HCA makes first finding of serious detriment Gas safety checks not done for two years
Rent collection 2
Rents receivable 4
Environmental sustainability 6
Housing / neighbourhood management 7
Care and support 9
Health and safety 10
HRS Review No. 48 — November 2013 — Housing and HR
2
Rent collection In this edition of the HRS Review, we are
continuing the practice from the last issue in
which we show, in boxes such as the one on the
right, risks highlighted in the financial
statements of the housing associations
concerned. In this particular case, all of these
associations identified welfare reform as a risk
but we are showing the action being taken to
monitor and mitigate its effect.
Now that the initial phases of welfare
reform have been in place for a few months,
data has begun to emerge on the impact on rent
collection. In September, the NHF published
the results of a survey of 51 housing
associations, which found that 51% of tenants
affected by the bedroom tax had been unable to
pay their rent in full between April and June,
with 25% in arrears for the first time. In the
same month, a survey of housing associations
by Inside Housing and Capita found that 10% of
associations had seen arrears increase by more
than 20% as a result of the welfare reforms
introduced to date, with 41% reporting an
increase in arrears of at least 5%.
A number of more specific research
projects have focussed on the impact of the bedroom tax, the savings to the
government from implementing this measure and the strategies that landlords can
use to encourage affected tenants to pay their rent in full. A survey of twelve social
landlords in Merseyside at the end of September revealed that arrears had increased
by £2.2imillion since the introduction of the bedroom tax in April, while empty
properties had increased by 29% to 1,956 and average relet times had increased from
28 days to 38 days.
A paper from the University of York published on 14th October claimed that
the actual savings from the implementation of the bedroom tax would be much
lower than government estimates. According to the research, which involved
Affinity Sutton, Gentoo, Riverside and ALMO Wigan & Leigh Housing, the savings
would be reduced from the claimed £480imillion per year to £160imillion per year
because the proportion of tenants downsizing or moving to the private sector was
greater than predicted and because of the increased costs of Discretionary Housing
Payments, rent collection and managing arrears.
Research conducted by Ipsos Mori and published by Viridian Housing on 18th
October suggested that tenants affected by the bedroom tax and at risk of defaulting
on their rent payments were most likely to respond to incentives such as rent
holidays or vouchers for essential items, in return for paying their rent on time.
They would also benefit from one-to-one discussions about their personal
circumstances.
The research projects concentrating
on the impact of welfare reform on the rent
collection rates of housing associations all
show a significant increase in arrears. In
areas with relatively low demand, this
tends to be accompanied by an increase in
void losses. You should ensure that your
assumptions on rent collection are
sufficiently prudent, taking into account
the nature of the areas in which you work,
and monitor performance against the plan
on a regular basis. You should also
quantify the additional costs incurred as a
result of these changes, perhaps in terms of
a reduction in development capacity, and
feed them in to the umbrella bodies to
assist with lobbying,
In addition to making prudent
financial planning assumptions, the
Viridian research and the various public
statements highlight a number of positive
measures that may be taken:
Housing Association Response to the risks of welfare reform
Amicus Horizon Using prudential financial planning assumptions and
regular performance monitoring to enable early
intervention / action
Bromford Housing
Group
Fortnightly meetings to ensure that customers and
colleagues are prepared for the changes, additional
resources applied to work with “bedroom tax” customers
in arrears, a comprehensive communication programme
and engagement with the DWP on a number of projects to
learn and influence the design of Universal Credit
Family Mosaic We are putting resources in to help our tenants manage
the changes, and are part of a pilot scheme being run by
the DWP to test the new arrangements
Great Places Housing
Group
Welfare benefit working group and financial inclusion
team
Metropolitan
Housing Trust
Resident communication and signposting, improved
processes, cost efficiencies, arrears monitoring and
financial planning
Moat Homes Improving rent collection disciplines, engaging with local
advice and support agencies to establish a resource
network for residents and face-to-face advice to residents
using specially recruited staff
Southern Housing
Group
Increasing staffing in customer-facing areas and making
appropriately pessimistic planning assumptions
3
Some associations have already introduced incentives to encourage tenants
affected by the bedroom tax to return to work. On 24th July, South Liverpool
Housing Group launched a scheme in which the bedroom tax is funded for a period
of eight weeks for tenants participating in an "employability training programme."
The pilot scheme has initial funding of £3,500 for 20 participants.
