Future of the Wales & Borders Rail Franchise

Rail policy in Wales has significant cross-border impacts, and it's
not expected that the franchise map would change in 2018.
(Pic : Arriva Trains Wales)

Before I wrap up for the year, it's worth returning to my "favourite Assembly committee" – Business & Enterprise – which launched their report on the future of the Wales & Borders rail franchise on Wednesday (pdf).

Rail services in Wales recently come under criticism from the Campaign for Better Transport, who claim services were poorly used compared to the rest of the UK and that Welsh rail passengers have lower service satisfaction. The franchise to run rail services in Wales and the Marches is up for renewal in 2018.

The Committee didn't come up with any recommendations as such. Instead, they produced a draft Charter for the franchise, based on an assumption that powers over the Wales & Borders franchise would be devolved.

The Current Franchise

The Wales & Borders franchise is currently run by Arriva Trains Wales (ATW), a subsidiary of Arriva UK, who are in turn owned by Deutsche Bahn. ATW was awarded a 15-year franchise in 2003, with Westminster retaining powers to award rail franchises via the Department of Transport.

The committee say most of the evidence they received was critical of ATW's performance. This includes reasons like:

• Lack of demand forecasting, provision for passenger growth and investment (by ATW).
• A failure to reflect Welsh Government priorities.
• Inadequate rolling stock, poor service standards and complex fare structures.

The Association of Train Operating Companies (ATOC) said the franchise was awarded during a time of increasing austerity, while the SWWITCH transport consortium (covering south west Wales) said ATW had "performed well given the limitations of the franchise".

ATW said the current franchise was effective, with significant passenger growth, record levels of passenger satisfaction and improvements in punctuality.

The current franchise agreement (pdf) meant ATW only had to invest £400,000 over 15-years (what numpty drew that up!?). They say they invested £30million (p3 2.7).

Passenger Focus disagreed with ATW's assessment, saying that although some aspects were "good", there was no planning for future growth and the franchise contract was "flawed from the start".

The committee took evidence from Transport Scotland (the Scottish Government's transport agency). Railways are mostly (but not 100%) devolved to Scotland, and the ScotRail franchise is up for renewal in 2015, so they're going through the same process Wales is. They're including integrated transport provisions within their next franchise agreement, including linking rail services to active travel routes.

A New Franchise


Business Minister, Edwina Hart (Lab, Gower), told the committee that discussions over devolving further rail powers to Wales are "ongoing", while the Welsh and UK Governments have made it clear there should be further devolution of rail powers in both submissions to the Silk Commission. The UK Government are, in fact, actively pressing for devolution of railways, but it's unclear if that's to the same extent as Scotland.

The franchise map is unlikely to change as including English routes improves the franchise's "financial sustainability".

In terms of timescales; the procurement notice will be published in the EU in March 2017, tenders will be published in August 2017, the contract will be awarded in June 2018 and the franchise will come into effect in October 2018. The committee believes work needs to start now "to ensure deadlines are met".

In terms of the length of the franchise, the Department of Transport said long-term franchises were "not as attractive as they had once appeared". Edwina Hart said she would, however, prefer a "long-term relationship". Meanwhile, Railfuture suggested the current franchise should be extended so to enable a move towards a not-for-dividend business model.

Service Standards and Rolling Stock

Minimum service standards on board trains and in stations
should be part of any new franchise agreement.
(Pic : Wales Online)

Evidence suggested there needed to be minimum service standards as part of any new franchise in terms of facilities, rolling stock, integrated transport and dealing with complaints. Passenger Focus suggested there needed to be "hard measures" to tackle overcrowding and simplified fares, but "soft measures" when it comes to service quality.

In Scotland, stations are monitored every four weeks for things like as cleanliness, toilets, timetables and customer service. Inspectors are given laptops to instantly record reports. Respondents believe something similar should happen in Wales.

Passenger groups said there needed to be more regular contact between themselves and train operators, suggesting the creation of a "franchise panel" of rail users. ATW agreed that any new franchise needed to "ensure passengers views are at the forefront" of operations.

In terms of new routes, there was an emphasis on connectivity with England, in particular Liverpool and Manchester Aiports, Birmingham and London. Within Wales, there were calls for improved services on the Cambrian Line between Birmingham and Aberystwyth, and calls for a reopening of a "north-south" rail line between Carmarthen and Aberystwyth, electrification of the north Wales coast line and light rail in unspecified towns and cities.

I think most people using Welsh railways agree that current trains are barely suitable for modern transport. Most are 40 years old and nearing the end of their useful life. Evidence pointed to a need for Wi-Fi, improved disabled access, better refreshment and toilet facilities, and better facilities for bikes.

There's clear need for a long-term strategy on rolling stock
- whether "hand me downs" or brand new.
(Pic : David Burrell via Flickr)

As to where to get the trains from, there wasn't an agreement on whether rolling stock should be "cascaded" ("hand me downs") or bought new.

Transport expert, Prof. Stuart Cole, suggested the Welsh Government should become a "rolling stock company" in its own right, owning any Wales and Borders train fleet from 2018. Leasing company, Angel Trains (and ATW), said refurbishing old trains provided better value for money than completely new rolling stock.

Edwina Hart was open minded about either option, leaning towards refurbishment. While Plaid Cymru leader, Leanne Wood, has previously called for bespoke trains post-electrification.

It was generally agreed that the issue of rolling stock needed a "long-term strategy". However, Prof. Cole said any decision to lease or purchase new trains had to be in place by the end of 2014 as it takes up to 3 years for new trains to become available.

The Business Model

Three potential management models for a new franchise were offered.

• A standard model – Train operators receive revenues and accept risks, with subsidy paid by the Welsh Government or a premium paid by the franchise holder.
• A concession model – Operators are paid a fee to run services specified by a franchise authority. Revenues are then received by that authority (similar to MerseyRail and London Buses).
• A not-for-dividend model (aka "Glas Cymru model") – This could include a state-owned, not-for-profit company operating at arms length from the Welsh Government, or a co-operative franchise.

There was no clear consensus on which model would be best, though many respondents at a special "stakeholder event" believed the not-for-dividend model was worthy of further investigation. Railfuture outright supported it. Many though believed the business model itself wasn't as important as service delivery.

Prof. Cole believed that the traditional franchisee model would provide improvements to customers, but that the not-for-dividend model would be more popular. He also raised concerns there wasn't enough expertise within the Welsh Government to develop the franchise and procure things like rolling stock.

If the franchise moved to a not-for-dividend model, ATW say that there would be more management "by the Assembly", whereas if it's a for-profit business model, the operator takes on more of the management duties.They also believed that profit motive was essential to create economies of scale, saying that if the Welsh Government were considering a different business model, they should do so with their "eyes open to the risks".

ATOC produced evidence from KPMG that highlighted the benefits of competition between franchises, though its findings were questioned by a Leeds University study which said franchising has been "less successful, cost wise".

Edwina Hart said she was open-minded to a not-for-dividend company bidding to run the franchise, but would require the powers to enable that to happen. She did say though that "no substantial work" has been carried out by the Welsh Government to investigate a not-for-dividend model, which caused the committee concern.

