Official Report 483KB pdf
Agenda item 3 is oral evidence on the Housing (Scotland) Bill. The session will be split into two parts. The first part will focus on the establishment of the Scottish Housing Regulator and the performance of social landlords. The second part will focus on the bill’s provisions in relation to the right to buy.
As has been said, part 1 deals largely with regulation. It would be interesting to hear people’s views on where homelessness fits into the picture, especially with regard to safeguarding and promoting the interests of tenants of social landlords who are or who may become homeless.
I thank the committee for giving COSLA the opportunity to respond to questions on these issues; it is much appreciated.
COSLA’s reason for linking the regulator’s work so closely to that of Audit Scotland is primarily because homelessness is so important, and by the time homeless people reach housing services it is almost too late. We are about early intervention to prevent homelessness. Other services are involved, such as social work and voluntary sector agencies. We want to make strong links to Audit Scotland because we need to take an holistic view of homelessness. There is a specific duty on housing services to provide for homeless families and individuals but, if we are to be consistent about reducing and preventing homelessness, the regulatory powers must lie somewhere other than with the SHR. A range of existing regulators need to take an overall, joined-up approach to community care and other elements. We are keen to ensure that a more holistic approach to homelessness is embedded through Audit Scotland’s overview.
Thank you again to the committee and the convener for inviting us to give evidence.
Are you confident that the bill’s definition of “social landlord” captures everything that you want it to include, given that there are different types of housing in Scotland and that Glasgow has its own structure?
I ask the other witnesses for their views on the arrangement.
We strongly believe that the homelessness and housing functions of all social landlords should be regulated by a housing-specific regulator that has the required breadth of experience to do that work. The Scottish Housing Regulator has that breadth of experience. That was a strong plank of our response on the draft bill and we have not changed our position. Indeed, we publicly welcomed the fact that that proposal has not been dropped from the bill.
My view and that of the regional networks is that regulation by the Scottish Housing Regulator has been the most transparent approach. It has encouraged tenants to become involved in regulation and to understand why services are not being provided and are not up to the mark. We recognise the authorities and RSLs that have achieved good gradings within the existing framework, so it is important to tenants.
The SFHA gave separate evidence to the Finance Committee for its scrutiny of the financial implications of the bill, and within it we tried to relay the strong message that you raise. I cross-referred to it in the submission that I made to this committee.
I do not mean to cut anybody off but I am conscious of time, so does anyone disagree with that?
I do not disagree with it entirely, but it is important to bear in mind the resources that local authorities and RSLs have put into the regulatory process. We welcome the push towards more streamlined, proportionate regulation. Therefore, if input by the regulator is to reduce, it is probably right that its resource requirement should reduce as well. We hope for a concomitant reduction in the amount of money that local authorities put into regulation across the piece so that that resource can be used to deliver front-line services.
The point on fees has been picked up in a number of written submissions, so I am sure that members will have noticed it.
So materials have been produced.
As I said in response to a previous question, we are well aware that some councils are better than others at participation and, as has been said, that some tenants groups are better than others at participation. Local authorities throughout Scotland take seriously tenants’ views when they formulate policy and make decisions about anything that affects tenants, regardless of whether the processes that they have in place facilitate participation effectively. The language that is used in publications involves a judgment call but, if something that is published says, “The tenants agree with this,” councils take that on board.
I say with all due respect that those staff would be lost from public sector organisations. The Scottish Housing Regulator would gain, from which all would—I hope—gain in the end, but some authorities would have a vacuum in senior positions in the short term.
There are plenty of good staff throughout the sector to fill the vacuum.
It is important to remember that it is fundamental to the new scrutiny regime that the deliverer has the primary responsibility for getting things right. By and large, the system will be risk based—the regulator will be called in when tenants or others have noticed that something is going wrong. It is important that councils and others retain well-qualified staff as the front line for key deliverers, who will be responsible for picking up where things are going wrong and making amendments accordingly, before the regulator needs to be brought in.
We are keen to see joined-up working, of which there are good examples across Scotland. Cordale Housing Association has done amazing work in the community, not just on houses—it built a doctor’s surgery. We all know about the evidence that shows that education and housing are inextricably linked; where there are failing schools, there are failing homes. It is important to get both right. We would like to see in the charter some kind of obligation for housing providers to look not just at houses but at the wider community. They should look at employability and other issues in the community and work with other agencies not just to build houses but to build new schools. That has been done well in Scotland—there are excellent examples that we would like to see promoted in the charter and local charters. We have seen that approach working, and there is proven evidence that it works and creates healthier communities.
I will come back on that specific point; I find it quite interesting, and I am sure that Councillor McColl will have something to say on how local authorities communicate such things.
It makes me very proud that, when I come to meetings such as this, Cordale Housing Association is held up as an example of good practice. As some of you will know, Cordale Housing Association is based in Renton, which is in my council ward in West Dunbartonshire, so I am well aware of what it has managed to do. It has completely turned round a community by taking a more overarching view. I am equally pleased that the other witnesses agree that something like that should be part of the bill, because I also think that it should be. It comes back to the argument about delivering outcomes for areas. We must look at the high-level outcomes. It is not only about improving the housing; in improving the housing, we must also consider, for example, improving people’s health and wellbeing, which is one of the reasons why we feel that Audit Scotland should have a role to play, because it is more experienced at doing that.
What I am hearing—I will perhaps leave it at this—is that, in some respects, some of the housing association movement and some local authorities are ahead of the bill. It is about putting in the bill some of the good practice that is going on and it is about how through, I hope, light-touch regulation, we can monitor and assess what is going on. I have to say that it is like a school, a hospital or a residents association—some are performing better than others. It is only when a more effective monitoring process is put in place that those who could be doing more to work in partnership with local authorities and communicate with tenants can be encouraged. I am delighted with what I am hearing.
This is obviously an issue that the committee is still coming to grips with and we are listening to different views. The most powerful view that I have heard is from Mr Mullen, who said that he wants to ensure that there is equality of regulation across the sector and that housing association landlords and local authority landlords are under the same scrutiny. It is necessary for the eventual act to build confidence on that matter and how we go about achieving that has as much to do with tenants of local authorities as it does with this committee. However, I am listening to what you say and we will obviously scrutinise how that process goes forward.
I sincerely hope that all councillors take their responsibility seriously, and I believe that they do so. One of their remits is scrutiny and review, and I have witnessed that. As a local authority tenant, I have witnessed my local policy development and scrutiny panel, on which councillors are involved in all those sorts of issues. I am well aware of what happens in my local authority, although I cannot speak about the broader picture. However, I am quite sure that the governance standards by which councillors have to abide are robust enough to ensure that they give appropriate scrutiny to anything that they pass. More often than not, councillors act in the best interests of all their constituents.
