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SECTION 3 - PROPOSALS

8. The purpose of this consultation is to invite comment on:

• Proposed changes to the current circumstances set out in the 2002 Regulations under section 32A. These suggested changes are intended to clarify the purpose of this set of circumstances;
• The introduction of a further set of circumstances enabling local authorities to invoke the Regulations in order to discharge their duty by offering a short assured tenancy;
• Guidance required to support these changes; and
• The name of the proposed new Regulations and the language used within them.

9. The proposed outcome would be to have a new set of Regulations under section 32A which allow for non-permanent accommodation to be provided in two different sets of circumstances:

• To allow for the provision of transitional accommodation where a housing support assessment has concluded that permanent accommodation would not be sustainable at the current time. In these circumstances, the expectation is that the local authority will keep the case under review and provide permanent accommodation in the future should that become sustainable for the applicant following the provision of support. The transitional accommodation could be provided by means of an occupancy agreement, a Short Assured Tenancy or an SSST.
• To allow for the local authority to discharge its duty to a homeless household by ensuring provision of a short assured tenancy in the private rented sector where this was appropriate. It is presumed that local authorities will use these circumstances to increase the housing supply options available in their area, helping them to find sustainable solutions for homeless people and work towards delivery of the target that all unintentionally homeless people be entitled to settled accommodation by 2012.

10. Draft new Regulations are provided at Annex B; the 2002 Regulations would be revoked.

Changes to the current circumstances (Regulation 4)

11. The proposed amendments to the current circumstances are as set out in draft Regulation 4 at Annex B. The amendments do not involve substantive change to the circumstances currently in force; their purpose is to revise the language used to clarify that local authorities may provide non-permanent accommodation, together with support, in certain circumstances. These circumstances are that an applicant has housing support needs which mean that they would be unlikely to be able to sustain a tenancy at the current time; as such, permanent accommodation would not be appropriate.

12. Regulation 4b refers to the accommodation to be provided in such circumstances to be 'transitional'. This accommodation may be quite specialist in nature and have support or other services available on-site or otherwise linked to the property; alternatively, the accommodation itself may be from general stock but the applicant is receiving specific support services to develop the skills needed to manage a permanent tenancy. The 2002 Regulations refer to this type of accommodation as 'interim'; this phrase is not used in the new draft Regulations as the review process indicated the term was not well understood and was often confused with 'temporary accommodation'. The term 'transitional' supports the purpose of Regulation 4 which is to give local authorities powers to respond to the needs of applicants who would currently be unable to sustain permanent accommodation, recognising that, with time and appropriate support, they may be able to develop the skills to sustain their own tenancy.

13. In common with the 2002 Regulations, Regulation 4 requires that local authorities provide a package of support together with the transitional accommodation. These items are largely unchanged with two exceptions:

• Regulation 4(b)(v) contains a specific requirement for the local authority to give an undertaking to the applicant to provide permanent accommodation when a housing support assessment identifies this would be appropriate. This undertaking was not explicit in the 2002 Regulations.
• References to an end date for the accommodation and support package contained in the 2002 Regulation have not been replicated in the new draft; instead, Regulation 4(b)(iv) states that a review date must be set for a further support assessment to be carried out to assess progress. The purpose of this change is to reinforce the intention that the applicant will move on from the accommodation having gained the skills to maintain their own tenancy and the local authority has a duty to provide permanent accommodation at the appropriate time.

14. An example of a case where a local authority may wish to invoke Regulation 4 is provided below:

A local authority receives a homelessness application from a young man aged 17. He has left the family home following the breakdown of his parents' relationship and has never lived independently. The local authority find him to be unintentionally homeless and in priority need due to his age. A single shared assessment is conducted which finds that he has no independent living skills, no experience in managing budgets or personal financial matters and little awareness of the responsibilities of managing a property. As such, he is unlikely to be able to sustain a permanent tenancy at the present time and requires support to develop independent living skills. In the longer term, the assessment judges that, with the appropriate skills, he will be in a position to maintain his own tenancy. The local authority decides to invoke Regulation 4 to provide transitional accommodation and support to the applicant.

15. Views on the proposed revisions to the circumstances currently set out in the 2002 Regulations are invited. Current use of the 2002 Regulations is limited and it is thought this may be in part due to lack of clarity regarding their purpose and of guidance on their use. Limited guidance is contained in the Scottish Government's Code of Guidance on Homelessness but more detailed coverage is proposed to raise awareness and promote use. Views are sought on development and content of practice guidance on Regulation 4.

