Autumn Statement 2011

Chancellor of the Exchequer George Osborne delivered his 2011 Autumn Statement to Parliament today.

The Autumn Statement provides an update on the government’s plans for the economy based on the latest forecasts from the Office for Budget Responsibility, also published today.

The Chancellor said when the current public sector pay freeze ends – in 2013, for most – pay rises for public sector workers would average 1 per cent for a further two years saving more than £1 billion.

Most departments will have their funding cut to reflect the reduced pay bill. However, health and schools will be allowed to retain the savings “to protect those budgets in real terms”, he told MPs.

In his Statement the Chancellor restated a number of policies trailed in last week’s Housing Strategy for England, these include:

• New build indemnity scheme - under the scheme, home buyers will be able to purchase new build houses and flats with a five per cent deposit.
• Get Britain Building investment fund - this new £400 million programme, to be managed by the Homes and Communities Agency, will aim to unlock up to 16,000 homes on stalled sites.
• Right to Buy - reinvigorate the Right to Buy to support social tenants who aspire to own their own home. For each home purchased, the Government says it will provide an additional affordable home. 
• Empty homes - the Spending Review allocated £100 million to bring problematic empty homes in areas of high demand back into use as affordable housing. The Housing Strategy announced a further £50 million of funds to help tackle some of the worst concentrations of empty homes in areas of low demand.
• Support locally planned large scale development - this could include modern garden cities, urban and village extensions. The Government will invite proposals from developers and local authorities for new developments which have clear local support.
• Green Deal - the government is allocating £200 million of additional one-off capital resource to the Green Deal for energy efficiency in its initial phase over 2012-13 and 2013-14, to encourage early uptake. Further details will be set out next year and any plans will be subject to state aid considerations.

The government also published an updated National Infrastructure Plan 2011. This contains major commitments to improve the UK’s transport and broadband networks as well as steps to attract major new private sector investment.

In response to the Chancellor’s Autumn Statement, David Orr, Chief Executive of the National Housing Federation, said:

"The Government is ploughing money into infrastructure projects and building schemes which it hopes will give the economy an immediate boost."

"But it has largely ignored the one industry which would provide the Treasury with the biggest bang for the taxpayers’ buck: house-building."

"A public investment of £1bn - matched by £8bn from housing associations - would build 66,000 shared ownership homes for people on low to middle incomes, create 400,000 jobs and in doing so save the taxpayer £700m in job seeker's allowance not to mention the added savings from housing benefit and increased tax revenues."

The Federation also reports that a VAT exemption for shared services has potential to provide significant savings to the sector.

5 days in August

The Riots, Communities and Victims Panel has published its interim report on the widespread public disorder across England in August 2011.

Chaired by former JobCentre Plus chief Darra Singh the panel visited 21 areas and spoke with thousands of people who were affected by the riots and some who were not.

The report estimates that between 13,000 and 15,000 people were actively involved in the disturbances between 6 and 10 August. The overwhelming majority of those brought before the courts so far have been male and had a previous conviction. Nearly half (46 per cent) of the children brought before the courts live in the 10 per cent lowest income areas.

The report is split into three sections:

• In the first it sets out the facts, outlining what happened where and who was involved.
• In the second section, it considers what triggered the riots, why they spread and the motivations of those involved.
• In the final section, it outlines the areas the Panel intends to focus on in the next phase of the Panel's work and sets out further important questions the Panel think need to be answered.

The panel recommended a range of practical measures to help reduce the future risk of riots:

• Physical environment - local emergency plans should include a full threat assessment and review of town centre layouts.
• CCTV - local authorities and other relevant organisations should review local CCTV coverage and consider if it needs to be extended.
• Effective partnerships - local authorities should engage all frontline workers (eg, neighbourhood wardens) when there is a risk of rioting, for example to patrol the streets, and should consider asking charities and housing associations to help prevent disturbances.
• Trusted information sources - local authorities and the police should draw up plans to reach key target groups when trouble is brewing, for example via detached youth workers; messages to social housing residents; messages to parents.
• Access to information - local authorities and the police should ensure that mechanisms are in place to contact key groups of people if there is a risk of rioting.
• Practical measures - local authorities should review the use of diversionary activity when there is a risk of rioting. This could include voluntary as well as local authority services.
• Emergency plans - police, local authorities and other relevant organisations should immediately review their emergency plans to ensure they properly cover public disorder on the scale of the August riots.