There was also discussion on the benefits of integrating infrastructure (Network Rail functions) with train operations - dubbed a "deep alliance" - to help reduce costs overall. It means train operators and Network Rail could work together to improve efficiency and customer service in all aspects of rail operations.

The Draft Charter

The overriding aim of the Charter is to put passengers first.
Haven't we heard all that before though?
(Pic : BBC Wales)

The draft Charter (p34-36) had 10 key points, building on the committee's integrated transport inquiry, summarised as :

• Lobby the UK Government for devolution of powers and funding for railways so the Welsh Government is responsible for awarding the Wales & Borders franchise.
• Ensure the Welsh Government has the right expertise and funding in place to deliver an effective franchise and necessary rolling stock. This includes developing a rolling stock strategy "as a matter of urgency", factoring in electrification programmes.
• Base new routes on a detailed understanding of rail traffic flows in the franchise area, including cross-border routes.
• Take an early decision on the management model, clearly demonstrating how it would improve passenger satisfaction, service delivery and provide value for money.
• The Welsh Government, when drawing up the franchise, should clearly :
• Put passenger needs first and foremost.
• Require significant investment by the operator.
• Enhance performance monitoring based on the Scottish example, and enhance monitoring of services and environmental impacts.
• Simplify ticketing and fares, as well as provide high standards for station facilities and effective branding.
• Integrate with other modes of transport as well as walking and cycling routes.
• Develop a closer working relationship between the franchise holder and Network Rail.

All Aboard?

It looks like they've scored a hat trick.

In all honesty, from my own experience, rail services in Wales – while they could be significantly improved – aren't that bad. I have the luxury of living in an urban area though that's well served by routes, and it's clear rural Wales has serious problems. Rail services aren't as bad or as under pressure as bus services anyway. Following Scotland's lead when it comes to monitoring and maintaining standards of service is long overdue and a necessity.

You can't really argue with the Charter as outlined. It does seem a bit aspirational for now, and will need to be backed up with something concrete when it comes to awarding the franchise itself. That is however - in political terms - a long time away.

If there's one area you would point to a not-for-dividend/not-for-profit model working, it would be the railways. The former chair of the Assembly's Cross-Party Group on Rail, now Deputy Minister for Tackling Poverty, Vaughan Gething (Lab, Cardiff S. & Penarth), has led work on that before.

It's disappointing, but not surprising, that the Welsh Government have been lazy when it comes to investigating that model further. If Edwina Hart really wants to see that happen - I suspect that deep down, she might - she'll have to get her skates on. I suspect though that the next franchise will be awarded to an established company – simply because it's less risky. Typical Wales.

The overriding fact is that absolutely none of this matters without the devolution of prerequisite rail powers. That will have to happen by the end of 2014 at the latest judging by the timescales given in the report.

Read More

A slice of frozen PISA

Climb into your bath, track your arteries with a razor blade and bring on The Smiths.

It's PISA time, and there's nothing the Welsh enjoy more than a good moan, revelling in the doom as we all – once again - rubber neck the slow motion car crash that is the Welsh education system.

PISA, as you know, is an OECD initiative. Since 2000, it's tested 15 year olds in 60+ nations and territories every three years in reading, mathematics and science.

Although Wales has been included as part of regional statistics before, Wales has only sat the PISA tests separately since 2006, so today's results are the third set where Wales has featured specifically.

They're important because PISA is the closest we have to a direct international comparison in terms of education, as all pupils sit the same test at near enough the same time. It's not perfect, but it's the best measure we have and its results shouldn't be dismissed out of hand.

2012's Results

How Wales has performed in the last three PISA tests.
(Click to enlarge)

You can find all the data here, but the specific part relevant to Wales is here (pdf).

One crumb of comfort is that reading performances have improved slightly - up 4 points from 476 in 2009 to 480 in 2012. However, this still lags behind England (500), Scotland (506) and Northern Ireland (498). Northern Ireland was the only Home Nation to have seen a decline.

The bad news is that performances in maths and science in Wales have again declined – though not as sharply as 2009. Maths scores dropped by 4 points from 472 to 468, while science scores dropped by 5 points from 496 to 491. Again, the other Home Nations outperform Wales, with a ~20 point gap between Wales and the rest of the UK that shows no signs of closing.

For want of comparison, 2009 saw a 12 point drop in maths and 9 point drop in science. So the latest figures are hardly as "alarming" as The Western Mail screamed today.

Wales also remains below average compared to the rest of the OECD, placing an equivalent of 41^st out of 65 for reading, 43^rd for maths and joint 36^th place for science.

The changes to the raw scores are barely significant enough to make a big difference - we're talking 1% falls compared to 2009 (or a 1% rise in case of reading) - so it's fair to conclude that Welsh results have stagnated or frozen.

Examining Welsh Performances

International Comparisons

The Welsh education system is roughly as "awful" as
Sweden's, based on the 2012 results.
(Pic : Aberdeen University)

This is the whole point of PISA, but it seems everyone's determined to compare pencils with England alone. Wales – while far from brilliant – isn't the worst by a long shot, though there's clear need for improvement.

• Wales' score in maths places us in the bottom half of the table alongside Israel (466) and Croatia (471) but well ahead of Greece (453), Malaysia (421), UAE (434) and Qatar (376).
• In reading, Wales scored similarly to Sweden (483), Israel (485), Iceland (483) and Slovenia (481).
• In science, Wales scored similarly to Croatia (491), Italy (494), Luxembourg (491) and Russia (486) and was just 10 points off the OECD average.

However, in addition to being behind the other Home Nations on the whole, Wales is light years behind many other similar nations like New Zealand, Finland, Ireland and Slovenia.

That's before mentioning far-east nations like Singapore, Taiwan and South Korea who are in a league of their own, due to very intensive, competitive education systems and heavy use of private tuition. Those bring their own problems - like high suicide rates.

So, internationally speaking, Wales is a "C student who needs to buck their ideas up" and needn't sport a dunce's cap, while the UK as as whole isn't doing that much better. There are plenty of developed nations in the same boat we are.

To make a significant jump up the rankings, Welsh performances would have to improve by up to 10% (~40points).
Judging the overall figures, Welsh education standards are directly comparable with Israel, Sweden and Croatia.

You know...."third world" Sweden. Where the UK Conservatives went to get ideas for their school policies.The same Sweden which has an education system that's near enough as "awful" as Wales', just to put things in much-needed perspective.

Economic Performance

This is the first thing people point to when they analyse the results, (somewhat) logically deducing that PISA influences international investors when deciding where to invest, or impacts the economy in some great way.

Is there a correlation between good PISA scores and higher economic productivity?

2012 mathematics scores for the 65 nations/territories plotted against GDP per capita.
(Click to enlarge)

Using the mathematics scores in isolation - no. There's no strong correlation at all. If there is one it's incredibly weak.

All PISA does is compares test results, giving you a good idea of the strength of respective education systems. As pointed out, Wales scored similarly to Sweden, and performed better than many nations we've lost foreign direct investment to over the years, including parts of eastern Europe.

