Returning troops will go to top of housing lists

The Telegraph reports that David Cameron is about to legislate to require local authorities to give returning service men and women the highest priorty for social housing.

The proposal will be a key part of the military covenant that Cameron has promised to enshrine in law. The covenant refers to the mutual obligations between the nation and its Armed Forces. It sets out what safeguards, rewards and compensation military personnel can expect in return for military service – and the risks and hardships that can involve.

Grant Shapps said:

“I think it’s only right that when you’ve put your life on the line for this country, out there fighting in a war zone, you should receive a hero’s welcome when you return home.

“Sadly, all too often, there is no house to come back to and that’s why we’re absolutely determined to place those who have been brave enough to put their lives on the line at the front of the housing queue.”

Cameron is said to have been frustrated by advice given by civil servants that giving automatic priority for housing to ex-service personnel could be in breach of the Human Rights Act.

Last week Shapps announced that the military would be the top priority to benefit from for the FirstBuy scheme that helps first-time buyers who can't afford a large deposit to buy a new build home. He said:

“I am dispatching special housing agents to military bases and training camps as recruiting sergeants for the scheme, and we are encouraging developers to do the same. Troops will be told how they can benefit, and how they can apply to buy one of the thousands of new homes that will be made available over the next two years.”

Tsunami of repossessions on the way

Richard Banks, the chief executive of UK Asset Resolution (UKAR), which holds mortgages once owned by Bradford & Bingley and Northern Rock, told the Guardian that Britain is facing a 'tsunami' of house repossessions as soon as interest rates start to rise.

UK lenders were encouraged by the previous government to adopt a policy of "forebearance" to help customers stay in homes by, for example, reducing monthly interest payments. But now 23,000 of UKAR's mortgage holders are more than six months behind with payments, and across the industry, 12 per cent of mortgages have been subject to forebearance, according to the Financial Policy Committee of the Bank of England .

Banks warned that the industry may have been too lenient with some customers, saying that he believed a policy of "tough love" would be fairer to people struggling to pay off debts taken at the peak of the boom.

Citizens Advice Chief Executive Gillian Guy responded, saying that a policy of tough love would be short-sighted and unhelpful.

"Of course there will be cases where homeownership is unsustainable, but in that situation it is vital that those affected are helped out of home ownership in an orderly way and that they can get into secure rented accommodation with the least disruption possible. This is the key challenge for lenders and government.

"When lenders were not treating people fairly and failing to show forbearance repossession proceedings were started when people were only a couple of months in arrears. Since then lenders have done a good job with customers facing difficulties but we are now starting to see poor practice creep back in."

Speaking to MPs on the Treasury Committee, Professor David Miles from the Bank of England's Monetary Policy Committee said: "It's certainly true that the total amount of household debt relative to size of the economy is significantly larger than it was 20 years ago", but added "I'm not so pessimistic about the risk that arrears and repossessions move up sharply."

Concern over £610 million cuts to care for elderly

The charity Age UK has expressed concern over £610 million cuts to social care funding for older people describing them as, "devastating".

According to their report - 'Care in crisis: Causes and solutions' - net local authority spending on older people's social care has risen by just £43 million after inflation since 2004: a real terms increase of 0.1 per cent per year.

At the same time, the number of people aged over 85, who are more likely to need care, rose by 23 per cent - while care sector costs continued to outpace inflation.

Based on data gleaned from Freedom of Information requests sent to 139 local authorities, Age UK calculated that local authorities have reduced spending on social care by 8.4 per cent since 2010.

They said, 'In 2011-12, the net annual expenditure per person over the age of 65 is falling to £791, continuing a downward trend from £864 in 2010-2011 and £872 in 2009-10.'

However, the Government disputes these figures. Paul Burstow, the care services minister said, "Council spending on social care is under pressure - that's why the Government will provide an extra £7.2 billion over the next four years to local authorities so that they can protect services that support vulnerable people."

"But Age UK's research does not give the full picture and they have seriously underestimated the amount of additional support for social care and older people in particular."

Michelle Mitchell, Age UK's charity director said, "Funding for social care is already inadequate and the system today is failing many older people at the time when they really need help."

On 20 July 2010 the Government launched a Commission chaired by Andrew Dilnot, to work on proposals for the future funding of adult social care. The Dilnot Commission is due to publish a report on 4 July 2011, making recommendations on how to achieve an affordable and sustainable funding system for care and support.

The Commission's findings will help to inform a white paper on social care, due by December 2011; and a new social care reform bill is expected to progress through Parliament in 2012.