Communities Secretary Eric Pickles welcomed the panel's report, saying:

"We are embarked on a programme of action to tackle entrenched problems like the most troubled families, educational attainment and many other fundamental issues which can give people a stake in society and prevent such disorder from happening again."

Shadow Home Secretary Yvette Cooper said the report showed "the government needs to act urgently to deliver the support David Cameron promised to victims and communities."

The panel intends to publish its final report in March 2012.

OECD report warns of rise in homelessness

Ahead of the government's Autumn Statement the Organisation for Economic Co-operation and Development (OECD) warns that Britain faces sliding into a double-dip recession this winter.

The Paris-based OECD said it expected the UK to grow by 0.5% in 2012 as a whole but the two consecutive quarters of contraction fulfil the technical definition of a recession.

As a consequence the OECD report expects unemployment to rise to 9.1% by 2013, exacerbating social problems and leading to a rise in homelessness.

In CoalitionWatch we previously reported an increase in the number of homeless households with the government stating a 17% rise in the number owed a main homelessness duty, compared to the same quarter last year.

'Ghost town' funding announced

Housing minister Grant Shapps yesterday showed his usual flair for publicity when he turned £5.5m of additional government funding for areas hit by the government’s cuts to the housing market renewal programme into headlines claiming "£71 million to end the legacy of England's Ghost Streets".

In last year's Comprehensive Spending Review the government axed the £5bn Housing Market Renewal scheme eight years into what was originally envisaged as a 10 to 15-year programme. This resulted in many residents trapped in half-abandoned streets. In May this year, the government announced that councils in the worst affected arears of Merseyside, East Lancashire, North Staffordshire, Hull and Teesside could bid for a share of a £30m fund.

Yesterday, in response to the bids, the government decided to make an additional £5.5m available, allowing the bidding councils to address problems in all the streets or blocks where over 50 per cent of homes were vacant, and bringing Whitehall's contribution to £35.5m. The headline figure of £71m includes match funding from local councils.

The minister's sober statement to parliament contrasts sharply to the DCLG press notice.

Housing market needs unblocking? - Dave knows a man who can

According to The Independent diarist Andy McSmith, the prime minister has nicknamed housing minister Grant Shapp "Dyno Rod".

McSmith claims that David Cameron awarded the name to the minister formerly known as "Shappsy" at Monday's Cabinet meeting on the grounds that he is the man who has unblocked a stagnant housing market with his new build indemnity scheme.

Affordable housing starts plummet

The day after the government published its housing strategy that recognised the economic and social benefits of housebuilding, new figures from the Homes and Communities Authority (HCA) paint a dismal picture.

The national housing statistics for the six months to 30 September 2011 show 1,746 housing starts on site and 15,329 housing completions in England in the six months to 30 September 2011. This compares to 17,519 starts and 21,093 completions for the same period in 2010, a fall of 90% in completions and 27% in completions.

Affordable homes starts are a staggering 96.6% below those in the first half of 2010-11. 259 of these homes were for social rent. Just 56 affordable homes were started in London in the first half of the year, compared to 1,126 for the equivalent period last year.

The HCA says that it expects the rate of delivery to increase in the second half of 2011-12. Starts under the 2011-15 Affordable Homes Programme will be seen in the second half of 2011-12.

Labour’s shadow housing minister Jack Dromey said the figures showed the “disastrous impact” of the government’s cuts to house building budgets. He told 24dash:

“Yesterday this out of touch Government committed to giving back only 10 per cent of last year's £4 billion cut to housing investment to build just 3,200 affordable homes, this wouldn’t even cover 10 per cent of the fall in the affordable homes starts in the last six months. Their housing policies are failing and those in need of a decent, affordable home are paying the price."

