Memorandum from Fusion21 (BDH 19)
1. INTRODUCTION
1.1 Fusion21 is a social economy business which
promotes collaboration to save money and create jobs. Operating
nationally, Fusion21's supply chains help to deliver clients'
capital works programmes, create and retain sustainable jobs for
local people and generate cashable savings to reinvest in further
frontline service improvements.
1.2 Fusion 21 has received national recognition for
its achievements and positive contribution to the social housing
sector and the construction industry including:
— Delivering c£15 million cashable
efficiency savings as well as many non cashable benefits linked
to eProcurement systems.
— Creating 580 permanent jobs in the construction
industry with Fusion 21 contractors.
— Providing vocational training to over
700 Merseyside residents.
— Generating an estimated financial benefit
to Merseyside boroughs in excess of £19 million through regular
paid work and reductions in benefit claims.
— Winning the first Housing Corporation
Gold Award for "Innovation in Procurement" in 2006.
1.3 Our partner clients include the following
social landlords: Riverside, Knowsley Housing Trust, Arena, Helena
Partnership, Regenda Group, Plus Dane, South Liverpool Housing
Group and Liverpool Mutual Homes. This response is written in
collaboration with these partners and has been informed by a dialogue
with some of our partner contractors and consultants.
1.4 The partnership welcomed the introduction
of a minimum standard for decency which introduced, for the first
time, a common standard which could be recognised by regulators
and funders alike. In our experience social landlords should and
do have broad investment strategies driven by stock condition
data and linked to sustainability of neighbourhoods. So whilst
Decent Homes Standard (DHS) is a useful measure of condition it
does not necessarily drive investment.
2. SUMMARY OF
RESPONSE
2.1 Our answers are based on our experience
in England only. Our key points are:
— Any successor to DHS should allow social
landlords to focus on broad based asset management strategies
informed by robust stock condition information.
— Where dispensations on time are given there
should be flexibility on target dates to ensure that investment
is limited to stock and neighbourhoods which are sustainable.
— Landlords should be encouraged but not
forced to improve energy efficiency and environmental standards.
— Social landlords have a finite source
of income so decency requirements should not be increased without
regard to how costs can be met.
— The private sector is a major recipient
of housing benefit so there should be some compulsion on private
landlords to achieve decency.
— We hope that the current review of regulation
will set clear minimum standards with minimal levels of bureaucracy
to allow social landlords to deliver decent homes in sustainable
communities.
3. What lessons can be learned from the Decent
Homes programme and equivalents in Scotland, Wales and Northern
Ireland?
3.1 Planning and procurement time prior to embarking
on multi million pound programmes should be given more recognition
not least because the market needs to gear up to deliver the necessary
requirements. However the 2010 deadline was helpful in many ways
in that it provided a real focus for delivery and gave the opportunity
for long term planning. The decent homes programme also helped
to hasten some of the stock transfer processes.
3.2 Riverside's approach was to continue its
holistic approach to stock investment to ensure that they only
invested in stock and neighbourhoods with long term futures. This
approach effectively dealt with non-decency as these programmes
have been implemented; however a greater focus on neighbourhood
sustainability is required in the future. Riverside also adopted
a "Decent Homes Plus" standard for its investment delivery.
This meant that whilst dealing with the incidences of non-decency
we took the opportunity to enhance the standard of the dwelling
with a superior standard, such as double glazing and higher levels
of insulation.
3.3 The reduction in the original target of
100% to 95% was welcomed to allow consideration of the implications
of Housing Market Renewal. Riverside was also given a dispensation
of up to three additional years on 736 properties. Whilst a significant
number of these properties have been disposed of already there
is a likelihood that some will remain in our ownership beyond
the extended date. This risk would have been reduced if our original
request for a five rather than three year dispensation had been
allowed. For this reason in paragraph 4.3 we argue for realistic
timescales to be given where extensions are granted.
3.4 In our experience skills training and job
creation has been one of the major successes through certainty
of construction activity particularly in the Merseyside area.
3.5 There is a view that insufficient attention
has been given to the life cycle of components and that a more
realistic approach should be adopted in any future programmes.
4. Where targeted housing fails to reach the Decent
Homes criteria by 2010, how should this backlog be addressed?
4.1 We note that no specific penalties or incentives
were put into place when the standard was introduced. At this
stage, providers should be encouraged to work on a planned basis
to redress the failure and where there is an opportunity to work
collaboratively to address any backlog this should be considered
to obtain best value for money.
