Investing in Modernisation - An Agenda for Scotland's Housing :13

Investing in Modernisation - An Agenda for Scotland's Housing

Chapter 4 Developing a Strategic Approach Introduction 4.1 This chapter considers the institutional framework that will be required to take forward the Government's housing agenda into the next millennium. Achieving housing policy objectives requires not only resources, but also appropriate organisational arrangements and procedures to ensure that these are used fairly and efficiently and targeted on priorities. These arrangements must be capable of carrying out the task of modernising Scottish housing by providing effective strategic direction backed up by the necessary research, analysis and information. They also need to ensure high quality management, good standards of design and satisfactory means for ensuring participation and involvement by tenants and local communities.
The Scottish Parliament
4.2 From 1 July, the Scottish Parliament and the Scottish Ministers who will be accountable to it will be responsible for taking forward housing policy in Scotland. They will assume responsibility for all aspects of housing policy and legislation currently dealt with by the Scottish Office. This will include overall control of the housing functions of local authorities and Scottish Homes and the resources available to them. It will have oversight over all sectors in Scotland - the owner-occupied and privately rented sectors as well as housing associations and the publicly rented sector - and it will be responsible for key policy issues such as tackling homelessness and improving housing conditions generally.

4.3 The establishment of the new Parliament will provide a major opportunity to develop housing policies and structures that are relevant to Scotland's needs and circumstances. The Parliament will provide more opportunity for the elected representatives of the Scottish people to become involved in constructive discussion on the formulation of housing policy through debates, the consideration of draft legislation and the work of its Committees. The Parliament itself will also allow for increased and better informed scrutiny of the work of the Scottish Administration and Scottish Homes; and will determine the detailed audit and inspection arrangements for local authority services. This will provide for greater accountability than has been possible in the past. There should be more opportunity than at present for Scottish Ministers to develop first hand knowledge of housing conditions and problems throughout Scotland and to meet representatives of the various interested parties. There should also be increased scope for the imaginative consideration of issues which cut across a number of traditional policy areas to allow for the development of new and exciting approaches and solutions to problems. In short, we believe that the new Parliament will raise the profile of housing in Scottish political life and improve the quality of debate and decision making.
	Looking to the future: housing the new Scottish Parliament.
4.4 Taxation and responsibility for Social Security, including help provided to tenants on low incomes through Housing Benefit and to owner-occupiers through Income Support for Mortgage Interest, are reserved matters which will remain the responsibility of the Westminster Parliament. This will ensure, for example, that the same social security benefits are available to all those in need throughout the United Kingdom. Housing benefit is being considered as part of the wider Welfare Reform process announced by the Prime Minister with the aim of reducing barriers to work, encouraging personal responsibility and reducing fraud. Close liaison and co-operation at both Ministerial and official level will ensure that UK taxation and social security policies take full account of Scottish needs and concerns. It will also be necessary for both the UK Government and the Scottish Parliament and Executive to take into account the principle, as set out in the White Paper "Scotland's Parliament", that they will have to meet the extra costs of their decisions which fall on the other party.

Developing a National Strategic Framework
4.5 Most housing activity is rightly and of necessity carried out at a local level, and solutions to housing issues will often be found at the local level. However, there is also a clear need for housing activity to be set within the context of national needs and priorities, and the Scottish Executive will be well placed to develop a national strategic framework for housing in Scotland. The strategic framework would need to be informed by the findings of the national housing needs assessment, which was instigated in 1997 and whose results are anticipated shortly, together with other relevant information and research on the housing situation in Scotland, for example, the results of the national house condition survey and data from the annual Scottish household survey which is to be launched in 1999. It would also need to take account of the range of housing need at local level as identified in local authority Community and Housing Plans, and in Scottish Homes' Regional Plans. The overall aim would be to identify national priorities for housing in Scotland with associated targets and performance indicators. The strategic framework would be subject to wide-ranging debate and it would need to be monitored and reviewed on a periodic basis. It should provide a means of influencing the housing policies and programmes of local authorities, and other relevant bodies, with a view to ensuring that local strategies are compatible with national needs and priorities.

Views are sought on the proposal for a national strategic framework for housing in Scotland.

