Communities and Local Government

• Corporate
• Newsroom
• Speeches, statements and articles
• Next steps in social housing reform

www.communities.gov.uk

Next steps in social housing reform

Date of speech	12 December 2007
Location	London
Event summary	Event hosted by the Chartered Institute of Housing and the Housing Corporation

---

Draft text of the speech - may differ from the delivered version.

Introduction

Thank you very much Peter. And can I thank the Housing Corporation and CIH for hosting the event today. This is an opportunity, as Peter said, to reflect on how far we've come in the last twelve months. But also to think about maintaining that momentum, and to highlight the key themes that we want to work very closely with you on over the next few years, so that we can do more and better when it comes to delivering affordable and social housing for people across the country.

I hope that you will agree that the last twelve months have indeed been extremely important and very successful. We've seen housing rise to the top of the political agenda - it's really the Prime Minister's personal priority now. 
 
Over the last twelve months, we've concentrated particularly on housing supply.

And rightly so. Because as we all know, unless we deal with the fundamental undersupply, the fundamental need to build more homes across the board, it will be very hard to do any of the things that we want to do in terms of improving housing and housing opportunities.

I want now to focus on how, as we increase supply, we can also do more. And identify in particular how we can take further some of the work that John Hills started for us earlier in the year, as well some of the work Martin Cave set out in his review.

I want to particularly think about affordable housing. We'll say more in the New Year about what more we want to do for first time buyers - but today, I thought it would be helpful to debate and discuss with you and the panel what those next steps should be for social housing.
 
Over the last ten years, we've shown a very strong commitment to social housing and affordable housing in general - and to improving social homes. The £20 billion we've spent already on the decent homes programme in itself has lifted over a million children out of bad housing, out of cold damp housing. We should not underestimate the importance and power of that programme alone.
 
Think of the progress we've made too in terms of cutting homelessness, helping those who are most vulnerable, improving services offered through Supporting People

But there are still substantial challenges. The growing numbers on social housing waiting lists. But also the continued concentrations of worklessness and deprivation on social housing estates. And despite higher standards, as John Hill's report set out, many people are actually less happy with their neighbourhoods and their homes.
 
And I think that the detailed analysis that we had from John which highlighted things like the lack of mixed communities, the need to do more to overcome worklessness, to promote mobility, was critically important. We've had Martin Cave's review too, on how we needed to make sure that the system responds more effectively to tenants needs.

Social housing has been part of the fabric of the nation for over a hundred years. And the case for intervention to support those who cannot find the affordable, stable housing they need in the private sector remains powerful today.

70 per cent of households are now home owners, and 90 per cent say they want to be. But we know that homeownership is not sustainable for many. And we know that there are many families who struggle to find an affordable, stable home in the private sector. And social housing needs to deliver the security and the stability, as well as the affordability, that families need.

But it also has to meet the needs of the 21st century. Affordability and security are not enough. Social housing needs to support opportunity too. And that, critically, is where I think we need to do more.

At its best, social housing provides families with a secure and lovely home, in a great community with affordable rent, in a place where they want to live. And it gives them the security and confidence to get a job, get the kids settled in school, build up savings, and get on with their lives.
 
At its worst, social housing gives people a roof over their head, yes, but traps them in a home they don't really want to live in. Even when their family is growing far too fast for their small flat. Even when their house is too large for them to manage alone. Even when they're desperate to move to be where their grandchildren live. Even when they have the chance of a job further afield. And even when they have saved the cash to buy a share of a new home.

At its best, social and affordable housing gives people the secure base they need to make a better life for themselves and their children. But at its worst it drags people down rather than giving them a leg up.

And that is why I think it's critically important we do more to support those opportunities. To make sure that everyone has the chance to benefit from the best provision today.

I want to highlight now five central themes that I see for the department now on our work on social housing. Five themes that we want to work with you over the next few months and years.

Increasing supply and investment in bricks and mortar

The first is obviously around increasing investment and supply. As I've said, this is the theme that we've concentrated on over the past year, establishing an £8 billion programme for affordable homes, to deliver 70 000 new affordable homes a year by 2010.

We're announcing today details of the regional housing pot in response to the advice we've received. So every region will get a big increase in the number of new social homes, with the new Homes and Communities Agency tasked with spending this money most effectively.

We are going to need to look at what we can do better, what better results we can get from this investment. How we can increase, for example, the number of family homes being built as a result of this investment.

Continued investment in existing homes is vital too. So we're also announcing today the next wave of funding for ALMOs. We will be spending £2.4 billion on decent homes over the next three years - looking to extend the programme to a further 150, 000 homes.

There are new allocations for 26 ALMOs, with four new ALMOs also joining the programme today. We're reserving places for the remaining ALMOs for round six. They too will have their funding allocations once the details are finalised. We're announcing too a further housing transfer programme for 2008. So we'll need to make sure that investment continues to be well spent, with the greatest possible impact.