4.2 Undertaking DHS works in the refurbishment of
one-off empty properties refurbishment is not cost effective and
the emphasis in minimum void standards should be on compliance
with HHSRS[21]
rather than major component replacement to achieve DHS.
4.3 Future requests for time extensions should
be actively considered in the light of the economic climate and
the uncertainty of some neighbourhoods, and realistic deadlines
agreed.
5. Should minimum acceptable social housing standards
be amended to take account of environmental standards, fuel poverty
and the estate?
5.1 Whilst the Decent Homes Standard has dealt
effectively with the "bricks and mortar" we believe
a more holistic approach should be considered. This would focus
on the liveability of the dwelling in terms of its environmental
sustainability and energy performance and a focus on whether the
neighbourhood is sustainable in the longer term.
5.2 However, at a time when providers face a
negative rent increase only a cohesive policy with appropriate
joint funding cross-agency will succeed. In isolation social housing
providers cannot deliver this and there is little evidence of
central government policy forcing the issue at local government
levels. Without this there is no chance of successful or fundable
projects. We believe that government should produce a cohesive
vehicle for inter-agency planning and execution of regeneration
plans.
5.3 Social landlords are working towards further
improving the energy efficiency of their homes via the retrofit
agenda and projects to address fuel poverty. Knowsley Housing
Trust point out that, whilst sufficient funds may be available
to maintain decency going forward, raising standards beyond this
is a challenge for the business plan given the current economic
climate and prospect of rent decreases.
5.4 Funds are limited and social landlords need
to prioritise to establish the most cost effective use of money.
In maintaining sustainability we need to invest more in the external
environment that the internal, as neighbourhoods can fall into
irreversible decline if the level of investment is not right.
However, not all social housing is estate- based and government
needs to be aware that, whilst the quality of neighbourhoods is
important, few social landlords can have a significant impact
on their own. Great care must be taken not to hold social landlords
to account for wider neighbourhood/environmental standards which
they cannot always influence and which cannot readily be measured.
5.5 It is essential that landlords take into
account energy efficiency when investing in existing stock. Fuel
poverty is often a result of poorly insulated homes with low efficiency
white goods and inefficient heating systems. Schemes can be set
up to educate and encourage residents to be energy efficient and
this work has already begun within some social landlords' financial
inclusion and affordable warmth strategies.
5.6 We believe that the role of government and
regulators should be to encourage improvement in the quality of
provision via well informed asset management strategies. Whilst
there is a place for a baseline decency standard much more will
be achieved via an approach based on robust stock condition data
and cohesive neighbourhood based strategies.
6. Do the management organisations—councils,
including via ALMOs, and housing associations—need to change?
Will they have sufficient funds?
6.1 As most RSLs have committed significant
resources on DHS, leading in some cases to increased gearing ratios,
there is uncertainty how they will be able to fund these other
requirements.
6.2 We propose that if a tenant's fuel bills
are reduced due to works that the RSL has carried out then there
should be a facility to fund this in part by increases to the
rent. This would then give the RSLs some extra monies required
to do works, not only to the properties but to the estate environment
to prevent decline and encourage regeneration. Riverside has expressed
an interest in the Department of Energy and Climate Change (DECC)
pilot projects for a Pay As You Save scheme for energy efficiency
improvements to existing homes.
6.3 The sector does need to change (and is changing).
We need to understand more about what is possible technological
terms and spend more time educating both staff and residents.
As providers we will not have sufficient funds to do everything
we need to do to raise environmental standards, but given continuing
commitment from government (and EU) in the form of grants and
funding there is hope that progress can be made. A commitment
to change will need to extend to all stakeholders so that employers,
transport, and energy suppliers and so on all play their part
in providing funding and support.
7. How should the Decent Homes target for private
sector homes occupied by vulnerable people be taken forward?
7.1 We know from the Rugg review of the private
rented sector[22]
that standards in both private and owner occupied sectors fall
below those in social housing. 50% of private rented property
fails to meet the new Decent Homes standard. Only 66% of homeowners
live in "Decent Homes", compared to 72% of social tenants.
Whilst 21% of social housing stock achieves the highest Energy
Efficiency Rating, just 4% of owner-occupied properties and 10%
of privately rented homes meet this standard.[23]
To help improve standards across the board the
Decent Homes target could be applied to all rented stock as a
criterion for receipt of Housing Benefit and there could be legislation
that prevents landlords directly discriminating against benefit
claimants. Private landlords should be licensed and housing benefit
only paid for those licensed properties.