COSLA and SOLACE’s submission states that local authorities would be happier with the present regime, which is regulation by Audit Scotland, than with regulation by the Scottish Housing Regulator. The bill aims to achieve a common approach to the regulation of housing throughout Scotland. If we had two different regulatory regimes—one under Audit Scotland and one under the Scottish Housing Regulator—would that not create more confusion for tenants in relation to what is provided by and what they can expect from landlords? I understand that local authorities have a wider role under the homelessness legislation, but on the basic provision of housing and housing tenure, surely we need to find a single approach to regulating the delivery of services to tenants.
I do not agree that we need a single regulator. The important thing is not who does the inspection but the standards that housing providers are expected to meet, what is measured and the outcomes that are sought. From my point of view, who does the work is not important. Where there are specialist things that need to be looked at, Audit Scotland should certainly take expert advice from the Scottish Housing Regulator, but I do not agree that it is a problem to have two different inspection agencies.
The recent tenant priorities research came down to the basics. It showed that tenants want a good-quality service, affordable rent and good repairs—a range of basic things to which people have a right. The Scottish Housing Regulator provides a strong and rigorous regulatory regime. Our research showed that tenants of local authorities and RSLs were clear—there was no dissent—that local authority tenants and housing association tenants should be regulated in exactly the same way because they want the same basic services and to be able to compare their services with their neighbours’ services.
Because we have moved to risk-based scrutiny, tenants are unlikely to be more involved by the SHR than they are at present. Under the process in the bill, it is only when something amiss with an RSL or a council housing service is noted that the SHR will come in. We must focus on getting things right first time, at the point of delivery between councils or RSLs and tenants. That is where the focus should be. If we identify problems and things need to be strengthened to improve relationships with individual tenants or tenant participation groups, the focus needs to be on the process that enables councillors to use the information from the SHR or Audit Scotland to inform that work and to build those relationships. Such processes need to be in place at the point of delivery, on the front line, so that problems are not just picked up later.
We are heading into dangerous waters with mention of single outcome agreements. The committee is highly sceptical about whether outcomes can be measured in that way. I will let John Wilson back in in a moment, but I want to pick up on another issue that we want to cover. We have heard evidence that the powers of intervention and inquiry in part 4 of the bill could be balanced so that we do not overburden people with regulation, annual reports and self-assessment. We do not have to deal with that issue now, but before we finish today I would like to get some feedback on it, because concerns have been expressed in the written evidence that annual reporting and self-assessment just will not cut it.
I will be brief, because a lot has been said. The key to everything that was raised in the previous question is the charter itself. The charter will set out what tenants can expect. It has to be transparent, so that expectations are clear and outcomes are measurable. As Lesley Baird said, there has to be flexibility, because there is a diverse range of landlords out there. However, landlords have to be regulated in the same way by the same regulator, so that everybody is clear about what is being compared and measured.
No. I do not share that analysis at all.
I am not. I am simply asking you a question. You said that the devil is in the detail. I am saying that the detail could lead to that conclusion, just as it could lead to the alternative conclusion that the number of housing associations will increase.
Perhaps Mr Mullen could comment. What is tenants’ experience of the rationalisation of housing associations and the mergers that we have heard about that have occurred over the past 10 years? Have tenants seen those mergers as being good or bad?
Rationalisation is a matter for the different management boards, which tenants are involved in. Tenants who are directly involved in such decision making will be knowledgeable about it.
That is correct.
I want to comment not on that particular point but on the move towards the best value 2 regime for local authorities, which I think will inform the regulator’s approach to scrutiny. I wonder whether that will provide some view, not just of mergers—it would be wrong to see mergers as the answer to best value—but on how we partner up in terms of procurement and joint working across the piece. There are already plenty of good examples of councils and RSLs working together to maximise their funding to provide the greatest number of houses and ensure best practice locally. We hope that there will be something in the bill that will ensure that we can squeeze even more quality from the reduced budgets that we will face, and that we can work more closely in partnership. We will find that working more closely in partnership with tenants will prove to be part of best value, too. That is an important point. Mergers may be one part of that, but the partnerships that we have at the moment are the most likely way of saving money and providing better services.
Some of you have no view, but there was some vigorous nodding of heads.
That is one part of the bill that we have grave concerns about. We have no objections to self-assessment because it can lead to improvement, and it is always good to assess yourself. However, doing it in isolation is not the way to go. We suggest to landlords that they should involve their tenants when they carry out self-assessment. There would be far fewer reports to the regulator directly from tenants if the tenants were involved in the first place. That involvement is very important, and it is easy to get focus groups or other local groups together to talk about things and go through what the landlord is trying to achieve, how it is performing and so on. At the end of the day, if risk assessment is going to be based on information submitted by a council or RSL, it is important that that information is accompanied by the tenants’ view of services and how their landlord is performing. If we are going down the route of risk-based assessments, the information that the regulator gets from the landlord should be robust and valid, and it should have the confidence of the tenants on which it purports to report.
I agree with Danny Mullen that there are deep concerns that self-assessment is going to be an annual tick-box exercise. It should be more than just an annual process. Tenants should be involved in determining the service throughout the year so that when the report goes in at the end of the year, it is well rounded. It is vital that tenants are involved in that process.
That brings us to the end of evidence from this panel. Thank you all for your time and the evidence that you have given us. I look forward to your continued involvement in the progress of the bill.
From the outset, we have supported the intention of the bill to restrict the right to buy, and we understand and agree that the existing rights of tenants should be untouched. However, we have made it clear that, in our view, the unintended consequence of the proposed reforms is to make the right to buy far too complex. We need to find ways of simplifying and streamlining the process while staying true to the original intention of the bill, which is to safeguard social housing.
The Tenant Participation Advisory Service was involved in a series of events throughout the country at the “Firm Foundations” consultation stage, supported by the Scottish Government. We consulted tenants widely at that stage, and there were further sessions when the draft bill was published, so we have heard a lot of views on the right to buy.
How many of those houses would be available for homeless people? I just do not get the point about the irony that the homelessness legislation target will coincide with people exercising the right to buy. If they do not exercise that right, how many homeless people will be housed the next day? How does that work?
As I said, potentially 80,000 properties will be subject to the right to buy in 2012 that were never subject to it before the modernised right to buy was introduced.
Right.
Some local authorities are not willing to take the risk, and some are not in a position to build houses, regardless of what the legislation says. A fairly large number of authorities are not building new houses because they fear that, at some point in the future, that provision will be subject to the right to buy and will be lost.
The modernised right to buy should enable authorities to reclaim much of their outlay.
I will come back to that point.
It is a matter of finding a balance between protecting our disabled-accessible stock and providing the same benefits to all tenants across the piece. We have discovered that, along the way, we have lost many properties that have a large number of bedrooms, that are disabled accessible or that are suitable for older people. Therefore, people with those needs who are on the waiting list are discriminated against.
So the right to sell would exist.
You say that the modernised right to buy should be scrapped. Are you saying that that should happen just for housing associations or for housing associations and local authorities?
You are saying not that the right to buy should be scrapped altogether, but that it should not be introduced for housing associations.
We are referring to the right just as it relates to housing associations.
