This week's National news (November 24 - November 28)

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NATIONAL:Watchdog warns of ‘significant costs’ of Universal Credit delays

The Department for Work & Pensions’ (DWP) approach to extending the time for Universal Credit implementation has resulted in a sounder system but has come at a “significant cost”, the National Audit Office has revealed.
The Department set out to transform the benefits system with Universal Credit and suffered early setbacks. Since the reset in early 2013, it has reduced the delivery risks by significantly extending its timetable for introducing Universal Credit and choosing a more expensive twin-track approach: the roll-out of its ‘live service’ (which uses pre-2013 IT assets), while at the same time developing its new ‘digital service’.
The DWP believes the additional costs of this approach are justified because it expects Universal Credit to achieve substantial benefits for society sooner and more safely. However, the watchdog concluded that such potential benefits do not mean Universal Credit will be value for money regardless of how it is implemented and the cost of doing so.
Since the reset in early 2013, the Department has developed and refined its ‘test and learn’ approach while continuing to expand its live service. The Department was slow to produce long-term plans for the future services and HM Treasury required the programme to produce more realistic plans before it approved the business case in September 2014.
In the longer term, the DWP has reduced risks in its planned transfer of most tax credit claimants to Universal Credit by extending the timetable by two years to the end of 2019. It was becoming increasingly unlikely that the DWP could transfer over one million tax credit claimants on to Universal Credit in April 2016 as planned without significant operational risks.
The Department’s digital service has been delayed and is still in the very early stages of development. At this early stage it will depend heavily on manual intervention and will handle only a small number of claims – but it is soon to be tested with all claimant types, even the most complex. The timetable is challenging, with the Department planning to start to roll out its fully scalable digital service in just 18 months time.
It expects significant savings from its digital service, but does not yet have a contingency plan should the digital service be delayed or fail. It has not evaluated whether it could use the live service instead. The NAO estimates that using live service systems, without further investment, could cost £2.8 billion more in staff costs.
In principle, the DWP’s approach should allow it to learn from experience, improve the design and readiness of services and reduce risks. Given the gradual progress of the past year and the early stage of digital development, the Department has not yet tested its new digital approach, or gone through the process of integrating this with live service.
The NAO finds that the Department has continued to struggle to stabilize senior leadership roles and responsibilities. However, it has taken a more active approach to managing suppliers and establishing financial control within the programme. Among the NAO’s recommendations is that the Department ensure it has a clear basis for making decisions across the strands of the programme.
Amyas Morse, head of the National Audit Office, said: “The Department for Work & Pensions has reset Universal Credit on a sounder basis but at significant cost, by extending the time for implementation and choosing a more expensive approach. It is now vital that the Department quickly establish clear goals for delivering the programme, in terms of cost, time and functionality, against which it can be held to account.”
Full report: Universal Credit: progress update.

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NATIONAL:Rising number of private renters struggling with ‘horror homes’

More people are struggling with private rented homes which are damp, dangerous and in need of significant repair, according to a new Citizens Advice report.
The national charity helped people with 14 per cent more repairs and maintenance problems between July and September this year than in the same period in 2013.
Difficulties getting repairs and maintenance is the most common problem with private rented homes reported to Citizens Advice. In the past 12 months the charity helped people with almost 17,000 of these issues.
In one case a couple with two young children were living in a rented home which had severe damp problems, causing mould all over walls and in cupboards. Their private landlord repeatedly refused to treat the damp, but after the family contacted environmental health he agreed to pay for some anti-mould paint. Not long after this he evicted them.
In its Advice Trends report published today Citizens Advice highlights that one in three private rented properties in England does not meet the Government’s decent home minimum standard. Yet renters in England have very few rights and find it hard to hold landlords to account over poor conditions, for fear of eviction. Citizens Advice helped with 20 per cent more issues where people are facing eviction despite being up to date with rent.
The new Advice Trends report highlights a range of problems private renters are increasingly turning to Citizens Advice for help with. Between July to September 2013 and the same period this year Citizens Advice helped with:

