Examination of Witnesses (Question Numbers
1-19)
DR STEPHEN
BATTERSBY, MR
ANDREW GRIFFITHS,
MS SARAH
WEBB AND
MR RICHARD
CAPIE
26 OCTOBER 2009
Q1 Chair: Can I welcome you to the first
evidence session in our inquiry on Decent Homes. There are two
of you from each organisation. I am hoping that we are not going
to get both of you speaking on absolutely every point, that you
will exercise some restraint, and if indeed the other organisation
has said what you were going to say anyway, do not feel the need
to repeat it, because we have a lot of questions that we want
to try and tax you with, if I can put it that way. So my first
question really is about the probability that there will be a
backlog of non-decent homes still after 2010, particularly given
that the Government itself has diverted some of the funding that
was previously allocated to the Decent Homes programme to go towards
new house building, and the strong possibility that there might
be future cuts beyond 2010, whoever is in Government; and to ask
you how satisfactory you think the arrangements are to manage
and to fund Decent Homes after 2010.
Ms Webb: Shall I start? I think
we are concerned that the arrangements are not satisfactory beyond
2010. I will just give you a couple of specific examples. Firstly,
we are concerned about ALMOs who are in the later rounds who have,
as you have just identified, had their funding delayed beyond
2010. There are some ALMOs who may not have reached the two star
standard required to unlock the additional funding required, who
may similarly fall behind. There are gap-funded stock transfers
that would be expected to use the gap funding to build up decent
homes which have similarly had their money curtailed, and there
are retention local authorities where we know already that some
of them have plans that go beyond 2010. There is also a point
about the private sector, but I will leave that for colleagues.
Dr Battersby: Certainly so far
as the private sector is concerned, almost certainly the vast
majority of local authorities will be struggling, and certainly
from our work, most local authorities are literally responding
to complaint, and as the Audit Commission has pointed out, relatively
few have really effective strategies, so the arrangements now
are not exactly good, and certainly for the future are looking
even bleaker.
Q2 Chair: I guess the second question
that I want to get into is whether you think the purpose of the
Decent Homes programme is clear, and whether you think the focus
in future should be on continuing to improve housing, or whether
it should include broader social objectives.
Dr Battersby: If I may come in
on that one, I think one of the points that we have made is that
to some extent, the private sector targets were something of an
afterthought, and the purpose is not entirely clear. If the purpose
originally was as a minimum standard to try and focus investment,
and that is across the board, things have certainly moved on.
We come from the perspective of the housing and health nexus and
the impacts of housing on health, and as I say, if it is declaring
an interest, I was actually part of the team that helped develop
the Housing Health and Safety Rating System at Warwick University
as well as being president of CIEH, and certainly it is one of
the things that we think and believe is actually missing. So there
are health issues, and quite clearly with climate change and energy
efficiency, there is some overlap there. But I know, looking at
World Health Organisation work, and looking at healthy dwellings,
their location is important, but to incorporate something like
that would be difficult, because in the private sector particularly
it is different to perhaps in the social sector where you have
estates. In the private sector, it is problematic for a local
authority to actually ensure there is a green space in that area,
so to extend the Decent Homes standard beyond the immediate is
very difficult in the private sector.
Q3 Chair: We will be pursuing some
of those questions in a minute, if we can just kind of park them
for a second. Either Ms Webb or Mr Capie?
Ms Webb: I think as the organisation
that actually did the original work around the Decent Homes standard,
we believe that the relatively narrow focus that it has had on
bringing all properties up to a minimum standard has actually
been very important. We might all wish that things went further,
and certainly we would wish that things went further, but given
the backlog that we had, the place that we started at, it certainly
has been one of the most effective Government policies in terms
of focusing the mind and focusing attention on some pretty poor
standards, physical standards. Thinking from a tenant perspective,
it has transformed the experience of many millions of tenants
not far enough, but that focus has been important. I know you
will come back on to how it might be extended, but that narrow
focus has been quite important. We would not, for example, think
that the Decent Homes programme carried forward is the panacea
for everything that is wrong with housing and communities around,
for example, social mobility, for example, so focusing it, retaining
a focus on properties and the space in which properties are is,
we think, valuable.
Q4 Chair: Can I just pursue that
issue slightly? Is the Decent Homes standard, as it is at present,
sufficiently objective and clear for it to be being interpreted
in the same way by different local authorities, housing associations
and private sector landlords, so we all know what we are talking
about when we talk about decent homes?