There's a whole host of factors that determine whether businesses make an investment. Education and skills is one key part of that, but it's not the be all and end all.

There is, however, a clear correlation between socio-economic background and good PISA scores. According to Volume II of the report itself (p38), the difference in performance – on average - between the top advantaged quarter and bottom disadvantaged quarter is up to 90 points, with disadvantaged students twice as likely to wind up in the bottom quarter than advantaged students.

In economies where there is greater "resilience" (pupils who perform better than their socio-economic background suggests they would), the scores are higher. That means in order to improve performances, more chances need to be given to disadvantaged students.

If you are interested I suggest you read the whole report. However, it cements the link between individual motivation, deprivation (not money spent on schools) and poor educational performance.

The Welsh Education System

Time to invest more capital in the classroom, not on classrooms?
(Pic : Wales Cnline)

As ATL's Philip Dixon explained on Click on Wales, turning this around doesn't come down to selective schools, the Welsh language, not enough time teaching "the Three Rs" or whatever knee-jerk response the media and commentators want to come up with to explain things.

The report says higher performing nations "allocate school resources more equitably amongst advantaged and disadvantaged schools" and "grant more autonomy over curricula and assessments".

They also value teachers more. We see them as workhorses who can never do their job properly.

Policies outlined to improve educational equity include :

• Targeting low-performance schools, or low-performing students within schools - This could include a special curriculum, early prevention programmes or, in some circumstances, grade repetition ("holding students back a year").
• Targeting disadvantaged students – This includes, once again, a special curriculum, including disabled students in mainstream classes, and conditional financial incentives to make sure children regularly attend school. Technically, Wales is already doing some of this through the Flying Start scheme and Pupil Deprivation Grant.
• Raising standards for all students – Altering the curriculum, increasing class time, changing the length of the school day and improving teacher training.

I'm not convinced this is something you can "throw money at", as the Welsh Government and opposition parties might be minded to do. Clearly the answers don't lie in things like selective schools either.

The answer, in Wales' case, probably lies in the curriculum and how subjects are taught. It's no good just "teaching to the test", the curriculum itself is going to have to change fundamentally and teachers are going to have to be given the freedom, and trust, to innovate.

You can still do all that while setting down national guidelines and targets. The control freakery in Cathays Park needs to stop.

PISA puts theory in a practical, problem-solving context making it different from any other exam. Welsh schools generally just teach the theory and give straight-forward number/word-only questions, which are never placed in their practical, "real world" use. So when pupils come across a real world example, they might not fully understand the question or might miss key bits of information.
Successive Welsh Governments might well have pumped a lot of money into new schools, but they've clearly neglected the teachers and the curriculum itself. There's no point having lots of shiny new buildings if they're not properly equipped in terms of trained teachers who can deliver a meaningful curriculum.

So if there's one area I would expect more money and policy capital to be spent on, it would be professional development for teachers and developing a brand spanking new National Curriculum – not deprivation grants and school extensions.

And, of course, all the existing measures need to be given time to work too. Big changes take time to filter through though in education – perhaps up to a decade or more. Any measures taken in the last 5-10 years might not make a noticable impact until the 2020s.


Burnt by melted cheese? Let it cool first

The results are embarrassing. However, some of the the reaction to the results has been even more embarrassing. Everyone needs to CALM DOWN.

There's nothing in this worth getting excited about, and we're pretty much in exactly the same place we were last time around. Wailing and gnashing teeth without offering any practical solutions isn't going to help anyone. That's going to take time and thought.

Yes, it's disappointing news, and the Welsh Government/Welsh Labour deserve to be roundly criticised. The First Minister should be pretty red-faced right about now. I suspect if Leighton Andrews were still in his old role, when you add the tuition fee stuff to this, he would be looking at the sack.

However, the decline isn't as pronounced as 2009's and there's been a noticeable turnaround in reading. The worst of it might be over, and once various policies like the Literacy and Numeracy Framework begin to filter through, I suspect we might see modest improvements in scores (but not rankings) in 2015.

Luckily (or conveniently) for Welsh Labour, the results of 2015's tests won't be made public until after the 2016 National Assembly elections. Having said that, it also means there's no opportunity for an improvement between now and then to put on election leaflets.

The backdrop to that election campaign in terms of education is now boiling down to two areas - PISA and higher education funding.

It's all well and good that I can take a step back and look at it as part of the "big picture". Try telling parents that.
Everyone's going to have to take a deep breath, think rationally and think of long-term, transformative changes. Policy makers are going to have to look beyond England for inspiration, and I would recommend Finland and Estonia as the best places to start.

Unfortunately, as the media and political reaction to this has proven, there's plenty of knee-jerk politics out there, but precious little patience.