Revised regulatory framework for social housing

The Localism Act and the government’s new directions to the regulator will introduce substantial changes to the regulatory framework for social housing from April 2012.

The Tenant Services Authority (TSA) has launched the statutory consultation on a revised regulatory framework document. The consultation pack comprises three documents - the main framework and two annexes:

• Rent standard guidance (which consolidates and updates the various sources of the current guidance)
• Guidance notes on use of powers (updated to reflect the ‘serious detriment’ threshold).

The closing date for responses is 10 February 2012.

The new framework makes a distinction between economic and consumer regulation, with the main changes relating to consumer regulation.

Economic regulation

From April 2012 the regulator’s principal role will be the economic regulation of housing associations and other private registered providers. This will be the responsibility of the new independent regulation committee in the Homes and Communities Agency.

The framework sets out how the regulator will proactively ensure that its economic standards are being met, whilst meeting its new statutory duty to minimise interference. To minimise the burdens of data collection from 1 April 2012, all financial and statistical data from private providers will be collected through one consolidated administrative return, NROSH+. A document setting out more practical information about the regulation of economic standards is promised in 2012 once the regulatory framework has been finalised.

Consumer regulation

The regulator will have a have a ‘backstop’ role in consumer matters. Having setting the service delivery standards within the framework, it will only intervene where it considers there is risk of serious detriment (or harm) to tenants. Chapter five of the draft framework sets out how it will define and operate the ‘serious detriment’ threshold, and how it will accept referrals of consumer issues that pass the threshold.

The principal role in scrutinising landlord services and intervening where consumer standards are not met will fall to tenants’ panels, MPs and elected councillors.

Regulatory standards

Providers are still required to meet the relevant standards, with responsibility falling clearly on the boards and councillors who govern service delivery. However, except where there is a risk of serious harm to tenants, it will be for providers to support tenants both to shape and scrutinise service delivery and to hold boards and councillors to account.

The six current regulatory standards that providers are expected to meet are increased to seven, with the splitting off of rents from the tenancy standard, and are re-classified as either ‘economic’ or ‘consumer’. The standard on rents becomes part of the economic group. The economic standards do not apply to local authorities. The principal changes are:

• a revised value for money standard that is substantially different from the 2010 version, and will be subject to proactive regulation. It places an increased obligation on boards to develop and deliver a clear strategy to drive value for money improvements. Boards will be required to publish a robust annual self-assessment of their performance and how they are achieving value for money. The 2010 emphasis on reporting value for money to tenants changes to a wider obligation for transparent and accessible reporting to stakeholders.

• the tenant involvement and empowerment standard reflects the government’s emphasis on local mechanisms to involve tenants, scrutinise landlord performance and resolve complaints and disputes, and an increased scope for more tenant involvement in the management of repairs and maintenance. The principles of ‘local offers’ and annual reporting to tenants are retained.
  

• the tenure elements of the tenancy standard change significantly with regard to the introduction of flexible tenancies, protection for existing tenants, and requirements for tenancy policies. The ‘most secure form of tenancy…’ wording in the current tenancy standard disappears and different lengths of tenancy agreement will be allowed. New expectations to promote mutual exchanges are introduced including subscribing to a provider who is part of Homeswap Direct.

Registration

The regulator will continue to maintain a register of private and local authority providers. The tests at registration are amended to be compatible with how it can regulate consumer standards post-regulation.

Directions to the Social Regulator

The Secretary of State has published his Directions to the Social Housing Regulator - which has in turn allowed the Tenant Services Authority to launch the statutory consultation on the revised regulatory framework for social housing in England from April 2012.

