National Planning Policy Framework

The DCLG has published its National Planning Policy Framework (NPPF). Announced in Parliament by planning minister Greg Clark, the framework reduces 'over 1,300 pages of guidance in 44 documents' to 65 pages in one document (excluding technical guidance and traveller site planning policy).

Whilst there are plenty of mentions of 'Affordable Housing' and a tight definition of what is and isn't affordable, there are only a few concessions to help social landlords reduce waiting lists.

The main thrust of the framework outlines how local planning authorities should produce an up-to-date local plan and use it to grant permission for sustainable development.

For affordable housing this means:

• councils will identify
• how many affordable properties to build
• where they should go
• what tenure they should be
• who will live in affordable dwellings
• permitted affordable green belt developments to meet community needs
• site viability should outweigh 'obligations and burdens' such as affordable housing

The traveller site planning policy guidance stresses the need for councils to identify and plan for enough sites to meet the accommodation needs of travellers in or coming through their area.

The National Housing Federation has responded positively to the framework,  Chief Executive David Orr said:

"The NPPF also rightly puts the emphasis on creating mixed and balanced communities, crucially underpinned by a presumption in favour of sustainable development."

UK parliament has published a short briefing (aimed at MPs) that summarises the key points of the framework and provides useful background information.

Social housing regulatory framework published

The Tenant Services Authority has published its last major regulation document before abolition.

Bereft of TSA branding, The regulatory framework for social housing in England comes into effect on 1 April 2012 and takes into account changes introduced by the Localism Act 2011.

The new framework continues to differentiate between local authority and housing association landlords with its system of consumer regulation for all and economic regulation for non-local authorities.

The key principle of co-regulation remains unchanged,

"Boards and councillors who govern providers’ service delivery are responsible for meeting the standards and being transparent and accountable for their organisation’s delivery of its social housing objectives."

The main addition to the framework is the introduction of a value for money economic standard. This says that:

"....boards must maintain a robust assessment of the performance of all their assets and resources (including for example financial, social and environmental returns)."

As part of the process, providers need to publish an annual self assessment that:

• enables stakeholders to understand the return on assets measured against the organisation’s objectives
• provides absolute and comparative costs of delivering specific services
• shows evidence of value for money gains

Changes to consumer standards from the 2010 framework include:

•  the Tenant Involvement and Empowerment standard with:
• a greater focus on local mechanisms to resolve complaints and disputes
• an increased scope for more tenant involvement in repairs and maintenance
• retained principles of ‘local offers’ and annual reporting to tenants
• the Tenancy standard reflects changes in government policy, allowing different lengths of tenancy and setting out expectations to promote mutual exchange arrangements

As far as intervention by the regulator goes, it will be risk-based and proportionate - and mindful of the new statutory duty to minimise interference. The Localism Act made no changes to the powers of the regulator once a problem has been identified.

More practical information about the regulation of economic standards will be published in “Regulating the Standards”, available from the regulator’s website during April 2012.

Budget 2012 - effects on the housing sector

This year's Budget concentrates on reforms to the tax system that aim to reward work and support growth.

In his speech, Chancellor George Osborne was keen to point out that his budget was 'fiscally neutral' - ie all spending would be paid for by cuts elsewhere.

Key announcements affecting social housing include:

• a cap on the additional costs of Universal Credit of up to £2.5bn a year in the next spending review
• a consultation on the use of social housing Real Estate Investment Trusts (in Finance Bill 2013)
• a pledge to 'take action' if HRA reform increases public borrowing by current OBR estimates

In the detail there are a number of low-key announcements and reiterations that social landlords might like to note:

• an expectation that Right to Buy sales will generate up to £175m a year for the Treasury
• confirmation that tax relief on Stamp Duty for transfers to registered social landlords, shared ownership transactions and certain leases will be abolished
• confirmation of VAT exemption for services shared between VAT exempt bodies
• wholesale reform of Health and Safety regulations including RIDDOR
• announcement that the National Planning Policy Framework would be published at the end of March 2012
• minor changes to the household benefit cap as announced on 1 February
• £20m available to the not-for-profit advice sector in 2013–14, and again in 2014–15

The Treasury has a page devoted to Budget 2012 with details of the calculations, source data and assumptions made in the main document.

The National Housing Federation has responded to the Chancellor's Budget on specific issues. However the Federation's chief executive David Orr said, "...it is disappointing that the Chancellor has failed to put investment in housing at the forefront of driving forward economic growth in the UK."

