Thirty-odd years ago in Haringey we had a great scheme for helping elderly home owners manage their affairs. If it was their wish, the council would buy their family home at market value and, in exchange for a specified discount on the price, we would provide them with a home in a sheltered housing scheme or similar.
The scheme benefitted everyone. The council now owned an asset it could invest in and rent to a family, giving up a unit for which there was less (although still substantial) demand. The home owner was released from the burden of managing and maintaining a large house, often on a fixed income, and got a rented home with the support of a warden as well as a significant capital sum they could invest. The policy tackled both under-occupation and overcrowding.
The scheme was, of course, brought to a halt when Meryl Streep became Prime Minister in 1979. For ideological reasons the Tory government stopped ‘municipalisation’ and all the benefits of the scheme were lost. Elderly home owners were deprived of the opportunity to become residents of sheltered housing, which many of them aspired to do.
I suppose I should be pleased that Grant Shapps has started to reinvent the wheel to encourage older people to ‘downsize’ in a voluntary and non-coercive way. It contrasts sharply with Government’s bullying bedroom tax for social tenants who under-occupy.
Unfortunately the ideological objection to municipal ownership remains in his new scheme. In what passes as a Government announcement these days, Shapps told the Daily Telegraph that, instead of selling their home to the council, the elderly home owner would move into suitable rented or sheltered housing (which regrettably is in decline following changes in the Supporting People regime) and the council will lease their property, taking responsibility for maintaining and letting the property at ‘affordable rates’ (which I presume means well above social rent levels).
Based on an existing pilot scheme in Redbridge, the council would pay the costs of moving, renovations and financial advice. The former homeowners would receive the rental income and retain ownership of the home for their estate. As the council does not own the home, it will be willing to take on management and maintenance costs but will not want to invest in the property for the long term.
One issue is that it remains unclear whether Shapps intends that the rent received by the former owner would be net of management and maintenance costs; this would seem obvious but the (Lib Dem) Deputy leader of Redbridge Council wrote on ConservativeHome that “The home owner retains ownership of their home which is leased to the council to provide us with additional social housing. The owner receives all of the rent as income, as well as free property management.” ‘All of the rent’ seems to me to be not the right thing to do, and undermines the viability of the scheme.
Another issue to be resolved is the tenancy terms on which the new tenant of the family home occupies it, and what happens to them if the owner dies and the home is part of their estate. I assume the tenant will only be given a fixed term tenancy but they should have some reasonable guarantee of their security and period of notice.
Subject to seeing such details of how a national scheme might work, this looks like a reasonable step forward. It’s just a pity that an entire generation of home owners wishing to downsize, and an entire generation of families wishing to rent a home, have been denied the opportunity because of Thatcher’s ideological purity.
Author: Steve Hilditch
Categories
Beware Blue Tape
You have to watch the Tories like a hawk. Their latest gimmick is a review of a series of housing regulations under the guise of their ‘Red Tape Challenge’. As if it were all a little joke, Baroness Hanham (the Lords’ CLG Minister) ‘is asking people to vote out policies they think are the weakest links’ in the country’s housing laws. Everyone is invited to look through a long list of regulations and make suggestions as to what should go.
The danger in this exercise is illustrated by the Government’s examples of the ‘unnecessary red tape’ that they have already removed, which includes for example regulations on houses in multiple occupation and the supposedly liberating sections of the Localism Act.
Over 200 housing and construction regulations are covered by this latest red tape challenge – see the list here – covering the private rented sector, social housing, construction and building regulations. You are asked to comment on whether they should be scrapped altogether, changed from a regulation to a voluntary code, reformed or left as they are.
The problem with this kind of jumbo exercise is that the Government will get out of it what it wants. In the long list are important provisions protecting private or social tenants or building stndards that they will no doubt want to remove under the cover of having consulted in this meaningless way. We complained once before that the Government had included the whole of Equalities legislation in a single red tape challenge exercise – showing precisely how important they think equalities is.
Glancing down the housing list, most of the regulations mean little to me and they will sound technical and even trivial to most people. For example, I have no idea why there are so many Assured Tenancies (Approved Bodies) Orders, but some of our readers may be able to say why they matter. It would be surprising if there was nothing in the list that could and should be scrapped, but it is worth remembering that most will have been introduced to further a specific objective or to solve a particular problem.
