Local Government and Housing Committee

Welcome, everyone, back to committee following our break. This is our second evidence session of our follow-up inquiry on social housing supply. I'm very pleased to welcome our five witnesses here in the committee room today. First of all, Craig Sparrow, executive director of development with ClwydAlyn; and we have Neil Barber, executive director of property and investment with the Codi Group; we have Clarissa Corbisiero, deputy chief executive and director of policy and external affairs with Community Housing Cymru; we have Councillor Andrea Williams of Swansea Council, who is also representing councils in Wales in terms of housing on the Welsh Local Government Association; and then finally, Jim McKirdle, who is housing policy officer with the Welsh Local Government Association. Thank you all very much for coming in to give evidence today.

Perhaps I might begin with some initial questions around context, really. Firstly then, obviously we're looking at Welsh Government's response and progress made with regard to our previous committee report on social housing supply and also the affordable homes taskforce that Welsh Government set up and its recommendations. So, how proactive do you think Welsh Government has been in responding to this committee's work and that taskforce's recommendations? What sort of progress have we seen and why?

Shall I go first? Is it the red button?

No, you don't need to—

I don't need to do anything.

No.

Sorry. I haven't been here in person before. It's a first for me.

Thank you, first of all, for the opportunity to give evidence. I think, firstly, as a member of the affordable housing taskforce, that was very helpful for me to understand how we came to those recommendations. We do feel, from a WLGA perspective, that Welsh Government have been very proactive and have listened to the outcome from that group, and the fact that an implementation group has been established in terms of the implementation of the recommendations. The WLGA are part of the group, and Jim McKirdle is our representative on that, and the recommendations are being taken forward under the headings of local leadership, system leadership, streamlining the process, short-term measures, and medium and longer terms goals and skills. I think, in addition to that, one of the very helpful things from the Cabinet Secretary's approach to this is the regional meetings that she's established. Councils and registered social landlords attend those meetings and it's good to know that we're all in the same place, on the same page, and it's good to have the opportunity, in those discussions, to talk in more detail about the recommendations. So, I think they have been very proactive from a council perspective.

Okay. Thanks, Andrea. Neil.

I'd absolutely endorse what Andrea said. I think what we've all realised is the depth of the problem that we faced in terms of the issues that were affecting supply. For those of us involved in development, we'd seen it many years before and it's great that it really is being taken seriously. We've seen a lot of effort from Welsh Government put into this. It will take us quite close to the target, which is obviously great news, but I think the important thing for all of us is not to waste this opportunity to make these systemic changes that will make such a difference moving forward, to deliver the homes that we need in Wales.

I think I'd absolutely agree with that. I mean, is the Welsh Government taking it seriously? Of course, yes, they are. There are a huge number of recommendations for Welsh Government to wade through. Some will have more impact more quickly and at a larger level than others. We would encourage Welsh Government to think about how they prioritise some of those. And exactly as Neil said, thinking about the pipeline and the long-term plan here. I think the taskforce was incredibly helpful in setting out some of those key systemic things that they think should change, if we're going to maintain this pipeline, keep these green shoots that we've worked so hard to get, and make sure that there's certainty going into the next Senedd period, so that we can really move forward and scale up as much as we really want to.

Thank you. And Craig.

If I could just add quickly, thank you. Again, a pleasure to be here today. It was really refreshing, I felt, to be involved in that, as some of us have been around for a while, trying to deliver more and more affordable housing, and to be able to have the key people around the table in the room, discussing these things, maybe long and short term, was really refreshing, to be able to do that and actually get somebody to put some ambition into delivering more homes for people in Wales. So, there was a lot that came out of it, a lot of detail, and we worked really well with officers and members of Government. I just think it was one of those experiences where we really got a chance to be able to, from a grass-roots level, look at the issues of what's stopping us from delivering more at pace.

Okay. If we move on then, Clarissa, Community Housing Cymru are in favour of a national development corporation, which this committee also recommended. That was rejected by Welsh Government. What are your thoughts on that? Just how important would it be to have that corporation? How significant is it and how disappointing is it then that it's been rejected?

As you say, we are supportive of that as a recommendation; we think it's a really sensible enabling recommendation that takes us into the long term. At its core, what's really helpful about it is that I think it really picks at some of the challenges that we've got around scale. So, yes, there's a land division within Welsh Government doing great work on exemplar sites, but we think that a national development corporation or, indeed, whatever you'd like to name it, but a body with a sole function that is about scaling up the supply of land, providing additional support, technical expertise to local authorities when they're trying to deal with complex regeneration schemes and de-risking sites. We think that that's a really important contribution to the debate and should be part of a long-term plan to solve the housing emergency going forward.

I think if you look at the experience in other nations, there's experience across the UK where this has worked well, actually having an agency or a function with that sole purpose to be able to go and hold different departments, different agencies to account. With the best will in the world, this is never going to reach No. 1 in their top list of priorities, because they're busy and stretched. So, we think it could make a real difference to act as an enabler overall, really bring more land into the system, which would make a huge difference.

Okay. Is there general agreement with that? Andrea.

Yes, absolutely. Anything that will unlock land is something that we'd be very supportive of. I think it's important that we acknowledge that even though councils do have land banks and sites, they're not always in the areas where there is a deficit of affordable housing. For example, in Swansea, we have very little land in Gower, and it's hugely unaffordable there, and young people growing up can't afford to purchase homes in the place where they lived.

But I will mention from a Swansea perspective, the land and building development fund has been hugely beneficial. So, long may that continue.

Yes, okay. Anybody want to add anything? Craig.

I'd like to bring in the other dimension to that as well. Housing, yes, but a facility like that to create more jobs, employment in the same areas to build those communities, rather than just housing alone. I think some of us have probably seen in the past areas where we've got both, we've got mixed-use sites, reducing travel for people to get to work and those opportunities. I think that could also be beneficial, doing that.

Yes, okay. Lesley.

Thank you very much. Thanks, Chair; good morning, everyone. Looking at the 20,000 target that the Welsh Government set for this current term, they say they'll fulfil that by the end of this calendar year. I see you're all nodding. Are you in agreement that they will achieve that? And is there anything additional that needs to be done to make sure they do?