An Open and Consultative Approach to Housing Policy
4.6 Over the past year and a half, the Government has consciously sought to take forward its policies in partnership with other interested parties. In addition to the normal consultation arrangements, advisory panels have been established, linked to initiatives on New Housing Partnerships, Rough Sleepers and Empty Homes, which directly involve representatives of a range of bodies including COSLA, Scottish Homes, the SFHA, the CIOH and Shelter. Advisory panels along these lines have a number of advantages _ they help to ensure consensus on the way forward and that Government benefits from the knowledge and expertise of other organisations.
4.7 With the establishment of the Scottish Parliament, there is a case for establishing more permanent arrangements to provide a focus for advice and debate on housing issues in Scotland. One possibility might be for the Scottish Executive to establish a Scottish Housing Advisory Panel with access to a wide range of views and expertise. This might be chaired by the Scottish Minister with responsibility for housing and with the Scottish Administration providing the necessary Secretarial support. Its agenda would need to be agreed between the parties concerned but it could offer views on policy proposals at an early stage, provide advice on developments and trends in housing in Scotland, and establish sub-groups to examine particular problems or issues in depth. It could play a particularly useful role in advising on the development and implementation of a national strategic framework for housing in Scotland. The membership of the Advisory Panel would need to be considered carefully but there might be a case for a core membership comprising the key bodies and other experts in the housing field in Scotland but with wider representation brought in as necessary to help with the work of ad hoc sub-groups.

Views are sought on the proposal for a Scottish Housing Advisory Panel.

Creating a Stronger Tenant Input
4.8 The full involvement of tenants at all levels is crucial. All tenants, whether in mainstream housing or other types of accommodation, must have a say in the planning and delivery of housing services in the same way as they should in the wider governance of their communities, and we expect landlords to listen to their views about the quality of what is delivered. More and more tenants across Scotland are securing access to the decision-making processes, but there is considerable scope for improvement.
4.9 The Government's commitment to improving the quality of discussion between tenants and landlords has already been demonstrated through the consultation on the proposed National Strategy for Tenant Participation. Partners in Participation, published in October 1998, builds on the work of the Working Group on Tenant Participation established in May 1998 around a core membership of tenants representatives. The draft strategy identifies principles and sets goals and standards, and is aimed at shaping policy in this area at national and local levels. We are grateful for the responses received and are confident that a consensus is being established on the way ahead. It is important that tenants' organisations, landlords, and housing agencies should give consideration to the practical steps they are now willing to commit to, so that we can put these principles into action to promote good tenant participation practice.
4.10 Effective tenant participation has to be adequately resourced, and at the local level landlords and tenants need to enter into a constructive dialogue about the way that money, premises and support services can be best deployed to facilitate full tenant involvement. We have also invited views on the most appropriate way to target the resources made available from central government. In 1997-98, the Scottish Office made available a special grant of Ł30,000 to the Scottish Tenants Organisation (STO) to allow them to employ their first full-time development worker, in the hope that this will allow the STO to broaden its reach and represent tenants in all sectors across Scotland, and help promote and encourage effective tenant participation throughout the rented sector. It will also assist in giving tenants a voice so that they can participate in the formulation of housing policies at national level as well as community level.
4.11 For the future, we see clear merits in the introduction by a new Scottish Parliament of a statutory right to participation (we consulted on this legislative proposal as part of our draft National Strategy for Tenant Participation). This, coupled with the development of community ownership and New Housing Partnerships, would give tenants certainty that their needs and preferences for housing services and policies will be taken into account, as far as possible, within available resources. This brings with it benefits for landlords too, since the establishment of constructive dialogue with tenants provides useful feedback about tenants' views of existing services and changes that are required, which in turn can help to inform decisions about improving service delivery and providing value for money.