Regulations included in the list cover issues such as:
- the procedure covering demoted tenancies
- protection for social tenants when a registered provider becomes insolvent
- the forms of notice to be served on secure tenants when the landlord seeks possession
- the suitability of accommodation offered to homeless households
- the procedure governing registration as Commonhold land
- the use of Empty Dwelling Management Orders, and
- the management of houses in multiple occupation.
All of these are important issues in housing and most of the ones I have cited will be important to retain. But the device of reviewing all of them at once as part of a Cabinet Office exercise means that the eyes of the housing world are unlikely to be focused on any of them until, Bingo!, the Government concludes that a particular one should be removed or amended, which will probably be bad news for tenants somewhere.
So – a task for a night when sleep is avoiding you – have a look at the lists and see which of these regulations, if removed, would have a serious adverse effect. Then bung in a response to [email protected] saying briefly why it matters and why it should be retained (or strengthened). Then at least the website won’t be dominated by Tories and the Government won’t be able to say that there is no opposition to their conclusions.
Categories
Cameron makes it up
If Ed Miliband had said anything as ludicrous as David Cameron’s claim that private rented sector rents are going down he would have been all over the news facing demands that he apologise with detailed analysis by pundits of the figures that show he is wrong.
In response to a question by Joan Ruddock MP, Cameron had the nerve to claim that the housing benefit reforms were bringing rent levels down: “what we’ve seen so far, as housing benefit has been reformed and reduced, is that actually we have seen rent levels come down. So we’ve stopped ripping off the taxpayer.”
Cameron’s statement was contradicted by everyone who has ever done any work on private sector rents. Chartered Institute of Housing quoted National Valuation Office Agency data showing that LHA baseline rates, which are based on market rents, have increased or stayed the same in 853 out of 960 local authority areas since March 2011.
However the apparent misleading of Parliament never made it big in the mainstream news. The fact is that Cameron gets away with saying things that aren’t true and gets an easy ride from the media. No 10 set out the case for the defence. They told Inside Housing “We are hearing of cases where in return for direct payments to landlords our reforms are beginning to work” but, as IH notes, the spokesperson “was not able to provide numbers to back up the claim, saying that the Government will publish data on the impact of LHA reforms later in the year”.
If Miliband had tried such a pathetic explanation as that deployed by No 10 – “we’ll let you know in a few months” – he would have been ripped to shreds. “Hearing of cases”? What cases, where, how many, publish the data!
It is interesting, though, that commentary on private sector rents now often includes reference to Ken Livingstone’s idea of the London Living Rent, even if it is often misunderstood. Ken is seeking to open up the debate about rents by setting a benchmark – after due research – for the proportion of income that should reasonably be taken by rent if households are to retain sufficient income to meet their other needs. As the idea develops it should put pressure on social landlords who are beginning to charge excessive rents under this Government’s policies, but also kick off a debate about how to exert an element of control over the private sector as well.
The countries with the most successful private rented sectors have a stronger measure of rent control than we do, and better security of tenure as well – but it is difficult to work out how we get from where we are to where they are.
Apart from saving cash, which they look increasingly unlikely to do, the argument deployed most frequently by Iain Duncan Smith and Lord Freud, and repeated by Grant Shapps, was that the HB changes would bring down rents. It’s how markets work, they explained. We argued at the time that this was nonsense economics: the policies would do nothing to bring rents generally down as there was excess demand in the system, but would put upward pressure on rents in the lower end of the market as more people chased fewer affordable homes.
Labour Housing spokesperson Jack Dromey MP has been chasing Cameron over his mis-claim, but it would be good to see it feature in a future PMQs so that Labour nationally can show, as Ken Livingstone is doing in London, that someone will stand up for private tenants on low incomes.
Categories
In praise of DIY: SOS
I love Nick Knowles and his DIY SOS: The Big Build programme sums up my core attitude to housing policy. In it, people who have had a hard time get descended upon by a nice gang of builders who do up their house. The final scenes are normally the same: a grateful family, in tears of joy, say their lives have been changed forever.