I think the key here, actually, is about maintaining progress, protecting the pipeline. What does that mean in practice? It means ensuring that the funding continues to flow through. It means there are some very clear blockages currently in the system. I'm sure we'll touch on marine nitrates during the course of this evidence session, but our work with housing associations in west Wales shows 2,000 homes currently stalled. Nine hundred of those are at a later stage of development. Just to put that in context, in west Wales there are 1,600 people in temporary accommodation. So, it's absolutely enormous.

So, it's not without its challenges, but what can Government do? It can continue its focus on providing sufficient levels of the social housing grant and the transitional accommodation capital programme. I think setting out, certainly early in the new term, a clear ambition to continue at at least this scale, but to scale up significantly. We certainly agree with the committee's recommendation that around 20 per cent of homes in Wales should be affordable. We think that's where we should be aiming.

Just to add to what Clarissa said, I'm sure we're going to mention multi-year settlements and certainty around financial planning a number of times during this session, and that's certainly something that all landlords and developers will want to see in that certainty, but there are some smaller elements of support that have been provided by Government. I'm thinking specifically about support for local authorities through the local authority development programme—relatively small, but very important in encouraging councils to share good practice, share knowledge, and develop the skills that have been missing for many years when we've not been developing. Another project, Tai ar y Cyd, is an example of RSLs and councils working together to look at pattern-book developments, to smooth development and make them happen. So, there's a myriad of support that the Welsh Government have put in place that form part of a jigsaw, as part of this whole that Clarissa's referred to to take forward. So, steady as we go; let's do more of the same.

I think over the last two years, everyone's been focused on getting as close to the target as possible. It really has created the art of the possible, and we've seen lots of flexibility from the Welsh Government. The RSLs and development in local authorities have certainly stepped up to the plate. I believe we've created a really positive platform to take this forward in the next Senedd term. And as I said earlier, I just think it's so important that we take all of these steps to make sure that we're not in this position in five years' time.

If I can come in from a council perspective, I think, yes, we're confident we'll hit the target. We have really risen, I think, to the ambition. It's been hugely helpful—. As Jim referred to, we weren't building council houses, we haven't done for a long time, and it is still a steep learning curve. But we've learned a lot from our partners, from RSLs, and that collaboration has been really critical.

Also, in Swansea, we formed a developer forum where we could talk about the challenges and how we overcome them, and finding that RSLs and councils have similar challenges, so that's been really helpful. But we're also looking at all different types of delivery, all different models—for example package deals, where a private company will come in, do all the work for us, and then at the end, we purchase the property and the land, they take all the risk. There are lots of different things—joint ventures. There's a huge amount of tools in the box that we're working on. I think we will continue to do that.

I'm pleasantly surprised that we've hit the target, because as a cabinet member, I did have my doubts. I thought this is a huge challenge. But thanks to working with our partners, we will hit that and exceed it, because we know the figures very well; we're very well versed with previous committees that I've attended talking about the numbers in terms of homelessness. We absolutely need to keep our focus and our eye on the ball with that.

Both of you mentioned the TACP social housing voids, and a third of them that are funded from that are that. And obviously, they're not new houses within that target. Have you got any concerns about that? Do you think it should have been included in the target?

We agree with the taskforce recommendation about voids being included. In all reality, a long-term void has, we agree, ceased being part of the social housing stock. They're not places that people can live well anymore. If you look at the journey of scaling up to this level, the target has done its job: it has focused minds, it has focused resources, it has created a spirit of collective ambition. We've also had to be agile. There's been a huge amount of challenges facing delivery. Including voids in this way—. They don't contribute a huge amount overall to the target, but they are a helpful and pragmatic response, I think, to the overall outcome, which is making sure that there are more good-quality, affordable homes for people in Wales to live in. So, I think we're supportive of that.

My final question is around social housing landlords' appetite for building new houses. Again, if I can start with you, Clarissa. Are you aware of any barriers? Do you think some are more keen than others? What are you doing to make sure that universally they are keen to do this for us?

Overall, absolutely, we've seen a huge scale-up in appetite and delivery, so an increase overall in delivery of 79 per cent since the beginning of the Senedd period. And of the overall numbers, we're seeing housing associations deliver 75 per cent of those affordable homes. Our role in that is to support and help create the enabling conditions for associations to do more. Are there barriers? Yes, absolutely, there are. Some of this, which I'm sure we'll talk about during the committee, is about competing priorities, shared levels of risk, making sure that all housing associations are supported to play their part in whatever way they can. But it's a diverse sector, from our largest member, Codi, to those that provide very specialist services, which are equally valid and important and play a huge role in the community. And it's for those individual independent organisations to take a view on how they can best contribute to support their community.

I believe there's a very strong appetite. All RSLs that I'm aware of are really aligned with what the Welsh Government want to achieve in terms of delivering the homes that we need. In the last couple of years, we've seen, in response to COVID and supply-chain pressures, a huge increase in the level of collaboration between RSLs to address development challenges and also working with the developing local authorities as well. It's been heartening to see the level of engagement from the Welsh Government housing team with that group—so, not to just sit in a forum and talk about the problems, the issues, the difficulties, but to try and come up with practical solutions that have made a real tangible difference. As we move forward, I think the sector are looking for this platform to move on from here, because we want to do more, we want to do it more efficiently, we want a more strategic approach to delivery, moving forward.

If I could add to that, the ambition is definitely there. Some RSLs have actually taken some risk in terms of short-term land acquisitions too, which could be allocated sites that don't have detailed planning, and building up that supply of those sites. Because we can't do them all at once—private finance is usually the one that would stop in the business plan, so you'd need to plan that out carefully and cash flow it in your business plans. But the ambition to do that is definitely there. Some of the mechanisms of the Welsh Government, where we're able to access funding to do that, are really enabling us to put that pipeline of projects forward so that we can deliver them steadily over a number of years, and sustainably. Because, obviously, each association will have its own particular financial constraints and business plans. It needs to fit in with that—with the rest of the operation of the business. But there's definitely a lot of ambition there to be able to do more and also apply innovation to how we deliver them as well.

