'Allies of Aspiration' - Speech to the National Housing Federation Annual Conference
Birmingham, 16 September 2005

This is my first major speech devoted to housing since becoming Minister of Communities and Local Government, and the NHF Conference is a good place to give it. The Housing Association sector is driven by values of social justice, by commitments to innovation and entrepreneurship, and by a willingness to listen, learn and experiment - and those are characteristics that I hope I can demonstrate in my time in the job.

My starting point is that the importance of housing to the future of our economy, our environment and our communities has been seriously under-estimated. I hope we can put that right:

• because if you care about social justice, you need to care about people living in temporary accommodation; about people living in homes that lack the basics that most of us take for granted; about the people unable to get a foot on the housing ladder;
• if you care about the future of our economy and the chance for more people to share in economic growth, you need to care about removing the barriers to new supply so that the economy can grow; about making best use of the £17 billion we spend as a Government each year on housing;
• if you care about quality of life, you need to care about tackling our sink estates; about the segregation of communities divided by income, tenure, and ethnicity; about designing mixed, sustainable communities that foster respect;
• and if you care about the living standards of future generations as well as today's, you need to care about building on brownfield sites, about modern techniques of construction and design, about building homes that sustain our environment rather than deplete it.

So housing matters. A lot is at stake. Today, I want to set out how in our third term and beyond, housing policy can combine social, economic and environmental progress. And how, in order to achieve these goals, we need a fairer balance of power between the homeowners of today and the homeowners of tomorrow, between citizens and the state and between public, private and voluntary sectors.

Goals

The aim of housing policy as far as the population is concerned should not be difficult to summarise: every citizen with the best chance of securing the tenure and type of housing they want and all citizens with a house they can call home. In other words, housing markets across public and private sectors that put power in the hands of individuals; housing markets that are the allies of aspiration and social justice.

Nine out of ten people aspire to home ownership. So the first test of housing policy is whether we are widening opportunities to home ownership, removing the barriers that prevent the supply of new homes keeping pace with rising demand, pricing people into housing rather than out of it.

But Right to Buy does not mean Wrong to Rent. For those who do not want to own, or cannot afford to do so, or want to rent before they own, or move back to renting after owning, flexibility and quality in the rental sectors are absolutely vital. So the second test for policy is whether we are increasing the availability, choice, and quality of rental housing.

Finally, we also know that all people aspire to living not just in decent homes but in decent communities, bound together by shared values, supported by sense of neighbourhood, inspired by high quality design, and of course free from anti-social behaviour. So the third test of policy is whether we are we building sustainable communities that foster respect, community cohesion and social mobility.

Progress

These are challenging, complex tasks. If I were talking to you eight years ago, they would have seemed like a fantasy world, compared to a real world haunted by rough sleeping, memories of negative equity, chronic disinvestment.

But rough sleeping is down by 75 per cent; we have ended the scandal of homeless families living for long periods in poor quality bed and breakfast accommodation; and we can now focus on getting people from temporary to permanent accommodation.

Instead of 2.1 million homes below the decent homes standard, £13 billion of public funds and over £5 billion of private money has halved that number, and we can debate how to increase supply not just refurbish those that exist. Just 10% of the legacy of non-Decent Homes we inherited remain outside of the decent homes programme.

Instead of macro-economic instability, high interest rates, high unemployment and repossessions, we enjoy the longest period of sustained economic growth in 200 years, the lowest interest rates for 40 years, the lowest inflation for thirty years; there are 1 million more homeowners and we can debate how to increase home ownership in a sustainable way.

So as we put some of the problems of the past behind us, we can now focus on meeting the challenges of the future.

Challenges

In doing so, one theme stands out - the need to get the balance of power right within the housing system. For too many, there is a sense of powerlessness. The London teacher who fears she will never be able to afford to get on to the housing ladder. The tenant who does not get any choice about what council house she is allocated. The family feeling powerless to stop the anti-social behaviour of their neighbours.

As a Government, our job is to help people gain more power and control over their lives. The guiding principle is to ensure a fairer balance of power - because powerlessness is the enemy of modern democracy, breeding anger and bitterness, and fairness in the balance of power the best guarantor that we will deliver for the weak as well as the strong, for the long term as well as the present.

In our housing policy, that means using the powers of central government to ensure that all those with a role in the housing system - local authorities, RSLs, developers - serve the interests of citizens, whether they are tenants or owners.

So let me address the three tests for housing policy that I have set out.

Supply

First we must deliver a step change in the number of homes being built - both for rental and home ownership - raising environmental and design quality in the process.

The reason is simple. There are 30 per cent more households than thirty years ago. A quarter of this growth is due to people living longer, creating four generation families rather than two to three. Around 45% of new households are being created through people marrying later and divorcing more often.

But, over the past thirty years, as the number of households has risen by 30 per cent, there has been a 55 per cent fall in new housebuilding. In the four Southern regions in the last five years, 350,000 houses have been built but 500,000 households have formed.

This is not sustainable. Unless we act now to address the root causes of the problem - the failure to ensure the supply of houses keeps pace with demand - we are storing up trouble for future generations and for the economy as a whole.

