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Agenda item 2 is evidence on homelessness. I welcome our first panel of witnesses. Gavin Corbett is the policy manager for Shelter Scotland, Andy Young is the policy and strategy manager for the Scottish Federation of Housing Associations, and Robert Aldridge is the chief executive of the Scottish Council for Single Homeless. I invite one member of the panel to make some short introductory remarks, if you feel that you need to do that.
We are happy just to take questions.
Excellent. That gives us more time for questioning.
One of the main issues in the written submissions that we have received is progress towards the target that has been set for 2012. There has been mixed progress among local authorities—can you comment on the reasons for that?
The table at the back of Shelter's written submission gives a statistical picture of the rate of progress. The last column is a summary of that.
That sums up most of the issues. Each local authority has its individual pressures, which can be to do with the supply of housing, where the available housing is and where the pressures are. As Gavin Corbett has said, the variation can also be due to the priority that is given to homelessness by local authorities, which may place it above other, competing priorities.
Even within local authorities that are, on the face of it, performing well statistically, there are still pockets of real pressure.
You mentioned a number of problems, of which supply is one. Is another of them the legislative framework itself? It has been suggested in written evidence that 34 per cent of the allocations that are made in Scotland are made to people who present themselves as being homeless. Many members could cite higher percentages in their local authority areas. Is that a problem purely of supply, or does it have something to do with the legislation?
The figures in Shelter's written submission are 30 per cent for both local authorities and housing associations and 39 per cent for local authorities only. The graph on the third page of our submission tries to illustrate where the pressure is coming from. It shows that there is a squeeze in lettings, which is due both to rising demand from homeless people and to falling supply. The biggest contributory factor is falling supply. If you like, the gradient of the lines is much steeper because the supply of properties is reducing. The problem is fundamentally one of supply, but it is accentuated by rising numbers of homeless households. I guess that the numbers will only increase in the next couple of years if the projected number of repossessions is accurate.
Will you comment on the impact on homelessness of the current economic downturn?
We are all living with that from day to day. Some of the implications are not fully known, but we can make educated guesses about the impact on some areas. More people will find themselves in financial difficulties and unable to maintain their mortgage payments, so there may well be more pressure from that. We have anecdotal evidence that some private landlords who have buy-to-let mortgages are beginning to struggle to meet those mortgage payments, which then puts their private rented sector tenants at risk of becoming homeless.
The economic downturn will also impact on people's perception of homeless people, because some people will have to declare themselves homeless who would never in a million years have been in that situation before. That might change the public's perception of what homelessness is all about. I guess that that is a perverse benefit of the recession.
On the point about increased demand, we have taken a range of evidence on the collapse of the private sector, but it is still not clear, at least to me, what has gone on out there. The Cabinet Secretary for Health and Wellbeing told the committee recently that the outcome for rented accommodation this year would be 6,000 to 7,000 houses. Is that the case?
The change in housing association grant assumption levels means that it is more likely to be about 4,000.
I imagine that the figure of 6,000 to 7,000 is for the whole affordable housing investment programme, including low-cost home ownership. Very few homeless people would get access to that. The figure for the rental programme will probably be more akin to the number that Andy Young mentioned. He knows better than I do, but even that programme is under pressure to achieve the targets that have been set for it.
There is a lack of clarity about the 6,000 to 7,000 properties. You both say that the figure is 4,000. Where are the figures that will give the committee a real understanding of what is going on and what is available? Tackling homelessness is about the volume of houses that we can provide for rent. I accept that that is not the solution in itself, but it is part of the solution.
We can certainly provide those figures, but we were led to believe that housing supply was being dealt with separately.
I do not know why we did that. It was not clear to me that that had happened. The evidence that we have received from Shelter, the Scottish Council for Single Homeless and, I think, the Scottish Federation of Housing Associations points us to the fact that we cannot deal with homelessness without considering housing supply.
I have an important point, which I have raised with a couple of committee members individually. I have been examining housing investment for 15 years, and in each of those years the Government of the day published an investment bulletin that said how many houses it was building that year and how much it was paying for them. The current Government has not done that this year. That is a major weakness in the transparency of the programme. No published document says how many houses we expect to build. Given that there is a new minister, that might be one thing to press him for. It creates a problem in scrutiny of how the budget allocation and investment programme match the commitments that have been made.
Good morning, gentlemen. I will focus on allocations. Shelter has kindly provided statistics that show that, on average across Scotland, 79 per cent of people who are allocated houses are assessed as being in priority need. The impact on the general housing list is quite significant and often underreported, but to come to homelessness, which is the issue that we are talking about today, the statistics show what councils are doing. A high proportion of their available housing is being used to address homelessness. To what extent do you have evidence that people are putting themselves forward as being homeless when they may not really be homeless—for example, youths who leave the family home with the permission of the parent rather than being thrown out by the parent? I am sure that you can give some other examples. How much more could the private sector do to help reduce the number of homeless presentations?
I can perhaps clarify the housing association contribution. In a lot of the statistics that have been issued, there has been heavy reliance on the section 5 referral statistics. That is understandable, but there is growing evidence that in many parts of the country lets are made to homeless people through nomination agreements between local authorities and housing associations and, indeed, direct from housing association waiting lists. Homeless applications are also being prevented—as opposed to homelessness being prevented—by the use of internal transfers from housing associations and, occasionally, from the waiting lists. That will become even more apparent when the priority need barriers are completely dismantled as we head towards 2012, at which point more waiting list applicants would, if they presented as homeless, fall within the definition of homeless. The most obvious example of that is overcrowding.
The graph at the front of the Scottish Council for Single Homeless submission shows that the number of people who are presenting as homeless is beginning to tail off—a slight decrease has taken place. Similarly, the number of people who are assessed as being homeless in Scotland as a whole is beginning to decrease. There are obviously differences among local authority areas, but the figures suggest that we have reached the point at which we are identifying all those who are homeless and that the prevention work that is being done is beginning to have some effect.
I worked as a homeless persons officer for four years for a local authority and can say that it would be naive to suggest that all applications are of equal urgency. There are some subjective elements around the question of when a period of housing pressure becomes homelessness—perhaps Jim Tolson alluded to that.
