COMMITTEE FOR THE OFFICE OF THE FIRST MINISTER AND DEPUTY FIRST MINISTER
OFFICIAL REPORT
(Hansard)
Consideration of EU Issues
___________
1 April 2009
Members present for all or part of the proceedings:
Mr Danny Kennedy (Chairperson)
Mrs Naomi Long (Deputy Chairperson)
Ms Martina Anderson
Mr Stephen Moutray
Mr Jim Shannon
Mr Jimmy Spratt
Witnesses:
Mr Chris Williamson, Northern Ireland Federation of Housing Associations
The Chairperson (Mr Kennedy):
This evidence session is with a representative of the Northern Ireland Federation of Housing Associations (NIFHA). A written submission has been provided. I welcome Mr Chris Williamson, who is an old friend of this Committee in its various forms. Please make a short opening statement, after which members will ask questions.
Mr Chris Williamson (Northern Ireland Federation of Housing Associations):
Thank you, I am delighted to do so. I am sorry that my written submission arrived with the Committee at the last minute.
I am delighted to have the opportunity to talk to the Committee and to answer members’ questions. The paper that I provided is short, simple and uncomplicated. However, I emphasise that the federation is closely interested in what goes on in Europe, and, more particularly, in Europe’s impact here.
Like the Northern Ireland Council for Voluntary Action (NICVA), the federation believes that it has something to offer the rest of Europe rather than just taking ideas and money from it. Members might well ask what on earth social housing has to do with the EU. The top-line answer is nothing; it is not within one of the so-called competences of the European Union. To my mind, however, social housing is definitely one of the underpinning foundations of the EU.
It contributes to economic efficiency, which the EU is all about. There is a great deal of empirical evidence to suggest that having a variety of tenures and the flexibility of rented tenure, as well as owner occupation, which is unique in these islands compared with the rest of Europe, is helpful to economic development. The provision of good quality affordable homes for people who are at the lower end of the economic spectrum is important for the same reason.
Freedom of movement is one of the principles of the EU, and good-quality rented accommodation stock is important in facilitating free movement of labour from one region to another.
The term “social inclusion” probably came from Europe and has, rightly, been adopted here, because it is a helpful concept. The social housing sector is all about social inclusion. If for no other reason, affordable rents are a big help in getting people into employment. Given the benefits structure in the UK, high rents are a disincentive for people to take up low-paid employment. If the rent is relatively low, the disincentive effect is less. I am not saying that it is eliminated, but it is less.
Environmental sustainability has rocketed up the European and world agenda — not quickly enough for my liking, I might add. Social housing across Europe and in our country has been leading the way in doing something positive and practical to get housing up to good spatial and environmental standards. However, we have a long way to go; we are hardly even at the starting line, but at least the social sector is leading the way in a practical sense.
Europe impacts on social housing in two ways, one of which might be viewed as negative. Sometimes, Europe, even though it does not mean to, can get in the way, because of its complex and large population, and political and financial structures. Sometimes, European bureaucracy and other well-meaning rules can simply get in the way. The second impact is much more positive. I have given a number of examples, one of which resonates with what NICVA’s representatives just said about the supported employment programme.
One of our members — Triangle Housing Association, which is based in Ballymoney and operates throughout the North of Ireland — has made creative use of that money to help hundreds of people to get gainful employment, in the mainstream, that they would not have got otherwise. Another recent, and possibly more publicised, example is that of Clanmil Housing Association, which was able to get hold of money from the European Investment Bank at lending rates that are lower than the current official rate of lending.
The Chairperson:
Is that still going?
Mr Williamson:
Oh, yes. We are talking about a financing arrangement. You might be thinking of a project in which there was not enough public money to allow it to proceed in the financial year that has just finished. However, Clanmil Housing Association got money from the European Investment Bank for real projects. Those houses are sitting there now, they are occupied. That funding was extremely helpful, because every fraction of a percentage point that can be saved on interest rates has a direct impact on the viability of the organisation and on the rent that has to be charged of the tenants.
In addition, even though Northern Ireland is not the dominant player at the national level, it still has a voice in UK matters. I draw your attention to the issue of VAT rates. It has long been a matter of great concern to our federation that until recently the rate of VAT on renovation was 17·5% and the rate of VAT on new construction was 0%. That has an immediate and long-term impact on the issue of environmental sustainability, which I mentioned earlier. That puts the financial lever in favour of knocking down and rebuilding, rather than making use of what is already there. Often, in environmental terms, it is by no means necessary to knock down the entire street or property.