Getting the structures right

The second big theme this year has been institutional reform to support social and affordable housing. The regulatory and institutional structures do matter, if we are to give tenants the best possible deal.

Therefore, alongside the progress we've made on supply, the landmark Housing and Regeneration Bill is setting out a new framework to improve the way that social housing is managed. This directly responds to Martin Cave's recommendation that we should be offering tenants a greater say over where they live and how their homes are managed

The new framework must be a light touch system. It must reward performance and innovation. It's got to let good housing associations just get on with it. Freed from much of the bureaucracy and much of the information that they previously had to provide.
 
But equally, unlike the current system, we want to give the regulator more ability to focus on tenants needs and tenants experiences, and to step in when tenants are being let down.
 
Because despite rising physical standards, we know in some areas that tenants are dissatisfied with their housing and their neighbourhood. But unlike other residents, they are rarely in a position to up sticks, move somewhere else and find a different social landlord.

That's why it's so important that the regulator can champion tenants interests in that way. The regulator has got to be clear about what they want upfront. So are Ministers. So that we focus on outcomes, and not inputs. We've got to make sure that it's tenants interests which are at the heart of this new system.
 
This very much reflects the strong recommendations in both the Cave and the Hills reviews that what we need to do is think about existing tenants and existing communities.

Initially the regulator will cover only registered social landlords. But we want to see this extended to local authorities as rapidly as possible.

So I can announce today we are setting up an advisory group, chaired by Professor Ian Cole of Sheffield University and involving a range of stakeholders, to get on with working on the detail of how this will work in practice.

There are some governance issues, there are some challenges in getting the framework right to cover both local government and housing associations. But actually, it makes sense to get the domain-wide regulation in place as soon as possible. So I hope that you will work with us in order to get that detail right, so that we can introduce those legislative updates at the earliest opportunity.

We also want to go further in reforming the financial framework within which local authorities operate. 
 
As I'm sure many of you in local government would agree with me, the Housing Revenue Account is not the most ideal way to manage housing finance. And I don't think that it does provide the best and most effective way for local authorities to manage their assets in the long term, or to think about the long-term interests of their stock.

So we are also announcing today a review of the Housing Revenue Account, building on the pilots which are looking at how local authorities and ALMOs could be self-financing. And how we can better plan for the long term management of repairs, but also new build, creating a fairer system as well.

So the two themes that we've spent a lot of time concentrating on this year have been around increasing supply and revising the institutional framework.
 
And just delivering these on their own requires immense work. But this isn't sufficient. That's why we need to go further. And I want to highlight three further themes which particularly pick up on the work that John began.

We also have to address the specific challenges that John raised. As we invest more, we have to deliver more effectively.

These reflect John's theses that the policies that work well are those which treat people like individuals. That respond very much to their own personal circumstances. But also treat people like adults, giving them the choices they need, the chances to identify for themselves the opportunities that they should seize.

Improving housing services, mobility and choice

So my third theme is about what more we can do to promote greater housing options and greater mobility. Effectively - better housing, which better responds to people's needs in the 21st century. 
 
That means not only offering greater choice when people first apply - it also means giving them more choice to move later on in life as their circumstances change. The system is too inflexible right now.

For example, you get the growing families, crammed into one or two bedroom flat, even though their family has grown, waiting years for a bigger home that never materialises.

You get elderly people, who want to move closer to their families in order to watch their grandchildren grow up, find it really, really hard either to move from one end of the corner to another, or to move into a smaller home nearby.

Too many people are getting stuck in particular homes in particular places. It just shouldn't be so hard to move within social housing, and it shouldn't be so hard to give people a wider range of options to choose from to meet their needs.

What I particularly want to stress within this is the need to do more to tackle overcrowding. As we set out as part of the children's plan yesterday, overcrowding can have a huge impact on children's lives, - whether or not they've got the space they need to do their homework, the space to grow.

Parents and children argue quite enough as it is. And if there isn't the space for teenagers to go off and sulk, or for toddlers to sit somewhere and calm down, or for stressed parents to snatch a moment's peace then it can be so much more stressful.

Part of the problem is of course the need for more family homes. And Peter and I have already been talking about this - I have asked the housing Corporation to look at how much further we could go in terms of building more family homes. Should we start to measure the number of people housed as well as the number of homes that we build?

But we can't simply wait for these new homes to materialise. So it also means doing more with existing homes and provide more suitable help, more options and more mobility for families right now.
 
We need to remember too the older people, who often live in homes with one or more spare rooms. Many of them will want to stay put, remaining where their family memories are, and where they brought up their children - and they should be able to do that.