Read More

Senedd Watch - November 2013

• The UK Government announced - as their response to the first part of the Silk Commission - that financial powers would be devolved to the National Assembly, including : stamp duty, non-domestic rates, landfill tax, the ability to create new taxes (with Westminster agreement) and limited borrowing powers. Subject to a referendum, income tax varying powers could be devolved in future. However, the First Minister said there shouldn't be a vote until a fair funding formula is in place, drawing criticism from opposition leaders.
• The UK Government also announced the first NATO summit to be held in the UK since 1990 will be hosted at Newport's Celtic Manor resort from September 4-5 2014. The First Minister welcomed the announcement, saying he looked forward to receiving world leaders.
• In the second of a two-part review into business finance on behalf of the Welsh Government, Prof. Dylan Jones-Evans recommended that the government's investment arm, Finance Wales, be replaced with a Development Bank of Wales due to concerns about excessive interest rates and charges.
• Senior executives from Cardiff & Vale LHB warned the Assembly's Public Accounts Committee that, due to austerity, hospitals had become the only place to offer 24/7 care to the elderly. It was also said job losses were “inevitable” after concerns from AMs about a reported 400 job losses within the LHB.
• Education Minister Huw Lewis (Lab, Merthyr Tydfil & Rhymney) said it was “unrealistic” to expect PISA results to improve compared to 2010 when the latest figures are revealed in December, despite previous assurances from the First Minister that he himself expected “an improvement.” Opposition AMs questioned the contradictory positions, saying parents now had a right to ask questions about school standards.
• A University of London study revealed 37% of Welsh people were overweight by age 42, and a further 26-27% obese, with men more likely that women to be so. Although overall overweight and obese rates were similar to England and Scotland, obesity levels in isolation were highest in Wales.
• News UK director, Guto Harri, said at a Royal Television Society lecture in Cardiff that the UK press didn't give Wales a “rough deal”, and political differences were no reason for extra coverage in itself. Llywydd Rosemary Butler (Lab, Newport West) also outlined the Assembly's response to the “Democratic Deficit” in media coverage, proposing more support for trainee journalists and AMs, regional press days and more open and accessible data.
• Despite cuts to EU Common Agricultural Policy (CAP) funding, both the Minister for Food & Natural Resources, Alun Davies (Lab, Blaenau Gwent), and the Welsh Secretary believed the overall budget was “fair”, as cuts were shared equally across the UK, with an equal 1.6% cut in Pillar 1 funding.
• The Assembly's Finance Committee believed the draft budget for 2014-15, which was originally said to “prioritise jobs and growth”, instead prioritised the NHS. This was a “disconnect with the Welsh Government's stated priorities” according to committee chair, Jocelyn Davies AM (Plaid, South Wales East).
• The First Minister announced a decision to relocate high-dependency neonatal services from north Wales will be part-reversed. Services will instead to be centralised on one site, with only very seriously ill babies transferred to Arrowe Park Hospital in The Wirral. The decision received a mixed response, with Llyr Gruffydd AM (Plaid, North Wales) saying all services should be retained in north Wales.
• The Welsh Liberal Democrats outlined a three-point plan for the revival of the rural economy, including : a community bank structure, overcoming barriers to low numbers of rural apprenticeships and making universal access to broadband an obligation to service providers.
• Unemployment fell in Wales by 4,000 in the three months to September 2013 to stand at 7.8% (UK 7.6%). Employment rates were also said to have reached a “record high”. Business Minister Edwina Hart (Lab, Gower) said the figures are “very encouraging”, but there were still concerns about youth unemployment and unemployment amongst women.
• A joint report from Natural Resources Wales, WLGA and National Parks Wales revealed up to £1billion was spent in Wales' three national parks - attracting 12 million visitors - with total value added to the Welsh economy of £577million. Culture Minister, John Griffiths (Lab, Newport East), described the parks as an “asset to Wales.”
• The Assembly's Enterprise & Business Committee report into Youth Entrepreneurship recommended : key business skills should be taught in primary school, one-stop-shops for entrepreneurs and ways be found to close the gap between those desiring to start a business and those who follow through with it.
• The Welsh Conservatives launched a new housing policy, with the aims of “rejuvenating” the Right to Buy scheme - via a commitment to replace every social home sold on a one-for-one basis – planning deregulation and bringing more empty homes into use. Welsh Labour attacked the proposals, saying they were un-costed.
• Faith leaders expressed concerns about local authority cutbacks to free school transport, saying faith schools should receive the same levels of statutory protection as Welsh-medium schools. Local authorities were urged not to be “short-sighted in the decisions they make now.”
• A Western Mail investigation found 221 children had gone missing from local authority care over the last two years. Children's Commissioner, Keith Towler, said he was “alarmed” by the figures, while chair of the Assembly's Cross-Party Group on Human Trafficking, Joyce Watson AM (Lab, Mid & West Wales), pressed for an Assembly debate on the issue.
• PCC Christopher Salmon (Con, Dyfed-Powys) said policing powers had already been devolved to Wales as a result of the creation of Police & Crime Commissioners, and that devolution of policing to the National Assembly would cause confusion. Dafydd Elis-Thomas AM (Plaid, Dwyfor-Meironnydd) disagreed, saying he believed administration of justice would be devolved before 2020. Byron Davies AM (Con, South Wales West) later rejected the idea of devolution of policing.
• Education Minister Huw Lewis announced a two-year cross-party review into higher education funding, with the minister telling the Assembly he wanted an “enduring settlement”, timed to avoid the 2016 Welsh General Election. Plaid Cymru said they would participate, but would consider their own policies, while other opposition politicians described the timing as “cynical”.
• In relation, former Education Minister, Leighton Andrews AM (Lab, Rhondda) defended current tuition fee policies, after a Wales Audit Office report revealed it was based on a £7,000p.a. Assumed maximum tuition fee in England, not the eventual £9,000p.a maximum fees, resulting in an extra £156million being spent.
• Housing and Regeneration Minister, Carl Sargeant (Lab, Alyn & Deeside), introduced the Housing Bill, which proposes a mandatory licence system for private landlords, improve homelessness provision, abolition of the Housing Revenue Account Subsidy and statutory reviews of gypsy and traveller site provision in local authorities.
• The National Assembly passed the Recovery of Medical Costs for Asbestos Diseases Bill on November 20^th by 38 votes to 10. The Act will enable the Welsh NHS to recover the costs of treating asbestos-related diseases (estimated to be ~£1million), and enable the employment of up to 20 cancer nurses. The member who introduced the Bill, Mick Antoniw AM (Lab, Pontypridd), said that the law  “can make a significant improvement to the quality of life” of those blighted by the diseases.
• The National Assembly passed two sets Council Tax Reduction Scheme regulations, despite concerns from the Constitutional & Legislative Affairs committee they were “completely impenetrable” and could cause interpretation difficulties.
• The Wales Ambulance Service Trust met its targets for the first time in 12 months, with 65.2% of life-threatening emergencies responded to within 8 minutes, compared to a national target of 65%.
• Mandatory displays of food hygiene certificates as part of the Food Hygiene Rating Act 2013 came into force on November 28^th, and will be phased in for all outlets serving food over the next 18 months. Health Minister, Mark Drakeford (Lab, Cardiff West), said consumers could now make an “informed choice” about where they eat out.

Projects announced in November include : a new £30million round of the Economic Growth Fund, a £2.7million investment in cardiac services in Cardiff & Vale LHB, direct funding to prevent withdrawal of some bus services in Ceredigion, extra ferry services between Anglesey and the Republic of Ireland, the launch of a Procurement Academy at the University of South Wales, an extension of the latest round of Communities First funding into 2016, the announcement of the format of two city region boards, and the launch of the £170million Help to Buy Wales scheme for first-time buyers.

Read More

Welsh tuition fee policy under scrutiny

The Welsh Government's tuition fee policy was recently revealed by
the Wales Audit Office to have cost more than expected.
But does that headline tell the whole story?
(Pic : BBC Wales)

Last week, serious questions were raised about the Welsh Government's tuition fees policy, whereby they subsidise tuition fees for Welsh-domiciled students regardless of where in the UK they choose to study.

The Wales Audit Office (WAO) revealed the policy's cost – to date - ~£150million more than expected. That's because - in shorthand terms - the tuition fee cap was higher than the financial assumptions the Welsh Government used to base its final policy on.

In a related matter, Education Minister Huw Lewis (Lab, Merthyr Tydfil & Rhymney) recently ordered a two year, cross-party review into higher education funding.

The opposition have welcomed the review, albeit with reservations. Plaid Cymru have agreed to participate but would prefer to draw up their own long-term plans. The Lib Dems and Conservatives questioned its timing, as it was confirmed the review won't report back until after the 2016 Assembly elections, which could impact individual party's ability to draft alternative policies. However, the policy is effectively locked in until 2017 anyway.

The Assembly's Finance Committee are currently undertaking their own inquiry into Higher Education Finance. So this is likely to be a key education issue through 2014.

It's worth looking into the WAO's report closely, because - as I read it - it's perhaps not quite as serious a situation as it's been made out to be.

The Key Findings of the WAO report

You can read the report yourself here (pdf).

1. Policy appraisal concerns.

At the time the policy was being drawn up, 51% of students studying at Welsh universities were Welsh-domiciled, while 47% were English-domiciled. Around a third (34%) of all Welsh-domiciled students study in England too, making cross-border movement more important in terms of planning to the (then Labour-Plaid) Welsh Government than elsewhere in the UK.

