Choice words

How it would work: Good question. Significantly, the chapter on ‘raising the quality of social housing’ is where ‘the merits of transfer’ are detailed. It is the programme to transfer 200,000 homes a year, up on this year’s likely 150,000 outcome, that will drive the repairs revolution. Best value is also cited as a process to drive improvements. But it is still not clear how council stock in areas that do not transfer can be improved within ten years, unless council housing investment programmes are given a boost in the summer’s spending review – but if that happens, where’s the incentive to transfer?

Likely impact: Transfer business plans will be expected to demonstrate ability to meet the local backlog within the government timescale. It may be that ambitious new homes funding from the council’s sales receipt will have to be sacrificed to ensure this is realistic. Government approvals for private finance initiative schemes and arms length companies (see below) will also be tied to ability to rapidly address stock conditions. Pressure will increase on councils unable to meet the ten year repairs programme to opt for full transfer.

The real aim: There is no hidden agenda here. It is a huge coup for the housing sector to have won a timetabled and costed pledge to invest £19 billion in bricks and mortar. Ironically, it may have been the government’s low opinion of the now heavily stigmatised social rented sector that prompted such an ambitious target. Ministers clearly feel that ‘social housing isn’t working’ and recognise that tackling physical conditions is an essential and urgent part of the solution.

Critics say: This is a government pledge for others – mainly local authorities – to meet. By citing improvements in performance under best value as one of the three factors that will produce £19 billion, it is clear that good old ‘efficiency savings’ will be expected to contribute where taxpayers or transfer cash is insufficient. Is this realistic? And guess who will be blamed if the pledge isn’t met

Key phrase: ‘Public investment will not be enough to bring about the marked improvements we seek’

Arms length housing companies

‘The best performing authorities would be able to retain and use more of their rental income to finance borrowing for investment,’ once they have ‘established an arms’ length management company to manage their stock and associated investment.’

Nick Raynsford: ‘There will still be an awful lot of stock left in the local authority sector in five years’ time. It would have been irresponsible – and incompatible with our ten year repairs programme – not to try to do more to improve it. There’s no reason why you shouldn’t, in one area, have a local management company while some of the other stock is transferred.’

How it would work:: Housing departments rated ‘excellent’ under best value inspections will be able to access extra cash. But first they will need to set up a stand-alone housing management organisation with a ‘high quality business plan’ that complies with government policy on rents and lettings. Within existing public spending rules, these authorities would be given additional credit approvals to invest in their stock, via the new arms’ length company

Likely impact: Some will see this as a turning of the transfer tide, but they may be disappointed. The paper is clear that ‘only a small number of authorities will be able to pursue this option in any one year’. Treasury concern over the effects on public borrowing that this additional borrowing represents is likely to keep the number to a handful. The rewards for going down this route are likely to be significantly fewer than pursuing full transfer, suggesting that this option may suit best those local authorities that do not have urgent investment needs or those who use it alongside partial transfer of other stock. Ot they may regard it as just a short step away from full transfer at a later date.

The real aim: This is the political answer to those who complain that councils are given no real option but to transfer. ‘if you’re really good you won’t need to’ is the message. Making this option a reward not a right is a neat way to keep councils focused on their performance, calling the municipalists’ bluff

Critics say: The timing is terrible. Having finally persuaded councils across the UK to go for transfer and abandon their landlord role, the government has given reluctant councillors and sceptical tenants an excuse to halt the process. A good idea whose time has passed, arms length companies will benefit those who may least need the resources while potentially delaying the benefits of full transfer from areas crying out for investment

Homelessness reform

‘We propose to remove the current restriction that temporary housing need only be provided for two years.’ Instead, unintentionally homeless people should get temporary accommodation ‘until they obtain suitable settled accommodation in either the public or private sector’. Priority status will be extended to 16/17 year olds, those leaving care, prison and the services, plus victims of harassment and domestic violence.

Nick Raynsford: ‘We have chosen to widen priority need to what we think at the moment is feasible and practical. In just the same way as in 1977 the priority need groups that were defined then were what were regarded at the time as achievable. Although some people would have liked a wider definition, as always in politics there are compromises to be made. But we’ve moved the whole agenda forward and said there are important additional needs groups that should be included. The wider strategic role is one in which local authorities will be increasingly talking about, and liaising with other bodies to deliver, the policies to meet the needs of the people who are sleeping rough or are homeless in their area, not just those that are in priority need.’

