Examination of Witnesses (Question Numbers
260-279)
MS ALISON
INMAN, MS
GWYNETH TAYLOR
AND MR
PAUL TANNEY
23 NOVEMBER 2009
Q260 Chair: Mr Tanney, can you give
us an insight from your position at East Durham Homes into the
current state of your housing stock and how much progress you
think you are going to be able to make after 2010?
Mr Tanney: At the moment we are
running at just under 90 per cent non-decency and that is largely
historical in terms of the fact that there has not been the money
to invest in this stock, plus there has obviously been some poor
quality stock in there. What we are doing with the funds that
we have at the moment is that we are concentrating on elemental
replacement which is being done in consultation with our customers
so that we address the worst elements, things like making sure
that rewires are done, that are urgently needed for health and
safety and they are done on a programmed basis, and central heating
is done on a programmed basis so that you get better value for
money. In terms of moving forward, we are totally reliant on Decent
Homes funding to achieve the Decent Homes standard. There is no
way the local authority funding regime, either currently or the
proposed regime that is out to consultation, could fund Decent
Homes standard without an additional Decent Homes funding element.
Q261 Chair: I think it is difficult
for us outside to understand quite why your area has such a huge
proportion of non-decent homes still. Can you give us a bit of
an insight?
Mr Tanney: I think historically
the council was wedded to charging low rents, which meant that
there were not sufficient funds to invest in the stock. The investment
that has taken place has often been spread very thinly or has
been concentrated on Peterlee New Town, which is part of our stock,
a sixties new town, some of it with none traditional flat roofs,
with lots of maintenance problems there, so historically there
has not been a lot of money to invest and it has either been spread
too thinly or has had to be used to rectify problems within the
Peterlee stock. Where we are currently is that we have been replacing
individual elements, as I said, rewire programmes, doors and windows
programmes, central heating programmes, so that we address the
worst elements for tenants instead of being able to address a
smaller number of properties doing the full decency package. What
we have been able to do is address those worst elements in the
first two years and this year we have been able to begin to turn
to full decency packages and 42 per cent of this year's programme
has kick-started our full Decent Homes programme. Because we have
now got two stars as well we have received an initial allocation
for the remainder of this year of ALMO funding of £4.9 million
and clearly that is going towards full Decent Homes packages.
We have consulted with our tenants and we are doing the three
worst areas first, so we are investing in the Decent Homes packages
as of now with the new Decent Homes funding.
Q262 Chair: What proportion of your
homes do you think will be non-decent by the end of 2010?
Mr Tanney: Unfortunately, I am
not able to answer that because we have not agreed what funding
we are going to get from the Homes and Communities Agency for
2010-11, so right at this stage I do not know what funding I am
going to have from 1 April next year, even though we have got
two stars.
Q263 Chair: The £4.9 million—how
much of a reduction in your non-decent homes will that deliver?
Mr Tanney: The £4.9 million
allows us to do 255 homes up to the full Decent Homes standard
by 31 March next year. That will then bring us down to around
84 per cent non-decency.
Q264 Alison Seabeck: We have heard
a lot today going round Stockport and have read in the evidence
that we have received that ALMOs generally are seen as being able
to offer more above and beyond the Decent Homes standard to provide
community benefit. Why do you think that is, given that there
is a fixed amount, five per cent effectively, that you can spend?
Ms Inman: There are several elements
to that, one of which is carrots and sticks; sticks do not work
on their own. We have standards linked to investment, so in order
to access the Decent Homes funding ALMOs had to reach two stars,
so already we are committed to improvement. Often ALMOs, when
they started, were not even at zero stars. The point was made
earlier that these organisations were not performing well in many
cases, so there has been rapid improvement, and obviously the
better the organisation the better the programme is going to be.
As well as that it is about the way that tenants have been involved.
Tenants have driven the implementation of Decent Homes within
communities served by an ALMO.
Q265 Alison Seabeck: So therefore
tenant involvement is something which a new build scheme would
have much more difficulty in accessing because you are bringing
new people into an area perhaps with less commitment or less history
in that area. Would you say that is important?
