Firm Foundations: The Future of Housing in Scotland

The UNISON Scotland Submission to the Scottish Government discussion document, ‘Firm Foundations: the future of housing in Scotland'.

January 2008

Executive Summary

• UNISON is Scotland's largest trade union representing over 162,000 members working in the public sector in Scotland, including many with experience of working within the social housing sector.

• UNISON Scotland welcomes a number of the proposals contained within the discussion document, such as the ending of the right to buy and especially those that recognise the key role of local authorities in the development of sustainable communities and the decision to encourage them to build new council houses.

• However, the document is lacking in detail on some of the financial aspects of the support to local authorities, especially those whose tenants have rejected stock transfer and who may now have difficulties attaining the Scottish Housing Quality Standard. There also seems to be an over-emphasis on the private sector, either through private landlords or increased house building for sale.

• UNISON Scotland believes that one issue that would help development would be greater clarification of funding for affordable housing for future years instead of relying on annual budgets.

• UNISON Scotland would prefer an expansion of social housing to cover the housing need for low-income and homeless households. Where private sector lets are used they should be seen as a stop gap method until more social housing is developed.
  
  
• UNISON Scotland is concerned that there are only a limited number of local authorities which could use prudential borrowing capacity to build new housing stock. We would prefer that all local authorities had access to funding to enable the renovation of existing housing stock as well as for new build. There seems to be no reason why other social landlords such as housing associations can access direct grant aid for house building while local authorities cannot.
  
  
• UNISON Scotland has campaigned against stock transfers and will do the same over any proposal to transfer council housing to Arms Length Management Companies (ALMO's).
  
  
• UNISON Scotland supports the Scottish Government's attempt to seek clarification from the Treasury regarding options, other than stock transfer, which could see them write-off local authority housing debt.

• UNISON Scotland would like more detail on the abolition of Communities Scotland as we are concerned that the proposals seem to indicate the replacement of one quango with another along with increased central control.

Introduction

This paper constitutes UNISON Scotland's response to the Scottish Government discussion document, ‘Firm Foundations: the future of housing in Scotland'.

UNISON is Scotland's largest trade union representing over 162,000 members working in the public sector in Scotland, including many with experience of working within the social housing sector.

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

Introduction

UNISON Scotland welcomes a number of the proposals contained within the discussion document, such as the ending of the right to buy and especially those that recognise the key role of local authorities in the development of sustainable communities and the decision to encourage them to build new council houses.

However, there are a number of concerns for UNISON Scotland within the document and other issues on which greater clarification would be welcome.

This paper includes responses to the specific questions set in the document as well as more general comments on some of the policy ideas set out in the discussion document.

UNISON Scotland Response

Question 1: Do you agree that aiming to increase the rate of new housing supply in Scotland to at least 35,000 a year by the middle of the next decade is a sensible and realistic ambition, and that this will help set a necessary political context for acceleration in housing supply?

UNISON Scotland generally agrees that the rate of house building should be increased, especially in social rented sector. However, we would want more details on how this increase on house building is to be distributed across Scotland and across the differing housing tenures. UNISON Scotland have concerns that this target will not include the 30,000 homes for social housing that UNISON and others (including Shelter) believe are required in the next three years.

It should be noted that the last time house building was at 35,000 dwellings per year or above was in the 1970s when public sector and housing association new build accounted for 80% of all completions, compared to around 20% since the year 2000.

UNISON Scotland would also like a clearer definition of ‘affordable homes'. In too many areas, such as Edinburgh, key public sector workers cannot afford to live next to their work. This increases pressure on transport networks as well as creating recruitment and retention problems for employers.

UNISON Scotland supports the call within the discussion document for higher environmental and design standards for all new housing. Better standards in house building will make a positive contribution to the quality of Scottish homes. However UNISON Scotland would also like to see greater enforcement of the current building standards. In 2005/06 approximately 67% of dwellings in Scotland failed the Scottish Housing Quality Standard.

We believe that such an approach will not only produce more sustainable housing but will also lead to a reduction in heating costs and thus lessen, over time, the problem of fuel poverty. UNISON Scotland has campaigned for many years on the need to tackle fuel poverty within Scotland and the setting of new environmental and design standards could make a major contribution to tackling this issue. Fuel poverty affects too many households in Scotland, in 2005/06 around 23.5% of households experienced some form of fuel poverty.

Question 2: Do you agree that, to give practical effect to the ambition, local authorities should co-operate regionally in setting realistic housing targets for housing market areas, and in enabling the delivery of these targets? If so, what arrangements should be put in place to support and provide incentives for such co-operation between relevant local authorities?

