Policy Update

POLICY DEVELOPMENTS IN OTHER PARTS OF THE UK 

Osborne slashes tax credits and benefits

Chancellor George Osborne set out plans for £12 billion worth of cuts in benefits in his Summer Budget in July.

Tax credits and universal credit were first in the firing line. They will affect people in work and out of work and include cutting the amount that people can earn before they lose credits and restricting hem to the first two children from 2017. These cuts were only partially offset by Osborne’s plans for a national living wage.

The chancellor also extended the freeze in most working-age benefits, including the local housing allowance, until the end of the parliament, saving £4 billion.

And he confirmed plans for a lower benefit cap of £23,000 in London and £20,000 elsewhere, the end of automatic housing benefit for the under-21s and a cut in employment support allowance for those in the work-related activity group (WRAG) to the same level as job seekers allowance.

To mitigate the impact of cuts in housing benefit, Osborne announced an £800 million budget for discretionary housing payments (DHPs) over the five years to 2019/20.

Osborne is set to set out details of cuts in departmental spending, including block grant to Wales, Scotland and Northern Ireland, in his spending review in November.

ONS investigates classification of housing association debt 

The Office for National Statistics is to consider the classification of housing associations as private bodies following the Budget and other policy changes. This could potentially add their £60 billion of borrowing to public sector debt.

Previous governments have taken a cautious stance on policies that interfere with housing independence too much for fear that they could trigger debt reclassification.

In their public statements, ministers have taken a relaxed view on the issue, with David Cameron describing housing associations as ‘part of the public sector’ at prime minister’s questions. That has caused speculation that the government could be planning further reforms, perhaps allowing associations ‘free’ status in return for buying out their debt.

The policies that have triggered  the ONS investigation all apply to England only but it is unclear whether it could apply different criteria for the rest of the UK. As WHQ went to press, English housing associations were approving a voluntary agreement with the government on the right to buy that seemed partly designed to avoid reclassification.

Community Housing Cymru chief executive Stuart Ropke said: ‘In  Wales, housing policy is devolved, and housing associations are independent organisations. We are emphatically not part of the public sector. Our members deliver public services in Wales, as part of the most successful private, public and third sector partnership in the UK, and perhaps across all of Europe.’

ENGLAND

Budget shake-up for social housing

 The Summer Budget also included major changes affecting social housing in England.

George Osborne announced that:

  Social rents will be cut by 1 per cent a year for four years from 2016/17
Social landlords will be forced to charge near market or ‘pay to stay’ rents to tenants with a household income of more than £40,000 in London and £30,000 elsewhere.
There will be ‘a review of the use of lifetime tenancies in social housing to limit their use and ensure that households are offered tenancies that match their needs, and ensure that the best use is made of the social housing stock’.

The rent cut reverses a formula agreed by the Treasury just two years ago under the coalition government that allowed social landlords to increase rents by CPI inflation plus 1 per cent. Osborne said this would end ‘the ratchet of ever higher housing benefit chasing up every higher rents’ and save around £4 billion over the spending review period.

The independent Office for Budget Responsibility said the reduction in landlords’ income would reduce their investment in new homes. It estimated they would build 4,000 fewer new homes as a result in 2019/20 and 14,000 fewer over the spending review period.

Individual housing associations estimated that their expected income would fall by around 12 per cent over the next four years.

Meanwhile 168 local authorities with retained housing stock are set to lose £2.6 billion over the four years and £43 billion over the lifetime of their 30-year business plans. They warned this could affect their ability to repay debt to the Treasury under self-financing arrangements that only started in 2012.

SCOTLAND

Bill will give more protection to social renters 

The Scottish Government is set to  give private tenants protection against excessive rent increases and increased security of tenure.

A Private Tenancies Bill will ‘provide more predictable rents and protection for tenants against excessive rent increases, including the ability to introduce local rent controls for rent pressure areas’. This follows an earlier consultation proposing limits on rent increases for sitting tenants in ‘hot-spot areas’.