Ms Inman: First of all, there
was a ballot of all tenants and tenants voted positively for that
option, part of that being because tenants are on the boards of
ALMOs and tenants are setting the agenda. Tenants have been saying
what sort of a Decent Homes implementation they want within their
areas, so they have been involved in choosing the specifications
and choosing contractors, and so already that gives a real uplift
to an area instead of just being on the receiving end.
Ms Taylor: I think there are a
number of factors that have made the ALMO sector really work in
that regard. The focus, which has been very much on getting the
carrot of the funding, has been huge, not only getting the money,
but if you are a chief executive of an ALMO which does not get
its two stars you are quite often out of a job.
Q266 Alison Seabeck: It focuses the
mind!
Ms Taylor: It certainly does,
and often the board as well. The tenant engagement has been enormous.
I have worked in local authority housing for nearly 35 years and
I have never seen such a tremendous change in approach, and I
do not think I can state too much the tenant role in being able
to identify what is wanted and needed locally. ALMOs also work
specifically within the local community. They work for one local
authority, they are paid by that local authority, they have got
to deliver the priorities, so they are very much focused. They
know the community, they are out there on the ground working with
them, and I think all of that has helped. In addition, we are
gaining from the best bits of both the local authority and the
housing association sectors. We have that strong link with the
local authority but we also have the much more businesslike and
effective board structures of the housing associations which enable
decisions to be made much more quickly than in a more bureaucratic
organisation, so it is a range of different things which has led
to the success of the movement.
Mr Tanney: Can I give you an example
of that? At the inspection in 2007 East Durham Homes got no stars
by the Audit Commission in relation to its customer involvement.
At the inspection in July we got three stars in terms of customer
involvement. It is not just involvement in Decent Homes. We have
involved customers right from the beginning in establishing what
our role and purpose are, what our strategic objectives are as
a company. They are involved in all our service reviews. They
monitor the way our service is delivered and myself and the Chair
are called to account by our customer services panel, the Housing
Partnership. Every quarter we are called to attend and have to
be prepared to answer questions on anything that is worrying our
customers. That real accountability is a very positive thing both
from our customers' point of view but also for ourselves because
it keeps us on our toes and makes sure we deliver what our customers
want.
Q267 Alison Seabeck: So it is a key
driver for outcomes?
Mr Tanney: Yes.
Q268 Alison Seabeck: Can I move on
to fuel poverty and energy efficiency? I know, East Durham, that
in your evidence you talked about fuel poverty, stating that "social
housing providers should be encouraged to look at alternative
and supplementary fuel sources" . How closely aligned do
you think the government targets and programmes are to achieving
some of those aims?
Mr Tanney: We are quite lucky.
We have worked very closely with the district council of Easington
and now Durham County Council to make sure that we maximise our
input in terms of cavity wall insulation and additional loft and
top-up insulation, and our customers have said that this is a
major priority for them in terms of reducing their carbon footprint.
The number one priority for our customers was to try and get double
glazing into the properties to assist with that, and we have been
running programmes, which I have already mentioned, for central
heating and improved energy efficiency, so we have tried to tie
in what existing resources are available. From our point of view
we also need to make sure that we are not just looking at existing
resources but also what is the future. I think that comes as part
of Decent Homes 2; if there is going to be a Decent Homes 2, rather
than Decent Homes 1, where we have to get the properties up to
the Decent Homes standard.
Q269 Alison Seabeck: You are talking
about alternative and supplementary fuel sources?
Mr Tanney: Yes.
Q270 Alison Seabeck: What do you
have in mind, given the nature of your properties in Easington?
What would work for you there?
Mr Tanney: I think we have to
do a lot more work around them. We are about to start a pilot
on solar panels with ten properties. That is a joint pilot with
the council but I would like to do some more work around ground
source heat pumps and air heat pumps as well to see if they would
work in our area. I think though that that has to be very much
phase two. We have to address getting the properties insulated
and getting as many energy efficient boilers and systems in place
as we can at this stage.
