General Meeting
3rd March 2017
Meeting Room 3 – Laycock Professional Development Centre Islington
Attended by:
Kenny Aitchison – Wolverhampton City Council
Rob Main – Newark and Sherwood District Council
Leon Mclean - Nottingham City Council
Lynn Thomas – Colchester Borough Council
Anna Milner - South Tyneside MBC
Tayo Ajoje – LB Haringey
Tony Hirsch – LB Brent
Diane Parker NE Derbyshire DC
Gary Cummins – LB Lewisham
Sheila Sackey – Westminster CC
Stacey Sleeman – Cornwall Council
George Daley – Solihull MBC
Martin Gulliver – LB Haringey
Faisal Butt – Lb Barnet
Jeremy Mason – Derby CC
Alison Freeman – CWAG
Roy MacPepple – LB Tower Hamlets
Martin Oldfield – Manchester CC
Catherine Hand – Trowers and Hamlins (a.m. only)
Andrea Luker – CityWest Homes (p.m.only)
Apologies for Absence:
John Chirnside – Gateshead MBC
Martin Stacey - Cheltenham
Dean Rothwell – Newark and Sherwood
AGENDA ITEMS
ACTION1. Introduction / KA, CWAG Chair, welcomed everyone to the meeting.
2. The Housing White Paper – implications for councils with ALMOs ?
Catherine Hand Trowers and Hamlins / See presentation slides
http://www.councilswithalmos.org.uk/?page=LibraryViewDocument&itemid=4161
White Papers normally set out legislative proposals – this White Paper however contains lots of consultative elements and is very planning focussed.
After months of expectation and speculation, many had been expecting more. It is notable that the White Paper doesn’t address any of the important issues that impact on councils ability to build:
- HRA debt cap
The housing sector has been rife with rumours that there would be
proposals to lift the debt cap – this is not the case – Gavin Barwell has
confirmed that there will be no debt cap relaxation.
- Future rent levels
Although there is reference to social rents post 2020, there is no detail.
If there is a move to tie rent increases to new delivery, this will be a
problem for councils facing debt cap constraints.
- RTB receipts
Whilst there have been some hints about changes on RTB receipts and negotiations between DCLG and the Treasury are ongoing - no proposals on this have been included in the White Paper.
Council Land Disposal Regulations
The White Paper includes a commitment to “extend flexibility to dispose of land at less than best consideration” but there are no clear proposals. This is a complex legal area with different regulations for disposal of HRA and GF land. Relaxation of requirements for GF land may help with site assembly.
Local Housing Companies and RTB
The White Paper welcomes Local Housing Companies whilst stating these should not be used as a vehicle to exclude RTB. CH explained that the White Paper doesn’t actually change anything in relation to this - it would require new legislation to extend the RTB to affordable housing developed directly by ALMOs or other local delivery vehicles. There is no indication that Ministers of DCLG are considering legislating to change this.
However, it is important that councils and ALMOs don’t highlight the absence of the RTB as a major factor determining the decision to opt for the ALMO delivery route. The key factor isthe need to deal with debt cap restrictions rather than RTB and the tone and rhetoric that councils use needs to reflect this. Asking for further clarifications around the RTB issue is also not recommended as RTB restrictions tend to worry DCLG.
There is a potential risk that at some point Government may legislate to amend this but it is unlikely that the RTB would be applied retrospectively to properties developed using this route, because this would cause difficulties with business plans and existing borrowing.
The issue of whether properties are held in the HRA or GF is not significant in determining whether there is a secure tenancy subject to the RTB. The key question is whether a secure tenancy has technically been created, albeit inadvertently. Important factors are who owns the land and whether the property is covered by legally binding exemptions.
If the land is not owned by the local authority, an assured tenancy rather than a secure tenancy will be created.
Higher Value Voids
Not covered in the White paper. This issue had seemed to be dropping off the agenda, however a consultation on this has been promised. Gavin Barwell has indicated that LAs will not like it but the policy is still needed to fund the new HA RTB pilot ( which is a manifesto commitment).