  • A seven per cent rise in the number of issues around paying rent up front.
  • Seven per cent more issues where people struggle to get their deposit back.
  • A 15 per cent increase in the number of issues where people are harassed or illegally evicted by landlords.
Further analysis of the figures shows that young people are more likely to have problems with private landlords compared with older renters. One in six people in their twenties receiving help from Citizens Advice has an issue with a privately rented home.
Citizens Advice wants protections for people renting from private landlords to be improved. On Friday 28 November the Tenancies Reform Bill will be debated in Parliament. If enacted the Private Members Bill would prevent such retaliatory evictions.
Gillian Guy (pictured), chief executive of Citizens Advice, said: "It’s hard to feel at home in the private rented sector. People can struggle to lead a normal life when their home is in a state of disrepair and they could be told to leave at any time. But many feel powerless to speak out.
"People face a huge number of different housing problems. But despite one in five now renting privately, the sector is subject to comparatively little regulation. Rogue landlords and letting agents are free to mistreat tenants and charge ever increasing rents. In other markets consumers have far more protection, such as the right to refunds or repairs, if the product or service the pay for is not up to scratch.
"Urgent action is needed to bring renters’ rights up to a decent 21st century standard. Putting an end to retaliatory evictions is a good place to start.  We hope that MPs support the Tenancies Reform Bill on Friday.”
The Residential Landlords Association (RLA) said that Citizens Advice has wrongly asserted that the private rented sector is under regulated.
RLA analysis has found that there are 100 Acts of Parliament containing over 400 individual regulations affecting the sector.
Earlier this year, a report for the RLA, by Reading University’s Professor Michael Ball, warned that new regulations for the sector would “erode many of the gains made in private renting in the UK over the past two decades. The losers would be most existing and prospective tenants…”
The RLA said the Citizens Advice report also fails to note that 84 per cent of tenants in the private sector tenants are satisfied with their properties, a larger proportion than tenants in the social sector.
Chris Town, vice chairman of the RLA said: “The RLA and CAB share a desire to root out the criminal landlords who bring misery to people’s lives. To argue however that the sector is not covered by enough regulation is simply wrong.
“Rather than pile yet more regulations on the sector, what is needed is better enforcement of existing powers which hard pressed councils already find difficult to enforce.
“Whilst CAB and others can call for more regulations till the cows come home, what use are they if they cannot be enforced?”

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NATIONAL:HBF makes Autumn Statement call to boost housing numbers

House builders are calling on the Chancellor to use next week’s Autumn Statement to speed up the planning process and support small builders to deliver a boost to housing supply.
The Home Builders Federation (HBF) has recommended that Government improves the efficiency of the planning system so that it delivers more permissions, more quickly; and helps get more small builders – 4 out of 5 of whom have disappeared in 25 years – back ‘on to the pitch’ and delivering new homes. 
Whilst overall planning permissions are increasing, the time taken to get permissions to the stage where work can actually start on site is still taking far too long. HBF is calling on Government to cut the bureaucratic system so it can deliver ‘buildable’ or implementable permissions more quickly.
Building on recommendations made to Government over the summer, HBF has used its Autumn Statement submission to call on Government to;
  • Ensure Local Authority planning departments are adequately resourced to deliver an efficient service – and outsource work;
  • Introduce a Principle of Development certificate to simplify the planning process and reduce risks that freeze out start-ups and small firms
  • Introduce a proportionate, independent arbitration system to reduce the delays and costs that can run into hundreds of thousands of pounds, of the current appeals system.
HBF is also calling for specific assistance for SME builders. Smaller builders have been disproportionality hit by bureaucracy and complexity in the system which has increased considerably over the last two decades. This has contributed to a 78 per cent fall in the number of developers building 100 units or fewer in the period between 1988 and 2013.

It is these companies that would benefit from the above changes in particular. HBF is therefore suggesting:
  • Government should cut red tape and the wider regulatory burden on smaller developers – and particular care must be taken when considering the impact of the Housing Standards Review
  • Look at a Government backed development funding guarantee scheme for SME builders
  • Ensure Local Authorities are releasing some smaller sites when allocating land for development to increase delivery rates and level the playing field for start-ups and SMEs
Stewart Baseley (pictured), executive chairman of the HBF, said: “The Autumn Statement provides Government with a real opportunity to give housing supply a boost. If the industry is to build more homes more quickly we must address the failings inherent in the current planning process. We need a system that is responsive to current housing needs and not one that acts as a constraint. The current system is too slow, overly complex and costly and must be improved.
“We also need to see more help given to smaller developers, whose numbers have collapsed in recent years due largely to rising planning and regulatory cost. If we are to build 200,000 plus homes a year, all parts of the industry need to deliver and we need more players on the pitch.”
In its Autumn Statement submission HBF is also calling for Government to;
  • Look at how it can support the industry to recruit the people it needs
  • Review the current Stamp Duty thresholds and the impact on the market and in-particular first time buyers
  • Look at how it can boost retirement house building by introducing incentives for older people to downsize.
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NATIONAL:Call for social investment to support new housing models

