Localism

Memorandum from Place for People (LOCO 094)

1.0 Introduction

1.1 Places for People is one of the largest property management, development and regeneration companies in the UK. We own and manage more than 62,000 homes and have assets of £3.1 billion.

1.2 Our vision is to create and manage places where people want to live and our approach looks at all aspects of communities rather than focusing solely on the bricks and mortar provision of homes. Places for People’s innovative approach to place management and placemaking allows us to regenerate existing places, create new ones and focus on long-term management.

1.3 Our response to the CLG Committee’s inquiry into Localism is put in the context of our recent submission to the Comprehensive Spending Review (CSR), in which we outline our proposals for redefining social housing grant as well as putting forward our ideas for a Decent Neighbourhoods Standard. This standard would provide an effective framework for linking outcomes relating to themes that underpin the sustainable communities concept, such as housing, environment, health etc. Further details of our proposals for redefining social housing grant, as set out in our CSR submission, are attached as Appendix 1 and details of the Decent Neighbourhoods Standard are attached as Appendix 2.

2.0 Executive summary

2.1 In this response, Places for People puts forward the following views:

· We support the Government’s localism and decentralisation agenda and feel that it can bring tangible benefits for local communities.

· In our view, the Government can play a crucial role in providing incentives for homes to be built locally by reviewing the way social housing is funded in the UK. By redefining social housing grant as equity, Registered Providers would be able to deliver additional housing, which in turn would stimulate house building in other tenures.

· We also feel that the application of a Decent Neighbourhoods Standard would provide a framework for putting the localism agenda into practice and deliver real outcomes to support local communities. The way in which we envisage this would be coordination of investment across a range of themes such as housing, health, policing, education etc in order to combat deprivation and raise people’s aspirations at a neighbourhood level.

· Whitehall has a vital role to play in ensuring the success of the localism agenda in providing the right incentives for local outcomes to be delivered.

· Local Authorities will play an increasingly crucial role as localism is put into practice. We are in favour of receiving housing benefit payments direct from a single national benefits agency, to free up local authorities to focus on local service delivery and protect tenants from rental arrears and eviction which can result from delays in claims processing.

3.0 General comments

3.1 Places for People supports the Coalition Government’s drive to decentralise services and give more power to local communities. We also strongly support the emphasis in its housing policy on the development and delivery of sustainable communities, stimulating choice and working to help people fulfil their aspirations. Generally, we therefore believe that decentralisation does lead to more effective public service delivery.

3.2 Housing demand in the UK will continue to grow, and affordability will continue to be squeezed in coming years. A growing number of people will need access to some form of affordable or intermediate market housing. We have set out a proposal in our Comprehensive Spending Review submission for Government to redefine social housing grant as equity and allow rents to rise over a period of time, in order for Registered Providers to restructure and take advantage of the remaining equity on their balance sheets to build a range of tenures in mixed-income communities. Initial modelling we have undertaken estimates that redefinition of social housing grant as equity would release sufficient funding to build 214,000 affordable homes, as well as levering in house building in other tenures. Details of our proposal are attached as Appendix 1.

3.3 We feel that these proposals would help to underpin the localism agenda in providing an important incentive for Registered Providers to build new homes where they are badly needed.

4.0 Localism and public service delivery

4.1 The inquiry’s terms of reference ask about the extent to which localism leads to more effective public service delivery and what the limits are, or should be, of localism. As we set out in section 3 above, we support the principles of localism and we believe that Whitehall has an important role to play in ensuring incentives are in place to deliver the right outcomes.

4.2 In our recent response to the Department of Work and Pensions’ ’21st-Century Welfare’ consultation, we refer to a 2006 study into the decentralised delivery of unemployment benefits in the Netherlands. [1] .The Netherlands has taken a decentralised approach to public service delivery longer than most other European countries. In 2004, local authorities received additional financial responsibility to manage benefit claims and payments locally, as the proportion of their unemployment benefit budgets funded by central Government was reduced. The Dutch Government’s aim was to make overall budget savings by encouraging local authorities to take a more active approach to reducing benefit dependency.

4.3 Whilst the new policy did spur local authorities to action, there were unintended consequences in that resources were diverted away from more vulnerable and long-term unemployed people to newly unemployed claimants and younger people, who were closest to the labour market. People were also pressured to take up jobs below their skills and experience levels, rather than look for more sustainable, long-term employment, and there were some inconsistencies in performance and other local variations, for instance in the work obligation placed on single parents with children aged over five.

4.4 In our view, similar issues can be avoided in the UK. In the case of unemployment benefits, for instance, Registered Providers and other agencies could be given financial incentives based on their success in helping different categories of unemployed people (e.g. young people, long-time unemployed claimants, etc) back to work. This approach would support effective local delivery and achieve real outcomes in line with the Government’s policy on sustainable communities.

