Independence...Integrity...Value

May 2016

May 8th 2016, 10:37

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31st May 2016

This week we have published the June edition of the ‘AWICS Scottish News’. It includes articles on:

  • New Scottish Government's Programme
  • Scottish Housing Regulator publishes assessment of housing associations
  • Council Tax Reform
  • Scottish Housing Regulator's work plan, risk assessment and resident engagement
  • Scottish Welfare Fund
  • Scottish landlords expect increased costs
  • Housing Benefit Caps
  • Eildon Group's economic impact
  • Housing and Social Care services to be brought together in Perth
  • Scottish Social Housing Finance

To download your FREE copy please click HERE

I am currently busy working on our next seminar that is: ‘All You Want to Know about Scottish Social Housing’ and will be held in Edinburgh on 7th June 2016. The session will answer the following questions:

  • What financial environment are Scottish local authorities and housing associations working in?
  • How do the finances of Scottish local authority housing services work?
  • How do the finances of Scottish Housing Associations work?
  • How is the development of new social housing funded?

Delegates will gain an overview of Scottish social housing finance and will keep up to date with developments. We still have a few places available. For further information or to make a booking please click HERE

There is an interesting comment in this week’s ‘Inside Housing’ about Starter Homes by Lambeth Council, one of our principal clients. In their response to the government’s consultation they said that:

“There is a complete disconnect between local evidence of affordable housing need, as demonstrated through strategic housing market assessments, and the requirement that 20% of all homes delivered on all sites above a nationally prescribed threshold should be starter homes.”

I wonder if they will succeed in influencing the government’s thinking!

Last week I had a meeting with officers of a County Council who are having difficulty in finding housing association partners that would be willing to commit to new extra care elderly schemes and who wanted to hear my perspective as a housing finance consultant and former housing association Chair.

The problem is not a lack of willingness to participate on the part of housing associations or a lack of sites or finance but the general environment of uncertainty. The uncertainty affects not only the potential viability of individual schemes, but also affects the overall finances of housing associations making many of them increasingly risk averse. This is clearly not a good situation either for people who would like to move into an extra care elderly scheme of for local authorities that are trying to provide high quality care services on limited budgets.

The traditional model of funding development through a combination of grants; and loans supported by rents that are themselves supported by housing benefit no longer appears to be working. This is partly due to economic factors and partly due to government policy.

There is clearly a need or central government to display more joined-up thinking in its housing, welfare, social care, health and financial policies. In the meantime, there is also a need for local authorities to explore innovative ways of delivering extra care elderly schemes in this new financial environment.

26th May 2016

The elections on 5th May 2016 returned a minority Scottish National Party Government in Scotland and a minority Labour Government for Wales. There will therefore be a continuation of the policy approaches in Scotland and Wales that have been seen ever since devolution and increasing divergence between the approaches in England, Scotland and Wales that have been seen especially since 2010. Also, Sadiq Khan was elected as Labour Mayor of London, opening up the prospect of divergence between the policies of the national and City governments in London.

This week we have published the May edition of the ‘AWICS Wales News’. It includes articles on:

  • The Wales Bill
  • The Welsh Budget
  • Expert commission urges funding shake up for Welsh councils
  • Welsh Housing Investment
  • Welsh Government to update Welsh Housing Quality Standard
  • Housing in Wales update
  • Service Charges in Wales
  • Wrexham Council to invest £54million in housing improvement
  • Denbighshire Council to end 'right to buy'
  • Community Housing Cymru, Sheltered Housing and Welfare Reform
  • Heritage in Wales

To download your FREE copy please click HERE

Our next seminar will be: ‘All You Want to Know about Scottish Social Housing’ and will be held in Edinburgh on 7th June 2016. The session will answer the following questions:

  • What financial environment are Scottish local authorities and housing associations working in?
  • How do the finances of Scottish local authority housing services work?
  • How do the finances of Scottish Housing Associations work?
  • How is the development of new social housing funded?

Delegates will gain an overview of Scottish social housing finance and will keep up to date with developments. For further information or to make a booking please click HERE

This seminar comes at an opportune time. Social housing is becoming increasingly important in Scotland at a time of rising demand for affordable housing and constrained resources. Scottish local authorities and housing associations face significant challenges. The Scottish Government has passed the Housing (Scotland) Act 2014, reformed the Scottish Housing Regulator and is ending the ‘Right to Buy’. The Scottish Housing Regulator’s new approach emphasises ‘Value for Money’. The United Kingdom government has ‘reformed’ welfare with significant implications for Scottish tenants and landlords but some welfare powers have now been devolved to Scotland. All these aspects will be considered in the seminar.

Meanwhile, it has been reported that Sadiq Khan is willing to support Starter Homes in London in return for concessions on his investment programme and Right to Buy replacements. He is understood to have opened discussions with central government on housing and has offered to support the government’s aim of building starter homes, in exchange for concessions including the building of like-for-like replacements in the same area for social homes sold off under both ‘right to buy’ and high-value council home sales. It will be interesting to see whether Sadiq Khan succeeds in this and whether the same concessions will be considered in other parts of England as part of the devolution deals.

18th May 2016

The Queen’s Speech was made today. As predicted it contained few surprises with the government presumably not wanting to announce anything too controversial in advance of the European referendum on 23rd June. The proposal that is catching the headlines is that to reform prison administration but there are other announcements of relevance to public services including the following bills:

Neighbourhood Planning and Infrastructure Bill (England and Wales)

The government considers that the planning system is a barrier to development and requires reform. The Bill will build on the provisions of the Housing & Planning Act and will provide that:

  • Pre-commencement planning conditions are streamlined to speed up housing developments
  • Changes are made to make compulsory planning orders ‘clearer, fairer and faster’
  • A new statutory framework for paying compensation is introduced, based on market value of land
  • The National Infrastructure Commission will be put on a statutory footing
  • The Land Registry will be privatised

Local Growth and Jobs Bill (England only)

This Bill addresses the devolution agenda in England and provides that:

  • A framework be put in place to enable local authorities to retain 100% of business rates levied
  • New powers to be devolved to local authorities will be set out in law
  • Combined authority mayors will have scope to levy a business rate supplement to fund infrastructure projects

Children and Social Work Bill (England only)

This Bill is designed to improve opportunities for children in care and to speed up permanent adoption in England. It provides for:

  • Adoption procedures to be speeded up
  • Councils being required to tell children leaving care what services they are entitled to
  • All care leavers to have a right to a personal adviser to the age of 25
  • A new social work regulator to focus on training and professional standards
  • A duty on councils and schools to promote educational achievement for adopted children

Education for All Bill (Mainly England only)

The government’s plans to force every school in England to become an academy have been abandoned following protests from many in the local government and education sectors (including some in the Conservative Party) - instead the Education for All Bill proposes ‘moving towards a system where every school is an academy’ starting with those in the ‘worst performing local authorities’. In practice this may have the same effect but over a longer timescale. It also enacts the national funding formula for schools that is likely to see a significant redistribution of resources. It provides for:

  • Powers to convert under-performing schools in ‘unviable’ local authorities to academies
  • The goal of making every school an academy but there being no compulsion to do so
  • Head teachers, not councils, to be responsible for school improvement
  • A new national funding formula for schools
  • Schools to be responsible for assisting excluded pupils

Bus Services Bill (England only)

This Bill also addresses the devolution agenda for England and provides that:

  • Combined local authorities with elected mayors will have the power to franchise local services
  • Operators will be required to share route, fare and schedule data with approved developers
  • Councils will set standards for ticketing, branding and frequency of services
  • There will be clearer and simpler franchising arrangements

Wales Bill (Wales only)

This Bill is based on the draft that was published in October 2015 and provides for the clarification of the division of powers reserved to United Kingdom Parliament and those devolved to National Assembly of Wales. It includes devolving powers over energy, transport and elections (including the voting age) to the Welsh Assembly, and repeals the requirement for a referendum prior to devolution of income tax powers.

Returning to the European Union referendum, there is an interesting article in ‘Inside Housing’ this week by Chan Kataria, Chief Executive of the EMH Group entitled ‘Stay In’ in which he states that:

“I cannot think of any EU regulation relating to employment or health and safety that has not had a positive effect on the quality of life of our employees and society in general. Our sector thrives on being a responsible and ethical employer, and regulations such as the working time directive or paternity leave help to improve the work-life balance and motivation of our employees.”

10th May 2016

I am busy at the moment assisting two London housing associations with a merger plan; two local authorities with housing revenue account business plans; and preparing for our next seminars on Scottish social housing finance and English local authority housing finance.

Mergers are certainly topical among housing associations with the National Housing Federation having recently introduced a new code and reports of significant mergers taking place in England, Northern Ireland, Scotland and Wales. Sometimes these are motivated by weaknesses in the business position of one of the partners, while sometimes they are motivated by a wish to gain economies of scale that would increase the capacity to build new homes or to enhance services. Either way, one of the challenges is to ensure that a new merged association maintains the values of the existing associations, maintains a local presence and remains responsive to tenants and customers.

If you would like a copy of our briefing paper on housing association mergers please click HERE

The Housing & Planning Bill is now being passed between the Houses of Commons and Lords with Ministers disagreeing with their lordships’ amendments and the Lords reluctant to give way. In the meantime, housing associations and local authorities remain uncertain about the how measures including starter homes, right to buy for housing associations, sale of high value council homes, and near-market rents for tenants on high incomes will be managed in detail.

One of our principal clients, Basildon Borough Council has recently awarded an integrated £300million contract to maintain and repair its 13,000 housing stock and corporate buildings. The contract includes housing responsive repairs & maintenance, housing planned maintenance and improvements and repairs and maintenance of non-residential council buildings. It is expected that the contract will result in savings of £2million a year, a better reporting process and the introduction of a new handyperson service.

