Modernising Scotland's Social Housing
The Scottish Executive has made clear its ambition
of improving Scotland's social housing. Until recently this policy
has been pursued by advocating large scale voluntary transfer
(LSVT) of council housing to new "community" owners. This has
been seen in Glasgow, Scottish Borders, and Dumfries and Galloway
where council housing debt has been written off in return for
the transfer of the entire housing stock to new, not-for-profit
In its latest consultation the Scottish Executive
has indicated that it is now prepared to consider partial stock
transfer, and the application of the prudential financial framework
to local government housing. Indeed in the Labour manifesto for
the Scottish Parliament elections housing stock transfer is not
Scottish Executive's Current Consultation
At the end of March Margaret Curran as Minister
for Social Justice launched the Executive's consultation on Modernising
Scotland's Social Housing.
The consultation paper covers:
- The merits of establishing new Scottish Social Housing Standards.
The consultation asks how to develop a minimum set of quality
standards for tenants, the elements that should make up the
standards, the target dates and interim milestones for meeting
it, and how local authorities and Registered Social Landlords
(RSLs) should report their strategies for delivering the standard.
- Re-affirming the benefits of community ownership through whole-stock
- Extending the new Prudential Borrowing Regime to local authority
housing capital finance. The Executive is looking for views
on what business planning information local authorities and
the Scottish Executive need to have to reach informed decision
on the new prudential borrowing powers. The Executive states
that extra housing borrowing under the Prudential Regime will
be paid out of rents without placing an unsustainable burden
on current or future tenants.
- Dispensing with the Capital Receipt Set Aside Rules which
currently oblige councils to set aside 75% of receipts from
Right to Buy sales and 50% or receipts from the sale of land
or assets to reduce housing debt.
- Reporting arrangements and timescales for local authorities
and RSLs to deliver and fund the new Standards.
- Inviting ideas of innovative funding and management approaches.
- Improving the links between housing and regeneration; the
Community Ownership and partial transfers.
The deadline for responses to the Executive is
30 June 2003.
Issues for UNISON:
UNISON has consistently opposed large scale stock
transfer of council housing as privatisation.
- Stock transfer is not a good use of public money. Comparative
costings demonstrate how LSVTs bring about a long-term tax liability,
in that housing associate tenants receive more housing benefit
on average than council tenants as their rents are higher (£16.10
a wk more in Aug2002). This means that if 300,000 council tenants
become housing association tenants the extra annual cost is
likely to be £150m.
- Social housing should be run by publicly accountable organisations
with proper resources.
- UNISON does not believe that stock transfer is the most effective
way of delivering decent social housing. Evidence from England
shows that where local authorities are investing directly into
their housing stock the decent homes standard is being achieved
faster than through LSVT, PFI or Arms Length Management Organisations.
- We have concerns over staff transferring from the public sector,
and receiving inferior pay, conditions, creating a two tier
- These same concerns apply to partial stock transfer, with
added worries over divisions created between local authority
Extending the Prudential Borrowing Regime
to Council Housing in Scotland:
UNISON in general terms welcomes the Executive's
proposals to extend Prudential Borrowing to council housing in
Scotland. UK Housing Review observes that applying this
to council Housing Revenue Accounts could raise almost £1bn for
investment in council housing in the first few years, as compared
with current investment levels of about £100m.
In his analysis for UNISON of the proposals for
the English prudential framework for housing Professor Stephen
Bailey shows how there will be a greater degree of flexibility
for English councils financing housing investment from the Major
Repairs Allowance or via Arms- Length Management Organisations,
reducing the need for LSVTs and PFIs. However there will still
be very strong incentives for councils whose housing stock is
in poor condition with high levels of outstanding debt, maintenance
and refurbishment requirements to consider LSVTs. This is because
Housing Revenue Accounts will be so heavily committed to ongoing
unavoidable payments that these councils will face highly restrictive
prudential borrowing limits.
Scottish councils would face a similar scenario
to those south of the border. Local authorities with modest housing
debt, such as South Lanarkshire would have a real choice of borrowing
against their Housing Revenue Accounts rather than having to transfer
their housing stock to write off the debt. Ironically Glasgow
post-LSVT would be able to start again in borrowing to build new
council housing. However, local authorities with substantial debt
levels and poor housing stock, such as West Dunbartonshire, are
unlikely to find the Prudential Regime offers additional scope
to increase borrowing beyond what they can currently afford, so
stock transfer remains the only option. The Scottish Executive
consultation does acknowledge this situation.
Prof Bailey also argues that if applied to Scotland
the prudential borrowing regime would increase the incentive for
councils to raise rents to support even higher levels of increased
investment. This could lead to a reduction in the Scottish Block
grant available to the Scottish Parliament to spend on other services
due to the impact on Housing Benefit payments.
Scottish Social Housing Standard
UNISON welcomes the proposal for a Housing Standard
to ensure that social housing meets the highest standards of quality,
comfort and security. Trade unions should be consulted on the
development of the standard, given our members role in maintaining
and implementing social housing standards.
UNISON is also keen that the Housing Standards
should incorporate accessibility requirements to ensure housing
meets the needs of the elderly, families and disabled people.
The Social Housing Standard should address energy efficiency and
measures to tackle fuel poverty.
Developing the Standard is clearly a medium to
long term process, and whilst there is an urgency to improve Scotland's
social housing, UNISON is clear that we should not opt for short
term approaches which will place financial burdens on future generations.
Innovative approaches to finance and management
UNISON rejects the use of PFI and LSVTs to finance
and manage social housing. We believe that direct investment using
investment allowances to finance borrowing is the simplest, quickest
and most cost effective means of achieving decent social housing.
As noted above we believe that social housing should be run by
publicly accountable organisations.
Action for Branches
- Discuss the Consultation with colleagues and employers.
- Give your views to the Local Government Service Group / P&I
Team by 23 May for inclusion in UNISON's final response to the
Scottish Executive Consultation: