Author: Red Brick Blog

Most people reading or watching the media during the last few days would have been left with the impression that Jeremy Corbyn had launched a major attack on the last Labour Government. In fact, he made a forward-looking speech to teachers on moving away from an emphasis on social mobility to talking about wider social justice instead.

(Photo: Guardian)

It got little coverage, no surprise there, until it was attacked by Tony Blair with a video and a fanfare, after which Corbyn was widely denounced for disparaging the last Labour government. Much of the vitriol was not in response to what he actually said, or even his own tweets on the issue, but to a strange and incoherent tweet from Momentum in reply to Blair’s video, saying in effect that austerity was Blair’s legacy. A little bit of displacement was all that was needed to make the charge that Corbyn had had a go at the last Labour government.

Blair’s video is a hallmarked example of the spin at which he is so adept (a political talent Corbyn lacks). He takes one line from the social mobility speech – “for decades we have been told that inequality does not matter” – adds in a couple of quotes carefully selected from other speeches in the past, then claims Corbyn is constantly attacking the last Labour government and ‘enough is enough’, before laying out some of Labour’s relatively good record on taking people out of poverty, spending on public services (focusing on health and education), throwing in Labour’s excellent performance on overseas aid as well. So far as I know, none of these are disputed by Corbyn, indeed I frequently hear him attack the Tory record by quoting Labour’s achievements in these areas.

But the facts of Labour’s record was not what this was about. The media skirmish that ensued was remarkable for the lack of nuance. An exception was Sean Fitzsimons‏ who tweeted “My take on the Blair/Brown Government. Solid performer on most fronts. Excellent on NHS, education, and improving incomes of pensioners and middle/low pay with children. Poor on house building, class and wealth inequalities, and North/South divide. 7.5/10.”

For virtually everyone else it was either 0/10 or 10/10. Hatred of Blair on the one hand and hatred of Corbyn on the other. The result of this madness will be no Labour government at the next election.

So, what about the substance of what Corbyn said? He was talking about inequality not just tackling poverty and he was talking about the weaknesses of the social mobility idea. Blair counters by saying inequality diminished under Labour. He compares the bottom decile with the top decile, but it is the top 1% that has become detached from the rest of society and that is what Corbyn concentrates on. Then again, this was not mentioned in his speech. Whether inequality rose or fell largely depends on which figures you pick, and it depends whether you include wealth as well as income. Blair also stresses that social mobility improved under Labour, rather missing Corbyn’s central point.

Whether it is fair to include 1997-2010 in the ‘30 years in which we were told inequality doesn’t matter’ or ‘dropping 40 years of political consensus’ is of course a matter of judgement, but in my view it is fair because it has proved possible to reduce poverty (normally measured by comparing the poorest with the average) without reducing inequality. Andy Burnham on Marr yesterday used a similar rhetorical flourish, saying  that governments have ‘failed the north for many decades’ including when he was in government. Is he to be denounced? Another expert in rhetorical flourishes, Peter Mandelson, probably did the most damage to Labour’s reputation in this area with his notorious comment that he was “intensely relaxed about people getting filthy rich as long as they pay their taxes”.

The idea of social mobility relies too much on counting how many people born into poor circumstances ‘make it’ into the richest group or into political power. Media often reduce it to whether someone born into poverty could become prime minister or find a ‘route out’ though football or boxing – the topic of many a film. It is often associated with the idea of ‘meritocracy’ and has been used to justify a wide range of both progressive and reactionary policies – including grammar schools and paid-for places in private schools, both of which are said to improve ‘social mobility’.

Corbyn was building intelligently on a substantial debate about social mobility in recent months, including important reports by IPPR and by CLASS think tanks.  There has also been debate in and around the current Social Mobility Commission, which has  commented on issues to do with inequality, warning that without major reform social and economic divisions within Britain’s society are set to widen. One of the current Commissioners,  Sam Friedman‏ @SamFriedmanSoc tweeted that “I would personally welcome a shift of political narrative away from upward mobility for some and toward a greater emphasis on inequality, individual flourishing, and tackling the reproduction of privilege.”

I suppose I’m a good example of social mobility, brought up on a council estate in a one-illness-away-from-poverty family and ending up with degrees and well-paying jobs. But nearly all of the young people I grew up with left school at 16 and did not have the luck that came my way. In my view, the social mobility approach focuses on people like me and ‘the ladder out’, changing nothing structural, whereas the social justice approach cares about all the rest and how to create a rising tide that lifts all boats.

