Universal Credit Round 2 Survey Complete

The second round of the Universal Credit surveys is now complete and analysis of the returned questionnaires is underway. A total of 54 NHC member organisations took the time to complete the latest survey and NHC would like to thank participants for their continued support for the project. Some initial findings from the latest round are:

  • 84.9% of respondents say there are still delays in processing UC claims
  • 91.3% of organisations who’s rent cycle is charged in advance say UC paid in arrears causes problems
  • Over one-third of organisations cited tenants terminating their tenancies due to UC
  • Over two-thirds have seen an increase in enquiries to their money advice teams
  • Almost one-quarter of organisations have introduced ability to pay checks as a result of UC

More in-depth analysis is continuing and there will be a second focus group held to gather more qualitative information from members. We are also looking for case studies relevant to the study. If you have anything you could contribute, please send them on to Barry Turnbull at barry.turnbull@northern-consortium.org.uk

More information about the Universal Credit project and the first round report are available from the NHC website here. If you’d like to take part in subsequent rounds of the research please contact Barry Turnbull at the above email address or at (0191) 5661030.

Financial Exclusion call for evidence

The House of Lords Select Committee on Financial Exclusion has published its call for evidence. Interested parties are invited to submit written evidence to the Committee by Wednesday, 14th September.

The Committee has been set up to consider financial exclusion, which results in people having difficulty accessing or using the mainstream financial services that are necessary to participate in daily economic life and society.

Baroness Tyler of Enfield, who chairs the Committee, said: “Our inquiry will attempt to find a way forward. We will look at the role banks and others in the financial services industry can play in helping those who are currently excluded and we will examine the role of charities, Government and regulators. We will also look at the quality of financial education in the UK. Are we doing enough to ensure that children, young people and adults understand their finances and know where to seek help if they need it?”

The call for written evidence contains 14 questions that the Committee wishes to receive responses to. The questions can be found here.

For the inquiry to be effective it is important that views and experiences are heard from a wide range of people and organisations, the NHC urges members to feed in views and supporting evidence from their organisations and tenants. The NHC will be submitting evidence on behalf of our members across the North, so would appreciate any information to be sent to satty.rai@northern-consortium.org.uk by Monday, 5th September.

Health and Housing | Older People and Physical Health

As part of our on-going work exploring the links between the health sector and registered providers in the North, the NHC have published a new briefing on the topic of older people and physical health with case studies from leading providers in the North of England. You can read the briefing here.

The substance of the report will be further explored in a forthcoming policy roundtable that will look specifically at the issue of how the housing sector is engineering new working relationships with the health sector to support older people later in life.

Details of this roundtable will be available shortly but to register your interest, please contact callum.smith@northern-consortium.org.uk

House-building in the North

There have been many articles in the housing press post-Brexit about how the decision to leave the European Union has or will impact on the housing market. By analysing the latest Department of Communities and Local Government house-building data, we try to show if builders’ confidence was affected by the prospect of Brexit. This article will compare house building in the first quarter of 2016 with the corresponding data of 2015.

Headlines

In total, between January and March of 2016, there were 8,590 dwelling starts and 7,300 completions across the three northern regions. This equates to almost a quarter of all starts and completions in England (24.2% and 23.2% respectively).

While dwelling start figures for England fell by 10.2% compared with the first quarter of 2015, starts increased in the north by 11.4%. Indeed, total England starts fell in every tenure, whereas there was an increase in northern private starts (12.3%) and housing association starts (6%).

Conversely, dwelling completions fell in every tenure in the north and by a total of 10.9%. This compares to an all England fall of 8.3%. However, there was a 2.2% increase in private building in England as well as a 69.2% increase in local authority building completions compared with a 50% fall in the north.

Regional Activity

 

North East

    Quarter 1 2015 Quarter 1 2016 Change
All tenures Starts 1,630 1,700 +4.3%
Completions 2,300 1,700 -26.1%
Housing association Starts 170 210 +23.5%
Completions 540 230 -57.4%

North West

    Quarter 1 2015 Quarter 1 2016 Change
All tenures Starts 3,170 4,340 +36.9%
Completions 3,560 3,100 -12.9%
Housing association Starts 270 350 +29.6%
Completions 840 460 -45.2%

Yorkshire & Humber

    Quarter 1 2015 Quarter 1 2016 Change
All tenures Starts 2,910 2,550 -12.4%
Completions 2,330 2,500 +7.3%
Housing association Starts 230 150 -34.8%
Completions 370 290 -21.6%

The tables above show Yorkshire and Humberside bucking the northern trend insomuch as there was an increase in all completions, whilst the North East and the North West showed an increase in starts and decrease in completions – both total and for housing associations.

Sub-regional Activity

There were large increases in starts in Cheshire (73.6%) and Greater Manchester (59.5%) – largely driven by increases in Halton and Bolton respectively. Meanwhile, there were large decreases in starts in Northumberland (-50%) and Humberside (-45.9%). There were decreases in all Humberside authorities with the exception of North East Lincolnshire.