Funding routes, for example, like the land for housing fund, have been a godsend in that respect. It's fantastic that, over the decade that has been since it was introduced, it's evolved and expanded, and the amount of money that can be accessed through that. As Craig said, when we're taking these steps on large strategic sites, which will massively aid delivery moving forward, the ability to access that funding is hugely reassuring for our board when they weigh up the overall challenges facing the sector.

Alongside that, what is the WLGA doing to challenge your members to make sure that they're a part of this and that they're bringing forward a pipeline of schemes?

I think that, over the last five or six years, we've seen unprecedented numbers of people in temporary accommodation, for example, and the need to challenge authorities isn't really there in that respect. They get that, in terms of the need to provide homes for all in housing need, but with that particular focus on those in temporary accommodation.

The conversations with RSL partners, I think, have moved on, as colleagues have identified, over the last five or six years—there's been a much greater integration of supply issues with the challenges around homelessness. For example, there are regular discussions at the ending homelessness national advisory board, focusing on housing supply and the detail about how that can contribute to that. So, we've seen a much more integrated picture of need and the role that supply can take in meeting that housing need over the last five or six years. So, it's quite encouraging from that respect, but lots more to be done.

Perhaps if I can add to that, all 11 stockholding authorities are building right now, and the other 11 are working very closely with RSLs in terms of delivery in their council areas. So, there is definitely an appetite and an ambition to do more. And we recognise that we have to do something quite radical, really, and perhaps increase the scale and the pace of delivery, given the numbers of people who are in temporary accommodation at the moment, which are just going up and up. Thank you.

Thank you, Chair.

Okay, Lesley. Peter Fox.

Thank you. Good morning. There seems to be quite a positive message that the ingredients are in place to take forward and deliver more housing, but we all recognise that there's nowhere near enough housing coming forward. I just wondered if there were other Welsh Government policies or other policies that are still standing in the way of increasing supply. So, if you could level those, it would suddenly unlock things.

Perhaps if I can come at that from a council perspective and as a member of the taskforce. I made that point very clear, that if we continue to dilute our delivery in terms of trying to meet other objectives, we are not going to hit the targets for new build that we need, because we only have a certain amount of resource. For example, for the Welsh housing quality standard round 2 for Swansea, it's estimated it will cost £900 million. Is that really what we should be focusing on when people are homeless and there aren't enough homes? So, I don't disagree with the ambitions of the policies, but what I'd like to see is a timeline in terms of delivery so that we can focus at this point on the emergency and the housing crisis, and perhaps look at those when we're in a better, more positive, stronger position with more social housing that's been delivered.

We would completely agree. What we're seeing is absolutely huge system change on so many fronts at the moment, and where it all comes to roost is actually in the business planning and the capacity of delivery organisations, like housing associations and local authorities. And actually I think our message would be if you can plan it and phase it, please do that, and if you can build in certainty, that really helps. We've seen some examples of that. A 10-year rent settlement helps build some certainty across the business plan, but actually what we're seeing, and this committee will be well acquainted with this, are enormous technical Bills coming through that require huge system change, on top of things like the WHQS and things like the Renting Homes (Wales) Act 2016. And so making sure that we give the same kind of effort and energy to thinking about implementation and what can be borne by delivery organisations as we do about policy and ambition I think is a really important message for Government.

Were you suggesting, Andrea, that the housing quality standard is a little bit too ambitious? We had a conversation in an earlier session that aiming for that gold standard is perhaps holding back the delivery of a lot more houses, which could be delivered far quicker if there wasn't such an ambitious expectation.

I think, first of all, perhaps it would be interesting to understand what the tenant voice is in all of this. What's their priority? Is it their priority to have their home reach EPC A, or is it to have the existing maintenance and repairs that are much needed? Should that be the focus? As a council, we have reached 70 per cent in terms of the Welsh housing quality standard round 1. We need to acknowledge that we've got 30 per cent, therefore, that doesn't reach the standard. Let us focus on that first, because surely we shouldn't be going back around and doing things again when we haven't finished what we started in round 1. Yes, I think it's important that we acknowledge climate change and the crisis, the cost of energy and reducing people's energy bills, and we're all about putting solar on roofs and making properties more energy efficient, and that should be our focus, but there are some things in the standard that do feel a bit above and beyond. I think that we need to be a bit more pragmatic about what's actually a priority to make homes better for our residents.

Is that a view that's shared?

I don't know if Siân wants to come in.

I just wanted to drill down a little bit more into this, because I think it's important. Are we making the difference between new build and retrofitting and acquisitions, or are you saying that the standards are too high for all of those? Are we thinking of tweaking some bits of the system? Would that help?

I think it really would help to soften those targets a bit. For example, when you talk about acquisitions, there are a lot of properties that we simply wouldn't acquire because no amount of investment will let those reach the standard, and, surely, a home is a home. And when we're talking about slightly smaller rooms, is that really something that we should be focusing on?

But on the new build, we heard evidence earlier on that, surely, we should be building new homes now that don't need to be adapted later on. So, I think we need to be clear and have clarity about what we're talking about—which types of homes we're talking about, which types of standards need to maybe change.

You mentioned a number of things there. You mentioned things like retrofit, new build, existing stock. Going back to the question about investment in stock—the WHQS, that's a big number for all of us. That does inevitably affect borrowing and your investment planning. So, that does put pressure on there.

On the other things you mentioned, I think we're all quite proud of what we're doing in terms of new build right now, with the sorts of standards that we deliver, and that you don't have to go and change them later on. We don't want to be back in the same position in 10 years' time, retrofitting properties, if we can help it. So, I think the way, personally, I approach it is: what can we do to that property within reasonable investment that makes it cheaper for people to live in? That's what they want at the end of the day—warm and safe, and cheap to live in. And I think the standard on new build is great. It isn't all about energy performance certificates, because some of the things we do don't affect the EPC, but do reduce running costs for people that live in them. But there's a number of areas there that you could drill down into.