That is why we fully support Kate Barker's view that we need a step change in the supply of housing.

Our first step - in the Sustainable Communities Plan - was to ensure local authorities deliver the numbers set out in existing regional plans, and to increase the numbers being built in the Growth Areas and London by 200,000 by 2016.

We are also taking up the challenge on increasing the amount of new social housing. The Housing Corporation has launched its biggest ever programme of investment - £3.9 billion into affordable homes. We've increased new build by 10,000 a year, well on the way towards the 17-23,000 Barker recommended. Housing associations are making a major contribution in this area, and some local authorities are thinking in imaginative ways about the role they can play in expanding new build.

I am not going to pre-empt our response to Kate Barker's report today, but when we publish our response later this year I can say that we will be seeking to unlock the supply of land and new house building, promote sustained investment from the housebuilding industry, and support the infrastructure of schools, health care and transport needed to ensure homes are situated within sustainable communities.

Let me also address the argument that we have become diverted into a numbers game to the cost of people, communities and the environment. I believe this to be profoundly untrue:

• there is a myth that we are refusing to recognise the need for infrastructure spend; in fact, it is precisely because we are determined to build communities and not just houses that we are not ducking the infrastructure issues, and have committed, for example, £6bn of taxpayers' money to transport and other infrastructure projects in the Thames Gateway;
• there is a myth that we are hell-bent on concreting over rural England; in fact it is precisely because we are passionate about issues of environmental sustainability that we have driven up to 70% construction on brownfield land, saving greenfield land the size of Norwich; let's get real - the whole of the Sustainable Communities Plan represents 0.3 per cent of 13 million hectares of land in England;
• there is a myth that we put cost before quality; in fact it is precisely because we know the value of good value as well as the needs of the taxpayer that all fifty proposals for the £60 000 house had to conform to proper standards and that as a result of changes announced this week we will increase energy standards in new homes by 40 per cent by 2006;

Our critics like to pretend they are the voice of the people. In fact it is precisely because we are concerned with the demands of people that we are addressing the need for new housing in an honest and open way; current residents or their representatives must not confuse their legitimate interest in the design of new homes and the infrastructure to support them for a veto power over the legitimate aspirations of future generations.

Empowerment

The second test of policy concerns giving tenants more power and choice over their housing. Traditionally, tenants had little choice over where they lived - they were placed on council waiting lists and allocated property. But now we are seeing some 80 local authorities running choice based letting where tenants have more say over where live. Our aim is to see all local authorities operating choice based systems by 2010.

Once a tenant has chosen their home, it is vital they have strong powers of redress if they get poor service from their landlord. The historic expectation was that the council tenant could do this through the ballot box. But today less than one per cent of electoral wards in England and Wales have more than 50 per cent of households in council housing. So we need other mechanisms of accountability.

In truth the biggest pressure on social landlords, whether Council or RSL, comes from regulators, inspectors and funding system. But inspectors cannot always see the world as tenants see them. That's why I believe we need to find different ways of giving tenants the kind of power that owners take for granted - so that providers are held to account from the bottom up as well as the top down; put another way, so that we shift the balance of power between top down regulation and bottom up accountability.

I know many of you feel the regulations you face are disproportionate and want a different relationship. That's why I welcome the Housing Corporation's review of the burdens facing Housing Associations and I'm pleased to say that Sir Les Elton has just been appointed as an independent chairman. I believe in being clear about outcomes and intelligent about accountability, with the unequivocal aim of supporting good performance, not micro-managing it still less strangling it in form-filling.

My promise is this. We can reduce the burdens of inspection and regulation, but you need to share power and control with tenants and put tenant involvement at the heart of your organisations. This will involve housing associations bringing to the fore the ethos and spirit of mutuality, self-help and voluntarism that characterised their early development. Let's make stock transfer not just an engine for improving the fabric of homes but a catalyst for improving the strength of community.

So as you merge and get larger; an understandable response to the drive to maximise efficiency, it is even more important to get close to your communities and work harder to empower your residents. That isn't because it's what we say you must do, or because it is good practice (although it is), but because it makes you better, more effective social businesses and housing managers.

The truth is that housing associations should neither become merely another arm of the state nor pale imitations of the private sector. It is vital they retain and enhance their distinctive contribution as value driven third sector organisations. I believe in the power of the sector; together we need to convince the general public.

Mixed Communities

So there is a full agenda. Giving people the power to get on the housing ladder. Giving those who rent more choice and control.

Let me now turn to another area where I believe we have to do more to tip the balance of power.

Too many people in this country feel powerless when confronted with daily acts of anti-social behaviour - from graffiti and abandoned cars to binge drinking and noisy neighbours.

What I want to stress today is the role of housing management in putting the law to work on the side of the silent majority of decent tenants who want to live their lives in peace.

We have extended the powers to tackle anti-social behaviour through ASBOs, injunctions and demotion orders. Eviction remains an important sanction of last resort. It is now critical that housing managers and local authorities make the best use of these powers to provide a swift response. If tenants are clear about the responsibilities they have, and the consequences of not fulfilling them, I believe the vast majority will respond accordingly.

