Author: monimbó

Two recent surveys show how much concern there is among housing professionals about the failure to replace houses lost through right to buy. First, in March, in responding to the LGA’s housing self-financing survey, 71% of authorities said that the rules about capital receipts fail to let them build sufficient houses. Then a recent CIH member survey showed that one of their top three demands was to be able to make better use of right to buy receipts (see the graphic above). This is hardly surprising when the latest figures show sales to have risen to over 10,000 over the twelve months to last September (in DCLG live table 691), compared with just 4,000 for the twelve months before that. Over the same period when councils were forced to sell more than 10,000 homes, they were able to build less than 1,000.
The government’s pledges to replace right to buy sales were always qualified as applying only to the sales generated by higher discounts, which for the past two years have been at a maximum of £75,000 outside London and (for the past year) £100,000 in London. Furthermore, local authorities were expected to finance no more than 30% of the cost of a new house from receipts, funding the rest from other sources. The final twist was that replacement units have to be let at Affordable Rents, so they are not really replacements at all.
Even so, one-for-one replacement now looks like a sick joke. And what has been the government’s response to the haemorrhaging of social-rented stock? – to further promote the right to buy. It wants to reduce the qualifying period from five to three years through the coming Deregulation Bill. It’s going to appoint right to buy agents to facilitate sales and waste £100m in the process. And Eric Pickles wants to increase the maximum discounts still further and ensure that in future they keep pace with inflation.
As CIH pointed out in commenting on the original plans to ‘reinvigorate’ the right to buy, the problem with setting ever higher discounts, combined with the complex rules about reusing them, is that there simply isn’t enough money left in the pot to pay for replacement housing at local level. Apart from the rather blatant evidence provided by the new build statistics, the predictions made by CIH are also supported by the latest figures on capital receipts.
DCLG live table 692 shows that receipts in the past year (the money that came in after allowing for discounts) totalled £665m. Given that councils can build a house for an average cost of £125,000, these receipts could have financed over 5,000 new homes. They won’t of course, because the Treasury siphons off a hefty proportion of receipts and also imposes the rules noted above about replacements. The effect is to give far more priority to repaying debt than to building new homes. In other words, the right to buy offers the perfect combination for the coalition government: it helps to reduce government debt, it promotes home ownership and it cuts the numbers of council homes by ensuring that the best ones are sold off at knock-down prices. A better Tory housing policy is difficult to imagine.

