Housing Transformation Programme - Ministerial Response - 10 May 2013

Key Findings

Comments

1

A clearly agreed definition of the role and purpose of social housing, including a  clear  commitment  to  an  agreed approach  and  the  parameters,  has  not emerged  during  the  course  of  the Programme's  development [Section 3.1]

A legal definition will be developed as part  of  the  draft  enabling  law  to establish the proposed regulator; a draft of  which  has  been  presented  to  the Panel. It is the Ministers belief, shared by the Council of Ministers, that social and  affordable  housing  is  about providing long-term sustainable homes for those who find it difficult to access a home appropriate for their needs in the open market.

2

Confusion has arisen about the purpose of social housing due to the labelling of the  new  Housing  Company  as  a "strategic investment". [Section 3.2]

The Council of Ministers accepts that it is a social business; the States Strategic Plan is very clear in its expectations in regards  to  the  delivery  of  social housing.

The  term  "strategic  investment"  is  an accounting term and it is not accepted

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that this causes any confusion.

3

There  is  a  risk  that  the  Strategic Housing Unit may become marginalised amidst  competing  political  priorities. [Section 4.1]

The Council of Ministers is accepting amendment  (P.33/2013  Amd.(1)) lodged by the HSSH Scrutiny Panel on 16th April which will see the position of Minister for Housing remain.

4

A small Strategic Housing Unit will be challenged in overcoming the existing tensions and poor track record of joint working  and  coordination  of  housing policy  between  Departments  and Ministers.  In  order  to  function appropriately  it  must  have  clearly defined and agreed roles and aims at the outset. [Section 4.2]

The  roles  and  aims  of  the  Strategic Housing  Unit  are  clearly  defined  in P.33/2013, pages18-28.

Importantly, the existing conflict which has  been  identified  between  the Minister for Housing being landlord and regulator  is  sufficiently  dealt  with  by the  establishment  of  the  Strategic Housing  Unit,  leaving  the  Housing Company to concentrate on its landlord responsibilities  to  over  4,500  tenants. This being in accordance with Professor Christine Whitehead's recommendation.

The Council of Ministers is accepting amendment  (P.33/2013  Amd.(1)) lodged by the HSSH Scrutiny Panel on 16th  April  2013  which  will  see  the position  of  Minister  for  Housing remain.

5

Housing is an essential provision, and it is  important  to  be  able  to  clearly identify  a  Minister  with  direct responsibility for it. This is enshrined in the States Strategic Priority of "Housing Our Community." [Section 4.2]

The Council of Ministers is accepting amendment  (P.33/2013  Amd.(1)) lodged by the HSSH Scrutiny Panel on 16th  April  2013  which  will  see  the position  of  Minister  for  Housing remain.

6

The  Strategic  Housing  Unit  is  not sufficiently  independent  to  propose standards  for  Tenant  engagement  and set performance and probity standards for  Social  Housing  Providers. [Section 4.3]

It is the States that will set the policy and  standards  for  the  Regulator  to enforce.  The  operational  conflict  has been  removed  by  separating  the regulatory and landlord functions. There is  therefore  no  need  for  the  Strategic Housing  Unit  to  be  independent;  the regulator will be fully independent.

7

The Strategic Housing Unit is proposed to be responsible for a wide variety of operational and strategic functions, yet detail  about  how  it  will  be  held  to account  on  delivering  against  these priorities is not provided in P.33/2013. [Section 4.3]

The Council of Ministers is accepting amendment  (P.33/2013  Amd.(1)) lodged by the HSSH Scrutiny Panel on 16th  April  2013  which  will  see  the position  of  Minister  for  Housing remain.

It is proposed that the Regulator would

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report annually on the performance of the sector.

8

The  wording  of  the  in-principle enforcement powers for the Regulator risk the States unwittingly endorsing a mandate  to  bring  in  more  draconian regulations. [Section 5]

The Council of Ministers is accepting amendment  (P.33/2013  Amd.(1)) lodged by the HSSH Scrutiny Panel on 16th April 2013. This will ensure that the Minister for Housing brings forward for approval by the Assembly detailed proposals  which  are  proportionate  for Jersey.

9

Regulatory activities applied to Social Housing Providers risk becoming a top- down  approach  with  a  formulaic compliance  assessment  which concentrates  on  inputs  rather  than outcomes unless alternative methods of compliance are developed. [Section 5.1]

This key finding is not accepted, there is nothing in the proposals or principle of  regulation  which  suggests  a  top- down approach.

The Council of Ministers is accepting amendment  (P.33/2013  Amd.(1)) lodged by the HSSH Scrutiny Panel on 16th April 2013. This will ensure that the Minister for Housing brings forward for approval by the Assembly detailed proposals  which  are  proportionate  for Jersey.

10

The principle of encouraging a culture of co-regulation where Social Housing Providers  should  effectively  self- regulate  to  a  large  degree  does  not establish  clearly  how,  or  on  whose terms  the  providers  will  self-regulate. [Section 5.2]

This  statement  appears  somewhat confused.  Co-regulation  and  self- regulation are very different and cannot be used together. Self assessment could be  used  against  clear  and  meaningful regulations.