Corbyn plans to replace the social mobility commission with a social justice commission, sponsored by the Treasury, which would have a wider brief to undertake audits and impact assessments of policy and suggest changes to legislation.

The quote that caused the uproar was taken from this part of Corbyn’s speech:

“For decades we’ve been told that inequality doesn’t matter because the education system will allow talented and hard-working people to succeed whatever their background. But the greater inequality has become, the more entrenched it has become.”

“The idea that only a few talented or lucky people deserve to escape the disadvantage they were born into, leaving in place a social hierarchy in which millions are consigned to the scrap heap, results in the talents of millions of children being squandered.”

I think this is uncontroversial, not worthy of the fuss that’s been made, yet grounded in reality, and the right way to go.

And the legacy of past Labour governments was fairly judged by shadow education secretary Angela Rayner, speaking with Corbyn, who said

“The Tories like to talk about people like me who had a difficult start but got on in life as evidence that anyone can succeed on their own. But actually my life shows the exact opposite. Any success I have had is thanks to Labour governments that provided the council house, minimum wage, tax credits and Sure Start children’s centre that enabled me to achieve it. That is social justice.”

Rayner also published an article making the case for the change in New Statesman.

So, despite the fury and the apparent division, this shift in emphasis away from social mobility towards social justice is actually something the whole Labour Party should be capable of uniting around.

There are many battlegrounds within the party, but this shouldn’t be one of them. 

by Monimbo

Senior housing policy expert writing under a pseudonym.

Labour’s programme for the next general election needs to be bold and radical but also practical and achievable. There are a number of different estimates of how many affordable homes are needed and of what type. Here we try to unravel the figures and ask – how many council homes should Labour plan to build?

A new group called Labour Campaign for Council Housing aims to ‘radicalise Labour’s housing policy to ensure our party tackles the housing crisis when in government’. Fair enough. It rightly says that there is a crisis of availability of affordable housing, and that Labour’s priority should be to build social rented homes. It wants councils to build ‘at least’ 100,000 of these, with an extra 55,000 contributed by housing associations. It argues for £10 billion grant a year to fund councils to build them, or £100,000 per home.

No one can argue that this isn’t ambitious. The government currently spends less than £2 billion annually on building affordable homes, and few of these are let at social rents. Labour’s green paper, Housing for the Many, promises a programme of 100,000 affordable homes annually of which ‘the majority’ will be for social rent. It would finance this, in part, by raising grant to £4 billion annually, the level achieved by the last Labour Government in its final years. But the new campaign believes this is not enough: ‘these commitments would not meet the scale of ambition needed to solve our housing crisis’.

So they call for 155,000 social rented homes to be built, and expect two-thirds of these to be new council housing. The target comes from a Shelter report published earlier this year, A Vision for Social Housing. However, the report was out of step with other projections of housing need. For example, Crisis and the NHF published a detailed assessment by Glen Bramley showing the annual need for new social rented homes to be 100,000 across Great Britain, with 90,000 needed in England. There are various differences in the ways the two projections were done. Bramley’s assesses a much bigger existing backlog of unmet need, for example. But the main difference is that Shelter assumes that all new needs in the categories it identifies have to be met by building more social housing, whereas Crisis provides a dynamic assessment in which new building influences the whole housing market – as indeed it would in practice – changing the behaviour of landlords and renters as more affordable homes are provided. As might be expected from someone who has been modelling housing needs for years, Bramley’s model gets closer to the real dynamics of the housing market.

Another report calling for a similar level of social rented output came from Capital Economics, written for SHOUT and the National Federation of ALMOs. They argued that building 100,000 social rented homes a year would be justifiable in terms of savings in benefits and the wider effects of the extra construction activity on the economy and on government incomes. Essentially, while Crisis addressed the demographics and affordability, Capital Economics shows the feasibility of the programme. Both, in broad terms, back up Labour’s target.

Let’s have a closer look at the target suggested by the new campaign. For housing associations to contribute 55,000 homes would mean a huge shift away from affordable rent and shared ownership, but at least they have built close to that overall number in the recent past. But in calling for 100,000 new council houses to be built annually the new campaign seems to take little account of councils’ capacity. The last time they built as many as 100,000 homes per year was in the mid-1970s: in fact, you have to add up all the council houses built since 1985 before you get a figure exceeding 100,000, amounting to over 30 years of councils’ output.

