Three events hosted by Inside Housing and Mears saw local authority figures from Birmingham, Manchester and London discuss their biggest challenges and potential solutions. Photography by Guzelian, SWNS and Belinda Lawley
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A who’s who of local authority leading lights gathered together to discuss how councils can best deliver new homes and use existing assets for those most in need, over three consecutive weeks in October.
At a series of round table events, hosted by Inside Housing in partnership with Mears, sector figures talked about their own strategic plans, as well as how emerging policy developments are likely to affect their thinking.
The events provided a fascinating insight into emerging approaches to some of the biggest challenges facing councils, such as the introduction of the Homelessness Reduction Act next year and longer-term demographic changes. The meetings came as the government’s approach to social housing was thawing in some areas, with a new, more favourable rent deal on the table.
Here’s a snapshot of the thinking that emerged.
Simone Chinman Russell of Welwyn Hatfield
Opening the debate with local authority housing leaders from across London and the South of England, Martin Hilditch, deputy editor of Inside Housing, asks about their preparations for the introduction of the Homelessness Reduction Act on 1 April 2018.
Mark Meehan, director of housing need at Croydon Council, spells out the sector’s fears: inadequate funding, an over-ambitious timeline and a still non-existent code of guidance.
“If you put a couple of London boroughs together, you have [the population of] Wales. The money the Welsh Assembly received on a pro rata basis [when it introduced similar reforms] dwarfs the £61m on the table [for councils for 2017 from 1 April through 2019],” he says.
One borough puts their additional costs arising from the act at £750,000 to £1m a year, and says implementation could take up to three years. Authorities acknowledge that there has been a success story in Wales, with its focus on homelessness prevention. Government recognition of their role as first responders is welcomed.
Concerns are not just about money, but skills, staffing, restructuring, and a shift in culture towards dispersed services to support vulnerable tenants.
Simone Chinman Russell, executive director (housing and communities) at Welwyn Hatfield Borough Council, cautions: “The last piece of the jigsaw is supply. If you haven’t got that, all those actions mean nothing.”
Mark Baigent of Tower Hamlets
The challenge of creating a pipeline of supply amid the South’s affordability crisis runs through the debate as panellists unpick the competing pressures they face: the Homelessness Reduction Act along with the roll-out of Universal Credit, fire safety work following the Grenfell tragedy, and the ongoing attritional effect of Right to Buy.
“We’re bleeding stock,” says John East, strategic director for growth and homes at Barking and Dagenham Council. “To build 250 units a year for 50% of market rent is a challenge, and it just leaves us open to people’s speculations.”
David Edwards, executive director for housing and regeneration at Oxford City Council, says: “We’re trying every route – ALMOs, joint ventures, estate regeneration partnerships, and direct development.”
The debate lingers on the proliferation of council-owned housing companies, which allow councils to unlock land and private finance, and generate revenues to fill financial holes and subsidise
John Taylor, chief operating officer at Mears Housing Management, says partnerships can help deliver for councils in areas where they might otherwise
struggle. “We manage 11,000 properties working with 50 local authorities, as well as central government,” he says. “We’re not an owner; we take private finance and disused land and turn it into developments to meet local need.
“We have about 5,000 properties under homelessness contracts, long-term housing through Section 106, and we’re building for supported care and market rent property.”
Local housing companies have drawn the government’s scrutiny as they can circumvent Right to Buy, says Brian Reynolds, programme director at One Public Estate – a partnership between the Cabinet Office and the Local Government Association that seeks to release public land for housing.
Mark Meehan of Croydon
Mark Baigent, interim divisional director of housing and regeneration at Tower Hamlets Council, argues that local housing companies have evolved as authorities navigating the “Byzantine system [of regulations]”.
But with authorities seeking supply, and limited affordable land, competition is defining the debate around pan-London collaboration.
London councils have been forced to look further afield to help meet their demand for housing. This has led to some tricky dialogue between councils both in London and outside the capital as they look to meet need.
Mr East from Barking and Dagenham says: “We’d like to work together. But do we want to be a receptacle for every London borough’s – dare I say – poor, with the stresses that would bring?