As the social housing sector continues to grow and the housing market becomes increasingly unaffordable, a new report has challenged social investors to fund innovative, untested housing schemes.
Innovative Investment’, from housing charity Commonweal Housing, claims that more social investment should be supporting the trying and testing of promising new housing models.
Social Investment is unique and different to other funding options because it provides capital that is used to deliver both social and financial gains. The social investment market has grown to £300 million per annum today and is forecast to grow to approximately £1 billion by 2016.
Bringing together the expertise of seven sector experts from the fields of social investment, urban economics, and the voluntary and housing sector, the report examines how best these funds can be used to maximise the social, whilst maintaining the financial gains.
Analysing the opinions of the sector experts, the report concludes that whist there is unarguably a real need for increased house building and greater availability of social housing, social funders should be braver and be more willing to back innovative housing schemes, those often helping the most vulnerable who are left out of the general housing provision.
Ashley Horsey, Commonweal’s chief executive, said: “Commonweal believes that social funding should be used to deliver social gains, helping those at the margins of mainstream housing provision. This is where Social Investment can really make a real difference, as the name suggests, in funding for social good.
“As we have demonstrated through our work, even relatively modest investment sums can deliver excellent innovative schemes that address social exclusion and meet the needs of vulnerable service users, whilst at the same time being able to deliver positive financial results for social investors.”

Emily Bolton, director of social finance, said: “The housing market in England is broken. Whatever way the figures are cut, we just don’t build enough houses in this country. One route to launch new housing-based models is via social investment. In contrast to mainstream investors, social investors directly seek positive social impact in addition to financial returns.”
Vaughan Jones, former chief executive, Praxis Community Projects added: “Given that access to decent and affordable homes, is central to human community and housing is a major economic driver, this remains a key arena for social investment and innovation.”
The report shows that when lenders do take the risk and support innovative housing schemes the results can be ground-breaking. Commonweal backed housing schemes such as Peer Landlord, supported by £1.4m social investment funding provides shared accommodation and peer led support for individuals wanting to move on from homelessness and unemployment. 

The new No Recourse to Public Funds project, supported by a £2.5m investment provides housing and support for vulnerable migrants left in an asylum loophole, forced to live without any means for survival.

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NATIONAL:Support for people to build their own affordable homes

The Nationwide Foundation is providing nearly £180,000 to fund a major programme designed to boost overall housing output, and in particular to make it much easier for people on modest incomes to build their own homes. 

In most other countries, between a third to a half of all new homes are organised or built by people themselves, yet in the UK less than 10 per cent are currently delivered this way.
However, a recent survey suggested that there are seven million people in the UK who are keen on self building, and many of them are on modest incomes.

The year-long project will involve identifying why other European countries deliver a much higher proportion of their new homes via self build. The project will also involve working with around 50 local authorities in the UK to help them to facilitate thousands of opportunities for people to build or commission their own homes. In addition the work will examine whether new financial products would help the sector grow and make it easier for people in need of affordable housing to access loans enabling them to self build.

The work will focus on two main ways of boosting output of affordable self build homes:

  • The delivery of ready-to-go, modestly priced serviced building plots.  For example, in France it is currently possible to buy a decent fully-serviced building plot for about £20,000: the project wants to facilitate similar solutions here.
  • How communities can collaborate to jointly commission their own homes. For example, in Berlin around 15 per cent of all the new homes currently being built are now organised by local ‘building groups’; the homes are custom designed to suit their occupants, and they also typically work out about 25 per cent cheaper than conventional market built properties.
The research proposal was assembled by the National Custom & Self Build Association (NaCSBA), and a three-strong team will co-ordinate the work, starting in the next few weeks. 

Heading up the team will be Mario Wolf, who will be seconded for a year from the Department for Communities and Local Government. Mario is a senior housing policy advisor and he has worked on the Government’s various initiatives to expand the self and custom build sector for the last four years. He will be supported by Ted Stevens OBE (until recently, the chair of NaCSBA), and Sam Brown, a research associate at the University of Sheffield.

Towards the end of the project, the team will produce a range of practical guidance material aimed at communities, planners and public and private sector housing providers. It will also communicate the findings widely across the housing and planning sectors and within the financial community.

Welcoming the support of the Nationwide Foundation, NaCSBA chair Michael Holmes, said: “We believe there is scope to grow the current number of UK homes built this way from roughly 10,000 a year now, to nearer 50,000 in the long term. But if we are going to do this, we need to learn from experiences abroad where self build and custom build are a major part of new home building, and we must work more closely with our local authorities to help them to create more opportunities for people who want to build.”

Gary Hartin, the Nationwide Foundation’s programme manager, said: “Mainstream home-ownership is currently cost prohibitive for many people on low to middle incomes. Yet if self build housing was to become more accessible in the UK, it would offer a real alternative. We have funded this work with the intention that it will lead to the creation of opportunities for more affordable self build homes in the UK.”

