Independence...Integrity...Value

December 2015

Dec 8th 2015, 12:48

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29th December 2015

We have just published the January 2016 edition of the AWICS Wales News. This edition includes articles on:

  • Latest statistics show the value of housing associations to the Welsh economy.
  • Review into finance of local government in Wales launched.
  • Release of draft Wales Bill.
  • Responses to the Spending Review.
  • A Picture of Public Services
  • Reclassification of English Housing Associations may affect Wales
  • Welsh Government takes action to increase affordable housing
  • Welsh Government decides against rent cut

Your copy can be freely downloaded from HERE

It is noticeable that the Welsh Government is following policies that often contrast with those of the United Kingdom Government in England. In particular, investment in social housing continues in Wales with no right to buy in housing associations, no surprise reductions in rents, increases in the building of affordable housing and an emphasis on providing ‘more than just homes’ including benefits to local economies. However, Wales is not entirely immune from decisions taken in London including the spending review and the economic classification of housing associations.

We will be holding a webinar on Welsh social housing finance on 29th January 2016. This will explain how the finances of local authority housing and housing associations work in Wales. To find further information or to make a booking please click HERE

The flooding in Cumbria over the first weekend in December that affected the AWICS offices in Appleby (see my blog of 14th December below) has been followed by two more floods in Cumbria including Appleby and extensive flooding across much of Northern England, Scotland and North Wales including major cities such as Leeds and Manchester. Visits to affected areas by politicians and dignitaries expressing sympathy need to be followed by a clear recognition that the climate is changing and that our plans for flood control must change in response. I think that some politicians will have to overcome their aversions to limiting carbon emissions and to investment in public infrastructure.

The ‘Social Mobility and Child Poverty Commission published its report ‘State of the Nation 2015’ on 17th December. They reported that there is a gulf between today’s divided Britain and the ‘one nation’ the Prime Minister desires to lead. The commission warmly welcomes the Prime Minister’s commitment, made on the morning after the Election to make Britain ‘a place where a good life is in reach for everyone who is willing to work and do the right thing’. However, in this report, the scale of that one-nation challenge is laid bare. The commission warns that the current policy response is simply not ambitious enough to meet it, meaning that Britain remains on track to become an ever more divided nation. However, the commission recommends a major increase in the scale of ambition - among educators and employers, as well as government – that could deliver a Britain which is the most open, fair and mobile society in the modern world.

The report prompted the ‘Cumberland & Westmorland Herald’ (usually seen as a conservative newspaper) to make some interesting observations some of which are quoted below:

“Whenever we discuss the social and economic divide in Britain and the lack of real opportunities for many people we do it as if inequality is an accident that just somehow happens. (However) inequality is no accident. It is the result of very deliberate policies and actions by governments since 1979, and that includes Labour administrations. It is also the inevitable product of a social system based on privilege.

“The Victorians also built their empire on low wages, minimum benefits for the poor and the worship of entrepreneurship but, to their credit, there were philanthropists and they did begin to help the poor working class to begin the climb from poverty to social mobility and greater equality, because the Victorian wealthy did have a social conscience while Britain’s modern wealthy don’t seem to.”

21st December 2015

I would like to wish all our customers, suppliers, staff, users of our website and readers of our newsletters a Merry Christmas and a Happy New Year. This week we have launched our first seminar of 2016. It will be on: 'All You Want to Know about Service Charges in Social Housing' and there will be sessions in London and Leeds during February 2016. These seminars are designed to give an introduction and overview to this important subject and are fully up to date with all developments. The following questions will be addressed:

  • How do service charges work in housing associations and local authorities and for leaseholders and tenants?
  • How are service charges calculated?
  • How to de-pool service charges?
  • Legal obligations, accounting guidance and good practice.
  • When are service charges eligible for housing benefit / universal credit?
  • How to ensure excellent customer service.

For further information or to book your place please click HERE

During January we are holding webinars on a range of subjects including: Service Charges, Scottish Social Housing Finance, Self-financing in the Housing Revenue Account, Social Rent Reforms, an Introduction to the Housing Revenue Account and the Welfare Reform and Work Bill. For further information or to book your place please click HERE My latest briefing paper is on Business Planning in the Housing Revenuer Account. Your copy can be freely downloaded from HERE

2015 has been an eventful year in housing and local government with a new government introducing new policies for devolution and housing and continuing their austerity drive. I have been pleased to be able to assist clients with understanding and managing these changes and will look forward to continuing to do so in 2016.

14th December 2015

Last week the flooding in Cumbria and some other places hit the national headlines. In Appleby, where I live and where AWICS is based we had the worst floods since records began. Our offices are in the eighteenth century Shire Hall and that flooded for the first time ever. Luckily the water was not very deep in our office so most of our possessions could be retrieved unharmed. However, we have had to relocate temporarily while repair work is carried out.

There is no change to our contact details. Postage addressed to the Shire Hall is being redirected and we are still contactable on 017683-52165.

The challenge last week was to relocate the business while at the same time continuing to provide services to our customers, meeting deadlines and attending meetings. Everything I have been told about business resilience became very real. For example, the wisdom of backing up computers regularly and keeping the back-ups at a different location to the computers was clearly demonstrated.

