Continuing dialogue between the CCH and Nick Raynsford, the Housing Minister
Joint CCH/UKCC response to a letter from Nick Raynsford MP.
18 May 2000
Dear Nick
Your letter of 6th March, in response to the issues we raised at our meeting on 25 February, has been carefully considered by both the UKCC National Co-operative Housing Forum and the Confederation of Co-operative Housing, and we are pleased to have the opportunity of continuing our dialogue with you on the important policy issues raised.
As a general point, we support all methods of tenant control and empowerment, and we believe that tenants and prospective tenants should be given information on and be in a position to realistically opt for the model of their choice, including the model that we are representing - the housing co-operative model.
Grant Rate
This is a vital issue because in the absence of a grant rate that enables co-operative housing to be developed at rents that are considered by local authorities to be affordable, less new co-operative housing will be developed under the new Labour Government than was developed under any of the last three Conservative ones. I am sure that such a situation would not be a matter of pride for your Government.
We understand your concern to maximise the number of housing units developed with the social housing grant investment available. If large housing associations are capable of subsidising smaller ones, it follows that they should use their spare resources to produce more housing for rent. If this were required of them, it would cancel out any risk of loss of units that might arise from setting a grant rate that enables rent affordability to be achieved by co-operatives and other small or minority ethnic RSLs.
We were not asking for a preferential grant rate. Our view is that all RSLs that can demonstrate that they no longer have the ability to develop at current grant rates should have access to grant rates that enable them to charge affordable rents. With your Government's emphasis on rent affordability and convergence and the prospect of rent increases limited to no more than RPI, fewer RSLs will be able to subsidise an inadequate grant rate. A differential grant rate for RSLs that can demonstrate the need for it will help maintain the diversity of the RSL sector and enable co-operatives to develop. As you know, housing co-operatives have demonstrated for so many years that they are one of the most effective means of establishing democratically empowered local communities and of tackling social exclusion. It is a tragedy that the current grant regime no longer permits them to be developed.
Under revised social housing grant arrangements, co-operatives would also be able to offer your Government long-term certainty over rent levels. With the abolition of MIRAS it makes sound financial sense for co-operatives to raise private finance using index-linked mortgages. The Canadian co-operative housing sector developed an elegant mortgage that was very attractive to long-term pension fund managers. We have this modelled on computer and are keen to show it to your officials at the DETR. Using index-linked mortgages would also help to reduce the grant needed and help to maximise the number of units co-operatives could produce for the grant available.
We trust that you will consider it worthwhile to continue to consider these matters.
Stamp Duty/Corporation Tax
We are very pleased that stamp duty on transfers between RSLs has been abolished. We look forward to further progress on the issue of corporation tax.
Developing Ownership Co-operatives through Leasehold Ownership
We agree with you that one means to set up housing co-ops could be through partnership with larger RSLs, and we look forward to hearing the outcome of the discussions between your officials and the Housing Corporation on how leasing arrangements might help new housing co-ops to be established. We understand that subsequent to our meeting with you, the Corporation have arranged a meeting with Redditch Co-operative Homes, and we look forward to seeing how they resolve this issue.
Stock Transfers
We also look forward to hearing the outcome of your discussions on a 'joined-up' grant system that enables RSL and council tenants to consider co-operative ownership, particularly in stock transfer options. We are concerned that the Housing Corporation appears to be no longer viewing the Community Training & Enabling grant as a means of replicating the Section 16 grant, despite the success of that programme, and we are concerned that RSL tenants will continue to have no access to funding to establish resident controlled organisations. This lack of access to funding could have a significant effect on local authority tenant opposition to stock transfer programmes.
The Birmingham stock transfer has been heralded as a model for how transfers might be done in the future. We would agree that the proposals for the Birmingham stock transfer did look innovative when they were first announced, but with the originally proposed 46 neighbourhood tenant controlled vehicles (a proposal that might have enabled tenants to establish housing co-ops) now reduced to 11 non-tenant controlled RSLs across 90,000 properties, we are not yet convinced that the transfer will offer the significant community empowerment that might have resulted under the original proposals. It has been suggested to us that Birmingham tenants did not want to see a reduction from 46 neighbourhood vehicles, and we would interested to know what the rationale is for that reduction.
Promotion
We agree that local authorities have an important role to play in providing resident control options to tenants. We welcome your commitments to incorporate this point when you revise the Housing Transfer Guidelines and to approach the Housing Corporation to see if it can strengthen its expertise in this area and to do more to express the positive aspects of resident controlled housing.
Our representatives at a recent meeting of the Corporation's Resident Controlled Advisory Group were concerned that, following recent changes of personnel at the Corporation, there seemed to be a move back from the positive stance on resident control agreed at earlier meetings. We are committed to working positively with the Housing Corporation, but we are still not convinced that their staff have the commitment or expertise needed to expand tenants' rights to choose co-operative or other resident control options. We would be grateful if you would inform us of the outcome of your officials' discussion on this issue with the Housing Corporation.
We accept your view that tenant choice is what counts, but tenants will not choose co-operative or other resident controlled options unless they know they exist and there is a workable framework within which the choice can be exercised. We consider that it is the role of the DETR to ensure that the option for council and RSL tenants to establish a housing co-operative is widely publicised and that workable frameworks exist. We believe that the Confederation of Co-operative Housing could help promote and publicise the availability of resident controlled options and that this work should be funded, under contract, by the DETR.
Short Life Co-operatives
We welcome your in principle support for the continuing short-lifing of properties in London and the South-east. We do however feel that it would be appropriate for your Government to be ensuring that local authorities are required by the newly formed Housing Inspectorate under Best Value to seek to bring into usage all their empty properties and to consider where appropriate leasing them to short-life co-ops. We feel that it would also be appropriate for a similar requirement to be imposed on Housing Associations by the Housing Corporation with respect to their long term void properties.
Education and Training
We note that our proposal for a national education and training programme is not the remit of your department. We will progress our discussions with the Co-operative College with a view to making a proposal to the DFEE.
New Forms of Housing Co-ops
We agree with you that there is a need to investigate different forms of housing co-ops, and we are pleased that you will welcome detailed proposals, which we will send to your department in due course.