That is a good round-up of where we are. As Mr Corbett said, there is a good deal of pressure on the general housing list, with people who are looking for suitable rented accommodation finding that they cannot access it because of a shortage of available properties. As has been said, that pressure leads people who do not have enough points to get accommodation on the general list to consider presenting as homeless. That puts added pressure on the system, which is not helpful with regard to meeting the 2012 target.
When new houses are built in an area, some people get them by declaring themselves homeless, which causes a great deal of tension among those who are on the waiting list because their housing is not appropriate. Do we have any figures on how many people get those new homes through the homelessness route?
As far as I know, we do not have those figures for new-build developments. Most of the information is collected at a local authority level.
Do we have no evidence on that?
I think that we have no evidence either way.
It is important to bear in mind the fact that, although the perception is often that only homeless people are housed, the increased pressure on housing actually comes from a range of people with increasing vulnerabilities. As the amount of supply has decreased, local authorities and other social housing providers have had to house a higher proportion of people with a higher proportion of needs. Perhaps blaming that situation on homeless people has been a convenient way of labelling what is happening. A whole range of people with a wide range of needs are being housed. Although the perception might be that only homeless people are housed, the reality is that people from waiting lists are also housed.
Perhaps when someone with a problem is allocated a house and people raise complaints because of the ensuing difficulties, the housing association tells people that the tenancy had to be given under the Scottish Parliament's homelessness legislation. We are all in a blame game. However, that is a significant problem for people who have, as they see it, been good council tenants for many years but are denied access to new housing, or perceive that others are put ahead of them in the queue. The issue needs to be taken seriously. Do the witnesses have any ideas about how we could tackle that?
With new lettings, it would be quite easy to record in the Scottish continuous recording system—the SCORE system—who has been allocated new-build properties. I think that housing associations already do that.
I am pretty sure that it would be possible to extract information that would broadly cover what has been suggested.
If we could explode those myths and perceptions, that would be a good start.
The perception of what goes on needs to be tackled.
Would we need to revisit the legislation to tackle that?
I am not sure that we would need to revisit the legislation. As I said earlier, we need to monitor which category of need people are in when they are housed. I presume that, if we could monitor and measure that, we could explode those myths and get rid of the poor practice that was mentioned earlier.
How does the legislation tackle the issue about inappropriate housing and overcrowding? If we focus on homelessness as the only housing problem, there is no legislative support for people who are in what they would describe as inappropriate housing. They are stuck in that house. We cannot even build our way out of that problem because those who have priority under the homelessness legislation will be given the new houses whereas those who are, as they see it, in inappropriate housing will be stuck there.
Such people are catered for under the Housing (Scotland) Act 1987. However, I see where you are coming from. There is a definite tension between those two different categories of need.
That is the reality that you and I face. Housing associations face that as a daily problem.
When I worked for a local authority, councillors would often complain that every let in their ward in the past six months had been given to a homeless person. When we went through the lets, we found that that was not the case.
I know that we should not deal in anecdotes, but I have heard anecdotally about the problem in rural areas and in the Highlands in particular. I also know of community buy-outs and potential social housing suppliers who feel that the current legislative set-up is a disincentive to providing housing and they wonder whether it is worth their while building houses in an area where there is a housing shortage, if the lack of local connection requirement means that people who, for all sorts of cultural reasons, are very unwilling to describe themselves as homeless will remain permanently behind people in the queue who are willing to describe themselves as homeless but who might have appeared in an area out of the blue. You can understand the tension that that creates. I know from anecdotal evidence that feeling exists—certainly, in my neck of the woods.
I was asked to speak about that in some detail at the Rural Affairs and Environment Committee during its rural housing inquiry last year. The evidence that I produced for that would be useful, particularly in considering rural lets. It is true that there are additional pressures in rural areas. I have not heard about the problem that Alasdair Allan describes: I would be disappointed and surprised if there were such a disincentive to providing housing. There are ways in which housing providers can ensure that genuine locality-based needs are reflected. I am referring, for instance, to social networks, with people moving into an area for employment. The evidence is that lets are not swamped by people from some external area.
I declare an interest: I moved to the Western Isles, and I lived for the first year and a half there in a former loom shed, because of the lack of housing. I appreciate the point that you make, but I repeat that there is, nonetheless, a perception about the number of homeless allocations, certainly in my constituency. The figure is considerably higher there; in some parts of my constituency, it comes to 60 per cent of allocations. There is a feeling that if people are unwilling to describe themselves as homeless—as I have said, an awful lot of people in the Highlands and Islands are unwilling to do so for cultural reasons—they will never get a house. How do you overcome that problem and the cultural unwillingness of people to describe themselves as homeless in some circumstances?
It is perfectly legitimate for a local housing provider to come up with a local lettings initiative to cover exactly that type of situation, as long as it is evidence based and as long as the outcome is published and reflects the initial evidence base. The Scottish Housing Regulator is clear that that is legitimate. We are currently working with the Scottish Government on some allocations guidance, which will be published in September this year. That should clarify the matter.
I invite any further comments on allocations, before we move on.
I will address one of the issues that comes up in relation to allocations. The written submission from the Scottish Federation of Housing Associations shows "a 46% increase" in the number of people on waiting lists over a period covering almost the last decade. In addition, it identifies a
As my written submission states, housing associations have not always been very good at publishing the outcomes of their allocation policies. On squaring the circle, you are correct that tensions exist within allocation policies in catering for different needs. The guidance to which I referred earlier will, I hope, deal with those issues.
I do not have the numbers to hand but, from memory, I believe that about 30 per cent of local authority allocations are to homeless people and about 15 per cent are to people who are transferring. That figure has decreased, probably as a result of the squeeze to which John Wilson alluded. Although there is no reason why a landlord cannot allocate houses to transfers—obviously, that creates a succession of lets, so it does not reduce the overall volume of lets—I suspect that the difficulty is that the more transfers that are allocated, the longer people are kept stacked up in temporary accommodation, to which a cost is attached.