Of course, the flooding has had a more serious impact on people whose homes were flooded. In Appleby alone 250 homes were flooded. One family I know had two metres of water in the house – the first time they had been affected by flooding since 1968.

I was very impressed by the emergency services including the Police, Fire, Cumbria County Council, Eden District Council, Appleby Town Council and the voluntary groups who ensured that everyone was safe and helped with the clean-up. The Police station itself was flooded with about a metre of water and is now having to have the floors and plaster on the walls replaced.

One of my former colleagues on the Board of Impact Housing Association, Hazel Graham, is a keen environmental campaigner and was in Paris to lobby the international climate change conference. She told the ‘Cumberland News’ that:

“The news out of Paris is that the current draft deal will not prevent irreversible climate change. That means more of this. Tackling climate change feels more personal, more urgent than ever now.”

Climate change used to feel like an academic debate, or something that affected Polar Bears and South Sea islands – important but not part of my everyday life. It is now about flooded streets, homes and businesses in the town where I live including my own business.

The former MP for Carlisle, Eric Martlew, gave an interesting interview on Radio Cumbria about the Carlisle floods of 2005 and the flood defences that were built afterwards. Apparently the initial proposal was to build flood walls along the rivers in Carlisle and to build a reservoir to hold back flood waters. However, this scheme was deemed to be too expensive and only the walls were built at a cost of £30million rather than £50million. Last week the water flooded over the walls. The cost of the 2005 floods to everyone in Carlisle was estimated at £500million and the cost of the 2015 floods is likely to be greater. Is this good economics?

I am also told that half of the homes that the government plans to build over the next five years will be on flood plains.

Part of the answer may be to look at land use. For example, should we plant more forests in upland areas such as the Lake District and the Pennines to reduce the speed with which water runs off the land? Or should we accept that parts of some towns will inevitably flood, may not be suitable places to locate homes and businesses and should be used instead as playing fields, gardens or car parks?

A few years ago I went to the Netherlands. Much of the country lies below sea level and there are many rivers including the Rhine – Europe’s largest. I can’t help thinking that if the Dutch can control flooding on the Rhine delta there should be a way for the English to control the flooding of rivers like the Eden.

7th December 2015

Last Tuesday I presented our seminar on: ‘Local Authority New Build: The Financial Implications’ in London. I am grateful to all the delegates for their attendance and feedback. They described the information provided as ‘very relevant’, the quality of presentation as ‘excellent’ and said that the training met their needs ‘fully’. They described the seminar as thorough, clear, interesting, useful and practical. Specific observations included:

  • Always enjoy, pitched at the right level, but with a manual to refer to which is extremely helpful.
  • Very useful review, which will assist me when I undertake our review of the HRA Business Plan next year

This seminar is now available in-house. For details of its content please click HERE or to make enquiries or a booking please contact enquiries@awics.co.uk

Last Thursday I presented a webinar on Business Planning in the Housing Revenue Account that was well received. This is an important subject with many changes taking place. We have also published a briefing paper on the same subject that addresses the following question: What needs to be done to produce a high quality, fit for purpose housing revenue account business plan? Your free copy can be downloaded from HERE

The Spending Review has led to some interesting debate about its implications for local government in England. Some have complained that, yet again, local government is expected to make larger reductions in its expenditure than most other public services; while others argue that the reductions are modest and signal a change of approach by the government.

The proposal to allow councils to increase Council Tax by 2% to increase expenditure on social care raises a number of questions:

  • First, the policy implies that a 2% increase in Council Tax will be sufficient to meet the spending pressures that are faced by social care services. However, this is unlikely to be the case
  • Second, while councils that choose to increase Council Tax by 2% will have increased Council Tax receipts, they will still receive significantly reduced revenue support grant and their total resources will decline on average by 6.7% in real terms between now and 2019/20. In view of this it is difficult to see how councils could avoid making reductions in social care budgets much to the confusion of council taxpayers who will see their bills increase ostensibly to provide improved social care.
  • Third, the amount of income generated by a 2% increase in Council Tax varies greatly from one authority to another. As a rule of thumb councils in more affluent areas gain a higher proportion of their income from Council Tax than councils in less affluent areas. This means that the increased resources will be focused in affluent areas whereas the need to spend is focused in the less affluent areas.

The Homes & Communities Agency published its latest quarterly statistics last week and concluded that, despite everything, the English housing association sector remains in good financial health with £13.8billion of undrawn loan facilities, £5.3billion in cash and 98% of the sector having sufficient debt facilities in place to last over a year. Furthermore, housing associations intend to invest £8.8billion in new homes over the next twelve months. Significantly, there has been an increase in the number of affordable home ownership sales with 3,292 being made between July and September 2015. This is in accordance with the United Kingdom government’s focus on home ownership rather than social housing.

Meanwhile, the Scottish Government has announced that it has exceeded its five-year target of delivering 30,000 affordable homes by March 2016, funded by £1.7billion. As part of the target, the Scottish Government pledged to deliver 20,000 social rented homes including 5,000 council homes, both of which have also been exceeded. This reflects the continued importance given to social housing by the Scottish Government.

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