Thursday, 30 March 2017

Inside edge

All posts from: June 2009

Better late than never

Tue, 30 Jun 2009

After three false starts, the government seems to have finally come up with a housing rescue package that could make a real difference.

The £1.5bn of apparently new funding for new homes and imminent introduction of self-financing for council housing announced in Building Britain’s Future by Gordon Brown yesterday may not be everything the sector was pressing for but it amounts to much more than the paltry packages of  brought-forward money announced last year.

Half of the new money seems to come from other budgets (eco towns? RDAs? decent homes?) and half from other departments like the Home Office and Transport. It’s a recognition at last that the credit crunch and recession just might mean that more needs to be spent on affordable homes. Better late than never - and it comes at a time when the pressure is on public spending of any kind. 

The Communities and Local Government (CLG) department says the £1.5bn will fund 20,000 new affordable homes and another 10,000 delivered through the private sector. The detailed breakdown is:

  • extra funding for councils and housing associations to deliver 15,500 new homes (11,000 social rented, 4,000 affordable)
  • extending the Kickstart programme with the aim of delivering 13,000 homes (of which 4,000 will be affordable)
  • investing in the development of public sector land to delivery 1,250 homes of which 500 will be affordable. 

Previous Labour spending statements have had a habit of not turning  out to be quite impressive as they  were spun at the time. However, taking this one at face value, it will have a double benefit, delivering more desperately needed new homes in the next two years and ensuring that the housing budget enters the slash and burn spending round after the next election starting from a higher base. 

Housing minister John Healey is due to announce more details of the review of the housing revenue account later today. However, Brown’s statement made it clear that councils would be allowed to keep both capital receipts and their rents and Healey told Inside Housing last night that he would ‘dismantle’ the current system.

That still sounds some way short of what Defend Council Housing and the Local Government Association (LGA) were demanding and of Brown’s pledge in February that he would ‘sweep away anything that stands in their way’ but again it is better later than never. The devil will now be in the detail of how self- financing is equalised between different local authorities and how  the government intends to ensure that surpluses are spent on housing. 

Better late than never

Tue, 30 Jun 2009

After three false starts, the government seems to have finally come up with a housing rescue package that could make a real difference.

The £1.5bn of apparently new funding for new homes and imminent introduction of self-financing for council housing announced in Building Britain’s Future by Gordon Brown yesterday may not be everything the sector was pressing for but it amounts to much more than the paltry packages of  brought-forward money announced last year.

Half of the new money seems to come from other budgets (eco towns? RDAs? decent homes?) and half from other departments like the Home Office and Transport. It’s a recognition at last that the credit crunch and recession just might mean that more needs to be spent on affordable homes. Better late than never - and it comes at a time when the pressure is on public spending of any kind. 

The Communities and Local Government (CLG) department says the £1.5bn will fund 20,000 new affordable homes and another 10,000 delivered through the private sector. The detailed breakdown is:

  • extra funding for councils and housing associations to deliver 15,500 new homes (11,000 social rented, 4,000 affordable)
  • extending the Kickstart programme with the aim of delivering 13,000 homes (of which 4,000 will be affordable)
  • investing in the development of public sector land to delivery 1,250 homes of which 500 will be affordable. 

Previous Labour spending statements have had a habit of not turning  out to be quite impressive as they  were spun at the time. However, taking this one at face value, it will have a double benefit, delivering more desperately needed new homes in the next two years and ensuring that the housing budget enters the slash and burn spending round after the next election starting from a higher base. 

Housing minister John Healey is due to announce more details of the review of the housing revenue account later today. However, Brown’s statement made it clear that councils would be allowed to keep both capital receipts and their rents and Healey told Inside Housing last night that he would ‘dismantle’ the current system.

That still sounds some way short of what Defend Council Housing and the Local Government Association (LGA) were demanding and of Brown’s pledge in February that he would ‘sweep away anything that stands in their way’ but again it is better later than never. The devil will now be in the detail of how self- financing is equalised between different local authorities and how  the government intends to ensure that surpluses are spent on housing. 

Crunch time

Mon, 29 Jun 2009

A cash windfall from the Home Office and Department for Transport is not a bad way to start a crucial week for housing.

Business secretary Lord Mandelson has revealed that spending will be shifted within and between departments when the government publishes its policy department later today. 

Speaking on the Today programme he singled out housing as a main beneficiary of the process. ‘He [Gordon Brown] will be announcing a major boost in the provision of social and affordable housing over the next two years,’ he said. ‘That reflects a shift in spending both within the relevant department and between the Home Office and Department for Transport to the department.’

