Independence...Integrity...Value

July 2013

Jul 10th 2013, 10:33

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29th July 2013

The government’s announcement in the spending review that social rents will increase by the consumer prices index plus 1% each year from 2015 onwards was initially welcomed by many in social housing as it gave certainty and continued buoyancy in rental income. However, it came with a ‘sting in the tail’ when it was revealed by Graham Duncan, Deputy Director for Affordable Housing Regulation and Investment at ‘Communities & Local Government’ – in a letter to selected housing organisations – that the government intends to bring ‘rent convergence’ to an end. ‘Rent convergence’ is the process by which it is intended that all local authority and housing association rents should reach the government’s target rents by 2015 unless to do so would result in rent increases of more than inflation plus 0.5% plus £2 a week each year.

The latter says:

“Having considered the issue carefully, we are minded not to extend rent convergence beyond 2014/15… So when we say rent increases of up to consumer price index plus 1% from 2015/16 onwards, that is what we mean.”

The government intends to carry out a formal consultation in due course, but it appears that they intend to legislate to the effect that social rents cannot increase by more than the consumer prices index plus 1%. This appears to have various implications:

  • Councils whose rents are currently below target will never achieve target. As the government’s calculation of the debt that Councils have been given is based on target rents being achieved this will leave such councils under-resourced with serious implications for routine maintenance, major repairs and the decent homes standard. Southwark Borough Council is a good example of this. Similarly, housing associations whose business plans rely on rents achieving convergence may also struggle to reach the decent homes standard.
  • Councils and Housing Associations will have an incentive to increase their rents as much as possible in 2014 before the new system comes into force.
  • Government, despite its commitment to localism has taken another centralising step. The introduction of the borrowing cap and the ending of rent convergence both appear to undermine the stated objective of self-financing that was to give councils more autonomy. Government will continue to control councils’ income and borrowing.

If anyone would like a copy of Mr. Duncan’s letter please email Adrian.waite@awics.co.uk and I would be pleased to provide one.

Our latest briefing paper on ‘Housing Capital Programmes in English Local Authorities’ is now online and can be freely downloaded from: http://awics.co.uk/bphracapital.asp

22nd July 2013

Impact Housing Association, of which I am Chair, made representations on the Homes & Communities Agency’s proposals for the regulation of housing associations to the Agency and via a local member of parliament. Our concerns were that the Agency’s proposals to limit the ability of housing associations to carry out activities in addition to renting social and affordable housing unless they set up arm’s length subsidiaries would reduce their ability to develop new homes and to provide services to communities. I understand that many housing associations expressed similar reservations to us. The Agency is now indicating that they will propose a more flexible approach to regulation that would not undermine our ability to provide services to the community or to be innovative in finding ways to carry out new development. This is to be welcomed.

‘AWICS’ has recently published two new briefing papers that can be freely downloaded from our website:

  • Infrastructure Statement of June 2013
  • Self-Financing Budgets and Business Plans

The Chartered Institute of Public Finance & Accountancy (CIPFA) is carrying out a members’ survey, and by now all members should have received an email with a link to it. I think it is important that as many members as possible respond to let CIPFA have our views. I will certainly respond and I would urge others to do the same. If you are a CIPFA member and haven’t received an email please contact Tanya.rowan@cipfa.org .

15th July 2013

Last week I was looking at services for the old and the young.

I am currently doing some work in Oldham where I am assisting the Council with some financial analysis concerning their supported housing including that for extra care for the elderly. Oldham is an interesting Council to work with as they have transferred most of their stock but have retained two Private Finance Initiative schemes that between them manage about 1,400 flats and bungalows. They are heavily committed to developing extra care housing.

In Oldham there are a growing and increasingly diverse range of older people, who have different needs and expectations. The Council believes that it is important to encourage residents to exercise choice and to make them aware of opportunities through initiatives such as extra care housing and downsizing. A particular challenge is how to meet the needs of residents while ensuring value for money. They have also adopted the excellent strapline: ‘There are many players but only one team’.

One of the more exciting projects on which we are working at Impact Housing where I am Chairman is ‘Go4it’ that is a scheme that is designed to address poverty of opportunity and aspiration among the young and is an excellent example of a housing association that goes beyond offering housing into providing services that have an impact on the whole community.

