May 3, 2011. Today is the deadline for housing associations to submit their ‘offers’ to the Homes and Communities Agency about what homes they might build over the next four years. Islington Council in London has thought long and hard about its strategy for delivering affordable homes. In an exclusive article for Red Brick, Councillor James Murray, Executive Member for Housing at Islington, sets out the borough’s plan.
Today marks the latest stage (and by no means the final one) in attempts by housing associations and others to steer a course through the government’s new ‘Affordable Rent’ programme. This programme’s headline has been known for a while: that housing associations would be allowed to charge up to 80 per cent of market rent on new build homes and a percentage of their relets. But teasing out the practicalities and implications of how this works in practice is taking a lot more discussion.
And in London, the acute implications of rent levels being set at 80 per cent of market – particularly in the inner-London boroughs and particularly for family-sized properties – have inspired months of discussion between London boroughs, the Homes and Communities Agency, and housing associations operating in the capital.
As part of this discussion, many London boroughs have set out their initial positions on ‘Affordable Rent’. In Islington, our position has focused on how we can respond to the concerns we have about the difficulty of using ‘Affordable Rent’ to address housing needs in our very high value borough.
We believe a different model is more appropriate for Islington. We are asking housing associations to work with us and use grant from the local authority – in the form of public land at discounted rates and capital from our new homes bonus – rather than grant from the government’s main ‘Affordable Rent’ programme. In return for this, we ask that housing associations build homes at social rents.
We believe that this is the best way to tackle our housing crisis in Islington. Like many London boroughs we have thousands of overcrowded families, and several hundred who are severely overcrowded (lacking two or more bedrooms). It is clear that tackling this means prioritising more family homes for social rent.
Since the election in May, 2010, we have prioritised a new council home building programme that means we will be on-site for over 100 new homes this year. Alongside our council-owned stock, we want to continue to work with our housing association partners.
In Islington we have a strong relationship with a number of housing associations. Through historical links, stock transfers, and new build projects, housing associations have played and continue to play a vital and positive role in Islington’s affordable housing stock.
We want this relationship to continue, and we believe that our plan for social rent with local authority grant will be the best way to enable willing housing associations to continue to build the kind of homes we need.
It goes without saying that the 80 per cent of market rent ‘Affordable Rent’ properties would be completely unaffordable in Islington. Our social rents are currently between 30 – 35 per cent of market rent, and so this would represent more than a doubling of the current levels.
Allowing properties to be developed at 80 per cent market rent would mean the new tenants either face an enormous rent hike or a deep benefits trap. Those not on benefits may decline to move into a new flat in future – even if doing so would relieve overcrowding or reduce under occupation – because of the unattractiveness of higher rents for new build properties. And for those on benefits, the looming prospect of caps makes the outlook uncertain and grim.
Some have suggested allowing 80 per cent market rent on, say, one-bed properties, and offering a rent level less than 80 per cent on the larger family dwellings. This may work in some places, but we do not believe it works in Islington. Our planning policy is explicit that we need the family homes rather than new one-bedroom flats. Our current council-owned stock is over 40 per cent one-bed properties – we are in fact piloting a separate programme of selling certain one-beds through shared ownership and using the capital raised to build new family homes.
So our priority in Islington has to be family homes at genuinely affordable rents. With our well-known high property prices in Islington, we believe that social rents, offering close to a level playing field with council rents, are the right level for this.
That is why we have said we will support schemes from housing associations that offer homes at social rent, and that are subsidised where necessary through our grant in the form of public land or capital. We have a pipeline of sites identified from public land – enough land for over 500 homes immediately, with several hundred more being looked at for the future. And our decision to dedicate almost all the borough’s new homes bonus to new home building means this year we can offer £1 million capital grant.
We have been pleased by the positive reaction from a number of housing associations to our plans. We are currently in negotiation with one of our housing associations on the details for a new scheme that would be the first under the new regime to offer social rent with land subsidy from the borough.
Our model will not be appropriate for allLondonboroughs – just as the ‘Affordable Rent’ model is not appropriate for Islington. But although it is self-evident that our position is outside the government’s main programme, we are committed to working with willing housing associations to make this work for them and for those in our borough with the most acute housing need.