Several legal challenges have been brought against the bedroom tax, with a
number of recent successful cases in Scotland having a potential impact on the
operation of the policy across the UK. Following the decision of the First-Tier
Tribunal, in relation to tenants in Fife, that minimum space standards as set out in
the Housing Act should be taken into account when determining what constitutes a
bedroom, the DWP issued an Urgent Bulletin on 23rd September. This stated that,
when "determining whether or not a property is under-occupied, the only
consideration should be the composition of the household and the number of
bedrooms as designated by the landlord, but not by measuring rooms." In the light of
the same decision, the CIH advised local authorities to obtain data from landlords on
room sizes in order to identify properties where decisions could be open to
challenge.
Another successful appeal against the bedroom tax took place on 27th
September when a woman with multiple sclerosis won an appeal against Glasgow
City Council's decision to deduct housing benefit due to the "spare" bedroom used
by her husband. The couple cannot share a bedroom because the woman needs an
adapted bed and to keep medical equipment in her room.
A further case is still ongoing, after a hearing to consider a challenge to the
bedroom tax from women fleeing domestic violence or struggling to bring up
families on their own concluded at the High Court on 4th October. Lord Justice Elias
and Lord Justice Bean are due to produce a ruling on the case shortly.
Turning now to the overall benefit cap, which had been implemented across
the whole country by the end of September, following pilot schemes in four London
boroughs. One of these, Haringey, was the subject of a report published by the
Chartered Institute of Housing on 23rd October. The study found that in only 74
out of 747 cases had claimants found work of more than 16 hours per week.
Although savings had been made from the welfare benefit bill, these were largely
being taken up by additional Discretionary Housing Payments made by the local
authority and by additional costs of supporting the families. There was also a
significantly increased risk of homelessness.
While many aspects of the welfare reform programme have now been
implemented, Universal Credit is only in operation for a small number of claimants
in parts of the north west. The National Audit Office’s report on early progress with
the scheme, published on 5th October, concluded "that the Department was overly
ambitious in both the timetable and scope of the programme. The Department took
risks to try to meet the short timescale and used a new project management
approach which it had never before used on a programme of this size and
complexity." The national roll-out had been delayed and that the DWP did not yet
know to what extent its IT systems would support a national roll-out. The DWP had
used a previously untried programme management approach and lacked
appropriate controls to monitor progress with the project. It was therefore inevitable
that Universal Credit would be implemented later than originally planned.
Frequent internal and external
communication, through a variety of
means, including face-to-face meetings
with the affected tenants
Applying additional resources to assist
tenants with making choices and to
manage rent collection
Building links with other local
agencies, such as food banks or
financial advice / inclusion agencies
Engaging with the DWP on pilot
schemes to help to prepare for changes
and to influence how they will work
Providing incentives for residents to
get into work and to pay their rent on
time even if their income is reduced.
Note that the DWP guidance states
that the number of bedrooms in a property
is “as designated by the landlord.”
Associations should agree a clear protocol
for reviewing and, where appropriate,
amending the number of bedrooms a
property has, bearing in mind that
reducing the number of bedrooms would
also reduce the rent receivable.
4
More recently, Inside Housing reported significant criticism of the DWP from
social landlords in the areas trialling the Universal Credit system, citing poor
communication and difficulties in getting the payment of housing costs of residents
in arrears switched back to the landlord. Landlords also complained that there was
no way of knowing whether a tenant was receiving Universal Credit.
An indirect impact on rent collection as a result of welfare reform has resulted
from the replacement of the national Council Tax Benefit scheme with local
arrangements, combined with a lower level of funding from central government. In
September, a mass clamp down on unpaid Council Tax in the London Borough of
Southwark raised concerns about a rise in rent arrears for tenants in the area.
Looking to the future, the bedroom tax looks likely to be repealed if the next
government does not include the Conservatives. Speaking at the Labour Party
conference in September, Ed Miliband committed the Party to scrapping the
bedroom tax if elected at the next general election, with the move funded by closing
a tax loophole for hedge funds and by tackling "tax scams in the construction
industry." Meanwhile, the Liberal Democrat conference passed a motion
condemning the bedroom tax for "discriminating against the most vulnerable in
society" with only two votes against.
Another policy of the coalition government with negative implications for
housing associations was the reduction in the availability of legal aid for housing
cases. This has reportedly increased costs to landlords by around 30% to 40%
because of the time taken to explain the law to unrepresented tenants. Timothy
Waitt of Anthony Gold Solicitors told Inside Housing that both evictions and the write
-off of unrecoverable arrears were now more likely.
