Moving on to the front foot
As TAI comes around again and our first housing bill is due to be published shortly, Vikki Hiscocks and Keith Edwards take stock of the prospects for housing in challenging times.
A gloomy outlook
There’s a strong sense we’re at a crossroads in housing policy and practice in Wales. Let’s start by getting some of the ‘downside issues’ out in the open. Public investment in housing in Wales in 2009/10 was the lowest in the UK at less than 1% of total government spend. The new UK Housing Review * points out this was half the proportion in Scotland and Northern Ireland, and 50% less than England.
In absolute terms, the situation has got considerably worse since the Welsh Government spending review. Whilst there has been some very welcome new capital investment announced recently and efforts continue to secure more resources, this hasn’t filled the £120 million gap needed to restore it to One Wales levels.
The mismatch between supply and demand will have undoubtedly got worse since Alan Holmans 2010 report as we clearly haven’t got anywhere near the target of 14,200 new homes per year it set as a minimum requirement. Even the much heralded exceeding of the One Wales 6500 target was significantly less than half of what Holmans estimated was needed for affordable housing alone.
The biggest challenge of all is how we deal with the human cost of downturn and possible double dip recession, made worse by the fact that the UK Government is simultaneously embarking on a welfare reform programme that evidence shows is likely to have many detrimental impacts on many of our most vulnerable people and communities. One thing that successive Welsh Governments can be justifiably proud of is the way they have protected the Supporting People budget in stark contrast to England for example. Of course with homelessness increasing and demand for support services rising as a consequence, budgets will inevitably come under more pressure.
There are many other problems with the housing system including a lack of flexibility and the domino effect of stasis in the home ownership market on other sectors. Factor in chronic underinvestment in our relatively older private sector stock and the lack of a WHQS ‘Plan B’ for a number of local authorities and you might conclude our best strategy would be to baton down the hatches until this perfect storm blows over.
On the positive side ….
Of course that’s not the way we do things in Wales. In amongst the doom and gloom there are some real good news stories, and this formed the basis the ’case for housing’ Homes for All Cymru and the Cross Party Housing Group made to Huw Lewis and the First Minister in January 2012. The evidence included that housing can:
- have a major positive impact on the economy at a very difficult time. A recent report for CHC by the Wales Economic Research Unit showed that investment by the housing association sector alone amounted to over £800 million in 2010 / 11, up 16% on the previous year. A study by Shelter England demonstrated that every £1 of public investment in housing generated £3.51 of economic output in terms of the construction sector alone
- reduce health spending by having a positive impact on physical and mental health including respiratory illness and cardiac disease. Shelter Cymru and the BRE Trust estimate that poor quality housing leads to accidents in the home that cost the NHS in Wales £67 million per year in treatment costs alone
- improve educational performance – the home learning environment has the single biggest impact on educational attainment of children
- through the Supporting People programme save around £2.30 for every pound spent and help deal with the human costs of financial hardship – increased domestic abuse, mental ill-health, drug and alcohol issues, family breakdown and homelessness
- reduce spending in other areas through Care and Repair service across Wales which are estimated to save £7.50 for every pound spent through, for example, fewer hospital admissions
- help ensure, through advice and support services, that thousands of individuals and families keep their homes and avoid homelessness. For example, the cost of providing temporary accommodation to a household in priority need and re-housing afterwards has been estimated at £5,300 per case per year
- help to regenerate our most disadvantaged communities by using the Can Do Toolkit which last year helped create over 1800 jobs and apprenticeships, many in our most disadvantaged communities
- have an impact on fuel poverty through the ARBED programme which has helped reduce fuel costs for 6,000 households and levered in over £30 million additional investment
Making the case
Although we understand the constraints that government faces, it’s important that we never stop arguing for significant additional and long term capital investment in housing. It should always be the ‘big ticket’ item on our list if we are to address chronic, structural underinvestment. However, the housing community has two other strengths to play too in any ‘offer’ to government. First, we are much better connected up than other parts of the UK – we know each other well, are used to working together and have actually been ‘co-producing’ for a long time. This makes us lighter on our feet and potentially much quicker to act decisively and in concert.
Secondly, we are enthusiastic innovators. Our list of asks of the First Minister include relatively low cost items that, given the record of the sector, could produce huge rewards. This included resources to:
- pilot new build co-operative housing schemes and lever in private finance
- increase the size and scope of the empty property loan fund
- establish a dedicated health and housing fund to facilitate cross sector demonstration projects
- pilot a citizen support fund to help individuals with small grants or loans to overcome individual barriers to meeting housing needs
- demonstration projects focussing on the private rented sector aiming to increase supply and improve standards
- support for mortgage rescue based on the successful model developed in Wales
- transitional funding to underpin the successful redistribution of Supporting People funding
From agreement to action
So how do we move on to the front foot and make sure the intellectual argument for housing (largely won) is followed by a political and long term resource commitment. A first cabinet seat for housing and the way the Minister has personally committed to majoring on this aspect of his responsibilities, through his recent statement and the forthcoming bill are hugely significant developments. Meeting the Housing Challenge: A Consensus for Action as Hugh Lewis himself pointed out, wasn’t a typical consultation paper loaded with policy detail. Instead, it aimed to set out the significant challenges from his perspective with the aim of building dialogue and perhaps more critically, consensus, between politicians, nationally and locally, and between officials and officers in organisations inside and outside the housing sector.
The statement was particularly welcome for two reasons. Firstly, it gives a very clear steer on what the Minister’s priorities are. It has his personal imprint on it and by all accounts was largely written by him. Secondly, the housing sector in Wales has been waiting in anticipation for some tangible details around the proposed Housing Bill – the statement gives a further indication of what’s likely to be included. We know it is likely to cover. Homelessness, the private rented sector and social housing tenure have all been cited as key themes for inclusion in the Bill.
The Minister makes no secret of the fact that there is a limited amount of money available and that some tough choices will have to be made. In true ‘co-production’ style, the Minister threw open to the sector some of those ‘difficult box’ questions that we have all been grappling with as housing professionals and organisations. Where should efforts be focused? What should be the priorities for spending the money we have? Who needs help the most? It is these ‘big picture’ issues and priorities that the Minister is seeking some broad agreement on and it will be interesting to see whether the Welsh housing sector can rise to the challenge of developing a shared agenda for action over the coming months.
Recognising the complexity of housing market forces, the consultation suggested that the role of Welsh Government is to act as a ‘system steward’ ensuring the combination of planning policies, regulation, and financial support combine to ensure that enough new homes are build to meet rising demand. CIH Cymru welcomed a more cross tenure and whole system approach, as we have consistently made the case that you cannot intervene in one part of the market without consequential impacts elsewhere.
Since devolution we’ve flexed our legislative muscles sparingly, using secondary powers or tagging Welsh provisions on the back of UK Bills. CIH Cymru welcomes the forthcoming Housing Bill as it will allow us to be much more ambitious. It won’t be the panacea for all housing ills. We may already have sufficient powers in some areas and it’s the lack of a corporate commitment and resources that’s the problem. It is also true that you can’t simply legislate social problems away – if we could we’d have made homelessness illegal years ago. But a Housing Act could be a very important tool in the box of interventions.
Any new powers should help address specific imbalances in our system including:
- new homelessness provisions based on the current impact assessment
- reforming tenure in order to deliver more flexibility and efficiency
- new powers to intervene in the private rented sector to improve quality
Any measures should be fully scrutinised and based on clear evidence. We should engage in a mature and honest debate at this historic time for housing. CIH Cymru is up for the challenge – it’s time for us to move on to the front foot!