Apr 10th 2013, 10:50
There is increasing concern among tenants and housing managers in local authorities about how councils are spending rent money. According to the 1989 Local Government & Housing Act rents are ring-fenced and can only be spent on providing council housing and housing related services. However, it has long been suspected that many councils use creative accounting to charge the tenants for services that should really be met from their general fund (council tax, business rates and government grant).
This was one of the issues that I raised with Communities & Local Government when I was on their working party that looked at self-financing and the future of the housing revenue account back in 2008. One of our recommendations was that there should be clearer guidance around the ‘ring fence’ to protect tenants from unscrupulous landlords. However, in practice this recommendation was not accepted and councils are left with local discretion.
This week the ‘Local Government Chronicle’ revealed how councils of all political persuasions are using this discretion. They are using it to charge tenants for the cost of general fund services including libraries, community centres, youth clubs, car parks, waste bins and street lighting.
Perhaps there will be a renewed interest in stock transfer among tenants anxious to escape the clutches of their rapacious council landlord!
I am in the process of finalising preparations for this year’s seminar ‘All You Want to Know about Scottish Social Housing Finance’ that will be held in Falkirk on 7th May. As always, it has proved a popular event but there are still a few places available. For more information please see https://awics.co.uk/scottish_social_housing_finance_training_course.asp
This week we have also published our 2013 guide to Scottish Social Housing Finance. There is more information on our website from where a copy can be ordered. Please see https://awics.co.uk/scottish_social_housing_finance.asp
The Universal Credit pilot started in Ashton-under-Lyne this week, prior to it being rolled out across the United Kingdom over the next few years. It will be interesting to see the implications of the pilot and whether it will confirm the government’s view that the reform will streamline the system and assist people back to work, or whether it will prove financially disastrous for social landlords and their tenants.
My recent travels have taken me to two contrasting places: Southwark and Pembrokeshire.
Southwark Council is the largest social landlord in London. They are a long standing AWICS customer. In the past we have provided training for officers and tenants and carried out the financial analysis for their housing stock options appraisal in 2005/06. Unfortunately, Southwark is one of the Councils that have yet to achieve the decent homes standard. They therefore established a commission to look at future options.
The commission concluded that the Council has a chance to break from the past and can do things differently. But to do this the council will need to change the way it invests in and manages its council housing. It will need to run council housing more as a social business. That in turn will require a different and more business-orientated mind set. More refurbishment and more demolition and redevelopment are options for the future, but the council has to decide how many low-rent homes it wants to provide and for whom. Options include reducing the stock from the current 40,000 to 30,000 or even 20,000. The landscape of social housing is certainly changing.
Pembrokeshire Council is a unitary authority, largely rural and the westernmost in Wales. They have a stock of 6,500 homes all of which meet the Welsh Housing Quality Standard but there are problems with affordability and the supply of social housing and concerns about the effects of welfare reform. I was there last week to present ‘All You Want to Know about Welsh Social Housing Finance’ to a group of officers from the finance and housing departments.
‘All You Want to Know about Welsh Social Housing Finance’ is available as an open seminar or an in-house course. For more information please click here: https://awics.co.uk/welsh_social_housing_finance_2013.asp
Last week saw the publication of our popular guide to Welsh Social Housing Finance. Our website contains further information and copies can be bought from there at: https://awics.co.uk/local_authority_housing_finance_in_wales.asp
I have also spent time preparing for next month’s session of ‘All You Want to Know about Scottish Social Housing Finance’ in Falkirk on 7th May. This seminar is proving popular with local authorities and housing associations and we still have a few places available. For more information please click here: https://awics.co.uk/scottish_social_housing_finance_training_course.asp
The Homes & Communities Agency are out to consultation on changes to regulation following the difficulties experienced by Cosmopolitan Housing Association. Their main proposal is the ring-fencing of social housing assets as a way of protecting them from the non-regulated activities of housing associations such as providing furniture stores or student accommodation. However, they also propose that associations should prepare recovery plans as well as risk plans; and that there should be restrictions on disposals of assets. It is likely that these proposals will lead to many housing associations adopting more complex group structures if they wish to continue to offer a diverse range of services to communities. This consultation will be one of the main issues at the next meeting of the Board of Impact Housing Association, where I am Chair. I have spent some of the last few days preparing for an in-house training course for a Welsh local authority on social housing finance. The increasing divergence in housing policy in the four nations of the United Kingdom following devolution can be seen in many areas. However, it is interesting to note that, over a year after the abolition of the housing subsidy system in England, the housing subsidy system is still in use in Wales. The reason for this is not because the Welsh Government or the Welsh local authorities do not want to move to self-financing, but because they have not been able to persuade the Treasury to agree on the amount of additional debt that the local authorities would take on. I would have thought that settling with the eleven Welsh local authorities that have retained their housing stock would be a simple matter for the Treasury in comparison with some of the other challenges that it faces.
Our annual seminar on Welsh Social Housing Finance will be held in Cardiff on 5th June 2013. Further information can be found here.
I am available to provide advice to housing associations. For more information please click here.
The news this week has been dominated by the government’s controversial welfare reforms and changes to the tax system. They will obviously have a significant effect on many people and organisations including benefit claimants and on social landlords.
It is interesting to note that while the government is making significant reductions in benefits that are targeted at the needy, they are protecting public services such as health and education that are enjoyed by all the seven social classes that we now find that we have.
I keep returning to this point. There must be something fundamentally wrong with our economy where for millions of people the imbalance between their incomes and the cost of decent housing is so great that they either need substantial public subsidy or are forced into homelessness, overcrowding or poor housing. The reforms that we really need would have to go far further than any that are now being contemplated and would need to include the whole housing market, the labour market and pensions.
Our seminar on welfare reform will be held in October. See https://awics.co.uk/welfareseminar.asp
I have spent the week completing a report on Value for money in a Fleet Maintenance service and making preparations for our next seminars – ‘All You Want to Know about Scottish Social Housing Finance’ and ‘All You Want to Know about Welsh Social Housing Finance’. I am struck by the increasing differences in the way public services are provided and managed in England, Scotland and Wales. One thing that I enjoy about being a management consultant is the diversity of the work: Looking at different services in different organisations in different places where the problems and the aspirations are all different. The work has taken me as far north as Stornoway and as far south as Cape Town. My next trips are to Inner London and the West of Wales.
Further information about our Scottish and Welsh seminars can be found at: