29 September 2006
Moves to inspect housing associations more rapidly and to give them less advance warning of visits by inspectors could be unfair on the sector, the head of the Audit Commission has warned landlords.
Quicker inspections were more likely to highlight problems and shortcomings in organisations, Steve Bundred, the commission's chief executive, told delegates at the National Housing Federation conference in Birmingham last week.
'The focus on failure could present a distorted picture,' he said during a debate on regulation.
Bundred added that many registered social landlords used the time they spent preparing for inspections as an opportunity to review their own performance. Nevertheless, changes to the regime were likely to be made from next April, while short-notice inspections could start next autumn.
Reforms to the inspection system were first proposed earlier this year when Sir Les Elton delivered his review of regulation in the sector. Most of his 84 recommendations have been accepted by the Housing Corporation and the Department for Communities and Local Government.
The Elton review is expected to lead to lighter regulation of the sector, with landlords being promised a 10% reduction in red tape if they are deemed to be performing well.
Bundred also used his speech to criticise RSLs for claiming they were a special case. He said any debate on the future of inspections must feed into a wider debate involving other public sector bodies.
'It's about maximising the contribution of housing providers to wider objectives,' he said.
But Keith Exford, chief executive of Affinity Homes and a member of the Elton review group, said the current system relied heavily on the goodwill of associations.
'A modern system of regulation needs to be proportionate and risk-based,' he said. 'It should be designed for all [housing] providers, whether they are private, public or independent.'
Later, Jon Rouse, the corporation's chief executive, called for activity-led regulation of housing providers that reflects 'what you do and not who you are'.
He also suggested that, with the distinction between RSLs and private developers becoming blurred, tenants should have the opportunity to change landlords in the same way that people can switch utility companies.
Minister calls for consensus on affordable home building
Housing minister Yvette Cooper has called for a new political consensus over the need to build more affordable homes.
The Conservative front bench had failed to sign up to the government's plans for growth in Southeast England, while the Tory-run regional assembly wanted lower house building targets, she told the conference.
'We simply can't say to the next generation that they will be denied the chance to own their own home,' she said. 'This is an area where we should have political consensus.'
Last year, 170,000 new homes were built in England compared with just 130,000 in 2001. But new development is still struggling to keep pace with the growth in households.
On October 2, ministers will launch their latest low-cost home ownership scheme – Open Market HomeBuy – with private lenders joining the government in offering buyers equity loans to cover 25% of the cost of their property.
Calling on housing associations to lead mixed developments, possibly in partnership with developers, Cooper said: 'The private sector is not doing enough to step into the gap and help people who can afford mortgage repayments but can't afford to take their first step on to the housing ladder.'
Later, the minister admitted it was a mystery why builders had not responded to the heavy demand for new homes. While there were faults in the planning system, it might be necessary to break up large sites owned by single developers as they had an interest in slowing down construction to keep house prices higher, she added.
Landlords 'need to spell out priorities'
Landlords must be willing to list their priorities if housing is to avoid missing out in next year's Comprehensive Spending Review, according to the Treasury.
James Paton, head of housing at the Treasury, told a fringe meeting: 'If you ask for everything, we won't know what's important to you. You don't want people like me deciding things from the centre.'
Paton warned that capital growth is likely to be restricted to about 2%, compared with 8% in the past two spending reviews. 'We have reached our borrowing or capital spending speed limit,' he said.
But although housing providers need to be realistic, the Department for Communities and Local Government appears better placed than other government departments that have already agreed to freeze or cut spending in real terms. 'You are in a relatively good position because it's clear that this area continues to be a government priority,' he added.
Richard McCarthy, director general for planning and communities at the DCLG, said the CSR gave housing associations a further opportunity to come up with innovative solutions.
'It's a challenge to maximise the use of the assets you hold, many of which were funded with government support,' he said.
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