Whether Building Britain’s Future really will amount to anything major on new homes remains to be seen but reports suggest it will also include anti-BNP measures on allocations. What seems more certain is that it will be the last spending announcement for a year - Mandelson also revealed that the next spending review will not be held until after the next election.

Housing’s crucial week is expected to continue with publication of the review of the housing revenue account (HRA) - the timing probably linked to the Local Government Association conference. 

The LGA started its campaign to build up to 300,000 new homes in the next ten years earlier this month. Disappointingly, though, only 40 MPs have so far signed an early day motion backing the campaign - 22 Labour, 13 Lib Dems, two Democratic Unionists, an independent and just two Tories. 

Crunch time

Mon, 29 Jun 2009

A cash windfall from the Home Office and Department for Transport is not a bad way to start a crucial week for housing.

Business secretary Lord Mandelson has revealed that spending will be shifted within and between departments when the government publishes its policy department later today. 

Speaking on the Today programme he singled out housing as a main beneficiary of the process. ‘He [Gordon Brown] will be announcing a major boost in the provision of social and affordable housing over the next two years,’ he said. ‘That reflects a shift in spending both within the relevant department and between the Home Office and Department for Transport to the department.’

Whether Building Britain’s Future really will amount to anything major on new homes remains to be seen but reports suggest it will also include anti-BNP measures on allocations. What seems more certain is that it will be the last spending announcement for a year - Mandelson also revealed that the next spending review will not be held until after the next election.

Housing’s crucial week is expected to continue with publication of the review of the housing revenue account (HRA) - the timing probably linked to the Local Government Association conference. 

The LGA started its campaign to build up to 300,000 new homes in the next ten years earlier this month. Disappointingly, though, only 40 MPs have so far signed an early day motion backing the campaign - 22 Labour, 13 Lib Dems, two Democratic Unionists, an independent and just two Tories. 

Home James

Thu, 25 Jun 2009

So what can five celebs with 10 houses and a palace between them tell us about homelessness? 

Last night’s Famous, Rich and Homeless on BBC1 (watch again here) set out to find out. Journalist Rosie Boycott, comedian Hardeep Singh, former tennis player Annabel Croft, actor Bruce Jones and James, Marquess of Blandord were sent to sleep rough by Big Issue founder John Bird and former Centrepoint worker Craig Last. 

I should confess at this point that I’m not exactly the greatest fan of reality TV - and the reviews have not been universally kind  - but I kept watching as they coped with being dumped on the streets with just the clothes they stood up in.

Rosie’s lies about being homeless because she’d been beaten up by her drunken husband nets her £8 straight off and then another £40 from one woman.

Annabel is dropped in Soho but is soon sleeping rough in the doorway of Dolce and Gabana in Bond Street and finding out where to get fed. Hardeep (‘I don’t want to be urinated on unless it’s in the privacy of my own home’) heads straight for Soho. 

Bruce offers to take pictures of tourists at Westminster and then asks them for money. ‘I’m working - it’s not begging,’ he says.

And James? As readers of the tabloids will have already known, on the first night he disappears into the car park of a 5 star hotel where his camera crew is conveniently escorted off the premises and Craig later discovers his untouched sleeping bag. On the second the production team let him sleep in the hotel. On the third, he’s walking out of the programme pursued up the street by John Bird.

All entertaining stuff. I’m not sure it’s going to change many viewers’ opinions about homelessness but it should open a few eyes about life on the streets and (tonight) in hostels. As for the ten houses and a palace (though I’m not sure James actually gets to inherit the palace), at no stage were they seen as potentially part of the problem. 

I did find myself wonder though what the John Bird who was telling the Daily Mail two years ago that the answer was to ‘lock up the homeless’ might make of all this. 

‘What nobody wants to acknowledge is that 90 per cent of people in and around homelessness have drink and drug problems. And 90 per cent of that figure are people who cannot control it,’ he wrote. ‘The people who are homeless through addiction are feckless, unstable, unreliable, incapable of holding down a job, feeding themselves or cleaning themselves.

‘You take them into a hostel, patch them up and put them in State housing on benefits and they continue to kill themselves at the State’s expense. They are ill and should be “sectioned” - lifted from the streets and confined in the care of the mental health system, behind bars if necessary. It sounds drastic - and I expect a lot of outraged criticism - but it is the only realistic solution.’

Whether you agree or disagree with that draconian solution, what about James, Marquess of Blandford, reality show cheat ….and drug abuser? 

Famous, Rich and Sectioned? I was about to say I’d watch that…but then I realised a TV producer is probably pitching the idea somewhere even as I speak. 

Home James

Thu, 25 Jun 2009

So what can five celebs with 10 houses and a palace between them tell us about homelessness? 