5.0 Lessons from Total Place

5.1 We welcomed the previous Government’s Total Place initiative and were interested to read the final report in March this year. We agree with the Total Place assertion that centralised solutions often do not reach the most disadvantaged in society and that local context needs to be taken into account in order to tackle deprivation and boost economic growth.

5.2 We also agree that there are potential savings to be made by linking different types of investment. The savings identified in the report are initial estimates, however, and we agree with the report’s recommendation that further work needs to be done on the development of full business cases. The implications in terms of workforce also need to be examined more closely, as bringing together staff employed by different public bodies and on different terms and conditions could lead to confusion and further inefficiencies in service delivery.

5.3 Places for People supports the principles underlying Total Place. In particular, we feel that investment needs to be linked up better to deliver outcomes across a range of themes. We have long advocated the introduction of a Decent Neighbourhoods Standard (see Appendix 2), which fits closely with the aims of Total Place.

5.4 Based on our considerable experience of working in neighbourhoods, it is clear that there is a real need for local communities to be given a framework to develop area-wide business plans that break up spatial concentrations of deprivation and provide a broader range of tenures and tenancy types.

5.5 The way in which we envisage a Decent Neighbourhoods approach would work, would be to bring together all investment into a neighbourhood, including rent, benefits such as housing benefit and Job Seeker’s Allowance, council tax, economic development interventions, community funds, as well as coordinating other funding such as policing, health, education, transport, etc. Indeed, pooled or coordinated Government budgets focused on ensuring money was spent more effectively was a feature of the Localis study into the success of localism in Manchester [2] .

5.6 The Decent Neighbourhoods Standard would create clarity of responsibility and avoid waste and duplication. In particular, it can be used to encourage and incentivise active asset management strategies to break up existing concentrated areas of poverty and deprivation, including the potential radical restructuring of an area. It could also deliver a significant change in the way we engage with local people within the context of a set of nationally agreed standards. Finally, it would create the linkage between local involvement and policy outcomes.

6.0 The role of Whitehall

6.1 Whitehall has a crucial role to play in ensuring that localism and decentralisation lead to effective service delivery and budget savings. As the example from the Netherlands shows, even when there is strong direction from central Government, unintended consequences are possible and service delivery can be inconsistent.

6.2 In our view, the Government needs to put in place clear incentives for local authorities, Registered Providers and other agencies to deliver the right outcomes to support Whitehall policy.

7.0 The role of the local authority

7.1 Local authorities play an important role in delivering services to communities, and their roles will expand as the localism agenda is put into practice more extensively. We feel it is important for the Government to define more precisely whether ‘local areas’ will be delineated by local authority boundaries, or whether economic areas will be used to target investment. We welcome the announcements on local economic partnerships and would be keen to work with these new bodies in delivering services to local communities.

7.2 As the Total Place pilots have demonstrated, partnership working can deliver better policy outcomes as well as efficiency savings. In our view, Local Authorities should have a statutory responsibility to deliver the Decent Neighbourhoods Standard set out above, and will have a key role in ensuring that investments are coordinated and outcomes delivered. As mentioned in section 6, the relevant Whitehall departments would then be responsible for monitoring performance and ensuring consistency.

7.3 As we have set out in our response to the DWP’s "21st-Century Welfare" consultation, Places for People is strongly in favour of receiving housing benefit payments direct from a single national agency, rather than individual local authorities. In our view, this would free up local authorities to deliver essential services as well as helping to protect our tenants from arrears levels and the risk of losing their home as a result of delays in processing payments.

8.0 Conclusions

8.1 Places for People welcomes the Coalition Government’s move towards decentralisation and localism and believes that this approach can bring real benefits to local communities.

8.2 A crucial way in which the Government can help deliver affordable homes in local communities, is to review the way social housing is funded. By redefining social housing grant as equity, funds could be released to enable Registered Providers to build a significant number of new affordable homes, which would boost house building in other tenures as well as the wider economy both at a local and national level. Details of the proposals, as outlined in Places for People’s Comprehensive Spending Review submission, are attached as Appendix 1.

8.3 We welcomed the Total Place initiative and have developed proposals for a Decent Neighbourhoods Standard which is in line with Total Place principles. Under the Standard, investment into a local area would be coordinated in order to deliver outcomes across a range of themes such as housing, health, education, etc. This would be an effective way to deliver the localism agenda and tackle deprivation at a local neighbourhood level.

8.4 In our view, Whitehall has an important role to play in ensuring the success of the localism agenda in putting in place clear incentives to ensure the right outcomes are delivered and unintended consequences are guarded against.

8.5 We feel that housing benefit should be paid direct to Registered Providers by a single national agency. This would free up the local authorities to deliver important services locally and help protect tenants against rental arrears and eviction which can be a result of claims processing delays.

October 2010