LGIU | Housing and Homelessness – Where are we now?

LGIU Policy Briefing

November 24, 2016

Housing and Homelessness – Where are we now?

Author: Sheila Camp, LGiU associate

Summary

This briefing looks at the changes heralded for housing policy by the post-Cameron Conservative government. Is it, as Inside Housing proclaimed in the wake of the Tory party conference, “a new dawn” or merely a slight shift in government rhetoric? At present, details are scarce but a Housing White Paper is promised before 2017.

We also look at the broad conclusions of the Communities and Local Government Committee’s inquiry into homelessness (PDF document) and ask whether the potential policy changes will start to address the main contributory factors to the rise in homelessness which the Committee identified. It also looks at the proposals in the Homelessness Reduction Bill, a Private Members Bill introduced by one of the Committee members, Bob Blackman, and now backed by government.

This briefing will be of particular interest to members and officers with responsibility for housing, housing advice and support for vulnerable residents and of general interest to other elected members and officers.

Note This briefing was written just before the Autumn Statement – we will be publishing a detailed briefing shortly on the Autumn Statement which will include the housing measures in it.

Briefing in full

Following the referendum result and with few “big beasts” from the previous administration remaining in government, the stage was set for policy changes, most notably the abandonment of the previous Chancellor’s austerity programme, designed to produce a budget surplus by 2020.

Housing policy under the Cameron government was based largely on the belief that the current housing shortage could be resolved by prioritising home ownership and doing little to assist households who could not afford it – other than further welfare benefit restrictions. Social landlords, their development plans already constrained by the one per cent rent cut over the next four years, found that central government investment was to be restricted to home ownership schemes, with “starter homes” now dubbed affordable housing.

The Housing and Planning Act 2015 underpinned this policy drive, with right to buy extended to housing association tenants, a mandatory requirement for starter homes to be included in new build schemes, and various measures – for example “pay to stay” and fixed term tenancies – designed to make renting from councils less attractive, though Pay to stay has now been dropped by the government.

Against a background of housing shortage, rising private sector rents and increasing homelessness, the Communities and Local Government Select Committee begun an enquiry into homelessness in December 2015. Their report was published on 18 August 2016, shortly after the May government took office, and identified many of the underlying aspects of the housing crisis which were contributing to the rise in homelessness.

At the beginning of October, the Prime Minister in her Conference speech set out the broad issues on which her government’s housing policy would be based, signalling somewhat of a break with the previous emphasis on home ownership and prompting Inside Housing’s enthusiastic headline “a new dawn”. Whether that turns out to be the case is yet to be determined.

Potential Policy changes

In keeping with her pledge to govern for the whole country when she took over as Prime Minister, Theresa May’s main message in her conference speech was that housing policy should work for all. In perhaps a tacit admission that her predecessor’s policies to boost home ownership above all else, would not solve the housing crisis, she said “we simply need to build more homes”. So, what are the major policy changes heralded by May and fleshed out a little by the incoming ministerial team of Secretary of State Sajid Javid and Housing Minister Gavin Barwell?

Housing supply

With the Prime Minister indicating a more interventionist approach to housing supply than simply promoting home ownership initiatives, the government announced a new Home Building Fund of £3 billion (made up of unallocated funds from existing programmes) to be used both for infrastructure and to assist small builders; and a £2 billion Accelerated Construction programme to underwrite housing development – in the event of the market proving difficult, builders know properties can be purchased by the Homes and Communities Agency.

Increasing supply will focus on 100 local authority areas where demand greatly exceeds local supply; these areas have not yet been identified publicly, but may in fact be concentrated in the south east to the detriment of other parts of the country.

More flexibility over tenure

In keeping with Theresa May’s assertion that “we simply need to build more homes”, the new Housing Minister indicated that the Shared Ownership and Affordable Homes programme may be expanded to enable schemes for sub- market rental dwellings to be funded.

Redefining Starter Homes

At present, Starter Homes are defined in the Housing and Planning Act 2015 as properties for first-time buyers under 40 with a discount of at least 20 per cent. The new Housing Minister indicated that he would consider widening the definition to include other types of Starter Homes. No details are yet available.

Brownfield land

Details are also awaited on a promised package of measures to encourage urban regeneration and building on brownfield land.

Housing White Paper (November/December)

The Housing Minister has indicated that the Housing White Paper, promised before the end of 2016, will provide a “detailed strategy” on increasing the supply of new homes. Hopefully, it will also flesh out the other changes the government has heralded, including any necessary legislative changes, for example any redefinition of Starter Homes. It will provide an opportunity for everyone with an interest in solving the country’s housing crisis to assess whether the new regime is really on track to increase supply to the degree necessary

Homelessness inquiry CLG committee

The Committee’s main conclusions and recommendations to stem the rise in homelessness are set out below.