Andrew Dilnot speaks about his Commission's forthcoming report

Legal aid budget slashed

The government's Legal Aid, Sentencing and Punishment of Offenders Bill, published on Tuesday, attracted a lot of attention due to the Justice Secretary's u-turn on proposals on sentencing.

However, Ken Clark is pressing ahead with plans to cut £290m from the annual legal aid bill of more than £2bn.

Under the plans, some 600,000 cases of legal aid in England and Wales will no longer be funded if the full package goes through Parliament. These include debt cases (except debt threatening homelessness), social security benefits, divorce and custody battles and immigration, other than where someone is detained.

The legal aid proposals have been widely criticised. The Law Society, which represents solicitors, called the bill the "single biggest attack on state-funded legal advice for the poor and vulnerable since the legal aid system was introduced" and the Bar Council, which represents barristers in England and Wales, warned that "access to justice will be systematically deprived" by the reforms.

The housing law blog Nearly Legal carries a scathing critique of the Bill's legal aid and civil justice provisions.

Opponents of the government's proposals claim that the reduced availability of legal aid could end up costing more than it saves. The fact-checking organisation Full Fact has looked at the evidence behind the claim. Research from Citizens Advice in 2010 supporting the argument was acknowledged by the agency to have limitations, but the government has provided no figures of its own. The Justice Select Committee has said:

“We are surprised that the Government is proposing to make such changes without assessing their likely impact on spending from the public purse and we call on them to do so before taking a final decision on implementation.”

Such an assessment is clearly not planned, as the Ministry of Justice is to fast-track the legislation through Parliament. The second reading of the Bill will take place on Wednesday, 29 June. The Left Foot Forward blog points out that in recent history legislation has only been fast tracked five times: for emergency anti-terror legislation, economic legislation and Northern Irish law.

Housing associations asked to open their books

Grant Shapps told delegates at this year's Harrogate 2011 Conference that he will consult with housing associations later this year over whether to extend Freedom of Information (FOI) requests to include social landlords. This would oblige housing associations, currently excluded from FOI as they are not public authorities, to respond to requests for information made by tenants and other members of the public.

Shapps said that, but said if the sector refuses to adopt FOI, it would have to demonstrate a commitment to transparency, such as publishing spending details over £500.

The Ministry of Justice already plans to broaden its list of public bodies for inclusion under the Freedom of Information umbrella. Shapps said:

"Housing associations have a long and distinguished track record of providing the affordable homes the millions of tenants rely on. But with more pressure on the public purse than ever, all organisations that receive public investment should become more transparent and open to the taxpayers who put the pennies in the purse. Tenants should also be able to scrutinise and understand the way in which their landlords take decisions."

The Government hopes that including housing associations in FOI requests will yield greater efficiency savings, as the salaries of senior staff will be available for public scrutiny.

Responding to Shapps's announcement David Orr, the National Housing Federation's chief executive, said:

"Spending by housing associations is scrutinised by independent boards and tenants already have access to housing associations' accounts. Publishing details of every transaction over £500 would be hugely bureaucratic, expensive and provide few meaningful benefits for tenants."

Orr pointed out that housing associations generate the majority of their funding from private sources and not from the taxpayer, and he called for the government to let social landlords focus on their core task of building affordable homes.

Pickles claims councils could save £10 billion a year

Communities Secretary Eric Pickles recently claimed that councils could make painless savings of 10 to 20 percent through procurement efficiencies.

In a speech to a localism conference organised by the Reform think tank, Pickles criticised councils for "salami-slicing" services instead of using the freedoms offered by localism to ask big questions about how services are run.

He was quick to highlight £50 billion of procurement spend across local government saying:

"We've put out research by industry experts Opera Solutions today - that backs up estimates made by local government itself - showing councils could save 10 to 20 per cent in procurement spending."

"That's £10 billion a year. Opera tested their theory across three adjoining councils just looking at spending on energy, mobile phone and legal services. By taking the best price for the same goods and using consolidated spending these councils could shave a collective £1.4m off their bills - a 10 per cent reduction."

Opera Solutions is a multinational data analytics company. Its 'white paper', "Realising Savings Through Procurement Optimisation" is an eight page brochure of which two pages are devoted to its research into council data published under the Government's transparency agenda. Its conclusions are based on extrapolating the findings from just three unnamed, neighbouring councils. The remainder of the document markets Opera's data-mining and analysis services.