I am interested in your responses to the convener's point about getting sound figures on the number of houses that are completed each year. Shelter has provided a list of local authorities and their progress towards the 2012 target. The majority of councils have made excellent progress and are to be congratulated on that, but I am not sure that we know how they have made that progress, why a few have not and whether we will be able to sustain the progress. How can we get that information so that, where there are challenges, we can make changes?
We are concerned that limited information will be collected at central Government level from now on. Information is gathered through the HL1 form—the homelessness return form—which informs the statistical return. A previous project that was sponsored by the Scottish Government involved officers from the Association of Local Authority Chief Housing Officers going round every local authority to delve into the problems that they were having. Now, as the level of information that comes in centrally is diminishing, it is more important than ever to get a handle on local authorities that are having difficulty meeting the 2012 target. We state in our written evidence that it is time to do a stocktake of where we are and what is needed in individual areas to ensure that we get to the ambitious but realisable target for 2012. Because less information is being gathered centrally, it will be much more difficult to know where the problems are.
We argued for a stocktake last year, too, but it did not find favour with the Government at the time. There are a few reasons why it is worth reconsidering the idea. First, we have provided evidence that although there has been significant progress in some areas, things are still difficult. Secondly, this is the year when authorities have to meet an interim target to reach the 2012 target, which might be an opportunity to ask whether we have in the box all the tools that we need. Thirdly, we have a new minister, so perhaps this is an opportunity for him to look at the programme that he has inherited and to consider whether changes need to be made to it. Fourthly, the context has changed considerably. Back in 2002, when the homelessness task force report was launched, no one could have anticipated that we would be looking at such a high level of mortgage repossessions and that unemployment would be rising to levels not seen since the early 1990s. Given that changed context, it is worth asking whether we have got the programme right or whether we need to refresh it to ensure that we know what is happening.
I echo what my two colleagues have said. We might look like a band of brothers; we are in total agreement on that issue.
That is okay.
You talked about trying to get the information so that you can find out what the difficulties are. Do you have any information about why some local authorities seem to be stalling and some challenges seem to be arising, or is it just that, as you get towards the end, things get more difficult?
We have information, some of which is from the report by local government secondees to which Robert Aldridge referred. The data are not necessarily directly comparable across areas, but we have qualitative information. We can dig underneath the statistics that are given in the Shelter evidence. To some extent, lack of progress is a reflection of where an authority started from. Although it appears from my evidence that Glasgow City Council is struggling, that is partly because in 2003-04 it was already giving a high number of allocations to homeless people, so it has been harder for it to make progress than it has been for authorities that previously gave the issue a low priority. Sometimes the picture changes depending on what you look at. If it would be helpful, we could provide more information, but the Government collects a lot of information that could be analysed further. That might be better done in the context of some kind of spring clean or stocktake, or whatever you want to call it.
We have come full circle. The main way of dealing with homelessness is by finding people a house. If we do not have the information about who needs houses, how do we build a programme that addresses housing need?
What you say is partly true, but we can also undertake preventive activities. We should ensure that when people are found houses, that is a long-term and sustainable solution. Many other elements contribute to the numbers that are coming through the system in the first place. Part of the ability to meet the 2012 target will relate to how local authorities manage support for people who are at the early stages of getting into difficulty, before the difficulty becomes a homelessness crisis. It is about not simply managing the crisis when people become homeless but intervening early. That involves all the elements around housing support funding, which we will also have less information about in the future.
I do not want to give the impression that we are somehow shooting in the dark. Local authorities' local housing strategies contain a lot of information about the needs in their areas and the kind of investment that is required. The only difficulty for an evidence session such as this is that you cannot add up all 32 strategies and say, "This is where we're at." However, that does not mean that the information is lacking at local level.
I think that my colleague Patricia Ferguson will cover supporting people funding, which you were clear about in your written submission, Mr Aldridge, when you said that things are only going to get more difficult. Given the present economic climate, there are clearly housing pressures. Is there a risk that that pressure will become the reason why the target is not met?
I think that the target can and should be met. We need to keep a close eye on any new elements. As Gavin Corbett said, given the economic climate, we are in a different place than we expected to be in 2002. More than ever, it is important that we monitor carefully any changes to allow appropriate Government intervention if required or to give additional power to local authorities if required, and that we re-examine how we are doing.
I am quite optimistic for two reasons. First, ministers have made it clear that the 2012 target is a firm commitment. I do not get any sense that it will somehow be whittled away. Secondly, although we expect rising numbers of repossessions, it is important not to overestimate the impact of that. Around 40,000 homeless applicants are assessed as homeless. Repossessions may rise from 2,000 to around 6,000 or 7,000 in the next couple of years—that is the best estimate that we can get from mortgage providers—but not all of the people involved in those additional repossessions will choose to apply as homeless, because some will find accommodation in the private rented sector or by other means, so we are talking about perhaps an extra 2,000 or 3,000 applications from struggling home owners. That is significant and it is a huge rise among home owners, but it will not double the number of homeless people or do anything else that will make the 2012 target unachievable. It is important to put it in perspective.
It is an ideal opportunity for us all to refocus.
I appreciate your responses. There is clearly a good argument for taking stock at this stage and refocusing our efforts to achieve the 2012 target.
This is an opportune moment for me to come into the discussion, because I want to ask about the mortgage market and repossessions. The previous Executive attempted to provide some support in the form of a mortgage to rent scheme. Under the current Government, that has been expanded and a new product has been introduced—a mortgage to shared equity scheme. I would like your opinions on both products and how they can stave off repossessions and, therefore, increased levels of homelessness.
Housing associations have been really keen to get involved in the mortgage to rent scheme. Over the six years of the scheme, we have helped 700 families to stay in their homes. We have mixed opinions of the mortgage to shared equity scheme, because we are not sure how housing associations benefit from being involved in it. We have concerns about shared equity under the current economic circumstances anyway.
