DCLG performance review 2010-11

Last week the Communities and Local Government Select Committee carried out a review of DCLG performance over the year and questioned its future direction of travel. A transcript of the review has now been published.

In attendance were Secretary of State Eric Pickles MP, Housing Minister Grant Shapps MP and Minister for Decentralisation and Cities Greg Clark MP.

Committee members George Hollingberry MP and Heidi Alexander MP questioned Grant Shapps on the new Housing Strategy and whether it was the government's target to provide 450,000 new homes a year.

Shapps said he estimates that 170,000 affordable homes will be built by 2015, though ideally, he would be looking for 200,000 plus to be built each year. He said a range of initiatives will provide the 170,000 homes:

• by encouraging the sale of 100,000 council homes through Right to Buy, and using all of that money to replace, on a one-for-one basis, every one of those homes. Thereby providing an additional 100,000  homes.

• Growing Places Fund - £500 million to unlock the larger infrastructure projects that could enable housing, in many cases, to go ahead

• Get Britain Building fund - £420 million fund, providing around 16,000 or 17,000 homes.

• £71 million programme for housing market renewal aimed at ensuring that there will be no street in the country where over half the street is empty.

• the New Homes Bonus will bring 22,000 empty homes back into use.

Shapps confirmed that 94 social housing providers have already been contracted for £1.5 billion to build 75,000 affordable homes.

Heidi Alexander MP also asked Shapps whether through the Affordable Rent model costs are being shifted on to the Housing Benefit Bill. In reply Grant Shapps said,

"A lot of people think immediately that if you are charging a higher intermediate rent-which in London is 65% of the market rent-surely housing benefit bills are going to go up. The reality is that a lot of the people who will be living in those new Affordable Rent homes are at the moment, in the private rented sector, paying 100% of the market rent."

"We actually see a reduction in the Housing Benefit Bill in those cases and overall a few tens of millions’ increase over the Parliament, but it is not a dramatic shift."

Investment in the private rented sector

The government has confirmed that Sir Adrian Montague will lead an independent review of barriers to investment in rented homes and has published its terms of reference.

The review will examine how best to encourage greater investment in rental properties - the government is seeking to support the rapid growth of the private rented sector by increasing the supply of affordable homes.

Sir Adrian said,

"I'm honoured to have been chosen to lead the review into the potential for institutional investment in housing. The private rental sector has gone through a period of rapid growth, and it's crucial that the government does all it can to ensure that demand continues to be met."

"I aim to help remove barriers to investment, contributing to the continuing health of a sector that millions of people rely on."

Earlier this week we reported in CoalitionWatch that the London Assembly's Planning and Housing Committee published a report calling for tenancies of at least five years and tax incentives for landlords who improve properties, alongside a range of other measures aimed at improving conditions for the one in four Londoners who live in the private rented sector.

Increasing Right to Buy discounts

The government has today published its consultation paper and impact assessment on increasing Right to Buy discounts for tenants in April 2012. It is proposing to increase the cap to £50,000, effectively trebling the discount in some parts of the country.

This will mean, for example, that someone in the West Midlands who had been a tenant for eight years on an household income of £20,000 could buy their £90,000 flat with a discount of £50,000 compared to £26,000 previously - effectively doubling their discount.

In London, a tenant for five years buying a flat worth £160,000 would also receive a discount of £50,000 - more than three times the previous cap of £16,000.

The government does not intend to change the qualifying period for eligibility and the proposed changes also apply to the Preserved Right to Buy.

The valuations used in calculating the self-financing settlement payments to end Housing Revenue Account subsidy include a forecast of lost surplus income arising from Right to Buy sales under the current Right to Buy policy.

As the government expects sales to be substantially higher than the self financing projections, the consultation proposes that a part of the Right to Buy receipt should be used to pay down the housing debt supportable from the lost income from these additional sales.

However, under all models mentioned in the consultation paper, the receipts for replacement will require supplementing by borrowing, landlord contributions in land or funds and under some of the options modelled, some additional funding.

The government says it will discuss the proposals with key partners including landlords, lenders and tenant organisations. The consultation closes on 2 February 2012.

No Second Night Out

The government's 'No Second Night Out' scheme trialled in London for a six-month period from April 2011 has been extended to communities across England.

Set up by the London Delivery Board 'No Second Night Out' focuses on helping those who find themselves rough sleeping on the streets of London for the first time.

It involves having services in place so people sleeping rough are quickly identified with the help of the public and provided with accommodation and support.

Inside Housing reports that the scheme has now been rolled out to 19 communities getting government grants of up to £250,000 each to help them adopt 'No Second Night Out' and tailor it to their area’s needs.

The scheme is being administered by Homeless Link and the grants are part of an £8m pot being awarded by the Homelessness Transition Fund to 41 projects that aim to help ensure that no one lives on our streets.

The independent Fund was set up to help support the national rough sleeping strategy Vision to end rough sleeping: No Second Night Out nationwide.

Commenting, Sharon Allen, Chair of the Fund’s Grants Panel said, "In these difficult times, the funding announced today will help charities provide the vital support that many homeless people need to get back on their feet."

"The quality of applications and demand for help was extremely high. However, I am pleased that these grants will help protect essential services and develop new, more effective ways to stop people living on our streets."

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.

Improving private rented housing

The London Assembly's Planning and Housing Committee has published a report calling for tenancies of at least five years and tax incentives for landlords who improve properties, alongside a range of other measures aimed at improving conditions for the one in four Londoners who live in the private rented sector.

The Committee found that about a third of the private rented sector in London – around 280,000 homes - fails to meet the “decent homes” standard used by social landlords, and one in three private landlords is considered to be “rogue”, leaving tenants at the mercy of poor conditions or sudden eviction.

The report calls on the Mayor, boroughs and central government to make it a priority to bring properties and landlords up to scratch, and makes a series of recommendations. The Mayor should:

• Lobby government to examine longer and more secure tenancies, with protection from retaliatory eviction.
• Develop the idea of a “kitemark” in the form of an “accreditation badge” that sets out an achievable minimum standard that applies to landlords, and property.
• Work with estate and managing agents to encourage them to require rented properties to have the “accreditation badge” before advertising them for rent.
• Ensure that where public subsidy is given for new mixed tenure housing developments, landlords offering private rented sector homes offer a range of tenancy lengths.
• Review the selective licensing approach that LB of Newham is implementing, in terms of its cost effectiveness and ability to target improvements in the worst private rented sector housing.
• Work with boroughs to find ways of incentivising landlords and managing agents to take part in accreditation schemes.

Local authorities should:

• Only discharge their duty of homelessness by offering housing that meets minimum standards based on the Mayor’s “accreditation badge”, once established.

• Where they discharge their duty of homelessness to families into the private rented sector, aim for a minimum tenancy offer of five years.

The government should:

• Review the viability of tax incentives for private landlords to encourage them to make physical improvements in their property, or for those who offer longer tenancies than the 6 month Assured Shorthold Tenancy minimum.

The Guardian has also reported that Inner-city landlords are exploiting the country's acute housing shortage by evicting tenants and replacing them with those prepared to pay more.

"Next year looks set to be even more difficult for private renters," said Campbell Robb, Shelter's chief executive. "At the very time we are seeing an influx of families into the sector, it shows worrying signs of becoming an increasingly unstable place to live."

DCLG paid interim finance chief £435k a year

The Department of Communities and Local Government paid Capita Resourcing £580,000 between March 2010 and July 2011 for the services of Stephen Park as its finance director.

Secretary of State Eric Pickles has been vociferous in his criticisms of 'fat cat' salaries in local councils and quangos, yet found himself defending the position of his own department. During a Select Committee hearing into the performance of the DCLG in 2010–11, he explained the difficulties DCLG had in finding a replacement with the right qualifications despite advertising the post twice. He said that someone with the necessary qualification and experience can earn significantly more in private industry.

Labour MP David Heyes pointed out the irony that local councils facing similar difficulties in recruiting chief executives and finance directors are frequently criticised by ministers. In his reply Pickles said that the public sector can never match the kind of pay that's available in the private sector.

Watch the questioning on Parliament TV. [timestamp:16:58:45]

PM's 'troubled families' plan

Prime minister David Cameron announced on Wednesday that the government was making available £450 million in a cross-government drive to turn around the lives of 120,000 of some of the country's most troubled families by the end of this Parliament.

Cameron first announced the initiative in August in the aftermath of that month's riots.

Former head of the Respect Task Force Louise Casey will head a new Troubled Families Team based within the Department for Communities and Local Government to drive forward a non-governmental approach to provide expert help to local areas.

The government funding will be offered to local authorities on a payment-by-results basis when they and their partners achieve success with families, and will fund 40 per cent of the cost of the intervention, which the remaining 60 per cent coming from the councils' own budgets.

The Government will also fund a national network of troubled family 'trouble-shooters' in each (upper-tier) local council. The trouble-shooters will operate at a senior level to oversee the programme of action in their area.

A troubled family is defined as one meeting at least five of seven characteristics. The government estimates that most troubled 120,000 families cost central and local government £9 billion a year - an average of £75,000 per family. Currently, only £1 billion of the £9 billion is spent on targeted interventions which could help turn the troubled families' lives around.

Channel 4’s FactCheck blog deconstructs the financing of the initiative, pointing out that:

• including the 60 per cent local authority contribution, the announcements envisages a spend of £1.12bn on the initiative
• Department for Education (DfE) figures put the cost at £14,000 per family – which works out at £1.6bn for 120,000 families, leaving a shortfall of half a billion pounds
• the government expects councils to fund their contribution from existing budgets, at a time when council budgets are being slashed and funding to family intervention projects was being reduced.

'London Living Rent' row

Housing minister Grant Shapps has responded on Twitter to the campaign promises on the private rented sector from Labour's candidate for London Mayor, Ken Livingstone.

Earlier today, Livingstone announced that, if elected Mayor, he would establish a campaign for a London Living Rent, saying that no-one should pay more than a third of their wages on rent. He also said that he would work with other stakeholders to establish a London-wide non-profit lettings agency to tackle rogue landlords and drive up standards in the private rented sector.

In response, Shapps tweeted:

" left-wing rent controls would be a disaster – fewer homes to rent, and shabbier accommodation for tenants" and

"when rent controls were in place, rented sector contracted to just 8% - complete madness to re-introduce!"

 When asked by Livinstone's Team (@ken4london) if he was happy with the level of income Londoners spend on housing, Shapps agreed that income spent on housing is too high, going on to praise London Mayor Boris Johnson's record on building affordable homes.

Speaking at the NHF's London Development Conference, Johnson referred to the London rents map that gives tenants information on average rents in their local area but drew the line at introducing rent controls. His office told Inside Housing that the mayor does not have statutory powers to impose rent controls or establish a lettings agency.

Campaign against ‘bedroom tax’ plans

The National Housing Federation has done a good job of raising awareness of the implications of the government's plans to claw back housing benefit from claimants deemed to be under-occupying, dubbing the proposal a bedroom tax in an unashamed effort to catch the eye of the tabloid press.

Anyone deemed to be under-occupying by one bedroom stands to lose up to 15% of their housing benefit in changes due to be introduced in 2013, and those considered to have two or more 'spare' bedrooms – even if they are in use – will lose up to 25% of their benefit.

The Federation's analysis shows the extent of the cuts faced by many families.

For households in London living in three-bedroom homes and deemed to be under-occupying by two or more bedrooms, the 25% reduction in housing benefit being contemplated would docked their housing benefit by £1,385 a year - the largest penalty of any region Britain.

And in the North West – the region with the highest level of under occupancy – families living in a three-bedroom property face a cut of up to £955 a year.

Writing in the Huffington Post, NHF chief executive David Orr points out that those affected include families who are deemed to have just one 'spare' bedroom, perhaps because their children have left home or a family member has died. The Department for Work and Pensions has admitted that two thirds of those affected are disabled.

Same sex teenagers up to the age of 15 will be forced to share a bedroom. And foster parents will be affected even where their bedrooms are occupied by foster children, who for benefit purposes do not count as part of the household.

Amongst the print media, the Mirror and a number of regional newspapers have run stories based on the NHF briefing. On the other hand, there are signs that ministers have briefed sympathetic journalists, with the Daily Mail yesterday running a vitriolic story headlined ‘1m empty rooms paid for by housing benefits... and it's costing the taxpayer £500m a year’ which referred to ‘the growing scandal of under-occupation of taxpayer-funded homes’.

Crossbench peer (and former NHF boss) Lord Best has tabled an amendment to the Welfare Reform Bill make the rules more flexible, to allow one additional bedroom above that permitted by the proposed criteria. This is due to be debated by the House of Lords on Wednesday 14 December.