Completed dwellings more than doubled in Cheshire (115%) on 2015 Q1 figures and increased by over two-fifths in Northumberland (42.9%). In the North East, County Durham (-42.9%) and Tees Valley (43.4%) saw the largest decrease in completions.

Contact:

Barry Turnbull

barry.turnbull@northern-consortium.org.uk

Universal Credit Research Update

The first report of NHC’s research into Universal Credit has been published and can be downloaded from our website here. The research investigates how the implementation and continuing rollout of Universal Credit is affecting housing organisations in the north and some of the headlines from round 1 are:

  • 5% of respondent organisations have intervened in some way to help tenants with the cost of living
  • Average level of rent arrears of Universal Credit claimants in participating organisations has risen by 41.1% since roll out
  • More than three-quarters say staff spend more time supporting tenants through Universal Credit that through Housing Benefit claims

It is important that we get a picture of how UC is impacting member organisations over time to take robust evidence to our discussions with DWP and the second survey is now available to be completed here. We would really appreciate it if you could complete the survey by the 29th July deadline. Thereafter, the data analysis will take place with the second report being published in early August. As was the case in the first round, there will also be a focus group to collect more qualitative information next month.

There will then be two final rounds of research and reports. The next questionnaire will be published in November, while the final round will begin in February with the final report being published in March 2017. As well as gathering information from the surveys and focus groups we’d be very interested in hearing from members that have case studies to share to provide real life examples to our discussions with DWP. If you could share any such information, please contact Barry Turnbull at the email address below.

Contact:

Barry Turnbull
barry.turnbull@northern-consortium.org.uk

populationprojectionmap

Population Projections 2016 to 2036

Introduction

On 25th May, the Office of National Statistics (ONS), published the 2014-based Subnational Population Projections for England. They are the first local breakdown of population projections since 2014 and also provide age range breakdown at the local level and replace the 2012-based projections published by the ONS in November 2013. National population projections provide an indication of the future size and age structure of the UK and its constituent countries based on a set of assumptions of future fertility, mortality and migration, including a number of variant projections based on alternative scenarios.

These latest figures, and the household projections that will be based on them, will inform where there is demand for housing development and will prove important to planners in drawing up local plans. Although there is inevitable uncertainty in the assumptions reflecting the inherent unpredictability of demographic behaviour, meaning that projections become increasingly uncertain the further they are carried forward into the future, this briefing is designed to illustrate how the population of the north will change over the twenty year period from 2016 to 2036.

The population of England is projected to increase by 7.2 million over the next two decades, a 13% increase on 2016 to stand at 62.4 million in 2036.

Regional Change

“All regions of England are projected to see an increase in their population size over the next decade, with London, the East of England and South East projected to grow faster than the country as a whole. The population is also ageing with all regions seeing a faster growth in those aged 65 and over than in younger age groups.” Suzie Dunsmith, ONS.

Indeed, London’s population is projected to increase by 21.6% by 2036 compared to 13% for the whole of England. Meanwhile, the three northern regions are projected to see the slowest population growth in the country. The total northern population is projected to grow by just over 1 million to 16.3 million. This equates to an increase of 7%.

Table 1: Regional Population change (000s)

2016 2036 % change
England 55,218.7 62,403.9 13.0%
North East 2,636.1 2,780.9 5.5%
North West 7,190.5 7,666.7 6.6%
Yorkshire And The Humber 5,414.9 5,855.9 8.1%

As Table 1 above shows, Yorkshire and the Humber will see the greatest proportionate increase in population (8.1%) followed by the North West (6.6%) and the North East (5.5%). However, in numerical terms, the North West is set to see the greatest increase, with a 476,200 increase taking the population to 7.7 million in 2036. Yorkshire and the Humber will see a 441,000 increase in population and the North East, 145,000, taking these populations rise to 5.9 million and 2.8 million respectively.

Sub-regional Change

The most noticeable sub-regional statistic is that while most sub-regions are projected to see an increase in population, Cumbria is the only sub-region projected to see a decrease over the next twenty years. Between 2016 and 2036, the Cumbrian population is projected to fall by 6,700 (-1.3%). Elsewhere in the North West, Greater Manchester is to see the greatest increase in population in the north. A 10.2% increase in population up to 2036 will see the population to grow by 284,000 to 3.1 million.

As Table 2 below shows, West Yorkshire is also likely to see a significant growth in population up to 2036. A 226,000 increase here will result in the population increasing to 2.5 million; an increase of 9.9%.