I have had a productive dialogue with Government ministers about the expansion of the money in the mortgage to rent scheme—up from £20 million to £35 million over the next two years, which is welcome—and the development of a shared equity product, for which Shelter Scotland argued as much from the point of view of potentially struggling home owners as from the point of view of providers. We felt that some home owners might want to keep a foothold in the home ownership market and not convert directly to social rent, which is what happens under the mortgage to rent scheme. The mortgage to shared equity scheme is an additional way of responding to that situation, although I agree with Andy Young that it is likely to be small scale. Evidence from research that the Government published recently shows that few of the people who benefited from the mortgage to rent scheme would have been able to afford the mortgage to shared equity scheme, so it is likely to be a relatively small part of the landscape.
I agree with my colleagues. It is useful to have as many tools in the box as we can to prevent people from entering the homelessness stream. The schemes are helpful, but they are not the only way of dealing with matters.
I have spoken to some housing associations about the mortgage to rent scheme, and they have been highly supportive of it. They are interested in getting involved in the mortgage to shared equity scheme but, if a housing association was going round its area with an investment programme, where would a shared-equity house sit within it? The home owner could still be left with a bill for a portion of that programme. That is one issue that was raised with me. There is a question about equality of status for the tenants and shared-equity owners. I take on board the fact that there are obviously issues to be ironed out.
Shelter has had clients who used sell and rent back and it is bad news. Apart from being unregulated, the sell and rent back is a bad deal for tenants. The typical price that people get for their homes is 15 to 20 per cent below market value, which is a bad deal. The rents are very high, usually well above the eligibility level for housing benefit. Also, the tenancies are insecure, for example they are short assured tenancies. That is not just Shelter's view—we have had clients who have been through it.
I am glad to hear you say that. I know that the Office of Fair Trading is currently writing to some of the companies that provide sell and rent back to ask them to justify some of their claims. I have read the OFT's report on sell and rent back, and some of Shelter's anecdotal experience chimes precisely with the alarm bells that rang for me when I looked into sell and rent back. I was worried that there was effectively a black market in repossessions, where people were taking a huge hit on the value of their property, and then, six months down the line, finding their rent spiralling and themselves being kicked out because they could not afford to pay. I welcome any regulation of that.
There is a case for a well-regulated, private sector sell and rent back scheme. Any Government scheme, such as mortgage to rent, will have eligibility thresholds. Any Government scheme that uses public money has to say at some point that it will not help people whose house is over a certain value, or perhaps it depends upon the householder's employment status. I agree that a well-regulated and well-run private sector scheme might complement that, and we have done some work on the characteristics of a well-functioning private sector initiative.
I do not know whether the committee will do further work in that area, but I would be delighted to meet any of the witnesses to discuss how to take those ideas forward.
The devil will surely be in the detail.
To follow Bob Doris's point, the committee would be interested in considering the issues, given that mortgage to rent has helped 700 families, the question mark over shared equity and the fact that sell and rent back has no redeeming features at all.
Immediately after this meeting, I have got the first meeting of the Scottish Government's repossessions working group, which has been set up partly to examine the legislative safety net for homeowners and partly to consider other initiatives that could help to ensure that any rise in the number of repossessions does not result in a rise in the number of homeless people. Things are happening to address the issues, which I would be happy to report back on at future committee meetings.
Yes, and I am sure that we will be able to discuss that with the minister as well.
The committee is concerned about sell and rent back, given our moves to end unintentional homelessness. I wonder whether sell and rent back has any benefits whatsoever, or whether it should be ended rather than regulated. Does it have any redeeming features at all?
Not at the moment.
Sell and rent back is basically a form of equity release. I do not have a problem with someone negotiating with a private provider because they are not eligible for the mortgage to rent scheme, perhaps because they do not have acute mortgage arrears problems or because the value of their house is particularly high but, to be honest, I would be surprised if that was a rational way to go. There must be an easier way to release equity.
Is there enough merit in sell and rent back from the point of view of reducing the number of homeless people as we approach the 2012 target for it to be continued with, or is it so fraught with problems that we would be better to recognise that it does not help and to walk away?
I do not know enough about the legal instruments that we would require to prohibit it. I would have thought that the scale at which it could operate ethically might be so small that it would be close to its not operating at all, but I do not know enough about the detail.
I will move on to a different but related subject. Some of us are interested in finding out whether the effect of the supporting people fund can still be monitored even though there is no longer ring fencing. Mr Aldridge's submission commented on that. Has there been any monitoring of the impact of the removal of ring fencing, not from a political point of view but from the point of view of the effect that it might have had on that support?
The housing support enabling unit, which receives funding from the Scottish Government, has done a baseline study of specific projects to find out what is happening. It will conduct annual surveys to examine some of the implications. One of the advantages of the removal of ring fencing—it can also be seen as a disadvantage—is that the money can be used in more imaginative and flexible ways without having to be reported back on as strictly as before. It will therefore be quite difficult to get comparable data.
Anecdotal evidence from our members suggests that it is indeed the lower levels of support that are being affected at the moment.
Good morning, gentlemen. In relation to homelessness services and progress towards the 2012 target, I was interested to read in Shelter's submission that the City of Edinburgh Council got an A rating from the Scottish Housing Regulator, and it also performs well in the progress table that is appended to the Shelter submission. Is it a coincidence or a contributory factor to that A rating that the City of Edinburgh Council has the largest private sector leasing scheme in the UK?
Perhaps Cathy King, who will appear on a later panel, can answer that too, but—
I am sure that she will have a view, but I am interested in whether you have a policy point of view.
The inspection would have covered the whole range of homelessness services, of which the temporary accommodation that the private sector leasing scheme contributes would have been one important part. Edinburgh took significant steps in recognising that it could not provide temporary accommodation from existing resources and it looked imaginatively at how the private sector could contribute. PSL would have been an important factor in the inspection's high rating. Edinburgh is the only authority so far to have gained an A. I am sure that its approach to providing temporary accommodation was a feature of that.
I agree with all that Gavin Corbett said and add that private sector leasing can play a useful role as part of a solution, but it is important to bear in mind the fact that the rents that are charged in private sector leasing are often very high, which means that it is difficult for people to move into low-paid employment and sustain their tenancy. It will be even more important to consider that when the new central Government welfare reforms are introduced, as they will make it possible for someone to suffer a benefits sanction if they refuse to take up low-paid employment. It is really important that we consider the affordability of rents in private sector leasing schemes for people who undertake low-paid employment.