Just to add a couple of points, because I do agree that we need absolute clarity on this aspect. I think with new build, we'd all agree with you—we don't want to be building new homes that we need to go back and do further retrofit work to in years to come. We think there is a debate, possibly, to be had about space standards, in terms of how many of our social and rent customers actually need the lifetime homes element of the homes that they live in, because, often, that will be adding nearly 10 sq m of extra floor space, at £3,500 a square metre, on two and three-bed homes. So, that could be a debate. There is a challenge that we're seeing in the urban areas about building multistorey developments and achieving EPC A, and perhaps we need some flexibility there.

With regard to the WHQS, we're already seeing some flexibility, aren't we? On the first introduction, in terms of the target for when we needed to achieve EPC A, when we talked to our board about it, they were really concerned about that, because like lots of RSLs and local authorities, we do not want to be forced between investing in the quality of our new homes and delivering new. We want to do both, and we're really keen to do both. So, I think, now that the investment in the existing homes can be informed by the target energy pathways, we can have sensible discussions about how that can be funded. It's great that we're having support through the optimised retrofit programme. We're learning a huge amount through that, and I do think the point that Andrea made about the customer voice within this is huge, because the level of disruption to get to the previous iteration of WHQS within a customer's home would have been hugely disruptive. So, I see an increasing sense of pragmatism in that area.

And I think the ORP programme has helped to significantly crack two things there. Some of it is WHQS, but some of it is retrofitting poor-performing homes. So, we've been able, through proper asset management, to target that money where it's best needed for the worst-performing homes. And some associations have a fairly good spread of homes. A lot of them are in good condition and are energy efficient. But targeting it to the worst ones, and with TACP grants and WHQS, building it into your asset management plan, you can improve them significantly. It's the longer term, it's the £100 million, from my perspective, on WHQS, to hit everything for EPC A by the deadline, that's the issue, and how that fits into our business plans and how we're going to afford that.

Okay. And Andrea.

Thank you. From a council perspective, I think it's worth noting that Swansea have gone above the standard in terms of our new home builds. So, we've developed a Swansea standard that exceeds the Welsh housing quality standard, because we recognise that we want good-quality properties for our tenants in terms of energy efficiency.

And coming back to Jim's point about the pattern book, I think that is something that we could really—. I've felt strongly about this for quite a long time—if we're all in the same space asking for the same quality, the same materials, the same build type, then that could give certainty to the supply chains and local SMEs, and hopefully bring economies of scale, bring those costs down. So, I don't think we should roll back on the standards. I think we should continue as we are on new build.

Joel.

Thank you, Chair. It just brings me on with what Councillor Williams was just saying there, then—. So, obviously, in my role as a Senedd Member, we visit a lot of new housing estates that have been built, and the thing that strikes me the most is, when I have a tour with a construction company, they all say, 'Well, these are the social or affordable housing allocation'—and they'll have heat source pumps, they'll have solar panels—'and then this is the private market.' But they have the bog-standard boilers, they don't have the heat sources. I just wanted to know, is that something that you've picked up? Because that, to me, highlights, then, that there's an unsustainability with that. If they're saying, 'With the private market, it isn't necessarily going to be heat source', or 'It's too expensive for us to do that', won't that have an impact, then, on the social housing market in the long run? I find that quite odd, because we're talking about acquisitions and repurposing houses. If new houses aren't being built to the standard that we're expecting for social or affordable housing, are we making a stick in the future to hit ourselves with, if that makes sense?

Andrea.

Just to come in, briefly, on that, I actually visited private developments last week that actually had solar and air-source heat pumps and ground-source heat pumps on their sites. So, we are seeing private developers doing that and having a good moral compass for the benefit of the people who are purchasing those homes as well as the social housing on that site.

How across the board do you think that is, then? Because that would strike me as a rarity, if that makes sense. When I've visited housing builders who pride themselves on that, that's what sets them apart from their competitors. But the vast majority of them—we're talking about the big multinational ones now, not SMEs—don't go down that route. It's only to make their social or affordable housing allocation.

They don't have to, whilst you have to. It's regulation, isn't it?

You would have definitely seen that over the last couple of years, and you'll still see some of the run-off of it, because, for developers, they have to work to a margin. If they don't make a margin, then they can't continue. But there's a couple of things that are changing that. So, moving forward, anything that's being developed, moving forward, and over the last year, on lots of developments, they can't put gas boilers in anymore, so they have to go down a renewable energy source.

For us and other RSLs, when we're developing at scale, we're really keen to do mixed-tenure developments because we want to create communities that can thrive. So, we will look to try and harmonise standards as much as we possibly can. There have been some good examples with Welsh Government that funded the innovative housing programme, which has allowed RSLs and some local authorities to invest and take all homes on a development up to a standard. And I think that also the Welsh Government land division have looked to take that approach on a number of the sites that they're bringing forward, such as Cosmeston. So, I think we will see a greater equalisation of standards, a lot of that driven by building regs, but there's still likely to be a difference because of the margin pressures that developers are under. Perhaps land could form part of that solution in breaking that.

Sorry, go on, Craig.

I agree with that. It's a good point because the debate on why private houses are smaller than public houses has been around a long time. And I think the innovation has got cheaper over the last few years. I've seen a number of developments with those technologies in there. But, of course, the big difference is we rarely sell our homes. There are savings to us in not maintaining gas boilers. There are safety things if we have air source rather than gas. So, we're taking a much longer view, and to create a sustainable tenancy as well for people that can afford to live in them. So, there are differences, I think, from a user perspective, which are really important, as to why I wouldn't want to roll back and then start using gas again. But I think it has got more economical the more it's built, the more it's produced and the more developers start using it. I think those savings have started to come through, and I've seen a few recently.

Okay. Peter.

Just on that last point, the council is doing a big project in my village and I've seen that equalisation of standards, but, of course, that's an RSL commercial package sort of thing, isn't it? And it looks like they're in a better shape to be able to start delivering that, which is encouraging.

My first question was about policy areas that might be holding things back. And one that you might have some analysis on, or certainly some views on, is the expectation around—Natural Resources Wales's expectations—around marine standards. I just wondered what your views are and how much has that held back affordable housing or social housing production? I know, in my area, it clearly would have done. Is there any wider analysis of how many houses that's held back?

