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VOLUME 1 - REPORT, MINUTES OF PROCEEDINGS AND MINUTES
OF EVIDENCE OF THE COMMITTEE RELATING TO THE REPORT

COMMITTEE FOR SOCIAL DEVELOPMENT

1. The Committee for Social Development is a Statutory Committee of the Northern Ireland Assembly, established in accordance with paragraphs 8 and 9 of Strand One of the Belfast Agreement and under Assembly Standing Order No 46.

2. The Committee has a scrutiny, policy development and consultation role with respect to the Department for Social Development and has a role in the initiation of legislation.

3. The Committee has power:

4. The Committee was established on 29 November 1999 with 11 members including a Chairperson and Deputy Chairperson and a quorum of 5. The membership of the Committee is as follows-

5. All correspondence should be addressed to the Clerk to the Committee for Social Development, Room 419 Parliament Buildings, Stormont, Belfast BT4 3XX.

* Mr McClarty was removed from the Committee on 6 February 2001.

** Mr Hamilton was appointed to the Committee on 6 February 2001.

TABLE OF CONTENTS

Volume one
Report and Proceedings of the Committee

1.0 Principal Recommendations
1.1 Private Sector Renewal
1.2 Houses in Multiple Occupation and Regulation of the Private Rented Sector
1.3 The Right to Buy for Housing Association Tenants
1.4 Large Scale Voluntary Transfers and the Role of the Housing Executive

2.0 Methodology
2.1 Background
2.2 Terms of Reference
2.3 Specialist Advice
2.4 Written Submissions
2.5 Oral Evidence

3.0 Introduction

4.0 Private Sector Renewal
4.1 Background
4.2 Consultations
4.3 Principal Recommendation
4.4 Some Further Ideas to be considered in relation to Private Sector Renewal

5.0 Houses in Multiple Occupation (HMO) and the Regulation of the Private Rented Sector (PRS)
5.1 Background
5.1.1 Law and Policy
5.1.2 Regulation of the Private Rented Sector
5.1.3 Regulated and Restricted Properties
5.1.4 Uncontrolled Furnished Sector
5.1.5 More Expensive Dwellings
5.1.6 Lower Cost New Build and Sold Housing Executive Dwellings
5.2 Consultations
5.3 Principal Recommendation
5.4 Some Further Ideas to be considered in relation to Houses in Multiple Occupation and the
Regulation of the Private Rented Sector

6.0 Right to Buy (RTB) for Housing Association Tenants
6.1 Background
6.1.1 Concerns and Questions
6.1.2 Why do we have Right to Buy
6.2 Consultations
6.3 Principal Recommendation
6.4 Some Further Ideas to be considered in relation to the Right to Buy for Housing Association Tenants

7.0 Large Scale Voluntary Transfers and the Role of The Northern Ireland Housing Executive
7.1 Background
7.1.1 What Other Approaches are Available?
7.1.2 What are the Main Features of Arms Length Arrangements?
7.1.3 What do Other Regional Assemblies propose?
7.1.4 What are the Key Issues for Northern Ireland?
7.2 Consultations
7.3 Impact of LSVT on the Role of the Housing Executive
7.4 Conclusion
7.5 Principal Recommendation
7.6 Some Further Ideas to be considered in relation to Large Scale Voluntary Transfers
and the Role of the Housing Executive

Minutes of Proceedings relating to the Report
Minutes of Evidence relating to the Report
List of witnesses who gave oral evidence
List of written evidence submitted to the Committee
Glossary

Volume Two -
Written Submissions Relating to the Report

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REPORT

1.0 PRINCIPAL RECOMMENDATIONS

1.1 Private Sector Renewal

The Social Development Committee considers that the introduction of a grants system based on a largely discretionary, rather than a mainly mandatory, approach should facilitate finer targeting and offer more options in helping those in poor housing conditions (4.3).

1.2 Houses in Multiple Occupation (HMO) and Regulation of the Private Rented Sector (PRS)

The Social Development Committee considers that there should be a transfer of responsibility for this function from the Department for Social Development to the Northern Ireland Housing Executive and that the Housing Executive should be responsible for introducing and operarting a licensing scheme.(5.3).

1.3 The Right to Buy (RTB) for Housing Association Tenants

Whilst the extension of the statutory right to buy to housing association tenants should proceed at this stage, the Committee considers that a complete review of the scheme should be initiated along the lines suggested by the Chartered Institute of Housing (6.3).

1.4 Large Scale Voluntary Transfers (LSVT) and the Role of the Housing Executive

The Social Development Committee believes that there is a need for a body to take a strategic role in relation to housing provision in Northern Ireland. The Committee recommends that the Northern Ireland Housing Executive should have an enhanced strategic role and that the proposed Housing Bill should address the conflict between such a role and the part the Housing Executive plays as the largest social landlord in Northern Ireland (7.5).

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2.0 METHODOLOGY

2.1 Background

The Social Development Committee decided, at a Committee meeting on 11 January 2001, to investigate the content of the proposed Housing Bill to allow identification of suitable topics for inclusion in the Future Work Programme. The Committee considered the matter further at its meeting on 18 January 2001.

On 25 January 2001, following detailed considerations and an explanation from the officials of the policy intentions behind the legislative proposals, the Committee agreed to investigate six main areas:-

The Committee agreed, at a meeting on the 22 March 2001, that Private Sector Renewal, Houses in Multiple Occupation and the Regulation of the Private Rented Sector, Large Scale Voluntary Transfers and Housing Association Tenants - Right to Buy be the subject of a single report. Two further and separate inquiries into 'Anti-Social Behaviour' and 'Homelessness' would be conducted.

2.2 Terms of Reference

The following Terms of Reference were set for the initial part of the Housing Inquiry:

1. Private Sector Renewal

"To investigate current Northern Ireland proposals to move from mandatory to discretionary grants schemes and group repair schemes and, if appropriate, conduct comparisons with the United Kingdom and the Republic of Ireland".

2. Houses in Multiple Occupation (HMO) and Regulation of Private Rented Sector (PRS)

"To (1) examine current Northern Ireland law and policy in relation to the above, conduct comparisons with the United Kingdom and the Republic of Ireland, summarise existing Northern Ireland practice in relation to HMO's and the PRS; and (2) identify benefits / disbenefits of new proposals".

3. Large Scale Voluntary Transfers and the NIHE

"To investigate current proposals in Northern Ireland for 'Large Scale Voluntary Transfers'; to identify the social benefits and disbenefits of such proposals and to examine the effects on, and future for, the Northern Ireland Housing Executive".

4. Rights of Housing Association Tenants to buy their Properties

"To investigate current proposals in Northern Ireland relating to the Rights of Housing Association Tenants to buy their own properties; to examine the social benefits and disbenefits of such proposals".

2.3 Specialist Advice

The Committee, at a meeting on 5 April 2001, considered and selected a Special Adviser to assist in its deliberations.

2.4 Written Submissions

The Committee considered 46 written submissions in relation to its Inquiry.

2.5 Oral Evidence

Oral evidence was heard from:

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3.0 INTRODUCTION

The Social Development Committee is grateful to everyone who took the time to make written and oral submissions. These submissions have had a significant bearing on the principal recommendations made in this report. The Social Development Committee is particularly grateful to its specialist adviser, Paddy Gray, Senior Lecturer in Housing, University of Ulster for the contribution he made towards this Report and the recommendations contained in it. These recommendations are made on the premise that there should be local solutions to local problems. However, a contextual account of what is happening in Great Britain and the Republic of Ireland is also provided.

The Social Development Committee recognises that elsewhere in the United Kingdom the delivery of housing management services for social housing has gone through many changes since the early 1980s. There has been a shift away from the comprehensive housing authorities of the 1970s to a more diverse range of new social landlords, particularly housing associations, where the majority of new build for social housing is developed. In Northern Ireland, however, housing provision and management has been highly politicised and controversial and there has been little change in the way social housing has been managed for over 25 years. The Northern Ireland Housing Executive has dominated the sector throughout the period since power was transferred to it from local authorities in 1971. The Committee commends the Northern Ireland Housing Executive for the sterling work it has undertaken, since its inception, not only in the housing field but also in terms of the role it has played in improving the social well-being of the people of Northern Ireland. Housing associations, on the other hand, have grown slowly to account for just 3% of the housing stock in 1999.

In July 1996, after widespread consultation, the then Department for the Environment for Northern Ireland published its Housing Policy Review Document, "Building on Success: The Way Ahead." This was the first major review of housing policy since the setting up of the NIHE in 1971 but the review document did emphasise that it was based on the acceptance that the Housing Executive was to remain the single regional housing authority for Northern Ireland. Since then there have been many developments in the political process, notably the establishment of the Northern Ireland Assembly.

Since the early 1970s, the former DOE (NI) played a major role in deciding directions for housing policy under the framework of Direct Rule. Many policies that were introduced in GB in the 1980s, particularly those that encouraged the growth of alternative registered social landlords, were not introduced here. Whilst much of the existing housing legislation has mirrored legislation passed in GB, there are also many provisions that have not been introduced due to the special circumstances that exist in Northern Ireland. These include Large Scale Voluntary Transfers, Housing Action Trusts, Compulsory Competitive Tendering for Housing Management and recent changes in GB to the Homeless Legislation. It is important, however, that any understanding of change in Northern Ireland must reflect both the particular features of the Northern Irish housing scene, and the wider influences affecting housing and public services throughout the United Kingdom. It is also important to recognise that future housing policy must consider the needs of the local population and that it is not always necessary to bolt on to legislation that has been passed in Great Britain.

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4.0 PRIVATE SECTOR RENEWAL

4.1 Background

Grant aid to private owners to enable them to repair and improve their homes has been part of housing renovation policy in the UK for the past 40 years and has been a major component of policy since 1969. Until 1990 the broad elements of policy in this area were consistent across the UK, although subject to significant differences between countries, but since that date England and Wales, followed by Northern Ireland, have made significant changes to the framework for grant provision. In Scotland there are three main types of grant available to private homeowners. Standard amenity grants which are available as a right for the provision of missing amenities; improvement grants which are discretionary unless an applicant has been served with an improvement order from a local authority or the dwelling is in a Housing Action Area including improvement; and repair grants which are discretionary unless an applicant has been served with a notice from a local authority requiring works to be carried out.

In England, and Wales a new system of grants was introduced in 1990 matched in 1992 in Northern Ireland. Renovation grants were introduced to assist with the improvement or repair of dwellings. These grants were mandatory for work to bring dwellings up to the standard of fitness for human habitation.

In England and Wales the Discretionary Grants Scheme has been operative since December 1996. In March 2001, the DETR set out in detail the government's proposals for reforming the legislation governing private sector housing renewal for England and Wales. The basis of the reforms are to provide:

In the Republic of Ireland there are two strategic initiatives:

Improvement of works in lieu of Local Authority Housing:

This allows local authorities to improve or extend privately owned houses occupied or intended to be occupied by an approved applicant for housing as an alternative to the provision of local authority housing. Persons qualifying for this scheme include those whose application for local authority housing has been approved; those who occupy a local authority house or who have bought under the tenant purchase scheme and who wish to move to a privately owned house and return their existing dwelling to the local authority as well as a tenant of a voluntary housing body who has been a tenant for more than one year and who wishes to move to a privately owned house.

The local authority can also carry out improvement works under this scheme to privately owned houses which are owned by the applicant, where the house is defective or overcrowded for the needs of the applicant or owned by a relative of the applicant; and where the house is defective or would be overcrowded when the applicant moves into the house. The local authority may carry out any works to eliminate defects in the house or to provide additional accommodation where this is necessary to eliminate overcrowding or to accommodate a person not residing in the house who is approved for local authority housing.

The local authority will pay the full cost of the works carried out to the house. Participants will pay a reasonable weekly or monthly charge in respect of outlay of costs over a maximum of 15 years.

Disabled Persons Grant:

Local authorities may pay a grant for the provision of additional accommodation or necessary works of adaptation to a private house to meet the needs of a member of the household with a disability. Costs of the work must be more than £200 and grant aid is available for up to 90% of the works approved by the local authority normally up to a maximum of £14,000 although there is discretion to exceed this amount. There is no means test.

In Northern Ireland there are a number of grants which are currently paid to the private sector and which are either mandatory or discretionary.

4.2 Consultations

Responses were received from 25 organisations. Whilst there were conflicting responses there was a general welcome to the proposed move from mandatory to discretionary grants schemes given that the current regime has not always resulted in the appropriate targeting of public funds and it has created some operational difficulties for Environmental Health Departments. There was concern that levels of unfitness in Northern Ireland are still unacceptably high at 7.3% and that unfitness levels in Fermanagh, Cookstown and Down are running at 17.5%, 13.0% and 10.6% respectively which suggests that the Housing Executive's present approach to area improvement, linked to their reluctance to implement certain of their statutory powers for dealing with individual unfit dwellings, runs contrary to their strategic objective of reducing unfitness.

Another concern that has been raised is that the experience of local authorities in England was that the move to discretionary grants, whilst allowing targeting of low-income home owners, led to the total grant budget not being spent and money being redirected to other spending priorities beyond housing services.

There has been a call for the statutory standard of unfitness in Northern Ireland to be revised to include more measures of condition and to provide an effective measurement of non-traditional stock. The Housing Executive could then draw up local strategies for all housing in Northern Ireland to deal with unfitness. There was also a call for the setting of clear targets for the reduction of unfitness in Northern Ireland over a ten year period.

An equivalent scheme which operates a percentage grant aid incentive scheme to encourage development in the public sector to 'lifetime homes' standard should also be introduced to the private sector.

Alternative sources of finance have been called for by reviewing the whole system of grant giving powers. The capacity for levering private finance should be investigated to make the existing mandatory grant funding go further than it currently does in meeting home owners' repair and improvement needs. At the one end of the spectrum, lower income households with very limited equity need grant assistance whilst, at the other end, homeowners on higher incomes and with equity in their homes should be encouraged to unlock and use that capital to pay for repairs and improvements. The NIHE should have the ability to make interest-bearing loans and also award grants which are repayable. Grants should only be given where no other option is available or practicable. Grants could be made recyclable by insisting that the grant is repaid once the property is sold.

Although there was support for Group Repair Schemes there was a call to widen the eligibility criteria and the scheme should be made more attractive. There was concern expressed, however, that many contractors have found difficulty in receiving payment and would not be prepared to engage in this type of work again.

Finally a view was taken that it does not make sense to make a switch now from mandatory to discretionary grants which stemmed from the Housing Policy Review 1996 as a different grants climate exists now where there is a robust grants budget and an absence of lengthy queues. In view of this, a better grants system could be tailored towards meeting the strategic needs of our local communities, harnessing the best from the GB experience and reflecting the changes in unfitness standards.

4.3 Principal Recommendation on Private Sector Renewal

The Social Development Committee considers that the introduction of a grants system based on a largely discretionary rather than a mainly mandatory approach should facilitate finer targeting and offer more options in helping those in poor housing conditions.

However, and in order to avoid allegations of unfair discrimination, such a system requires the support of well researched local strategies, good marketing, and clear targets which are subject to public scrutiny in the Draft District Housing Plans. The Social Development Committee has concluded that such an approach underscores the importance of the Housing Executive continuing to fulfil its comprehensive and strategic role in housing matters. The Social Development Committee acknowledges that housing policy has moved on from the days of very large targets (and public funding) together with an expectation of long time scales in tackling them. Now targets are expected to be tackled more quickly and at area level in tandem with other social and economic goals.

4.4 Some Further Ideas to be Considered in Relation to Private Sector Renewal

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5.0 HOUSES IN MULTIPLE OCCUPATION (HMO) AND THE REGULATION
OF THE PRIVATE RENTED SECTOR (PRS)

5.1 Background

In Northern Ireland the Housing Executive has estimated that there are 9,700 Houses in Multiple Occupation - housing 30,000 people. These are mainly to be found in Belfast, Londonderry and Portrush/Portstewart. HMO can include premises in the private rented sector, social rented sector and owner occupation although policy and enforcement concerns about HMO tend to focus on private rented premises. HMO play a vital role in the housing market by providing affordable flexible accommodation in areas of high demand where rents are high. In the light of the growing numbers of single person households and changing lifestyle patterns, demand for single person housing is expected to grow in Northern Ireland and HMO will therefore remain a significant feature of the housing market for the foreseeable future.

Physical conditions and management standards are often worse for HMO, and they pose the most significant fire risks to occupants. There is also public concern in some areas not just about the conditions to which HMO residents may be exposed but also about the impact of the residents themselves on the area and its amenities.

According to the Housing Executive some growth of HMO activity has been noted in a number of district towns in Northern Ireland and although this growth is small in terms of the total housing stock, single persons are moving into private rented sector properties in areas such as Dungannon, Omagh and North Down.

5.1.1 Law and Policy

The Committee acknowledges there are difficulties in finding an agreed definition of a House in Multiple Occupation. As currently defined in housing legislation a 'house in multiple occupation' means 'a house which is occupied by persons who do not form a single household'. There is a considerable amount of case law as to what constitutes a 'house' and what constitutes a 'household' for HMO purposes. There have been a number of legal cases about whether the mode of living of particular groups of people sharing a house constitutes a single household or not and doubts still remain over how the definition is applied.

The Committee noted that in England, the law on houses in multiple occupation is provided by the Housing Act 1985, as amended by the Housing Act 1996 which introduced certain new schemes at the discretion of local authorities, however, these have not been taken up. As mentioned above the current legal definition of a HMO is "a house which is occupied by persons who do not form a single household". In Barnes v Sheffield City Council (1995), the Court of Appeal significantly muddled this definition by overlaying it with nine separate non-exhaustive considerations which local authorities were required to take into account in assessing whether a dwelling was an HMO within the statutory definition.

This has led to local authorities restricting the types of property which it will include. For example, many authorities will no longer regard student lettings as HMO. Once a property has been defined as an HMO, the local authority may set up a registration scheme through which it essentially controls the standards in it. Other than this, there is a duty on the person managing the property to keep the premises fit for the number of occupants.

The regulatory systems appear to be broadly similar between Northern Ireland and England. Indeed, recent Consultation Papers issued by the DETR (1999) have been mirrored by similar documents issued by the NIHE (2000). The major difference is that mandatory grant is no longer available in England and the level of use varies from authority to authority.

The Housing Act 1996 gives local authorities in England discretion to adopt registration schemes for HMO making it a duty for houses to be registered for which the scheme applies. There are three types of scheme:

There are now proposals to introduce a mandatory licensing scheme for HMO in England and it is intended that the following will be included:

The Committee noted that in Scotland, local authorities have a wide range of powers available to take action on HMO under existing primary and secondary legislation. The Housing (Scotland) Act 1987 empowers local authorities to control HMO by imposing 'management orders' which apply a code of management set out in regulations obliging landlords to keep the HMO in repair and good order; 'works orders' which can be used to compel works to ensure compliance with the management code; and 'notices' to require other improvements to rectify defects and to require the provision of means of escape from fire and 'notices and directions' to limit or reduce overcrowding.

Local authorities have had discretionary powers since 1991 to establish a licensing scheme for HMO in their area although many have still not introduced a scheme. In 2000 legislation was introduced to implement a mandatory licensing scheme for all HMO properties in Scotland. Under the scheme owners of HMO are required to apply for a licence which can be refused by Councils where there are concerns over factors such as fire safety, physical conditions and bad management standards. Councils also have powers to search properties suspected of operating without a licence and instigate prosecutions in such cases. Only properties owned by local authorities and residential and nursing homes are exempt as they are already subject to an equivalent regulatory scheme. The licensing scheme is being phased in, with a threshold set for licensing those properties with more than five occupants for the first year. This threshold is being reduced each year until properties with more than two occupants will require a licence by 2003.

The Committee noted that in the Republic of Ireland, legislation does not distinguish between HMO and other private rented properties. The main provisions applicable to the private rented sector are contained in the following regulations:

In summary these regulations provide for a registration scheme, similar to the Scheme with Control Provisions in England, to be applied by the local authorities. The standards in this scheme, however, are acknowledged to be basic and local authorities have not been active in enforcing statutory regulations.

There is also no grant available for owners to carry out works required to bring properties up to standard. There is, however, a form of tax relief available for new build properties and for providing student accommodation. Tax relief is currently available to both tenants and landlords.

The Private Rented Sector in the Republic of Ireland has traditionally consisted of unfurnished dwellings - which were formally rent controlled - and uncontrolled accommodation, generally furnished. Up to the 1980s legislation in the Republic virtually mirrored legislation in Northern Ireland with regulated, restricted and controlled tenancies.

In July 1999 a Commission on the Private Rented Residential Sector was set up with the following Terms of Reference:-

"To examine the working of the landlord and tenant relationship in respect of residential tenancies in the private rented sector and to make such recommendations, including changes to the law, as the Commission considers proper, equitable and feasible with a view to:

Improving the security of tenure of tenants in the occupation of their dwellings.

Maintaining a fair and reasonable balance between the respective rights and obligations of landlords and existing and future tenants.

Increasing investment in, and the supply of, residential accommodation for renting, including the removal of any identified constraints to the development of the sector."

The Commission reported in July 2000; its and conclusions were as follows:

The Board will have a quasi-judicial role, in that its findings in the event of a dispute can only be appealed to a Court, and even then only on a point of law.

The Board will also provide research, monitoring, policy advice, model leases, good practice guidelines and general advice.

It is also proposed that the facility to write off construction costs or refurbishment costs against rental income for tax purposes should be extended to all types of private rented sector properties.

In Northern Ireland, responsibility for overseeing the management of HMO is in the hands of the NIHE which sets certain standards similar to those in place in England. The same definition of HMO is used, with the same complications. Current NI law in relation to HMO is covered by the Housing (Northern Ireland) Order 1981, the Housing (Northern Ireland) Order 1992 and the Housing (Management of Houses in Multiple Occupation) Regulations (Northern Ireland) 1993.

5.1.2 Regulation of the Private Rented Sector

Concern over the quality of housing in the private rented sector has been growing over recent years. Whilst data exists on unfitness, it is more difficult to assess what has been happening with disrepair, largely due to changing definitions and problems in measuring likely costs of repairs. Homes that are most likely to be affected often belong to those on the lowest incomes like single parents, the unemployed and the elderly. There has been a proven correlation in the past between inadequate housing conditions and poor health.

The statutory standard of unfitness in England, Wales and Northern Ireland is based on a minimum habitable condition as defined in the Local Government and Housing Act 1989 with its detailed implementation set out in the DoE Circular 17/96. Structural stability, freedom from damp, adequate heating, lighting and ventilation, the piped supply of wholesome water and adequate drainage, facilities to prepare and cook food and a WC and bath/shower and hand basin with cold and hot water are all statutory requirements. Failure to meet just one of these criteria, making the property 'not reasonably suitable for occupation', renders it unfit for human habitation and requires the local authority's environmental health officers (EHOs) to use cost benefit analysis to decide on repair, deferred action, closure or demolition.

In Scotland there is the 'below tolerable standard (BTS)' defined in the Housing (Scotland) Act 1987; it closely resembles legislation for the rest of the UK but also requires satisfactory access to all external doors and outbuildings.

Levels of enforcement of the existing fitness standards are low, perhaps because of the problems, both political and for the individual, which can follow the serving of a notice. The DETR is working on a new Housing Health and Safety Rating System (HHSRS). Its underlying principle is that any dwelling should be a safe and healthy environment both for its occupants and visitors, and has identified 24 hazards (compared to nine in the fitness standard); it covers houses, flats and bedsits, including any shared access areas. Legislation is required to enact its provisions but the new system will be employed alongside the fitness standard for the time being.

The current legislation affecting the Private Rented Sector in Northern Ireland dates primarily from 1978, although the history of the sector goes back to the beginning of the 20th Century and, in 1939, about 90% of the housing stock was privately rented. The current make-up of the sector is unique and has not followed developments experienced in other parts of the UK or in the Republic of Ireland.

The private rented sector can be divided into four different market sectors:

5.1.3 Regulated and Restricted Properties

The Rent Register, held by the Department for Social Development for properties controlled under the 1978 Rent Order, recorded, earlier in 2001, a total of 6,498 properties: 6,109 regulated tenancies and 384 restricted tenancies. There is no compulsion for landlords to register their properties.

5.1.4 Uncontrolled Furnished Sector

This component tends to be dominated by young upwardly mobile tenants mainly in the form of HMO. These tenants tend to move into the owner occupied sector in the longer term.

5.1.5 More Expensive Dwellings

There have been a number of city centre and water edge developments as well as apartments in areas like Belfast, Derry/Londonderry, Fermanagh, the North Coast and North Down for the purposes of letting.

5.1.6 Lower Cost New Build and Sold Housing Executive Dwellings

This relies on lower cost new dwellings and Housing Executive Right to Buy properties being bought as an investment. These dwellings are providing for a group which would normally have been housed in the social rented sector.

The Rent (Northern Ireland) Order 1978 applies to older properties in the lower end of the private rented sector, with the aim of ensuring that rents reflect house conditions and that tenants have a considerable security of tenure. The DSD is responsible for setting rents for controlled regulated tenancies, for maintaining a register of these rents and for reviewing these rents as appropriate. The Rent Order also defines the role of the Rent Officer who is confined to assessing rents on controlled regulated tenancies when these are the subject of appeal by either tenant or landlord. District Councils have powers to investigate cases of harassment or illegal eviction or to deal with issues of disrepair. Environmental Health Departments can issue Certificates of Disrepair on Regulated Tenancies, or Public Health notices on all types of tenancies. The Northern Ireland Housing Executive's responsibilities lie in the administration of housing benefit and the private sector grants schemes.

The most notable effect of the subsequent Housing (NI) Order 1983 was to introduce shorthold tenancies, to extend rent regulation to certain unregistered housing associations and to modify the regulated tenancy standard. The regulated standards have again been revised in the 1992 Housing Order and now correspond to the NIHE fitness standard.

The Social Development Committee understands that there may be provisions in the proposed Housing Bill in Northern Ireland to transfer the Department's responsibilities for the Rent Register to the NIHE.

5.2 Consultation on Houses in Multiple Occupation and the Regulation of the Private Rented Sector

Responses were received from 25 organisations. One of the major concerns expressed was the lack of clarity of definition of what is a HMO (see also 4.2). This of course has been a problem in the legislation in England and some responses called for the introduction of the DETR proposed definition in their consultation paper 'Licensing of Houses in Multiple Occupation - England'. There was particular concern that houses occupied by students were, in many cases, excluded from the definition.

Another major concern was the lack of a landlord registration system and many responses called for the introduction of a mandatory licensing scheme as they felt that the proposed voluntary scheme to be introduced by the NIHE will not go far enough. Some Councils called for the regulatory role of HMOs to be placed with District Councils rather than the NIHE. It was suggested that District Councils are, in many respects, better placed to fulfil the role of regulator of housing standards than the NIHE due to their greater accessibility, democratic accountability and their independence from owners of the property. Councils have wide ranging and extensive enforcement and regulation experience and therefore are well placed to regulate and enforce housing standards including the assessment of unfitness.

It was suggested that applicants for a licensing scheme should be compelled to sign up to an independent ombudsman service as a condition of receiving a license. Properties should also be inspected before a license is issued although different arrangements may be appropriate for larger numbers of properties. There was a call for inspections of properties once they become vacant as well as random inspections. Basic training should also be introduced as a requirement for a license being issued as suggested in the DETR consultation document on mandatory licensing.

Some responses called for selective licensing as there was concern that powers should not be used to reduce the provision of HMO. Many organisations were in favour of licensing the whole of the Private Rented Sector although a light regulatory system might be more appropriate for those parts of the sector that pose the least risks to residents. It was suggested that any Licensing Authority and any Review panel should be widely representative of the community and include representatives of local Councils. Any inspecting body, however, should be independent of the Licensing Authority.

There was a call for the linking of housing benefit payments to housing standards. A 'Certificate of Market Rent', setting the maximum rent on which to pay housing benefit, should be issued with the granting of a licence. Many organisations also called for an accreditation system and one suggestion stated that something equivalent to a 'star' system should be introduced so that people would know the standard of accommodation and the standard of management they could expect. This could be linked to the amount of housing benefit paid and the level of rent charged.

There was a general welcome that the Rent Register should be transferred from the DSD to the NIHE. There was also a general consensus that the 1978 Rent Order should be reviewed and updated given its cumbersome nature; this work is currently underway.

5.3 Principal Recommendation Houses in Multiple Occupation (HMO) and on Regulation
of the Private Rented Sector (PRS)

The Social Development Committee considers that there should be a transfer of responsibility for this function from the Department of Social Development to the Northern Ireland Housing Executive and that the Housing Executive should be responsible for introducing and operating a licensing scheme.

This would recognise the value of local knowledge for successful interventions in this small, but increasingly dynamic, sector in which many vulnerable tenants are located.

The Committee acknowledges the need for regulation of the sector but contends that regulation must not force people from investing in it. Houses in Multiple Occupation play a vital role in the housing market by providing affordable, flexible accommodation, in areas of high demand where rents are high. In the light of the growing numbers of single person households and changing lifestyle patterns, demand for single person housing is expected to grow in Northern Ireland and Houses in Multiple Occupation will therefore remain a significant feature of the housing market for the foreseeable future. The Committee supports the view that standards of accommodation and housing management are set and that a licensing scheme should be introduced to benefit both the demand side and the supply side of this sector.

5.4 Some Further Ideas to be Considered in Relation to Houses in Multiple Occupation
and the Regulation of the Private Rented Sector

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6.0 RIGHT TO BUY (RTB) FOR HOUSING ASSOCIATION TENANTS

6.1 Background

In Northern Ireland the Housing Executive introduced a Voluntary House Sales Scheme in 1979 and although the formal Right to Buy (RTB) scheme was introduced under the Housing (NI) Order 1983, all sales to tenants of the Housing Executive were completed under the voluntary scheme as opposed to the formal RTB legislation. Both schemes continued to be available to NIHE tenants until the early 1990s when the Housing (NI) Order 1992 replaced the RTB with a provision that the Executive shall prepare a scheme for the sale of houses to secure tenants and submit this to the Department for approval.

In 1996 the Housing Policy Review for Northern Ireland advocated the notion of a single set of rights for tenants to replace the existing uneven arrangements across the social rented sector. In 1998 the then DOE for Northern Ireland issued a housing association circular setting out the terms of the voluntary sales scheme. A Voluntary Purchase Grant was introduced which was payable by the Department to the Association which would compensate the housing association to the full extent of the tenant's discount, and any Housing Association Grant (HAG) which was previously paid was not recouped. Registered Associations have an element of discretion over which properties they decide to sell. Up until April 2000, 214 housing association dwellings have been sold to sitting tenants whilst a total of 91,541 dwellings had been sold by the NIHE under the RTB.

6.1.1 Concerns and Questions

Right To Buy involves two important aspects of tenant/individual well being. It gives the statutory right to purchase the current home from the landlord and this may be a valuable right should the tenant wish to change tenure and not move from the existing dwelling even if there was no discount available. Many people who aspire to owner occupation might not wish to leave their dwelling in order to do so, particularly those who have been living in the community for a number of years. It also gives substantial discounts so that a change of tenure via RTB may imply changes in both the level and form of housing subsidy received.

6.1.2 Why Do We Have Right To Buy?

Right To Buy was introduced to Northern Ireland in line with similar policies introduced in GB. At that time local authorities had been pursuing the policy on a voluntary basis throughout the 1970s because they were concerned that tenants doing well and on the threshold of home ownership would either leave estates or move to the suburbs as they could not buy the house they were in. They were already recognising that in some localised places there was not enough home-ownership to mesh with local market requirements and, for them, selling council houses was a local strategy tool. From an ideological perspective the government pursued the policy in its drive to increase owner occupation as the preferred tenure and to reduce the domination of 'council housing'.

RTB as a policy instrument has been criticised, however, in that it had no area or community rationale and it was a consumer specific policy. There was no real concern in policy circles as to its possible area effects and no attempt had been made to integrate RTB into the framework for the local delivery of policy (such as the setting of area investment priorities). As a result RTB has failed to cohere properly with emerging regeneration policies and approaches. RTB to date can be seen to have been operating in isolation from other policy instruments and in particular cases possibly at variance to them.

6.2 Consultations on Right to Buy for Housing Associations

The NIHE is of the general opinion that similar rights should exist for all social housing tenants in Northern Ireland in whatever form it may take. It believes that arguments against the principles of RTB for housing associations are difficult to sustain. Whilst it acknowledges that the housing association movement has reservations about RTB it would be difficult to allow exemptions over and above those that apply to NIHE sales particularly in those small associations where house sales may threaten their viability. There is a view that the number of housing associations in NI is too large in any event and that some consolidation would assist financial and housing management, and the achievement of performance standards. Consolidation could reduce the impact of exemption from RTB on the basis of size.

The Council for Mortgage Lenders supports the RTB for Housing Executive properties that has contributed to Northern Ireland having the highest rate of owner occupation in the UK at 71.9%. The extension of the RTB to housing associations does raise concerns in that receipts from sales could be insufficient to meet housing associations debts and growing organisations could be transformed into shrinking bodies with poor morale and lack of forward vision. The extension of Voluntary Purchase Grant (VPG) with the RTB may have long term implications as it may be expensive if NIHE levels of discounts offered create high demand for properties. It might force a rethink on the levels of discounts available and the government might be forced to cut VPG at a later date.