That is interesting, because it says in the City of Edinburgh submission:
We can return to the point about employment. Because of the way in which the legislation is framed, it is not possible for an authority to discharge its duty through the private sector. It is possible for people to find their own solution, which might be what is happening in Edinburgh. The Scottish Government has been consulting on changes so that settled accommodation is provided in the private rented sector. That might build on current practice. I do not have any problem with that.
Thank you. Let us move on to housing supply, which is highlighted in the Shelter submission, although I am sure that others might wish to respond. The issue is about the right to buy and
It is right that the houses that were sold under the right to buy cannot be treated as if they were demolished. If that was hinted at, it is a false argument. However, the right to buy has had a significant effect on lettings that are available to local authorities. We have touched on this before, but the previous Scottish Executive's report on the right to buy had clear evidence that the right to buy was linked to the falling number of lettings. I think that we have all argued that the falling number of lettings lies behind some of the tensions between people on waiting lists and homeless people being housed. The right to buy is not the only contributor to that because falling levels of housing output have contributed as well, but the right to buy has been the most significant feature. However, its effect is less than the total change in stock from the social rented sector to owner-occupation.
So it is false to try to equate the numbers sold with the number of new houses built. The correct comparison is between how many would have been available for let and how many are available. Is that right?
Of course, many of the houses are available to let again, but in the private sector, at much increased rents.
Indeed, they are. I am just coming on to that point. What percentage of the 480,000 homes is available for let in the private sector?
There are no data on that, but it might be in the order of 5 to 10 per cent of the homes that were sold. That estimate is based on discussions with housing managers. However, tenants groups cannot find words to express their outrage about what is happening with ex-council or ex-housing association houses that are available for let in the private sector. They see homes that were part of their community and which were available for their neighbours or their sons and daughters at affordable rents being let at exorbitant rents and creaming in money, as far as they can see, through the housing benefit system. Such lets are often badly managed because generally in such situations people did not take an explicit decision to become a private landlord. Those lets are a very unpopular outcome.
The data on the right to buy show that the houses that were sold were primarily certain types of houses in certain locations. The issue is therefore not about making a direct comparison between the numbers sold and the number of lets, but about the fact that almost all the larger houses were sold under the right to buy. Even if larger houses and houses in certain locations previously became available for let only once every 10 or 15 years, now they do not become available at all. That is particularly important for areas that suffer extreme pressure on housing, such as some rural areas. That is another element to bear in mind.
Yes, but we already have legislation to deal with pressurised areas under the reformed right to buy that was introduced by the previous Government.
Only for new tenancies.
Exactly, but there are already restrictions in place in that regard in pressurised areas. Is that not right?
Yes, that restriction can be applied for. However, the point is that because it was primarily certain types and sizes of houses that were sold, some areas do not have the full range of sizes and types of housing any more. That is particularly the case in some rural areas. It is therefore after the fact that many local authorities have applied for pressured area status.
If 5 to 10 per cent of right-to-buy houses become available for let in the private sector, how many houses become available for let from the stock of a local authority or registered social landlord in a year?
The social rented sector has roughly a 10 per cent turnover in a year, but that is not directly comparable, so 5 to 10 per cent is a kind of stock figure. Obviously, if we took 10 per cent of that in turn, the figure would be much smaller.
That is particularly the case for the exemption of housing associations from the modernised right to buy. That exemption ends in 2012. Many newly built housing association properties will be eligible to be bought by their tenants in 2012.
Yes, I noticed that in your submission. Among your 260,000 houses—or however many it is—how many households will have the right to buy?
I would need to find that out for you. The picture in housing associations is very complex because of charitable status.
I presume that the figures are there, and that your call for a moratorium is based on them. Many people expect a right to buy, but they would not get it if your request were accepted.
That is correct.
I ask the panel to put aside for a second the fairytale scenario that has just been outlined by Mr McLetchie and to consider the right to buy from where we are now—with an extreme shortage of properties as a result of the right to buy. Are further changes in the right-to-buy legislation required to protect as much of the stock as possible, so that more houses are available? Do we have to do more than just protect houses for new tenants in pressured areas?
The SFHA welcomes the proposal to end the right to buy for all new-build properties, and we welcome the consultation to end the right to buy for all new tenancies, but we would also like the exemption that ends in 2012 to be made permanent if possible.
The Scottish Council for Single Homeless takes the same view.
And Shelter Scotland.
That is very welcome. Thank you.
I had wanted to ask a number of questions, but I know that we are short of time so I will ask just one.
The figure of 5,000 has been relatively steady all the time that I have worked in Scotland, which is now 14 years. If we do not build 10,000 houses every year, I very much doubt that we will meet the 2012 target. It is that simple.
If we do not build 10,000 houses a year, the pressure on allocations will increase, and the issues relating to public perception, which were discussed earlier, will become more intense. The greater the supply, the easier it is to meet demand. At the moment, demand is much greater than supply. It is therefore very important that we make social rented housing more available.
I echo those comments. The 2012 target is still meetable, but not building 10,000 houses would be likely to amplify the tensions that many people have mentioned, which no one wants to happen.
As there are no further questions, I thank this panel of witnesses for attending.
Good morning. My first question is for Ms King, although I am sure that the others will wish to comment on it. As we heard earlier, Edinburgh received a high grading for its homelessness services. However, you suggest in your paper that the timescale for dealing with homeless households is increasing, as is the amount of time that households spend in temporary accommodation. What particular pressures do you feel are adding to that burden? How would we deal with them?
The particular pressure is simply the availability of permanent accommodation. We have a duty to provide homeless people and families with a secure tenancy but, given the supply of social rented housing in the city, we cannot achieve that. In a recent homelessness strategy, we said for the first time that we do not think that we will achieve the 2012 target under those terms.
Is it as straightforward as supply issues? I recognise the service that you have been delivering, but are there other things that you could deliver?
