Northern Ireland Housing Executive, Housing Forum - 17 October 2008

Good morning Ladies and Gentlemen.  Thank you for your kind invitation to speak at this meeting of the Housing Forum today and for the opportunity to talk to you on the subject of my New Housing Agenda.  

I have no need to remind you that the credit crunch is still very much with us and I hope that the extraordinary actions taken this month by various governments throughout the world will help to ease the current financial crisis. However we have our own housing crisis which needs no less extraordinary action.

I launched the New Housing Agenda in the Northern Ireland Assembly on 26 February this year – and it’s the most radical and energetic agenda for housing to be launched in Northern Ireland for a generation. When I announced the New Housing Agenda, I made it clear that I wanted to bring forward new housing opportunities that would bring our people together, not continue to keep them apart. I have made this a central theme in my responsibility for Housing. As we move away from the legacy of our divided and troubled past, we can genuinely look forward to a better future, a better shared future, and an equal future for everyone.

There are many key components to the New Housing Agenda including;

More recently, as the effects of the global financial crisis have started to impact on all of us here in Northern Ireland, I have gone further and introduced the following measures in the housing policy area:

My first and foremost priority, however, is to increase the supply of housing and I was delighted to see that in my first year as Housing Minister, I was able to do just that, starting 1595 new homes, nearly 100 above target.  That was a fantastic start and the support I received from the Housing Sector in delivering this was very much appreciated.  

But we know that it was only a start and one which we must look to build on. I have set some very challenging targets to deliver 5250 new homes in the next three years and if I am to deliver these, we must look to be more imaginative than ever before. Let me be very clear. These targets are non-negotiable and I expect to see the first 1500 delivered this year, but more importantly, the public - people on waiting lists and homeless people - expect and need to see these houses provided. We must not lose sight of this.

One of the new and innovative ways I intend to increase the supply of housing is through the introduction of a developers’ contribution. As I have already mentioned, the waiting lists for social housing are long.  We urgently need more social housing.

I appreciate developers’ concerns particularly at this time but I remain convinced that this is the best way to get more housing. The concerns of the developers will be taken into account when the policy is being introduced.

I have met with the Environment Minister to press for the introduction of developers’ contributions for social housing.  Unfortunately, progress on this matter is dependent on progress being made on revisions to Planning Policy Statement 14, but the Environment Minister and I will jointly consider the timing and phasing-in of any new arrangements.

In September this year I launched the “Own A Home” initiative in Portadown. This is a partnership between Turkington's, Clanmil and South Ulster Housing Associations, and Barclays Bank.   This initiative is a unique low cost pathway to home ownership.  It gives first time buyers a real opportunity to get on the housing ladder by taking a part equity share in a house without the burden of a large deposit.  As part of the new Housing Agenda, I pledged to increase the supply of affordable housing, and this scheme - a first in Great Britain and Ireland - does just that.  

Following the launch of this initiative, North and West Housing Association made up to £4million available for similar affordable housing schemes and I am aware of other developers and Housing Associations who are also now interested in this initiative.

I have also instigated a review of the House Sales Scheme.  In fact, the consultation period on my proposals to allow tenants of the Housing Executive and Housing Associations to buy a share in their homes is now almost at an end. Subject to the final outcome of that consultation, eligible tenants will be able to buy a 25 per cent stake in their home – and be able to increase their ownership share in steps of just 5 per cent – from the end of November. It will help those who aspire to homeownership but who currently cannot afford to buy their home outright.

Earlier I said that we need innovative solutions and, against an increasingly difficult background of public sector constraint, my ambitious housing targets will only be achieved if we can find these. While I want to work closely with the private sector to generate even more private sector investment, we must at the same time make the public purse stretch further and my new Procurement Strategy will be one of the key platforms to ensure just that. It is about getting more bang for your bucks.

The Strategy will streamline housing association procurement activity into four dedicated procurement groups. This will be a more efficient way of doing business. By bringing housing associations together in a more structured and coherent operation, and, by pooling their experience, expertise and purchasing power, I believe we can make savings of up to 10%, over the next five year period.  And I don’t intend to make savings for the sake of them. I assure you any savings we can generate will go back into the Programme, not the Treasury.

The Procurement Strategy will also encourage improved quality in design including greater use of non-traditional methods of construction. This will lead to more energy efficient, and environmentally friendly social housing.  

I am pleased to confirm that we have now appointed Trowers and Hamlins as the National Change Agent for Northern Ireland.  They have been here since 13 October to guide, support and navigate our new Procurement Groups through the process. They already have extensive experience of social housing procurement from their work in Great Britain and I have no doubt you will be well supported by them.

We have given Trowers and Hamlins as broad a remit as possible to allow each of the Procurement Groups to move as quickly in the initial years as they can manage. By the end of this five year strategy, we expect all Procurement Groups to be fully compliant in public procurement policy, but Rome wasn’t built in a day and I assure you there will be flexibility to ease your transition.

I am confident that this new strategy will make a valuable contribution to the New Housing Agenda. Working together we can bring about real improvements, effect real change and ultimately deliver real homes for those most in need. We must not forget that our ultimate aim is to meet housing need and we all share that same ambition.

