Social Housing Property Plan 2007–2016

STATES OF JERSEY

r

SOCIAL HOUSING PROPERTY PLAN 2007–2016

Lodged au Greffe on 16th January 2007 by the Minister for Housing

STATES GREFFE

PROPOSITION

THE STATES are asked to decide whether they are of opinion

to r ef er to their Act dated 27th June 2006 in which they adopted the Strategic Plan 2006 to 2011 and, in

particular, Section 3.8 of that Plan and -

to a g r ee t h at the States social housing stock should be brought up to an acceptable condition and

maintained at that standard through an adequately funded maintenance programme and –

(i ) t o a g ree that a number of non-core, prime location properties, as detailed in Appendix  C of

the Social Housing Property Plan 2007 – 2016, should be sold on the open market;

(i i ) to a gree that the Housing Department should make arrangements to enable States rental

tenants to apply to buy one of the properties listed in Appendix  D of the Plan, according to the 10-year timetable specified, on a shared equity basis or at full value, and with first- time-buyer conditions attached, as set out in Section 3.7.1 of the Plan;

(i ii ) t o r e quest the Minister for Treasury and Resources to agree –

  (a ) th a t , i n a c c o rdance with Article  15(3) of the Public Finances (Jersey) Law 2005, the

receipts from sales effected under paragraphs (i) and (ii) should, in the first instance, be put towards the planned programme of property refurbishment and regeneration of key high-rise developments detailed in Appendix  B of the Plan,

  (b ) t h a t th e re c e ipts generated from sales effected under (i) and (ii) that are not required

to complete the planned programme of property refurbishment and regeneration detailed in Appendix  B should be held in an interest-bearing fund and that the interest generated be credited to the Housing Department's revenue account;

(i v ) t o ag ree that the Housing Department should plan for the creation of additional sheltered

housing, through conversion of existing stock and acquisition where appropriate;

(v ) t o a g ree that there should be no further transfer of stock to Housing Trusts unless explicitly

agreed by the States Assembly.

MINISTER FOR HOUSING

REPORT

SECTION 1: The need for a Property Plan

1. I n troduction

1. Strategic targets

The States Strategic Plan 2006-2011, adopted by the States Assembly on 27th June 2006, set a number of targets for the Housing Department. Among the most important of these was the production of two major pieces of work. The first (and the subject of the present report) is the Property Plan, the essential purpose of which is to identify the estate management, maintenance, and refurbishment issues currently confronting the Housing Department, considered together with the States commitment to expand home ownership, and to make recommendations accordingly.

Among the priority issues to be covered here are –

Dealing with the immediate problem of refurbishment requirements

Ensuring that States rental accommodation is fit for purpose, with particular reference to the demographic bulge

Putting the Departmental budget on a sound footing, with particular reference to the ongoing revenue cost of maintenance

Increasing the level of home ownership in Jersey, particularly in respect of States Tenants by devising innovative means for them to purchase existing states rental accommodation.

2. Theneedto act now

As indicated in the following section, the Housing Department will, during 2007, be commissioning a fundamental review of the organisation and structure of social housing provision in Jersey – but any temptation to defer making a decision until after that report has been produced, should be strongly resisted. An organisational review will tell us nothing new about the most urgent issue facing us: the condition, and fitness for purpose, of the stock.

It is that stock condition which is the subject of the present report. Already, 18% of States rental housing stock would fail at least one aspect of the U.K. Decent Homes Standard. This figure is set to rise rapidly over the next few years. Real people live in this accommodation. They cannot afford to wait for another report or another review to confirm what we and they already know only too well.

3. Fundamental review of social housing

The second piece of work committed to in Section  3.8 of the Strategic Plan, was the production of a fundamental review of social housing in the Island. This report will be produced during the second half of 2007, and will focus on all of the issues, including but not exclusively –

The purpose of social housing

Affordability

Allocations criteria

The nature and extent of any currently unmet social housing need

How it should be regulated and by whom

The long-term future for Housing Trusts and States rental accommodation

Links to other corporate policy areas, such as the eradication of poverty and the assurance of housing supply to meet the needs of key workers or returnees

Medium and long-term costs of options

Potential for greater inter-agency co-operation and/or organisational change.

