Memorandum from Communities and Local
Government and the Homes and Communities Agency (BDH 36)
DECENT HOMES
HISTORY AND
LESSONS LEARNT
1. In 1997, the Government committed to
tackling the £19 billion backlog in disrepair in social
housing and in the 2000 Green paper set out that it would
make all social housing decent by 2010. There were around 1.8 million
non-decent social homes in 2000. The standard covered the basic
components of a home that made it warm, wind and weather-tight.
It was set as a threshold so that any home below the standard
would be improved.
2. All items included had to be capable
of some objective measurement and of having a threshold level
set. The elements of the standard also had to be in the control
of the landlord to ensure deliverability. This is why the standard
was confined to elements within the curtilage of the home. Because
of this it was not assumed that delivery of the standard took
all available resources.
3. The Government set the "Decent Homes"
standard and expected all social landlords to deliver. However,
there is no statutory basis for the standard which is set out
in guidance. The Housing Corporation included the Decent Homes
standard in the regulatory code. Most landlords are completing
works far in excess of the Decent Homes standard.
4. The social sector Decent Homes programme
has delivered much more than the obvious improvements to the housing
stock. There are many and varied examples of innovative and best
practise by landlords in delivering their programme of works.
The Decent Homes programme has:
— delivered efficiencies with procurement
consortia;
— empowered tenants, improved access and
social inclusiveness;
— and improved the environment and security
of estates.
5. The Decent Homes programme has also made
a contribution to tackling worklessness in a number of ways:
— creating employment opportunities within
the building sector (eg 300 training opportunities in South
Yorkshire);
— directly providing employment for some
residents—as tenant representatives;
— and establishing programmes to encourage
people into training and work
6. The definition of the standard has also
changed since introduction. The Housing Health and Safety Rating
System (HHSRS) is a new approach to the evaluation of potential
risks to health and safety from any deficiencies identified in
dwellings. HHSRS was introduced in the Housing Act 2004, and came
into force on 6 April 2006, replacing the "fitness standard"
as the statutory minimum standard for housing and as one component
of the Decent Homes measurement. Although the tough new statutory
assessment of housing standards raised the bar to drive further
housing improvements it also led to an increased number of homes
that could be considered to contain hazards. The HHSRS includes
fire risk as a hazard, and we are now considering whether we cost
for any recommendations to emerge from the Camberwell fire as
part of the review of work under the new self financing.
7. We have used both the English House Condition
Survey (EHCS) and social landlords' own data in the reporting
of Decent Homes to measure progress on the delivery of Decent
Homes. However, 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.
Following work to investigate why this was occurring we moved
from using the EHCS to using social landlords' data in the reporting
of Decent Homes for the Departmental Strategic Objective (DSO)
on Housing.
8. 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.
9. Although there are statistical issues
with monitoring the standard, there are also practical issues
with achieving 100% decency. Making homes decent is not always
straightforward. The appropriate course of action for any non-decent
home is a matter of professional judgment, taking all the facts
and circumstances into consideration. Some homes, although technically
non-decent, may nevertheless be already performing at a level
that is acceptable in terms of what the standard is seeking to
achieve. Homes may also become non-decent but it would make sense
to make them decent outside a cost-effective programme of planned
works.
10. The Northern Ireland Decent Homes Standard
was introduced in June 2004 and is the same as the English
standard with a target date of 2010. In 2008 the Northern
Ireland Housing Executive reported that 75% of their 93,400 homes
met the Decent Homes Standard.
11. The Scottish Housing Quality Standard
(SHQS) was set in February 2004 with a target date for social
housing of 2015. It goes further than the Decent Homes Standard
in, for example, its energy-efficiency requirements. There are
599,000 social rented homes in Scotland in 2005-06 only
40% of social housing met the SHQS.
12. The Welsh Housing Quality Standard (WHQS)
is to be achieved by 2012. It goes further than the English or
Scottish Standards, requiring that houses be well managed and
located in attractive and safe environments and as far as possible
suit the specific requirements of the household (eg specific disabilities).
There are 235,000 social homes in Wales in 2004 only
0.8% met the WHQS.
13. There are 3,965,000 social rented
homes in England, in 2007 71% of social homes were decent.
When the Decent Homes target was set in 2001, the aim was to eliminate
a backlog of disrepair and ensure that no one was living in a
home that was below a basic minimum level of decency. It was a
huge task that was being faced. From the experiences in Northern
Ireland and England it is clear that there are real benefits from
setting a clearly defined deliverable target.
14. Once the Decent Homes standard has been
achieved there will be a solid base for considering what further
improvements need to be made. Scotland and Wales have set higher
standards but have lower numbers of dwellings to tackle and are
making less progress.
