Annual review of Chief Executive salaries

The exclusive poll of the 177 largest associations by stock owned shows average basic chief executive pay grew 3.3% year-on-year to £150,131 in 2015/16.

The average bonus rose 10.7% over the same period. The poll also shows the gender pay gap still appears to be an issue in housing, with average male chief executive pay 7.2% higher than female pay.

Click here for the full results and in-depth analysis.

Complaints report – demonstrates an increase in tenant complaints

The number of tenant complaints received by social landlords surveyed  has steadily increased during the past three financial years.

The report by Housemark can be found here:

HM complaints report

Research seen exclusively by Inside Housingshows the average social landlord received 33 complaints per 1,000 homes managed in 2015/16. (This figure, based on data from 83 social landlords from across Britain, has increased from 31 complaints per 1,000 homes in 2014/15 and from 27.6 in 2013/14).

The report shows complaints about property services – including repairs and maintenance – made up more than half of the complaints last year.

The Housemark report said many of the associations that responded expect complaints to increase further due in part to “housing providers having to strip back services to make up for expected reductions in funding”.

The 83 landlords were selected because Housemark had comparable data for them covering several years, with 67

RTB – new and voluntary – where are we now?

Here is a useful summary from Inside Housing:

https://social.shorthand.com/insidehousing/jydtttxO6P/the-right-to-buy-extension

Citizenship post brexit

The British citizenship system has lain unreformed for decades, and the Brexit vote has cast the status and security of the 3 million EU citizens living here into doubt. This report reviews current policy, and sets out the immediate reforms required to reshape a fairer, globally competitive citizenship system that would best serve Britain’s interests.
This report is the report from the IPPR:
Here is the summary of findings from IPPR:

“Decades of high migration have brought millions of people to Britain’s shores. Many come to make the UK their home – working, raising families and becoming a permanent part of British society. Yet the political debate on immigration has recently tended to focus on the numbers of new immigrants coming into the country. This has had a distortive effect on the debate. Too little attention has been paid to migrants who are already here, and their pathway to citizenship. The means by which migrants make Britain their permanent home – indeed, become British citizens – is important. Yet for decades, the British citizenship system has lain unreformed.

The result of the European referendum has thrown this neglect into sharp relief. As Britain embarks upon negotiations to leave the European Union, there is no clarity on the future status and security of the 3 million citizens of other EU countries who live here. People who came to Britain legally and legitimately, who have built their lives here and contributed to British prosperity and culture, have no way of knowing whether they will be able to stay and on what terms.

In this report, we discuss the current status of EU citizens in Britain and their prospects as British withdrawal is triggered. Swift and fundamental reform is urgently needed, and we argue that all EU citizens who live here should automatically be granted indefinite leave to remain. We must recognise that European children who have been brought up in Britain, even if they do not have British nationality, will maintain an enduring connection to the country for the rest of their lives. Furthermore, the contribution that EU workers have made to the National Health Service especially must be recognised and safeguarded. The country’s social cohesion depends upon a comprehensive system that integrates the migrants who have made their lives here into the national population.

However, broader reforms of the British citizenship system are overdue. Citizenship policy has developed incrementally, in response to changing migration flows and globalisation, since the British Nationality Act was passed in 1981. The system now stands on the brink of the most significant structural change since the end of Empire. Before the EU referendum, the government announced it would undertake a review of citizenship policy. This is an important opportunity to examine how the system is working and the impacts it has in the current reality of a high-migration country in an increasingly globalised economy.

Acquiring British nationality is tougher than it has ever been. As a result of reforms introduced over the past 20 years, prospective citizens have to pass a series of tests. They have to learn the language and culture, observe the law, be of good character, meet the residency requirement and pay a high fee. In many ways this is right: British citizenship should be a hard-earned privilege.

But as a means of fostering the country’s economic prosperity and social cohesion, a more sophisticated system is needed. In this report, we argue that two groups of migrants, at opposite ends of the scale, are disproportionately disadvantaged by the current system. First, for migrants with world-class skills, the current system takes too long and is too uncertain. Access to a British passport would give them the ability to travel for their work and the security to put down roots and invest in the UK. Other countries compete vigorously to attract this talent, and the future success of the British economy depends on our ability to attract and retain them. Our citizenship system risks encouraging them to look elsewhere, and thus poses a real threat to our international competitiveness.

This is far from a negligible issue: while Britain has toughened its citizenship system over the past 20 years, our competitor economies have liberalised theirs. Germany, for example, has significantly liberalised access to citizenship for migrants. As Brexit stokes concern that London’s financial services sector may migrate to Paris or Frankfurt, Britain must improve its offer to the world’s most talented – particularly those who are already here. It should not be so difficult for them to become British and access the benefits of citizenship.

Second, low-wage migrants who are here legally and integrate well would benefit from citizenship. These migrants compete hard for jobs and accommodation. Recent reforms have made landlords and employers liable for the immigration status of those they employ or rent homes to. Those with an unusual passport, or whose residency is not straightforward or easily provable, will suffer, as employers and landlords with little knowledge of the immigration system may err on the side of caution. A British passport, which they fully satisfy the requirements for, would be a useful insurance for this group. But the spiralling price of citizenship – now more than £1,200 – has put it beyond their reach. It is far more expensive in the UK than in comparable countries. The low-skilled and low-wage labour supply is likely to decrease if the UK scraps free movement between the UK and European Union countries in light of the referendum result. Those migrants who are already here must be given a pathway to citizenship in the interests of social cohesion.

Recommendations

To safeguard the future of EU citizens living in Britain, and to send a clear message that Britain wants to integrate Europeans who have made their lives here, we recommend that the government takes the following immediate actions.

  • Grant indefinite leave to remain to all EU citizens resident in Britain.
  • Offer automatic British citizenship to all European children who have been educated in Britain.
  • Waive the £1,200 fee for British citizenship for all EU citizens who have been living here for more than five years.
  • Offer automatic British citizenship to all Europeans working in the National Health Service, to recognise the importance of their contribution and safeguard public health.

We also recommend a series of reforms to make the citizenship system altogether better suited to the complexities of a 21st century, high-migration country.

  1. Give the right to vote in local elections to all migrants with indefinite leave to remain. Currently, Commonwealth migrants can vote in local elections, as can EU migrants – although they will likely lose that right when we leave the EU. Illogically, longstanding migrants from other parts of the world have no voting rights at all. In recognition of the fact that long-term residents are part of their communities, the government should give all of them the right to vote in local council elections.
  2. Create a fast-track route to citizenship for those with globally competitive skills. By paying a higher fee, those with world-class skills in industries that power the British economy should be able to access citizenship, the ability to travel that it brings, and the security to invest and put down roots. This would send a much-needed message that Britain is open and competing hard in the global race for skills despite both our toughening immigration system and Brexit.
  3. Freeze the price of citizenship. The cost of naturalising has spiralled in recent years, and Britain is now among the most expensive citizenship regimes in the developed world. The full integration that citizenship connotes is being moved out of the reach of most migrants, and should not be allowed to become any more expensive.
  4. Introduce a government-backed citizenship loan. Migrants who satisfy all the other requirements of citizenship and who are in work but earning below £20,000 per year should be able to take out a citizenship loan, allowing them to pay the cost of their citizenship back over time. This loan would be interest-free and government-backed, in the same vein as student loans and start-up loans. We estimate that within a number of years any revenue loss would be offset by income from the fast-track route. “

London Mayor signs up to diversity pledge

Sadiq Khan’s top housing team have signed up to a pledge to promote better speaker diversity at industry events.

The pledge, developed by thinktank Future of London, sees figures from the housing and development world promise to promote diverse speakers and shun non-diverse events.

The pledge can be signed by individuals or organisations and involves agreeing to at least two of five standards:

  • Hold public-facing events which include under-represented demographic groups (by gender, ethnicity, ability, age etc) as speakers
  • Put forward speakers from under-represented groups to represent our organisation, including at senior levels and across disciplines
  • Encourage organisations I work with to host diverse events
  • Avoid participating in sessions which feature only one demographic grou

This will help increase the pool of voices and signers suggest they will not speak on panels without at least one woman participating.