4. Background work

Both the present report, and the fundamental review to be produced in 2007, should be viewed in the context of a number of other pieces of work which are either under development or recently published, and which each contribute towards an overall picture of Island housing supply and demand. The most significant of these other documents are –

Planning for Homes 2006 – the latest in an annual series of statistical reports produced jointly by the Planning and Housing Departments;

Housing Needs Survey – undertaken in late 2004 to estimate, by analysing respondents' aspirations, the potential housing requirements of households in Jersey for the forthcoming 5-year period 2005-2009 – it is intended to revise this Survey during 2007;

Review of the Island Plan (preparatory work for this is being carried out by the Planning Department);

Migration – Monitoring and Regulation (P.25/2005) – the Report and Proposition from the Policy and Resources Committee, outlining a new system for controlling entitlement to employment and accommodation;

The Parr Report – the Law and Economics Consulting Group produced a report in November 2000 on the Economics of the Housing Market in Jersey (known as the Parr Report). It emphasised a pressing need to address both how the demand for housing is managed, through subsidy and policy, and how supply of housing might be increased, with the new Island Plan being seen as the main mechanism to deliver change;

Aiming for a Fairer Society' – the 2001 report for the Social Policy Strategy Group, from Professor Robert Walker of the University of Nottingham, which led to –

Social Policy review (P.47/2002) produced by the Social Security Department;

Income Support System (R.C.48/2004) which led to –

Draft Income Support Law (P.102/2006).

5. Principal issues

A number of separate but linked issues have led to the tabling of this Report and Proposition, in particular –

an urgent need to re-invest in the social housing stock, through planned maintenance and refurbishment;

inadequate revenue budget and capital funds to achieve this re-investment, and a corresponding duty placed on the Housing Department, under the States Strategic Plan 2006 to 2011, to produce detailed proposals for the procurement of funding to sustain a programme of refurbishment works for States rental accommodation;

a duty placed on the Housing Department, under the States Strategic Plan 2006 to 2011, to use social housing stock to progress a shared equity scheme in order to encourage an increase in levels of home ownership in the Island;

a duty placed on the Housing Department, under the States Strategic Plan 2006 to 2011, to achieve the Decent Homes Standard by 2016;

a duty placed on the Housing Department, under the States Strategic Plan 2006 to 2011, to review, develop and implement strategies for the provision of social housing in the Island, including the long-term management of States rental accommodation – this being the first of a series of reports which will be produced towards that target;

a recognition that the States rental housing stock is both larger than necessary, and of the wrong composition to meet predicted patterns of future need.

In seeking to meet these challenges, the Housing Department has adopted a holistic, sustainable and practical approach which will, it is hoped, meet with the approval of the Assembly.

2. T h e problem

The Housing Department is well aware of the financial pressures confronting the States. This report, therefore, should not be seen as a traditional plea for more resources: Rather, it is a carefully structured, self-funding plan to meet the urgent needs of social housing tenants, by making strategic use of the housing portfolio.

The provision of long-term, sustainable and affordable housing to meet the needs of those members of the community who are least able to secure suitable accommodation, is the main function of the Housing Department, reflected in its responsibilities as landlord to one out of every seven people in the Island – 13,000 people living in 4,600 States rental dwellings.

An essential part of those responsibilities as landlord is to ensure that the public sector social housing stock is kept in good condition, so that it can be efficiently used by those in need. With such a large portfolio of properties, this task naturally demands significant, regular investment.

However, unlike other social rental landlords, the Housing Department currently also has a responsibility to administer and fund rent subsidy schemes for both the private and public sector. These schemes ensure affordability for a considerable number of tenants, but place significant demands on the annual Housing budget, to the point where reasonable provision for repairs and maintenance to the States rental stock has been, and continues to be, compromised.

For a number of years, the Housing revenue budget has been starved of funds, while at the same time there has been constant pressure to defer capital spending. As a result, routine maintenance has been trimmed to a dangerously low level, and there is a significant backlog in the programme of major modernisation/improvement schemes funded from capital. The Housing Department has reviewed the condition of the entire portfolio, and has concluded that –

£7 million p.a., rather than£4.5 million, is currently required to maintain the buildings in a sound and safe condition;

capital investment of £75 million is needed, over the next ten years, to bring the social housing stock up to an acceptable standard, and to regenerate key areas, particularly within St. Helier;

the only realistic way in which these two issues can be dealt with, is through the sale of some property in

order to raise the funds to be spent on the remainder.