Table 2: Sub-regional population change (000s)

2016 2036 % change
Northumberland 316.3 321.9 1.8%
Tyne and Wear 1,128.1 1,197.2 6.1%
County Durham 522.2 561.6 7.5%
Tees Valley 669.6 700.2 4.6%
Cumbria 496.5 489.8 -1.3%
Lancashire 1,478.3 1,533.1 3.7%
Greater Manchester 2,770.3 3,054.1 10.2%
Merseyside 1,398.6 1,474.8 5.4%
Cheshire 1,046.5 1,114.9 6.5%
North Yorkshire 811.8 863.9 6.4%
West Yorkshire 2,293.7 2,520.1 9.9%
Humberside 928.5 970.3 4.5%
South Yorkshire 1,380.8 1,501.7 8.8%
All North 15,241.2 16,303.6 7.0%

Similarly, South Yorkshire is likely to see a noticeable increase in its population (8.8%). An extra 120,000 people over twenty years will take the population to 1.5 million.

All sub-regions across the North East will see an increase in population – the greatest proportionate increase will be in County Durham (7.5%). In terms of the number of people, the extra 69,000 people likely to live in Tyne & Wear, taking the population to 1.2 million, means it will continue as the most populous conurbation in the region.

District Level Change

The fall in the Cumbrian population is focused in three local authority areas. Barrow-in-Furness (-7.8%) and Copeland (-4.8%) are the local authorities with the largest decrease in population in the whole of the north to 2036. In addition, Allerdale is projected to see a fall of 0.9% in population. Elsewhere, the Lancastrian districts of Hyndburn (-1.9%), Blackburn with Darwen (-1.5%) and Blackpool (-0.2%) are also set to see a falling population. Richmondshire in North Yorkshire is also projected to see a 1.9% population reduction.

Map 1: Population change by local authority

Contains Ordnance Survey data © Crown copyright and database right 2011

As the red areas on Map 1 above show, the Greater Manchester local authorities of Salford (17.3%), Manchester (14.8%) and Trafford (14.4%) as well as Chorley (14.6%) in Lancashire are projected to see the greatest increase in population. Other areas of significant increases in population can be seen in West, South and North Yorkshire. Areas such as York, Selby, Leeds, Kirklees, Sheffield and Barnsley all of projected population increases of over 10% over the next twenty years as does Warrington in Cheshire.

Age construction
As well as the continuing trend of increases in the old and in particular very old populations, there is a theme both nationally and locally, of certain age groups seeing a fall in population. In almost every local authority in the north, we are likely to see a decrease in the number of people aged in their mid-40s to their early 50s.

Furthermore, in many areas there is projected to be a fall in the number very young people aged from 0 to 10 years old. This is not a phenomenon witnessed at the national level.

Conclusion

The 2014-based national population projections are based on the estimated population at the middle of 2014 and a set of demographic assumptions about future fertility, mortality and migration based on analysis of trends and expert advice.

The data shows the north will see continued growth in its population, albeit at a slower rate than in other areas of the country. Indeed, whereas all other English regions will see population growth of over 10% (and over 20% in London) none of the three northern regions’ growth will region that figure.

For more information on this and NHC’s data analysis service contact:

Barry Turnbull

(0191) 5661030

barry.turnbull@northern-consortium.org.uk

Local Government Finance Settlement Briefing

Introduction
Following a consultation published in December 2015 on the provisional Settlement, the Department for Communities and Local Government (DCLG) published the final local government finance Settlement: England, 2016 to 2017, the annual determination of funding to local government, on 8 February 2016.

This briefing is designed to provide Northern Housing Consortium members with information on how the LG Settlement has changed over the ten year period from 2006/07 to the 2016/17 financial year. The indicative Settlements up to the end of the current parliament (2019/20) will also be explored. The data in this briefing will not include an analysis of allocations to Fire Authorities, rather allocations to upper and lower tier councils are analysed. As the analysis explores different local authority types dating prior to the local authority restructure of 2009, a 2006/07 proxy for the new unitary authorities was created by aggregating former district and a proportion of shire county grants.

Background
The total value of grants to local authorities in England was £17,966million. Services are divided into five groups reflecting the division of responsibilities for providing services in some non-metropolitan areas: some services are provided predominantly by district councils (‘lower-tier services’), others by county councils (‘upper-tier services’), and others by fire and rescue authorities (‘fire and rescue services’). The fourth group of services covers those services other than policing services and fire and rescue services provided by the Greater London Authority and its functional bodies. The fifth group of services covers the notional policing element of the council tax freeze grant legacy payments included within the Local Government Finance Settlement. Different percentage reductions to core funding are applied to each group of services, reflecting the pressures on those services. The upper-tier element is calculated for the following classes of authority: non-metropolitan district councils which have the functions of county councils, county councils, London borough councils, Common Council of the City of London and metropolitan district councils.

