Consultation Response. Transfer of the Management of Development Funding. Housing (Scotland) Act 2001

Transcription

1 Consultation Response Transfer of the Management of Development Funding Housing (Scotland) Act 2001 Section 93(2) Assistance to Registered Social Landlords and other Persons (Grants) Consultation on Draft Regulations January 2004

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3 Introduction The Chartered Institute of Housing in Scotland (CIH) welcomes this opportunity to comment on Communities Scotland s consultation paper, on the transfer of the management of development funding to local authorities. The CIH is the professional organisation which represents people who work in housing. Its purpose is to maximise the contribution that housing professionals make to the well-being of communities. The CIH has over 17,000 members nationally, with almost 1,800 individual members in Scotland. Members work in local authorities, registered social landlords, Communities Scotland, The Rent Service, voluntary organisations, educational institutions and the private sector. Many of CIH in Scotland members work in local authorities and RSLs and will therefore be affected by these proposals. This response is based on: Feedback from CIH members in Scotland, Meetings with members, Discussions with other interested organisations. Whilst the consultation is restricted to the draft regulations the CIH has also felt it is important to look at these in the wider context of development funding. Therefore there are a number of general comments relevant to the transfer of development funding and the wider Strategic Investment Framework. General Comments Development Funding Allocation A fundamental question that needs to be addressed is how the level of funding that will be allocated to local authorities for development funding purposes will be assessed. A good Local Housing Strategy (LHS) is critical to local authorities being given development funding responsibility. In order to receive development funding they must have an LHS that has been graded as either good or very good. Previously Communities Scotland development was allocated to Scottish areas based on the Housing Market Context Statements prepared by Communities Scotland. Feedback received by the CIH suggests that these statements often cover too wide an area so can be unable to accurately target resources. Also they are not as comprehensive as the new LHS system. The procedures set out in Communities Scotland s draft regulations, that are being consulted on, state that all applications for a development funding grant must be appraised against the LHS to ensure that grant funding for a project is in line with the priorities set out in the LHS. Given the more comprehensive nature of the LHS system and the need to cross reference with them on allocating development funding the CIH believes that decisions on the level of funding to be given to individual local authorities should be based on the identified need in the LHS. The CIH asks that Communities Scotland and the Scottish Executive, in developing the Strategic Investment Framework, commit to basing the overall future development funding budget on an assessment of the LHS of all local authorities who will be in receipt of development funding powers. LHS should become a key measure of housing

4 need in Scotland and furthermore a key identifier of the solutions to a range of housing needs. Meeting The Scottish Social Housing Standard The standard is yet to be announced. However, it is anticipated that it will incur new costs on social landlord to bring all their properties up to standard. This may be particularly true for stock transfer RSLs who have inherited poor quality properties. They may need to review their current business plans in light of the new standard. Experience from England also suggests that a number of RLS are finding it difficult to meet the English standard. Development funding currently available in Scotland does not fund repairs (except for pre 30 September 1989 HAG funded projects). Improvement works can attract HAG funding, although what is meant by improvement is not defined in the draft regulations. If HAG for improvement were available to meet the costs of moving toward the Scottish Social Housing Standard this may place a huge burden on the budget, possibly to the detriment of new development taking place. In developing the Strategic Investment Framework for Scotland the CIH asks that Communities Scotland and the Scottish Executive give serious consideration to developing and funding a new grant to assist RSLs in meeting the Scottish Social Housing Standard, where their financial viability may be threatened or tenants rents may be forced to rise significantly. Value for Money and Targeting Local Needs The draft regulations are very much concerned with the administration of the development funding powers. Their main focus appears to be on ensuring value for money. There are a number of bureaucratic and potentially burdensome measures to achieve this, for example the four funding routes set out in Schedule 1. These will make it harder for some RSLs to apply for HAG funding than others. RSLs with a better performance grading will have a streamlined process whereas RSLs under two years old or with a less good performance grading will have a much more onerous procedure to follow. The CIH recognises that value for money is important. However, it believes that under the new arrangements local authorities will wish to work closely with RSLs on planning and delivering development programmes in their area and that overly onerous application procedures are therefore unnecessary and should be avoided. We are concerned that some of the bureaucracy in the regulations may work against meeting local need. The CIH would rather have the procedures to be followed allocating and overseeing development funding closely tied into the needs outlined in the LHS. Therefore if a newer RSL is the only RSL working in an area where new development need is identified then they may well be the best placed to take that development forward and as such should be given all encouragement and assistance possible to do that. Currently the regulations may place obstacles in the way of them and actively discourage them from applying for funding. Whereas some RSLs will find it easier to apply for funding and this could impact upon the locations where developments are able to go ahead, potentially distorting the LHS priorities. Subsidy Targets The draft regulations appear to leave the level of subsidy being made available through HAG for a development up to the local authority to determine and agree