Changes to allow local authorities to discharge their duty through a short assured tenancy in the private rented sector (Regulation 5)

16. There are a number of reasons for attempting to facilitate greater use of the private rented sector:

• Analysis of responses to the discussion document Firm Foundations revealed broad - but conditional - support for proposals to make greater use of the private rented sector to meet local housing need. This consultation paper discusses in detail the conditions which should be attached to greater use of the sector for homeless households.
• Opening up wider possibilities to use the private rented sector will ensure that homeless households have a greater range of choice of properties and locations in which to resettle. In particular, in some areas it will mean that homeless people can access properties nearer to employment opportunities or social networks than would be possible in the social sector.
• Local authorities already have the ability to discharge their duty to homeless households in the private rented sector through an assured tenancy. However, they find it difficult to achieve this outcome as assured tenancies are very rarely offered and do not appear to be seen as a realistic option by private landlords. Short Assured Tenancies are most common in the PRS and we are therefore proposing that we work with landlords to discharge duty through this route, with certain conditions attached, as set out below.
• Achieving the 2012 target will mean treating all homeless people equally and providing greater entitlements to those households currently assessed as 'non-priority' under the legislation. For most authorities this will mean providing more settled solutions for greater numbers of single men, a significant proportion of whom will be young. This ties in with greater use of the private rented sector which contains a mix of property sizes and is particularly popular with younger people.
• Existing schemes such as rent deposit guarantee schemes, lead tenancies and the Cyrenians Flatmates scheme demonstrate that the private rented sector can be a viable option for homeless households. Information on rates of tenancy sustainment where rent deposit guarantee schemes have been used to place homeless households in the private rented sector has not been collected by schemes in a systematic way but a pilot scheme in Highland reported 89% of tenancies created were sustained for over 3 years ⁷.
• Local authorities have consistently sought greater flexibility in using the private rented sector to meet the needs of homeless households ⁸. This is seen as an important tool in working towards meeting the 2012 target and allowing social housing to be let to a wider range of households in housing need.
• Recent and ongoing work to improve standards in both the management and physical condition of housing in the private rented sector, through, for example, the introduction of Landlord Registration, the Repairing Standard and the launch of Landlord Accreditation Scotland - mean it is a viable option for a range of tenants.

17. The proposed new set of circumstances is as set out at Regulation 5 at Annex B. These allow for 'non-permanent' accommodation to be provided where:

A short assured tenancy with a minimum 12 month tenancy period is available to the applicant

18. We are proposing that landlords work with local authorities to provide tenancy agreements for applicants which allow for a minimum tenancy period of 12 months. This is to provide greater security of tenure than the usual minimum period for a SAT which is 6 months. Short Assured Tenancies are provided for by the Housing (Scotland) Act 1988. Our proposal to extend the minimum period of the tenancy does not alter any of those provisions, and, following the expiry of the minimum period, the tenancy would be available for renewal by the landlord and the tenant as normal and according to the provisions of the Housing (Scotland) Act 1988.

The tenancy is affordable for the household

19. Local authorities already have a responsibility when discharging their duties to homeless households to consider whether tenancies offered are affordable for the individual applicant household. This responsibility would apply to discharge of duty using a SAT and encourage authorities to consider carefully the suitability of this option generally, and a particular tenancy specifically, for an applicant. In addition, the requirement that affordability be considered when invoking Regulation 5 will help ensure that - as far as possible - the risks of work disincentives or rent arrears are mitigated.

20. Not all homeless households will be in receipt of housing benefit; however, it is expected that local authorities and landlords will need to work together to consider the implications of Local Housing Allowance, which replaced housing benefit in the private rented sector from April this year. Such considerations may include affordability, in terms of the market rent the landlord would normally charge compared to the Local Housing Allowance for the area, the time taken to administer Local Housing Allowance by the local authority and whether direct payment of benefit to the tenant is appropriate for the applicant.

21. It is proposed that the guidance accompanying Regulation 5 discuss the issues local authorities might wish to consider in reaching a view on whether the tenancy is likely to be affordable. These include employability and the risk of rent arrears. Views are invited on the guidance practitioners would find helpful in assessing tenancy affordability.