Did I just hear a shift in the evidence—that the individual’s right to buy should be limited but that the council’s right to sell should be enhanced?
The issue is becoming more complicated. The effect of the bill will be, in a generation’s time, to end the right to buy . It is like stamping out a bush fire—over time, the right will disappear.
Our discussions on the bill have so far focused on the right-to-buy restrictions that the Government seeks to bring in. I will put another point to you. During my involvement in the social housing sector over many years, I have been approached by many people who would like more focus on the right to rent. We have touched on the right to buy and even the right to sell this morning, but we could focus on the right to rent, either immediately or over a short period of time, as many tenants and tenants’ groups and organisations throughout Scotland feel that the right to buy should be ended. That would simplify the situation—as Mr Young said earlier, the bill is in many ways quite complicated and I will come to that in a moment. Do you, from your various viewpoints, think that we should focus on the right to rent? It could be undertaken as an immediate step or phased in over a period of five years, for example, and there would therefore be no right to buy for any tenant, regardless of the circumstances or the length of their tenancy.
That is a good point, convener, because the amount of rented properties as against—
It is an endorsement of your point, but we will get another four answers.
I have nothing more to add.
You are entitled to opt out; that is fine. I am sure that Mr Mullen will want to answer.
A right to rent sounds really good, but it presupposes that there are houses for people to rent. We will come to the right to rent once we have ended the right to buy.
Not if we legislate, I would have thought.
Sorry, Jim. You are back on.
I realise that we seem to be batting this back and forth and I appreciate Bob Doris’s supplementary. I understand why people might be reluctant to answer the question, but it is a big concern that has been raised with me and other committee members by tenants and tenants organisations throughout Scotland.
That is the position of the tenants organisations. If you choose freely to move, you should be aware that you are losing your right to buy and you should not retain it either on return to the social rented sector or, indeed, if you move from a new build back to an older property.
At the moment a tenant who came back into the rented sector would have the modernised right to buy, meaning that they would have to wait five years to exercise it and would then receive a maximum £15,000 discount at some point down the line, which, as we have agreed, is not a huge amount of money. The situation that the bill will create will be confusing and it would be better avoided.
My apologies, convener. That was my mobile phone.
It was David Cameron calling to give him his lines.
Those are the figures in the 2006 Scottish Government study, “The Right To Buy In Scotland: Pulling Together The Evidence”.
I am absolutely speculating and guessing but I would say that under the modernised right to buy, with the £15,000 discount, the average would be £65,000 to £75,000.
Yes, because we are not here to get money; we are here to house people, mainly in rented accommodation—that is our reason for existence.
Yes.
That is not the information that we receive from our larger members, who are probably the most affected.
Yes, but would your members not rather build new stock?
Oh, I see.
Well, they obviously want to build new stock as well.
Right, but they do not want £250 million to £300 million a year to help them build that new stock. Is that correct?
But you are talking about denying yourselves the right to those moneys after 2012, are you not?
I am asking you about a policy, which your association advocates, that will deny your associations a substantial source of funding from 2012 onwards.
I would need to go back to the members who gave us the information and clarify that.
We can seek clarification on some issues that arose in that line of questioning and get more information to help the committee.
There seems to be a uniform view on that.
I had to tell him, “Sorry, David, I’m busy”.
Are you talking about selling a vacant property?
No, I am talking about selling any house. As I understand it, councils, as individual free-standing corporations, have a right to buy and sell. What law stops a council selling any property or land that it owns?
The right to sell concept is a new one on me.
Yes.
Did the same Scottish Government study give any estimates for the annual receipts from the sale of these 3,500 to 4,000 houses?
Good—that is fine. Let us come on to that reason for existence. I asked the Scottish Government to provide us with a breakdown of the sources of finance for new social housing per unit. I was told that the average cost in 2008-09 was £132,000, that the grant element from the Scottish Government and other forms of public subsidy was £84,000 and that what was called private finance, which is basically the resources that are available to housing associations, was £48,000. The latter sum comes from a mixture of the housing associations’ reserves, borrowing and right-to-buy receipts, although those will be modest at the moment. So two thirds of any house that you build is, in effect, financed by way of grant, is it not?
I am not sure that that is entirely accurate. I would need to check that, Mr McLetchie.
They tell me that it does not quite work in that way and is not quite as simple as that.
Oh, I see. What would they spend the £250 million on?
I do not know, but they would have lost the stock, would they not?
With respect, I think that you are oversimplifying a very complex situation.
They do not want to lose properties in areas with scarce resources.
Our information came from members who are used to dealing with the matter day in and day out. They tell us that it does not have the effect that you make it out to have.
That is right.
The money would not allow us to build as many houses as we would sell. I think that that is the crucial key to the issue.
I have got the numbers from the Scottish Government, because I asked all these questions before we started this line of questioning. I can assure you that, in very broad terms, two thirds of the cost of your houses comes in grant and one third comes from your own resources. If you increase your own resources, your capacity to build new houses, with the assistance of further funding from the Government, is increased and not decreased. Is that not right?
I suggest that you do, because I think that they are under a serious misapprehension and that perhaps their judgment is becoming a little distorted by thinking too much about the stock that they have rather than the stock that they should build in the future.
We have another comment to make on pressured area status. We would like it to be extended to include all forms of the right to buy, not just the modernised entitlement. If an area deserves pressured area status, it should apply to all forms of the right to buy.
Are there any other comments on that?
Yes, we would appreciate that.
I consider homelessness to be so important that it must be regulated and there must be a clear objective of providing protection for homeless people. Too often, people who are vulnerable and in need of help are left to their own devices. I am sure that the regulation of homelessness services should be the role of the Scottish Housing Regulator. It has experience of regulating local authorities as well as registered social landlords, and it has called on the RSL sector to redouble its efforts to provide homes for homeless people. The Scottish Housing Regulator should govern all aspects of regulation for local authorities and social landlords.
Yes. We are content with the definition.
Yes.
Yes.
Yes.
Nobody knows councils better than Audit Scotland. No service operates on its own nowadays. In the past, perhaps, services operated in their own silos, but that is now in the distant past. It has already been said that a range of services are involved in homelessness, and we believe that if inspection is done by Audit Scotland, an holistic approach can be taken. The Government and councils are now looking at strategic outcomes for people across the broad range of council services. We believe that Audit Scotland should use the Scottish Housing Regulator’s expertise where necessary, but a more joined-up inspection regime would not only provide a better idea of how councils perform in delivering outcomes but reduce the burden of inspections on local authorities.
We hear that message loud and clear. Thank you.
The relationship between tenants and councillors or councils is an unequal partnership. Tenants must have capacity to engage in that arena.
At the moment, the social housing charter is a draft. Our concern was that it would be seen as a done deal—something that was already decided and on which tenants would have no influence. There should be a framework, but we are really pleased to see that, for example, Glasgow Housing Association will not be compared with the Hebridean Housing Partnership or Orkney Islands Council. We are pleased that there is flexibility.