NICVA’s representatives also mentioned structural funds. I am not as well versed as they are about exactly what the position is. I know that for the first time, a chink has opened in which housing can get access to structural funds, at least in theory. I am not saying that it can be accessed in Northern Ireland right now. However, until quite recently there was a blanket “no”, and now there is now a little “yes”, whereby structural funds can be used to improve the energy efficiency of existing homes. I re-emphasise that I need to check the detail of whether that extends to the UK and Northern Ireland. That might seem minor, but it is quite a major breakthrough.
Our federation has been working with counterparts in the United Kingdom, the Republic of Ireland and from throughout Europe ever since it was founded more than 30 years ago. The European Liaison Committee for Social Housing or CECODHAS — which is a horrible acronym — is very good at doing exactly the sort of work that the representatives of NICVA spoke about earlier in trying to get in at the very beginning of policy formulation in Europe.
Even more so than in this Assembly, it is desperately important to get in at the beginning of policy formulation in Europe, because it is just so complicated. There are so many aspects to it that, once the wheels start going in a particular direction, it is hard to get them shifted. CECODHAS has proved increasingly effective at representing the social housing sector in what, on the surface, might look like stony ground for social housing.
To return to what I was saying at the start of my presentation, housing is not an EU competence per se. However, I believe that it is fundamental for the proper operation of the EU.
The Chairperson:
Thank you for your presentation and for the paper that you submitted. It may be useful to find out roughly how many people have been helped through the initiatives that are run by Clanmil Housing Association and Triangle Housing Association. If that additional information could be provided at some stage, that would be very helpful.
Do you think that, historically, we have got the balance right in how we have spent European money?
Mr Williamson:
I am not sure, but I know that certain programmes were available only to Northern Ireland, and I hope that we made the fullest possible use of those programmes. A more useful suggestion may be to look at the present and the future, rather than looking back, and try to position ourselves much more cleverly. The business of clever working is the name of the game. Any kind of tools that can be used should be used, such as those that the NICVA representatives mentioned.
We had a bit of a laugh about French partners, but it is true; there are things in the field of energy efficiency, for instance, in the housing field, where the programme information is submitted to me by email, and it states that we need to have at least three other European partners in different countries. Even with our links through CECODHAS that I mentioned and praised, it is hard to get those things lined up, especially within the time frame that is required to submit a valid submission.
If there are ways and means, and I am not giving you answers, I am just saying that that would be an area where better or more directed minds than mine may come up with some bright ideas to help position the Northern Ireland players — voluntary, private and public — better than they have done in the past.
Ms Anderson:
Although you say that social housing does not have an EU competence, with regards to EU planning directives and the need for intervention in the early stage of formulation of policy, what impact do planning directives have on the provision of social housing or in the development of social housing?
Mr Williamson:
That depends on what you mean by planning, but I think what you are getting at are things to do with the environmental assessments. The EU is definitely a classic example of what the NICVA representatives said, in that such a high proportion of our legislation comes directly from Europe, and that is one of them.
The answer to your question about environmental assessments is that it has had a pretty minimal effect so far in the social housing field. However, there are definitely a couple of schemes that I know of where it has had a direct impact. As time goes on, social housing is being built on more difficult sites. By difficult, I mean places where there is contaminated land, for example, the gasworks site off the Ormeau Road, or Cromac Street in Belfast, where they had to dig a great big hole in the ground, about 10 ft deep, and physically transport that material away to a safe site before the land could be reused for the office park that it now is. That kind of thing, on a smaller scale, is happening to more and more social housing sites. So far, the impact has been quite limited, but, over time, it will build up.
Moving on to what the man or woman in the street might call planning, Europe does not tell us how to do our area plans or that kind of detail. You are quite right, however, that it has a fundamental impact on those sorts of environmental and other assessments.
Ms Anderson:
You applauded the European Liaison Committee for Social Housing. How firm a connection does the federation have with it? Does information flow from it to you? Is your organisation a member of it?
Mr Williamson:
I get emails at least monthly, and sometimes more frequently than that. Regular news-sheets are issued, which I circulate to all of our federation’s members. Half-yearly meetings take place. My chairman and I went to the most recent one, although I will not be attending the next one. General assemblies take place between those half-yearly meetings, and working groups meet on a range of issues, including urban regeneration. Those meetings take place at different venues. I have not been to those, but I make it my business to attend one of the general assemblies at least once every two years.
I find that those meetings are a curate’s egg in that they are good in parts. There is always enough good, positive networking and keeping in touch with the main European issues to make them worthwhile.
Mr Shannon:
Chris, you admitted that you do not have much influence with Europe, but your presentation lists the practical ways in which you can help. How can other housing associations be made aware of how they can get loans from the European Investment Bank, which is advantageous because the rates are good? That will be advantageous to all housing associations, not just Clanmil.