The WAO say the Welsh Government wanted to "respond quickly" to Westminster's decision to raise the tuition fee cap to £9,000 per year. As a result, WAO say there was "limited engagement" between the Welsh Government and funding body, HEFCW, in terms of formulating a response.

Officials drew up six scenarios, each of them – except one – based on £9,000 tuition fees in Wales, England and Northern Ireland.

The Welsh Government only expected "elite" universities to charge the maximum £9,000; or universities to charge £9,000 for high-cost courses (like sciences), and £6,000 for low-cost courses (like liberal arts).

Officials decided a financial model based on a £7,000 average fee would, therefore, be appropriate. The Welsh Government's chief economist agreed, albeit with some concerns about the strength of the evidence.

However, HEFCW weren't given the opportunity to challenge the figures, and believed the £7,000 assumption was "too optimistic". They were proven right.

So there was a mismatch between the financial models originally drawn up (based on a £9,000 fee) and the £7,000 average fee assumption the Welsh Government decided its final policy with. Subsequently, the WAO claim the "appraisal (of the six options on the table) failed to conform to best practice."

The Welsh Government have since updated their models, meaning the policy will cost £809million between 2012-13 and 2016-17 - £156million more than originally forecast.

2. Issues with tuition fee policy implementation

WAO say both the Welsh Government and HEFCW have implemented the tuition fee policy "effectively", but they have concerns about :

• Changes to part-time tuition fees – These haven't progressed "as the Welsh Government intended", but there was wide support to put decisions on hold. WAO say there needs to be longer-term certainty as part-time tuition fees are currently unregulated.
• Processing student finance applications – Welsh Government plans to centralise student finance through the Student Loans Company (currently on hold due to problems in England) need to address weaknesses in the system. It was investigated as part of the Higher Education (Governance and Information) Bill (due to pass next week), and there are concerns about possible fraud depending on how "ordinarily resident in Wales" will be defined and enforced.
• The role of HEFCW – WAO say HEFCW handled the tuition fee policy well, but some of their work – like keeping a limit on non-Welsh UK and EU-domiciled students, and cuts to postgraduate course funding – has led to criticism from universities.

3. Financial health of Welsh universities

I think it's worth pointing out that the main headline finding from the WAO report seems to have flown over people's heads : the finances of Welsh universities are said to be "in good health" and "generally sound". That's the most important thing, and is perhaps good news for the Welsh Government. Good news is hard to sell though.

Income at Welsh universities is up year-on-year, mostly as a result of higher tuition fees. Although surpluses are said to be falling - which could put Welsh universities at a competitive disadvantage in the medium-term – Welsh universities are set to continue to have strong cash resources and reserves.

The Key Issues

Because the higher than expected costs have been absorbed by the Welsh Government - seemingly without any major problems - then this perhaps isn't as serious as it could've been.  It's fairly normal for government departments to run up unexpected cost overruns, even with the best plans and estimates in place.

As the - then - Education Minister, Leighton Andrews (Lab, Rhondda), said himself (and it's there in the WAO report) officials knew about the financial impact a £9,000 cap would have and planned for it. Though they rushed the process, you can see why they wanted to work with averages if time was running out to come up with a response.

Perhaps the most important issue - which doesn't seem to have been mentioned elsewhere - is the absence of key input from HEFCW, who were clearly concerned about the "optimistic" use of an average £7,000 tuition fee when finalising the policy. HEFCW are effectively in charge of distributing HE finance, so brushing them off seems a poor decision.

Another issue surrounds whether the whole cabinet knew of the potential financial risks of a £9,000 cap when the policy was decided, though the report says Leighton Andrews and other "certain cabinet members" knew. According to Toby Mason, that includes former Deputy First Minister, Ieuan Wyn-Jones. It should've been made available to the whole cabinet though in order to them to make a properly informed decision.

Sticking with the policy as it was seems both commendably stubborn (Leighton Andrews trying to do good by Welsh students) yet regrettably short-sighted - to the tune of £156million.

So the heart was there, the head was not. It was clearly rushed policy, but not without some thought behind it. This isn't an AWEMA or a RIFW, though it's no doubt very embarrassing for Cathays Park.

The principle of the tuition fee policy is fine (if controversial), and in some respects quite commendable. However, in straightened time, such policies should perhaps only apply to Welsh-domiciled students studying at Welsh universities; though a reduced subsidy for Welsh domiciled students studying elsewhere might be appropriate (or a full subsidy applying to certain key courses, like medicine and nursing).

It's for the forthcoming review and Finance Committee inquiries to ultimately decide, I suppose.UPDATE : 26/11/13 : BBC Wales report that the First Minister has published the cabinet papers and minutes from the day the tuition fee policy was decided in November 2010. It appears the final decision was based on a £7,000 average fee assumption, with passive references to the prospect of higher fees being set immediately.

That pretty much corroborates what Leighton Andrews has said and it doesn't really change anything. But you still have to ask whether the cabinet were able to make a fully informed decision based on the information that was presented to them?

Read More

Housing Bill introduced to the National Assembly

The Welsh Government's Housing Bill is a wide-ranging law that aims
to tackle "rogue landlords", address homelessness, improve social housing
standards and reduce the number of empty homes.
(Pic : The Guardian)

Continuing the housing theme, the Welsh Government's Housing Bill was introduced to the National Assembly on Tuesday by Housing and Regeneration Minister, Carl Sargeant (Lab, Alyn & Deeside).

It's fair to describe it as "flagship" legislation, and it's also a whopper, coming in at 85 pages.The Bill's available here (pdf) and the explanatory memorandum here (pdf).
It's been recently said elsewhere....apparently....that the Welsh blogosphere often "lacks thought and detail", is too safe and sanitised and has failed to "facilitate democratic engagement and scrutiny".

I'll admit it. I've let you, the Assembly, our AMs and the whole of Welsh society down.

It's a burden I carry every night, as I lie awake, wondering whether to cover gosspy, banal stories like the ongoing collapse of local democracy in Carmarthenshire, the impact of High Speed 2 on the Welsh economy or getting my chompers around the annual report of the Chief Dental Officer.

The blogosphere continuously fails to demand answers to the big questions. What does the Taxpayers' Alliance think about politicians eating and breathing at public expense? What does some chippy anonymous source think about press officers writing press releases at their place of work?

The blogosphere was supposed to open a window, casting light and transparency on Welsh democracy and those who claim to uphold it. Clearly, all opening that window ever did was let in a field's worth of beefy cow farts. It's a dereliction of duty. We need to return to fighting for what is right and cover the controversial.

I'll spend more time hanging around the Senedd, Eli Jenkins pub and Tŷ Hywel looking for receipts in bins. I'll use my extensive network of Assembly spies and media connections - because everyone outside the Bay Bubble establishment has them - more effectively; telling you if Assembly staff are using all those flatscreen TVs to watch Bargain Hunt, or what AMs really think of Peter Black's ties. The people have a right to know.