Q271 Alison Seabeck: Can I ask generally
how the ALMO sector is looking at a new Decent Homes standard,
what comes next and how that better links into existing government
programmes and government targets, energy efficiency, for example?
Ms Inman: What we have had up
to now with Decent Homes is an internal specification, so it has
looked at where people are living, inside their homes. I think
mark two has got to move on to looking at communities; it has
got to be looking at communal areas within flats; it has got to
be looking at estates. People are developing a pride in their
homes.
Q272 Alison Seabeck: Community heating
systems, retro-fitting of community heating?
Ms Inman: One of our biggest problems
is managing tower blocks, for example, the communal areas, the
lifts, and all the rest of it. One of our members is installing
a wind turbine on the top of a block of flats. If you have got
flats, and there are so many down sides with them, one of the
positives is that there is an awful lot of wind up there, so if
we can move on to looking at things like that within phase two
I think that will be really exciting.
Ms Taylor: I think you will find
that most of the early round ALMOs that are finished or close
to finishing are actively working on issues about environmental
improvements, but again we are getting—
Q273 Chair: Can I just stop you?
When you talk about environmental improvements do you mean improvements
to the environment around the buildings or do you mean energy
efficiency?
Ms Taylor: I actually mean both,
but in this particular context, if we look at energy efficiency,
we do have quite a lot of ALMOs exploring new techniques, things
like ground source heat pumps and the kinds of issues that Paul
has already mentioned. However, again, because of the intractable
nature of the stock a lot of these are quite expensive to deliver,
particularly on some of the non-traditional build and the high
rise dwellings, and so there is an issue about investment capacity.
Q274 Alison Seabeck: I will move
on to the TSA which has had a fairly positive welcome in the evidence
we have received. Do you think there is anything missing from
the proposed national regulatory framework, and, if so, what?
Ms Inman: It is a good start.
It is setting basic standards. I think the devil will be in the
detail. We are excited at the thought of local standards, and
obviously that fits well with the ALMO model where tenants—
Q275 Alison Seabeck: Before you go
on can you give me some examples when you talk about the possible
benefits for local standards? What do you mean by that, just so
it is on the record? What do you see happening?
Mr Tanney: From my point of view
the TSA standards are welcome in terms of forming a basic minimum
but something that is missing from an ALMO that has got to two
stars, and from reading them over the week and bearing in mind
the consultation document has just come out, is that they do not
appear to be overly aspirational and they are therefore reliant
on the establishment of local standards. The best example is that
most of us in the ALMO world and housing associations themselves
have agreed with their own customers a slight variation over and
above the Decent Homes standard. The Decent Homes standard itself
is fairly basic, so we, with our customers, have agreed a slightly
higher standard. I suppose that is the most obvious example that
relates to the main focus of this inquiry. For ourselves that
includes an extra row of tiles and a focal point fire in the living
room, which would generally be an electric focal point fire, so
there the standard is slightly above the basic Decent Homes standard
that we ourselves have agreed.
Q276 Alison Seabeck: So when you
do your rewiring you hard-wire smoke alarms while you are doing
it?
Mr Tanney: That is another good
example.
Q277 John Cummings: Very briefly,
Mr Tanney, can you indicate to the Committee what the department
needs to in the short term in order for us to move towards tackling
the immense backlog of homes in the area which do not reach decent
standards?
Mr Tanney: From my point of view
what it needs to do is guarantee Decent Homes funding over the
next four to five years, not just for East Durham Homes but for
all those ALMOs that have not achieved decent standards. Even
with the new proposals for self-financing of the housing revenue
accounts we will not be able to achieve decency in the modelling
work we have done without there being separate Decent Homes grant
funding. The thing the department can do is try to get that funding
secured. The stop-start nature of the existing programme means
that I was not able to answer a simple question about where would
our decency level be next year because I do not yet know what
my funding is. The impact that has in terms of local job creation
with our partners who are going to deliver the programme is considerable,
so we are not getting the regeneration benefits in terms of job
creation and investment that we should be because my partners
are saying, "We cannot take apprentices on until we know
what we are going to get". We in East Durham Homes under
our revised structure were going to create a trainee surveyor's
post. We cannot do things like that until we know we have got
continuity of funding, so it has a big impact in terms of jobs
and the added benefits that that brings, but also we need continuity
to deliver to people who are living in homes and paying their
rent.
