working together – thinking alike: what do councils and local enterprise partnerships expect from housing associations? r A Smith Institute report by Andrew Heywood e b a la n c in g t h e e c o n o m y 2 0 1 1 The Smith Institute The Smith Institute is an independent think tank which provides a high-level forum for thought leadership and debate on public policy and politics. It seeks to engage politicians, senior decision makers, practitioners, academia, opinion formers and commentators on promoting policies for a fairer society. Sovereign Sovereign Housing Association is one of the largest housing associations in the south and south west of England, owning and managing more than 37,500 homes. We offer and build a wide range of affordable housing options, and invest in our communities and residents to help them achieve their aspirations. THE SMITH INSTITUTE working together – thinking alike: what do councils and local enterprise partnerships expect from housing associations? A Smith Institute report by Andrew Heywood This report represents the view of the author and not those of the Smith Institute. Published by The Smith Institute © The Smith Institute June 2015 THE SMITH INSTITUTE Contents Foreword 3 Executive summary 6 Introduction 10 1. Local authorities, local enterprise partnerships and housing associations: the key issues 12 Housing associations and local authorities: a complex relationship 15 Local enterprise partnerships: new opportunities for housing associations? 21 2. A new type of relationship: local authority views of housing associations 26 3. Forming a relationship: LEPs and housing associations 38 4. Conclusions and recommendations: strengthening partnerships in a changing environment 44 References 54 2 THE SMITH INSTITUTE Foreword There has never been a greater need for housing associations, This report from the Smith Institute attempts to get under the local authorities and Local Enterprise Partnerships (LEPs) to work skin of those relationships and make practical recommendations together. on how we can do more together. We are facing major challenges in building the affordable homes Based on interviews with colleagues from local authorities and our communities need: falling public subsidy, rising land and LEPs, it describes a traditional relationship in transition and new house prices as well as continuing pressure on welfare budgets. relationships in development. It identifies opportunities to tackle This, combined with the planned expansion of Right to Buy to the vital challenge of providing new homes in a part of England housing association homes – and the financial risk it brings – where demand is high, and land seems scarce. Crucially, the report means we need to be more collaborative and innovative than provides clear guidance on how key players can collaborate in local ever before in order to provide more homes. communities to ensure that the right homes are built in the right places, and how their work can be supported at a national level. To do this we need to continue to redraw our historic relationships with our local authority partners, and to forge new links with the The report also places the spotlight on how housing associations increasingly influential network of LEPs. are working with local authorities to provide housing and welfare services, including supporting vulnerable households and We have already started this process and 2015 sees the start of preparing for the introduction of Universal Credit. Against the our new three-year strategy. This reaffirms our social purpose backdrop of continued austerity and sharp reductions in welfare with a long-term commitment to building great homes and payments this has not been an easy task. However, the report communities whilst continuing to meet the interests of our makes some helpful recommendations on how to strengthen the residents and partners. We also reinforced the values that are relationship for the benefit of existing and prospective residents. embedded in the way we work – providing great service, effective I hope this report will help those of us working to tackle the collaboration, acting with integrity, and being progressive in housing crisis through local partnerships to understand each challenging the way we do things, so we can deliver even more. other better, and to work together more effectively. Both for people needing a home, and for a nation seeking to consolidate I see these same principles and values in the local authorities and the economic recovery, it feels as if housing has never been more LEPs with which we do business in Southern England. important. I urge everyone involved in addressing the new homes challenge to consider its recommendations. This is not necessarily a new area of focus, both the Elphicke- House Report and the Lyons Housing Review highlighted the Finally on behalf of Sovereign, we are delighted to have been importance of housing for local economic growth; the urgent able to work with the Smith Institute on this very timely need to address land supply; and the vital role of local agencies. project. I would like to thank all those who gave their time to Both emphasised the importance of local leadership, and the role be interviewed, with a special thanks to those who attended the of local partnerships and alliances in ensuring that the efforts of roundtable event. In particular, we offer a big thank you to the different players are brought together with a clear and effective author, Andrew Heywood, whose research is, as always, insightful focus on delivery. and thought provoking. Ann Santry CBE Chief Executive, Sovereign Housing Association 3 THE SMITH INSTITUTE 4 THE SMITH INSTITUTE Executive summary 5 THE SMITH INSTITUTE Executive summary This is a study into the changing relationships between local Housing Federation should engage with local authorities and authorities, housing associations and local enterprise partnerships their representative bodies to examine how planning applications (LEPs) in the South East and the South West. The work is based can better reflect local authority planning policies, while still on a combination of desk research and 32 semi-structured meeting housing association needs in terms of viability, housing interviews with senior practitioners and representatives from the management and other factors. three sectors. Recommendation 2: Housing associations should ensure that The focus of the report is on housing supply and housing they make full use of pre-application processes offered by local