There are a number of factors which make this the ideal time to discuss and decide on this issue –

The States Assembly has recently approved the Strategic Plan 2006 to 2011, which requires the Housing Department to produce proposals for matters such as refurbishment funding and a shared equity scheme based on the use of States rental stock (see Section 1.3);

It is impossible to overstate the urgency of the situation. Currently, 18% of States rental stock fails at least one aspect of the best available objective measurement, the Decent Homes Standard (DHS). If action is not taken now, then by 2010 (the year which the U.K. government has set as the target date in a 10-year programme for all British social housing to meet the DHS) 25% of the social housing stock here in Jersey will fail to meet that standard (see Sections 1.4 to 1.7);

With the imminent transfer of rental subsidy administration to the Social Security Department, there is an opportunity to look at the Housing Department budget afresh (see Sections 1.8 and 1.9);

The present public sector social housing stock is larger than is necessary overall to meet social housing need, and demographic changes mean that it is the wrong mix' to meet predicted need (particularly for sheltered housing) in the medium to long-term future (see Sections 1.10 and 1.11); and

There is increasing recognition – embodied in the Strategic Plan adopted by the States – of the community demand for a greater degree of home-ownership. The Strategic Plan assumes that the Housing Department, and States rental stock, will have a key role to play in meeting that community aspiration (see Sections

1.12 and 1.13).

3. T h e strategic background

Section 3.8 of the States Strategic Plan 2006 to 2011, adopted on 28th June 2006, sets as a target a good standard of affordable accommodation for all', indicated by –

Increased levels of home ownership

Reduction in the number of people waiting to be adequately housed

A supply of homes that better meets the Island's housing requirements

Equity in access to the housing market

Stable housing market/prices

Building standards that are equal to those in the U.K.

Increase in the percentage of homes in public ownership at "Decent Homes Standard"

Increase in provision of Island-wide sheltered housing.

Specific listed targets are –

3 .8 . 1  F rom 2007, commence a programme to bring States-owned housing stock up to United Kingdom

Decent Homes Standard' by 2016

3 .8 . 2 R eview housing demand/supply through the publication of Planning for Homes' in 2006

3 . 8 .3 Produce detailed proposals for the procurement of funding to sustain a programme of

refurbishment works for States rental accommodation with acceptance of a report and proposition by July 2006

3 .8 . 4 R eview, develop and implement strategies for the provision of Social Housing in the Island,

including the long-term management of States rental accommodation

3 .8 . 5  I ntroduce new policies which will ensure more equality in entitlement to accommodation by 2008 3 .8 . 6  A mend building bye-laws to incorporate Lifetime Homes Standards by 2007

3 .8 . 7  R eview building bye-law standards for fire safety, energy efficiency and structure following their

forthcoming review and adoption in the U.K.

3 .8 . 8  I ntroduce a shared equity and, if appropriate, potential discount scheme, initially using existing

Housing Department stock to increase home ownership

3 .8 . 9  I ntroduce security of tenure legislation by 2007.

The present report particularly addresses targets 3.8.1, 3.8.3, 3.8.4 and 3.8.8.

4. H  ousingStockcondition

1. Factors influencing maintenance needs

As at 1st June 2006, the Department managed 4,602 units of social rented accommodation. Not surprisingly, the stock is made up of properties of varying ages, as follows –

Period of construction

1900 – 1949 1950 – 1959 1960 – 1964 1965 – 1969 1970 – 1979 1980 – 1984 1985 – 1989 1990 – 1999 2000 – 2006

Percentage of stock constructed

4.2% 12.1% 4.2% 7.9% 37.8% 11.4% 9.5% 12.4% 0.6%

The period of construction has a significant impact on the maintenance and improvement needs of the stock, and therefore on the approach adopted in this property plan. This is not only because of the obvious fact that buildings deteriorate with age, but also because there have been particular periods of history, in Jersey and elsewhere, which were characterised by poor building; and because any significant change in building standard regulations has an impact on the maintenance requirements of property constructed prior to that change.

It has been clearly identified that different types of stock have different maintenance needs, and that unit size is also important: Small units such as bedsits or one-bedroom flats cost proportionately more to maintain than larger dwellings, partly because of high turnover rates, but also because the most frequently maintained items – kitchens and bathrooms – are largely the same.

The Chartered Institute of Housing reports that Non-traditional [i.e. non-standard] stock has higher on-going maintenance costs than traditional due to the inherent defects and materials used'. In a District Audit of its stock, Gosport Borough Council concluded that property built between 1945 and 1964 is generally less well constructed and less likely to have had significant improvement works undertaken.'