And for the rest of the population, that’s why we have housing policy.
Knowles leads us through it with expert explanations of what’s going on, what the design hopes to achieve, how the plumbing works, and also holds interesting interviews with the family asking how they got into this position – in a nice non-judgemental way – and what difference a proper home will make to them. He has a natural ability to explain how fulfilling the most basic of needs – a decent home – can be transformational.
I have no idea how much it costs the BBC to put it together but they must be running the government close in the number of homes completed in the first 6 months of the year.
You can apply to be on the programme. As the BBC says, it is looking for major domestic construction projects to feature, and that they may be able to help ‘if you’ve had an unexpected change of fortune’. Well, tens of thousands probably qualify to come forward – people in temporary accommodation, overcrowded households, people who can no longer afford their accommodation due to HB cuts, etc.
If only the BBC and Nick Knowles could manage 100,000 projects a year. We’d be sorted.
Categories
Who gets subsidised housing?
Monimbo
In Steve’s trenchant critique of the proposals by Frank Field and David Davis to boost the right buy, he raises the ever-topical issue of whether social housing is ‘subsidised’ and, by implication, the wider question of whether other sectors are, and if so by how much? This is an issue regularly addressed by the annual UK Housing Review, and armed with a sneak preview of this year’s edition I’ve been checking it out. (Unpaid advert on behalf of authors Steve Wilcox and Hal Pawson – it will shortly be available here).
Let’s start with the sector that’s really cushioned by the government. Yes, that’s right, it’s you owner-occupiers, especially if you have paid off your mortgage. How so? Well the benefits to mortgage payers were wiped out when tax relief ended in 2000, but all owners enjoy capital gains tax relief now worth £5bn (net). Those with no or only small mortgages also benefit from not being taxed on the value of their home (as used to be the case through Schedule A). This is worth an astonishing £11bn. Add back in the taxes that owners do pay, and the net subsidy is a romping £12bn. Even if you dismiss the tax on the imputed value of a home as an academic notion which shouldn’t enter the balance sheet, then the outcome is that owners pay no net taxes at all. But as Steve Wilcox points out, the existence of these tax advantages means that house prices are far higher than they might otherwise be, benefitting existing owners and adding to the hurdles faced by first-time buyers.
Private landlords don’t enjoy the same tax advantages as homeowners but they benefit from a less restrictive regulatory regime, which means they can access interest-only mortgages. Furthermore, the recent growth in numbers of landlords who own only one or two houses is undoubtedly fuelled by homeowners who can afford a deposit to buy another house to rent out. Taken together, Wilcox argues that the effects of the tax and regulatory regimes benefit existing owner-occupiers most, then landlords, with first-time buyers (especially those who can’t afford a deposit) at the bottom of the pile.
Let’s turn to subsidy for renting. All tenants, of course, are eligible for housing benefit. The average HB payment for private tenants, at £114p.w. inEngland, compares with £82 for housing association tenants and £73 for council tenants. Obviously, this is largely a function of higher rents. But those who claim that social housing is ‘subsidised’ because it charges lower than market rents often fail to point out the costs that then fall on government through the HB budget.
How much is the economic subsidy due to lower social rents actually worth? Well, quite a lot, given that social rents run at about 60% of market levels: some £7bn annually. But again as Steve Wilcox points out, the gap will close (slowly) as the government’s ‘affordable’ rents kick in. And this will in turn have a knock-on effect on HB costs.
It could however be argued that the ‘economic subsidy’ for social housing is as artificial as the implicit tax reliefs for homeowners, given that no (sensible) government would raise social rents to full market levels. But, oddly enough, those who go on about this subsidy to social housing don’t tend to draw attention to the similar one for owner-occupiers.
But surely social housing gets direct subsidy? We are all aware of the social housing grant for new homes and historic subsidy for council housing, but as Steve Hilditch pointed out much of this has been paid off, given that average council debt is now only £17k per house. And council housing has now been making a ‘profit’ since 2008, recognised by the handsome payment to the Treasury implied by the debt settlement that will take place when council housing gives up all future subsidy on 1st April this year. Council housing in Scotland has meanwhile been running without direct subsidy for years, and Scottish councils have been building lots of houses recently, partly from their rental income. As will increasingly happen in England, Scottish council tenants are themselves cross-subsiding new tenants.
