Here is the latest on equality news:

HDN-eBriefing-December-2015

More than four in 10 young people using homelessness services face losing their accommodation because of government benefit cuts, a survey has found. The government is planning to remove housing benefit for 18 to 21-year-old jobseekers.

Reported in inside Housing:

“A survey by umbrella group Homeless Link, of 158 providers of homelessness services, found that 44% of the respondents’ clients were aged between 18 and 21 and were not care leavers.

Care leavers will be exempt from the policy, ministers have previously said.

The survey was part of Homeless Link’s annual Youth Homelessness report, which looks at the state of the youth homelessness sector.

Housing figures have raised concerns that without access to housing benefit, many homeless young people will be unable to pay for their accommodation and would be unable to return home.

This has raised fears of an increase in street homelessness among young people.”

More than one in four social landlords are currently approving Right to Buy property purchases without validating applications – while more than half of housing professionals estimate the incidence of fraud to be higher than previously thought. These are just two of the headline findings of an exclusive Inside Housing Right to Buy fraud survey – sponsored by corporate investigators BBFI – that casts a spotlight on the dark side of the Conservative housing initiative launched by the late Margaret Thatcher in the 1980s.

According to the CIH:

“The national survey comes in the wake of two groundbreaking reports that have charted a spike in fraud. In October 2014, the Audit Commission reported a 400% rise in Right to Buy fraud in the capital between April 2012 and March 2014, while in July this year the London Boroughs’ Fraud Investigators’ Group (LBFIG) found that 3% of Right to Buy applications made each year in the capital were fraudulent.

But the findings also come as the scheme is about to be extended to 1.3m housing association tenants countrywide as heralded by chancellor George Osborne in his Autumn Statement. As such, hundreds of housing associations that have never run the scheme before will now face this type of fraud for the very first time.

Assessing risk

The 215 respondents surveyed hailed from diverse housing disciplines including care and support, regeneration, procurement and housing management. The majority (70%) worked for housing associations, with the remainder from local authorities (18.5%) and arm’s-length management organisations (11.5%). (Stock transfer housing associations already have some experience of this policy, as their tenants are often eligible for the ‘preserved Right to Buy’.)

According to Paul Slowey, who founded BBFI in 2008, Right to Buy fraud has escalated as house prices have soared, with property discounts – £103,900 in London or £77,900 countrywide – increasingly attractive to fraudsters.

“Every 20 fraudulent applications approved by landlords in the capital equates to a loss of £2m from the sector,” says Mr Slowey. “With the scheme being extended, even the accepted level of fraud could see millions of pounds of social housing being bought up by fraudsters. But we believe the problem is greater, and that the results of this survey underpin that.

“Some landlords are inadvertently leaving the door open to fraud by failing to fully screen applications,” says Mr Slowey. “Others estimate the actual level of fraud to be far higher than they are currently managing to identify.”
That more than one in four social landlords (27%) nationally are currently approving Right to Buy property purchases without screening the ‘validity of applications’ – such as checking the applicant is the actual tenant, or that the money to purchase is their own, or from an approved source – is “deeply concerning”, Mr Slowey says.

FRAUD WATCH GRAPH 360px
Alan Bryce, author of the LBFIG report, says: “Robust validation is the key to rebuffing fraud. I’m not that surprised that one in four do not have a robust system in place. This is not a box-ticking exercise, but a risk-based investigation – you need fraud specialists.”

The survey findings reveal the multiplicity of screening approaches used by social landlords. The majority (66.7%) of organisations screen 90%-100% of applications – but 16% of landlords investigate less than half of applications, and 2.3% of respondents work in organisations that probe a maximum of 10%.

The findings also highlight a chasm between identified and perceived levels of Right to Buy fraud – with the level of perceived fraud far higher than previously thought.

Some 60% of respondents said identified fraud ran at between 0%-2% of applications, 30% at 2%-10%, while just 1.3% of respondents claimed fraud affected more than half of applications.

But asked to estimate the incidence of actual fraud, the majority (50.6%) of respondents said it ran at anywhere between 2% and 25% of applications.

Karen Neald, solicitor at law firm Weightmans, said this was likely to be in part due to regional variations in property values that make fraud more attractive in high-value areas such as London.

While many respondents perceived they were failing to identify fraud, 73% of respondents believed there was a link between the incidence of fraudulent Right to Buy applications and general tenancy abuse, such as sub-letting.

According to Mr Slowey, this is an essential link to make. “From our experience, where someone has abused a tenancy, any Right to Buy application warrants investigation, as there appears to be a direct link in a high percentage of cases.”