Last night’s Famous, Rich and Homeless on BBC1 (watch again here) set out to find out. Journalist Rosie Boycott, comedian Hardeep Singh, former tennis player Annabel Croft, actor Bruce Jones and James, Marquess of Blandord were sent to sleep rough by Big Issue founder John Bird and former Centrepoint worker Craig Last. 

I should confess at this point that I’m not exactly the greatest fan of reality TV - and the reviews have not been universally kind  - but I kept watching as they coped with being dumped on the streets with just the clothes they stood up in.

Rosie’s lies about being homeless because she’d been beaten up by her drunken husband nets her £8 straight off and then another £40 from one woman.

Annabel is dropped in Soho but is soon sleeping rough in the doorway of Dolce and Gabana in Bond Street and finding out where to get fed. Hardeep (‘I don’t want to be urinated on unless it’s in the privacy of my own home’) heads straight for Soho. 

Bruce offers to take pictures of tourists at Westminster and then asks them for money. ‘I’m working - it’s not begging,’ he says.

And James? As readers of the tabloids will have already known, on the first night he disappears into the car park of a 5 star hotel where his camera crew is conveniently escorted off the premises and Craig later discovers his untouched sleeping bag. On the second the production team let him sleep in the hotel. On the third, he’s walking out of the programme pursued up the street by John Bird.

All entertaining stuff. I’m not sure it’s going to change many viewers’ opinions about homelessness but it should open a few eyes about life on the streets and (tonight) in hostels. As for the ten houses and a palace (though I’m not sure James actually gets to inherit the palace), at no stage were they seen as potentially part of the problem. 

I did find myself wonder though what the John Bird who was telling the Daily Mail two years ago that the answer was to ‘lock up the homeless’ might make of all this. 

‘What nobody wants to acknowledge is that 90 per cent of people in and around homelessness have drink and drug problems. And 90 per cent of that figure are people who cannot control it,’ he wrote. ‘The people who are homeless through addiction are feckless, unstable, unreliable, incapable of holding down a job, feeding themselves or cleaning themselves.

‘You take them into a hostel, patch them up and put them in State housing on benefits and they continue to kill themselves at the State’s expense. They are ill and should be “sectioned” - lifted from the streets and confined in the care of the mental health system, behind bars if necessary. It sounds drastic - and I expect a lot of outraged criticism - but it is the only realistic solution.’

Whether you agree or disagree with that draconian solution, what about James, Marquess of Blandford, reality show cheat ….and drug abuser? 

Famous, Rich and Sectioned? I was about to say I’d watch that…but then I realised a TV producer is probably pitching the idea somewhere even as I speak. 

Weeds and shoots

Wed, 24 Jun 2009

With the latest stats on mortgage approvals, transactions and house prices all showing  improvement, everything in the garden looks much rosier than it seemed last winter. But could yellow weeds be about to sprout up around all those green shoots?

The Japanese knotweed in the plot is still rising unemployment. That’s the main reason for the Council of Mortgage Lenders predicted an accelerating rate of repossessions yesterday, even though the headline number will not be as bad as it feared - and perhaps why credit conditions do not seem to be improving. 

But negative equity could prove to be equally herbicide-resistant, according to a survey by ratings agency Fitch that says 15%of borrowers with prime residential mortgage-backed securities (RMBS) already have loans worth more than their home and that the total could rise to 34 per cent by the end of the downturn.

And things are not looking to good in the private rented garden either. The Royal Institution of Chartered Surveyors shows that rents are falling at the fastest rate since it started its survey 10 years ago and are now falling faster than house prices.

The Fitch survey is important because it is only talking about securitised prime loans - negative equity is probably even higher in the sub-prime sector. They will also be loans taken out in the last few years, arranged through securitisation vehicles like Northern Rock’s Granite.

The implications for lenders, and therefore for lending levels, are that borrowers who are ‘underwater’ are less able to get out of trouble and more likely to default. There is also a huge problem of people who have positive equity but not enough to qualify for good remortgage rates. 

Fitch expects house prices to fall more too - by up to 35% from peak to trough as opposed to the current 19% despite recent rises in the Halifax and Nationwide indices. It argues that those increases were driven by lack of supply and could in themselves be the catalyst for further declines as homeowners who have been waiting for prices to stabilise decide to sell, so increasing supply. 

Many of those non-sellers are currently reluctant landlords and they will not find the latest RICS survey very pleasant reading. Some 55% more surveyors reported a fall in rents than a rise. The percentage balance expecting a further fall fell back from the record high recorded in January but is still at -25%. And gross yields - the return on rents and capital values - are falling for the first time since April 2007, indicating that rents are falling faster than house prices.

The survey does not yet show evidence of a significant increase in landlords planning to sell but that overhang, combined with negative equity and unemployment, could be the weeds in the garden for years to come. 