8. Are adequate arrangements in place for the
future regulation of minimum acceptable housing standards?
8.1 The evidence is being compiled at a time
when the whole structure of regulation is being reviewed. The
Tenant Services Authority has published its discussion paper on
the future of housing regulation and CLG is consulting on its
directions to the TSA, the remit of which includes "quality
of housing". The Housing Corporation Regulatory Code remains
the backbone of regulation at the time of writing. In addition
to this, when conducting their housing inspections, the Audit
Commission refer to the Key Lines of Enquiry (KLOES), in particular
the Stock Condition and Asset Management KLOE.
8.2 The Regulatory Code itself provides very
generic advice on the need for homes to be maintained which, although
acceptable in a wider regulatory sense do not assist with standard
setting. The "excellent descriptors" in the KLOE describe
the standards which social landlords should aspire to although
they do not make sufficient reference to energy efficiency and
sustainability measures or affordable warmth. However in our experience
the KLOEs are sometimes applied in a fairly inflexible way by
inspectors for example with hard and fast ratios on the volume
of responsive and planned repairs.
8.3 Government proposes to direct TSA on the
content of the standard it should set on quality of accommodation
with reference to continuation of the Decent Homes programme.
The proposed directive maintains current policy on Decent Homes
(achievement of target by 2010) but gives no hint of what may
lie beyond saying only that the direction will allow TSA flexibility
to work with landlords in developing a strategy to meet the standard
after 2010.
8.4 It is proposed that a new national standard
on Quality of Housing (Decent Homes) is created by the TSA and
as a housing association we would welcome setting of minimum standards
although mindful of the fact that decent homes do not necessarily
make for decent neighbourhoods. The standard is likely to refer
to published Decent Homes Guidance. However with 2010 looming
any guidance would need to go further than this in setting standards
for tomorrow. The possibility that local standards on quality
of homes may go beyond the national definition is raised in the
TSA consultation and we do not disagree with this but believe
the content of local standards should not be a matter for regulators.
8.5 In conclusion, although a framework exists
current arrangements for future regulation are not at the present
time adequate as there is insufficient information available on
which to base plans and strategies. The framework which replaces
the Regulatory Code needs to give specific guidance on what landlords
are expected to achieve in the wake of Decent Homes including
any energy efficiency and sustainability requirements.
8.6 However, given the vast diversity within
our housing stock, we would suggest that the main aim of the regulator
should not be to focus on rigid standards. The real role for regulators
should be to (i) check providers have adequate information on
their stock (ii) ensure they have robust planning frameworks in
place and (iii) ensure that investment levels are appropriate
given the nature and condition of stock and the resources available.
If the current regulatory bodies continue to target only the housing
provider and not the wider stakeholder group, only the provider
will be improving. Similarly, where regulation concentrates on
housing provision the overall positive effect on the community
will be limited.
8.7 We would also reiterate that DHS does not
in the main apply to the private and owner occupied sector creating
huge disparities in property condition across the country. New
build space standards at the bottom end of market will almost
certainly create problems for the future and there is no independent
inspection of decency being applied.
9. Are there local examples of innovative best
practice with wider post-2010 applicability?
9.1 Fusion21 has a long history of achieving
collaborative buying linked in with creation of jobs. This collaborative
approach has led to a high level of shared learning amongst many
organisations. This had a direct effect on improved methods of
working for certain organisations, KHT managing to finish their
programme of works 18 months earlier than previously anticipated.
It has allowed for organisations to tackle issues of common concern
and as a result Fusion21 has sustained itself beyond decent homes.
Fusion 21 has been hugely successful in levering
much needed job creation into Merseyside on the back of the investment
needed to meet DHS. With long term business certainty the construction
supply chain has been able to support the RSL partners in achieving
this success. This model can be replicated and applied in principle
post 2010.
Several RSLs are already undertaking pilot projects
to try and achieve best practice for designs and so on.
10. CONCLUSIONS
We welcome the discussion on the issues of decency
in the housing sector and await with interest the findings of
the Select Committee. Our main concern is that any successor to
the DHS is modern, affordable, fit for purpose and complimentary
to the sustainability of individual properties and the wider community.
September 2009
21 Housing Health and Safety Rating System. Back
22
The Private Rented Sector, its contribution and potential. Julie
Rugg and David Rhodes, Centre for Housing Policy, University of
York. Back
23
Source: CLG 2007. Back
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