It’s a long time since waiting lists did what they say on the tin. But the changes resulting from the latest DCLG guidance mean they will soon be more a barometer of local politics than of housing need.
Back in the good (or bad?) old days, anyone could put their name down on the waiting list for a council house and many people used to do so as an insurance policy. The last Labour government arguably had contradictory lines on this. In its quest to reverse the 1996 Tory homelessness legislation, its Homelessness Act in 2002 made waiting lists open to anyone (except those ineligible because of their immigration status). However, it later began to backtrack and encourage councils to adopt a ‘housing options’ approach to housing applicants. Some councils implemented this enthusiastically, notably Portsmouth who by reviewing old applications cut their waiting list from 12,500 to 2,500. Nevertheless, the 2002 requirements stayed in place.
The coalition saw the rise in waiting list numbers over recent years in England as resulting partly from these open lists, which in its view encouraged people to register even when they had ‘no real need of social housing’. The Localism Act 2011 introduced the concept of ‘qualifying persons’ who would be eligible to apply for housing, and gave considerable discretion to local authorities to decide who they should be. That said, the initial guidance wasn’t very different from the previous government’s: both emphasised a ‘housing options’ approach.
This changed last December when the government more specifically encouraged councils to give preference to local people, or those who have ‘a close association with the local area’. Its recommended ‘residency requirement’ is now two years. As a result of the various changes different councils have been trimming their lists (while equally some have done nothing). For example, Bournemouth seemed to follow similar practices to neighbouring Portsmouth in cutting its list from 9,425 to 3,177.
There is a difference between applying a residency test for entry to the list, and applying one before an allocation is made. It’s relatively common, for example, to have a local connection test like Dover’s which requires applicants who get an offer to show that they’ve lived there for three out of the last five years.
However, the changes seem to have launched a war of attrition in London, with various Boroughs implementing increasingly tough criteria before people can even get onto the list. Most now have a three-year test. But last year both Hammersmith & Fulham and Brent introduced five-year residency requirements for entry to the list. In Hammersmith’s case, this enabled them to cut its numbers by a gigantic 90% to only 768 applicants. Then Hillingdon upped the ante by introducing a ten-year residency requirement. Barking and Dagenham have just followed on by also adopting a ten-year test.
It is interesting to read the paper to B&D’s cabinet meeting on 8 April on its housing allocations review. Officers put forward options of having two-, five- or ten-year residency tests. In their assessment of the variable impacts, they judged even the five-year test would have a disproportionate impact on BME residents (they form three-quarters of those affected), with other affected groups being young people and those with jobs. Nevertheless officers recommended a five-year test.
They appeared very concerned about the impact of a possible ten-year test, because of those who would then qualify 80% would be white British – even though they now form only an estimated 40% of B&D’s population. Their equalities impact assessment indicated that it would not only disproportionately affect BME groups, but that these are also (on average) in greater housing need. It concluded that there was a potential impact on community cohesion in the borough as well as risk of a legal challenge.
Guess what Barking & Dagenham’s brave councillors decided to do? – they went for the ten-year test. Facing UKIP challengers in all wards in the coming elections, they decided a policy change was needed which would (on the advice of their own officers) give clear preference to white British housing applicants over the majority of the borough’s population.
We’ll have to see if the more extreme residency tests remain in place after next month’s polls. But whether they do or not, it’s clear that housing need is again becoming a political plaything. Of course local politicians should be able to decide their waiting list criteria and allocations policies, but they shouldn’t be able to throw objective tests of housing need out of the window. Surely the best response to UKIP is to get out the black, young and working voters who’ll be penalised by the sort of policies they’ll introduce if they get into power?

Given reports of the difficulties councils face in replacing houses they are forced to sell, shouldn’t the right to buy be curtailed before it does even more damage?
A survey by the LGA reports that four out of five councils are finding it hard to replace on a one-for-one basis the houses they’ve sold through right to buy. There is a range of obstacles. For nearly three-quarters, the biggest problem is that they can’t finance enough replacements from the capital receipts they’re able to keep. There are various reasons for this and the arrangements are complex, and this is why the LGA is calling for the restrictions to be dropped in an amendment to the Deregulation Bill now going through parliament. The government is of course unlikely to accept this amendment, because it would prevent them getting a share of RTB receipts to help bring down debt. But what’s more important, a tiny reduction in debt or ensuring that the RTB doesn’t result in a loss of rented housing stock?
One of the virtues of the UK Housing Review, extolled in Red Brick on various occasions, is that it provides the data on which we can take a long-term view of policies like RTB. The 2013 edition showed that, across Britain, RTB sales since 1980 had reached over 2.5m homes. It also showed that total receipts from those sales were slightly under £50bn. In other words, the RTB has been a prolonged fire sale in which houses and flats have been sold at an average price of only £20,000. This might be excellent value for buyers, especially when many of them later sell the property to a private landlord, but it represents dreadful value for the public sector. Even if more recent sales are likely to have produced higher average receipts, it’s hardly surprising that a combination of high new build costs and being forced to share the receipts with the Treasury means that one-for-one replacement is extremely hard to achieve.
We all know what the consequences have been, and one of the most important has been the impact on social rented stock. Back in 1981, across Great Britain this stood at over 6.5m dwellings (councils and associations added together). It’s now fallen to 4.8m, even though we’ve been building an average of 35,000 new social rented homes per year over the intervening 33 years. In other words, successive governments’ building programmes have made up less than half of the loss in stock: it’s hardly surprising that we’ve got such a huge backlog of housing need.
Supporters of RTB will of course protest that the houses haven’t been ‘lost’ they are still there. And even if they hadn’t been sold, the tenants who bought them would likely have used them for the rest of their lives in many cases. Both of these points are true, but the failure to reinvest means that we now have a much smaller social stock to meet the needs of those on low incomes (quite apart from the ambition we might have had to continue catering for middle-income households in social housing, as was the case before 1980).
Ending the right to buy may not be an election winning strategy (although it seems to have done no harm in Scotland). But three reforms would curtail its worst effects. One would be to restore maximum discounts and other safeguards to what they were before 2010. This would be a perfectly reasonable move, given current demand for social housing. The second would be to ensure that all receipts are used for new building, if necessary dedicating part of the HCA’s budget to the (possibly fairly small) grant that would be needed to top up the receipt. Of course, Red Brick would add to this a third reform – that borrowing controls on councils should be eased or preferably removed.
An indication of the potential that would be released by fairer rules is given by other responses to the LGA survey. They confirm replies to a recent one by ARCH which show that councils are currently planning to build 4-5,000 houses per year. LGA suggest the potential with different rules could be extra output of 48,000 units over five years. There is now a run of studies in the two years since council housing became self-financing that point to the extra capacity waiting to be unleashed. If the government’s review of the role of councils in housing supply, confirmed this week, doesn’t take up this challenge, will Labour’s Lyons Review?