The government received 209 consultation responses to the draft directions, on tenure, mutual exchange, tenant involvement and empowerment, rents and quality of accommodation, and has made a number of minor amendments:

• Tenure reform:
• landlords should take account of the needs of vulnerable household members in framing their succession policies
• tenants who are decanted should always receive a tenancy with no less security on their return to settled accommodation
• landlords are required to make a proactive decision on whether or not to reissue a tenant with another tenancy at the end of the fixed term.
• Mutual exchange:
• landlords can meet the terms of the new standard by subscribing to a provider who is part of Homeswap Direct 
• Tenant involvement and empowerment:
• no change despite reservations of "a large majority of respondents from the landlord and tenant sector"
• Rents:
• no requirement to rebase a rent when a tenant moves from a starter tenancy to an assured (or assured shorthold) tenancy
• Quality of accommodation:
• no change
  

The final directions on tenure and mutual exchange will not be issued formally until the commencement of the relevant provisions in the Localism Act.

Government housing strategy

Prime Minister David Cameron today launched "Laying the Foundations: A Housing Strategy for England".

The strategy, introduced by Cameron and Deputy PM Nick Clegg, claims to be a "radical and unashamedly ambitious strategy" with two main aims:

• unblocking the home ownership market and creating jobs
• spreading opportunity (particularly opportunity for home ownership).

In fact, much of the strategy consists of policies that have already been announced and, in some cases, are already up and running. It's certainly useful to have these drawn together into a single document, and set within the context of the government's philosophy, but new ideas are a little thin on the ground.

The headline grabber is a new build mortgage indemnity scheme, that will enable purchasers buying a new home covered by the arrangements to get a mortgage loan to cover 95% of the purchase price. Led by the Home Builders Federation and the Council of Mortgage Lenders (CML), the scheme allows housebuilders to deposit 3.5 per cent of the sale price in the indemnity fund, which will be backed by additional government guarantees. Further details of how the scheme will work are given on the DCLG website.

Other measures which the government claims will make an immediate impact on the housing market include the launch of a new £400m "Get Britain Building" investment fund, which will support firms in need of development finance. Alongside plans to allow developers to require councils to reconsider section 106 agreements entered into before April 2010, the fund is intended to get development started on stalled sites that have planning permission and are otherwise "shovel ready".

The strategy provides a little more detail on the Right to Buy (RTB) reforms announced by Cameron during to Conservative party conference.

The government will consult on proposals to raise the caps on discount that are set in secondary legislation - the aim is raise the average discount received by buyers in England up to half the value of their homes. The document states that every additional home sold under RTB will replaced by a new home, but insists that only a fraction of the RTB receipts from council homes will be required for this purpose, since most of the cost will be funded by borrowing and (in some cases) cross-subsidy by the provider. The remaining receipts will go towards repayment of outstanding debt and to the Treasury for deficit reduction.

Housing associations are not to be told what do do with the receipts, but these "are likely to be recycled to support new build and other public benefits".

Unsurprisingly, the chapter on the private rented sector is particularly thin, concentrating on the government's moves to encourage institutional investment in the sector.

Chapter five of the strategy is devoted to empty homes. It restates a series of prior announcements, including changes to make it more difficult for councils to obtain an Empty Property Management Order and plans to criminalise squatting. There will be £50 million of new funding to tackle concentrations of poor quality homes in areas of low demand (subject to match funding being obtained).

The final chapters of the report draw together existing policies and initiatives on the quality of homes, places and housing support.

Reaction

Inside Housing has produced a helpful set of articles running through the main points in the strategy.

The Chartered Institute of Housing warned that the strategy's foundations are not robust enough to achieve its aims. The National Housing Federation welcomed the recognition that housing is key to kick-starting economy, but warns that plans to build more homes don't go far enough.

The Guardian columnist Matt Griffith is unimpressed with the mortgage indemnity scheme:

"While some of the initiatives – notably the government's pledge to provide insurance for mortgages to new-build properties – are the equivalent of an intergenerational mugging: the state underwrites young people taking on a huge debt for an asset that is clearly overvalued.

"Elsewhere there is a strange sense of deja vu, as gimmicks from the Brown era are reheated and presented as new. Much of the package seems to be about channelling more government subsidy to housebuilders, an odd tactic given their long history of failing to deliver the goods."