And finally, we shouldn’t forget to add into the reckoning the direct subsidies to homeowners. They get renovation grants, support for mortgage interest (for owners who lose their jobs), right to buy discounts and shared ownership schemes, together worth a princely £1.7bn in 2010.
This all means that the only straightforward answer to the question ‘who gets subsidised housing?’ is that everyone does, from the Queen downwards. Singling out council and housing association tenants as ‘subsidised’ may be politically convenient to the likes of Field and Davis, but it doesn’t square with the facts. As I’ve argued here before, let’s argue for the introduction of self-financing in England on 1st April as the date on which everyone should stop calling council housing ‘subsidised’.
Categories
The right to write rubbish
The Institute for Public Policy Research (IPPR) has put its hard-earned credibility and reputation for good quality research and intellectual reasoning on the line by publishing a flimsy pamphlet by Frank Field MP and David Davies MP on extending the right to buy to include all housing association tenants.
At first sight it seems fair that all social tenants should have the same right to buy, but the pamphlet doesn’t even mention let alone consider the issue that housing associations are not public bodies; they receive a (declining) measure of subsidy but that doesn’t necessarily give Government the right to say that they should dispose of their assets at a substantial discount without compensation. Try that one on the farmers.
In an attempt to appear progressive, they say they want to do something about the ‘chronic shortage of social housing’ and blame this on ‘the low turnover of tenancies’. Turnover has indeed fallen as tenants’ alternative options have reduced, but the two big hits in terms of the collapse in new lettings are the failure to build new homes and the huge reduction in the volume of properties in the council sector due to…. the right to buy. Where is the analysis of the impact of the historic RTB on housing opportunities? There is none.
Then there are the usual stereotypes, in this case ‘the subsidised tenant’: ‘Social tenants have little financial incentive to give up their subsidised rent and become owner-occupiers. The subsidy for social housing rent varies by region but is substantial. Social rents are well below market rents.’ So being charged a rent below market rent is ‘a subsidy’ despite the fact that it is not market provision. Council housing makes a profit; despite initial investment in the form of capital grant even housing association new build homes make a profit over their lifetimes, and normally a large capital gain to boot, so where is the subsidy? And even if you accept the idea that opportunity cost (ie the rent you could make by letting on the market) is a subsidy, it is a hypothetical sum of money, so it is just wrong to say it is ‘taxpayer-subsidised’.
And why does the word ‘subsidised’ not appear before ‘owner-occupiers’? Living in London, the relief I get as a matter of course from capital gains on my home – a tax subsidy not available for any other asset – is far greater than anything a tenant is ever likely to see. Indeed, especially in London, it would be interesting to know how much tax revenue has been lost through tenants buying at a discount then selling at a huge mark up a few years later, free of tax.
There is no attempt to provide an intellectual justification, even in their own terms, for arguing that giving tenants a discount on market rents is so reprehensible but giving a discount on market value to another tenant to exercise the right to buy is such a fine thing to do.
Then we have the knocking copy: tenants who are ‘highly paid union leaders’ (plural?) and well-known MPs (sorry Mr Dobson). Fair enough – nothing wrong with knocking copy, he said quickly – but in this case a bit unoriginal. And the dodgy, not to say made-up, statistics: ‘In Westminster alone, more than 2,000 social tenants earn over £50,000 a year, with around 200 on six-figure salaries.’ Really? They shouldn’t believe everything they’re given by Tory Central Office or Westminster Council press office.
And, worst of all, there is no analysis of how much the sales would generate to contribute to new investment (the authors supposed goal). Just an assumption that the money raised could be spent: ‘Crucial to this policy’s success – both in increasing home ownership and increasing the supply of new homes – is that all the funds generated from sales are spent on the building of new social housing.’ I couldn’t quite believe this so checked the online interview given by Field, and he says it again. So they are either ignorant of the fact that the sold homes will be carrying outstanding debt – and that paying it off would have first call on the money raised – or they think it should be left for other tenants to pay for. Their hopelessly optimistic view of how much can be generated from RTB sales was clearly contradicted by Tony’s last post, which showed how poor the actual returns from sales are. The Government’s new scheme will not meet its aim of replacing homes sold ‘one for one’ let alone ‘like for like’, and neither will these proposals.