How it would work: Local authorities will have a duty towards a wider range of ‘priority’ groups – particularly young people. A limited version of the proposed ‘choice’ in general lettings will be extended to homeless people, with councils given the discretion to determine how long the period of choice lasts, taking into account local demand and costs of temporary accommodation. Once the period of choice ends they will ‘have the right to one single offer of suitable settled social or private sector accommodation’. ‘This would act as a powerful incentive for them to exercise their choice quickly.’ There are various proposals to increase the prevention of homelessness and, In low demand areas, the government signals ‘greater flexibility to assist non-priority homeless households’.

Likely impact: Demand may increase as new groups are given priority, but where will they go if there is no contingent increase in new homes supply? Elsewhere, the document suggests allowing social landlords in low demand areas the chance to ‘let some of their properties at market rents’ and enabling councils to ‘use their own stock to provide temporary accommodation’. This suggests a growing trend towards short term letting by social landlords. Housing associations may yet become key providers of ‘suitable’ private accommodation as an alternative to full secure/assured tenancies.

The real aim: A genuine concern to improve vulnerable groups’ rights is coupled with a recognition that the days of ‘homes for life’ are over. Homeless applicants and those in need on the register will get more assistance and more choice. But the message government wants to filter down is that applying to the council no longer means getting a long-term council or housing association home as the end product. This is already the position in law, but it could now be set to become more common practice.

Critics say: Councils are being asked to cope with more demand with no sign yet of a boost to new homes supply. New social housing would be much more appropriate for homeless households than private sector tenancies. What happens to homeless applicants could depend, even more than at present, on where you live. The paper recognises that ‘pressures in some parts of the country will impose constraints on the extent to which homeless people can be allowed free choice.’

More choice for new tenants

‘We do not believe points-based assessment systems are an ideal way of ensuring that social housing lettings meet need in a sustainable way.’ The government will therefore ‘promote lettings policies that offer choice by establishing a new fund to pilot customer choice-based lettings systems in different areas of the country.’ But the government ‘does not propose to impose any particular scheme by statute. It is up to local authorities to determine what works within their locality.’

Nick Raynsford: ‘We can’t go on with the old allocation system where people join the waiting list and then they’re told when they’re going to be housed. Reform is essential.

‘People are forced to demean themselves in order to get access to housing. They are required to demonstrate that they are poor, disadvantaged, ill, vulnerable. This has shades of the 19th century Poor Law. I want to see people having more of a role in the process themselves, then they won’t feel at the mercy of others. After all, you wouldn’t wait for an estate agent to contact you when a house comes onto the market. You go round and look at what’s on offer yourself.’

How it would work: The government wants a ‘wider adoption’ of some of the best practice already being pioneered by local authorities. The basic idea is to try to work the element of preference into the heart of the system and to move away from detailed ‘points assessments’ and towards broad bands of need. Lets might, for example, be openly advertised and only those who express an interest in a given property would then be considered.

Criteria for allocation might then include the need to produce a mix of households, for example reducing child density. Ideas to be piloted further include the Dutch Delft system, which expects customers to return coupons to apply for properties where they meet the requirements of the type of household suitable for the property. Housing associations will have to subject their own lettings to a greater degree of co-operation with local authority policies. Inter-authority co-operation is also expected, to widen the scope for movement across council boundaries.

Likely impact: Depends on each local authority’s willingness (and capacity) to change the way it operates when not strictly required to by central government. Those embracing the new thinking could find the ‘market’ lettings principle brings a much stronger commitment to the home and neighbourhood by tenants that have actively chosen to live there. But it will take a long time to wean many housing staff off their power of ‘allocation’. Even authorities keen on offering choice will find their scope to do so determined by the nature of their stock and turnover in lettings.

The real aim: This is just the beginning of a fundamental change. Breaks the traditions of welfare dependency, by making those seeking the rewards of a long term affordable tenancy show greater commitment to it. Councils have so far only been expected to think of their existing tenants as customers. Having to ‘market’ new lets will force them to understand and meet future demands.

