Against all odds- decent homes for Brummies

By on 22/01/2010 in Blog

Financial reform is essential if stock retaining councils are to secure the future of their already under funded decent homes programmes, argues Cllr John Lines, Cabinet Member for Housing.

“Yes, 2010 is finally here – the year of the decent homes standard. We know the target will be missed due to lack of adequate resources – a fact acknowledged recently by housing minister John Healey.

It is now clear that just 92 per cent of homes will meet the standard this year and that the level of non-decent homes had grown in 27 councils.

This will be unacceptable to those tenants who must continue to live in homes that are poorly heated and have draughty widows, and it will be an embarrassment to the government.

Decent homes was a key ambition, along with building 100,000 new affordable homes a year.

Too little, too late

Some council housing had suffered many years of neglect and lack of investment announced in 2001. The decent homes policy was long overdue and a welcome recognition of the need to invest and maintain the nation's affordable rented housing stock. Social tenants deserved no less.

However, the established standard was minimalist and only met basic requirements for a modern home. It was certainly below the expectations and aspirations of today's tenants. The obligation on landlords was merely to ensure that properties had basic facilities, were in a reasonable state of repair and met minimum thermal efficiency standards. There were no requirements to maintain the general appearance of estates, no provision made for maintaining common facilities, such as lifts and fire protection.

The policy was also inadequate for private sector homes. Eventually this was only partly recognised by the requirement to improve homes for some vulnerable people. Doing this remains a huge challenge for most privately owned UK homes.

Ministers understated the resources required to deliver decent homes. Certainly tenants in retained stock authorities, like Birmingham, were treated inequitably compared to tenants of transfer authorities, arm's-length management organisations and housing associations.

Uneven playing field

The government was content to provide additional resources to facilitate stock transfers that promised investment beyond decent homes – funded by the remaining council tenants, as evidenced through the continuing withdrawal of resources through the housing revenue account subsidy system. The system is now accepted as unfair across the political spectrum.

Birmingham's tenants chose to keep the council as their landlord in April 2002, when less than 30 per cent of our stock was decent. When I became cabinet member for housing in June 2004, I was obliged to find a way to deliver decent homes from the council's own resources.

We have made excellent progress, despite the inadequate and inequitable government financial support. The level of decency has increased steadily, from 34 per cent in April 2004, to 90 per cent by March 2009. We expect to exceed the 95 per cent national target this year. 

This follows a clear financial and operational plan. Our decent homes programme is funded through a combination of resources, including affordable prudential borrowing (£138 million) with borrowing/repayment costs funded through HRA efficiencies.

Incidentally, this prudential borrowing is not included in the debt calculations for subsidy purposes and therefore the interest costs are not covered through the subsidy system. Unlike borrowing for ALMO prgrammes which is included in the subsidy calculations for the authority.

The council also redirected land and retainable right to buy receipts to support the programme (coincidently, also £138 million). Had the council been able to keep all right to buy receipts it would have retained more than £150 million, and not had to borrow prudentially.

On-going decent homes maintenance is also being funded effectively by Birmingham tenants (our subsidy contribution for 2009/10 far exceeds the major repairs account allowance received by almost £17 million). Readers will understand why our tenants believe they are being punished for voting to stay with the council.

In hindsight, it all sounds so easy – but the past five years have been incredibly challenging. The challenge now is to maintain the standard.

Winds of change

The proposed council housing finance reforms, albeit long overdue, could potentially provide a long-term, sustainable future for our decent homes.

I am pleased that after many years of fierce personal criticism of the current framework (supported by members, tenants and housing professionals nationally), that there could be a more equitable set-up that will abolish the subsidy system and allow councils to retain all right to buy receipts. 

Some of the proposed reforms are of concern though. Notably, that resources under a devolved self-financing system will only be provided to maintain decent homes and may be supported by a debt reallocation regime.

To delay means more decay for our homes. The debt debate serves only to divide councils and delay change. This will not meet the aspirations of tenants and I would urge Mr Healey to consider carefully the final offer proposals and allow councils complete retention of all resources. Then decent homes 'plus' can be provided within affordable rent levels.

So, whenever the general election comes, the next few months promise to be lively. Or as we say in Birmingham, business as usual.”

This story originally appeared in Inside Housing


If you enjoyed this article, subscribe now to receive more just like it.