By presenting the Communities Secretary with the message he wants to hear, the company has gained invaluable exposure, with both middle market tabloids running prominent stories based on the headline findings.

According to the Express, "Every household in the country could get a £450 tax rebate if councils stopped wasting £10 billion a year".

The Mail's line was to attack, 'clueless councils' who waste, 'unnecessary money' on energy, mobile phones and legal services.

Baroness Margaret Eaton, chairman of the Local Government Association said:

"Taking estimated savings from a tiny part of the spending of just three councils and grossing them up across all 375 local authorities in England and Wales is eye-catching but inaccurate."

"There is a wide variation between local authorities in the size and scale of savings that are possible through efficiency measures, not least because many have already produced the one-off savings that can be delivered by improving procurement and sharing services."

Public sector reform - the next u-turn?

The Open Public Services White Paper, which was to open up break up "state monopolies" and allow communities, charities and companies to take over the running of public services has been delayed again.

The document has been subject to repeated delays and, instead of appearing in March, is likely to come out in July or even September, and the Prime Minister's plans could be diluted or even put on ice.

One minister told the Telegraph "It hardly makes sense for us to rewrite our health reforms to limit competition and the private sector role, then push ahead with the same things everywhere else."

Another "conservative source" told the newspaper that the document might be a consultative Green Paper rather than a White Paper setting out firm government policy.

Commentators suggest that there has been a big row behind the scenes, with conservatives fingering the Liberal Democrat Chief Secretary to the Treasury Danny Alexander but Chancellor George Osborne also said to have doubts over the financial and political cost.

Colin Talbot, writing in Public Finance, points out the similarities to the delays to Labour's "Modernising Government" white paper in 1997-99 and observes that few governments across the world ever manage to produce ever come up with coherent reform strategies for their public services.

Homelessness on the rise

Homelessness is rising for the first time in years as the effects of the recession are felt. According to the latest statistics issued by the Department of Communities and Local Government 44,160 households were accepted as homeless last year - a 10 per cent increase on the previous year.

The the number of people approaching their council as homeless is also 23 per cent higher than the same time last year, while the proportion being accepted as homeless has fallen by 2 per cent.

These government figures precede cuts affecting new claimants' housing allowances and campaigners have warned that the surge in homelessness will accelerate over the coming months. Benefit cuts to existing claimants will start in January 2012.

Campbell Robb, Chief Executive of Shelter said:

"It is perhaps the most shocking consequence of our housing crisis that so many households in our affluent nation do not have a home to call their own."

"These figures come at the very time government plans within the Localism Bill will weaken the rights of homeless people further, by allowing councils to push homeless families into the private rented sector. This will ultimately trap them in a constant cycle of insecurity and homelessness, with devastating outcomes for children and families."

Crisis Chief Executive Leslie Morphy said:

"The government's own figures show that homelessness is on the rise once more, yet instead of redoubling their efforts to end this scandal, ministers are cutting housing benefit and weakening homeless people's rights to housing."

Crisis is also concerned that the statistics show that the number of people becoming homeless because of the ending of a private tenancy is also rising.

Housing Minister Grant Shapps said tackling homelessness remains a government priority:

"Today's figures underline how the recession has brought difficult times for lots of people. I urge anyone who thinks they may be at risk of losing their home to take action immediately. There is help available and repossession should only ever be the very last resort. No one in financial difficulty should be embarrassed to seek help if they need it and worried homeowners should speak to their mortgage lender immediately."

A ministerial working group on preventing and tackling homelessness is expected to report at the end of this month.

Hunger in the UK: Are foodbanks the answer?

ResPublica Director Philip Blond has published a thought piece encouraging the government to do more to support foodbanks. These provide emergency supplies to UK citizens who are on the brink of starvation.

Most foodbank recipients are not homeless; they are low-income working families who hit crisis, people who have been made redundant or people experiencing benefits delays.

In the last 12 months, according to The Trussell Trust over 61,000 people received emergency food from charity foodbanks. A 50 per cent increase from the previous year. With increasing demand The Trussell Trust has launched a new foodbank every week in 2011, launching its 100th UK foodbank in May 2011.

The community led foodbanks are often coordinated by local churches, and they depend on donations from schools, businesses and individuals. Food donations are sorted by volunteers, and care professionals issue vouchers to those in need. These can be exchanged for 3 days worth of much needed supplies.

