Decent Homes ODPM Committee 28 Jan 2004

Oral Evidence given by Jim Coulter, Chief Executive, Danny Friedman, Head of Policy and Nigel Minto, Head of Project, National Housing Federation; Rt Hon Keith Hill MP, Minister of State for Housing and Planning, Ms A. Kirkham, and Mr G. Hollingworth, Office of the Deputy Prime Minister.

Q474 Mr. David Clelland: Mr Friedman talked earlier about the wider issues and he seemed to suggest there is some tension between the Decent Homes target and wider community and environmental issues. Do you think it is feasible or even desirable to fully integrate the Decent Homes target with the Sustainable Communities plan?

Mr Coulter: I think there is a policy and a resources conflict. The Sustainable Communities plan has been admired by many and that includes us. It is comprehensive, it has a long-term vision, but it has a number of lead points in it, most obviously the growth areas which some consider to be biased and therefore unbalancing other priorities for housing needs in other parts of the country. We certainly want to see the regional inequity in the present process addressed and that comes back to the position faced in the Spending Review. The Barker Review makes clear that there is a shortage of affordable housing supply. It is our view that regeneration-led housing investment also needs more resource. So the Chancellor and the Government generally is going to have to address that particular question in the not too distant future. There is an underlying conflict of shortage of resource. Our view is that Housing Associations need to take their responsibilities to use their assets creatively to meet their obligations, but Government needs to do its part too and that includes more capital investment in the major repairs area.

Q475 Mr. David Clelland: Do you think the local authorities have sought adequate involvement from stakeholder Housing Associations when they have been commissioning option appraisals following the ODPM's guidance of June 2003?

Mr Coulter: At this stage I think there is probably not a sufficient level of engagement. On the whole stock transfer has been to standalone organisations and we establish a very early relationship with those standalone organisations. It is less frequent than local authorities talking to the existing Housing Association stakeholder community about what the broader options would be. That is something the Department wants to change, but that has not happened yet.

Q489 Mr. David Clelland: But what about things like accessibility and decent neighbourhood requirements? Would you not be willing to consider widening the definition of the standard in order to include things like that?

Keith Hill: I recognise that this is an issue. You will know, of course, that all of the options can, and as I understand it normally do, contain an element of broader environmental regeneration. Of course, in the PFI schemes the regeneration of the whole neighbourhood is integral to the project over a period of 30 years. In the transfer schemes I understand that it is normally about five per cent which is allocated to broader environmental improvement and regeneration and the same goes for the ALMO so there is already an element there. Some of these broader issues, of course, are addressed in other government programmes. I am thinking, for example, of the Pathfinder regeneration schemes where we hope to be able to announce good things in the near future, not least, I understand, in your own locality. Nevertheless, I recognise this as an issue but we have to be targeted and focused. There is an expanding resource, twice the amount that the Government inherited, which is being invested in these areas. Government I think gets in trouble when it dilutes and loses focus and there is always a great tendency, is there not, to chop and change the programme? I think that we are absolutely right to remain quite focused on the properties themselves.

Q490 Mr. David Clelland: On the properties themselves, in terms of accessibility for the elderly and disabled, surely that is something which ought to be a basic standard. What about when we are refurbishing properties to meet the Decent Homes Standard? Should it not be compulsory to ensure that accessibility is built into that?

Keith Hill: Presumably not in every case. I do not think there are many advocates of the implementation of - what are they called? - lifetime homes across the board. I think it is part of the Mayor's target for something like ten per cent of new and possibly refurbished properties that should have those lifetime requirements. Again, I think there is an issue, and it is one that we should increasingly be aware of and probably cater for as we develop programmes, but again it is a matter of resource.

Q491 Mr. David Clelland: But you do not think there are basic accessibility issues that could be addressed in terms of the standard? I am not talking about having walk-in showers in every house and that sort of stuff, but there are basic things like the width of doors making life easier for elderly and disabled people. There are basic things that could be done, are there not, that could be built into this standard?

Keith Hill: I think it is a difficult issue. Of course, you are right. One recognises that we live in an increasingly aged society and we recognise the advantages of independent living and we want people to live in their own homes for as long as possible, and those homes need to be fitted for elderly citizens. I would expect authorities to take these considerations into account in their programmes, not, I have to say, (though this is again a matter for consideration) necessarily implementing these standards across the board, but perhaps thinking about the way in which one might focus these standards, at least in some of the properties. Are we doing anything more on that?