Ian Cowie, writing in the Telegraph's Your Money section is even blunter:

"Amid a credit crisis caused by excessive debt, much of it secured to overpriced property, the Government now proposes to encourage laxer lending to people with no history of repaying debt so that they can buy overpriced property.

"You really could not make it up. Government proposals for taxpayers to underwrite looser mortgage lending for first time buyers may help buy-to-let landlords exit the housing market with handsome profits before house prices fall further. But they are unlikely to be of lasting benefit to anyone encouraged to take on excessive debt before interest rates rise from their current historic low and more homebuyers find themselves in negative equity."

Consultation on HRA self-financing determinations

The government has today published its consultation on implementing self-financing for council housing. It sets out the framework for the new system and gives councils their draft settlement figures.

The Secretary of State, under section 173 of the Localism Act 2011, is required to consult each affected local authority before making determinations to implement self-financing for council housing. The government has set out five draft determinations:

• Settlement Payments Determination - sets out the amount each local authority will either pay the government or receive from the government in order to exit the current subsidy system.

• Limit on Indebtedness Determination - places a cap on the amount of housing debt each council may hold.

• Housing Revenue Account Subsidy Amendment Determination for the year 2011/12 - adjusts the subsidy entitlement for this financial year in order to take account of the interest costs or savings arising from the settlement payments.

• Item 8 Credit and Debit Amendment Determination for the year 2011/12 - enables the appropriate charges to be made between the Housing Revenue Account and a council’s General Fund to reflect the borrowing costs or savings in this financial year arising from the settlement payments.

• Item 8 Credit and Debit Determinations for 2012 onwards - provides a framework for the Housing Revenue Account ring-fence to continue to operate under a devolved system of funding.

Alongside these draft determinations, the government has published the spreadsheet models which have been used to calculate the self-financing valuations, settlement payments and debt limits.

As part of the consultation the government is also asking for local authorities to consider whether the data and calculation for their authority is correct.

Any responses to the consultation must be submitted to the Department for Communities and Local Government no later than 5pm on 6 January 2012.

Localism Act 2011

The DCLG has announced that the Localism Bill received Royal Assent on 15 November.

Hailing it as an "historic shift in power back to local people", the Act contains the following key measures for the social housing sector:

• the TSA will be abolished
• social landlords will be expected to support tenant panels
• the abolition of the housing revenue account subsidy system
• reformed homelessness legislation
• a national home swap scheme for social tenant mutual exchanges

Full details of the Act have been published on legislation.gov.uk .

Kerslake to become Head Civil Servant

The DCLG has announced that Sir Bob Kerslake is to become Head of the Civil Service alongside his existing role as the department's Permanent Secretary.

He will take on the additional duties after Cabinet Secretary Sir Gus O'Donnell retires at the end of the year. Sir Gus's responsibilities will be separated out between Sir Bob and current Number 10 Permanent Secretary Jeremy Heywood.

Inside Housing reported that "Sir Bob will have his salary increased by £30,000 to £200,000-a-year to take on the new role which will mean him splitting his time between Westminster and Eland House."

Homes for heroes

At the start of the remembrance weekend, Housing Minister Grant Shapps has issued a press release promising to "to pull out all the stops to give them the support they need - whether buying their first home or applying for social housing."

The statement repeats various pledges given in recent months including:

• priority for Government-funded home ownership schemes
• housing advice sessions at British military bases
• imposing a duty on councils to put "heroes who want a home in their area" at the top of local waiting lists

Many local authorities across the country have already voluntarily introduced their own "military covenant" giving waiting list priority to people leaving the armed forces, but nevertheless the government's commitment to localism seems to weaken when there are headlines to be grabbed.

Shapps said:

"All these actions mean we're marching double-time toward making sure that those who serve our country get the homes and support they deserve."