More positively, there is a suggestion that the Minister may be willing to look at RTB again:
- He has said that RTB is only justifiable if it produces replacement homes.
- There is some evidence that housing association RTB is less popular than expected (applicants are charged a fee to apply and must have 10 qualifying years to apply).
- No one has worked out how to deliver transferable RTB.
- RTB receipts are a clunky and random way of freeing up resources for housing.
Rent Deal
Rent reduction has a significant impact on council capacity to undertake new building.
There is some speculation that post 2020 rent increases will be linked to development capacity and delivery. HAs excited by the prospect of greater flexibility to deliver more homes but this could be a real problem for councils who can’t deliver due to debt caps.
CH suggested Councils should be focussing on their rent aspirations post 2020. In the past councils had significant flexibility to set rents. Local authorities need to negotiate strongly on this issue as securing their income stream is essential if they are to deliver new supply. A joined up and robust LA approach is needed (the interests of the housing association sector in this regards will be led by their lenders).
Build to Rent
The White Paper reflects a change in tone recognising the need for more affordable rent options:
- Changes proposed to the National Planning Policy Framework, so Local Authorities can proactively plan for Build to Rent
- Enable Build to Rent developers to offer Affordable Private Rent and Family friendly tenancies – 3 years or more –but later Gavin Barwell said no plans to legislate for longer tenancies.
Starter Homes
A number of new measures aim to deliver better targeting of this product:
- the introduction of a 15 year repayment period for discounts
- 20% mandatory starter home requirement replaced by a general duty to promote. Local authorities to decide the mix of affordable/starter homes subject to a minimum of 10% affordable home ownership.
- Higher proportion to be delivered on brownfield sites
- £1.2 billion Starter Home Land Fund
- restrictions on sub-letting ( albeit to be enforced through planning which is not particularly effective),
- new maximum income eligibility rules on a par with shared ownership - an income of less than £80k (£90k in London)
- requirement for buyers to take out a mortgage of at least 25%.
- 40 year age limit to stay but relaxed if one partner over 40 and for injured military service personnel and people whose partner died in military service.
- may be acceptable on rural exception sites
Older Persons Housing
Whilst the White Paper recognises of the importance of older persons housing, there are no substantive new policies proposed. There had been some anticipation that changes to stamp duty to encourage downsizing might be considered but these haven’t made it into the White Paper.
Planning
Proposal to introduce a standardised methodology for establishing housing need. For Government, this is not particularly linked to promoting the delivery of new affordable housing.
CWAG Consultation Response??
Common Housing Needs Assessment Methodology
Discussion around how the housing need methodology is likely to be determined and how this might impact on councils. Some members felt that a common methodology would be difficult to achieve in practice and should be determined locally. Others felt that a common methodology would be positive.
All agreed that if a figure for housing need is to be derived using a common methodology, this is likely to be used more widely across government to assess need and distribute resources.
Members suggested that in responding to the consultation CWAG should make the case for the needs assessment methodology to look in more detail at the different groups that may fall within the definition of requiring affordable housing. The methodology needs to recognise that this is not a single grouping but covers people with a range of housing needs and aspirations with differing capacity to contribute to their housing costs. There needs to be a real focus on the impact of low and uncertain incomes. The methodology should also avoid wide income bandings (e.g. earnings up to £80K)
Changes to the Regulations on RTB Receipts
Members felt it would be good to lobby on RTB receipts. Receipts are difficult to spend but councils are loath to hand them back. With some additional flexibility around the regulations would be able to make better use of them. The following issues were highlighted:
- Extension of the time to spend receipts beyond the current 3 year limit.
- Allow RTB receipts to be combined with other funding.
- Capacity to flex the 30% grant funding limit – to say 50%
- Flexibility on the debt cap
Other Issues
De-regulation of the HA sector and changes to the HA consents regime from 6th April will mean HAs are no longer required to consult with councils about stock disposals.