Where necessary, extra support will be needed through Parenting Orders and other measures. But changing the expectations and norms within our neighbourhoods can be done. It requires housing associations and local authorities to give it the priority it deserves.

The drive against anti-social behaviour also requires more than catching and convicting perpetrators, important though that is. It requires us to tackle the sources of anti-social behaviour and attack the conditions in which norms of decency and respect break down.

That is why our mission must be decent communities not just decent homes - communities free of the stigma that they are 'sink estates' or 'benefit ghettoes'.

Many of you have pioneered the development of mixed tenure, mixed-income communities. But an estimated 60 per cent of houses in local authority ownership are on estates that have less than a quarter of homes that are owner occupied - an invitation for problems to multiply rather than reduce.

The goal should be clear: every neighbourhood offering the mix of housing tenure and size that encourages families to move up but not move out. That is why we have been working in Gipton, Harpurhey and Canning Town to learn about what works and showcase what can be achieved. Now we need to take it further:

• by linking English Partnerships to all our New Deal for Communities areas to help them become mixed communities, delivering new properties for sale and rent
• by encouraging every local authority to see its land as an asset to be mobilised for mixed housing use
• by promoting shared equity schemes which give people the chance to get a foot on the housing ladder by purchasing a 25 per cent stake in their home; I believe housing associations should be championing shared equity schemes
• by defending and developing the innovation at the heart of our Housing Market Renewal Pathfinders, which are seeking to breathe new life, new people, new housing into areas of low demand; the debate is not about the minority of houses that are being knocked down but about the communities that are being rebuilt
• and as we develop new private housing, let's develop mixed communities there too, as the GLA are doing with their guidelines to developers that 35 per cent of new housing should be social rented and 15 per cent should be shared equity.

Shared ownership is not a betrayal of your mission to meet need and promote social justice but a fulfilment of it. And of course we can do more than that.

Housing Associations have the assets and skills not just to provide high quality homes, but be an agent of change in their neighbourhoods. That's what the Federation's In Business for Neighbourhoods is all about and why I am strong supporter of it, whether through wardens and neighbourhood managers or youth facilities and childcare.

Delivery - the role of the Local Authority

Let me focus finally on the role of the local authority. I want to build on the experience of those authorities - for example I have seen it for myself in Sheffield - which have embraced a new and enhanced strategic role - understanding housing needs and demands, and being proactive about using all their powers and resources to meet these needs.

I recognise that local authorities have important responsibilities in respect of social housing. Tackling homelessness and supporting people to live independently will remain vital roles for local authority housing staff, working closely - more closely in fact - with social services and health. Some local authorities, like Newham and Hounslow, are using financial freedoms to build new housing. As we embark on the Comprehensive Spending Review, learning from the experience of stock transfers and ALMOs as well as the New Deal for Communities, our task in Government is to ensure that we use public funds in a way that maximises the leverage on private resources and maximises the benefits to tenants.

But as we do this work, we must remember that the local authority role is not defined by money. In fact there is a strong argument that it has been too much defined by arguments about money. The strategic role is about a range of powers and a range of assets as well as a range of funding sources. My argument is that the local authority and its powers over land use need to be at the disposal of the frustrated first time buyer as well as its powers as a landlord being at the disposal of the long term tenant.

This strategic role of the local authority starts from its ability to look at land use in an area and the operation of the housing market across all tenures - in other words to be a custodian of the community and not just a custodian of some of its housing. The strategic role is about utilising planning powers to ensure supply keeps pace with demand; about delivering on housing plans; about chasing up developers who sit on land after planning permission has been granted; about ensuring housing investment is matched with investment in infrastructure and public services by working with public services and developers.

I see this as a shift of mindset as well as a shift of thinking - so that the local authority housing department is seen as an ally of the planning department as much as the social services department. It will take skills and capacity, as well as better data on housing needs, and we in central government need to support local government in developing their strategic role for the benefit of all sectors and all citizens.

Conclusion

So this is the vision. A major step change delivered in the supply of homes so that more people can get a step on the housing ladder. All tenants getting more choice over their lettings and more power through tenant management. All communities mixed communities based on mutual respect. The best standards of design and environmentally friendly construction built into buildings standards.

Delivering this vision will require a different balance of powers and responsibilities. Central Government setting ambitious outcomes but micro-managing less. Local authorities focussed on strategy, planning and partnerships. Housing associations marrying efficiency with a third sector ethos of mutuality and self-help. Developers using the increased supply of land to adopt a more entrepreneurial and long term outlook. Citizens with more power in their hands. More power to get on the housing ladder; more power as tenants; more power to tackle anti-social behaviour.

The great philanthropist, Joseph Rowntree once said, "I do not want to establish communities bearing the stamp of charity." His vision was of housing as the foundation of a good society. I think it is an exciting vision. It is our shared vision. And one that together we must deliver.

Speech by the Rt Hon David Miliband MP, 16 September 2005

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