The Chartered Institute of Housing recommends the ending of the obligation of the NIHE to sell under the RTB and instead to allow policies for both the Housing Executive and housing associations sales of existing and new dwellings to be decided according to local strategies. Discounts should be determined locally and be subject to a national monetary cap and all social landlords should retain all future RTB receipts for housing purposes. Quota selling should be introduced to preserve certain percentages of particular types of stock. There should be tighter rules on eligibility and exemptions in rural settlements of less than 5,000 population. The financial viability of existing associations should be ensured through exemptions from the scheme for a number of years. Transferable discounts should also be introduced in areas of high demand and the organisation argues that it is inequitable that some tenants paying the same rents for the same types of properties can receive substantially different values for their discounts.

The NI Federation of Housing Associations calls for a new sales policy to, on the one hand meet housing need, but on the other hand, retain sufficient stock for those who cannot, or do not want to, become owner occupiers. A sales scheme should not compromise the financial viability of housing associations nor put the repayment of private loans at risk. The Federation criticises the current scheme for failing to take into account the shortage of housing in high demand areas and abuses in the scheme exacerbated by the very rate of discounts whereby larger discounts are awarded to tenants living in high value areas than those living in low value areas. It also questions the value for money the current scheme gives to the taxpayer.

The NI Tenants Action Project argues that any policy should not limit the rights of tenants nor should it damage the long term viability of the voluntary housing movement. There is a concern that associations will lose their best stock and face a declining asset base. The organisation is also concerned that smaller associations may have to diversify their interests or face being swallowed up by stronger or better resourced associations.

Finally the NI Co-ownership Housing Association (NICHA) believes that there are adequate home buyer initiatives already in place and extending the RTB to housing associations could have implications for the future supply of rented houses particularly in urban areas.

6.3 Principal Recommendation on the Right to Buy for Housing Association Tenants

Whilst the extension of the statutory right to buy to housing association tenants should proceed at this stage, the Committee considers that a complete review of the scheme should be initiated along the lines suggested by the Chartered Institute of Housing.

The Social Development Committee supports the arguments for equality of treatment for all tenants in the social sector; however it is clear that with differential markets some tenants can expect to do much better than others and often at the expense of prospective tenants. Whilst the extension of the statutory right to buy to housing association tenants should proceed at this stage the Committee considers that a complete review of the scheme should be initiated along the lines suggested by the Chartered Institute of Housing. It is one thing to promote self-help but being over generous with discounts could inhibit the ability to cope with rising housing need in some areas. It is important, however, not to have differentials on how individuals are treated in the scheme and there should be one rule for all social housing tenants.

6.4 Some Further Ideas to be Considered in Relation to the Right to Buy for
Housing Association Tenants

It is important that a fair and equitable scheme is introduced for all social landlords and that the amount of subsidy given is no greater than had the tenant stayed in public sector accommodation. It may be that portable discounts could be introduced as an option for those who may want to move to another area for owner occupation but they must also have the option of buying their own home if they wish.

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7.0 LARGE SCALE VOLUNTARY TRANSFERS AND THE ROLE OF THE
NORTHERN IRELAND HOUSING EXECUTIVE

7.1 Background

"Large Scale Voluntary Transfer" (LSVT) is the disposal of local authority housing stock to an existing or new registered Social Landlord - in effect to a landlord who will be subject to regulation.

Current legislation already permits the transfer of social housing stock in Northern Ireland, subject to the agreement of all tenants affected by the transfer. The Social Development Committee understands that the Department for Social Development proposes to legislate to remove a single tenant veto and instead make provision for any transfer to be subject to the agreement of the majority of tenants. This will bring Northern Ireland law into line with the rest of the United Kingdom.

LSVT was initially introduced in Great Britain as a means of attracting private investment to address a £22bn housing repairs backlog. This form of private investment does not impact on government borrowing. More recently Government has set LSVT in the context of:

Government has created a funding pool to finance the LSVT programme. This was essential because some local authority stock has a negative value (the loan debt is greater than the value of the stock). To be admitted to the transfer programme key selection criteria have been set by Government. These cover:

In order to submit an LSVT proposal for inclusion in the programme, a local authority must provide:

Where an overhanging debt would remain, the local authority would seek Government funding through a one-off grant.

Where the receipt from a disposal is greater than the outstanding loan debt, a levy (20%) is payable to the Treasury by the local authority.

Some 400,000 properties have been transferred under LSVT since 1998. The annual transfer programme has been set at 200,000 units against a total local authority stock of over 3 million.

7.1.1 What other approaches are available?

Government has acknowledged that "even at an enhanced rate of stock transfer, the amount of housing remaining in local authority ownership will be significant for many years".

The housing policy statement within the green paper "Quality and Choice: a Decent Home for All" points to a range of options apart from transfer which local authorities may use for future investment in their stock;

In addition some local authorities are investigating the prospect of borrowing against their rental stream (securitisation model) but this has not received DETR approval.

7.1.2 What are the main features of arms length arrangements?

An arms length arrangement means setting up a company (limited by guarantee) controlled by the local authority, to perform its landlord function. In effect the stock remains in the ownership of the local authority, tenants remain secure tenants of the Local Authority and retain the right to buy their property. Provided the company receives a "very good" rating by the Housing Inspectorate it may submit a bid for additional resources.

Government has set up a special fund for such companies that would provide an average £500 per dwelling that could support borrowing of some £5000 per dwelling. The borrowing counts for capital control purposes. In addition capital receipts from disposals would be available to it.

While it is a matter for authorities to determine which functions to delegate to the company, Government guidelines suggest local authorities should retain responsibility for homelessness, housing benefit and some other services which are considered strategic.

7.1.3 What do other Regional Assemblies propose?

The Welsh Assembly has approved "A Framework for a National Housing Strategy for Wales". The framework does not promote a specific option to deal with the £1bn backlog in repairs. Instead it states 'all methods of securing additional investment in local authority housing from private finance sources consistent with current Public Sector Borrowing Requirement rules are being considered'.

In Scotland, between 1997 and 2001, net public sector expenditure on housing increased by 40%. At the same time the Assembly's Housing Green Paper has promoted "community ownership". Community ownership would normally result from the transfer of existing public sector rented housing to alternative community landlords under arrangements which ensure that:-

Around 50,000 properties have been transferred and some local authorities, Glasgow in particular, are currently pursuing the " community ownership" model.

7.1.4 What are key issues for Northern Ireland?

The "tests" for various options including the status quo relate to:-

Since social housing stock is managed by the NIHE as opposed to each local authority, the requirement for this separation could be questioned, particularly given the relative scale of Northern Ireland. In addition it could be argued that the mixed strategic/operational role in Northern Ireland has been successful.

The Board of the Housing Executive provides various forms of representation although it is acknowledged that there is no statutory form of tenant representation. In addition the tenant involvement framework and compacts provide for direct involvement at operational and policy level by tenants (and indeed other residents). Such involvement and participation is also extensive in urban renewal areas and in those neighbourhoods that are subject to estate strategy.

The limited research carried out by the Housing Executive suggests that tenants are satisfied with the Housing Executive as landlord and it may be difficult to secure agreement to transfer.

Existing benchmarks against other housing authorities have shown the Housing Executive to offer highly cost effective services, although with room for improvement. Whether or not alternative structures would provide better services must be seriously questioned particularly since under each of the options, the statutory responsibility for some services would remain with the Housing Executive.

While a case can be made for landlords with limited housing stock (say 12,000) this must be set against the resultant fragmentation of services, complications and confusion in seeking to "join up" services and higher overhead costs. In addition it is noteworthy that amalgamations among smaller Housing Association landlords in England is becoming more common in order to effect economies of scale. The "purchasing power" of larger authorities would therefore be lost under a fragmented arrangement.

There is no doubt this is a key driver for those local authorities with massive improvement and repair backlogs. While backlogs exist in Northern Ireland, continued investment has maintained them at a relatively lower level. Indeed it could be argued that backlogs exist because significant housing funds have been diverted into other strategic non-landlords priorities, not least 'urban renewal' and 'care in the community'. In its broadest sense therefore existing investment is contributing to a wider agenda in Northern Ireland. Nevertheless the requirement to seek additional finance from whatever source remains.

7.2 Consultation on Large Scale Voluntary Transfers and the Role of the Housing Executive

A number of common themes have emerged alongside a number of conflicting responses. The overriding objective was the need to secure the necessary funding to maintain the existing stock in the social housing sector and to ensure that adequate new housing is provided to meets the needs of the Northern Ireland population.

Many of the responses provided a comprehensive background to what has been happening in GB and what other approaches may be available. It would be appropriate to discuss the various responses under the following headings.

Separation of the "Strategic" from the "Operational" role of the NIHE

The NIHE point out that arrangements are different in Northern Ireland than elsewhere in the UK in that local authorities in Northern Ireland do not manage social housing. This requirement could therefore be questioned particularly given the scale of operations throughout the region. The mixed strategic/operational role has been successful in the past.

The Council for Mortgage Lenders (CML) also points to the fact that Northern Ireland is different to elsewhere in the UK and that this must be taken into consideration. The NIHE, rather than Local Authorities, owns all non-housing association social housing properties and it has a good track record as a housing provider. The CML is concerned that a change to the status of the NIHE might raise serious questions as to the accountability of the NIHE and its ability to carry out its strategic functions.

The NI Federation of Housing Associations (NIFHA), however, argues that this strategic role should be transferred to the Department for Social Development leaving the NIHE to concentrate on its role of landlord, enabler of housing developments by others, provider of grants to the private sector and as an energy conservation authority, and as an agent for the administration of vital public services including Housing Benefit and the proposed Supporting People Fund.

The Northern Ireland Tenants Action Project (NITAP) sees the benefit of separating the regulatory function of social housing from the delivery mechanism. It also believes that LSVT might pave the way for greater tenant involvement and control through the creation of management and other co-operatives where neighbourhood services are effectively managed by the people who live there.

Transfer of stock to alternative landlords and attracting private finance

The Housing Executive seriously question whether or not the setting up of alternative structures would provide better services particularly given that the statutory responsibility of some services would remain with the Housing Executive under each of the options put forward. The organisation argues that existing benchmarks against other housing authorities have shown that the Executive offers highly cost effective services, although there is room for improvement. Whilst a case can be made for landlords with limited stock this must be set against the resultant fragmentation of services, complications and confusion in seeking to 'join up services' and higher overhead costs. It is becoming more common in England for amalgamations of smaller housing associations in order to effect economies of scale and the 'purchasing power' of larger authorities would be lost under a fragmented arrangement.

The Chartered Institute of Housing developed a number of models that exist in GB including the creation of a Public Corporation with more borrowing freedom, the creation of a "big" housing association, the creation of a number of smaller housing associations, the setting up of arms length companies or a mixed strategy which could include competition.

The Council for Mortgage Lenders (CML) argues that LSVTs have a number of advantages including the levering of private finance to undertake much needed improvements, circumventing the Public Sector Borrowing Requirement (PSBR) and supplementing inadequate public investment. Transfers can mean that public money is protected within a not for profit, regulated sector. Tenant participation is maximised with a typical Registered Social Landlord (RSL) having one-third tenant representation on their management boards. Local Authorities also have board representation which maintains local accountability and allows the organisation to be locally focussed. The CML argues that there are fewer immediate reasons for introducing private finance to Northern Ireland than there are in the rest of the UK but there are reasons to open up access to private finance in the longer term. The organisation argues that, in the absence of an appropriate alternative model, serious consideration should be given to LSVT as a means to securing the longer term future of social housing in Northern Ireland.

The NI Federation of Housing Associations considers that it is right to transfer NIHE stock to socially motivated bodies whose borrowing falls outside of PSBR rules. This would release very large sums of money from the Assembly's budget for re-investment in other areas of housing policy and/or programmes contributing to social well-being. It would offer more choice for tenants and enable NIHE tenants to get their homes upgraded earlier than would otherwise be the case, whilst not disadvantaging other tenants. It could open up new or enhanced opportunities to support community development, tenant involvement and neighbourhood regeneration.

NITAP recognises the advantages of transferring stock to alternative organisations in that it enables public funding to be extended by accessing private finance. It also believes that alternative providers will respond more directly to the needs of tenants. It lists many disadvantages including the possibility that alternative landlords may not have the capacity to deliver the landlord function as effectively as the NIHE. It commends the NIHE for the way it has delivered services uniformly throughout the region and the way it has brought the customer closer to decisions through consumer panels. It argues that the housing market may become less accountable, and accessible and tenants rights may be affected by transfer. As associations grow, the experience of smaller associations may be lost and there is a danger that the best stock will be transferred, leaving a residual public stock, marginalized and facing further under-investment.

Northern Ireland Co-ownership Housing Association (NIHCA) argues that any options for LSVT should not adversely impact on established performance standards for social housing management, mechanisms for control and accountability, policy and programme delivery and the relative situations of individual tenants.

7.3 Impact of LSVT on the Role of the Housing Executive

It is the view of the Social Development Committee that the future role of the Executive will be influenced by a variety of factors other than LSVT. These include:-

However it is clear that there are key functions/activities which are required to be delivered within the housing system in Northern Ireland. These are:-

Strategic Role

Investment Role

Regulation Role

Provider Role

7.4 Conclusion

In conclusion therefore LSVT is one model, amongst others, which have emerged since 1995 in GB. It is clear that in both England and in the devolved administrations in Wales and Scotland, other models are being pursued. The conditions that exist in Great Britain in terms of substantial investment backlogs do not exist in Northern Ireland where the social rented stock is in relatively good condition. However there is a backlog but more importantly there is a need for continued reinvestment in stock. Whether or not this can be funded from within public sector resources will be a key determinant of the best model.

The Social Development Committee notes the submission of the NIHE and is inclined to agree that the existence of a strong single strategic housing authority for the Region brings many strengths, economies of scale and accountability, which could be easily lost in the fragmented structures which LSVT could produce. It is also becoming apparent that the challenge of tackling urban regeneration and neighbourhood renewal and the mix of public and private investment required would be difficult to achieve in the type of fragmented structure that might arise from LSVT.

7.5 Principal Recommendation on Large Scale Voluntary Transfers and the Role of the
Housing Executive

The Social Development Committee believes that there is a need for a body to take a strategic role in relation to housing provision in Northern Ireland. The Committee recommends that the Northern Ireland Housing Executive should have an enhanced strategic role and that the proposed Housing Bill should address the conflict between such a role and the part the Housing Executive plays as the largest social landlord in Northern Ireland.

7.6 Some Ideas for Further Consideration in Relation to Large Scale Voluntary Transfers and the
Role of the Housing Executive

The Department should confine itself to policy making and financial control. Those areas where local market conditions have to be assessed should be left to the Housing Executive. The Housing Executive should continue to commission and carry out research, be involved in the development of District Plans, and more comprehensively the regulation and scrutiny of other housing providers. The Housing Executive has the experience and staff to do so and this is not currently available to the Department.

The Housing Executive's function as a social landlord is not likely to be readily taken up by others.

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Minutes of Proceedings
Relating to the Report

THURSDAY, 11 JANUARY 2001.
ROOM 144, PARLIAMENT BUILDINGS.

Present: Mr F Cobain (Chairman)
Ms M Gildernew (Deputy Chairperson)
Sir John Gorman
Mr B Hutchinson
Mr D McClarty
Mr M Robinson
Mr J Tierney
Mr S Wilson

Apologies: Mr G Kelly
Mr D O'Connor
Mr E ONeill

In Attendance: Mr G Martin
Mr K Barker
Mr L Hart
Ms V Surplus

Mr Cobain took the chair at 2.10 p.m.

5. Future Work Programme

(i) The Committee agreed to invite Departmental officials to the next meeting to provide a broad outline of the content of the proposed Housing Bill to assist the Committee to make an informed decision on suitable topics for inclusion in the work programme.

MR F COBAIN
COMMITTEE CHAIRMAN

[Extract]

THURSDAY, 18 JANUARY 2001.
ROOM 144, PARLIAMENT BUILDINGS.

Present: Mr F Cobain (Chairman)
Sir John Gorman
Mr B Hutchinson
Mr D McClarty
Mr D O'Connor
Mr E ONeill
Mr M Robinson
Mr J Tierney
Mr S Wilson

Apologies: Ms M Gildernew (Deputy Chairperson)
Mr G Kelly

In Attendance: Mr G Martin
Mr K Barker
Mr L Hart
Ms V Surplus

Mr Cobain took the chair at 2.10 p.m.

2. Matters Arising

(i) At last week's meeting the Committee agreed to ask officials to attend to-day's meeting to provide a broad outline of the content of the Housing Bill. The Minister has written to say that there are difficulties regarding the Housing Bill and it is felt that officials would not be able to add to the Committee's understanding of the present position and they will not be attending.

Public session

5. Forthcoming Housing Bill

(i) Sir John Gorman wished to outline some of his observations regarding the future of housing in Northern Ireland;

To achieve the above Sir John felt that one approach would be to transfer assets to a new body which could be called, for example, the Northern Ireland Housing and Regeneration Trust. A Trust board would be set up which would consist of politicians, tenants and independent people of competence. The Trust would be operationally independent but would be controlled by the Minister and Committee for Social Development. This new body would be able to obtain private finance, and by delegation, assess need and homelessness and housing benefit.

The NIHE would retain responsibility for policy on compulsory requisition, grants and energy conservation which help contain Departmental running costs, reduces legal costs and regulates performance of landlords (private Housing Associations).

(ii) The Committee considered the Ministers written response of 17 January regarding the forthcoming Housing Bill and agreed to ask Departmental officials to attend next week's meeting to explain the policy intentions behind the following legislative proposals;

The Committee further agreed that following the explanation from Departmental officials the Committee would select topics and set terms of reference for inclusion in the future work programme.

MR F COBAIN
COMMITTEE CHAIRMAN

[Extract]

THURSDAY, 25 JANUARY 2001.
ROOM 144, PARLIAMENT BUILDINGS.

Present: Mr F Cobain (Chairman)
Ms M Gildernew (Deputy Chairperson)
Mr B Hutchinson
Mr E ONeill
Mr M Robinson
Mr J Tierney
Mr S Wilson

Apologies: Sir John Gorman
Mr G Kelly
Mr D McClarty
Mr D O'Connor

In Attendance: Mr G Martin
Mr S Graham
Mr K Barker
Mr L Hart
Ms V Surplus

Mr Cobain took the chair at 2.14 p.m.

Private Session

6. Proposed Housing Bill

The Chairman welcomed the officials to the meeting at 3.09pm.

DSD officials: Mr David Crothers
Mr George Davidson

The discussions are recorded separately in verbatim minutes of evidence.

The Chairman thanked the officials and they left at 3.50 p.m.

Private Session

Following discussions with the researchers and the explanation from the officials of the policy intentions behind the following legislative proposals the Committee agreed to investigate;

The Committee further agreed that the Clerk and the researchers should agree draft Terms of Reference for the Committee to consider at next week's meeting.

MR F COBAIN
COMMITTEE CHAIRMAN

[Extract]

THURSDAY, 1 March 2001.
ROOM 144, PARLIAMENT BUILDINGS.

Present: Mr F Cobain (Chairman)
Sir John Gorman
Mr B Hutchinson
Mr M Robinson
Mr J Tierney

Apologies: Mr D O'Connor
Mr E ONeill

In Attendance: Mr S Graham
Mr K Barker
Mr L Hart
Ms V Surplus

Mr Cobain took the chair at 2.11 p.m.

Private Session

8. Draft Terms of Reference and Timetable for Housing Inquiry

The Committee noted the contents of a paper, tabled by the Clerk, which included a draft timetable. The Committee agreed that consideration should be given to inviting an academic to assist in carrying out the necessary work and further agreed that the Clerk should investigate how best to take the matter forward. Mr J Tierney suggested that the Committee include 'disability' as an additional topic in their inquiry into Housing in Northern Ireland. The Committee agreed that the inquiry should proceed into the original six topics as previously agreed and that consideration could be given to including 'disability' at a later date.

MR F COBAIN
COMMITTEE CHAIRMAN

[Extract]

THURSDAY, 15 March 2001.
ROOM 144, PARLIAMENT BUILDINGS.

Present: Mr F Cobain (Chairman)
Sir John Gorman
Mr B Hutchinson
Mr E ONeill
Mr M Robinson
Mr J Tierney
Mr S Wilson

Apologies: Ms M Gildernew (Deputy Chairperson)
Mr G Kelly
Mr D O'Connor

In Attendance: Mr S Graham
Mr K Barker
Mr L Hart
Ms V Surplus

Mr Cobain took the chair at 2.08 p.m.

Private Session

2. Matters Arising

The Committee agreed to consider Housing as agenda item 6.

6. Housing - Draft Terms of Reference & Timetable

The Committee noted that the Clerk is continuing to discuss with the Research Department the practical arrangements to progress this investigation. The Committee agreed that Terms of Reference in respect of topics 3 and 4 i.e. 'Large Scale Voluntary Transfers and the NIHE' and 'Rights of Housing Association Tenants to Buy Their Properties' and a timetable for the completion of the investigation in respect of topics 1 to 4 should be tabled by the Clerk at next week's meeting.

MR F COBAIN
COMMITTEE CHAIRMAN

[Extract]

THURSDAY, 22 March 2001.
ROOM 144, PARLIAMENT BUILDINGS.

Present: Mr F Cobain (Chairman)
Sir John Gorman
Mr B Hutchinson
Mr D O'Connor
Mr E ONeill
Mr M Robinson
Mr J Tierney
Mr S Wilson

Apologies: Ms M Gildernew (Deputy Chairperson)
Mr G Kelly

In Attendance: Mr S Graham
Mr K Barker
Mr L Hart
Ms V Surplus

Mr Cobain took the chair at 2.05 p.m.

Private Session

6. Housing - Draft Terms of Reference & Timetable

The Committee noted the paper tabled by the Clerk. The Committee agreed that;

should be the subject of a single report and the Committee would conduct two further and separate inquiries into 'Anti-Social Behaviour' and 'Homelessness'.

The Committee further agreed the timetable for the completion of this report, the narrow Terms of Reference for items 3 and 4 and in the interests of keeping to the timetable that, rather than going for formal public consultation letters to selected organisations will issue on 26 March with a deadline of 20 April for replies.

MR F COBAIN
COMMITTEE CHAIRMAN

[Extract]

THURSDAY, 29 March 2001.
ROOM 144, PARLIAMENT BUILDINGS.

Present: Mr F Cobain (Chairman)
Ms M Gildernew (Deputy Chairperson)
Sir John Gorman
Mr G Kelly
Mr M Robinson
Mr S Wilson

Apologies: Mr T Hamilton
Mr B Hutchinson
Mr E ONeill
Mr J Tierney

In Attendance: Mr S Graham
Mr K Barker
Mr L Hart
Ms V Surplus

Mr Cobain took the chair at 2.20 p.m.

Private Session

6. Housing - Private Sector Renewal and Houses in Multiple Occupation
(Regulation of the Private Rented Sector)

In attendance: Eileen Regan (Senior Researcher)
Malachy Finnegan (Researcher)

The Chairman welcomed the Researchers to the meeting at 4.00 p.m. after which Eileen Regan made a presentation. A summary of the presentation was circulated to the Members. After discussion the Committee agreed to consider the Research papers further at its next meeting, on Tuesday 3 April, if necessary, and the Researchers were asked to be in attendance. The Chairman thanked the Researchers and they left at 4.15 p.m.

MR F COBAIN
COMMITTEE CHAIRMAN

[Extract]

THURSDAY, 5 April 2001.
ROOM 144, PARLIAMENT BUILDINGS.

Present: Mr F Cobain (Chairman)
Mr B Hutchinson
Mr E ONeill
Mr M Robinson
Mr J Tierney
Mr S Wilson

Apologies: Ms Michelle Gildernew (Deputy Chairperson)
Sir John Gorman

In Attendance: Mr S Graham
Mr K Barker
Mr L Hart
Ms V Surplus

Mr Cobain took the chair at 2.20 p.m.

Private Session

5. Housing

(i) Private Sector Renewal and Houses in Multiple Occupation and the Regulation of the Private Rented Sector

In attendance: Eileen Regan (Senior Researcher)
Malachy Finnegan (Researcher)

The Chairman welcomed the Researchers to the meeting at 3.30 p.m. Following the presentation of background research papers by Eileen Regan last week in relation to Private Sector Renewal, Malachy Finnegan made a presentation of background research papers in relation to Houses in Multiple Occupation and the Regulation of the Private Rented Sector. A summary of the presentation was circulated to the Members. After discussion the Committee agreed to note the content of the research background papers and agreed that the Clerk should investigate how the Committee can consider further if proposals in relation to Houses of Multiple Occupation will impact on planning law.

The Chairman thanked the Researchers and they left at 4.15 p.m.

(ii) Consideration and selection of an Academic

The Committee considered the list of Academics provided by Research and Library Services. The Committee expressed concern that there was no Assembly process or current guidelines in existence in relation to the selection process and agreed that the Clerk should write to the Commission in those terms. In these circumstances the Committee, taking into account the time frame for its Report, considered the information supplied by the Academics, paying particular attention to applicants on the basis of experience, cost, availability and local knowledge.

It was proposed by Mr E ONeill and seconded by Mr B Hutchinson that Mr Paddy Gray be appointed. This was unanimously agreed by the Committee.

(iii) Consider list of witnesses to give oral evidence

The Committee considered the list of respondees in relation to Private Sector Renewal and Houses in Multiple Occupation and the Regulation of the Private Rented Sector (Topics 1 & 2) and the selected organisations in relation to Large Scale Voluntary Transfers and the NIHE and Rights of Housing Association Tenants to Buy Their Properties (Topics 3 & 4). The Committee agreed to invite the following organisations to give oral evidence on the following;

Topics 1 & 2

Chartered Institute of Environmental Health

National Union of Students (UK) and the Union of Students in Ireland

Topics 3 & 4

Northern Ireland Tenants Action Project

Housing Rights Service

Northern Ireland Co-Ownership Housing Association Limited

Council of Mortgage Lenders

Topics 1, 2, 3 & 4

Chartered Institute of Housing In Northern Ireland

The Northern Ireland Federation of Housing Associations

Northern Ireland Housing Executive.

MR F COBAIN
COMMITTEE CHAIRMAN

[Extract]

THURSDAY, 26 April 2001.
ROOM 144, PARLIAMENT BUILDINGS.

Present: Mr F Cobain (Chairman)
Sir John Gorman
Mr B Hutchinson
Mr G Kelly
Mr D O'Connor
Mr E ONeill

Apologies: Ms Michelle Gildernew (Deputy Chairperson)
Mr M Robinson
Mr J Tierney

In Attendance: Mr S Graham
Mr K Barker
Mr L Hart
Ms V Surplus

Mr Cobain took the chair at 2.10 p.m.

Private Session

5. Housing Inquiry

The Committee noted the research papers tabled in relation to Large Scale Voluntary Transfers and the NIHE and the Rights of Housing Association Tenants to Buy their own Properties and that the Researchers would be speaking to the papers at the extraordinary meeting of the Committee on Tuesday 1 May.

The Committee noted the content of the folder tabled containing the written evidence and synopsis of comments in relation to Private Sector Renewal and Houses of Multiple Occupation and the Private Rented Sector. The Committee further noted that the written evidence and synopsis of comments in relation to Large Scale Voluntary Transfers and the NIHE and the Rights of Housing Association Tenants to Buy would be issued to Members on Friday 27 April. The Committee agreed to study their content in advance of the oral evidence sessions scheduled for Tuesday 1, Thursday 3 and Tuesday 8 May.

MR F COBAIN
COMMITTEE CHAIRMAN

[Extract]

Tuesday, 1 may 2001.
ROOM 135, PARLIAMENT BUILDINGS.

Present: Mr F Cobain (Chairman)
Ms Michelle Gildernew (Deputy Chairperson)
Mr T Hamilton
Mr B Hutchinson
Mr E ONeill
Mr M Robinson
Mr J Tierney

Apologies: Sir John Gorman
Mr D O'Connor

In Attendance: Mr S Graham
Mr K Barker
Mr L Hart
Ms V Surplus

Mr Cobain took the chair at 1.05 p.m.

Public Session

The Clerk reported that Mr B Hutchinson had indicated that he would join the meeting following his attendance at the regular Business Committee session. The Clerk further reported that Mr B Hutchinson wished to declare his interest as a member of Filor Housing Association.

1. Housing Inquiry - Oral Evidence

Chartered Institute of Environmental Health

The Chairman welcomed the representatives of the Chartered Institute of Environmental Health to the meeting at 1.05 p.m.

In attendance: Mr Dan Kennedy
Mr John Corkey
Ms Siobhan Toland

The discussions are recorded separately in verbatim minutes of evidence. The Chairman thanked the representatives and they left the meeting at 1.30 p.m.

National Union of Students (UK) and the Union of Students in Ireland

The Chairman welcomed the representatives of the National Union of Students (UK) and the Union of Students in Ireland to the meeting at 1.30 p.m.

In attendance: Mr Peter O'Neill
Mr Brian Slevin

The discussions are recorded separately in verbatim minutes of evidence. The Chairman thanked the representatives and they left the meeting at 1.55 p.m.

Private Session

Large Scale Voluntary Transfers and The Rights of Housing Association Tenants to Buy their Properties

In attendance: Eileen Regan (Senior Researcher)
Malachy Finnegan (Researcher)

The Chairman welcomed the Researchers to the meeting at 2.14 p.m. Malachy Finnegan made a presentation in relation to Large Scale Voluntary Transfers and Eileen Regan made a presentation in relation to The Rights of Housing Association Tenants to Buy their Properties. A Summary of the presentations were circulated to the Members. After discussion the Committee agreed to note the content of the research background papers and the Chairman thanked the Researchers and they left at 2.50 p.m.

Public Session

The Northern Ireland Tenant Action Project

The Chairman welcomed the representatives of the Northern Ireland Tenant Action Project to the meeting at 2.50 p.m.

In attendance: Mr Murray Watt
Ms Fiona Stewart

The discussions are recorded separately in verbatim minutes of evidence. The Chairman thanked the representatives and they left the meeting at 3.15 p.m.

The Northern Ireland Co-ownership Housing Association Limited

The Chairman welcomed the representatives of the Northern Ireland Co-ownership Housing Association Limited to the meeting at 3.15 p.m.

In attendance: Mr Kevin Butler
Ms Lynn Patterson

The discussions are recorded separately in verbatim minutes of evidence. The Chairman thanked the representatives and they left the meeting at 3.25 p.m.

The Council of Mortgage Lenders

The Chairman welcomed the representatives of the Council of Mortgage Lenders to the meeting at 3.35 p.m.

In attendance: Mr Dan Corr
Mr Gary Mills
Mr Andrew Heywood
Ms Sandra McCormick

The discussions are recorded separately in verbatim minutes of evidence. The Chairman thanked the representatives and they left the meeting at 4.10 p.m.

MR F COBAIN
COMMITTEE CHAIRMAN

[Extract]

Thursday, 3 may 2001.
ROOM 144, PARLIAMENT BUILDINGS.

Present: Mr F Cobain (Chairman)
Sir John Gorman
Mr T Hamilton
Mr B Hutchinson
Mr G Kelly
Mr D O'Connor
Mr E ONeill
Mr M Robinson
Mr J Tierney
Mr S Wilson

Apologies: Ms M Gildernew (Deputy Chairperson)

In Attendance: Mr S Graham
Mr D Martin
Mr K Barker
Mr L Hart
Ms V Surplus

Mr Cobain took the chair at 2.10 p.m.

Public Session

7. Housing Inquiry - Oral Evidence

The Committee noted the content of further papers in relation to the Housing Inquiry containing further submissions, a further synopsis and a revised timetable. The Committee agreed to consider their content in advance of the oral evidence session scheduled for Tuesday 8 May.

Mr Hutchinson declared his interest as a member of Filor Housing Association.

Chartered Institute of Housing in Northern Ireland

The Chairman welcomed the representatives of the Chartered Institute of Housing in Northern Ireland to the meeting at 3.25 p.m.

In attendance: Mr Kieran Walsh, Mr John Perry, Ms Janet Hunter, Mr John Gartland

The discussions are recorded separately in verbatim minutes of evidence. The Chairman thanked the representatives and they left the meeting at 4.00 p.m.

The Northern Ireland Federation of Housing Associations

The Chairman welcomed the representatives of the Northern Ireland Federation of Housing Associations to the meeting at 4.05 p.m.

In attendance: Ms Jean Fulton, Mr Chris Williamson, Mr Gerry Kelly, Mr Graham Merton

The discussions are recorded separately in verbatim minutes of evidence. The Chairman thanked the representatives and they left the meeting at 4.20 p.m.

MR F COBAIN
COMMITTEE CHAIRMAN

[Extract]

Tuesday, 8 may 2001.
ROOM 152, PARLIAMENT BUILDINGS.

Present: Mr F Cobain (Chairman)
Sir John Gorman
Mr T Hamilton
Mr B Hutchinson
Mr D O'Connor
Mr E ONeill
Mr J Tierney

Apologies: Mr M Robinson

In Attendance: Mr D Martin
Mr K Barker
Mr L Hart

Mr Cobain took the chair at 1.02 p.m.

Public Session

Mr B Hutchinson declared his interest as a member of the Filor Housing Association.

1. Housing Inquiry - Oral Evidence

Northern Ireland Housing Executive

The Chairman welcomed the representatives of the Northern Ireland Housing Executive to the meeting at 1.05 p.m.

In attendance: Mr Paddy McIntyre (Chief Executive)
Mr Mike Shanks
Mr Colm McCaughley

The discussions are recorded separately in verbatim minutes of evidence. The Chairman thanked the representatives and they left the meeting at 2.30 p.m.

Belfast City Council

The Chairman welcomed the representatives of the Belfast City Council to the meeting at 2.40 p.m.

In attendance: Mr W Francey
Mr A Hassard

The discussions are recorded separately in verbatim minutes of evidence. The Chairman thanked the representatives and they left the meeting at 3.00 p.m.

MR F COBAIN
COMMITTEE CHAIRMAN

[Extract]

Thursday, 10 may 2001.
ROOM 144, PARLIAMENT BUILDINGS.

Present: Mr F Cobain (Chairman)
Sir John Gorman
Mr T Hamilton
Mr B Hutchinson
Mr D O'Connor
Mr E ONeill
Mr J Tierney

Apologies: Mr M Robinson
Mr G Kelly

In Attendance: Mr D Martin
Mr K Barker
Mr L Hart
Ms V Surplus

Mr Cobain took the chair at 2.15 p.m.

Private Session

3. Housing Inquiry - Houses In Multiple Occupation (HMO's) and Planning Law -
Presentation by Assembly Researcher

In attendance: Eileen Regan (Senior Researcher)

The Chairman welcomed the Researcher to the meeting at 2.30 p.m. after which she made a presentation. A summary of the presentation was circulated to the Members. After discussion the Committee agreed to note its content and the Chairman thanked the Researcher for her presentation and she left at 2.41 p.m.

6. Any Other Business

The Committee agreed that subject to the availability of the specialist adviser in relation to the Housing Inquiry, Mr Paddy Gray, a special meeting should be arranged for lunchtime on Monday 21 June.

MR F COBAIN
COMMITTEE CHAIRMAN

[Extract]

Thursday, 17 may 2001.
ROOM 144, PARLIAMENT BUILDINGS.

Present: Mr F Cobain (Chairman)
Sir John Gorman
Mr T Hamilton
Mr G Kelly
Mr E ONeill Mr J Tierney
Mr S Wilson

Apologies: Ms M Gildernew (Deputy Chairperson)
Mr D O'Connor
Mr M Robinson

In Attendance: Mr D Martin
Mr K Barker
Mr L Hart
Ms V Surplus

Mr Cobain took the chair at 2.05 p.m.

Private Session

2. Matters Arising

The Committee, after discussion, agreed to meet on Monday 21 May at 1.00 p.m. when Mr Paddy Gray the Specialist Adviser in relation to the Housing Inquiry will outline his initial views on key issues relating to the inquiry.

Public Session

5. Memorandum on the Proposed Housing Bill

The Committee noted the content of the draft memorandum of the Housing Bill and agreed that the Committee should complete its report on Housing and then ask officials to attend a meeting before the summer recess to discuss the memorandum.

MR F COBAIN
COMMITTEE CHAIRMAN

[Extract]

MONDAY, 21 may 2001.
ROOM 144, PARLIAMENT BUILDINGS.

Present: Mr F Cobain (Chairman)
Sir John Gorman
Mr B Hutchinson
Mr E ONeill
Mr M Robinson
Mr J Tierney
Mr S Wilson

Apologies: None

In Attendance: Mr S Graham
Mr D Martin
Mr K Barker
Mr L Hart
Ms V Surplus

Mr Cobain took the chair at 1.06 p.m.

Private Session

5. Housing Inquiry

(i) Paper from Assembly Research Department on the DETR Consultation Paper "Private Sector Housing Renewal"

The Committee noted the research papers tabled in relation to the DETR Consultation Paper "Private Sector Housing Renewal".

(ii) Discussion with Paddy Gray, Specialist Adviser to the Housing Inquiry

Those in attendance: Mr Paddy Gray - Senior Lecturer in Housing - University of Ulster

The Chairman welcomed Mr Gray to the meeting at 1.10 p.m. after which Mr Gray made a presentation of his initial thoughts in relation to the Housing Inquiry a copy of which was circulated to the members. The Chairman thanked Mr Gray and he left at 2.05 p.m.

MR F COBAIN
COMMITTEE CHAIRMAN

[Extract]

Thursday, 14 June 2001.
ROOM 144, PARLIAMENT BUILDINGS.

Present: Mr F Cobain (Chairman)
Mr J Tierney
Mr D O'Connor
Mr S Wilson
Mr B Hutchinson

Apologies: Mr E ONeill

In Attendance: Mr S Graham
Mr L Hart
Ms V Surplus

Mr Cobain took the chair at 2.24 p.m.

5. Housing Inquiry

The Committee decided to defer consideration of the draft Report until 21 June and noted that this would result in a delay in publication. The Committee agreed that further discussion might be required at meetings between 21 June and 5 July.

MR F COBAIN
COMMITTEE CHAIRMAN

[Extract]

Thursday, 21 June 2001.
ROOM 144, PARLIAMENT BUILDINGS.

Present: Mr F Cobain (Chairman)
Ms M Gildernew (Deputy Chairperson)
Mr J Tierney
Mr E ONeill
Sir J Gorman
Mr T Hamilton
Mr S Wilson
Mr B Hutchinson

Apologies: Mr D O'Connor
Mr M Robinson
Mr G Kelly

In Attendance: Mr S Graham
Mr L Hart
Ms V Surplus
Miss F Douglas

Mr Cobain took the chair at 2.12 p.m.

6. Housing Inquiry

The Committee agreed to hold a special Committee meeting on Monday 25 June and defer discussion on the Housing Inquiry until then.

MR F COBAIN
COMMITTEE CHAIRMAN

[Extract]

MONDAY, 25 June 2001.
ROOM 144, PARLIAMENT BUILDINGS.

Present: Mr F Cobain (Chairman)
Ms M Gildernew (Deputy Chairperson)
Mr J Tierney
Mr D O'Connor
Sir J Gorman
Mr S Wilson
Mr M Robinson
Mr B Hutchinson

Apologies: Mr T Hamilton

In Attendance: Mr S Graham
Mr L Hart
Ms V Surplus
Miss F Douglas

Mr Cobain took the chair at 12.16 p.m.

Private Session

1. Housing Inquiry

The Committee considered its first reading of the draft Housing Inquiry Report.

MR F COBAIN
COMMITTEE CHAIRMAN

[Extract]

Thursday, 5 July 2001.
ROOM 144, PARLIAMENT BUILDINGS.

Present: Ms M Gildernew (Deputy Chairperson)
Mr J Tierney
Mr D O'Connor
Mr E ONeill
Mr T Hamilton
Mr S Wilson
Mr M Robinson
Mr G Kelly
Mr B Hutchinson

Apologies: Mr F Cobain (Chairman)
Sir J Gorman

In Attendance: Mr S Graham
Mr L Hart
Ms V Surplus
Miss F Douglas

Ms Gildernew took the chair at 2.14 p.m.

5. Housing Inquiry

The Committee began a final reading of the Housing Report. However, as some Members expressed concern over certain elements within the Report, it was agreed to defer the final reading until after the Summer Recess. The Clerk was asked to make arrangements for a special meeting.

MS M GILDERNEW
COMMITTEE DEPUTY CHAIRPERSON

[Extract]

Thursday, 6 september 2001
ROOM 144, PARLIAMENT BUILDINGS

Present: Mr F Cobain (Chairman)
Ms M Gildernew
Sir J Gorman
Mr T Hamilton
Mr M Robinson
Mr J Tierney
Mr S Wilson

Apologies: Mr G Kelly
Mr B Hutchinson
Mr E ONeill

In Attendance: Mr S Graham
Mr L McLernon
Mrs J McMurray
Ms V Surplus
Miss F Douglas

Mr Cobain took the chair at 2.09 p.m.

Private Session

7. Housing Inquiry

A revised section on 'Larger Scale Voluntary Transfer' was circulated. Members agreed to consider it and forward any comments to the Clerk by Tuesday 11 September.

MR F COBAIN
COMMITTEE CHAIRMAN

[Extract]

Thursday, 13 september 2001
ROOM 144, PARLIAMENT BUILDINGS

With the agreement of the Members, the meeting was rescheduled to commence at 3.15 p.m., following the Assembly Plenary sitting.

Present: Mr F Cobain (Chairman)
Ms M Gildernew (Deputy Chairperson)
Mr B Hutchinson
Mr D O'Connor
Mr T Hamilton
Mr M Robinson
Mr J Tierney
Mr S Wilson

Apologies: Sir John Gorman
Mr E ONeill

In Attendance: Mr S Graham
Mr L McLernon
Miss F Douglas

Mr Cobain took the chair at 3.27 p.m.

Private Session

7. Housing Inquiry - Committee's Report

The Chairman confirmed that no further comments had been received from the Members in relation to Large Scale Voluntary Transfer. In the Circumstances, the Committee instructed that the Clerk should complete drafting of the Committee's report and make arrangements for it to be considered at a special meeting.

MR F COBAIN
COMMITTEE CHAIRMAN

[Extract]

Thursday, 18 October 2001
ROOM 144, PARLIAMENT BUILDINGS

Present: Mr F Cobain (Chairman)
M Gildernew (Deputy Chairperson)
Sir J Gorman
Mr T Hamilton
Mr B Hutchinson
Mr S Wilson
Mr M Robinson
Mr J Tierney
Mr D O'Connor

Apologies: Mr G Kelly
Mr E ONeill

In Attendance: Mr S Graham
Mr L McLernon
Miss F Douglas

Mr Cobain took the chair at 2.08 p.m.

5. Report on Housing in Northern Ireland

Members agreed to conduct a final reading of the Housing Report after all the other business before the Committee was disposed of.

5. Report on Housing in Northern Ireland (continued)

The Committee conducted a final reading of its Report on Housing in Northern Ireland as follows

Section 1 deferred.

Section 2 agreed, subject to the correction of minor typographical errors.

Section 3 agreed, subject to the inclusion of a new, penultimate sentence, in the second paragraph, about the role of the Northern Ireland Housing Executive.

Section 4 agreed.

Section 5 agreed, subject to the inclusion of additional wording, in the principal recommendation, about the introduction and operation of a 'licensing scheme'.

Mr T Hamilton left the meeting at 3.00 p.m.

Section 6 agreed.

Section 7 agreed, subject to re-wording of the principal recommendation.

Ms M Gildernew left the meeting at 3.28 p.m.

The Committee further agreed the annexes to the Report and then returned to Section 1; it was agreed, subject to consequential amendments arising from the Committee's consideration of Sections 5 and 7.

Resolved: That the Draft Report should be ordered for printing, subject to amendments.

MR F COBAIN
COMMITTEE CHAIRMAN

[Extract]

Top

MINUTES OF EVIDENCE
RELATING TO THE REPORT

MINUTES OF EVIDENCE

Thursday 25 January 2001

Members present:

Mr Cobain (Chairperson)

Ms Gildernew (Deputy Chairperson)

Mr B Hutchinson

Mr ONeill

Mr M Robinson

Mr Tierney

Mr S Wilson

Witnesses:

Mr David Crothers ) Departmental Officials

Mr George Davidson )

1.

The Chairperson: Good afternoon. We are discussing the proposed mythical Housing Bill - it seems as though everyone has seen it except us. We have asked you to come and discuss some of the specific issues that the Minister wrote to us about in September 2000. Perhaps you would run through a number of the areas in his letter for us, particularly paragraphs 2, 3, 5 6, 12, 14(iii) and 15. We would appreciate your thoughts on these areas. We intend to do some research and it is important that we have some idea of the Department's views. We have selected some issues that we think are important.

2.

Mr Crothers: Mr Davidson will deal with some of the paragraphs and I will deal with the others. The first section relates to "Houses in Multiple Occupation (HMOs)" which Mr Davidson will explain.

3.

Mr Davidson: HMOs are part of the private rented sector, which is the smallest sector that we have. However, they suffer quality problems, both in terms of management and in the physical nature of the properties. They comprise properties generally used for students and other young people, and the separate living arrangements, which apply in them, bring certain unique problems.

4.

The policy objectives are to improve quality and safety, bringing properties into the scope of the work of statutory agencies. Many properties that are currently HMOs do not fall within the legislative definition and are, therefore, outside the scope of the work of these agencies.

5.

Our first proposal is to amend the definition of an HMO in the legislation, so that any property shared by people - a property shared by people who are not part of what we would regard as a normal family - will come within the HMO definition. Some case law in England has rendered HMOs outside the scope of existing legislation because by showing that certain groups of people, while not - shall we say - blood relatives, have come to arrangements whereby one pays the rent, one does the shopping, one does the cleaning. They are classed as a household and that, unfortunately, takes the property outside the current HMO definition.

6.

We are trying to correct that by defining a HMO as a property which is shared by people who are not a normal blood family. That will come within the purview of the Housing Executive and the Fire Authority.

7.

The second proposal is that we will provide for a licensing scheme for HMOs. That is seen as a way, perhaps, of encouraging landlords to bring properties up to particular standards so that they can have them licensed and make them attractive to potential tenants. In the near future, the Housing Executive intends to launch a voluntary licensing scheme at a landlords' forum. That will be for wide consultation and, eventually we will evaluate how that scheme works. It is to be hoped that legislative provisions will be in place when the voluntary scheme is evaluated. That will inform whether or not to make it a statutory scheme. That is in the future, but those are the two statutory instruments we are presently considering.

8.

Mr ONeill: Many people would welcome a licensing scheme. I am interested to know what kind of controls the Department would visualise in the legislation to ensure that people kept to the licensing requirements.

9.

Did the Department consider at any stage the density of HMOs in particular areas? I am sure the members of the Committee are aware of the problem which has emerged, that many HMOs in one street considerably change the character and composition of the local population and cause quite a few community difficulties. Did the Department ever consider density? Is it possible to consider that?

10.

Mr Davidson: The housing division of the Department recognises that it is an issue, but until now we have regarded it as a planning matter. Planning approval has to be sought to turn ordinary houses into HMOs and we consider that density of HMOs to be a matter for the planners.

11.

The Department's Housing Division has not, at this stage, sought to put any pressure on planners to look at the numbers of houses that are turning into HMOs in particular areas. It is recognised that the intention in the legislative provision is to bring more properties into the scope of the Housing Executive, and clearly there will be staffing and resource issues for them.

12.

In relation to where they are situated, the Department - at any rate, through its housing division - has not sought to influence that in any way. It has allowed the market to determine whether there is a need for properties of that kind. If the need is geographical, then we look to the planners to ensure that the proper rules are applied when they are being changed.

13.

Mr ONeill: Do you have any control over the issue of licences? If a landlord met a set of criteria, would you be concerned about issuing 50 licences for one cul-de-sac?

14.

Mr Davidson: That would be a concern for the Housing Executive rather than the Department. All this legislation does is allow the Housing Executive to introduce a licensing scheme if it so wishes. I suspect the legislation will not go as far as designing the look of the scheme. It might be much the same as the house sales scheme, in which the Housing Executive designs a scheme for the Department's approval. Legislation simply allows the Executive to design a scheme say, for the sale of its houses, for the allocation of properties or, as in this case, to license the landlords of HMOs.

15.

Mr S Wilson: I know we said we should not get into the detail of legislation, which has not yet been drawn up, but a number of issues arise. You mentioned the location of HMOs being determined by planning policy. The fact is that most people have never applied for planning permission. I imagine that 90% of houses in multiple occupation in Belfast have never been subject to planning permission.

16.

We had a unique case on the Lisburn Road in which a person wished to legitimise what was going on in the house and applied for planning permission to make it an HMO. The application was turned down on the basis that the plan was unsuitable for the area. The Lisburn Road has one of the highest concentrations of HMOs in Northern Ireland. However, most of the houses there are not HMOs.

17.

As regards policy, who will be the licensing authority? Will it be the local council, the Housing Executive or another body? The Housing Executive already turns a blind eye to houses illegally being used for multiple occupation, for example, by paying out housing benefit to four or five people in the same house without ever ascertaining whether planning permission has been sought to use the house for that purpose. I have asked the Housing Executive about this. If the Housing Executive is to be given responsibility, what onus will be on it to ensure that there is a licence for a house used for multiple occupancy?

18.

Mr Davidson: At this point, we have not even decided that there will be a licensing scheme. We are putting provisions in place that will allow the Housing Executive to introduce a licensing scheme if it feels such a scheme to be valuable and needed. Of course, at the time of introduction, the scheme would be put out for public consultation. The terms would be open for everyone to consider, just as would the question of whether the Housing Executive would be the best authority to run the scheme. Local housing authorities in England are doing this. The Housing Executive would be the first port of call in Northern Ireland regarding the operation of such a scheme.

19.

Mr Crothers: The points raised by Mr ONeill and Mr Wilson are fair. If one has a licensing scheme, it must reflect the conditions appropriate to the property. If a scheme is put in place, it should contain, for example, the requirement that proper planning approval be in place. There will have to be some kind of enforcement provisions to ensure that any licensing requirements are met. The debate will be on whether that should be a matter for the Housing Executive or for the district council. However, as Mr Davidson has said, we have not yet reached the stage of deciding how a scheme might be taken forward.

20.

Mr Davidson: Unless the licensing scheme - if it is brought in on a statutory basis - requires everyone who operates an HMO to obtain a licence before they can do so, certain properties may remain outside its control, and their owners might still get away with operating in the absence of planning permission. Can one impose any particular criterion on those who apply to the scheme?

21.

The Chairperson: As I understand it, we have seen nothing whatsoever of the Housing Bill. We have written to the Department but received nothing. The Bill was obviously sent to the Housing Executive.

22.

Mr Crothers: No. There is no draft Housing Bill as such. We do not have a draft Bill. We have been corresponding with Legislative Counsel, and we have had various provisions ferried backwards and forwards. Perhaps Mr Davidson could correct me if I am wrong, but we do not have a draft Housing Bill.

23.

Mr ONeill: What happened to the 1998 Housing Order?

24.

Mr Crothers: There is no 1998 Housing Order. There was a draft Housing Order in 1996, which contained most of the grant provisions, but it was never enacted - and that is only one element of the proposed Housing Bill. Debate is still ongoing with the Office of the First Minister and the Deputy First Minister as to the shape, content and form of a Housing Bill, but one has not been produced. Until it is cleared by them, we cannot proceed.

25.

The Chairperson: I am totally confused. So that we are absolutely clear, are you saying that the Department for Social Development has no work done on a new Housing Bill?

26.

Mr Davidson: Legislative provisions have been drafted by the Office of the Legislative Counsel, but they are not in the form of a Bill. Since 1996, when the Housing Order fell at the change of Government, we have been legislating for certain policy proposals that successive Ministers have been happy with. A certain amount of drafting work is actually done, but not in the form of a Bill at present. There are simply provisions on some of these issues. At some point, when these policies go ahead, they will be drafted but there is no Bill at present. We are looking at policy proposals that our Minister has said he would be happy to run with.

27.

Mr ONeill: In 1998, Lord Dubs said that the Bill was ready. He said he was not going to push it forward because he was going to leave it to the Assembly. He made a public statement to that effect.

28.

Mr Davidson: That is correct. At that time there were certain legislative provisions drawn up by the Office of Legislative Counsel. They would have proceeded into a Northern Ireland Order, but that has not happened either because of the change of Administration.

29.

The Chairperson: Is the Housing Bill in the legislative programme?

30.

Mr Davidson: Yes, it is in the programme.

31.

Mr Crothers: There is provision for a Housing Bill.

32.

The Chairperson: But you have not looked at it at all?

33.

Mr Crothers: We have not got a Bill, as such, to take forward into the programme. Once we get the approval of the Office of the First Minister and the Deputy First Minister, then the Legislative Counsel will formally produce a draft Bill.

34.

Mr S Wilson: You say that you have the elements - the bits and pieces you have been gathering up over the years - that have to be married into the Bill when you get the go ahead. What time period are you talking about for the Legislative Counsel to take all those bits and pieces and put them into a Bill that can be formally presented? Given something as diverse and complex as this, are you talking about weeks, months or years? What timescale are you talking about?

35.

Mr Crothers: How long is a piece of string? It depends on what is agreed should go into the Bill. As it stands, most of the provisions could already have been drafted and a Bill could be produced in a relatively short period of time. It would be for the Office of Legislative Counsel to decide the timeframe. I would hope that it could be produced reasonably quickly. It depends on the provisions that have to go forward, and some other provisions that have yet to be drafted.

36.

The Chairperson: To clarify this, you have prepared some provisions for the First Minister and Deputy First Minister, and that is as far as this has gone.

37.

Mr Davidson: Yes, that is correct.

38.

The Chairperson: You have sent those provisions to the Office of the First Minister and the Deputy First Minister. Has their Department seen them?

39.

Mr Davidson: They have seen the policies we propose to legislate for.

40.

The Chairperson: What was their response to the policy?

41.

Mr Davidson: They have not questioned any of the individual policies. Presently, they are questioning timing, content and so forth.

42.

The Department has gone as far as it can in issuing instructions to the Legislative Counsel as to what we want. We have told the Office of the Legislative Counsel that we want to provide for a HMO licensing scheme, and we want to redefine the definition of homelessness. We have given it to them in plain English, so they know what the policy intentions are, and they will put that into "legislative speak". Not all of the provisions have been put in to legislative form at present. Until such time as it is agreed as to what will go in, the Office of the Legislative Counsel cannot do any more work.

43.

Mr S Wilson: I am worried about that. We have given it to them in plain English, but it is not getting legislated for. That implies that the proposals are translated from plain English into gobbledegook.

44.

The Chairperson: We had given a clear indication that we would not question the proposed Bill in detail, and we will not question it. However, we are somewhat bemused about the whole matter. Let us move on to the private-rented sector.

45.

Mr Crothers: This is another area that we want to see included in the Housing Bill, and we have identified the provisions we would like to see included.

46.

The private-rented sector is covered by the Rent (Northern Ireland) Order 1978. Such properties are regulated tenancies, most of which are in pretty poor condition. It is an area that we know very little about. In light of that, the Minister recently announced a review of that sector of the market. That review will complement a wider review by the Housing Executive of the whole private-rented sector.

47.

There are about 7,000 properties caught by the 1978 Order. The Department's function, at present, is to maintain a register, and to provide advice to tenants and landlords. That function could just as easily be exercised by the Northern Ireland Housing Executive, and we feel that the transfer of that function would be appropriate as the Housing Executive is the single, comprehensive housing authority in Northern Ireland. That is why the decision was made. It was felt that the Housing Executive would be better placed to administer the function.

48.

The Chairperson: OK. We move on to private- sector renewal.

49.

Mr Davidson: That is a private sector grant scheme administered by the Housing Executive. Its main purpose is to remedy unfitness, through two main grants: renovation grant and replacement grant. Replacement grant is unique to Northern Ireland - it is not in the parent scheme across the water. The scheme also allows properties to be adapted to meet the immediate needs of the disabled.

50.

The current scheme is a mandatory one. Providing a property meets any of the elements of the fitness standard specified in the law, and providing the individual does not have sufficient means to carry out the necessary work, the grant scheme will assist. People with sufficient means are deemed to have enough money for the necessary repairs, so the grant scheme does not assist. In some cases the grant scheme pays the whole cost of the repairs - for people who have no means - while in other cases grant is combined with the individual's own input. If your house fails the fitness standard and you fulfil certain criteria, then the Housing Executive must give you a grant.

51.

We are proposing to make the scheme discretionary, which will mean that the Housing Executive will not have a duty to meet an individual's need for grant. There are no signs that the discretionary scheme will be administered in a different way, but it will enable the Housing Executive to have the flexibility to target grants towards people or areas. The current scheme does not allow for that. It operates on the basis that a person in one area has as much right to a grant as a person in another area - even though the area itself may be blighted by unfitness.

52.

The change will allow the flexibility for grants to be targeted, although the Housing Executive has not yet decided that it even wants to target grants differently. Grants are currently targeted at unfit properties and at the "poor" strata of homeowners. The Housing Executive has not yet decided how it might use the discretion, but it has agreed that a discretionary scheme will give it much greater flexibility to deal with unfitness - perhaps on an area basis or through low-cost grants. This move makes the scheme discretionary, but it leaves disabled facilities grants as mandatory to reflect the Government's desire to ensure that the disabled have houses to meet their particular needs. There is also a discretionary grant for disabled facilities.

53.

The group repair scheme mentioned in the original paper is designed to take away some of the inflexibility in the current legislation. It allows us to deal with certain properties, so that some area-based regeneration schemeS can go ahead.

54.

The third proposal is to change the present minor- works assistance grant, which is a small grant available specifically to the elderly on income-related benefits. The current scheme creates a gap. If people who are not elderly or on income-related benefits cannot access renovation or replacement grant - because there is minor disrepair in their home - they are left without the minaccess to any grant assistance. Therefore we will replaceor-works assistance grant with a home-repair grant, which will be open to the elderly and the non-elderly, all on income-related benefits. We are going to increase the limit and increase the range of works that can be covered by that particular grant.

55.

Mr S Wilson: Can I have some clarification on the discretionary grant scheme? You say that it is designed to allow the Housing Executive, where there is limited money available for spending on grants, to target particular areas.

56.

Mr Davidson: I did not mention limited resources. The Executive can increase the grants, but only if they want to, through the normal process.

57.

Mr S Wilson: You do not give everybody a grant. Is that the reason for that discretion? You have to select on some basis. Presently, there is kind of a mandatory arrangement saying that you have to meet certain conditions, such as a certain income level, to qualify. That simply means that sometimes people have to wait a bit longer, because money is not available in a particular year.

58.

You are now saying that there will be this power of discretion. As far as the discretion is concerned, will the Housing Executive people design the scheme themselves? Will the parameters of that discretion be built into any legislation? Or will the Housing Executive be free to change those parameters as and when they see changes in housing circumstances in particular locations?

59.

Mr Davidson: Even at the current time, there is not sufficient money to fully fund the grant scheme and many other housing programmes. That situation would not change. Speculation is that under the discretionary scheme, the Housing Executive could reduce the grant budget if it wanted to. There would no longer be a mandatory demand on them to finance it. But there would be other pressures on them. They have no intention of reducing the grant budget, even in their planned expenditure. They are keeping to the levels that were already there for the last few years.

60.

The pressures of the Programme for Government and new TSN will be there. They may decide to stay in mandatory mode, and not use the discretion at all. That is something they could choose to do. If at some point they chose to use the discretion to direct resources in a different way than the present grant scheme, that would be subject to equality impact assessment. The Housing Executive would not be in a position to simply decide that they will use discretion in a particular way, that they would not be accountable for this, and there would be no other pressures brought to bear. There would have to be full consultation on any proposal, if they wish to change the direction of the system from what it presently is under the mandatory scheme. In theory, the Executive could reduce the budget, if there were cuts on its programme. At the present time, they could not cut the grant budget. It simply means that they will have to manage the demand.

61.

The Chairperson: But it gives them more flexibility. Let us move on to the right to buy proposal.

62.

Mr Crothers: The purpose of the right to buy provision is to align the rights of housing association tenants with those of Housing Executive tenants. Housing Executive tenants currently have the right to buy, while housing association tenants do not have this statutory right. A voluntary scheme is in place, and the Department is encouraging housing associations to adopt the scheme in anticipation of the introduction of a statutory scheme. This legislation is designed to introduce a statutory scheme that will require housing associations to implement a house sales project that mirrors that of the Housing Executive.

63.

The Chairperson: Why was the policy decision made to omit the clause on the regulation of housing associations? Why are there no clauses for that?

64.

Mr Crothers: As part of the housing policy review, it was proposed that the Housing Executive become responsible for the regulation of housing associations. When the Minister was appointed - that was originally Mr Nigel Dodds - a raft of measures flowed from the housing policy review and a decision was taken as to which of those would go forward for legislation immediately. Given that the Department had responsibility for the regulation of housing associations, it was decided that the function was being properly exercised. The Minister decided that there was no pressing need at that time to transfer the function to the Housing Executive, although it was not ruled out as a future possibility. It was decided not to proceed at that time, given that there were other pressures to introduce legislation. It was also decided that to transfer the regulation to the Executive would add a considerable volume of legislative provisions.

65.

Mr S Wilson: How many people are involved in the regulation of housing associations?

66.

Mr Crothers: Nearly everyone in the Housing Division in the Department for Social Development is involved in some way. That is approximately 40 staff. Those working on it daily would number less than half that.

67.

The Chairperson: To clarify, do these 40 staff work across the range of housing issues?

68.

Mr Crothers: Yes.

69.

The Chairperson: What percentage of their time is actually spent in housing association work?

70.

Mr Crothers: There would be at least 20 staff dedicated to that full-time.

71.

The Chairperson: Out of 40?

72.

Mr Crothers: Yes, however, I would guess that 40-50% of the time of the other 20 people could be spent on housing association work.

73.

The Chairperson: That is roughly 30 out of the 40?

74.

Mr Crothers: Yes.

75.

Mr B Hutchinson: I would like to return to the issue of the right to buy. It seems that housing association houses are being compared to those of the Housing Executive. There is a difference. Housing associations have to go to banks to raise money to build houses, while the Housing Executive gets its money directly from Government - no private money is used. If social housing is continually being sold to private owners, how do you plan to ensure that it does not happen in areas where social housing is needed?

76.

Mr Crothers: That question is agitating the minds of those in the voluntary housing movement. The intention is to introduce a statutory purchase grant that will be paid to housing associations to reimburse them for the discount they have to offer to the prospective buyer of the housing association house. That money will then be ring-fenced and will be used either to build new property or, depending on the circumstances, on existing property.

77.

There might be a feeling that is wrong to sell too many houses in a particular area, but this helps to promote sustainable communities. The house sales policy contributes to that through mixed tenure estates. Some would argue that that is a good thing; selling the houses to tenants helps to create more stable and balanced communities.

78.

Mr B Hutchinson: I do not disagree, as long as it is provided by the private sector.

79.

The Chairperson: We shall move on to homelessness.

80.

Mr Davidson: There are three aspects to the homelessness proposals, and all are about alignment with GB. We do not slavishly follow GB in housing policy, but in this case we thought that we should do so.

81.

The first proposal is that we bring Northern Ireland's legislation into line with GB on the question of classifying people as homeless. In GB, people are not classed as homeless if they have accommodation available to them anywhere in the United Kingdom. Northern Ireland's legislation on homelessness states that people are homeless if they do not have anywhere to live in Northern Ireland. Therefore, we could, in theory, have a person who has accommodation in England, Scotland or Wales presenting as homeless to the Housing Executive. Under current legislation, they could be deemed to be homeless because they have no property in Northern Ireland. We will bring our legislation into line with that in the rest of the United Kingdom: someone who has a property anywhere in the United Kingdom will not be classed as homeless in Northern Ireland.

82.

The second proposal is about intentionality. People are classed as homeless as long as they are not deemed to have made themselves intentionally homeless. The Housing Executive makes certain inquiries when a person presents as homeless to see whether there is contrived homelessness - maybe because of a deal with the rest of the family. There is a perception that people are getting a fast track to social housing and being classed as homeless when they may not, strictly speaking, be so. The Housing Executive, however, has no legislative basis for making such inquiries. In England, local authorities have a legislative basis for looking closely at intentionality, and we propose to give the Housing Executive the legislative basis to do what they currently do anyway.

83.

Mr ONeill: What kind of controls are you thinking of putting into the legislation? There are many complaints about the rigour of the Housing Executive investigation, and there is evidence that cases who present as being homeless are not classified as such. Will the legislation reinforce the present regime or will it allow some freedom of interpretation?

84.

Mr Davidson: If a person does not present to the Housing Executive as homeless, there is little that the Housing Executive can do about that. We are dealing with people who come to the Housing Executive applying to be classified as a homeless person. I cannot say how the legislation will look; the Office of Legislative Counsel will do that. We are proposing to provide for a situation in which a person may be treated as intentionally homeless and, therefore, will not be owed the same duty by the Housing Executive as a person who is unintentionally homeless.

85.

They shall be treated as intentionally homeless if they deliberately enter into an arrangement with the intention of misrepresenting their circumstances. How the Housing Executive will actually go about trying to see if someone has misrepresented their circumstances is not something that I suspect will be built into the legislation. The Executive will simply be given powers to inquire into intentionality, which they presently do not have the powers to do, whereas local authorities in Great Britain do have those powers. I cannot say at this point how the legislation will actually look, but the policy intention is that a person could be classed as intentionally homeless if they deliberately enter into an agreement with other people to misrepresent their circumstances as "homeless".

