Decent Homes Standard and the 2012 ‘debt settlement’

Included in the government’s Social Housing Green Paper is a review of the Decent Homes Standard (see Note below). This has elicited a response from some quarters that improving standards will threaten council business plans. Inside Housing writes that “Local authority housing business plans could be rendered unsustainable if the government revises the Decent Homes Standard, it has been claimed.”

They cite John Bibby, chief executive of ARCH (the Association of Retained Council Housing). He said

The problem comes with resources. The self-financing settlement of the housing revenue account was predicated on local authorities having the income and borrowing to deliver and maintain the standard over a 30 year business plan period, and if there is a significant change that could make those plans not sustainable. The government would need to revisit the settlement if it did make major changes.”

The settlement refers to the 2012 ‘debt settlement’ when what was said to be the national council housing debt was redistributed amongst councils that still owned their housing stock. The amount of ‘debt’ local authorities were given was based on an assessment of income and expenditure over the 30 year course of their business plans.

Obviously any changes to the Decent Homes Standard would have financial implications. For instance the DHS has a measurement of the lifespan of components such as kitchens, bathrooms, central heating boilers, roofs etc. It would cost more if they had to be renewed earlier than the current standards. To that extent John Bibby is right to raise the issue of ‘revisiting’ the settlement. What that means is that the government would have to cut the ‘debt’ level which they imposed on councils in 2012 in line with the higher expenditure which improving the DHS would necessitate.

What we don’t understand however, is why ARCH, which brings together many of the councils that still own housing stock, has not raised the issue of reopening the debt settlement when previous government policies such as the 4 year rent cut and the ‘enhanced right to buy’ have had an even greater impact on the finances of housing revenue accounts. To one degree or another all local authority revenue accounts are unsustainable now in the long term as a result of declining income owing to government policies introduced after 2012.

ARCH, as the body which brings together stock owning local authorities, could play an important role in raising this issue. But it’s a demand which should be pressed on the government now because of the gross underfunding of HRAs which already exists, rather than waiting to see if they come forward with any proposals to improve the DHS.

Martin Wicks

Secretary, Swindon Tenants Campaign Group

Note: Decent Home definition

That the DHS criteria are not very high is reflected in the rules in relation to “reasonably modern facilities and services”. Dwellings which fail to meet the criteria are those which lack 3 or more of the following:

  • a reasonable modern kitchen (20 years old or less)

  • a kitchen without adequate space and layout

  • a reasonably modern bathroom (30 years old or less)

  • an appropriately located bathroom and WC

  • adequate insulation against external noise (where external noise is a problem);

  • adequate size and layout of common areas for a block of flats.

These are not very generous criteria since “A home lacking two or fewer of the above is still classed as decent, therefore it is not necessary to modernise kitchens and bathrooms if a home meets the remaining criteria”.

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