Presentation Slides – CWAG Finance and Business Planning Workshop – June 2024 ( Cloned )
Workshop facilitated by Steve Partridge (Savills) covering
- Economic pressures undiminished for HRA sector
- Revising national projections
- Impact of rising capital pressures
- Revenue Repairs
- Reserves and savings
- Building safety
- Energy efficiency and net zero carbon
- Newbuild development – where are we?
- Other revenue pressures
- Future investment
CWAG Newsletter – May 2024
This Update includes the following
Progress of Renters Reform Bill
After almost a year, the Renters Reform Bill finally completed its passage through the House of Commons on 24th April 2024. Delays were due to concerns around the capacity of the Courts to process possession cases.
A significant number of amendments have been made including:
- Tenants will not be able to give notice that they wish to end a tenancy for at least 6 months after taking it on, rather than after two months as previously proposed.
- Abolition of section 21 “no fault” evictions will not take place until court reforms have been implemented (the Opposition continues to press for a clearer implementation date as the legislation currently leaves the timing a matter for Ministerial judgement).
- Provisions have been added to allow landlords to recover possession of properties let to full-time students at the end of the academic year to ensure these are available for reletting to students in the next academic year.
- The Minister also committed to undertake a review of local authority private rented sector licensing schemes with “the aim of reducing burdens on landlords”.
- The Government will review the implementation of the tenancy reforms within 18 months of measures being applied to existing tenancies.
The Bill has now moved to the House of Lords receiving it’s first and second reading in the on 1st May 2024 and 15th May 2024 respectively. Secretary of State, Michael Gove has stated the government’s intention to enact the legislation by the ‘summer’ with Implementation by the Autumn.
Consultation Outcome – Changes to RSH Fee Regime
The Regulator of Social Housing (RSH) has announced the outcome of its consultation on proposed changes to the charging regime for social landlords. The Decision Statement indicates that there was broad support for the new approach which will see fees paid by social landlords to cover the full cost of regulation in the sector.
For councils, this will mean a requirement to pay fees for the first time to cover the cost of the RSH’s more active regulation against the Consumer Standards, including the new the inspections regime. Councils owning over 1000 homes will be charged at a pro rata rate of £6.63 per property.
The new arrangements come into effect on 1 July 2024. Invoices will be sent out in June. For more details see the RSH Decision Statement
Recent Publications
Reforming the Right to Buy (The Housing Forum) – April 2024
Whilst ending the Right to Buy altogether would be the best way of safeguarding the social housing stock, this report recognises that all the main political parties currently want to retain the RTB in some form. This briefing paper sets out a series of recommendations to tackle the most problematic aspects of the current scheme including:
- Removing the RTB from Newbuild homes
- Using covenants to prevent the letting out of property, or alternatively requiring properties to be offered to the council to be let if not used for owner occupation.
- Allowing councils to receive the full value of RTB sales.
- Modernising exemption criteria e.g. to include larger homes and bungalows.
- Discounts should be reduced to no more than 20%.
The Finances and Sustainability of the Social Housing Sector (LUHC Committee) – Published 29th April 2024
This report from the Levelling Up Housing and Communities Select Committee highlights the severe financial pressures currently facing the social housing sector.
Current issues have arisen because of repeated government-imposed rent caps coinciding with unprecedented costs for decarbonisation, fire safety and the regeneration of older homes. Whilst overall the sector is deemed to be generally resilient, the impact on social housing newbuild has been stark as providers retrench and focus on their existing stock.
Given the chronic shortage of social housing the Committee recommends that the Government should set and publish a target for the number of social homes it intends to build each year, prioritising grant funding for social housing rather than the current focus on affordable rent and shared ownership. The Government is also urged to use the planning system to support social housing build schemes using land value capture as a tool to ensure land price does not inhibit development of new social homes. Other proposals include greater flexibility in the net additionality guidelines used by Homes England as these are a barrier to regeneration schemes in many areas. The Government is also urged to fund fire safety works in the social housing sector on the same basis at currently available to the private sector.
Rethinking Repairs and Maintenance : 12 Guiding Principles (Chartered Institute of Housing / National Housing Federation) – Published 9th May 2024
This report relates to one of the action plan recommendations in the 2023 CIH / NHF ‘Better Social Housing Review’, namely ‘Housing associations should partner with residents, contractors and frontline staff to develop and apply new standards defining what an excellent maintenance and repairs process looks like.’
This guidance identifies twelve guiding principles for how social landlords should work with residents to improve the repairs and maintenance services. The 12 principles are grouped into themes which are intended to be addressed consecutively, starting with culture and resident engagement, tackling discrimination, and involving frontline colleagues to understand and improve performance.
Future Meetings
CWAG Finance and Business Planning Meeting Thursday 6th June 2024 (10.00 – 13.00)
New Regulatory Regimes – LGA with the Housing Ombudsman and Regulator of Social Housing – Thursday 13th June 2024 (3 pm. – 4 pm)
The LGA is hosting a webinar that will bring together the Housing Ombudsman and Regulator of Social Housing to discuss the recent changes and new requirements impacting on councils.