Author: Steve Hilditch
Shirley Porter, responsible for the ‘Homes for Votes’ scandal in the 1980s – what the Law Lords called ‘a deliberate, blatant, and dishonest use of public powers’ that amounted to ‘political corruption’ – would never have been brought to book if new Audit proposals by the Tory government had been in place during her reign in Westminster in the 1980s.
Some people think that the Tory Party has never forgiven the Audit Commission for the tenacity they showed in bringing their brightest council star Porter to justice and causing huge embarrassment to the Thatcher/Major governments. The Tories nationally never apologised for what was done in their Party’s name.
Now Eric Pickles and Grant Shapps have proposed ending the right of electors to raise ‘objections’ to the local authority’s accounts with the council’s official Auditor. They say it is ‘outdated’ and ‘over-burdensome’ on council tax payers – well, not in Westminster, where £12m was recouped from Porter (and it should have been £40m, the amount set by the Law Lords in their judgement). Removing the right to object is contradictory to both their localism policy and their repeated statements that they wish to devolve power not just to local government but to the people.
Porter’s gerrymander in Westminster would not have been exposed if it had not been for outstanding work by opposition councillors and others in the community who were concerned about the council’s housing policy as described here and here and here. But it was the process by which local electors could raise a formal objection to the council’s accounts that ensured that an initially sceptical Auditor was required to look into the matter; investigations that led to the most damning report ever issued about a local authority. Moreover, it was the independence of the Audit Commission standing behind the Auditor that ensured that the case was brought to a conclusion – and it took more than a decade. There was a lot to withstand – political pressure to have the matter dropped, a personally offensive campaign against the Auditor, and criticism of the high cost of the forensic enquiry (dawn raids on city hall, tens of thousands of documents and dozens of interviews) and the court cases.
Pickles’ and Shapps’ proposals are contained in a CLG consultation document on the ‘Future of local public audit’. It sounds dull but there is a lot in this consultation of concern to anyone with an interest in local government and its probity.
The consultation paper says that “The right to object to the accounts was first introduced more than 150 years ago, at a time when the auditor was the only individual to whom an elector could raise issues of concern.”
But in Westminster, less than 25 years ago, the council wouldn’t listen to the accusations that there was gerrymandering going on, the government wouldn’t listen, and the Tory party certainly wouldn’t listen. The only route that worked for local people was to raise an objection to the District Auditor, who took a serious and independent view of his role in tackling improper behaviour. This right should be retained.
It’s a complicated business, housing. Those poor souls at the Policy Exchange and their pollsters YouGov apparently can’t tell the difference between social housing and council housing. Despite generating alarming headlines (‘Public backs limit to social housing areas’ – thanks, Inside Housing) a glance at the detail of the poll (and the base data, entitled ‘Fairness’ presumably with a touch of irony) shows just a little confusion. Although the discussion in the Policy Exchange report ‘Just Deserts’ is about social housing, the actual questions asked were about council housing. Just as well they didn’t wander into the fantasy world of ‘Affordable Rent’?*
Strange questions they were too. “People should not be offered council houses that are worth more than the average house in their local authority” Agree or disagree? Despite requiring considerable knowledge – what is the average, how do council houses compare in value, might there be a different answer for housing associations, does this ever happen in reality? – the question is really quite leading. So no surprise that a majority say they agree. It tells us very little about public attitudes to council houses, and nothing whatsoever about public attitudes to housing association properties to rent (because they weren’t asked about that).
And the second question was “People should not be offered council housing in expensive areas” Agree or disagree? Also rather leading and confusing.
This selection of questions tells me more about Policy Exchange and the point they wanted to make in the first place. I suspect they know – and if they don’t, YouGov should – that if you ask positive questions about mixed and balanced communities you get very different answers. But that wouldn’t fit PEx’s obsession with contradicting the pro-equality conclusions in The Spirit Level, would it?
*PS I’ve started calling ‘Affordable Rent’ SCARE tenancies – standing for So-Called Affordable REnt. Will it catch on?
The Welfare Reform Bill, currently in Committee Stage in the House of Commons (follow the debates here), contains many provisions which will have a profound effect on the housing opportunities of people on low incomes in the years to come.
