Independence...Integrity...Value

April 2016

Apr 8th 2016, 11:01

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25th April 2016

The week before last I presented our seminar on the Housing & Planning Bill in London. The session was well received and I am grateful to all the delegates who attended. They said that the information provided was relevant, the quality of presentation was good and that the training met their needs fully. They described the session as valuable, useful and clear.

The seminar is now available as an in-house session. For more information or to book a session please contact me at Adrian.waite@awics.co.uk

My 100-page book that accompanies the seminar has been published and can be ordered online. For more information or to place an order please click HERE

Today we have published our latest briefing paper on ‘Scottish Social Housing Finance’. This briefing paper considers the financial position of Scottish social housing – including local authority housing and housing associations with particular reference to the latest published accounts that cover 2014/15 and includes sections on:

  • Introduction - Scottish Social Housing Finance
  • Scottish Government: Housing Policy
  • Local Authority Housing Revenue Accounts
  • Housing Association Finances
  • Welfare Reform
  • Conclusions

The Scottish Government is pursuing policies that are broadly in support of affordable and social housing in Scotland. In particular, there continues to be a substantial affordable housing investment programme available to councils and registered social landlords.

Local authorities account for income and expenditure on social housing through housing revenue accounts. Housing revenue accounts continue to be viable although they continue to report increased expenditure on management, increased capital financing costs arising from increased debt taken on to finance expenditure on the Scottish Housing Quality Standard and therefore increased rents.

Similarly, the housing association sector continues to be financially viable although the Scottish Housing Regulator has recently raised concerns about the long-term affordability of rents in view of the trend, in common with the local authority sector, for rents to increase faster than either prices or incomes.

Your copy of the briefing paper can be freely downloaded from HERE

We have also updated our publications for Scotland brochure. Your copy can be freely downloaded from HERE

Our seminar ‘All You Want to Know about Scottish Social Housing Finance’ will be held in Edinburgh on 7th June 2016. For more information or to make a booking please click HERE

The approach in Scotland is in marked contrast with that in England where the United Kingdom government is abandoning funding social housing in favour of funding schemes that are designed to halt the decline in home ownership; and is extending ‘right to buy’ through the ‘re-invigorated scheme’ in local authorities and the voluntary extension of ‘right to buy’ in housing associations.

However, the United Kingdom government has softened its stance on secure tenancies by conceding an amendment to the Housing & Planning Bill in the House of Lords to the effect that councils will review whether tenants should continue to be entitled to a secure tenancy every ten years rather than every five as originally proposed and that families with children will not be subjected to a review.

11th April 2016

I am writing this blog on the train while on my way to London prior to presenting our seminar on the implications for housing and local government of the Housing & Planning Bill tomorrow. This session has proved popular and I am looking forward to meeting the delegates.

The Bill has started its committee stage in the House of Lords today with both the government and opposition peers submitting a series of amendments. The opposition amendments have largely been anticipated for some time with a combination of Labour, Liberal-Democrat, Crossbench and even some disaffected Conservative peers intending to ‘water down’ the Bill regarding matters including starter homes, the sale of high value council homes and the ending of lifetime secure tenancies.

The introduction of significant amendments at this last stage by ministers is more surprising. Why didn’t they sort out what they wanted in the Bill before it was first presented in the House of Commons? Two amendments announced this week relate to starter homes and the sale of high value council homes. Eligibility for starter homes is to be restricted to those aged between 23 and forty. The change to exclude people aged under 23 is on the grounds that this would ensure that only ‘working people’ would benefit from the scheme. Interesting – I, and most people I know, started working before the age of 23! The wording of the Bill regarding the definition of high value council homes is to be to widened to include homes that are of a high value in relation to the remainder of the council’s stock as well as those that are generally of a high value. This is something that I was expecting to happen although I had thought that the Bill was already drafted widely enough to allow the government to do this through regulations. It will allow the government to require all councils to sell a significant number of their homes and oblige all councils to make significant payments to the Treasury even in areas where property values are relatively low.

My 100-page book that accompanies the seminar has been published and can be ordered online. For more information or to place an order please click HERE

The government has also stated that the ‘grants’ that it will pay to housing associations to compensate them for selling homes at a discount under the ‘right to buy’ will be accounted for as revenue income. I am surprised that this is a matter about which ministers can make announcements as I would have expected it to be a matter of proper accounting practice to be covered by the SORP (Statement of Recommended Practice). Nonetheless, this is good news for housing associations.