Impact of welfare reform in London

An estimated 133,000 households – some 20% of the total number of workless households - in London will be unable to afford their rent if proposed changes to the welfare system go ahead as planned, according to new research published by London Councils.

The research, carried out by Navigant Consulting, suggests that the proposed welfare changes are likely to significantly impact on households in London, because the government’s policy takes no account of higher housing costs in the capital.

Navigant Consulting looked at both the impact of the Universal Credit cap, and changes to the Local Housing Allowance (LHA), which proposes to reduce the amount of housing benefit available to private sector tenants. By looking at the records of more than 480,000 households receiving housing benefit across 24 boroughs, they uncovered a detailed picture of the impact on affordability of housing in London.

The analysis shows that the proportion of workless households whose accommodation would not be affordable and the degree of the cash shortfall varies significantly between the boroughs.

Brent and Redbridge are the boroughs where the most families – some 30 per cent - would not be able to afford their current rent, because they have a greater proportion of larger households, and because these workless families face relatively higher rents. In addition, many inner London boroughs would also become unaffordable to low income families by 2016, the report states.

Mayor Sir Steve Bullock, executive member for housing for London Councils said,

"We have always said that it is right to have a simplified benefits system and one which incentivises more people to work. However, there is real concern that because of the higher costs of housing in London, Universal Credit could lead to so many households being unable to pay their rent."

"Apart from the human cost on families who cannot pay the rent, this could put real pressure on local authorities’ services, for example on social care.  It also increases the chances that there will be a greater concentration of workless, low-income and deprived families in certain pockets of the capital."

The report also explores the impact of two alternatives to the currently proposed Universal Credit cap. One is to introduce a London-weighted cap which would take into account the higher cost of rented accommodation in London, by reflecting the capital’s greater median wages. The net effect of this would be to increase the number of households able to afford their accommodation by 37,600.

The other proposal is to exclude Child Benefit from the cap. This would enable a further 17,338 households to afford their current accommodation.

Housing strategy delayed

The coalition government's new housing strategy, promised by the end of October, has been delayed - the latest update on the department's work programme now promises the document "this autumn".

The October implementation update of the DCLG Structural Reform Plan says that  a "slight delay in publication agreed with No10 and Deputy Prime Minister's advisors, to allow further work on Right To Buy following announcement at conference".

On the opening day of the Conservative party conference last month, Prime Minister David Cameron announced on the Andrew Marr show that he planned to increase discounts to encourage council tenants to buy their own homes.

The DCLG subsequently published 'Right to Buy - Questions and Answers' which explained that the money raised would then be used to pay off the debt, and to fund more affordable housing. Under the new plan, for every home bought under Right to Buy, the document pledged that a new affordable home would be built – over and above the government's existing plans.

Localism Bill gains parliamentary approval

The Localism Bill completed its parliamentary stages last night, when MPs voted to accept all the amendments made to the bill in the House of Lords.

Minister of State Greg Clark told the House:

"For the best of a century, most Bills that have passed through this House have taken power from communities and councils and given more power to central Government, or in some cases to European government. This is an historic Bill, not just for the measures it contains but for what it represents. It is about striking out in a different direction. Power should be held at the lowest possible level. We want this to be the first Parliament for many years that, by the end of its Sessions, will have given power away."

In response, Helen Jones (Labour) said:

"The Minister would have us believe that this is an historic Bill that returns power to the lowest level. In fact, it is not. It is a Bill about centralising power and devolving the blame."

The Local Government Chronicle reports that the bill could receive Royal Assent as early as next week.

Julian Ashby confirmed as chair of the HCA Regulation Committee

While we wait patiently for the government to publish its directions to the social housing regulator - which will in turn allow the regulator to begin consulting on the revised regulatory framework - it's worth reading the Communities and Local Government Committee's report of its pre-appointment hearing with Julian Ashby.

Ashby, who is a current member of the Tenant Services Authority (TSA) Board and its Deputy Chair, was confirmed last week as Chair of the Homes and Communities Regulation Committee with a three year tenure. He will receive £50,000 to £70,000 a year for a time commitment of up to 2.5 days per week.