The RTPI says planners are essential to increased housing output, pointing to their submission to the Lyons Review. But why do they ignore the potential of planning gain created through section 106 agreements?
Neither the RTPI nor the Town and Country Planning Association make much mention of planning gain and section 106 in their submissions to the review, seeming to accept the coalition’s sidelining of the measure since it took office. The government’s attitude to s106 was confirmed this week when its new online guidance also made little mention of its role in providing affordable housing. Yet it’s arguable that it’s one of the most important ways in which planners can contribute to the output of new homes at social rents.
In contrast, three of the other Lyons submissions – from ARCH, CIH and JRF – focussed strongly on the potential revival of s106, and a little background history quickly shows why this is the case. ‘Planning gain’ was first established by section 106 of the Town and Country Planning Act 1990, hence its alternative name. This measure allows planning authorities to oblige developers to include affordable housing (and potentially other things like schools) in their developments, either by setting land aside or by building the homes or by paying cash instead. It took a while for the use of planning gain to grow and for good practice to develop. But by 2010/11, as the graph from Savills shows, s106 accounted for 60 per cent of affordable housing completions.
This is particularly pertinent to Lyons and to Labour as this was the peak year of the old National Affordable Housing Programme, that the Tories brought to a halt in the 2010 Spending Review.
Since then, goaded by the developers, the Tories have poured cold water on s106, coming up with various ways to reduce its impact that culminated in last year’s Growth and Infrastructure Act, which invited developers to appeal against uneconomic s106 requirements. Of course, there was a case for looking at planning obligations after the credit crunch, and many local planning authorities were evidently doing so on a voluntary basis. But it was also apparent that developers would try to kill off s106 in the recession so that it wouldn’t bug them again when the market started to grow. Which of course is what is now happening.
The Tories seem strangely indifferent to the effects of weakened s106 agreements on their own Affordable Homes Programme.  But even now they still make a significant contribution, providing 4,820 units in 2012/13 alone, in recent years even with no grant from the Homes and Communities Agency. Clearly they now need to be harnessed as part of Labour’s drive to build 200,000 homes per year: in fact, not to do so would invite failure.
There are plenty of issues about the working of s106, for example why its use is so variable between local authorities. Clearly it needs to be reappraised and guidance strengthened. However, Labour has so far been rather indifferent to it. Roberta Blackman-Woods MP, the planning spokesperson, has said that it would be reviewed alongside the Community Infrastructure Levy with the idea of replacing it with a ‘community investment fund’. The problem with this is that if the planning gain is taken as a financial contribution it misses out many of the successful attributes of s106, especially the fact that land is made available and new developments as a result are often mixed. There is also the danger that, with so much pressure to renew or extend infrastructure under limited capital budgets, that’s where the money will be spent, rather than on housing.
Lyons should be well aware of the risks of dropping s106 and also of the potential gains from keeping and strengthening it. After all, at the peak of output under the last government, when output from planning gain was at its height, we were building 140,000 homes per year in total.  Rather than holding back development, section 106 was one of the leading drivers of it.