The same is almost certainly true in Jersey. Indeed, it could be argued that the period during which Island property was less well constructed probably extends further, as far as the mid-1970s, especially when one considers the high-rise developments which were constructed between 1967 and 1975.

Generally, high rise blocks are more expensive to maintain due to higher cyclical maintenance costs, inherent defects, access, and health and safety considerations.

Furthermore, in the mid-1980s, local Building Regulations in respect of such important issues as heating and insulation were significantly changed, in line with latest U.K. standards. Unless they have been subject to major refurbishment in recent years, local buildings constructed before that time generally do not benefit from what are now considered adequate levels of insulation.

Whilst pre-war properties might be considered to be of better build quality, buildings of this type can again be expensive to maintain and improve, mainly due to the types of materials used; this is particularly relevant when buildings have some historical merit which attracts protection in the form of listed status.

It can be concluded from all of this, that as much as 66% but certainly a minimum of 29% of the Department's social housing stock can be considered as non-traditional', and therefore generally more expensive than average to maintain, in terms of the Chartered Institute of Housing's findings.

2. Maintenancebudget savings – false economy

In any property-owning organisation, when savings are sought, it is always the building maintenance budget which is especially vulnerable, simply because other areas of spending are usually mandatory, or at least difficult to defer. For a year or two, the adverse effects of cutting back on maintenance can pass almost unnoticed; even so, they are insidious and cumulative. In the housing sphere, ultimately, units of accommodation become unfit or even unsafe, and have to be closed down. Well before that time, they become unpopular with tenants, and therefore difficult to let.

The Housing Department fully recognises the need for efficiency and value for money. Over a number of years the Department has radically reorganised its maintenance function to ensure that services are provided better, simpler, cheaper'. Making full use of the Department's buying power as a major construction customer, advantageous schedules of rates have been negotiated for the 3 key areas of routine maintenance, response repairs and void property refurbishment. As a direct result, the Department is recording value-for-money performance measures which would place it among the very top performing social landlords in the U.K.

Value for money is not enough, however, if the overall lack of funding means that the essential maintenance programme falls further and further behind. Detailed surveys of the stock under management have clearly shown that a sum of about £7 million per annum is required to keep the buildings in good and safe condition, while the current budget allocation is around £4.5 million per annum. Efficiency gains alone cannot bridge such a gap. Quite simply, all other things being equal, the Housing revenue expenditure budget would need to be increased by £2.5 million per annum, in order to provide for a fully funded maintenance programme.

Each year that passes with inadequate funding for preventive maintenance has a number of negative effects:

It inevitably means that, when the work is eventually carried out, its cost will have increased by more than the intervening rate of inflation, because problems will have become more serious over time.

It places a higher demand on costly, urgent response', ad hoc repairs which then in turn disrupt planned maintenance programmes.

It increases the risk of accident and injury to tenants, and therefore the exposure of the States to potentially expensive claims.

Ultimately it leads to residential accommodation being underused, and eventually closed down as unfit or unsafe.

The Department has a sound knowledge of its stock. It has planned rolling maintenance programmes for the next 20 years (seeAppendix A) and has produced a comprehensive refurbishment programme covering a 10-year period (see Appendix B). The Department is therefore well positioned to face future demands, knowing both the scale of the problems and the required solution – but is frustrated by a chronic shortage of funding to make the necessary improvements.

5. T h e DecentHomesStandard

The U.K. Government has defined a Decent Home' as one which is wind- and weather-tight, warm, and with modern facilities. Specifically, it must –

1. meet the current minimum statutory standard for housing;
2. be in a reasonable state of repair;
3. have reasonably modern facilities and services;
4. provide a reasonable degree of thermal comfort (measured by effective insulation and efficient heating).

These are not just abstract targets. There is strong evidence, for example in the work of the National Family and Parenting Institute, the Annual Report of the U.K.'s Chief Inspector of Social Services, and CAMHS (Child and Adolescent Mental Health Strategies) published by a number of local authorities, of a causal link between poor standards of accommodation, adult depression, and poor health and education outcomes for young people.