Readers may recall the case of Manchester City Council v Pinnock, in which
the courts introduced the requirement for proportionality to be considered in cases
of eviction. In October, the European Court of Human Rights dismissed a final
appeal in this case, which, if successful, would have made it more difficult for social
landlords to evict tenants for rent arrears.
In terms of past rent increases, data
published by the HCA on 20th August showed
that, for associations with more than 1,000
units, rents increased on average by 6.3% to
£88.40 per week. This includes 39,594
Affordable Rent units, which had an average net rent of £112.61 per week.
We now know that target rents may increase by up to 3.7% next April
following the publication of the September inflation figures by the ONS on 15th
October. This showed RPI at 3.2%, down from 3.3% in August, while CPI, which will
form the basis of future rent increases, was unchanged at 2.7%. The median
prediction from HM Treasury’s latest comparison of independent forecasts for the
UK economy is that CPI will be at 2.3% in the last quarter of 2014, producing a rent
increase of 3.3%, although the forecasts ranged from 1.6% to 3.6%.
In addition to the confirmed 3.7%
increase in target rents next April, it
would be reasonable to plan for rent
increases of 3.0% per year thereafter, in
the expectation of CPI being at 2.0%,
although in reality it will probably be a
little higher than this.
Rents receivable Housing Association Identified risk
Great Places Housing
Group
Government policies adversely affect Great Places,
including the Affordable Rent regime
Moat Homes Inability to increase rents in line with inflation in future
When planning, you need to take
account of several uncertainties in
relation to welfare reform. The
implementation of Universal Credit is
slipping and may be further delayed due
to IT problems or changes in government.
There is also a risk of a much faster
transfer of existing claimants at the end of
the programme in order to keep to the
original timetable; you need to ensure that
you are ready for this..
Some of the measures may well be
repealed if there is a change in
government, particularly the bedroom tax.
This may be welcome in terms of rent
collection but makes planning a suitable
development programme more difficult, so
some flexibility may be needed in the plan
in terms of unit sizes, depending on the
outcome of the 2015 election.
The withdrawal of legal aid from
many housing cases is another factor
requiring increased resources from
housing associations and should be taken
into account when considering an
appropriate level of staffing for the income
management team.
5
In relation to new lettings, considerable concerns have been
expressed about the impact on poverty of charging Affordable
Rents. For example, at the Liberal Democrat conference, Simon
Hughes called for "affordable" to be redefined so that it would
"have words that mean what people think they'll mean."
In response to this situation, two large London-based
housing associations commissioned reviews of their rent policy.
London & Quadrant Housing Trust (L&Q) commissioned a report
from the Chartered Institute of Housing, which considered a wide
range of options for future rent policy (see box). L&Q may
withdraw from providing larger properties under the Affordable
Homes Programme because of increasing arrears and rising
demand for food banks.
Earlier in the year, Affinity Sutton commissioned a review
from the University of Cambridge to consider the impact of the
overall benefit cap on families paying Affordable Rents in five local authority areas,
from the London Borough of Bromley to Plymouth in Devon. The report found that,
although the cap would not affect smaller families, a family with three children
would not be able to afford 80% of the market rent in four of the five areas
considered: in Bromley, Hertsmere, Brighton & Hove and Mid-Sussex.
Affordability is seen as a particularly important issue in the capital, as
evidenced by a meeting of the Greater London Authority on 3rd September, at which
a proposal by the Mayor to set rents for new social housing at a maximum of 80%
and an average of 65% of the market rent was defeated by twelve votes to nine. This
was short of the required two-thirds majority to overturn a mayoral strategy. The
plan was opposed by a number of boroughs, both Conservative and Labour, on the
grounds that the rents would not be affordable to people on average incomes.
Another element of the government’s policy on rents is for higher earners in
social housing to pay the market rent rather than the lower social rent. On 25th July,
the DCLG published a summary of responses to its "pay to stay" proposals. The
document confirmed that the government intends to "allow landlords to charge
market rents to those social tenant households with incomes of more than £60,000
per year." It intends to pass legislation to require tenants earning above the
threshold to declare their income.
The measure does not appear to be appropriate for high-value areas.
