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Modernising Scotland's Social Housing: A consultation paper

SECTION 5 IMPROVING THE LINKS BETWEEN HOUSING AND REGENERATION; THE COMMUNITY OWNERSHIP PROGRAMME AND PARTIAL TRANSFERS

In November 2002 the Minister announced that she wanted to consider ways in which housing investment and regeneration funding could be better co-ordinated to mutually support each other. She undertook to report further on what steps the Executive would take to improve these linkages. She also undertook to review the stock transfer process with a view to streamlining it. On 18 March 2003 at a speech in Stirling, Ms Curran made a number of related announcements on these themes.

The Minister said that the goal she believed should be shared by the Scottish Executive, local authorities, RSLs and other stakeholders was to work together to:-

• develop strong, safe communities;
• provide and maintain social housing to a minimum standard;
• support wider regeneration of stock transfer areas, including environmental and neighbourhood renewal projects; and
• make a coherent link between housing investment and the Community Planning process and other regeneration activities.

In aiming to deliver this shared goal the Minister said that she wanted to concentrate on three key elements:

• First, how to link up physical, social and economic regeneration more effectively than in the past. Good quality, affordable housing is a key element in regeneration, but there is little point in investing in housing if the surrounding neighbourhood is scarred with graffiti and litter, there are few places for young people to get together and there are few job opportunities.
• Second, how to give greater impetus to putting communities at the heart of the regeneration process.
• Third, how to make community planning the driver for making the first two happen.

The following paragraphs describe these in some more detail.

Stock transfer and regeneration

The most pressing cases for transfer to community ownership are often in those areas most needing regeneration. We must be more systematic in improving the links between housing and wider regeneration, so that the massive investment made through stock transfer is not frustrated by failure to tackle wider regeneration issues.

Therefore we will be making available up to £175m by 2005-06 for regeneration linked to Community Ownership. In order to be able to make a case for access to this funding local authorities will first have to be accepted onto the Community Ownership Programme. There will be a number of things that a local authority will need to have in place before they can get onto the programme, the main one being a fully-costed business case for transfer.

They will also need to show how their stock transfer proposal relates to their regeneration strategy, which will require close links to Community Planning partnerships.

The Minister plans to define regeneration widely for these purposes. For example, it could include early action (pre-ballot) to tackle demolitions or new build. It might also include dealing with environmental aspects such as land reclamation. More also needs to be done to support neighbourhood renewal projects as part of the physical redevelopment of the housing stock.

Partial Transfers

Ms Curran also said that when she announced the plan to bring housing capital finance into the Prudential Regime, her objective was to increase the funding options open to local authorities. Following the further work that had been undertaken to consider the stock transfer process the Minister, working in partnership with the Treasury, has decided that the same financial arrangements for debt write-off that apply to whole-stock transfers should now also apply to partial stock transfers in Scotland. Partial transfers are therefore now on the table as another option for local authorities to use to meet the new quality Standard.

What this means in practice, therefore, is that Scottish local authorities will have open to them the options of pursuing whole-stock transfer, partial stock transfer or retention using the Prudential Regime to fund the investment from their own resources.

However, Ministers want to avoid the previous experience of partial transfers being disproportionately expensive and tending to be developed without any wider strategic context for the remaining stock. Therefore a series of rules will be developed which will govern how partial transfers to community ownership will be considered.

The principal rules will be that:-

• any partial transfer proposal will need to be set in the context of how a local authority intends to ensure that the remaining housing stock can be brought up to the new Scottish Social Housing Standard;
• the transaction costs in arranging partials should not be disproportionate to the number of houses involved which may suggest setting some kind of minimum threshold; and,
• the financial support that is offered for partial transfers - and particularly for negative value stock - does not exceed the financial support that would be given if the authority had undertaken a whole-stock transfer.

The Minister noted that while local authorities are likely to welcome this additional flexibility the partial transfer option will not be an easy option for them. Authorities will need to convince the Executive that they have a clear vision for their entire stock. For some authorities a whole-stock transfer will remain their best and perhaps only option to ensure that they can deliver the new Standard.

Next Steps

As part of the discussion with local authorities, RSLs and others that this consultation paper will generate the Executive will continue to define how the above developments will operate in practice and further details will issue in due course.

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