Yes—

Sorry, perhaps if I could—. Thank you. This is, obviously, in my region, having a massive impact—in the south-west Wales region. And I can give you some figures just to paint a picture. It affects 11,800 homes—2,300 of those are affordable homes—and a direct impact on 10,000 jobs. Now, I'm already having conversations with contractors, who we would normally go to and subcontract jobs to, that we can't subcontract to them, and they are falling over because they haven't got that pipeline of work to keep them in business. So, it's extremely worrying, and I am deeply concerned. There are so many sites on hold at the moment. It's not good. We've had to divert to sites that aren't impacted by the nitrate issue, but that's not ideal at the moment. To have that many homes at a stop is extremely concerning.

I think we would absolutely agree. So, our analysis in west Wales—2,000 affordable homes on hold; 900 of those almost there, in terms of where they were in the pipeline. And I think it's worth flagging that this is the second time in five years, actually, we've been in this situation—in a situation where important environmental considerations and protections are falling the heaviest on the housing sector. This is where the brunt is being felt, where, actually, the contribution is fairly minimal. Certainly, we are pleased that the Welsh Government is taking it seriously. They've set up a taskforce. That's very positive, but we're in a housing emergency. We need to see quicker action, and we would certainly love to see exploration of a temporary exemption for affordable housing to simply get these sites moving and through.

So, would you say, then, that NRW's guidance is a proportionate response, or is it over-heavy?

I think what we haven't done collectively is learnt the lessons, actually, from phosphates, about making sure that there are enough early warning systems in place so that we can get prepared, we can start thinking about mitigations early on in the process. It's not an 'either or'; we absolutely appreciate that. And it's not about the nature emergency or the housing emergency trumping each other. But, actually, we need to get much, much better earlier on in the process so that we don't end up in the situation where, as Andrea said, you know, they've got people losing their jobs in the supply chain and homes are on hold.

I'd like to add to that, Chair, if that's okay. It's been really difficult. I mean, in our organisation alone, there were over 500 homes that we couldn't build because of the first round of nitrate issues. And I think, you know, no-one would disagree that we want to look after the environment—that' great; we do a lot of work on that—but I think the difference for us is that when we're building homes, it's for people that are already living in those communities. So, we're not adding extra people. I think one of the arguments that we tried to put forward was that we're not importing people into areas that are increasing nitrates, they're already living there—overcrowding or homelessness, or whatever. So, I think if that would have been exempt to some degree, that would help us carry on, and also protect some of those developers and contractors that we use—many of them local, who rely on a lot of our big contracts—to keep going. It has been a difficult time. So, I would hope, in the future, that could be thought about in advance.

And many of the schemes were caught in—what's been surfaced through the work of the taskforce—the complexities of the planning system, so various schemes at points where they were requiring various pre-commencement discharge of planning conditions, which is very onerous and can take a huge amount of time. We were in a situation before Christmas where a contractor was looking to start development, they'd been working through these conditions for a very long period of time, and they were facing laying 40 of their workforce off before Christmas. But, thankfully, working with Swansea Council, we were able to come up with a pragmatic solution in that instance, which has allowed that to progress.

It sounds like there'd be consensus that we need NRW to be a bit more flexible in their approach. I've heard situations myself where there's a technical answer. Unless it can have 100 per cent phosphate stripping, it won't be allowed, whereas most technical options only guarantee a 98 per cent stripping. If we had flexibility to enable that, then you could, perhaps, move things forward.

Thanks. I think that's all from me.

Okay, Peter. Lesley.

Thanks very much. Clarissa, I don't think it was your evidence, but in the CHC written evidence, it stated that there were barriers around infrastructure—so, water and electricity. I wonder if you could describe what those barriers are a bit more and how they could be overcome.

Yes. I think I'll probably defer to my housing association colleagues to give some examples of how these play out in practice. But I think we recognise the infrastructure support challenge and costs are significant across the piece, and we recognise that Dŵr Cymru and others are working their way through those. It's similar to the discussion around sharing risk, so that planners and consenting bodies feel that they have more space and room to take decisions that are pragmatic and work in a local area. I don't know if either of you wanted to add your experience locally on infrastructure.

Yes. So, about infrastructure in particular, whether that be water or power or whatever that might be, sometimes even allocated sites, which have been around a long time, you could get the infrastructure there, but the cost of it to service the sites is significant. There have been difficulties in power to many sites, for instance, and taking electricity as an example, where you're developing and little is known about what's available in that network area to service that development. It is very, very difficult to join all those organisations up to deliver a project. It's really complex stuff and takes a long, long time. I'm not sure that there's a quick fix to that. But a lot of the investment that we put in in developing our new-build estates—we are putting new substations in, we're putting new supplies in and this sort of thing—sometimes they've obviously got other asset management plan issues, or they've got a certain capacity, and then they have an emergency. Sometimes, getting them on board to service the new development is a difficulty, which creates problems onsite and then late in delivery, that sort of thing. But they're not the only two, obviously, of the services that come in when you're delivering housing, but it is a difficult one to manage.

Some areas are easier than others, where you've got master planning sites where the infrastructure has already been thought about in advance, and that's a great benefit, because you can essentially purchase plots on a master plan area that is already fully serviced, or the services are up to the site. It's where the ones have stalled because of the cost in bringing them to the site that it's an issue.

We've encountered practical—. Once we know that there's a problem, say if the timing of our development proposals don't tie up with Dŵr Cymru's investment in the waste treatment works in an area, we've looked at options in terms of, if we fund it, contributed towards that, could we be recompensed for that into the future, to help get the homes built earlier? But, Craig, you were saying, when you tried that, there's legislation that prevents that happening.

Yes. There was difficulty in an authority changing its investment plan. I believe that, once they have a plan, they like to stick to that. We did try, at one point—it was about phosphates, linking in to that—in joining with developers and other RSLs to actually provide funding to get it earlier, so we could build the houses quicker. But I was informed that there's some sort of legislation that prevented us from paying an authority to almost advance their asset management plan for our benefit to build homes. That was an idea that we had, but it didn't get there.

Maybe that could be something that a development corporation could—[Inaudible.]

