Housing Convention - 10 June 2009

Mr Chairman, Delegates, good morning. I am delighted to have the opportunity to join you and your many stakeholder guests here in Armagh today at this, first, Housing Council Convention.

Since you asked me to speak on The Legacy of Housing Need in Northern Ireland, I have been reflecting on this subject. I think we can sum it up by saying that since the establishment of the Northern Ireland Housing Executive back in the 1970s, we have seen a transformation of the public housing stock and in particular a massive reduction in housing unfitness.

We have also seen a substantial sell-off of public housing and a failure by successive governments to build enough new housing to meet ever growing demand. Thinking in particular about the last two years, since I took up office in May 2007, we have inherited a situation of record long waiting lists, unprecedented levels of housing stress and record homelessness.  So a huge challenge from day 1!

Two years ago I was also presented with the recommendation (or decision already taken) to abolish the Housing Council, - one of the original Review of Public Administration recommendations.

I chose not to do so as I felt that the Housing Council had worked well over the years in giving important legitimacy and accountability to housing when there was a lack of democratic accountability. Although we now have devolution, I believe the Housing Council still has an important role into the future – particularly in the context of retaining the core functions of our existing strategic housing authority.

Looking at measures to enhance the Council’s future role I am pleased to say I am currently considering recommendations on the future role of the Housing Council contained in a report by Professor Knox which I will respond to shortly.  I have now instigated bi-monthly meetings with the Housing Council that are very useful. And this Conference is taking place today as part of how I see the Council’s role enhanced, as they act as a forum for engagement with the ‘housing family’ in local government on the many challenges facing the housing sector.

I should mention that some housing functions will be transferring from the NI Housing Executive to Local government under RPA, as they are a good fit with the Councils’ existing environmental and inspection activities. I am also pleased that all – yes all – of DSD’s urban regeneration and community development activities are transferring to local government and that will include programmes such as ‘Living over the Shop’ – which although involving housing - is really part of regeneration.

No-one should be in any doubt that as Minister I am committed to supporting a new empowered local government with the central community planning function – and also a more streamlined central government focused on policy.

When I took up office I also inherited the Semple Affordability Review and established an interdepartmental group to advance its implementation. I also commissioned an expert Housing Advisory Panel under the Chairmanship of Professor Alastair Adair of the University of Ulster. A very useful report was produced on the dynamics of our local housing market.

However, even then we knew that whatever happened with budgets and markets, we needed to be more innovative in housing – particularly in relation to housing finance.

For this reason I invited housing finance expert Baroness Margaret Ford to look into how we could introduce more private finance into housing investment and spread scarce public resources further.  She too produced an excellent report, and we have already implemented a number of her recommendations such as improving the ratio of taxpayer to Housing Association investment in the social housing programme and bringing private finance into co-ownership for the first time.

Just over a year ago I launched the New Housing Agenda.  At that time, house prices were ten times average earnings and more and more people were turning to social housing as their only opportunity of having a home to call their own. I was very clear then that more needed to be invested in social housing, but I couldn’t have predicted the enormity of the change in the economic climate which then developed.  As we all know now, the house price bubble has truly burst. In the quarter ending 31 December 2008, house sales were down by almost 37% and average house prices had dropped dramatically.

So it is clear that, in the period ahead we need to proactively grapple with both the legacy of underprovision - and the crisis in the housing market.

You are all aware that the Housing Budget was under significant pressure during the last financial year due to the collapse of the housing market and its impact on planned receipts from house and land sales.

House sales have fallen off a cliff - leaving a serious ongoing deficit in the budget.

We started last year with a shortfall of £80 million - As a result of the pressure, capital spending had to be curtailed in some areas, particularly the new build programme and funding redirected to other programmes where money had already been committed. The Housing Budget is again facing a shortfall of £100 million this year and next year too. This is equivalent to the loss of up to 1,200 new build houses each year, which to me is simply unacceptable.

As a result of this shortfall, very difficult decisions have had to be made in relation to the allocation of our limited resources.  Because funding is so limited, it has been directed to priorities.