A representative from the Housing Ombudsman will discuss the new Complaints Handling Code, including how local authorities should identify the member responsible under a council’s statutory duty. The Regulator of Social Housing will set out the powers available to them under the new regulatory regime, including inspections and grading of local authority housing services. There will be opportunities to raise issues and question both before and during the event.
For further details see the LGA website
CWAG Newsletter – April 2024
This Update includes the following
CWAG Organisational Update
Members will be aware that Southend City Council is planning to take on the Administrative Authority role on behalf of the group once all members have signed up to the Service Level Agreement. On transfer the policy officer post will transfer along with management of the group’s financial affairs.
In addition, the group has a new Chair. Geoff Beales from Colchester City Council has taken on the role on an interim basis as Anna Milner has stood aside from the position following the decision by South Tyneside to bring management back in house by 2nd October 2024. The post will be subject to an election at the Annual General Meeting in September. Anna will stay on as an Executive Member until the AGM.
Government confirms CPI + 1% rent settlement for 2025/26
The Government has confirmed that the existing social housing rent settlement will be rolled over by a further year until April 2026. This means annual rent increases will continue to be capped at Consumer Price Index (CPI) plus one percentage point for 2025-26. This early announcement provides greater short-term certainty effectively deferring negotiations around the longer-term rental settlement for the next government.
Consultation Response – Competence and Conduct Standard
The Competence and Conduct Standard Consultation sets out the implementation arrangements for the new regulatory standard requiring senior housing managers and executives within social housing to either have or be working towards a relevant professional qualification.
The CWAG response recognises the value of relevant professional qualifications in improving performance and driving up standards in the social rented sector. However, alongside this there are concerns around the tight implementation timescales and the potential for these to negatively impact staff recruitment and retention in the short-term. The proposed timescales do not offer sufficient time to implement the necessary organisational and training challenges alongside succession planning.
In addition, the costs associated with introducing these measures are likely to be significantly higher than estimated in the impact assessment. No additional resources have been identified to cover implementation and associated costs which will need to be funded from already stretched Housing Revenue Accounts.
Other issues highlighted include role descriptions that are a poor fit with ALMO clienting arrangements and potential problems for organisations using external contractors where roles are deemed in scope of the new regulations.
Good Practice Consultation – Housing Ombudsman
The Housing Ombudsman has launched a consultation for social housing landlords on a proposed new approach for issuing Good Practice. The proposals relate to new powers conferred on the Housing Ombudsman in the Social Housing (Regulation) Act 2023 to issue guidance on good practice in carrying out housing activities covered by the Ombudsman Scheme.
The consultation is about providing access to ‘good practice’ as opposed to ‘best practice’. As such, the proposed approach will encourage landlords to self-assess against a good practice template at the point an issue arises rather than wait for a complaint about the topic. In practice, there may be entirely justifiable reasons for the landlord’s response to differ from suggested good practice, however undertaking the self-assessment allows for the decision to be documented and scrutinised.
The consultation seeks feedback on the Ombudsman’s principles of good practice and proposed approach as well as suggestions for potential topics. The intention is to issue ‘good practice guidance on two topics per year. Initial suggested topics include:
- making an effective apology
- deciding on appropriate levels of compensation
- effective complaint handling during merger or stock transfer
- effective root cause analysis of complaints
- knowledge and information management
The consultation closes on 21st May 2024
Good-Practice-consultation-26-March-2024.pdf (housing-ombudsman.org.uk)
Recent Publications
Housing Outlook Report Q1 2024 Resolution Foundation (March 2024)
This review sets the UK housing market within the context of similar advance economies and examines whether the housing crisis in the UK, particularly affordability pressures and quality issues are specific to the UK. Homes in the UK are more cramped, poorer quality and more expensive relative to general price levels than in other OECD countries. The housing stock is also the oldest in Europe (4 in 10 homes were built before 1946) with consequent issues around damp and poor insulation. The report highlights why housing is likely to feature prominently in this year’s General Election.
Follow-up report: Spotlight on Noise complaints – Time to be Heard – Housing Ombudsman (April 2024)
The Housing Ombudsman has published its evaluation into its Spotlight report on noise complaints. The report highlights several positive developments in this area including the following:
- Landlords responding more sensitively and being more open to potential contributing factors underlying noise complaints.
- Introducing timescales for responding to noise complaints.
- Triaging noise complaints to ascertain whether they fall under household noise or ASB..
- Focusing on preventative actions, such as using void improvements to help reduce noise concerns for incoming residents.
- Developing a less confrontational approach including changes to the language used e.g. no longer using terms such as ‘perpetrator’ and ‘incidents’.
Learning from Severe Maladministration – Housing Ombudsman (April 2024)
This new Housing Ombudsman report is intended to be first of a new series of reports looking in more detail at the learning from recent casework where there has been a finding of severe maladministration. This report highlights cases involving 8 landlords.