In the LGA's response Chairman Sir Merrick Cockell, said: "Local authorities are seeing their government grant cut by 28 per cent over the current funding period. In comparison, Whitehall will trim budgets by just 8 per cent."

Councils urged to follow Whitehall's example

Housing Minister Grant Shapps has written to council leaders urging them to 'follow Whitehall's example and protect Supporting People (SP) funding'.

His letter reminds councils to "consider evidence showing that every £1 spent through this housing support saves £3"....from the budgets of social landlords, NHS and the Police.

An SP cuts reminder is becoming an annual occurrence for Mr Shapps. In March 2011, he co-signed a letter to The Telegraph criticising councils' SP spending cuts. Quoting Communities Secretary Eric Pickles, that letter claimed that every "£1 spent on Supporting People will probably save them £5 or £6 further down the line."

Criminalising squatters could cost £790m

The campaign group SQUASH, which opposes further criminalisation of squatting, has published research which claims that the cost of Clause 136 of the Legal Aid, Sentencing and Punishment of Offenders Bill (LASPO), designed to criminalise squatting in 'residential' criminalising squatting, could reach £790 million in the first five years.

This would more than wipe out the £350m savings intended to be made by LAPSO when it comes in.

The Government's impact assessment estimates the costs as £25 million over five years. However, the SQUASH report points out that no attempt has been made to account for the costs of rehousing and rehabilitating those who currently squat, and estimates of the costs to the criminal justice system of prosecution of squatters in residential properties.

SQUASH's calculations for the most probable scenario puts the true annual cost of criminalisation as between £63.2m and £158.1m annually. Over five years, this amounts to a bill of between £316.16m for a low population of squatters, and £790.39m for a high population.

Amendments to LAPSO, including one that would exclude buildings that had been empty for twelve months or more, were debated last night in the House of Lords. Lady Miller of Chilthorne Domer (Liberal Democrat) said:

"It is no accident that squatting in an empty property has never before been criminalised in the UK. In its historic context, it has been seen as a humane response to the homeless seeking shelter. Any big change deserves more scrutiny than it has so far had in its entire passage through Parliament."

Lord Bach (Labour) referred to the findings of the SQUASH report and quoted the Law Society as saying:

"The proposals in this consultation are based on misunderstandings by the media of the scale of the problem and a misunderstanding of the current law".

Replying for the government, Baroness Northover (Liberal Democrat) opposed her political ally's amendment, saying:

"We believe that that is wrong in principle. We would not accept that after a year of non-use it would be defensible to deprive owners of their other assets such as cars or phones. Moreover, there are many legitimate reasons why a residential building might be left empty for a year or more-for example, when a property is inherited following a death and probate takes some time to be sorted out."

She then offered a meeting with the rebel Lords before the Third Reading of the Bill, saying the government had a series of transition measures planned. Lady Miller withdrew her amendment without forcing a vote, although she indicated that she would seek to bring the matter back before the Lords if she was not satisfied with assurances given at the meeting.

Shapps 'tackling neighbours from hell'

A press release issued by the Department for Communities and Local Government claims that Housing Minister Grant Shapps is tackling neighbours from hell - by announcing Community Harm Statements.

The Statements, developed by a group led by CIH's ASB Action Team, provide a summary of evidence that can help barristers answer judges' questions about complex ASB cases, and the harmful impact on the community and local resources.

The CIH ASB Action team has been funded for the last two years by Shapps's department. The funding finishes at the end of this month.

Fuel-poor households to rise

The number households in England struggling to pay their fuel bills could more than double to almost 10 million by 2016 due to rising energy prices, according to a new government commissioned report.

The latest official fuel poverty figures show 4m households in England in fuel poverty, compared to 1.2m in 2004.

Professor John Hills of the London School of Economics started his research in March last year looking at the definition of fuel poverty, targets, and the effectiveness of different policy interventions. An interim report was published in October last year, setting out his initial thoughts.

In the final set of recommendations Professor Hills:

• is clear that fuel poverty is currently measured in a way that is both flawed and unhelpful

• has proposed a new way to define fuel poverty, separating the extent of the issue (the number of people affected) from its depth (how badly people are affected)

• shows how the impact of government policies can be assessed against this new proposed definition, showing the positive impact current government policies are having on tackling fuel poverty.

On the publication of the report Professor Hills said:

"When one focuses on the core of the problem in the way I propose, the outlook is profoundly disappointing, with the scale of the problem heading to be nearly three times higher in 2016 – the date legislation set for its elimination – than in 2003."