A Scottish Private Rented Tenancy will replace the current assured system and remove the no-fault ground for repossession. This means landlords will be unable to ask a tenant to leave just because the fixed-term has ended and will instead have to rely on specified grounds such as wanting to sell the home or live in it themselves, rent arrears and anti-social behaviour.

The Programme for Scotland 2015/16 also pledges to use new legislative powers for the Scottish Parliament to abolish the bedroom tax and amend the housing provisions in universal credit.

NORTHERN IRELAND

Home repossessions fall

Mortgage repossessions fell sharply as the housing market in Northern Ireland continues to recover.

Figures released by the Court Service showed there were 283 repossessions in the April to June 2015 quarter, down 62 per cent on a year ago.

Nicola McCrudden, Chartered Institute of Housing director for Northern Ireland, said: ‘This is very welcome news for homeowners and the housing market generally. The combination of low interest rates, increased access to government backed mortgage debt advice and more stability in the jobs market has had a steadying effect on housing.’

However, repossessions in 2014 were still eight times higher than in 2007 before the crash in the housing market and are much higher than in the rest of the UK. An estimated 60,000 mortgages taken out since 2005 are still in negative equity.

WELSH GOVERNMENT

Partnership with HBF aims to boost supply and jobs

Welsh Government and the Home Builders federation have signed a pact to boost housing supply and maximise local employment and training opportunities from construction in Wales.

The pact seeks to build on an encouraging trend in housebuilding. The April to June 2015 quarter saw 1,804 starts in Wale, up 6 per cent on a year earlier. That followed a 20 per cent increase in 2014/15. The quarter also saw 1,750 completions, up 10 per cent on April to June 2014, to follow a 6 per cent rise last year.

The private sector accounted for 84 per cent of completions in the last three months though housing associations also completed more homes.

The pact seeks to ensure that supply meets growing demand while making the most of community benefit opportunities. Welsh Government commits to extend Help to Buy – Wales, make more public land available and cut red tape.

Communities minister Lesley  Griffiths said: ‘I am determined to see this momentum continue and believe there is still more we can do to continue delivering homes for people across Wales. The pact I have announced today has been developed in close partnership with the HBF and its members, and will help us achieve our priority of increasing housing supply.’

Tories and Lib dems give Big Question answers

September saw significant political moves on housing by opposition parties ahead of next year’s Assembly elections.

Speaking at CIH’s Cymru’s Big Question event, Mark Isherwood of the Welsh Conservatives ruled out the extension of the right to buy to housing associations and the cut in social rents proposed by his party in England.

Meanwhile Peter Black said that the Welsh Liberal Democrats would set a target of 20,000 new affordable homes in the next Assembly term, double the 10,000 target set by Labour for 2011-2016. He pledged that the Lib Dems would double the current social housing grant budget of £35 million a year to £70 million a year.

Change of heart on six-month moratorium

Communities and tackling poverty minister Lesley Griffiths says she will reinstate the six-month moratorium in private tenancies after hearing representations on the Renting Homes (Wales) Bill.

Speaking at a Stage 2 meeting of the Communities, Equalities and Local Government Committee in the Assembly as WHQ went to press at the end of September, the minister said that after consideration she believed the risks of removing the moratorium outweighed the benefits and that she would bring forward an amendment at Stage 3 to reinstate the current position. She also said that she would consider the case for greater security in future although it would need to be widely consulted on.

Removal of the moratorium was one of the most controversial aspects of the Bill. Those in favour argued it would simplify the law and not make much practical difference but opponents argued it would leave private tenants in Wales with less security of tenure than in the rest of the UK.

Rent Smart Wales goes live

Following the Housing Act, private landlords and agents must become registered via Rent Smart Wales (rentsmart.gov.wales) from Autumn 2015.

All private landlords with a rental property in Wales must register themselves and the addresses of their properties. Landlords must apply for a licence if they let or manage property. If they instruct an agent to do the work on their behalf, the agent must be licensed. To get a license, a landlords or agent must be adequately trained and declare themselves ‘fit and proper’.