Job Centres used to issue food vouchers to clients in need, Blond says, but the previous government outlawed this practice on the grounds that, 'all those entitled to benefits received them on the day if they were in crisis, and that delay was not an issue.' In addition, not all UK towns have food banks, so reliance on them was seen as unfair during Tony Blair's tenure.

Philip Blond recommends that the Job Centre Plus should be allowed to refer clients to foodbanks for emergency aid and the government should, 'prioritise timely payment of benefits to which people are entitled and which they evidently need.'

Foodbanks are very much in-step with the Coalition's big society vision. They depend on well co-ordinated local networks, committed to delivering essential services to people who need them. They also shift the burden of responsibility away from local authorities and towards the voluntary sector.

The BBC has reported that 'some families on low incomes are struggling to feed themselves with inflation well above average wage rises and the trend expected to continue'.

Foster carers will lose out in HB reforms

The Independent on Sunday reported that foster carers risk losing up to £700 a year in housing benefit under planned rule changes.

The National Housing Federation and the Fostering Network, the UK’s leading fostering charity, are concerned that the government plans cut benefits for social housing tenants deemed to have ‘spare’ bedrooms would hit foster carers living in social housing.

Foster carers are required to have spare rooms for fostered children in order to foster. However, the proposals would mean foster carers in social housing are forced to pay the ‘spare room penalty’ and many will be left out of pocket as they will have to meet the housing costs for fostered children themselves.

The Department for Work and Pensions told the Independent on Sunday that the change, contained in the Welfare Reform Bill, will be fairer since payments made to foster families include a housing element.

Robert Tapsfield, chief executive of the Fostering Network, said: “Fostered children need to have their own bedrooms in almost all circumstances so these proposals will put foster carers in social housing under real financial pressure.

“These plans will also make it even more difficult for families in social housing to become foster carers at a time when we urgently need more people to come forward.”

“The Government needs to reconsider these proposals as foster carers should not have to subsidise the housing costs for fostered children out of their own pockets.”

It is estimated that an extra 10,000 foster carers are needed in the UK.

Foster family allowances, depending on a child's age and local authority, can range from £125 a week for babies to more than £250 for a 16- to 18-year-old in London. Under the housing benefit changes, a claimant with one "spare room" is expected to receive a 13 per cent cut, with the payment reduced by 23 per cent for two or more spare rooms. Claimants, on average, could lose £676 a year.

NHF chief executive David Orr said:

“Ministers have failed to think through the potentially disastrous implications of imposing an under occupation penalty on so many different groups of tenants.”

The Welfare Reform Bill began its report stage on 13 June 2011 and will continue on 15 June 2011, when it is expected to receive its third reading.

Homeless face worsening health as cuts bite

An open letter published in the Times and Independent newspapers voices concern that homeless people may be left without a safety net following proposed NHS reforms.

The chief executives of Homeless Link, the National Housing Federation and St Mungo's have written to the press drawing attention to the likelihood of homeless people losing their safety net following proposed NHS reforms.

The letter states, 'NHS proposals fail to ensure that the needs of homeless people will be considered. People who don't have a home are often transient and they can be invisible to the very GPs who are about to become responsible for commissioning health services.'

Published in April, Homeless Link's 2011 survey of needs and provision (SNAP) among homelessness organisations found healthcare provision for homeless people is being cut despite increasing need.

The survey found projects were seeing more people with physical, mental health and substance misuse problems than before, but their ability to meet these needs was moving in reverse.

The proportion of services whose clients could access drugs services fell from 95% to 89% from 2010-11, with falls for alcohol services (96% to 92%), physical health (97% to 93%) and mental health services (96% to 95%). All these measures had increased from 2008-10.

Homelessness agencies have traditionally accessed health services from the NHS and other external providers but cuts in these had led many specialist services to develop in-house provision, the SNAP survey found.

Homeless Link chief executive Jenny Edwards says that she is disturbed by the findings:

"So much progress has been made in the past five or six years and now it looks as if this has turned around and is dropping back very rapidly."

She says that NHS and social care teams working with homeless people are often seen as the most expensive as well as the easiest to cut.

"Cutting back may save costs in someone's budget but it will inevitably mean a bigger cost elsewhere in both the justice budget and in the emergency health budget," she warns.

Charles Fraser, chief executive of St Mungo's and a member of the national health inclusion board, says that in many areas of the country the health needs of homeless people have never been measured and therefore effectively do not exist.

"The one thing I want to say to Andrew Lansley is these reforms must ensure that the health of the most disadvantaged is the number one priority."