The Scottish National Party government was re-elected last week – although it may have to rely on some support from minority parties in the Scottish Government. The social housing sector is calling on the new government to prioritise housing with Mary Taylor, Chief Executive of the Scottish Federation of Housing Associations saying that:

“Given the parliamentary arithmetic, we urge all parties to work together constructively to build the affordable housing to which they are all committed. Commitments to increasing the amount of affordable housing, introducing extra energy efficiency measures to fight fuel poverty and using the new welfare powers to, amongst other measures, abolish the ‘bedroom tax’ are supported across the Scottish Parliament. It is vital that these pledges are realised over the lifetime of the next parliament in order for everyone in Scotland to have a warm, energy efficient, affordable home and to improve the life chances, health and wellbeing of some of the poorest and most vulnerable people in Scotland. Together with our members, we stand ready to assist government and parliament in realising these commitments.”

Our seminar: ‘All You Want to Know About Scottish Social Housing Finance’ will be held in Edinburgh on 7th June 2016. It will consider all aspects of social housing finance including the priorities of the new government and will address the following questions;

  • What financial environment are Scottish local authorities and housing associations working in?
  • How do the finances of Scottish local authority housing services work?
  • How do the finances of Scottish Housing Associations work?
  • How is the development of new social housing funded?

For further information or to make a booking please click HERE

Our seminar: ‘All You Want to Know About Local Authority Housing Finance’ will be held in Leeds on 12th July 2016. It will consider the following questions:

  • How does the Housing Revenue Account work?
  • How does the Housing General Fund work?
  • How does the Housing Capital Programme work?
  • What are the financial opportunities and threats for local authority housing?

For further information or to make a booking please click HERE

3rd May 2016

In this week’s blog I highlight some stories in the housing, local government and local press that I hope will be of interest to readers.

The European Investment Bank is becoming a significant funder of housing associations with it being reported that it committed £1billion in April 2016 with a further £0.6billion in the process of being negotiated. An article in ‘Inside Housing’ by Peter Apps makes some interesting observations about this in the context of the European Union referendum:

“The European Investment Bank has provided more funding to social housing projects in the United Kingdom than any other member state… (It) is able to offer lower rates than other long-term investors in the sector in part because of its not-for-profit status… While the deals which have so far been announced will not be affected by Britain’s status in the European Union, future investment may be threatened if Britain votes to leave.”

And David Orr, Chief Executive of the National Housing Federation is quoted as saying:

“Leaving the European Union could… affect housing associations’ ability to build homes. Boards should consider that Brexit could make it harder to source labour and materials, and make investment more expensive.”

In many parts of England progress with the devolution agenda has been frustratingly slow. For example, Cumbria County Council (run by a Labour / Liberal-Democrat coalition) and its six districts recently failed to agree a devolution deal with the Department for Communities & Local Government. Writing in the ‘Cumberland & Westmorland Herald’, Councillor Neil Hughes (Liberal-Democrat) of Cumbria County Council describes the proposed deal as:

“A half-baked, first stage Cumbria deal which would have left Cumbria worse off financially, seen it lose control of its own highways network and forced to hold countywide elections for an all-powerful mayor… Now is not the time for a ‘combined authority’ which leaves most Cumbrians worse off – which is why Cumbria County Council voted against what was initially on offer: Perhaps a better model will materialise which we can all subscribe to. We look to the Government to produce this and Cumbrians to embrace it only if it is the genuine thing.”

There does not appear to be a ‘meeting of minds’ here between the government and the local authorities about what devolution should be about!

Meanwhile in Oldham (that is part of the Greater Manchester devolution deal) it has been found that partnership with colleges is key to capitalising on the budget’s boost to skills funding. Oldham Council is one of AWICS’ principal clients, and their Director of Enterprise and Skills, Tom Stannard, writes in the ‘Local Government Chronicle’ that:

“Before Christmas the government announced a stabilisation of skills funding… With skills now playing a major part in many devolution deals, the headlines from the March 2016 settlement are:

  • A 19% increase for 19+ apprenticeship allocations.
  • A 3% increase or 16-18 apprenticeship allocations.
  • A 24% increase for Skills Funding Agency funded 16-18 traineeship allocations.
  • A 29% increase in advanced learner loan facilities.

“Councils will need creative responses to make better use of a more dynamic funding market for skills provision… The premium will be on partnerships.”

Meanwhile another AWICS principal client, Newham Borough Council, has bought the former ‘Focus E15’ hostel (Brimstone House in Stratford) to prevent it being bought by a private developer who would have built ‘unaffordable’ flats. The building had been used as a hostel for young people by East Thames Housing Association but had been closed in 2014. Newham Borough Council intends to use it to provide temporary accommodation for homeless people.

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