The Role of Local Authorities
4.12 As indicated in Chapter 1, the role of local authorities in relation to housing policy has changed markedly over the past century. From an initial focus on ensuring improvements to protect public health, they increasingly played a central role in the direct provision of housing frequently linked to slum clearance programmes. Over the past 30 years, as new building programmes have been cut back, local authorities have focused more on the management of their existing stock, although in recent years the size of this stock has reduced through Right to Buy sales and, in some cases, demolitions. They have also been given many new tasks and responsibilities in relation to housing including preparing Housing Plans, promoting home energy conservation and undertaking duties in relation to the homeless and people with community care needs.
4.13 The strategy for promoting community ownership, as set out in Chapter 3, will lead to further changes in the role of local authorities. These changes will reinforce the need for local authorities to play a key strategic role in the future. The Government's objective is that local authorities should take a comprehensive view of housing requirements in their area and develop a local housing strategy to tackle these. They will want to take account of all the households in their area and all of the housing stock _ irrespective of tenure _ and identify how best they can influence providers and managers of housing to ensure their objectives are met. The local housing strategy will therefore be wide-ranging and take account, for example, of the needs of the homeless (including the single homeless), young people, ethnic minorities and the full range of community care client groups. There should also be clear policies for the owner-occupied and privately rented sectors as well as for affordable rented housing. In short, we see the local authority role in housing as focusing on "strategic planning". This is a view which has been endorsed by COSLA in its Housing into the Millennium report and by housing professionals.
4.14 The recently published CIOH Practice Note Creating a New Future _ the Strategic Role of Scottish Local Authorities provides a clear overview of what is involved in discharging this strategic role and provides guidance on how this role might be discharged with examples based on existing practice. It identifies the strategic role of local authorities as encompassing the following functions and activities: assessing housing needs and demands in all sectors; identifying the resources and powers available to the authority or other agencies to meet need; being the lead housing agency in determining priorities for action; devising a housing strategy to meet needs, in consultation with others; co-ordinating implementation of the housing strategy; assisting or encouraging the improvement of the housing stock across all tenures; improving the management of the total housing stock (including property owned by private sector landlords); assisting or encouraging others to build or refurbish housing; ensuring the adequate provision of housing advice and information; and, monitoring and reviewing the housing strategy.
4.15 The idea of a strategic role is not new and as the CIOH report makes clear, many local authorities have already moved a considerable way in this direction. The developing role of local authorities in community planning in their areas, in collaboration with other key bodies, will also encourage further moves in this direction. Nevertheless, while local authorities remain as significant providers of housing in their own right there may be at least a perceived conflict of interests.

Views are sought on the proposal that local authorities should concentrate on their strategic role.

4.16 As local authorities relinquish their management and provider role, there is a clear need for changes in the financial and planning framework in which they currently operate. In particular, it will be necessary to: ensure that local authorities have an effective say in Scottish Homes development funding in their area, especially if traditional HRA capital allocations become obsolete; rationalise the existing housing planning process with greater integration between local authority Housing Plans and Scottish Homes Regional Plans; create new mechanisms for allocating resources in line with national priorities; and, ensure that the regulatory regime for housing is sufficiently robust and flexible to cope with a rapidly changing environment.
These issues are discussed in more detail below as part of the consideration of the future role of Scottish Homes.
4.17 This increased emphasis on the strategic role for local authorities is consistent with our wider agenda for modernising local government. The Best Value regime is introducing a challenging new framework for improving service delivery and this will be true where councils deliver services directly or where different models of service provision are employed. Although Best Value will apply to councils' own stock, the same principles will apply to local authority stock that has transferred to new community landlords through the performance standards which will form part of the regulatory and supervisory framework to be administered by Scottish Homes.
4.18 We welcome the recognition by many housing professionals of the positive opportunity that Best Value represents and in developing guidance for housing services the Department has been careful to build on the firm foundations which already exist. Best Value affects every aspect of service delivery. It is therefore critically important for housing services to forge links with others including other service departments in councils, other councils, and also the many others who are increasing involved in the delivery of housing services, such as housing associations, the private sector, and the many voluntary sector groups and organisations with a role to play. The Government sees no need at this stage formally to extend Best Value requirements to other landlords, but in its review of performance standards for housing associations, Scottish Homes is taking account of the development of Best Value for the council sector. In the longer term, there may be benefits in establishing a more formal mechanism for ensuring a consistent regulatory approach across the housing sector, and this is discussed further below (see paragraph 4.25).

The Future Role of Scottish Homes
4.19 Since its inception in 1989, Scottish Homes has played a central role in Scottish housing working in partnership with local authorities in many areas. It has overseen the development and expansion of the housing association movement in Scotland, introduced a new range of grant schemes to encourage low cost home ownership and mixed tenure communities, and successfully attracted private sector funding into socially rented housing in Scotland. It has developed a substantial housing research and evaluation programme and managed the periodic national house condition surveys. With a strong presence at both national and regional level, it has been well placed to take forward Government priorities.
4.20 Bearing in mind these considerable achievements, it is appropriate to consider the future role of Scottish Homes in the period when the Scottish Parliament and Executive have been established particularly if local authorities have transferred, or are in the process of transferring, much of their existing stock to new social landlords. It will be for the Scottish Parliament and Executive to decide, in due course, whether Scottish Homes should continue in its present form or whether changes are required. Decisions on these matters will, however, need to be informed by a detailed and careful consideration of its future role.
4.21 Any consideration of the future role of Scottish Homes needs to take account of its current functions, whether they are likely to be still required in the future and, if so, whether they should be undertaken at national or local level. Scottish Homes currently has four main areas of activity: the direct provision of housing and housing services; the regulation and supervision of housing associations and other registered social landlords; the development of strategy and policy (including associated research and information, and advice on stock transfers); and, the strategic planning and delivery of development funding for the provision of housing and housing services by others.
Each of these is discussed in turn below.