Q278 John Cummings: On a more general
note, can you indicate to the Committee why ALMOs have "outperformed
RSLs and retained stock" authorities?
Mr Tanney: I think we would all
want to jump in here, to be perfectly honest. It is partly carrot
and stick. Gwyneth pointed out that ALMO chief executives do not
have jobs if they do not get two stars, but it is really about
the whole nature of the way we are developing our services. I
indicated how involved our customers are. What it means is that
when we are delivering services they are the types of services
that our customers want in the way that our customers want them,
and that is reflected when the Audit Commission come in and see
that we are delivering efficient, effective services. We are also
free from the council, we are standing at a distance from the
council, so some of the changes I have been able to implement
quite quickly. Because we are stand alone and I report to a board
I have been able to do some changes quite quickly to make improvements
happen. I will give you the easiest example. Our call contact
centre is open from eight in the morning till eight at night plus
from eight till 12 on a Saturday. We have been able to invest
in a customer relations management system, we have scripting in
the contact centre so that the consistency is there, and that
was done just through local consultation with the union within
our organisation and then went to the board. If I had had to take
that through the council it would have taken a lot longer to implement.
Chair: I am anxious about the time and
I would quite like to move on to the funding questions. We can
come back to this one if we have the time.
Q279 Mr Turner: We have heard from
East Durham about the problems with the HRA and their specific
issues. I wonder if you could, from the National Association,
give us your view of how you think the changes to the HRA might
improve or make no difference or make it worse for ALMOs and for
Decent Homes standards in general?
Ms Inman: From our research most
of the ALMO sector, were the HRA reforms to be brought in with
certain other tweaking, would become viable and self-sustaining.
Not everybody is going to be but the vast majority of our authorities
would be. Certainly one of the things that we have been able to
do is consult a lot with our tenants on this and our tenants want
the reforms to the HRA. They find it very difficult to understand
why they are paying rent and then that rent is going somewhere
else. They did suggest that maybe that should happen with mortgages
as well, so maybe if you are paying a mortgage some of it will
go off your house but the rest of it will go off Mr Cummings's
house. It is unsustainable, it is daft. The system as proposed
in the review would work for most of the sector. There are going
to be problems. There is some stock out there that is so much
in need of massive investment that there will still issues to
be dealt with, but on the whole we are exceedingly positive about
it, are we not?
Ms Taylor: We are. I would also
make the point that the proposals have directly come from the
original work we did jointly with the Chartered Institute of Housing
and HouseMark in 2005 which then led to self-financing case studies
and then persuaded CLG what everybody else had been saying for
ten years, that the current subsidy system does not work. I think
you have to split it down into several key areas. One is the backlog.
That is what the Decent Homes funding programme was aimed to address
and still needs to do. There is still quite a considerable backlog
left to be achieved. That will need additional resource. The aim
of the Decent Homes programme was that, having addressed that
backlog, the subsidy system would allow you to sustain Decent
Homes. It clearly currently does not; the Government's own research
shows that, but we do believe that, provided a number of factors
are okay, such as the amount of debt that is redistributed and
that there are no significant changes in terms of rent policy
or interest rates, for the vast majority, once the backlog has
been addressed, the self-financing system will allow councils
to have a sensible and locally appropriate approach that will
also enable them to sustain Decent Homes. There will be a very
small number of authorities with significantly intractable stock
that may need some additional support but it will be quite small
and therefore much more manageable. We are certainly very keen
for the Government to go ahead with the proposals as soon as possible
so that local authorities can finally have a stable financial
regime that is not only transparent to tenants but will enable
them to plan long term and have efficient programmes for the future.
Currently, a system where you have no idea each year what your
income is going to be simply does not allow that kind of proper
programming.
| 
