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: j.hargreaves@HargreavesRS.co.uk Chris Mansfield: c.mansfield@HargreavesRS.co.uk Sharron Preston: s.preston@HargreavesRS.co.uk 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