A Consultation

The UNISON Scotland Submission to the Scottish Government consultation, ‘Investing in Affordable Housing’.

March 2009

Executive Summary

• UNISON is Scotland’s largest trade union representing over 162,000 members working in the public sector in Scotland and is the largest union representing those who work within the social housing sector.

• UNISON Scotland welcomes the focus on increasing the amount of affordable housing in Scotland, especially as the economy continues to decline and more pressure is put on the existing stock.

• UNISON Scotland would prefer to see local authorities able to bid for housing grant on an equal basis with Registered Social Landlords (RSL) in order to increase the amount of affordable housing in Scotland and create a more stable housing market.

• Local Authorities already carry out assessment on housing need with their Local Housing Strategies and look at investment plans via their Strategic Housing Investment Plans. By providing more funding, on an equal basis to RSLs, UNISON Scotland believes that local authorities could be important drivers in increasing the amount and range of affordable housing.

• UNISON Scotland is concerned that the proposals for regional prospectuses are made, more to reduce the number of regions rather than to identify and work with recognised housing markets. Similarly UNISON Scotland has concerns regarding Glasgow and Edinburgh being excluded from their surrounding housing markets according to the consultation.

• If this consultation is taken forward, then UNISON Scotland would like to see local authorities having the choice of not only competing for funding on an equal basis, but also having the option of joining and/or leading consortia.

• In order to maintain transparency over the use of public funding for affordable housing, UNISON Scotland does not believe that the private sector should be included in any consortia.

• When deciding the funding criteria for Lead Developers, UNISON Scotland would like to see the inspection grades awarded by the Scottish Housing Regulator, as well as RSL contributions to tackling homelessness, taken into account.

• UNISON Scotland believes that core indicators relating to the number and type of units completed (including specialist housing), along with overall costs and subsidy levels should be included. It is also important to capture information about quality and sustainability and the extent to which local programmes deliver on the priorities set out in SHIPs.

Introduction

This paper constitutes UNISON Scotland’s response to the Scottish Government consultation, ‘Investing in Affordable Housing’.

UNISON is Scotland’s largest trade union representing over 162,000 members working in the public sector in Scotland and is the largest union representing those who work within the social housing sector.

UNISON Scotland welcomes the opportunity to respond to this consultation exercise.

General Comments

Before answering the specific questions contained within the consultation document Unison Scotland would like to highlight a number of general points regarding investing in affordable housing.

UNISON Scotland welcomes the focus on increasing the amount of affordable housing in Scotland, especially as the economy continues to decline and more pressure is put on the existing stock. The report by the Chartered Institute for Housing (CIH) on the economic crisis, ‘The credit crunch & the Scottish housing system’, highlights the impact this is having on the whole housing system. This includes falling house prices and sales as well as increasing levels of repossessions. This is also reflected in the latest Housing Statistics for Scotland which indicates a marked decline in new build starts, particularly in the private sector, but also affecting RSLs.

UNISON Scotland is also concerned at the reduction in Housing Association Grant (HAG) levels from June 2008 as highlighted in the ‘Arrested Development’ report by CIH. The current economic crisis is impacting on the ability of RSLs to borrow private finance, while keeping rents affordable, as the HAG reduction – although partially reversed in February 2009 – will result in RSLs building fewer affordable houses.

Although the focus of this paper is on Registered Social Landlords (RSLs), UNISON Scotland believes that there should be a level playing field with regard to the investment for affordable housing, to allow local authorities to access funding on an equal basis with RSLs.

A key element in building affordable housing is the issue of land. Local authorities can provide land for development but are constrained in having to achieve best value for any land sales. By providing more equitable access to funding, local authorities can bring the land into use for their own building programmes and move more quickly to build affordable housing.

Another key element blocking local authorities from building new affordable housing is the historic housing debt. In the Firm Foundations consultation paper the Scottish Government committed itself to pursue the Westminster Government for debt write-off. UNISON Scotland would be interested in further information on this approach as debt write-off would allow local authorities to build more affordable housing.

UNISON Scotland believes that Scotland needs to develop a housing policy that promotes efficient and stable choices rather than specific tenures, and to assess the possibilities for more effective methods of securing unearned land value gains for affordable housing purposes. UNISON Scotland believes that both the Scottish and the Westminster Governments should critically rethink the current housing policy emphasis given to promoting owner occupation, especially to groups in society that are vulnerable to, and poorly equipped to cope with, economic and housing market volatility.