One of the changes that has attracted little attention is designed to tackle under-occupation in the social rented sector. From 2013 housing benefit will be reduced if the household is of working age (the limit is rising from 60 to 65) and is deemed to be living in accommodation which is too big for their needs. An ‘underoccupying’ claimant will lose a proportion of their HB, which will no longer meet their current housing costs, with an average loss of £13 per week.
The government’s own impact assessment estimates that 670,000 social tenants will be affected, around one-third of all HB claimants in the sector. In the north, between 40-50% of tenants will be affected, in London around 20%. This is an extraordinary number of people.
Affected tenants will face a ‘choice’: make up the shortfall from their other income, take in a lodger, or move to smaller accommodation in either the social or the private rented sector. Even if only half of those affected decide to move, pity the poor landlord in the north when 1 in 5 of all tenants knock on the door asking for an urgent move to smaller accommodation. In London, additional transfer requests from 10% of tenants would swamp the housing allocations system.
Nearly 4 in 5 of those affected currently ‘underoccupy’ their homes by just one bedroom. They are hardly evil – most people with one spare bedroom do not recognise themselves as underoccupiers, and often the last bedroom is small anyway – but they will lose £11 per week on average. Over recent years policy had moved strongly towards recognising that the real challenge in underoccupation is to tackle cases where there are 2 or more spare bedrooms, where there is most to gain. Under the new rules, a family of 6 with 2 sons and 2 daughters living in a 4 bedroom property would be deemed to be underoccupiers, and would receive the arbitrary HB ‘fine’.
The loss of an average of £13 per week might not be noticed by the Cabinet of millionaires, but this is a huge sum of money to anyone on a very low income. The policy’s only chance of success will be if there is a supply of smaller homes to transfer into. Yet the government’s impact assessment admits that there are simply not enough smaller housing association and council properties available.
The policy is the opposite of the ‘moral hazard’ – where people are insulated from the consequences of their own actions. In this case people will face the consequences of the government’s actions with no reasonable course of action open to them to avoid or pre-empt or respond to the change in policy. It is coercive and in a nasty way: if they cannot move, they will face deliberate impoverishment with no way out.
Will the policy achieve its stated aim and save any money? Labour shadow welfare reform minister Karen Buck thinks not. Tenants who are unable or unwilling to move will fall into rent arrears, with the risk of eviction (and loss to the landlord) triggering the costs associated with a rise in homelessness. The government thinks that some will move into the private rented sector, where rents are higher even for smaller properties, so the cost will go up not down.
And in a final irony, the policy will not even address, indeed will avoid, the biggest single issue in the underoccupation debate – which is what to do with underoccupiers of retirement age whose family has moved on.
For our previous post on the Tories’ market solution to underoccupation, click here.
One of the more offensive acts of this government has been to put the Equalities Act 2010 up as a topic for debate on its ‘Red Tape Challenge’ website.
Housing organisations have been at the forefront of promoting good policy in equalities and diversity for many years – the latest evidence being CIH’s publication this month of its guide to delivering housing services to lesbian, gay, bisexual and transgender customers – and should be ready to make the case for the retention of the Act in its entirety, together with its supporting regulations.
The 2010 Equalities Act – summarised here – pulled together the previous diverse strands of discrimination and equalities law into a coherent whole and added new duties and responsibilities. It harmonised the legislation to provide a single approach wherever possible.
Extensions included the new duty on public bodies to consider socio-economic disadvantage when making strategic decisions, wider definitions of discrimination, harassment and victimisation, stronger duties to help eliminate conduct which the Act prohibits, to advance equality of opportunity and foster good relations between people who share a relevant protected characteristic and people who do not, the use of positive action, amendments to family property law to remove discriminatory provisions and additional statutory property rights for civil partners.
What has caused so much offence is that all the other topics posted on the Red Tape Challenge website seem to involve changes to regulations whereas the equalities topic invites comment on the entire Act, which is of course primary legislation only recently passed by Parliament.
That is not to say that the other topics are unimportant – the website reads like a list of all the things where more not less regulation is probably needed (eg Major Hazard Industries, Biodiversity, Pensions).
It is worth a look at the comments contributed to the Red Tape website on equalities. It is pleasing to note the relative lack of hateful comments (compared to many website discussions on this topic) and the many positive and supportive comments.