Other changes will remove local authority voting rights on RSL Boards. Whilst this mainly impacts on LSVTs, there are issues for ALMOs which are also RPs. As ALMOs are council owned companies any change that removes local authority voting rights on ALMO Boards would not be appropriate. CWAG needs to ensure that officials at DCLG understand what the ALMO sector does and that any new regulations take into account the needs of this sector.
Homelessness Reduction Bill – although not in the White Paper, this issue is moving up the political agenda. Homelessness is a GF activity. Announcements relating to rebadged Homelessness Prevention Grant are expected in the Budget.
Emphasis on high density in the White Paper was discussed. Difference between high rise (which is expensive to maintain and not necessarily high density) and lower rise mansion blocks which allow building to higher densities. Pressure on space standards is worrying and short sighted.
3. Case Study – Management of Flexible Tenancies CityWest Homes -
Andrea Luker / See Presentation slides.
http://www.councilswithalmos.org.uk/?page=LibraryViewDocument&itemid=4163
Westminster has very limited space to increase social / affordable rented stock and flexible tenancies potentially offer opportunities to make better use of stock.
This is particularly important given the overall level of demand and the type of properties available. 47% of council properties are 1 bed /studios but the biggest demand is from families.
Westminster offers most new tenants an introductory one year tenancy followed by a five year flexible tenancy. Two year tenancies are only used in exceptional circumstances e.g. renewal of existing tenancies where there are tenancy breaches or some discretionary successors.
First 5 year reviews not due until January 2019. There have been 88 reviews at the end of the introductory period. Of these 4 were identified as overcrowded.
The CityWest experience is that it is difficult to identify any significant differences at this stage between secure and flexible tenancies.
· Changing the tenancy profile occurs very slowly as only new tenants are affected.
· There is an assumption that tenancies will be renewed unless there are major breaches in the agreement or the tenants’ circumstances or income have changed significantly.
· Tenants don’t seem to regard their tenancy as inferior or less secure.
· From the reviews so far there is no evidence that tenants are in a position to move on into other tenures – tenancies are likely to be renewed in most cases.
4. Case Study Housing Allocations Scheme and Tenancy Policy
Solihull MBC -
George Daley / See Presentation slides
http://www.councilswithalmos.org.uk/?page=LibraryViewDocument&itemid=4164
The decision to use flexible tenancies in Solihull following the Localism Act was driven by a desire for more local control and to make best use of the housing stock.
A particular issue in 2013 was the size of the housing register and the number of people with no local connection who were registered in more than one district.
The council uses one year introductory tenancies in conjunction with two and five year flexible tenancies. There are extensive exemptions where a lifetime tenancy is offered.
These arrangements were seen as offering opportunities to work with tenants on a wider range of issues such as employment. It could however be argued that this could have been built into normal housing management without the need for tenure change - but the review process does give structure to this.
Current review of flexible tenancy arrangements has highlighted that more two year flexible tenancies have been set up than expected and further analysis is required to understand the reasons for this.
5. Case Study Fixed term tenancies in Barnet
Faisal Butt / See Presentation slides
http://www.councilswithalmos.org.uk/?page=LibraryViewDocument&itemid=4165
Flexible tenancies introduced in 2012 with the objective of ensuring best use of the housing stock in the borough. There is a particular focus on local connection, tackling under-occupation and overcrowding as well as promoting community engagement, employment and independence.
Two and five year flexible tenancies are used in conjunction with introductory tenancies. Lifetime tenancies are only offered in limited circumstances e.g. applicant is in receipt of a state pension.
Young people are offered two year flexible tenancies which are linked to community contribution requirements – failure to engage with this aspect will result in the tenancy not being renewed on review.
6. Feedback Supported Housing Review – Fair access to funding task and finish group.
Rob Main / RM gave feedback from the fair access to funding task and finish group he has attended as part of the supported housing review. There is an expectation that funding will be vested at a county level in two tier authorities. Other discussions have tended to divide around the interests of particular client groups. A report and recommendations is expected shortly and will be circulated.
Next Meeting / Next Meeting - Friday 23rd June 2017. The meeting will be in Manchester – venue to be confirmed.
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CWAG General Meeting – 3rd March 2017