Consultation papers

Draft Statutory Guidance on the National training Framework on Violence against Women, Domestic Abuse and Sexual Violence – gov.wales/consultations/ people-and-communities/national- training-framework-on-violence- abuse/?lang=en – Responses by October 23
Refugee Asylum Seeker Delivery Plan – gov.wales/consultations/people- and-communities/refugee-asylum- seeker-delivery-plan/?lang=en – Responses by December 10

WALES

Landlords join forces on domestic abuse 

Social landlords in Gwent have teamed up in a project to tackle domestic abuse.

The project aims to ensure a more effective service for social housing tenants in Gwent suffering from domestic abuse, by developing a toolkit for social landlords. They hope the toolkit can also be replicated across the housing sector in Wales, to help all social landlords in tackling and preventing domestic abuse.

Social landlords taking part include Bron Afon Community Housing, Charter Housing, Caerphilly County Borough Council, Melin Homes, Monmouthshire Housing, Newport City Homes, United Welsh Housing Association, Derwen Cymru and Tai Calon Community Housing.

Information from Women’s Aid shows that around 90 per cent of the people they support live in rented, largely social, housing. In 2013/14 over 1,000 cases of domestic abuse were picked up by the social landlords taking part in the project.

All of the social landlords involved already have policies and practices in place for dealing with domestic abuse, but recognise that more can be done.

Ceridwen Wood was recently appointed as project manager to take forward this work in a post jointly funded by all organisations involved.

Subsidy cut scuppers plans for solar panels 

UK government cuts to the feed-in tariff have forced a Welsh council to drop plans to install solar panels on 2,700 of its homes.

The Department for Energy and Climate Change is set to cut the feed-in tariff, the return that households get for the electricity generated, by 90 per cent in January before abolishing it in 2019.

This makes plans by Carmarthenshire County Council to install solar panels on a third of its homes unviable. Housing teams are now looking at other ways to help tenants save money on their fuel bills and improve the energy efficiency of their homes.

The council had been working with Gen Community to develop the programme and establish a community fund to pool the income from the domestic feed-in tariff. Council tenants were in line to save £6.3 million on their energy bills over 20 years.

Cllr Linda Evans, executive board member for housing, said: ‘Unfortunately the Government recently announced in a consultation that they intend to cut the feed-in tariff drastically from 12.47p to 1.63p as from January 2016. This is much more than anyone anticipated.

‘The present Executive Board, the previous Executive Board, and officers, worked hard to get this project together and we are all extremely disappointed. I am writing to the Welsh ministers and the minister in London expressing our concerns in Carmarthenshire.’

Welsh drive to end youth homelessness 

Five Welsh charities will work together to develop a Welsh dimension to the UK campaign to End youth Homelessness.

Adref, Dewis, GISDA, Llamau and Swansea Young Single Homeless Project (SYSHP) formed a new partnership to raise awareness of youth homelessness in Wales in August. This follows the successful UK-wide collaboration led by Centrepoint.

In one of its first actions, the End Youth Homelessness Cymru partnership is calling on the Welsh Government to put an end to the practice of placing vulnerable, homeless 16 and 17 year olds in bed and breakfast accommodation. It says this puts them at an unacceptable risk, with the same bed and breakfasts being used by many local authorities to house newly released adult prisoners.

Dewis chief executive, Stuart Mckinnon said: ‘The support of young people and the harnessing of their skills and abilities should be at the core of the Welsh Government’s agenda, and without stability of accommodation and the right support, Wales will not fully realise one if its greatest assets.’

PUBLICATIONS: 10 TO LOOK OUT FOR

1) The Shape of Wales to Come: Wales’ economy, environment and society in 2020

Bevan Foundation, September 2015

www.bevanfoundation.org/publications/shape-wales-2020/

2) Toward a Wales Free from Poverty: emerging ideas

Joseph Rowntree Foundation and Bevan Foundation, August 2015

www.bevanfoundation.org/publications/wales-free-poverty/

3) The Homelessness Monitor Wales 2015

Crisis, August 2015

www.crisis.org.uk/data/files/publications/HomelessnessMonitorWales2015_final.pdf

4) Monitoring Poverty and Social Exclusion in Wales 2015

New Policy Institute and Joseph Rowntree Foundation, September 2015