In the year 2000, an estimated 2,100,000 homes owned by local authorities and housing associations in the U.K. failed to comply with the Decent Homes Standard. Throughout the U.K., there was an estimated £19  billion backlog of repairs and improvement. In that year, the U.K. government set a tough target for social housing providers, requiring that all social rented housing should meet the Decent Homes Standard by 2010 – that is, within 10  years. Whilst latest estimates suggest that it is unlikely that this target will be met, the number of non- compliant homes is coming down year on year.

Performance across the U.K. is far from consistent, however, as shown in the following table of percentages of non-DHS-compliant properties –

2003 2004 2005 Swoituht h3 ,W00e0s tt oH 5o,u00si0n gp rporpoevritdieesrs 30.10% 25.30% 19.00%

National Mean Average 22.90% 19.70% 18.70% National Top Performers 1.00% 1.20% 0.90%

There will be a natural inclination for Jersey to aspire to be a top performer in this sector. Even if the necessary funding was immediately available, however, achieving the 2010 target would require too great a concentration of refurbishment activity in too short a time. This would place considerable inflationary pressure on local contractors over the next couple of years, and would create a repetition of the problem in 20 or so years' time. It would also require an unmanageably large degree of estate decanting' during refurbishment.

It is considered more sensible management to spread the required work in a more sustainable way over a 10-year period, leading (as stated in the States Strategic Plan 2006-2011) to full compliance with the Standard by 2016. This reflects the recent States decision, in adopting the Strategic Plan.

6. C a pital ExpenditureRequirements

As  well  as  the  annual  maintenance  requirement,  there  is  also  a  significant  backlog  in  the modernisation/improvement programme, due to pressures on capital funding across the States. Analysis of the whole portfolio has indicated that capital funding of some £75  million at 2006 prices will be required, over the next 10 years, in order to meet the States strategic target of achieving Decent Homes Standard, across the board, by 2016. This estimate of an average £7.5 million a year, before allowing for any inflation increases over the 10- year plan period, is based on a list of priced works, and can therefore be considered reasonably accurate. It is a far higher urgent annual capital requirement than the sum which has been agreed in principle as Housing capital funding for the next 5 years.

During the last 10 years a number of estates – Oak Tree Gardens, Cherry Orchard Court and others – have been redeveloped or refurbished to a high standard, and similar works are currently in progress at both Le Squez and Le Marais. Unfortunately there are a significant number of other estates which need attention.

The best current estimate, based on detailed appraisal of the housing stock, is that 2,300 properties in some 60 locations, ranging from large estates to single dwellings, are in need of modernisation or redevelopment within the next 10 years. Unless the States are prepared to countenance the gradual closure of estates, there is no way to avoid the need to re-invest in the stock. A summary of this programme, with the list of priced works, is attached as Appendix B.

It is acknowledged that the Council of Ministers has made available a total of £6 million a year in capital funding, for each of the 5 years 2007-2011, even though this additional £30 million has to be offset against the withdrawal of existing capital bids totalling £15 million in respect of the Cedars and Ann Court Phase 1. (These 2 bids wer withdrawn partly because of pressure to allocate resources to other areas, partly because a package of funding over 5 years was considered far more useful in terms of the ability to plan ahead with some measure of certainty.)

If the States approve the measures proposed in this Property Plan, the capital requirement will be higher over the first 5 years than over the last five (2012-2016), both because of the urgent nature of some initiatives, and because some refurbishment will need to take place before funds can be generated through sales of property. The capital funding already promised will therefore be needed during these early years, in order to kick-start' the redevelopment programme.

7. T h e needforregenerationin key areas

Included within the general capital need for refurbishment to bring property up to the Decent Homes Standard, there are a number of key areas, particularly within St. Helier, which look shabby andtired' and which are in urgent need of regeneration. It is difficult for a community to have pride in (and therefore care for) its living environment if it feels like a run down, cheerless, concrete jungle'.

In Jersey, shortage of land zoned for building has at times created pressure to build high, with insufficient thought given to the social consequences. Often, the short-term benefit of creating large numbers of housing units on relatively small parcels of land is outweighed by the long-term social damage caused.

The Housing Department portfolio includes a number of properties which can be considered high-rise', at least by local standards: La Collette Flats, The Cedars, De Quetteville Court, Convent Court, Caesarea Court, Hue Court and Le Marais tend to provide an awkward mix of family accommodation and accommodation best suited to older people. These 2 client groups have very different needs, and the potential for friction in a densely- populated building is considerable.