11

The  Sub-Panel  is  supportive  of  the proposal  to  bring  all  social  housing stock up to a Decent Homes Standard. However  it  is  not  clear  whether regulation is required to achieve this as stock  maintenance  appears  to  have fallen  behind  due  to  financial constraints  rather  than  organisational resistance. [Section 5.4]

This  statement  is  not  correct.  In  the past, there has been a lack of political will  to  provide  the  necessary  funds within the States sector, but the Trust stock  has  not  suffered  the  same financial  constraints  and  yet  a proportion has equally fallen behind the Decent  Homes  Standard  e.g.   Troy Court, Perquage Court, etc.

Once there are no financial barriers for bringing the States stock up to Decent Homes  Standard  it  will  be  important that  regulation  exists  to  ensure  that Decent  Homes  Standard  is  achieved across the sector and maintained at that standard going forward.

12

Appetite for the regulation of the private rented sector to set and ensure delivery

The Panel on the one hand viewed the proposals to regulate the social rented

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Comments

of  consumer  standards  is  strong. [Section 5.5]

sector  as  "draconian",  preferring  a voluntary charter, yet on the other hand is supportive of a fully regulated private sector. This is contradictory.

A  fully  regulated  private  sector  is  a much  wider  piece  of  work  and  the Minister took the view, directed by the priorities  set  in  the  last  2  States Strategic  Plans,  to  initially  focus  on social housing which has been funded by the States and where the States is carrying  a  long-term  obligation  to provide interest rate subsidies. Private sector  regulation  is  also  being developed  within  Health  and  Social Services.

However,  the  Enabling  Law  being proposed  to  regulate  social  housing would  allow  the  States,  by  new regulations, to widen the scope of the regulation as it sees fit.

13

If the Housing Trusts are to be relied on to deliver a sizeable proportion of new social  and  affordable  housing developments,  growing  the  sector should be the overall goal rather than compelling  providers  to  achieve uniform standards. [Section 5.6]

The introduction of the rent policy will ensure that all of the Trusts have the means to refurbish all of their homes to decent homes standard and can develop new  homes  when  new  sites  are identified.  It  is,  however,  more important  that  those  homes,  and existing homes, are being appropriately occupied by those in the greatest need by  being  allocated  through  the Affordable Housing Gateway and that the services offered to tenants across the social  housing  sector  are  comparable and are being continuously improved.

If all the Trusts want to deliver more social and affordable housing then they must be able to demonstrate that they have the financial model to do so and business  plans  that  reflect  how  those homes will be maintained for the long- term.  They  would  then  be  fully supported  in  any  such  developments. Some are already working closely with the Minister for Housing and are well prepared to deliver more homes.

14

There is a risk that future Assemblies and  Ministers  may  change  policy

The States must have the ability to set policy, and will be relied upon to debate

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Comments

priorities  around  regulation,  which would be passed on to the regulator for implementation.  Regular,  sizeable  or controversial policy changes could risk undermining  the  credibility  of  the regulator  in  the  eyes  of  stakeholders. [Section 5.7]

such changes fully before implementing any decisions.

15

The case for a regulator made on the basis of poor performance on the behalf of other Social Housing Providers is not justified. [Section 5.8]

The  lack  of  an  adequate  regulatory framework for the sector was identified by Professor Christine Whitehead in her Review of Social Housing. The case for that  finding  was  not  based  on  poor performance  of  social  housing providers,  but  a  reflection  that  the existing  regulatory  framework  for housing is not strongly developed. At the  present  time  States  housing  is  a States  Department  and  is  therefore regulated through the political system. Trusts are  nominally  regulated  by the Department – which in the Professor's view was inappropriate.

16

The  proposals  lack  any  significant information  about  the  relationship between social housing tenants and the proposed regulatory body. [Section 5.9]

This is accepted. As consumers of the services which social landlords provide, tenants have a vital role in informing the regulatory process.

The  Minister  has  suggested  that  the Regulator  will  want  to  establish  a Resident Scrutiny Panel, which would seek representative views from tenants across  the  social  housing  sector,  and which would contribute to the formation of regulatory judgements of the relative performance  of  individual  social landlords.  However,  it  seemed unnecessary to set this out in what is an in  principle  decision  in  respect  of regulation and which might later tie the regulators  hands  if  he/she  elected  to consult  stakeholders  in  a  different manner.

17

The  introduction  of  an  Independent Regulator  is  not  immediately appropriate for Jersey's social housing sector alone. [Section 5.10]

This  is  not  the  view  of  Professor Christine Whitehead who identified the lack  of  an  adequate  regulatory framework for the sector as an issue.

However,  the  Council  of  Ministers  is accepting  amendment  (P.33/2013 Amd.(1)) lodged by the HSSH Scrutiny

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Panel  on  16th  April  2013.  This  will ensure  that  the  Minister  for  Housing brings  forward  for  approval  by  the Assembly detailed proposals which are proportionate for Jersey.