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NATIONAL:Universal Credit rolled out to families today

The UK Government's flagship welfare reform programme Universal Credit is being extended, with parents able to claim it for the first time.
The changes to the scheme, which merges six benefits in to one payment, will initially apply to parents in parts of North West England.
Work and pensions secretary Iain Duncan Smith (pictured) said the accelerated roll out means that a third of the country’s Jobcentres will be taking claims for the new benefit by spring 2015.
From today, couples with children and lone parents will be able to claim support worth up to 70 per cent of childcare costs regardless of hours worked – with a monthly limit for one child of £532, and £912 for two or more children.
Iain Duncan Smith said: "Universal Credit is bringing welfare into the 21st Century by restoring fairness to the system and making work pay in a modern labour market.
"As part of our long-term economic plan, today sees the next stage of this welfare revolution brining families on-board with extra childcare support and flexibility for employers. By spring next year one in three jobcentres will be offering the new benefit."
The secretary of state announced in September that he would accelerate roll out of Universal Credit nationwide to Jobcentres from February 2015.
It is already available to single and couple claimants in over 80 Jobcentres in England, Wales and Scotland and will be available in nearly 100 Jobcentres by Christmas.
Hailed by the Government as a revolution in welfare provision, the scheme has not been without its problems.
Tens of millions of pounds have been written off due to technical problems and only 20,000 people are currently claiming it, rather than the one million initially envisaged by ministers.
Now a group of 30 North West Housing Associations have expressed fears over a New Year influx of new claimants.
The issue was identified about residents leaving benefits to take up temporary Christmas work during an event hosted by Equity Housing Group and the National Housing Federation. When the work period is over, a percentage of those residents will need to begin a new claim, which will be in the form of Universal Credit.
Like many other providers in the North West, Equity Housing has begun to see some their tenants making claims for Universal Credit. The full day conference gave participants the opportunity to find out how others have prepared for Universal Credit and how providers are managing customers with live claims.
Gareth Bevan from the National Housing Federation, who spoke at the event said: “Equity’s event was a great opportunity for housing associations who are starting to see a number of customers become recipients of Universal Credit. It was a great opportunity for everyone to learn from each other and explore how organisations can work together in the future.”
A positive outcome of the day included a commitment from the DWP to provide a Universal Credit partner contact for all social housing providers – a move which all attendees welcomed.
David Fisher, Equity Housing Group’s CEO added: “We were delighted to host this event. As we know, Universal Credit will begin to affect a significant number of our customers and the fact that so many social landlords attended demonstrates a real appetite for collaboration in the Northwest in terms of support, sharing good practice and learning from others.”
In October the DWP published a Universal Credit progress report.
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NATIONAL:Austerity ‘pushing social tenants into debt’

A report which focuses on financial exclusion and debt in social housing has painted a worrying picture of the financial struggle many tenants face.
‘Beyond the Margins’, a new report by think-tank the Human City Institute and progressive pressure group Compass, supported by social landlords the Aster GroupTrident Social Investment Group, and WM Housing Group, concluded that social tenants are having a tough time at the moment.
The report confirms that social tenants are increasingly relying on credit – often from payday lenders and other high-interest credit providers - to make ends meet as austerity and welfare reforms reduce spending power. The research was undertaken as part of the Compass ‘end legal loan-sharking’ campaign. It also highlights the role of social landlords in helping financially excluded tenants.
Through an in-depth interview survey of more than 300 social tenants on two Midlands’ housing estates, the report reveals that social tenants are being squeezed by stagnant wages, rapidly rising living costs and pressures to take up high-cost credit. Almost one third of tenants say that their standard of living has fallen in the last two years and half say it has remained the same. Few have seen improvement.
Four fifths are surviving on less than £200 per week. The average weekly household income of tenants is just £152. After the costs of food, fuel and debt have been covered, each tenant household has £6.51 per day on average to cover all other living costs for all household members, including children. No wonder that one third of tenants say that their financial circumstances are poor and worsening.
Two thirds have no savings and of those who do, half have less than £1,000. Just 7 per cent of all tenants have savings over £5,000. So tenants have few assets on which to rely in a crisis. Almost two thirds of tenants have problems making ends meet until pay day or benefit payments are due. Inevitably, many rely on high-cost credit through pay day loan companies or shops supplying household goods at ruinous rates of interest.
Kevin Gulliver (pictured top), director of HCI, said: “Social tenants are struggling under the strain of debt. The survey shows that almost half of tenants are servicing significant debt, despite their low incomes, with average debt repayments taking 20p out of every pound of income. Fifty-five per cent of indebted tenants owe over £1,000, with 19 per cent owing over £6,000 and 14 per cent over £10,000.
“One third indicate that their debts are unmanageable with 60 per cent always or sometimes having problems with debt repayments. One in five tenants told us that they always have to go without necessities like food to make debt repayments. Almost 20 per cent had used a high-cost lender such as a payday loan company or pawn brokers.”
Dudley North MP and former housing minister Ian Austin (pictured right), who wrote the Foreword to the report and has campaigned against the most pernicious effects of high-cost credit added: “Access to affordable credit is a vital part of a successful economy. A fair, stable credit system allows people to plan ahead and shape their own futures. Yet in today’s economic climate, as the cost of living soars, wages are frozen, and the effects of austerity and welfare are biting deep into people’s pockets and purses, more and more people, especially those on low incomes, are using credit just to make ends meet.
“I have campaigned in my own constituency to drive payday loan shops off the High Street. Money is tight for families, and this report demonstrates how these predatory businesses are making money by piling debt on poor people.”
Now that high-cost lenders are being brought into the financial regulatory system and facing caps on credit from the Financial Conduct Authority, better terms for borrowers are envisaged. However, if high-cost lenders withdraw from the low income, unsecured credit market, many social tenants may have nowhere to go to access credit.
The HCI-Compass report recommends that housing associations are best placed to step into the breach to support community finance initiatives, and to provide extra services, such as furnished tenancies, warmer homes and affordable food, to tackle the causes of debt at source.