Ms Kirkham: The guidance that is about to go on our website does suggest, as part of the refurbishment package for local authorities and housing associations, that when doing that they should take those factors into account because often you can do something within the home. For example, when you put in new windows you can fit them with catches that can be easily used by disabled people, so those sorts of considerations I think should automatically be done.

Q492 Mr. David Clelland: But these are considerations. You are not willing to build those into the standards, saying "You must reach this standard"? You are just saying there are some things they might do but they do not necessarily have to do?

Ms Kirkham: We have left it as things that they might do, to point out those things they can probably do for the same cost as putting in a normal window frame, for example.

Q519 Mr. David Clelland: Can you explain why you have decided not to allow local authorities to directly invest in housing through investment allowances which were originally suggested by your department?

Keith Hill: I am not sure that I can myself answer that question. Let me turn to my guru.

Ms Kirkham: I think the housing allowances that you were referring to were something that were floated in what we called the blue skies debate a couple of years ago and there was not in response to that fairly wide debate very much interest shown in that as a particular option. At the same time as that debate was going on we conducted the PSA Plus Review where one of the very clear conclusions from a wide range of stakeholders was that what Government should perhaps be doing was narrowing down and focusing on the options that would deliver and that were going to be there and put on the table and not consistently having an alternative here or an alternative there because local authorities were saying to us, "That is confusing. We are not quite sure what might be coming up", and so at that point we decided we would go for the three options as the Minister has already explained.

Q520 Mr. David Clelland: Have you seen the Unison figures on this, which show that quite substantial levels of capital investment could be generated by a relatively modest investment allowance? Is that something you have studied? Would you agree with that?

Keith Hill: I am aware that Unison have argued for the investment allowance in its submissions to the Committee but I can only reiterate what Anne has already said to you, which is that we floated this proposal in our earlier consultation two years ago and there were simply no takers at that point.

Q521 Mr. David Clelland: Can I ask you about assistance to local authorities to tackle their worst stock? Now that the Estates Renewal Challenge Fund has gone what plans do you have for the new system of dowries to help local authorities to deal with their older properties?

Keith Hill: Again, I am not in a position to answer that one. I wonder if Anne could help on that one.

Ms Kirkham: The Estates Renewal Challenge Fund provided a subsidy where the transfer price did not stack up so it was a negative effect. The current position is that there is no reason why negative funding cannot be provided. There is no legislative reason why that cannot be the case. We have said to regional housing boards that if, as part of their wider strategy, they deem it to be appropriate to support a negative value transfer then they can look at using the resources in that way, so it is really open to the wider regional strategy as to what the priorities are and how the resources are best used.

Keith Hill: There are two things here, I think. It is the familiar refrain of resource and there is a limit. There is very extensive, as it were, shortfalling in terms of the quality of stock in the private sector which is, of course, what, 70 per cent of our housing stock overall in the UK. To address the totality of that shortfall would be a quite impossible demand on government spending and, indeed, I do not see why government should address that demand. After all, these are private properties and it is for their private owners to deal with those issues unless there are compelling reasons why they cannot. As you know, there are various programmes which owner-occupiers can access but it does seem to me very important, particularly on the part of the Labour Government, to focus on the vulnerable in private sector housing; somebody has to be their champion. Within the context of limited resource, within the context of our absolutely correct commitment to delivering on decent homes for the properties for which we, as a government, have the most obvious and direct responsibility we are doing our best with regard to the private sector.

Q541 Mr. David Clelland: There are regulations that cover the private sector, it is no good saying, "it is the private sector, what it has got to do with us?" There are building regulations and all sorts of regulations to regulate the private sector, so why is the Decent Homes Standard not applied to all the private sector in the same way?

Keith Hill: Because if we applied the Decent Homes Standard to all the private sector it would probably consume the totality of annual government expenditure, it is an impossible demand. We have to be targeted, we have to be selective, and we have to do the best we can within limited resources.

Q542 Mr. David Clelland: Why only 70 per cent when the public sector has to reach 100 per cent?

Keith Hill: For just that reason, it is a matter of resource.

Keith Hill: Just a matter of resource? At the end of the day practically everything in government is just a matter of resource, is it not?

Q544 Chairman: How much more will it cost to go from 70 per cent to 75 per cent?