Some local authorities already co-operate regionally with joint working arrangements, such as the eight local authorities comprising the Glasgow and Clyde Valley Joint Structure which plans for future housing requirements across all tenures. UNISON Scotland would prefer this approach to be developed across Scotland, where many local authorities already work together on regional issues, rather than a top-down approach.

While accepting the important planning role for local authorities UNISON Scotland would also like to emphasis their role as a major provider of housing services and would like to see the experience and skills utilised further with an expansion of local authority housing stock. Local Authorities have in-house specialist staff to deal with not just planning but also with the delivery of housing.

Question 3: Is there a role for a specialist national function to provide expert support for local authorities in strategic planning for housing?

What expertise do you think this function would require?

There may be a need for specialist national roles in determining the amount of housing needed nationally as well as advice and support on accessing increased funding, particularly for social housing. This may also include support to gather housing and planning evidence as required for the development of local housing strategies. However, UNISON Scotland would prefer a bottom up approach to be taken on this issue.

Question 4: Even when land has planning permission there are still blockages that prevent new housing being built. What additional arrangements would, or could, accelerate development on land with planning permissions to help ensure that future housing supply targets are met?

UNISON Scotland believes that one issue that would help development would be greater clarification of funding for affordable housing for future years instead of relying on annual budgets. Another issue that sometimes holds back developments is the delay in processing compulsory purchases, especially the time taken by the Scottish Government to approve these. This could help speed up development in many brownfield sites.

Question 5: We have proposed that much expanded or new, stand-alone settlements may be a valid solution. How should we best encourage the development of new, sustainable communities that are sympathetic to Scotland's landscape and environment?

Any such settlements would need to be included in National Planning Framework to be supported with appropriate National Planning Policy in order for this to be given effect through the planning process.

There is a concern that many regeneration projects are dependent upon housing within brownfield sites and that making it too easy to build on Greenfield sites could hamper regeneration of many communities within Scotland.

Question 6: How should different types of assistance within LIFT be targeted?

UNISON Scotland believes that although there may be a need to help households meet their home ownership aspirations, this should not serve as a substitute for investment in social housing.

UNISON Scotland would also like to ensure that any assistance should be targeted to households unable to meet their housing needs within the private sector and does not encourage households into owner occupation who will struggle to afford it. Further consideration should be given to the full and ongoing cost of owner occupation and that those who would struggle to afford this tenure should not be forced into it as their only housing option.

We would also prefer a different name for this form of housing support. LIFT is also the acronym for small scale PFI schemes and any confusion with these heavily flawed schemes would be unfortunate.

Question 7: How could the Government stimulate more innovative mortgage and related products and services to assist people in purchasing their first home?

UNISON Scotland would welcome any proposals that provided longer term, fixed rate mortgages. Any developments that would lower the costs for households in the early years of purchase (when the mortgage cost to income ratio tends to be highest) would be welcome.

Question 8: Should the Government provide direct cash grants to first-time buyers?

UNISON Scotland is concerned that such payments will do little to alleviate the current housing problems and may in fact make the problem worse by contributing to house price inflation.

Question 9: How can the private house-building sector play a bigger role in providing, without public subsidy, increased provision of affordable starter homes?

Planning regulations could be used to impose a mix of house types and size on any private development to match local housing needs.

Question 10: What issues do you consider should be taken into account when considering the increased use of private sector lets to house low-income and homeless households?

UNISON Scotland would prefer an expansion of social housing to cover the housing need for low-income and homeless households. Where private sector lets are used they should be seen as a stop gap method until more social housing is developed.

There are some concerns with the use of private sector lets in the past where tenants rights and the service offered was not of a suitable standard. However, while there has been some improvement in terms of local authorities engaging with the private sector - mainly through the national registration scheme and local landlord forums - there is not as yet any national research on the outcomes of this. It would make more sense to have a review of these issues and the whole private rented sector to inform decisions on whether councils should use private landlords to house low-income/ homeless households.

The higher rents normally charged in the private sector can create disincentives for low income households to access employment, education and training as well as being a strain on the public purse. Although the use of private lets means that subsidy isn't required to fund the capital cost of developing new housing supply, the higher rents may well lead to higher public expenditure costs in the long term.

Also, the changes to housing benefit should be taken into account in any planned use of private sector.

UNISON Scotland has a further concern that the use of the private sector may not prevent repeat homelessness as many homeless people require support to sustain housing.

Question 11: How should we ensure an appropriate balance between safeguarding tenants' rights and encouraging the private rented sector to achieve its full potential in Scotland's overall housing market?

See answers from question above for UNISON Scotland's concerns regarding the use of the private sector.

Question 12: Do you think there is sufficient engagement between the public sector and private landlords? If not, what else should national and local government be doing?

Some areas have private landlords forums these should be assessed and, if appropriate, extended. However the review of private rented sector could look at this issue.