The idea of Go4it is to let young people (in school years 7 to 11) look at their skills and talents and believe they can achieve anything they want to. They will have an insight of what it is like to be in a working environment and for them to experience first-hand what their ideal job would be like also to see the steps they must take to reach their goals. Some work experience students recently got involved and their experiences are described on the Impact website at http://www.impacthousing.org.uk/news/work-experience-students-find-out-about-interesting-project

9th July 2013

Today I have been presenting ‘Developments in Local Authority Housing Finance’ at our annual seminar in London. The session was attended by representatives from all parts of England and included housing officers, accountants and elected members. The seminar covered the political, economic, social and technical context, self-financing, rents, development, business planning, welfare reform and many other subjects. It was well received with feedback from delegates including:

  • Excellent Range
  • Very
  • Good Slides and Book
  • Adrian
  • is a very knowledgeable and clear speaker
  • Exercise after lunch was good

Unfortunately, this is the last open session of the year, but the seminar is still available as an in-house course. For details see http://awics.co.uk/local_authority_housing_finance_seminar_england.asp

The book that accompanies the seminar is also available for sale. See http://awics.co.uk/bookdevts.asp

I have spent most of the weekend marking management accounting examination scripts for the Chartered Institute of Public Finance & Accountancy’s International Public Financial Management certificate. The candidates for this qualification are mainly from developing countries in Africa and Asia. This is interesting because every so often a candidate tells me something interesting about their country and it is also good to be doing something to help to build capacity in these countries. I will soon be writing the exam papers for the December 2013 sitting.

3rd July 2013

Last week I attended the Annual General Meeting of Impact Housing Association. I was re-elected as Chairman with Kenneth Meeks, a resident board member elected as Vice-Chairman. The main part of the business, though, was to consider the annual report and our plans for 2013/14. The main issue that we are addressing is the adverse effect of the recession and the government’s welfare reforms on our tenants and communities and the ways in which we can alleviate this.

George Osborne announced the Spending Review last Wednesday. As expected it included £11.5billion of spending reductions for 2015/16 affecting many public services but especially local government. It also included the government’s policy for social rents after 2015. Our briefing paper was available on Thursday morning and can be freely downloaded from http://awics.co.uk/bpspendreview.asp. It is clear that local authorities will have to continue to find ways of doing more with less and that our seminar on ‘Value for Money and Performance Management in Local Government and Housing’ in September will be especially relevant. Further information about our seminar can be found at http://awics.co.uk/performance_management_seminar.asp.

The Spending Review was followed by Danny Alexander’s announcement about the government’s plans to spend £100billion on infrastructure including housing. This included an extension of the affordable housing programme, but resources for social housing are still woefully inadequate and the cap on local authority borrowing remains.

This afternoon I have been watching the parliamentary debate on disabled access at train stations that has been initiated by my member of parliament – Rory Stewart. I am interested in this because we make a lot of use of the railway – for example to travel to London to present our various seminars. However, my wife Elaine, who acts as administrator and receptionist at our seminars, is disabled with arthritis. Our nearest mainline railway station is Penrith but it is impossible for disabled people to get to or from the northbound platform because access is via an underpass with many steps and damp and uneven surfaces. Consequently, when we travel together we are not able to use Penrith station but have to make a 75 mile round trip to Carlisle where there is disabled access. In my view it is a disgrace that the railway industry is not obliged to provide disabled access at all stations – especially those on the mainline. Elaine has given interviews to BBC Radio Cumbria and ITV Border about the problem. Rory Stewart is arguing for a footbridge with lifts and I hope, for the sake of all disabled people in the Penrith area, that he is successful. More information is on Rory Stewart's website at http://www.rorystewart.co.uk/rory-receives-ministerial-encouragement-for-disabled-access-at-penrith-station/

This week I am putting together the finishing touches for next week’s seminar on ‘Developments in Local Authority Housing Finance’ in London on 9th July. As usual, the seminar has proved popular but there are a few places still available. For details or to make a booking please see http://awics.co.uk/local_authority_housing_finance_seminar_england.asp . The accompanying book is also on sale. See http://awics.co.uk/bookdevts.asp

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