18

The proposed rent reforms are difficult to support as the principle of bringing social rents in line with a high  value property  market  subverts  the  role  of social housing in providing sub-market accommodation  for  those  unable  to afford market prices. [Section 6]

This is not accepted. Social Housing is not  merely  characterised  by  its  rental structure,  sub-market  or  otherwise. Security of tenure for example is seen as a major benefit of being the tenant of a  social  landlord  which  reflects  the tenant's  long-term  housing requirements [often life-long]. Tenants of  social  landlords  generally  have relative  security  of  tenure  for  life  as long as they pay the rent and observe other conditions of tenancy. Importantly the characteristics  of  the social  sector population  mean  that  social  housing managers  play  an  important  role  in supporting  their  tenants  by  providing housing related services and access to other  assistance  that  other  market' landlords are not required to provide.

The Minister is pleased that despite this key finding, the Panel accepts that the policy being proposed is the only way forward given the unlikely availability of capital subsidies and the urgent need to  redevelop  and  expand  the  housing stock.

19

The choice being taken in the proposed reforms to allow rents to rise explicitly commits  to  a  revenue-based  subsidy model  rather  than  a  model  based  on capital grants. [Section 6.1]

This  is  correct,  as  it  is  the  most sustainable model for the long-term.

Achieving  Decent  Homes  within  a 10 year  period  would  not  be  possible with capital grants; indeed this is why the stock is in its current condition.

20

The "Housing Strategy for the 1990's" (P.142/1991) established the 90% fair rent'  policy  at a  time  when  having  a small difference between open market and social rents was acceptable as both sectors  were  broadly  affordable.  The principles  underpinning  rent  reform should  be  linked  to  any  agreed definition  of  the  purpose  and  role  of social housing. [Section 6.2]

It  is  not  accepted  that  there  was  a smaller  difference  between  the  open market and social rents in the 1990's, and they were no more affordable than rents today without significant financial assistance.  The  Private  Sector  Rent Rebate  Scheme  was  developed  at  the time to address this and States tenants already  benefited  from  the  Rent Abatement Scheme.

Social  Housing  is  not  merely

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characterised  by  its  rental  structure, sub-market  or  otherwise.  Security  of tenure for example is seen as a major benefit of being the tenant of a social landlord  which  reflects  the  tenant's long-term housing requirements [often life-long].  Tenants  of  social  landlords generally  have  relative  security  of tenure for life as long as they pay the rent  and  observe  other  conditions  of tenancy. Importantly the characteristics of  the  social  sector  population  mean that  social  housing  managers  play  an important  role  in  supporting  their tenants  by  providing  housing  related services and access to other assistance that  other  market'  landlords  are  not required to provide.

21

Whilst  the  return  to  a  10%  rental subsidy increases potential income and borrowing  for  the  Housing  Company over time, it will take a long time to work through and may not increase the number of properties available to people who cannot meet their needs elsewhere. [Section 6.3]

On  the  contrary,  the  rent  policy  will enable the proposed Housing Company to  develop  more  homes  as  and  when sites are released for development.

At least 637 additional homes will be delivered over the next 10 years and the sector  will have  the  capacity  to  build more  if  this  is  a  requirement  of  the Strategic Housing Unit and the States, demonstrated  by  demand  being captured  by  the  Affordable  Housing Gateway. This does of course rely upon sites being released for development.

22

If rents are set at lower than 90% of market  rents  in  future,  the  Housing Company risks becoming unsustainable and  may  require  additional  States funding  should  the  property  market weaken. [Section 6.4]

The States would have full regard for the affects such decisions would have on the Housing Company. The Business Plan  is  robust  for  a  wide  range  of scenarios.

23

Tenants  currently  in  receipt  of  the accommodation  component  of  Income Support will be reliant on benefits for longer as a result of the proposed rent reforms – unless their earnings increase at  a  greater  extent  than  the  cost  of living. [Section 6.5.1]

This  may  be  the  case,  but  average earnings have, over the past 20 years, increased to at a rate above RPI.

24

The implications of the rent reforms for low and high income groups in social housing that are not currently in receipt of  Income  Support  are  not  clear,  and

This is not accepted, the social impact assessment  carried  out  as  part  of  the Housing  Transformation  Programme provided  very  clear  outcomes  for

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there  are  concerns  that  low-income pensioners not claiming Income Support may  be  negatively  affected  by  the current proposals. [Section 6.5.2]

tenants in all income groups. Only 35 States tenants are expected to be drawn into Income Support as a consequence of the return to 90% of market rents. Low  income  pensioners  will  not  be affected by the rent reform unless they move within the stock and, even then, Income  Support  will  be  available  to them if they cannot afford the new rent.

25

The additional cost for Income Support for States social Tenants arising  from the rent reforms will be funded by the Treasury  by  means  of  an  additional budget allocation to the Social Security Department, rather than being borne by the proposed Housing Company at start up. [Section 6.5.3]

Correct.

