Treasury rent control threatens house building

Yet another way for this government to milk the local government cash cow.

Copied from LGC online
22 August 2013 | By Keith Cooper

Some of the most ambitious council housing building programmes for decades have been put into jeopardy by the surprise Treasury plan to seize control of local authority rent levels.

Officials have been warned by the Chartered Institute of Housing that the shake-up of ‘social rent’ policy unveiled during the spending period announcement will pull £1.2bn out of council housing budgets over the next decade.

The policy will cut short an arrangement that allowed councils to align rents with those charged by housing associations and undermines key assumptions in their 30-year housing budget plans.

LGC understands ministers are preparing to take a hard line on enforcing the rent policy as the Treasury is concerned that councils will refuse to comply. This includes the option of central regulation of council rents for the refuseniks.

CIH analysis predicts that the authority hardest hit by the policy will see £300m stripped out of its housing revenue account, a budget councils have only controlled since April last year. Until then the HRA had been in the Treasury’s hands.

Croydon LBC, which is hoping to build almost 2,000 homes a year, has calculated that the changes could suck £254.8m out of its HRA. Such a loss would force it to “fundamentally review” its business plan, according to Richard Simpson, its director of finance and assets.

Camden LBC has warned that the new policy could substantially heighten the risk of its 1,100 house building programme. Its £400m plan to refurbish existing stock might also have to be put back, a spokeswoman said. Investment decisions would become “more difficult and risky”, she added. “The potential loss of revenue has been estimated at £75m over a 10 year period.”

The threat of centrally imposed rent controls comes at time when councils have just begun gearing up for large-scale house building schemes.

Camden and Croydon’s house building plans would dwarf the tiny numbers of new local authority homes built during the past two decades.

Reliable evidence of the new rent policy’s impact has only just emerged, following detailed analysis of the proposals by the Chartered Institute of Housing and consultancy Sector.

Abigail Davies, assistant director of policy and practice at the institute, said the changes would over 10 years cost around 125 authorities £1.2bn in ‘net present value’.

This takes into account economic projections and is understood to be the most accurate representation of the impact to date.

The hardest hit authorities are in London and the southeast, with around 24 authorities losing more than £10m each, according to the CIH. “There are some councils which will be very severely affected,” Ms Davies said.

Sector’s analysis of the government’s new ‘rent guarantee’ suggests that it could see £250m pulled out of many councils’ housing budgets.

The guarantee expects all social landlords to increase rents by the consumer price index +1% for 10 years from 2015-16. Until now, councils assumed rents would rise by the retail price index +0.5% for three decades, as government policy papers had indicated.

Ian Green, a manager at Sector, said it was acting for several concerned councils.

“The worry for local authorities is that at the end of 10 years, the government will change it to CPI only,” he added. “If they do that, it will have a substantial impact.”

Ms Davies urged ministers not to undermine council housing investment so soon after local authorities had regained control of their budgets.

A spokeswoman for the DCLG described the new rent policy as a “fair deal for tenants and landlords”.

Explainer
The Treasury’s new social rent policy has two key elements. The first cuts short ‘rent convergence policy’ one year early. Introduced by the previous Labour administration, this had allowed councils to bring their rent levels into line with those of highercost housing associations. Without the extra year, most authorities will be left out of pocket.

The second change is a new ‘rent formula’ which states that social rents should increase by CPI +1% for 10 years from 2015-16. Both policies could save the exchequer £1bn between 2015-16 and 2017-18, a sum which depends on whether councils will toe the policy line.

“The main uncertainty [about the savings] is the behavioural response from local authority landlords,” Treasury documents say. The DCLG is therefore considering rent regulation.

Minimum room size standards – if you can afford it.

This extract from the DCLG press release, really gives me the willies, as my old dad used to say. I don’t have a problem with making sure homes work for older people – as I will be one, sooner than I wish to admit – and disabled people, so they should be. What I don’t like and what makes me both suspicious and, as usual, extremely cynical, is the bit in bold. How can one local authority have different room size needs, compared to another? Are there any secret pockets of pygmies or giants DCLG know about and we don’t?

Or is this DCLG speaking out of both sides of their collective mouths? They give you an opportunity to make an improvement in your policies, but only if you are willing to invest in proving that it is justified for your particular area? This is of course standard practice in Local Plan preparation. Producing the evidence required to justify NOT providing enough housing land, being the most obvious one. Gypsy and Traveller sites, leisure, public open space requirements and road infrastructure, are all evidence based requirements that are totally appropriate, as somebody has to pay for them and they should not be required just for the sake of it – but room sizes, really?

This statement is clearly designed to con people into thinking that DCLG are, to quote Eric Pickles, “on the side of hard working taxpayers”, whilst at the same time discouraging cash strapped councils from actually doing the evidence gathering required. If DCLG were genuine in their wish to see our rabbits hutch homes consigned to history, they would simple produce a national standard to be applied in the same as the building regulations are. Score another one for the vested interests of the planning industry me thinks.

The Department for Communities and Local Government (DCLG) said the administration was inviting views on “minimum space and access standards that would allow councils to seek bigger homes to meet local needs, including those of older and disabled people”.

Bandstand argument now off track

I see the Graham Dark fan club is continuing to leap to his defence, although today’s letter is from the original writer so that’s hardly a surprise. As I’ve said previously, it’s amazing how quickly letters in the press drift away from the initial issue. This lady has now gone down the route of how wonderful the music events are and that she has never seen me at one! And your point is madam?
In retrospect, it probably was a bit too blunt to write that it was the only good idea he’d ever brought to the Spalding Town Forum, even if it is close to the truth.
What I should have said, was that a band stand in Ayscoughfee Gardens, was a suggestion made and promoted more than once by Graham Dark’s and that he had actually brought detailed plans for one to a previous Spalding Town Forum meeting. On that basis, why was this lady attacking me for making a passing comment, about something her hero is supporting and promoting?
Even his idea for a bandstand on the cheap, is ill conceived given his proposed location. The roofed enclosure behind the now disused paddling pool, is too small in length, or depth for a start. Suggesting that it can be made fit for purpose using local trades people, at a lower cost that building a bandstand from scratch, may be true, but it won’t be as cheap as suggested and is not backup with any figures.

As an aside, the original, original idea for a band stand in Aycoughfee Gardens, came from a previous councillor colleague of mine, Paul Walls. Paul’s other more ‘madcap’ idea, that I would really love to see happen, is a glass sided restaurant and viewing deck on top of the Spalding water tower. With that view, it could be our equivalent of Tattershall Castle!

Scrutiny is no more than whistling in the wind

20130730-085704.jpg

Nearly every other day now, councillors are being told that they are, ‘key to driving forward the innovations needed to transform local government, so that it can weather the current financial storm being visited upon it by Westminster’.
Along with this often junior government minister uttered blurb, which is actually code for we’re passing the buck – they wouldn’t describe it as a ‘financial storm’, but rather, local government doing its bit – comes advice that the scrutiny process is an integral element in any transformation strategy.
It’s somewhat disingenuous to identify scrutiny as the way forward, given the abysmal record it has even when richly resourced and supported, as in the case of the Parliamentary scrutiny system.
Almost every other week we hear and read statements from various Parliamentary committees, with Keith Vaz and Margaret Hodge having a seemingly insatiable appetite for appearing on our TV screens, with the opening words, “The government needs to….”, yet what difference does it make to what the government actually does?
Translate this to the amateur, volunteer ‘scout master’ world of the local government councillor, where officer support is always at a premium and constantly under threat from the slash and burn economics of deficit reduction, and scrutiny looks more like whistling in the wind, than an insightful process, that can beat a path to innovative service delivery.

By way of a footnote, I would point to the recent revelations regarding the Lincolnshire Hospitals Trust. Lincolnshire County Council has a health scrutiny committee, with South Holland District Council represented by an independent councillor, who takes every opportunity to tell us what the committee is, or more accurately, isn’t doing. I say isn’t doing, because, in theory, if LCC’s scrutiny of our local hospitals was in any way effective, Lincolnshire hospitals wouldn’t have one of the highest abnormal death rates in England would it? Unfortunately, they seem to have gotten themselves completely hung up on the proposed changes to our local ambulance service instead.

Local Young Apprentice Competition

A Message from Foundations

Dear all

As some of you may know, we have organised a ‘family fun day’ on 29 September in Spalding. We have a ‘young apprentice’ style competition, with a great prize for the winner. We are looking for three more contestants for the competition. They must be 15-16 years old and belong to a group (i.e. sports team, cadets, etc).

Please could you pass the message on to any individual or any group who may be interested. This is a great competition for young people, and a really good opportunity for a community group to get some publicity without having to do anything for it!

The website for the event is http://www.familyenterpriseday.co.uk.

Thanks ever so much.

Good charities are also good businesses – some are better than others

I’m reposting this, following today’s front page story in the Telegraph. Although they are targeting the £100k+ salaries that some charity bosses now apparently receive, they are also suggesting that this could be a sign of the salary creep that is allegedly happening in the public sector.

It should hardly come as a surprise, that if you push the often complex and challenging community support work done by local authorities on to the voluntary sector, their executives are going to expect to be rewarded for managing that increased workload. As I say below, good charities are also good businesses and good businesses know that high quality management doesn’t come on the cheap.