It was costing more not building the houses than it would've been for us all to put something in the pot to be able to service a number of developments together.

So, when legislation is a barrier, we definitely need to look at that. Okay. Thank you, Chair.

Okay. Thanks, Lesley. I think Andrea wanted to—.

Yes. Thank you. I'm not going to repeat; I agree and concur with what's been said. But just to add a different element to the discussion around utilities, I do think that we need to have some forward plan in terms of the grid. What does the grid look like? Is it going to be a hydrogen grid? We need to do some longer term planning on this and understand what that looks like so that we can accordingly adjust our plans to meet that, because there's a lot of uncertainty at the moment in terms of future energy provision, and that makes me very nervous—that we might invest in the wrong way and then we've got to go back and do it all again, and we know we've got limited resource.

Okay. Thank you, Chair.

Okay. Joel.

Thank you, Chair. It was just a quick question, really—it just jogged my memory about infrastructure limitations and that. One of the questions I asked in the previous evidence session—and I think it's been raised in your written evidence as well—was about the lack of or the concerns regarding the workforce that's there in Wales to actually build these properties, in that it's a shrinking workforce, there are people retiring and there's losing that skill set. So, it isn't just the construction workers or even the chain that surrounds it, really, to build these houses. Is that something that you've picked up? What sort of progress is the Welsh Government making towards that? I know, on some of the recommendations that this committee has previously made in terms of a workforce development strategy, that the Welsh Government hasn't really signed fully up to that. I just want to get your views on that, really.

I think there's an absolutely huge opportunity here, which we're not collectively realising, although progress is being made. We've recently published a socioeconomic research report, which showed that, for every 20,000 affordable homes that you build, it generates 12,000 jobs in the construction phase alone, and then, year on year, thousands of extra jobs. So, the opportunity is real and it's here. The resilience of the supply chain is a worry, I think, for us here in Wales, and we've seen a number of small and medium-sized enterprises over the past few years not exist anymore, and that's caused practical challenges. So, I think there's a huge opportunity to scale up further. We think that workforce has to be part of a long-term plan for housing for the next Senedd period. I think there's a variable approach across Wales. We do think that, actually, the Welsh Government could have a really important convening role with organisations like regional skills partnerships, to make sure that they are thinking about the combined contribution that housing can play in the mix, and not just the construction of new homes, but we spent some time talking about the retrofit of existing homes at the same time and how you can position apprenticeships and job opportunities here as part of good-quality, local jobs. If we can phase and create a pipeline here, actually, we can provide some certainty for SMEs to scale up a little bit more. So, we think there's a more co-ordinating and convening role, which could take us forward a little bit.

All right. Neil.

Could I add to that? There's an opportunity here, in that I think far more people in society are seeing the potential of working in the construction sector. There's a recognition that AI is going to impact on lots of jobs into the future. It's likely to have less impact in terms of trades activity. I also see a real momentum across lots of RSLs in trying to do more in this space. So, at Codi, we've got a green careers pathway, which has been developed with lottery funding. We're really excited about what that could do in terms of getting local people involved in the technology that we need for new homes. I also visited the Adra academy in north Wales before Christmas. It was fantastic to see the work that's going on there, and a real emphasis on trying to target this at our customers. It's not exclusively for our customers, but we know that far too many social renting customers are in difficult economic situations, and if we can help them on their employment journey, that feels like a really important thing to do.

Yes. Sure.

I think there's been a real step change in the types of jobs. A lot of us are using a lot of offsite manufacture, a lot of new technologies going in there, and I think it's a real opportunity for people, younger people especially, to come into construction to do something other than bricklaying. For instance, there's a lot of opportunity there that's been opened up by what associations have done. So, a lot of our homes have been offsite manufactured, and all those sorts of innovations going into them are local projects that employ mainly local people to build them, and we're putting a lot of investment into that economy. Many of us are actively involved in building up that opportunity for tenants to become employed.

So, with that, then, to what extent would you say it's market driven, rather than driven by the Welsh Government?

I think it depends on the regions. I think the regions are very different. I think the region of south Wales is very different to some of the economics in north and mid Wales. We have lost a lot of contractors over the years in delivering housing. I'll speak for my region, if you like. There's now a group of contractors that have been there a long time and have got a steady workflow and a steady book of contracts from organisations like us and local authorities to build public buildings, for instance.

I think the ambition from the Welsh Government when we speak to officers about actually including social value into our schemes is there. I think that's part sometimes of our submissions to the Welsh Government when we're getting grant funding to build homes, and I think that really is an integral part of it. So, I see a lot of support for that and I think a lot of that is down to us as providers to do our job.

Andrea.

From a Welsh Government perspective, I do think they are supportive of this agenda. We, for example, are establishing a school with better vocational studies in that school, for 14 to 16-year-olds. We recognise that, through succession planning, it's an ageing workforce and there are gaps. I think we're also losing a lot of young people who are not particularly academic, and when they leave school they're often second, third generation unemployed. So, I think vocational studies would be a really good thing and understanding that you've got that pipeline of work so that they're not training to then drop off a cliff and not have a job. The jobs will be there, but acknowledging as well that they will be higher skilled. For example, for your quantity surveyors and your architects, certainly, as local authorities, we really struggle to pay the salaries that the private sector pays, but we do need those skills. So, we find that growing our own talent through apprenticeships is successful, and often we retain about 80 per cent of our apprentices, even when they acknowledge they could get perhaps £10,000 plus more in the private sector. They enjoy working for the local authority and the job security that that brings. So, I do think that the Welsh Government are supportive of that approach and I do think that that needs to be maintained, and long may that continue, otherwise we're going to not have a workforce that's skilled enough to do this delivery that we need.

And Jim.

Only briefly to build on that, as colleagues have mentioned, it's not just about trades jobs here. It's a wide range of skilled jobs. So, inside a local authority, if you've got a squeeze point with planners, if you haven't got legal capacity, then all of those can affect the slowdown, if not halt the delivery at the end of the day. So, we need to look at the whole chain here to see where that capacity needs to be applied and where the opportunities are.

Okay. Thank you very much. Peter.