Cost to communities

But do social landlords think they will be able to cope with a sudden uptick in applications? The survey probed respondents on two levels.

First it asked respondents if organisations would be able to cope with the sheer volume of applications expected once the scheme was open to an additional 1.3m tenants.

Nearly 60% of respondents said they were either “quite” or “very” confident they could. But the remaining 40% were either “not very” or “not at all” confident, or, in the case of 7%, “not be able to” cope.

Respondents were then asked if they could cope with validating applications – such as investigating addresses linked to applicants, outstanding loans and entries on the electoral register.

When the workload in validating applications was outlined, confidence levels fell. Some 53.9% of respondents said they were either “quite” or “very” confident. However, more than 35% were either “not very” or “not at all” confident, with around 10% saying that they would “not be able to” cope.

But housing experts said the high levels of confidence among social landlords reflected the work they were putting in in advance of the scheme’s extension.

Responding to the findings, Catherine Ryder, policy advisor at the National Housing Federation, insisted housing associations are committed to ensuring, as far as possible, that all Right to Buy sales are genuine. “We have an opportunity to learn from the current Right to Buy scheme and ensure the application and sales process is as robust as possible,” she adds.

The findings of this survey suggest such measures will be vital if landlords are to fend off the spectre of fraud.

In association with BFI “

According to IPPR:

unlocking-free-movement_Dec2015

“Our reforms include:

Public services: We propose creating a new EU fund that local authorities and services can apply to in order to alleviate pressures on schools, hospitals and housing due to migration.

Crime and security: We propose changing EU law to allow greater scope for member states to expel EU migrants who pose a threat to public security. In particular, we propose removing the provision stating that EU citizens who are permanent residents cannot be expelled unless on ‘serious grounds of public policy or security’.

Undercutting and exploitation: We propose that EU member states improve cooperation in order to tackle cross-border exploitation of free movement by unscrupulous employers.

Integration: We propose changing EU law to allow the UK to require EU migrants to have an English language qualification and pass the ‘Life in the UK’ citizenship test in order to get permanent residence.

Welfare: As IPPR has argued previously, the government should focus its efforts on changing the benefits rules on unemployed rather than in-work EU migrants. EU rules should be changed to place additional restrictions on UK benefits for unemployed EU migrants until they have worked in the UK for three years. “

Shoreline will scrap a range of “non-core” services, including its dedicated employment service, in light of the social housing rent cut.

Accoridng to Inside Housing:

“Shoreline Housing Partnership estimates it needs to save £4m a year to cope with the annual 1% cut to rents announced by George Osborne in July. This is the equivalent to 19% of the £20.5m operating costs reported by the association in 2013/14.

The 8,000-home landlord, which had previously announced it expected to cut jobs, has today published more detail of services it will cut.

It will abolish its dedicated employment and skills service and end apprenticeships, work placements and internships.

It will move away from having specialist crime prevention, tenancy support, area development and older person’s teams and move towards generic housing officer roles in smaller neighbourhood patches. The association will also reduce its garden assistance scheme and no longer provide funding for Leeds City Credit Union and Grimsby Citizens Advice Bureau.

A total of 36 full-time equivalent posts will be axed, with the organisation initially seeking voluntary redundancies.

Shoreline is one of a number of social landlords to announce cost-cutting measures following the rent cut announcement (see box). An Inside Housing survey of housing association chief executives in October showed 72% think it likely their organisation will cut back on ‘non-core’ activity – defined as activity not relating to housing management or construction.

Shoreline in May also had its financial viability rating downgraded by the Homes and Communities Agency due to a number of financial exposures, including having a large stock improvement programme and a project to demolish several tower blocks consisting of 640 homes. Shoreline’s ‘V2’ rating means it complies with standards but needs to manage exposure to risk. A spokesperson at the time said Shoreline had a plan to cope with the exposures.

SOCIAL LANDLORD CUT ANNOUNCEMENTS TO DATE
Aspire Looking at up to 70 job cuts
Circle Looking for savings of £50m a year
Devon & Cornwall Looking at up to 40 job cuts
Gentoo Cutting 330 jobs – nearly a fifth of its workforce
Hyde Cutting expenditure by £32m
Muir Group Eight redundancies and consulting on more, £4m loss in income
New Charter Cutting 150 jobs
North Herts Homes Forty-five to 50 posts to be removed
Plus Dane Modelling for cuts of 25% to operating costs
Shoreline Thirty-six redundancies
Weaver Vale Announced may have to be job cuts “

The English social housing regulator is set to review current rules limiting tougher regulation to housing associations with more than 1,000 homes.