It’s perhaps cruel to recall John Prescott’s ten-year transport plan that faded into oblivion almost as soon as it was announced. But if the Blair government had too many plans and strategies, the coalition seems to have drawn the lesson that it’s better to have none at all – or at least as few as possible.
Nevertheless, it can’t completely wean itself off setting targets. As Shelter’s John Bibby points out for example, there is one to double the number of self-build homes constructed over the next decade. The only problem is that no one knows what the ‘decade’ is and therefore what the actual target might be. As he says, ministers seem to have chosen various figures, as high as 30,000 homes and as low as 14,000, so that their most recent versions of the target are in fact lower, not higher, than the output when the ambition to double the figures was first announced.
It’s curious, however, that the government can set a target for self-build but eschews one for non-self-build, i.e. for the rest of housing output. Or does it? There was certainly no new build target in its 2011 ‘housing strategy’ Laying the Foundations. Yet how can we judge whether the strategy is working unless it contains some measure of performance? Since then, the planning minister has said we should get back to building ‘220,000, 250,000 or 290,000 homes a year’. So now we have the opposite of a proper target – an aspiration so huge and so vague that it looks more like a pipedream.
The coalition could learn lessons from both the successful and unsuccessful use of targets by the previous government.  OK, we all know that Gordon Brown was also pipe dreaming when he said he wanted homeownership to reach 75 per cent, and that almost immediately it started to move backwards. We also know that Labour set a fuel poverty target which it failed to meet, but it was at least a statutory yardstick that clearly revealed whether or not policy was working. At the same time, Labour set an ambitious target to halve the use of temporary accommodation for homeless people in England, and by the year it left office the target was met.
Perhaps Labour’s most successful target of all was the aim to meet the Decent Homes Standard in the social sector within a decade.  It wasn’t quite achieved, but it is a case study in how government can set a realistic, long-term programme and maintain commitment to it.  What did it involve? First, the definition of a standard and of a timeframe (with input from those in the sector lobbying for the programme). Second, an assessment of the resources required and a commitment to provide them. Third, delivery mechanisms, accompanied by enthusiastic promotion of the programme and getting buy-in from those on whom its success depended. And finally, proper measurement and monitoring, with adjustment to the programme as experience was gained.
Now I know that the decent homes programme was exceptional and Labour’s overall track record, as noted above, was mixed.  But decent homes proved that government, at all levels, could deliver: in this case, a total investment of £37 billion across all social landlords over ten years.
Another area replete with targets is tackling climate change. Here both past and present governments are guilty of setting targets without proper plans for how they will be delivered. The main one is in Labour’s Climate Change Act 2008: it requires the UK to reduce carbon dioxide emissions by 80%, relative to 1990 levels, by 2050. The interim target is a 34% reduction by 2020. In addition, the government is obliged to set and meet five-year ‘carbon budgets’ as stepping stones.
The problem is that, while the mechanisms are in place, they don’t tie in with government budgeting and, as we know, the government’s energy efficiency programmes are now regarded as dispensable ‘green crap’. So although we have an Energy Efficiency Strategy, which has just been updated, it doesn’t spell out what is needed and how we are doing. For example, to meet the carbon targets we need to improve, every minute, one additional existing home to the high standards required. Needless to say we are not doing so, in part because the Green Deal has been such a flop. Does this failure get assessed in the updated strategy, with action to tackle the slow progress? No.
What lessons should Labour draw for its housing policies, from the experience of this and the previous governments? First, I think it has done the right thing in setting a 200,000 target for housing output.  Yes, it’s less than what’s ideally required, but at the same time it’s realistic. Labour set a target of 240,000 annual completions in 2007, but the last time English housebuilding briefly topped 200,000 was in 1988. It has already established the Lyons Review, which should give it a firm basis for planning how to achieve the target. The commitment will need to be underwritten by the next Chancellor, and there’ll need to be a detailed implementation programme and an ongoing review mechanism to ensure that it is being met and can be adjusted as required.
If it takes the 200,000 target seriously, Labour could again give a lesson in how to construct and deliver a housing investment programme, as Nick Raynsford and subsequent ministers did with decent homes.  There’s never been a more important time to learn from what Labour has achieved in the past.

