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Blog 15th June 2020

Jun 15th, 13:18

Blog 15th June 2020

In this blog I consider the effect of the coronavirus pandemic on housing and adult social care. I refer to the government’s announcement on right to buy receipts, the decision of Cardiff City Council to acquire a hundred homes for affordable rent and a survey that shows significant under-funding of adult social care.

Right to Buy

In response to the delays in house building caused by the coronavirus lockdown, the Ministry for Housing, Communities & Local Government has given councils in England a six-month extension to the time they have to spend capital receipts from right to buy sales made in 2017/18 before they must return them to the Treasury. Councils are offered a revised agreement with the government on right to buy receipts under section 11(6) of the Local Government Act 2003 delaying the next spending deadline until 31st December 2020. Currently, the next two deadlines would be 30th June and 30th September 2020. Councils must respond to the offer by 3rd July 2020 and are asked to:

“Keep the department informed if it becomes clear over coming months that they are likely to face challenges meeting the 31 December deadline”.

The Ministry states that:

“The Covid crisis has, in some cases, halted or slowed down housing development… We have listened to councils’ concern that the coronavirus pandemic may affect their house building programmes and in turn their ability to spend their right to buy receipts within the permitted three years. That is why we have extended the deadline, giving local authorities an additional six months in which to spend the Right to Buy receipts. We will continue to liaise with councils over the coming months… By rolling up the next two deadlines to the end of the calendar year, the Department’s objective is that more will be spent on replacement social housing,”

gateshead_houses_2

Council Houses in Gateshead

Many in local government will see this as an inadequate response. The Local Government Association had called for the deadline to be extended to at least five years. Councillor David Renard (Conservative), Housing spokesperson for the Local Government Association and leader of Swindon Borough Council, said that:

“With the building of new homes delayed or stopped altogether by the coronavirus crisis, many councils have been concerned that they will not have the opportunity to spend Right to Buy money on replacing much-needed homes sold under the scheme. While we continue to push for a longer extension, this is a step in the right direction and will go some way to allowing councils more time to replace these homes, and make sure we can provide desperately-needed social homes to those who need them.”

In 2012, right to buy was reinvigorated in England with discounts being increased to up to £112,300, and the government stated that homes sold would be replaced with new affordable homes. Since then 85,645 homes have been sold but only 28,090 replacements have been started or acquired. The Local Government Association considers that Councils have been prevented from replacing the sold homes because they are only allowed to use a third of each receipt to spend on building new homes.

Cardiff City Council

Cardiff City Council currently has a target of delivering 1,000 new council homes by 2022, with an additional 1,000 homes in the medium term. However, they report that widespread site shutdowns at the start of the coronavirus lockdown period mean that meeting delivery targets for 2021/21 may potentially prove challenging.

The Council considers that the coronavirus crisis has presented an opportunity for them to consider varying their approach to housebuilding. They could move to building tenure-neutral developments, seeking contracting partnerships rather than developer partnerships, allowing it to build homes directly for sale or market rent, alongside various affordable tenures.

County Hall, Cardiff

Meanwhile, the Council has agreed to buy 107 homes from Wates, valued at build costs and agreed overheads, and subject to due diligence checks. The homes are part of schemes from the Cardiff Living project, that since 2016, has built mixed-tenure developments in partnership between the Council and Wates and aims to deliver 1,500 new homes, of which roughly 600 will be council homes for social rent. The Council states that this will:

“Prevent our current Cardiff Living sites from stalling, removing the risk of market sale properties remaining unsold.”

Wates has recently announced 300 redundancies because of coronavirus.

Councillor Lynda Thorne (Labour), Cabinet member for Housing & Communities at the council, told ‘Inside Housing’ that:

“An opportunity to acquire 102 more homes than we originally expected through our award-winning Cardiff Living partnership with Wates Residential has arisen… These additional homes could provide much-needed, good-quality affordable homes which the council could rent, or they could potentially go up for sale via our assisted homeownership scheme. This is an opportunity we want to thoroughly investigate to see what value it could give residents, the taxpayer and the council.”

Adult Social Care

A survey commissioned by the Association of Directors of Adult Social Care to which 146 local authorities in England with adult social care responsibility responded, has found that the coronavirus pandemic has made ‘extremely fragile’ care markets even more susceptible to market failure – with 96% of respondents saying they didn’t have enough funding.

In an earlier blog, I considered reports that adult social care services may face more than £6.6bilion in additional costs by the end of September because of the pandemic.

James Bullion, President of the Association of Directors of Adult Social Care told ‘Public Finance’ that the government should reform and reset social care and that:

“The results of the survey paint a vivid picture of the devastating effect of Covid-19 upon millions of us… Those who have died prematurely, those who have had to grieve in isolation, those who have been discharged from hospital without the right assessment, those who have been unable to access community-based services, those who are isolated or shielding, those requiring safeguarding, those experiencing mental health or addiction crises, those experiencing domestic violence, and / or exploitation, and those who work in adult social care.

“The government must ensure that social care is never again left exposed to a pandemic. This starts by protecting those of us with care and support needs from the current and subsequent waves of Covid-19 and extends to ensuring social care is at the centre of all future emergency planning and preparation.”

Rob Whiteman, Chief Executive of the Chartered Institute of Public Finance & Accountancy, was reported in ‘Public Finance’ saying that:

“Social care has undoubtedly been the forgotten front line in this pandemic. While the National Health Service received immediate financial support in the form of £6.6billion from the Emergency Fund, and a carte blanche on spending, funding for social care remains the burden of already hard-pressed local government… An already over-stretched and under-resourced social care sector has been placed under incredible strain, the effects of which are going to be felt for years to come. “It’s time for the government to stop treating social care like the poor relation and provide this critical sector, which cares for the most vulnerable people in society, with the resources and long-overdue reform it requires.”

Conclusions

The Coronavirus pandemic is exposing weaknesses in Britain’s public services. There is clearly a need for radical change.

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