"But this daunting problem is one with solutions. Our analysis shows that improving the housing of those at risk is the most cost-effective way of tackling the problem, cutting energy waste, with large long-term benefits to society as a whole. We need a renewed and ambitious strategy to do this."

In a ministerial statement on the publication of this report Secretary of State for Energy and Climate Change Edward Davey said:

"It is important that this opportunity to improve the framework for tackling fuel poverty is seized. Today, I therefore commit myself and the Government to the adoption of a revised approach to measuring fuel poverty by the end of the year. In preparation for this I will be working closely with my colleagues across Government."

Edward Davey says he will pubish in the summer a consultation on the new approach he proposes to take.

Shapps to 'give tenants control'

Housing Minister Grant Shapps is consulting the sector about regulations to make it easier for tenants to exercise their Right to Manage as well as a new Right to Transfer.

The regulations seek to place a requirement on local authorities to co-operate with tenants who are minded to take forward a transfer. This forms part of the government's localism agenda and the consultation says it's, 'key to Government’s ambition to increase tenant empowerment and involvement.'

The proposed reforms to the Right to Manage would make it easier for tenants to take over the management of local services such as repairs, cleaning and security. The consultation says:

'Tenant Management Organisations are proven models of community control of public services. Evidence shows that they improve service quality, secure better value for money and boost satisfaction.' Housing Minister Grant Shapps said:

"I want to make it easier than ever for council tenants to take charge of local services, from minor repairs to major regeneration. And it will no longer be acceptable for councils to dismiss tenants' proposals for improvement out of hand."

Responses to this consultation will inform the introduction of the Housing (Right to Transfer from a Local Authority Landlord) (England) Regulations 2012 and its associated guidance and changes to the Housing (Right to Manage) (England) Regulations 2008.

Revamped Right to Buy rules published

The government has today published new rules for the revamped Right to Buy, which will significantly increase the discounts for social tenants in England.

Currently most Right to Buy discounts are limited by caps ranging from £16,000 in most parts of London to £38,000 in parts of the South East - described by housing minister Grant Shapps as "miserly restrictions". From 2 April 2012, the maximum discount available to tenants exercising the right to buy will go up to £75,000 - a £25,000 increase on the cap proposed in the consultation document.

The government has pledged that every additional home sold under Right to Buy will be replaced by a new Affordable Rent homes, with receipts from sales recycled towards the cost of replacement.

The Department of Communities and Local Government claims that, after calculating transaction costs and compensating authorities for loss of income above what has been covered in the self-financing settlement, HM Treasury and local authorities will receive the amounts they would have expected to receive, had the policy on Right to Buy remained unchanged.

Councils will be allowed to retain the remainder of the receipts if they agree to use the money to fund part of the cost of replacement homes, and so long as Right to Buy receipts account for no more than 30 per cent of the cost of the new home. The remainder of the cost will be funded by borrowing supported by Affordable Rents, which may be up to 80 per cent of market rents, "and by cross-subsidy from the landlord's own resources, including (in some cases) land".

If a council is unwilling to sign an agreement with the DCLG then funds will be redistributed nationally by the Homes and Communities Agency or, in London, the Greater London Authority.

The government cannot insist that housing associations replace right to buy homes since they are independent organisations, but it plans to incentivise them to reinvest receipts - for instance by prioritising those that toe the line when considering bids to use the funds returned for national redistribution.

The consultation responses and the government's response has also been published, together with an impact assessment and a fact sheet for lenders.

Welfare Reform Bill gains Royal Assent

The government's widely debated Welfare Reform Bill gained Royal Assent on 8 March, replacing most means-tested benefits with Universal Credit.

Our sector is still analysing the full impact of the new Act on landlords and tenants, and the National Housing Federation recently published a series of briefings which it will add to as further details emerge.

For tenants, the Act will cap benefits which workless household can receive to £500 per week for couples and lone parents - and £350 per week for single people without children.

It will also impact on around 670,000 working-age social tenants with spare bedrooms. For example, if a family has one spare room they will lose 14 per cent of their housing benefit. If they have two spare rooms the cut will be 25 per cent. This is likely to cause problems for tenants who are already struggling to pay their rent.

Another issue is that from October 2013, housing benefit will be paid directly to working-age tenants. The government will run five 'demonstration projects' between June 2012 and June 2013 to assess the impact of this.

Heralding the reforms, Work and Pensions Secretary Iain Duncan Smith said:

"The Universal Credit will mean that work will pay for the first time, helping to lift people out of worklessness and the endless cycle of benefits. Whilst those people who need our help and support will know they will get it without question."