‘Sell expensive council houses’ says the Telegraph headline. The HCA’s Prospectus for its 2015-18 programme, also published yesterday, couldn’t be more blunt. They ‘expect bidders to explain how many properties they are planning to sell… and why they have chosen not to dispose of more’.
The ostensible reason for flogging off even more of the family silver is to enable providers to build more homes with less grant. But I think there are two other reasons. One is that it feeds the myth that councils are irresponsibly sitting on properties that the average punter can only dream of buying. The Telegraph story was illustrated by yet another picture of what is claimed as Britain’s most expensive council home. At the moment it’s a pair of houses recently sold by Southwark. Not long ago it was a gatekeeper’s lodge in Kentish Town. Either way, readers will have their prejudices confirmed, that ‘subsidised’ tenants are living in palatial homes, and that council housing is run by people who couldn’t get a receptionist job in an estate agents.
The other underlying reason is that this is all part of the war on social mix. There are now so many examples of policy acting against mixed communities and – specifically – of the rights of people on low incomes to live near jobs in central London, that it is pretty obviously intentional. Bedroom tax, the benefits cap, shipping homeless families out of London, the Mayor’s indifference to his own affordable housing requirements, the redevelopment of big chunks of social housing to create expensive new flats – all these are grist to the mill. If, at the age of 83, Dame Shirley Porter still keeps up with politics, she must be delighted that her ‘homes for votes’ scam has now been adopted as official government policy.
Even taken at face value, the policy can be seen as endorsement of the Policy Exchange idea of selling off as much valuable stock as possible. Their 2012 report Ending Expensive Social Tenancies was analysed in Red Brick by Tony Clements, and his argument that it represented both bad economics and bad social policy still holds. But it now presumably has the backing of PE’s former housing specialist Alex Morton, described (with no apparent irony) as one of the jewels in the think-tank’s crown, who has just been recruited to the Downing Street policy unit.
Just to prove that the No.10 policy unit is a hot-bed of housing policy ideas, its former head Paul Kirby popped up last month with the suggestion that selling the family silver should not only underpin the HCA programme but could sort out the whole housing market. In his version, councils would sell off every house that fell vacant, and part of the proceeds would be turned into grant for replacement homes. In the process, he seems to ignore both the debt on the house that’s sold and the new borrowing on the one that’s built, which would both become a charge to the rents of the remaining tenants.
When, at the age of 91, Harold Macmillan inveigled against selling the family silver he didn’t mention council homes. But since his governments built so many of them he would certainly have been entitled to do so. He was making the point that selling off valuable assets in times of financial trouble may well be a mistake. It’s one that I discussed in Red Brick when looking at arguments made two years ago in Stuart Lowe’s book The Housing Debate. Social housing is a very valuable commodity, and while we might want to (and indeed should) use its value creatively, there are always plenty of people who simply want to run it down and at the same time strip it of its best assets. Right to buy did this in spades; now that it’s a policy that has largely run its course, new ways of disposing of the family silver are evidently required.
Red Brick readers have a better idea: keep as much social housing as we can, let at its current rents, because demand is high from large parts of the population who simply can’t afford anything more expensive. Furthermore, as well as being valuable in themselves, council homes in particular have very low debt levels (only £17,000 per unit). Let’s use this asset value to build more of them at similar rents. This will need subsidy, but this is much better value than hiking rents up to ‘affordable’ levels and having to pick up the tab through housing benefit.
If anyone in the No.10 policy unit doubts that this case stacks up, let them look at the calculations by accountants PwC in their 2011 report The Numbers Game. They clearly show the long-term value of using capital grant to build new houses for letting at social rents, as against using less grant, letting them at higher rents and allowing housing benefit to take the strain. Given their subtitle, ‘increasing housing supply and funding in hard times’, it’s a conclusion that might even have been endorsed by that nice Mr Macmillan.

Which is the first housing body to have its ‘housing manifesto’ ready for the coming election campaign? Hats off to the National Federation of ALMOs, which published its manifesto this week, making the case for investment in council housing and specifically for the added value given by arms length management companies.

ALMOs have had a rough time under the coalition government, both because it ended their preferential treatment for decent homes finance, and because it cut the amounts available to tackle existing backlogs. Some ALMO authorities lost out on money they hoped to receive, while non-ALMO councils were helped (to some extent) when they no longer expected it. All lost though from the fizzling out of any real target to get all social housing up to the full standard, and even more so because Labour’s plan for a higher ‘Warm Homes’ standard was ignored.