The funding lines included in the Settlement are:

  • Settlement Funding Assessment: this is made up of retained business rate revenue, which is then subject to either a ‘tariff’ (a subtraction) or a ‘top-up’ (an addition), and Revenue Support Grant. The tariffs and top-ups are a system of redistribution between wealthier and more deprived local authorities;
  • New Homes Bonus funding: local authorities receive an extra sum of money for each new house completed in their area;
  • Improved Better Care Fund: this consists of additional funding to be used to contribute towards extra spending on social care. Local authorities will also be able to raise council tax to contribute towards greater spending on social care. Allocations of funding under the Better Care Fund will take into account each authority’s capacity to raise council tax;
  • Rural Services Delivery Grant: a non-ringfenced grant to authorities in the highest quartile of ‘sparsity’, recognising the extra costs of delivering public services in rural authorities

The final Settlement 2016/17 confirmed that core government funding to councils, Revenue Support Grant (RSG) would reduce by 28 per cent (£2.7 billion). Government proposed a new methodology for allocating reductions in RSG to take into account councils’ ability to raise income through council tax. In effect, the new system now accounts for the differing extent to which councils rely on grants, locally retained business rates and council tax, making reductions smaller than they would otherwise have been to those that are more reliant on the grant as a proportion of their total income. As a result, local authorities able to raise more of their own revenue from council tax will receive bigger grant funding reductions than they would have received under the previous methodology. The Government has provided additional funding in the form of a transitional grant of £150 million in both 2016/17 and 2017/18 for councils that were most adversely affected by the change in the distribution of RSG. The reduction is based on an assumption by the Government that the council tax base will continue to grow at the same rate as it did from 2013/14 to 2015/16. New Homes Bonus will be outside this process and unchanged.

The Secretary of State announced that he would conduct a review of needs. This will dovetail with the introduction of 100% business rates retention (which the Secretary of State strongly implied to be in 19/20) and could be used as a transition mechanism earlier.

Recognising that council services in rural areas face extra costs, the Secretary of State proposed in the provisional Settlement that the Rural Services Delivery Grant (RSDG)  should be increased from £15.5million to £20million in 2016 to 2017 and to £65million in 2019 to 2020. However, after the consultation period, the RSDG is to increase to £80.5m in 2016/17.

Geographical analysis
The total value of the Settlement coming to the three northern regions is £5,470.64million. This equates to 30.4% of the total England figure. Notwithstanding this, the North East, North West and Yorkshire and the Humber are three of only four regions that have seen a decrease in their Settlements on 2006/07 – London having seen a significant reduction in their grant.

Table 1: Regional allocation

  Settlement Funding Assessment (£m) % change
2006-07 2016-17
East Midlands 1265.32 1287.34 1.7%
East of England 1187.17 1242.64 4.7%
London 5740.28 4555.10 -20.6%
North East 1103.00 1078.99 -2.2%
North West 2643.36 2640.06 -0.1%
South East 2003.65 2132.74 6.4%
South West 1285.61 1331.76 3.6%
West Midlands 1908.44 1945.78 2.0%
Yorkshire and The Humber 1821.31 1751.58 -3.8%

Yorkshire and the Humber (-3.8%) was the hardest hit of the northern regions, while the North East saw a reduction of 2.2% and the North West, 0.1%. In total, £97million was lost to the North over this period.  In terms of regional share of the total Settlement, all regions outside London benefitted at London’s expense to a greater or lesser extent. London’s share fell by 4.9%. As table 2 shows, the South East benefitted most (+1.3%), whilst Yorkshire and the Humber’s share of the total Settlement grew by only 0.1%.

Table 2: Share of Settlement by region

Share of England Total Change in share
2006-07 2016-17
East Midlands 6.7% 7.2% 0.5%
East of England 6.3% 6.9% 0.7%
London 30.3% 25.4% -4.9%
North East 5.8% 6.0% 0.2%
North West 13.9% 14.7% 0.8%
South East 10.6% 11.9% 1.3%
South West 6.8% 7.4% 0.6%
West Midlands 10.1% 10.8% 0.8%
Yorkshire and The Humber 9.6% 9.7% 0.1%

Typically urban authorities derive a greater proportion of their funding from central grants due to having greater social and economic needs, and so receive larger sums of deprivation-targeted grants. It is perceived that county and district councils tend to have fewer deprived areas and so receive small amounts of grant. Table 3 below shows the level of grant for different authority type and how these compare with 2006/07 grants.

The table shows that metropolitan authorities received the greatest proportion of the total grant (26.4%), followed by shire counties (22.7%) and unitary authorities (21.1%). The data also shows that the shire county allocation is the result of a significant increase on the 2006/07 figures. This is despite there being fewer shire counties post 2009. All other types of council with the exception of unitary authorities (+4.1%) saw a reduction in Settlement.

Table 3: Settlement by Authority Classification

2016/17 Settlement (£m) % of total Settlement % change on 2006-07
Shire County 4085.33 22.7% 29.7%
Shire District 789.80 4.4% -47.9%
London Borough 3398.55 18.9% -7.5%
Metropolitan District 4751.58 26.4% -3.4%
Unitary Authority 3784.20 21.1% 4.1%
GLA 1156.56 6.4% -44.0%

Maps 1a and 1b below illustrate which district authorities and which shire counties have seen an increase and which have seen a decrease in their Settlements between 2006/07 and 2016/17. Map 1b shows that Cambridgeshire was the only shire county that saw a fall in grant (-0.9%). All three shire districts in the North (Cumbria, Lancashire and North Yorkshire) benefitted by an increased Settlement.