 

HCA watching house completions post brexit

The HCA is keeping a “careful watch” after housing associations missed their forecast sales revenue by more than a quarter in the run-up to the referendum.

New figures show that the sector’s largest social landlords generated £182m less revenue than expected on homes built specifically for sale in the three months to June this year.

The Homes and Communities Agency (HCA) has told Inside Housing it would keep a close eye on whether declining sales were part of an emerging pattern as speculation grows about slowing market confidence following the Brexit vote.

The HCA’s latest quarterly survey, published today, shows 239 housing associations received income of £531m from current asset sales between April and June – 25.5% less than the £713m forecast and £304m down on the previous quarter.

Latest HCA regulatory judgements

The HCA has put 5,500-home Saffron Housing Trust’s compliant governance grading under review

The HCA downgraded the governance grading of North Devon Homes (NDH) from a G1 to G2, but left its V1 viability rating untouched.

It said the 3,100-home association had “not been able to evidence sufficiently that its governance arrangements enable it to manage its affairs with an appropriate degree of effectiveness and foresight”. G2 means an association complies with standards but needs to improve.

Broadacres Housing Association, a 6,000-home landlord in north Yorkshire, was re-issued with a compliant G2 and V2 grading, meaning it needs to make improvements.

The HCA highlighted Broadacres’ increased financial risk because of the performance of its development company subsidiary Mulberry Homes Yorkshire.

LATEST HCA JUDGEMENTS
Provider Governance Viability
Aspire Group G1 V1
Bournemouth Churches HA G2 V2
Broadacres HA G2 V2
Calico Homes G1 V1
Hastoe HA G1 V1
Livin Housing G1 V1
North Devon Homes G2 V1
Nottingham Community HA G1 V1
Saffron Housing Trust G1 (under review) V1

JRF report 5 million adults lack basic literacy and numeracy skills

Five million adults are lacking basic reading, writing and numeracy skills essential to everyday life and being able to find and secure work, according to analysis for the Joseph Rowntree Foundation (JRF) today.

It means they may struggle to carry a number of basic tasks, ranging from writing short messages, using a cash point to withdraw money, being able to understand price labels on food or pay household bills.

A further 12.6 million adults lack basic digital skills – meaning they struggle to carry out tasks as send emails or fill out online job application forms.  JRF’s research shows the internet is considered essential by the public in an era when access public services and good deals for essentials are increasingly found online.

JRF said the figures painted a troubling picture of people being let down the education system or left behind in the modern economy, with little opportunity to improve their skills. It comes ahead of JRF’s strategy to solve UK poverty, which will be published next month.

Comparisons of basic skills in England to other countries shows:

  • A large proportion of young people in England are entering adulthood without the skills to get by:
  • 23% of 16-18 year olds, 17% of 19 – 24 year olds are at the lowest level of literacy (level 1 or below), compared to 19% of 55-65 year olds.
  • 29% of 16-18 year olds, 25% of 19 – 24 year olds are at the lowest level of numeracy (level 1 or below), compared to 26% of 55-65 year olds.
  • In other nations, young people significantly outperform older people. By contrast and of significant concern, older people have higher literacy and numeracy scores than young people in England:
  • For the oldest age group in the study (55 – 65), England is third in the international rankings for literacy, for the youngest age group (16-18) it is 18th.
  • England is the only country where the average literacy score of the youngest age group (16-18 years) is lower than that of the oldest age group (55-65 years).
  • On literacy, the North East, West Midlands, North West and Yorkshire and Humber fare worst on its scores. On numeracy, the North East, London, East Midlands and West Midlands had the lowest scores.
  • Overall the UK ranks 15th for numeracy and 17th for literacy among the 34 OECD countries.
  • The current basic skills training on offer is often more focussed on the qualifications people gain, and less on the outcomes such as whether they secure work, undertake further training or increase their earnings. JRF is calling for a drive to ensure all adults meet all basic skills needs, including digital skills, by 2030:
  • The scheme would see people taking training in community settings, such night classes, greater use of online learning for those able to do so, regular sessions in community centres and churches, or employers providing the additional training in the workplace.
  • The scheme would provide tailored training where people undertake the modules they need to develop literacy, numeracy, digital and/or English language skills, alongside health and financial capabilities. The training should be grounded in the real world, related to every day budgeting skills and financial planning.
  • To meet the 2030 target, participation rates need to double from around 100,000 people per year for literacy and numeracy to 200,000. Priority should be given to people experiencing or at risk of poverty. The scheme could help an additional 280,000 people into work by 2030.
  • Delivering this ambitious target would require refocusing the existing £200m invested on average each year in literacy and numeracy in England, plus a further £200m per year of new funding.