I think so. The service received recognition because we consider a range of options. We do not assume that if a person is homeless, what they need is a council house. The length of time that people spend in temporary accommodation is particularly concerning because they tend to lose community links and family support, which means that that support has to be provided elsewhere, through housing support or social services. That is quite difficult.
That brings us back to the supply issues. Will the other panel members say what pressures they feel are on their homeless service at the moment and how they will try to address those?
I concur with Cathy King. The absolute bottom line is supply issues. There is a lot of potential in bumping up the action that we take on the prevention side of things, but I would have serious doubts about whether everything that we could do there would be enough to make up for the shortfall in permanent accommodation.
It is a familiar story in West Dunbartonshire. There has been an increase in the length of time people are staying in temporary accommodation, which is purely the effect of there not being permanent accommodation for them to move on to. I echo what the other witnesses said. There are things that we could do—the new strategy concurs with that. It is about prevention, increasing choice for people, and having a sustainable solution. However, the supply logjam is definitely an issue at the moment. People are spending longer in temporary accommodation.
West Dunbartonshire Council states in its written submission that the private rented sector in its area is quite small. You will have heard it said earlier in the discussion that that sector is seen as one of the options by which the supply of accommodation can be increased. Are there opportunities to increase such provision in your area, Mr Kerr, or will such provision always remain an add-on rather than a solution?
There are always opportunities to have dialogue with private landlords in our area. The private rented sector in our area is indeed small and quite self-sufficient. We want to engage in dialogue with private landlords, but the question is whether they need to have a dialogue with us. At the moment, very few private lets are available in West Dunbartonshire, so the private landlords may not need to engage with us. However, we will keep on trying to engage with them.
There is a relatively large private sector in the Scottish Borders Council area, and it is fair to say that our relationships with the private sector are generally very good and positive. In the recent past, we have started a rent deposit guarantee scheme and we have private sector leasing. Those projects are in their early days, but they are promising. There is much more scope for us to do much more with the private sector, but what I said about the prevention of homelessness should be borne in mind. The extent to which such things will help us achieve the 2012 target remains debatable.
Various local authorities are represented here, but we still come back to the issue of supply. That seems to be the main issue.
We have discussed supply, but what are the other issues? The legislation on lets to homeless people has been presented as a particular issue. Previous witnesses discussed the rising proportions of allocations in some parts of the country to people who have presented themselves as homeless. How different are the issues in different parts of the country?
In Edinburgh, 60 to 65 per cent of lets in our stock go to priority need homeless people. The figures are also increasing for RSLs in the city. We operate a choice-based letting system that gives priority to homeless people. The figure for housing associations is around 40 per cent and rising. They link into our common housing register and choice-based advertising.
Scottish Borders Council is a stock transfer authority, so we do not have our own houses to let. I am not certain what proportion of our local RSL partners' properties goes to homeless people, but it is certainly lower than the figure that Cathy King gave for Edinburgh.
Last year, the proportion of council lets in West Dunbartonshire going to homeless households was 42 per cent; for RSL lets, the figure stood at roughly 38 per cent. Last year, we published a new homelessness strategy. When developing that, we looked at the question of lets to homeless households. We have agreed to phase in an increase in the number of such lets to 50 per cent across the sector by 2011. The figure was agreed through a range of consultation methods with tenants groups and communities in West Dunbartonshire as a whole. We sought to dispel some of the myths about homeless lets and to change perceptions about the type of individuals who become homeless and their reasons for becoming homeless. As a result, we got full support from tenants groups and the tenants movement in West Dunbartonshire. The council and RSLs will phase in the increase over the next couple of years, so that we reach the 50 per cent target by 2011.
I was interested to hear you say that you managed to gain confidence in the process by speaking to tenants groups. Nonetheless, there are negative perceptions of the current process and what some people consider to be its inequities, if they are stuck in a queue. You mentioned the issue of supply, but what can be done to overcome the perception of unfairness in the process of allocation? I am sure that many people come to you about that issue.
We have attempted to address it by moving to a choice-based letting system that is absolutely transparent. Under that system, we advertise every home that becomes vacant. RSL partners have joined recently, so nearly 90 per cent of all social rented homes in Edinburgh are advertised.
The system is transparent, but do people who are homeless have access to those houses?
Yes. They have priority. We have a dual trump system. Medical need has gold priority, which is the highest, and people who are homeless have silver priority, which is next. They leapfrog anyone who just wants to move—I do not intend to demean this—to be nearer work, school or a relative.
So we are giving false expectation to people who are overcrowded or in inappropriate housing—we are pretending that we are giving them an opportunity to bid.
I do not think that we are. The system works only if people are clear about what housing is available to them. Our traditional waiting list system, which involved their filling in a form and our writing to them some time later to tell them that a house was available, gave a false expectation. This is a subject in itself—I could speak on it for hours, but I do not want to take up the committee's time.
You mentioned increasing the volume of houses available. If we built houses and met the targets, how would that help people who are overcrowded or in inappropriate housing?
That would help those people because supply is the major issue. The city does not have many houses with more than two bedrooms and we have very few that have more than three or four bedrooms.
The legislative pressure is to tackle homelessness by 2012 and smaller homes are needed to fulfil the statutory responsibility. However, what matters is not just the number of houses. How many houses can you obtain to deal with inappropriate housing and overcrowding? What is the proportion of such houses? Setting the cost aside, you are not under the same pressure to build those homes.
The position is determined by the housing needs survey, which is under way throughout the Lothians. After that is complete, we will have hard facts.
Is that thinking reflected in your current strategy, or will you become smarter only in the future?
What I described is the basis of our housing needs survey. Needs are complex and varied, as members can imagine, but the housing needs analysis will consider that.
Will you outline the private sector leasing scheme that the City of Edinburgh Council runs, to which the previous panel referred? I am particularly interested in what the council pays landlords who are part of the scheme, relative to what tenants are charged and to the maximum rent that is eligible for housing benefit. If you gave us an idea of the economics, that would be useful.
It is unfortunate that I do not have detailed information with me. However, I will outline the scheme and provide the details shortly after the meeting.