Question 13: What other options should we consider for increasing the supply of private rented housing for low income and homeless households?

UNISON Scotland would prefer an expansion in social housing to meet the needs of low income/ homeless households.

UNISON Scotland also has concerns that while public sector housing has to meet the Scottish Housing Quality Standard the same conditions do not apply to the private sector.

Question 14: How could more private landlords be encouraged to let to tenants on benefits and homeless households?

UNISON Scotland would prefer to see a stronger social housing sector as the answer to the problem of tenants on benefits and homeless households.

Question 15: What other schemes or incentives might help us to recycle empty properties more effectively?

In some areas the local council leases empty properties from private landlords to help meet their housing need. This may be expanded, at least in the short term, until social housing stock is expanded. There may also be the option of grants for refurbishing properties on the condition that they are managed within the social housing sector to target additional housing for homeless people.

Question 16: Do you agree that we should exempt new build social housing from the Right to Buy?

UNISON Scotland welcomes the proposal to end the right to buy for new social housing and the review on the future of the whole right to buy scheme. The effects of the RTB has seen many councils lose the most popular house types in high demand areas, creating a mismatch between housing applications/ needs and available housing stock.

Investment in new social housing is put at risk by the continuance of the right to buy scheme. Future attempts to solve the crisis of affordable housing would be put at risk if the RTB remained.

Question 17: Do you agree that we should subsidise local authorities in areas of need to use their prudential borrowing capacity to build new council houses?

While welcoming the new positive role for local authorities as social landlords, UNISON Scotland is concerned that there are only a limited number of local authorities which could use prudential borrowing capacity to build new housing stock. We would prefer that all local authorities had access to funding to enable the renovation of existing housing stock as well as for new build. There seems to be no reason why other social landlords such as housing associations can access direct grant aid for house building while local authorities cannot. We should also look at ways that local authorities can use prudential borrowing powers even when they have historic debt. This may include separating schemes within the council accounts.

The overwhelming factor affecting local authorities building and managing homes is not a lack of incentive to build but the problem of historic housing debt. UNISON Scotland therefore also welcome the communication with the treasury regarding other circumstances, apart from stock transfer, where debt write off could occur.

UNISON Scotland is also concerned that housing debts are either paid off or transferred in the case of housing stock transfer. In the interests of creating a level playing field and providing real tenant choice UNISON Scotland believes that the housing debt burden should similarly be removed from councils wanting to retain and invest in their housing stock and welcomes the Scottish Government's proposal to raise this issue with the Treasury. UNISON Scotland believes that council housing would be a more attractive option for a wider range of people if debt write-off took place and councils were allowed to invest in their existing stock as well as developing new housing.

Question 18: Do you agree that we should introduce large-scale competitions for subsidy?

UNISON Scotland is unsure that competition per se, would reduce costs and may simply increase bureaucracy, leading to protectionism, less collaboration and spreading of good practice etc. However, there may be some arguments that some development programmes are too small and combining these could bring some procurement savings. Local authorities acting together, rather in competition, could potentially lead to greater savings in providing larger scale contracts.

In general the funds available should be allocated to the schemes likely to make the greatest impact allowing local authorities to focus on meeting housing needs rather than jumping through hoops to access funding.

Question 19: If not, how would you ensure that public subsidy is used to build as many good quality RSL houses as possible?

See above

Question 20: Do you agree that we should subsidise the development of houses for mid-market rent?

UNISON Scotland believes that although this type of housing may help in diversifying social housing and creating a more sustainable mix of tenants, there is a danger that this could divert resources from those in most housing need. In 2006 there were over 200,000 people on house waiting lists - showing the massive

challenge councils are facing providing housing.

The examples given in the discussion document as to who would benefit from mid-market rents include teachers and nurses. Although this may be attractive to some key workers, the level of such rents would be out of reach of other key public sector workers. UNISON Scotland would like to see the development of a scheme to assist key public sector workers meet their housing needs.

Question 21: If so, should the subsidy be awarded as part of the competitive regime for awarding HAG that we are proposing?

See above

Question 22: If not, how would you increase variety in social housing?

See above

Question 23: Do you agree that we should encourage landlords to look as a means of adjusting the mix of their stock in the interests of achieving more sustainable mixed communities?

UNISON Scotland believes that more sustainable, mixed communities may increase the desirability of council housing and lead to it be a tenure of choice rather than a tenure of last resort.

Question 24: Do you think that subsidies for development should be provided to bodies other than registered social landlords?

UNISON Scotland would want safeguards to ensure that public funding is going where it is needed and that there are proper regulation and inspection procedures in place as well as rights for tenants. We do not believe that those who are not registered social landlords could proved such safeguards and therefore should not be able to access such subsidies.