Instead of my typically concise, pithy blogs, I'm going to do something different today and go into a bit more detail than usual. There's nothing more worthy of democratic engagement and scrutiny than a new law; which could directly and indirectly affect tens of millions in public and private spending as well as thousands of households. The sort of thing I'd usually just gloss over.

Few of you are masochistic enough to delve through it yourselves, so I guess I'm going to have to try to cram more than 250 pages of text to as close to 2,000 words as possible. In my own time. By myself. For free.

What people think of that and whether people take time to acknowledge it is another matter.


Why does Wales need a Housing Bill?

It's claimed 14,000 new homes are required in Wales each year – up to 9,200 private new builds, and 5,100 from other providers like private landlords, housing associations and local authorities. They're all going to be of varying quality and owned/operated by many different companies and individuals.

One of the key aims is to create a mandatory licensing system for landlords and letting agents, as until now such schemes have been voluntary, with some landlords being bad news for both tenants and communities.

The Welsh Government say there are 22,000 empty properties, many of which can be brought up to a decent standard. Existing homes, especially older housing, also need upgrades. That's being carried out to social housing via the Wales Quality Housing Standard (WHQS), but not enough is being done in the private rented sector.

Homelessness is on an upward trend – some 5,800 households were accepted as homeless in 2012-13 - as housebuilding slows, social houses aren't built at a fast enough rate to keep up with demand, and welfare reforms impact households, like the infamous "bedroom tax".

In addition to that there's the perennial local campaign favourite of new gypsy and traveller sites, while the Bill could also lead to reforms in social housing standards and charges, and make an expansion of co-operative home ownership easier and more attractive to prospective tenants.

What does the Housing Bill propose?

The Bill itself is divided into 8 parts and 3 schedules. I'm clumping them together into broad themes instead.

Regulation of the Private Renting Sector

The Bill:

• Makes it a legal requirement for private landlords and/or letting agents to register and be licenced with any local authority in which they let property.
• Places statutory duties on local authorities to maintain a publicly accessible register of licenced landlords and agents.
• Places a duty on licenced landlords or agents to notify local authorities of any change of circumstances within 28 days of the change occurring.
• Disqualifies people from receiving a licence if they :
• fail a "fit and proper persons test" – including committing fraud, acts of discrimination or harassment, firearms offences, sexual offences or failing to comply with other housing/landlord laws.
• haven't been trained in managing rental properties to the local authority's satisfaction.
• don't agree to abide by a Welsh Government Code of Practice.
• Mandates that licences will be valid for 5 years from the date of issue and will allow licences to be renewed 3 months before they expire.
• Grants local authorities the power to :
  • revoke licences if a landlord or agent breaches any rules (with a right to appeal).
  • issue "rent stopping orders" - where no rent is payable – if a landlord fails to comply with licencing requirements.
  • turn down a licence renewal (with a right to appeal).
• Creates new offences, like :
• failing to produce/display a licence - up to £1,000 fine.
• advertising, letting or managing a rental property without a licence - up to £1,000 fine, barring a "reasonable excuse".
• failing to provide documents to local authorities when required - up to £2,500 fine.
• providing false information to the local authority - up to £2,500 fine.

Homelessness

The Housing Bill aims to prevent people becoming homeless in the
first place by placing duties on housing authorities to intervene early.
(Pic :BBC)

The Bill:

• Places a statutory duty on local authorities to carry out a homelessness review and publish a homelessness strategy every four years starting in 2018, which includes monitoring current and expected levels of homelessness, homelessness prevention activities and resources available to combat homelessness.
• Defines a "homeless person" as someone who :
• has no accommodation they can occupy legally.
• cannot occupy a home in the UK they would otherwise be entitled to occupy.
• cannot secure entry into a home they otherwise live in.
• lives in a movable home with no permitted place to put it.
• Defines someone as "threatened with homelessness" if they would become homeless (as defined above) within 56 days.
• Outlines that when dealing with homelessness applications, local authorities must :
• determine whether emergency accommodation is "suitable" for a person.
• provide information and advice to someone who's homeless or threatened with homelessness.
• prevent homelessness applicants from becoming homeless in the first place.
• guarantee accommodation for "priority need applicants".
• try and find accommodation within their area whenever they can. Though the Bill sets out the arrangements whereby they notify, in writing, any other local authority they intend house someone in.
• Sets out guidelines for appeals, reviews, and protection of a homeless applicant's property (where applicable).
• Makes it an offence to provide false, or knowingly withhold, information when making a homelessness application, punishable by a fine of up to £2,500.
• Gives local authorities the power to refer homeless applicants to another local authority in Wales or England if they don't have a local connection - unless they're at risk of domestic abuse.
• Defines "local connection" as a person who :
• was normally resident in the local authority they've made a homelessness application in.
• is employed in the local authority.
• has family associations in the local authority.

Eligibility for Homelessness Assistance

• "Priority need applicants" include :
• pregnant women (and a person they would normally reside with).
• people with dependant children, with disabilities, are elderly, have a serious illness or are subject to domestic abuse.
• people affected by a natural or man-made disaster.
• 16-21 year olds who've left care, fostering or are at risk of sexual or financial exploitation.
• former military personnel who are homeless upon leaving the Armed Forces.
• "vulnerable" released prisoners (or someone who's been held on remand) but only those with a "local connection" (as defined above).
• People ineligible for help under this law are :
• persons from abroad who are otherwise ineligible, including non-EU nationals.
• subject to immigration controls or are excluded from benefit entitlements under the Asylum & Immigration Acts 1996 & 1999
• Statutory homelessness duties on local authorities will end for people who:
• turn down emergency accommodation that the local authority has deemed suitable.
• become "intentionally homeless" (i.e. evicted due to anti-social behaviour) – though the Welsh Government will have the power to draw up who counts as "intentionally homeless".
• accepts either an offer of a private sector tenancy that lasts at least 6 months or a social housing tenancy.

Gypsies & Travellers

The Housing Bill could lead to an increase in the number
of legal traveller sites in Wales.
(Pic : BBC Wales)

The Bill :

• Defines a "gypsy or traveller" as
• a person of a "nomadic lifestyle" regardless of race.
• people who used to live a nomadic lifestyle but no longer do (i.e. health reasons).
• travelling circuses and show people.
• anyone who lives in a mobile home for cultural reasons.
• Places a statutory duty on local authorities to :
• carry out an assessment of, and publish a report into, gypsy and traveller site requirements every five years from the publication of their first report.
• use their powers under the Mobile Homes Act 2013 to provide sites for travellers where there's an assessed need.
• Gives Welsh Ministers the power to :
• approve, amend or reject any gypsy and traveller needs assessment, and issue guidance to local authorities.
• force local authorities to meet certain duties with regard gypsy and traveller sites as stipulated in the Mobile Homes Act 2013.

