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Local decisions: a fairer future for social housing - closes 17th January 2011

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Summary

This document sets out the Government's plans for radical reform to the social housing system. It includes changes on tenure; the management of waiting lists; and the homelessness duty. It also covers the introduction of a new 'affordable rent' tenancy and changes to the system of council housing finance. It includes measures to improve mobility, tackle overcrowding and under-occupation. The reforms will ensure that social landlords can make better use of social housing and target support where it is needed most.

A summary of the Government's plans for reform to the social housing system is also available below.

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Housing Minister Grant Shapps and Communities Minister Andrew Stunell today announced plans for the most radical reform of social housing in a generation, with a fundamental shift of power from Whitehall to councils and local housing associations.

The changes will affect all areas of social housing policy, giving councils more flexibility to use their social housing stock to the maximum effect and drive down waiting lists. Over the past 13 years the number of people on waiting lists has almost doubled to five million - caused, Ministers argue, by the current centrally-determined rules.

Ministers believe that the current rules to allocate social homes are unfair and, despite £17billion of spending on social housing over the last 13 years, have left nearly twice as many people on waiting lists.

Proposals published today will make the system fairer, giving councils the option to offer flexible tenancies and greater local discretion to decide allocations, so better use is made of this valuable national resource. The rules will strike a sensible balance between the needs of new and existing tenants, and ensure the support that social housing provides is focussed on the most vulnerable and those who need it most, for as long as they need it.
Mr Shapps said councils will be given much greater flexibility to help homeless families find appropriate housing, and existing tenants who may be trapped in unsuitable accommodation, or unable to take up a job offer because they can't move. A quarter of a million social homes remain overcrowded, and more than 400,000 under-occupied.

Housing Minister Grant Shapps said:

"For far too long in this country there has been a lazy consensus about the use of social housing, which has left one of our most valuable resources trapped in a system that helps far fewer people than it should. This out-of-date approach has seen waiting lists rocket and is unfair to people who genuinely need social homes. They trap existing tenants in poverty, often in homes that aren't suitable for them.

"So the current system is ripe for reform, and the changes we're bringing in will ensure that from now on our social housing helps as many people as possible. The new system will protect the most vulnerable in society, ensuring those in greatest housing need are given priority. It will also be more flexible, with councils and housing associations able to offer fixed tenancies that give people the helping hand they need, when they need it. But above all it will be fairer - councils will now be able to make decisions that genuinely meet the needs of local people, and the changes will not any affect any existing tenants."

Communities Minister Andrew Stunell said:

"To have five million people stuck on social housing waiting lists is unacceptable - clearly this system is broken and needs a radical overhaul.

"We need to have a much smarter system that protects lifetime tenancies, but also provides the flexibility to ensure that help is targeted at people who really need it, and enables us to get more for every pound of taxpayers' money. In times of economic hardship, it is vital that social housing is effective in helping people get back on their feet."

Key reforms will include:

  • Flexible tenancies - decisions on tenancy arrangements will be made locally. Currently national policy dictates that social landlords can only offer lifetime tenancies. Social homes for life are allocated to people who may have only a short-term housing crisis, which means households continue to occupy a social home and to pay low rents, even if they no longer need this support. Councils and housing associations will now have the flexibility to offer new social housing tenants fixed tenancies - offering minimum contracts of two years. The lifetime tenancies and succession rights of existing council and housing association tenants will not be affected. New tenants will be guaranteed one succession to a spouse or partner, with landlords free to grant further succession rights.
  • Fairer allocations - councils will now be able to set their own rules about who qualifies to go on the housing waiting list. At the moment anyone can apply to live in social housing, whether they need to or not. The 'reasonable preference' categories for those with the greatest housing needs will be kept, to ensure priority for social housing continues to go to the most vulnerable in society and those who need it most.
  • Greater mobility - it will be easier for any of the eight million social tenants in England to move when their circumstances change. Only five per cent of social tenants moved home over the past year compared to almost a quarter of tenants in the private sector. Existing tenants will be removed from housing waiting lists - freeing up social landlords to work together and focus on helping those tenants wanting to move to do so. A new National Home Swap Scheme will offer tenants access to details of social homes available for swaps across the country, regardless of which home swap service they have joined - making it easier for them to move whether to a different sized property, to be closer to family, or for work.
  • Fairer provision for homeless people - there will be greater flexibility for councils to make decisions on how best to help people at risk of homelessness at the local level. Currently some homeless families are turning down the decent private rented accommodation they've been offered as a settled home, and demanding to be provided with expensive temporary accommodation, at huge cost to the taxpayer, until a social home becomes available. Councils will be able to offer flexible solutions to people at risk of homelessness. Despite tight public finances, the Government will be investing £400m to prevent homelessness and rough sleeping.
  • Affordable Rents - a new 'Affordable Rent' tenancy will be offered by housing associations to some new tenants of social housing from April 2011. Affordable Rent properties will offer fixed term tenancies at a rent higher than social rent - with landlords able to set rents at up to 80 per cent of local market rents. This will enable landlords to raise funds to build more affordable housing for those who need it. The Government is investing £4.5 billion in new affordable homes over the Spending Review period, which combined with the reform of social housing should deliver up to 150,000 new homes over the next four years.
  • New tenants power of scrutiny - Grant Shapps has announced plans for the abolition of the Tenant Services Authority, and instead to give England's eight million social housing tenants strengthened powers to ensure that their landlords provide quality housing and are held to account when problems arise. Landlords will be expected to support tenant panels - or equivalent bodies - in order to give tenants the opportunity to scrutinise the services being offered and to be involved in resolving disputes. These changes will be made as part of the forthcoming Localism Bill.