Another key component of the New Housing Agenda was the introduction of a new Code for Sustainable Housing. From April this year, all new social homes are built to a new standard that goes further than the previous Eco-homes rating of ‘good’. These new homes will be built from more traditional methods of construction, making them more environmentally friendly.  They will be 25% more energy efficient than those built previously, offering greater protection against the effects of Fuel Poverty for generations to come. These new homes link in very closely to my work to alleviate Fuel Poverty, something that is becoming more and more of a problem for many ordinary households, faced today with rising energy costs and having to make the shocking choice of whether to heat or eat.

The Warm Homes Scheme is a central element in Government’s Fuel Poverty Strategy.  It aims to improve domestic energy efficiency, therefore reducing energy consumption in eligible households in the owner-occupied and private rented sector.  

The Scheme has assisted over 60,000 households in Northern Ireland to date and I have instructed Eaga, who manage the Scheme on behalf of the Department, to aggressively target those most in need, for example to those people with no central heating.  

My officials are now finalising changes to the Warm Homes Scheme which will take account of the recent Northern Ireland Audit Office recommendations, and a consultation paper will be published in November.  

Fuel Poverty is a cross-departmental issue and in May this year, anticipating the looming fuel poverty crisis, I established the Fuel Poverty Task Force.  This Taskforce brought together representatives from Government and the wider energy sector to identify measures to tackle fuel poverty and, in particular, to identify short-term recommendations that could be developed to assist people who will be in need this winter.

I developed a set of practical proposals from the Task Force’s report, which were circulated to Minister’s as a draft Executive paper prior to the scheduled Executive meeting on 18 September.  Unfortunately, as you are only too aware, that meeting did not take place.  However, I received responses from a number of Ministers and had discussions with the Minister of Finance and Personnel and the Minister for Health, who recognised the importance of the proposals, the general implications for health, and the need to progress work urgently.  When the Executive failed to meet yet again, I revised the paper, taking account of the views of the other Ministers, and produced a final Executive paper, which I have sought clearance for via the urgent procedure route.  

I need clearance for the package because, although the benefits of the proposals may not reach people until January 2009, the work, including possible legislation, needs to start immediately.  

As we move into another Winter, it is a timely reminder of the homeless people in our country.  And July 2007 saw the launch of a strategy to promote the social inclusion of the homeless people and those at risk of becoming homeless. An action plan for this strategy has focussed on Homelessness.  A steering group has been set up by my Department to implement the principles and recommendations of the strategy.

I look forward to seeing concrete outcomes from this new approach to tackling homelessness and the problems associated with it.

In relation to private sector housing, I referred earlier to a Mortgage Rescue Scheme, as keeping people on the housing ladder is important. Repossession, or the threat of it, can be immensely stressful for the individuals and families involved. In the second quarter of this year the Courts Service reported a further increase in applications for repossession with over 900 applications being made.

It is important to remember that for many, arrears can be caused by illness, unemployment, relationship breakdown, or a host of other factors.  For those who do fall behind in their mortgage, the best – and by far the easiest – way to avoid repossession is to seek help at an early stage. It is often the case that, the earlier advice is sought, the more solutions can be found. However, this needs the co-operation of financial institutions, which also need to take extra ordinary measures to help these people in the same spirit that they were given help.  

The consultation on my proposals for mortgage rescue, which is underway, outlines possible solutions for people who are facing repossession. I want to make advice more easily available for people who are having problems paying their mortgage or other loans secured on their home.  This will help them explore the various options open to them.  For those who may need intervention I am also proposing help, in the forms of either Mortgage to Rent for people who cannot afford even a small mortgage or Flexible Tenure for those who can.

I am continuing to seek the resources to allow me to operate this important Scheme.  We cannot stand idly by and watch people we could have helped face the trauma of repossession.  Many of you here will already have been sent a copy of the Consultation Document which seeks your views on my proposals for stepping in to provide what will be for many, a vital lifeline. The closing date for responses is 21 November and I hope as many as possible will respond to this important initiative.

In addition to this, as you will all by now know,  the Co-Ownership Housing Association has secured an extra £35m of private funding from the Bank of Ireland to supplement the £15m that my Department provided at the beginning of the year. This is excellent news for people trying to get onto the housing ladder. The funding will ensure that the Co-Ownership Housing Association will deliver the Programme for Government’s target of 500 affordable houses this year; applications in the pipeline will be dealt with first. This borrowing is the first step, a pioneer if you like, with hopefully a long term public/private financing strategy to follow for Co-Ownership homes in 2009 and beyond.

While this is welcome, I am also committed to looking for other ways to make co-ownership more effective and I will be bring forward proposals for consultation later this year which will look at new models for co-ownership and will include changes to the entry level and buy out steps to make co-ownership easier to access.

Since becoming Minister for Social Development, I have given a consistent message.   I’m sure all of you present today have heard me say it before, but I make no apologies for restating that everyone should have the opportunity to live in a decent, warm home that is affordable to them. I am fully committed to alleviating the current housing crisis and I have made it my first and foremost priority.

I thank you once again for inviting me to address your conference and I trust that the remainder of the time will be informative and productive.