26

Some of these comments in P.33/2013 may  lead  readers  to  assume  that  the Income  Support  bill  arising  from  the rent  reforms  will  be  negligible,  even though  the  data  to  provide  a  solid understanding  of this is not available. [Section 6.5.3]

The  Income  Support  implications  are well  set  out  within  P.33/2013  (p.52 Section 5.5).  However,  other  changes which  may  affect  Income  Support, unconnected  with  P.33/2013,  are  and will remain a matter for the Minister for Social  Security  and  Council  of Ministers to address.

27

The Housing Trusts will bear additional Income Support costs as a result of the proposed rent policy, estimated to peak at £1 million once the reforms are fully implemented. [Section 6.5.3]

The  Housing  Trusts  have  yet  to commission independent market rental assessments of their properties, so the uplifts  in  rents  associated  with  the return to 90% of market rents for the Housing Trusts is yet to be confirmed. The  Housing  Trusts  will  receive additional rental income over time from the proposed rents policy and they will only be required to bear the cost of the additional income support at a level of 50% of this additional rental income as on  average  50%  of  Housing  Trust tenants  are  in  receipt  of  Income Support. Given the Housing Trusts have not expressed any concerns over their viability  based  on  the  current  rents policy, this additional rental income and the  associated  return  to  the  Treasury should not limit their ability to develop further  social  housing,  but  actually enhance the viability of new schemes.

It should be noted that some Trusts have

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significant surpluses and are paying off loans.

28

The  Business  Plan  for  the  Housing Company is set up in such a way that the minority of tenants who pay some or all of their rents from their own income are  effectively  funding  the  whole revenue  operation  of  the  Housing Company. [Section 6.8]

This is incorrect. The Business Case is supported  by  4  key  income  streams; those being sales, borrowing, rents and the  adjustment  in  the  return  to  the Treasury and their proportions are set out  in  the  financial  model  within  the Full Business Case.

29

The implication of the Annual Returns Agreement  is  that  tenants  in  social housing not currently claiming Income Support  are  indirectly  subsidising  the provision  of  Income  Support. [Section 6.9]

Only those tenants who can afford to pay  the  new  rents  will  do  so.  Under current arrangements, those tenants are receiving a hidden subsidy which is not means  tested.  The  cost  of  providing those  homes  exists  now  but  is  not transparent.

30

A  clear  consequence  of  the  proposed system  is  that  Income  Support  will increase  to  cover  the  costs  of  the increased social rents. This aspect of the social  housing  reforms  may  create pressure  on  the  States'  taxation  and expenditure programme. [Section 6.9]

Cost pressures have been quantified and accepted  as  affordable  over  the  next 30 years.

The cost of providing the homes exists now  but  is  hidden;  rent  reform  will allow the true cost of providing social housing to be better understood and be more  appropriately  dealt  with  by Income Support.

31

The  potential  difference  in  movement between  the  financial  return  from  the new Housing Company on the one hand and the cost of Income Support on the other  risks  having  significant consequences  for  the  States'  financial programme. [Section 6.10]

It  would  not  be  appropriate  for  the Housing Company to bear the cost of changes  to  Income  Support  policy, which may have no relation to housing provision. The Housing Company will be  responsible  for  providing  a  social housing  stock  which  meets  Decent Homes  Standards  and  high  quality services  to  tenants.  It  is  for  Social Security  and  the  Treasury  to  manage and deal with any potential changes in demand  for  the  suite  of  benefits captured under Income Support.

32

The fact that external lending markets were  not  willing  to  provide  funding facilities  for  the  proposed  Housing Company is a reflection of the markets rather than a concern with the Housing Company's  financial  model. [Section 7.4]

The approach taken by external lenders was  noted  in  P.33/2013.  The  banks were willing to lend to the Company but not  the  full  amount  individually  and advised  preferential  rates  would  be achieved by the States.

It is pleasing to note that the Panel has accepted  the  viability  of  the  financial

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model.

33

A  net  gain  of  287  new  social  rented homes over 30 years is not acceptable, given the rising demand for affordable housing on the Island. [Section 7.8]

The proposals aim to deliver far more benefits  than  just  an  increase  in  the social housing stock. They will also see the  existing  stock  brought  up  to  the English Decent Homes Standard within a  10  year  period,  an  additional  300 affordable homes for sale delivered by the  company  and  the  delivery  of  an additional  203  new  homes  by  the Housing Trusts. The reforms will also create  a  new  housing  company,  one which is more commercially agile and flexible  to  respond  quickly  to  the changing housing needs of the Island. The  business  case allows  for  all  sites currently  in  States  ownership  and designated  for  social  housing  to  be developed.

However,  the  effect  of  the  new  rent policy  will  be  to  provide  the  new company and the Housing Trusts with the  means  to  deliver  further  social housing if additional sites are identified and borrowing is made available. The identified growth set out in the FBC is therefore very much a minimum and the sector will be able to deliver as many homes as are required, assuming sites are released for housing development.