services, and includes background information on the various planning authorities in order to ensure that planning applications actors and the changing operating environments. The main progress more smoothly through the planning process. recommendations are: Recommendation 3: The NPPF requires that local authorities Housing associations and local authorities – partnerships have a robust local plan that fully assesses housing need and in transition identifies five years’ supply of land for development. There is a Despite a long history of collaboration, the relationship between belief among planners and developers that this has shifted the local authorities is in transition. Local authorities identified balance in favour of new development. DCLG should initiate an these changes as: a more “commercial” attitude to development inquiry to ascertain the extent to which this is in fact the case. among housing associations in terms of both planning and their response to local authority strategic housing needs; a more risk- Meeting strategic housing need averse attitude to allocations and local authority nominations; All local authorities claimed to consult housing associations over the and less willingness on the part of some housing associations development of the strategic housing market assessment (SHMA) to assist local authorities in the discharge of their homelessness and their local plan. While some were satisfied with the level of duties by accepting the most vulnerable households. response received from housing associations, others had experienced rather limited feedback. It was suggested that this might be due to Planning housing associations becoming larger and more remote. Most local authorities prefer to deal with housing associations rather than with commercial developers in relation to planning Some housing associations believe they have to be selective applications. Nevertheless, a significant number of local in terms of which local authorities with which to engage. authorities said they saw housing associations as becoming more Certain authorities with very large schemes may still attract the commercially minded and embracing the culture and values of interest of a number of developer housing associations, while a private developers. They noted instances of housing associations neighbouring authority may find it hard to generate any interest. attempting to negotiate downwards section 106 requirements and of housing associations challenging local authority planning Local authorities also suggested that formal consultation should decisions at appeal. be augmented by housing associations sharing their development plans with local authorities at the earliest possible stage. Local authorities offered proposals for making the professional relationship with housing associations work better. They were Recommendation 4: Individual local authorities should concerned that planning applications from housing associations carefully update contact lists of housing associations to ensure were not always of sufficient quality and did not take into that consultation requests are sent to the correct individuals account council planning policies. at the right address. The Local Government Association should investigate whether there is a case for collecting such information Housing associations pointed to the lack of staff and resources of centrally and disseminating it to local authorities. local planning authorities as factors that make for a more difficult relationship. Housing associations also said some local authorities Recommendation 5: Housing associations should contact local were less than wholehearted in their support for new development. authority staff preparing strategic housing market assessments and local plans at the earliest stage where new development is Local authorities indicated that the requirement under the contemplated, in order to ensure that local needs are addressed National Planning Policy Framework (NPPF) for local plans to and that local planning takes account of the possibility of such realistically assess housing need and to identify sufficient land developments. for five years of development had made a positive difference. Local authority allocation policies and housing associations The traditional sense of common identity between local authorities Many local authorities have altered their allocation policies in and housing associations appears to be gradually being replaced order to give priority to those households with local connections by a more professional relationship between independent parties and to support those accessing work or training. contracting to undertake certain functions. A number of local authorities maintained that housing Recommendation 1: Housing associations and the National associations had changed their approach to nominations by 6 THE SMITH INSTITUTE introducing strict affordability criteria, particularly in respect The local authority involvement in the processing of housing of affordable rent properties. Others showed a greater benefit claims will end. Housing associations will have to forge reluctance to accept nominations from vulnerable households new relationships with a central administration under the or those with a record of antisocial behaviour or rent arrears. auspices of the Department of Work & Pensions (DWP). This may not be easy. Both local authorities and housing associations believe the changing attitude to nominations to be a consequence of Recommendation 9: DWP and the National Housing Federation a changed environment in respect of development funding. should work to ensure that housing associations build personal Welfare reform is the other major consideration. and organisational links with the universal-credit administration in advance of the main caseload coming on stream, so that Recommendation 6: Government should reassess the practical effective working relationships are established in pursuit of impact of its welfare reform policies and cuts in development efficient administration and processing of claims. grant on local authority nominations to housing associations in discharge of their housing duties. The government should Homelessness then take action to ensure that its own policies do not hinder Local authorities are fairly satisfied with the assistance they receive the proper allocation of social housing to those in need. from housing associations in discharging their duties in relation to homelessness. A specific area of tension is the provision of Recommendation 7: Local authorities and housing temporary accommodation, where local authorities said that associations should work together on ways to improve people’s housing associations could do more. ability to afford a tenancy in advance of being nominated (for instance, helping them to tackle any debt problems). Local authorities also have concerns about the changing attitude to local authority nominations. Where housing associations are less Local authorities as developers willing to accept vulnerable households and are more stringent in Despite the new freedoms, stock-retaining councils have yet to applying affordability criteria, there will inevitably be an impact on develop at any scale (there were only 130 housing completions the homeless. by local authorities in 2013/14 in the South East and the South West combined). The majority of local authorities do not believe Recommendation 10: Shortage of temporary accommodation that their relationships with housing associations have changed is a problem for local authorities in discharging their duties in much. However, a minority believe that their relationships with relation to homelessness. The National Housing Federation and housing associations have changed, principally because they the Local Government Association should discuss whether there are less willing to make development land available. is scope for housing associations to provide more temporary accommodation out of current resources but also engage with the A significant proportion of development now being undertaken HCA to explore the possibility that development programmes can by local authorities may simply be replacing development that include new temporary accommodation where this is appropriate. housing associations would previously have undertaken on the same land. Some housing associations claim that because Recommendation 11: The government should recognise that one of their capacity and capability (especially in areas such as impact of a changed funding environment for new development procurement and project management) they can offer better (and the simultaneous introduction of welfare reform) has been to value for money than can councils in regard to new-build. make housing associations less able to assist local authorities in the discharge of their homelessness duties in respect of some of the Recommendation 8: The Homes & Communities Agency most vulnerable households. The government should reassess the should commission a study to determine the scale of future impact of these policies in the context of local authority statutory local authority development aspirations to be implemented homelessness duties and make adjustments as necessary. both with and without the aid of grant. In addition the HCA should determine how much of this activity is “new” LEPs and housing associations development and how it compares with other social housing The relationship between housing associations and LEPs is providers in regard to value for money. something of a clean slate, and is complicated by the fact that the 14 LEPs in the South East and South West are structured Administration of housing benefit differently and are of different sizes and at different stages of The links between local authorities and housing associations maturity. Expectations are limited on both sides, and few LEPs have in respect of housing benefit are recognised as being fully engaged with housing associations. While significant numbers strong and generally positive on both sides. However, local of housing associations have secured places on LEP boards or authorities identified a number of areas where problems had have obtained representation on LEP panels/groups there appears arisen as a result of welfare reform, including rent arrears due to be only limited enthusiasm for LEPs; at this stage probably to the bedroom tax and a shortage of smaller homes. Local only a proportion of housing associations would rate building authorities commented that welfare reform had contributed to relationships with a local LEP as a high priority. the more conservative response of some housing associations to nominations of vulnerable and financially challenged Nevertheless, most LEPs view affordable housing as important households. and acknowledge the housing association role in training 7 THE SMITH INSTITUTE and assisting people back into employment. The housing could develop a “collective voice” like a forum, so that an LEP did associations’ other community roles do not register highly. There not have to use limited resources to keep in touch with a large is also a perception among some LEPs that open market housing number of different organisations. is more important than affordable housing, and that housing associations are not the only developers of affordable housing. Recommendation 12: There is a need for a clearer statement from government as to what it expects from LEPs in the field of Many of the LEPs’ housing aims are also on a large scale and often housing and what it is reasonable for housing associations to across local authority boundaries, although funding to LEPs for look for when trying to establish relationships with LEPs. housing is small compared with transport. Moreover, it is difficult to discern from the LEP economic strategies whether the LEP itself Recommendation 13: In advance of seeking involvement with is the delivery agent or “enabler”. Housing associations argue that an individual LEP, housing associations should be clear about they should have access to a clear statement of what it is realistic how housing fits with the broader growth agenda and how to expect from involvement with an LEP in the housing field. it is represented as sector. Housing associations should also engage with local LEPs and encourage them to put in place While LEP strategic economic plans often refer to housing as an broad consultation with the sector when seeking to develop their activity, there are very few references to housing associations. strategies. Responses from LEP interviewees suggested that while simple oversight could be a factor, there was in some cases a lack of Recommendation 14: In order to assist the development of awareness of what housing associations could contribute. stronger links between housing associations and LEPs, LEPs should consider establishing a regional or national forum to More than one LEP suggested that contact between LEPs and facilitate on-going contact between housing associations and housing associations could be improved if housing associations LEPs. 8