86.

Mr ONeill: Is that the only category that you are concerned about in this part?

87.

Mr Davidson: Those are the only things that we are legislating towards.

88.

Mr Davidson: The third category deals with persons from abroad. In England, the Home Office can make certain provisions as to what class of person shall be owed a duty by the housing authority, or to allow the Department, in this case, to make regulations prescribing the classes of people from abroad who are to be treated as ineligible for homelessness assistance. It is tied in with asylum and immigration issues across the water, and this is just to bring us into line. People from abroad will not be entitled to homes. Northern Ireland would not have the same powers, and may potentially become a magnet for people abroad who see an easier route into Northern Ireland than the rest of the UK. We are just bringing ourselves into line with GB, so that persons will be brought through the same way.

89.

The Chairperson: Injunctions against antisocial behaviour.

90.

Mr Davidson: At present, where a tenant of the Housing Executive has breached or threatens to breach their tenancy agreement, the Executive can apply to the courts for an injunction restraining the tenant from breaching or continuing to breach their agreement. While the present injunction can protect the Executive's interests as a landlord, there is less scope for protecting the interests of Executive tenants where the individuals committing antisocial behaviour are not themselves tenants.

91.

It is proposed to allow the Housing Executive to apply for a new kind of injunction that can be granted against any person who engages in any kind of antisocial behaviour, where this effects the Executive's housing stock. In other words, there is a gap in the present legislation. If a private-sector owner, and there are a number of them in Executive estates, is guilty of causing antisocial behaviour, the Executive has limited powers, if any, to do anything about that, because they are not their tenant. This tries to correct that. Again, it brings us into line with local structures in England and Wales under the Housing Act 1996.

92.

We are also proposing to extend the facility to apply for injunctions to registered housing associations, as well as the Housing Executive. Since housing associations will now be the landlord of estates, in small estates, this will make the join between the two social landlords.

93.

The Chairperson: And finally, large-scale voluntary transfers.

94.

Mr Crothers: The large-scale voluntary transfer provision is included because, as the legislation stands at the moment, if a decision was taken to go down this route, a single tenant of a particular estate could veto the transfer. There are no plans to sell off the Housing Executive stock at this point, but it was considered prudent to take the opportunity in this proposed legislation to remove the embargo that an individual tenant would have - and to bring the situation in to line with England, Scotland and Wales - whereby a majority of tenants eventually decide whether or not to agree to a voluntary transfer.

95.

Mr ONeill: How many examples does the Department have where one person has frustrated an attempt to sell off?

96.

Mr Crothers: No attempt has been made to sell off any of the Housing Executive property.

97.

Mr ONeill: Why is this necessary?

98.

Mr Crothers: A decision may be taken at some time in the future to remove the "landlord" role of the Housing Executive. This is a topical debate in Scotland and Wales. A political decision might be made to remove the landlord role of the Housing Executive; to set up arms-length companies or transfer the stock to a housing association. If that happens, then it would seem prudent to introduce this legislation to remove the embargo of an individual.

99.

Mr ONeill: I know we are waiting on other developments regarding this, but I am highly suspicious of this particular piece of legislation and I will wait to see what will develop.

100.

The Chairperson: Thank you very much.

MINUTES OF EVIDENCE

Tuesday 1 May 2001

Members present:

Mr Cobain (Chairperson)

Ms Gildernew (Deputy Chairperson)

Mr Hamilton

Mr ONeill

Mr M Robinson

Mr Tierney

Witnesses:

Mr D Kennedy ) Chartered Institute of

Ms S Toland ) Environmental Health

Mr J Corkey )

101.

The Chairperson: Good afternoon. Welcome to the Social Development Committee.

102.

Mr Kennedy: I am the chairman of the Northern Ireland Centre of the Chartered Institute of Environmental Health. The institute is concerned with the protection, enhancement and promotion of public and environmental health. To this end it has 9,000 members who enforce regulations and educate the general public through local authorities, central government and in the commercial sector. Our professional body, based in London, advises the Government on practical matters and on public health policy and also responds to a wide range of consultations that the Government puts forward.

103.

Mr Corkey: I will give a short synopsis of the Northern Ireland Centre's main points. With regard to the proposed move from mandatory to discretionary grants, I will focus specifically on repair grants. These are available for work that is to be carried out to comply with public health notices. The percentage grant, in this case, is dependent on the net annual value of the property, and is available to the entire private sector, including owner-occupiers.

104.

That has encouraged the owners of both occupied and vacant properties to request district councils to serve public health notices that require them to carry out repair work. Many speculative landlords use this mechanism as a fast-track method of circumventing a more appropriate renovation grant, for which they would be means-tested.

105.

Many properties have been effectively repaired using this grant. However, the Northern Ireland Centre believes that the primary purpose of the Public Health (Ireland) Act 1878, with regard to housing, should be exclusively to protect people in their homes, rather than support speculative landlords or affluent owner- occupiers in repairing their properties.

106.

We believe that moving to a discretionary repair grant would allow the Housing Executive to set appropriate criteria, so that vulnerable people would be properly protected and property owners would be suitably means-tested. However, the Centre wishes to see mandatory repairs grants remaining for tenancies protected under the Rent (Northern Ireland) Order 1978, as the rental income from those properties is controlled by the Government, and would normally be less than the market rent.

107.

The Northern Ireland Housing Executive is the biggest landlord in the Province, and the Northern Ireland House Condition Survey 1996 estimated that there were over 3,000 unfit Housing Executive dwellings. As the Housing Executive cannot take enforcement action against itself, we believe that an independent authority should be responsible for the enforcement of fitness standards in Housing Executive property. Indeed, the Centre believes that the Housing Executive should in general be relieved of its conflicting role as regulator and provider, and that the enforcement of housing standards should be a function of an independent regulator.

108.

We are particularly concerned that there appears to be reluctance on the part of the Housing Executive to serve repair notices on unfit dwellings, despite its having an obligation to deal with the issue of unfitness. In addition, we feel that some of the unfitness levels identified in former housing action areas, where the Housing Executive is proposing area renewal or redevelopment, would not stand up to scrutiny. For example, it is difficult to understand an unfitness level of as much as 70% in a former housing action area, when the Province's average is just over 7%. Therefore, there is a compelling case for an independent assessor of unfitness in Housing Executive property, so that the public can have confidence in the objectivity of the Housing Executive and its reasons for action in relation to unfit dwellings.

109.

District councils are ideally placed to provide the independence needed to ensure that the assessment of fitness is both accurate and objective. Environmental health officers working in local authority environmental health departments have the regulatory experience in fitness assessment, not only through their training, but also through their statutory powers under the Rent (Northern Ireland) Order 1978 and their involvement, as surveyors and supervisors, in successive house condition surveys.

110.

With regard to houses in multiple occupation (HMOs), the Northern Ireland Centre endorses the Government's commitment to a mandatory licensing scheme and recommends that the Assembly move to introduce mandatory licensing as a matter of priority. We would also wish to see a clearer definition of HMO being introduced in order to ensure that all multiply occupied dwellings are included. Many of the worst housing conditions are to be found in HMOs, and often they provide accommodation for the most vulnerable members of our society. We believe that the Housing Executive, as a landlord, is trying to fulfil conflicting roles by being responsible for both regulation and provision of housing.

111.

The current Housing Executive approach to HMOs will not adequately address the problems in that section of the privately rented sector. For example, the 1999 strategy document implied that it was following a primarily grant-led strategy. However, regulation of this sector must include a proactive policy of enforcement if health, safety and welfare are to be properly protected.

112.

The voluntary licensing scheme recently proposed by the Housing Executive is unlikely to adequately address the worst HMOs, which often house the poorest and most vulnerable tenants. The Northern Ireland Centre believes that environmental health officers working for district councils have the necessary training and experience to assess health risks in HMOs and to identify enforcement priorities so that the most dangerous properties are addressed first. A discretionary grant from the Housing Executive could be used in tandem with this approach to facilitate landlords in complying with their statutory obligations. We do not believe that the transfer of these regulatory functions would in any way undermine the Housing Executive's strategic role as the Province's housing authority.

113.

The Northern Ireland Centre is particularly concerned about the limited repair options that are available in the privately rented sector. We want to see powers similar to those in England and Wales, where local authorities can take action in respect of otherwise fit properties that are in disrepair. We recommend that the Committee proposes that provisions similar to those contained in section 190 of the Housing Act 1985 be included in the housing Bill.

114.

A recent Court of Appeal judgement precludes district councils from serving public health notices in respect of conditions that give rise to a risk of physical injury. While that is not specifically a matter for the housing Bill, the Committee may wish at a future date to consider an expanded definition of public health nuisance that includes health risks associated with traumatic physical injury.

115.

Finally, all private sector landlords are required to provide their tenants with rent books. The Rent (Northern Ireland) Order 1978, however, did not designate any specific enforcing authority for that provision, and many landlords ignore it. We recommend that an amendment to the 1978 Order be included in the housing Bill, designating district councils as the enforcing authority for the rent book regulations. That would require only a simple amendment and would not only provide tenants with greater security of tenure, but also facilitate many of the investigations that are carried out by district council environmental health officers into allegations of harassment and unlawful eviction.

116.

Mr ONeill: The most interesting and innovative point you make relates to the unfitness issue and the role that you see for district councils because of their objectivity; in the past, councils have not been known for that quality. Are you confident that councils have that objectivity, particularly as you recommend that they be the sole arbiters of the situation? You do not provide any recourse for those who might be in dispute with the council. Your confidence is interesting. We are due for an administrative change and we do not know what the shape of that will be, yet you appear to be confident. I would appreciate your response to that.

117.

Do you see any budgetary problems in moving from a mandatory to a discretionary grant? Would a discretionary budgetary regime be more easily raided in the annual allocations than a mandatory one?

118.

Mr Corkey: That is a matter for the Housing Executive. We cannot speculate on that. Our approach is primarily pragmatic. In our experience, the mandatory grant currently available to people on foot of a public health notice has encouraged an inappropriate use of public resources. Money is often directed toward speculative landlords and people with ample means, because the grant is not means-tested. We believe that the primary purpose of the public health legislation is to protect the vulnerable. We do not feel that the mandatory grant facilitates that.

119.

The Chairperson: What about councils and their powers to make decisions on issues?

120.

Ms Toland: I do not think it would be fair to make a sweeping statement on the independence of district councils either in the past or in the future. In terms of the professional body that we are representing here today - the environmental health profession - even if the district council function dealing with the interpretation of unfitness were transferred, the independence of the profession is certainly controlled.

121.

To become an environmental health officer you have to become a chartered practitioner, which takes a number of years. There are continuing professional development schemes to ensure that there is a drive toward consistency and uniformity among all environmental health practitioners in the United Kingdom.

122.

Locally, district councils form alliances in committees that look at consistency issues. They look at the procedures and their application in all aspects of the regulatory enforcement role. There is a control mechanism there. That is where we feel that the argument is very strong: in terms of the independence and the equitable application that an environmental health practitioner can bring to this area of work.

123.

The Chairperson: I want to go back to the issue of voluntary and mandatory grants. You say that it is essential that they be means-tested. Does a means- testing issue go along with the decision to move from mandatory to discretionary grants?

124.

Mr Corkey: Yes.

125.

The Chairperson: I am always concerned about means-tested grants. I have found from experience that some elderly people who own their own homes also have small occupational pensions. When they are means-tested, they fail to qualify for grants. A group of people would be excluded and would never get their houses repaired.

126.

Mr Corkey: I do not disagree with that. We are not best placed to advise on what the actual mechanism of means-testing should be. There is a function that they fulfil today, and we are not involved in that. We are lay people in that respect, in that we assume that means-testing will be a fair system that will ensure that people who cannot afford to pay are not made to pay.

127.

The Chairperson: That is not the case.

128.

Mr Corkey: We are coming at it from a slightly different angle. There is another side of the coin if you like, in that we have seen the public health legislation being used and abused as a speculative process, rather than simply as a mechanism for protecting people in their homes. That is my concern. I do not have any great view on the mechanism of means-testing. However, I did stress that we want to see a mandatory grant retained in relation to protected tenancies.

129.

Ms Toland: At the moment there is no means test as such, but there is a sliding scale based on the net annual value of the property. For older and larger homes, the grant is minimal. It is only £500 for owner-occupiers. It is not meeting their needs at the moment, so this would be a way of supplementing what is currently available for owner-occupiers.

130.

Mr Corkey: From an enforcement point of view, environmental health officers are being asked by property owners to come out, inspect their premises and subsequently serve a notice requiring them to do something that they are perfectly at liberty to do without district council intervention. That is a misdirection of resources. It would be better to try to target those who are in need, rather than facilitate people who have means and who have found a way round the system.

131.

Mr ONeill: That is exactly the point. Is there no other way of dealing with the administration of a mandatory grant? I recognise the problem that has been identified, but is there no other way in which that could be implemented without removing the mandatory grant?

132.

The Executive budget can often be raided for different things, and inevitably it means a reduction in such services. If there was an obligation to provide a grant and that was taken away, some of us would feel that something had been lost. The administration of the grant could perhaps be made more secure in order to prevent such abuse.

133.

Mr Corkey: At the moment a grant is available for vacant properties. That is because we are obligated to serve public health notices on occupied or vacant properties if there is deemed to be a public health nuisance in that property. It seems inappropriate to serve a notice on a vacant property in order to protect someone's health and safety. It may be that it is inappropriate to have any grant payable on foot of a public health notice served in respect of a vacant property. Perhaps the grant should be restricted to occupied properties.

134.

We are talking about a specific grant. We are talking about the repair grant, which is solely available for public health notices and for certificates of disrepair in protected tenancies.

135.

The Chairperson: Please remind us of the limits of that.

136.

Mr Corkey: The financial limits?

137.

The Chairperson: Yes.

138.

Mr Corkey: The maximum grant is £5,500. In respect of owner-occupiers, it was limited significantly to £500 in 1996. The grant available is a percentage of that, depending on the net annual value of the property. That is not exactly means-testing.

139.

Mr ONeill: I will return to my former issue. I really wanted to hear about the regulator's role. You are identifying something not unlike a housing ombudsman, or someone with that type of a role, when you talk about the regulation for HMOs and the regulating standards.

140.

Mr Corkey: That may be slightly misleading. We do not see district councils as having a role in the sense that you are describing. We are recommending that district councils, through their environmental health departments, be responsible for the enforcement of provisions relating to unfitness and HMOs. That is a relatively small part of the Housing Executive's current function. It would facilitate the Housing Executive in relieving it from something that, in many respects, is inconsistent with its role as a landlord. We do not see ourselves as regulators of the Housing Executive per se, other than in relation to unfit properties. Housing Executive tenants living in an unfit property currently have no one designated to regulate their situation, despite the fact that the law says that no one should be expected to live in an unfit house.

141.

Ms Toland: Our experience is that private tenants are living in unfit properties. They have difficulty in getting repairs executed by the landlord. There is no proactive enforcement regime coming from the Executive in terms of requiring a landlord to carry out works in order to make houses fit. Therefore, we are going in and out of properties trying to deal with those situations under public health nuisance legislation that is 120 years old, and that is very ineffective in dealing with the overall fitness of a property.

142.

Mr ONeill: Is that your view on licensing of housing?

143.

Mr Corkey: Yes, we think that mandatory licensing of HMOs would be a move in the right direction, because it would bring all HMOs immediately under control. A failure to license would be an offence, and set out within that licensing framework would be standards that the landlords and the properties would have to comply with. It would make regulation of that sector that much easier.

144.

We have expressed concern about the proposed voluntary licensing scheme being put forward by the Housing Executive, because voluntary licensing will not include those people who wish to remain outside the scheme. They will invariably be people who are less concerned about the interests of their tenants and more concerned about extracting multiple rents from a single property with very little investment.

145.

Ms Toland: The professional body has been working with the Department of the Environment, Transport and the Regions on a scheme that would involve mandatory licensing of all of the private rented sector, not just HMOs. The experience of our colleagues in the English authorities suggests that that is the way forward and that the voluntary licensing scheme has not worked. We are suggesting that it should be mandatory. We have support from the Department of the Environment, Transport and the Regions. This measure was in the proposed Housing Bill put before Parliament last autumn. We hope that this Committee will consider it.

146.

The Chairperson: What is the size of the problem as far as landlords are concerned? I am sure that there are good landlords.

147.

Mr Corkey: In respect of what?

148.

The Chairperson: HMOs and unfitness.

149.

Mr Corkey: I do not have those figures.

150.

The Chairperson: What percentage of landlords would be in the category of "poor landlord"?

151.

Mr Corkey: I am not sure what the exact percentage is, but one of the problems with the current housing market is that people see housing as an investment opportunity. Lay people - people who are not professional landlords - are buying property as a quick-fix investment. "Unscrupulous" might be too harsh a word for some of them, but they are less experienced. A significant number of property owners - not a majority - put the minimum investment into it and try to extract the maximum from it. We are concerned that very often it is the most vulnerable people who end up living in that sector of the housing market.

152.

The Chairperson: We are all concerned about that. Thank you very much. It has been very interesting.

MINUTES OF EVIDENCE

Tuesday 1 May 2001

Members present:

Mr Cobain (Chairperson)

Ms Gildernew(Deputy Chairperson)

Mr Hamilton

Mr B Hutchinson

Mr ONeill

Mr McClarty

Mr M Robinson

Mr Tierney

Witnesses:

Mr B Slevin ) National Union of Students (UK)

Mr P O'Neill ) and the Union of Students in Ireland

153.

The Chairperson: Welcome to the Committee. The format will be 10 minutes for presentation and 15 to 20 minutes for questions.

154.

Mr P O'Neill: Thank you for the opportunity to present oral evidence supporting the two written submissions that we made. Given the relatively short time available, we will concentrate on Houses in Multiple Occupation (HMOs). We are more than happy to pick up any wider points from our second submission, which outlined the broader issue of student housing as part of the wider housing inquiry.

155.

We are the representative body for student organisations in Northern Ireland and we have a long history of involvement in housing campaigning, particularly in the private rented sector. With the increase of students living in this sector, we have had particular concerns about HMOs for a number of years. We estimate that there are 13,000 students throughout Northern Ireland who live mostly in category B shared houses.

156.

Our recent survey showed the wider position of student housing. It is estimated that there are 185,000 students, trainees, student nurses and others in tertiary education in Northern Ireland. With approximately 5,000 places being provided by colleges, institutional accommodation cannot cater for the bulk of student accommodation needs.

157.

Queen's University, for example, estimated that 8,000 of their students live in the private rented sector. The University of Ulster estimates that 5,000 students live in traditional flat land across Northern Ireland.

158.

In our submission we have also included some evidence on costs. Private rented accommodation is slightly cheaper than the average institutional accommodation. We estimate that colleges charge an average of £40 per week while the private rented sector average rent, estimated by Queen's University, is £38 per week.

159.

Some of the key issues highlighted in our submission to this Committee, and to the Housing Executive's voluntary licensing scheme, suggest that developments in Great Britain should be followed. That should have been done much sooner.

160.

Quite frankly we are frustrated with the slow progress of the Housing Executive on this issue. It appears to have been in consultation mode for the last four years yet our members still continue to live in dangerous properties. There have been well-publicised incidents where students have actually died as a result of fire in such accommodation.

161.

We are calling on the Housing Executive to speed up the process of inspecting and licensing but we realise that it is under funding constraints. Nevertheless, we want to see a greater sense of urgency, particularly in targeting properties of greater risk that, in our opinion, are often in student areas.

162.

We welcome plans to include college and nursing accommodation within regulatory controls. Halls of residence should be included within the framework even though that will have particular implications, especially for the two universities. We want to see an improvement in tenancy management standards and in the legal rights of tenants, such as security of tenure in the private rented sector.

163.

The greater promotion and enforcement of safety standards, particularly fire safety, is also important. We want to see the Housing Executive, as well as giving due recognition and support to landlord associations, supporting tenants' associations in the HMO sector also. The Housing Executive's strategy is a little skewed in favour of landlords at the expense of the development of a real voice for tenants in the HMO sector.

164.

We want to see tenants associations developed with the support of the Housing Executive. Indeed, we want to see a tenants' representative included in the appeal mechanisms, that the Housing Executive has proposed. We want the Housing Executive to refuse to license landlords who have convictions for assaults on their tenants or who have been convicted for breaches of health and safety legislation.

165.

Although we have concentrated on the HMO regulations, particularly the voluntary licensing schemes, we are more than happy to take questions on the private rented sector generally. However, the mandatory licensing of HMOs would be a useful start, with a greater willingness from the Housing Executive to engage with organisations like ourselves and other representative bodies to try and protect the interests of tenants in HMOs.

166.

Mr Slevin: As Mr O'Neill says, I am the elected representative for the National Union of Students - Union of Students in Ireland (NUS-USI), but previously I was a welfare officer in the Students Union of Queen's University, Belfast. I was the first port of call for students with problems concerning their accommodation. Houses in south Belfast are notoriously three storey buildings, and I have looked at cases where landlords have attempted to pack in as many students as possible. One of the worst cases I came across was a six-bedroom house with 13 students living in it. The rooms were actually divided by a hanging curtain or blanket down the middle. That was the best deal that those students could get. They were only paying £25 to £30 a week, as opposed to £50 to £60 a week for other accommodation.

167.

When universities and colleges upgrade their on-campus accommodation they do it in such a way that they price students out of the market. There may be a room with en suite facilities, Internet access perhaps, and a phone line - but students cannot afford it. The better-off students will move into the nice on-campus accommodation and the students from low- income backgrounds look for cheap accommodation that, more often than not, will tend to be in the room divided by a blanket or curtain.

168.

From my experience of the mandatory grants for landlords, a landlord will acquire a property that probably does not meet fire and safety regulation requirements. They will receive a grant to upgrade the accommodation, and will subsequently price the student out of the market. I am now moving out of my second accommodation because the landlord has received such a grant. He will do up the accommodation, and put up the rent by £50 a month. I could not afford that on my current wage, nor when I was a student. Everything is geared towards assisting the landlord. It is about time that the tenant is taken into the equation.

169.

The Chairperson: Do you have any formal relationship with the Housing Executive?

170.

Mr P O'Neill.

171.

No. We request meetings from time to time.

172.

The Chairperson: Is there any formal relationship between your organisation and the Housing Executive?

173.

Mr P O'Neill: We are not involved in any machinery for consultation or association.

174.

The Chairperson: Are the conditions you talked about for students in Belfast the same for those living outside Belfast?

175.

Mr Slevin: Some housing in Coleraine is summer holiday accommodation. That tends to be of a higher standard, and therefore cheaper. The rule of thumb is that the further you have to travel, the cheaper the accommodation will be. It would be expensive to live close to a university or college. Coleraine and Magee campuses might not experience the same problems as in Belfast. However, come September when the students are aware of the need to find accommodation early, then the furthest-away, or worst, accommodations are taken up. That happens in Coleraine and Magee also.

176.

Mr E ONeill: Your presentation and documentation are comprehensive. Your priority of getting mandatory licensing for landlords is clear. Your initial paper states that you would like to see a duty of care placed on all landlords. Have you looked at the licensing scheme and the discretionary licensing scheme that the Housing Executive recently introduced for HMOs? As representatives of the student body, can you be certain that that will provide a sufficient duty of care?

177.

Mr P O'Neill: We do not think so. We are informed by the Scottish model, and the way that the matter has been approached in Scotland. It is clear more stringent controls, together with the relationship that has been developed between landlord associations, tenants groups, and the partnership approach between local authorities and those bodies, is the way to develop a greater enforcement of the duty of care and tenant management standards. We recognise that it will take some time. Landlord associations in Northern Ireland are underdeveloped. We are talking about evolution in the strategy, nevertheless, we want the Housing Executive to take greater ownership as regards promoting the debate and getting across to landlords their responsibilities in that sector.

178.

The Chairperson: If there is to be an improvement in HMOs - as everyone wants - that may mean a necessary increase in rents. Has that been taken for granted?

179.

Realistically, I do not think that people in the private sector will spend large amounts of money improving houses, and then cut rents. The students that you are talking about, and who concern us, are living on the margins, and they will be further marginalised. That is a difficulty that we will have to wrestle with also. It is right that we flag that issue. However, it is not just as straightforward as you make out.

180.

Mr Slevin: Absolutely. If it is a question of increasing rents by a certain percentage while bringing accommodations up to health and safety standards then it is a fair enough balancing act. Ideally we would like to see a situation where all HMOs are regulated for fire and safety and rents are not increased. If that is not going to happen then we must put the safety of the student before the price of the accommodation.

181.

Ms Gildernew: Your presentation was comprehensive. You talked about landlords getting grants and then pricing students out of the accommodation. As I am sure you are aware that activity is not restricted to student accommodation. The International Fund for Ireland grants awarded to private landlords mean that they can usually place extortionate rents on property.

182.

I am well aware of the poor standards in student accommodation and, in particular, the fire safety standards. You are pushing against an open door as far as the Committee is concerned because the mandate on licensing must be brought in. However, the question is how we ensure that licensing does not result in students not being able to get any accommodation. If students cannot afford property in the licensed rented sector they may turn to back street private landlords who can provide accommodation that students can afford and that will be of a worse standard than they are in at the moment.

183.

Mr P O'Neill: Rent control is an issue. Obviously, in the controlled sector there are rent controls. Why should that pertain only to properties because of age? There is no logical reason why rent control is not extended right across the private rented sector, and we certainly have concerns. The last thing that we want to do is to restrict the already reduced private rented sector. We recognise that there is a delicate balance in providing incentives for entrepreneurs, which effectively landlords are; they want to make a buck out of housing people. That is why we think that the public authority - the Housing Executive - has a role in public housing and changing the balance between providing accommodation just for families, which is what there is at the moment.

184.

Perhaps the Housing Executive has a role to play in opening up housing stock to single people following the growth of the number of single people and young people who want to live in a variety of housing types. The public authority could actually provide shared accommodation so that there is an alternative to the private sector. We could get a much wider mix; we could get accommodation above shops; we could bring in a greater variety of housing types and tenures such as there are in continental Europe. For some reason the UK and Ireland have not been developed as much. We would argue that the Housing Executive should be more imaginative, vest in more properties and lease property directly to student organisations such as our student housing association co-operative - SHAC. We would like to see SHAC having a much bigger role to play in providing more options to students and other people.

185.

The Chairperson: We all realise that a lot more people want to live on their own. The old style of living in the family home is changing. I would like to see the Housing Executive respond to that in a more imaginative way than they have done up to now. The change in lifestyle manifests itself in the private sector apartments, which appeal to young professional people and suit their style of living. The Housing Executive needs to take some of that on board.

186.

Your point about working alongside the students' housing representatives was interesting. It is important for those of us who are not at the coalface to listen to people who are dealing with the issue on a day to day basis.

187.

The Committee would be happy to raise some of those issues when the Housing Executive representatives attend. If you are going to look at how tenants' associations deal with tenants, it is important that you look at the tenants as well - which is something that you do.

188.

Mr Hamilton: Mr Slevin, you said that you would accept the fact that if landlords had to bring their properties up to a certain standard you would agree to a percentage rise in the rent. Were you suggesting that there should be a limit to the increase that the landlord would be allowed to make in the rent?

189.

Mr Slevin: Yes. Peter O'Neill touched on the point that we could foresee an increase in costs in the rented sector. Personally, I have lived in two houses where the landlord has received the improvement grant. The rent in the first case went up from £120 per month to £175 per month. Currently the second house is going from £142 per month to £192 per month and that is a massive increase. While I would not like to see an increase in rent just because the landlord is bringing his or her premises up to basic standards I can foresee it happening. However, I would like to see some sort of control employed.

190.

Mr Hamilton: Would that be legislation to limit the increase that the landlord would be allow to charge due to improvements?

191.

Mr Slevin: Absolutely. From what I have seen, landlords have scrimped and saved to try and stretch this grant money out. The landlord is in a position where the premises that he purchased was perhaps at a cut down price because of its standard. He receives financial support for renovation, and when the house reaches a certain standard he will charge more for it or he can sell it on at a significant profit. This issue should have been addressed sooner, but I would welcome any proposal to cap the increase on premises that has received a grant to renovate it.

192.

Mr E ONeill: I was interested in your comment that you did not have any particular relationship with the Housing Executive. I remember a study that was done on student housing in 1996. It appeared to be quite an authoritative document at the time, and it seemed to touch on most of the issues. I remember that it was received well by all sides. I agree with your frustration that nothing much has happened in the years since it was published. However, I am surprised that no partnerships emanated from it.

193.

Mr P O'Neill: We will probably come back to the issue about rowdy behaviour in student areas that has come up recently. Students are being blamed for causing that behaviour, and there is no doubt that students are involved. We will bring a submission to you on that. However we have been talking to the Housing Executive for some time about a partnership approach between ourselves and institutions close to students. There is no doubt about it; the Housing Executive just seems to be unwilling to engage. They are probably stretched and their management time is limited.

194.

This document, 'Student Housing in Northern Ireland: General Consumer Council 1998', which we thoroughly recommend, has a whole range of proposals, and it would be quite an interesting exercise to tick them off - particularly regarding the Housing Executive's responsibilities and what organisations it has engaged with. We have been frustrated by this, and any help you might give to encourage the Executive to work with bodies such as ourselves would be most appreciated.

195.

The Chairperson: Could you give us some idea of student numbers? Are they rising or falling? Will the problem of HMOs get worse in the near future?

196.

Mr P O'Neill: We estimate that 13,000 students are currently living in HMOs, most of which are category B accommodation. Student numbers are set to increase. You may be aware of what the Minister of Further and Higher Education, Training and Employment, Mr Farren, has done. Approximately 5,500 students will arrive on campus in the next three to four years; demand is still growing. We suspect that more of those students who traditionally went "across the water" to study - to Scotland in particular - may be forced to remain locally.

197.

There will be increased pressure on institutions to provide more housing to cover that demand. There is a limit on how much accommodation colleges can provide. To be fair, more and more students are studying while living at home with their parents, but we anticipate we shall still be left with a significant increase in numbers seeking private rented accommodation. It is difficult to predict, and the Housing Executive could perhaps do more work and help us look at the projections. Within the next two to three years we believe there could be upwards of 16,000 students living in HMO properties throughout Northern Ireland. I feel that is a reasonable estimate.

198.

The Chairperson: We previously spoke to the district councils. How might we speed up the inspection and licensing of HMOs? Would district councils be the proper bodies to ensure that recommendations are enforced? They are clearly concerned that having the Housing Executive as landlord and enforcer is not a proper situation.

199.

Mr Slevin: It is a matter of finding out where HMOs are, gaining access to them and identifying the landlords who might have multiple properties. They work with institutions such as Queen's University, the University of Ulster and the student unions, for the situation might be described as one of mandatory versus voluntary.

200.

Good landlords will do their best to promote themselves; they work very closely with the academic institutions, and there would be no problem correcting the defects of their accommodation. However, accommodation officers in universities and colleges know the landlords, having databases of them and their properties. Through working with them, the officers have a fair idea of exactly what is there.

201.

The Chairperson: Thank you very much; it has been very interesting. We shall take up that issue with the Housing Executive. Our relationship with them is extremely important to us. Thank you very much for your time.

MINUTES OF EVIDENCE

Tuesday 1 May 2001

Members present:

Mr Cobain (Chairperson)

Ms Gildernew(Deputy Chairperson)

Mr Hamilton

Mr B Hutchinson

Mr ONeill

Mr M Robinson

Mr Tierney

Witnesses:

Mr K Butler ) Northern Ireland Co-ownership

Ms Patterson ) Housing Association Limited

202.

The Chairperson: Welcome to the Committee. We are hoping to work to a format of 10 minutes for presentation, followed by some questions.

203.

Mr Butler: Thank you for the invitation and the opportunity to speak to you today. I do not intend to speak for very long because we did not have much to say in the submission that we made to you as we are not directly involved in this matter. We are just giving an opinion from a professional point of view. I would like to make the following brief points in light of our submission.

204.

On Large Scale Voluntary Transfers (LSVTs) from the Northern Ireland Housing Executive (NIHE), it is important first of all to assess the potential in Northern Ireland terms. What should be the criteria for potential LSVTs in terms of stock? What, if anything, is to be included in the stock to be transferred? How many properties are involved and what is their location? By location, I mean areas of high demand and so forth.

205.

Secondly, there is the matter of new types of landlord - housing associations or private management companies. It could be argued that housing associations would be setting themselves up as mini housing executives, as at the moment they have a development function. In taking on transfers of stock they would become developers and managers. At the moment they do not really have a large-scale management role - they simply develop, and manage what they develop.

206.

Private management companies - another type of landlord - are simply created for the sole purpose of managing and maintaining groups of properties. Thought must be given to support those likely to be affected, including the NIHE tenant base and those on the common waiting list for accommodation.

207.