Weeds and shoots

Wed, 24 Jun 2009

With the latest stats on mortgage approvals, transactions and house prices all showing  improvement, everything in the garden looks much rosier than it seemed last winter. But could yellow weeds be about to sprout up around all those green shoots?

The Japanese knotweed in the plot is still rising unemployment. That’s the main reason for the Council of Mortgage Lenders predicted an accelerating rate of repossessions yesterday, even though the headline number will not be as bad as it feared - and perhaps why credit conditions do not seem to be improving. 

But negative equity could prove to be equally herbicide-resistant, according to a survey by ratings agency Fitch that says 15%of borrowers with prime residential mortgage-backed securities (RMBS) already have loans worth more than their home and that the total could rise to 34 per cent by the end of the downturn.

And things are not looking to good in the private rented garden either. The Royal Institution of Chartered Surveyors shows that rents are falling at the fastest rate since it started its survey 10 years ago and are now falling faster than house prices.

The Fitch survey is important because it is only talking about securitised prime loans - negative equity is probably even higher in the sub-prime sector. They will also be loans taken out in the last few years, arranged through securitisation vehicles like Northern Rock’s Granite.

The implications for lenders, and therefore for lending levels, are that borrowers who are ‘underwater’ are less able to get out of trouble and more likely to default. There is also a huge problem of people who have positive equity but not enough to qualify for good remortgage rates. 

Fitch expects house prices to fall more too - by up to 35% from peak to trough as opposed to the current 19% despite recent rises in the Halifax and Nationwide indices. It argues that those increases were driven by lack of supply and could in themselves be the catalyst for further declines as homeowners who have been waiting for prices to stabilise decide to sell, so increasing supply. 

Many of those non-sellers are currently reluctant landlords and they will not find the latest RICS survey very pleasant reading. Some 55% more surveyors reported a fall in rents than a rise. The percentage balance expecting a further fall fell back from the record high recorded in January but is still at -25%. And gross yields - the return on rents and capital values - are falling for the first time since April 2007, indicating that rents are falling faster than house prices.

The survey does not yet show evidence of a significant increase in landlords planning to sell but that overhang, combined with negative equity and unemployment, could be the weeds in the garden for years to come. 

Grown-up debate

Tue, 23 Jun 2009

Supporters of an end to security of tenure might like to take time out to read a heavyweight new report that studies the life chances of four generations of social housing tenants.

Growing up in Social Housing shows the dramatic change in the profile of social tenants - with 27% of the least well-off and 11% of the best-off families in 1946 changing to 49% of the least well-off and 2% of the best-off by 2000. As Ruth Lipton, one of the team of authors from the Institute of Education and London School of Economics, says in this week’s Inside Housing there is also a widening gap between tenures in education levels and lone parenthood. 

That concentration of deprivation has been used in other studies to justify radical changes to security of tenure and worklessness. But the report for the Tenant Services Authority, Scottish government and Joseph Rowntree Foundation begs to differ.

‘This report offers no support for reducing the attractiveness of social renting or the number of homes available,’ it says. ‘If anything, it suggests the reverse: we need to help social housing catch up with the desirability of home-ownership housing, and increase its social mix.’

‘Crucially, other areas of social policy, such as childcare and education, also need to more effectively tackle childhood tenure gaps as these cannot be effectively addressed through housing policy initiatives.’

As inequality grows, they argue, housing policy can do less about it - the answer lies in other policy areas. ‘The more that we target social housing on the disadvantaged; the less can be expected of specific housing policies (for example changes in tenancy conditions). In some respects we might expect other social policies targeted towards those who need social housing to do far more, and housing policy to do less, to ensure that the disadvantage with which people enter the social housing sector does not continue or get worse.’

That sounds like a pretty good case against the easy ‘solution’ of an end to the ‘tenancy for life’. Will it be the last word on the subject? Almost certainly not.

Grown-up debate

Tue, 23 Jun 2009

Supporters of an end to security of tenure might like to take time out to read a heavyweight new report that studies the life chances of four generations of social housing tenants.

Growing up in Social Housing shows the dramatic change in the profile of social tenants - with 27% of the least well-off and 11% of the best-off families in 1946 changing to 49% of the least well-off and 2% of the best-off by 2000. As Ruth Lipton, one of the team of authors from the Institute of Education and London School of Economics, says in this week’s Inside Housing there is also a widening gap between tenures in education levels and lone parenthood. 

That concentration of deprivation has been used in other studies to justify radical changes to security of tenure and worklessness. But the report for the Tenant Services Authority, Scottish government and Joseph Rowntree Foundation begs to differ.