I am interested in your statement that all the rent is eligible for housing benefit. The previous panel suggested that there is a huge disparity between the rents that are charged and what would otherwise be charged in the private sector. However, that is not your experience. You are leasing houses from the private sector and effectively subletting them to tenants at rents that are all eligible for housing benefit. Is that correct?
That is the case. In designing our scheme, we were careful to ensure that it was housing benefit eligible, and it is.
So, the evidence to the contrary, which was given by the previous panel, is wrong.
Specifically in relation to our scheme, but perhaps not in relation to others.
Yes. The point that I am trying to clarify is that you have managed to secure, through your very successful scheme, 1,500 homes in three years, which you are effectively subletting to homeless people in the city, a large number of whom are in employment, at rents that are all eligible for housing benefit.
That is right, although I am not sure of the impact of welfare reform.
A few minutes ago, I referred to Scottish Borders Council having a private sector leasing scheme. We use Orchard and Shipman as well. The contract is very similar—close to identical, I think. I do not have exact figures to hand, but I would be happy to provide those for the committee after the meeting. We have a housing benefit shortfall on our private sector leasing properties. The level of the shortfall is much smaller for smaller properties, but it rises for larger properties.
Patricia Ferguson has a supplementary question on that issue.
It is just a small point and, in a sense, a side issue. Does any of these properties have factoring charges attached to it? If so, how are those paid?
I am not aware of any of the properties that we are involved with having factoring charges. However, some must, and I am not sure what happens about that. Factoring charges are quite unusual in Edinburgh—there is not a huge factoring sector except for new-build properties.
I would say the same.
I would like to pursue with Cathy King the issue of the City of Edinburgh Council's need for affordable housing. The strategy has identified opportunities to provide up to 7,836 affordable homes, and it would be very nice if we could produce all of those. To what extent has the council benefited from the £100 million that has been accelerated in the affordable housing investment programme? How much of that money has been allocated to Edinburgh, given the scale of the need?
I will take the first question first, which was about the additional funding that has been brought forward. As context, I point out that Edinburgh and Glasgow are different from the rest of Scotland, in that we get money directly from the Scottish Government and we manage the development funding to RSLs. Other local authorities do not do that. We were advised recently that £1.8 million is available for investment in the Craigmillar area, which has an urban regeneration company. That is the extent to which we have benefited from the £100,000 to date. We are ever hopeful, though.
Did you mean £100 million?
Sorry—yes.
You have had £1.8 million of the £100 million.
Yes.
The actual construction only takes, what, a year?
It is difficult to say. At the moment, it takes longer than that. The process of negotiating section 75 agreements under the affordable housing planning policy can take a considerable time. Even when we have done that, there is work to be done on the infrastructure, and housing for the open market is often built first. The affordable housing is often the last part of a development to be built—it comes at the tail end of construction.
Realistically, is it fair to say that the accelerated investment is useful in terms of acquiring land and building up a land bank for future social housing but that it will be four or five years before we get to the stage of having houses and flats for people to occupy?
It is certainly a longer-term project. Having said that, things can be accelerated at certain times and in certain areas. For example, we have a proposal for some land that we own, and we hope to move quite quickly to build on that. We hope that homes will be available there within two or three years. However, that project does not involve section 75 agreements, which are an issue for private developers, and it requires considerable streamlining of planning policy.
So, even when you own the land, the process takes two to three years, and it takes four to five years when you acquire properties through a developer under a section 75 agreement.
Yes.
Thank you.
I am particularly interested in local government's perspective on a couple of points that were made by the previous panel of witnesses, who represented housing associations and the voluntary sector. The first is about the removal of ring fencing from the supporting people fund. As we heard, many people with tenancies would find it difficult to maintain their tenancy without support. If the tenancy is lost, that will cause problems further down the line. I am interested in your comments on the effects that the removal of ring fencing and the introduction of single outcome agreements have had in your areas.
On the removal of ring fencing from the supporting people fund, I think that we could demonstrate in Edinburgh that the fund's value, especially in preventing homelessness, was well established. I suppose we were fortunate in that the programme was valued to the extent that the vast bulk of the resources that existed before ring fencing was removed remain in supporting people and housing support services.
We are still in a fluid situation in terms of where the supporting people money lands up. The change has been a mixed blessing, in that it has allowed us to ensure better targeting of the money that we are given but, from the point of view of housing homeless people, there is a concern—to repeat what Mr Aldridge said earlier—that the lower level of housing support might come under increasing pressure. I hope that things do not turn out like that but, like every other local authority, Scottish Borders Council has so many competing priorities that that might be a pressure in future.
Like other local authorities, West Dunbartonshire Council is facing pressures, but we are probably in a position of strength in that—to pick up on the previous panel's discussion on light-touch housing support—our housing support service is part of the homelessness team so it has not been affected by the removal of ring fencing. Our funding for housing support is still secure as part of overall homelessness funding. That funding will continue and, if anything, be added to because our homeless strategy development outlines prevention of homelessness as a key function of a local authority. We want to provide as much intensive support as possible. Although such support is referred to as a light-touch approach, that light touch can make all the difference in setting up someone for successful independent living.
Just for clarity, what does Cathy King mean by "the vast bulk"? Does she mean that funding levels are at a standstill, or lower or greater?
Sorry, what did I say about the vast bulk?
You said that you continue to have the vast bulk of the resources that were available to you last year under the supporting people fund. Does that mean that the funding is at a standstill or that it has been cut only slightly?
It is probably not at a standstill. To explain the context, as David Kemp said, the removal of the ring fencing and of the prescribed tasks for supporting people has allowed us to use the money more effectively and inventively. We have been able to begin to look at economies in delivery across our support services, including traditional social care services such as home-help services and housing support. We have made some economies that have been reinvested in support services. We have probably had a slight reduction in funding but, with those on-going efficiencies, that has not come at the cost of services. We have recently commissioned our housing support services and reduced the cost of the contracts, but that money has been reinvested in additional capacity. The funding is broadly the same, but I suppose that I am nervous about saying that it is exactly the same.