Essentially we start from the position that any transfer of housing stock to another landlord should, as a minimum, leave the tenant no worse off. Ideally, it should offer some benefit to the tenant. It is also be important to ensure that regardless of who the landlord is, tenants should have access to the same standard of service, and that landlords should be equally and severally accountable for providing that service. That would entail a significant commitment to consulting with tenants and to managing and monitoring the service. Through the Department for Social Development, the NIHE and the housing association movement, there already exist established performance standards for social housing management, mechanisms for the control and accountability of social landlords, and regional and local housing policy - an integrated strategy for programme delivery.

208.

In looking at the rights of housing association tenants to buy their properties, the Programme for Government - and I am sure everybody quotes that document - aims to ensure that everyone has the opportunity to access decent affordable housing in the tenure of their choice. The Northern Ireland Co-Ownership Housing Association is the only housing association registered in Northern Ireland that does not provide housing for rent. As a specialist shared ownership association, proposals for the right to buy do not directly apply to us. In fact, it could be said that our purpose is to acquire properties on behalf of our applicants and then encourage them to remove them as quickly as possible from our stock by increasing their share and becoming full owners of the properties.

209.

I understand that the Northern Ireland Federation of Housing Associations is developing proposals on right-to-buy and that witnesses will shortly appear before the Committee on this matter. Our comments therefore relate to the importance of clarifying the ultimate policy objective. Is it to enable people to buy affordable homes or - more specifically - to buy homes in which they currently live? To what extent should policy and the public purse support property choice as well as tenure choice?

210.

The main low-cost home ownership initiatives in Northern Ireland, which are the Housing Executive's tenants' sale scheme and the co-ownership equity sharing scheme, are well established in part of the local culture. Concerning co-ownership, both Housing Executive and housing association tenants are already assessed on an equal footing. People may not however purchase through co-ownership the property in which they currently reside. If this inquiry results in changes to the mechanism for tenant purchases, there may perhaps be a future role for the co-ownership scheme in assisting some tenants to buy their current home.

211.

Mr ONeill: Mr Butler queried the use of public funds in allowing housing association tenants the right to buy their own property. I did not pick up on what you said. Can you expand on that? It was the reason why public money should be spent. Should it be spent because of where people want to live, or should it be because of their choice of property? Was it to enable people to buy houses or was it to enable people to buy the houses that they currently live in?

212.

Mr Butler: Yes. The question is whether public money will be used to allow people to buy their current home. In other words, will public money be used to help social housing tenants to buy a unit of social housing or will it be used to encourage them to buy another property on the open market? In buying the properties they currently live in, tenants are heading for home ownership but they are also removing a social housing unit from stock. We are asking if that is the only way to help them. Is buying their own homes the only way for social housing tenants to become home owners, or will they be offered some other boon or assistance to enter home ownership? I am just raising that question.

213.

The Chairperson: Thank you very much.

MINUTES OF EVIDENCE

Tuesday 1 May 2001

Members present:

Mr Cobain (Chairperson)

Ms Gildernew(Deputy Chairperson)

Mr B Hutchinson

Mr ONeill

Mr M Robinson

Mr Tierney

Witnesses:

Mr M Watt ) Northern Ireland

Ms F Stewart ) Tenants Action Project

214.

The Chairperson: Good afternoon. The Committee will listen to your presentation and then ask questions.

215.

Mr Watt: All I will do is add a few observations that are inherent in the submission that we have already made. The comments we submitted, and the comments that we are making today, come from discussions with our own staff team and represent the views of the Northern Ireland Tenants Action Project (NITAP). We are pleased to have this opportunity to meet with you, particularly given the issues under consideration. I hope that these will form part of the new housing Bill.

216.

I will deal with large-scale voluntary transfers first. It is an interesting issue, and one that perhaps has not been given serious consideration in Northern Ireland before. Our organisation is glad to have the opportunity to broaden the scope of the housing debate. It is probably true to say that the large-scale voluntary transfer has become a central plank of the UK Government's housing policy. So much so, in fact, that a lot of commentators and, indeed, politicians in GB are describing it as the death knell of the local authority as major landlord.

217.

There is no doubt that it is an important tool in tackling major housing finance and management issues. Indeed, many authorities have gone the whole way to transferring their stock out of their own ownership, either to arm's-length management companies or other registered social landlords. The city of Coventry transferred some 40,000 properties in one fell swoop. At the same time, it is not such a bed of roses for the city of Glasgow. The transfer there has not gone through yet, despite the fact that the Bank of Scotland has offered £1·6 billion as part of the refurbishment package. They are talking about 90,000 houses.

218.

I was fortunate early in my career to work for Dundee District Council, which was pioneering stock transfer in the city at that time. I worked on a team that established the first par value housing co-operative in the city, along with a range of other initiatives intended to regenerate an estate on the periphery of the city. Plenty of lessons were learned from that particular exercise. The most telling one for myself, and the one that most informs the job that I presently do with NITAP, is the importance of investing time and resources in bringing local people along with the whole process. In fact, we transferred the ownership of a major part of the estate to a par value co-operative, meaning that tenants themselves took over not just the management but also the physical ownership, through the £1 share of the estate.

219.

I read yesterday that in Alton Park Estate, a 3,000-house estate in Wandsworth, south London, the residents have formally taken over the management of all housing services. That process was started six years ago. If we are talking about any kind of stock transfer - large-scale, voluntary or otherwise - there is going to be a fairly long lead-in period, particularly when one of the goals is to bring the local residents, be they tenants, owner-occupiers or others, along with the process.

220.

Some of the press speculation that I have seen in recent weeks probably prompted the view of large-scale voluntary transfer as a threat to the Housing Executive. My colleagues and I do not view it as such. We see it as an opportunity for housing and other professionals to get together with local people in order to establish the most appropriate mechanisms for the delivery of housing services and other services that are appropriate to the needs in their areas.

221.

It is worth restating that the Housing Executive has gone some way in pioneering resident involvement in services, both through the community involvement framework, which NITAP is pleased to support, and also through community participation compacts, which are emerging in most districts. There are increasing opportunities for residents to influence and shape services. The logical conclusion of that will be some form of stock transfer. If residents and other bodies want to go down that avenue, NITAP will be keen to support and facilitate that.

222.

With regard to the right-to-buy for housing association tenants, I hesitate to add further to what we have already said. I do not know whether it is a moot point at this stage; in the housing law reform in Great Britain there is a proposal to produce a bill by 2002-03 that would create single tenancies for all social housing. I anticipate a single tenancy for social rent, and it will include continued right-to-buy. Whatever comes out of these deliberations or out of the United Kingdom housing policy, NITAP is keen to ensure that housing associations are not punished for having good stock by losing that stock through right-to-buy. Some mechanism for protecting or compensating associations will be put in place.

223.

Mr Tierney: Can you develop what you said about the housing association? Are you supporting the right to buy?

224.

Mr Watt: There are compelling reasons to support extending the right to buy to housing associations, not least the fact that when the associations took over the new build responsibility from the Housing Executive, it created a two-tier situation. Some tenants in the rented section have the right to buy and others do not. That is an anomaly that ought to be addressed.

225.

If we are talking about stock transfer at the same time, housing associations in the rest of Great Britain have had their stock swelled through stock transfer from local authorities. That is one of the reasons why the discussion on the extension of right-to-buy to housing association tenants has been introduced. There are compelling reasons for doing that. However, the smaller associations, which manage some very good stock, need to be protected so that they do not lose all that stock under right-to-buy, particularly if discounts are offered at similar rates as have been offered in the public sector.

226.

Mr Tierney: If you accept the argument over right-to-buy, some smaller associations may suffer. You cannot give people in larger associations the right to buy and prevent those in the small associations from buying. That is discrimination.

227.

Mr Watt: Larger associations may also suffer, but they have a greater development capacity and so can absorb losing some of their stock through right-to-buy. The smaller and more specialist housing associations are most at threat. I would be loath to see any association losing its stock without having some kind of compensation mechanism in place.

228.

Mr B Hutchinson: People have the right to buy houses - a measure to try and change housing stock that was introduced by the Tories - but social housing is still required for a lot of people. How would you look after areas of high demand for social housing? If lots of properties are sold in those areas, then the need cannot be fulfilled. Should there be some form of protection for special needs housing? Should it not be sold?

229.

Mr Watt: Special needs housing needs to be protected in the rented sector so that it continues to be made available to those who need it. The experience of the Housing Executive is that changing family circumstances have left some older person's dwellings (OPD) in the hands of people who would not otherwise have qualified for them. We need to make sure that the proper kind of housing is available to those who need it.

230.

I am not convinced that the housing associations in Northern Ireland are sufficiently advanced to take the high demand areas and regeneration strategies on board - they are not advanced as their counterparts in Great Britain. However, I look forward to the time when they are. The Housing Executive has done a lot of regeneration and redevelopment work, but there is still a lot to be done and, in the absence of any others, the Housing Executive is the most appropriate mechanism for doing that.

231.

The Chairperson: The housing association is in a different position from the Northern Ireland Housing Executive as regards right-to-buy. Housing associations borrow money, and a lot of that money is borrowed on the presumption that rental streams will continue for a number of years. Is there some sort of compensation for housing associations if they lose their stock?

232.

You are talking about small groups of tenants taking over 5,000 to 10,000 houses throughout the Province. Would the administrative costs of large-scale voluntary transfers (LSVT) be enormous? Would there be 30 chief executives and 30 housing executive boards instead of one? What would be the benefit of that? The Housing Executive has 130,000 properties. What would be the benefit of breaking that down into 30 or 40 small housing associations?

233.

Mr Watt: I am not sure that there are huge financial benefits.

234.

The Chairperson: The idea of LSVT is the accrual of financial benefit for the Housing Executive. That is the motivating force across the water - go for LSVT and lever in private money.

235.

Mr Watt: It is designed to lever in private money, but also to allow the public contribution to continue to -

236.

The Chairperson: We can do that. Consumer panels and such things have been set up, and the Housing Executive can be made more democratic without touching its financial structure. The motivating force for LSVT across the water is to lever in private money - that is the whole key.

237.

Mr Watt: It is one key. I think that -

238.

The Chairperson: Is it not the motivating key?

239.

Mr Watt: The motivating key in the 1980s was to remove housing from local authorities, primarily because central Government was involved -

240.

The Chairperson: I know that; that was an ideological argument in the 1980s. I am talking about today. This is a Labour Government - even though it is hard to tell the difference between this Government and a Tory Government. The motivating force today is to lever in private money.

241.

Mr Watt: In England - not so much Scotland or Wales - the interests that resulted from the merger of the smaller housing associations into larger associations are less to do with small housing management issues. It is more to do with asset management, huge investment portfolios, the ability to borrow on the properties that they already own - particularly where some of those have come from good quality local authority stock - and the ability to borrow and act as businesses.

242.

Moves are afoot to do away with voluntary boards in certain associations, replacing them with paid boards so that the associations no longer act as such but as private rented landlords. There may be a desire on the part of the Government that associations be allowed to use part of the housing stock currently owned by the Housing Executive as an asset against which they could borrow. There may be benefits - social rather than financial - in pursuing resident management or ownership of the housing stock.

243.

To use the other side of the argument, it is a matter of creating a stakeholder democracy, where people have physical and financial ownership of the areas in which they choose to live so that they feel a greater sense of stewardship. One suspects that those social benefits from more sustainable use of the environment will have additional - if perhaps hidden - financial costs. There is another side to that equation, though it is very difficult to quantify at this stage.

244.

Mr ONeill: You made a number of points about the benefits of large-scale voluntary transfer, but more points against it.

245.

Mr Watt: I am glad that you spotted that.

246.

Mr ONeill: I am sure that all the points are interesting. However, from your point of view representing the tenants, which is better for them? Is it better to deal with a unitary housing authority that has a consistent set of rules and standards - I am in danger of revealing my own bias here - or to be in a multifaceted situation wherein one encounters different kinds of regimes?

247.

Mr Watt: I would love to be able to say that it is a little of both. There are certainly benefits. The history of the Housing Executive and the quality of service it provides are arguments for maintaining it. NITAP has seen the other side, in the relationship between the 37 district offices and individual consumer panels. Each district and group of community and tenant representatives works out its own ways of interacting with each other and has its own priorities for service improvements and adaptations.

248.

If the standards and expectations of the service are consistent, one obviously requires a unitary authority to apply them, such as the Housing Corporation in England, Scottish Homes in Scotland or Tai Cymru in Wales. There is certainly a role for Paddy McIntyre and his colleagues in the Housing Executive in ensuring that the standards set can be monitored, evaluated and enforced. The mechanism for delivery could differ from Strabane to Castlereagh if those providing and receiving the service have agreed on it in order to respond to local needs and demands.

249.

Mr ONeill: Does that degree of satisfaction have anything to do with your remark that tenants' groups have not shown as high a level of interest in taking control of their own estates or even environment? From dealing with tenants as you do, do you feel that that reflects a degree of satisfaction with the housing service they receive, or are there some other reasons why that has not happened here?

250.

Mr Watt: On the one hand, if the Housing Executive's own research on the matter can be believed - and I believe it can - there is a high level of satisfaction with its services. On the other, the question of stock transfer has not yet arisen in the Province. Consideration has not been given to this matter. It has been very much a GB issue, rather than a Northern Ireland one. It has not developed organically out of our methods of providing public sector housing. If other considerations are brought to bear, such as the desire to lever private finance into public sector housing, then that changes the ground considerably. I can see some appetite for people providing the housing service themselves, rather than parachuting in a registered social landlord from another part of the Province or the United Kingdom.

251.

Ms Stewart: To be fair, the disadvantages were mentioned. There are uncertainties and, as an organisation, we recognise that. As you said, the framework of compacts and consumer panels we are now working in has opened that up and formalised many of those arrangements. However, if a choice is given, how will that choice be made? There will be a big difference in the way that groups operate, particularly in urban areas compared to rural areas. Mainly people are satisfied with the service that is being provided through the compacts, but if choice is involved, how do we ensure that they are properly informed and trained to undertake that?

252.

The Chairperson: We have had representations from student organisations. They have no formal links with the Housing Executive. Do you have a working relationship with students to make representation on their behalf to the Housing Executive?

253.

Mr Watt: If any of the student unions wished us to raise an issue, either with the individual consumer panel or their central community advisory group, we would be pleased to discuss that with them.

254.

Finally, I have a draft copy of a community participation compact that has been agreed between the Housing Executive and us. I will leave a copy for your information.

255.

The Chairperson: Thank you. That was very interesting.

MINUTES OF EVIDENCE

Tuesday 1 May 2001

Members present:

Mr Cobain (Chairperson)

Ms Gildernew(Deputy Chairperson)

Mr Hamilton

Mr B Hutchinson

Mr ONeill

Mr M Robinson

Mr Tierney

Witnesses:

Mr K Butler ) Northern Ireland Co-ownership

Ms Patterson ) Housing Association Limited

256.

The Chairperson: Welcome to the Committee. We are hoping to work to a format of 10 minutes for presentation, followed by some questions.

257.

Mr Butler: Thank you for the invitation and the opportunity to speak to you today. I do not intend to speak for very long because we did not have much to say in the submission that we made to you as we are not directly involved in this matter. We are just giving an opinion from a professional point of view. I would like to make the following brief points in light of our submission.

258.

On Large Scale Voluntary Transfers (LSVTs) from the Northern Ireland Housing Executive (NIHE), it is important first of all to assess the potential in Northern Ireland terms. What should be the criteria for potential LSVTs in terms of stock? What, if anything, is to be included in the stock to be transferred? How many properties are involved and what is their location? By location, I mean areas of high demand and so forth.

259.

Secondly, there is the matter of new types of landlord - housing associations or private management companies. It could be argued that housing associations would be setting themselves up as mini housing executives, as at the moment they have a development function. In taking on transfers of stock they would become developers and managers. At the moment they do not really have a large-scale management role - they simply develop, and manage what they develop.

260.

Private management companies - another type of landlord - are simply created for the sole purpose of managing and maintaining groups of properties. Thought must be given to support those likely to be affected, including the NIHE tenant base and those on the common waiting list for accommodation.

261.

Essentially we start from the position that any transfer of housing stock to another landlord should, as a minimum, leave the tenant no worse off. Ideally, it should offer some benefit to the tenant. It is also be important to ensure that regardless of who the landlord is, tenants should have access to the same standard of service, and that landlords should be equally and severally accountable for providing that service. That would entail a significant commitment to consulting with tenants and to managing and monitoring the service. Through the Department for Social Development, the NIHE and the housing association movement, there already exist established performance standards for social housing management, mechanisms for the control and accountability of social landlords, and regional and local housing policy - an integrated strategy for programme delivery.

262.

In looking at the rights of housing association tenants to buy their properties, the Programme for Government - and I am sure everybody quotes that document - aims to ensure that everyone has the opportunity to access decent affordable housing in the tenure of their choice. The Northern Ireland Co-Ownership Housing Association is the only housing association registered in Northern Ireland that does not provide housing for rent. As a specialist shared ownership association, proposals for the right to buy do not directly apply to us. In fact, it could be said that our purpose is to acquire properties on behalf of our applicants and then encourage them to remove them as quickly as possible from our stock by increasing their share and becoming full owners of the properties.

263.

I understand that the Northern Ireland Federation of Housing Associations is developing proposals on right-to-buy and that witnesses will shortly appear before the Committee on this matter. Our comments therefore relate to the importance of clarifying the ultimate policy objective. Is it to enable people to buy affordable homes or - more specifically - to buy homes in which they currently live? To what extent should policy and the public purse support property choice as well as tenure choice?

264.

The main low-cost home ownership initiatives in Northern Ireland, which are the Housing Executive's tenants' sale scheme and the co-ownership equity sharing scheme, are well established in part of the local culture. Concerning co-ownership, both Housing Executive and housing association tenants are already assessed on an equal footing. People may not however purchase through co-ownership the property in which they currently reside. If this inquiry results in changes to the mechanism for tenant purchases, there may perhaps be a future role for the co-ownership scheme in assisting some tenants to buy their current home.

265.

Mr ONeill: Mr Butler queried the use of public funds in allowing housing association tenants the right to buy their own property. I did not pick up on what you said. Can you expand on that? It was the reason why public money should be spent. Should it be spent because of where people want to live, or should it be because of their choice of property? Was it to enable people to buy houses or was it to enable people to buy the houses that they currently live in?

266.

Mr Butler: Yes. The question is whether public money will be used to allow people to buy their current home. In other words, will public money be used to help social housing tenants to buy a unit of social housing or will it be used to encourage them to buy another property on the open market? In buying the properties they currently live in, tenants are heading for home ownership but they are also removing a social housing unit from stock. We are asking if that is the only way to help them. Is buying their own homes the only way for social housing tenants to become home owners, or will they be offered some other boon or assistance to enter home ownership? I am just raising that question.

267.

The Chairperson: Thank you very much.

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MINUTES OF EVIDENCE

Tuesday 1 May 2001

Members present:

Mr Cobain (Chairperson)

Ms Gildernew(Deputy Chairperson)

Mr B Hutchinson

Mr ONeill

Mr M Robinson

Mr Tierney

Witnesses:

Mr Mills )

Mr Corr ) Council of

Ms McCormick ) Mortgage Lenders

Mr Heywood )

268.

The Chairperson: Welcome to the Committee. You will have 10 minutes for your presentation, after which there will be questions.

269.

Mr Mills: Our members hold 98% of the mortgage assets in Northern Ireland and we are interested in the issues that the Committee is discussing. We welcome the opportunity to be involved in this public policy debate.

270.

Sandra McCormick is from the Ulster Bank. Andrew Heywood is a member of the Council of Mortgage Lenders committee. He looks after the committee's interests in Northern Ireland as well as the regional committees in Scotland and Wales and is therefore aware of regional issues across the UK. Dan Corr is a long-standing member of our committee and former chairman who is with Nationwide. I am the most recent appointee to the chair.

271.

Mr Heywood: It is good to be here at a point when we can make a modest contribution to the longer- term strategic debate. We are not here because of a crisis in social housing in Northern Ireland or because of widespread dissatisfaction with social housing providers, unlike in other parts of the UK. Social housing in Northern Ireland is generally of a higher quality than elsewhere in the UK. The main provider of that housing, the Northern Ireland Housing Executive, is respected and has community support.

272.

We have the chance to offer a few thoughts on the preparation of the longer-term strategic view of the future of the Northern Ireland Housing Executive, stock transfer and the associated issue of the right to buy and housing association tenants.

273.

I would like to draw on the UK experience of Large Scale Voluntary Transfers (LSVTs). That is one of the options worth serious long-term consideration. LSVTs have perhaps been the biggest development in social housing in the UK. Over 500,000 homes have been transferred to registered social landlords and about £21 billion of private finance has been levered in via those transfers.

274.

Approximately 115 different lending institutions are involved in that transfer process. Most stock transfers have taken place in England. However, Scotland is preparing its own transfer programme and the issue is under debate in Wales. Without going into too much detail, stock transfer offers advantages that make it worth consideration by the Committee. LSVTs enable private finance to be levered in because landlords are outside the public sector borrowing requirement (PSBR). When public finance is limited, LSVTs provide an opportunity to meet the backlog in repairs and improvements to social housing. In England, for instance, that backlog was estimated at £19 billion.

275.

Transfers also mean that public investment is protected by not-for-profit regulated organisations. That regulation is important. Tenant participation is maximised, as is local accountability. Tenants are the most important people in the scheme, and there is evidence that they are generally more satisfied with housing association landlords than with the old local authority landlords -survey evidence can support that.

276.

The situation in Northern Ireland is different to that in the UK as a whole. As I have already mentioned, public sector housing in Northern Ireland is generally better than private sector housing when it comes to matters such as stock condition and age. Public sector housing in Northern Ireland also tends to be better than analogous stock in England. The horrendous backlogs that have made the matter more urgent elsewhere are not an issue in Northern Ireland. The Northern Ireland Housing Executive has also been perceived as a sound landlord, taking a strategic view that ensures high quality of provision.

277.

There is not the same urgency for stock transfer or any other major change in social housing organisation as there is elsewhere. Nevertheless, long-term options do need to be considered, and the reasons are as follows. One of the reasons that Northern Ireland public housing is better than elsewhere in the United Kingdom is that per capita spending has tended to be higher in Northern Ireland than elsewhere in the United Kingdom and we have to ask ourselves whether, in a more normalised environment, that is going to continue to be the case, or whether there will progressively be a need to bring in private finance to supplement public finance over the longer term. That is clearly a political judgement that has to be made, but it is an issue that at least has to be looked at.

278.

Secondly, the Northern Ireland Housing Executive (NIHE) is shrinking as a landlord because it does not have new build and because of the effects of the right to buy at around 4,500 per year. Sooner or later the question of economies of scale will mean that there will be some sort of a debate along the lines suggested by the Department of the Environment policy review document from 1996, 'Building on Success'.

279.

Also unlike elsewhere in the United Kingdom, NIHE provides 85% to 90% of social housing in Northern Ireland. There is not the plurality of provision between different local authorities and between the local authority and registered social landlord (RSL) sector that you get elsewhere, so in that sense there is no element of tenant choice and no element of competition to drive up standards. It may be well worth looking at that in the longer term.

280.

Not all options to bring in private finance - if that were to be one of the major considerations in terms of making changes to the role of NIHE - would necessarily involve stock transfer. In our limited experience we have come across various options that have been canvassed. The notion of "arms length" companies is one, as I am sure you are aware, that has been promoted by Nick Raynsford, the Minister for Housing, Planning and Construction, by which local authorities set up a wholly-owned company which then gives them a certain amount of discretion over borrowing.

281.

It provides a degree of discretion and there may be certain management advantages in it. However, it is at the moment an untried option in that no English local authority has yet managed to successfully get through the hoops that the Government has set. There are some signs that the Government is likely to relax those, so we may see some movement in the direction of "arms length" companies over the next year. However, a major problem is that while they create a certain amount of relaxation in borrowing, they do not circumvent the PSBR.

282.

I have also heard private finance initiatives (PFI) being canvassed. PFI as you know is a system by which the risk of providing a service is taken by a private provider while the public authority tends to retain ownership. PFI in housing terms would presumably mean that the tenants remained as NIHE tenants but services would be offered by a private provider on a long-term basis.

283.

As you may be aware, the Government has set up eight pathfinder projects in England to examine this as an option. At this stage it remains an untried option and in the view of some it could prove to be an expensive one. That said, it cannot be ruled out at this stage.

284.

There have also been discussions about changing the status of the NIHE itself to enable it to become independent of the PSBR. That is quite interesting. One could have a halfway house perhaps, such as a public corporation like the Post Office, which would not give all the advantages of being outside the PSBR but would give some flexibility. One could take it further and reconstitute the NIHE as a huge registered social landlord with borrowing powers. However, that would raise questions about whether it would be publicly accountable enough to continue with its strategic role, which, most people would agree, has been an important one over the years of its existence.

285.

It would then be one huge semi-privatised organisation sitting amongst 40-odd very small housing associations. Quite how the balance of that would work would have to be thought about quite carefully.

286.

There are a number of options and clearly none of them could be sensibly ruled out at this stage. I suggest that, from looking at longer term needs, the role of the NIHE could be maintained as a strategic housing authority, but not necessarily as a landlord, depending on how one views that.

287.

The option of stock transfer to a number of registered social landlords in the future could be worth considering because it provides a means to lever in private finance; it offers tenant participation; it offers a regulatory framework to give tenants confidence. It would also help build up the housing association sector, particularly if some of the existing organisations are involved. The housing association sector in Northern Ireland is small compared with elsewhere in the UK. At this stage we would ask you to consider that option. It has a track record that makes it worthy of serious consideration.

288.

If you recall, we gave evidence in December on the right to buy issue, and I will update that now. It was not apparent then that if the voluntary purchase grant, that is currently given to housing associations who voluntarily operate the right to buy to refund them the discount that they give to tenants, would be extended if the right to buy was extended to housing association tenants. Clearly, that move by the Department for Social Development makes a major change to that situation in that it largely, in our view, removes the fear of lenders security on housing association assets being eroded, or housing associations ending up with a debt that they could not service.

289.

You may still wish to argue as to whether there could be some short-term cash flow problems for associations in that situation, but, clearly, it removes major short-term concerns. We would make one longer-term point about the right to buy - at the present time the voluntary purchase grant is not a huge burden on public expenditure. However, if the right to buy was extended it would become a burden, and if public expenditure constraints became stricter it could become a tinge and, perhaps, something of a distorting factor. That must be looked at in more detail.

290.

However the right to buy might become a large burden if the stock transfer, or a similar option, was entered into. The number of properties susceptible to voluntary purchase grant through the right to buy would grow dramatically. That could lead to the awkward position of either withdrawing voluntary purchase grants to avoid distorting other priorities - that could place some registered social landlords in difficulty - or sticking with it and potentially soaking up a significant proportion of the housing budget. Therefore it is simply a longer-term word of warning in that direction.

291.

Ms Gildernew: You talked at length about the benefits of LSVT. What are the disadvantages?

292.

Mr Heywood: There are two perceived disadvantages. The first is stated as being the loss of immediate local democratic accountability. In UK terms that would be where housing is controlled by democratically elected local authorities and it could be argued that there is direct democratic control. It is an overstated argument, because boards of registered social landlords typically have a third local authority and direct tenant representation. The situation here is different. However, that is the most commonly stated disadvantage.

293.

The other disadvantage - and again it is overstated - is that the landlord and strategic functions are disconnected. In other words, a local authority might still have a strategic function with regard to housing, but will not act as a landlord. Some people view this as a disadvantage while others would disagree on the basis that to properly exercise a strategic role across both the private and public sectors a local authority ought to be able to stand back.

294.

An analogous argument could be applied to the NIHE. Those are the two most commonly stated disadvantages, but I am sceptical of their significance.

295.

Ms Gildernew: A concern about the lack of affordable social housing was expressed in other submissions to the Committee. Do you share this concern?

296.

Mr Heywood: If there is to be an increase in the supply of affordable social housing, the ability to lever in private finance could act as a means of meeting housing needs if public expenditure constraints were to tighten in the future.

297.

Ms Gildernew: Does it concern you that although rent increases are capped for the first few years, there have been significant rent increases in properties across the water?

298.

Mr Heywood: In the past, some RSL rents have risen more quickly than local authority rents. However, the Westminster Government aims to bring RSL and local authority rents into line over the next 10 years. If a large-scale transfer were to take place this side of the water, it is presumed that the Department for Social Development would try to create some sort of continuity here too.

299.

Ms Gildernew: Finally, if the Department for Social Development were to have a role in maintaining rent levels inside a fixed rate, would LSVT private bodies become less attractive?

300.

Mr Heywood: That has not been the case until now. The RSLs are not-for-profit bodies anyway, though they need to viable. There is a general confidence that they will be able to meet those targets of converging rents while remaining viable.

301.

The lenders have fairly narrow margins on social- housing lending, but most RSL business plans appear to be robust enough to be able to service their borrowing, meet their costs, and meet their targets.

302.

Ms Gildernew: We do not have firm evidence that they have maintained rents at reasonable rates. According to some of the figures we have received, there have been increases of 60%-70%.

303.

Mr Heywood: As with the local authority sector, there have been occasional problems with housing associations that have not performed as well. For instance, that is one of the reasons why the Housing Corporation has been overhauling its regulation of RSLs. We are moving towards a situation in which the Government will require closer convergence on rents, therefore it will be important to have a regulatory regime to ensure efficiency and viability. Any move towards stock transfers in Northern Ireland ought to be made in adherence with the regulatory regime to ensure that that is adequate to the task.

304.

Mr ONeill: Mr Heywood, in your comments on stock transfer you said that Northern Ireland lacked an element of competition to drive up standards. On the other hand, you spent a good deal of time praising housing standards here. Are you saying that there is no need for us to use a model that, when applied in England, has not resulted in such high standards? Should we argue for the retention of the system that has produced these good standards, which were outlined by the Housing Executive high quality relationship with tenants, good quality of building, et cetera?

305.

Mr Heywood: I take your point. One of the underlying factors in Northern Ireland has been higher level of per capita public expenditure - for understandable reasons - over quite a long period. That has made a difference. The NIHE has performed well. However, because something has performed well does not necessarily mean that you do not look at experience elsewhere to see whether there are possibilities of making it perform better. It may be that increased competition and plurality of provision will provide fertile ground to promote new ideas and create an impetus for a general raising of standards.

306.

Mr ONeill: The converse of that is patently true as well. If something works, why change it?

307.

Mr Mills: All of us who live in Northern Ireland are proud of what the Housing Executive has achieved. Our perspective is that we are now moving into a different era for public funding in relation to housing. We are lucky to have the time to sit down and think about this in a controlled way. It will probably be some years before the crisis develops, if it does develop. The current debate is therefore very welcome, and I suppose that we all feel that things are changing. The members in this room probably agree that aspects of public funding are also changing.

308.

From a personal perspective, RSLs appear, on the surface at least, to operate in a very similar way to housing associations. We have had very good experience of housing associations in Northern Ireland. We have a good record of managing housing through the NIHE, and, therefore, we have competent housing associations, by and large. It is not beyond the bounds of possibility that we could have an orderly transfer to these RSL-type bodies and that, through them, we could achieve efficiency in social housing and keep rents under control.

309.

We share the concerns - but lenders are not in this business just to make money. As Andrew Heywood said, although lenders are not lending at a loss, they are lending on very tight margins. Frankly, there are probably more profitable ways to use the money. However, it suits all of us to have an orderly housing market, and we are happy to help in that. If you look at the list of lenders you will see that quite a number of people do not appear on it, because they have not taken part in this kind of funding before in Northern Ireland - certainly not with housing associations. It is not necessarily something that all lenders would want to do, because it is not a hugely profitable activity. We just need to find a mechanism by which they can contribute, and we can encourage them to contribute, to help the future provision in Northern Ireland.

310.

Mr ONeill: I can see that lenders would have considerable interest in the stability of the housing market and in encouraging people out of public-owned houses and into private capacity, where perhaps they will eventually move into the higher market thus keeping the business ticking over. I can understand your interest. However, how far does your commitment go?

311.

Some time ago a right-to-buy scheme was negotiated - I think by a member of this Committee, Sir John Gorman, when he was chief executive - with lenders to try to give people the opportunity to have mortgages even though their incomes were not, let us say, very high or dependable. The scheme was for people who would not normally be good mortgage- lender material, if you know what I mean - those who would not normally qualify for a mortgage. That was all negotiated and put into place. However, my information is that it is not in place any longer. Perhaps I am wrong.

312.

Mr Corr: You are correct. I worked with Sir John Gorman on that matter in a private capacity. He was a board member of my own organisation. In the private sector, demands are governed by needs. You are quite right; that scheme faded out because of the lack of demand.

313.

The changing environment mentioned by Mr Mills is probably the determining factor in our looking at the whole question of the NIHE in a different light. I suppose that the right-to-buy scheme has been the catalytic factor in all of that in recent years. It has changed the face of the NIHE in that it does not have anything like the same number of properties to govern. The right-to-buy scheme has had a major influence. It has been the catalyst in changing the face of housing in Northern Ireland. It has also changed the NIHE. We are in a changing environment and I agree with Mr Mills that this is a superb opportunity to look at that change.

314.

Mr ONeill: Would you be interested in such a scheme?

315.

