality-consultation Summary of responses and next steps, February 2010. Back

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