The review of social housing regulation, published last year, determined that proactive economic regulation of housing associations should continue after the abolition of the TSA, but with more focus on value for money for the taxpayer. The role of consumer regulation will be refocused on setting clear service standards for social landlords and addressing serious failures against those standards. Local mechanisms will be used to address routine problems, with an enhanced role for elected councillors, MPs and tenant panels in the complaints process.

The Localism Bill, when enacted, will transfer the regulatory powers and functions of the TSA to a statutory Regulation Committee in the Homes and Communities Agency (HCA). The regulatory framework of powers and standards will transfer to the Regulation Committee, which will be legally separated from HCA’s investment functions and with its membership appointed by the Secretary of State.

The Select Committee report details Ashby's experience, his new role and includes a transcript of his evidence to the Committee where he faced 50 questions about his suitability for the post, potential conflicts of interest with his other non-executive positions and how he would approach the challenges of chairing the Regulation Committee.

The MPs concluded that Ashby is a suitable candidate for the post and recommended his appointment, but drew the Secretary of State’s attention to the need to have adequate arrangements in place to resolve potential conflicts should they arise or be perceived to arise from his remunerated directorships.

The HCA is now looking to appoint six independent members. Each will be paid £11,000 a year for a time commitment of two days per month. The DCLG has obtained a cash advance of £20,000 from the Contingencies Fund to allow the recruitment and appointment of these Committee members ahead of the Royal Assent of the Localisms Bill.

Report reveals full impact of incapacity benefit reforms

A research report from the Centre for Regional Economic and Social Research Centre at Sheffield Hallam University reveals the likely impact of current reforms to incapacity benefits.

The report shows that the headline total of 2.6m men and women on incapacity benefits is set to be cut by nearly 1m by 2014. Most of these will be existing claimants who will lose their entitlement.

It finds that the reforms are likely to push 600,000 people out of the benefits system altogether, forcing them to fall back on other household members for support.

The report estimates the impact of reforms for every district in the country, saying:

'The highly skewed distribution of incapacity claimants across the country means that the older industrial areas of the North, Scotland and Wales, in particular, will be most affected by the reforms. The reforms will impact barely at all on the most prosperous parts of southern England.'

Professor Steve Fothergill, who co-authored the report, said, "The large numbers that will be pushed off incapacity benefits over the next two to three years are entirely the result of changes in benefit rules - the introduction of a new tougher medical test and, in particular, the more widespread application of means-testing from next April onwards."

"The reduction does not mean that there is currently widespread fraud, or that the health problems and disabilities are anything less than real."

National regeneration strategy called for

The government has no adequate strategy to address the complex problems faced by England's most deprived communities warned MPs from the Communities and Local Government (CLG) Select Committee in a new report published today.

The CLG Select Committee conducted an inquiry into regeneration, following the publication by the government in January 2011 of Regeneration to enable growth: What Government is doing in support of community-led regeneration.

The new report calls on the government to publish a national regeneration strategy that specifically targets the country’s most disadvantaged communities. The Select Committee said this should be based upon a detailed understanding of what worked or failed in the past, incorporating lessons from places like Hulme where a successful regeneration scheme has transformed a deprived area into a thriving community.

The main findings of the CLG Select Committee include:

• The government’s approach to regeneration focuses overwhelmingly on the pursuit of economic growth - it does not do enough to address the specific needs of places where the market has failed to deliver essential investment

• More needs to be done to encourage private investment into areas of market failure, for instance through the provision of ‘gap funding’

• The decision to cancel the Housing Market Renewal Pathfinder Programme has had a profound effect upon the lives of people living in communities across the North and Midlands - action is urgently needed to help those affected

• The government urgently needs to review the lessons from previous regeneration programmes, and consider how they can be applied to future schemes

• While the government has aspirations to give communities control over regeneration in their area, the practical mechanisms to achieve this are lacking

• A Community Budgets approach - pooling resources from public bodies across a given local area - could make an important contribution to regeneration

Clive Betts MP, Chair of the All-Party CLG Select Committee, said:

"The Government has cut public funding for regeneration programmes dramatically and has produced no adequate 'strategy' for regeneration sufficient to tackle the deep-seated problems faced by our most deprived communities."