Notes to editors

1. The Government has embarked on a radical programme to shift power from Westminster to councils and communities, including a fundamental reform of social housing. Details of the proposals, some of which will be subject to consultation, are published in Local decisions: a fairer future for social housing. A copy of the paper can be found at: www.communities.gov.uk/publications/housing/socialhousingreform<.

2. The Government will be making further announcements on getting empty homes back into productive use in due course. Other reforms included in the paper include changes to:

  • Succession - the rules on succession will become the same for all new council and housing association tenants. There will be an automatic legal right of one succession to a spouse or partner. However, landlords will be able to give additional succession rights in the tenancy agreement, if they choose. The changes to succession will not affect existing tenants or the right of a joint tenant to take over the tenancy when the other joint tenant dies.
  • Council Housing Finance - the current arrangement for financing council housing - through the Housing Revenue Account subsidy system - is complex, leaves authorities uncertain about future income and doesn't enable them to plan long-term. The Government plans to replace this with a new self-financing arrangement that will enable councils to keep all the rent money they raise and spend it locally on their services. It will also enable tenants and local taxpayers to hold their landlord to account for the cost and quality of their housing.

3. The Department has today written to local councils and fire authorities outlining its support for specific PFI projects. This follows a review of the Department's priorities for investment after last month's Spending Review. This has concluded that all the housing, fire and joint service centre PFI projects under contract and in procurement (subject to rigorous assessment of value for money) will continue to be funded but not those in the initial design stage.

http://www.communities.gov.uk/news/corporate/1775575<

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Housing Minister Grant Shapps today announced further details about the new scheme that will allow housing associations to offer flexible tenancies and deliver more affordable homes.

From 2011, housing associations will have an additional Affordable Rent option to offer households who need support. Affordable Rent properties will give housing associations the flexibility to offer fixed term tenancies to some new tenants at a rent level higher than social rent - with landlords able to set rents at up to 80 per cent of local market rents.

Landlords will be able to offer the new tenancies in return for investment agreements, which will enable them to raise funds to build more affordable housing. The flexible tenancies will be for new tenants only - the lifetime tenancies and succession rights of existing council and housing association tenants will not be affected.

The Affordable Rent model is the first step towards delivering these wider reforms announced last month and to be included as part of the forthcoming Localism Bill.

The Government is investing £4.5 billion to deliver up to 150,000 new affordable homes over the next four years, with around £2bn of this funding to support the delivery of new Affordable Rent homes. Ministers intend to make the payment of grant funding conditional on transparency.

Ministers believe the current centrally-determined system for social housing has led to the number of people on waiting lists over the past 13 years to almost double to five million. Affordable Rent is part of a package of measures that will affect all areas of social housing policy, giving councils and housing associations more flexibility to use their social housing stock to the maximum effect and drive down waiting lists.

In a statement published in Parliament today, Mr Shapps set out how the Affordable Rent scheme will work. Early next year, the Homes and Communities Agency will publish a full framework document that will form the basis for bids from housing associations who are interested in offering Affordable Rent.

Housing associations will have the flexibility to convert vacant social rent properties to the new flexible tenancies at a rent level of up to 80 per cent of market rent - but only after they have reached an investment agreement with the Homes and Communities Agency about how additional rental income will be reinvested in delivering new affordable housing.

Housing Minister Grant Shapps said:

"With five million people languishing on waiting lists, it's clear we need to act quickly to completely overhaul the system for social housing. That's why today I am setting out the next steps towards a smarter system - one that ensures housing associations have the flexibility they need to target help at the people who really need it, for as long as they need it.