The registered tenants organisations are the driving force in getting out the message about the bill. We did a pretty good job during the consultation exercise, as has been witnessed in the responses from individual tenants groups. The nine regions also actively promote information sharing, newsletters and other means of communication with their RTO members.
We are all aware that the effectiveness of tenant participation varies across the 32 local authorities in Scotland. Some councils are not good at it and others are good at it. We work together and learn from one another in that respect. The same can be said for tenants groups—some are good at participation and some are not. Those that are not good tend to seek help from tenants networks to improve. I am pleased that the Scottish social housing charter is widely supported among the other witnesses, as it will improve the situation and can only be positive. However, as has been said, it is not a done deal and we need to involve more people in its development.
We are in the process of doing so.
You are in the process of producing materials to let people know about the bill. We have lots of written and oral evidence about what tenants want and you are now producing information for tenants on what the bill might mean for them. Who is leading the debate? That is all I am asking.
There is a variety of ways of going about that. Just because people live in a house, that does not mean that they have signed up to participation. I would like them to do that, but they do not always do so. We must consider innovative and interesting approaches. Tenants often say that they will not get involved because the decision has already been made. We have to get beyond that and help tenants understand that the decision has not been made and that there are ways that they can influence what happens in a small or a greater way. We are excited about the bill, because we think that tenants can have a huge impact on it .
The Housing (Scotland) Act 2001 introduced tenant participation and a role for tenants in the housing sector other than just being a tenant. They had to be consulted. The act placed a lot of duties on landlords to inform their tenants and engage with them more forcefully. However, that has not been completely successful. It is good in some areas, such as West Lothian, where I live, where we have a good rapport with councillors, the administration and the council’s officers—we are well informed and engaged in debates—but we recognise that the approach is not as good in other areas. Capacity is needed to enable tenants to formulate their ideas, to think through problems and to get to the bottom of what the bill is and what it means for them. It is important that we as tenants have good landlords. Landlords are supposed to resource us, but they are not doing that.
I will follow up Mary Mulligan’s final point about resources and ask about financial and staffing resources. The SFHA makes the proper and fair point in its submission that staff should be
We would not be concerned if the regulator appointed such well-motivated and well-qualified staff—we would applaud it for doing so. We would view them not as lost to the sector but as an aid to supporting continuous improvement in the sector.
I agree with Maureen Watson. The housing sector is a good place to be and is full of exciting, innovative and professional people who are desperate for promoted posts. The situation would be seen as an opportunity rather than a concern.
Jim Tolson talks about resource being taken away from local authorities and the RSL sector, but that is at a time when their resources are being reduced, so they cannot retain the employment status of the people they have. I do not see the issue as a problem. Professional people always look to move to the right area and the right job for them. If they want to make a career of it, good luck to them. When they leave, they leave a good place for someone just as capable to take over. We have witnessed that—we have lost housing officers and managers, but good enough people have come in to take their place.
It is interesting to note that, to some extent, the panel is split in its view. I do not know how many officers will be required to support the Scottish Housing Regulator. If it requires half a dozen spread across Scotland, the impact will be minimal, but if it requires many people, the burden may be significant, especially if more than one of them come from one organisation. That is food for thought for the committee and the Parliament as we consider the bill.
Good morning. I have been delighted to hear the witnesses talk about wider engagement with tenants and the wider community. Housing associations and local authorities already know that successful RSLs are less about houses than about communities. Before today’s meeting, I was interested to read in our papers:
My point is much the same as Lesley Baird’s. There is room for flexibility in the charter to deal with local variations and scenarios. However, the overriding point is that we have national standards that are applicable across the board to drive forward improvements in the services that tenants receive and maintain houses nationally according to the Scottish housing quality standard. Tenant participation should always be included as well, because such participation is unbelievably patchy across Scotland. Almost 10 years after the 2001 act, we are still fighting for a place at the table with some landlords, so it is important that tenant participation is one of the major areas to be covered in the charter. Having said all that, I believe that, given the good will of all the partners involved, there will be manageable and measurable standards that will drive forward good practice.
I cannot comment on the HRA funds of individual councils, but I am sure that there are excellent governance arrangements both within RSLs and within councils.
I concur with that. I repeat that it is important that a regulator involves the people whom it is supposed to be protecting, and Audit Scotland does not do that. It works away on its own and produces a report that gets buried in a council chamber. More tenants have read the inspection reports that the Scottish Housing Regulator publishes, and tenants can get involved in improvement plans where appropriate. Under that approach, tenant involvement is maximised and things are more transparent to tenants. It is important that there is a single regulator that regulates across the board.
From the councils’ point of view, we are not talking about making the charter so flexible that, in effect, every council and every RSL can have its own charter. We believe that the charter has an important role to play. It should be high level and should say what standards people are expected to meet, but it should not necessarily say exactly how people should deliver those standards. It is not for the charter to do that.
You got an award for it.
Yes—I still have the award—but it was utterly meaningless. There was a lot of tenant involvement in it, but we did not take it to the next stage—there was no measure for us to look at once we had produced it. The charter must be measurable.
I concur with everything that Lesley Baird has just said. The concept of minimum standards is interesting and it should be possible, during the consultation, to explore how minimum standards and local flexibility could be balanced in the charter. The concept of minimum standards is not new to housing associations and housing co-ops. It was part of the raising standards in housing sequence of good practice guidance, which was highly successful for a number of years—and some of it still exists. We could have a minimum level that everyone had to meet and, over and above that, flexibility.
Good morning, everyone. I have some questions about trends in the housing association movement and the implications of the bill for that. I will start with a question for Maureen Watson. How many housing associations and co-operatives are there in Scotland? What have the recent trends been on the number of those organisations?
There are around 162 housing associations and co-operatives at the moment.
It is lower by about 40. Over the years, there has been a trend towards mergers. There have been two mergers in the past year, and I do not see that trend stopping as people look at smarter ways of working and commonalities of interest.
Right. So you believe that the merger and rationalisation process will continue, but that it will not be accelerated or decelerated by the enactment of the bill.
That is not our assessment at the moment. Many of the difficulties will come in the details of the different consultations that are about to come out on the back of the bill. I reserve my judgment until we see the exact details of what all the little bits of draft guidance will require housing associations and co-ops to do.
We will keep a close eye on matters and fully participate in all the different rafts of consultation that are coming out. We are looking forward to that and gearing ourselves up for it. What works for tenants is at the root of the issue.
Do you and your members think that those promises will be fulfilled?
Have the promises that were made during stock transfers been fulfilled? The regulator considers promises that have been made to tenants. If the regulator thinks that those promises have been put aside without good reason and without consultation with the tenants, they will raise that issue in their reports. I have read plenty about that.
Yes.
But most of those mergers and rationalisations occurred before the onset of the current economic crisis, so they are a function not of that but of a process that has been embedded in the system for a number of years, as I think Maureen Watson said in response to my initial question. Is that correct?