A think tank 'Urban Pollinators' has provided analysis and commentary on the report including what it missed. It says,

"The task now is to rescue regeneration from the ashes of government policy and regenerate it. That means sharing and reapplying learning, investing in the skills and knowledge of all involved, and being clear about both the need and the implications of the new context we work in."

Commons pass squatting criminalisation plans

Opposition attempts to exclude long term empty homes from government plans to criminalise squatting were defeated last night in the House of Commons.

The Commons last night debated a controversial new clause 26 added to the Legal Aid, Sentencing And Punishment of Offenders Bill during the Report Stage in the House of Commons. The clause seeks to make squatting in a residential building a criminal offence subject to a prison sentence of up to a year and a fine of up to £5,000.

Opponents to the move, which include homeless charities, and many housing lawyers, point out that squatting in the home of a "displaced residential occupier" or "protected intending occupier" is already a criminal offence, but one that is poorly enforced by the police. Introducing the clause for the government, Minister for Prisons and Probation Crispin Blunt acknowledged that the Metropolitan Police admitted that a lack of training and practical knowledge regarding the law on squatting may be a barrier to effective enforcement.

Nevertheless, the government was unmoved by opposition argument that the law was unnecessary and would criminalise vulnerable homeless people.

Shadow Justice Minister Andy Slaughter supported the idea that there may be categories of squatters who need to be criminalised, but claimed this clause was ill thought out and unsupported by evidence. Labour forced a vote on an amendment that would have excluded buildings that had been empty for more than six months when squatted, and where there were no significant steps being taken to refurbish, let or sell the building at the time of squatting.

The amendment was defeated by 23 votes to 300, but will no doubt be subject to further debate when the Bill moves to the House of Lords.

Government u-turn on access to Ombudsman

The Localism Bill received its Third Reading in the House of Lords last night and will now return to the Commons with amendments. At the last minute the government put forward an amendment that will allow tenants direct access to the ombudsman in certain circumstances.

The government's intention in drafting the housing complaints proposals in the Bill was to promote the resolution of complaints as far as possible at the most local level, and to encourage a system where ideally the ombudsman is brought in only where local resolution does not prove possible. Consequently it had sought to introduce a new "democratic filter" which would have prevented the Ombudsman from investigating until a written referral was made by an MP, local councillor or a designated tenant panel.

However, as reported previously by CoalitionWatch, these arrangements proved controversial, leading the government to look again at its plans.

The amendment means that tenants will retain the option to go directly to the Housing Ombudsman if eight weeks have elapsed since the end of the landlord's internal complaints process, or if a local representative explicitly declines to refer the complaint to the ombudsman or agrees that the tenant may approach the ombudsman directly.

Communities and Local Government minister Baroness Hanham explained the reasoning behind the eight week time limit:

"It allows sufficient time for a complaint to reach the local representative and for the local representative to make representations to the landlord and achieve a successful resolution to the complaint without imposing an unnecessary or onerous delay on the tenant. It might help the House if I unpick this a little further.

"First, as the clock starts at the end of the landlord's process in our proposal, we would expect the tenant to require a little time to forward the complaint to the local representative, and we make allowance for this. Secondly, it is important to recognise that in most cases the local representative will want to review the case materials before going further and will possibly want to discuss them with the tenant. It is key to our aim of getting local representatives more involved in housing complaints that they are given the space and opportunity to do that. If, on the other hand, the local representative concludes that the complaint cannot be resolved locally, they do not need to wait for the eight weeks to elapse. They can at any stage refer the complaint to the ombudsman or agree to the tenant accessing the ombudsman directly. We believe that we should trust local representatives on the ground to make this judgment and to provide effective support and advocacy on behalf of tenants."