Katie Schmuecker, Head of Policy at JRF, said:

“In a prosperous country like Britain, everyone should have the basic skills they need to participate in society and build a career. But these shocking figures show millions of adults are being left behind in the modern economy, holding back their potential and the productivity of our businesses suffering as a result. Businesses and community groups must play a leading role in helping people learn the skills they need to be able to find work and progress into better-paid roles – but this needs to be backed by real ambition on the part of government.”

Stephen Evans, Deputy Chief Executive at Learning & Work Institute:

“Everyone needs a set of basics for life and work in modern Britain. It’s shocking that so many people lack these core capabilities. This holds back people’s life chances, businesses future success, and national prosperity. Our research for JRF should act as a clear call for a national mission to help everyone get these core skills. At Learning & Work Institute we’ve been trialling a new way to do this. The benefits of working with people and communities to tailor support and relate it to everyday life are clear: we’ve seen increased engagement in learning and community life, and savings to public services.”

Figures are drawn from the Skills for Life survey from the Department for Business, Innovation and Skills (BIS) and The international survey of adult skills 2012: adult literacy, numeracy and problem solving skills in England

Impact of Pay to Stay on Council Tenant rents

Council tenants across England face rent hikes of £1,000 a year on average under the government’s Pay to Stay scheme, according to research.

The controversial policy, which is yet to be introduced, is expected to hit more than 70,000 local authority tenancies around the country.

Inside Housing have been investigating – this is what they said:

“Under Pay to Stay, households living in council housing and earning more than £31,000 (£40,000 inLondon) will be forced to pay increased rents up to market rates.

Research by Savills, commissioned by the Local Government Association (LGA), found that the 70,255 households earning above the income threshold will see their rents increase by an average of £1,065 a year.

A total of 9.3% of council tenants in the South East will face higher rents, while just 5.3% of tenants in the North East will see an increase.

 

In London, affected households will pay £132 a month extra in rent, with the figure averaging £72 outside the capital.

The government originally forecast that the policy would save £365m in 2017/18, however Savills estimated that the savings would amount to just £75m annually. This is before deductions are made for significant administrative costs.

Much of the forecast savings from the Pay to Stay policy had to be slashed when, under pressure from the House of Lords, ministers changed the ‘taper’ rate to protect more tenants.

For every £1 that tenants earn above the threshold, they will face a 15p increase in their rent.

 

Pay to Stay is expected to begin this April, but councils have warned that they do not have the systems in place yet to implement the policy.

A spokesperson from the Department for Communities and Local Government (DCLG) said: “Pay to Stay better reflects tenants’ ability to pay while those who genuinely need support continue to receive it. It means households earning £32,000 would see rents rise by just a couple of pounds a week.” “

Tenants on Housing benefit and under 35 are hard to house

The application of the ‘Local Housing Allowance (LHA) cap’ to social tenancies, which among other things severely restricts the amount of housing benefit that can be claimed by general needs tenants under 35, without children. Most will only be eligible for the ‘shared accommodation rate’ – based on the cost of renting a room in a shared house or flat. Although the cut to benefits only starts on 1 April 2018, it will apply to any tenancies signed from 1 April 2016.

Inside Housing have been campaigning on tis and have recently completed a survey of the biggets HAs ad their reaction to the problem – this is what they found:

“A Department for Work and Pensions (DWP) spokesperson noted that local authorities can use Discretionary Housing Payments to help tenants “transition to our reforms”, and said: “These changes are about restoring fairness to the system and ensuring that those on benefits face the same choices as everyone else. The reality is, nothing will change until April 2018, and existing tenants will be unaffected.”