I've just got a couple of questions I might merge into one, actually, on planning, because we know that the housing taskforce called on local authorities to prioritise the planning applications of new affordable homes. So, I just wondered if we've seen some progress on that. Also, the Welsh Government have got a programme to try and create capacity and, as a result, we're seeing increasing planning fees and things. Is that approach going to realise or unlock the capital and the resource you need to actually increase that capacity in the system?

I think my colleagues from RSLs will no doubt have something to say about the planning system in a moment. But I think we are beginning to see change here. I think the focus is welcome. The initiatives that you mentioned on the part of the Welsh Government around planning fees and other support will make a difference, but it will not be in the short term. And I think that it's welcome that we've started that journey. We need to build on that.

Local authorities do look to prioritise affordable housing schemes, but they are operating within a statutory planning framework. They have to prioritise other things as well. Councillor Williams mentioned the local and regional housing events. I've been at a number of those where there has been very pointed discussion about the initiatives that local authorities and their RSL partners are taking to discuss how to unblock any potential blockages to delivery here, and actually looking at practically bringing people together to create solutions to deliver on those ambitions. So, it is happening.

Perhaps if I can add to that, and I totally agree with what Jim has said, I think there needs to be an acknowledgement that, during COVID, it took 10 weeks to build a 1,500-bed field hospital. Perhaps we want to bear that in mind—that, when you remove the red tape, it will speed up progress.

Good point.

I was just going to bring in that we need well-resourced planning teams and well-resourced legal teams, at the end of the day. I think there has been progress made in lots of areas. I've been pushing a lot through the taskforce to get more delegated authority, to get applications approved where they're already on allocated housing sites, or where they already actually have planning permission. I think that's something that—. I was keen to make the point.

So, you'd say that capacity, like you said, is a bit of an issue?

I think in some areas it was. I’ll bring Neil in now. Some areas are more well resourced than others. There's a lack of people coming through wanting to be planners, I think, at the end of the day. I think it's been a challenge, especially in north Wales, where it's the same planners moving around authorities. It just feels to me that it needed more.

There are definitely a lot of planners in Wales doing a really good job in difficult circumstances. They get a lot of stick, but we see generally a really positive relationship with local authority planners. There are issues around how it then is co-ordinated with all the other elements, such as sustainable drainage systems approval bodies, et cetera, where complications come in. But I've seen a really interesting example in Torfaen and Blaenau Gwent, where they've shared a resource, and that consultant is coming in and focusing specifically on affordable housing.

I do think there's—. I'm a bit nervous. From an RSL point of view, obviously, selfishly, yes, it'd be great to prioritise affordable housing, but we need the whole housing system, don't we? We do need active developers who can sell homes for market sale. That creates section 106 opportunities as well. We're seeing increasing opportunities for partnerships with these developers, which is fantastic in terms of our ability to share risk, resource and access their lower build costs. So, I think the focus should be on getting the whole system to work. Actually, in terms of increasing fees, I think virtually all developers—. No-one likes spending more money, do they? But, actually, if you could take away the delays then everyone would be prepared to pay a premium for that, because you pay one way or the other, and at the moment there's far, far too much waste and cost in the system as it currently operates.

I think that's absolutely right, and ensuring that that additional resource flows through to the planning team I think is a really important assurance, actually, for those that are experienced in the planning team. And I think we often talk about planning as a kind of catch-all, and actually the resource pressures are felt across the whole planning and consenting system. Jim talked about lawyers and making sure that we've got highways; ensuring that there is resourcing across the system, I think, helps us speed up.

There's also something, for me, about culture and ensuring that all parts of the system are acting as if there is a housing emergency. Prioritising affordable housing applications is one part of that. Increased delegated authority and building in certainty as much as you possibly can in an approvals process, and simplifying the system as much as you possibly can, all go a huge way to actually speeding things up and giving confidence. And all of that brings to bear about risk appetite and the appetite to scale up overall. So, certainly we would really support the proposals made in the taskforce's report around simplifying the system across Wales—things like section 106, mortgage exemption clauses, those kinds of things. They're technical, they're boring, they make a big difference, and so we really think priority should be given to those. And that will help. It really will make a difference.

Okay, thank you very much. Thanks, Peter. Siân, could you ask on land value capture, please?

Can I just ask a tiny one on—?

Yes, go on, yes.

I'm going to speak in Welsh. We have talked briefly about acquisitions, and I'd like to know—. There's an argument, perhaps, that we need to be more flexible in terms of the standards that that property has to be brought up to. So, forget about those: are there any other problems that prevent you from going after that aspect? I'm thinking of flats above shops on the high street, for example. Apart from the standards, what are the other problems in terms of acquiring that kind of property and turning it into social housing in the long term?

Perhaps if I can come in in terms of our approach as a council, and I'm sure it's probably very similar with RSLs as well, we do have to factor in the cost. So, if something is ideal, we want to acquire it, it meets all the standards, however it's going to cost a substantial amount of money to bring it up to a fit, habitable condition, then we would turn that down and not acquire it. And then you still have that problem, as we all know as local councillors, and I'm sure you do as Senedd Members, that those dilapidated properties that are the eyesores in your communities will never be turned around, because it's not just affordable. So, finance and resource are a big barrier in terms of that, and I'm sure others will comment on other barriers.

You mentioned one thing as a barrier. You mentioned living over a shop and those sorts of areas, the difficulties in delivering those, depending on where it is—you know, physical issues. It has been done, but also, in many towns, there's been a refocus on pleasure and enjoyment rather than housing. I'm involved in a regeneration area at the moment where people need housing there, but they wouldn't particularly want to live on the high street. So, it's what do you do with that accommodation above? I think there are opportunities there. I think many of us are very conscious not to purchase the problems of the future. I think I mentioned it earlier on. I don't want to be coming back to properties in 10 years from now and having to invest a significant amount of money. We have been able to purchase a lot of properties off the market that are not too far away from the standards in terms of size, and what we've done is plan in our viability model, if we can reasonably bring that up to standard by 2030, or whichever date we're hitting, to get to a similar level of efficiency to the properties we already have. So, we do build that in our models. We don't purchase everything; I think that's a mistake. We need to make sure that what we're building, like I say, isn't another problem for the future. But maybe there are other ways of supporting private development and private developers to be able to achieve that in certain areas and do some sort of partnership with them if some properties are not too far off from what we'd see as acceptable standards. So, I think there's a lot going on, especially in regeneration areas, but those are my main thoughts on that.