Ms Webb: I think this is an issue
of a big picture versus a detailed picture. At the margins, there
will always be room for slight interpretation. There will always
be examples that you can point to where somebody will say this
bathroom officially needs to be replaced but actually it is fine,
or vice versa, but at the level of the big picture, and fundamentally
changing the standard of housing, then actually I think it has
been well enough understood. That does not mean we cannot always
improve the guidance that there is for local authorities, particularly
around the private sector, I think there is more ambiguity around
the private sector, but there is very little excuse for people
to say that they have not done it because they did not understand
it. That does not mean that we could not go further, but I do
not think any failures have primarily been failures of misunderstanding.
Mr Griffiths: There is an issue
with an understanding of the process of category 1 hazard under
the Housing Health and Safety Rating System, whether in fact those
who actually have to assess that fully understand the system.
We have anecdotal evidence of a number of registered social landlords
where the surveyors involved in this clearly do not fully understand
the Housing Health and Safety Rating System, and therefore are
not in a position to determine whether category 1 is present.
In the training that we have carried out, I took a brief snapshot;
over the last few months, we have had 55 delegates come to train,
not one has come from a housing association.
Q5 Chair: Where have they come from?
Mr Griffiths: Local authorities.
Q6 Chair: Would they be local authority
officers in the housing department, or would they be environmental
health officers generally who would be inspecting private properties
as well?
Mr Griffiths: They would be environmental
health officers inspecting private properties in private sector
housing services in local authorities, so they are dealing with
it in the private sector. The training is available to all, but
it is just not being taken up by RSLs.
Q7 Chair: So would some of the properties
they are inspecting, for example, be houses in multiple occupation?
Mr Griffiths: Yes, they would.
Q8 Alison Seabeck: What do you think
are the most important changes that are needed to the current
Decent Homes standards in order to continue to make improvements?
You have talked about it needing to be a narrow focus. What changes
would you like to see?
Mr Capie: I think we have to look
at the existing Decent Homes criteria and actually be very clear
about what its original purpose was. As Sarah said, our priority
at this moment in time should actually be focusing on delivering
the existing commitments we have. A detraction from that, in particular
given the challenges we have around funding, would not necessarily
be particularly helpful. I think we should also be using this
time to actually be thinking ahead about where we want to go post
2010. We almost have to separate two issues out, retain a short,
narrow focus at this moment in time to ensure that we actually
deliver on our existing commitment, but also be thinking about
what the next steps might include, and that is where we would
probably be looking at again a wider range of more ambitious targets.
This is where we can actually start to bring in some of those
questions around, for example, the carbon issues that we have
been focusing on. I think one of the most important things that
we also need to do is understand where we are at at this moment
in time. There is a gap, and it is something the CIH has called
for in our written evidence, to actually undertake an audit of
where we are at this moment in time, and what shortfall we may
face by 2010, and actually have some explicit commitments to set
out what we are going to do to tackle that shortfall and plan
how we address that.
Ms Webb: Assuming that we can
talk about Decent Homes 2, if you like, as a concept, then clearly
our main asks would be to include something about environmental
areas, to include something about eco standards, carbon footprint,
and to include something about fuel poverty.
Q9 Alison Seabeck: Thank you very
much. A nice concise answer. We have touched on carbon reduction
targets. Clearly from what you have said, you believe that the
Decent Homes programme is one of the ways of dealing with the
problem we have in that area, and tackling it.
Ms Webb: I think yes and no. The
figure that is widely used for the CO2 emissions that come from
housing is 27 per cent of the total CO2 emissions, so it is absolutely
clear to us that we will not deal with generally our CO2 emissions
in this country if we do not deal with the existing housing stock.
Clearly, if we are going to invent Decent Homes 2, which we would
argue we should, then eco standards should be part of that. However,
the vast majority of stock in the country are not social houses,
they are private houses. The Decent Homes standard does not cover
the majority of private sector houses, so whilst thinking that
there is a clear place for adding eco standards into any Decent
Homes 2, we would not miss the opportunity to say that there needs
to be a separate programme for bringing all housing in this country
up to a better eco standard.
Chair: It might be useful if Dr Battersby
or Mr Griffiths came in in relation to the private sector.
Alison Seabeck: I was going to come back
on that.
Q10 Chair: Whether Decent Homes is
a useful vehicle or not.
Dr Battersby: The problem in the
private sector, apart from the obvious, is fuel poverty; excess
cold is the most serious hazard and the greatest cause of ill-health
and death. With excess winter deaths it is a fundamental issue.