As Field and Davies’ headline call for housing association tenants to have the RTB is also a longstanding Tory policy, I suspect this is an advance scouting trip on behalf of the Government to guage the response. As such, it would be more appropriately published by Localis rather than IPPR.
As the Welfare Reform Bill returns to the House of Lords, it is becoming ever more obvious that the Tories and LibDems have no idea what they are doing and the damage they will cause.
We have covered the Bill before on Red Brick, for example here and here, but it is emerging that the total Household Benefit Cap will possibly be the most damaging change of all. And it is the least well understood.
In theory the cap is, according to DWP’s impact assessment: ‘a cap on the total amount of benefit that working-age people can receive so that households on out of work benefits will no longer receive more in benefit than the average weekly wage earned by working households.’ The limit, expected to be around £350 a week for a single person and £500 a week for families with children, not only includes out-of-work benefits like Jobseekers Allowance but also benefits which are available in and out of work like housing benefit and benefits that are available universally like Child Benefit.
The comparison with ‘the average weekly wage’ immediately falls down because in-work benefits are excluded from the calculation. It is not a like for like comparison of household income. It’s a crude and vindictive policy that can only have been invented by drunkards after a bad night on the ale, which makes it all the more regrettable that Liam Byrne has supported the principle. The only defence of his position is that the line that people on benefits shouldn’t get more than people in work spins well.
However the real disgrace is that Iain Duncan Smith and his Department are not able to say what impact the policy will have and on whom. Their estimate is that around 50,000 families will receive less benefit because of the cap (it only applies to those of working age). They admit, as with many of their tax and spending cuts policies, that the biggest impact will be on the larger families – over 80% of those affected will have 3 or more children. On average, household losses are expected to average £93 per week. 35% will lose more than £100 per week.
DWP estimated, in response to Parliamentary Questions, that 70% of those affected would be social tenants leaving 30% (around 15,000) as private tenants. These estimates are counter-intuitive and extraordinary given the importance of housing benefit in the calculation of the cap and the huge difference between private and social rents, and they led frontbencher Karen Buck MP on a voyage of discovery about the statistics and the relationship between the new cap rule and other statutory duties. Well, given the lack of answers, it has been more of a voyage of non-discovery.
Eric Pickles has already accepted that the cap will cause about 20,000 extra homelessness acceptances on top of the 20,000 extra expected due to the other housing benefit changes. That’s a lot. Homeless households placed in temporary accommodation in the private sector by their local authority are subject to the cap. Their rents are high and they are often unable to work because of the disruption caused by homelessness. Previously they may have been waiting for a social rented flat, now more likely they will be waiting for their local authority to discharge its duty by finding them a suitable letting in the private sector. There are 49,000 households in TA in England, nearly 36,000 in London. Many of these are likely to come up against the cap. However DWP cannot even say if such households have been counted in the 70% (social tenants) or the 30% (private tenants). If it is the latter, the figures just do not add up, given how many ‘ordinary’ private tenants in inner London will also come up against the cap – after all, unemployed people living in mansions in posh bits of London are supposedly the primary target of the policy.
My understanding of the homelessness legislation is that any shortfall between housing benefit receivable and the cost of temporary accommodation is met by the council concerned. So any existing homeless household in TA that falls foul of the cap would have the excess charged to the council’s General Fund rather than to the housing benefit budget, not something that councils will welcome. And when the council is seeking suitable accommodation for the family, it will only be able to discharge its duty if the accommodation is affordable. If the family is subject to the cap, the council might have real difficulty in making such accommodation available.
Similarly complicated considerations will apply for any private tenant falling foul of the cap. If they can no longer pay their rent, they are threatened with homelessness for arrears. If the reason for the arrears is the withdrawal of housing benefit, the council would seem unlikely to me to be able to argue intentionality. The household will have to be accepted as homeless and the same complicated arrangements for TA and for the discharge of the council’s duty will ensue.