According to research by Hometrack, the policy will not work in 88 wards across
sixteen local authority areas in London because tenants would need to earn more
than the £60,000 threshold in order to afford median Affordable Rents for a two-
bedroom property, even at the London average of 63% of the market rate. In
Kensington & Chelsea, Westminster, City of London and Camden, the income
required to meet the median rent for the borough as a whole exceeded the threshold.
Take-up of the scheme by social landlords is not expected to be high.
According to a survey by Inside Housing, the majority of social landlords are unlikely
to take the option under the government's pay-to-stay policy to charge market rents
to tenants earning more than £60,000 per year. None of the 41 landlords surveyed
had a definite plan to implement the policy.
The suitability of Affordable Rents
depends to a great extent on the nature of
the area in which you are working. In
London and its immediate surroundings,
80% of the market rent will be too high to
be affordable to people on benefits or low
incomes. In areas of the north of England,
80% of the market rent may actually be
less than the social rent, so no benefit
would accrue to the association from
charging these rents. However, in some
areas the higher rent may still be
affordable, particularly for new lettings to
people in employment, while giving a
sufficient boost to development capacity.
You should review your approach to this
issue, attempting to achieve a reasonable
balance between affordability and an
income stream to fund new homes.
We do not recommend the adoption
of the government’s pay-to-stay proposals,
since the additional income generated is
likely to be outweighed by the increase in
administrative costs. In the longer term,
associations might consider a different
product in which the rent is wholly or
partly related to household income,
although this may require legislation and
would increase the volatility of income.
Options for future rent setting (CIH / L&Q)
1. Continue the current dual system of social rents and
Affordable Rents
2. Return to using target rents only
3. Apply Affordable Rents to all current and future lettings
4. Giving flexibility to the landlord to set a rent between
minimum and maximum thresholds, taking account of
the circumstances of tenants
5. Combining a formula-based rent with an additional
charge based on household income
6. A system based wholly on the tenant’s income
7. A redistributive system combining elements of many of
the above options
6
The recent announcement of a
further large increase in energy prices puts
further onus on the fuel poverty aspects of
an association’s approach to
environmental sustainability. With
household incomes being squeezed, if
nothing is done to reduce fuel costs there
will be an increase in poverty, rent arrears
and ultimately evictions.
You should review your policies in
this area to maximise the benefit that could
be gained from the range of government
initiatives that are available. Since the
cost of installation of photovoltaic panels
has fallen, a programme of installations
may be viable despite the reductions in the
Feed-in Tariff.
Deals with energy companies to
fund improvements in the energy
efficiency of homes would also be beneficial
to both landlords and tenants, although the
terms of the deal may depend upon the
timing of announcements of changes to the
ECO and / or Green Deal so you should
seek expert advice on such proposals.
Many housing association tenants are
facing increasing levels of fuel poverty due to
rising energy prices. According to research
undertaken by Riverside, which followed the
lives of 18 households, two-thirds of them struggled to heat their homes and more
than half rationed their use of heating, after energy prices rose by 15.5% between
July 2012 and February 2013. Many energy companies have recently announced
further price increases well above inflation.
This was one of the factors considered by the Energy & Climate Change
Select Committee, which published its report on Energy Prices, Profits and Poverty
on 29th July. The report noted that rising prices were exacerbating fuel poverty and
called for tax-funded public spending to address the situation, rather than levies on
energy bills, which also directly hit the fuel poor. In relation to the Energy Company
Obligation (ECO), it concluded that "resources under ECO are insufficient
considering the scale of fuel poverty. We recommend that ECO expenditure is
devoted primarily to fuel-poor households, and further recommend that
Government reconsider how best to incentivise take-up and funding of the most
expensive energy efficiency measures such as solid wall insulation."
More recently, it was reported that the government was considering
extending the ECO by eighteen months, giving the energy firms more time to
complete energy efficiency works, although the targets may also be increased.
Energy companies, threatened by a potential fine of 1% of global turnover for not
fulfilling their obligations, have been complaining that low take-up of the Green
Deal is holding back expenditure under the ECO programme.
A more positive development was the signing, in September, by First Wessex
of a £4.3 million contract for the installation of photo-voltaic (PV) panels on 800
homes, along with its offices and depots. The organisation noted that the cost of PV
panels had fallen significantly since the Feed-in Tariffs were reduced in November
2011, making the scheme viable. First Wessex expects residents to save between £75
and £150 per year, while carbon emissions will be reduced by 1,250 tonnes per
annum.
