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Review of the year 2012

From the Queen’s diamond jubilee to the London Olympics, 2012 will be a year we’ll never forget. Here, Inside Housing looks at the ups and downs for the housing sector

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The big bang

THe big bang

It won’t be remembered as a boom year but 2012 was the year the sector was hit by a big bang of reforms.

Council finance reform

England’s 171 stock-owning councils finally broke free of the shackles of the central government housing subsidy system after years of lobbying. Under the deal the councils took on £29.2 billion of debt in return for being allowed to keep future rental income.

Detailed research and investigations by Inside Housing revealed how councils were planning to use their new found freedoms as many deliberated whether to increase spending on regeneration and refurbishment or on paying down their debts.

Welsh housing white paper

21 May was a good day for housing professionals in Wales. It was the date on which the Welsh Government published its housing white paper, entitled Better lives and communities, which included its plan to end family homelessness by 2019.

Launching the document, housing minister Huw Lewis said: ‘What this means is that no children in Wales will experience homelessness ever again. Housing is the bedrock of this government’s progressive agenda around poverty.’

Other proposals include improving the quality of homes through the Welsh Housing Quality Standard and other methods.

John Puzey, director of Shelter Cymru, described it as ‘a tremendous step forward’.

Vikki Hiscocks, policy and public affairs manager at the Chartered Institute of Housing in Wales, said it was ‘ambitious but it is realistic and achievable’.

Scottish Housing Regulator

The start of the financial year also saw the creation of a strict new regulator in Scotland - the no-nonsense Scottish Housing Regulator, which claimed by year-end to have saved three landlords from going bust. Meanwhile in England, there was a more relaxed, kid-gloves approach, with the formation of the Homes and Communities Agency regulation committee.

Its year was spent dealing with a series of crises, including a deal to save troubled Cosmopolitan Housing Association, which was hanging in the balance at the end of 2012.

Planning reform

As if this wasn’t enough to think about, 1 April also saw the publication of a new planning framework for England. The national planning policy framework requires councils to identify a five-year land supply plus and an extra 5 per cent buffer. By year-end it was apparent some councils were struggling to fulfil the obligation.


Cock up of the year

Cock up of the year

Kudos for the cock-up of 2012 goes to the Communities and Local Government department.

The CLG was on the verge of defeat in a legal battle over a £35.5 million grant paid to 13 councils.

The funding had been announced to great fanfare by then housing minister Grant Shapps in 2011 who said it would provide a ‘clean break’ from a policy of large-scale demolition projects in the north of England and the midlands.

But it quickly emerged that despite Mr Shapps’ rhetoric, most of the funding was being used to finance further demolition work.

Campaign group SAVE started legal proceedings after the news emerged. And in November, Inside Housing revealed that lawyers acting for the government had written to SAVE’s solicitors setting out the terms under which it was willing to concede defeat, having admitted that the decision to grant the funding was ‘unlawful’.

The cock-up opens a huge can of worms because, despite all the money having been allocated and just under half of it spent, campaigners now want to see the money ‘clawed back and spent on what it was intended to be spent on’.


Rows

Rows

The row between Iain Duncan Smith and housing association London & Quadrant about a former dog track reached new levels of animosity in 2012.

The year started just after L&Q had apologised to Mr Duncan Smith after linking the Work and Pensions secretary to alleged threatening behaviour by protestors. This year, things got a lot worse. Infuriated by Waltham Forest Council allowing L&Q to include no social housing and less than the normal amount of affordable housing in its scheme, Mr Duncan Smith threw his toys out of the pram. Despite the government having all-but ended funding for the tenure itself, Mr Duncan Smith threatened to go running to well-known champion of social housing Eric Pickles and ‘question L&Q’s status as a social housing provider’. In an attempt presumably to avoid getting into a slanging match, L&Q’s response throughout the ongoing row has been to issue statements listing the details and benefits of its proposed scheme.

Mr Duncan Smith’s mood was not helped by London mayor Boris Johnson’s decision in October to allow the development to go ahead.


Rising Stars

Rising Stars

A series of fresh-faced housing professionals were put through their paces in June, as the Chartered Institute of Housing and Inside Housing’s competition to find housing’s Rising Star reached its climax.

Dean Slavin, resident involvement manager at Manchester’s Parkway Green Housing Trust, emerged victorious after a closely fought contest at the annual CIH conference at its new home in Manchester.