It is no coincidence that some of these high-rise buildings are among the least popular accommodation – generating the highest proportion of complaints about issues such as cleaning and anti-social behaviour, and the highest number of transfer requests. Once this kind of situation gets beyond a certain level, the downward spiral can be almost irreversible, destroying all community spirit and pride.

If the States give the Minister and the Department the power to make essential strategic decisions about the housing stock, as outlined elsewhere in this report, it is the intention to put necessary resources into regeneration initiatives in key areas, righting the wrongs of the past. Chief among these target areas would be –

demolition of the Convent Court and Caesarea Court high-rise buildings, and their replacement with new housing schemes;

demolition of the De Quetteville Court high-rise building, and redevelopment of the site into a small complex of suitably designed sheltered homes.

In addition, in the final years of the Plan, serious consideration will need to be given to the future of the 4 high- rise blocks at Le Marais. These blocks were originally constructed in 1972, and a good deal of work was done on them between 1999 and 2002. By 2016, they will be nearly 45  years old, and will require either further expensive major work, or demolition and replacement (probably with a scheme of family houses and flats).

In the case of some of the taller blocks – particularly those in relatively good condition, with a small footprint' which would restrict the potential for redevelopment – it is proposed that remodelling as sheltered housing will be the best way forward. As was mentioned in Section  1.4.1, however, high-rise blocks can often be inherently expensive to maintain, particularly if the original standard of construction was poor. For both social and resource reasons, then, refurbishment is generally less likely to be the favoured option than redevelopment.

8. T h e HousingDepartmentRevenue Budget

Excluding the income and expenditure associated with Housing Control and Building Loans, and recharges to Treasury funds, the Housing Department revenue budget for 2006 is broadly as follows –

Income £'000

Gross Rents (32,227) It  is  easy  to  see the Other income (2,095) disproportionate

impact on this budget   T o t a l i n co m  e    (34,323) of  the  private  and

public  sector  rent Expenditure subsidy  schemes.

When savings have to Rents Subsidies 25,050 be found –

Staff & administration 1,528

Fixed operational costs (cleaning, utilities etc.) 3,956 they  cannot  be Insurance & rates 899 drawn,  to  any significant  degree,

31,433 from rental subsidies, Maintenance without  creating  the  Response repairs 1,172 very  hardship  which  Voids 1,459 subsidy  schemes  are  Planned maintenance and decoration 1,835 designed to alleviate;

 Medical alterations 75

staff  and 4,541 administration  costs,

as  a  function  of   T o t a l e x p e n d it u r e  35,974 property  under

management,

Net Expenditure (cash limit) (1,651) compare  very favourably with other

social landlords, and could not be further reduced without having a serious negative impact on service

standards;

inevitably, the savings pressure falls, repeatedly, on the same area – maintenance.

The rental subsidy components of the Housing budget dwarf the sums available to carry out the Department's core tasks. In approximate terms, £25  million per annum is the cost of rental subsidy, while£10.9  million is available for all other activities put together. With staffing and fixed costs currently amounting to £6.4  million per annum, just £4.5  million is left, each year, to invest in building maintenance. At less than one per cent of the portfolio's value, this maintenance investment is well below the level which any responsible private sector landlord would consider prudent.

The problem is exacerbated by the fact that the Housing Department have not been able to make provision for future expenditure. By way of contrast, the Housing Trusts were originally set up with the ability to put annual savings into a sinking fund to cover the cost of future major work.

Comparative data collected by KPMG as part of its Benchmarking of Public Services 2003 – Final Report', and which the Department has continued to maintain, shows that weekly repair costs per dwelling in Jersey are well below those in the U.K. If local efficiency was the only reason for this difference, it would be impressive. However, the fact is that the small amount spent per unit per week reflects a budget which is inadequate to maintain an ageing stock and provide a responsive maintenance service to some of the most vulnerable people in our society.

Over the last 4  years to date, the response repairs budget in Jersey, expressed on a per-unit per-week basis, has been –

2 0 0 3  £ 5.00 2 0 0 4  £ 4.56 2 0 0 5  £ 4.77 2 0 0 6  £ 4.89

The U.K. median equivalent for the current year is £12.80. If the Housing Department's response repair budget was set on this basis, the total 2006 spend under this heading would be £3.071  million.

Furthermore, the accepted U.K. standard is that response repairs should amount to no more than 24% of a housing provider's  total  maintenance  budget – which  would  lead  to  a  total  maintenance  allocation,  in  Jersey,  of £12.8  million – very much more than the £4.5  million currently available for this purpose.