So what is the government up to? The equalities website says that the government’s approach is as follows: “We do not want public bodies to have to show people these things: how they worked out whether their rules and services were fair; what they looked at when they checked that their rules and services were fair; who they involved when they were working out their equality goals; how they were going to check whether they had met their goals. We will not make public bodies tell us how they will work out how they are going to check that they are meeting their goals. This is because it will not help public bodies make equality better.”
Accusations of ‘red tape’ and ‘box ticking’ are often little more than a back door attack on the purpose of the regulations themselves. I suspect this is exactly what is happening on equalities. The whole housing sector should be watchful.
The Tories seem to have invented the New Homes Bonus in a panic when they realised that stripping away Labour’s regional infrastructure for housebuilding would leave them with no policy at all, see our previous comment here. But the NHB is proving even more bizarre than we predicted.
Yesterday, Shadow Housing Minister Alison Seabeck published her research on the distribution of the Bonus, showing the wild variations in payments across the country. The research, confirmed by the House of Commons Library, shows that Richmondshire, in William Hague’s constituency, qualifies for a New Homes Bonus of £56,449 for adding just nine homes to their housing stock, whilst Scarborough is entitled to just £7,356 despite adding nearly three times as many. For each additional home, Richmondshire will receive 2033% more in New Homes Bonus money than will Scarborough.
Rather like the general cuts to local authorities, the richer parts of the country do better than the poorer parts. The 10 least deprived local authorities in the country receive over 20% more in NHB funding for each new home than do the 10 most deprived authorities. This matters because in future years the bonus will be funded by ‘top-slicing’ the main council formula grant – so some of the country’s most deprived areas will lose out on grant in order to pay large bonuses to wealthier areas – and by 2016 the cost will be £1.2bn each year! Research by the National Housing Federation indicated that the net impact of this policy will see the North losing £100m in funding each year.
Here are Alison’s examples:
|
New Homes Bonus ‘Losers’ |
New Homes Bonus ‘Winners’ |
||
|
Local Authority |
NHB per Home |
Local Authority |
NHB per Home |
|
Scarborough |
£294.24 |
Elmbridge |
£2,080.05 |
|
South Lakeland |
£496.96 |
West Berkshire |
£2,082.19 |
|
Preston |
£783.84 |
Three Rivers |
£2,122.85 |
|
Barrow-in-Furness |
£972.08 |
Chiltern |
£3,694.00 |
|
Burnley |
£990.37 |
Richmondshire |
£6,272.16 |
Red Brick was not the only one to comment on the government’s social mobility strategy. Simon Jenkins in the Guardian also had a lot to say on the subject, but reserved much of his venom for council housing, saying: “It’s security of housing tenure that impedes economic migration and ossifies divides.”
This annoyed our guest bloggerMonimbo, who writes:
The Guardian’s Simon Jenkins appears to place most of the blame for Britain’s lack of social mobility at the doors of social housing, and the security it provides (6 April). This is by no means the first time that social housing has been blamed for society’s ills, but Jenkins excels in attaching so much prominence to security of tenure and the availability of housing benefit. Yet his own article shows some of the perversity of his argument. While calling for more mixed communities, he decries the fact that a well-paid trade union leader can still occupy social housing. Isn’t Bob Crow an example of the kind of person needed by the ‘integrated mixed communities’ that Jenkins says he wants?
But the real problem is the fault he finds with security of tenure. Whereas private tenants can be evicted after six months, social tenants can only be evicted through the courts, though of course they can and do move of their own accord. It is ironic that most proponents of reducing security, which is a highly valued feature of social housing, would never dream of applying the same remedy to themselves. Take secure tenure away and the result would be many more of the nightmare situations which Jenkins describes. Yes, these conditions do exist in some unpopular estates where tenants vote with their feet and there is little sense of community, but these are in a minority. Just consider the impact of higher turnover on the local state schools which he mentions, if pupils living in their catchment areas were forced to move regularly in the interests of ‘mobility’.
If Jenkins is unconvinced, let him ask about the effects of the highly mobile population that tends to occupy many council properties that were sold under the right to buy, and are now owned by absentee landlords. In many cases, these are rented out to transient workers who move in and out and have no stake in the area. Often poorly managed, they can be the focus of local problems and yet local authorities have fewer powers to tackle them than they do with households in secure tenancies.