Environmental sustainability and fuel poverty Housing Association Identified risk
Affinity Sutton The potential for future regulatory requirements imposing
minimum standards of eco-efficiency on our existing stock
7
It is unlikely that any significant
changes will now be made to the Anti-
Social Behaviour Crime and Policing Bill
before it becomes law, so you may start
preparing now by reviewing procedures
and training staff on the new
arrangements. This should include
defining the agencies with which the
association would normally consult when
issuing an IPNA and, possibly, creating a
budget to fund positive changes. We
would also encourage landlords to sign up
to information-sharing agreements with
relevant agencies such as the police and
health services.
Associations should also consider
the size and nature of the investment that
they plan to make to improve the
functioning of the local community, by
encouraging increases in the take-up of
employment, education and training. This
could involve partnerships with other
statutory and voluntary organisations,
employers, schools and colleges. Clear
objectives should be established as to the
social return expected from this
investment.
Apprenticeships and training schemes
Housing associations are responsible
for managing both individual tenancies and
the wider neighbourhood. Both may be
affected by anti-social behaviour (ASB), which
takes up a significant amount of the resources
of many social landlords. According to
HouseMark's ASB benchmarking: analysis of
results 2012/13, published in July, housing
associations tackled 300,000 cases of anti-social behaviour during the year to March
at a cost of £325imillion, employing around 5,000 full-time staff. Social landlords
have a success rate in tackling anti-social behaviour of around 90% compared with
only around 20% in the private sector.
This success rate could be at risk due to changes in the statutory framework
that have been criticised as unclear and confusing. Writing in Social Housing, Kirsty
Varley of Croftons Solicitors noted that the Injunctions to Prevent Nuisance and
Annoyance (IPNAs) contained in the Anti-Social Behaviour, Crime and Policing Bill
can require the perpetrators of ASB to make positive changes, such as attending
anger management classes. However, the Bill does not specify who would pay for
these changes and, Ms Varley argued, the social landlord could end up paying for
them, significantly increasing their costs. There is also a requirement to consult
other agencies "if appropriate" but this is not defined in the Bill so increasing the
uncertainty of working with the new legislation.
An important factor in the effective management of ASB is communication
between agencies. On 22nd October, thirty housing associations signed the
"Manchester Concordat," an agreement for the sharing of information and resources
between the landlords and Greater Manchester Police to help to tackle the problem.
A more positive aspect of neighbourhood management involves initiatives
to boost employment, education and training in the area in which an association is
involved. In October, First Ark group launched a charitable subsidiary One Ark to
improve life chances and the economy of the Knowsley area by:
Nurturing new business start-ups;
Investing to create more employment, apprenticeships and training
opportunities;
Developing talent to raise levels of aspiration and choice;
Empowering and enabling ambassadors to increase knowledge, skills and
business strength.
Housing and neighbourhood management Housing Association Identified risk
Affinity Sutton The failure of processes and systems to ensure high levels
of customer service
Hyde Housing
Association
Service Delivery adversely affected by failure to deliver
change and improvement programme
Peabody Trust Failure to improve service delivery, leading to poor
customer satisfaction scores
8
You should be aware of the planned
changes to allocations and enter into a
dialogue with the relevant local authorities
around the detail of how the guidance
might be implemented in your area.
Regular checks should be
undertaken to ensure that the named
tenant continues to reside in the property.
These could take place during maintenance
visits or as part of an annual “MOT
check” on the property. Where there has
been no communication for some time or
difficulty in arranging access for gas safety
checks, this would indicate an increased
probability that the home has been sub-let.
In addition to the partnerships with
other organisations mentioned above, you
should develop strong links with local food
banks and be in a position to refer tenants
in financial distress to these organisations
for support. This should be linked, as in
Peabody’s case, to the provision of advice
to help the family to improve their
financial position.
Access to the scarce resource of social housing is through
the allocations process, which the government has been seeking
to amend in line with its localism agenda. On 14th October, the
DCLG issued for consultation draft statutory guidance on the
allocation of social housing for local authorities in England.
According to the document, only people meeting a two-year
local residency test or establishing a connection such as family
ties or employment in the area, would be able to join the waiting
list for social housing. The consultation will close on 22nd
November.
The scarcity and value of social housing has also led to
illegal subletting by tenants seeking to make money on the
difference between social and market rents. Until recently, this
was a civil offence but, on 15th October, sub-letting a social
home became a criminal offence under the Prevention of Social Housing Fraud Act.