The advantageous schedules of rates which have been negotiated with contractors mean that the picture is not so black. Certainly, more resources are needed, but it is felt that –

a much smaller overall increase is required than would be dictated by blind reliance on the U.K. measures;

any increase should be primarily directed at planned maintenance, where one pound does the work of two, rather than at response repairs.

Application of these principles gives rise to the following adjusted budget, based on the current number and mix of properties –

Income £'000

Gross Rents (32,227) 1.9 T he transfer Other income (2,095) of  subsidies  to  the Social  Security

  T o t a l i n co m  e    (34,323) Department Expenditure In the spring of 2007,

it is expected that the

Rents Subsidies 25,050 Income  Support Staff & administration 1,528 System  currently Fixed operational costs (cleaning, utilities etc.) 3,956 being  developed  by Insurance & rates 899 the  Social  Security Department  will

31,433 come  into  operation. Maintenance Rental  subsidy,  as  a  Response repairs 1,668 key  element  of  Voids 1,459 income  support,  will  Planned maintenance and decoration 3,835 be  administered  Medical alterations 75 entirely  by  that

Department.

7,037

Clearly  the  cash   T o t a l e x p e n d it u r e  38,470 limits  of  both

Departments  will Net Expenditure (cash limit) (4,147) change to reflect their

changed

Current Net Expenditure (cash limit) (1,651) responsibilities.  In the  case  of  the

Additional Requirement 2,496 Housing Department, what remains will be

a  budget  whose  sole purpose will be to set housing policy and administer and maintain States rental properties. It will become more obvious than ever before, that this budget is grossly inadequate for the demands placed on it.

10. D emographicchanges

When the 2001 census was taken, 17% of the total local population were above normal working age. By 2010, that proportion will be 19%, and by 2030, 30% of the population will be over 65. A significant number of these older members of society are likely to be asset-rich, cash-poor' home-owners, who may wish to downsize to more manageable, affordable accommodation. They will only be able to do so if provision is made for suitable last-time' homes for purchase as well as for rental. It is vital to plan ahead for that known future need.

The average age of a States tenant is 55, while the comparable figure for the general adult population, taken from the 2001 Census, is 47. Nearly 1,800 pensioners are living in States rental accommodation.

Age Band States Tenants General adult

population

Aged over 60 40% 24% Aged between 50 & 59 20% 15.5% Aged between 40 & 49 20% 19% Aged under 40 20% 41.5%

For some time, the acknowledged area of greatest shortage, within social rented housing, was that of 3- and 4- bedroom houses for use as family homes. However, the H2 list in the Island Plan brought forward a number of sites for development, such as Field  1218 and Field  1370 (both in St.  Helier) and Field  40 and Fields 89, 89A 9 92A and 93 (formerly Hodge Nurseries) in St.  Clement, among others.

The general presumption with all of these sites has been that they will be developed on a mixed tenure basis, primarily for families, with 45% of the resultant homes being provided for social rented purposes and 55% for first-time buyers. Planning for Homes 2006', the best guide to predicted levels of supply and demand, shows clearly that these sites, together with the remaining sites identified in policies H3 and H4, will provide sufficient homes to meet the 3- and 4-bedroom need of the Island for some years to come. Equally, Planning for Homes 2006' shows that increasingly, a different social group – people beyond normal working age – represent the biggest and most immediate planning challenge, with an estimated 350 sheltered housing units needed within the next 5  years, albeit that it is anticipated that this need may already have risen to nearer 400 units.

The Department will be working in collaboration with Planning as part of future revisions to Planning for Homes' in order to ensure adequate provision of last-time buyer homes. Some of this additional provision can be achieved through conversion of existing accommodation, while some will have to be created by acquisition from, or co-operation with, private developers.

11. T hepublic sector housing mix'

The current composition of States rental stock is as follows –

The increasing numbers of retired people living in the Island will have a right to expect secure, well-insulated, disabled-friendly accommodation in a good state of repair – mostly one- and two-bedroom flats, with a higher requirement than ever for units on the ground floor (the units for which demand is already highest).

Tired, high-rise buildings with poor insulation and ageing, unreliable lifts, will not meet the challenge, in terms of what we can predict about future housing demand.