That is an interesting point. Does Maureen Watson, on behalf of the SFHA, agree that there should be tenant ballots on transfers of engagements, or should ballots be limited to stock transfers?
That is an interesting proposal from Lesley Baird. It is not one that we have debated within our sector yet. I would like to take soundings from members on it.
Does anyone take the contrary view? The burden of regulation was mentioned earlier.
It is a tenet of the new, post-Howat, scrutiny that self-assessment is the bottom line for how assessment is undertaken. The best value 2 approach that Audit Scotland will take to councils at a corporate level will contain some checks and balances so that the quality of self-assessment and what it entails across the piece can be checked. That approach will also ensure that improvement is driven corporately. An important aspect of Audit Scotland’s role is ensuring a high standard of self-assessment across the piece.
I do not disagree with anything that anyone has said. Self-assessment must involve tenants. It is a challenge—we have been trying to do it for some time in our sector. However, we are supporting our members through the process, and there is lots of scope to improve the guidance on self-assessment. We will work with our members and the regulator to ensure that self-assessment happens. Annual reporting will provide good information, but the process must be proportionate and fair, and it must look at areas of good performance as well as landlords that are not performing quite as well as others. That will inform continuous self-improvement for everyone.
Our second evidence session on the Housing (Scotland) Bill is on the right to buy. I welcome two new witnesses to join the previous panel: Andy Young, policy and strategy manager at the Scottish Federation of Housing Associations; and Jamie Ballantine, head of projects at the Tenant Participation Advisory Service Scotland. In the interests of time, we will go directly to questions.
COSLA supports an end to the right to buy for new-build properties and new tenancies. We would not support an end to the right to buy for all tenancies, including current tenancies, because many local authorities in Scotland have used the right to buy—and their right to sell—as an effective way of getting some income. We think that there needs to be some local flexibility. Local authorities should be able to designate areas where they will and will not sell properties, based on assessed need. It is important to allow local authorities the flexibility to generate some income by getting rid of housing that they no longer need.
I reiterate what Jamie Ballantine has said. Tenants find the current system a bit complicated because they cannot understand how one person can get one discount and someone else can get an entirely different discount, whether the right to buy is modernised or reserved. The system is now being complicated further. There must be a real reason for extending or withdrawing the right to buy. Generally, tenants welcome the ending of the right to buy for new social rented properties and would like any new tenant coming into the sector not to have the right to buy. There must be a cut-off point for the right to buy.
Both ends of the spectrum that John Wilson describes would be involved, with the potential selling off of properties that could not be brought up to meet SHQS in the near future within local government resources, but for which there is scope for the necessary investment being brought into play under private ownership.
Do any other panel members have comments?
One of the targets that we are trying to meet with regard to housing provision, particularly in the social rented sector, is on homelessness. The present Government and previous Governments have committed themselves to meeting strict targets in that regard.
It does not work quite that simply.
Of course it does not.
As we have heard and as we all understand, there is nothing simple about the issue. You pointed out earlier that the situation is complex. It should not be simplified, as you have just done. We are talking not about homelessness but about housing need. The people who are in those homes and who want to exercise the right to buy need that home, or a home somewhere else.
All the witness panels in our current programme are on aspects of the bill, but we have taken considerable evidence on other issues from those organisations. Their focus is on a slightly different issue from the one that we are discussing today.
Regardless of whether it is economic to end the right to buy, we currently have the lowest level of stock in the social rented sector. Maintaining that stock will become unviable if we continue to lose rental streams from such properties, as they pay for improvements, to drive up standards and so on. They also provide employment for the people who provide the services to us. If we do not have a viable social rented sector, where will we provide homes for the homeless? We are already beginning to contract out that responsibility to the private rented sector. All of us know the vagaries of that sector and the difficulties that are associated with securing proper accommodation for homeless people. There is an economic case for retention of social housing stock and ending the right to buy.
You have prompted my second question, which concerns a written submission that we received from the Scottish Disability Equality Forum. The forum points out that the people with whom it is involved are often those who have waited longest for appropriate properties to move into and feels that they are more likely to lose out under the proposed changes. Is it unfair that a person with disabilities who has to move into a new, more accessible property because their existing house is no longer suitable will lose the right to buy? People who stay in their houses will hold on to that right, as would the disabled person if they stayed in their house.
I have a lot of sympathy for the issue as Mary Mulligan described it, but if a disabled person has a right to buy they can use it to buy the property that they are in at the moment, so we are talking about losing the right to buy only if they move to a state-of-the-art, disabled-friendly, new-build house. I can imagine people aspiring to own a property like that, but only two or three houses in a whole area are being built to that disabled-friendly design. If we allowed someone who moved into such a house the option of buying it, the house would be lost to the social rented sector and replacing it would be a problem. If we allowed the disabled person to buy the house, it would create an equality issue in reverse, because other people who move into new housing would lose their right to buy. I wait with bated breath to find out what you decide.
My final question is to Mr Young. The bill proposes—and I have heard nobody argue against it—that local authorities should be given more say in how pressured area status is implemented, where it happens and how it happens and that the status should apply for longer. Could that be the way forward for the right to buy? Should we take a more local approach? That would deal with some of the COSLA representatives’ points about local authorities that feel that they need to sell properties, whether that is because they cannot bring a house up to standard or because that suits the overall planning for an area. That approach would give local authorities—in conjunction with tenants, I should say—a better say in how they sell properties, rather than scrapping the right to buy across the board, which seemed to be the SFHA’s proposal.
Our overarching view is that the right to buy should be ended and that the modernised right to buy should not be introduced for housing associations in 2012. I have some sympathy with what you suggest. We have said that, underneath our overarching view, we generally support the proposals.
The ability to sell would be available.
The position is different. That could not be done for local authorities, because local authority tenants can currently exercise the modernised right to buy, whereas housing association tenants cannot. That would be about removing rights.
I would be worried about a right to sell for councils, because the first thing that a council that was in trouble would do was sell properties. I would be afraid that, in most cases, the properties that councils could sell would be new builds. Ending the right to buy, but selling off the sitting tenant’s property is a double whammy, which worries me.
But you cannot make an impact unless a substantial amount of housing stock is returned to the sector. How many houses are we talking about, and over what period of time? The Government’s ambition is for around 18,000 homes to be returned. Andy Young has already publicly stated his view on that—he does not take it seriously either. Is that just a diversion from the fact that there are 285,000 people on the waiting list for social rented housing? Is it just an academic—or an old—argument?
My understanding is that the Government’s research predicted that the bill would save somewhere between 12,000 and 18,000 houses from the right to buy.
It is difficult to come up with a figure, particularly in the current economic circumstances. The other issue is that the tenants to whom the right to buy does not yet apply tend to live in new-build housing association properties, so we do not know what the eventual take-up might be. The figure of 12,000 to 18,000 houses is an educated guess.
The French housing federation looked at our homelessness legislation and transformed it into a right to rent in France—that is perhaps the next step for us.