Despite this, all shire districts in the country saw a decrease in their Settlement. Furthermore, Map 1a shows that only eight of the 36 metropolitan districts nationally (22%) received a higher Settlement than in 2006/07 (six of these were in the North). However, unitary authorities fared better with 39 (70% of the total) having a higher Settlement. Only 13 of these were in the North, however.

District change 2006/07 – 2016/17

District change 2006/07 – 2016/17

 

County change 2006/07 – 2016/17

County change 2006/07 – 2016/17

 

Per Capita
Since 2006/07, the population of England has risen by more than 3.5million people and the Settlement to local authorities has fallen by £990million over the same period. As a result, the Settlement represents a change in spending power from £373.43 per person in 2006/07 to £300.76 per person in 2016/17.

Table 4 below shows how the per capita allocation has changed in the regions over the last ten years. London’s relatively large population growth (over 1million) and disproportionate fall in Settlement, has resulted in a per capita reduction of over £230.

Table 4: Settlement per capita

Per Capita Settlement (£)

Change on 2006-07

2006-07

2016-17

East Midlands

289.93

277.60

-12.33

East of England

211.75

206.47

-5.27

London

764.11

533.47

-230.64

North East

431.58

412.03

-19.55

North West

385.71

370.12

-15.59

South East

243.23

240.34

-2.88

South West

250.57

245.56

-5.01

West Midlands

355.61

340.57

-15.04

Yorkshire and The Humber

354.17

326.79

-27.39

In the North, Yorkshire and the Humber councils are worse off by an average of £27.39 per person. In the North East, that figure is £19.55 and in the North West, £15.59. All regions saw a per capita decrease but in comparison to London and the North, some areas the fall was by as little as £2.88 (South East) and £5.01 (South West).

The North West authorities of South Ribble (£28.92) and South Lakeland (£28.98) have the lowest per capita Settlement in the North. Meanwhile, Liverpool (£573.17) and Blackpool (£539.82) have the highest per capita Settlement.

Offer for future years
Responding to a local government request, the Secretary of State set out indicative figures to allow councils to apply for a 4 year budget, extending to the end of the current Parliament in 2019/20. This was designed to allow councils to formulate ways to translate this greater certainty into efficiency savings. Giving councils the option of longer-term funding Settlements is significant and is seen as an important step towards the financial certainty councils need to run high quality services.

The Government forecasts the total funding available for council services to be broadly similar in 2019/20 as it is now. However, by 2019/20, indicative figures show that the LG Settlement to local authorities will be £13.9bn – a 22.3% fall on the 2016/17 Settlement. All local authorities will see a reduction in their Settlement on 2016/17 figures with the exception of the Greater London Authority (3.6% increase) and the Isles of Scilly where there will be no change. The combined indicative Settlement for the three northern regions stands at £4.3bn, a fall of 21.2%.

The cost pressures, and reductions in the first two years of the Settlement, will mean that many councils will still need to find savings elsewhere, make significant reductions to meet funding gaps and may have to ask residents to pay more council tax. Indeed, allowing councils the flexibility to raise Band D council tax by the maximum of £5 or two per cent will help mitigate some of the additional funding pressures they face in 2016/17 and beyond.

Conclusion
The offer of four-year funding Settlements, with council tax and localised business rates playing a more important role than RSG is a positive development. In the longer term, local authorities will hope that the move to full business rates retention is done in a well-considered and collaborative way and the presentation of the Settlement still includes the rather optimistic assumption that council tax base growth will be about 2% per year, however. Furthermore, with the ending of the transition grant the recipients will face sharp funding cuts in 2018/19.

The publication of the final LG Financial Settlement shows that the majority of lower-tier authorities have seen a reduction in the Settlement they have received from DCLG as Government continues to address the deficit. However, most shire counties and many authorities providing upper-tier services have seen their allocation of funds increase on their 2006/07 figures.

This and the indicative figures to 2019/20 suggest that local authorities will continue to face severe pressures on their budgets and therefore on the services that they provide to their residents.

Briefing Prepared by
Barry Turnbull, Policy Services Officer
barry.turnbull@northern-consortium.org.uk

Universal Credit Research Update

The first round of surveys for the NHC’s Universal Credit research is now complete and data analysis and report writing is underway. The project is designed to collate intelligence around the on-going issues for participating organisations and their tenants/residents during roll out of Universal Credit.