In many ways, it might appear from the statistics above, that there is an ample supply of small flats to meet the needs created by the demographic bulge'. However –

Many flats have access problems:

Very few of the bedsits and small flats are on the ground floor, and those that are, are already in great demand. For the others, in many cases there is no lift; in others, if the single lift is out of commission, people can be effectively trapped for significant periods of time. Generally, there will be no actual danger or risk to health, but people's quality of life is severely impaired in this type of situation.

It should also be noted that, even in those buildings which are equipped with more than one lift, each lift does not always serve every floor; and some lifts are approaching the end of their useful life.

One-bedroom flats are in the majority:

Traditionally, housing authorities have housed elderly single people and couples in one-bedroom accommodation. The States Housing Department is no exception to this general rule. Increasingly though, it is felt that many elderly people, particularly those with grandchildren, have a legitimate requirement, in terms of a full quality of life, for two-bedroom units, which would allow them to have visitors (and at times of illness, carers) to stay, or to look after grandchildren occasionally in an emergency.

Even purely from a financial point of view, it should be remembered that a second bedroom can cost less in the long run than a respite care place, or a place on a hospital ward or in a nursing home for an elderly person recovering from an operation. And from a social perspective, helping people to cope, in their own home, with the occasional crisis, is clearly preferable to institutional care.

Some two-bedroom units could be created by conversion of existing stock, or amalgamation of less useful accommodation, but obviously amalgamation reduces the total number of units available.

12. E ncouraginghomeownership

The Housing Department currently administers a large number of properties which are likely to be a poor fit' in terms of the increasing future social need for last-time homes' and sheltered accommodation. The most realistic way of meeting the specific housing needs of the future population mix (as the Guernsey strategy report has also concluded) will be to raise funds from the sale of some of these mismatched' housing units in order to raise funds to refurbish or redevelop other, more suitable units.

At the same time, the Strategic Plan has set a target of increasing the extent of home ownership in the Island. Among the reasons for the adoption of this target, are the well-established principles that –

People who have purchased during their higher-earning years will have an asset which can help to support them later in life, with less need to call on help from the taxpayer;

in many cases, the benefit of property ownership will be passed on to the following generation.

In terms of the sale of social housing stock to tenants, there is also strong evidence that –

mixed tenure estates tend to be socially stronger than those which consist solely of social rental;

an increased sense of pride leads to reduced resource demands in the form of maintenance bills and costs generated by vandalism.

There are undoubtedly a number of ways in which the States could encourage home ownership, whether (as with the H2 and H3 sites) by supporting the development of affordable starter homes; through financial assistance in the form of tax incentives; or (as was suggested recently) through some form of interest-free loan scheme. A number of such approaches are considered further in Section 3.

13. T argeting socialrentedhousing

The purpose of social rented housing is clearly to meet the accommodation needs of those in the community who would be unable to house themselves, whether through rental or purchase, in the open market. It is implicit in that purpose, that resources should be accurately targeted at need.

To that end, Housing Department allocations criteria are set in such a way as to direct the available resources at three main groups:

1. P e o ple with physicalormental disabilities, who need special typesof housing, butwhocannot afford such accommodation in the private sector.
2. F a m ilies with young children,on relatively low incomes.

3. P e o ple aged 50 or over, on relatively low incomes.

The phrase relatively low' is important: Because of the generally high cost of living in Jersey, income bars are set higher than would be normal elsewhere, and discretion is used in special circumstances, such as when a family income drops during the time that one partner needs to stay at home to look after a baby, or when childcare costs impose a particularly heavy burden.

Maximum income levels (under review) are currently:

Family with one child.................................. £575 per week (£29,900 p.a.) Family with two children (same sex)............ £650 per week (£33,800 p.a.) Family with two children (opposite sex)........ £725 per week (£37,700 p.a.) Family with three or more children............... £725 per week (£37,700 p.a.) Single persons over 50................................ £450 per week (£23,400 p.a.)

Increasingly, however, over the last few years, it has been found necessary to exercise discretion to relax these maximum income criteria, in order to let properties. This, as much as any other single piece of data, suggests that there is an over-supply of social rented housing.

More importantly perhaps, the eligibility test only happens once: Once someone has been accepted as a States rental tenant, however much their financial or other circumstances may improve, they are free to continue to occupy social rented accommodation indefinitely, even though the Waiting List includes people in far greater financial and social need. In terms of targeted social assistance, this makes very little sense.