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Social housing renaissance hopes fade as green paper falls short

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When former housing and communities secretary Sajid Javid promised, almost a year ago, that the social housing green paper would be “the most substantial report of its kind for a generation” it created hope of a perhaps unlikely renaissance in council house building.

Despite the hype about social housing manufactured in Whitehall in the wake of the Grenfell Tower fire, the green paper – published earlier this month – ultimately offered no significant shift in the government’s position on councils’ contribution to a promised upscaling of development.

The sense of horror and injustice created by Grenfell meant the green paper’s overriding focus on governance and regulation was inevitable, but there has been widespread disappointment at the inclusion of only some minor flexibilities for councils - either already announced or tagged on in a supplementary paper.

Was this due to the government’s stubborn refusal to increase the national debt by lifting councils’ borrowing caps, despite the false economy created by the social impacts of homelessness, housing insecurity and displacement? Was it down to a lack of trust in councils to deliver? Or was it more generally a reflection of the government’s attitude to social housing itself?

Melanie Rees, head of policy at the Chartered Institute of Housing, told LGC it was generally expected that no further funding for council housing would be made available ahead of the spending review, due spring next year, but added the government missed an opportunity to “rebalance” the existing £53bn earmarked for housing, which currently includes about 20% for affordable homes and a small percentage of that earmarked for social housing.

The green paper proposes to tighten regulation, with possible “Ofsted-style” inspections and the introduction of league tables which could influence access to funding.

Currently the Regulator of Social Housing largely focuses on private registered providers’ governance and financial viability to give assurance to lenders, with councils, arms-length management companies and other providers left out of the regulatory loop.

Within a week of the Ministry of Housing, Communities & Local Government announcing plans to give the regulator “sharper teeth” Arun DC was issued with a notice for failing to have adequate plans in place to carry out fire and water risk assessments on the 3,500 homes it owns. Enforcement powers may be used. A spokesman for Arun DC said the council “recognises the seriousness of the situation” and added it is working with the regulator to demonstrate “the breach is being rectified and that our ongoing commitment to the safety of residents is paramount”.

Ms Rees welcomed wider and stronger regulation as Grenfell starkly showed the soft-touch approach is not working. She said it is important that organisations, including councils, should faceconsequences for poor practice and be compelled to place tenants “at the heart of things”.

But Ms Rees warned it would be difficult to set an appropriate series of indicators for such a diverse sector, warning league tables can be “a can opener or a tool”.

Ms Rees raised concerns over data quality and whether the indicators reflected what matters to tenants. She also questioned the quality of data and warned the process could lead to organisations “gaming” the system.

John Bibby, chief executive of the Association of Retained Council Housing, told LGC the final performance indicators and how they are used is “up for grabs” but added they should be “balanced” and not a “blunt instrument” used to “kick local government”.

Mr Bibby said the threat of losing access to funding under the affordable housing programme was a “moot point” while the cap on borrowing remains and councils are unable to build at scale.

However, he added: “If the government are true to their word in the longer term about creating a new generation of council housing then it could have potential major implications about those authorities that can and can’t access that funding and therefore can and can’t develop.”

Mr Bibby said the government’s decision not to require councils to sell high-value assets had removed a “drag” on future planning. However, he warned there are limits to the impact proposed right-to-buy reforms (see overleaf) can have as councils cannot forecast when capital receipts will arrive, which hinders the development of forward programmes.

The green paper also floats the idea of council stock being transferred to community housing associations, if tenants demand it.

Both Ms Rees and Mr Bibby argued this principle should apply to all providers and tenants of private registered providers.

Mr Bibby said: “Is this a backdoor way of just getting rid of council housing again if it only applies to councils and not the whole sector?”

Meanwhile, the government’s supposed determination to challenge the stigma attached to social housing was undermined by the language used in the green paper. It made references to social housing being a “safety net” and a “springboard to a better life”, therefore implying social housing is for the most troubled in society.

“[The government] recognised the stigma there, but they didn’t actually acknowledge their role in that and further perpetuated that by the language used, which shows how systemic it is,” said Ms Rees.

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