The Landlord Role of Scottish Homes
4.22 At its establishment, Scottish Homes inherited some 75,000 houses, but approximately 56,000 have been sold, either to individuals through Right to Buy sales or to new social landlords. The landlord function is diminishing and we endorse the policy of transferring the remaining stock, subject in each case to the support of the tenants. On present plans, the remaining stock should be sold over the next two to three years. The need is to manage the decline of this function carefully, to protect the interests of the tenants, the taxpayer and Scottish Homes staff.

Registration and Supervision
4.23 There is a clear continuing need for the registration and supervision of housing associations and other social landlords and this work is likely to expand as new community landlords are established as a result of the New Housing Partnerships Initiative. Registration and supervision is necessary to protect the interests of tenants, the public investment involved and to ensure the confidence of private investors. This function is currently carried out primarily at the national level and should continue to be so. This would ensure consistency of standards, and avoid the increased costs that would result from each local authority setting up its own arrangements, and recognise the fact that there are a number of housing associations which operate in several local authority areas. There is also a strong case for keeping registration and supervision at "arms length" from the Scottish Executive in the way that Scottish Homes does at present.
4.24 A separate issue for consideration is whether registration and supervision should be extended to cover local authority housing departments. In general, the Government is looking to local authorities to transfer their stock to new landlords who would be subject to registration and supervision as a matter of course. The remaining housing functions of local authorities, including the development of their strategic role, would then be subject to review and oversight through Best Value arrangements. However, there may be benefits in establishing a single regulatory regime across the housing sector, under the supervision of a single body. This would ensure that there were consistent standards for social housing provision, and stronger protection for the end users, whatever the status of the housing provider, and this could be particularly helpful where there are local authorities who continue with their provider role on a longer term basis. A single housing regulator could also play an important role in monitoring local authorities to develop their strategic and enabling role, and in establishing standards and best practice in this area. We recognise however that the possibility of a single regulator raises important questions about the accountability of local authorities and about their relationship with the Scottish Executive and Parliament. It would be important, for example, for any such regulatory body to have a clear line of responsibility to Parliament, either directly as an independent regulator or through Ministers.

Views are sought on the merits of establishing a single regulator with responsibility for housing associations, other community landlords and the housing functions of local authorities including their strategic role.

Policy and Strategy Development
4.25 Scottish Homes currently undertakes a range of analytical work related to policy and strategy backed up with research and the provision of information. There is no doubt that the bulk of this work will continue to be required and that it should be organised primarily at the national level. Indeed there is likely to be an increasing need for information and analytical work linked to the development of a national housing strategy and the work of a national advisory panel and Chapter 3 has already noted the advice and assistance on stock transfers which Scottish Homes Initiatives Unit can provide to local authorities. It will be important to ensure that this work is closely integrated with the policy work of the Scottish Administration's own housing staff. Close collaboration would help to ensure that the Scottish Executive is well placed to take a soundly based and pro-active policy making stance.