A housing support services assessment has been carried out and concluded that a) there are no tenancy support needs; or b) any tenancy support needs identified can be met within the accommodation provided under the tenancy and a package of support is in place to meet those needs

The support to meet the support needs of the household is available

22. These clauses are intended to ensure that the applicant's support needs are identified and met to mitigate the risk of tenancy failure and repeat homelessness. They are also intended to provide reassurance to landlords that the applicant is receiving any help required to enable them to be a responsible tenant. It is intended that the accompanying guidance discuss the types of tenancy support which could be considered, for example, money advice, help with budgeting, independent living skills and how the support is provided.

23. The clause emphasises that discharge of duty via a SAT will only be an appropriate and sustainable outcome in certain cases and authorities should consider the individual circumstances of applicants to determine the most appropriate housing solution.

The applicant has consented in writing that: (a) they have received housing advice from the local authority and been signposted/had access to further sources of independent housing advice; (b) they understand that accepting a short assured tenancy offered under this regulation equates to discharge of the local authority's duty under homelessness legislation; and (c) they consent to discharge of duty through invoking this Regulation

24. The aim of this clause is to ensure that the applicant makes an informed decision about whether they wish an outcome in the private rented sector via a SAT to be considered by the local authority. It is suggested that a sample form be developed for inclusion in guidance accompanying the revised Regulations.

25. It is intended that applicants would 'opt in' to the widening of their housing options by discharge of duty via a SAT by giving written consent. Applicants who chose not to 'opt in' would continue to be owed a duty of permanent accommodation via the usual outcomes of a SST in the social sector or an assured tenancy in the private rented sector. Where an applicant chose to 'opt in', the local authority would seek to identify suitable accommodation offers from both the private rented and the social sectors. Their duty could be discharged through a reasonable offer of a SAT under Regulation 5 where that offer meets the legal requirements set out in homelessness legislation ⁹. Local authorities would also have the option to discharge duty through a SST or an assured tenancy. The flow chart below illustrates the proposed operation of Regulation 5.

26. An example of a case where a local authority may wish to invoke the Regulation is provided below:

A local authority receives a homelessness application from a 35 year old woman with 2 dependent children. The applicant became homeless when her landlord sold the property she was renting; the applicant is currently staying with her mother in the local area. The local authority find the applicant to be unintentionally homeless and in priority need. At a housing options interview, the applicant indicates a strong preference to stay in the local area as her children attend school there, she works nearby and it is near her mother's home. The local authority considers that, in the context of the local housing market and the applicant's circumstances, discharge of duty via a SAT in the private rented sector is a suitable option for the applicant. The local authority provide case-specific housing advice to the applicant and ask her if she wishes to extend her housing options to include a SAT. The applicant agrees and gives written consent for the authority to extend their search for suitable accommodation offers to include a SAT in the private rented sector in accordance with Regulation 5.

27. Views are invited on the proposed circumstances in which local authorities would be able to discharge duty with a SAT.

Considerations

28. Respondents to the discussion document Firm Foundations indicated that greater use of the private rented sector to discharge duty to homeless household should be conditional on ensuring that the housing is well-managed, in reasonable condition, affordable and offers security of tenure. The proposed circumstances set out in Regulation 5 are intended to address concerns about affordability and security of tenure. It is not considered necessary to include specific provisions in the legislation to address concerns about property condition and management for the reasons set out below.

Property condition and management

29. As noted previously, local authorities already have powers to discharge duty to homeless households in the private rented sector by means of an assured tenancy. However, assured tenancies are offered infrequently by landlords and the purpose of the new Regulations is to widen access to the sector.

30. A number of policy initiatives have been introduced in recent years to help improve management standards and the quality of accommodation in the private rented sector, and to provide protection for tenants:

• Section 32(5) of the Housing (Scotland) Act 1987 (as amended by the Housing (Scotland) Act 2001) states that local authorities cannot fulfil their accommodation duties to homeless households through accommodation which is overcrowded, may endanger the health of its occupants, does not meet any special needs of the applicant (or household) or is not reasonable for them to occupy. This provision applies to accommodation sourced from both the social and the private rented sectors.
• The Repairing Standard, introduced via the Housing (Scotland) Act 2006 sets minimum standards of repair which tenants in the private rented sector can expect. Tenants also have the right to complain to the Private Rented Housing Panel if they have given reasonable notice to their landlord that repairs are needed but these have not been carried out.
• Landlord Registration ensures that all landlords are assessed by their local authority as 'fit and proper' to let property under provisions contained in the Antisocial Behaviour etc. (Scotland) Act 2004. The aim of the scheme is to improve standards in private rented housing through the introduction of minimum legal requirements. The scheme has also increased engagement between local authorities and the private rented sector, making the sector more visible and accountable.
• The creation of the new national landlord accreditation scheme - Landlord Accreditation Scotland - presents an opportunity to introduce further safeguards for tenants in relation to the management and quality of private rented accommodation. Some respondents to Firm Foundations suggested that membership of an accreditation scheme be linked to local authority discharge of duty through use of a SAT in the private rented sector. The national scheme is in its infancy at present and we do not think it appropriate to include membership of it, or a local accreditation scheme, as a circumstance which must be met in order that Regulation 5 be invoked. However, we wish to explore during the consultation process how to promote good practice in the use of the private rented sector for homeless households and how, in making greater use of their flexibility in discharging duty, local authorities can support and benefit from initiatives to improve standards.