‘This report offers no support for reducing the attractiveness of social renting or the number of homes available,’ it says. ‘If anything, it suggests the reverse: we need to help social housing catch up with the desirability of home-ownership housing, and increase its social mix.’

‘Crucially, other areas of social policy, such as childcare and education, also need to more effectively tackle childhood tenure gaps as these cannot be effectively addressed through housing policy initiatives.’

As inequality grows, they argue, housing policy can do less about it - the answer lies in other policy areas. ‘The more that we target social housing on the disadvantaged; the less can be expected of specific housing policies (for example changes in tenancy conditions). In some respects we might expect other social policies targeted towards those who need social housing to do far more, and housing policy to do less, to ensure that the disadvantage with which people enter the social housing sector does not continue or get worse.’

That sounds like a pretty good case against the easy ‘solution’ of an end to the ‘tenancy for life’. Will it be the last word on the subject? Almost certainly not.

Good news and bad

Mon, 22 Jun 2009

A downgraded repossession forecast by the Council of Mortgage Lenders (CML) is widely being reported as more good news on the housing market. It is anything but.

The CML now says 65,000 families will lose their homes this year, compared to the 75,000 it forecast six months ago, as a result of lower interest rates, increased forebearance by lenders and government intervention. That means the total should peak well short of the 75,500 seen in the last crash in 1991. 

But before anyone gets too carried away with that, it is also warning that ‘the improvement is likely to be slow and drawn out, especially as the extensive fiscal, monetary and credit support measures are gradually unwound’.

It’s been clear that the 75,000 figure was an overestimate since the CML published figures showing 12,800 repossessions in the first quarter of the year. That was a 50% rise on the first quarter of 2008 but much better than it had expected.

However, the latest estimate suggests that the rest of the year will see another 52,000 families lose their homes - a rise of 66% on the last three quarters of 2008. That hardly sounds like a recovery - the repossession rate will actually accelerate from now.

It’s the same story with the rest of the CML predictions, despite a reduced forecast for the number of people in mortgage arrears. It says the number of transactions will fall to just 700,000 this year (the same as it forecast six months ago), less than half of the level seen in 2006 and 2007 and 23% down on an already appalling 2008.

The CML also says the lending famine will continue. Gross advances will still fall to £145 bn, down 44% on 2008 and 60% on 2007. And although net lending will not be quite as disastrous as it said six months ago, it will still be in unprecedented negative territory, with banks lending £5 bn less in new mortgages than they are repaid on old ones.

It’s perfectly possible that these forecasts too will turn out to be too gloomy, leading to more ‘good news’ reports at the end of the year. However, the CML rightly raises the question of what happens when all the emergency intervention comes to an end. When you bear in mind that the recovery so far is based on interest rates that cannot stay this low for ever, on time-limited government support schemes and on multi-billion schemes to boost lending, it’s clear that there is still plenty of pain to come. 

Good news and bad

Mon, 22 Jun 2009

A downgraded repossession forecast by the Council of Mortgage Lenders (CML) is widely being reported as more good news on the housing market. It is anything but.

The CML now says 65,000 families will lose their homes this year, compared to the 75,000 it forecast six months ago, as a result of lower interest rates, increased forebearance by lenders and government intervention. That means the total should peak well short of the 75,500 seen in the last crash in 1991. 

But before anyone gets too carried away with that, it is also warning that ‘the improvement is likely to be slow and drawn out, especially as the extensive fiscal, monetary and credit support measures are gradually unwound’.

It’s been clear that the 75,000 figure was an overestimate since the CML published figures showing 12,800 repossessions in the first quarter of the year. That was a 50% rise on the first quarter of 2008 but much better than it had expected.

However, the latest estimate suggests that the rest of the year will see another 52,000 families lose their homes - a rise of 66% on the last three quarters of 2008. That hardly sounds like a recovery - the repossession rate will actually accelerate from now.

It’s the same story with the rest of the CML predictions, despite a reduced forecast for the number of people in mortgage arrears. It says the number of transactions will fall to just 700,000 this year (the same as it forecast six months ago), less than half of the level seen in 2006 and 2007 and 23% down on an already appalling 2008.

The CML also says the lending famine will continue. Gross advances will still fall to £145 bn, down 44% on 2008 and 60% on 2007. And although net lending will not be quite as disastrous as it said six months ago, it will still be in unprecedented negative territory, with banks lending £5 bn less in new mortgages than they are repaid on old ones.

It’s perfectly possible that these forecasts too will turn out to be too gloomy, leading to more ‘good news’ reports at the end of the year. However, the CML rightly raises the question of what happens when all the emergency intervention comes to an end. When you bear in mind that the recovery so far is based on interest rates that cannot stay this low for ever, on time-limited government support schemes and on multi-billion schemes to boost lending, it’s clear that there is still plenty of pain to come. 