That is helpful—thank you.
I will make a general comment. Councils should be given the flexibility to meet the needs of their area however they see fit and feel that they can do that best, on the basis of proper housing needs studies. We are talking not about giving councils carte blanche to sell off all their housing stock but about giving them the flexibility to target areas in which they feel that there is a need to sell, for whatever reason.
That is at the expense of tenants. It seems to me that the issue is not the principle, but who has the right. I am thinking aloud. We have lots of criticism of the tenant’s right to buy and the proposed solution is giving the council the right to sell. That is what we have just said, or do I misunderstand?
Do any of the panel members believe that?
That is an interesting point from Mr Mullen. I am not sure that I should comment, as I do not have a mandate to do so from COSLA—I will decline to put forward a COSLA point of view.
I have a point.
I am always telling Bob Doris that I will let him in later but is your question on this subject, Bob?
I will ask my question; if you want to deal with it later, that is fine. I want to put the cat among the pigeons. How about we just say that after 2016—to pick a date at random—no one will have the right to buy? Between now and 2016 we can look at what barriers there were for those who wanted to exercise their right to buy but have never bothered to do it. The date is set for 2016, we have a blank sheet of paper, and local authorities and housing associations know where they stand. I take Mr Ballantine’s point about the peak that you might get when people then moved to buy their house, but the situation would be uncomplicated and we would know where we stood.
You are using Jim Tolson’s question time. I allowed you a supplementary. Is there any credence to the approach of picking a date out of the air? It seems a bit—
Would you be open to the legal challenge that you have taken rights away from people?
That question is more for tenants organisations. Earlier, Mr Mullen said that he had no problem with that, as long as people know that that is the case and as long as that is their choice.
I think that I have made the federation’s views clear on this. It might clarify things if the bill said that the right to buy should be ended for all new tenancies, not all new tenants. [Interruption.]
We will pause a moment while there is an execution. [Laughter.]
Indeed—and me, too. Can we therefore agree that it is a complete red herring and totally irrelevant to our discussion?
Excellent. I was intrigued by Mr Young’s assertion—validated, I believe he said, by the Scottish Government—that when the modernised right to buy is introduced for housing associations in 2012 there will be an estimated 3,500 to 4,000 sales per annum out of a stock of 80,000.
Not to my knowledge. I do not know, so I cannot answer the question.
That seems a bit of an omission. What would be the average receipt from the sale of one of these houses?
If we multiply that by 3,500 or 4,000, we are—if my mental arithmetic serves me right—talking about receipts in the order of £250 million to £300 million per annum. Is that about right?
Possibly, but one of the houses might be stuck out in the Orkney Islands, which has only four socially rented properties.
I am just talking about the policy in the round. The housing association movement would generate receipts of £250 million to £300 million into its own coffers. Perhaps the Scottish Government could give us those numbers so that we get detail that is based on its projections. Am I not right in thinking that those receipts must be set in the context of total Scottish Government expenditure on affordable housing of around £500 million in the past year? In fact, I think that it declined in the past year because of the previous acceleration.
That sounds about right.
So, at a time of public sector spending constraint, when the affordable housing budget is in decline, partly because of last year’s accelerations, you are telling me that the housing associations of Scotland, which are the principal recipients of that budget, want to turn their backs on the prospect of getting £250 million to £300 million a year into their coffers. Is that the policy?
Right. That grant comes into the housing association’s coffers. If a house is sold five years down the line through the modernised right to buy, the grant, minus a very modest discount—which we have agreed that it is under the modernised right to buy—is replaced by funds that come from the private sector, which is the banks and building societies that give mortgages to the tenants who buy, or from the private savings of the tenants. So the money that is used to buy the houses under the right to buy will come from banks and building societies by way of mortgages to the tenants. Is that not correct?
Yes, in most cases.
And all that money flows from private sector lenders to the tenants and then comes back to the housing associations, which get to keep it. Except in limited cases of stock transfer, they are under no requirement to repay it to the Government that gave them the housing association grant in the first place, are they?
I assure you that that is the answer that I got from the Government, which I will happily share with you.
We are talking about what you want to achieve. You want to turn your back on £250 million to £350 million a year in receipts, do you not?
Our members say that they would rather keep the stock in the rented sector.
Apparently not.
They could build new stock. I find it incredible that organisations that are supposedly dedicated to building new affordable housing for rent or for shared equity schemes want to turn their backs, at a time of declining public sector budgets, on sources of huge revenues that would enable them to fulfil their basic purpose. That seems to me a bizarre policy.
I think that it needs a degree of simplification and common sense. What you have to tell me is simply why your housing associations apparently do not want £250 million a year of resources to apply as they think appropriate in the interests of tenants.
Even though they could then build new properties in such areas with all the receipts that come in.
They tell me that it is not quite as straightforward and simple as that.
I think that you will find, Mr Young, that it is as straightforward and simple as that, because the resources that are, as you defined, from the Scottish Government are not subject to being repaid to the Scottish Government, other than in the limited context of stock transfer properties. I strongly recommend that your association researches where such moneys would go and into what coffers they would flow, before you come along and tell us that you want a policy that will deny and limit the ability of your organisations to provide affordable rented housing for people in Scotland who need it. Do you not think that it might be a good idea to get some information about the flow of money?
On the contrary, Mr Young. As I established previously, for every £1 that you contribute from your own resources, you get £2 from the Government in HAG. That is what builds the new houses—that is what the information says. So you can actually double your money. Is that not right?
I do not think that that is right. I see that a few of your colleagues are also shaking their heads. It is clear that somebody has got their numbers not quite right somewhere.
If Mr Young takes the issue back to his members, perhaps he could ask them to calculate exactly, if they used Mr McLetchie’s model for building new houses, how much loan debt the housing associations would be carrying for paying backs the loans that they have secured from banks and other financial institutions to build the houses that they rent out at the moment. Perhaps he could also ask how much rental income would be lost—
John, at the end of the meeting the committee will have the opportunity to decide what further information it needs as a result of Mr McLetchie’s line of questioning. We are not addressing those points to only one member of the panel. I hope that we will build on some of the questions that have been answered and agree collectively about any further information that we might require. We will have the opportunity to ensure that we get all the information that we need.
I want to comment briefly on Mr McLetchie’s rather forceful and passionate points. If the SFHA has any further information in relation to those points, it would be good to get some idea at some point in the future of the rental income loss from the housing that was sold over the years. That is quite important. Also, I would like to get some idea—although maybe not today—of the housing aspirations that have been denied to people who are still in the social rented sector who want to move to larger family houses that have been lost under the right to buy. Finally, I would like to see some analysis of the maintenance required on the houses that have not been subject to the right to buy compared to those that have been sold off. You said previously that it is more expensive to maintain the houses that people do not want to buy than those that people have bought. I imagine that Mr McLetchie could be comparing apples with oranges, which should also be put on the record.