Of course, many local authorities are now gearing up to bigger building programmes, taking advantage of the government’s removal of the caps on their borrowing last November. The government believes that within a few years they might build 10,000 units annually, as compared to fewer than 5,000 now. This looks a reasonable assessment, but any progress beyond that depends on overcoming a number of serious constraints. These include access to land, having the skills to run a large new-build programme and being able to finance the extra borrowing involved from rental income. But the biggest constraint is access to grant. Labour’s plan to increase grant to £4 billion annually would help enormously if the money were to be refocussed on social rented homes. Councils could also continue to make use of developer contributions, which already finance nearly half of affordable housing output. Nevertheless Labour’s 100,000 affordable homes target is already an ambitious one, especially if the social rented element is to be close to 90,000 annually.

Now the new campaign argues for a target more than 50% higher, and one which relies much more on councils building than on housing associations. They want to raise the affordable homes budget to £10 billion annually, with grants of £100,000 per unit. The ambition is commendable, but why set a target that many will regard as far too high, and one which bears no relation to the sector’s capacity – especially that of local authorities? Do they really expect an incoming Labour chancellor to set a housing budget which is five times its current level and to be able to spend it from virtually a standing start?

The advantage of the target set in ‘Housing for the Many’ is that it is realistic, costed and grounded in reality: it’s rightly ambitious without being pie in the sky. With strong commitment, it’s capable of being delivered over a five-year period. The new campaign arguing the case for council housing is warmly welcome, but we have to make sure that Labour is able to deliver its current target before we set an even higher one that might be a step too far.

by Monimbo

Senior housing policy expert writing under a pseudonym.

Another statement from the Chancellor, another failure to recognise the looming crisis in local government spending. It’s less than a week since the National Audit Office issued its report on the financial state of local councils, which even the LGA acknowledged was a ‘stark’ warning. But although the LGA says the government must ‘urgently address’ the funding gap, complaining that councils face a cliff-edge, the Chancellor obviously believes that most councils will simply put the brakes on and avert a catastrophe, and if a few overshoot the cliff-edge he can blame it on their incompetence.

The NAO report shows that councils are in a hard game of robbing Peter to pay Paul. Councillors know that, come what may, they have to try to keep social care functioning, the bins being emptied and the streets lit at night. Some of these services have even seen a small increase in funding (children’s care has been increased by 3.2% in real terms). The consequences for other areas of council work are indeed stark, and housing is one of them.

The report shows that spending in two areas – planning and development and housing services – fell respectively by almost 53% and 46% in real terms over the period 2010/11-2016/17. These two broad service areas have been those hit hardest by reductions in funding under the coalition and Tory governments.

But these figures hide even bigger falls in some aspects of those services. For example, spending on housing-related support has fallen by 69%. Many of these services met a range of needs, including those of homeless clients. Of course they include several services that help people in groups that the government claims to prioritise, such as those with mental health problems or who are victims of domestic violence. They provide the help that numbers of people need to sustain their tenancies and avoid homelessness. Spending on private sector renewal is another victim – it has been cut by 63%. Development control – which among other things helps secure a flow of housing land for new building – has suffered a 53% cut. Expenditure on temporary accommodation, however, has rocketed by 57%, because most councils that don’t have enough homes for the homeless are inevitably often forced to place them in high-cost private lettings.

Councils will soon face higher costs, because they will take on a new set of obligations when the Homelessness Reduction Act takes effect in April. The legislation is welcome, but massively underfunded: some £61 million is being allocated outside London and £11 million in the capital. No one thinks this is enough.

Council housing, in the meantime, as not been subject to the same cuts because it is paid for entirely from tenants’ rents. But of course it has been pushed to absorb more and more costs of services that should be paid from general funds, with tenants seeing service reductions as a result. Councils can hardly be blamed for looking for ever more ingenuous ways to cross-subsidise services but neither should tenants be expected to be complacent about what their rents are used for.