Evidence shows that fixed-term tenancies are failing

A new report - Security of tenure in Social Housing: An International Review - raises doubts about government plans to remove security of tenure and give landlords the ability to offer fixed term renewable tenancies with a minimum of two years.

The report by Heriot-Watt University and commissioned by Shelter, looks at how other countries have fared after introducing the same policy. It looked closely at the Australian model used in New South Wales (NSW) - which heavily influenced the government’s policy - which showed that less than 1% of fixed-term social tenancies have so far been terminated. There is now mounting pressure in NSW for the policy to be reviewed.

Homelessness charity, Shelter, like the authors of the report Heriot-Watt University, fear that tenants won't improve their circumstances because they won't want to lose their home.

Chief executive of Shelter, Campbell Robb, says:

"On the one hand the Government continually say they want to encourage people back into work. Yet they have produced a proposal that will act as an enormous disincentive to someone to increase their income when it could mean losing their home."

"As the Localism Bill travels through the Lords this week, we strongly urge the Government to rethink these plans, rather than create yet more insecurity for people in these difficult times."

In reaction to this report Housing Minister Grant Shapps defended government plans to implement fixed-term tenancies - in an Inside Housing article he said:

"With some 4.5 million people on social housing waiting lists, it’s clear that not only do we need more homes, but we also need a complete overhaul of the system, to one that offers much more flexibility than the current ‘one size fits all’ approach."

"Our proposals – unlike Australia – are about flexibility, not prescription and social landlords will have the freedom to allocate more flexible tenancies based on local need, but of course retaining discretion to offer tenancies on a lifetime basis."

"The new Affordable Rent scheme will also offer landlords the freedom they need to offer a range of solutions to people’s housing needs, while being able to raise extra rents to invest in house-building. It also ensures that as many people as possible benefit from this valuable resource." 

Focus on high earning tenants

Various news sites recently reported that Grant Shapps wants to ensure social housing tenants on £100,000-plus salaries will be evicted, even though this would inevitably mean changing the law. According to the Daily Telegraph, Shapps said:

"With so many people in housing need languishing on the waiting lists which doubled under Labour, it’s right to consider whether people on £100,000-plus salaries should get their rent subsidised by the taxpayer. Social housing is an expensive and scarce resource which should be targeted on supporting those in real need."

The same story was quickly picked up by the Daily Mail. In the wake of the resulting political maelstrom it seems that Shapps may have changed his mind. An article published on PoliticsHome says, 'The Housing Minister has insisted that he does not plan to move existing council tenants from their homes'... The focus would be on raising rents for existing tenants earning over £100,000 a year and, 'tenants would only have to leave their homes if they refused to pay the higher rate.'

Conservative Home says, 'Westminster propose that those earning more than £50,000 should receive no subsidy - with those earning more than £30,000 starting to see the subsidy reduced. There would be a sliding scale.'

All this begs the question: what are the average yearly earnings of social housing tenants? According to the Chartered Institute of Housing (CIH) in their report, 'Allocating social housing: Opportunities and challenges' (page 8),  'The median gross income for households in social housing in 2007/8 was £10,900, compared to £29,200 for owner occupiers'. They also point out that, '68 per cent of households in the social housing sector have an income less than £15,000 per annum.'

DCLG reveals plans to outsource Audit Commission

Sir Bob Kerslake has written to local authority chief executives to advise them that the 'preferred' option to replace the Audit Commission is for councils to outsource auditing until they can appoint their own auditors.

He also reminds recipients that they have until the end of this month to respond to a consultation on the future of local public audit.

A number of media websites have further details....

Public Finance says:

The Department for Communities and Local Government has written to all council chief executives today stating that ministers’ ‘initial view’ is that the best way of securing value for money from the Audit Commission’s abolition would be to outsource all the audit work to the private sector.

By the end of 2012 only a small residual body would be left to oversee contracts until local public bodies are in a position to appoint their own auditors.

Local government minister Grant Shapps said: ‘Our initial view is that outsourcing could prove the best value for money and we have asked the commission to start work on paving the way for outsourcing the 2012/13 audits to keep this option open before we make a final decision.’

The BBC's website adds:

Audit Commission chief executive Eugene Sullivan said there was potentially scope for existing employees to tender for the work by joining forces and creating a "new and distinctive provider" along mutual lines.

localgov.co.uk has published a quote from Mr Sullivan:

"We have been asked to design a procurement process that allows a range of firms to bid, including the possibility of an in-house bid, which could form the basis of a new and distinctive provider in the market, possibly a mutual."