It’s tempting to see this as some sort of three card trick by government, where they encourage charities to take over more and more local authority work, thereby easing the burden on the public purse. In the meantime, these charities are working their socks off to find the extra funding needed to supplement the often inadequate funding that has been passed on by the already inadequately funded local authorities. The confidence tricks comes when you realise that much of the extra money required comes from the same public that has already paid their taxes to government to provide those services!

Personally, unlike some, I’ve never laboured under the illusion that all those who work for charities, do it out of the goodness of their hearts – even where that charity has no national profile.

When it comes to the national charities and their modus operandi, they are, first and foremost businesses, with a business plans, financial projections and performance targets. As such, when they need to recruit somebody into one of their senior management positions, the last thing on their minds is likely to be the social conscience of the individuals applying for the vacant position.

Indeed, having somebody who is more concerned about doing ‘the right thing’ at every step of the way, even if it costs the organisation money, is more likely to find themselves receiving a thank you very much for applying letter, than one offering congratulations.

So, I suppose it shouldn’t be too much of a surprise to see that some of the most popular charities are paying big bucks to their top staff.

That said, it stills seem slightly wrong to see £60,000 plus salaries, potentially being paid out of the pennies and pounds donated via high street collections and charity shop donations, sometimes by those who can least afford it.

To be absolutely fair, at least to those charities that deserve it, the key number for me, is the % of their total income spent of their raison d’être, charity. Those that achieve 70% and above should be acknowledged for achieving figures similar to the overheads costs seen in most successful and efficient businesses.

Those returning figures below 70% and especially below 50%, should be questioned as to their effectiveness and as for the Age UK figures, well…..

Charity

Income Millions

% Spent On Charitable Activity

Number Of Staff Earning Over £60,000

Cancer Research

£493

70

160

Oxfam

£386

76

35

Save the Children

£333

89

31

British Heart Foundation

£250

46

36

Banardo’s

£245

80

35

Royal Mencap Society

£201

96

39

British Red Cross

£200

67

32

Action for Children

£198

93

38

RNLI

£173

78

42

Age UK

£168

49

41

All above figures copied, with thanks, from the article by Richard Dyson – Sunday Telegraph, Money Supplement, 21 July 2013

£2bn cost to British businesses of European red tape

So now we have the evidence, what are our leaders going to actually do about it? Especially the bit about our own civil servants ‘gold plating’, that can be fixed immediately.

By Robert Watts – Sunday Telegraph – 21st July 2013

COMPLYING with European Union regulations is costing Britain billions of pounds a year, the first official audit of the cost of membership is to disclose.
The burden on British businesses will be laid bare in a series of reports which will be published tomorrow by William Hague, the Foreign Secretary.
The audit is made up of six reports – called “Balance of Competences” – which civil servants have spent months preparing.
Senior Conservatives hope the reports will form the bedrock of a renegotiation with Brussels, if David Cameron wins the 2015 general election.
Evidence published alongside the reports will show:
• More than 400 new laws have been passed by the European Parliament since the Coalition was formed three years ago, with legislation costing British business £676 million a year;
• Complying with the EU Agency Workers’ Directive costs British firms as much as £1.5 billion a year;
• Less than half of foreign aid money paid by EU institutions goes to help the world’s poorest people.
The initial documents will look at how the EU affects British taxation, health, overseas aid, foreign policy, animal welfare and food safety.
One of the reports will also provide an overview of how the single market affects British businesses.
A further 26 reports will be published in coming months, in a boost to the Euro-sceptic wing of the Conservatives.
However, Tory Government sources indicated that Lib Dem elements of the Government had “sexed down” some of the more critical evidence of EU waste and bureaucracy.
“These are sober documents that provide evidence and analysis about Britain’s relationship with Europe – they do not set out future Government policy,” said a senior Foreign Office source.

It is understood one of the key themes of the reports will be that civil servants in Whitehall often “goldplate” EU regulations unnecessarily to make such laws more onerous than necessary.