My priority must be to protect the vulnerable, and funding has therefore been protected for the social newbuild programme to make more homes available for those in most urgent need. The target for new homes in 2009/10 being 1750.  

I have also tried to protect the Warm Homes budget to help those faced with fuel poverty – and the Supporting People budget so that more people can live independently in the community rather than face life in institutions.

This has left the Housing Executive with some difficult decisions and management challenges. But the answer is not to try to rob Peter to pay Paul – we simply must secure more resources in total for housing.

In addition, I have seen persuasive evidence from senior economists (including Mike Smyth who is speaking later), that increased investment in social housing is one of the best ways to keep businesses afloat and workers in jobs. House building offers a higher economic multiplier than larger infrastructure projects; it creates or sustains more jobs than other options and spreads the benefits over a wider geographical area.

For every 10 jobs created by expanding the social housing programme, at least a further 7 jobs will be sustained elsewhere in the supply chain and in the retail sector. Current market conditions are more suited than ever to increase investment in social housing - which would help the most vulnerable by providing them with a home.  

But let me be absolutely clear - there is not enough money in the housing budget, and we must win the argument to have it increased and have housing placed on a more sustainable financial footing.

Living hand to mouth in hopeful anticipation of extra money from quarterly monitoring rounds is simply not acceptable and no way to run a multi million pound programme. So be assured that I will continue to press my Executive colleagues for their support for increases in funding for the Social Housing Development Programme and Housing Executive programmes over the next year - and I believe we can win that argument.

I also intend to increase the supply of housing through the introduction of a developers’ contribution. This remains an important goal to complement the Social Housing Development Programme.  My officials, in conjunction with colleagues from the Department of the Environment, are currently progressing this complex policy development.

I have provided record amounts to Co-Ownership.  For example, just over £19m in the 2007/08 financial year, over £15m last year and a further £15m this year. This level of commitment has allowed Co-Ownership to obtain increased financial backing from the banks which will make it possible for targets to be met.  

I also said I would develop proposals for a mortgage rescue scheme. Such a scheme would potentially help people who are facing repossession due to mortgage arrears Unfortunately, although we have done the work and have a scheme designed and ready to go, we have not got the funding to launch a full blown scheme.

However, on a more positive note, I recently launched a mortgage advice and debt service and I have been able to invest an additional £100,000 to increase the volume of professional mortgage rescue advice and support to help those facing mortgage difficulties. I will continue to seek the necessary resources for the full scheme.

The private rented sector has experienced steady growth since the early 1990s and I recently launched a package of proposals for public consultation, aimed at delivering improvements, to help the Private Sector become better placed to help meet current and future challenges.

So on every front we are straining to do more - to obtain more resources, and make the resources we have go further.

This will put pressure on everyone charged with delivery but it is our duty to do everything we can in these difficult times.

 

But while I desperately want to see more houses and better houses it is not just about bricks and mortar.

I have said before, while I firmly believe that a house is first and foremost a home for individuals and families, I am also convinced that it is also the key building block of our entire social development.

The nature of housing in many ways determines the nature of our communities and it is my belief that radical reform of our desperately segregated housing sector is needed if we are to heal the damaging divisions in our community. I believe in a shared future: a real shared future. That’s why we support a Shared Neighbourhoods programme in existing estates and have a number of cross-community initiatives underway relating to new developments.

But I want to go further.  Fifteen years after the ceasefires, the number of peace walls have increased – not decreased.  We have institutionalised division and segregation and it is my intention that we start to dismantle this – at least in the field of housing.  

Apart from the huge financial and economic challenges - which, in time, I think we can overcome - we have a moral duty to heal a damaged and often dysfunctional society. This is a long-haul project, and it will continue to permeate everything I do as Housing Minister and as Minister for Social Development.

I want to finish by assuring you that I am convinced that by working together, and making those difficult decisions with energy and innovation, we will ensure our housing goals are achieved. It really is about partnership and unity of purpose. And we can succeed.

May I congratulate the Housing Council on its first Convention and pay tribute to successive Councils for making the housing sector more cohesive over 35 years. Finally, I hope everyone here finds the Convention enjoyable and informative.

Thank you.