NATIONAL:England has space for ‘a million homes’ on brownfield land

A report from the Campaign to Protect Rural England (CPRE) has shown that local authorities have identified the capacity for at least one million new homes on suitable brownfield land in England.
The report also makes a series of recommendations that would make brownfield land more attractive to developers and encourage local authorities to do more to identify suitable sites.
With estimates for brownfield capacity previously ranging from 200,000 to 1.8 million, the report provides the first comprehensive figure for brownfield capacity since the end of mandatory local authority submissions to the National Land Use Database (NLUD) in 2010.
Based on research conducted for CPRE by the University of the West of England (UWE), From wasted space to living spaces concludes that a minimum of 976,000 new homes could be built on identified brownfield sites. But the researchers note that even this figure underestimates suitable land as it only identifies land already derelict or with planning permission; it does not include currently underused land that could be used for housing, such as car parks, or new brownfield land that will become available.
Within the 976,000 figure, the report finds that brownfield land with either detailed or outline planning permission is ready to accommodate more than 400,000 houses, while currently vacant or derelict land without planning permission could accommodate more than 550,000. Nearly half of this vacant space is located in the south east, the east of England and London, which itself could house 146,000 homes.
UWE conducted its analysis with data collected from a survey of local planning authorities. Before 2010 local authorities submitted data on available land to the NLUD, which consequently provided a national picture of brownfield land available for housing. Planning data from the 82 local authorities that provided figures for 2011 and 2012 indicate that in the period 2010-2012 the total amount of suitable brownfield land actually increased by 67 hectares despite 1658 hectares being redeveloped.
Paul Miner, planning campaign manager at the Campaign to Protect Rural England (CPRE), said: “This research demonstrates the huge existing capacity for housing on brownfield land. At a time when there is great pressure on our green spaces, utilising this land through a brownfield first policy would protect our countryside and regenerate urban areas.
“We want this new, authoritative evidence to lead to a sustained focus on suitable brownfield land. We can and must do more to get these sites redeveloped, whether it be reviving the National Land Use Database or implementing strong local plans to deal with multiple landowners on difficult sites.”
Housing and planning minister Brandon Lewis said: “We welcome this report, which illustrates the scope for building new homes and protecting the countryside at the same time.  
“This Government wants to see the maximum amount of brownfield land being used to build new homes, whilst also maintaining protections for our beautiful countryside. That is why our planning reforms encourage councils to use brownfield land for new buildings, free up disused public sector land for redevelopment and why we’ve invested £235 million into bringing 80,000 long term empty homes back into use since 2010.
“We are proud to be building more homes to support hard working families and help first time buyers onto the property ladder.”

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NATIONAL:Aldwyck suspends merger talks following downgrades

Aldwyck Housing Group has announced it is to suspend merger talks to focus on regaining its regulatory compliant status.
The Bedfordshire-based housing association, which had proposed a merger with Paradigm, has been downgraded by the Homes and Communities Agency (HCA) twice in the last three months.
In September, Aldwyck had its governance rating downgraded from a G1 rating to a G2 due to a “significant conflict of interest” involving payments to another company.

And just last week the regulator’s assessments of Aldwyck’s governance and financial viability saw further downgrades.
The regulator concluded that Aldwyck does not have an effective risk management and internal controls framework and that the regulator does not have sufficient assurance that Aldwyck currently has the capacity and capability to exercise effective control over the provider’s affairs.
As a result, the Aldwyck Group Board has unanimously agreed to suspend all merger discussions to focus on “delivering a comprehensive Governance Action Plan using both internal and external expertise”.
Aldwyck chairman Richard Reynolds said: “The first priority for the Board has to be addressing regulatory matters following last week’s judgement from the Homes and Communities Agency. While there are strategic benefits for a merger, we must focus on matters in hand.  Our Governance Action Plan will be our primary concern over at least the next 12 months.”
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NATIONAL:Herefordshire Housing secures £120m through capital markets