Welfare Reform Bill - debate and human rights

The Welfare Reform Bill yesterday entered the first day of report stage in the House of Lords after much debate during a 17-day Grand Committee stage, which ended on 28 November. The Joint Committee on Human Rights (JCHR) also published its legislative scrutiny report on the Bill.

The first debate was on an amendment moved by Lady Meacher that would allow claimants to choose more frequent benefit payments than those envisaged by the government, whose aim is to encourage:

"out-of-work households to budget on a monthly rather than a fortnightly basis in the belief that it will better prepare people for the reality of working life."

Proponents of the amendment argued that the low paid workers are mainly paid weekly or fortnightly, and that a move to monthly payments would place intolerable strains on teh budgeting abilities of the poor. The amendment was defeated by two votes.

An attempt to protect the level of disability additions for children, led by Lady Grey-Thompson was defeated by a similar margin.

The final debate centred on government plans for council tax benefit. Lady Hollis introduced an amendment that sought to retain a universal system of council tax benefit, thereby blocking government plans to give a fixed-rate grant to local authorities from which they will design their own council tax rebate scheme. The amendment was defeated by 30 votes.

Human rights

The JCHR report warns that elements of the Welfare Reform Bill could be in breach of the European Convention on Human Rights (ECHR).

It believes there is a risk that the conditionality and sanction provisions in the Bill - which could involve withdrawing benefits for up to three years from claimants if they fail to meet certain requirements - might in some circumstances lead to destitution, contrary to Article 3 of the European ECHR, which outlaws inhuman or degrading treatment.

It also recommends allowing additional discretion to exempt disabled people facing exceptional hardship from the benefit cap and from the provisions concerning under-occupation of social housing, and suggests a trial period for certain measures.

Clegg tells cities 'do it your way'

Deputy Prime Minister Nick Clegg has 'set free from Whitehall' eight cities and their surrounding areas, by offering them power in return for accountability.

Launching the report 'Unlocking growth in cities', Mr Clegg plans to give cities devolved power over infrastructure to enable them to grow and attract investment.

As well as transport and technology, these cities are being offered 'bespoke deals' to take on more planning and regeneration responsibilities - including Homes and Communities Agency 'spending and functions'.

The eight 'cities', or Local Enterprise Partnerships to be technically correct, are:

• Leeds City Region
• Liverpool City Region
• Greater Manchester
• Sheffield City Region
• West of England (the old Avon local authority area including Bristol)
• Derby, Derbyshire, Nottingham and Nottinghamshire
• Greater Birmingham and Solihull (a strip of the midlands stretching from Bromsgrove to Burton-on-Trent)
• North Eastern (includes County Durham and Northumberland as well as Newcastle, Sunderland and Gateshead)

Over the next few months Greg Clark, Minister for Cities will work with individual cities and across all government departments to agree a series of tailored ‘city deals’.

Clark launches Localism that works report

Minister for Decentralisation and Cities Greg Clark has launched a report for the PlaceShapers group of housing associations at an event in London.

The report 'Localism that works', shows how PlaceShapers are "at the spearhead of delivering localism to transform communities, lives and opportunities".

In his introduction Mr Clark says, "this document can provide valuable insights to social landlords and communities alike who want to shape their neighbourhood for the better".

The report contains 16 case studies showing how housing associations have engaged with the concept of localism to show that they are 'more than just landlords' and can save public expenditure.

Stunell reminds councils to consult on ALMO changes

Communities Minister Andrew Stunell has written updated guidance for councils reviewing the future of arms length management organisations (ALMOs) managing their council housing. A copy of the guidance is available on the National Federation of ALMOs website.

The guidance makes clear that decisions about the future of ALMOs must be made locally and the the Government will not be imposing unnecessary regulations or burdens on councils.

However, it states that councils should apply the same degree of resident involvement into deciding what to do now as they did when they set up the ALMO. There are no plans to enforce any action though.

The document lists the consultation steps that councils ought to take when considering their ALMO's future. These include:

• a ballot or comprehensive consultation process conducted externally
• tenants on the project group leading the review
• a full cost benefit analysis
• the involvement of ALMO boards and officers

It states that the DCLG does not intervene in disputes between councils and their ALMOs, but will provide assistance and support to ensure reviews are carried out appropriately.