Factors contributing to the increase in homelessness

There is no one single cause of homelessness, although there are trends in factors which contribute to the loss of a home.

The private rented sector (PRS)

The ending of a fixed term Assured Shorthold Tenancy is an increasing reason for a household becoming homeless, up to 30% in 2015 from 13% 10 years’ earlier (DCLG figures). Rising rents mean households are often unable to find affordable alternative accommodation, given the level of Local Housing Allowance – the housing benefit payment based on the 30th percentile of market rents in the area, which frequently does not cover the actual asking rent.

In addition, there is evidence that landlords are less willing to let to people on housing benefit and even more wary about letting to homeless households.

The Committee concluded that the government should look at ways of giving greater confidence to both landlords and tenants to let to homeless people, including reviewing LHA levels and promoting longer ASTs.

Availability of social housing

The Committee concluded that problems in the PRS were exacerbated by the shortage of social housing, which, despite the demonstrable demand, is no longer funded by government. Whilst accepting there is a demand for the home ownership initiatives, particularly starter homes, not everyone can afford them. The current government definition of “affordable housing” should be reviewed so that it includes social rented housing.

Changes to the welfare system

The Committee identified several changes which have contributed – or have the potential to contribute – the increase in homelessness. These are

  • the freezing of working age benefits for 4 years
  • the reduction in the household benefit cap from £26,000 to £20,000 (£23,000 in London)
  • excluding 18-21 year olds from claiming housing support (from April 2017)
  • extension of the Shared Accommodation rate of housing benefit to single people under 35
  • the payment of housing benefit direct to the tenant

The Committee concluded that, taken as a whole, the welfare reforms of recent years have increased pressure on levels of homelessness.

The role of local authorities

Gatekeeping and support

Local authorities have a duty to secure accommodation for homeless households in priority need. For other homeless people, they only have a duty to provide advice and support which, the Committee found, varied considerably throughout the country.

Whilst recognising the pressures on local authorities, the Committee concluded that the Government should monitor local authorities in order to promote best practice, to identify authorities which are not meeting their statutory duties and implement a code of practice to which local authorities should adhere. The Homelessness Reduction Bill, which now has government support, should go some way to ensuring a more uniform level of advice and support throughout the country.

Councils placing households outside of their administrative boundaries

Whilst recognising the reasons for some councils placing households away from their home authority, the Committee considered this should only be done as a last resort; the families should be supported in their new areas; and the receiving authority should be fully informed

The need for accurate statistics on Homelessness

Accurate statistics on homelessness are vital if the issue is to be addressed.

The Department for Communities and Local Government (DCLG) publishes three sets of data on homelessness – statutory homelessness; prevention and relief; and rough sleeping. Statutory homelessness includes those households who are unintentionally homeless and in priority need. Prevention includes action by the local authority to prevent households becoming homeless; relief is where the household, on becoming homeless, has been helped to secure accommodation by the local council. The rough sleeping statistics are based on a snapshot of of the numbers sleeping rough on a particular night, ascertained either by a headcount or, more usually, an estimate by the local council.

The UK Statistics Authority assessed the DCLG data last December and concluded that only the statistics on statutory homelessness could be considered as national statistics; the two others were potentially misleading.

The Committee considered urgent action was needed to improve DCLG’s data collection so it more accurately reflected the actual scale of homelessness, including “hidden” homeless households. They resolved to monitor progress and review in 12 months.

Other issues identified by the Committee

The service user’s perspective

The Committee took considerable evidence on the perspective of the recipients of the homelessness service. They found that the main issues were:

  • Being treated with respect and compassion

At a time when they are extremely vulnerable, homeless households should be treated sensitively and not made to feel they are part of the problem.

  • Choice and autonomy

Households reported that they felt when using the homelessness service  that they had lost all measure of choice and autonomy

  • Quality of service

The Committee considered that the Government should review and reinforce the statutory Code of Practice to ensure it outlines clearly the levels of service that local authorities must provide and encourages regular training of staff to     ensure a sympathetic and sensitive service. Services should put users first with a compassionate approach that gives individuals an element of choice and autonomy.

Vulnerable groups and multiple complex needs

The Committee concluded that the homelessness services often dealt poorly with many vulnerable groups, particularly those who had more than one vulnerability. Such people frequently found their needs dealt with in isolation, even to the extent of being given conflicting appointment time. There was often a tendency for each group of professionals to deal with their specific area of expertise, rather than deal with whole person.