Critics say: Those better at expressing their choice are not necessarily those who most need the security of a social tenancy. The choice agenda could be a smokescreen for social engineering of estates to make tenants more acceptable to housing managers and others. Many cities, such as London, have their worst estates close to some of the most desirable socially-rented street properties – choice here is likely to be all in one direction, leaving homeless people and those most desperate to take the least desirable properties.

Rent reform

‘‘Rents, while remaining affordable, need to be restructured so that tenants see they are fair.’ Restructuring to reflect the size, quality and location of the home ‘should be phased over 10 years’. Any changes in rent due to restructuring should be limited to £2 per week each year.

How it would work: The paper ducks a decision at this stage, citing two of a number of options as the ‘more promising’. One is to stick with existing council guideline rents, which take account of both property values and affordability – but to apply the system on a regional basis to both local authority and housing association rents.

The other option, which the paper hints it favours, was put forward by the IPPR think tank. This suggests a minimum rent for each property based on its running costs, plus a top-up to reflect property value, expressed as, say £3.75 per week more per £10,000 worth of value. But this add-on cost would fall to £1.75 for every £10,000 above the average value for a socially-rented home (currently £44,000).

The green paper also suggest some rent convergence between council and housing associations rents – which are currently around 20% higher – though it falls short of setting a timetable for complete compatibility. Instead, housing associations will be required to base rent setting on the ‘same principles’ as councils – rent coherence rather than convergence. As council rents rise in real terms, housing association rent rises are to be pegged to RPI only. The ‘plus one’ per cent formula is to go, from April 2012.

Likely impact: Again, this is the beginning of a long-haul reform. But one thing is clear, once ministers have chosen their favoured council rent formula, housing associations will be expected to fall into line. Coupled with the possible introduction of a single tenancy, this move will increasingly blur the differences between council and housing association sectors. Rents and rights will gradually merge, though the pace of stock transfer may make this process irrelevant.

The real aim: The government is serious about getting social tenants to see there is a logic to the price they pay for the home they live in. Meanwhile, affordability is an issue for the Treasury too, hence the increased squeeze on housing association rent rises. With the majority of stock due to be in this sector (via stock transfer) within only a few years, the housing benefit alarm bells have been ringing at No. 11 Downing Street. If more affordable rents means fewer new homes for the same money, so be it. This green paper is all about quality before quantity.

Critics say: For some poor tenants, this could amount to an extra £1,000 a year (those who get a £2 per week rise over ten years) – potentially punishing people for living in a well off area. For those already in high rent properties, how does a softly softly 10 year plan help them come off benefits and pay their own rent in the short term? The new ‘RPI only’ rent increase ceiling for housing associations only tackles rent increases, not their actual level.

Scotland: what's the difference?

Scotland’s housing green paper was published 15 months ago. In Holyrood there is no direct equivalent of a white paper, but it is a requirement that all bills demonstrate adequate pre-legislative scrutiny. A draft housing bill will be issued for consultation before the Scottish Parliament ends its first session on 10 July.

Much of the attention north of the border has been ozn how the English paper will directly affect Scotland: most obviously on housing benefit, but also any fiscal changes to private renting and some aspects of protection for home-owners. In England, long-term housing benefit changes are clearly being linked to rent reform and new allocations systems. In Scotland there has been little debate on the former and very serious reservations about the latter. Ten years from now, will the square peg of housing benefit fit in devolution’s round hole?

It is striking how stock transfer is driving housing policy in Scotland. Take the single social tenancy, for example: mentioned in passing by the DETR but a core part of the Scottish housing bill. Anti-transfer campaigners point to the reduction in rights in moving from a secure to an assured tenancy, so the new agreement will be closely modelled on the secure tenancy.

However, communities minister Wendy Alexander has needlessly ruffled the consensus by insisting on a largely unreformed right to buy being extended to new tenants of most transfer bodies. It would have been just as easy, critics say, to reduce the impact of the right to buy, while making it more universal.

Stock transfer also features heavily in the homelessness task force’s preliminary recommendations. Faced with the accusation that it can undermine councils’ homelessness duties, a large part of the task force report is devoted to setting out new arrangements so local authorities can continue their duty. There are no equivalent arrangements elsewhere in the UK.

The differences between the two bills may actually help promote debate. Why are some proposals deemed good enough for England but not Scotland – and vice versa? They also demonstrate that, like it or loathe it, devolution does mean difference.