Mr Corr: Are you saying that there is a need?

316.

Mr ONeill: If a need were identified, would you be interested?

317.

Mr Mills: We would certainly consider it.

318.

Ms McCormick: It is something that would need further investigation, but all lenders would carry out responsible lending practices. We still need to know if we are doing people a favour by helping them get into a scenario that we would not normally encourage. That would need to be carefully defined.

319.

Mr ONeill: That is a general question. I am not necessarily making an argument for or against it.

320.

Ms McCormick: In my organisation we do quite considerable lending for the right-to-buy scheme, where the criteria are not black and white. We also look at the grey cases and analyse those on a case-by-case basis, always adhering to our principles of responsible lending.

321.

Mr B Hutchinson: I believe that you are right, Ms McCormick. However, as decision-makers and elected representatives, we have to look at the social benefits involved. If a right-to-buy scheme were in place, would that just move someone from a maintenance list? We must look at that also.

322.

One of my concerns about the right-to-buy scheme is that we have social housing in particular areas where there is high demand and if we were to sell those houses we would end up with nowhere to house people. The other disadvantage is that there would be areas where there is no demand. By doing this, you would be in many ways - though I do not think that ghetto is the right term - making it worse.

323.

Mr Mills: Those are all valid points. We recognise, above all, that there is a limit to the size of the owner buying market. There will always be a need for social housing and we will need to find the best way to fund that. We are in a situation where the Exchequer tends to provide more funding for us for housing than perhaps they have done per capita across the water. If that were to continue, then we would probably not be having this debate. We could take the view that is unlikely to continue and therefore we will have to look for other ways to provide social housing. You are correct, and I think that we, as a group of lenders, will act responsibly in trying to aid that provision.

324.

Mr B Hutchinson: How would you see it operating? If the Department for Social Development were to decide that everybody had the right to buy, people would be coming to your institutions for loans. Would you impose restrictions in particular areas, or would you be advising the Department not to open up that market?

325.

Mr Mills: As Ms McCormick said, all lenders look at individuals, rather than areas. There is no redlining of any area as far as I know, by any of the lenders. We view every proposition on its merits. There is not as much Government support now as there was when the original right-to-buy scheme came out for people who were falling into arrears difficulties. Each person must make his own provision or have insurance.

326.

If we were to encourage people who could not afford to buy houses to do so, that would be acting irresponsibly towards them and towards the market in general. We do not want to get into the situation - as happened in the late 1980s and early 1990s, particularly across the water where there was negative equity - where competition meant that good lending practice went out the window and money was loaned to people who could afford to repay. It is as simple as that.

327.

Mr B Hutchinson: Would you suggest that the Government should give urban development grants and keep mortgages down?

328.

Mr Mills: It is a question of how resources are used. That is probably a for you to determine.

329.

Mr B Hutchinson: It has been successful in areas in Belfast.

330.

Mr Corr: I have taken part in many forums on the subject of housing and finance, and if we were having this discussion in 1988 or 1989, it would be different to the discussion we are having now. At that time recession occurred and it changed our minds dramatically. There is nothing that tightens organisations as much as when they start to lose about £300 million a year.

331.

The Chairperson: Could I just make this point. We are trying to equate Northern Ireland with the rest of the United Kingdom. They are two separate entities, and they face two very different problems. You are correct in saying that Northern Ireland stock is far better than it is across the water. The stock across the water got to levels where the Government was forced to look for private finance, and it levered in huge amounts of private money. We are not in that situation; stock here is relatively good. We discussed that issue today. The Housing Executive pay about £250 million per year in loan debts. That is on a plateau at the moment and will continue to fall quite dramatically over the next five or ten years. That will mean that additional finance will be available to the Housing Executive without touching the PSBR.

332.

There are many factors involved. One is that 80% of Housing Executive tenants claim housing benefit, irrespective of what the rents are. They are completely immune from rent increases. In rental streams, the NIHE is completely different from its counterpart across the water.

333.

I accept your point that we have been cushioned to a certain extent through the recessions and through the PSBR in that housing has been allowed to continue to grow here. We have been very fortunate, but that is not going to continue. Everyone knows that there is going to be a restriction over the next number of years as far as Northern Ireland is concerned. We should not necessarily run out and think that that is going to be an absolute disaster, because it may not be. There is no sense of changing things for the sake of change. Everyone must look at organisations as we go along, because we do not want to remain in a rut. No one is saying that.

334.

There are clear differences between Northern Ireland and across the water, but trying to parachute problems and solutions between here and there may not necessarily be the answer to our problems. We are very fortunate that we have a housing authority, which, to a large extent, has the confidence of tenants. We can work with them. From a purely financial point of view, the situation is not the same as it is across the water.

335.

Mr Mills: We totally accept that. NIHE has the confidence of tenants and the confidence of lenders as well. We see it as a very efficient and effective body.

336.

Mr B Hutchinson: Are there figures for the number of people in England who purchase their houses, which are now being redeveloped, and for which they cannot afford another mortgage? For instance, are there any figures relating to people in their mid-40s who bought the houses that they are now living in from the Government and that are going to be redeveloped, who cannot afford the new mortgage?

337.

Mr Heywood: There are some cities where urban regeneration problems have created difficulties for owners in terms of local authority compulsory purchase, which has then left owners in positions of negative equity. However, that has not particularly been an right-to-buy owner problem. It has been more of a problem in areas where, for a variety of reasons, the community has gone downhill. People may have bought houses for £25,000 to £30,000 - the compulsory purchase value can be as low as £8,000 - and suddenly people are in serious difficulty.

338.

Salford, in Manchester, is one case in point, as is Sunderland and parts of Newcastle. However, it is not particularly a right-to-buy problem as far as I am aware.

339.

The Chairperson: Thank you very much. That was very interesting.

MINUTES OF EVIDENCE

Thursday 3 May 2001

Members present:

Mr Cobain (Chairperson)

Sir John Gorman

Mr B Hutchinson

Mr G Kelly

Mr O'Connor

Mr ONeill

Mr M Robinson

Mr Tierney

Mr S Wilson

Witnesses:

Mr J Gartland ) The Chartered

Ms J Hunter ) Institute of

Mr J Perry ) Housing in

Mr K Walsh ) Northern Ireland

340.

The Chairperson: Good afternoon and welcome to the Social Development Committee.

341.

Will members declare their interests?

342.

Mr B Hutchinson: I declare an interest. I am a voluntary member of Filor Housing Association.

343.

Mr Walsh: I would like to introduce the delegation and state who and what the Chartered Institute of Housing (CIH) is and its role in Northern Ireland. I will then highlight some of the recommendations from the written submission. Janet Hunter is the director of the housing rights service and a member of the Northern Ireland branch of the institute. John Perry is the director of policy for the institute throughout the UK. John Gartland is the Chief Executive of the Ulidia Housing Association and also the Northern Ireland member on the UK council of the institute.

344.

The institute is a professional body for people who work in social housing, with a membership base of 17,500 throughout the UK, divided into various regions and co-ordinated on a branch structure with voluntary members contributing through that branch. Northern Ireland has the smallest branch but is the institute's response to the devolution agenda, and, with the support of the then Department of the Environment, the institute received funding to facilitate the setting up of an office in Northern Ireland. I am the director of the office in Northern Ireland, and the office is manned by a policy officer, who is aiding me today, a training and education officer, looking at developing training and education to service the needs of housing staff; and also office administration staff.

345.

The main points of our submission detailed each of the two stages covering the four main items that the Committee enquired about. I propose to go through each of those in turn, highlighting some of the major points from the written submission.

346.

In relation to the private sector renewal proposal, to move from mandatory to discretionary grants, we believe that this is a passive measure and simply replicates the changes that were introduced in England and Wales in 1996. We do not believe that the same dynamics for change exist today compared to 1996. What is required is a housing strategy that meets the needs of all our local community, harnessing the best form of developments in the rest of the UK but reflecting changes in unfitness standards. The CIH believes that expenditure on renovation grants needs to be better targeted so that the households which benefit are those with the worst problems and least able to pay for the necessary work. It is possible to stretch the available funds to a larger number of households by combining partial grant with low-cost loans in a match-funding arrangement. This would give owners an incentive to improve their homes.

347.

Reducing the level of unfitness must become a clear target for Government policy, equivalent to the 10-year target for social housing in the rest of the UK. Without clear objectives the choice of tools at this time appears meaningless.

348.

With regard to houses in multiple occupation (HMOs) and the regulation of the private rented sector, I would state that the proposal to introduce a voluntary licensing scheme for HMOs is welcomed by the institute as a useful first step. The institute agrees that the aim of licensing should be to raise property and management standards but feels that compulsory licensing across the whole private rented sector is required to ensure a better deal for all private tenants, not just those in houses in multiple occupation. It would be a better use of public money, would raise the image of the sector and act as a catalyst for expansion. Licensing needs to be kept simple and cost effective, incorporating an independent appeals process which is not included in the current voluntary scheme to be introduced by the Northern Ireland Housing Executive. Licensing also needs to be seen as an accredition of quality in terms of condition and management. Owing to the size of the sector in Northern Ireland, compulsory licensing is manageable.

349.

Regarding the vagaries of private renting in Northern Ireland, we need to develop a vision for the future, looking particularly at housing conditions, the distinction between controlled and uncontrolled tenancies and the issues of security of tenure and rent.

350.

On large-scale voluntary transfer, the outline proposal by the Department for Social Development is simply to remove the single tenant veto, should stock transfer be proposed. The CIH submission, however, provides a preliminary look at some of the future options against the background of what is happening elsewhere in the UK. Key issues include retaining public confidence in our current delivery mechanisms, the need to harness resources and expertise, levering in private investment, treatment of Housing Executive debt and more modest reforms to current delivery mechanisms. Those reforms could be introduced in the current structures or as part of the development of preferred future options.

351.

On the right of housing association tenants to buy their properties, the CIH does not oppose the extension of the right to buy to all social housing tenants. We want, however, to see reforms which achieve a better balance between the aspirations of individual tenants and the necessity to provide decent rented housing for those in housing need, to be decided according to local strategies.

352.

We propose that discounts should be determined locally, subject to a regional cap. Social landlords should be able to retain the right to buy receipts for housing purposes. We believe that we should investigate quota selling to preserve certain percentages of particular types of housing stock. There need to be tighter rules in eligibility, standardised discount for flats and houses, and exemption for rural settlements with a population of less than 5,000. It is necessary to ensure the financial viability of existing associations through exemption for a number of years, to introduce a transferable discount scheme or the Homebuy initiative, to examine the cost floor rules and clawback periods, and to introduce a system of monitoring and review.

353.

It is argued that extending the right to buy to all social housing tenants is equitable. How can it be equitable that in one area some tenants can receive upwards of £60,000 discount, while in a different location tenants paying the same rent for the same property of the same age will receive less than £15,000? We believe that a modernised house sale scheme is required for all social housing tenants, with flexibility and discounts linked to actual housing need.

354.

The CIH welcomes this opportunity to address the Committee and to articulate the principal recommendations in our written submissions. We are pleased that the Committee has commenced this process of consultation, which will undoubtedly assist in developing a more strategic approach to underpinning future housing services. We believe that is lacking in the current piecemeal, incremental approach in the outline legislation.

355.

We look forward to local solutions' being applied to Northern Ireland housing issues, and to the development of the specific strategies' reflecting our community. Members here recognise this challenge, and you can be assured of our continued support and co-operation in developing coherent policies to help to shape the future.

356.

We thank you for our invitation today, and commend our recommendations to you.

357.

Mr Tierney: Are the figures you quoted - £60,000 and £15,000 - the prices of the houses in certain areas?

358.

Mr Walsh: The Housing Executive would tell you that recently one of its properties was valued at over £100,000. The current maximum discount for a house is 60%, allowing that tenant £60,000 discount. In another area, the same property could, because of the demand and the value of that house, be valued at £25,000, a maximum discount of £15,000. That is the inequity.

359.

Mr ONeill: I am interested in that area, and the institute is making - let us say - startling recommendations. I gather from what you have said today and from your submission that you want the right to buy for all social housing to be re-examined and focused to what is good for Northern Ireland.

360.

You introduced a couple of things that I find very interesting - for example, the small rural town with less than 5,000 houses. I would like to hear some of the rationale behind those things, why you have come to those conclusions. Perhaps you would also expand on all of your recommendations on the right to buy.

361.

Mr Walsh: In relation to the rural settlements, the Assembly has committed itself to rural proofing its policies. We recognise that by selling off the properties - which have been provided in local settlements to meet the public sector needs in those communities - we are losing those properties, and we are not able to meet the needs of local residents in local settlements. More often than not people are having to go outside those settlements.

362.

It is also about keeping pace with developments in the rest of the UK. In 1996 they introduced changes in the right to buy and right to acquire which allowed exemptions in rural settlements of less than 3,000. The Housing Executive voluntary sales scheme has not kept pace with some of those developments during that period of time. This is an opportunity to try to look at that rationale, to look at rural proofing those particular policies and yet not simply be driven on the basis of equity - that everybody should have this - but to look at it much more strategically. We want to look at what the future and current demands for housing are in certain areas and to allow the policy to reflect those changes.

363.

People would not be disadvantaged by such a proposal. If people were interested in buying property and stepping on to the owner/occupation ladder they would still - through the transferable discount or the Homebuy schemes - be able to receive moneys to help them purchase. This would free up their property to rehouse people from the waiting list in that area, and this would reflect demands. At the current time, if a sitting tenant buys the house he lives in, that property is lost in terms of its future potential to rehouse people in need in that area. What this does is balance the needs of demand with the requirements to continue to support the right to buy. Perhaps Mr Perry wants to add something on the UK situation.

364.

Mr Perry: It is worthwhile looking back at why the right to buy was established in the first place. It was brought in as a means of promoting home ownership and raising the level of home ownership. Now that home ownership across the UK is at a high level compared with the rest of Europe that original reason for having the right to buy has largely disappeared. We would like to see the right to buy used more strategically in Northern Ireland and in the UK as a whole. What is the purpose of the right to buy? Do we want it? Do we want to look at it in relation to the way that the local housing markets are working? In some areas promotion of home ownership might be a good idea. In other areas maintaining affordable rented housing may be a high priority because of the loss of rented houses and the inability to build new rented housing over the last few years.

365.

There is also bound to be concern about sustainability as we push towards higher and higher levels of home ownership. We want to make sure that we are not encouraging people into home ownership who cannot sustain it over a long period.

366.

Interestingly, on the rural housing aspect, a few months ago your colleagues in the Environment Committee at Westminster proposed that the right to buy should be restricted in rural areas of less than 5,000 dwellings. That is the first significant suggested change in policy on the right to buy in England for several years. There is a momentum building up behind the idea that the right to buy does not make sense in rural areas where there is such a premium on rented property, and where, in many cases, the right to buy is eroding the supply of rented property. In some places it has been reduced almost to zero.

367.

The Chairperson: Let us suppose that I am a tenant of the Housing Executive and living in an area of high demand. The Housing Executive wants to sell the house in that area, and I want to buy it. Are you suggesting that the Housing Executive would give me a premium to go somewhere else?

368.

Mr Walsh: Yes. Many of the local authorities in England who have not had the advantage of being able to build for a number of years have introduced a transferable discounts scheme. The level of discount that you would be entitled to, as a sitting tenant, is made available for you to buy a property in the area that you want to go to. You can use that as a deposit to facilitate that move and free up the property you have.

369.

We have sold over 90,000 properties to sitting tenants. We now have 120,000 properties. When the Housing Executive came into being there were 212,000 properties. We still have urgent housing need, but we cannot meet that need because the opportunities are no longer available. If someone moves out they can use that property. Under the acquisition of satisfactory housing (ASH) scheme, the Housing Executive and housing associations are returning to those areas to buy back former Housing Executive properties to meet needs. Therefore, in essence, they are giving the discount on one property and then they are fuelling price inflation by trying to buy properties back to meet the needs in the same areas. It is a vicious circle.

370.

There is an opportunity to cut that circle by saying that the policy should be in place, not to disadvantage one community or another, but to facilitate house purchase with a discount cap. The caps would not allow some people to get £60,000 and other people paying the same rent, £15,000, rather they would facilitate mixed tenure in areas to allow stability, and in other areas, to encourage people to move out so that you could use the property.

371.

The Chairperson: What about people who are not Housing Executive tenants? People who live in Housing Executive houses in an area of high demand may not want to sell their house, but the Housing Executive gives them a premium to move elsewhere. How is that not a disadvantage to someone who is a first-time buyer or who has just got married and is not in a Housing Executive house and has to find the money to purchase a house elsewhere?

372.

Mr Walsh: These were the same arguments when the right to buy was introduced in 1980. People said that discount was being given to Housing Executive tenants to buy a house in that location, and they were living next door as an owner/occupier. This was endeavouring to create stability in some areas by allowing people to become owners so that they were more likely to take an interest in their community and their property and invest in that. That was the ethos behind it.

373.

The Chairperson: You are damaging that ethos by allowing people to buy a house away from that area.

374.

Mr Walsh: You are freeing up that property to rehouse people in need. Tenants could purchase in the same area but free up the social housing property for allocation from the waiting list.

375.

Mr S Wilson: Has the scheme encouraged house-price inflation in those areas? In effect, you are injecting extra money into the housing market, albeit local authority money, by giving people discounts to carry on to other properties.

376.

With regard to the private rented sector, some of us are concerned, first, about the rise in housing benefit bills and, secondly, about the way in which housing benefit levels have enriched many undesirable landlords, judging by the conditions of their properties.

377.

How would the certificate of market rent operate? Who would issue that? At present the district valuer is supposed to do the valuation, and it remains a mystery to us how he arrives at certain sums. Housing demands in areas change, so how often would it be reassessed? What obligation would there be on the Housing Executive, and what percentage of housing benefit would the Housing Executive pay?

378.

Mr Walsh: The Housing Executive would issue the certificate of market rent. The current system is that the Valuation and Lands Agency (VLA) makes a recommendation on the market rent in a particular area, but that does not dilute the responsibility on the Housing Executive to accept or reject that. The decision-making is still with the Housing Executive. Under the current proposal on licensing, the Housing Executive quite rightly has focused on multiple occupation housing. However, if we want to raise the standard across the sector for all those living in the private rented sector, not just students, nurses or people who are more likely to be in HMOs, but also the elderly who are living in controlled and uncontrolled tenancies et cetera, or who are living in furnished flats, there is an opportunity now to introduce compulsory licensing for the whole private rented sector.

379.

As part of that compulsory licence an inspection would need to be carried out on all the properties. The life of that licence would be determined by the condition of a particular property. If there were concerns that the condition of the property might deteriorate the licence could be for one year provided that certain works were done. The duration of the licence would be determined up to a maximum of five years because of the condition and management standards on that particular property.

380.

As a condition of that, there would be a certificate of market rent given by the executive stating the housing benefit payable on inspection of the property and its current condition. Instead of an application coming in, the executive sending that to the VLA, the VLA going out to do the inspection and sending it back to the executive and the executive then making the determination, regardless of what the VLA says, this process would cut that out. As soon as the inspection has been carried out and the licence issued to the landlord he knows what that rent is going to be. It short-circuits the processing times.

381.

Mr S Wilson: Unlike the current system where the VLA bases the rent on the general level of rent in the area, it would be linked to the condition of the property.

382.

Mr Walsh: The landlord would know, and it would be part of the licence. Sorry, did I miss an earlier point Mr Wilson?

383.

Mr S Wilson: Was there any evidence of house-price inflation as a result of the transferable discount scheme?

384.

Mr Walsh: I am not sure of the results of the surveys carried out in England. One important aspect of the right to buy is the capping of discounts. Currently someone could take advantage after three years and sell the property for £75,000 to £80,000 or whatever, and they would not have to pay back any discount. The high discount is then fuelling price inflation. If the level of discount is restricted the likely impact in fuelling price inflation is reduced. I do not know if they have done any work in England, but if you restrict the level of discount then there is less disposable equity to fuel that.

385.

Mr Perry: The level of transactions is not high enough in relation to the overall housing market. There are perhaps 600,000 transactions per year in England, and we are probably talking about a few thousand transferable discounts, so it is relatively insignificant. I do not suppose it has had an impact.

386.

Mr O'Connor: Mr Perry, you mentioned 5,000 dwellings. Is that 5,000 dwellings or 5,000 people?

387.

Mr Perry: Five-thousand people.

388.

Mr O'Connor: Northern Ireland is not really like England as we do not have all the big cities. Most of the population would be in smaller towns such as Ballyclare, which only have a population of 5,000. Are you going to say that Ballyclare is a rural area?

389.

You mentioned also the ASH scheme. The Housing Executive is reluctant to implement that scheme. There is the fact that people cannot sell for three years after they buy. If that requirement were done away with then surely if people bought their property and then decided that they wanted to move on, it could be acquired back under the ASH scheme. My problem is that we have a lot of mixed-tenure estates because of the right to buy where the area has been enhanced by a higher level of home ownership. Are you saying that if people want to buy their own homes they will be moved out of a Housing Executive estate where there is a high demand? That will create an estate for the haves and one for the have-nots. Under the Good Friday Agreement people have a right to freely choose their own place of residence. If I decide that I want to live in Larne, then that is my right. I should not be disadvantaged when it comes to buying my own home. If you are going to tell me that I cannot buy my own home and am going to receive money to move elsewhere, that then does away with my right to freely choose my own place of residence.

390.

Secondly, you end up with larger estates of social housing, no mixed tenure properties and a situation where you have the haves in one place and the have-nots in another. Have you thought this through?

391.

Mr Walsh: We are saying that the approach to right to buy needs to be strategic. If part of that strategy is to encourage mixed tenure because of stability, then that is one of the reasons that you would allow right to buy in that particular area. That is preferable to having a blanket ban on a particular area, as they are doing in Scotland. They are drawing a ring around an area saying that the area is in high demand and are not allowing right to buy for five years in the high demand areas. We do not believe that to be fair or equitable.

392.

We are suggesting that there is still a way of allowing those people to exercise their right to move into the owner occupation sector within the same area or estate, should they wish, but not to lose that property to the public stock. By selling that property to the sitting tenant you are not able to rehouse someone who is homeless or staying in temporary accommodation for an extended period. The accommodation is not there.

393.

The Housing Executive sold 5,500 properties last year. With mortgage interest rates coming down, the level of discount under the right to buy, and even the fact that the Assembly kept the rent increase down at a figure it has not been at for many years, for many people it is cheaper to buy than to rent. The bottom line of that policy is that you are not then able to meet the demands of the people who are in housing need because the accommodation is not unavailable. It is a strategic approach to develop mixed tenure in those areas where that is part of the strategy, but also not to lose housing stock in areas so that you are not able to meet the housing needs of people on those waiting lists. That is where the balance is needed.

394.

Mr O'Connor: That is affecting people's right to buy. If I am earning money I may be able to afford to buy my house on a Housing Executive estate because I am going to get it for £12,000 to £13,000. If I am on a low income I can afford to get a mortgage for that amount, as I am entitled to a discount of £20,000. For me to move out of that estate to somewhere else, and get a mortgage of £60,000 to £80,000, may not be on. So it is going to hamper home ownership.

395.

Mr Walsh: I am not sure how that would hamper home ownership. Even though they are entitled to discount, they would still have to be able to demonstrate to a lender that they are able to support the mortgage involved in the other house.

396.

Mr O'Connor: Exactly. I cannot go and buy the other property, whereas I may be able to buy the Housing Executive property.

397.

Mr Walsh: It is this thing about the balance. Also in relation to equity, a number of properties are exempt because they are built or made available specifically for elderly or handicapped. Under existing rules those people have not been able to buy anyway. If you are looking to make a blanket extension for all tenants in all types of properties to be entitled to all the available discounts, what we would be witnessing would be the end of social housing in Northern Ireland. A more strategic approach should be adopted to look at the local needs based on demands to facilitate those people in those areas that still wish to exercise the right for owner occupation.

398.

Mr B Hutchinson: I take the opposite view. One of my concerns is that there are high levels of demand for social housing in particular areas. If we have this rule about the right to buy, we are actually preventing people from being able to get in there and buy. My difficulty is that people are talking about those who have the money to buy a house, yet there are people who are on housing benefit because they cannot even afford rent. It is those people that I want to focus on. For me, the issue is about how we find a solution that suits those people. If there is a right to buy, and people have a right to buy a house, we need to work out how we protect that area. Many people would argue that this is not affected anyway, because 80% of people are on housing benefit.

399.

Mr Walsh: I do not think that is right. Simply because it is stated that 80% of Housing Executive tenants are on housing benefit does not mean that their ability to buy is diluted. The rules in Northern Ireland, under the voluntary sales scheme, are that you no longer even need to live in that property to be able to buy that property along with the sitting tenant. For example, I was brought up in a Housing Executive property; my brothers, sisters and I bought my mother's house.

400.

We do not actually live there, but we looked on the purchase as an investment. In essence, that property is now lost for somebody to be rehoused in. God forbid, but if something were to happen to my mother tomorrow, that house would be put on the market to be sold. It is not available to rehouse someone on the waiting list in that particular area. Housing benefit can disguise the fact that many of the people availing of the right to buy are actually on housing benefit.

401.

Mr O'Connor: That is the point that I am making.

402.

Mr Walsh: Yes, but they are only able to avail of that because their families are prepared to do that. There is nothing to stop their families still being prepared to assist them by taking advantage of the transferable discount or the home buy initiative, which they have introduced over in England, to facilitate that move and not lose the property.

403.

However, we have to recognise that, by continuing with the right to buy, we lose the property. The Housing Executive is selling 5,500 properties, as I have said. The housing associations have now become the new build providers. That is not because they asked for it to happen or because somebody thought that they would be more effective or efficient than the Housing Executive, it is simply because they are able to access private money. The effect of that is going to be higher rents for those people in those new properties. It is about trying to balance particular needs with the overriding need to rehouse people who are in most need.

404.

Sir John Gorman: Have you discussed this with the Housing Executive and put the same arguments to them?

405.

Mr Walsh: The Housing Executive recently announced a review of the voluntary sales scheme - it is going to bring that forward in the autumn. I am not sure whether there has been a sea change or whether the momentum of this inquiry has made it look at some of those changes. It will be looking at demand, discounts, eligibility and the rules of the right-to-buy and the voluntary sales schemes. The Housing Executive actually sell under the voluntary sales scheme and not the statutory scheme. A person can actually buy from the first day that he or she becomes a tenant. There is no waiting period.

406.

Sir John Gorman: Having introduced this scheme in 1979, I would be the last person to say that it is not time to have a look at it again; we are now approaching 2002.

407.

Mr ONeill: I would like you to expand a little on the options talked about under the large-scale voluntary transfer section, and the proposed new arrangements. You listed seven options - "doing nothing" and six others. Out of those, only two were for a large organisation; the others envisaged smaller units. We have only heard one batch of evidence so far, but the Housing Executive, with its one set of standards and various other plus factors has received a very great deal of support. Elected representatives and tenants seem to regard it as a very satisfactory model. As an institute, what is your professional opinion? Where does your preference lie, because you do not prioritise any of your options?

408.

Mr Perry: At this stage we are simply trying to provoke a discussion on this issue. We have not got a fixed view. Clearly the Housing Executive is widely regarded as having provided a good service over many years, and, therefore, one should not lightly disrupt the housing executive - there needs to be a good reason for doing it. On the other hand, a backlog of disrepair is already developing. It is building up. There will probably be a growing backlog of disrepair in the Housing Executive's stock, which will not be fundable from public funds.

409.

In England, and Scotland, and, to an extent, in Wales, there is a much more critical situation in public sector stock. The policy there has shifted towards stock transfer to bring in private funds. That is clearly an option for the Housing Executive stock. What we were trying to do in the paper was look at the costs and benefits, in a preliminary way, of the different options that would allow that to be done.

410.

One option would be to keep the executive as a whole and to argue with the Treasury that the executive should be reconstituted in such a way as to enable it to borrow privately as an entity in its own right, - just as the Post Office is being given the freedom to borrow. We looked at that option, but we also looked at options that would involve the breaking up of the stock. We do not have a fixed view. However, rather than just looking at one option, or not looking publicly at any options at all, we want a debate on the issue, with the pros and cons being looked at in public.

411.

Mr S Wilson: If the Housing Executive is to have a regulatory function over housing associations, do you see it as a requirement that the present housing stock be transferred from the Housing Executive to some other body or bodies?

412.

Mr Walsh: I just want to add that the issue of overhanging debt and the treatment of debt is a fundamental consideration in determining which option you are going to take up.

413.

In relation to the regulatory role and whether a split is required, the CIH view is that although it may be preferable, there is no reason why there needs to be a split. The model of the regulatory role does not require that physical split between the client and the contractor. That does not need to happen to drive it down one road or another.

414.

The Chairperson: Thank you very much. That was a very interesting discussion.

MINUTES OF EVIDENCE

Thursday 3 May 2001

Members present:

Mr Cobain (Chairperson)

Sir John Gorman

Mr B Hutchinson

Mr O'Connor

Mr ONeill

Mr M Robinson

Mr S Wilson

Witnesses:

Ms J Fulton )

Mr G Kelly ) Northern Ireland Federation

Mr C Williamson ) of Housing Associations

Mr G Murton )

415.

The Chairperson: Good afternoon and welcome to the Committee. We have read your written submission. Please give us a brief introduction before we move to the questions.

416.

Ms Fulton: I am the chief executive of the BIH Housing Association. I am also the vice-chairperson of the Northern Ireland Federation of Housing Associations (NIFHA), and it is in that role that I am here today. Gerry Kelly is from North & West Housing Ltd. Chris Williamson is the director of NIFHA. Graham Murton is the NIFHA's research and development officer. Our chairman, John Gill, sends his apologies.

417.

As you know, many of the housing associations in Northern Ireland are 25 years old this year. We were established in 1976 - five years after the creation of the Northern Ireland Housing Executive - to complement the executive's work, and, through the years, we have worked very closely with it. Very recently, the housing associations have been involved in working with the executive in creating a new common selection scheme for all of Northern Ireland.

418.

We acknowledge the Housing Executive's good work throughout its 30 years and the way that we have worked together. We have some views on working in partnership in the future with the Housing Executive and the Assembly to ensure that we deliver the best housing for the people of Northern Ireland. We do not have any other agenda. We hope to deliver a good service to all our existing tenants, to new people on the waiting lists and to people being housed by the executive and ourselves. That is our prime objective.

419.

We also want to make the best use that we can of taxpayers' money. We have a duty as stewards of public money to make sure that it is spent in the best and most effective way. The housing association framework, and legislative framework as it is set up, now allows us to make best use of taxpayers' money for the delivery of the social housing programme. We want to continue that and complement the work of the Housing Executive in its landlord role.

420.

We have some views on the major items under discussion. Mr Gerry Kelly will comment on the voluntary transfer regime.

421.

Mr G Kelly: The federation has made a submission to the Committee about voluntary transfers, and I have now developed that. I have copies here for the members.

422.

We believe that there is merit in considering a pilot scheme in Northern Ireland. The benefits would be that the tenants would get their houses improved at a much earlier stage. The Housing Executive would be able to dispose of some of its worst housing stock and the associated management problems. The taxpayer would save on the refurbishment bill and the Assembly budget could be redirected to other programmes.

423.

I am not saying that the GB model should be implemented in Northern Ireland, as it is being applied across the water. Perhaps there is scope for small-scale voluntary transfer; it is currently taking place in the Province.

424.

I was involved in an unsuccessful transfer pilot in 1997. We looked at the transfer of 250 houses in the Creggan estate on the west bank of the Foyle. The project was unsuccessful largely because the Department felt there was little benefit in it to the public purse. Savings made by utilising private finance were countered in the longer term by the increase in housing benefit expenditure due to higher rents. The Department did, however, accept that there would have been obvious benefit to the tenants. One of the reasons that we got involved was that the tenants had asked us to see whether there was any way that we could improve their houses. They knew that if they remained with the Housing Executive the improvements would not take place for years. In fact, the improvements have still not taken place.

425.

Our scheme foundered on costs. One of the key factors, which I point out in section 3.1, was that the houses had to be transferred at vacant possession market value in 1997. More recently the Department of Finance and Personnel has accepted transfer at tenanted market value. That has allowed us to become involved with a number of small-scale voluntary transfers. I list two examples - the replacement of rural cottages in County Tyrone and County Fermanagh, where we acquire occupied houses, demolish them and replace them with new ones; and a redevelopment scheme in the centre of Coleraine, where we are acquiring occupied Housing Executive houses for demolition and replacement.

426.

Section 4.1 points out that the Housing Executive's annual report indicates that there are 10,000 executive- owned properties that require major improvement work, of which 8,000 are without central heating. The cash cost of that work is estimated to be approximately £140 million.

427.

In Section 5, I table a possible pilot for small- scale voluntary transfer involving 120 houses of the 250 that we looked at in 1997. If we were to spend around £33,000 per house, it would greatly improve, and extend, each house. If the scheme were to proceed it would save the public purse £3·3 million in capital expenditure and cost only a little more in annual revenue expenditure.

428.