The Committee recommended focus on the individual and more cross-speciality working to ensure all vulnerabilities were addressed

Cross-Government working

A similar problem was identified in central government, where a lack of communication between departments or conflicting policies could work against the individual. A common approach to homelessness was needed.

Homelessness legislation

The Committee compared the approach to homelessness in England, where households not in priority need receive very little assistance in practice with the more recent legislation in Scotland and Wales.

The legislative approach in Scotland and Wales

In Scotland, priority need was abolished as from 31 December 2012, leaving Scottish local authorities with a duty to secure accommodation for all homeless households. As the legislation was passed in2003, councils had a 10 year lead in time to prepare.

In Wales, the 2014 Act placed a duty on local authorities to prevent households threatened with homelessness within 56 days (up from 28 days) from actually becoming homeless. For those households who are homeless when they seek assistance, councils must help secure accommodation for 56 days, but only have a continuing responsibility for households in priority need.

The Committee considered the Scottish approach was not appropriate for England because of the different housing markets. Having found support provided to homeless households not in priority need was at best variable in England, they welcomed the Welsh emphasis on prevention and linked this to their support for the Homelessness Reduction Bill.

The Homelessness Reduction Bill

The Homelessness Reduction Bill, now proceeding as a Private Member’s Bill but with government support, is designed to ensure that all households who are either homeless or threatened with homelessness within 56 days receive genuine help and advice from their local council. This is regardless of whether they are in priority need. Originally, the Bill would have given councils a duty to secure accommodation for 56 days, (the Welsh approach) but this was withdrawn as impractical in the England context. The current wording will impose a duty on councils to assist all homeless and potentially homeless households; the government has indicated it will provide additional to councils to cover their costs.

Comment

Policy changes

The under-supply of new homes has been identified for some years as being the root cause of the country’s continuing housing crisis. It fuels increases in housing costs – both rents and purchase price – which, in turn, leads to housing becoming increasingly unaffordable, contributing to overcrowding and, in the worst case scenario, homelessness. Ever higher rents place a huge burden on the country’s social security budget, which government seeks to address by cuts to benefits, rather than measures to control rents.

The recognition by the May government that the necessary increases in supply will not happen by the market responding to measures to increase home ownership alone is welcome and the emphasis on a cross tenure approach to the supply issue must be the way ahead. The target of one million new homes by 2020 is commendable – but we have had targets before. Delivery is key and a thorough assessment of the government’s plans must wait for the “detailed strategy” promised in the forthcoming White Paper.

Nothing so far is proposed to stem the potential loss of existing social housing stock through extending RTB to housing association tenants, to be funded by the sale of “higher value” council homes. Nor does there seem to be any indication of reviewing benefit cuts, which exacerbate affordability issues.

Homelessness

Affordability and housing shortages runs through the Select Committee’s recommendations on homelessness. A major increase in supply will, in the medium to long term, help greatly with stemming the rise in homelessness and promoting that increase across all tenures is also vital.

However, given the lack of any intention to review benefit changes, which are impacting on low income households being able to afford their homes, it does not seem that there are any short term answers to increasing homelessness. The new duty for councils to take steps to prevent people becoming homeless will only have meaning if there is somewhere available that they can afford; in many high pressured areas, this is not the case.

Related briefings: 
Housing and Planning Act 2016

Neighbourhood Planning update: Autumn 2016

Inside Housing | Pay to Stay meetings cancelled as policies face delays

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11 November 2016

Pay to Stay meetings cancelled as policies face delays

 

Meetings of the Government’s Pay to Stay working group have been cancelled as several key measures in the Housing and Planning Act look set to be delayed.

Inside Housing can exclusively reveal that the Government has cancelled scheduled meetings despite the policy- under which higher earning tenants pay up to market rent- originally being planned for implementation in April next year.

It is not clear why the meetings have been cancelled, but sector figures this week said it suggested a delay. Councils have been urging ministers to put the start date back to give them time to prepare.

The news emerged days after a senior civil servant admitted the Right to Buy (RTB) extension to housing association tenants is set to be delayed as a result of the Brexit vote.

Housing minister Gavin Barwell also said this week that councils “need plenty of time” before implementing the higher value asset levy intended to fund the RTB extension, in response to a question about whether councils would still have to pay the levy in 2017/18 as expected. The government said regulations to implement Pay to Stay and the levy, along with RTB guidance, will be published in ‘due course’.

The Pay to Stay policy requires council tenants to pay up to market rent if they earn over £31,000, or £40,000 in London.