While Jenkins is right to say there are not enough mixed communities, he doesn’t say how ending security of tenure would remedy this. Nor does he recognise the intense pressure put on social landlords since the 1980s, through the failure to build enough homes and the need to concentrate ever poorer families in those available. He calls social housing ‘subsidised’ but which tenure isn’t? – the last government spent over £1 billion annually subsidising home owners, for example, while council housing rents now pay about £100 million in surpluses back to the Treasury.
For half a century council housing catered for a range of income groups, and many of those struggling to become home owners would welcome it now – if there was sufficient available. Of the 1.7 million households on council waiting lists, many are private tenants with very limited security. Government figures show that fewer than one in five social tenants would prefer to be a homeowner; the number preferring to be an insecure private tenant is of course far lower.
The links between bad housing and ill-health always seem obvious to anyone who has worked in the housing sector. Although controlling the spread of disease was a major factor in the surge of interest in the housing conditions of the working classes a century ago, even the advent of ‘joined-up policy making’ in modern times has failed to establish the case that spending on improving housing could be an important factor in preventing ill-health and reducing the requirement to spend on health care.
If your job involves being in and out of other people’s homes you tend to see the effects of bad housing daily but it still seems to be a poorly evidenced area of policy. It’s good then that there has been more interest in this topic recently.
A recent report by the Parliamentary Office of Science and Technology pulls together a lot of evidence from multiple sources and shows in particular the importance of the Decent Homes programme. Conditions linked to non-decent housing include: cardiovascular diseases; respiratory diseases; rheumatoid arthritis; depression and anxiety; nausea and diarrhoea; infections; allergic symptoms; hypothermia; physical injury from accidents; food poisoning. The report also points out that “Proposals to stop providing social tenancies for life may also decrease security of tenure which could lead to an increase in mental health problems”. Overall, the report says, the detrimental effect of poor housing costs the Health Service over £600m a year.
Yesterday, Shelter Cymru published research conducted by themselves and the Building Research Establishment (BRE) which estimated that poor housing costs the NHS in Wales around £67m a year. It calculates the costs to the NHS of treating accidents and illnesses caused by problems in the home such as unsafe steps, electrical hazards, excessive cold, damp and mould. If you include other disbenefits of poor housing, such as children’s poor educational attainment and reduced life chances, the wider bill to society is estimated to be even greater at around £168m a year. Shelter say this is the first time a definitive financial cost has been placed on poor housing, emphasising that the economic case for improving bad housing in Wales is as strong as the moral case. They also point to the progress made in housing under Aneurin Bevan, when housing policy was firmly located in the health department.
The report estimates that the payback time in health care savings of bringing all housing up to acceptable condition would be 22 years, but that in some areas it would be much less, for example investment in addressing dangerous stairs would be paid back in 5.7 years.
Taking the argument one step further, the resident-controlled housing association WECH has done ground-breaking research showing the beneficial effect that empowerment can have on well-being, thereby reducing ill-health. Their research shows that, although WECH residents experience high levels of deprivation, they are happier and more engaged because they collectively own their estates and feel a much stronger sense of belonging to their neighbourhood.
As Labour embarks on its housing policy review, it will be important to avoid a silo approach to housing policy. The external benefits of housing investment deserve to be at the top of the agenda.
As one who rails against the constant mischaracterisation of council housing and council tenants in the media (and by some housing professionals), watching a serious but entertaining history of council housing was a joy.
Michael Collins’ ‘The Great Estate: The Rise and Fall of the Council House’ not only traced the history of council housing from the building of the Boundary Estate in Shoreditch in 1893 to the demolition of the Heygate Estate in 2011 but did so through a riveting mix of analysis, archive footage and personal histories. It’s a highly recommended watch for anyone with an interest in housing, available on i-player.
I thought Collins made some excellent points in a thread running throughout the programme about the importance of creating neighbourhoods and not just estates of homes, what he called the sense of belonging, and his description of Aneurin Bevan’s concept of a classless new society based on council housing. His criticism of the government’s move towards temporary tenancies was all the more powerful in this context – it will destroy, as he said, the sense of permanence that gives people a reason to make an investment in their homes and estates.