The next project milestones will be:

  • Publication of Report 1 (May)
  • Round 2 survey distributed (June)
  • Focus Group 1 (mid June)
  • Publication of Report 2 (July)
  • Round 3 survey distributed (September)
  • Focus Group 2 (end of Sept/beginning of Oct)
  • Publication of Report 3 (October)
  • Round 4 survey distributed (December)
  • Potential Focus Group 3 (Beginning of Jan)
  • Publication of Final Report (January)

Evidence collected throughout this project will be used to engage with DWP officials to raise members’ concerns of procedural issues in the early stages of the new regime. It is important therefore, that as many members participate as possible so that we can take a robust evidence base to these discussions. Please watch for announcements in future editions of the NHC eZine of the next round of the survey and submit your evidence here.

If you would like more information on this research or if you would like to discuss how NHC can help you with your research needs, please contact Barry Turnbull, Policy Services Officer on 0191 566 1030 or at barry.turnbull@northern-consortium.org.uk

Regional Policy Network Round-up

The NHC as a membership body, facilitates three regional Policy Networks across the North East, North West and Yorkshire & Humberside. The North East Policy Network has been up and running for many years, and recently has grown and attracted interest from even more members across the north east.  The Yorkshire & Humber and North West Policy Networks are very new, and have met once to date with a second meeting for each scheduled in the next coming months.

The Policy Networks provide NHC members the opportunity to come together on a quarterly basis, at different member venues in each region to network and discuss policy developments and what they mean for each region, challenges and approaches to mitigate their impact on business, tenants and communities, and good practice.

Across the three networks there were shared concerns which included:

 

Universal Credit (UC) 

  • Huge concerns and challenges around inconsistency of messages from DWP/JCP
  • Organisations need to increase staff time and resources to manage the small number of current cases and time spent on each one. This will not be sustainable going forward as UC is fully implemented.
  • Concerns around the Full Digital Service and how this will be managed by each local JCP office. What about those who can’t access the service for various reasons? What support will be in place for them? Will this delay their claim/payment?
  • Relationship with local DWP Partnership Managers largely positive. However there are issues with the Service Centres – are the messages being communicated to the relevant colleagues there?

 

LHA Cap

  • Members are currently carrying out various impact analyses and modeling different scenarios.
  • Seen as a high business risk across the sector – high rise stock and supported housing poses the greatest risk to businesses.
  • Ways to mitigate the impact of the LHA cap include reviewing allocations and tenancy policies. What do these look like? The introduction of affordability checks and refusing tenants who are unable to afford it will cause problems.
  • The general view is that no-one really understands what the effect of the change will be and that the impact probably won’t be known until it actually happens. Often, tenants will only deal with financial changes when they actually hit, as was the case with the under occupation charge.

 

1% Rent Reduction 

  • Has had a huge impact on businesses. Many organsiations are experiencing staff cuts and restructures.
  • Many members are carrying out reviews of non-core and core services, looking at costs and benefits.
  • Developments are being stalled until a full review of business plans is carried out

 

Benefit Cap

  • Identifying tenants who will be impacted is a difficult process as the sector does not collect information on tenant income.
  • Some members are contacting those that were affected by the £26,000 cap and informing them of the up-to-date changes.
  • Some members are visiting households potentially impacted.

 

This is a summary of some of the discussions that have taken place to date across the networks, for further information on the regional policy networks, please visit http://www.northern-consortium.org.uk/services/policy/working-groups/

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Delivering New Homes – A Future Off-site?

This is the first in a series of briefings, produced by the Northern Housing Consortium, covering off-site manufacturing and modular housing and the role it might play in addressing the shortage of new homes in the UK.

The briefings will cover the many aspects of off-site construction including the financial case, accreditation, sustainability and energy efficiency. This first briefing will give an overview of off-site construction and take a look at its potential impact on social housing.

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While the Government has outlined a number of housing related policies and initiatives aimed at increasing home ownership and addressing the affordability crisis, underlying it all is the severe shortage of new homes. For decades, housing supply has failed to keep pace with increased demand due to a longer life expectancy, immigration and a rise in single occupancy households. It is estimated that an increase of two or three times the current supply is needed to close the gap. Or put another way, around 250,000 new homes each year for the next 20 years and the Government has set an ambitious target of 1 million new homes started by 2020. To achieve this target, the Government is focusing on three key areas: building houses on scale and at speed, SMEs, and innovative technology.

Building new homes at the scale and speed needed to meet the nation’s needs is a challenge for a construction industry hit hard by the recent economic downturn.  The sector, which has seen massive consolidation over the last eight years, now has to contend with a significant reduction in skilled labour and a brick shortage. It is clear that tackling the housing shortage is going to require some innovative solutions and off-site manufacture (OSM) could be the key to accelerating the delivery of new homes.

So is off-site manufacture really innovative? Well, no. Pre-fabricated housing has been around for over a century and was used in large numbers in the mid-20th century to quickly replace housing stock destroyed in the Second World War. Since then, it has suffered something of an image problem and developers have tended to stick to more conventional onsite construction for residential developments. Innovation has of course, continued in off-site manufacturing and it has come a long way since the post-war prefabs of the 1950s. New OSM technologies have been used widely for hotels, offices and student accommodation.  Modular off-site construction is commonly used abroad and is the standard form of construction in many countries. Now, the depth of the current housing shortage has forced developers in the UK to take a fresh look at off-site manufacturing.