The scramble for accommodation beyond council boundaries is also taking up much thinking time. Welwyn Hatfield’s Ms Chinman Russell says: “We wouldn’t have known another borough was targeting properties in our area if a local estate agent hadn’t tipped us off.”
Mr Reynolds of One Public Estate reports that the idea of a housing company for London is back on the table in government.
Is working together more closely likely to bring wins for cash-strapped councils? Gary Josey, director of housing and communities at Bournemouth Borough Council, says greater co-operation is inevitable.
“You can’t have boroughs falling over each other. If just for efficiency, boroughs will co-operate. And it might be closer than you think.”
Heather Wood and Nick Murphy
The mood music changes a week later as the debate continues at the Birmingham Repertory Theatre in the Midlands.
The challenges faced by councils in the region are no less pronounced, however. Not for the first time – or the last – the subject of Right to Buy and the difficulties of even standing still with the delivery of council housing raises its head.
Peter Griffiths, cabinet member for housing and homes at Birmingham City Council, explains: “This year we will lose 600 homes to Right to Buy and build 400. We need 38,000 homes by 2020, so there’s a huge gap to bridge.”
Barriers to development remain despite the softening in government rhetoric and reset of the rent cap at the Consumer Price Index plus 1%.
“We’ve had the £2bn [in additional government funding] and the rent settlement, but we have issues that drag on delivery,” says John Bibby, chief executive of the Association of Retained Council Housing (ARCH).
While Housing Revenue Account (HRA) borrowing caps were shackling authorities, the uncertainty created by welfare reform, Right to Buy and the potential for the government to force councils to sell their high-value stock is undermining business plans and stalling sites from moving forward.
Heather Wood, interim assistant director of housing at South Cambridgeshire District Council, which is part of a Homelessness Reduction Act trailblazer scheme, explains the financial pressure authorities face.
“We estimate our homelessness footfall will increase by 25-50%. We need to find £250,000 for the additional staff. But our burdens money will only pay for one,” she says.
Securing a pipeline of properties from housing associations is proving another challenge in the run-up to the Homelessness Reduction Act. Ms Wood’s concern echoes around the table.
Some panellists say their links to housing associations had withered as the sector had consolidated and associations had lost local ties. Others report their former bedfellows are retrenching and refusing nominations in fear of potential arrears under Universal Credit. But the mantra in the West Midlands has been to keep calm and carry on, taking matters into their own hands wherever possible.
One authority has used money it set aside for the high-value asset levy to build temporary accommodation, gambling that the legislation will be dropped. Another has tapped general fund borrowing to push ahead with a supported housing project.
Trying to break even with stock losses from Right to Buy is a Canute-like experience, says Nick Murphy, chief executive of Nottingham City Homes, which is pushing ahead with the biggest council housing programme in a generation.
“We’re building in our own name using general fund borrowing, so we’re in effect a local housing company registered provider arm, so that we can draw down Homes and Communities Agency grant, and we’ve also set up an arm developing market rent properties.”
Despite the pressures, Mr Murphy senses opportunity in the upcoming Social Housing Green Paper.
“It’s a seminal opportunity when Theresa May stands up and says we’re going to build council houses. But how do we make the most of that opportunity?
“If I scrub one piece of legislation, beyond the Housing Revenue Account cap and Right to Buy, it would be an obscure one that allows councils to gift receipts to anyone but their own ALMO.”
So what else is on the wish list? Bespoke delivery deals with government have topped the region’s agenda for the past 12 months. Others call for greater protections for new build properties from speculators.
But on a wider level there is a consensus that inconsistencies in housing and benefit policies have to end.
“Someone in government needs to take a helicopter view of this. They have to do the basic economics,” says Mr Bibby of ARCH.
Conversations at the Manchester event
One week later, when housing leaders from across the North meet to continue the debate in Manchester, they welcome a government U-turn on plans to cap housing benefit rates in supported housing (albeit with some caution about aspects of the proposals).