I assure Mr Young that he can stop writing furiously. The committee will communicate with the appropriate bodies and give a clear list of questions or further information that we might require from them or from the Scottish Government. We will have the opportunity to do that as an on-going part of taking evidence.
It gives us a degree of flexibility, but it could be argued that extending the period from five to 10 years is rather arbitrary. That might be something for the committee to discuss.
We have received quite a lot of feedback from our members that the section on the purpose of the regulator and its objectives should mention homelessness. We are talking to our members about initiatives to alleviate and prevent homelessness and about tenancy sustainment initiatives, and we will seek to discuss those further with our members as the bill proceeds. We can provide the committee with some written examples if that would be preferable.
Good morning to you all. COSLA’s submission states:
What discussions has COSLA had with Audit Scotland about the arrangement?
We have had discussions with Audit Scotland and indeed with the Scottish Government. We agree that Audit Scotland should have the primary, overarching view of regulation within housing services. We are content that there is a role for the regulator, but it should exist within that overarching framework. We hope that that approach will lead not to silo inspections of single services but to inspections in relation to the outcomes of reducing homelessness, improving community safety, improving the environment and so on.
In collecting evidence across Scotland, it was clear to us that tenants of both local authorities and RSLs were delighted for the sectors to be regulated equally and that because the Scottish Housing Regulator is the expert body in regulating housing, it should be the organisation that continues to regulate RSLs and housing associations. Tenants throughout Scotland were upset and concerned to hear the suggestion that housing associations and local authorities should be regulated differently. Tenants certainly want equality. We understand that there is a lot of work because a lot of regulation is involved. There must be a coming together so that the regulatory burden is not so onerous and tenants are regulated equally throughout Scotland.
I have a general question on the level of tenant participation. Some strong views have been expressed in the submissions. How have we established, beyond the normal networks, the awareness of tenants—the people who actually live in rented properties—of the bill’s impact on them? What do they know about it? What additional work has taken place to consult and engage them? Have their views been surveyed?
There is a lot of work to be done. Do you agree that we must be careful when we say that something is not acceptable to tenants, or that tenants want this or that, given that there has been little discussion with them because of a lack of resources and of participation and, at the extreme, because English is not people’s first language? If I spoke to 20 people in Greenock who have been tenants for many years and whose first language is English, how many of them would know about the implications of the bill, other than those who participate in committees? We will discuss the right to buy with the next panel of witnesses, but how many tenants know about the impact of that on them? How many know about any outcomes that will improve the quality of their housing? How many would say that homelessness is the main issue and how many would say that quality of housing is the main issue? How have we established what people who live in social rented accommodation feel about the bill and what their priorities are?
We hope that we have provided sufficient information to the tenants who are on the boards of housing associations or the members of housing co-operatives to enable them to get involved in actively provoking debate in their areas. At three or four recent events we had active debate with tenants about the implications of the bill. We encourage them to hold local meetings and we offer our support when they want to do that. We are considering providing tenants with an easy guide to the bill and what it means for them. I was at a meeting last night at a co-operative at which we discussed that issue.
From the point of view of local authorities and probably RSLs—although I am not here to speak for RSLs—if we are inspected and told to improve X, Y or Z in the service and we have lost some of our best staff to the regulator, we will have lost significant capacity to meet the regulator’s requirements and recommendations. That is something to think about.
Tenant participation is well tailored to deal with aspects of community life. Where there is a tenants group in a particular area, it will deal with the whole package in relation to where people live, and everything that happens in that area and the wider community.
Housing associations and housing co-operatives have a strong track record in having a wider role in social enterprise activity. That is increasing all the time, so I would support its inclusion in the charter. We have a lengthy period of consultation ahead of us on what will be in the charter, so that will get the debate going and we can look at how to perform the balancing act, because we encounter difficulties and barriers all the time. Their first interest is the tenants in their area, but there is also the wider community that they serve.
I would not argue against what you are saying, but I sound a note of caution. The link back to Audit Scotland is important because if we are talking about antisocial behaviour, for example, there is an important link back to the regulation of policing, what is happening in the world of community safety and so on. If we are talking about supporting tenants into employability and whatever, there may be links back to other sources of regulation that are going on elsewhere. The issue is whether the SHR should have a very wide remit and a generic knowledge or whether it should have a specific remit around housing, tenants and so forth and should link very well to other areas of Audit Scotland’s work and to the other regulators. We could go in two directions and we perhaps need to explore each of them to work out what the imperatives are that we are working towards.
I absolutely agree that the level of scrutiny for RSLs and local authorities and the standards that they have to live up to should be the same. However, as I said, we feel that there should be a different way of going about that, because there are other aspects to consider, particularly for local authorities.
I am a bit nervous about the charter being regarded as something that will solve all the world’s problems. However, are there any important general considerations that the committee should take into account as the charter develops? Mr Mullen described it as a Scottish charter. Should it be a Scottish charter that covers everything? Or should it have flexibility with regard to geographical area or different types of landlord? I would like to know about general considerations rather than what should be included in the charter for allocations, quality or whatever.
As Danny Mullen said, the charter has to be flexible and transparent. We cannot compare Glasgow Housing Association with the Hebridean Housing Partnership—that would make a nonsense of the charter. It must have flexibility written into it and be able to ensure that tenants and organisations are measured properly against a set of flexible standards. That is the difficulty, though. As I said, how do we compare the GHA with the Hebridean Housing Partnership?
There is nothing contrary from anyone else, which is good.
Good morning. I am really surprised that my colleague Bob Doris did not refer to a housing association that he likes to put on a pedestal for the work that it has done: Queen’s Cross Housing Association. Anybody who has been involved in housing will be aware that Queen’s Cross has been ahead of the game with regard to housing associations’ wider role for a number of years. It has not just looked at community facilities, but has provided a range of services in the local community, including business units for start-up companies in the area. It has been possible for some time for housing associations to have a wider role, and regulation is in place to allow housing associations to do that. The provision in the bill for housing associations or co-operatives to have a wider role is therefore not something new.
I am sorry, sir, but I could not disagree more. I cannot accept anybody telling COSLA that councillors are taking decisions without full knowledge of the facts or without information that they should have. That is quite an allegation to make, sir, and I take exception to it. That is my only comment.
There are some examples of excellent governance at a high level in the housing association sector and in the co-op sector. However, we think that the bill could also help by replacing schedule 7 to the Housing (Scotland) Act 2001. We are all for being transparent, accountable, open and honest, but some unintended consequences flow from the requirements in schedule 7. We are happy to see that the bill promotes the idea of an ethical code.
That leads on to the question that I was going to ask about the charter. Lesley Baird is quite right that flexibility needs to be built in for the various registered social landlords out there and the 32 local authorities. How much flexibility should be in the charter? Should there be benchmarking in it to say that every tenant in Scotland, regardless of who their landlord is, can expect basic standards? Landlords could build on the charter and provide better services. Would that not be a fairer approach than talking about flexibility? There are more than 200 registered social landlords at the moment and 32 local authorities, although not all local authorities are housing providers. We could have more than 250 different charters if we build in flexibility. Surely every tenant wants to know what neighbouring tenants are getting or what neighbouring authorities are offering. The same basic standards should apply throughout Scotland.