Social Housing Standards

The Bill :

• Gives Welsh Ministers the power to set and revise standards for social housing, including :
• rent levels and service charges (which will be charged separately).
• rules relating to rent levels and service charges.
• the quality of social housing itself.
• Gives Welsh Ministers (or someone working on their behalf) the power to issue warnings, intervene, and the power of entry, if they believe housing authorities aren't complying with standards.
• Removes a requirement in the Housing Act 1985 for housing authorities - when setting "reasonable rents" - to keep social rents broadly in line with private sector rents. Instead, they'll need to comply with any new guidance/limits Welsh Ministers introduce.

Finance, Tenancies and Council Tax on Empty Properties

Long-term empty and abandoned homes will be liable
to a 150% council tax rate.
(Pic : BBC Wales)

The Bill :

• Abolishes the Housing Revenue Accounts Subsidy (HRAS), and gives Welsh Ministers the power to set a "settlement payment" for the eleven Welsh local authorities forced to leave the scheme as a result.
• Amends the Housing Act 1988 to enable mutuals and co-operatives to provide assured tenancies, enabling co-operative/mutual tenants to benefit from the same legal protections as assured tenancies offered elsewhere.
• Via amendments to the Local Government Finance Act 1992, gives local authorities the option to set an additional 50% rate of council tax (150%) on "long-term empty properties" (unoccupied and unfurnished for at least a year). It also gives Welsh Ministers the power to decided what properties this would apply to.

Costs

Now things start to get complicated.

Creating a mandatory landlord and agent register will cost £500,000, but would be self-financing because of fee income. Start-up costs for local authorities are estimated to be £250,000. Most of the burden falls on landlords and agents - upwards of £8million (between 2015-2017) - with costs falling to £265,000 per year once landlords/agents are registered and properly accredited as outlined in the Bill.

With regard the homelessness measures, the explanatory memorandum estimates ~32,100 applications for homelessness assistance will be made in 2015-16. The total cost, under existing laws, is estimated to be ~£21.3million. Under the preferred option in the new law, additional costs are estimated to be £5.9million, based on increases in homelessness assistance applications - an extra 3,200 - as a result of the Bill's provisions (for example, increasing the limit of "threatened with homelessness" from 28 to 56 days).

The total cost of the homelessness provisions is estimated to be in the region of £27.2-32.4million, based on expected homelessness figures, which themselves are dependant on multiple factors, including welfare reform and the state of the economy.

The gypsy and traveller measures will cost ~£1.6million per year until 2019-20, with most of that being the existing £1.5million grant to fund new traveller sites.

The preferred option for social housing standards sees a £15,000 per year cost fall on the Welsh Government, and £7,000 per year falling on social housing providers to collect and submit data. The preferred option for rent and service charge changes would initially cost £1.7million to set up – the vast bulk falling on local authorities – and £397,000 per year afterwards.

Abolishing HRAS has apparently been agreed with the Treasury, estimated to cost ~£990,000. However, an estimated £33million of rent income from Welsh local authority housing would then remain in Wales instead of being paid to Westminster.

The costs of the co-operative housing tenancy provisions will be around £130-140,000, mostly taking the form of continued funding to the Wales Co-operative Centre.

Additional council tax rate on empty homes would initially cost £359,000 to local authorities and Welsh Government to set up. From 2016-17, when the provisions come into force, it'll cost £527,000 per year in increased enforcement and tribunal costs. However, it's estimated a 150% council tax rate would raise somewhere between £11-14.4million for local authorities from the just over 24,200 homes left empty for more than a year.

What does this Bill mean?

Expect to see more of this.
This Bill is....wait for it....potentially quite controversial, and there
are more talking points than the media have let on.
(Pic : Wales Online)

There are many significant provisions in this Bill, notably the creation of a mandatory licensing system for private landlords, which should professionalise the industry further, helping to drive "slumlords" out – I'm thinking along the north Wales coast in particular.

Alongside that, other provisions – like those relating to mutual and co-operative housing and a fairer system of rents and charges for social housing tenants – seem sensible, even populist in some circumstances. It's for AMs to decide if that's truly the case though.

The extra council tax rate on empty properties might cause problems, especially if many are old holiday homes that haven't been used in a long time, though it's unrelated to the proposed general 200% rate on second homes. It would also encourage owners either to sell, renovate or rent their properties, increasing housing supply.

The abolition of HRAS – one of the few ways Wales has subsidised England to the tune of hundreds of millions of pounds, perhaps more, for decades – will lead to rent being retained in Wales, and money that could be reinvested in social housing by housing authorities. If the Bill passes and HRAS is abolished, then the Bevan Foundation and Plaid Cymru can probably chalk up its abolition as a success for them as much as the Welsh Government.

The gypsy and traveller provisions could cause problems as many people have an "issue" with traveller sites. The prospect of more of them being required by law could lead to difficulties in some communities, and perhaps for individual AMs too. No AM will be able to campaign against extra traveller sites honestly if they back the provisions in the Bill as outlined.

Entrenched opposition to sites might be less if local residents knew travellers living on legal sites were paying their way (they pay council tax when living on local authority and private sites, and most - if not all - work), had a strict code of conduct, and had full access to local authority services like rubbish collection.

There needs to be a bit of common sense when deciding where they should go. They shouldn't be sited out in the sticks on busy main roads, but there's no point in siting them in built up areas either. I'm not sure if that's best left to any Welsh Government guidance/regulations to come from the Bill, or if it should be included as clauses within the Bill itself.

The homelessness provisions are extensive – perhaps to the point it should've been a stand alone Homelessness Bill. They could cause controversy, mainly due to the impact on recently-released prisoners and (as I understand it) the powers for Welsh local authorities to transfer any homeless applicants who don't have a local connection elsewhere - including back over the border where applicable. The only exceptions, it seems, would be those fleeing domestic violence.

The Bill maintains released prisoners as a priority homelessness group if they have a proven local connection. However, homelessness is often cited as a cause of re-offending. Like gypsies and travellers, sheltered accommodation for homeless and vulnerable young adults is often sited in unsuitable places and attracts local opposition.

It's a reasonable compromise, as is the general requirement for a "local connection" when receiving homelessness assistance. It's best people receive help where they have strong connections and are perhaps known to the authorities, instead of becoming vagrants. The same requirements should apply to social homes too.

Read More

Welsh Tory Housing Policies - Do they add up?

It's obvious we need more housing, but are recent Welsh Conservative proposals the
right way forward? Or at an even more basic level, do their numbers add up?
(Pic : BBC Wales)

The Welsh Government's long awaited for Housing Bill was formally introduced to the National Assembly today (it's separate from the proposed Renting Homes Bill), and I'll take a closer look at that later this week.

Though last week, the Welsh Conservatives - via Shadow Housing Minister, Mark Isherwood (Con, North Wales) - launched their own outline policy proposals, entitled A Vision for Welsh Housing (pdf).

The Three Main Proposals

1. – Increase House Building

It's said every £1 spent on construction boosts the economy by £1.70.The Welsh Conservatives want to increase the current ~4,900 homes built per year to 14,000 per year, based on (often controversial) local authority housing need assessments.

Local councils set quotas for affordable housing within each development, and the Welsh Conservatives believe these quotas hinder the viability of large developments. So, they propose viability assessments from house builders themselves should be the overriding consideration, with the number of affordable homes per development based on commercial viability, not a "catch-all target".

In addition, they propose the creation of a Welsh Housing Commission to develop "evidence-based ideas", with membership that includes private house builders, private landlords and housing associations. They also want to nurture more construction talent in schools and colleges for obvious reasons.

2. – "Right to Buy" reforms

The headline policy is to ring-fence funds raised from "Right to Buy" sales in order to build a replacement social home for every home sold – termed "one for one". They point to England, where £367million was raised from just under 6,000 sales in 2012-13.

The Welsh Conservatives also want to prevent "Right to Buy" homes being sold quickly or turned into buy-to-lets. They'll do that by forcing a repayment of some of the "Right to Buy" discount a seller receives depending on how long they lived in the property.

3. – Bring empty homes back into use

Any home left unoccupied for more than 6 months is legally classified as "empty".

It's long been Welsh Government policy to bring abandoned properties – estimates suggest between 22,000-33,500 of them in Wales – back into use. The Welsh Government currently aim to being 5,000 back into use by 2016 via their Houses into Homes scheme, which offers interest-free loans to renovate empty properties.

The Conservatives propose something similar to a UK Government scheme in England, where a proportion of empty homes funding is paid directly to social landlords and community housing groups.

Also, the Welsh Government currently intend to levy higher council tax rates on second and empty homes left vacant for up to one year (which is part of the Housing Bill) – the Welsh Conservatives would increase that to two years to give owners more breathing room.

The Reaction

It's fair to say the reaction to the proposals has been lukewarm.

On the positive side, it was partially welcomed by Community Housing Cymru (CHC), with BBC Wales reporting CHC agreed with a lot of the content, and the ambition to increase housing supply, but noted that UK Government policies (such as the "Bedroom Tax") have reduced rental income for housing associations and seen an increase in empty properties. It looks like house builders have also broadly welcomed the proposals too.

Plaid Cymru and the Welsh Government haven't honoured it with a formal response yet (unless, in the case of the latter, you consider the Housing Bill itself a response), though the policy proposals are due to be debated in the Assembly tomorrow.

Peter Black AM (Lib Dem, South Wales West) described it as, "Big on ambition, short on detail and full of holes." Meanwhile, Welsh Labour's backbench spokesperson for Everything, Mike Hedges AM (Lab, Swansea East), is quoted as saying there were "not enough details in these proposal to take them seriously".

I'm inclined to agree with them.

Does it add up?

There's nothing fundamentally wrong with policies that encourage home-ownership and increase housing supply (both private and social), and I agree with it perhaps for the same reasons as the Welsh Conservatives - it promotes personal responsibility, is often a decent investment and facilitates an all around sense of prosperity and well-being.

Meanwhile, the creation of a Welsh Housing Commission is a step up from, or complement to, the existing construction sector panel.

However, policy approaches are beginning to sound like a stuck record, led by supply-side thinking (house builders, developers and landlords) while neglecting the demand-side (tenants, communities and buyers). Things like shared equity and mortgage guarantees, for example, seem a way to prop house prices up - a form of renting with a large down-payment - rather than a serious attempt to make homes more affordable.
Here's an idea. Why don't we start building cheaper homes, full stop? Here's some examples. Here's some more.

14,000 homes built per year seems a laughable number considering even – by the Welsh Conservatives' own figures (Annex A)– at peak strength the construction industry built 10-11,000 homes per year.

8,000-9,000 per year might be a more realistic target, which would still be double the current housebuilding rate, though largely dependant on a significant Welsh economic recovery.

Please tell me the Welsh Conservatives don't believe property should drive economic growth? Haven't they learned anything from the last ten years?

Most demand will be for affordable housing (from first time buyers, people moving from the rental sector, and those priced out in rural Wales) and one and two bedroom homes for purchase and rent (for the increase in numbers of single people, people in social housing affected by the "Bedroom Tax" and down-sizing pensioners).

An affordable home is generally defined as being priced at three to four times household income. In Wales (average salary given as £24,076 p9), that would be around £72-96,000 for a single person, and £144-193,000 for a couple - presuming both earned the average salary or more.

Take a look at any planning application for a big housing development. House builders seem keen to build three and four bedroom executive homes that sell for £180-200,000+ – even in the valleys.

There's a market mismatch. People who need a one or two bedroom home don't have any option but to buy a more expensive three or four bedroom one. And of course house builders will say, "We don't want a 40% affordable housing quota,"because it reduces space for the money-makers.Regulatory cuts will see more estates of stupidly-overpriced cuckoo clock houses built in places like Tonyrefail because it's cheaper to build there than Cardiff.

House builders know poorer local authorities will bend over backwards to get more higher-rate council taxpayers living within their borders. It's awful policy. It could cause an Irish-style housing bubble if house price optimism keeps trumping common sense, and that's before mentioning wider planning and "sustainability" issues like transport and overbuilding in unsuitable areas.

The Welsh Tory proposals - in the absence of a detailed assessment - hint at two
social houses needing to be sold under "Right to Buy"  to pay for one replacement.
(Pic : Gwalia Housing)

On the specifics of their "Right to Buy" proposals (or "Right to Acquire" for non-local authority social housing tenants), firstly, if there were a rush of "Right to Buy" sales, it would cause a reduction in social housing until replacements are built. So there would need to be significant numbers of social homes built before any "Right to Buy" reforms can come into effect to prevent making short-term housing shortages even worse.

On costings, the numbers given in this Welsh Government statement (£3.8million for 35 social houses), imply each "Right to Buy" home would need to raise between £100-110,000 to enable a one-for-one replacement. That presumably includes associated costs like land, access, S106 agreements and utilities (and we're talking one and two bedroom homes, larger homes would cost more).

Based on the English "Right to Buy" figures the Welsh Conservatives provided (£367million from 5,944 dwelling sales - p24), "Right to Buy" raised £61,742 per home - but remember discounts are larger and house prices are generally higher in England. And only 844 replacements have been bought or are under construction so far - "One for Seven".

Any funding gap would either need to be filled from the Welsh Government's housing budget (which I'd imagine wouldn't be ring-fenced or boosted by any Conservative government), from housing associations' own capital funds or borrowing.


Next, the maximum "Right to Buy" discount in Wales is up to £16,000.

The Welsh Conservatives would probably have to keep that £16,000 cap. They'll be unable to raise the discount to English levels (up to £75,000 in many areas outside London) otherwise sale income would be even less, and there would be even less money to build a one-for-one replacement.

So it's likely that at least two social homes would need to be sold to build one replacement. "One for Two" doesn't sound like a good deal. If the Welsh Tories have better figures to back up their policy, they need to produce them – as early as tomorrow's debate, I'd say - because the ship's sinking beneath the waves.

And what is it with Welsh parties not publishing details when announcing policies?

UPDATE : 22/11/2013 - During the debate, Mark Isherwood did provide general figures, but it appears nothing relating to the one-for-one policy. The only "concrete" figures came from Peter Black and Carl Sargeant, and they both concur that the sums for a one-for-one replacement of social homes simply don't add up. "Basic maths" in Carl's own words.

Read More