The Government does not yet seem to have decided, if a household is subject to the cap, which benefit they will actually lose. Until Universal Credit comes in, the cap system will be administered as part of the housing benefit system. But could they decide that, to make up the average £93 loss, the family is effectively losing its Child Benefit, thereby protecting its housing benefit? That would effectively end Child Benefit as a universal allowance. Or will housing benefit always be the variable sum? In which case how will councils discharge their homelessness duties where they have to secure accommodation that is affordable? The Government’s belief that ‘affordable rent’ properties will be offered to the same profile of people as ‘social rent’ properties is now even more questionable.
The implications of all of this seem to be lost on the Government, at least in their public pronouncements. There would seem to me to be new incentives for households to seek the limited protection offered by the homelessness legislation and, for example, always insist on making a formal application under the legislation rather than accepting an informal arrangement though the prevention and relief of homelessness duties.
Finally, it will come down to money. There seems a risk that the impact of the cap will bear down only on housing. For households in TA this would seem to imply a transfer of cost from the national HB budget to the local General Fund – not welcome. There will be many more people moving through the homelessness system and councils will find it exceptionally difficult to secure accommodation for families subject to the cap. For some families with children facing the cap there will be strong pressure to resort to s17 Childrens Act payments to maintain the family in their accommodation rather than face the prospect of taking children into care. Many councils will face the possibility that the only way to find affordable housing for a family subject to the cap will be to move them a long way away. And that will pile costs on to the receiving councils.
I can find no evidence that any of these complexities have been considered by Ministers, at least in public, and they divert any attempt to pin them down because statistics aren’t available. As they pursue the little ideological tantrum that produced the idea of the cap in the first place, they have a responsibility to do some research and explain who will be affected and what will happen to them.
My New Year’s Day slumbers were interrupted by the unwelcome sound of Grant Shapps’ voice on the BBC TV News.
The topics were two previously announced plans to make subletting by social tenants a criminal offence and to make high earning social tenants pay more in rent. This gave Shapps the chance to say that hardworking taxpayers pay billions for social housing and it should only go to those that really need it. Neither proposal is likely to achieve this but no Labour spokesperson was interviewed to put the alternative case.
But what interested me was the introduction to the piece said that there were ‘new government plans’ and that they were ’proposals outlined today’. ‘Ministers are announcing a crackdown’. So you would expect that some kind of statement had been put out by CLG, a consultation paper or whatever. But nothing appears on the website, no statement or press release, and it is clear that nothing new was being announced at all. It may have been a quiet news day but this was just a free hit for the Tory housing Minster.
Another complaint will wing its way to the BBC, but I suspect it will have as little effect as all the previous ones.
Another year, another easy ride for a Minister. Is it too much to hope for that Shapps’ policies will occasionally attract intelligent and critical questioning?
Welcome to 2012!!
Categories
No room at the Inn
Homelessness always has a special resonance at Christmas. Yesterday Crisis opened its doors for the 40th year running and will provide 20 different services, including food, accommodation and health checks to over 3,000 people. Crisis’s Leslie Morphy believes the importance of the Xmas service they provide is to help people start the journey out of homelessness: ‘The most important aspect of our Crisis at Christmas work is to help our guests begin to take steps out of homelessness: giving health MOTs, housing and job advice, and encouraging them to come to Crisis Skylight where we can offer year round support.’
Whilst people sleeping rough is the most visible sign of homelessness, countless others do not have a safe or secure home. On Tuesday Shelter revealed that nearly 70,000 children will experience Xmas in temporary accommodation, including hostels, bed and breakfasts and refuges across the country. Shelter’s Kay Boycott says: ‘We cannot underestimate the damage homelessness has on children’s lives. They often miss out on vital schooling because they are shunted from place to place and many become ill by the poor conditions they are forced to live in.’
Over at Pickles Towers, the Government talks the talk about tackling homelessness whilst making things far worse. The homelessness safety net has been reduced, money for affordable housing has been slashed, changes to housing benefit will make many tenants – private and social – much more vulnerable to homelessness, Supporting People work on homelessness has also been slashed. Grant Shapps grabs headlines cynically by announcing a bit of money here and there which doesn’t compensate for what has been taken away. Shapps has the nerve to say that homelessness is lower than in 18 of the last 20 years without acknowledging that it had been going down consistently for many years and has now started going up again. He is an expert at the use and abuse of statistics but even he can’t deny the serious change in direction caused by their policies.