But we also know that there are many people - indeed I see many older people with this problem in my constituency surgeries - who want to move over the local authority border to be closer to their children or their grandchildren, to look after them in their old age. And it's still too hard to do so.

So we need to do more to make sure social housing can respond to older people's needs.

And key to both is providing greater mobility within social housing, as well as a greater range of housing choices and options to meet people's needs.

Some areas are starting to do this very well. But we need every area to be doing this.

You can imagine if a two bedroom property becomes empty, it's allocated to a pregnant woman on the waiting list in temporary accommodation who does indeed need a two bedroom flat

However, we could have offered that home to a widow who's currently in a three or four bedroom home, which could then have helped an overcrowded family living in a two bedroom home, which is then still free for the new mum to be.

Three families benefit rather than one. It's surprising actually how often that doesn't happen even when it could. So we need to make sure that is much more the normal practice in every corner of the country, to promote mobility through the system.

There is good practice to draw upon, as John Hill's report set out. The choice based lettings schemes and the homelessness prevention programmes have become more tailored, and are providing more choice.

But I do want to set out how we can improve mobility and choice.
 
First, given the scale of the problem, we need particular targeted action to tackle overcrowding. We are publishing today a new action plan on overcrowding, with £15m to support 38 pathfinders covering not just the London boroughs but also key high pressure areas across the country.

It will help councils use different approaches whether it's helping people move to smaller homes, whether helping them to find breathing space in the private rented sector, or whether it's even looking at loft extensions as a way of increasing the space in existing homes.

And as the statutory overcrowding standards haven't been updated since the 30s, we need to modernise those too.
 
We need the pathfinders to operate straight away to a higher standard, to the bedroom standard. And we will use the pathfinders, once they have the extra resources in place to assess the timetable to be able to change the statutory standard up to the bedroom standard as well.

Secondly we expect councils across the country to give much greater priority to older people wanting to downsize. And I think we should change the reasonable preference criteria so that every council can to reflect this in their allocations approach. We'll consult too on whether people wanting to move for work should get greater priority too.

Thirdly, we will invest £3.8m expanding the choice based lettings scheme across local council boundaries, so that councils and housing associations can join together within the sub region to offer tenants more choice. This will enable all local authorities to be able to be part of such a sub regional choice based lettings scheme by 2010.

But for many people, especially in today's modern labour market, their family haven't just crossed the local authority border, they might have moved half way across the country

So we need to do more to promote mobility across the country. Again, I think the choice based lettings are the best basis for us to start from. So I want to look at how we can link up those choice based lettings schemes.

And we'll be working with the Housing Corporation, key social landlords and authorities across the country on how we can do that, and start to build a national programme where we can give people much better choice about where they can move to.
 
Fourthly, to be really helpful for families on the waiting list or who are in need of different kinds of housing in a social home, the choice based lettings services should not just be about lettings. They should do more to include shared ownership options nearby, or perhaps other kinds of private rented sector options.

In order to provide better quality options, we want to explore the potential within the private rented sector further, and we'll be announcing in the New Year details of a review of the private rented sector.

I think too, within that, we want to see local authorities working better with partners to develop common housing registers. Why should it be so much hassle for people to sign up with a series of different providers, just in order to make sure they've got the best chance to find the home that they need?

Given that the best local authorities are already starting to offer these kinds of housing options, we will be sponsoring and supporting five areas to expand substantial housing options, and see how much better we could use those to better help tenants - both existing tenants and new applicants - get the housing that they need.

And we want to work with you on how we take that further. What more should we do to support better housing services, more appropriate housing services, more personalised housing services alongside greater mobility?

Social housing and social mobility

The fourth theme I wanted to highlight is around not simply looking at housing mobility, but at social mobility too. How can social housing support social mobility in the 21st century?

With the widening gap in house prices, with the increasing reliance that people have on help from Mum and Dad to help get themselves on the housing ladder, there is a serious danger that over the next ten or twenty years we'll see greater polarisation between those families who live in social housing and those who are homeowners.

So I think we need to do more to look at how we can support those in social housing. To give them greater opportunity, and to give their children greater opportunity. To give them the chance to get work, dealing with some of the worklessness problems that John highlighted as a priority in his report. But also, to give people the chance to own, to build up assets or to build up savings.

So we want over the next few months to explore in more detail with the housing associations, councils and tenants how best social housing can support social mobility.

Let me highlight a few key elements of that work.

For a start, the five housing options pilots that we will sponsor, which will develop better advice on housing options, will also need to provide advice and help on employment options and training options. So that they really are truly integrated housing and employment advice services. So we can see whether we can make it work and then extend the approach much more widely.
 
Secondly, as part of that, I think that we should focus much more on young people's needs, and how much young homeless people need more in terms of training and employment support. 
 