Politicians and the construction industry alike have expounded the virtues of OSM in recent years. Speaking in 2014, Brandon Lewis MP, Minister for Housing & Planning, insisted that not only would off-site construction methods improve the quality of homes, it would deliver them faster and he urged the sector to embrace modern construction methods. According to government figures, the offsite construction sector currently accounts for around 7% of total construction output in the UK and is worth more than £1.5bn to the economy.

If proof were needed that OSM is moving up the agenda, the institutional investment by Legal & General into large-scale off-site manufacture demonstrates its belief that the market is set to grow. Legal & General Homes are poised to open an off-site manufacturing plant using cross-laminated timber (CLT) in Leeds – the first in the UK. With a capacity of 3,000 units every year, it will also be the largest in the world to use CLT.

 

What OSM technologies are available?

Volumetric units – 3D modules fully assembled in a factory (the term “modular” is used to describe load-bearing units). The units can arrive onsite with electrics, plumbing, kitchens and bathrooms all fitted.  They can be decorated and even leave the factory with curtains hanging.

Cross-laminated timber – Used by some manufacturers, CLT has outstanding structural performance, zero deflection when moved to sites and requires no plastering.

Panellised systems – This system involves the on-site assembly of flat panel walls, and cassette floors and roofs. Systems range in complexity from simple timber or light steel frames (open), to more complex factory finished units incorporating insulation, lining, doors, windows and services distribution (closed panels). Panellised systems can be used for refurbishing existing properties using a ‘wrap-around’ process and Accord’s OSM business, LoCal Homes, has used this method in a real feat of engineering to refurbish individual flats as part of a block.  This could offer a solution for housing associations in northern regions where the quality of existing stock is often seen as a problem.

Hybrid – A ‘best of both worlds’ approach combining the benefits of modules for highly serviced areas like kitchens and bathrooms with the flexibility associated with panellised construction for other spaces.

 

CAD/CAM Design & Manufacture

Computer-aided design and computer-aided manufacturing software are used to produce highly accurate and precise structures from wood, steel or concrete. 3D modelling enables a fully completed building to be visualised before its construction. This allows for the complete traceability of components making it easy to identify parts for maintenance schedules.

Such precision means that modular units are able to be almost completely airtight. The window voids on Legal & General CLT modules are predicted be to within 0.1mm accuracy which means there is no need for foam or draft excluders. Working to such tight standards requires extra care at the design stage to ensure a high level of accuracy and close collaboration between project management, architects, site contractors and the off-site manufacturer is crucial.

The use of CAD/CAM has also enabled mass customisation which can be achieved at relatively low volumes, giving developers a greater degree of flexibility to meet specific needs.

 

Benefits

Speed – The obvious and perhaps most significant benefit to OSM is the shorter build time. The clean, controlled factory environment allows for a much faster build without the inevitable stoppages for bad weather. It also allows for site preparations and foundation work to be carried out simultaneously. From the point at which plans are submitted to the factory, a volumetric build can be ready occupation in around four months and it can take as little as 48 hours site time to be put in place.

Predictability – With a high percentage of the build in a controlled factory environment, overall build costs are largely stable and predictable.

Cost – The factory setting results in consistent build quality and better quality control with fewer defects.  Other cost savings can be made through reduced preliminaries and value engineering.

Quality – Volumetric production in particular offers significant benefits by transferring specialist trades for highly serviced areas such as bathrooms, in factory conditions.  The repetitive processes within the factory ensure every component is manufactured to the same exacting standards and quality control is built in as part of the process, leading to consistent, high quality finished products.

Labour – A reduced on-site labour requirement lessens the effect of labour and skills shortages in the construction industry.

Reduced waste – Off-site manufacture means that there is very little on-site waste to dispose of and it is far easier to re-use or recycle much of the waste generated within the factory. Premier Modular (part of Waco) for example, operates a Company Environmental Management System to recycle or re-use 90-95% of their waste materials. Composite panel cut-offs are broken down and reused, timber is wood chipped and plasterboard is processed to produce fertilizer or even cat litter.

Health & Safety – Health & Safety is much easier to control in a factory environment and with fewer people on-site, the risk of accidents is significantly reduced.

Theft – There is less need for easily removable materials to be kept onsite, therefore reducing the risk of theft.

Less disruption – Off-site manufacture drastically reduces vehicle movements, dust and noise on-site, meaning less disruption for local residents.

Energy efficiency – Off–site manufacture is significantly more efficient to build and is demonstrably more airtight, reducing energy bills for residents – usually built to Code of Sustainability 4, 5 or 6.

Flexibility – Volumetric modules are supported by the four exterior walls, allowing the internal space to be easily adapted in order to meet changing requirements.

 

How will this impact social housing?