Other benefits are clearly derived from new initiatives such as the Gateway and the  full  attainment  of  Decent  Homes Standards.  The  Gateway  will  ensure that the social housing stock is better targeted  at  those  in  need  and  better housing standards will offer improved conditions  to  tenants  helping  to  deal with  issues  such  as  fuel  poverty  and supporting independent living.

34

Guernsey's  Housing  Company  has benefited from joining the South West Benchmarking Club which allows it to compare performance indicators against peer housing associations and identify areas  of  success  and  areas  for improvement.  A  similar  set  up  would complement  the  work  of  a  regulatory

The Housing Department has, for some time, been engaged with benchmarking with  UK  equivalent  social  housing providers  of  a  comparable  stock  size and this will continue.

The  relevance  of  the  South  West Benchmarking  Club  will  be  further investigated.

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body in Jersey. [Section 7.10]

35

The Sub-Panel believes that it is likely that  the  social  housing  reforms  will affect  Parish  provision  in  some  way, especially as many would consider that they fall into the category of a social housing provider. [Section 8.3]

There has never been any desire to force the Parishes to be included in the social housing reforms – albeit that they could benefit  from  utilising  the  Affordable Housing  gateway  for  their  allocations should  they  wish  to  do  so.  That  is  a matter for the individual Parishes.

The Minister for Housing has recently written to the Chairman of the Comité des Connétable s to offer reassurance in this respect.

36

The present reforms are not sufficient to make  any  meaningful  contribution  to the future provision of affordable and social housing. The demand for social housing has increased in recent years, yet the proposals do not explicitly state how  this  need  can  be  met  by  the proposed  Housing  Company  or  any other  Social  Housing  Provider. [Section 9]

The proposals aim to deliver far more benefits  than  just  an  increase  in  the social housing stock. They will also see the existing stock brought up to Decent Homes  Standard  within  a  10  year period,  will  see  an  additional  300 affordable homes delivered and provide the Housing Trusts with the ability to deliver an additional 203 social rented homes.  They  will  also  create  a  new housing  company,  one  which is  more commercially  agile  and  flexible  to respond  quickly  to  the  changing housing needs of the Island.

The  business  case allows  for  all  sites currently  in  States  ownership  and designated  for  social  housing  to  be developed. However, the new company can  and  will  deliver  further  social housing  for  viable  schemes  if  further sites  are  identified  and  borrowing  is made available.

The new Housing Company will be able to  deliver  as  many  homes  as  are required, assuming sites are released for housing development. The Minister for Planning  and  Environment  has  been charged  with  bringing  forward  more sites  for  such  development.  All registered social housing providers will be able to use the rent policy to make new  schemes  financially  sustainable and  also  to  access  land  offered  to registered providers.

The  Social  Housing  Provider  will  be responsible for determining the balance

Key Findings

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between  supply  and  demand,  such policy decisions being approved by the States.

Comments  received  from  Professor Christine  Whitehead  reflect  her endorsement  that  the  proposals  are indeed sufficient and address all of the challenges set out in her report –

"A careful reading of these documents makes it clear that all the challenges set out in my report have been addressed – through the development of mechanisms to  improve  strategy,  regulation  and delivery.

Equally  the  recommendations  have been properly and fully assessed, taking account of the economic and political environment as well as the objectives of ensuring an efficient and well regulated social sector. In addition there has been careful  thought  given  to  the  States' commitment  to  clarify  the  policy framework; to fund new investment; and to  balance  rents  and  income  support policies.

The result should be a social housing regime which is robust and can ensure independence  of  management,  greater flexibility to address requirements in the most  appropriate  way;  and  access  to resources to meet future needs"

37

Selling  off  units  that  are  entirely inappropriate  for  social  housing  may assist in raising funds but the Sub-Panel does  not  generally  agree  with  the principle of selling off social housing to private individuals when it is already in short supply. [Section 9.2]

Under P.6/2007, only non-core, prime location properties were to be sold to on the open market to private individuals. Such  properties  are  expensive  to maintain  and  the  rental  income generated  insufficient  to  cover  the required  maintenance.  Other  sales through P.6/2007, and all future sales will  be  made  to  those  qualifying through  the  Affordable  Housing Gateway, assessed as being in need of affordable housing. In most cases, these will  be  existing  social  rented  tenants and therefore a social housing unit will be released when the sale is completed, or  if  purchasing  their  existing  home, this is a change in tenure only as they would not have moved out without the

Key Findings

Comments

opportunity to purchase with assistance.

P.6/2007 said that sales "will be carried out  in  a  managed,  sustainable  way, without imposing unnecessary strain on the wider housing market, and related at all times to current levels of supply and demand within social housing"

Decisions on sales to the open market and  to  tenants  will  continue  to  be balanced against delivery of new social renting housing and the needs reflected in  the  Affordable  Housing  Gateway List.

38

The Trusts will develop 203 new units of  accommodation  over  30  years  as identified in the Report, and there is an assumption that Trusts will continue to make  a  significant  and  meaningful contribution to the supply of affordable and social homes. [Section 9.3]

Correct. This view has been expressed by the Trust Chairmen and the Council of Ministers recognises the significant contribution that the Trusts can make.