Mr Williamson: The federation recognises the aspirations of many social housing tenants to become owner-occupiers. However, it is important that the Assembly balance the aspirations of those already housed against the needs of those who are not housed - those who are on the waiting list now or who may be on it in the future.

429.

We accept that it is reasonable for the Government to consider an incentive, or limited public subsidy, to help social tenants achieve their aspirations of home ownership. Ideally, the NIFHA would like to see a home ownership promotion scheme which spans the entire social housing sector but which is flexible enough to reflect the considerable variations that exist between a local supply and demand situation and the one next door. Secondly, it should allow for the totally different financial regimes under which the Housing Executive, on one hand, and the housing associations, on the other, operate. Thirdly, it should be equitable for all social tenants.

430.

The present Housing Executive scheme is not very good at achieving those objectives. It reduces the ability of social landlords to address the severe needs that exist in some areas but is flexible enough to allow sales in areas where there is not so much pressure on social housing.

431.

The application of the same sales scheme as the Housing Executive has been running for a long time could undermine the viability of some of the NIFHA's members and reduce the number of social landlords and the amount of their available stock.

432.

The scheme, with minor variations, has been around for a long time. Meanwhile, policy has moved on in other parts of the United Kingdom in a number of ways, and that should be looked at.

433.

The NIFHA recommends that the Committee and Assembly look carefully at the research that we are undertaking. There are two parts to that research. One is being carried out by an independent group - the University of Glasgow. That is currently under way, and it is looking at the aims and rationale. The second part will be done in-house. We will be looking at the implications for associations and our membership on two aspects - their ability to address housing need, and their finances.

434.

It would be wise for the Assembly to look carefully before jumping to the conclusion that the housing sales scheme that applies to the Housing Executive should be applied to the associations.

435.

Ms Fulton: I am conscious of your time and the fact that you want to ensure that you still have a quorum. In line with the NIFHA's legislative thinking - and the volunteers in the community being sought through the Programme for Government - the voluntary housing movement provides over 10% of the desired number through the voluntary committee members who are involved in each housing association. It would be remiss of me not to pay tribute to their work and to highlight it to the Committee.

436.

Sir John Gorman: I have great admiration for the work of the federation under Ms Gault and Ms Fulton. I just want you to realise that the Housing Executive will have a point of view on this. Have you discussed your ideas with the executive?

437.

Mr Williamson: I made an informal approach to the deputy chief executive to see whether we could compare notes before coming to this Committee. Admittedly it was rather late in the day, but there has been no reply to that informal approach. There was willingness there, but it has not happened. We are perfectly happy to release the presentation to the public, including the Housing Executive, now that we have delivered it.

438.

Mr O'Connor: Many housing associations partake in the voluntary sales scheme. In the area where I live there are 250 voids, yet they will not sell because it is claimed that the properties are required are for housing need. Those tenants are being disadvantaged because of the areas where they live. Does discount money that is made up by the Department for Social Development, and the money that you get from the tenant, not allow you to acquire additional stock to use for social housing? How can you argue that you are keeping housing for people in need when you actually get the money back from the Department, and the money from the sale, to provide for that need?

439.

Ms Fulton: The house sales moneys go back into the association's reserves to be spent within a fixed period of time on new housing. We have a house disposal reserve, which must be spent within three years from receipt of that money, and it does go back into the purchase or construction of new housing.

440.

My own association has been doing that, but what we are receiving from house sales proceeds - even though it is making up the historic cost of the property - is not actually buying new property now because of the increasing land costs. That is the dilemma. Our house disposal fund cannot match the increased costs. We cannot operate on a one-for-one basis. The associations must spend the money within three years. If not, it goes back to the Department.

441.

Mr O'Connor: Rather than transferring the stock to you, would it not be better to transfer some of the land banks to you? That would allow you to create new build housing.

442.

Ms Fulton: That would be very welcome. The land bank has an historic cost. It may have cost between £200,000 and £300,000 to buy that stock, but the land may now be valued at £2.3 million. Land is transferred to the associations at its current value, and that is part of the dilemma that there is in the transfer of Housing Executive land to ourselves. We have to pay the current market value for vacant land.

443.

Mr O'Connor: You do not pay historic costs?

444.

Ms Fulton: No, we do not. Gerry Kelly could pick up the issue that he mentioned in relation to a tenanted property, which is slightly different.

445.

Mr G Kelly: We also have a voluntary house sales policy. We sell at market value, which tends to be around £50,000 in most of the estates in our area. To replace that house today would cost £80,000. As we sell, as Ms Fulton said, we cannot replace like for like. That is a major difficulty for small housing associations.

446.

Mr Williamson: Even if the money were the same and we had enough money to build, the trouble is that it is desperately difficult to find a place to put new housing in the areas of greatest need.

447.

It sounds grand that you get money in to replace houses, but it is not as simple as that, unfortunately.

448.

The Chairperson: Thank you very much.

MINUTES OF EVIDENCE

Tuesday 8 May 2001

Members present:

Mr Cobain (Chairperson)

Sir John Gorman

Mr Hamilton

Mr B Hutchinson

Mr O'Connor

Mr ONeill

Mr Tierney

Witnesses:

Mr P McIntyre )

Mr C McCaughley ) The Northern Ireland

Mr M Shanks ) Housing Executive

449.

The Chairperson: Have members any interests to declare?

450.

Mr B Hutchinson: I declare an interest in that I am a voluntary member on the board of Filor Housing Association.

451.

The Chairperson: Welcome gentlemen - would you like to begin?

452.

Mr McIntyre: We talked to the Committee staff about how we might approach this. The suggestion was that we take each of the areas, talk for about five minutes and then take questions.

453.

I will give the background to the regulation of the private rented sector, which is a growing sector - it has grown by something like 10,000 over these past 10 years. The house condition survey will probably report a greater growth than that next year. It involves a number of different markets - the low cost market; the houses in multiple occupation (HMO) market; the high rent market - mainly apartments; a growing buy-to-rent market, and also an increasing market in former Housing Executive properties that have gone for sale, and are now available for private rent.

454.

It is generally recognised that at the lower end of the market, where there are poor house conditions and poor households, the tendency is to have many small landlords. The legislation proposes to transfer the functions relating to the administration of the Rent Order (Northern Ireland) 1978 to the Housing Executive. The Order deals with rent registration for regulated and restricted tenancies in relation to rent and repairs in that small sector, which consists of about 6,500 dwellings. The Minister has also recently announced a legal review of the law relating to the Order to be carried out by the Department.

455.

We are carrying out research on the private rented sector. We are looking at how it performs; how it works; the nature of the landlords and tenants; the impact on the economy in terms of workers, mobility and so forth; changing lifestyles, particularly young people, and the role of housing benefit in sustaining the sector. The issues in the sector are: conditions, particularly at the lower end of the market; management, particularly poor management and how we might facilitate an improvement; the differences between regulated rents and market rents, and the role of housing benefit in responding to the market.

456.

There have been some recent developments in the market. New sectors are developing to cope with the demand from single people, and I have highlighted those. The private rented sector is also an important part of the market in meeting the housing needs of young single people. We really need to develop an approach to the private rented sector in Northern Ireland that looks at private renting as a means of increasing supply to meet diverse needs. Along with that is the need to improve conditions and standards. There are issues involving market led rents, housing benefit limits, and a reasonable balance being struck between the rights and responsibilities of landlords and tenants. The proposed legislation is a first stepping stone on the way to developing a broader approach to the market, after the research has been analysed and the review of the legislation has been completed. That is our view about the legislation.

457.

Sir John Gorman: Presumably the private rented sector is performing a very useful function. There is an issue concerning the degree to which the sector should be legislated for, controlled, and monitored. There is always the danger - and we heard it during the Assembly debate on fireworks - that there is always somebody wanting to impose some new law or controls. Is there a danger that we are going to put potential landlords off doing anything about this?

458.

Mr McIntyre: That is a very important point. I made a fleeting reference to it when I said that there has got to be some reasonable balance. The more you control this market, the more likely you are to drive suppliers out. On the other hand, there are issues concerning poor conditions. On occasions housing benefit is funding this sector, and we need to be looking particularly at that end of the market, as far as controls are concerned.

459.

The Chairperson: You talk about driving private landlords out of the market if the legislation becomes too stringent. We are not talking about good landlords here; we are talking about poor landlords. People making a business out of this sector have to get things right. Are we worrying too much about this? A lot of the houses in poor condition would be owned by someone who has four houses or less?

460.

Mr McIntyre: It is generally accepted that the thrust of regulation ought to be related to the condition of the property and the standards of management allied to the payment of housing benefit, since there is public money involved. The extent to which you regulate the private rented sector has been a century long battle in housing policy. In doing so, do you force the people in that market to pull out?

461.

The Chairperson: The issue that worries us is people coming out of the private rented sector. My view - and maybe I have misinterpreted this - is that the houses in poor repair belong to landlords who own two or three homes. Is that a misinterpretation?

462.

Mr McIntyre: Part of the difficulty is that most landlords in Northern Ireland own, on average, five or six properties. The market has grown and changed over this past ten years, and we are intending, by way of research, to understand that market better.

463.

Mr B Hutchinson: Our difficulty, whether as councillors or MLAs, is that we will always be approached by people who are paying benefits for housing that would be classified as below sub-standard - in some cases you would not put a dog into them. We need to protect those people who are never going to get enough points on the Housing Executive list, and have to turn to these landlords. I was interested to read in you paper about the link between housing benefits and standards, but unless standards are checked on a regular basis, that will not work. How many staff would you need, and how much would it cost to operate?

464.

Mr McIntyre: We are looking at this from a policy perspective, and have not yet considered costs. It is a major part of the national housing benefit debate going on across the water, and is not a local matter.

465.

Mr B Hutchinson: Do you think that the executive could control this, and deal with the problem?

466.

Mr McIntyre: I do not see why not, and I would be interested to know your view.

467.

Mr B Hutchinson: You would need more staff and more money, and my concern is would you get that?

468.

Mr Tierney: Why would a good landlord object to regulations? You made the point that it would have to be balanced out, but I do not see any argument for that. The regulation would be there to protect both tenants and landlords. No one running a decent business would object to regulations.

469.

Mr McIntyre: Our experience of consulting on voluntary licensing is that the landlords who have responded do not have any objection to it.

470.

Mr Tierney: I am responding to your earlier answer to Sir John Gorman, when you said that you have to be careful with it, or you could drive people out. You would only drive out the people who are running a bad show, as the Chairman said. If they are driven out because you are regulating it with licenses, then so be it. Housing benefit is being paid for tenants who are living in those poor conditions, and that is the responsibility of the Housing Executive.

471.

The Chairperson: Following on from that, how does that square with your point about linking housing benefit to unfitness? If we regulate this too heavily, you say we are going to drive those people out of the market. Surely we are not going to pay public money - as we are at the moment - for people to live in slums. If public money is going to be spent, the house has to be fit for habitation. The only way to do that is to regulate, because they are not going to do it voluntarily.

472.

Mr McIntyre: A distinction has to be made between landlords who want to bring their properties up to the proper standards, and whether the current rental levels and income from those properties allow them to do so. Apart from housing benefit, there should also be a relationship with availability of grants. That it is an approach which would help legitimate landlords - who have no intention whatsoever of being anything other than that - and is also a policy that will help those landlords who want to bring their properties up to standard to achieve that.

473.

Mr Tierney: Tenants have to be protected. If it is not up to standard, regardless of the reason, they have to be told to bring it up to standard. People should not be asked to live in those conditions - and you know the conditions we are talking about in some cases. I accept that the landlords involved are in the minority. Most landlords are very good, but there are people living in poor conditions, and that must stop. The only way to stop it is to regulate it.

474.

Mr McIntyre: It must be regulated it in a sensible way. You cannot just walk into some areas of high housing need tomorrow and say "We are now the regulator; your property is not up to standard and we are closing it down." That accommodation, be it good or bad, is offering something to somebody at a particular point in time. We must take the approach of working with and helping the landlords who want to improve their standards. We also need to tackle the landlords who have no interest in making improvements - get them out of the market place.

475.

The Chairperson: That is what we are looking for. With regard to the enforcement of housing fitness, and regulation of that, would you be opposed to city or district councils enforcing that?

476.

Mr McIntyre: Presumably you are talking about repair notices, and so on, and, at the end of the day, that will be for others to decide. When you are look at tackling housing conditions and disrepair, you have to ally it to other things for which we have responsibility, such as payment of grants and housing benefit. It would make sense for whoever who is handling those issues to be handling them in their entirety - not bits here and there. We have a good relationship with the environmental health officers that we work with in this field, and use them for quite a bit of our work.

477.

The Chairperson: One of the pressing points they made to us was that they wanted to see some independence in this field.

478.

Mr McIntyre: I can understand where they are coming from there. Our view would be that the enforcement, and notices to do with house conditions, housing grants and housing benefits are all part and parcel of the same thing, and are best dealt with by one agency.

479.

Mr O'Connor: In relation to the areas of high housing need, many of these private landlords rent houses in areas where there is not high housing needs, and, in some cases, a large number of voids. For instance, in my area, acquisition of satisfactory housing (ASH) has not been used for a long time. Therefore, people wanting to live in certain areas cannot get housed there and are forced to go these landlords. In a lot of cases the houses have no central heating, and many have had regulated rent certificates from the council and have been subsequently served with notices for penetrating dampness, and such like. It seems that these notices have to be served on the landlord before the landlord is eligible for a housing repair grant. If someone has to live in a house that is damp, why can the grant not be paid to stop the house becoming damp in the first instance?

480.

If the executive were to take on some kind of regulatory role -where it is responsible for regulating the fitness of these houses and the grants - it could do away with that situation. Someone could inform you that their house is in disrepair, and you could take the appropriate action there and then, without having to go through the whole rigmarole of district councils serving notices on private landlords and private landlords having to apply for a housing grant. It seems to be a roundabout system at present. People have the right to choose their own particular residence, and if they choose to live somewhere they should be not disadvantaged socially because their landlord is not part of the Northern Ireland Housing Executive.

481.

Mr McIntyre: This is a point that we can pick up as part of our discussion on grants - the relationship between disrepair and grants - if that is OK with Mr O'Connor. I would not disagree with the point he is making.

482.

The Chairperson: Before we leave the private rented sector, you made the point that you could go in tomorrow morning and tell landlords that you are going to regulate them. Could you give us a timeframe for that?

483.

Mr McIntyre: I am not trying to avoid the question. In many ways the jury on the private rented sector is still out until we come back with the research. We will want to share that research with everybody, because it is the first big piece of research to be carried out in the private rented sector.

484.

The Chairperson: We are saying is that we cannot go on paying housing benefit for houses that are unfit - everybody around this table is in agreement with that. There is going to have to be some regulation in this field, and if some people fall off the edge, that is bad luck. I take your point that you cannot go in tomorrow morning and say that you are going to regulate. However, there is no sense coming here and saying that we agree to regulate but there is no timeframe to do it. If there is no timeframe, no one will do anything. The Committee wants to see poor landlords regulated.

485.

Mr McIntyre: I will sound a note of caution there. Any linkages between housing benefit, poor conditions and regulating landlords, are outside the control of almost all of us sitting here, to a large extent, other than the representations that we might make to the National Housing Benefits Scheme. What happens across there is critical.

486.

Mr O'Connor: Are you proposing to regulate houses on a similar basis to the way the executive currently works - x amount of bedrooms and living rooms at so many pounds each; whether it has central heating or not at so many pounds each? Is this the way that you regulate a price when you are talking about market-led rents?

487.

Mr McCaughley: The unfortunate answer is no. First, in linking housing benefit to housing conditions, there was an implication in a Green Paper that the Government would head down this road. The latest view is that they may back away from this, taking care not to wreck the housing market in high demand areas, so we may never see that. The issue then is what control can the Housing Executive have over rents in the private rented sector? In three weeks time we will again take control over rents in the private market for housing benefits. Some years ago, we lost control to the Valuation and Lands Agency by departmental directive. A recent judicial review directed that we could not delegate that function, so it comes back to us in June.

488.

The Valuation and Lands Agency only recognised about 10 housing markets in Northern Ireland in the private rented sector. From June, we will break it down in to more markets, to try and reflect reality. However, there are regulations that tell us how we do that. The law states that we have to find the highest and the lowest rent, and divide by two to come up with an average rent for that area. It is good that we are getting that rent setting facility back, but there is only so much that we can do within the regulations to actually set that rent. We will try to exercise as much control as we can to reflect housing conditions, but we need to be careful that we do not step outside the regulations.

489.

Mr Tierney: Regardless of the conditions?

490.

Mr McCaughley: Let me put it this way. If you defined a housing market in an area that had nothing but bad houses, you would be setting a lower rent would you not?

491.

Mr O'Connor: In my area I could get a Housing Executive house with four bedrooms in good condition for around £50 a week. The going rate on housing benefit for a two up, two down private rented house is £75 a week, but it will generally be an 80 or 90 years old house.

492.

Mr McCaughley: If it is in the same housing market we can address that.

493.

The Chairperson: I know that housing benefit is not a devolved function, but housing is. The Assembly have a right to look at the Housing Bill and ensure that it contains regulations that we think are fit. However, I take the point about housing benefits.

494.

Mr McIntyre: I will now talk about houses in multiple occupation (HMO), which are a sub-set of the market we have just been talking about. We have some powers to deal with HMOs that are unfit - houses that are not up to fire standards, overcrowded or over occupied for the facilities and amenities provided. It is a small-scale, but high-risk sector, which is an important point to make about HMOs. There are nearly 10,000 HMOs at the moment - 30,000 people in flats, bedsits, lodgings, shared houses, bed-and-breakfasts and so forth. They are mainly concentrated in north and south Belfast, Coleraine, around the university area, and Derry. There has been some growth in HMOs in North Down and in towns such as Dungannon and Omagh. It is an important segment of the market for meeting the needs of young, single people.

495.

Around 9% of HMOs are statutory unfit, but more importantly, approximately one out of three do not meet HMO standards such as fire standards, and the facilities that it should have for the number of occupants, or overcrowding. We issued a HMO strategy in June 2000, and there were a number of strands to it. Firstly, there is the issue of legal powers, which I will return to later as it is covered by the legislation. Secondly, there is a 10-year target for inspection and grant aid to bring the sector up to standard. We are seeing the beginnings of an area-based approach in north Belfast and Derry as part of their housing strategies. That will take a little time to move along, as both are fairly recent strategies. Licensing is part of the legislation. There is also the issue of building relationships with landlords. We have started this process with seminars and various other things held around the Province; which are well attended. One of the issues being addressed is the definition of a HMO. I do not want to get tied down in the technicalities, but, suffice to say, there has been sufficient case law to narrow down what may be the initial definition of a HMO, particularly dealing with student housing.

496.

Secondly, in January we had consultation regarding a voluntary licensing scheme, which has just finished. Over 40 submissions were received, with a broad support from most quarters. There are issues over the standards, exclusions, phasing and information that will go into the public domain, and so on. We eventually see this leading to a mandatory scheme.

497.

We have discussed at some length the relationships between rent levels and housing benefit. We need to get on with implementing that HMO strategy. Some may feel that a 10-year strategy is too long, in which case we would need to take views on how that might be shortened. We need clarification about the definition of a HMO, and the legislation will provide that. We need to incrementally move to compulsory mandatory licensing, and the legislation again includes the powers that will allow that scheme to be introduced. We must look at how it might be phased in, and that concerns resources. One might hit the high risk HMOs first - those with most occupants. We must increase the inspection and enforcement activity; our operation is up by 50% to 70% over this past couple of years. We must be seeking changes to the national housing benefit policy linked to standards, a point we have already discussed. That is our views on HMOs, linked into the broader private rented sector.

498.

The Chairperson: Last week we had a delegation from the National Union of Students (UK) and the Union of Students in Ireland, and a point arose from that meeting which I said that I would raise with you. They believe that there is a very poor relationship between you and them. They represent the student body, which is a very important area in HMOs. Is there any way that you can form a relationship with them as far as HMOs are concerned? They do not have any formal relationship with you, which concerns them as they represent the vast majority of people living in HMOs. Like any other tenants' association, they want to be represented on that level. I said I would raise that issue with you.

499.

Mr McIntrye: We would certainly welcome that and will make contact with them. They were part of the consultation on the voluntary licensing scheme. We already have fairly close relationships with the accommodation officers in both universities.

500.

The Chairperson: We will give you the names of the individuals who were here last week. You can make contact with them and that will keep us all right.

501.

Mr ONeill: This has much to do with regulation, which has already been explored with regard to the private sector. Have you had any feedback on the voluntary registration scheme? How effective has that been in defining the number of HMOs, and what level of success have you had in enrolling people? Can you put a percentage on the number of people who have enrolled and those who have not? What are the obstacles to moving them from voluntary to mandatory registration? Mr McIntyre referred to the strategic role that the Housing Executive might perhaps have with regard to the numbers of HMOs in an area, and the environmental consequences - the destruction of local communities and so on.

502.

Mr McIntyre: Perhaps I was not clear. We currently have a proposal under consultation to introduce voluntary licensing in advance of compulsory licensing. That consultation period finished only last week. We had a couple of big meetings in Belfast and in Derry. As I have already mentioned the responses that we have had from about 40 of the meetings have been pretty positive, and we will now analyse those responses. We propose to respond to the consultation on the voluntary licensing scheme this autumn. It will provide a run-in to mandatory licensing, which we expect to see as part of the legislation. We have no direct experience of voluntary licensing to report.

503.

Mr ONeill: Do you know what percentage of the sector has given you a response?

504.

Mr McIntyre: Not at this exact moment, but we can find notify you in writing. We have had about 40 responses from 40 different organisations. The landlord response tends to be more about phasing and timing. I do not think we have had any responses in opposition to licensing from bodies representing landlords. The Association of Landlords, which represents private landlords - not all of them, but quite a lot - has been represented at each of the seminars that we have run on this.

505.

Mr ONeill: Did you have much response from that sector most in need of regulation?

506.

Mr McIntyre: It is hard to tell. There are those who believe it is a good idea and will turn up at those events, and others will not turn up. Having said that, approximately 400 to 500 landlords attended the events around the Province. We were quite pleased with the turn out. Generally, the issue has been about the phasing of licensing, and some aspects of its detail and standards. Good landlords recognise that licensing is a good thing for them. That sums up the feeling from those meetings rather than actual written responses, which is hardly surprising.

507.

The issue of the density of HMO's has been raised before and is predominantly a planning issue. I understand that planners have picked up on the issue as a result of comments made by Assembly Members and other public representatives recently, including, if I am not mistaken, your colleague from Derry, Mr Tierney.

508.

Mr ONeill: I am aware of that, but I am also aware of the role that the Housing Executive has in the environment. Is there not a responsibility for the environment, particularly when you work through your tenants representation groups?

509.

Mr McIntyre: It is an issue, and the most effective way to deal with it is probably through planning powers, as opposed to housing powers. That is our view. In Great Britain it tends to be tackled from a planning perspective, based on evidence from there.

510.

Mr ONeill: I understand the planning consequences, but I would like the Housing Executive to play a role in this.

511.

Mr McIntyre: I will note that point.

512.

The Chairperson: Why are we moving to this voluntary licensing as an interim stage?

513.

Mr McIntyre: Do you mean in advance of legislation? At best, we presume that the draft Bill is not going to be ready for consultation until early 2002. I could be wrong but that is my understanding. It has to go through certain processes and, as it is likely to encourage debate, it could take quite some time before it is set down in legislation.

514.

Last week the National Union of Students was critical of the executive prevaricating about licensing - I think that was the word they used. We are responding by trying to get voluntary licensing in place. At the very least, we will learn some lessons about how to operate a voluntary licensing scheme.

515.

The Chairperson: I will end this section with the same point that Mr ONeill made about houses in multiple occupation changing the character of areas - planners will be loathe to do much about it. A large percentage of the pressure would come on the Housing Executive because, obviously, housing benefit plays a big role in the matter.

516.

Mr McIntyre: I take your point. I am not quite sure whether we have powers that would address it beyond what is available to the planning service at present.

517.

The Chairperson: We are talking about a Bill, and holding these discussions against the background of a Housing Bill. We are trying to fish out information and ideas that will help the Committee to form a view on the Housing Bill. Planners have a role in this matter, but I assume it will be difficult for planners to identify areas of the cities with houses suitable for multiple occupation and houses that are not - they have not done it before. A number of agencies must come together to protect communities.

518.

For example, there are no houses of multiple occupation in the Springfield Road or the surrounding area at present. When the University of Ulster goes in there I would think that within three or four years your properties in that area, which are in areas of high demand, will go to the private rented sector.

519.

Mr ONeill: I would support that. A section of the housing review document involving the environmental side of things was accepted without any controversy by all and sundry. The Housing Executive should play a more strategic role in dealing with the quality of the delivery of housing in the community, rather than just the actual bricks and mortar. This would give the Housing Executive an enhanced role in the community, and in community participation. These areas would have more relevance to this kind of problem than simple planning permission.

520.

Mr McIntyre: Currently we do not have powers to address that - the planning service probably does. If the Committee is saying that the executive needs the powers to address that, I would not disagree.

521.

The Chairperson: The point we are trying to make is that housing has an impact on the character of homes, whether it is through planning or the Housing Executive. The Springfield Road is an area of high demand. You must be blind not to see that in five or ten years time - if the University of Ulster goes into that area - a large amount of the stock there, which is currently owned by the Housing Executive, will move from Housing Executive ownership to housing of multiple occupation. Tenants will buy their own homes and sell them on to landlords, thereby changing that whole community.

522.

Everybody has a responsibility. We were talking to tenants about the future of their areas. The Housing Executive and the communities have a role to play. The Housing Executive, along with the planners and the Department, must take a strategic overview of the matter.

523.

Mr McIntyre: I do not disagree with that.

524.

The next topic is private sector renewal, and the proposed changes to the grant scheme in the legislation. I will not go through the current grant scheme, as people are fairly familiar with it. It is mandatory for renovation grants, replacement grants, houses in multiple occupation (HMO) grants and disability grants.

525.

Grants are an important weapon in dealing with unfitness. That sector accounts for expenditure of about £40 million to £45 million per annum. Between 1991 and 1996, as measured by the house conditions survey, 24,000 dwellings moved from unfitness to fitness; 40% of them did so through receiving grant aid. The house condition survey, which has just started this year and will report next year, will, I suspect, give the same type of data about the importance of grants in attacking unfitness.

526.

The proposals in the legislation are twofold. The first is the intention to shift from a mandatory scheme to a discretionary one, which would put us in line with current GB grants legislation. The starting point for this was a policy review in 1995-96, which said that we should switch to a discretionary scheme because there was a big call on public funds. Until recently the Housing Executive would have supported that position. The other parts of the legislation are concerned with tidying up existing grants, and we do not have any difficulty with that.

527.

The main issue we want to flag up for the Committee is shifting from mandatory to discretionary schemes. Strangely, GB, within the past month, have decided to dump the discretionary system introduced in 1995. In their consultation paper, which went out in March, they are now signalling that there should be a shift from a national improvement scheme to local schemes. We have referred to the consultation document in our submission. In the new scheme, the Government would put a broad framework of powers into place. That would allow each local authority to develop local grants scheme or housing renewal schemes using a menu of tools such as grants, loans, help to agencies, and relocation grants. That is the first shift.

528.

The second shift is that they are looking at diversity of assistance. They are not just looking at grants; they are looking at a bigger role for improvement loans. They are looking at using the equity in houses to generate funds, which would allow people to carry out improvements. Strengthening the assistance available to the elderly and disabled is another part of the proposals, which have come out in March.

529.

The reason for the Housing Executive's shift in approach is partly to do with the fairly recent shift in GB. It is introducing the issue of local schemes for local areas, which is in line with our thinking. As well as that, the huge backlogs, which used to exist in grants, no longer exist. That was another reason why people wanted a mandatory scheme.

530.

One of the issues that need to be tackled in the private sector renewal is unfitness. There are still about 40,000 houses involved. Each year, approximately 4,000 houses move from disrepair to being unfit. Grants would be important in helping tackle that. There is an ongoing need to tackle elderly and disability needs. When talking about the need to accelerate HMO activities there is also the need to prevent houses moving from disrepair into unfitness.

531.

As well as that, you will be fairly familiar with the unfitness standard here, which is basically at the physical level. It deals with lack of facilities and amenities, and poor layout, and triggers many things including access to grants. There are major changes coming in GB, where they are switching to a much broader health and safety rating for a dwelling. It would include items such as warmth and comfort as well as risks such as fire and radon. It would be about risks to the individual as well as the physical condition of the house. We need to take that on board.

532.

There is the need to use grants to attract private investment, and there is an issue about using the grant system to target grant-aid in a more focused way. We ought to be looking at developing a local grant scheme, which combines some elements of mandatory activity - for example, concerning HMOs and disabilities - with discretionary elements to meet the Northern Ireland circumstances. Our view is that the proposed change in the legislation, from mandatory to discretionary, needs to be thought about in light of what is happening.

533.

Secondly, there are legal and tidying up provisions to the grant legislation, which we do not have any particular problem with. We feel that it is a fairly late change.

534.

The Chairperson: The Committee opposes moving from mandatory to discretionary grants because it is an easy way for the Department to raid funds. With a discretionary grant you could take the money in three or four years time and you would not be getting the same amount of money each year. A mandatory system would suit us better.

535.

I am interested in a holistic approach to improving the system. How do you go about informing elderly and disabled people about assistance? The method of getting information to elderly people, irrespective of their situation, to enable them to avail of everything they are entitled to, concerns me. How will the Housing Executive approach the issue?

536.

Mr Shanks: As the Committee will be aware, we work with home improvement agencies, specifically Shelter and Fold agencies to inform and facilitate elderly and disabled people in accessing the grant system. That has grown over the last three or four years and is now working quite effectively. We recently prepared a paper showing that the agencies were doing quite well and we are intent on continuing with that.

537.

The Chairperson: We would appreciate sight of that paper, as we have not seen it. We are endeavouring to target elderly people who would be socially excluded - those not tied into either Shelter or other organisations. They are living alone and have very little contact with people. Some live in appalling conditions but that does not mean that they cannot receive the grant. They are not aware of what they are entitled to and a big percentage of their houses fall into disrepair as a result. Can we do anything for the elderly through Help the Aged or Age Concern, which are more appropriate organisations for the task rather than Shelter?

538.

Mr Shanks: We do engage with these agencies to make contact with the elderly who require grants. The adaptation side of the disabled facilities grants (DFGs) has grown considerably over the last few years as a result of that activity.

539.

The Chairperson: Yes, but that is more to do with the disabled than with the elderly.

540.

Mr McIntyre: As always, we could be doing more. This year we will be looking at a best value review of those home improvement agencies - and whether or not we are getting the best out of them, and if there is a need to expand.

541.

Mr McCaughley: The Fold model is very good, in that they work through networks or contacts with churches, local voluntary organisations. It seems to be a very good way to do business for the elderly and disabled in any area.

542.

Mr Tierney: The Housing Executive automatically refers them anyway.

543.

Mr McCaughley: That is right. It is coming at the problem from two sides.

544.

The Chairperson: Looking at the holistic approach, we have this adage about joined-up government. How do we actually achieve that, and are we going to have some sort of agreement across Departments? We are not talking just about houses and disrepair, end of story. We are talking about a holistic approach, taking into account people who are at risk- elderly people who have no heating and people with disabilities. Those aspects lie outside the control of the Department for Social Development, never mind this Committee. At present disability adaptations come from our budget and we are not going to be left in that role. The Health and Social Services provides the visiting officer, we provide the money and the resources. Has any thought been given to a holistic approach?

545.

Mr McIntyre: Concentrating on the housing and health field alone, last year we issued a major piece of work looking at our relationship vis-à-vis the health sector and the clients we have in common. There are about 20 recommendations to follow through to make that work more effectively. The Department for Social Development and, indeed, your own Committee has established an inquiry on urban regeneration and community development. That relates to our work in housing renewal areas in co-operation with all the other agencies. The message on joined-up government is not lost on organisations like our own, but a lot of work needs to be done to get these partnerships working effectively.

546.

The Chairperson: Those organisations must work effectively if they are to have an impact. It is senseless having good ideas that never come to anything. Large-scale voluntary transfers are a good idea, but there has to be results.

547.

Mr McIntyre: When neighbourhood renewal emerges from the Department for Social Development, it will be the key to pulling together matters on health, housing, community development and so forth at a neighbourhood level.

548.

Mr O'Connor: In some cases, it can take senior occupational therapists 15 months to see patients. Is there any way that the Housing Executive could not be dependent on the Health Service, but have its own trained maintenance officer who can make quick assessments if, for example, a handrail to help the elderly needs to be put in place? There is a safe homes grant in the South, which gives elderly people money to put mortise locks, chains and window locks on to their homes. Can we use the same criteria as those used for the domestic energy grant to give out grants similar to those in the South, so that people - especially the elderly and vulnerable - can facilitate that type of minor work?

549.

