23 November 2007
Welsh local authorities have a tough housing standard to meet and only one real way of paying for it: transferring their stock to an RSL. It's not a popular policy, especially for councils whose tenants have rejected any move. Neil Merrick reports
In the next few months, more than 10,000 council homes in the Welsh valleys will be taken over by a new social landlord. The transfer of Rhondda Cynon Taff's stock to RCT Homes follows a ballot last year, in which 58% of the county borough council's tenants backed the move.
Tenants were promised that, if the transfer went ahead, the housing association would spend £186m on improvements to meet the Welsh Housing Quality Standard. 'It will be new kitchens and bathrooms for the next seven or eight years,' says RCT Homes resources director, Malcolm Wilson.
Two-thirds of the bill will be covered by private borrowing, an option denied to local authorities. But although two other councils are also poised to transfer their homes to registered social landlords and six more plan ballots, most councils in Wales are resisting government pressure to use transfer as a means to raise money for improvements.
The Welsh Assembly Government has set a deadline of 2012 for all local authorities to achieve the housing quality standard. Since this May's elections, which led to a Labour/Plaid Cymru coalition administration, the issue has come to a head and started to stretch relations between the Assembly and councils of all political affiliations.
Estimates suggest that the 15 Welsh councils still managing homes are about £880m short of the £1.9bn required to meet the standard. With the Assembly unwilling to fund an arm's-length management organisation programme, the authorities are angry that stock transfer appears to be the only game in town.
To make matters worse, the Welsh standard is tougher, and therefore more expensive, than England's decent homes standard. Even Valleys to Coast, an RSL that inherited Bridgend County Borough Council's homes four years ago, is struggling to meet some of the environmental criteria on estates.
Bridgend was until recently the only council in Wales that had persuaded its tenants to back a transfer. Tenants of the City and County of Swansea and Wrexham County Borough Council, which together are almost £400m short of the sums they need, have voted against a transfer.
Since the ballot in Wrexham in 2003, the council has raised rents and cut services to balance its housing revenue account. But this year it will spend a record £15m on capital schemes. According to council leader Aled Roberts, it is unlikely that tenants would back transfer if a second ballot were held, because they are happy with the council. 'Satisfaction levels are rising,' he says.
Roberts, who is the Welsh Local Government Association's housing spokesman, claims the Welsh Assembly is 'in denial' over the real situation facing councils such as Wrexham and Swansea. Along with other local authority leaders, he wants it to give a clear indication of what action – if any – it will take against councils that miss the 2012 deadline.
Welsh Housing Minister Jocelyn Davies has suggested that the Assembly might grant extensions. But at the same time the Assembly says tenants who have already been balloted cannot be asked to vote again until after next May's local elections.
'There is frustration that the Assembly hasn't taken on board that it's not wholly within a local authority's gift to achieve a “yes” vote,' says Roberts. 'There is a lack of real debate between local government and the Assembly over this issue.'
An Assembly spokesman says councils have known since 2002 that they must achieve the standard, which also applies to RSLs. He adds that the Assembly is willing to consider extensions for authorities that can prove they have a 'robust business case' and achieve the standard within a reasonable period after 2012. Alternative means for raising money will be considered only if they fall within Treasury rules. 'We are constantly monitoring progress and providing support to local authorities to aid them in achieving the target,' he says.
Among the six councils balloting tenants is Conwy County Borough Council, which is £29m short of the £53m it requires to upgrade its 3,800 homes. A new landlord, Cartrefi Conwy (Housing Conwy), has been set up in the expectation that tenants will support transfer in this month's vote. The result is due early next week.
Ken Finch, Conwy's corporate director for resources, says the council would have preferred to avoid transfer if it could have found another way to raise funds. 'We have a proud record of dealing with council housing and our tenants, but all the financial equations are stacked up against us.'
Flintshire County Council, which faces a borrowing gap of £87m, is holding out against any ballot while talks continue with ministers. The council, which has 7,500 homes, is trying to calculate how close it can get to the standard using grants it will receive for major repairs.
Chief executive Colin Everett says councillors recognise that the situation is beyond their control and that the business case for retention is weak. But at the same time, they remain 'passionate' about retaining the homes. 'The government talks about localism,' he says. 'Localism is about the local council making the case for local democracy.'
Back in Rhondda Cynon Taff, Malcolm Wilson says RCT Homes will do far more than just bring social housing up to standard. 'It's about leading regeneration in the area,' he says. The housing association is promising a new type of community management model that gives tenants more say over the way their homes, and services, are run.
Bron Afon Community Housing, which is due to take over 8,000 homes from Torfaen County Borough Council by the end of March next year, has also pledged to increase tenant involvement. Any local resident can become a member of the RSL, although tenants will retain a majority of votes.
Duncan Forbes, Bron Afon's chief executive, says the transfer was closely overseen by tenant representatives. 'The organisation has been developed through a genuine mutual partnership and consensus between tenants, staff and councillors,' he adds.
Bron Afon is borrowing £130m towards the £187m needed to meet the quality standard on time. Like other landlords, it fears that the timescale is too tight for all the external environmental work. 'We've said that we plan to do it by then,' adds Forbes. 'We would never sign up to a legally binding agreement.'
When Valleys to Coast took over Bridgend's housing in 2003, the standard was at an embryonic stage. The new association has spent just over half the £70m it promised but thinks the final bill could be slightly higher than forecast, mainly because of the number of properties standing empty for long periods.
Valleys to Coast borrowed £45m for improvement work and new development. It also received £8m from the Assembly because of the poor condition of the stock it inherited. 'Within six months of transfer, most properties had some improvements done,' says Alun Rawlins, the RSL's finance director. 'That helped the local community feel that transfer was the best thing that could have happened.'
Community Housing Cymru, the umbrella body for housing associations in Wales, regrets that more local authorities are not following Bridgend down the transfer route. Sioned Hughes, its development manager, says councils should focus on the need to offer tenants better-quality homes and wider benefits. 'We're very much part of social enterprise in Wales,' she adds.
Although local authority officers insist they are on good terms with their counterparts at the Welsh Assembly, the housing debate has undoubtedly stretched relations between some politicians.
'The Assembly is a relatively new institution,' says Steve Long, director of the Chartered Institute of Housing Cymru. 'In democracy terms, it's very young. Inevitably we get some tension.'
According to Long, many councils have deferred transfers, waiting for others to make the first move. But hard decisions must be taken soon if the standard is to be achieved by 2012.
'It's difficult to see how the majority are going to do so unless they pick up the pace and move quicker than they have until now,' he says. La
Who's out and who's in: the transfer list
- All local authorities in Wales must meet the Welsh Housing Quality Standard by 2012. To date, just one local authority — Bridgend — has transferred its stock to a housing association so that part of the cost can be covered by private borrowing.
- Tenants in three more councils — Monmouth, Rhondda Cynon Taff and Torfaen — have voted for transfer and will move to new landlords by early next year. Tenants in Swansea and Wrexham rejected the transfer option.
- Six local authorities are planning to hold ballots. The remainder — along with Swansea and Wrexham — are studying their options or have told the Welsh Assembly that they have sufficient money to bring their homes up to standard.
- Stock transfer is the only real option available to Welsh councils that cannot afford to meet the housing quality standard. The Welsh Assembly does not see arm's-length management organisations or the Private Finance Initiative as ways to pay for better social housing.
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