His prize included the chance to guest edit the penultimate edition of Inside Housing in 2012 - fittingly for Mr Slavin it was our residents special issue. He used his time in the hot seat (pictured with news editor Nick Duxbury) to argue that any reduction in emphasis on resident involvement in difficult times represents bad value for money for landlords.


Campaigns

RIOT_REPORT

Six months after the riots that swept through some of England’s major cities in August 2011, Inside Housing, the Chartered Institute of Housing and the National Housing Federation published The Riot Report: How housing providers are building stronger communities.

Numerous other reports and media analyses on the riots had already highlighted problems in communities relating to opportunities, aspirations, employment, family support and communication. Inside Housing set out to demonstrate how housing providers are tackling these issues to build stronger, safer communities - and not just in riot-hit areas.

The report, published on 10 February, was sent to nearly 300 politicians and decision-makers with the hope of raising awareness of the role social landlords play in providing a wide variety of opportunities to residents which might otherwise be out of their reach.


The Environment

The Environment

The government’s flagship policy on energy efficiency, the green deal, struggled to get started this year.

The policy, aimed to help residents insulate their homes and install energy-saving technology, was intended to be launched with a bang in October. Now we’ll have to wait until the end of January.

When it finally launches, the green deal will work by allowing residents of all tenures to install energy efficiency measures in their home without an upfront payment. They will pay back the loan with the energy savings made via a charge on their electricity bills.

A couple of bright spots did stand out: Birmingham Council led the way in launching its green deal plans for the city and a number of other local authorities are following suit. Housing association Gentoo, already a bit of an eco-pioneer, became one of the first housing associations to commit to becoming an official green deal provider in April.

Meanwhile, social landlords have been cashing in on the last days of the old subsidy regime. Energy companies have been paying for energy efficiency work as they scramble to meet their obligations under the carbon emission reduction target and the community energy saving programme, which both came to an end this year. All eyes are on 31 December 2012: if they fail to meet the deadline, the energy firms risk fines of up to 10 per cent of their global turnover.


Investigations

Investigations 1

Rising rent levels

Under fire in the House of Lords over welfare changes, the prime minister suggested government reforms were starting to work back in January. David Cameron told parliament that ‘what we have seen so far, as housing benefit has been reformed and recorded, is that [private] rent levels have come down, so we have stopped ripping off the tax payer’. Number 10 later said that private landlords were reducing rent in return for local housing allowance being paid directly to them.

With housing professionals left incredulous by this claim, Inside Housing stepped in to investigate the truth. We sent out freedom of information requests to every English council and - out of the 204 that responded - found just 36 that had reported any rent reductions in return for direct payment of LHA. Of the 36, the numbers of landlords reducing rent in each area was miniscule.

The investigation led to one of Inside Housing’s most memorable front pages (see image, right) and saw Labour shadow housing minister Jack Dromey raise the issue in parliament.

Investigations 2

Assault on the rise

With times tough for many tenants, a detailed investigation in June revealed that in some areas, housing officers’ safety has been put at risk.

Figures from freedom of information requests and questionnaires carried out by Inside Housing sent to more than 220 social landlords found that every day in the UK a front line housing worker was victim to a violent assault.
Between January 2009 and 31 March this year front line workers reported 8,898 assaults - around 1,350 of which were physical. Separate research, carried out at the same time by Inside Housing, suggested that these figures may just represent the tip of the iceberg.

Our survey of 134 front line workers found that more than a third had not reported assaults to their employer.

Investigations 3

New homes bonus

Back in January a detailed investigation carried out by Inside Housing into the new homes bonus revealed disturbing news about how councils were choosing to spend the money - on topping up general funds rather than new housing development.

Ministers had promised councils in England would receive a bonus in the form of a payment equal to the council tax on any new properties for the first six years. In April 2011 it fulfilled the pledge by handing out some £200 million for local authorities to spend in 2011/12.

Investigations 4

 

Fire safety

Fire safety has been a high profile issue for social landlords since six people died in a fire in Southwark Council’s Lakanal House tower block back in 2009.

Despite this, Inside Housing revealed that three years down the line social landlords were being served with an average of one enforcement notice a week by fire brigades across England.

Our research revealed that over the six months between September 2011 and March 2012, at least 35 notices were served to social landlords.