Even so, despite some councils like Sheffield taking housing management back in-house, and others like Bolton and Rochdale effectively transferring their stock to their ALMOs and losing their control over it, ALMOs are now enjoying a minor resurgence. In November, Northampton Council announced that it would set up an ALMO to manage its stock, which if it goes ahead will mean it joins a handful of others to have created new ALMOs, despite there no longer being any link to decent homes funding. One of the main attractions is that, as standalone companies, ALMOs have more freedom to make efficiency savings, and indeed where councils have entered new, long-term contracts with their ALMOs (like Derby), it has usually been because their efficiency saves more than the extra costs of having a separate company.

The NFA manifesto plugs this case, of course, but also argues that ALMOs can do much more.  They have branched out into managing private rented properties on behalf of landlords (thus helping to guarantee minimum standards), created training schemes and apprenticeships to tackle worklessness, addressed financial exclusion among tenants, as well as a host of other added-value activities.

ALMOs have not been resting on their laurels with the existing stock, in many cases improving it beyond the Decent Homes Standard, especially in terms of energy efficiency. The manifesto calls for something not unlike Labour’s Warm Homes standard, arguing for all council stock to have an energy-efficiency (‘SAP’) rating of at least 70 by 2020, with no stock falling below a rating of 40. This could only be done with financial support beyond the current ECO programme, which has in any case recently been cut back.

But the strongest case comes in contributing to new build. ALMOs have already added over 2,000 homes to their councils’ stock, and have plans to build 3,000 more over the next five years. They’ve often done this by taking advantage of small sites, old garage schemes and other opportunities within their estates, where effectively only the landlord can build new homes. It goes without saying that to do so requires detailed negotiation with tenants so that newly built houses meet local needs.

Which leads to the manifesto’s key recommendation, of no surprise to Red Brick readers, that the borrowing caps that hold back council housing investment must be raised.  The manifesto leaves open whether this should be done by raising the caps and relying on prudential borrowing rules alone, or whether there should be a rule change to make the caps unnecessary. Needless to say, either would be very welcome. Presumably, the Lib-Dems may well adopt it as policy as they have in the past. But will we have a party in power in 2015 that is actually willing to make this critical reform?

As the Lyons Commission starts its work, plenty of ‘solutions’ to the housing crisis will be put forward, especially ones that purport to allow more investment in social housing at little extra cost in subsidy or borrowing.  While we ought to welcome new ideas, we also have to be wary of easy fixes that won’t work on the scale required. Already several are emerging.

Most recent is Nicolas Boys Smith and the organisation Create Streets. They want to replace high-rise estates in London with high-density, low-rise housing. They claim this can increase housebuilding at no cost to the taxpayer.  Unfortunately there are so many holes in their plans for how to go about it that the basic notion, which might not be a bad one, is more likely to cause problems than solve them. They want to finance the schemes by extra borrowing, to be paid for using a mixture of surpluses of rent over running costs, private market sales and recycled right to buy receipts. But more borrowing does – oddly enough – add to government debt, even though costs could be met from rents and other sources. More importantly, though, the idea can easily be seized on to justify the sort of project that Andy Slaughter MP wrote about in Red Brick recently: redeveloping existing estates in ways that marginalise the existing residents, because the best way of paying for the extra borrowing is to replace their homes with high-cost units for sale or market rent. This could easily mean more of the social cleansing already favoured by Hammersmith and Fulham.

Some of the plans on offer purport to solve the borrowing problem more directly, by taking it off balance sheet. Again, of course, new ideas are welcome, but in this field so many solutions have been offered in the past that it seems unlikely that anyone will find a genuine new one, other than changing the borrowing rules. Last year David Orr said we should scrap ALMOs and replace them with municipal housing companies. More recently, Richard Parker made what sounds like the same suggestion, albeit applied to parts of a council’s stock not to the whole stock. 

Now these proposals need to be taken seriously, as both their proponents are members of the Lyons group. However, the obvious disadvantage in both cases is that they involve stock transfer and, unlike with an ALMO, the new body can’t be controlled by its parent council if the new borrowing is not to count towards public sector debt.  This is exactly the conundrum which the National Federation of ALMOs tried to get to grips with in its 2011 report Building on the potential of ALMOs to invest in local communities. And it has to be admitted that the report wasn’t successful, as only one ALMO and its council have pursued any of the options the NFA put forward.