The charter must be measurable, otherwise it will be meaningless. A long time ago, I worked for a local authority that had a really nice charter that looked great—
Mr Mullen is desperate to comment, but first we will hear from Maureen Watson.
In general, I concur with what has been said. We are starting off with a blank sheet. The charter must be measurable and it must be flexible so that it can take account of the differences between rural and urban areas, for example. All the outcomes in the charter must meet the priorities of tenants in the areas that it deals with. The focus should be on tenants’ priorities—what they see as the services to which they are entitled and those that they desire. The charter should ensure that the delivery of those services is prompt and high quality. Those are the sort of issues that can be measured.
Is that figure higher or lower than it was 10 or 20 years ago?
Notwithstanding the fact that new housing associations might be created in Glasgow as a result of second-stage stock transfer, overall the number of such bodies across Scotland is in decline and you expect that to continue.
Yes. I expect more mergers to take place, although I am not quite sure at what rate that will happen—we are monitoring the issue with interest.
I am sorry—thank you for that.
That is not my analysis. I am simply asking whether you have done an analysis and come to a conclusion.
The conclusion that we have come to is that the bill offers many opportunities for more partnership working across housing associations and co-operatives. That will not always mean that people will join up, but it will mean that people will look for ways to share services and become more efficient in order to deliver the outputs that might be required by whatever eventually ends up being in the charter. It is about people thinking innovatively, working smarter and looking for opportunities. I do not agree that the words “merge” and “acquire” scream out from the bill.
So the details could accelerate the rationalisation process and lead to a faster decline in the number of housing associations.
I would not like you to put words into my mouth.
So the existing regulatory mechanism highlights those deficiencies. Is that right?
Therefore, the enactment of the bill will not make any difference in that respect.
What you are talking about is a business process that derives from the current economic climate. Tenants are aware that they, too, live in that environment. If they see rationalisations, mergers and so on going on, provided they are consulted, they understand that there can be a business case for that. The safeguard should be that tenants are allowed to voice their opinion on whether their landlord can transfer the ownership of their house to someone else. That is important. They will find out all about not just their own landlord but the landlord that is merging with their landlord. Hopefully, they will know that, at the end of the day, there is a business case for the merger and that it will improve conditions in the housing in which they live.
On the issue of economies of scale, the stock transfer that took place in the Western Isles was from the Western Isles Council to the Hebridean Housing Partnership. There were five housing associations in the Western Isles, the smallest of which, Berneray Housing Association, had only eight houses and the largest 190 houses. It made perfect sense for those organisations to come together and form the Hebridean Housing Partnership. We did the independent advice for that process. As Danny Mullen said, it is important that tenants are involved. We went round every door in the area, talking to tenants. We took Gaelic speakers with us because many of the tenants were older and did not speak English.
That is interesting. We can explore that further with other witnesses. Does anyone else want to comment on that?
Do the witnesses believe that the bill should specify that tenants should be on the board of the Scottish Housing Regulator?
As you are aware, this session will look at the right to buy. The right to buy has existed for almost 30 years, and the bill proposes to introduce changes to it, particularly for new-build housing. What do you think of the proposals and do you think that they could be amended and improved? I know that the SFHA may have different views from the local authorities on the proposals and their implications.
We have almost reached the 30th anniversary of the introduction of the right to buy by the Conservative Government. As we have heard from the panel, many people argue that the right to buy was a good incentive to change tenure type throughout Scotland. As I have said before, prior to 1979 about 65 per cent of tenure was in the social rented sector, with 35 per cent in the private sector. Those figures have almost reversed now, with 35 per cent of tenure now being in the social rented sector and more than 60 per cent in the private sector. We have been trying to resolve some matters concerning housing supply, which is the issue when it comes to the right to buy.
I will put Lindsay McGregor on the spot for that question. There have been some detailed discussions to which I have not been privy involving the chair of the COSLA executive group that I am representing today. I would rather that the officer involved gave a technical response.
As John Wilson explained, there is a problem with losing houses, but there is also a problem with the supply of affordable social rented housing. There are funding constraints. We know that housing associations are concerned about cuts in the housing association grant. However, new and alternative business models are being developed that could be attractive to the Government and housing associations. For example, one model involves packaging school regeneration and housing regeneration as one procurement bundle and letting the housing association be responsible for delivering the school as well as the housing and then leasing the school back to the local authority, which would take some of the burden off the housing association grant. Such models are worth exploring, and the bill gives a platform for that, partly through the charter.
I totally agree with those comments, but I add that the reason why councils’ homeless lists are increasing is not just because people are unable to pay their mortgages, but because some people are unable to pay the costs in the private rented sector. As a private tenant, I can tell you that rent costs are not coming down in line with other costs that have come down because of the recession. That is another pressure.
There is a certain irony that the housing association exemption will end in 2012, which is the year for which the homelessness target has been set. Scottish Government analysts calculate that, when the exemption ends, there might be between 3,500 and 4,500 sales of housing association properties per year until 2015, after which the rate will level off to about 3,000 a year. That tells us what the correlation is with the homelessness legislation.
What is simple is that those people cannot currently exercise the right to buy but, in 2012, which is the year when the homelessness target kicks in, they will have that right. That is what I meant by an irony.
The issue is clearly about the smaller discount with the modernised right to buy.
That figure is set in statute, so its value will diminish over the years. If any headline comes out of the bill, it will be about the right to buy. People may be concerned about that or may capitalise on it by telling tenants that they may lose their right to buy, to create a rush. That will happen, because people who are in a position to exercise the right to buy know the value of their house. They will exercise their right using the old or modernised discounts, so they will have enough equity to get a mortgage. At the moment, people cannot get mortgages because they have a high loan-to-value ratio, but a sitting tenant, with a discount, who seeks a mortgage will get it and be able to exercise their right to buy. After the bill is passed, there will definitely be an increase in right-to-buy sales.
The Scottish Council for Single Homeless, among many other organisations that I could name, has submitted written evidence to us, so we will look at that in relation to the issue that Mr Ballantine raised.
It is not an economic argument. It is not about saving councils money but about the fact that housing waiting lists across Scotland—I am not talking only about homeless lists, but about people applying for council houses or houses with special adaptations—are huge. There is a dearth of social housing in Scotland. We believe—and tenants agree—that anything that makes it easier for local authorities to build new houses to address that is positive.
If that will be the case, it will certainly be unfortunate. Perhaps the Parliament should look at that. I can make no specific comments on the proposal because I have not been involved in discussions about COSLA’s response to it. As a general rule, local authorities give extra points in their allocation policies to people who have special needs. In a number of local authority areas there are also provisions to adapt houses as the needs of the people who are in them increase. That is more a matter for individual local authorities, rather than one for COSLA to respond to.