In general, UNISON Scotland believes that there is still some detail to be added to the policies discussed within this consultation and would prefer to give a fuller response once this detail is released.

UNISON Scotland Response

Question 1: To what extent does our assessment of the current economic situation reflect your assessment?

UNISON Scotland believes that one of the consequences of the current economic situation is likely to be an increased need for affordable housing. This makes it important to maximise the number of new homes that can be provided from the national housing budget. This reflects our response to the Firm Foundations consultation.

Question 2: Does the economic situation strengthen or weaken the case for investment reform at this time, and why?

UNISON Scotland believes that the current economic situation strengthens the case for investment reform in order to maximise the number of affordable housing from the current housing budget. However, UNISON Scotland would suggest that local authorities should have a stronger role in the direct build and provision of affordable housing. Local authorities have a range of skills and resources, not least land, which could be brought into service to increase the supply of affordable housing if they were allowed the same access to affordable housing funding as RSLs.

Question 3: Do you agree that local authority Strategic Housing Investment Plans and related strategies should form the basis for identifying investment priorities for periods of up to five years?

While agreeing that local authority Strategic Housing Investment Plans (SHIPs) and related strategies should form the basis for identifying investment priorities for periods of up to five years, UNISON Scotland believes that the use of Regional Structures and Prospectuses may detract from existing work being carried out on SHIPs. Through their Local Housing Strategies (LHS) local authorities identify housing needs and plan to address these from investment planning via their SHIP. The objectives stated in the consultation paper can already be achieved by the current structures and thus be more easily and quickly implemented by the use of SHIPs rather than establishing new regional prospectuses.

Question 4: Do you agree with our proposed principles on which geographic regions for investment will be based?

If Regional Structures are to be implemented they should be based upon transparent principles as indicated in the consultation paper.

Question 5: a) Do you agree with our proposed treatment for Orkney, Shetland and the Western Isles Councils? b) Do you agree with our proposed approach for Glasgow City and City of Edinburgh Councils?

a) UNISON Scotland recognises the unique nature of the Island authorities and accepts that different treatment may have to be applied to them.

b) UNISON Scotland has concerns regarding the differential approach to Glasgow City and City of Edinburgh Councils. If there are to be opt-outs from the regional structure then, while accepting the position above of the island authorities, it would be better to achieve uniformity across the rest of the country and incorporate Glasgow and Edinburgh within their regional housing markets.

Question 6: Do you agree that Councils, as the strategic planning and housing authorities, and in collaboration with RSLs, should advise on the regions to be adopted as the basis for Prospectuses?

UNISON Scotland believes it is essential that local authorities are involved in identifying the regional groups. The illustrative map contained within the consultation document seems to be aimed more at reducing the number of regions rather than identifying existing linkages between local authorities. For instance, the seems no logical reason for Group E where councils on either side of the Clyde are grouped together and almost circle Glasgow, yet that city is excluded even though it has a major impact on this regional housing market. Currently eight councils in the Glasgow and Clyde Valley area are working together to implement new guidance on assessing housing need and demand within this area. If the aim of the consultation is to ensure housing investment is based on regional areas, then it seems at odds to break up existing regional housing markets. UNISON Scotland would prefer housing investment to be based upon local authority areas.

Question 7: a) Do you agree the scope of the content proposed for Prospectuses set out in Table 2? b) How can we ensure that the housing need of people with specialist requirements or in more remote or rural areas are fully reflected in Prospectuses?

a) UNISON Scotland is in broad agreement with the scope of the content proposed for the Prospectuses set out in Table 2. We believe that they should draw on the information already contained within the SHIP for each local authority area.

b) Information relating to specialist housing need is already gathered within each Local Housing Strategy and is fed into the relevant SHIP. There is no need to duplicate this work.

Question 8: a) Do you agree that there is a need to provide guidance within Prospectuses on maximum rent levels and is the proposed framework acceptable?

UNISON Scotland understand the reasons for providing guidance on maximum affordability thresholds and think this would be helpful.

Question 9: a) Are there other issues which would similarly benefit from guidance? b) What are these and what is the case for including them?

UNISON Scotland has no further comment to add here.

Question 10: a) Is the Lead Developer role proposed here sufficient to deliver a more streamlined and effective approach to investment in and procurement of new affordable housing? b) Does it adequately balance and recognise the needs and roles of non-developing RSL partners?

1. The proposal will lead to a reduction in the number of developing RSLs, however without further information on expected outcomes, UNISON Scotland is uncertain on how effective this approach will be.
2. The consultation paper appears to take adequate account of the roles of non-developing RSL partners.

Question 11: What are your views on the routes we propose for establishing Lead Developers?

The proposals seem reasonable, based on the policy objectives contained within the consultation paper.

Question 12: a) Do you agree with the proposed principles of consortia and responsibilities for consortium heads?

UNISON Scotland is in general agreement with the proposed principles of consortia and the responsibilities for consortium heads.

Question 13: a) Do you agree with the proposals on formation of consortia, including the requirement of a formal agreement to govern relationships within consortia? b) What guidance would be helpful to support the sector in setting up consortia and Lead Developer arrangements? c) What guidance would be helpful to ensure tenant and community engagement in

decision-making?

1. UNISON Scotland agree with the general proposals and the requirement for a formal agreement to govern relationships within consortia.
2. UNISON Scotland has no comment to make on this issue.
3. Local housing need would already have been assessed via LHS for each constituent local authority area within any regional area. RSLs may be able to bring additional local knowledge to the process but this should not be at the expense of over-ruling identified housing need. However, this could be reflected in tenant input on housing design and layout etc.

Question 14: a) Do you consider that there may be circumstances in which consortium membership should include local authorities or other non-RSL bodies? b) In what circumstances would you see this as appropriate?

1. If this process goes ahead, UNISON Scotland believes that local authorities could bring additional knowledge and resources to consortia, including land, and the potential to pool resources for greater economies of scale. Due to issues surrounding the transparency of public funding, UNISON Scotland does not believe private developers should have a role in this process.
2. UNISON Scotland believes it should be up to each local authority to decide whether to join local consortia.

Question 15: Are there circumstances in which bodies other than RSLs might be eligible to become heads of consortia and Lead Developers?

UNISON Scotland could envisage local authorities becoming lead developers but this would be dependent on the size and scale of proposed regional areas. However, UNISON Scotland believes that local authorities – if given a level playing field on access to funding for affordable housing – could build affordable housing more quickly and cheaply than RSLs.

Question 16: Do you agree that a pre-qualification process should be included in the new arrangements?

UNISON Scotland has no concerns regarding the pre-qualification process.

Question 17: Are the pre-qualification criteria and information requirements set out at Annex C a reasonable basis on which to work with the Regulator, the SFHA and COSLA to refine the pre-qualification process?

The information provided in Annex C seems reasonable.

Question 18: Do you agree with the proposed funding criteria for bids for specific projects?

UNISON Scotland would also like to see the inspection grades awarded by the Scottish Housing Regulator, as well as RSL contributions to tackling homelessness, taken into account.

Question 19: Do you agree with our proposed approach to development of an assessment framework?

UNISON Scotland believes it is important that local authorities are able to contribute to the assessment of the proposals.

Question 20: How might we enhance the involvement of local authorities, RSLs and other stakeholders in the assessment of proposals?

Local Authorities have increased their involvement in existing investment processes over the past few years with the development of SHIPs. UNISON Scotland believes their involvement is crucial to the assessment process but would want more detail on the proposed assessment framework.

Question 21: Do you agree with our proposed approach to the appointment and management of Lead Developers?

The proposals seem reasonable.

Question 22: a) Do you agree with the overall approach to grant agreements for Lead Developers as set out here? b) What do you suggest we could alter to make grant payments more streamlined?

1. UNISON Scotland believes that the approach is consistent to the policy objectives of this consultation.
2. UNISON Scotland has no comment to make on this issue.

Question 23: Do you have any comments on the proposed timetable?

UNISON Scotland believes that the timetable is challenging, especially for local authorities who have to group together in, as yet, unidentified regional groupings.

Question 24: Which indicators and what aspects of the Investment Programme should be included in a monitoring and evaluation framework?

UNISON Scotland believes that core indicators relating to the number and type of units completed (including specialist housing), along with overall costs and subsidy levels should be included. It is also important to capture information about quality and sustainability and the extent to which local programmes deliver on the priorities set out in SHIPs.

For further information please contact:

Matt Smith, Scottish Secretary

UNISON Scotland

UNISON House

14, West Campbell Street,

Glasgow G2 6RX

Tel 0870 7777 006 Fax 0141-331 1203

E-mail: matt.smith@unison.co.uk