But tenants picking up the keys to their new homes today will be affected if they are still relying on housing benefit to pay the rent in 2018, and are under 35 at that time. This also means social landlords are already making tricky decisions about whether they can rent to tenants they think will be affected – if it is at all unclear whether they will be able to afford the rent.

So Inside Housing sent a survey to the 180 biggest housing associations asking detailed questions about how housing associations are changing their allocation policies. Forty-seven responded, giving us a glimpse into how decisions on “how to get a housing association house” are changing on the ground.

Only 11% of them plan to make no changes to how they treat under-35s in their allocations policy, compared to 13% who have already made changes and 60% who plan to change their allocations in future.

“It’s likely a lot of the under-35s nominated to us will not be able to afford the property,” one housing association predicted.

Some of the changes being made will make it even harder for younger people to get tenancies from a housing association. Among those reported to Inside Housing are:

·         Younger tenants to be given assured shorthold tenancies, or two-year tenancies, rather than more secure tenancy agreements.

·         Blocking under-35s from renting in certain blocks of flats or certain buildings.

·         Blocking under-35s from renting new build homes, as these will be rented under affordable rents set at up to 80% of market level, leaving an even larger gap between housing benefit entitlement and rent.

·         Only accepting the youngest tenants, under the age of 21, if the council agrees it will pay their full rent.

·         Additional affordability assessments.

Rather than restricting access to housing, a number of landlords are reducing rents for younger tenants with no children.

For example, Amicus Horizon plans for its new tenants under 35, without children, to be allocated social rent housing, rather than affordable rent.

This will still leave a shortfall – but not as great. “The shared accommodation rate of LHA is effectively half the one-bedroom equivalent, leaving most residents facing a weekly shortfall of £10 to £15 to make up through their own means,” explains Paul Hackett, chief executive of the 28,000-home landlord. “We’ll raise awareness before we let homes and offer help and advice through our tenancy sustainment and financial inclusion teams,” he adds.

“Our biggest concern is what will happen in two years when these tenants can no longer pay their rent – it’s likely they will be evicted and be seen as intentionally homeless.” Quote from anonymous housing association source

Housing associations are aware of the impacts of these changes on their younger tenants, and fear a cycle of homelessness is coming in the future. As one said, “Our biggest concern is what will happen in two years when these tenants can no longer pay their rent – it’s likely they will be evicted and be seen as intentionally homeless.”

Centrepoint, a London homelessness charity with 1,100 supported accommodation spaces, is at the sharp end, as its residents are under 24. Going back to the family home is not a solution for many of its young people, and the charity already struggles to help residents find suitable housing when they are ready to ‘move on’.

The charity worries it will face extra demand from young people made homeless because they are unable to afford their social or affordable rent – and a ‘bed-blocking’ scenario where it is impossible for its existing residents to leave.

Paul Noblet, head of public affairs at Centrepoint, says: “It’s really difficult to know where young people will go, unless there are thousands of thousands of homes built, or there are sufficient jobs that are paying sufficient salaries.”

The LHA cap and under-35s

The Local Housing Allowance limits the amount of housing benefit which tenants in the private sector can claim to help pay their rent.

But in November last year, George Osborne announced that the cap would be extended – and the same formula used to calculate entitlement to housing benefit for ‘social sector’ tenants as well, if they signed their tenancy agreement from 1 April this year.

From 1 April 2018, tenants under 35 with no children will only be eligible for the ‘shared accommodation rate’ set under the LHA, area-by-area. This limits most tenants under 35, if they don’t have children, to enough housing benefit to cover a room in a shared house. The rate is meant to be set at the lowest third of properties on the local rental market. This would not be enough to cover social or affordable rent for a council or housing association home.

There are a number of exemptions to the shared accommodation rate in the private sector, but the government has not yet said if the same rules will apply to social sector homes.

How many will be affected?

We don’t know how many tenants will be put on the shared accommodation rate, partly because the exact exclusions haven’t yet been announced and additionally the government has not yet published an impact assessment. In the absence of official calculations, some light is shed by examining the Department for Communities and Local Government’s CORE data on new lettings.