I think that your answer indicates the type of pressure that is on the budgets. It remains to be seen what quality of service is delivered for that reduced investment.
Again, the issue is complex. I think that we have seen a significant fall-off in the number of right-to-buy applications since the modernised right to buy was introduced. The valuations under the modernised right to buy have provided us with a significant capital gain. We have recently seen a further fall-off due to the changing credit situation, which is beginning to cause us some concern for our capital budget.
As Scottish Borders Council is a stock transfer authority I am not sure that it is appropriate for me to say very much on that point, apart from commenting that anything at all that could be done to protect the very limited supply of affordable housing would be a good thing.
We in West Dunbartonshire would welcome a reform of the right to buy, although I emphasise Cathy King's point about a potential vast increase in demand for right-to-buy properties until the date of repeal.
It is interesting to note that there is support—some of it strong—among local authorities, as there was among the voluntary sector and the housing association sector, for changes to be made. The people around Scotland with whom I have discussed the housing situation feel that such changes would be a key driver for protecting limited stock—as Mr Kemp rightly described it—and for giving people more options.
I am sure that Mr Tolson will have the opportunity at some future date to review the evidence in a cold light.
I wish to explore the arrangements that are in place in the City of Edinburgh Council and Scottish Borders Council regarding the private rented sector and the agreements that have been reached.
I think that I said that they are about £10 a month more. That is because, when we entered the contract, we considered the broad market rent. I do not mean the housing benefit market rent; I mean that we spoke to estate agents and did research across the city to find out the actual going rate for private rented accommodation. We negotiated and signed the contract with Orchard and Shipman, and we are tied into that for five years. Most recently, I have seen a slight drop in private sector rents in Edinburgh. Because of that, and because of the fact that we are still on an old contract, the rents are a wee bit higher. That is where the discrepancy comes from. It is not a function of private sector leasing per se; it is more a function of how the market has been operating.
The second part was about how those rents compare with rents for the council's own stock.
Part of the issue is that although the City of Edinburgh Council's rents are among the highest for local authority housing, rents in general are very high in Edinburgh, so the council's rents are still about a quarter of what we might expect in the private rented sector. That is the difficulty for us.
I ask Mr Kemp the same question. Given that Scottish Borders Council disposed of its housing stock, I seek a comparison with the registered social landlords in the Borders.
I am not certain of the figures, but my feeling is that the PSL rents are still slightly higher than the RSL rents. However, I am happy to check that and provide you with the figures.
Ms King indicated that 40 per cent of people in the City of Edinburgh who went to the private rented sector through the agency agreement were in work. That means that 60 per cent of those people were not in work. Has the City of Edinburgh Council identified any problems with the payment of rent by the 40 per cent who are in work—or any of the 60 per cent who might find work?
First, I will set that in context. About 40 per cent of those people are in work, whereas about 10 per cent of people in our council-owned temporary accommodation are in work. To some extent, a quite different group of people are homeless, and it is not the most chaotic who are in the private sector leasing scheme. In part, that is choice; in part, it is just how it has shaped up.
You stated that the people who are offered the private rented sector as an option are less chaotic than those who find themselves in temporary accommodation. Can you relate that statement to the homelessness policies of the City of Edinburgh Council? You deal with people who are homeless and who have presented as homeless, but you indicated that the people who are allocated the private sector option have less chaotic lifestyles.
In any local authority, a mix of people become homeless. Some people become serially homeless—they have several episodes of homelessness. Other people become homeless for a range of reasons, such as relationship breakdown or a break in the chain of buying a house.
Another aspect is that people who have greater support needs will be designated as being in priority need. They are then entitled to permanent accommodation, and the private sector leasing scheme will, therefore, be suitable for them only for a short period of time. That therefore raises a question mark about that sector's suitability for such people in relation to dealing with any issues that they have. Sorry—I am not being particularly eloquent. What I am getting at is that the private sector leasing scheme will take on people who are perhaps not in priority need, for example. A greater proportion of the people who are in priority need will have to go into permanent housing. I did not describe that very well—I hope that it makes sense.
We will read it in the Official Report.
First, it is not policy that 60 per cent of our lets go to homeless people through the priority system; that is just how the outcome shapes up. The figure is about 60 per cent for the council, and around 40 per cent—and increasing—for RSLs. We have a common housing register, which has been crucial in freeing up access to RSL accommodation in particular for homeless people. It has made it much simpler for anybody who is looking for a house: they fill in one form and can access 100 per cent of the social rented housing in the city. I am in favour of that.
We have one final, brief question.
I am interested in Cathy King's comments about crossing local authority boundaries. We heard earlier that there was much resentment about people without a local connection coming into communities, so there may be a conflict. However, that is not the subject of the quick question that I was going to ask.
We are not storing up problems. We keep the situation under review. The five-year contract is between ourselves and Orchard and Shipman—people go into the flats on shorter contracts. Recognising that we have not yet discharged our homelessness duty, we try to work with people to get them permanent accommodation. Some people will stay in the accommodation for two or three years, which helps to stabilise their family. The five-year contract is not for the individual in the house. There is a rolling process: when a property comes on to the private sector leasing market, we review it, and there will be occasions when landlords want to break the contract before the five years are up. We work to get permanent housing for the people in such accommodation.
That is good to hear. However, the scheme has been described as a tool that you have in the toolbox to tackle homelessness and provide home support for tenancies. If the scheme comes to an end, you will suddenly have 1,500 fewer tools in your toolbox. I would be wary of that. I hope that you are successful in your negotiations, because it would be damaging if the scheme did not continue.
A particular threat is the suggestion that banks will be less likely to lend on buy-to-let properties, which would have an impact on our PSL scheme. If that happened suddenly, it would be a major issue for us. You are right.
That is interesting, thanks.
I said that there would be one final, brief question, but committee members have reminded me that they are in charge. Patricia Ferguson will ask the very last question.
I have a request that relates to my question about factoring. It would be helpful if Mr Kemp and Ms King could give the committee information on any factored properties and how factoring charges impact on the overall situation.
I thank the witnesses for their attendance; it has been a helpful evidence session.