Select Committee on Office of the Deputy Prime Minister: Housing, Planning, Local Government and the Regions Memoranda

Memorandum by Christine Pointer, SOLACE Housing Spokesperson (HOU 11)

  The Government's Housing Green Paper and subsequent policy initiatives taken with the recent CSR announcements have recognised the contribution that local affordable social housing makes to creating sustainable communities. The Government needs to recognise however since 1977, when the last green paper was issued, that the proportion of public finance for housing has substantially reduced.

  This short paper outlines areas of concern worthy of more detailed consideration as they affect local authorities namely—

    (1)  Right to Buy and Law Commission Proposals.

    (2)  Financial Regime.

    (3)  Role of Local Authority.

    (4)  Housing Corporation and RSLs.

    (5)  Role of Private Sector.


  Since the introduction of the Right to Buy in the Housing Act 1980 many tenants have become homeowners. In many areas this has resulted in more balanced communities, in terms of tenure, rather than monolithic landlord owned estates. However, communities have lost the opportunity to reuse the housing sold in terms of relets or to replace affordable homes—particularly in rural areas and areas of very high demand. The current pressures to meet local housing needs in many parts of the Country would be greatly assisted were the Government to modify or repeal this supposed right. This could be allied to the current Law Commission proposals in terms of Housing Law Reform and the development of an alternative equity stake as detailed by the Chartered Institute of Housing.


  Since 1980 local authorities have been prevented from fully using the proceeds from council house or land disposals. It is therefore not surprising that the local authorities have been unable to replace or secure replacement of the affordable housing lost. A number of the proposals in the Local Government Bill again redistribute capital and revenue resources according to Government prescription. In particular the pooling of "surplus" housing subsidy could be used to meet the need for new housing, regeneration or Decent Homes investment. Local Authorities need to be trusted to use local assets and resources to meet locally identified needs and priorities the potential inability to do so potentially undermines the value of community planning and Local Strategic Partnerships.

  Many Local Authorities have issues of private sector renewal as well as regeneration and the New Deal for communities fund should be more widely available not simply for those apparently "most deprived" neighbourhoods.

  The recently published proposals for Housing Capital Finance detail the ways in which local authorities are being deprived of resources and decisions in terms of democratic local accountability. Firstly the Government's pooling of RTB receipts and secondly its treatment of debt free authorities. The Government's exchequer contributions to National Funding of Housing 2001-02 was only £332 million out of a total of £1,580 million through HIP and ADP with £1,248 million representing set aside receipts from locally generated RTB's. The Capital Receipts Group of over 50 cross party authorities has submitted a response to these proposals and the LGA has belatedly accepted that it is an issue to which it should respond.


  Local Authorities embrace and support the Green Paper's proposals to develop a more strategic role to local and regional housing markets. Many Local Authorities are developing strong local plans, enabling and supporting RSLs to deliver affordable social housing. A matter of key concern is the requirement placed on other bodies to obtain best consideration in respect of land disposal. Too often health and other public agencies readily recognise the contribution that affordable housing makes to recruiting and maintaining a public sector workforce (nurses, teachers, police, fire, care workers etc) especially in London, South East and along the South Coast. However, budget pressures on these very same organisations and the inflexible rules about land/property disposals mean that opportunities to secure affordable housing for key workers are simply being lost—when, for example, Health Trusts are selling off assets—including former nurses homes and other empty property, which could be readily used as affordable homes. A thorough review of statutory guidance to ensure adequate affordable social housing—indeed, a joined-up approach—is now required. The current mixture of unitary, metropolitan, county and district is unhelpful to providing a coherent local sub regional and regional local government view.


  Since the Housing Act 1988 Registered Social Landlords have had to mortgage their assets, and housing benefit has taken the strain. The recently introduced Rent Restructuring proposals could lead to increasing inability of RSL to fund additional housing. Increase in the SHG rate whilst requiring capital subsidy would mean that more affordable rents could be achieved. It is believed that Local Authorities currently provide more SHG than the Housing Corporation. However, the proposed changes to the LA SAG regime is likely to significantly reduce the attractiveness of funding RSLs by Local Authorities.

  The Housing Corporation and other Regional Agencies cannot be expected to respond to the varying local needs across the Country. Local Authorities should be allowed to continue to utilise and benefit from LA SHG. The voluntary housing movement of earlier decades has now become a social housing business without always meaningful local accountabilities. Consideration should be given to allow board members to received some remuneration as this would help overcome many difficulties experienced by RSLs and the corporation in managing these social businesses.


  The Governments lack of intervention in the private rented sector has produced a slight renaissance in investment started in the 1990s by the BES initiative. Compared to mainline Europe there has been little institutional investment in long term rented housing. The recently published research by OPDM Fiscal Measures etc outlines the various models that could be applied. The major financial institutions need to be encouraged further to take a wider more socially responsible perspective for the future.

  The Government's Shared Ownership initiatives need reviewing in terms of stair-casing and homebuy limits. Employers in many parts of this country have recognised how house price affordability is affecting their business.

  At the same time the Government has devolved economic issue to Regional Development Agencies with very few incentives for business to get involved in housing issues. The industry as well as Government local and national need to review and improve the buying and selling of homes.


  Local Authorities are willing, able and generally capable of assessing and securing improvements in their local housing markets. The Government now has alternative tools ie CPA to address those authorities who are failing. The current proposals in the Local Government Bill do not recognise the maturity of Local Authorities to be allowed to play their part to meet local housing needs.

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Prepared 22 October 2002