The irony of celebrating a reversal in poor judgement, as opposed to new progressive policy, is not lost on panellists. But for Dave Richmond, city neighbourhoods and housing manager at Hull City Council, it would underpin the council’s efforts to build and drive economic growth.
“The past couple of weeks have been a godsend,” he says. “The long-term certainty of knowing where we stand on rents and Local Housing Allowance will release growth.”
Unlocking supply to drive economic growth is also at the heart of the Greater Manchester Spatial Framework, which aims to provide the land for new homes and jobs across the city region.
Greater Manchester mayor Andy Burnham backs the framework. But it is the joint work of, and signed off by, the 10 boroughs that make up Greater Manchester.
Paul Beardmore, director of housing at Manchester City Council, explains: “We didn’t invent the combined authority, it evolved out of the links between the 10 authorities. They exist because the boundaries in Manchester make no sense, so the only way to make progress is to work together.”
So what is holding development back?
Jayne Traverse, regional programme manager at One Public Estate – which helps to broker deals between local authorities, landowners, and management companies – reports finance, skills and capacity issues throughout the supply chain.
Smaller authorities in which budgets have been pinched often lack the skills, planning capacity and appetite for risk to pave the way for developments.
Meanwhile, small and medium-sized developers and builders often lack the depth of skills and financial muscle to take advantage of opportunities.
Access to gap funding is key to getting development off the ground, enabling infrastructure to be brought forward.
And a local council’s ability to play placemaker, creating a vision of sustainable communities and a market that funders and developers can buy into, is increasingly important.
In Manchester, affordable housing and homelessness have traditionally been treated as local borough issues, but that too is beginning to change.
With strong links between housing, education, and life chances, and in the wake of Grenfell, authorities are now confronting the reality that housing need has to be intertwined with health, education and planning.
Against a backdrop of welfare reform and the Homelessness Reduction Act, housing chiefs are asking existential questions over the purpose of development and what council housing is for.
“Is everyone living in our stock in need of that level of subsidy and support?” asks Mr Beardmore.
“Can we use that stock better? Thirty per cent of our tenants in social rented housing are over 60; can we help free up family homes by offering a better environment?”
He would also like to see councils drive up standards and professionalise the private rented sector. “In some cases, I call it the ‘criminal rented sector’. It’s gangs laundering money. We need to give them competition.”
Mike Wright, strategic lead on homelessness at the Greater Manchester Combined Authority, spells out what he wants from the housing sector in preparation for the Homelessness Reduction Act.
“It’s not a single authority issue. The boroughs in Greater Manchester need to find some sensible implementation of the act, so that we follow it in the spirit, as well as the letter.
“The question is: how do we get an offer for everybody? And how do we make an offer to those people who we don’t have one for at the moment?”
Claire Astbury, Luton Borough Council
Mark Baigent, Tower Hamlets Council
Alan Benson, Haringey Council
Simone Chinman Russell, Welwyn Hatfield Borough Council
John East, Barking and Dagenham Council
David Edwards, Oxford City Council
Rebecca Emmett, Basingstoke and Deane Borough Council
Mike England, Slough Borough Council
Gary Josey, Bournemouth Borough Council
Mark Meehan, Croydon Council
Brian Reynolds, One Public Estate
John Taylor, Mears Housing Management
Simon Bowers, Daventry District Council
John Bibby, ARCH
Peter Griffiths, Birmingham City Council
Glyn Jones, North West Leicestershire District Council
Nick Murphy, Nottingham City Homes
Ciarán O’Shea, Mears Housing Management
Paul Parkinson, Ashfield District Council
Vicki Popplewell, West Midlands Housing Officer Group
Katie Prati, Kettering Borough Council
Heather Wood, South Cambridgeshire District Council
Paul Beardmore, Manchester City Council
Karen Carsberg, Cheshire East Council
Chris Findley, Salford City Council
Maggie Gjessing, Leeds City Council
Dave Richmond, Hull City Council
John Taylor, Mears Housing Management
Jayne Traverse, One Public Estate
Louise Williams, Public Health England
Mike Wright, Greater Manchester Combined Authority