One leader of a local government body, Jonathan Carr-West of the Local Government Information Unit, has spoken up: ‘Councils are running out of money fast’ he says, ‘We have already seen one county council go under and others may soon follow unless the government takes action now’. The LGA wrings its hands and urges the government ‘to provide the financial sustainability and certainty needed to protect the local services our communities rely on’. John McDonnell got it right when he said in response to the Chancellor, ‘We face – in every public service – a crisis on a scale we’ve never seen before… Our public services are at breaking point and many of our local councils are near bankruptcy’. He criticised the ‘indefensible spectacle’ of a chancellor ‘failing to lift a finger’ to help struggling local authorities. From Philip Hammond the looming catastrophe brought not a single word.

by Monimbo

Senior housing policy expert writing under a pseudonym.

Why did the number of homes let at social rents fall by 150,000 in the last five years? Surprisingly, although right to buy was a big factor, it wasn’t the biggest. From April 2012 until the same month in 2017, right to buy led to 55,000 council houses sales and 20,000 by housing associations (the latter is because of the ‘preserved’ right to buy kept by tenants if their homes are transferred to a new landlord). So half the net loss can be explained by such sales.

But there were two much bigger factors behind this recent assessment by the Chartered Institute of Housing of the losses in social rented stock. First, new build would easily have offset right to buy sales if output of social rented homes had continued at the same rate as in the previous four years: from 2008/09-2011/12, thanks to the investment made under Labour’s National Affordable Housing Programme (NAHP), 142,000 social rented homes were built, over 35,000 per year. Had this continued, social landlords would have built two new homes at social rent for every one sold, even after right to buy was ‘reinvigorated’ with bigger discounts from April 2012. As it is, the Tories are clearly poised to fail in their much more limited promise to replace the extra houses sold as a result of the right to buy being ‘reinvigorated’, and of course the replacements are all likely to be let at higher, ‘affordable’ rents.

Nevertheless, some new homes are being built for social rent. Adding together new homes built by housing associations and by local authorities, these total just over 50,000 over the five years. Not only is this far lower than achieved under Labour’s NAHP but numbers are now down to only 5,000 per year, with little prospect of their being revived. So in mathematical terms the biggest reason for the loss of social rented homes is failure to build: if Labour had still been in power, continuing a similar programme to its NAHP, around 125,000 more social rented homes would have been built than has been achieved by the coalition/Tory governments.

Increase in stock of ‘affordable’ rented homes, 2012-2017

Source: HCA, Private registered provider social housing stock in England 2016-2017.

So selling off the stock wasn’t the biggest reason for the loss of social rented homes, it was the failure to build. Oddly enough, right to buy wasn’t even the second biggest reason. The candidate for this status can be seen in the graph. From 2011 onwards, the coalition government set out to make a heavy dent in the provision of social rented housing in two ways. First, as we have seen, it built homes for ‘affordable’ rent instead of social rent, constructing about 90,000 up to April 2017. But second, it converted homes from social rent to ‘affordable’ rent at an even faster pace, with 102,000 conversions in total by the same date (shown purple in the graph, the green columns show the total AR stock from conversions plus new build). It forced associations to do this to give them extra rental income, to offset the loss of government grant (it fell from around £60,000 per new home built under Labour to less than £20,000 under the Tories). This is therefore easily the second most important factor in the decline of social rent.

Right to buy, whether for councils or housing association properties, is therefore the third biggest factor. But even this isn’t the whole story: both councils and housing associations have been demolishing social rented stock (for example, in regeneration schemes), and these losses run at around 4,000 per year.

In addition to these recent attacks on the social rented stock, it faces two more potential dangers: the new right to buy for housing association tenants, and the enforced sales of ‘high value’ council properties. At the moment, the first of these is only going ahead as a pilot scheme in the West Midlands, and will be funded by government. But the prospect of enforced sales of council houses, now less likely after the Grenfell Tower disaster, is still ‘on the books’ and is inhibiting many councils from taking on more ambitious investment plans. If right to buy for association tenants were to go ahead across the country, someone would have to fund the discounts and at the moment the only money potentially available is from forcing councils to sell off their better stock.

In this situation, Labour’s priorities should be clear: not only does it need an even more ambitious new build programme than it had when it was last in power, but this needs to focus strongly on building for social rent, as John Healey has promised. And the haemorrhaging of the existing stock must be halted too. This will mean, first, either suspending council tenants’ right to buy or at the very least making the discounts they receive much less attractive; second, rescinding the promise to housing association tenants that they can buy their homes and calling off ‘high value’ council sales; third, ending the conversion of properties to higher rents and, finally, ensuring that any regeneration schemes provide for at least one-for-one replacement of any social rented homes that are to be demolished.

by Monimbo

Senior housing policy expert writing under a pseudonym.