Social housing tenants, many of whom are on welfare benefits and / or low
incomes, are being squeezed by cuts in benefits and low or non-existent wage rises
while the cost of essentials such as food and fuel is rising sharply. This has led to an
increasing use of food banks, with whom housing associations are often building
stronger links. On 17th October, the Peabody Trust announced that it had struck a
deal to offer food vouchers to residents in need in all of the 28 London boroughs in
which it operates. Where vouchers are issued, Peabody will offer ongoing support
to residents to help them resolve their financial problems, such as help with
managing money, support into employment, or financial advice.
Part of the housing management brief involves getting feedback from tenants
about the quality and effectiveness of services. This includes handling complaints,
which, if not resolved successfully, may get referred to the Housing Ombudsman
Service (HOS). HOS reported 3,207 enquiries or complaints in the quarter to June,
compared to 2,456 in the same quarter of 2012. Possible causes include greater
awareness of value for money due to welfare reform, as well as the economic
situation and wider austerity programme leading to a sense of disenchantment. In
addition, the Ombudsman now has a wider remit while the role of the social housing
regulator has been reduced in this area.
The umbrella group for tenants and residents associations is the Tenants' &
Residents' Organisation of England (TAROE). This organisation reported an
increase in complaints from tenants about changes to tenant consultation
arrangements as part of the restructuring of groups. Commenting on this issue,
John Bryant of the NHF told Inside Housing that "While many housing associations
are simplifying their group structures for reasons of efficiency and economy, there is
no reason for this to have any impact on their commitment to effective resident
engagement. It will, however, sometimes mean that existing structures need to be
changed."
TAROE itself has been facing a threat to its continued existence, after the loss
of government funding in 2011. In response to this, the organisation has applied to
the Charity Commission to register a new company, TAROE Trust Ltd., to make it
easier to secure donations. The existing company limited by guarantee will be
wound up and any remaining assets donated to the charity.
9
The links between housing, health
and social care, as emphasised by the
amendments agreed in October, provide an
opportunity for discussions with local
authorities along with health
commissioners and providers, as to how
the housing stock of the area should
develop to meet the evolving needs of the
population. This could include gaining
support and capital / revenue funding for
new care / support schemes from the NHS
rather than local authority sources.
Associations should continue to
regularly review their strategic approach
to care and support, considering whether
they are seeking to grow this area or to
divest these services to other providers that
could provide better value for money.
Evidencing of improved outcomes will be
important, since it will be preferable to
compete with other providers on the
quality of service and the benefit to society
rather than price.
Care and support The links between the provision of
housing and care and support have been
subject to much debate over recent weeks in
the House of Lords. On 9th October, it
passed two government amendments to
the Health and Social Care Bill in relation to
these links. The first clarifies that "the
provision of housing accommodation is a
health-related service," which will require
both local authorities and the NHS to
promote integration between care and
support, health and housing. The second extends the list of partners, with whom local
authorities would have a duty to co-operate, to include housing associations. Further
amendments in the name of Lord Best, to ensure that people have access to good
information on the housing options available to them and to require local authorities to
have regard to the housing situation facing those with care needs in their area, were
debated but did not come to the vote.
Meanwhile, data obtained by Inside Housing in July, under the Freedom of
Information Act, indicated that spending on Supporting People services across
seventeen councils had been reduced by 24% since 2008, while the weighting between
quality and price on procurement had, in a number of cases, been amended in favour
of price.
In response to this, associations are having to review their strategic approach to
the provision of housing-related support. One option is to increase resilience and
reduce unit costs through growth or partnerships with other associations. Specialist
providers of accommodation and other services for homeless people, St Mungo's and
Broadway, have recently begun discussions about a merger. Family Mosaic, on the
other hand, is reportedly planning to increase the revenue from its care and support
services from £60imillion to £100imillion per year, while Home Group's care and
support arm, Stonham, is expected to bid for contracts to provide probation support to
medium- and low-risk offenders from 2015.
Another option is to review services and carefully measure the positive impact
they are having on individuals and the wider community. In August, Thames Reach
reported on the work undertaken as a result of its Social Impact Bond agreement with
the Greater London Authority. Of 415 homeless people the organisation had
worked with since November 2012, 320 had been taken off the street and more
than 70 were now in stable accommodation.
A major risk in this area is that there is a “race to the bottom”
characterised by falling contract values and reductions in terms and conditions
for staff. In August, the Unite trade union threatened further strikes at One
Housing Group after the Group posted a surplus of £35.8imillion and awarded an
ad hoc bonus of £750 to all staff other than those in its care and support business.