Fire enforcement notices are issued when a landlord has failed to comply with the Regulatory Reform (Fire Safety) Order 2005 and set out measures they are legally obliged to complete within a specific timescale.

The investigation also looked at the tragic deaths of 42-year-old mother Kunaliny Alagaratnam and her cousin Santhirapathy Tharmalingam on 4 February 2011, after a fire broke out in a neighbouring flat on the 16th floor of Deptford’s Marine Tower in south London.

A week after the fire Lewisham Homes, the arm’s-length management organisation responsible for looking after the block, was served with an enforcement notice by the London Fire Brigade.


Heroes

George Clarke - Heroes

George Clarke

TV presenter George Clarke might not be everyone’s cup of tea - particularly if you work for Liverpool Council - but there is no doubt he has run one of the most high-profile housing campaigns for years.

Mr Clarke rose from presenting Channel 4’s The Great British Property Scandal in 2011 to being appointed as an independent advisor to the government on bringing empty homes back into use in April this year. All of this is in addition to the £150 million the government has made available to turn empty homes into affordable housing over the past 18 months.

When he was appointed to his new role Mr Clarke said he would ‘leave no stone unturned in my efforts to find a solution to the problem’. And he showed he had lost none of his campaigning zeal when he presented an update on the Great British Property Scandal programme late in 2012.

Lord Richard Best - Heroes

Lord Richard Best

Crossbench peer Lord Richard Best spearheaded attempts by peers to make the so-called ‘bedroom tax’ fairer.

The housing stalwart repeatedly persuaded peers to change the measure, becoming a thorn in the government’s side.

Although he failed to change the policy, he did force the government to commit to commissioning a review and to make £30 million of funding available to help those affected, as well as raising public awareness of the tax.

Phil Davies - Heroes

Phil Davies

The arm’s-length management organisation movement lost a much-loved leading figure in July when Phil Davies, chief executive of Derby Homes, died at the age of 59.

Mr Davies was one of the leading lights of the movement from its birth 10 years ago. Throughout his time there, Derby Homes was among the top-performing ALMOs in the country. Mr Davies also pushed for new financial freedoms for ALMOs from their early days - a process that eventually culminated in this year’s self-financing deal.

Last year, in a time of uncertainty for many ALMOs, Mr Davies helped Derby Homes secure a new 10-year contract with Derby Council to continue to manage homes in the city.

Jim Coulter, former chief executive of the National Housing Federation and retiring deputy of the Homes and Communities Agency regulation committee, described Mr Davies as a ‘constant source of information and wise advice, focused on neighbourhood needs and without any side or pretensions’.


Crisis

Crisis 1

NIHE in hot water

This year is unlikely to be one that the Northern Ireland Housing Executive will look back on with any fondness.

The landlord lurched from bad headline to bad headline in 2012 as it was rocked by allegations of dodgy land deals and came under intense pressure from ministers for its handling of contracts.

In July the Northern Irish Government took the extraordinary step of placing the 90,000-home organisation under supervision after a report found that work being carried out under its £170 million responsive repairs contracts was not being checked or billed correctly.

The intervention followed the resignation of the organisation’s chair, Brian Rowntree, days earlier citing a ‘challenging relationship’ with the Department of Social Development in an email to the organisation’s 3,000 staff. A report from the Audit Office identified ‘significant weaknesses’ in the control of maintenance contracts.

On top of all of this, the organisation’s staff faced a stressful year as politicians debated its future behind-the-scenes. The most likely scenario will see the executive’s stock split five ways as its landlord and strategic functions are separated. Debate about its future has been raging all year - and is likely to continue well into 2013.

Crisis 2

Cosmo sees ratings plummet

Crises don’t come much bigger than the one that has gripped Cosmopolitan Housing Group this year.

The 12,500-home landlord has been handed the worst possible rating for both its financial viability and governance by the Homes and Communities Agency. The amount the landlord owes to a group of creditors is such that, at the time of going to press, a rescue deal that would see 54,000-home giant Riverside take it over was delayed and in danger of collapse.

Cosmopolitan’s financial plight first came to light in the summer when guarantees given to financiers of its 3,500-strong student housing subsidiary were discovered to be on-balance sheet obligations. The late discovery of the obligations led to a delay in filing accounts and a subsequent breach of financial covenants.

The regulator’s judgement said that the ‘group’s approach to risk was based on an over-simplification of presenting issues, coupled with too little scrutiny of new deals taking place after the merger [in December 2011 with Chester and District Housing Trust].