Thirdly, we want to work through the programme that Hazel Blears and Peter Hain recently announced, the Working Neighbourhoods Fund. That's going to invest £1.5 billion into overcoming worklessness, promoting skills, enterprise and employment in our most deprived areas. Most of those areas are the areas with the highest concentrations of social housing.

So it's critically important that social housing providers are part of those neighbourhood programmes. And this is a chance to get a stronger emphasis on local communities and their proposals to tackle persistent pockets of unemployment, promote regeneration across the area, and look at new approaches and put an end to the revolving door of short-term, unstable work which offer people support beyond the job centre - perhaps in the local social housing centre, perhaps through job advice in libraries or schemes to boost skills run in the local school.

Areas which are successful in turning around long-term unemployment will receive financial incentives - rewards to be invested in new community facilities or local projects. 
 
And we want to explore whether social landlords could offer more direct financial incentives for tenants who are working, and working over the long term, maybe shares, maybe additional help to work towards shared ownership.

So there are a range of ways in which we could do more to help more people into work - taking social housing and linking that with employment.

We also want to look at what else we can do to help those people who may not be able to afford to buy the whole of their own home but who might be able to afford a share.

The social homebuy pilot has been running for some time now. But we know that for many people one of the obstacles to participation has been their inability to meet the full costs of maintenance. So we need now, as we extend the pilot, which is what we are keen to do, to look at ways to ensure that they only take on a share of the maintenance, as they take on a share of the home.
 
And we want to work with you, not just on that proposal, but on further proposals to increase access to assets and savings. That may be about building up a share in the home. But it may also be about other means of building up those assets and savings for the future, and for their children.

Mixed communities

Finally, my fifth theme is around how we promote mixed income communities within existing areas as well as in new communities. We can't say that social housing is doing enough to promote opportunity if the results are still whole estates where only social tenants live.

There are already mixed communities demonstration projects in place.

Like in Newham - where a new estate of more than 10 000 homes will offer more than a third of homes for social rented and intermediate tenures, while the rest will be available for private housing - alongside investment in regenerating the town centre and local parks.

Critical to that has been levering in private sector investment. As we've seen from the John Calcutt review, his view and assessment was that there is much more that we could do to build those public-private partnerships around potentially difficult urban sites, using the value within them to deliver more homes but also more mixed income communities.

We want the Homes and Communities Agency, once it's set up, to see this as one of its major programmes and themes.

Because while we've talked over the last 12 months about the Homes and Communities Agency's role in delivering new homes, as that has been our focus through the green paper, we should not forget the tradition of English Partnerships in supporting regeneration programmes as well.

So we want to make sure that the Homes and Communities Agency will support regeneration, the establishment of mixed communities, as a critical part of its work.

And to support that, we will set out in the New Year, details of a New Communities Fund. This is revenue funding to support communities, to work with the capital funding of the Homes and Communities Agency, in order to deliver mixed communities across existing estates - with greater, more imaginative proposals, as some areas are already doing.

And not just looking at how we provide a greater mix on social housing estates, which need a greater proportion of private sector tenure. But also, looking at how we do more to mix up some of the new executive estates or the high income areas which also should have more affordable housing. We should see mixed income communities as something which goes both ways.

Conclusion

So we've set out then, five themes which we want to work with you. We don't have definitive answers to any of these yet. But we do have a lot of progress that's been made, and a lot of proposals that we want to take forward quite rapidly.

We've put great intensity and focus into the policy development around housing supply in the last twelve months - and that is our big challenge in terms of delivery now over the next few years.

Our challenge now in terms of policy development is around these themes. How we do more to increase opportunities for those living in social housing, or those who want to live in social housing but can't get in through the door at the moment?

On supply - how can we do more to build the family homes as well as the additional units we need? On the institutional structure - how can we rapidly extend to local councils and ALMOs the new regulatory framework? And what should we do to improve the Housing Revenue Account? On housing options and mobility - how can we better cater for the needs of different groups, for families, for older people, and to promote greater choice and mobility within the system? On social mobility - how can this be better promoted through social housing, particularly through helping people into work but also helping them to build up assets? And finally what more can we do to promote mixed incomes and tenures in existing communities as well as in new developments?

In each of these areas, we are keen to work with you, and we will set out more details on each in the New Year. We want to see quite rapid progress, with each of the reviews reporting back before the summer.

We hope that you will continue to work as closely with us as many of you have already been doing on what we can do to increase supply and to increase affordable housing.

I think we have, between us, made immense progress, getting housing so far up the political agenda. But we also know that supply alone will not be enough to meet the aspirations of the next generation, nor to meet their needs, nor to offer the opportunities that they have to have for the future.

So that's our challenge now. I hope that you will join with us. There is an important and powerful future for social housing, but we have to do more to make that a success and provide the next generation with the opportunities they need. Thank you very much.