“Fund it yourselves” was the clear message from communities secretary Sajid Javid to the Communities Select Committee and then again in response to an emergency question from John Healey last Thursday. Red Brick had already outlined the options available to the government to help authorities make their tower blocks safe, and before that we called on the government to foot the bill. Javid has now made it clear he has no intention of doing so.

Of course he found some warm words with which to give the impression he was bending over backwards to help. “What we will absolutely do with every local authority,” he said to the committee, “is work with them closely and make sure that, through that work with them and the financial assistance that we can provide and the financial flexibilities, they are able to pay for any essential works that they deem necessary.” But he went on to say “we are not planning grants” and that his assistance is limited to “financial flexibilities that can provide the funding.”

The options appear to be twofold. Either councils will be allowed to borrow more, if they would otherwise hit the borrowing caps that apply to their council housing finances. Or they will be allowed to make transfers from their General Funds, for example from reserves, to bolster their Housing Revenue Accounts. The latter could mean that council tenants are not burdened with extra costs, unless of course (as seems likely) such a transfer only covers part of the costs of fire prevention work, and some still has to be paid from rental income. The first option, relaxed borrowing caps, offers nothing to councils at all, except the ability to spend more of their tenants’ money. Either way, local people – whether just tenants or a combination of tenants and council taxpayers (which include tenants too, of course) – will be meeting the cost of the work, not central government. The “financial assistance that we can provide” turns out to be zilch.

These options are those foreseen by Red Brick in July. We said that, in all probability, the government would force councils to pay for remedial works from tenants’ rents, perhaps offering “help” in the form of looser borrowing caps or (we speculated) permission to raise rents. Even if extra subsidy were offered in the form of grant, we suggested that the government would simply take this from its existing capital programmes. In the event, it’s not even going that far.

Why is this important? Council housing accounts are already under severe pressure. A four-year period of compulsory rent cuts still has two years to run, arrears are shooting up as universal credit and other ‘welfare reforms’ are rolled out, right to buy continues apace and councils are still faced with the threat of having to sell off their highest value properties, even though this may well now not happen. Furthermore, councils have already been told there will be no more government money to keep houses at the Decent Homes Standard, even though a stubborn 15% of the stock has failed the standard over the last four years. If they divert money to post-Grenfell safety works, this will almost certainly be at the expense of their obligation to meet the DHS.

Furthermore, it is only a short time since the prime minister was promising a new generation of council houses. For the councils that have a significant volume of post-Grenfell work, the pressures on rental income that were already intense look set to get worse. Now that Sajid Javid has explained that his “flexibilities” will offer them no extra cash, the prime ministerial promise looks vacuous.

By Ross Fraser

In the aftermath of the Grenfell Tower fire, many local residents expressed the view that the outsourcing of housing management and (in part) major works programmes to the KCTMO had contributed to the disaster.  They also called for the TMO to be wound up.

Residents were clear, and continue to insist, that they want the council’s housing stock to be managed directly by the council.   They believe that direct political control of the housing stock by elected councillors is preferable to any outsourcing arrangement.

Recently, LB Kensington & Chelsea has decided to terminate its management agreement with the KCTMO – which will mean that the TMO is going to be wound up.

However, LB Kensington & Chelsea is now urgently meeting housing associations to determine whether they would be willing to manage part or all of the management of the its housing stock.

This puts housing associations in a difficult position.  They want to do as much as they can to help the victims of Grenfell and others who have also lost their homes as a result of the disaster. But they know – particularly as the public enquiry evolves – that organisations acting against the express wishes of local residents will not be welcome.

Which begs the question: why can’t Kensington & Chelsea recreate a housing department?

There is no shortage of support available.  The highly experienced Barry Quirk is running the council and knows all about housing from his time as Chief Executive at LB Lewisham.  The government has sent in a Task Force to advise the council – which includes the highly-respected Chris Wood who has been Director of Housing in three London boroughs.   They could visit LB Wandsworth to see how an excellent housing department operates.

With council elections set for next year it might be wise for the council to work jointly with local residents – and in complete transparency – to explore a range of options in a measured manner.  Decisions can be made post-election.

But common-sense still seems to be in short supply amongst the council leadership.