Jocelyn Davies, the Deputy Minister for Housing and Regeneration
Housing has been a high priority for the One Wales Government and I am pleased to update members on a number of commitments today. Raising standards in social housing has been one of my priorities and a report has been published today on the pilot project to develop more robust mechanisms for assessing achievement against standards, Social Landlords’ Performance in Achieving Welsh Quality Housing Standard.
One of my first activities as Deputy Minister for Housing was to commission an independent review of Affordable Housing which was chaired by Sue Essex. All those involved in housing in Wales were invited to give their views and offer suggestions for how the system could be improved, resulting in a report with 43 recommendations for action. I accepted the report and put into place a new collaborative system to work through each of the challenges identified.
One of the recommendations was a full review of the arrangements for setting social housing rents. A cross sector review group including tenants associations was established to develop proposals for a new policy that would be fairer and more transparent and apply to social landlords. Today I agreed to a consultation on a proposed new social rents policy.
More recently, I commissioned an independent review of Housing Related Support chaired by Sir Mansel Aylward. The review group report made a series of recommendations and I have again put in place a collaborative process to work through and implement the recommendations. I have approved the Supporting People National Outcomes Framework which has been developed through this process.
My approach has been to work in close collaboration with key partners in the housing sector and I would like to thank them for their commitment to improving housing in Wales and provide an update on overall achievements during this government.
The principles and approach underpinning the development of housing policy
Our vision for housing is set out in One Wales and the National Housing Strategy, published last year. Fundamental to my approach has been early and open engagement with partners on both policy and delivery and this has been essential to our achievements.
Building on the recommendations of the Beecham Report, Beyond Boundaries: Citizen-centred local services for Wales, we have sought to ensure the interests of citizens and service users are at the heart of policy and delivery, to work with partners to develop policy and plan implementation and to maximise the value that can be achieved for the Welsh pound. In doing this, the Welsh Assembly Government has been driving change within housing in Wales.
This collaborative approach first used in housing as a way of taking forward the recommendations from the Affordable Housing Task Force chaired by Sue Essex has been evaluated independently. The independent report concluded that the approach resulted in a clearer direction for housing policy with much greater buy in from delivery partners.
The main elements of my approach to housing policy and delivery as been:
- A truly collaborative approach to policy formation and implementation, with all partners equally able to influence and contribute to outcomes
- Policy drafted with the interests of the service user being central to its formation
- Clear roles and responsibilities, with the Government’s role remaining strategic and separate from those whose role relates to delivery or planning/ commissioning
- Ownership of solutions increased by inviting all partners to contribute resources to resolve collective problems;
- Openness and transparency to improve relationships and enable difficult conversations to take place when interests diverge;
- A stronger emphasis on providing evidence of need and measuring outcomes
- Encouraging innovation and good practice
- Using legislative powers where appropriate to strengthen policy
- Raising the profile of housing and housing related disciplines and ensuring government is challenged by setting up independently chaired external groups to advise on key areas
- Establishing a risk based and outcome focused regulatory approach for Housing Associations.
What has been achieved
This approach and underpinning principles have enabled us to achieve improved outcomes for housing and tenants in Wales, including:
- Exceeding our target to create 6500 homes over the 4 year period of the government
- £430 million of Welsh Assembly Government investment in our housing stock with an additional £265m being contributed by the housing association sector in extra borrowing
- 1200 training opportunities and jobs created on the back of housing investment, by using the i2i toolkits and targeted recruitment and training techniques
- Cross sector agreement to, and current implementation of, changes to Housing Related Support to deliver more effective use of resources and ensure that the interests of service users are placed at the heart of service delivery
- Major increased investment in our social housing stock through a focus on achieving the Welsh Quality Housing Standard resulting in improved stock condition and also, along with arbed, has reduced energy costs for tenants.
- A robust and challenging new Regulatory Framework for housing associations which puts tenants and service users at its heart, based on clear delivery outcomes.
Housing Need and Housing Supply
Housing need across Wales is now the basis for allocating investment in new social housing. Previously, a judgement was made on the deliverability of housing development and this determined how funding decisions were reached. Research was commissioned from Alan Holmans to quantify housing need by Local Authority and this became the basis for decisions going forward.
The role of Local Authorities has also been strengthened so that they decide priorities for new development locally, and they are made more accountable for their decisions by the requirement to produce annual Affordable Housing Development Statements.
This requirement has been strengthened by providing training, support and guidance to enable maximum benefit to be gained through the use of “Section 106 agreements”. This is a planning mechanism that requires developers to contribute to the supply of affordable housing when they are building homes for the private sector.
We have concentrated on providing advice and support to those in danger of losing their homes, resulting in a decrease in the numbers of those presenting as homeless to Local Authorities.
In addition, the successful Mortgage Rescue Scheme used Social Housing Grant to enable those in danger of having their homes re-possessed by mortgage lenders, to rent them instead. This helped 384 households preventing 808 adults and 383 children from becoming homeless.