This, alongside an inadequate control environment, especially in relation to the development function, exposed the group to unacceptable levels of risk.’

The crisis looks set to drag on into 2013 as Riverside continues to battle to find a solution and the regulator probes the role of its predecessor, the Tenant Services Authority, in waving through the merger with CDHT.


International housing

International Housing

With the US presidential elections approaching, Inside Housing travelled to America to journey through the home of the housing crisis and scrutinise president Obama’s housing record.

Our journey saw us visit California, Washington DC and Maryland looking at innovative practice, including a scheme in which a local housing organisation in Baltimore helps struggling homeowners to let a room in their home to raise extra cash.

We also visited San Francisco to find out why its famously liberal residents have decided to get tough in a bid to solve homelessness.

Inside Housing also travelled throughout Europe during 2012, in a bid to bring readers in-depth information about major housing stories which could help their businesses or have worrying parallels for the UK housing sector.

In September we visited Holland to examine the case of Dutch housing giant Vestia, which saw its finances implode earlier in the year leaving it a bank debt of €1.3 billion (£1.05 billion) and the sector facing a €700 million (£565 million) bailout package. We looked at what went wrong and whether similarities between the Dutch and UK housing approach could see similar problems develop here in the future.

Our sister title, Sustainable Housing, also published an international edition in which we visited Germany to catch up with Dr Wolfgang Feist, creator of the famous Passivhaus method, to see whether it is really set to create the homes of the future.

We also visited Almere, in Holland, home to Europe’s biggest self-build scheme to date to see if the sector could take-off back in the UK.


A little piece of history

A little piece of history

2012 is a year that will live long in the collective memory for two reasons - The Queen’s diamond jubilee and the London Olympics.

Inside Housing enjoyed the celebrations as much as the next person but we also took an in-depth look at the wider impact of the Olympics on regeneration and risked being carted off to the tower by asking if the Crown Estate had done enough to tackle the UK’s housing crisis. We looked at criticism from MPs that the Crown Estate was becoming far too focused on creating profits and had forgotten its wider social responsibilities. This included criticism from the House of Commons Scottish affairs committee in March, which stated in a report that ‘at worst’ the Crown Estate ‘behaves as an absentee landlord or tax collector, which does not reinvest to any significant extent in the sectors and communities from which it derives income’.

However, the piece wasn’t all doom and gloom and we also looked at the Crown Estate’s partnership with the Homes and Communities Agency to release land for thousands of new homes.

Our detailed Olympic special examined the impact the sporting extravaganza has had on previous host cities and their housing markets and also scrutinised the potential impact of the Olympic village. When the athletes’ dormitory is converted into a brand new community, it will provide the last large-scale social housing development in England, due to the end of government funding for the tenure.

We also spent a bizarre day with residents of the Lund Point tower block in Newham. A stone’s throw from the Olympic Park, residents found themselves living in a TV studio as the BBC moved into the upper floors of their block, which overlooked the park, to broadcast its daily news bulletins. Inside Housing was forced to blag its way into the building as a security guard told us it had been placed on ‘lockdown’ - the kind of situation that had been frustrating a number of residents who said it was becoming increasingly difficult for family and friends to visit them.

But our favourite moment of the summer came when pop-band Madness transformed Buckingham Palace into a block of flats via a nifty projection during the jubilee concert.

Most read stories on www.insidehousing.co.uk

1. Child starved to death after benefits delay
2. MP calls for wife of Islamic cleric to be evicted
3. Social tenants to accept bedroom tax penalty
4. Landlords braced for impact of benefit reform
5. DWP to close bedroom tax loophole
6. Government sets out right to buy plans
7. Lodger rules to ease impact of bedroom tax
8. Fewer service charges to be covered by benefits
9. Record payout for housing association boss
10. Troubled Cosmopolitan in rescue merger talks

Predictions

Housing minister at the turn of the year Grant Shapps - or Michael Green as many now know him - finally got himself a promotion in 2012 to chair of the Conservative Party. Inside Housing had originally tipped him for promotion at the end of 2010, but never ones to admit defeat we tipped him again at the end of 2011. This year we’ll stick our neck out and predict that an IT disaster will put back the launch date of the government’s much-vaunted universal credit scheme - resulting in a new work and pensions secretary by 2014.


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