The Government has already taken several steps that water down the effects of the policy. Inside Housing reported last month DCLG was considering exempting council tenants in areas where social rents and market rents are similar and councils will be able to decide how to define market rent locally.

The Higher Value Asset Levy councils would be forced to pay also faces delay. Housing bodies had expected the Levy to be introduced from April next year. However, housing minister Gavin Barwell told the Communities and Local Government committee this week that no implementation date had been decided. He added he is “very aware” the legislation was “quite controversial” and the government will need to give councils “plenty of time” to implement the policy.

The Levy regulations were due to be published before the parliamentary summer recess in July but still have not materialised four months later. Experts said it would now be difficult for the policy to be introduced from next April. Clive Betts, chair of the CLG committee, said most councils are setting their budgets for next year and “haven’t got any idea what figure is going to be placed on them to estimate the high value assets”.

John Bibby, chief executive of the Association of Retained Council Housing, said if the voluntary RTB is delayed- as a civil servant this week said it would be – the higher value asset levy for councils should also be put back. He said ARCH would lobby “very strongly” for the levy to be delayed. He added: “If [the voluntary RTB] is not going to go ahead then there’s no reason to levy the councils.”

John Healey, shadow housing secretary said: “Ministers should recognise that on the Housing and Planning Act they may have won the legislation but they lost the argument. No-one thinks that forcing councils to sell off the best of their homes is an answer to the country’s affordable housing deficit. It can only make the problem worse.”

A DCLG spokesperson said nothing had changed with the higher value asset levy policy. He added: “We are currently considering how best to implement the policy to ensure it is robust and fair to councils. We will make an announcement in due course.”

Inside Housing | Housing minister casts doubt over Higher Value Asset Levy date

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08 November 2016

Housing minister casts doubt over higher value levy date

The levy is meant to fund the building of homes to replace those sold through the extension of Right to Buy to housing association tenants. The Government was widely expected to implement the policy from April next year but detailed regulations required to implement the measure have not been published. A Department for Communities and Local Government civil servant also admitted last week that the Right to Buy extension has been delayed by the Brexit referendum vote.

Speaking at a Communities and Local Government committee session this afternoon, Mr Barwell said the government has not made any decisions about when councils will be expected to make the payment but details of the “controversial policy” would require “quite a notice period” before being introduced.

He said: “We haven’t taken a decision on timing yet but we have a statutory duty to consult councils before making any determination setting out the payment that would be required and the regulations require affirmative procedure in the House so there’s clearly quite a big process that we have to go through before we could start making charges.”

Mr Betts pressed the housing minister whether councils will be expected to find any of the high value asset levy in their budgets for 2017/18.

Mr Barwell said: “In terms of the process we have to go through, consulting and taking affirmative regulations through the House, you can see there would be quite a notice period before we could start making those charges.”

Clive Betts, chair of the CLG committee, said most councils are setting their budgets for next year and “haven’t got any idea what figure is going to be placed on them to estimate the high value assets”.

Sajid Javid, communities secretary, said the government is “clearly very much aware that councils will need to know what the burdens are on them and that is something we don’t want to surprise any councils with”.

He added: “We want to give them fair notice what that will be. And as we progress and have more details we will share them.”

Mr Betts asked if the payment would be required at the beginning of a financial year. Mr Barwell said the Government wanted to make sure it is a “smooth process”.

He added he is “very aware” the legislation that went through the House was “quite controversial” and it will require time to allow people to comment on the detail of the regulations when they are published and give councils “plenty of time” to implement the policy.

The Housing and Planning Act, which received Royal Assent in May, gives the secretary of state the power to levy a charge on councils, based on estimates of higher value vacant stock.

APSE Direct News | Homes for all!

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May/June 20216

Homes for all!

Catch up on the latest housing research by APSE and the TCPA, which follows up on our previous research, Housing The Nation: Ensuring Councils can deliver more and better homes

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The latest APSE housing research, Housing The Nation: Ensuring Councils can deliver more and better homesis a collaborative effort between the APSE[TCPA] and APSE. Our aim was to establish the latest position on housing across the UK and, crucially, find out how local councils could produce the homes needed to support everybody in their local community.

The latest household projections for England, published in November 2015, suggest we need over 220,000 additional homes each year until 20131 if we are to accommodate the projected growth in households. Currently, however, we are reaching just over half that figure. To catch up by 2020, we will now need to create over 310,000 homes a year over the next 5 years. This in itself is a stark finding; as the goal to provide enough homes slips further away each time we fail to meet these targets, the pressure on housing delivery is inevitably intensified.