Learning from Severe Maladministration (housing-ombudsman.org.uk)
Shared Ownership Report – House of Commons Levelling Up, Housing and Communities Committee (March 2024)
This report looks in detail at the current problems with shared ownership including rapidly rising rents, uncapped service charges, liability for repairs and maintenance costs and complex leases which combined mean shared ownership has become an unbearable reality for many people seeking to become homeowners. The report makes a number of recommendations that are urgently required to improve shared ownership to address current weaknesses undermining this ownership vehicle.
Finance and Business Planning Meeting – Diary Date
Professionalism Consultation Response
The Competence and Conduct Standard Consultation sets out the implementation arrangements for the new regulatory standard requiring senior housing managers and executives within social housing to either have, or be working towards, a relevant professional qualification.
Whilst recognising the value relevant professional qualifications in driving up standards in the social rented sector, the CWAG consultation response highlighted concerns around the tight implementation timescales and the potential for these to negatively impact staff recruitment and retention in the short-term. The proposed timescales do not offer sufficient time to implement the necessary organisational and training challenges alongside succession planning.
In addition, the costs associated with introducing these measures are likely to be significantly higher than estimated in the impact assessment. No additional resources have been identified to cover implementation and associated costs which will need to be funded from already stretched Housing Revenue Accounts.
Other issues highlighted include that role descriptions are a poor fit with ALMO clienting arrangements. In addition, organisations using external contractors may face difficult challenges if these roles are deemed in scope of the new regulations.
CWAG Newsletter – March 2024
This Update includes the following
Right to Buy Receipts and the Budget
The recent Budget included details of arrangements for the coming year covering the use of Right to Buy receipts to fund replacement affordable homes.
On the positive side, the Government has responded to calls for increased flexibility around the proportion of Right to Buy receipts that can be used as part of the funding package to deliver replacement homes. Local authorities will now be able to use a higher percentage of Right to Buy receipts, up from 40% to 50% of scheme costs, a change that should assist scheme viability and funding pressures.
However disappointingly there will be no extension of the temporary arrangement allowing councils to keep 100% of the Right to Buy receipts from council house sales in 2022/23 and 2023/24. This will now come to an end this month and receipts generated from sales in 2024/25 will be subject to a 20 -25% clawback by the Treasury, reducing resources and scope to deliver replacement homes.
Other regulations limiting the proportion of replacement homes that can acquired as acquisitions have been retained at 50% until 2025/26. Longer term the Government wants to see a balance between the delivery of new build homes using Right to Buy receipts and acquisitions, to ensure that Right to Buy receipts contribute to new housing supply.
Final version of RSH consumer standards published.
On 29th February the Regulator of Social Housing (RSH) published a series of documents setting out the final arrangements for Consumer Regulation which will come into effect on 1 April 2024. A detailed summary of the new approach to regulation is set out in the publication Reshaping Consumer Regulation – our new approach. Guidance explaining how the new regulatory arrangements will operate, including inspections, is set out in a collection of documents available on the ‘How we regulate’ page on the Regulator’s website.
The four revised consumer standards are:
Safety and Quality Standard – Sets outcomes about the safety and quality of tenants’ homes and the landlord services they receive.
Transparency, Influence and Accountability Standard – Requires landlords to be open with tenants and treat them with fairness and respect so they can access services, raise concerns and influence decision making, holding their landlord to account.
Neighbourhood and Community Standard – Requires landlords to work constructively with other organisations to help ensure tenants live in safe neighbourhoods.
Tenancy Standard – Sets outcomes about how landlords allocate and let homes and manage tenancies.
Recent Publications
The economic impact of building social housing – Report by Centre for Economic and Building Research (CEBR)
This NHF and Shelter commissioned report sets out the arguments in favour of building social housing and forms part of the pre-election debate around housing policy. Based around scenario modelling the report tracks the economic, social and employment benefits of building 90,000 new social homes per year over a 10 year period. According to the researchers, significant benefits would accrue from the start of the programme with projections indicating that the programme would break even in the third year post construction achieving a net present value of £2.4 billion. Download Executive Summary
Local Housing Allowance – What can Claimants Afford? – Savills Research
Research by Savills analysed over one million Zoopla asking rents in 2023 and concluded that only 8.5% of homes listed would have been affordable using the new uplifted LHA rates. From April LHA will increase on average by 17%, or £110 more per month, compared to when rates were last increased in April 2020. However, in the 4-year period private up to November 2023, private rents have grown on average by 29% across the UK suggesting that those reliant on housing benefit will continue to struggle. The report highlights the wider problem of affordability and high demand impacting all tenures emphasising the urgent need for delivery of more affordable homes to both rent and buy.
Complaints Handling Failure Orders Report (October – December 2023) – Housing Ombudsman
This latest quarterly report highlights a significant reduction in the number of complaints failure orders issued in the final quarter of 2023 compared to the previous quarter. With the introduction of the new Statutory Complaint Handling Code from April the report provides several good practice compliance examples relating to accepting complaints, agreeing extensions and provision of evidence.
The State of Local Government Finance in England 2024 Report – Local Government Information Unit
This annual survey of local government in England highlights the extreme and unprecedented financial pressures currently facing local authorities with 9% of councils indicating that they face bankruptcy in the next financial year and more than half warning they will be in a similar situation within the next 5 years if funding pressures are not addressed.