Keith Hill: I do not know if we have costed that. Have we? Here is just the man.

Mr Hollingworth: I could not give you the exact figure. To actually go to 100 per cent would cost about £9 billion in terms of private sector conditions.

Q545 Mr. David Clelland: £9 billion extra?

Mr Hollingworth: Yes, £9 billion extra up to 2010. It would involve quite a considerable amount of extra resource to try and get there. Just expanding on what the Minister said, there is a more technical reason why we cannot get to 100 per cent - I think I explained that last time - in the sense that we are focusing on vulnerable houses, quite rightly, because I think that is what government should be doing, within private sector housing stock. The extent of non-decency in the whole private sector housing stock is enormous: 5.4 million homes in the private sector are non-decent. To actually deal with all of those would cost an absolutely astronomical amount of money.

Q546 Chairman: How much?

Mr Hollingworth: We have done the figures. It would be something like 40, 50, 60 billion. We will give you that figure.

Keith Hill: We will let you have a note on that.

Mr Hollingworth: It would be an enormous amount of money. The government should not be doing it anyway in the sense that this is basically the owners' responsibility. If we are targeting on vulnerable households they will pop up anywhere in the private sector, we will never entirely solve the problem of vulnerable households and non-decent homes in the private sector. We will never get to 100 per cent. It is an arithmetical calculation and we are quite happy to expand on that. We think 70 per cent is a reasonable target to aim for over the next few years given the size of the problem, given the level of resources that are going in, and we are monitoring that to see how much we do need, and also the problems about enforcement. You said why do we not make the Decent Homes Standard the standard in the private rented sector? We could do that but it would be very expensive and then you would have the problems of losing stock in the private rented sector. We have to have a balance between having a viable private rented sector and enforcing minimum standards. We have a more complicated system of ownership responsibility and difficulties of enforcing standards against owners in the private sector. That is why we have only gone to 70 per cent. That might be an underestimate, we have only just set this target and we need to monitor it. We will monitor it over the period of the target to see whether it is too strong or it is too weak. Given the evidence that we have got and the changes that have happened in the past we think it is quite a challenging target to go for.

Q547 Mr. David Clelland: I will come back to the question of vulnerability in a moment. The 70 per cent target is a national target, is it not?

Mr Hollingworth: That is right.

Q548 Mr. David Clelland: Is this not likely to lead to regional disparities if we are only dealing with it on a national basis? Should we have regional targets?

Mr Hollingworth: We will certainly talk to Regional Housing Boards about that. Obviously for the Regional Housing Boards to address this, in the guidance we have just issued we have said that we would expect all individual local authorities to aim towards 70 per cent by 2010, we would expect Regional Housing Boards to have a policy towards decent homes in the private sector and most of them have thought about it and quite a lot of them are developing a private sector Decent Homes Strategy. We will be working through the Regional Housing Boards and directly with local authorities to make sure that this target is achieved nationally but there are no grave disparities. Clearly there are some parts of the country where there are problems that are worse than others and different methods of tackling it in different parts of the country. One would not expect the methods of dealing with it in London, where there is a lot of equity and a lot more scope for offering loans and equity release, to be the same as in the North and North West.

Q549 Mr. David Clelland: Just to return to this question of vulnerability: why is the definition so narrowly defined? Surely there are people who could be described as vulnerable who are not necessarily in receipt of state benefit of one kind or another. It is a very narrow definition, is it not?

Mr Hollingworth: It is a narrow definition and I think we accept that. We had to come to some definition which we could focus on and monitor and it is quite sensible that we would expect local authorities to aim at the most vulnerable. We have never said anywhere that that is the only target that we expect local authorities to cater for. That is another quite complicated issue. We expect local authorities to offer a set of assistance to private sector homes in cases where they think they need help, not just to vulnerable people under our definition. Our definition is to monitor it and one would expect that target to improve because those are clearly the worst cases. We are not restricting local authorities to just offering loans and grants to vulnerable people in the definition of means tested, there is a wider scope. Under Warm Front it is slightly different. The DEFRA grants through Warm Front are restricted to people on means tested benefit, which is another reason why we have lined up our definition.

This is an uncorrected transcript of evidence taken in public and reported to the House. The transcript has been placed on the internet on the authority of the Committee. Neither witnesses nor Members have had the opportunity to correct the record. The transcript is not yet an approved formal record of these proceedings.