This is why the NFA have returned to campaigning for a change in the borrowing rules as the most effective way of releasing councils’ potential to build more homes. Simply stated, the problem is that municipal companies in which councils only have a minority stake are stock transfers on the lines of those in Bolton and Rochdale (both former ALMOs where the councils gave up their majority control). If the councils retain a controlling stake, then there is no change in their borrowing status. And it’s a pretty safe bet that almost all the places where councillors and tenants are willing to give up council control have already done so.

Finally (for the moment), we have Mick McAteer of the Financial Inclusion Centre, calling for the issue of social housing government bonds. These would ‘fund a housing programme on the necessary scale’. But they would of course again be public borrowing, and in any case would be unlikely to compete with the terms offered by the Public Works Loan Board. A much better option is the LGA’s idea of a Municipal Bonds Agency, but if this goes ahead it is vital that it is set up in a way which helps councils avoid any new debt being counted as public borrowing, as John Perry argues in Public Finance. Here, for sure, is a model worth pursuing, but one which would only achieve its full potential if linked to a change in the borrowing rules.

A big test of the Lyons review will be whether it can steer its way through these proposals, successfully sorting the wheat from the chaff. But this observer, for one, will be disappointed if Lyons doesn’t conclude that – while new ideas may help in some circumstances – there’s no getting away from two fundamentals. One is the need for ongoing subsidy for new building, so that rents can be kept down to genuinely affordable levels. The other is a change in the borrowing rules or the lifting of the borrowing caps, so that councils can build on a similar basis to housing associations. The Lyons Review will be a let down if it doesn’t give these the prominence they deserve.

As the Lyons Commission gets underway, there’ll be plenty of people arguing there is no housing problem at all, or we’re looking at it wrongly, or there’s an obvious solution that no one has yet thought of. More on the topic of easy fixes in due course, but in the meantime we have the blog Left Outside offering Four charts that prove you know nothing about the housing market.

 

The main point made is that numerous articles have pointed to the housing output achieved in the 1960s and 1970s – for example the recent one by James Meek, which reproduces the graph above. But these articles show they ‘know nothing’ about the housing market, because they ignore the effects of slum clearance. If you take the loss of houses into account as well as the gain from new building, you get a chart like the one below.

As Left Outside says, the post-war years still look good, but a lot less ‘stellar’. It goes on to point out that output during the Blair/Brown governments now looks pretty good by comparison. The blog goes on to discuss the changing composition of the stock (houses being subdivided into flats) and the influence of planning legislation.
However, the main point seems to be to rubbish the argument that, if we built so many houses after the war, why can’t we do so now? But of course serious commentators (like those who write for Red Brick) are simply making the point that the building industry was able to gear up and deliver on a massive scale in those post-war years, but seems incapable of doing so since the 1990s. The fact that it was also engaged in slum clearance does, if anything, make the point even stronger. We might add that, in the 1980s, while social housing output fell sharply, private housebuilding was sustained and increased to around 200,000 per year towards the end of the decade. To give a more comprehensive picture, as Left Outside claims to do, we might also point to the massive investment being made in housing renewal in the 1980s, which also fell off rapidly in the 1990s. So the fallback in public construction in the 1980s appears not to have led to a loss of capacity – it got diverted into private housebuilding and renovation.
Left Outside makes a reasonable but different point, that if someone needs a house, it’s the total stock available that matters, not the numbers of newly built ones. If you need social housing, then it’s the number of new lettings. These issues are important too. But they don’t detract from the fact that we had massive capacity to build and repair houses until the 1980s.  If we could achieve similar private output now, while also building enough social dwellings, we could add around 240,000 units to the stock each year. Instead, we are struggling to produce even half that number. As house prices have boomed, aside from the mini-peak just before the crunch in 2008, the private sector has largely failed to respond.  Despite Left Outside’s four charts that prove housing commentators ‘know nothing’, we do know one thing: that the housebuilding sector is under-delivering.

