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.
THE TENANT SERVICES AUTHORITY
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]
REFORM OF THE HOUSING REVENUE ACCOUNT
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.
THE HOUSING PLEDGE
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.
STRATEGY FOR HOUSEHOLD ENERGY MANAGEMENT
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]
RUGG REVIEW OF PRIVATE RENTED HOUSING
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 www.hm-treasury.gov.uk. Back
14
HM Treasury, 2002 Spending Review: Public Service Agreements,
Chapter 5, available at www.hm-treasury.gov.uk. Back
15
HM Treasury, 2004 Spending Review Stability, Security and Opportunity
for All: Investing for Britain's long-term future, Chapter
5, available at www.hm-treasury.gov.uk. 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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