Slide 1 ‘Rents and Risks’ ARCH Presentation 23 September 2013 Councillor Ian Wingfield – Deputy Leader and Cabinet Member for Housing Management

Slide 2 Councillor Ian Wingfield – Deputy Leader and Cabinet Member for Housing Management The impact of welfare reform Lessons from the Direct Payment pilot Proposed changes to rent convergence Southwark Housing Commission New-build – 10,000 new homes ‘Rent and Risks’

Slide 3 Councillor Ian Wingfield – Deputy Leader and Cabinet Member for Housing Management Welfare Reform The council needs to deliver a balanced budget Without a reliable income stream service delivery may be jeopardised, loan commitments or planned projects won’t be met, borrowing becomes more difficult – reputational damage Will rent take priority or will the temptation to spend the UC direct cash payments be too much? UC is paid monthly but most of our tenants pay weekly If UC process fails, evictions will increase, council is last resort and carries the financial risk Increased void periods results in reduced rent collection Reductions in advice agency funding will affect landlords providing housing-related services - a key tool in preventing rent arrears

Slide 4 Councillor Ian Wingfield – Deputy Leader and Cabinet Member for Housing Management Lessons from the Direct Payment pilot Costs are up, rent collection is down - additional service delivery resources needed and reduced patch sizes UC process and data sharing remain undecided - needs to be automatic and automated otherwise UC will make process unworkable and open to fraud Effective delivery of support, with an outcome that reduces arrears - huge majority of tenants decline support even when in arrears, we have little evidence of support interventions that work and UC claimant commitment should include paying rent Switchbacks are increasing as tenants fall further into debt Southwark arrears on project are currently 11% Key part of effective income management – educating tenant as to exactly how much they pay, when and how at an initial stage

We optimised resources available via subsidy system by implementing rent restructuring Have always mitigated annual rent increases for tenants by applying affordability limits (RPI + ½ + £2) Under self-financing rents form over 70% of all HRA income, so any proposed change can be far-reaching The promised CLG consultation is welcome, but must address timing & scope – we need clarity Are the changes so profound that we need to lobby for reopening the Settlement? Slide 8 The end of Rent Convergence? Finance and Resources – Housing Finance Slide 5 Councillor Ian Wingfield – Deputy Leader and Cabinet Member for Housing Management

Slide 6 Southwark Housing Commission Independently run and chaired Wide-ranging brief Evidence-gathering methodology Report to Cabinet Broad options set out – what type of provider in future? Community Conversation Councillor Ian Wingfield – Deputy Leader and Cabinet Member for Housing Management

Slide 7 New-Build Proposals Some key questions we ask ourselves: What is the Council’s overall objective as a social landlord? How do we set our own direction? How is that direction affected by outside forces? 10,000 home proposal expands on earlier commitment regarding new-build Rent changes won’t derail it but they will impact on other aspects of where we want to be We want to take local decisions and be held to account locally for them Councillor Ian Wingfield – Deputy Leader and Cabinet Member for Housing Management