Herefordshire Housing Limited (HHL) has secured £120 million of funding to refinance existing bank loans and raise additional funding to support their growth plans in Herefordshire.
The bonds, which are rated A2 by Moody’s Investor Services, provide £85m on day one and a further £35m retained bonds to sell to investors in the future.
The bonds have a 35 year maturity, amortising over the last 5 years, and are priced at a credit spread of 138bps above the yield on the benchmark gilt. 
The bond is listed, and was placed with several investors following a competitive funding process. Asset cover is market standard (105 per cent EUV-SH and 115 per cent MV-T). Interest cover is at a portfolio level based on the charged properties, rather than at a corporate level.
£70m of the funds will be used to refinance restrictive bank loans and break embedded fixes, with the remaining £15m for new development, including regeneration schemes in Hereford.
At only 12 years old, Herefordshire Housing is one of the newest stock transfers to enter the capital markets.
Richard Woolley, HHL’s director of resources, said: “Our first issuance in the capital markets has enabled us to exit restrictive LSVT style bank loans, and raise funding for additional development that would not have been possible under our old funding arrangements. We are delighted with the outcome and the ability to continue developing and investing in communities in Herefordshire and surrounding areas.”
TradeRisks acted as arranger and dealer on the issue, with Allen & Overy as the capital market lawyers. HHL was supported by Trowers and Hamlins LLP as legal advisors.
Jon Slater, joint chief executive of TradeRisks, said: “A private but competitive funding process, using public listed documentation, has enabled HHL to borrow at attractive levels, particularly given the recent widening of spreads, and to secure a flexible borrowing structure without restrictive bank covenants.”

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NATIONAL:Report finds young working renters now most at risk of poverty

Young working families who live in rented accommodation are now the most at risk of falling into poverty, a new report has revealed today.
The Joseph Rowntree Foundation’s (JRF) annual report Monitoring Poverty and Social Exclusion written by the New Policy Institute (NPI) tells the definitive story of how the UK’s economic recovery is affecting people in poverty.
Showing a dramatic change in who is most at risk of poverty compared to 10 years ago, the report highlights a big rise in the proportion of adults under 25 in poverty, and a big fall among the over 75s.
It found that as many people in poverty are living in working families as workless ones the same number of people in poverty are living in private rented housing as social rented accommodation.
The report highlights the way the housing market has had a negative impact on people in poverty. It said there is not enough social housing, which means more people in poverty are living with insecure tenancies in the private rented sector.
The number of private landlord repossessions is now higher than the number of mortgage repossessions (17,000 compared to 15,000 in 2013/14).
The end of a private rented sector tenancy is now the most common cause of homelessness. The number of Housing Benefit claimants has risen by over a million in the last 10 years, and despite an overall drop in the number of claimants in the last year, there was an increase in working people claiming Housing Benefit and the average amount they claim is rising.
A significant change in the labour market in the last ten years towards zero hours contracts, part time work and low-paid self-employment, means that getting a job does not necessarily mean getting out of poverty.
The report shows that two thirds of people who moved from unemployment into work in the last year are paid below the Living Wage.
Incomes are lower on average than a decade ago and the worst off have seen the biggest falls – nearly 10 per cent lower than a decade ago.
Average wages for men working full time (in real terms) have dropped from £13.90 to £12.90 per hour between 2008 and 2013, while for women (whose employment rate has never been higher) wages fell from £10.80 per hour to £10.30 in the same period.
For the lowest paid quarter of men, hourly pay fell by 70p per hour; for women, 40p per hour.
The research also found that the welfare system is not delivering as well as it should be.
Jobseeker’s Allowance claimants are now more likely to be sanctioned for not attending the Work Programme than to get a job through it, while over 60,000 disabled people had to wait for more than 9 months for their employment support allowance claim to be assessed. 
Julia Unwin, chief executive of JRF, said: “This year’s report shows a real change in UK society over a relatively short period of time. We are concerned that the economic recovery we face will still have so many people living in poverty. It is a risk, waste and cost we cannot afford: we will never reach our full economic potential with so many people struggling to make ends meet. 
“A comprehensive strategy is needed to tackle poverty in the UK. It must tackle the root causes of poverty, such as low pay and the high cost of essentials. This research in particular demonstrates that affordable housing has to be part of the answer to tackling poverty: all main political parties need to focus now on providing more decent, affordable homes for people on low incomes.”
Tom MacInnes, research director at the NPI, said: “This report highlights some good news on employment – but earnings and incomes are still lower than five years ago, and most people who moved from unemployment into work can only find a low paid job. Government has focussed its efforts on welfare reform, but tackling poverty needs a wider scope, covering the job market, the costs and security of housing and the quality of services provided to people on low incomes.”

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NATIONAL:Procurement changes could save ‘billions of pounds’

Social landlords could potentially save billions of pounds if they make some key changes to the way they procure, install and maintain boilers, according to a new report.
Launched at the EMEX energy management show in London’s ExCel last week, the report presents the findings of a review organised by the Association of Gas Safety Managers (AGSM).

