Lord Freud dismissed LHA flexibility for fire safety in tower blocks

My heart goes out to the people of Grenfell Tower but my stomach turns every time a minister makes a comment about us all learning lessons.

Upper_Grenfell_Tower

In fraud, crime or corruption it is the usual practice is to follow the money to find the crime.

I have been to KCTMO in the past and I am sure there will be no fraud, so in the public inquiry into Grenfell Tower (and hopefully wider safety in high rise flats) instead of following the money, they should follow the reduction in money.

The Public Inquiry should also consider each of the decisions and who made them and whether they slowed down the money stream resulting in unsafe buildings, substandard specifications, no investment in proven fire safety methods and the final tragic outcome.

As an example of slowing down the money stream is the Government’s treatment of the Local Housing Allowances (LHA) on high rise flats.

Last July, I joined a number of other Chief Executives at a round table meeting with Lord Freud at the DWP to discuss the impact of LHA and the particular problems facing councils and housing associations who own tower blocks over 10 storeys.

The people around the table mostly represented areas with low rates of LHA, like the area in which I work, Merthyr Tydfil, where the LHA for a 1 bedroom flat is £67.76 and our rent in our tower block is £69.93 (and we have the lowest rents in Wales).

It is obvious to anybody who spends five minutes looking at LHA that it is a complete mess, it is political decision to cut benefit based on little empirical evidence.

Our case to Lord Freud covered a number of points and we argued that in high rise flats:-

  • We have already made a considerable social and capital investment in them and these decisions on investment where made when 100% of rent would be paid by benefit. In England this earlier return on investment assumptions about the regeneration of high rise have already been undermined by the 1% rent cut.
  • There was an additional capital investment to make them safe and secure compared to low rise accommodation.
  • There was on going costs of maintaining and managing security and fire safety measures.

We argued that the cost of fire safety in particular needed to be charged in either the rent or service charges, and that these rents could not be compared with the bottom 30th percentile rent in the private sector against which the LHA had been set.

We argued that, in referencing our high rise rents against a poor quality private rent with questionable fire safety, did not allow us to effectively and safely invest and manage high rise flats.

We argued that low rise flats in the private sector did not have the complex security and fire safety issue such as fire panels, fire alarms, sprinklers, compartmentalisation lightening conductors and dry risers to maintain that were essential in a high rise.

We even gave the Minister a get out of jail ‘almost free’ card.

We suggested that the LHA could have a 10% flexibility for high rise flats. In the case of Merthyr Valleys Homes, our current service charge for fire safety is £0.98 per week which would easily fit within a 10% flexibility.

As the policy is currently proposed the very poorest households on benefit will have to make a contribution to rent and on top pay the service charge for fire safety measures out of their Universal Credit.

Lord Freud’s response was to do nothing and he used the same old discretionary housing payment mop up excuse.

By its name DHP is discretionary and when you are dealing with fire safety there should be no discretion on the landlord about installing fire safety measures, and there should be no discretion for the Government in the payment of housing benefit to the people who live there.

The safety of people in high rise flats is now a national issue and all tenants should have the right to the most appropriate fire safety investment and this decision should not be fettered using an NPV investment model based on low rents and low LHA thresholds.

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