The  Trusts  will,  however,  need  to demonstrate  that  they  have  the appropriate business plans and business cases  to  deliver  these  homes  whilst ensuring  the  attainment  of  Decent Homes  Standards  for  their  existing stock.

39

The absence of a formal "exit gateway" for  individuals  whose  circumstances have improved means that encouraging tenants to stay in their home for life is not a sensible approach when the Island has a fixed limit on the amount of social housing with little hope of maximally increasing supply. [Section 9.4]

This  is  not  correct,  the  Housing Department already offers opportunities for  tenants  to  purchase  under  the deferred payment scheme and has seen over 100 tenants become homeowners since the scheme was launched.

Going  forward,  it  will  be  for  the Strategic  Housing  Unit  to  develop additional  schemes  to  allow  more choice of affordable housing and, using such policies approved by the States, to see these implemented by the registered social housing providers.

40

The  States  has  at  times  appeared  to pursue  best  financial  value  from property  sales  rather  than  best  social value,  thus  missing  an  opportunity  to support  provision  of  sub-market housing. [Section 9.5]

There is no evidence to suggest that this has  been  the  case  for  the  Housing Department. Sales have been based on First  Time  Buyer  values  with  tenants being given an opportunity, should they require  it,  to  apply  for  up  to  a  25% deferred payment on their purchase of a home.

In  respect  of  these  sales,  it  has  long been  accepted  by  the  Minister  for

Key Findings

Comments

Treasury  and  Resources  and  the Minister  for  Housing  that  they  are trading financial value for social benefit in accordance with a decision made by the States Assembly within P.6/2007.

Sites  that  become  available  for development are assessed on a site by site  basis  for  their  suitability  for affordable housing.

41

Existing affordable housing policies are uncoordinated  and  ineffective.  They have failed to produce any meaningful affordable  housing  schemes  for  the Island. [Section 9.6]

The  Strategic  Housing  Unit  will develop an Island wide housing strategy and  coordinate  housing  policy  in  the future.

The  weakness  with  existing  policies within the Island Plan is the reliance on the  level  of  open  market  housing  to deliver  affordable  housing  as  a  by- product.  That  weakness  will  be significantly  reduced  by  the  proposed return to nearer market rents which will make  the  development  of  affordable housing more viable.

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The  Minister  for  Housing should ensure the following:

1

An agreed position on the role and purpose of social housing should be developed within 6- 12  months  to  support implementation of the Housing reforms  and  contribute  to coherent future policy.

This  definition  should  also clarify  how  the  new  Housing Company will balance its social and moral obligation alongside its  role  as  a  States  Strategic Investment.

SHU

Accept

A stated position on the role and purpose of social housing is necessary and will be developed by the Strategic Housing Unit within 12 months of its development.

P.33/2013 sets out very clearly what the new Housing Company will be doing. This will be further documented in the Transfer

June 2014

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To

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Ministers and the States should sign  up  to  this  definition  in practice. [Sections 3.1, 3.2]

Agreement.

It is not accepted that the role and purpose of social housing needs a States decision. However, a legal definition will be developed as part of the draft enabling law to establish the proposed regulator, which will be presented to the States in due course.

2

Reliable means to deliver new supply of both social rented and affordable  home  ownership properties  must  be  urgently investigated and committed to, including partnerships with the private sector.

Hsg

Accept

The existing sites that are available are already fully investigated and reported within P.33/2013 and R.15/2013 and the proposed return to nearer market rents provides the funding.

P.33/2013 also states that –

"the robustness of the business case of the proposed new Housing Company means that these sales and re-alignment of the stock will not prevent the Company from developing new social housing and affordable units, should the States, through approval of its Housing Strategy, wish to do so. Each project would need to be considered on its merits and in light of the borrowing necessary, but the new Company would have capacity and

Already actioned.

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Additional  capital  investment from  the  States  should  be considered  if  required [Section 7.8]  and  appropriate States  owned  land  should  be utilised at a price that enables development  of  affordable housing [Section 9.5].

A  clear  commitment  must  be made by the Housing Company to review Business Plans within 3  years  to  see  if  additional capacity  to  support  new development can be identified, and  this  information  reported back to the States. [Section 9.3]

SHU T&R

SHU

Accept

Accept

flexibility to react to changing requirements."

This will be a fundamental role for the Strategic Housing Unit in the future, but no capital investment is available within the Medium Term Financial Plan 2013– 2015. Treasury and Resources will provide funding if the States agree.

The Strategic Housing Unit will lead on this. It will decide what level of supply is required in order to meet the demand evidenced by the Affordable Housing Gateway. The Strategic Housing Unit may require all Social Housing Providers to review their business plans every 3 years against policy initiatives/agreed housing strategy.

Timescales for the completion of this action can only be confirmed once the Strategic Housing Unit is fully established and as part of an Island wide housing strategy.

Timescales for the completion of this action can only be confirmed once the Strategic Housing Unit is fully established and as part of an Island wide housing strategy.