Lord Redesdale
Stakeholders who attended the review in July included housing organisations (primarily gas and asset managers and directors) procurement frameworks, boiler manufacturers, contractors, merchants, members of the AGSM and CORGI Technical Services.
Each year, many thousands of organisations in social housing across the UK spend millions of pounds going through the Procurement process for the installation, service and maintenance of boilers. Most have fairly standard requirements to supply heat in the most efficient, cost effective, sustainable manner.
But the review found that many of the current processes are bureaucratic (largely due to current EU Regulations), expensive, a waste of public money, no longer fit for purpose, unsustainable, lacking in innovation and collaboration leading to fragmented economies.

Claire Heyes
The key recommendations for Stage II of the Review concluded that there need to be:
  1. Benchmarking and standardisation need to more widely used and brought up to date
  2. Streamlined procurement processes – it is time to cut the red tape and think out of the box.
  3. Review of legislation to enable the sector to cut waste and drive long term efficiencies
  4. Changes to current legislation for Landlords to carry out annual gas safety checks
  5. Tenant engagement and accountability in line with the Right to Manage philosophy
  6. Lifecycle costings initiatives for boilers moving from the race to-the-bottom on price, to addressing the lifetime costs and value for money
  7. Built in energy efficiency providing affordable warmth has a standard requirement
  8. Industry collaboration with an integrated approach at all levels and stages of the supply chain including contractor training accreditation
  9. Greater reliability of modern boilers and a review of parts and labour warranties
Claire Heyes, CEO of the AGSM, said: “The Report being published today highlights that there are some serious issues in the way boiler procurement is currently being carried out. All stakeholders in the supply chain have highlighted issues and the public money being wasted on the processes is shocking. Money is being wasted by housing organisations and suppliers spending thousands of man hours in the development, submission and assessment of lengthy pre-qualification questionnaires and invitations to tender. Procurement Frameworks don’t always encourage the best value for money over the lifetime of a boiler. None of this benefits the tenant at a time of welfare reforms and rising fuel prices.
“With millions of tenants living in fuel poverty, energy efficiency and sustainability need to become a standard requirement. There is a need for a wide level of industry collaboration.
“We have identified the issues and can see some paths forward in the process to make changes. But it’s clear that this is a very complex issue involving many stakeholders. The launch of the Report into the Boiler Procurement Review is the first stage in the process of change. We have the engagement and support of all areas of the sector and will welcome input from all interested parties as we move into the second stage of the process.”
Lord Redesdale, CEO of the Energy Managers Association, who chaired the July meeting of stakeholders at the House of Lords, added: “The first stage of the Review into the Procurement process shows that there could potentially be billions of pounds of public money being wasted. The launch of the report is a key step in drawing attention to the issues, the bureaucracy and the waste of public money. We would welcome the participation of all stakeholders in the discussions about how we can implement the recommendations in the report.”

NATIONAL:Wheatley bond raises £250m to build thousands of affordable homes

Wheatley Group, Scotland’s largest housing, care and regeneration organisation, has raised £250 million after issuing an AA- rated public-listed bond.
The offer period was closed early due to high demand and the 4.4 per cent bond, due 2044, was more than £125m oversubscribed. The money raised will part fund a development programme of 2800 new affordable homes across Central Scotland.
It is the first time a Scottish housing association has raised finance through the issue of a public bond on the capital markets. Wheatley was rated AA- by Standard & Poor’s ratings agency earlier this year.
Alastair Dempster (pictured top), chair of Wheatley Group, said: “The phenomenal success of the Wheatley bond issue will benefit ultimately thousands of tenants and families across Central Scotland. This is a huge vote of confidence in the critical importance of the social housing sector in Scotland in creating and sustaining strong and vibrant communities.”
Martin Armstrong (pictured right), Wheatley Group chief executive, said: “The successful launch of our bond will enable us to increase hugely the supply of high-quality, affordable housing. We will now press ahead with our plans to build thousands of new, much-needed new homes across Central Scotland.”
Wheatley, which operates across 12 local authority areas and owns and manages 72,000 homes, engaged RBS and Lloyds Banking Group as joint book runners to manage and arrange the bond. 
David Mackay, director in the Debt Capital Markets team at The Royal Bank of Scotland, added: “The past year has been a great journey and it has been a pleasure to have been involved with the debut capital markets transaction from Wheatley. The deal represents a fantastic result for all those involved in the transaction and has aided Wheatley to secure long-term financing that will support the growth and development of the organisation.”
Raj Jayaprakash, associate director in Lloyds Bank Commercial Banking’s corporate debt capital markets team, said: “This is a landmark bond, representing both the first public issue by a Scottish housing association and the first Scottish issuer to access the bond market after the independence referendum in September.”

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NATIONAL:Blog: Housing and poverty

British Property Federation’s Ian Fletcher discusses how UK housing affects poverty and how the industry can help keep housing at the top of the political agenda.
The impact of housing on poverty and life chances is well documented, but was highlighted again last week at two thought-provoking events this week from the Joseph Rowntree Foundation (JRF) and Reform.
The JRF’s event focused on a research report it had launched looking at how housing impacts on poverty and housing affordability, projected forward to 2040. It is important that research has influence and doesn’t just sit on a shelf so, to make a media splash, JRF had decided to lead on a statistic they had produced that appeared to show that private rents will rise by 90 per cent in real terms up until 2040. This was based on some black box econometric model and presented almost as irrefutable, with little detail on the assumptions used or how the result was derived. It possibly lost them some friends in the sector, which would be a pity since there was some other good analysis in the report – particularly on different kinds of poverty and therefore different responses.
The Reform event had more discussion, and centred around the well-respected Rt Hon Frank Field MP who, as well as being Labour MP for Birkenhead, is also this Government’s Poverty Czar. He rattled off a set of depressing statistics and anecdotes on how the die is cast for many of our citizens from a very early age, and how extraordinarily hard it is to break it.
What I personally took from the events was the following four points:

  1. Our current housing policy interventions are such blunt instruments: social housing, or housing benefit. Neither is particularly well targeted, so we end up with people in social renting who are experiencing temporary poverty because of life’s events, and ought to be provided with more tailored temporary support and flexible housing options. And we have people who are experiencing enduring and chronic poverty, and end up in private rented housing, sometimes supporting the worst end of the sector.
  2. Simply substituting benefit spending for more social rented housing misses that point. We need more capital spending, but into a wider breadth of options and interventions for those facing temporary poverty.
  3. This breadth is increasingly being provided by housing associations, which have a critical role to play in delivering more flexible and tailored support. However, the regulatory and investment regime that they operate in constrains how much they can do.
  4. Our sector is just starting to play an important role in providing institutional investment in housing at a scale that will make it easier to deliver flexible solutions to peoples’ housing needs.
There are exceptional moral and social policy arguments for good housing and these are often very well articulated. I have seen umpteen research reports on the links between poor housing and adverse health and education impacts. The case is proven. Where there are disagreements, these are over the solutions – although there is pretty much a consensus that we need to increase supply of all tenures.
Evidence is more scant on the economic and business policy arguments for good housing and how it helps productivity, the jobs market, and long-term growth. It is important the housing sector makes both cases if it is continue to see housing rising up the political agenda.
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NATIONAL:Europe's largest crowdfunded solar scheme hailed a success

Leeds-based Oakapple Renewable Energy has joined forces with a Scottish firm in what it said was Europe's largest ever crowdfunded solar energy project.
The company is working in partnership with Glasgow-based Edison Energy to install up to 749 roof mounted solar PV systems with a total capacity of 2,595 kW for Berwickshire Housing Association (BHA).
The scheme called "Oakapple Berwickshire" will roll out over four months and will be installed on houses across Berwickshire, including Duns, Eyemouth and Coldstream, helping to reduce tenants' energy bills.
The £3.1m scheme is being financed through Abundance, the UK's largest ethical investment platform.
Oakapple Renewable Energy chairman Phil Taylor said: "We were delighted to be approached by Edison Energy to partner them in this extremely worthwhile scheme. They have an excellent reputation in providing sustainable energy solutions to social housing and it is great that we are able to provide solar power to benefit the tenants of BHA who may be struggling with their electricity bills."
Financed by Abundance, the UK’s largest ethical investment platform, the £3.1 million scheme is the latest in a range of developments for Edison Energy, including the Commonwealth Games Athletes’ Village in Glasgow.
Regarding the project, business development director, Fraser MacKenzie said: “We have found our natural partner in Oakapple Renewable Energy and the fact that we are able to fully cover the costs of Solar PV projects makes it an attractive proposition and we would welcome the opportunity to talk to other housing associations who might like to help their tenants benefit in a similar way.”
Helen Forsyth (pictured), chief executive of BHA, spoke positively of the financial benefits solar panels can create: “Our tenants living in these solar powered homes will enjoy a substantial drop in their energy bills, with as much as a 30 per cent reduction saving potentially over £100 per home a year, without having to pay anything towards the project.  We’re determined to do what we can to address fuel poverty and, working with Oakapple Renewable Energy, Edison Energy and Abundance, is a fantastic way to tackle the problem.”
To encourage early take up, investors will earn 7 per cent initial interest from the date they invest to 31 May 2015 when the solar panels are fully operational. Interest is payable in arrears and the first payment will be made after the minimum £500,000 investment threshold is reached. From 1 June 2015 investors will be paid their capital and interest return for 20 years, giving a 7.5 per cent internal rate of return.

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