Housing Minister Grant Shapps and Communities Minister Andrew Stunell today announced plans for the most radical reform of social housing in a generation, with a fundamental shift of power from Whitehall to councils and local housing associations.
The changes will affect all areas of social housing policy, giving councils more flexibility to use their social housing stock to the maximum effect and drive down waiting lists. Over the past 13 years the number of people on waiting lists has almost doubled to five million – caused, Ministers argue, by the current centrally-determined rules.
Ministers believe that the current rules to allocate social homes are unfair and, despite £17 billion of spending on social housing over the last 13 years, have left nearly twice as many people on waiting lists.
Proposals published today will make the system fairer, giving councils the option to offer flexible tenancies and greater local discretion to decide allocations, so better use is made of this valuable national resource. The rules will strike a sensible balance between the needs of new and existing tenants, and ensure the support that social housing provides is focussed on the most vulnerable and those who need it most, for as long as they need it.
Mr Shapps said councils will be given much greater flexibility to help homeless families find appropriate housing, and existing tenants who may be trapped in unsuitable accommodation, or unable to take up a job offer because they can't move. A quarter of a million social homes remain overcrowded, and more than 400,000 under-occupied.
Housing Minister Grant Shapps said:
"For far too long in this country there has been a lazy consensus about the use of social housing, which has left one of our most valuable resources trapped in a system that helps far fewer people than it should. This out-of-date approach has seen waiting lists rocket and is unfair to people who genuinely need social homes. They trap existing tenants in poverty, often in homes that aren't suitable for them.
"So the current system is ripe for reform, and the changes we're bringing in will ensure that from now on our social housing helps as many people as possible. The new system will protect the most vulnerable in society, ensuring those in greatest housing need are given priority. It will also be more flexible, with councils and housing associations able to offer fixed tenancies that give people the helping hand they need, when they need it. But above all it will be fairer – councils will now be able to make decisions that genuinely meet the needs of local people, and the changes will not any affect any existing tenants."
Communities Minister Andrew Stunell said:
"To have five million people stuck on social housing waiting lists is unacceptable – clearly this system is broken and needs a radical overhaul.
"We need to have a much smarter system that protects lifetime tenancies, but also provides the flexibility to ensure that help is targeted at people who really need it, and enables us to get more for every pound of taxpayers' money. In times of economic hardship, it is vital that social housing is effective in helping people get back on their feet."
Key reforms will include:
- Flexible tenancies – decisions on tenancy arrangements will be made locally. Currently national policy dictates that social landlords can only offer lifetime tenancies. Social homes for life are allocated to people who may have only a short-term housing crisis, which means households continue to occupy a social home and to pay low rents, even if they no longer need this support. Councils and housing associations will now have the flexibility to offer new social housing tenants fixed tenancies – offering minimum contracts of two years. The lifetime tenancies and succession rights of existing council and housing association tenants will not be affected. New tenants will be guaranteed one succession to a spouse or partner, with landlords free to grant further succession rights.
- Fairer allocations – councils will now be able to set their own rules about who qualifies to go on the housing waiting list. At the moment anyone can apply to live in social housing, whether they need to or not. The 'reasonable preference' categories for those with the greatest housing needs will be kept, to ensure priority for social housing continues to go to the most vulnerable in society and those who need it most.
- Greater mobility – it will be easier for any of the eight million social tenants in England to move when their circumstances change. Only five per cent of social tenants moved home over the past year compared to almost a quarter of tenants in the private sector. Existing tenants will be removed from housing waiting lists – freeing up social landlords to work together and focus on helping those tenants wanting to move to do so. A new National Home Swap Scheme will offer tenants access to details of social homes available for swaps across the country, regardless of which home swap service they have joined – making it easier for them to move whether to a different sized property, to be closer to family, or for work.
- Fairer provision for homeless people – there will be greater flexibility for councils to make decisions on how best to help people at risk of homelessness at the local level. Currently some homeless families are turning down the decent private rented accommodation they've been offered as a settled home, and demanding to be provided with expensive temporary accommodation, at huge cost to the taxpayer, until a social home becomes available. Councils will be able to offer flexible solutions to people at risk of homelessness. Despite tight public finances, the Government will be investing £400m to prevent homelessness and rough sleeping.
- Affordable Rents – a new 'Affordable Rent' tenancy will be offered by housing associations to some new tenants of social housing from April 2011. Affordable Rent properties will offer fixed term tenancies at a rent higher than social rent – with landlords able to set rents at up to 80 per cent of local market rents. This will enable landlords to raise funds to build more affordable housing for those who need it. The Government is investing £4.5 billion in new affordable homes over the Spending Review period, which combined with the reform of social housing should deliver up to 150,000 new homes over the next four years.
- New tenants power of scrutiny – Grant Shapps has announced plans for the abolition of the Tenant Services Authority, and instead to give England's eight million social housing tenants strengthened powers to ensure that their landlords provide quality housing and are held to account when problems arise. Landlords will be expected to support tenant panels – or equivalent bodies – in order to give tenants the opportunity to scrutinise the services being offered and to be involved in resolving disputes. These changes will be made as part of the forthcoming Localism Bill.
The Government will be making further announcements on getting empty homes back into productive use in due course. Other reforms included in the paper include changes to:
- Succession – the rules on succession will become the same for all new council and housing association tenants. There will be an automatic legal right of one succession to a spouse or partner. However, landlords will be able to give additional succession rights in the tenancy agreement, if they choose. The changes to succession will not affect existing tenants or the right of a joint tenant to take over the tenancy when the other joint tenant dies.
- Council Housing Finance – the current arrangement for financing council housing – through the Housing Revenue Account subsidy system – is complex, leaves authorities uncertain about future income and doesn't enable them to plan long-term. The Government plans to replace this with a new self-financing arrangement that will enable councils to keep all the rent money they raise and spend it locally on their services. It will also enable tenants and local taxpayers to hold their landlord to account for the cost and quality of their housing.