31. It is proposed that guidance accompanying Regulation 5 contain advice to local authorities on how they might best adopt procedures and local policies to ensure that the legal framework on property condition and housing management operate to its best advantage. This could include options such as property inspection by the local authority or an appointed agent.

32. Views are invited on the suggested measures to address concerns about the quality and management of private rented sector accommodation which could be used to discharge duty through a SAT.

Use of Regulation 5

33. Discharge of duty through a SAT in the private rented sector will not be appropriate for all homeless households. It is intended that local authorities use the powers contained in Regulation 5 to seek housing options in the PRS where this is an appropriate and sustainable outcome for the individual concerned. There may be certain household types or profiles which are better suited to discharge of duty in this way. However, it is suggested that local authorities consider the circumstances of each case individually to determine the most appropriate housing option and that it would not be appropriate for Regulation 5 to be invoked automatically on grounds of household type. Furthermore, local authorities are best able to determine the most appropriate use of the Regulations in the context of the local housing market and having access to all the relevant information about the circumstances of the applicant. For these reasons, it is proposed that Regulation 5 does not include circumstances covering household type. Views on this approach are welcomed.

Repeat Homelessness

34. Section 32A of the 1987 Act provides that, when accommodation is secured under the circumstances of the Regulations, section 26 of the Act (definition of intentionality) does not apply. This provision is contained in primary legislation and as such does not form part of this consultation. However, it is relevant context in which local authorities should consider the suitability of applicants for discharge of duty under the Regulations; it is in both the local authorities' and the applicants' interest that the outcome sought is appropriate and sustainable.

Equalities

35. The Scottish Government, and other public bodies including local authorities, have a statutory duty to equality impact assess new and existing policies on grounds of race, gender and disability. Scottish Ministers have also made a commitment that the Scottish Government will also equality impact assess policies on grounds of sexual orientation, age and religion or belief. Furthermore, local authorities have a range of duties under relevant equal opportunities legislation, including the encouragement of equal opportunities and the observance of equal opportunity requirements in the exercise of the functions given under the Housing (Scotland) Act 2001.

36. We wish to be clear about the potential impact on equality groups of introducing additional flexibility for local authorities in discharging their accommodation duties to homeless households. For example, there may be considerations around the suitability of certain property types prevalent in the private rented sector for some disabled applicants. The requirement to 'opt in' through giving written consent and having received housing advice may raise issues for applicants who have literacy problems or whose first language is not English. We will seek to explore the impact of our proposals with equality groups as part of this consultation but would welcome views and comments from all respondents.

Monitoring & evaluation

37. It is important that any changes to the homelessness policy and legislative framework can be monitored and evaluated. Using the HL1 data collection system, local authorities can currently record discharge of duty through the 2002 Regulations and also the type of accommodation accepted by the applicant. Additional guidance on use of the HL1 would be required to clarify how outcomes under the new Regulations should be recorded in order for the changes to be monitored and impact to be assessed.

38. In addition, there may be a case for an evaluation to assess the impact of the legislative changes on local authorities' capacity to meet the 2012 target. We will also want to monitor the impact on the achievement of sustainable housing outcomes for homeless people and wider impacts on the supply of private rented accommodation for other tenants who traditionally seek accommodation in the sector, including students, migrant workers and young professionals. Views on the suggested approach to monitoring and evaluation are invited.

Guidance

39. As discussed throughout this paper it is proposed that practice guidance be developed in association with local authorities and other partners to facilitate best use of the Regulations. The guidance would be informed by the review of the private rented sector currently ongoing in order that authorities are able to maximise the additional flexibility offered by invoking Regulation 5. Suggested content is noted throughout this paper and comments and additions would be welcome.

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