Okay. Turning, then, to the availability of public land, I think that Community Housing Cymru have called on the Welsh Government to scale up its work to bring forward public land at a discount. The Government have told us that they feel that there is already enough land in the pipeline. So, do you think that the Welsh Government needs to be more ambitious in this area?

The short answer is 'yes'. As I referenced earlier, we only have land in certain areas, and that's not necessarily in the right areas. There are different problems with different local authorities. Monmouthshire, for example, their property costs are astronomical and so people can't afford to live in those areas, and so it is really a challenge. I think we should be using every tool in the box. We should be taking every opportunity to build wherever we can, and I think it is important that we consider all land. I think Welsh Government could have an important role to play in Welsh Government land and increasing developments.

I completely agree, and I think this is about building a resilient, ambitious pipeline for the future. Let's not forget that we've got 11,000 people in temporary accommodation. Those figures are stubborn. They don't move much; they haven't moved much for years. Actually, what we really need to do is think about, particularly, surplus public sector land, actually thinking about how we can make the best use of that coming forward. And whilst Welsh Government, through their land division, have made some good progress and have shown us what can be done through their exemplar sites, there's much, much more that we can do if we're bold and ambitious.

And it's not necessarily about the land being provided at a discount. There needs to be a mature conversation in terms of what we're looking to do with that land and what policy objectives we're looking to achieve. Receipts will be very important for lots of public bodies, but in many areas local authorities are struggling to spend their social housing grant. So, if social housing grant could be developed to bring those sites forward, then, actually, in most instances, there doesn't need to be a discount in terms of the land value.

Just to add to that, if I may, some of us have acquired land from Welsh Government and local authorities recently. We're just about to finish one this year, a mixed development of 150 homes, partnering with a house builder as well. The land wasn't discounted; we were able to provide a bigger scheme and arrange the deal for that scheme, which provided a receipt as well. But that site did come through land division as an asset from Welsh Government to deliver for affordable. So, we're above policy on that. Out of 150, there are 83 affordable homes, much higher than the planning requirement. So, I think there are really good examples of that. I think there are probably more, but of course some of these assets have a value on the books of local authorities too, and it may form part of their business plan—maybe sometimes that could be an issue. We know we can't get everything for nothing all the time, and that's not what we're after, but sometimes there might be a viability gap if you are developing in a regeneration area, for instance, which we need some extra assistance with. The housing division and the Welsh Government have been able to look at those sites, the grant levels, to enable those to work. So, a lot has been done, but I think there are definitely more opportunities.

Do we need a development corporation, so that we can ramp up this work rather than rely on land division? You all agree? The committee's recommended that as well, so, good.

Yes, I think we've had agreement on that, haven't we? Yes. Okay. Finance, Joel?

Thank you, Chair. I'm conscious of the time, so I'll probably just ask the one question, really. It's a question I asked the previous evidence in committee, and I think it's been raised in the written evidence here, about social rent convergence. I know the UK Government consulted on it, I think last year. It looks like they might bring it in into some context going forward, with the 10-year rent settlement. I just want to get people's views on that. Is that something you would be advocating to be brought in? Could it be delivered sustainably? What could be the drawbacks, really, from a tenant perspective then as well?

We certainly—. Sorry, do you want to go first?

We would certainly support—. We welcome the rent review and the certainty the 10-year settlement brings, but it's really important that Welsh Government follow through on their commitment to look at the area of convergence. There is a lot more that can be done to generate further income, to create fairness across the system as a whole, and convergence plays a big part in that. I think it's also important that Welsh Government follow through on the commitment to look at the affordability framework that was discussed. The rent review that has been carried out didn't really make very many people happy in terms of the outcome. There's more work to be done in that area. Convergence is a really important part of that.

I agree with Jim. Convergence is a really important part of the picture. It's about bringing equity and fairness. Some of these issues are a long time in the making, they're historic, and, actually, it's about bringing a more equitable regime in place for tenants. I think also Jim's absolutely right that affordability needs to be considered hand in hand with that. We've made some progress on that, and we've got affordability tools and principles that housing associations and other social landlords use, but actually looking at this in the round, I think, would be a really helpful thing.

From a UK perspective, I know rent convergence was withdrawn about 10 years ago, I think. Obviously, I won't say how old I was then, but could you give an idea of why was that? Was that a political decision or was there something other than that there?

Whether it was withdrawn in England, or England and Wales?

Yes, if you're aware of why it was withdrawn there.

I'm not aware of the detail of why it was withdrawn in England, to be honest, but I think the challenges around target rent bands and about different parts of the social housing sector all moving towards a consistent place is a challenge that we see in other nations in the UK as well. We're not unique here in Wales. Some of this is about how the social housing sector has grown up over time. For example, local authorities have been in a different situation for a long time both in England and in Wales under the HRA moving to a self-financing system. Also, for social housing associations, many of them across Wales find themselves in different positions for different properties. This is about bringing everybody up to the same position. We're not unique here in having this challenge.

Perhaps if I can add as well from a council perspective that it does have to be a phased, gradual change, because some of our local authority rents are much lower than others. It would be a bit of an ambitious thing to hit that target for conversions for some of those tenants. We wouldn't want to see their rents fly up. At the same time as well, while we're on the subject of finance, just to mention, because I appreciate time, there is a recommendation from the taskforce to give grant relief for land transaction tax for local authorities, which I know RSLs benefit from. I think that would also be very helpful.

Thank you very much for that, Andrea. Thank you all very much for coming in to give evidence to committee today. You will be sent a transcript to check for factual accuracy. Thank you all very much. Diolch yn fawr.

The next item for committee, item 4, is papers to note. Is committee content to note the three papers that we have before us today? Yes. Thank you very much.

Item 5 is a motion under Standing Order 17.42 to resolve to exclude the public from the remainder of this meeting. Is committee content to do so? I see that you are. We will move to private session.