However Sam Lister, policy and practice officer at the Chartered Institute of Housing (CIH), criticised the reforms. Addressing a CIH south east conference in Brighton he said:

"The advantage of the system we have at the moment, which is administered locally, is if things go wrong at the very worst people can take all their papers down to the people assessing it... that will be lost."

The Act introduces other significant changes to the benefits system:

• replaces Disability Living Allowance with Personal Independence Payments
• uprates Local Housing Allowance rates by the Consumer Price Index (CPI)
• amends the forthcoming statutory child maintenance scheme
• limits the payment of contributory Employment and Support Allowance to a 12-month period.

The Act can be downloaded from legislation.gov.uk.

Cashback scheme attracts controversy

Housing Minister Grant Shapps is offering tenants a chance to get involved in his Tenant Cashback Scheme, saying it provides them with opportunities to:

• earn up to £500 a year for those who sign up and agree to undertake minor repairs in their homes
• pool money in communities to improve the local area and help neighbours who can't do the work themselves.

Shapps said, "Rather than having to wait for landlords to act, tenants should be able to tackle their own DIY dilemmas and get paid for it."

The Tenant Cashback Scheme was launched in April 2011 and billed as, 'a Cashback deal worth billions'. It was followed by a DCLG consultation dated July 2011 called 'Implementing social housing reform', where the Scheme was described as a 'proposed direction' for tenant involvement and empowerment. The department published an impact assessment about the scheme on the same date.

Shapps's latest announcement puts a new spin on the initiative, as he currently calls it an 'apprenticeship'. He asks landlords to provide training to carry out basic repairs, in the belief that this will cut their repair costs while boosting tenants' job prospects.

Three pilot schemes went ahead in the summer of 2011 and these looked at:

• scope and scale of the scheme
• overall costs
• potential benefits
• practical questions, including contractual issues.

National Housing Federation (NHF) Director David Orr was interviewed on BBC Five Live before the pilots went ahead, to discuss how the scheme would work. He said, "It's an idea which is well worth testing."

However, in a briefing dated June 2011, the NHF identified a range of opportunities and challenges. For example, residents could save money which might be spent locally or saved for a deposit. On the other hand, the scheme may have a negative impact on existing repairs or maintenance staff.

Following his latest announcement Shapps's scheme was criticised by the construction union UCCAT who are worried about health and safety issues. They said:

'The danger of being exposed to asbestos is particularly acute as social landlords do not have to manage asbestos within a tenant’s home, nor do they have to maintain an asbestos register for their properties. Without this information tenants undertaking DIY work could be endangering their health, without even realising it.'

According to an article on 24dash, the sector is split over the whole issue, but Shapps has urged councils and housing associations not to "deny" their tenants the right to take part in the scheme.

Cable call to get housing moving

In a private letter to David Cameron, Business Secretary Vince Cable called for greater government commitment to supporting home construction.

Liberal Democrat Cable's five page letter, dated 8 February and leaked to the BBC, is sharply critical of what he sees as the shortcomings in the government's industrial and economic policies.

He makes five suggestions to improve the situation, of which the fifth relates to the construction industry, stating:

‘Finally, the economy will continue to struggle while the construction industry remains so depressed. By contrast the big recovery in the 1930s was driven by a combination of new industries (cars and chemicals) and construction: estates of semis and lots of council housing. Construction provides plenty of jobs and supports UK supply chains, including innovative products, ranging from new more sustainable construction materials to energy saving technologies.

‘I strongly welcome the Housing Strategy that Number 10 developed last autumn. Galvanising the housing construction market would have a much wider economic impact in stimulating innovation and growth, and I absolutely agree that it should be an important priority. There is a particular problem with financing; the housing associations, which could drive recovery, are unable to mobilise funds on any scale. We should have the same level of commitment across Government to getting housing moving as is beginning to happen for infrastructure.’

The National Housing Federation welcomed Cable's comments. NHF Chief Executive David Orr told Inside Housing:

‘A public investment of £1 billion - matched by £10 billion from housing associations - would build 66,000 new homes and create around 100,000 jobs in the construction industry, plus many more in the wider supply chain.

‘It would also save the government nearly £400 million in benefit payments and boost national economic activity by £15 billion. Few other sectors can offer this potential with such short lead-in times and the prospect of so much of the benefit being retained domestically.’

NHF defends HAs’ record on transparency

The National Housing Federation has published a briefing recognising the importance of transparency, openness and accountability to housing associations, and outlining the different approaches housing associations and others are taking to deliver this commitment to transparency.