Development Funding
4.26 The management of Scottish Homes' development funding programme is currently undertaken by five Regional Offices throughout Scotland. Each Region operates within the framework of a Regional Plan, prepared in consultation with local authorities and other relevant bodies and approved by Scottish Homes Board. Regional staff have the delegated authority to approve individual projects and in determining priorities, take into account local housing needs. This assessment is based on a local housing market analysis, and discussions with local authorities and others, which may be formalised into strategic agreements. Currently 23 local authorities have Strategic Agreements with Scottish Homes.
4.27 There is a case for creating a single or consolidated budget for public expenditure on housing in Scotland, especially if the bulk of the existing public sector stock transfers into community ownership. This would help to ensure a "level playing field" between different types of expenditure so that decisions on priorities are not influenced by different subsidy regimes or the ability to move resources between different budgets. As the new community landlords will look to private sector funding for any necessary programme of repair and modernisation work on their houses, this single budget would need to cover requirements such as: the public subsidy required for new socially rented housing; the grant contribution required for low cost home ownership initiatives; funding for adaptations for the disabled; some revenue funding, for example, for Care and Repair.
In due course, this single pot might also include the resources to fund improvement and repair grants and adaptations in the private sector. This would require this funding responsibility to be transferred from the local authority general capital allocation. Resources currently reserved for initiatives such as the Rough Sleepers and the Empty Homes Initiatives might also be merged into this single pot in the longer term. There may be a continuing need for a limited number of centrally managed initiatives of this sort although the number and scope are likely to change over time.

Views are sought on the proposal for a single budget for public expenditure on housing.

4.28 In our view, development funding has to be administered primarily at the local or regional level, but within clear national guidance on priorities and criteria and arrangements to ensure value for money. Where local authorities have transferred the bulk of their stock into community ownership, it is right that they should be given a much greater role in determining priorities within their area. There is a strong case for having a single operational housing plan or strategy at the local level and which would be consistent with the community plan and the community care plan for the local authority area in question. Local authorities would have lead responsibility for preparing these new style housing plans and they might supersede both the existing Housing Plan and Scottish Homes Regional Plan for that local authority area. The local authority would be expected to consult with Scottish Homes Regional Staff and draw on their expertise and advice, not least to ensure that the implications of housing markets which go beyond local authority boundaries are taken into account. These plans would identify the agreed priorities for development funding within local authority areas at both the strategic and the project level.

Views are sought on the proposal for a single local housing plan or strategy to implement regional and national priorities within each local authority area.

4.29 The Scottish Executive will need to establish a robust mechanism for allocating resources to local authority areas which takes account of national priorities. Currently, Scottish Homes is working up proposals for allocating resources to its Regions based on indices of need, linked to measures of social exclusion, and an assessment of performance. The Government believes that, in principle, this is the right approach and that it might be extended, in due course, to determine allocations to individual local authority areas. The precise indicators used to determine need would require careful consideration, but assessing relative performance is bound to be more difficult and potentially controversial. Regional staff of Scottish Homes could play a central role in this allocation process on behalf of the Scottish Executive.

Views are sought on the best way of allocating resources to local authority areas, taking account of national priorities. Views are also sought on the role of Scottish Homes Regions in delivering national priorities on behalf of the Scottish Executive.

Summary
4.30 There is a continuing need for many of the functions currently undertaken by Scottish Homes. Registration and supervision and policy and strategic analysis require to be organised at the national level. Development funding needs to be allocated primarily at the local and regional level but delivered within national priorities and guidelines set down by the Scottish Executive, guided by an Advisory Panel. The shift to community ownership will require some far-reaching changes, particularly in relation to development funding, and we have set out some suggestions in this area. The precise organisational arrangements required to deliver these proposals will be a matter for the Scottish Parliament and Executive and any major changes in the position of Scottish Homes would require legislation in due course.

Views are sought on which of the main activities currently undertaken by Scottish Homes will be relevant in the future and how they should be undertaken at the national, regional and local level.

Conclusions
4.31 The advent of the Scottish Parliament and the implementation of our proposals for community ownership will provide a unique opportunity to review the existing ways in which housing policy and programmes are formulated and delivered. This chapter has set out some of the ways in which we can all make the most of this opportunity and views are invited on the key proposals, in particular: the suggestion that the Scottish Executive should develop a national strategic framework for housing (paragraph 4.5); the proposal for a Scottish Housing Advisory Panel (paragraph 4.7); the view that local authorities should increasingly focus on their strategic role (paragraph 4.15); the merits of establishing a single regulator with responsibility for housing associations, other community landlords and the housing functions of local authorities (paragraph 4.24); the discussion of the main activities currently undertaken by Scottish Homes and whether, in future, these will still be required and, if so, how they should be undertaken at national, regional and local level (paragraphs 4.21 to 4.30); and, the proposals to create a single budget of public expenditure for housing (paragraph 4.27); the suggestion of a single housing plan or strategy at the local level (paragraph 4.28); ideas for a new mechanism for allocating resources to local authorities and the role of the Scottish Homes Regions in delivery of national priorities (paragraph 4.29).