Housing Forum – 1 December 2009

Mr Chairman, Ladies and Gentlemen, honoured guests, my thanks for your invitation to join you here this morning and in particular Brian for your warm words of welcome.

It is always a pleasure to take part in events that bring together such a wide range of experience and expertise from the housing family and today is no exception.

The recent publication of the paper from the Commission on the Future for Housing in Northern Ireland set up by the Chartered Institute of Housing provides a useful context for today’s meeting.  

When I launched the New Housing Agenda last year, I placed the Shared Future ethos at the heart of all my endeavours in housing.  I believe that housing can literally become the catalyst to start bringing our divided community together.  I was pleased to see some recognition of this in the Commission’s report, albeit I would like to see some detail about how the Commission believe this can now be delivered.  

We already have adopted a twin track approach to delivering more shared future housing in both our New Build Programme and in existing estates through the excellent Shared Neighbourhood Programme.  However I would like to see us do more and believe we could be more proactive in driving this forward.  

After all 8 out of 10 people now tell us they want to live in shared neighbourhoods so I would welcome any new thinking the Commission may eventually have on how we can deliver this outcome.

That may well involve some reform of the allocation framework also identified in the report.  Let me be clear from the outset however, I fully support the principle that housing must be allocated on need.  That is a strength of the Common Selection Scheme, and I would be resistant to move away from that premise.  But that is not to say we can not build a better Scheme and bring forward change that could deliver the greater flexibility for both tenants and landlords.  

A revised model to assess housing need, particularly in rural areas, is overdue.  The use of Choice Based Lettings is also something I want to see taken forward with more vigour.  The Commission highlight both issues, so again any added value the Commission can make to our work will certainly be welcome.

I was also pleased to see the Commission suggest that we should make housing a priority, in effect putting housing at the heart of our Economic Recovery.

I hope this will help to move my Ministerial Colleagues in the Executive towards this belief.

I have already ring fenced £155m to deliver 1,750 new homes this year, our largest number for a decade.  This investment will not only support those in greatest housing need, but will provide a very timely boost for our local construction industry which has been savaged by the downturn in the economy. Building as much as possible on land we already own, maximises the economic injection into the construction sector. It really does make sense for a variety of reasons to invest in social housing right now.

Housing is the only mainstream Government Programme that is dependant on a high level of capital receipts that can be generated by land and house sales.  The economic downturn has made it impossible to bring in this money.  It is no-ones fault; it is just another challenge which we need to face up to.  The Commission recognises however that over the next 10 years, the Housing Budget could suffer from a £1bn deficit.  

I believe that the only way to fix the problem is to allocate a sufficient housing budget that is not dependant on the vagaries of the market and I will continue to make this case at the Executive table.

Until then however we must continue to make the scarce resources we have go as far as possible and I am pleased to see the Commission recognise the efforts we are making in that respect.  The creation of four Procurement Groups will ensure a more efficient delivery of our new build programme.  By coming together in this way, Housing Associations can start to realise the full potential that now exists for them.  This need not be restricted to procurement of the new build programme alone.  Maintenance of existing homes is an obvious next step and beyond that is there potential for a pooling of other tenant services and activities amongst Associations?  

Could the Procurement Groups use their new collective strengths to borrow more competitively and attract new financing opportunities at better rates than were previously available? Bond financing is certainly one way forward.

These are the sort of issues I and other Housing Ministers from across the British Irish Council will consider when we meet here in Northern Ireland at the end of this week. I am very pleased that the BIC invited me to lead its workstream on housing and that we have 100% turnout of Housing Ministers on these islands at our meeting in Newcastle, Co. Down on Thursday and Friday.

I will be announcing a record level of investment in Social Housing both here and across the UK from the European Investment Bank. We will also hear directly from the Housing Finance Corporation in Dublin about many of the financing initiatives the Commission has identified.  So while it is becoming harder to fund, there is still good news here for housing.

I would also congratulate the Institute of Housing Commission for not shying away from some of the more difficult issues we currently face.

The role of the Strategic Housing Authority and the issue of social rents are both raised by the Commission.  

Existing Treasury rules prevent the Housing Executive from utilising their extensive asset base to borrow to help alleviate some of the pressures we face elsewhere in our housing budget.  This issue has already been raised in the Varney report.  I am keen to see how we could perhaps overcome these Treasury obstacles, and some work within my own Department and the Housing Executive has been undertaken to see how that might develop.  If the Commission can help plot a course through these obstacles, I have no doubt my officials will be pleased to consider it.

Similarly, I am also aware that there exists a significant difference in social rents across all social landlords here.  It is, however,  too simplistic to say that Housing Executive rents are just too low.

There is in fact no consistent approach to rent setting amongst the Housing Association movement itself.  I plan to start work next year to identify the potential for a rent convergence model that could address each of these issues.  I want to see what the implications of this may be for social landlords and tenants alike before deciding further on it.

Let me be very clear, in the current very difficult economic climate, I am not in favour of increasing rents, particularly to those in social housing who are often at greatest risk of poverty and social exclusion. So whilst I am mindful that rent increases could generate additional revenue to put back into our programme and most of the cost would be covered by Housing Benefit, we need to balance that against the ability of tenants to pay.  

Ladies and Gentlemen, there is so much more in the  report that I have not even had time to touch on during this short address.  As I said at the outset, this report covers some considerable ground and many of the issues are already under consideration within my Department or the Housing Executive.  That is not to say that it is too late to influence our thinking.  It is never too late to have a good idea.

The challenge facing the future for housing here is immense.  But in every challenge, there comes an opportunity.  We need to be creative and innovative. We need to have an open mind to the new opportunities that can be created and I assure you, my Department will not be found wanting in promoting that approach.

The support of the wider housing family in bringing new ideas to the table and helping us deliver them from start to finish can not be underestimated.

I look forward to seeing the final report of the Commission that will no doubt be further refined and shaped by the contributions that will come from each of you today. If there are good new ideas and propositions which could be implemented by the Department then I will certainly take them on board.

Best wishes for the rest of your day and once again my thanks for your invitation to open this Forum and for your continuing support as we seek to deliver the new housing agenda.