3

The  requirement  for  the Housing  Trusts  to  contribute towards  the  Housing component of Income Support should  be  reviewed  and reported  back  to  the  States within 2 years to ensure that the Trusts  are  able  to  operate efficiently  and  deliver additional stock [Section 6.5.3].

SHU

Accept

All registered social housing providers will be expected to submit annual performance reports to the Regulator. The Regulator, in turn, will be expected to report to the States annually on the performance of all the registered social housing providers.

Timescales for the completion of this action can only be confirmed once the Strategic Housing Unit is fully established and as part of an Island wide housing strategy.

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4

A  protocol  should  be established and agreed between the  Minister  for  Housing  and the Parishes within 6 months to provide  greater  clarity  about how  the  Gateway  system  will impact on social and affordable homes  delivered  by  the Parishes. [Section 8.3]

SHU

Accept

There has never been any desire to force the Parishes to be included in the social housing reforms – albeit that they could benefit from utilising the Affordable Housing gateway for their allocations should they wish to do so. That is a matter for the individual Parishes.

The Minister for Housing has recently written to the Chairman of the Comité des Connétable s to offer reassurance in this respect.

Timescales for the completion of this action can only be confirmed once the Strategic Housing Unit is fully established and as part of an Island wide housing strategy.

5

An exit gateway combined with savings  initiatives  or  shared equity  schemes  should  be developed to cater to the needs of  those  wishing  or  able  to move out of the social sector if their  financial  circumstances significantly  improve.. [Section 9.4]

SHU

Accept

The Housing Department already offers opportunities for tenants to purchase under the deferred payment scheme and has seen over 100 tenants become homeowners since the scheme was launched.

Going forward, it will be for the Strategic Housing Unit to develop additional schemes to allow more choice of affordable housing and, using such policies approved by the States, to see these implemented by the registered social housing providers.

Timescales for the completion of this action can only be confirmed once the Strategic Housing Unit is fully established and as part of an Island wide housing strategy.

6

The  Minister  for  Housing

SHU

Accept

The Council of

Timescales for

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should be retained as the head of  the  Strategic  Housing  Unit and  given  responsibility  for housing  across  all  tenures. [Section 4.2]. This is critical in helping to address the lack of joined-up  thinking  on affordable housing policies and should be agreed by the States as it is essential to the success of  stimulating  new  supply. [Section 9.6]

Ministers is accepting the amendment lodged by the HSSH Scrutiny Panel on 16th April 2013 (P.33/2013 Amd.(1)) which will see the position of Minister for Housing remain, but without the operational responsibilities of being landlord to 4,500 tenants.

Regulation will be independent and with operational responsibilities moved to the proposed Housing Company the Minister for Housing's role will be restricted to developing policy with the Strategic Housing Unit.

the completion of this action can only be confirmed once the Strategic Housing Unit is fully established and as part of an Island wide housing strategy.

Strategic Housing Unit

7

Additional steps setting out the expected  ways  of  working,  to build  a  more  collaborative culture  and  ensure  adequate resources  are  available  should be  developed  to  support  the Strategic  Housing  Unit.  This should be reported back to the States  by  the  Minister  for Housing  within  6  months. [Sections 4.2, 4.1]

SHU

Accept

This will be developed as part of an Island wide housing strategy.

Timescales for the completion of this action can only be confirmed once the Strategic Housing Unit is fully established and as part of an Island wide housing strategy.

8

Very explicit terms, conditions and stated outcomes should be established and approved by the States prior to the establishment of the Strategic Housing Unit in order to provide a more formal and accountable structure  than currently  proposed.

Reject

These are clearly listed in pages 18-28 of P.33/2013.

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[Section 4.3]

Regulation of Social Housing

9

Prior  to  introducing  a  social housing  regulator,  alternatives for regulation must be brought forward  that  are  more appropriate  to  the  size  and nature  of  Jersey's  social housing  sector  including  a Social Housing Charter or Code of Practice developed within the next 12 months and signed up to  by  all  providers [Section 5.4]. A Jersey Homes Standard that is appropriate to Jersey's needs must be created within 12 months [Section 5.4].

SHU

Accept

The Council of Ministers is accepting the amendment (P.33/2013 Amd.(1)) which will see alternatives to regulation brought forward for the States to consider.

The Minister for Housing will though want meaningful regulation that ensures decent homes compliance, so a charter is not believed to be appropriate.

Timescales for the completion of this action can only be confirmed once the Strategic Housing Unit is fully established and as part of an Island wide housing strategy.

10

Regulatory activity needs to be focused  on  improving  service delivery as opposed to dealing with  service  failure [Section 5.1]  and  should  rely upon  cooperation  rather  than compulsion as much as possible with  regard  to  directing  the financial affairs of other Social Housing  Providers. [Section 5.6]

SHU

Accept

A voluntary approach to regulation has not worked to date and therefore whatever regulatory framework is approved by the States must provide adequate confidence that tenants are protected.

Timescales for the completion of this action can only be confirmed once the Strategic Housing Unit is fully established and as part of an Island wide housing strategy.