According to Inside Housing:
“A potential shakeup could mean that smaller associations receive more scrutiny from the Homes and Communities Agency (HCA), with some large associations subject to less regulation.

On Monday, Fiona MacGregor, the HCA’s director of regulation, told parliament’s Communities and Local Government Select Committee on Monday that there would be a review of the current system in the new year.

Currently, housing associations that own and manage more than 1,000 homes receive closer scrutiny from the HCA’s regulation arm, meaning they are subject to “in-depth assessments” of risk profiles, exposures and governance.

Landlords with fewer than 1,000 homes are required to submit regular information to the regulator but are not scrutinsed as closely.

Ms MacGregor told MPs the regulator would review whether to implement a “more nuanced system”, which could scrap the distinction between housing associations with more than 1,000 homes and those with fewer.

“You can have fewer than 1,000 homes and still have a reasonably risky business, and you can have more than 1,000 homes and have a very stable safe business,” she said.

The move is being considered by the HCA as it mulls whether to re-focus its resources away from less risky housing associations, in the expectation of future funding cuts.

The review has also been prompted by the government’s deregulation package, which will be laid out in the Housing and Planning Bill, and recent government policy, such as social rent and housing benefit changes announced in the July Budget and the Spending Review – which could put smaller associations at risk.

Tony Stacey, chief executive of South Yorkshire Housing Association, criticised the current system as “arbitrary” and welcomed a more “finely tuned” arrangement.”

Housing minister Brandon Lewis has announced details of a deregulation package that he hopes will allow housing associations to move back into the private sector.

Accoridng to Inside Housing:

“At the Communities and Local Government Committee , Mr Lewis said housing associations will no longer need permission from the regulator to make certain changes and will have complete discretion over how to use funds from sales, including through the Right to Buy scheme.

The changes will be tabled as amendments to the Housing and Planning Bill. These include removing the constitutional consents regime so housing associations will no longer need permission from the regulator before they make certain changes including mergers, restructuring, winding up and dissolution.

The disposals regime will be removed so housing associations no longer require permission from the regulator for sales, charging for security and changes of ownership.

Housing associations will still need to notify the regulator when they make changes so the regulator can maintain a register of social housing providers.

The regulator could be given the power to appoint managers to housing associations where there are breaches of legal requirements.

Mr Lewis said the government has “sought to balance two key aims… to enable the [Office for National Statistics] to return the sector entirely to private” and the “need to maintain a proportionate regulatory system for the sector which gives tenants comfort”.

The government also proposes abolishing the disposals proceeds fund which means housing associations will no longer need to spend receipts from Right to Buy sales according to rules set by the regulator.

Mr Lewis said this would give housing associations “more flexibility” to manage their funds “to build more affordable homes and help more people into ownership while ensuring that the historical grant is reinvested in housing as it was intended”.

Pay to Stay, under which higher-income tenants pay up to market rent, will not now be compulsory for housing associations. However, associations will be able to set higher levels of rents for high-income tenants.

Mr Lewis added that “as far as possible” the government will “encourage parity” between housing associations and local authorities to “ensure fairness for tenants”.

He confirmed that a special administration regime for housing associations would be introduced which is to be used in the “unlikely event” of a housing association becoming insolvent.

Mr Lewis said there had never been an insolvency “to date” but the special administration regime “will help to protect the service to tenants” and the £45bn government grant invested in the sector. It will also ensure creditors can recover their security “if necessary”.

The Office for National Statistics in October reclassified associations as part of the public sector for accounting purposes, due to regulatory measures introduced under the previous Labour government. “

Flagship Housing Group, which owns 22,000 homes, has received a ‘G2’ rating, which means it complies with Homes and Communities Agency’s (HCA) standards but needs to improve.

In a judgement the HCA warned that the board of Flagship “has not been receiving sufficient assurance on the operation of its controls”. It said that this “assurance gap” compromises the group’s ability to ensure a “sound system of internal control”.

According to Inside Housing:

The HCA was critical of a move by Flagship in April 2015 to replace an outsourced internal audit with an in-house programme of systems reviews “based on lean systems methodology with a focus on driving out waste”.

It said: “Assurance plans are not linked to key risks and controls and instead are prioritised according to where managers have identified potential efficiency gains.”

The HCA said Flagship’s audit committee meets infrequently and had no audits planned at the time of the organisation’s regulatory in-depth assessment (IDA).

A Flagship Group spokesperson said: “We have committed to reviewing this new approach [to internal audits] and will take on board the findings of the IDA to quickly strengthen this aspect of our work.”