Open Europe, the Euro-sceptic think tank, described the reports as a “useful exercise that will inform the EU debate for years to come”. Stephen Booth, a researcher for Open Europe, added: “Unless this review is complemented by a more political strategy to set out the parameters of a future EU renegotiation to secure more flexible UK membership terms, it will not be sufficient.”
The Prime Minister ordered the series of reports on EU influence in July 2012. The documents focus on how each Whitehall department is influenced by the EU, as part of the Prime Minister’s plan to negotiate a new deal without forcing Britain to leave the EU entirely.
The Government also sent out a wider survey to all 26 member countries asking for their opinions on the balance of power between the EU and national parliaments. However, Mr Cameron’s aims received a setback when France and Germany declined to take part in the exercise.
A senior Lib Dem source confirmed that Nick Clegg, the Deputy Prime Minister, and other fellow party members had been through the Balance of Competences studies. “We have fed into and amended these documents just as we would any government reports,” the source said.
“These documents are not about providing Tory Euro-sceptic headbangers with ammunition to help Britain leave the EU. This is serious, meaty work to assess the pros and cons of what the European Union does for Britain.”
A submission by the British Chambers of Commerce will argue that though its members value the single market, firms often feel stifled by regulations.
“Many of the rules governing the Internal Market are overly complex and expensive to comply with, which has resulted in burdensome and unacceptably high regulation costs for UK business,” it reads.
“The widespread feeling among chamber members is that there have been a number of instances where they were provided with insufficient warning or advice before a new rule was introduced.”
Support for Mr Cameron has rallied on the Tory’s traditionally Euro-sceptic back benches since he set out a new policy on Europe earlier this year.
The Prime Minister said that if the Conservatives won the next general election he would seek to renegotiate Britain’s relationship with Europe. Once the negotiation is complete, Mr Cameron would ask the British public whether it wants to remain part of the EU in an “in-out referendum”, to be held by 2017 at the latest.
So far, the Conservatives are the only party to commit to an EU referendum. However, a private member’s Bill tabled by the Tory backbencher James Wharton aims to introduce legislation that would oblige any party that won the next election to hold such a vote.
In an interview with The Telegraph this weekend Graham Brady, the chairman of the 1922 committee, urged Mr Cameron to set out clearly what he hoped to achieve from a renegotiation with Europe. “We should be driving for a very profound renegotiation with Europe with very little political integration,” he said.

…It’s claimed that Davey got Hayes sacked…

“Climate change sceptic Mr Hayes had asked the head of power giants E.on to warn of blackouts unless the Coalition watered down its green crusade and made a U-turn on the closure of coal-fired generators. But Mr Hayes’s boss, Energy Secretary Ed Davey, hit the roof when he found out about the ‘treachery’ – and demanded he was sacked.
Two weeks later, Mr Hayes was dismissed and given a minor backroom role in No 10, advising David Cameron on links with Tory MPs.” – Mail on Sunday

I want access to this database too

I gather the government intends to offer free access to the postal address database, for small businesses and charities. Having just fought, unsuccessfully, in county council elections, I believe there is a good case for extending the same access to local government election candidates.

Two of the many challenges for any candidate, are time management and workforce. Despite being a district councillor for 14 years, nothing can prepared me for the workload involved in fighting a single-handed campaign, across an area twice the size of my two member district council ward.

Treading the streets, pushing a leaflet thorough every letterbox in sight is hard work, but at least this doesn’t require you to search for an individual address, so can be done on autopilot to some extent. However, when it comes to targeted campaigning, such as in the case of postal voter (PV) letters, the printed list, in PDF format, provided by the council, with streets listed alphabetically, as opposed geographically, is less than helpful.

The major benefit of being able to access the postal address database for your division, would be the ability to reorganise the PV list by postcode, which are of course organised geographically. Armed with this list, one of the more time consuming jobs for any candidate, would become less of a chore.

As a Conservative candidate, it’s not really my job to make life easier for the opposition. However, if we want a more diverse, less Politically focussed range of candidates to stand in future elections, we should be seeking ways to make it a less daunting and labour intensive task. This is especially the case when the candidate is standing as an independent and unlikely to have any sort of Party campaign team to support them.

Sorry madam, do you really mean him?

The writer of a letter in today’s Spalding Guardian, in which I am mentioned, must have experienced a case of mistaken identity. Either that, or somebody, who looks like me, is going around calling himself Graham Dark – that’s a scarcely thought on so many levels!

The lady writer is a jewellery shop owner in Spalding town centre and is referring to a newspaper report on the recent meeting of the Spalding Town Forum. At the meeting, a debate took place on the use of the section 106 money paid by the Springfields developer, to help reduce the development’s impact on Spalding town centre.

At that meeting, I made a passing comment that, if built, a bandstand could be there for a hundred years. I didn’t suggest that a town centre manager wouldn’t be a good idea, but I was concerned that, when the s106 money ran out after 4 or 5 years, and the position hadn’t become self-financing, that would be a negative outcome for all of us.

According to this lady, I should speak to one Graham Dark, as he has some really good ideas, none of which it seems, incredibly, include building a bandstand in Aycoughfee Gardens!

Her suggestion that Graham Dark has offered some good suggestions on how to spend this money, flies in face of the facts. The truth of the matter is, that Graham has been banging on about a bandstand in Ayscoughfee Gardens for several years now. Indeed, if memory serves, he has never really suggested any other use for the s106 money that is now up for grabs.

I’m not sure how this lady has ended up getting her facts so wrong, but I will be writing to the newspaper to put the record straight. After all, I get enough stick for things I have said and done, without getting blamed for things I haven’t!