First consider age – the two age cohorts most likely to be allocated a new tenancy are those aged 25-31 (25%) and those aged 18-24 (21%). That means at least 46% of new tenants are definitely in the age bracket for the shared accommodation rate, although we don’t know how many have children or would be otherwise exempt. The next most significant age group is 31 to 38-year-olds (19%), an unknown number of which will be affected.

It is a good bet that many of these new tenants will rely on housing benefit, as only a quarter of all new tenants receive no benefits at all.

Understanding the rules

Only 66% of housing associations told us they are clear on the rules for the LHA cap on under-35s, even though tenants picking up the keys to their housing association flat or house today could be affected.

Partly this is because housing associations are still not sure about which tenants will be exempt. It’s already clear that under-35s with children will be able to get more than the shared room rate of housing benefit. Assuming that the rules match private sector housing benefit, people who have been in homelessness accommodation for six months should also be exempt – if they are between 25 and 35.

But housing managers told Inside Housing that the specifics of how this will work are not clear. “We are as informed as we can be at this time,” one said.

“We understand the rules that apply in the private rented sector – and that ministers intend to extend something similar in the social rented sector – but we will be lobbying for broader exemptions,” another association said – for example, it will be pleading the case of young, vulnerable tenants moving out of supported housing and into a general needs tenancy.

“We do not feel all the information from the DWP has been made clear. At landlord forums we have attended there has been some confusion across the sector,” was another comment.

Assessing tenants

Housing associations are already preparing for the shared accommodation rate – with 89% having analysed the benefit reductions that affected residents will face.

Only three of the 47 housing associations expect that local authorities will signal which of their new tenants will be affected by the change, with nearly half assuming that they will need to carry out checks themselves during the allocation process. Another 45% said they don’t know, expect to split the responsibility with local authorities, or expect different councils from which they take nominations to adopt different approaches.

Will housing associations set up shared housing?

If you are under 35, single and with no children – yet reliant on housing benefit – government policy is pushing you one way: a room in a shared house or flat.

But such houses are typically rented out by private sector landlords. Social landlords have barely any involvement.

Could that change in the future, as landlords perceive that most of their housing will be impossible for many under-35s to access?

The results of our survey suggest the answer is yes – with some qualifications.

Just under a third of housing associations are considering the development of shared housing for under-35s, in direct response to the LHA cap.

Still, there are reasons why housing associations are not already active shared housing landlords, with a perception that these tenancies are difficult to manage high up the list. In the private sector, tenants can find friends and acquaintances to move into any vacant rooms. But housing associations are tied to systems of allocating homes according to priority need, which makes such arrangements more difficult.

Grand Union Housing Group is typical of the 36% not considering this approach. “Shared housing is fraught with problems and there are very few (if any) examples of it working well,” the 11,000-home association said in response to our survey.

Another association said: “We have considered it but shared tenancies are very problematic to manage and are therefore unlikely to be introduced.”

Still, other associations are looking at more indirect ways to get involved in this part of the market. One in the South East told us it may set up a ‘matching’ service to help younger people find rooms in shared houses.

Local authority angst

The relationship between housing associations and local authorities is already under strain, primarily because of the Right to Buy extension, to be paid for by forcing local authorities to sell their own high-value stock.

But Inside Housing’s survey reveals that the LHA cap risks putting the two halves of the social housing sector further at odds. The reason? Housing associations may start turning down under-35s who are referred from council waiting lists, if they are entitled only to the shared room rate, on the basis they won’t be able to afford the rent. But local authorities will still have a statutory duty to house young people without children in this age bracket.

Some associations expect local authorities to be sympathetic. “There is a shared understanding that tenancies have to be sustainable and so affordability has to be considered,” one pointed out. Another hopes that local authorities could help to fund rents for affected young people.

But many associations already anticipate this will cause friction. “They would see it as a failure to meet our duties in addressing housing need,” one told Inside Housing. Another said its local authority would be “deeply unhappy. Although we’re entitled to do so it could place serious strains on our relationships”.

“We are likely to be challenged as this approach will breach most nomination agreements,” another said.

But housing associations worry that if they accept tenants who cannot pay their rent, without guarantees from local authorities, they could later be considered intentionally homeless if evicted due to arrears.”