Mr McIntyre: We have completed a joint review on adaptations with the Health Service sector. The review says that the Housing Executive will deal with minor adaptations and heating, but occupational therapists must be involved for major adaptations. That applies only to the public rented sector. The legislation says that if you are an owner-occupier trying to get a disability grant in the private sector, you must have the recommendation of an occupational therapist - there is no way around that in the short term. I was at a conference a couple of weeks ago in the South, and the big complaint was that enough money is not being spent there to address poor housing conditions, whereas we are spending £45 million a year on that. We have chosen to follow the way that grant legislation has been developed here. We focus on that rather than giving out smaller grants to address the matter. However, that is not to say that giving smaller grants is not a good idea.

550.

Sir John Gorman: I am on the board of Help the Aged, and at every board meeting there is discussion about this matter. Anne O'Reilly, the executive of Help the Aged, has given the impression that the organisation gets a lot of help from the Housing Executive. What is attractive about the private sector investing through grants, and how does that work?

551.

Mr McIntyre: Owners who put their own money into it carry out most improvement to property. There is a view emerging that if you have a grant of £30,000, it might be better to put the grant at £20,000 and help the individual to raise the balance some other way, perhaps by working with lenders. That can be done, and there are proposals in GB that suggest that it is better to get loans at a lower cost than is currently being done. That might be an example.

552.

Mr ONeill: It is more significant, and I hope that the Housing Executive and others to whom the Committee has spoken look at needs in particular circumstances. We need to take that kind of approach more and more. Regarding disability improvements - or handicapped adaptations, as they used to be called - and the role of occupational therapists in that area, the Minister of Health, Social Services and Public Safety announced that 20 extra occupational therapists are to be employed. Is it possible to quantify the impact that that will have on an occupational therapist's salary? Will it be as bad as it used to be? Will it make any difference or is it sufficient as it is?

553.

Mr McCaughley: The adaptation review predicted that we would solve the public sector problem reasonably quickly, and we have already seen a reduction of about 30% over the past three weeks and heating assessments are all sitting on our desks now. The situation in the public sector will improve. We will have come to terms with it over the next year or two.

554.

The problem, as predicted, has now shifted to the private sector. People who are waiting for a disabled facilities grant are now waiting longer. As the review suggested, the answer to the problem is at least 30 more occupational therapists to enable us to meet the growth in demand for the service. Any additional occupational therapists will have an impact on the situation. We will ease the burden on the private sector by taking work from the public sector, but the big growth will be in the private sector in the years ahead.

555.

The Chairperson: We have no control over the private sector.

556.

Mr McCaughley: We do not have control over that sector, but it would not take much to promote the idea that there should not be an occupational therapist requirement for the private sector, and that could be covered in a Housing Bill. We could quickly assess minor adaptations and provide grant aid.

557.

The Chairperson: There would still be a role for professionals on the big jobs.

558.

Mr McCaughley: Yes. The big jobs would require professional input.

559.

Mr ONeill: We might take up that suggestion.

560.

The Chairperson: Even if we are successful in getting more occupational therapists, can the Housing Executive cope with additional adaptations at a faster rate?

561.

Mr McCaughley: We have bills on our desks to the value of £5 million because of the backlog of heating requests, so we have made an in-year bid for an additional £5 million.

562.

The Chairperson: You will probably get about £4.

563.

Mr McIntyre: We received a fair amount of money last year, which quite significantly reduced the heating backlog. Our concern is to get the industry and our machine in a position to do the adaptations. We put the bid in because we think that we can do that. We seem to get quite a good hearing for money for adaptations.

564.

The Chairperson: Seeing is believing.

565.

Mr Tierney: I do not think that one Department should provide 20 new staff while another Department provides the money to carry out the process.

566.

Mr McIntyre: Perhaps this is when we will be sacked. There has been a lot of debate about large-scale voluntary transfers. Originally, this was a political issue in Great Britain because it was Conservative policy to take responsibility for housing away from local authorities. New build had gone, and the right-to-buy scheme had run out of steam, so the Government were looking for ways of taking responsibility for housing away from local authorities.

567.

More recently, the debate has been about how to address the investment backlog of about £22 billion. The Government have made a commitment to provide everyone in the social rented sector with a decent home within 10 years. There are still big targets to meet in the fifth year of the process.

568.

Large-scale voluntary transfer is one of a number of options that are available in Great Britain now, and I think that we finished our submission with some extracts from the Green Paper on housing which showed the other models. Investment in the social rented sector has also doubled over the past couple of years, so large-scale voluntary transfer is now seen in a slightly different context. About 400,000 dwellings have been transferred since 1988, and about 200,000 per year are scheduled for the next three years. It is worth bearing in mind that the Government have set a maximum of 12,000 dwellings for large-scale voluntary transfer. We were in Glasgow last week where they have 90,000 dwellings, and that is causing real problems - I might come back to that in a moment.

569.

Large-scale voluntary transfer is also about local authorities taking on a more strategic role, and getting out of the private sector. There are problems with the financing of large-scale voluntary transfers. Early transfers were from Shire councils, which were selling good quality stock. The receipts that they got from the transfers were bigger than the debts outstanding on the stock, so the receipts paid off the debts, and there were no problems. The receipts for the next set of transfers tended to be less than the outstanding debt on the stock, particularly in urban areas, and that caused problems for the Government. The Government in Scotland, and now in England, are starting to take care of what are described as "over-hanging" debts. They have changed the rules to suit this as they have gone along. It has to be done with tenant agreement, so a majority of tenants must vote for it.

570.

Another important issue has emerged recently, and that is the idea of rent convergence. Local authority rents have tended to be a lot lower than those in the registered social rented sector. Building business plans around large scale voluntary transfers (LSVTs) and using the rate of inflation plus 2% has created a poverty issue. The Government have now decided that, as part of a rent convergence policy, rents in future will be based on the rate of inflation plus 1%, followed later by rate of inflation plus 0·5%, and eventually zero. This has presented some LSVTs with a problem.

571.

From a Northern Ireland perspective, there has always been a facility to transfer dwellings, and the legislation provided for a single tenant to stop transfer that taking place. The proposal in the Bill is that this provision should be removed, and we have no problem with that.

572.

There are other models. Scotland is going for community-type landlords. In Glasgow the funding authorities have stated that they do not want their stock broken up into 12 housing associations, each with 10,000 houses. From a funding perspective they need cross-subsidisation - the good stock must subsidise the bad. In Glasgow there will be a single transfer to a single housing association.

573.

In LSVTs the ownership transfers to a registered social landlord. Other models include "arms-length" companies where ownership does not transfer. In our context, a separate company would be set up within the Housing Executive with a separate agreement with the board. It would be able to borrow public money as opposed to private money. LSVT's have access to private borrowing.

574.

The Finance and Personnel Committee is looking at a private finance initiative (PFI), and we have enclosed a submission that we made to it recently. This is marginal in terms of its impact in GB. Under this type of initiative a company bids to design, manage, operate and repair under contract to the Housing Executive. We pay it a service charge, and ownership reverts to us at the end of 30 years, for example. PFIs are really intended for schemes rather than stock, whereas the "arms-length" approach pertains to the whole stock.

575.

There is the traditional public sector route. Our investment backlog is about £200 million, and there is a continuing need for investment. Full use of capital receipts could clear that backlog within a reasonable period of time. That is another model which is available, but it will keep borrowing within the public expenditure system.

576.

In Northern Ireland there is the issue of whether you can mix strategic and operational roles. We have performed a mixture of roles for 30 years reasonably successfully. There is an ideological view about mixing the provider role with the strategic role and the regulator. It is clear that as an organisation with mixed roles we have been able to influence urban renewal, health and so on that might not have been possible with landlord involvement.

577.

We have a fairly sophisticated tenant involvement framework with a range of options available to tenant groups from lobby groups through to a number of groups who manage some aspects of our responsibility. We detect no great movement among tenants to manage stock. Research indicates that tenants want good service, full information and full consultation without necessarily being involved in ownership and management. We need to bear this in mind.

578.

We have one fully working management tenant body, which is Strathfoyle in Derry. We tried an LSVT in Ballysally, Coleraine, but it did not get off the ground. We all hear the bad stories, but research tells us that tenants have a reasonably good view about the service provided by the Housing Executive.

579.

On small-scale versus large-scale landlords the view is that small is good, large is bad. Nevertheless, there are debates over fragmentation, economies of scale, common standards and so forth. In relation to large-scale voluntary transfers, there would be an addition of 10 to 12 small social landlords in an already very crowded marketplace here. Securing additional finance is probably more critical than any ideology, and I have already talked about that. The Housing Executive is accountable, the chairman of the board is accountable to a Minister and you can call us to account. That would not necessarily be the case with different structures.

580.

As you know, a joint Department of Social Development/NI Housing Executive study is looking at the options. We are using a firm of consultants who have a lot of experience in Glasgow and Birmingham. Interestingly, Glasgow told us last week that £60 million have been spent on consultancy fees, surveys of property, separate structures et cetera to reach the position where they are still deciding whether or not to go ahead. There is a big price to be paid before we decide. That study is due to report in about September.

581.

We have no difficulty with the current legislative proposal, and it should be proceeded with. We will complete the investigation into other models, and I understand the Minister has made a commitment to share it with the Committee. We have no answer at the minute. We need to be thinking of the best way to address those issues in a Northern Ireland context, rather than think that something like large scale voluntary transfer can easily be imported.

582.

The Chairperson: The whole thrust behind the large-scale voluntary transfers across the water was financial. During the last number of years housing has not been at the top of the list. The only way to deal with huge repair bills was through private finance. The situation here is completely different.

583.

Mr McIntyre: There is a backlog but it is not as significant, and there is a need for continued investment. However, we are not addressing the same thing.

584.

The Chairperson: The thrust across the water was purely financial.

585.

Mr McIntyre: In recent years, absolutely.

586.

The Chairperson: That pressure is not here. If the Housing Executive were to get the loans or the debt charges reduced from the £240 million currently being paid, would those repayments fall over the next five or ten years?

587.

Mr McIntyre: The profile will probably begin to fall off in 2004. I suppose there will be capacity to borrow further when that begins to ease.

588.

The Chairperson: My point is that financially the Housing Executive or the Assembly are not under the same financial pressure as their equivalents are across the water, so the drive for large-scale voluntary transfer is not the same.

589.

Mr McIntyre: Absolutely.

590.

The Chairperson: If the Housing Executive's debt and repayments were to fall, there might be a better chance. The Department of Social Development is talking to Finance and Personnel about capital receipts and loans. In four or five years' time the Housing Executive could be in a stronger financial position than it is today.

591.

Mr McIntrye: When the consultants report on the different models the Housing Executive and the Executive will see for themselves the best financial approach to take in funding that investment and it might just be the traditional public sector route.

592.

Sir John Gorman: It is a totally different situation that we retain, or notionally retain, all the proceeds of house sales. Presumably, if we went in for large-scale voluntary transfers we would still be in that position?

593.

Mr McCaughley: No. It is subject to an individual deal between the local authority and a particular housing association, but the broad guidelines show that the receipts would probably be split.

594.

Sir John Gorman: But in the absence of a local authority's having any interest in this and the stock's being to a great degree Housing Executive stock, where does the split occur?

595.

Mr McCaughley: The Government view is that under no circumstances must the new landlord reap a windfall beyond the date of the agreed transfer. All this is built in before you start - what grants you are going to charge and what is going to happen to any disposals after the date of transfer. In broad terms it is like a profit sharing arrangement at that stage.

596.

Sir John Gorman: So there is no huge benefit from the £240 million interest payment that is now coming out of the Executive's housing budget? There is no particular benefit from large-scale voluntary transfers?

597.

Mr McCaughley: I am sorry. I was talking about the disposal of the property in the future. What happens to the loan debt is critical to any of these calculations, and there are a number of scenarios. Scenario one is that you have a declining debt anyway. The question is who gets the windfall from that? Is it the Northern Ireland block, or is it raided by the Treasury?

598.

If it is a negative value local authority, it can ask the Government to buy it out. The Government will give Glasgow £964 million to buy out the debt, but they will want to ensure in the years ahead that nobody reaps the benefits from that without their having firm control over it.

599.

Mr ONeill: What happened to the budget when they bought Glasgow out?

600.

Mr McIntyre: The large-scale voluntary transfer in Glasgow has not happened yet. We were there two years ago. It is an interesting tale, because they were exactly as they are now. The Minister decided that, as opposed to a single transfer, she wanted the thing to fragment and break up into 10 or 12 housing associations around Glasgow. A number of investigations by funders and consultants told them two things. One, it could not be broken up because you need good stock to subsidise bad stock as far as the funder is concerned. Secondly, in any event, there is a leasing problem. You cannot use secondary leases in Scotland because of the law. So they are back to where they were two years ago, which is proposing a single transfer. Glasgow Housing Association was set up a couple of years ago employing 60 people - there are a lot of people in Glasgow City Council working this out - and they are now going for a single transfer again. They are supposed to be out balloting tenants in November this year, which will be difficult for them. So it has not happened yet.

601.

Mr O'Connor: We talked about public and private money. Private money invariably means that somebody somewhere gets a kickback. There has to be one somewhere when you are talking about private money. Obviously, the Executive should not be able to borrow at much more competitive rates from the Government than any other organisation. So if you are going to go down the road of privatising anything, which is what a large scale voluntary transfer (LSVT) is - you are privatising 10,000 houses, 30,000 houses, or whatever - somebody somewhere has to pay for it. In the end shareholders, bankers or somebody will get a dividend from the public purse. That is the difficulty that I have with it. Public money is there to benefit the public, not private individuals who can afford to finance such an operation. That is what invariably happens.

602.

Mr McIntyre: I agree with what Mr O'Connor is saying.

603.

The Chairperson: We will move on to the right to buy for housing associations.

604.

Mr McIntyre: The same rights should apply to all socially rented dwellings. We now have a single waiting list with a common allocation policy and performance measures and a common housing benefits scheme. We do not see why housing association tenants should not have the same right to buy.

605.

Some points have been made about the financial impact. The grant that the association got when it built the property is not recouped on sale. The grant pays for the discount lost. Financially, I am not sure that the consequences are as dire as may have been suggested.

606.

We also have to consider exclusions. For example, sheltered schemes are excluded under our scheme. It has also been suggested that small associations have their stock excluded and that rural areas and areas of high demand should be excluded, elements of schemes across the water. It must be borne in mind that we are playing a totally different ball game. Exclusions need to be examined very carefully from the equality point of view before you decide what, if anything, you are going to exclude.

607.

We are reviewing our right to buy scheme. A suggestion was made that we were doing it on the back of this recent inquiry. In fact, the Minister, in answer to a question last December, said that we were carrying this review out. It will be going to the board in May, then to the Minister, then out for consultation and then no doubt to the Committee.

608.

We are looking at joint purchase, tenancy qualification, repurchasing, what exclusions should or should not apply, historic costs and discount levels. We will also carry out a full equality assessment. Whatever scheme we end up with as a result of that should apply to all registered social landlords, stock, exclusions and everything. That is our view.

609.

Mr ONeill: The Committee's current examination of the right to buy has been mentioned. You also referred to supporting the right to buy of housing association tenants. House sales in Northern Ireland have surpassed what was sometimes regarded as the mythical figure of 70% of the housing stock.

610.

Mr McIntyre: We sold 90,000. Owner/occupied houses account for about 70%.

611.

Mr ONeill: That is fairly near the limit. Should we not look at those exclusions that we are talking about? I am aware that people must be treated equally. We are supportive of that in the Assembly, but a person to be housed must have equality of opportunity as well, which must be weighed against the right to buy. The right to social housing may be even more important than the right to buy.

612.

If the right to be housed is important, do we not need to re-examine the entire house sales policy? That includes what the Housing Executive has been doing and what is proposed for the housing associations. We must ensure that that most important right of all - the right to a house - can be catered for.

613.

Mr McIntyre: The key issue around the house sales scheme is probably what is included and what is not. People might suggest that some should be included that are not. We will be looking at the equality assessment impact from both sides of that coin, particularly with regard to rural housing and areas of high demand. There is an equality issue there. When it is put into the political domain, given how often that issue has been debated at the Housing Council, it will be a narrow outcome.

614.

The Chairperson: The whole issue is equality. Once a house is sold, it is gone forever. Selling houses in areas of high demand changes the whole focus of those areas from public housing to private housing, and whole areas are lost to emerging tenants.

615.

Mr McIntyre: We are going to look at repurchasing as part of a right to buy scheme, for example, in areas where houses are coming back on the market.

616.

The Chairperson: Why sell them in the first place if you are going to purchase them again? What about capping?

617.

Mr McIntyre: It is one of the issues that we will be examining as part of the review. The review is not completed, but we are looking at capping discounts that have been applied to schemes elsewhere.

618.

The Chairperson: What about subsidising tenants who live in areas of high demand to move elsewhere?

619.

Mr McIntyre: We will be looking at as part of the review. It is a very expensive entry point.

620.

The Chairperson: Yes, but giving people discounts to buy a house in an area of high demand and then having to buy it back is also a very expensive way of doing things. Not only that, but the house is lost for ever.

621.

Mr McIntyre: There are equality issues there as well to do with who gets a house and who does not.

622.

The Chairperson: It may not be the person who needs it.

623.

The other issue is about tenants buying their homes. What percentage of people who buy homes are not tenants?

624.

Mr McCaughley: That rule was partially changed about 18 months ago, and it is now part of the review. The issue was to what extent we would demand that you be a resident in the household to be party to the mortgage. About 18 months ago we tightened it so that the person had to be a relative, because people unrelated to the residents were buying the houses.

625.

The Chairperson: Yes, but even people who are related are buying the houses in areas of high demand - not the tenants. People who are on the waiting list for an area cannot get a house, and it is not the tenants who are stopping them - it may be their son, daughter or granddaughter.

626.

Mr McCaughley: They are buying them jointly; they cannot buy them in their own right. The simple answer is that that is part of the review as well. There are also residency rules concerning the purchasers.

627.

The Chairperson: Those are big issues.

628.

Mr McIntyre: And another one is that the more you cut the sales down, the less is the receipt as well.

629.

Sir John Gorman: I would like to give notice that I am strongly against the view that you are expressing. There is an equality issue here, and there is absolute equality between a social tenant a house owner and their families. They are entitled to be seen as part of the country's strategic housing programme. I would be very opposed to being at a Committee that carried an idea that house purchases and ownership were in some way less meritorious than house rental. I say that just in case there is any belief that we are all for one thing and not for the other.

630.

The Chairperson: No, selling homes to tenants is perfectly all right, but what I am saying is that a lot of tenants -

631.

Sir John Gorman: You used the phrase "lost for ever", Mr Chairman.

632.

The Chairperson: They are lost for ever.

633.

Sir John Gorman: No - they are being used by people.

634.

The Chairperson: They are lost for ever to public housing.

635.

Mr ONeill: I will rationalise this a bit. Perhaps we have reached that mythical threshold of the number of social houses that can be sold while leaving us with a balance between social and private housing. That is my concern, and that is what you are saying as well, Mr Chairman. This issue must be focused on, and I am glad to see, given the responses from the Executive, that that is happening.

636.

Mr O'Connor: To develop this point further, I am in favour of extending the right to buy to private landlords as well. We had evidence last Thursday from the Chartered Institute of Housing who, as has been suggested, could say "You are entitled to a £20,000 discount on your home. We will give you £20,000 to move out of the area and go elsewhere." My concern about that is that people may then buy their homes because they can only afford a mortgage of between £15,000 and £20,000.

637.

What would be your views on the impact of such a scheme? Would it create an us-and-them situation where, in an area of high demand, if you were to put a freeze on house sales, you would end up with an us-and-them estate: an estate totally for social rental. You would then lose the advantage that you have gained over the past years of estates being mixed tenure?

638.

Mr McIntyre: One of the possible benefits of the house sales scheme at the levels you have talked about, which probably were not anticipated at the time, is that it has done more to create mixed tenure in estates than any other Government policy that has tried to tinker with it. The real situation is not reflected in the 30 or 40 estates that you read about in the press, estates where there are serious problems of anti-social behaviour and so forth, which are predominantly publicly rented.

639.

There are 550 estates beyond that, mixed tenure estates with high levels of owner occupation. There are lots of pluses and minuses about this thing, which is why we will be presenting a fairly complicated policy. A lot of the decisions are political -should you have a house sales policy, and, if you do, what should you or should you not sell. Any policy has prices and trade-offs.

640.

Mr O'Connor: The Chairman talked about the situation where if I, as a tenant, purchase my home, that property is lost forever to the public sector. Surely people have taken advantage of discounts and things in the past. Is there room for a buy-back clause for the Executive? For example, if a house is in an area of high demand, and the Executive sells it to me, when I want to sell it first refusal could go to the Executive under the Acquisition of Satisfactory Houses scheme (ASH), or whatever, to ensure that social provision is maintained in that area.

641.

Mr McIntyre: Again, that is one of the issues within the terms of reference of the review.

642.

The Chairperson: Good. Thank you very much.

MINUTES OF EVIDENCE

Tuesday 8 May 2001

Members present:

Mr Cobain (Chairperson)

Mr Hamilton

Mr B Hutchinson

Mr O'Connor

Mr ONeill

Mr Tierney

Witnesses:

Mr A Hassard ) Belfast City Council

Mr W Francey )

643.

The Chairperson: Good afternoon. You are all welcome to the Committee.

644.

Mr Francey: I thank the Committee for allowing the Belfast City Council to present its views today, and I congratulate the Committee on taking the initiative to examine these important issues.

645.

A written submission has been made on behalf of Belfast City Council, but, as stated in the covering letter, the council itself has not had an opportunity to consider or endorse that submission. However, we will be presenting it to the relevant council committee on 21 May. If there is any significant change in the council's view at that time, we will notify the Committee.

646.

Even though the views contained in the submission are an officer response, they are based on views expressed by the council in reviews dating back to the late 1980s.

647.

The council was asked to comment on private sector renewal, and with regard to that we commented on the rules governing grants. The council recognises that there are reasons for a shift in the balance between discretionary and mandatory grants. However, there are considerable qualifications about moving excessively towards discretionary grants. Since the late 1980s the council has supported the idea of having a strong statutory link to mandatory grants and notices which are served under the Public Health Acts or the Rent Order (Northern Ireland) 1978 in relation to houses in the controlled sector.

648.

The council recognises that such grant aid spent on maintaining housing conditions is difficult to justify through investment appraisals. However, Belfast City Council feels that expenditure of that type should not be tested in that way, particularly in relation to notices under the Public Health Acts. The proper yardstick for the appropriateness of that expenditure is the amount of hardship relieved. The people involved are usually from the most extreme social conditions, and the work is of a minor first-aid nature.

649.

The other qualification is that there need to be rules governing the exercise of any discretion regarding the payment of grants. Grant expenditure and scarce resources need to be allocated to areas of greatest social need and to the worst housing conditions. A crude application of mandatory grants cannot be expected to deliver that. A good example of a blunt instrument was the change in the rules governing mandatory grants for owner/occupiers where a cost ceiling of £500 was imposed a number of years ago.

650.

When that was introduced, the council expressed the view it had previously expressed about the importance of retaining the mandatory link with the controlled sector. It pointed out that using that kind of instrument without means testing, if it were to achieve its ostensible purpose, would probably result in a strong downside. Owner-occupiers who had difficulty financing essential repairs would be the casualties of that kind of approach.

651.

There are arguments for moving to discretionary grants, but we feel that the mandatory approach serves the purpose of allocating scarce resources best provided that it is linked with means testing where appropriate.

652.

The Chairperson: We will cover each sector as we go along. Are you saying that mandatory grants are more focused?

653.

Mr Francey: Yes - with means testing. We recognise that there can be administrative difficulties.

654.

The Chairperson: I was going to ask you about that.

655.

Mr Francey: Mr Hassard has more day-to-day contact with these problems. We will provide any clarification necessary.

656.

The Chairperson: The Committee agrees with mandatory grants - for different reasons, of course. The difficulty is that the administrative costs of means testing probably outweighs the amount you want to pay out.

657.

Mr Hassard: We recognise that there are difficulties with that. However, as Mr Francey has said, there is merit in trying to focus public money into the areas of most need. There may be other ways round this. However, for tenants and landlords who are subject to the Rent (Northern Ireland) Order 1978 in the controlled sector, where only subsidised rents are available to allow for repairs, there still needs to be some mechanism to enable repairs to be carried out and so protect those tenants.

658.

Some of the money for repair grants is being spent on vacant property that is subject to a public health notice. Ultimately, this is seen as an investment by people who want to bring such stock back into use either to let as a furnished property or to sell. That is a drain on public money. We recognise that there are difficulties, but there is a need to get heads around the idea of targeting people in most need, and means testing is one of the ways of doing that.

659.

Mr Francey: Public health notices are not discretionary. The criteria are statutory and have been in existence for a long time. They have been refined over the years by case law, but essentially the constraints are well defined.

660.

At the risk of stating the obvious, it is sometimes worthwhile as a starting point to recognise that HMO (houses in multiple occupancy) tenants are characterised by the special difficulties they face. These derive largely from the nature of HMOs. The sense of care and responsibility that exists between members of a single household cannot be relied upon to ensure the health, safety and welfare of HMO tenants where, by definition, there is no such family or household link.

661.

For that reason statutory standards that have been laid down, which address amenity matters and things like fire precautions, are needed to cover this risk, which is of a special type that is not found in normal houses.

662.

The statistics, to our knowledge, are not detailed on this sector, and we are relying on evidence from a general house conditions survey. A special survey of houses in multiple occupation was done about 10 years ago, and there are statistics in the Housing Executive's draft strategy. However, from our analysis of those statistics, it is obvious that there is a high level of substandard conditions. We know that almost one in ten of the houses in this sector are unfit. However, about a third do not meet the standards that govern things like amenities and fire precautions. According to the figures, I believe that the Housing Executive in Belfast served something in the region of 900 notices in a sector of about 4,500 houses. That is a very substantial proportion.

663.

The other statistics that are presented alongside those by the Housing Executive raise some questions about the effectiveness of the measures taken to ensure that houses are brought into compliance with those regulations to secure appropriate standards of health and safety. This underlines our belief that there are difficulties for tenants if the level of regulatory activity is determined by the level of grant funding. That is why we have always felt that there is a need to separate the regulatory and management functions. In fact, that is something which, as far as I am aware, was presented by the Government at the time of the 1994/96 Housing Policy Review.

664.

Our position is that there needs to be a separate application of statutory remedies, just as there is in the controlled sector - through the use of whatever powers are available, be it the Rent (NI) Order 1978 or the Public Health Acts - rather than have it limited in an arbitrary sense. This is an uncontrolled sector. By and large landlords are not in the sort of financial straits that tenants or even landlords in some parts of the controlled sector face. The health and safety of tenants should be paramount.

665.

The Chairman: Good.

666.

Mr Francey: The third issue to do with the private rented sector and regulation therein is the Rent Order. We are aware that a review has been initiated by the Department on the workings of the Rent Order and the wider issue of regulation. It is the council's intention to press again to have weaknesses in the Order addressed, and these are issues that Belfast City Council has been pressing for nearly 20 years in some cases. However, there is one point that also applies to the other points about the regulation of housing in multiple occupation. I know you have heard this before because, since our written submission was made, I have seen the submission made by the Chartered Institute of Environmental Health. Belfast City Council has repeatedly made the point that consideration should be given to whether there would be benefits for tenants from creating a comprehensive regulatory function for district councils on housing matters.

667.

The council has been concerned that, while the remedies that are available to councils are applied vigorously and rigorously, it is difficult to explain why some of them, such as notices for dealing with unfit houses that are widely recognised as having been rarely, if ever, used, must be seen as complementary. I assume that, as with houses in multiple occupation, there are two issues, one perhaps being the investment assessment of expenditure of that type. I am speculating about that. We feel that the remedies should be used in appropriate circumstances.

668.

We have made the point in the past that the range of remedies that are available to tenants in Northern Ireland has always been less than is available in Great Britain. One omission is the power to serve a notice on houses that are not unfit but are in substantial disrepair, a section 190 notice under the 1985 Housing Act.

669.

We feel that that power could be applied beneficially in Northern Ireland. It is not available, the council has pressed for its introduction, and we feel that the arguments for that are strong. The fundamental point is that consideration should, at least, be given to a universal enforcement role for councils. Councils are well suited to that. They have a strong culture of regulation; councils are responsible for hundreds of regulations across a wide range of functions. That is generally supported by legal resources, and the result is that regulations are applied cost effectively.

670.

A specific issue that the council has repeatedly pressed about is the need to address the weakness in the Rent (Northern Ireland) Order 1978. There are two principal points there. We have direct experience, gathered over many years and going back to the introduction of the Order in 1978, of landlords avoiding their responsibility to comply with a certificate of disrepair in a regulated tenancy simply by living outside the jurisdiction. A simple remedy for that is to define an owner in the same way as in the Public Health Acts. The consequence of that is that the agent, the person who manages the property and collects the rent, would be responsibile and could, therefore, be held to account and required to comply with any such notice. This has worked well with public health notices for over 100 years. In fact in 1988 the Department acknowledged that the merits of that had been recognised and said that changes would be made, but those changes did not materialise in the Housing (Northern Ireland) Order 1992.

671.

Secondly, I find it difficult to understand why changing the regulation was resisted, but the Rent Order defines the respective repairing responsibilities of tenants and landlords. However, that does not apply where there is a tenancy agreement that is not compatible with that. The tenancy agreement takes precedence if there is any inconsistency.

672.

I cannot help thinking that there would be uproar if there were any attempt to alter the repairing obligations of tenants and landlords in public sector housing. When the Order was introduced the Minister at the time pointed out that agreements of that nature should not be lightly set aside. We did not consider it to be a question of setting it aside lightly, but rather of simply identifying that one of the principles of the Rent (Northern Ireland) Order 1978 was to establish rent parity with the public sector. In return for that, one would assume, landlords should have similar repairing obligations to the public sector landlords.

673.

The solution would have been simple -repeal article 40, define the obligations of landlords and tenants and to give them universal application.

674.

Defining an enforcing authority for rent book regulations is important. Those regulations have been on the statute book for many years, but no one has been assigned responsibility for enforcing them. That is easy to put right, and representations have been made, not just by councils, but also by groups such as the Housing Rights Service.

675.

Those are the specific points that we raised in the submission.

676.

The Chairperson: Thank you very much.

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LIST OF WITNESSES WHO GAVE ORAL EVIDENCE
TO THE COMMITTEE

Department for Social Development

Chartered Institute of Environmental Health

National Union of Students (UK) and the Union of Students in Ireland

Northern Ireland Tenants' Action Project

Northern Ireland Co-ownership Housing Association Limited

Council of Mortgage Lenders

The Chartered Institute of Housing in Northern Ireland

Northern Ireland Federation of Housing Associations

The Northern Ireland Housing Executive

Belfast City Council

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LIST OF WRITTEN EVIDENCE SUBMITTED
TO THE COMMITTEE

LIST OF WRITTEN EVIDENCE SUBMITTED TO THE COMMITTEE
(THESE ARE PUBLISHED IN VOLUME 2 OF THIS REPORT)

The Northern Ireland Federation of Housing Associations

Belfast City Council

Castlereagh Borough Council

Simon Community Northern Ireland

Council of Mortgage Lenders Northern Ireland

Northern Ireland Housing Executive

Environment and Heritage Service

Ards Borough Council

Northern Ireland Co-ownership Housing Association Limited

Environment and Heritage Service

Northern Ireland Tenants Action Project

Ballynafeigh Housing Association Ltd

Hearth Housing Association

Ballymoney Borough Council

Queens University Belfast

Council of Mortgage Lenders Northern Ireland

Fermanagh District Council

Chartered Institute of Housing in Northern Ireland

Paddy Hillyard, Paddy Gray and Ursula McAnulty

Housing Rights Service

Shelter (Northern Ireland)

Health Action North and West Belfast

Coleraine Borough Council

National Union of Students (UK) and the Union of Students in Ireland (NUS - USI)

Disability Action

Cookstown District Council

Northern Ireland Tenants Action Project

Co-ownership Housing

Donacloney Housing Association Ltd

Presbyterian Housing Association (NI) Limited

Northern Health and Social Services Board

Ballymena Borough Council

Flax Housing Association Ltd

Craigavon Borough Council (Public Services Liaison Committee)

Habinteg Housing Association (Ulster) Ltd

Chartered Institute of Environmental Health

North Belfast Mission Housing Society Ltd

Newtownabbey Borough Council

Open Door Housing Association (Northern Ireland) Ltd

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GLOSSARY

BTS Below Tolerable Standard

DETR Department of Environment, Transport and Regions

DOE Department of Environment

DSD Department for Social Development

EHO Environment Health Offices

HAG Housing Association Grant

HHSRS Housing Health and Safety Rating System

HMO House in Multiple Occupation

LSVT Large Scale Voluntary Transfer

NICHA Northern Ireland Co-Ownership Housing Association

NIHE Northern Ireland Housing Executive

PRS Private Rented Sector

PRTB Private Residential Tenancies Board

PSBR Public Sector Borrowing Requirement

RTB Right to Buy

VPG Voluntary Purchase Grant

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