A spokesperson for the association told Inside Housing that the budget for One
Support had been "stretched to its limit" and that therefore staff whose roles are
funded by contracted services would not receive a pay rise. The surplus had
been earmarked to fund the development of new affordable homes. In
September, it was reported that the Group was set to hold talks with Unite
through the conciliation service ACAS, in an attempt to resolve matters.
Housing Association Identified risk
Amicus Horizon Care and support funding: falling hourly rates and loss of
contracts impacts financial viability of floating support services
Family Mosaic Reductions in Supporting People funding
Great Places Housing
Group
Losing market share of funding to competition, local authorities
restructuring services, costs of staffing relative to competition,
doubts around longer-term scheme suitability
Home Group Failure to meet targeted growth in income within the Care and
Support Business
10
Gas safety legislation imposes an
absolute duty on landlords to undertake
checks on gas appliances every twelve
months. The approach of the HCA to this
case indicates that a hard line may be taken
if this duty is not met, even where there
may be difficulties in gaining access. You
should therefore review your procedures to
ensure that legal proceedings to obtain
access are begun early in the process. You
should also consider whether to use a risk-
based approach in which properties
without a track record of easy access are
targeted well in advance of the twelve-
month deadline.
Although not a health and safety
issue, it is also noteworthy that the HCA’s
tolerance of large pay-offs for departing
Chief Executives is reducing and this is
likely to influence its Regulatory
Judgements for Governance, as was also
the case for Great Places Housing Group.
Where associations diversify into
activities beyond their traditional housing
role, this may bring exposure to new and
greater health and safety risks to those that
they are used to managing. Specific
independent advice on health and safety
risks should be taken as part of due
diligence and close monitoring undertaken
of risks judged to be high. Staff training in
key safety issues such as asbestos will be
important to protect individuals against
safety hazards, as well as the company’s
reputation and income stream.
There have been a number of health and
safety matters in the news over the last quarter,
led by the decision of the HCA to declare its
first finding of “serious detriment” in relation
to a safety failing. On 15th October, the
regulator issued Gallions Housing Association
with a Regulatory Notice following a failure of
the Home Standard. This involved the failure
by the association to undertake a gas safety
check on the boiler in one property for more
than two years. Although the HCA acknowledged that there had been difficulties
for the association in obtaining access, it cited an unnecessary delay in seeking a
legal resolution to the issue, in arriving at this decision. On 30th October the HCA
issued a Regulatory Judgement downgrading the Governance rating to level 3. This
decision was also driven by the association's decision to make it's Chief Executive
redundant and to pay him compensation reported to be of the order of £400,000 in
advance of the completion of its planned merger with the Peabody Trust.
In response to the Notice, Gallions Housing Association reviewed procedures
and increased board oversight of its gas safety checks. Some commentators
expressed surprise that the first finding of serious detriment had involved a failing in
relation to only one property, but the regulator said that it had acted in a
proportionate way and urged associations to take legal action to obtain access where
necessary.
More serious than this regulatory breach was the breach of statutory
requirements by Romag Ltd, a subsidiary of Gentoo Group, when it exposed 196
staff and visitors to asbestos fibres. This had taken place in July 2011 when no action
was taken for nine days after fire alarm installers had drilled through an asbestos
panel, despite recommendations from the company's own safety advisors to cordon
off and clean up the affected area. On 15th October, Romag was fined £20,000 and
ordered to pay £12,638 in costs for a breach of health and safety legislation.
Another asbestos incident occurred on 19th June, when a plumber working for
Mears on behalf of London Borough of Southwark displaced asbestos in two homes,
exposing eight residents
to asbestos. An
investigation by the
landlord found
"individual
incompetence rather
than corporate or
structural failings
within Mears" and the
council therefore
proceeded to enter into
a long-term
maintenance contract
with the firm.
Health and Safety Housing Association Identified risk
Home Group Home fails to meet its health and safety obligations.
Metropolitan
Housing Trust
Failure in duty of care: death or serious injuries for which
Metropolitan is responsible
Notting Hill Housing
Trust
Given the death in 2008 of one of our residents from
carbon monoxide poisoning, we remain concerned about
health and safety.
Peabody Trust Failure to maintain an effective health and safety
management system
11
All associations should put in place
an inspection regime for the restrictors on
windows above the ground floor level.