In a separate judgement today, 9,900-home Aldwyck Housing Group had its governance upgraded to ‘G2’, meaning it now complies with HCA rules. This followed previous criticisms that it did not have an effective risk management framework in place. It has since strengthened its board, carried out an audit of its culture and reviewed its governance and finance department.

Acis Group also had its governance rating upgraded to the highest possible ‘G1’ rating. This followed improvements to its value-for-money self-assessment.

The HCA also re-affirmed several previous governance and financial viability gradings for organisations following IDAs (see box).

LATEST HCA GRADINGS

Provider Gov Via Reason
Acis Group G1 V1 Governance upgrade
Aldwyck Housing Group G2 V2 Governance upgrade
Aspire Group G1 V1 No change
Calico Homes G1 V1 No change
Central & Cecil Housing Trust G1 V2 No change
Cheshire Peaks & Plains Housing Trust G1 V1 No change
Durham Aged Mineworkers’ Homes Association G1 V1 No change
East End Homes G1 V2 No change
Eden Housing Association G1 V1 No change
Flagship Housing Group G2 V1 Governance downgrade
Gateway Housing Association G1 V1 No change
Halton Housing Trust G1 V1 No change
Hanover Housing Association G1 V1 No change
Hastoe Housing Association G1 V2 No change “

Several large landlords intend to introduce a version of Pay to Stay following the government’s decision to make the policy voluntary for housing associations.

According to Inside Housing:

“Housing minister Brandon Lewis on Tuesday announced a government u-turn on the Pay to Stay policy as part of a wider deregulation package in a bid to remove association debt from the national balance sheet.

However, he said he expects “the majority” of associations to consider adopting a Pay to Stay-style policy voluntarily. Under the government’s policy, which will still be compulsory for councils, tenants earning £30,000 – or £40,000 in London – will be charged up to market rents.

Family Mosaic, Stonewater and Metropolitan all intend to implement a Pay to Stay policy, subject to approval by their respective boards. Some smaller housing associations, along with care specialist Anchor, said they were not going to implement the policy.”

Nearly 90% of social tenants receiving Universal Credit are in rent arrears because of a seven-week wait for the first payment, say the NFA.

According to Insie Housing:

“Exclusive research by the National Federation of ALMOs (NFA) and the Association of Retained Council Housing (ARCH) shows tenants have fallen into “shocking” levels of arrears since the scheme started to be rolled out nationally in April last year.

A survey of 36 landlords carried out between October and November found the proportion of tenants receiving Universal Credit in rent arrears was three times the sector average rate of 31% because of systemic problems with the scheme.

It showed 89% of 2,000 new Universal Credit recipients were in arrears and, of these, 34% were subject to an Alternative Payment Arrangement (APA) which passes rent directly to landlords after accruing more than eight weeks of arrears.

It also revealed tenants were suffering financial hardship, with some landlords reporting tenants turning to loan sharks to cover their costs during the seven-week wait for the first Universal Credit payment.

Landlords reported that these problems were being compounded by Department for Work and Pensions (DWP) administrative difficulties, such as delays (see box).

Hugh Broadbent, chair of the NFA, described the findings as “shocking” and “very concerning for everyone involved in managing in this country”.

Under Universal Credit, claimants receive a single monthly payment combining six benefits into one, paid in most circumstances direct to households. So far the scheme has been rolled out to 155,568 people – mostly single and new claimants – and is to be widely phased in by October 2017.

On the back of the findings, NFA and ARCH have written to DWP officials urging them to abandon a one-week wait for Universal Credit entitlement and to halve the assessment period from six weeks to just three ahead of larger roll-out.

Tracy Langton, project lead on welfare reform at Northwards, which has 260 tenants receiving Universal Credit of which 40% had pre-existing arrears, said landlords should be “hugely concerned” by the findings.

“It [arrears] is structurally built into the system. It’s just too long for people to wait.”

The NFA and ARCH were unable to state what proportion of the 89% of claimants already had arrears before they went on to Universal Credit, but a spokesperson insisted the figure was largely a result of DWP process problems rather than the profile of claimants.

The DWP declined to comment.

The survey of 26 ALMOs and 10 councils with 386,000 homes found:

96% said they were “frequently” or “sometimes” not receiving timely notification of tenants going on to Universal Credit
95% said claimants “frequently” or “sometimes” reported hardship while waiting for their first payment
82% said payments were “frequently” or “sometimes” delayed
82% said the housing element of the payment was “frequently” or “sometimes” incorrectly calculated, or omitted entirely”