This comes after months of government pressure on housing associations to become more transparent in their dealings.

The briefing points out that the sector has led the way on some of these issues, for example, having routinely published information on chief executives’ remuneration for the last 15 years.

However, the NHF believes that associations should remain free to evolve their own transparency policy in conjunction with its stakeholders.

The briefing gives examples of the approaches of individual associations, including breakdowns of spending, regular performance reporting and publishing the HouseMark benchmarking dashboard.

Viridian is the latest association to adopt a new transparency policy, as explained by its Chief Executive Matthew Fox in a recent Inside Housing article.

Legal aid and legal costs

The Legal Aid, Sentencing and Punishment of Offenders Bill entered the report stage in the House of Lords on 5 March, and the government suffered three defeats on the first day of debate.

The government wants save £350m by limiting the availability of legal aid. However, plans to restrict legal support for victims of domestic violence were defeated by a majority of 37.

Peers also voted to state in the legislation that people should have "access to legal services that effectively meet their needs" and the terms for appointing a Director of Legal Aid Casework were spelled out in the legislation to protect the postholder's independence.

There is only one amendment to be debated that directly relates to housing. As drafted, the Bill would rule out legal aid for benefits work, even when involved in defending possession proceedings.

Amendments 75, 76 and 77, yet to be debated, seek to ensure that, where the loss of the home is threatened due to nonpayment of the rent or mortgage, advice and casework can be provided to address an underlying benefits problem causing or contributing to the arrears. Shelter has produced a useful briefing [a big thank you to the Nearly Legal blog for highlighting this].

Ombudsman urges clarity in costs

Cost is the single most common cause of complaints from people about their lawyers, according to the Legal Ombudsman.

In a new report, Chief Legal Ombudsman and former Shelter boss Adam Sampson says the legal profession must learn the value of clearer pricing information and good customer service or risk falling behind more marketing led companies in the long run.

The report, titled “Costs and customer service in a changing legal services market” uses the stories of real people who came to the Ombudsman with complaints about costs to illustrate difficulties faced by consumers.

Since launching in 2010, 20-25% of the Ombudsman's investigations have involved issues related to cost, either where a consumer felt they had been over-charged, confused, or surprised at the costs presented to them by their lawyer.

As well as publishing a report, the Ombudsman has produced a guide for consumers, to help them ask the right sort of questions when first enquiring, and a guide for lawyers, to help them prevent complaints or resolve them quickly if a problem arises.

Outsourcing the Audit Commission

The Audit Commission has announced the four private firms that are set to replace the Commission's own Audit Practice. Audit fees for most local public bodies may fall by £250m over five years.

The savings will come in part from the award of four contracts to Grant Thornton, KPMG, Ernst & Young and Mazars subsidiary the DA Partnership. The DA Partnership is a wholly-owned subsidiary of Mazars LLP, and will be led by current head of audit practice at the Audit Commission, Gareth Davies.

Mr Davies had been attempting to launch a mutual made up of Audit Commission staff. However, DA partnership has only been awarded one contract for the North East and North Yorkshire - not enough to create an employee-owned independent firm.

Grant Thornton and KPMG already have contracts in place with the Audit Commission, alongside Deloittes, PWC and PKF and these existing contracts will remain in place, so in total there will be seven firms that will undertake the audits of larger public bodies.

The dominance of the so-called 'Big Four' in the market for large company audits is currently under investigation by the Competition Commission.

The outsourcing contracts will run for five years with the option to extend for an additional 3 years, and relates to the audits of larger bodies. The Audit Commission is running in parallel an outsourcing process for the audits of smaller bodies, and has published its outsourcing strategy.

Sir Merrick Cockell, Chairman of the Local Government Association, said:

"The Local Government Association would like to see councils themselves procuring their audit services and we have been working with Government to that end. In the current financial climate this next step towards that goal represents significant and guaranteed savings for five years and that is good news for local government. At a time when they are facing very hard decisions about budgets, this will be a tangible financial benefit to them."

In the meantime, the government is pressing ahead with its plans for disbanding the Audit Commission and is developing the new local public audit framework that will replace the current arrangements. Following the publication of the Government Response to the Consultation on the Future of Local Audit on 4 January 2012, it has undertaken discussions with local public bodies and other key partners.

Staff at the Commission's in-house practice will transfer to the winning bidders on 31 October, leaving a small residual Commission to oversee the outsourced contracts until the Commission is abolished and the contracts transferred.