Whilst Government policy has been concentrated on the delivery of so-called affordable homes, the research calls into question what we can reasonably describe as “affordable”. Housing shortages, and the resultant high prices and rents, mean that young people are living with parents or in house shares for longer, rather than forming a household of their own. Rising student debt levels and potential future welfare reform are likely to make their position even more difficult. Even if the homes required are actually built, the latest Government  household projections suggest that couples aged between 25 and 34 will be less able to live in their own home n 2031 than their counterparts in 2011.

Housing need has huge implications beyond those unable to afford to buy or rent their own property. Improved planning and better housing have long been identified as essential for improving the health of communities, reducing health inequalities and cutting costs for the taxpayer.

Conversely, poor quality housing and inadequate supply of new homes impacts on the social well-being of communities, with costs to the NHS reportedly at £1.4bn. A lack of decent affordable housing also reduces labour mobility and undermines the ability of our towns and cities to attract new businesses.

A recent CBI survey [London Business Survey, September 2015]highlighted that housing costs and availability in London were having a negative impact on companies’ ability to retain and recruit staff, particularly employees on lower incomes; 57% of businesses surveyed report that housing cost and availability was negatively impacting on attempts to recruit entry level staff.

So what are we, APSE and the TCPA, calling for? We want the Government to develop a housing strategy for the nation that provides decent homes for everyone in society, including those dependent on social and genuinely affordable housing for rent. Whilst efforts have been concentrated on affordable homes to buy, we want the Government to ensure that local authorities are at the heart of this new housing strategy, not least because the definition of “affordability” should be determined locally. Councils are best placed to respond to local need, but they require the freedom and flexibility to deliver new homes.

We are also calling upon Government to reverse its decision to reduce social rents by 1% per year for the next 4 years – this move alone has taken millions away from local authorities’ ability to invest in the social rented sector. The Housing and Planning Act 2016 arguably further removes councils from the equation, introducing new changes changes to Right To Buy and the selling off of the most valuable housing assets.

APSE and the TCPA believe that councils, despite the added burdens placed on them by the Housing and Planning Act, can play a stronger role in driving the delivery of new homes, either on their own or through joint vneture. Our research explores the role of local housing companies working alongside councils to deliver new homes. Council land and assets can help drive investment in the most sustainable locations, and the private rental sector can help meet local housing needs, generating long-term income streams in the process.  Councils investing in  the private rented sector can also encourage others to invest in their local areas, and bring about positive investments. This can include providing greater choice and better quality accommodation for those reliant on the private rented sector. Whilst the private rented sector will not replace the need for social rented homes, it is part of the toolkit available to local councils, allowing them to respond to urgent local housing need.

Case studies within the report have found councils being innovative, using local housing companies.

Thurrock Council established a local housing company, named Gloriana. Wholly-owned by the the council, Gloriana is delivering 1,000 new affordable homes over the next 5 years, as well as a 10% increase – using current projections – in the number of new private sector homes delivered over the next 5 years. All of these new council homes will be built to London Space Standards and Lifetime Homes, reflecting high quality design and materials.

Within the London Borough of Harrow, their Great Estates Model has established a local regeneration company with ambitions to deliver a £1.75bn investment programme into Harrow and Wealdstone town centres. Included within the regeneration plan is the delivery of 5,500 new homes, 2 new schools, around 3,000 new jobs and a district heating network to service major sites alongside a £31.3m funding pot through the Mayor of London’s Housing Zones scheme.

In Manchester, the Housing Investment Fund – a joint venture between Manchester City Council and the Greater Manchester Pension Fund, administered by Tameside Council – was established to deliver private rented sector housing, delivering on local housing need whilst also creating a return for the Local Government Pension Fund.

In Edinburgh, a council-led joint venture using the National Housing Trust initiative is helping to deliver new affordable homes using £182m of private and public funding. However, Edinburgh is not just delivering standard housing units – of 1,055 new affordable homes completing in 2014/15, around 115 homes were specifically designed with older people in mind.

In another best practice example, Aberdeen has created a new council-led joint venture with People For Places, which is set to to deliver homes for key workers on modest incomes. They plan to develop an initial 1,000 affordable homes and 1,000 private development homes, with the potential for a further 1,000 properties and an investment pot for affordable housing and private development of £300m.

We know that the solutions to the housing crisis facing the UK are complex. Yet, our findings show that without local councils in the driving seat, we cannot deliver the homes we need. A failure to local councils at the heart of housing delivery, and to address the need for new social homes to rent, will spell catastrophe for a whole generation struggling to either afford to buy so-called affordable homes, or rent from a largely unregulated private rented sector.

Now is the time for Government to place councils at the heart of delivering homes for all.