Shortly before George Osborne set out his alarming vision for public expenditure, James Meek asked whether government welfare and housing policy is a war on the poor. He begins his LRB article Where will we live? with the case of a 60-year old woman in Tower Hamlets, struggling to pay the bedroom tax, who has also been hit by loss of her incapacity benefit as she’s now judged fit to work. As Meek says:
What’s being done to her is happening quite slowly, over a period of months, and is not the work of a gang of thugs breaking down her door and screaming in her face, but is conducted through forms and letters and interviews with courteous people who explain apologetically that they’re only implementing a new set of rules. At the age of sixty, having worked for thirty years before being registered as too unwell to work, Pat Quinn is effectively being told that she’s a shirker, and that the two-bedroom council flat where she’s lived for forty years and where her husband died is a luxury she doesn’t deserve. She’s been targeted for self-eviction. Essentially, the government is trying to starve her out.’

Red Brick readers are familiar with such cases, but Meek’s description cuts to the quick.  He concludes, ‘the government has stopped short of explicitly declaring war on the poor. But how different would the situation be if it had?’ Here I beg to differ with him slightly: while the attacks on the poor haven’t yet quite been described as a war, they certainly look very much like one. As Ken Livingstone said about Thatcher’s assault on trade unions, in which three million unemployed was a price worth paying: ‘Thatcher’s great friend Augusto Pinochet used machine guns to control labour, whereas Thatcher used the less drastic means of anti-union laws. But their goal was the same, to reduce the share of working class income in the economy.’  Or to put it in Meek’s terms, Osborne hasn’t actually sent in a gang of thugs to drive Pat Quinn out of her house, but the goal is the same. It’s to squeeze spending on welfare benefits, at least for non-pensioners, out of the economy.

Another parallel occurs to me, and this time Labour shares part of the blame. Both the current and previous Home Secretaries effectively believe that ‘asylum seeker’ is another name for an illegal immigrant and that, while still paying lip-service to UN conventions, life should be made so uncomfortable that they will stop coming here or go ‘home’.  The same panoply of weapons was used in the war against asylum seekers as is now being used against welfare claimants: placing negative stories in the media, cutting financial support to levels on which it is almost impossible to survive, vastly increasing the bureaucracy they have to cut through to get any help at all, moving them around so as to cut any community ties they may form, and finally handing over their accommodation to the likes of G4S and Serco.

OK, so the latter hasn’t yet happened to welfare recipients, but the government has already resurrected the idea of outsourcing housing management and it will certainly do this if it gets the chance in the next parliament. We might also add that asylum seekers were prevented by the last government from getting jobs and supporting themselves, which made them easier to demonise. Osborne hasn’t prevented the poor from working, of course, but by saying they could work when either realistically they couldn’t, or there aren’t jobs available, or the welfare system penalises them if they only work part-time, he achieves the same demonising effect. There’s even a direct link to immigration in the weaponry deployed by Duncan Smith: benefit scroungers who won’t work mean that employers look for immigrants who will.  So as well as wrecking the economy, benefit claimants are also responsible for immigration.

There are now of course tens of thousands of cases like Pat Quinn’s, many involving stomach-churning hardship. Osborne and IDS cannot be unaware of the damage they are causing, so the obvious conclusion is that it is not just a ‘price worth paying’ to squeeze welfare out of the system, but is actually an intentional part of the process.  If poor people can be made to suffer sufficiently, some will indeed move into low-paid jobs; but most (like asylum seekers) will live on the margins of survival, even if a few will regrettably turn to crime, end up sleeping rough, commit suicide or simply die. Squeezing welfare out of the system isn’t just about saving money, it’s about changing minds.  Welfare claimants have to learn the hard way that relying on the state is no longer an option, because the state is no longer interested in their survival.

To legitimise this cruelty, claimants are made to look like they’re crooks or worse. As we saw in response to the Channel Four programme Benefits Street, there are plenty of real thugs with baseball bats (or at least with Twitter accounts) who’d love to sort Osborne’s problem out for him.  It’s difficult to disagree with Pat Quinn’s conclusions, based on her own plight: ‘I’m sure if they had their way they would kill us. I really believe that.’ Even if you think that she’s exaggerating, you can’t deny that Pat Quinn and other claimants are getting Osborne’s message.