Housing Related Support
One Wales committed to provide extra funding for the Supporting People programme. We have achieved this despite budgetary cuts and our final budget published in February protects this going forward, with £140 million allocated for 2010/11 for the Supporting People programme.
In December 2009, I commissioned Professor Sir Mansel Alyward to lead a review into all aspects of the programme. The recommendations which were published in November 2010 were radical in terms of how housing related support could best be delivered. Providers, commissioners and landlords are working together with my officials to deliver the changes necessary.
The review group also looked for evidence of value for money building on a study conducted by Matrix in 2006. They concluded that for every £1 spent through this programme, a minimum of £1.68 was saved from the public purse.
The Welsh Housing Quality Standard has been the main mechanism to ensure that investment continues to be used to bring all homes in the sector to a modern standard. The standard must be met by all social landlords by 2012, unless an extension has been approved. We have piloted a more robust mechanisms for assessing achievement against standards today I published the report Social Landlords’ Performance in Achieving the Welsh Housing Quality Standard.
Procurement and the i2i Toolkit
The Can Do tool kit, developed by the Chartered Institute of Housing and i2i, provides guidance and specific advice necessary to ensure training and work opportunities are provided either through new build or by contractors who have been successful in winning WHQS contracts. Using this mechanism and Targeted Recruitment and Training (a similar initiative adopted by the Integrate consortium) nearly 1200 training and job opportunities have been created by the housing sector to date. This good practice is also being encouraged for wider take up in other areas of public investment outside of housing.
Maximising Resources by using the Private Sector
The National Housing Strategy Improving Lives and Communities which I launched last year recognised that housing need would never be met by the social housing sector alone, and encouraged the use of the private sector.
Specifically, the Welsh Government is encouraging Registered Social Landlords to establish social lettings agencies. These use the skills and experience of the sector to manage homes that are owned privately, and enable access for people on housing waiting lists.
Housing and Climate Change
Welsh Housing Quality Standard is driving up standards of energy efficiency in the social housing sector. In Regeneration Areas, Housing Association homes have benefitted from Retrofit measures that have included the use of solar energy for heating hot water and generating electricity under the first phase of arbed. The second phase of arbed is now being developed and it will access European funding to extend provision across private and local authority homes.
In addition, a pilot of nearly 300 homes has been developed at Code 4 and 5 levels of the Code for Sustainable Homes, an accreditation standard for sustainability. The valuable feedback gained from the pilots can be used to develop policy in this area.
These schemes will reduce carbon emissions as well as benefitting tenants by reducing energy costs.
A new Regulatory Framework
The Essex Review revealed the need for a thorough review of the regulatory arrangements for Housing Associations.
Many of the processes have now been reformed, and a new Regulatory Framework is in the process of being introduced. It recognises and supports a wider community regeneration role for Housing Associations, building on the landlord services they currently provide. It also expects them to use all of the resources within their power to increase housing supply and community benefits. This new regime is based upon increased intervention powers.
The Housing Measure, passed by the National Assembly just last week, will now put our regulatory framework on a statutory footing. This will increase confidence of lenders to lend to Housing Associations in Wales.
Reform of the Housing Revenue Account
Payment back to Treasury from surpluses made on the Housing Revenue Accounts of Welsh Local Authorities since 1999, has been a disproportionate burden, compared to English or Scottish Authorities. In that period 66% of total negative subsidies were paid by Welsh Local Authorities despite owning only 6% of housing stock across the three countries. The Welsh Assembly Government has been clear that this is inequitable and in need of urgent reform. Negotiations are ongoing with Treasury and we are seeking parity with Scotland by seeking separation from the arrangements in England and autonomy in this area.
Attracting additional investment
One of the early impacts of the recession was a withdrawal from the lending market for social housing by a number of the financial institutions involved. It led to recognition that the sector was over reliant on this form of long term funding and that the capital markets should be explored as an option. The Welsh Government funded Community Housing Cymru to work in collaboration with others to explore whether capital finance could help bring more value from Social Housing Grant as well as provide an alternative source of finance. They concluded that this may be most effective in increasing the supply of intermediate housing. Further work is being done by a number of Housing Associations to assess the wider applicability of this model.
Challenges going forward
There have been positive outcomes for tenants, for those looking for a home and for wider communities as a result of housing policy and investment during this government. However, there are a number of challenges that will face the next government, not least the drastic reductions to the Welsh Government’s budget. This comes at a time when homelessness is increasing and there are additional demands on social housing stock. The UK Government’s Welfare to Work programme is bringing cuts to welfare benefits generally and Housing Benefit specifically. Coupled with the rise in VAT and increasing food and fuel costs, many tenants will receive a significant decrease in income, creating hardship and disruption to communities. In light of this, it will be particularly important to attract additional external resources into the provision of affordable housing in Wales and to secure reform of the unfair Local Authority Housing Revenue Account system.