Next month I will be presenting our seminars on ‘All You Want to Know about Housing Association Finance’ in London and Leeds. These seminars provide an introduction and overview of the finance of housing associations and are especially useful for those who are not experts but who need a working knowledge such as board members, housing managers, people in local authorities who work with housing associations and others with an interest in housing association finance. For more information or to make a booking please click HERE

This week the ‘Public Finance’ magazine has reported that actuaries have found a £1billion deficit in the Local Government Pension Scheme that will have to be met through increased employers’ contributions. At the same time 24dash has reported a £1billion deficit in the pension policies of the largest hundred housing associations. Clearly, the same sort of deficit exists in all other public and private pension schemes in all parts of the United Kingdom. The main reason why these deficits have arisen is that pension schemes usually base their business plans on making substantial returns by investing pension contributions but in practice have been able to achieve only low levels of return on their investments. The main reason for this is that since 2008 it has been the policy of the government and the Bank of England to maintain interest rates at the record low level of 0.5% in the hope that this will stimulate private investment. However, the private investment has failed to materialise and the main beneficiary has been the government itself in its capacity as the main borrower. The cost is falling on pension funds and will inevitably lead either to higher contributions or lower benefits. Is this another unintended consequence of government economic policy or is it part of the plan?

6th April 2016

This week we have published the April 2016 edition of the AWICS Housing News. It includes articles on:

  • Starter Homes
  • Housing Association Mergers
  • Scottish Housing Regulator publishes assessment of Housing Associations
  • Budget 2016: The Implications for Housing and Welfare
  • Local Government Association Advocates Housing Devolution
  • Local Government Association research on Homelessness
  • Regeneration Schemes in Wales
  • Housing & Planning Bill: Implications for Housing and Local Government

Your copy can be freely downloaded from HERE

We have also published two new briefing papers that consider the government’s flagship policy of starter homes and the merger of housing associations. Your copies can be freely downloaded from the following links:

Starter Homes

Mergers of Housing Associations

Next week I will be in London to present our seminar on the implications for housing and local government of the Housing & Planning Bill. This session has proved popular but we still have TWO places left. If you would like that place to be yours, please book soon. For more information or to make a booking please click HERE

The 100-page book that accompanies the seminar has also been published and can be ordered online. For more information or to place an order please click HERE

Next month I will be presenting our seminars on ‘All You Want to Know about Housing Association Finance’ in London and Leeds. These seminars provide an introduction and overview of the finance of housing associations and are especially useful for those who are not experts but who need a working knowledge such as board members, housing managers, people in local authorities who work with housing associations and others with an interest in housing association finance. For more information or to make a booking please click HERE

The week before Easter I was in Suffolk to present an in-house session of ‘All You Want to Know about Service Charges in Social Housing’ to a group of people from local authorities in Suffolk. As usual, the session was well received. Our next regional seminars on the subject will be held in Cardiff and London in September. For more information or to make a booking please click HERE To make an enquiry about an in-house session please email me at Adrian.waite@awics.co.uk For general information about assistance with service charges please click HERE

I wrote in my briefing paper on last month’s budget that the proposed national formula for distributing school budgets was likely to result in a redistribution of resources. Last month the government went out to consultation on its proposals. Under these, every school would receive a direct lump sum payment that will not vary with pupil numbers with the result that resources will be re-distributed away from urban areas where schools tend to be larger and towards rural areas where schools tend to be smaller. Rory Stewart MP (Penrith & the Border, Conservative) has welcomed these proposals in the ‘Cumberland & Westmorland Herald’ saying that:

“This is not… about what happens in the classroom. Our rural schools are cores of our community… We have lost far too many rural schools over the last decades. And schools with very few students are always in a tight financial situation.”

He is correct, many of the village schools in rural areas including Penrith and the Border have very few pupils. Some even have none at all! Keeping these schools open is very expensive and whenever local authorities try to close some of them they meet with strong local opposition. Turning these schools into nationally controlled academies with generous funding will help them to stay open, but will it represent value for money?

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