Residents should also be encouraged to
check these devices and report any found to
be faulty for repair or replacement.
Landlords should also check
whether they have any properties clad in
timber similar to those in Basildon or in a
non-fire resistant material as used at
Lakanal House and bring forward plans
for replacement at an early date.
The MOT check mentioned in the
Housing Management section could
provide a good opportunity to identify
properties affected by damp or mould. In
many cases these may be dealt with by
improving ventilation and educating the
tenant to reduce condensation. In others
there may be a more fundamental problem
to be addressed.
The First Ark issue highlights the
need for a regular review of all health and
safety risk assessments, particularly where
there has been a change of circumstances.
You should have systems in place to
evidence that risk assessments, including
the control measures, have been reviewed
at least annually and that the controls are
in place as intended.
A safety issue of particular
importance to landlords with medium- and
high-rise properties involves the security of
windows and the potential for falls from a
height. On 6th March 2011, a six year-old
boy fell to his death from a second floor
window in an A2Dominion property in
Southall, London. In a Rule 43 letter,
coroner Lorna Tagliavini asked the
association to carry out an investigation into
the window limiter in question.
A2Dominion found that the limiter could be
disengaged by pushing the frame, although
it could not tell whether this was the case at
the time of the accident. The landlord
implemented a programme to check
restrictors in all timber-frame windows
across its stock as well as fitting restrictors on all properties that do not have them.
Blocks of flats are also particularly susceptible to fire risk, since a fire may
spread quickly between adjoining units if fire stopping is not adequate. The fatal fire
at Lakanal House in Southwark on 3rd July 2009 continues to have an impact on the
council landlord, with relatives of the victims taking legal action. Rafael Cervi, who
lost his wife and two young children in the fire, is reportedly suing the landlord
Southwark Council, along with its maintenance contractor Apollo and the London Fire
& Emergency Planning Authority for a sum reported to be "in excess of £300,000."
A more recent, but thankfully non-fatal, fire in social housing took place in July,
on the Felmores Estate in Basildon, Essex. This rendered three homes uninhabitable
and caused smoke damage to two further properties. Essex Fire & Rescue said that the
timber-framed construction and timber cladding to the properties had contributed to
the spread of the blaze. The landlord, Basildon Council, plans to replace all of the
timber cladding with a fireproof material but is seeking an appropriate funding
solution for the £5imillion cost.
Social landlords are also required to maintain their homes so as not to expose
their tenants to unnecessary health risks. On 13th August, Lambeth Council was
convicted under Section 82 of the Environmental Protection Act 1990 for failing to
undertake repairs to one of its properties leading to damp and mould, which may
have caused the tenant's son to suffer from asthma. The council was fined £1,335 and
ordered to pay compensation of £500.
Finally, but equally importantly, housing associations, in common with all
employers, are responsible for the personal safety of their staff, taking into the risk of
assaults by tenants, dogs or other members of the public. In August, it was reported
that First Ark, the parent company of Knowsley Housing Trust, had advised staff not
to wear their uniforms or display their name badges out of working hours for fear for
their safety from bedroom tax protestors. A number of protests had been held outside
the organisation's offices.
Hargreaves Risk and Strategy 48 Broomfield Avenue London N13 4JN Tel: 020 8245 0737
Email: John Hargreaves: [email protected] Chris Mansfield: [email protected] Sharron Preston: [email protected] Website: www.HargreavesRS.co.uk
Aggregate housing association data for 2012/13
Measure 2011/12 2012/13 % change
Number of units owned 2,634,917 +1.9%
Number of units managed 2,753,701 +3.7%
General needs voids 26,156 (1.4%) 27,551 (1.4%) +5.3%
Supported / sheltered housing voids 16,613 (4.4%) 15,730 (4.2%) -5.3%
Additions to the stock through new build and purchases 39,558 31,372 -20.7%
Losses to the stock through sales, disposals and demolition 11,566 14,803 +28.0%
Number of evictions 9,243 9,014 -2.5%
Average net rent in general needs £83.20 £88.40 +6.3%
Average net rent in sheltered / supported housing £76.03 £80.82 +6.3%
Number of units let at an Affordable Rent 7,354 39,594 +438%
Average net Affordable Rent in general needs £109.11 £112.61 +3.2%
Units not meeting the Decent Homes Standard 45,312 (1.9%) 26,551 (1.1%) -41.4%
Source: Homes and Communities Agency, Aggregate Statistical Data Return, 2012/13