DECENT HOMES
BACKLOG
15. We have previously said that we expected
around 95% of social homes to be decent by 2010. The latest assessment
by the Homes and Communities Agency (HCA), on behalf of the Department,
has adjusted landlord statistical returns to reflect revised spending
plans and takes into account the current economic climate, which
has impacted on the anticipated landlord delivery plans due to
a fall in capital receipts.
16. It is estimated that the local authority
sector will have a backlog of over 255,000 non-decent dwellings
at the end of 2010. These homes fall into two main categories
those managed by Arms Length Management Organisations (ALMOs)
and those where the local authority has retained the management
responsibility.
17. 177,000 (69%) of the estimated
non-decent properties at 2010 are managed by ALMOs, who will
be given the funding to help them make their homes decent. ALMOs
rounds 1 and 2 have mostly finished spending. 106,700 of
the estimated non-decent properties will be managed by ALMOs,
rounds 3-5 are currently spending and are expected to achieve
the target by 2016. 63,500 of the estimated non-decent properties
will be managed by round 6 ALMOs. The intention to put back
the funding of Round 6 accounts for 11,250 of the estimated
number of dwellings remaining non-decent at 2010.
18. It is estimated that by 2010, 75 of
the 114 retention local authorities will have met the target.
The remaining 39 retention authorities will achieve it at
a later date.
19. Eleven of the retention local authorities
with a backlog at 2010 have Local Area Agreement improvement
targets (under National Indicator 158) on Decent Homes. This represents
40,620 (51%) of the estimated non-decent dwellings managed
by retention authorities in 2010
20. We are advised that the most significant
factor in the rising backlog has been a short fall in capital
receipts as a result of the current economic downturn.
21. Around 18% of the backlog (14,360 properties)
has arisen because the local authority is facing varying levels
of financial difficulty because tenants voted in a ballot against
the local authorities preferred delivery option, transfer or ALMO.
The Department, and latterly the HCA, has been working with the
two largest authorities to find innovative funding solutions.
The Department, Government Offices for the Regions and the HCA
are also actively engaged in discussions with another 10 of
these local authorities about how they will deliver the standard
in their housing stock.
22. The Government remains fully committed
to completing our comprehensive Decent Homes programme and once
completed to seeing this standard maintained in the future. The
reforms proposed will safeguard the commitment to future decent
homes. We will also improve the common areas of estates and will
ensure that there is sufficient funding in the new system to do
so. Our aim in setting up the self-financing system is to ensure
that it delivers in the future the investment needed to sustain
and maintain the existing stock of council homes.
DECENT HOMES
STANDARDS GOING
FORWARD
23. The Government remains committed to
delivering and maintaining the Decent Homes standard. It allows
all landlords to determine, in consultation with their tenants,
what works need to be completed, and in what order, to ensure
the standard is met.
24. Although tenants have generally supported
the standard, the focus on features within the home, potentially
at the expense of other things outside the home—such as
lifts and common parts, energy performance, and work to their
estates—has been the subject of some criticism. Tenants
can sometimes ascribe higher importance to the improvements outside
their home rather than within.
25. The Reform of Housing Finance review
concluded that future funding will need to be provided to at least
continue to deliver the Decent Homes Standard, but should in addition
provide funding for items such as lifts and common areas.
26. The National Strategy for Energy and
Climate Change White Paper reaffirms the Government's commitment
for the social housing sector to play a leading role in increasing
energy performance to reduce carbon emissions.
27. The Decent Homes programme in its planned
continuation will deliver some of what is required to improve
energy performance and reduce carbon emissions. In considering
the future shape of the Decent Homes programme, there are a number
of measures that would enhance further the sustainability and
energy efficiency of existing housing stock. We have further work
to do to consider whether to adopt a measures based approach or
an outcome based one in taking forward the decent homes standard
and to consider the implementation of a new sustainability standard.
The Reform of Council Housing Finance consultation sets out some
innovative funding options that would not require any additional
public expenditure. These funding options would be aligned to
the self-financing system for local authority finance.
FUNDING THE
DECENT HOMES
STANDARD
28. The Reform of Council Housing Finance
consultation document proposed dismantling the Housing Revenue
Account subsidy system and replacing it with a devolved system
of responsibility and funding. Under such an arrangement each
local authority would keep the money raised locally from rents
and use it to run their stock.
29. Councils would need to have enough money
from rental income to pay for ongoing maintenance at the Decent
Homes Standard as well as works needed to maintain lifts and common
parts. The Review concluded that rents set in line with current
social rent policy would generate sufficient income to sustain
the stock in all local authorities at the higher funding levels
proposed.
30. As there would be a one off settlement
for each council, and since they would be able to keep more of
the capital receipts, there would be greater certainty of funding
to allow councils to plan for works and procure them efficiently.
It would also facilitate effective long-term management of their
assets, and re-investment in replacement stock.
31. All councils would need to prepare a
30-year plan that would capture their social housing investment
requirements based on common standards. They would be accountable
for delivering against that plan. They would, however, have the
freedom to operate within that plan and to make changes without
their income projections having to be dependent on annual funding
arrangements and complex calculation of expenditure allowances.
32. The benefits delivered by ALMOs that
manage council housing services should not be affected by a change
in the system for financing council housing. We see a strong future
role for ALMOs which are valued by their tenants. We would expect
ALMOs to continue to develop their housing management capacity
and to look for opportunities to extend the range of services
they offer, including to other landlords, where this would improve
efficiency and effectiveness.
33. Transferring to a housing association
should also remain an option that council tenants can choose.
There are potential benefits from bringing in a not-for-profit
body with access to private finance to own and manage the homes.
However, there should be equity in the terms of public funding
whether they are transferred or retained in the future under self-financing.
The value placed on the stock in a self-financing agreement and
a transfer deal will be based on delivering the same standards
of service at a comparable cost.
FUTURE REGULATION
OF STANDARDS
34. The Tenant Services Authority (TSA)
was launched on 1 December 2008 and is already regulating
registered social landlords (RSLs). Since December, both the TSA
and the Department have taken important steps towards the establishment
of the new regulatory system in April 2010. The TSA has launched
a national conversation with tenants and landlords to inform the
development of its new regulatory standards. The Department is
currently consulting stakeholders on draft legislation that is
designed to implement 'cross-domain' regulation, so that the TSA
can also act as regulator in the interests of council tenants.
35. TSA as an independent regulator will
determine what standards to set to enable it to best meet its
statutory objectives, following consultation with tenants, landlords
and other stakeholders. Although it is primarily TSA's responsibility
to set standards, the Secretary of State also has a power in the
2008 Housing and Regeneration Act (section 197) to direct
TSA in relation to its standards. The purpose of this power is
to ensure TSA has regard to the Government's legitimate interest
in the regulatory standards it sets, and in particular those standards
which might directly affect central budgets or key policy issues.
36. The Department is also consulting on
matters relating to the regulatory standards that the TSA will
operate in the new system. The consultation document proposes
that Ministers should direct the TSA to set standards on rents,
quality of accommodation and tenant involvement. We have prepared
a draft direction that confirms the Government's commitment to
complete and continue with the Decent Homes programme.
37. The proposed direction aims to ensure
progress in reaching the Decent Homes standard. It therefore maintains
the current policy on Decent Homes, and will not impose any additional
burdens on landlords; the only change is that policy goals will
be achieved in part through TSA standards. In practice, meeting
and maintaining the standard depends on funding availability from
Government or other sources (eg rental income or private finance).
The direction cannot make provision for funding, and the capital
programme to fund Decent Homes is not in any case within TSA's
remit. Therefore, the Government is proposing a direction allowing
TSA the flexibility to work with landlords in developing a strategy
to meet the standard after 2010 where there is good reason
for doing so.
38. The quality of accommodation direction
would affect TSA's standards on Decent Homes, which may begin
to operate from April 2010. The direction would stand until it
was superseded following a consultation.
PRIVATE SECTOR
DECENT HOMES
39. Private Sector Decent Homes funding
has been driven by Public Service Agreement targets (PSA7) to
increase the proportion of vulnerable households living in Decent
Homes in the private sector to 70% by 2010. Progress towards meeting
this target has been good and was ahead of trajectory with the
target percentage figure nationally increasing from 42.9% in 1996 to
68% in 2006.
40. Against this progress we were able to
satisfy ourselves that the 2010 target would be met. Given
the drive to reduce the number of national indicators and targets
set by Government, PSA7 has now become a legacy target against
which we have made a public commitment to continue to monitor
progress through DSO 2.8.
41. For this purpose the updated definition
of Decent Homes, following the introduction of the HHSRS, will
be used with a statistical baseline for 2006. Under the updated
definition 59% of vulnerable private sector households lived in
decent homes in 2006. This figure is not comparable with the original
definition because of the incorporation of the HHSRS in the updated
Decent Homes standard but it can still be used to demonstrate
progress albeit against a new definition. Estimates for 2007 are
61% showing continued progress. The 2008 estimate of the
percentage of vulnerable private sector households living in Decent
Homes will be available in January 2010.
42. The Government remains committed to
improving house conditions across all tenures. Looking beyond
2010-11 and with the new climate of the HCA, the introduction
of the HHSRS, and changes to regional structures it is an appropriate
time to explore the future direction of this policy.
43. Communities and Local Government is
undertaking work over the coming months to consider options for
private sector Decent Homes, including looking at how works to
tackle disrepair are measured in the private sector, how the policy
contributes to wider Government agenda on health and climate change
together with the future delivery mechanism and drivers.
September 2009
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