As I say, that is the rating system which will be used there,
whether it is in HMOs or whether it is elsewhere, but again, the
problem is that local authorities have not been able to develop
effective strategies to address this. Certainly, the CLG did issue
advice in November last year on excess cold, but that is the main
focus, and indeed, the truth is that it is entirely possible to
actually have a home that actually, on the face of it, meets thermal
comfort criteria of the Decent Homes standard, but could still
have a serious health risk and a hazard of excess cold.
Chair: I think the question we are asking
though is: is the Decent Homes programme, in relation to the private
sector, an effective way of improving the energy efficiency of
that sector, and if not, what is, rather than going to the reason
why we need to do it.
Q11 Alison Seabeck: If I can add
to that, we talk here about the role of local authorities, clearly
with a strategy role in all of this; can they cope? They are not
enforcing the HMO regulations.
Dr Battersby: They cannot cope.
Ms Webb: And they cannot cope—
Q12 Chair: Hang on a minute, we still
do not have the answer. Is the Decent Homes programme an effective
vehicle within the private rented sector for delivering improved
thermal efficiency to help us meet the 27 per cent target or not?
Mr Capie: I think we have to look
at what Decent Homes—sorry.
Dr Battersby: Well, yes, I mean,
the short answer is that the rating system will be the focus for
intervention, not Decent Homes, and by accident it may address
the category 1 hazards.
Mr Capie: If we knew what we know
now about Decent Homes, we would have probably done it differently
from the outset, and we would have actually looked at some of
the broader issues around CO2 reduction as part of that. Where
we need to get to in relation to carbon reduction is something
quite significantly different from what we are trying to achieve
with Decent Homes. One of the things we would say is a forward
looking programme has to actually be tender blind, and it will
obviously be a lot more ambitious than what we have needed to
achieve with Decent Homes. The other thing we have to actually
do is look at how we reconcile some specific targets around housing
with actually some of the wider issues we will be taking forward,
for example around the thermal insulation and efficiency of public
buildings. If we are going to achieve some of this stuff, it is
going to require scale, and we will not necessarily be able to
do that just in housing, but in housing we know that the impact
we can have on reducing CO2 in housing is an area where we can
make some real inroads, because the technology is out there, the
big issue remains funding.
Q13 Alison Seabeck: I will move on
to lessons to be learned or not from Scotland and Wales. We have
a different scale in England of the problem, are there lessons
that are transferable from Scotland and Wales, are the English
guidelines simply too weak? National Energy Action think they
are too weak, in their evidence.
Ms Webb: We think there are some
lessons; they have had the benefit of coming after England, and
therefore they have learnt lessons. One of the clear lessons they
learnt was to build in slightly stricter standards around some
of the eco stuff and environmental stuff, which they clearly learnt
by talking to us and saying, if we had had our time again, that
is what we would have built into ours, so I think that is one
lesson. I think similarly they have been able, partly due to scale,
but partly also by observing us to build in more local variations,
and in particular to talk to local tenants and residents and build
that in from the start. Again, I think they are better than us
on that. The third thing which particularly relates to Scotland
is the financial freedoms which their local authorities have,
which is one of the ways in which we would see Decent Homes being
funded in the future, around HRA reform, which you might come
back to, so I will not talk about that now.
Q14 Mr Betts: Moving on to ALMOs,
it seems this is probably a success story to come out of the Decent
Homes programme. Are they a success simply because they have had
a lot of money thrown at them, or is there some benefit proven
from detaching the strategic housing functions from housing management?
Ms Webb: From our perspective,
the single most important thing that they have done is focus on
the services that matter most to tenants, and you can argue that
they did that because there was money attached to them being excellent,
but actually, in a way, it does not matter, that is what they
have done. In a way that the TSA is now encouraging all landlords
to do, they got early on the fact that the core services that
matter to tenants are around repairs and maintenance, quality
of services, those kinds of things, and they put all their energies
into being excellent at those things, and I think that is one
of their key successes. They also had, from the word go, an ethos
around sharing of best practice, which I think is to be commended
across the sector. They have worked together as a collective to
make sure that they were always working to the standards of the
best thinking, rather than the lowest common denominator thinking,
and that has been one of their key successes. They have not been
in competition with one another in a negative way, but they have
worked collaboratively together, they have worked together very
well, and I think that the strategy versus landlord function is
an interesting one. Do you want to pick up on that?