Public interest

Fri, 19 Jun 2009

Can of worms? Deep waters? Grey areas? The Appeal Court judgement yesterday that housing associations are public bodies under human rights law leaves me wondering which metaphors to mix next.

Associations were already public bodies for the purposes of EU procurement legislation. Now they are for human rights purposes too, which means they must take account of tenants’ rights such as the right to a family life and the right to a fair trial when applying for an eviction order. They will probably come to be seen as public bodies for freedom of information purposes too.

The implications of all that are far-reaching and unpredictable enough (just read the comments on Inside Housing’s story) but they would be dwarfed by any move to reclassify associations as public bodies for financial purposes, a decision that is down not to the courts but to the Office for National Statistics (ONS).

If that happened, and housing association borrowing was classified as public borrowing, it would remove their key advantage over local authorities at a stroke and undermine pretty much the whole funding model for building new homes and refurbishment via stock transfer too. 

It’s not clear what would trigger reclassification, but the legal moves in other areas, plus the bail-outs that have revealed that devices like the PFI are not as private as they seem, have surely brought it closer. 

From a quick read of the Appeal Court judgement (downloadable here) it’s clear that there is no single test of what constitutes a public body. The judges even disagreed between themselves, with two saying that L&Q is and one that it isn’t. 

A whole range of factors came into play in the majority ruling, including: the funding of associations through grant and housing benefit; their powers to apply for anti-social behaviour and parenting orders; the fact that 10% of L&Q’s stock is ex-local authority; statutory regulation; nomination agreements.

Lord Justice Elias said in his ruling: ‘None of these factors taken in isolation would suffice to make the functions of the provision of housing public functions, but I am satisfied that when considered cumulatively, they establish sufficient public flavour to bring the provision of social housing by this particular RSL within that concept.’

A bit like the complicated test for whether someone is employed or self-employed, it depends on the particular circumstances of the case. From the ruling it seems quite possible that a different RSL in different circumstances would not be a public body. Pending any possible appeal to the House of Lords, the judgement makes things a bit clearer but not completely clear. 

But while that might mean trebles all round for the legal profession, the ruling also seems to leave the Tenant Services Authority with a few issues to resolve. For a start, if it exists to promote the interests of tenants, surely, like the Equality and Human Rights Commission, it should welcome the extra new rights the judgement gives them. 

Looming on the horizon is the extension of its regulation remit to cover almo and local authority tenants too. That will again raise the case for a single tenancy for all social housing tenants and in particular the case for stopping associations using ground 8 to evict tenants with no grounds for stopping associations using ground 8 to evict tenants with no grounds for intervention by the courts.

That, ironically, was the ostensible reason why Susan Weaver took L&Q to court in the first place - and she lost on that. But the long-term implications of the case she launched will not go away so easily. 

 

Public interest

Fri, 19 Jun 2009

Can of worms? Deep waters? Grey areas? The Appeal Court judgement yesterday that housing associations are public bodies under human rights law leaves me wondering which metaphors to mix next.

Associations were already public bodies for the purposes of EU procurement legislation. Now they are for human rights purposes too, which means they must take account of tenants’ rights such as the right to a family life and the right to a fair trial when applying for an eviction order. They will probably come to be seen as public bodies for freedom of information purposes too.

The implications of all that are far-reaching and unpredictable enough (just read the comments on Inside Housing’s story) but they would be dwarfed by any move to reclassify associations as public bodies for financial purposes, a decision that is down not to the courts but to the Office for National Statistics (ONS).

If that happened, and housing association borrowing was classified as public borrowing, it would remove their key advantage over local authorities at a stroke and undermine pretty much the whole funding model for building new homes and refurbishment via stock transfer too. 

It’s not clear what would trigger reclassification, but the legal moves in other areas, plus the bail-outs that have revealed that devices like the PFI are not as private as they seem, have surely brought it closer. 

From a quick read of the Appeal Court judgement (downloadable here) it’s clear that there is no single test of what constitutes a public body. The judges even disagreed between themselves, with two saying that L&Q is and one that it isn’t. 

A whole range of factors came into play in the majority ruling, including: the funding of associations through grant and housing benefit; their powers to apply for anti-social behaviour and parenting orders; the fact that 10% of L&Q’s stock is ex-local authority; statutory regulation; nomination agreements.

Lord Justice Elias said in his ruling: ‘None of these factors taken in isolation would suffice to make the functions of the provision of housing public functions, but I am satisfied that when considered cumulatively, they establish sufficient public flavour to bring the provision of social housing by this particular RSL within that concept.’

