Part one: Meeting the decent homes standard

The rumour mill is working overtime in the sleepy town of Poole in Dorset. Footballer David Beckham is said to have bought a plot of land in Sandbanks, the millionaire's row of the English Riviera. According to a Daily Telegraph report published last year, property values there are the fourth highest in the world.

"The fifth-placed area is Manhattan, if you want to believe it," says a scornful Joe Logan, Poole council's head of housing management services and the man whose personal mission is to ensure the quiet, ever-so-English harbourside town of 140,000 people doesn't miss the boat when it comes to meeting the decent homes standard by the government-appointed deadline of 2010.

The regional daughter document of the Communities Plan for the South-west lists 10 authorities – almost half of the housing authorities in its area – that are at risk of failing to meet the decent homes target. Poole is among them. "It seems strange that homes that sell for millions of pounds exist side by side with homes occupied by local people that fall below a minimum standard of decency," says Logan. "People here struggle to get on the property ladder and a lot of them find it very frustrating, but there's not much you can do."

The problem is even more starkly defined when Logan reveals that Poole is pushing for all it is worth to get a place on the third round of the £2bn arm's-length management programme, the winners of which will be announced in July. This, says Logan, will allow Poole to get its hands on the £24.7m it needs to bring some 1800 of its 5300 properties up to the decency standard by 2010.

According to Poole's three-year housing strategy statement, published last year and based on its 30-year business plan, the council has a backlog of repairs totalling £17.9m. To achieve decency, the plan calculates Poole will need to spend about £186m. The statement also predicts that, without any investment over the next seven years, more than 3000 of Poole's properties would fail to meet the decent homes target.

To hit this target for all social housing is the task the Labour administration set local authorities and housing associations across England in April 2000 with its green paper Quality and Choice: A Decent Home for All. The race to meet the target is now well and truly under way, despite a serious case of the jitters last summer in the aftermath of a massive "no" vote by tenants of what would have been England's biggest stock transfer in Birmingham. Worried civil servants had to tell John Prescott that his department, the Office of the Deputy Prime Minister, was at risk of falling 200,000 homes short of its 2010 goal. The result of this was the PSA Plus review.

The PSA Plus review ran for three months, a root-and-branch review of government polic for meeting the £19bn backlog of repairs that had built up throughout the 1980s and 1990s. The review team produced about 30 working papers and called for evidence from across the spectrum of those involved in meeting the 2010 target. The final draft of the review was handed to ministers the day before Christmas Eve. Its executive summary, Decent Homes, Decent Places, is essentially the first chapter of the Communities Plan and shows that, although the government has shuffled the pack, it is still offering only the same deck of cards to local authorities.

People here struggle to get on the property ladder and a lot of them find it frustrating 

Joe Logan, Head of Housing Management , Poole

One of the first paragraphs in that first chapter reads: "Local authorities will be able to choose the right approach for additional investment in housing stock which they own from three existing options: stock transfer; the private finance initiative; and, for high-performing authorities, arm's-length management. Authorities that do not use these options cannot expect increased investment in their stock above that from the housing investment programme."

Three steps to heaven?
The three options all have their benefits and disadvantages (see "Any strategy", page 27) and, as the Communities Plan acknowledges, different authorities will suit different solutions. Far and away the most popular option for councils that perform well enough is to set up an arm's-length management organisation, as this method allows for additional investment and access to borrowing to fund investment, but allows homes to stay, effectively, in council ownership.

The housing private finance initiative also involves councils retaining ownership and potentially attracting millions in investment from the private sector but, almost four years into the programme, only one of the eight pathfinders has actually put pen to paper: Manchester, with its regeneration of the Plymouth Grove estate (see "Plymouth go", page 32). Islington is shortly expected to follow Manchester's example but the other projects are still some way off getting work started on-site as a result of complex contractual and legal wranglings with bidders and the government over what is legitimate. The first PFI projects were always expected to prove costly, but as one consultant points out: "The costs of running bids is proving ridiculously high, with both councils and bidders facing costs of up to £1m, just to get to the negotiating table."

As for stock transfer, the programme of large-scale voluntary transfer of homes out of council ownership to housing associations has stalled after the body-blow of the "no" vote in Birmingham in spring last year. The government, though, is still determined to get back on track to meet its target of transferring 200,000 homes each year. Anxious councils, wary of the political risks and of the vociferous and highly organised campaigning of anti-transfer groups like Defend Council Housing, want to ensure they have full tenant – and, more importantly, government backing – before subjecting themselves to a ballot. This reassurance from Whitehall came with the Communities Plan and the associated policy tweaks, such as extending the repayment of overhanging council debt to partial stock transfers and meeting shortfalls in funding, are expected to return some element of certainty to the process.

In Poole, however, Val Rowling, chair of the tenant committee and a supporter of the council's ALMO bid, recalls the initial failed bid by the borough to transfer its stock in 1993. "Tenants are dead against stock transfer – they just don't want it," she says. "It was a very close ballot, but tenants just wanted to stay with the council. It was ultimately swayed by the elderly people's dwellings – but there was only about four to eight votes in it. Also, a lot of resentment came when the decision was made to stop giving councils money to build."

This chimes with what Paul Jenks, head of housing at the Local Government Association, believes is the prevailing mood among tenants. "I think there's still a big hole in the transfer target," he says. "There are a lot of councils that will manage it, but tenants are still deeply suspicious of transfers.

Tenants are dead against stock transfer – they just don’t want it 

Val Rowling, chair of poole’s tenant and ALMO supporter

"The recent changes are all in the right direction, but still make the assumption that tenants are falling over themselves to transfer – and they are not. A lot of tenants are deeply suspicious of ALMOs and think they're not that far a step from stock transfer.

"As a result, I don't think the government is there yet on the decent homes standard. The LGA has always argued that councils should be allowed to borrow against income streams. We await with interest to see what the "blue skies" debate on housing finance produces."

High ratings may not be enough
The rock upon which all Poole's housing-related figures are built is its stock conditions survey. Logan mentions this, and improving performance, with an almost religious zeal at every possible opportunity. He is rightly proud, however, as Poole's housing service has seen rocketing improvement since Logan took charge two years ago – a crucial point if the council is to perform well enough to win ALMO money. In its first visit, last year, the Audit Commission's inspectors awarded the repairs and maintenance service – an area which the council had identified as its worst – two stars with promising prospects to improve. Shortly afterwards, the Government Office for the South-west upgraded Poole's housing assessment for the second year running to "well above average". It is the only council in the country to manage this.

Understandably, Logan feels these ratings give his council an excellent chance of getting a slice of the £700m that is up for grabs in rounds three and four of ALMO bidding, with the government having boosted the amount available for the four rounds of the programme to £2bn. But although this sounds like a lot of money, the 21 councils involved in rounds one and two have already eaten up around £1.3bn of it; if we see a repeat of the first two rounds' allocations, in which each authority got, on average, around £61.9m, that would mean just 11 authorities sharing the £700m in rounds three and four.

According to the Communities Plan, a third of all housing fails to come up to scratch and there remain more than 1.5 million households living in social homes that are not up to the decent homes standard. As a result, competition for resources will be fierce. Just four days before today's deadline for submissions, the Office of the Deputy Prime Minister had already received more than a dozen expressions of interest, according to one source. It's not a comfortable thought, but some people are bound to miss out. What they are then supposed to do if, like Poole, stock transfer is not an option for them, remains unclear.