You mentioned how the building sustainable prosperity programmes supported people with learning disabilities. Those are practical issues that Europe can enhance and help. How can you do that? Do you contact all the housing associations directly and ensure that they are aware of those opportunities? Sometimes such opportunities get lost in the paperwork, but it is important that contact, if not ready-made, is reinforced.
Mr Williamson:
I accept those points. It is a function of our federation to keep the communication channels going, and it is one of our specific aims to promote the dissemination of good practice. The examples that you have quoted are clear instances of that, and I assure you that we are not behind the door when it comes to putting the word around about those kinds of issues. Not every housing association is engaged in supported-employment exercises, but the principle applies. I assure you that our federation has always circulated that kind of information, rather than allowing it to be kept secret.
I hope that you will recognise the magazine that I have brought. It is called ‘POSH’, which stands for perspective on social housing. We send it to you very four months, and you can bet your bottom dollar that one of its issues will, before long, include a reference to an issue to do with the European Investment Bank. That is another vehicle for getting the word out, and an electronic news-sheet is sent only to our members. That is sent out from my office every fortnight. In fact, the latest one went out this morning.
If I may, I will show the Committee an example of a document that was produced by CECODHAS. It is called ‘Safe as Houses — EU Social Housing Organisations: Preventing and Dealing With Anti-Social Behaviour’. It is a couple of years old, and I happened to see it on the shelf when I was leaving my office. I can leave it with the Committee Clerk, and if Committee members want more copies, I am sure that we could get them. That document is an example of case studies of real examples being taken at a European level of projects in Britain, Spain or wherever have devised schemes that try to mitigate antisocial behaviour. Those schemes are written up, and the communication mechanism exists to put word out.
Mr Shannon:
You mentioned that the EU has cleared a path for national Governments to reduce the rate of VAT. We are dealing with the Labour Party, which has delivered the highest ever level of taxation on the nation of Britain. What impact have you had in trying to get the Government to look at reducing VAT on housing repairs to 5%?
Mr Williamson:
That is where we link up with our UK counterparts — there are equivalent federations in England, Scotland and Wales. There is also one in the Republic of Ireland, but we are talking about the UK with regard to VAT on housing repairs. For years, the four federations in the UK, which meet every six months, have made formal submissions to a number of Chancellors of the Exchequer. So far, that approach has been to no avail, but I remain hopeful; the way that circumstances have moved in recent years is very much in our favour, so it is just a matter of time. It is a bit of a tragedy, because if the reform had taken place earlier things would have been a lot better.
Mr Spratt:
Governments have to raise their finances from taxes, and you said that a number of submissions have been made to Chancellors of the Exchequer. There will always be house repairs, because there is not a knock down and a rebuild in every case. If the VAT on housing repairs was reduced, have you thought about where the money to cover that will come from? My worry is that the money would have to come out of the social housing budget. Have you had any other thoughts on where the money could come from? The Government have to find the money through taxes, so if there is a reduction in the VAT on housing repairs, where will the money to cover that be found?
Mr Williamson:
That is an entirely fair question. It would be entirely wrong and completely unfair to say that social housing would pay for the reduction, because VAT is a huge tax.
Mr Spratt:
Would it come from the budgets for construction or the Health Service?
Mr Williamson:
Housing is only a very small proportion of the VAT take, and it makes up only one part of the construction budget, which is a much bigger entity. Social housing is an even smaller proportion of that budget. We are not so starry eyed as to say that you can do away with a tax without there being some implication through less services or higher taxes somewhere else. We favour an evening out of taxes: it is crazy to have 0% tax on new construction and a 17·5% tax on building something like an extension on a house that is perfectly sound but just needs enlargement. The more likely solution would be an evening out of the taxation.
Mr Spratt:
Would you say that the same percentage of tax should exist across the board?
Mr Williamson:
Yes, something along those lines. Account should be taken of the relative scale of the two operations; new constructions on the one hand, and renovation or repair work on the other.
The Chairperson:
The Barroso report was mentioned as were the different ways of accessing EU funds by through collaboration on a European-wide basis — the phrase “more clever ways” was used. Is it not now up to bodies, such as yours, to proactively investigate those rather than simply wait for the Executive or the Government to make a suggestion? Is it not incumbent on your organisation, and other organisations, to investigate those on a pragmatic and positive basis, and do you hope to do so?
Mr Williamson:
The answer is yes. What was the second question?
The Chairperson:
If the answer to the first question is yes, the answer to the second question is yes.
Thank you very much indeed, Chris for your presentation and your responses to our questions. If there is any other information that you want to provide for us, or if we have any queries, we will be in touch.
Mr Williamson:
You asked me to look into a question for you, and I will certainly do that.
The Chairperson:
Thank you very much indeed.