5 with the developer. The CIH would generally support this idea. However, we feel it would be useful for some national guidance to be developed in this area. In particular the CIH feels that it would be beneficial to have indicative national targets for subsidy levels with parameters for the circumstances in which these can be varied in the light of local conditions. This could include difficulties in attracting private finance for a much needed development in an unattractive environment, or ensuring good design quality is not sacrificed to pare down costs. It is important that building design and the wider community setting of the development are not compromised by HAG subsidy levels. Not focusing on these can be seen as a cost effective way of holding costs down. However, the CIH is concerned that we avoid storing up problems for the future through lower build quality, faceless design where people may not feel any pride in the area due to a lack of individualism in the development and rising youth disaffection as play and community facilites are scarified. Subsidy targets should not only be about obtaining value for money through greater private investment or an attempt to spread limited subsidies wider, they should also be about meeting local community need. There may be merit in making future revisions of the LHS set out a local authority statement on likely subsidy levels given local conditions across the area and the reasons for these. Local Flexibility The CIH is slightly uneasy about the amount of prescription in the draft regulations. This may make future revisions a more onerous process and it may be expected that revisions might be required following the publication of the Strategic Investment Framework. The CIH is more concerned about their impacts on local flexibility. A careful balance needs to be struck between local authorities having the flexibility to work with RSLs to take forward the LHS and the need for a national overview of the administration of development funding. National RSLs and those that work across more than one local authority area will benefit from some national strategic guidance and regulations and that should be the purpose of these draft regulations. They should seek to ensure that where it is practicable, that administrative procedures operated by local authorities should be consistent e.g. standardised application forms and uniformity of terms and conditions. This also helps private developers taking forward projects in their own right or on behalf for RSLs. However, over prescription should be avoided in the regulations to ensure that local priorities and needs can be determined and met by local authorities. Specific Comments of Draft Regulations Regulations 1-6 Section 5 B(ii) states that grant should not exceed the minimum required to enable a project to proceed taking into account funding available from all other sources. The CIH supports the principle of this but draws attention to the issues and concerns raised in Subsidy Targets above. Section 6

6 Clause c) This states that local authorities can charge interest on any sums due from grant recipients. The level of interest that local authorities can charge is not specified. The CIH believes this should be subject to a restriction. It could perhaps be linked to the Bank of England base rate. Clause d) This states that both grant recipients and local authorities must bear their own legal fees. This will be a new and additional charge for local authorities in their new role of administering development funding. The CIH does not think that they should be expected to meet these legal fees from their own resources as they represent an additional burden on local authority finance. Instead the CIH proposes that local authorities should be given grant aid toward their legal fees associated with administering development funding. This grant could come from a transfer of legal costs funding from Communities Scotland that would previously have been built into its budget. Clause j) States that grant recipients are expected to comply with the material requirements of the local authority approval document. The CIH is concerned that there may be some instances where the recipient is unhappy about the conditions being imposed. The CIH would therefore like to see a soft touch appeals process built into this perhaps to Communities Scotland. Clause r) - Requires grant recipients to make no changes in their composition, constitution or control without the consent of the local authority. The CIH is concerned that this could possibly be seen as undue interference in RSL business matters by a local authority. The CIH believes that this is unacceptable and that there is no benefit to including this clause in the general terms and conditions. Clauses x) & y) These prevent any security being taken over developments that have benefited from funding. The CIH is concerned that this may prevent RSLs from borrowing additional private finance in the future for work such as major repairs. The CIH cannot see a valid reason for this and suggests that they may be unnecessary. Schedule 1 HAG Section 1 and Section 2 Interpretation and Purpose Section states HAG can be used to fund improvement work. Section 1 does not give an interpretation or definition of what is meant by improvement work. The CIH supports this believing that improvement work should be open to a wide interpretation at the discretion of the local authority. However, the CIH is concerned that HAG for improvement should not be associated with existing stock meeting the Scottish Social Housing Standard. As stated above in Meeting The Scottish Social Housing Standard the CIH believes that an additional, newly resourced grant fund should be considered for this. The regulations for HAG do not say that it is available for conversion or renovation work. The CIH would like to see it being available for these purposes to continue to enable disused offices and warehouses etc. to be converted into housing. It will also enable the conversion of larger properties to smaller ones where demand and need for smaller properties is making the need for larger properties redundant. The interpretation of decant accommodation relates only to people who have to leave their home. The CIH believes that there may be merit in widening this as some refurbishment projects will also include office or retail accommodation. Issues with offices and retailers can lead to serious delays in projects going

7 ahead. The availability of funding in some circumstances to help decant these may ease the situation. Section 4 This section relates to the different funding routes. It is not clear which performance grades are referred to in this section. However, the CIH has concerns in general about the proposed funding routes preferring a more flexible approach to funding that takes greater account of which RSL is best placed to meet the identified local need rather than who can most easily apply for funding. See the comments in Value for Money and Targeting Local Needs above. Sections 5 7 These set out in great detail of the procedures to be followed by each funding route. The CIH is concerned that these may be too prescriptive and could hinder local flexibility. See comments in Local Flexibility above. This response has been prepared by: The Chartered Institute of Housing in Scotland 6 Palmerston Place Edinburgh EH12 5AA For further information please contact: Nick Fletcher, Policy and Public Affairs Officer nick.fletcher@cih.org Tel Fax