Question 25: What sorts of protections should be offered to tenants in these circumstances?

If public funding is being used then they should have the same rights as all social housing tenants.

Question 26: Do you think that the Scottish Government should vary Right to Buy discounts by (a) locality and/or (b) type of property?

UNISON Scotland believes that the right to buy should be abolished for all social housing.

Question 27: Do you agree that ALMOs can provide a satisfactory alternative to stock transfers?

UNISON Scotland has campaigned vigorously against stock transfers and will do the same with regard to any proposal to transfer council housing to Arms Length Management Companies (ALMO's). The principal benefit of changing ownership of the council housing stocks is the artificial link between stock transfer and debt write-off. Since debt write-off does not take place with a move to ALMOs then it offers no benefit.

If additional funding is available for ALMO's then surely it would also be available for councils retaining their stock?

Improvement in performance can more easily be achieved by councils, as can swifter investment if the funds were available. Moving to an ALMO would take up to two years, during which time housing stock would continue to deteriorate.

ALMOs don't offer secure funding, they have to bid for funds, leading to stop/go approach to planning and investment. The position in England is unclear as no ALMO has come to the end of its current lifespan.

UNISON Scotland believes there are no clear benefits to tenants - especially for those who have already rejected stock transfer and that a move to an ALMO would lead to confusion and frustration for tenants as well as less democratic accountability.

However, UNISON Scotland supports the Scottish Government's attempt to seek clarification from the Treasury regarding options, other than stock transfer, which could see them write-off local authority housing debt.

Question 28: Do you think that additional help from Government to enable landlords to meet the SHQS should be linked to improvements in a

landlord's performance?

Yes

Question 29: If so, what measures do you think would be beneficial? If not, why not?

There are a number of existing performance indicators such as management and support costs, void loss management, which could be used. If improvement is made or service is of high enough standard then this should allow access to additional support

Question 30: Do you agree that we need to find new ways of focussing on the quality of place/open space and greenspace within deprived neighbourhoods?

UNISON Scotland believes that as well as having better housing, meeting higher standards these standards should be extended into better quality neighbourhoods.

Question 31: Do you have suggestions for approaches that are not resource intensive and that include stakeholders?

There should be a review of all approaches currently used to see which offer the best choice but funding should not be the only key issue in determining this.

Question 32: Do you agree that the lead role (and recipient of any resources) to undertake this work should be open to a range of stakeholders?

Local authorities would be in the best position to take on the lead role to ensure that other, non-housing, issues are addressed such as environmental protection and community safety.

Question 33: Do you agree with the features and principles we have set out here for a modernised regulation framework?

UNISON Scotland would like more detail on the abolition of Communities Scotland as we are concerned that the proposals seem to indicate the replacement of one quango with another along with increased central control. UNISON Scotland would like to see the devolution of some of the current powers of Communities Scotland to local authorities.

Question 34: How would you like social housing regulation to be organised? (For example, should it be a separate organisation or part of a group of

other regulators?)

UNISON Scotland support the development of a modernised regulation framework that fits in with the principles of the Crerar review.

Other Comments?

We note that the recent consultation document on the Scottish Futures Trust effectively proposes extending PFI to housing for the first time in Scotland. We are surprised that there is no reference to this in ‘Firm Foundations'. UNISON would strongly oppose the use of PFI for housing on grounds of costs and accountability.

Conclusion

In general there are a number of proposals within the discussion document which UNISON Scotland would support. This includes the role of local authorities in the development of sustainable communities, the move to increase council housing, the removal of the right to buy and attempts to improve environmental and design standards which should help lessen fuel poverty.

However, the document is lacking in detail on some of the financial aspects of the support to local authorities, especially those whose tenants have rejected stock transfer and who may now have difficulties attaining the Scottish Housing Quality Standard. There also seems to be an over-emphasis on the private sector, either through private landlords or increased house building for sale.

The basis for this approach is Scottish Government research highlighting that owner occupation is the preferred choice for 86% of those surveyed. However, the shift to this tenure has been largely due to the right to buy legislation which has resulted in councils often retaining the poorer parts of their housing stock while still being liable for the housing debt of those homes sold off. This in itself has made it difficult for councils to build significant new housing in the past and has led to council housing becoming stigmatised as a housing tenure for those on low incomes or benefits. An expansion of council housing with new, more environmentally friendly and better designed housing could lead to an expansion in the social base of its tenants and would give many more people a wider choice for meeting their housing needs than has been the case over the past few years.

For Further Information Please Contact:

Matt Smith, Scottish Secretary
UNISONScotland
UNISON House
14, West Campbell Street,
Glasgow G2 6RX

Tel 0845 355 0845 Fax 0141 342 2835

e-mail matt.smith@unison.co.uk