11

Any  regulation  should  be flexible  enough to include the Private Rental Sector and other social  housing  providers  in future  without  significant  and costly  institutional  change. [Section 5.5]

Reject

This is rejected as it is not appropriate to consider any form of private sector regulation until the framework to be used within the social sector is confirmed.

The outcome of recommendation 9 and amendment (P.33/2013 Amd.(1)) need to be considered prior to any work being undertaken in

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regards to the private sector.

Return  to  a  Near  Market Rent Policy

12

Prior  to  implementing  policies proposing  a  return  to  fair market  rent  levels,  an  agreed definition  of  the  role  and purpose of social housing that has been approved by the States must be used to underpin any rent reform. [Section 6.2]

Reject

It is necessary to commence with reform of social housing now. P.33/2013 sets out very clearly what the new Housing Company will be doing. This will be further documented in the Transfer Agreement.

A stated position on the role and purpose of social housing is necessary and will be developed by the Strategic Housing Unit.

It is not accepted that the role and purpose of social housing needs a States decision before the rent reform can be implemented.

13

Any agreed rent reform should be  accompanied  by  measures designed  to  avoid  potential negative  social  and  economic effects. [Section 6]. This should include  a  detailed  analysis  of the  consequences  and limitations  of  relying  on  a revenue-based  subsidy  model for social housing [Section 6.1], and of a rent policy that will see low-income Tenants reliant on Income  Support  for  longer [Section 6.5.1]

Reject

The social and economic affects of the rents reform have been clearly set out in P.33/2013 and R.15/2013 and are considered minimal.

14

The  re-lets  policy  should  be kept under review to make sure

Hsg

Accept

This risk has already been identified and

Already Actioned

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To

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that the turnover of properties is not negatively affected and that re-lets are happening at a rate that  supports  delivery  of  the Housing  Company's commitments.  The  Minister should report back to the States annually  on  this  policy. [Section 6.5.1]

mitigated within the Full Business Case, R.15/2013, p.77, Risk 6.

It is proposed in P.33/2013 that the independent regulator will report annually to the States on the performance of all registered social housing providers.

15

Action  should  be  taken  to ensure  the  most  vulnerable households  are  protected against  rent  increases  upon moving,  including  the introduction of elderly rate for low-income  pensioners. [Section 6.5.2]

ESS

Accept

The Minister for Social Security will bring forward changes to Income Support to deal with low income tenants. It should be noted that Income Support already allows disregards for pensioners.

16

Policies  should  also  be developed  to  assist  those considered  higher  earners  to move into other tenures that are appropriate  to  their  needs. [Section 6.5.2]

SHU

Accept

It is expected that additional policies will be developed by the SHU.

The Housing Department already offers opportunities for tenants to purchase under the deferred payment scheme and has seen over 100 tenants become homeowners since the scheme was launched.

Timescales for the completion of this action can only be confirmed once the Strategic Housing Unit is fully established and as part of an Island wide housing strategy.

17

Prior  to  the  Debate  and approval of any rent policy, the Minister  must  clarify  the following –

(a)  the link between removing the  hidden  subsidy  and additional  States' expenditure  on  Income

Reject

(a) This is already clarified in P.33/2013, p.52

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Support;

2. the reliance on the rents of low-income  Tenants  to fund  the  Housing Association;

3. the  arrangement  for  the Treasury  to  fund  the additional  cost  of  Income Support  arising  from  the rent reforms

Explanation must be given as to why this system is preferable to the  existing  system,  and  the Assembly must decide whether, upon  consideration  of  these issues,  it  is  content  with  the approach outlined. [Section 6.9, 6.5.3, 6.9 and 6.8]

2. The Business Case is supported by 4 key income streams; those being sales, borrowing, rents and the adjustment in the return to the Treasury and their proportions are set out in the financial model within the Full Business Case.

3. This is already set out in P.33/2013 under "Income Support Implications" pages 51-52

A full options appraisal and financial model is summarised within R.15/2013.

Housing Company

18

The  proposed  Housing Company  and  regulated Housing Trusts should join an appropriate benchmarking club so that comparative measures of their performance can be made available  to  staff  and  tenants and  support  future improvements. [Section 7.10]

Hsg

Accept

The Housing Department has, for some time, been engaged with benchmarking with UK equivalent social housing providers of a comparison stock size and performs well. This will continue.

Already Actioned

19

Care  must  be  taken  to  avoid competition  between  the Housing  Company  and  the Housing Trusts with regards to pursuing  the  same  sites  for

SHU

Accept

The Strategic Housing Unit will decide which is the most appropriate registered social

Timescales for the completion of this action can only be confirmed once

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development and clear guidance published  about  developing sites  for  social  housing. [Section 9.3]

housing provider to develop sites in the future.

It must be recognised however that a collaborative working relationship between the Housing Department and the Trusts is well established and demonstrates that there is no inappropriate competition. The separation of policy setting, regulation and delivery will ensure this is maintained in the future.

the Strategic Housing Unit is fully established and as part of an Island wide housing strategy.