Matthew Warburton, Policy Advisor at the Association of Retained Council Housing (ARCH), discusses the need for a new and sustainable financial settlement for council housing.
Among the announcements included in Jeremy Hunt’s Autumn Statement on 17th November was confirmation that local authorities and housing associations would be permitted to raise rents next March by up to 7%, with additional flexibility for supported housing. Since the Government had consulted on alternative rent increase ceilings of 3% and 5%, most in the sector breathed a sigh of relief that they would be spared the need to make massive cuts to maintenance and improvement plans at least for one more year.
Landlords still face difficult decisions in setting spending priorities for next year as rising materials and building costs, plus a local authority pay settlement likely to average 7% will eat away at the amount of real work the rent increase will buy. Uppermost in their minds will be how to strike the balance between work needed to meet existing standards, including the Decent Homes Standard, and the need to move forward on the new requirements on building safety and moving towards net zero.
Decent Homes
Following the tragic death from mould of a Rochdale child, Michael Gove has, rightly, written to all social landlords drawing attention to their duties to ensure homes are decent, including free from damp or mould, and giving notice that the Regulator of Social Housing would soon be acting to enforce compliance with this duty.
He made a statement to Parliament on 16th November on the same subject, emphasising the additional powers to enforce compliance the Regulator is being given by the Social Housing Regulation Bill currently before Parliament. He also said, rightly, that works to alleviate a damp or mould problem that put people’s health at risk should never be put on hold pending legal action; the rule must be ‘fix the problem first, then deal with the legal repercussions’. The only aspect of the issue his statement failed to consider is the extent to which lack of money is part of the problem and if so, whether the Government shares in the responsibility for that.
Gove is right to argue that, in a winter when family budgets are hit by fast-rising food prices and energy costs, landlords’ top priority must be to ensure that homes are free from damp and mould. But to the extent that available resources are used to tackle these immediate problems, there are less available to, for example, improve energy efficiency to make homes cheaper to heat, or to make them safe from fire or other safety risks.
Setting priorities
Each part of Government always tends to believe that its own priority must be the top priority for social landlords — Gove may be right that freedom from damp and mould come first, but the new Building Safety Regulator has a different focus, and, according to BEIS, landlords which cannot afford to meet at least half of the cost of energy efficiency works will not be able to bid for the Social Housing Decarbonisation Fund.
DLUHC has a wider role than enforcing Decent Homes for all; it is responsible for ensuring that the financial settlement for local authority housing is sufficient to meet all the expenditure needs falling on Housing Revenue Accounts in the coming years. ARCH has been drawing attention to the widening gap between expected rent income and long-term expenditure needs since well before the current inflationary crisis broke. A rent increase ceiling next year only makes it more urgent that progress is made towards a new and sustainable financial settlement for council housing.