A bit like the complicated test for whether someone is employed or self-employed, it depends on the particular circumstances of the case. From the ruling it seems quite possible that a different RSL in different circumstances would not be a public body. Pending any possible appeal to the House of Lords, the judgement makes things a bit clearer but not completely clear. 

But while that might mean trebles all round for the legal profession, the ruling also seems to leave the Tenant Services Authority with a few issues to resolve. For a start, if it exists to promote the interests of tenants, surely, like the Equality and Human Rights Commission, it should welcome the extra new rights the judgement gives them. 

Looming on the horizon is the extension of its regulation remit to cover almo and local authority tenants too. That will again raise the case for a single tenancy for all social housing tenants and in particular the case for stopping associations using ground 8 to evict tenants with no grounds for stopping associations using ground 8 to evict tenants with no grounds for intervention by the courts.

That, ironically, was the ostensible reason why Susan Weaver took L&Q to court in the first place - and she lost on that. But the long-term implications of the case she launched will not go away so easily. 

 

Capital punishment

Thu, 18 Jun 2009

Who springs to mind when you think of victims of the credit crunch and property crash? Repossessed homeowners? Northern Rock shareholders? How about local authorities, who lost a cool £2.6bn in capital receipts last year?

New figures published by the Communities and Local Government department today reveal that total receipts fell 65% from £4bn in 2007/08 to just £1.4bn in 2008/09. Housing accounted for almost half of the losses, with capital receipts from housing fell 73% from £1.7bn to £466m.

The slump is not unexpected - it was revealed in an exclusive poll in Inside Housing in February - but still shocking. Receipts have been falling since the government cut right to buy discounts but actually saw a modest increase last year before falling off a cliff. 

To put the figures in perspective, the total amount local authorities so prudently invested in Icelandic banks was just under £1bn. And capital receipts have fallen by more in percentage terms than mortgage approvals. Only 12 months ago the government was forecasting that they would be pretty much the same as last year.

The figures also show an 11% fall in capital expenditure on housing by local authorities, from £5bn in 2007/08 to £4.4bn. But that was only half the £1.2bn slump in housing capital receipts. The slump is yet another reminder of the vicious spending squeeze to come.

Capital punishment

Thu, 18 Jun 2009

Who springs to mind when you think of victims of the credit crunch and property crash? Repossessed homeowners? Northern Rock shareholders? How about local authorities, who lost a cool £2.6bn in capital receipts last year?

New figures published by the Communities and Local Government department today reveal that total receipts fell 65% from £4bn in 2007/08 to just £1.4bn in 2008/09. Housing accounted for almost half of the losses, with capital receipts from housing fell 73% from £1.7bn to £466m.

The slump is not unexpected - it was revealed in an exclusive poll in Inside Housing in February - but still shocking. Receipts have been falling since the government cut right to buy discounts but actually saw a modest increase last year before falling off a cliff. 

To put the figures in perspective, the total amount local authorities so prudently invested in Icelandic banks was just under £1bn. And capital receipts have fallen by more in percentage terms than mortgage approvals. Only 12 months ago the government was forecasting that they would be pretty much the same as last year.

The figures also show an 11% fall in capital expenditure on housing by local authorities, from £5bn in 2007/08 to £4.4bn. But that was only half the £1.2bn slump in housing capital receipts. The slump is yet another reminder of the vicious spending squeeze to come.

Minding the gap

Wed, 17 Jun 2009

What are the chances of the government coming anywhere near to its target of 45,000 social rented homes a year by April 2011? 

No chance, says a new assessment by the Construction Products Association (CPA). Maybe, if you give us £3.6bn says the National Housing Federation (NHF). 

The headline graph in the CPA’s annual Achievable Targets report published yesterday makes clear that the target and forecast output are travelling in different directions. Output is set to fall from last year’s 27,000 to little more than 20,000 this year, it says, before recovering to about 22,000 in the next three. 

cpa

The answer, says the NHF, is £3.2bn of public investment. That would deliver 50,000 new social homes by next June, with a quarter of them paid for by housing associations. The alternative, it says, is a remorseless rise in waiting lists until one in ten people are on them by 2020. 

The case for extra investment has been unanswerable for months. There is maybe one last chance. But the problem is that, regardless of the encouraging noises that housing will feature in Gordon Brown 3.0, the cupboard is almost bare. 

As Sir Bob Kerslake tells Inside Housing TV today: ‘The key thing for me is that we recognise the continuing importance of continuing to build new houses and new communities and to recognise that to do that we have to make both the affordable housing sector work and the private housing sector work. We can’t simply rely on a public funded housing boom, it’s got to come from the two.’

That’s the background to his announcement yesterday of a new Housing Finance Group to look for new sources of private finance. Bridging that gap between output and need will take everything that can be squeezed out of the Treasury, all the extra abilities of local councils after the HCA review - and then some. 

