Entry: "Address to London Finance Company - 28 October 2003"

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I’ve been asked to talk about the big picture. I note there are quite a lot of finance directors and various experts here; you will not note that politicians are usually asked to talk about the big picture, because it’s the only thing that they can talk about and then we leave it to you to work out the devil in the detail.

I will also talk about the small but more desperate picture in Tower Hamlets

What is the Government trying to do?

What can housing associations try and do?

What is the vision for the future for successful neighbourhoods?

The Big Picture

What we don’t want:

- London to be inhabited by just two groups: the very rich and the very poor. That a trend we have to address and the most obvious way to do it is by providing a larger amount of affordable housing delivered in mixed-tenure developments.

I thought that I would give you a few examples of overcrowding case studies in Tower hamlets

Firstly Mrs A who lives at 29B Parfett Street. This is a small, 2 bedroom room. Mrs A has a husband and four children living with her. There is not enough room for all the children to have beds. Boys and girls have to share a room.

Then there is Mr B who lives at 29A Parfett Street. This is also a small, 2 bedroom flat. Mr B is elderly and disabled. He lives with his disabled wife, adult son, adult daughter and baby grandson. Once again, there is not enough room for everyone to have a bed, not enough room for facilities to deal with disability, and no privacy for the adult son and daughter.

Both tenants have asked for my help to get the only vacant house in their area – 22 Myrdle Street, clearly, at least one of them is going to be disappointed and in my experience, it might well be both of them.

Mr C lives at 117 Winterton House – in a one-bedroom flat on a high floor of a tower block. He lives with his wife and two children aged five and two. His wife is expecting her third child in three months time. Once again there is insufficient room for the existing children to have a bed each, and it is difficult to see how space could be made for a cot for the third child – the most likely place is in the bath.

In a recent overcrowding debate I spoke to Andrea Baker, who is the lettings manager at Tower Hamlets, about the problem of overcrowding, and possible solutions, she says that:

Tower Hamlets has a large number of overcrowded households on the waiting-list – 5,744 families lack one bedroom, but others lack two, three or even four. They have one family waiting who lack five bedrooms!

Overcrowded families are waiting a long time to move – 614 families who lack two bedrooms have been waiting more than five years for a move! And 99 families who lack three bedrooms have been waiting more than five years in appallingly overcrowded conditions.

The waiting list is not the full picture – some overcrowded tenants have not applied.

Owner-occupiers may well be overcrowded – including those who have bought their properties under right to buy, but many have no realistic access to housing through the waiting-list. Many have insufficient equity and/or income to raise enough money to buy a larger property. The price differential between two & three bedrooms, and three & four bedrooms, is very high in this area.

Overcrowding pushes the next generation into homelessness – sons and daughters grow up, apply for housing, marry and have kids – and they are still living with mum and dad. Sooner or later something has to give.

Private sector renting is not necessarily a viable alternative to social housing. The private sector in Tower Hamlet’s is small and expensive, and people are reluctant to move into the private sector because of the lack of security of tenure, poor history of private landlords on repairs et, as well as because of the expense.

So where do housing associations fit into this? Housing associations have to expand the Housing Plus Agenda, devised over the past few years. This recognises the fact that houses themselves don’t create communities. It recognises that we have to solve a riddle. The riddle goes something like this.

When is a house not a home?

The answer really, is when a home diminishes quality of life rather than improves it.

When a house is the place you are trying to escape from, rather than escape to.

When a house damages your health, stunts your children’s education and tears your family apart, then it is not a home.

When a house is situated in an area where fear is your biggest neighbour, then it is not a home.

So the Government’s aim in this is to build sustainable communities and to strengthen neighbourhoods and help people feel more secure.

The Government knows that housing associations must be at the heart of the drive for change that will create sustainable communities.

So we want stronger housing associations working in stronger communities.

So what does the Government hope the housing association of the future will be like? Some of you might have heard it before, but let me repeat it anyway:

We believe it will have a clear purpose based on high quality service and full on engagement with the community.

It will demonstrate increased competitiveness responsiveness to a changing financial and regulatory environment and it will create quality and efficiency in everything it does.

We want to bring more competition, fresh ideas and flexibility into the sector. That is one reason why we consulted on whether the Housing Corporation should be able to fund bodies that are not registered social landlords.

We have no intention of playing off the private sector against the independent sector and I pay tribute to the many partnerships represented in this room, but we do have the responsibility to consider new ways to deliver more affordable housing.

I know that I a number of people are worried about consolidation in housing today. In September Keith Hill launched the sub-regional housing strategy for six north London boroughs who between them share 180 housing associations. When your hear a figure like that, it’s not surprising that the issue of consolidation gets aired.

I won’t pretend that we won’t see any change in the number and size of housing associations, and I think that we will see housing associations rethinking where they operate. But from the Governments point of view delivery of our objectives is more important than size or numbers of housing associations.

So for example, it’s not just about providing housing but also working with local authorities to prevent homelessness. That means helping people to sustain tenancies, and working early on to address problems like rent arrears or anti-social behaviour.

Some housing associations have shown how this can be done. I hope more will follow the examples of good practice which put housing associations at the heart of sustainable communities.

Now I’ll turn to the Government’s framework.

Over the next three years, we’re increasing the total housing resource to £11 billion and we are on course to reduce the number of non decent social homes by one million by 2004. Through the transfer options we are unlocking huge amounts of investment in social housing. Already, £760 million has been allocated through PFI.
And we want even more tenants to enjoy the benefits of increased investment through housing transfer. The benefits that housing transfer has brought to over 780,000 tenants are clearly visible.

Tenants gain from faster renovation and improvement to their homes and have the chance of a greater say in how their homes are managed and they enjoy increased sense of ownership and involvement in the local regeneration of the wider area.

And then there is the ALMO sector that is growing in numbers and strength. ALMOs, either existing or proposed, cover nearly 550,00 homes or one in five of council stock.

Then there are the regional housing boards which are developing there own strategies. Pooling ideas, and promoting new practices – it’s all about making the most difference with the resources we have available.

And the strategy has to be about creating more affordable housing in London. In several sub-regions in the year 2002-3, we supplied more than double the number of new RSL dwellings, than in the year 1998-99, so there has been progress.

But it is quite clear that we are building too few home to meet our housing needs, and this risks damaging our economy and affects are ability to improve public services.

We need to do all we can to find – and fund – new homes at a cost that more people can afford through making the most of housing finance and also ensuring that we obtain affordable housing through the planning system.

Now there will be many problems along the way, and I am sure some of them will come up in the question & answer session. But basically, that’s the plan.

And when we’ve done all that, what’s the vision we’re left with?

Well, it one where our infrastructure works. Not just the physical infrastructure such as decent homes, transport, good schools, well designed environment and a mixed tenure environment.

But also where the social infrastructure works

New models of social enterprise, and I thank the private and voluntary sector that are leading the way

An inclusive society.

Not just sustainable communities but sustainable families.

Finally I just wanted to ask you all a question. Did anyone see Wife Swap on TV last night? I don’t usually watch TV, and yet the only time when I’m up against a tight deadline, 9:30 last night when wife swap was on and I hadn’t started writing this speech I decide to. So I switch on the TV and as ever, with reality TV, what I saw was a vision of hell. Actually, to be precise, two visions of hell

One in affluent housing

One in poor quality housing

Neither desperate

But both hellish!

It underlined the point I’ve been trying to make – that a house isn’t necessarily a home. All of us owe it to our children to work together to create the homes that Britain needs.

You are critical to this.

Thank you for your commitment to this agenda.