Jimmy McGovern made the point forcefully – despite being a tenant, ‘it was our house not the councils, that’s why we looked after it…… Just because it’s a council house doesn’t mean it’s not yours.’ Tell that to the government and the modern providers who see tenants as transitory occupiers of their (the landlords’) homes.
I also agree with Collins that utopian architecture, government subsidies for high rise, and jerry building caused huge problems, helped spoil the reputation of council estates as places to live and failed the ‘sense of belonging’ test. I would also add bad housing management to the list.
Where I depart from Collins is in his analysis of the impact of the 1977 homelessness legislation. It is not accurate to say it ‘jettisoned policies that favoured locals’ or that it led to the rehousing of ‘itinerant’ people. The vast majority of people rehoused were on local waiting lists and qualified under local connection rules, and having worked as a senior manager in one of the boroughs with the greatest numbers of homeless people, I think his claims that the system was abused are wildly exaggerated.
Of course there were changes on the demand side – as home ownership became an option for many, and as private renting contracted – but for council housing these were less important than what happened to supply. Collins says rightly that Thatcher passed the ‘death sentence’ on council housing, but he does it only in passing. It was the collapse in supply, starting after the 1976 IMF crisis but hugely intensified under Thatcher, that changed the nature of council housing and ended Bevan’s dream. The sector was made to become, as some Tories acknowledged then and some still do today, a residual tenure moving rapidly towards the American model, and with the same consequences.
Nor is it all bad today, or even normally bad. There are millions of people happily living in council homes at affordable rents, with the security of tenure that helps give them that crucial sense of belonging. And there are millions more who would be only too delighted to receive an offer to join them.
See another blogger’s view of the programme – Jules Birch of Inside Housing – here.
Categories
Auld Lang Syne
The eighteenth century French philosopher Voltaire once observed “We look to Scotland for all our ideas of civilisation”. If the new Scottish Labour Manifesto isn’t quite the new Scottish Enlightenment, it is certainly enlightened compared to anything we hear from the government in Westminster.
The emphasis in the Manifesto is on jobs and achieving greater prosperity in Scotland. But it also contains important housing commitments and an emphasis on affordable housing and mixed communities that has gone missing in the world of Pickles and Shapps (my thesaurus tells me the antonym of enlightenment is ignorance. Seems appropriate.)
The basic tenet of the housing policies in the Manifesto is that many Scots are anxious to obtain and retain secure affordable homes.
For example, on homelessness, it says that a Labour government would work towards meeting the target that all unintentionally homeless people are offered a secure tenancy by 2012 and would provide guidance on the interpretation of homelessness and housing legislation, in stark contrast to the approach in England of removing rights to secure tenancies from homeless people.
A mix of policies are proposed to assist people across the tenures. Labour will review the effectiveness of schemes to help home owners facing repossession, strengthen pre-action protocols, introduce First Foot, a new mortgage indemnity guarantee scheme that aims to reduce deposits to 5 or 10 %, and set up an infrastructure fund to encourage private housing development to build more homes to satisfy demand. New building should meet a Scottish Housing Quality Standard and there will be consultation on raising building standards especially in relation to energy efficiency. There is a strong target to end fuel poverty by 2016 and investment in community and household renewables, such as solar panels and community heat and power schemes, will provide a new revenue stream for housing associations, co-operatives and local authorities through the feed-in tariff.
The Manifesto says Labour will encourage responsible investment in the private rented sector and tighten landlord registration schemes to root out rogue landlords
Labour would establish a Taskforce to strengthen the role of local authorities and housing associations in increasing supply, especially of affordable homes. There is strong support for community-based housing associations and housing co-operatives, in particular in their role as ‘community anchors’, and the remit of the Scottish Investment Bank and Co-operative Development Scotland to will be extended to include housing. Social housing lettings will be reviewed to offer more support for vulnerable people and to ensure sustainable communities. And a Housing Advisory Service would be established for tenants and homeowners and new Housing Tribunal set up.
Scottish Labour Leader Iain Gray introduced the Manifesto ‘Fighting for what really matters’ by saying
“Scottish Labour believes that the foundation for a strong community is fairness. Jobs, opportunity and prosperity must be spread more widely throughout our communities – to improve housing, to regenerate deprived communities, to support the most vulnerable and to lift people out of poverty.”