 

Minding the gap

Wed, 17 Jun 2009

What are the chances of the government coming anywhere near to its target of 45,000 social rented homes a year by April 2011? 

No chance, says a new assessment by the Construction Products Association (CPA). Maybe, if you give us £3.6bn says the National Housing Federation (NHF). 

The headline graph in the CPA’s annual Achievable Targets report published yesterday makes clear that the target and forecast output are travelling in different directions. Output is set to fall from last year’s 27,000 to little more than 20,000 this year, it says, before recovering to about 22,000 in the next three. 

cpa

The answer, says the NHF, is £3.2bn of public investment. That would deliver 50,000 new social homes by next June, with a quarter of them paid for by housing associations. The alternative, it says, is a remorseless rise in waiting lists until one in ten people are on them by 2020. 

The case for extra investment has been unanswerable for months. There is maybe one last chance. But the problem is that, regardless of the encouraging noises that housing will feature in Gordon Brown 3.0, the cupboard is almost bare. 

As Sir Bob Kerslake tells Inside Housing TV today: ‘The key thing for me is that we recognise the continuing importance of continuing to build new houses and new communities and to recognise that to do that we have to make both the affordable housing sector work and the private housing sector work. We can’t simply rely on a public funded housing boom, it’s got to come from the two.’

That’s the background to his announcement yesterday of a new Housing Finance Group to look for new sources of private finance. Bridging that gap between output and need will take everything that can be squeezed out of the Treasury, all the extra abilities of local councils after the HCA review - and then some. 

 

Free association

Tue, 16 Jun 2009

It’s hard not to pinch yourself when you see Conservative-dominated local authorities demanding the right to build thousands of new council houses from a Labour government. 

The campaign launched at Harrogate today by the Local Government Association says that its members could build up to 300,000 additional affordable homes if the government reforms the housing revenue account (HRA), get to keep the extra income from retaining their tenants’ rents, are released from their historic debt and allowed to borrow against their assets. 

After all the private borrowing of the last decade, by the banks and through the private finance initiative, turned out to need a public bail-out when things went wrong, why not set councils free?

But you also have to wonder why, if it’s that simple, the government has not done it already. True, it’s taken years of campaigning to convince the Treasury to allow local authorities any freedom at all but can it really just be a conspiracy led by evil financial mandarins? 

Experts are most sceptical about central government taking over that historic debt, pointing out that the servicing costs would still have to be paid at a time when public spending budgets are under their greatest pressure in 30 years. Has the moment already passed?

If local authorities get to retain their rents, who is to say that the ones with the surpluses will use it to build more homes? What happens to the big inner city authorities who have deficits rather than surpluses? And even if the public borrowing rules are changed what’s to stop the Treasury using it as an excuse to cut the Homes and Communities Agency budget accordingly?

Which is why the review of the HRA, when it is finally published, is likely to be considerably less radical than the LGA says it wants. ‘Freedom’ for local authorities is a worthy cause - but only if it delivers desperately needed new homes. Which then makes you wonder how many Conservative councils also want ‘freedom’ from exactly that. 

Free association

Tue, 16 Jun 2009

It’s hard not to pinch yourself when you see Conservative-dominated local authorities demanding the right to build thousands of new council houses from a Labour government. 

The campaign launched at Harrogate today by the Local Government Association says that its members could build up to 300,000 additional affordable homes if the government reforms the housing revenue account (HRA), get to keep the extra income from retaining their tenants’ rents, are released from their historic debt and allowed to borrow against their assets. 

After all the private borrowing of the last decade, by the banks and through the private finance initiative, turned out to need a public bail-out when things went wrong, why not set councils free?

But you also have to wonder why, if it’s that simple, the government has not done it already. True, it’s taken years of campaigning to convince the Treasury to allow local authorities any freedom at all but can it really just be a conspiracy led by evil financial mandarins? 

Experts are most sceptical about central government taking over that historic debt, pointing out that the servicing costs would still have to be paid at a time when public spending budgets are under their greatest pressure in 30 years. Has the moment already passed?

If local authorities get to retain their rents, who is to say that the ones with the surpluses will use it to build more homes? What happens to the big inner city authorities who have deficits rather than surpluses? And even if the public borrowing rules are changed what’s to stop the Treasury using it as an excuse to cut the Homes and Communities Agency budget accordingly?

Which is why the review of the HRA, when it is finally published, is likely to be considerably less radical than the LGA says it wants. ‘Freedom’ for local authorities is a worthy cause - but only if it delivers desperately needed new homes. Which then makes you wonder how many Conservative councils also want ‘freedom’ from exactly that. 

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