As well as the pressure on housing associations to deliver more affordable new homes, the 1% rent reduction has increased the need for new and efficient ways of working.  One significant barrier to OSM has been the capital cost premium associated with the build.  Estimates vary between 5-20% depending on scale and complexity of the development and in a sector concerned with upfront costs, this can represent a significant hurdle.

However, OSM manufacturers argue that this additional upfront cost is nullified by the reduced lead times and early revenue streams from rental income and further reduced by low lifetime repair and maintenance costs. For rental properties therefore, where the association has a long term interest in the property, the Total Cost of Ownership (TCO) is reduced and justifies the OSM premium. It is also anticipated that in a growing market, costs will come down as economies of scale are achieved. This will be particularly important in parts of the north of England, where property values are lower.

This is not holding the north back though. A group of housing associations have joined forces to form the Modular Allianz.  The group are collaborating with Salford University with the objective of establishing whether modular or off-site manufacturing can work for the social housing sector. They want to develop a blueprint that can be replicated, improving quality, speed of delivery and lowering costs through economies of scale. Working collaboratively has thrown up many challenges in agreeing standard designs and specifications but between them they have put together a pipeline of 500 new homes and work is due to start on their first 160 homes in July this year. The Modular Allianz will continue to evaluate the value of OSM to the social housing sector and have attracted interest from housing associations across the north wishing to sign up to the project.

According to a survey conducted by Inside Housing published in March 2015, over the three years to 2018, 56.8% of 22,544 homes planned by 17 of the UK’s largest housing associations will be constructed using offsite methods, including timber frame and modular construction.

 

Case Study – New Charter: Boundary Close, Mossley

Boundary CloseBoundary Close2

New Charter set out to improve an existing site by replacing old post-war prefabs with new modular construction homes as a pilot scheme.  It put together a team involving the developer, Bowsall; principle contractor, Globe; architect, JDA; employers agent, Poole Dick; manufacturer, Factory Homes and New Charter as the client.

  • March 2013 – Existing tenants were rehoused and New Charter took possession of the site
  • Off-site construction of the units allowed for site preparation to take place simultaneously. Volumetric units were finished with half render/half brick slip.
  • November 2013 – site completed & tenants moved back into Boundary Close
  • Cost: £97k per unit (£25k per unit HCA funding)

Key lessons:

  • Too many people involved. A principle contractor and single point of contact would have been easier to manage;
  • Involve the manufacturer early in the planning stage;
  • A design responsibility matrix should be included between architect and manufacturer;
  • Monitoring and evaluation co-ordinators should be moved to one camp of responsibility;
  • Get it absolutely right in planning – there can be no fine-tuning onsite.

Key benefits:

  • New Charter say their tenants are extremely happy with their new homes;
  • Build quality was so high that there was very little need for touch-ups or fixing minor faults;
  • Tenants have noticed a significant reduction in their energy bills;
  • The homes have full accreditation and guarantees and will last as long as any timber built house;
  • Even with delays onsite (largely due to building control and service installations) the development was completed significantly quicker than a traditional onsite project.

 

Into the future?

Growing demand, a reduced skills base and the need for increased quality and efficiency have created a challenge that cannot be met without changing the way we see the construction of our built environment. Off-site manufacturing is recognised as part of the solution and the market for it, in all its forms, is growing.  But the industry is still fragmented and therefore the critical mass for OSM has not yet been achieved. This may be about to change. Institutional investors such as Legal & General Homes have judged the market conditions to be right for a dramatic growth in OSM.

Traditional on-site construction is slower and more dependent on factors outside of our control and OSM offers a greater degree of control and predictability. With more emphasis on the use of brownfield sites, which are often cramped, difficult to operate in and disturb local residents and businesses, OSM reduces the on-site traffic, noise, dust and inconvenience.

OSM has the potential to supply more houses, quickly and offer more diversity in the market.  Close working partnerships between the design team and the manufacturer can deliver a better quality, cost effective, energy efficient and sustainable home with lower lifetime maintenance costs.

A question remains as to whether OSM will benefit developers in the north as well as the south. OSM in the current market commands a capital cost premium which is easier to absorb when property values and rental incomes are higher.  In some parts of the north, it is likely that OSM will not be financially viable until economies of scale bring the unit cost down.

The challenge for off-site manufacturers is to overcome old stereotypes and prejudices. They need to convince the market that the technology has moved on. After all, we are all happy to accept technological advances in other sectors, such as the motor industry, and we all accept that our cars are built in clean, dry, automated factories with quality inspections at every step of process.  We probably wouldn’t want our cars built out in the rain, so why our houses?

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The NHC would like to hear more about your experiences with off-site manufacturing.  If you have a case study for us include in future briefings or are considering a pilot scheme, we would like to hear from you.  We are also setting up an OSM network for members keen to know more.  If you are interested in joining or would like to share your experiences with us please email Policy Services Manager, Justine McGrady on Justine.mcgrady@northern-consortium.org.uk