Mr Capie: I think we certainly
see that ALMOs in some ways have taken an awful lot of lessons
from the CPA and the local government performance framework and
the progress there, and also looked at the really positive things
that have been happening in the RSL sector, almost drawn on the
best of both worlds in some ways. As Sarah said, I think one of
the things that has been fundamental to them has been that right
from the outset, they have had a firm commitment on core services,
and involving tenants and shaping those core services. Obviously
the carrot of two stars, you get your funding, is a very, very
strong driver for those businesses as well. We would certainly
maintain that all local authorities should have an absolutely
fantastic and 100 per cent committed strategic housing function.
It does not matter if you have retained stock, it does not matter
if you have an ALMO, it does not matter if you have transferred,
the debates and arguments should be about how we make sure that
all local authorities are delivering that service as well as they
should do. I think the Audit Commission's report Building Better
Lives has kind of highlighted some of the issues around that,
but it is not a case of being good at delivering the strategic
function or being a good landlord, we do not see that as being
incompatible. As far as we are concerned, you should be able to
do both where that is the case, but you should be 100 per cent
committed to whatever function you are fulfilling, whether it
is delivering landlord services to a tenant population, or being
a strategic enabler across a wide range of providers.
Ms Webb: I mean, there are retention
local authorities that are good at strategy, and retention local
authorities that are not good at strategy; same for ALMOs.
Q15 Mr Betts: A lot of authorities
now have ALMOs and there is some concern about what happens after
2010, in the sense that some ALMOs have not finished their programme.
Around six ALMOs that have two stars or are about to get them
are now being told that they are not going to get any money for
the next 12 months or so, and will it then come at all? I suppose
there begin to be concerns there. For others who have done a lot
of work on the programme and see it coming to completion, what
happens to them after that time, in terms of their structures,
I mean, do you have any thoughts on that?
Ms Webb: Yes, I think those are
exactly the concerns that we have. If you are a tenant in an ALMO
that has been working towards the promise of money, what has happened
in the most recent housing pledges is bad news for you. We have
believed and have been arguing, I think, as far back certainly
as 2005, that there should be an opportunity to allow ALMOs to
borrow off balance sheet from the public sector. We have been
working on a way in which that could happen, we think that is
a very important piece of work. It has been slightly subsumed
by the work that has gone on around the HRA reform, but we think
it is a fundamental thing to the success of ALMOs going forward,
that we look at enabling them to stay as public sector owned assets,
but allowed to borrow privately off balance sheet. You get the
best of both worlds, the best of local authority owned stock and
of private borrowing that housing associations enjoy. We think
there are solutions around that, and we are hoping that CLG will
be prepared to work with us on looking at those solutions.
Q16 Mr Betts: Can I just push you
on two aspects of that? Firstly, if you cannot get the National
Statistics Office to redefine what is public borrowing and what
is private borrowing, I think it is actually their responsibility
in the end, then you are going to be stuck with some changes to
the ownership arrangements of ALMOs which I think were suggested
to get the percentage of council ownership down. Does not that
then rather take away the fundamental principle that people voted
for ALMOs by and large because the houses remained in local authority
ownership?
Ms Webb: No, you are right about
the ONS, although we have been talking to them since 2005 about
this, so we are not suggesting anything that we do not think they
would agree with. It might sound like semantics, but I think it
is actually very important semantics, that our proposition is
that the local authority stock is retained in ownership by the
local authority, but the ALMO, as an entity, is not owned by the
local authority. So what you might have to have, and the statistics
people have been listening to us, is the ALMO run by a group of
people where the local authority had 49 per cent of the seats
on that ALMO, so the stock ownership absolutely categorically
stays with the local authority, and that is the fundamental principle.
Q17 Mr Betts: Well, is it? Because
if the borrowing was going to be allowed under those rules, then
it would be the ALMO who would have to do the borrowing. Could
the ALMO realistically borrow and get the funding unless the ALMO
actually had assets to borrow against and control the rental stream
in the future?
Ms Webb: Absolutely, it is one
of those things about stock transfers that actually most lenders
lend on the value of the rental stream anyway. They might talk
about the value of the assets but they are actually lending against
the value of the rental stream, so they would carry on lending
against the value of the rental stream. What you then have to
do is balance the length of time that you give them that rental
stream borrowing for against the Treasury's rules about risk,
and that is exactly the same debate as you have with PFI, and
it is the same thinking as PFI.
Q18 Mr Betts: Would not the ALMO
need to control the rental stream? Currently it is the local authority
who fixes the rents, is it not?
Ms Webb: It is, yes, but I think
that would easily be possible to arrange.
Q19 Mr Betts: You would have to transfer
the responsibility for rentals to the ALMOs and give them a long-term
contract.
Ms Webb: Yes but that is no different
from PFI. It is exactly the same thinking as you have in PFI.
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