"While we will not change the arrangements for existing tenants, it's senseless to pretend, especially in times of economic hardship, that everyone accessing social housing is in the same boat, and needs a lifetime tenancy. Being able to offer a fixed-term Affordable Rent option will mean housing associations become even more effective in helping people get back on their feet, and ensure more affordable homes are built for every pound of taxpayers' money that is spent."

The Government has embarked on a radical programme to shift power from Westminster to councils and communities, including a fundamental reform of social housing. The proposals include giving greater flexibility to both council and housing association landlords over the types of tenure they can offer to new social housing tenants. Many of the changes will require legislation and will be includes in the Localism Bill that will be published shortly.

The Affordable Rent model is the first step towards delivering these wider reforms. Housing associations will be able to offer Affordable Rent on fixed term tenancies, but they will also retain the option to offer lifetime tenancies should they wish to do so.

Under the plans, Affordable Rent properties will be allocated in the same way that social rent properties are now. Existing lettings arrangements operated by councils and housing associations will continue to apply and properties for Affordable Rent will be made available through choice-based lettings where appropriate.

Where a landlord decides not to reissue an Affordable Rent tenancy at the end of the fixed term, the landlord will need to provide advice and assistance to help the tenant find suitable alternative accommodation. Landlords and tenants will be able to consider a range of end of tenancy options, including selling the property to the tenant via conversion to shared ownership.

Notes to editors

1. The parliamentary statement with further details of the new Affordable Rent model to be offered by housing associations from April 2011 will shortly be available on the Department for Communities and Local Government website.

2. The Government has embarked on a radical programme to shift power from Westminster to councils and communities, including a fundamental reform of social housing. Details of the proposals, some of which will be subject to consultation, are published in Local decisions: a fairer future for social housing. A copy of the paper can be found at: www.communities.gov.uk/publications/housing/socialhousingreform<.

3. Housing associations will be able to let an Affordable Rent property at up to 80 per cent of market rent for an equivalent property for that size and location. The association's calculation of the market rent would need to be based on a residential lettings estimate for a property of the appropriate size, condition and area.

4. The statutory and regulatory framework for allocations provides scope for local flexibility. Councils and housing associations may wish to exercise this discretion in relation to Affordable Rent in order to meet local needs and priorities in the most effective way possible (for example, through the adoption of appropriate local lettings policies).

5. The maximum annual rent increase on an Affordable Rent property will be RPI + 0.5 per cent. However associations will be required to rebase the rent on each occasion that a new tenancy agreement is issued (or renewed) for an Affordable Rent property. This requirement overrides the RPI + 0.5 per cent limit and will ensure that the rent set at the beginning of each new tenancy is no higher than 80 per cent of the market rent.

http://www.communities.gov.uk/news/corporate/1792355<

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Local decisions: next steps towards a fairer future for social housing - Summary of responses to consultation

Summary

This document summarises responses to the consultation paper, Local Decisions: a fairer future for social housing, and indicates the Government's intentions on next steps in the reform of social housing.

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Grant Shapps< (Minister of State (Housing and Local Government), Communities and Local Government; Welwyn Hatfield, Conservative)

I am today publishing a paper which sets out the next steps in the Government's reform of the social housing system, in light of the responses we have received to our policy document, "Local decisions; a fairer future for social housing", published in November last year. The paper which I am publishing today also contains a summary of those responses and a copy has been placed in the Library of the House<.

The reforms to social housing which are being taken forward in the Localism Bill will give local authorities far greater freedom and flexibility in the types of tenancies they can grant to social housing tenants; in the way they allocate their social housing; and in how they discharge their main homelessness duty. The reforms will also significantly improve mobility for social tenants. The reforms to tenure will only affect new social tenancies. We will ensure that the security and rights of existing social tenants continue to be protected in law.

I am publishing the response earlier than the usual three-month deadline from the end of consultation as I believe it will be useful to inform debate on the social housing provisions in the Bill.

The response to the consultation was overwhelming. Nearly 700 responses were received from individuals and organisations. There was a very strong response from local authorities and other social landlords who, in the main, welcomed the new freedoms and flexibilities which the Government are giving them.

The Localism Bill will give the Secretary of State< the power to issue a direction to the regulator of social housing on a tenancy standard and a direction on mobility. I am taking the opportunity presented through the paper I am publishing today to set out the Government's thinking on what we believe should be contained in both of these directions. I intend to publish a full technical draft of the directions on tenure and mobility later this year, when they will be subject to a full consultation.

http://www.theyworkforyou.com/wms/?id=2011-02-28a.5WS.1<

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