As always Steve Bell sums everything up with his image on the theme of ‘No room at the Inn’ and the ‘Big Society Poor House’.
We wish our readers a very happy holiday and an excellent New Year. We hope you have enjoyed Red Brick’s first full year and found something of interest to read and comment on.
Whilst people sleeping rough is the most visible sign of homelessness, countless others do not have a safe or secure home. On Tuesday Shelter revealed that nearly 70,000 children will experience Xmas in temporary accommodation, including hostels, bed and breakfasts and refuges across the country. Shelter’s Kay Boycott says: ‘We cannot underestimate the damage homelessness has on children’s lives. They often miss out on vital schooling because they are shunted from place to place and many become ill by the poor conditions they are forced to live in.’
Over at Pickles Towers, the Government talks the talk about tackling homelessness whilst making things far worse. The homelessness safety net has been reduced, money for affordable housing has been slashed, changes to housing benefit will make many tenants – private and social – much more vulnerable to homelessness, Supporting People work on homelessness has also been slashed. Grant Shapps grabs headlines cynically by announcing a bit of money here and there which doesn’t compensate for what has been taken away. Shapps has the nerve to say that homelessness is lower than in 18 of the last 20 years without acknowledging that it had been going down consistently for many years and has now started going up again. He is an expert at the use and abuse of statistics but even he can’t deny the serious change in direction caused by their policies.
As always Steve Bell sums everything up with his image on the theme of ‘No room at the Inn’ and the ‘Big Society Poor House’.
We wish our readers a very happy holiday and an excellent New Year. We hope you have enjoyed Red Brick’s first full year and found something of interest to read and comment on.
Yesterday’s publication of the consultation document (and the draft impact assessment) on the Government’s plans to increase the discounts available for the Right to Buy and for ‘one to one replacement’ with affordable homes is about as cheering as the pre-Xmas homelessness figures.
In many ways it’s a clever offer, or a clever bit of spin, in that it appears to deal with previous complaints about the RTB, and especially the lack of replacement of the homes sold, which meant that future generations of potential tenants effectively paid the price for sales. It remains to be seen whether the proposed rise in discounts – to an upper limit of £50,000, an effective increase from 25% to 50% – will ‘reinvigorate’ the RTB as much as the Government hopes. They estimate that some 300,000 tenants are eligible for the RTB and have the financial means to exercise it. But many houses and the more attractive homes have already been sold and there is huge uncertainty over future property values – we are all more risk averse than we were.
A proportion of the additional receipts will be channelled back, either nationally or locally, into further housing provision. But this will meet only a share of the cost of replacement, which will be variable between regions. If the additional RTB proceeds only meet part of the cost it cannot be said that the new scheme itself achieves one for one replacement. Replacement will require the use of other existing resources – land, borrowing capacity, local affordable housing funds (eg from s106 deals) and New Homes Bonus. These should already be committed to affordable housing provision. At best this seems like double counting and is more like a sleight of hand.
As a nationally conferred right, RTB sits uncomfortably with the Government’s commitment to ‘localism’. Few if any local choices are available within the scheme and, given that local authorities are supposed to be in the driving seat of new housebuilding, the Government is reticent about placing the responsibility for replacing the homes sold at the local level.
Councils will not have any choice when it comes to deciding what type of replacement homes should be provided. By central dictat they will be ‘affordable rent’ and not ‘social rent’. Given that all of the homes that will be sold will be social rented, even if you accept the ‘one to one’ replacement argument it cannot be said that they are ‘like for like’. The exclusion of the option to provide social rent is another step in its removal as a form of tenure and its substitution by the much less affordable and much less secure ‘affordable rent’ product. CLG’s assertion that the provision of ‘affordable rent’ to replace RTB sales will ‘ensure that our ability to meet housing need is not impaired’ is highly questionable. The misuse and indeed abuse of the word ‘affordable’ is getting worse every day.
The consultation runs until February and it is planned to introduce the new discounts through secondary legislation in April 2012 or shortly after.