The guidance is silent on how councils should deal with political or ideological motivations for altering the status of an ALMO.

Housing associations 'not keeping pace' with transparency

Housing Minister Grant Shapps has written to David Orr at the National Housing Federation complaining about housing associations' lack of progress towards transparency.

In his open letter, Mr Shapps claims that his government "has led the way on giving the public greater access to its accounts and expenditure" and "all bodies – be they public or private – that receive significant amounts of public funding should be more transparent and more open to scrutiny".

Leaving the ball in Mr Orr's court, Shapps states he is "keen to see the sector bring forward a comprehensive offer on transparency as soon as possible" reminding him that housing associations may soon become subject to Freedom of Information requests.

Shapps pledges to get social tenants online

Housing Minister Grant Shapps has pledged to 'end digital apartheid' declaring that internet access should be a necessity, not a luxury.

Chairing the 'Digital by Default' summit today with UK Digital Champion Martha Lane Fox, Shapps called on social housing providers to to get their tenants online:

"I'm calling on every social landlord to look long and hard at how they can help their tenants get online, from offering networks of public internet cafes to providing the technology to log on at home."

"Internet connectivity is considered by many to be the fourth essential utility, and should be a necessity, not a luxury. Government is committed to helping demolish this unacceptable digital divide that is blocking social mobility for millions of council tenants."

No details have been published about how social landlords are to fund this activity.

Councils get New Homes Bonus funding

Housing Minister Grant Shapps has announced that the second year of cash payments to Councils through the New Homes Bonus will total over £430 million, more than double the first year's payment.

The New Homes Bonus provisional allocations for 2012-13 includes £210 million for new and empty homes delivered in 2010/11, a second instalment of almost £200 million for homes built in 2009/10, and the first premium for affordable homes totalling £20 million.

Under the scheme each new Band D home earns the council payments of nearly £9,000, and a new affordable home earns £2,100 more than for a similar market home.

The New Homes Bonus commenced in April 2011, and will match fund the additional council tax raised for new homes and empty properties brought back into use, with an additional amount for affordable homes, for the following six years.

Housing Minister Grant Shapps said,

"The bonus payments for new homes last for six years - so this year's bonus is more than double the payment from year one, and it's why communities that continue to welcome new homes can expect to see bigger cash bonuses and improved local services in the future."

Some Councils are already consulting with their local communities to decide how to spend the New Homes Bonus. Wychavon District Council has worked with local people to develop a protocol for spending the bonus, which ensures that the benefits of growth are returned to the communities where new homes are being built.

Andrew Stunell MP has written an article about the New Homes Bonus on Liberal Democrat Voice calling it, 'a powerful incentive for local authorities to drive development and build the houses that we so desperately need.'

'Think outside the box' to deliver homes

Communities Minister Andrew Stunell has called again on farmers and rural councils to deliver more affordable housing, but this time to "think outside the box".

Back in October 2010 Andrew Stunell first called on farmers to identify disused farm buildings that could be converted into new affordable homes for local people, and for councils to look favourably on their planning applications.

Andrew Stunell highlighted a scheme run by Harrogate Borough Council that requires developers to make provision on the site for affordable housing, resulting in 34 extra affordable homes across 19 sites.

He gave the example of Wilstrop Lodge Farm where two large units at market value and two smaller, affordable units were built. The market value homes sold for £500,000, with the affordable homes sold at the discounted sale price of £60,000. Andrew Stunell said,

"Councils and rural communities need to think innovatively and outside the box to make sure they deliver the homes they need."

"The work by Harrogate Borough Council shows what can be done when a local authority thinks imaginatively about its affordable housing needs, and uses all the powers they have at their disposal."

This fulfils a Coalition Agreement commitment to enable the building of 'Homes on the Farm', by encouraging the redevelopment of disused agricultural buildings as new and affordable housing.

The aim is to help young families remain in their communities rather than be forced to move to towns or cities where suitable housing is cheaper and more plentiful.

According to the Liberal Democrats the 'Homes on the Farm' policy is the brainchild of Liberal Democrat MP for Westmorland and Lonsdale Tim Farron. South Lakeland District Council provided grants of up to £30,000 to allow local people fund the conversion of disused farm buildings into affordable family homes.