Red Brick

Not a great week for Mr Shapps.  Falling out with John Humphreys is a bit like the two school bullies squaring up to each other for a change, much to the relief of the usual victims, but even I have to admit it was great entertainment for those of us who are not keen on either chap.
Now, whether Shapps agreed to go on the Today programme before agreeing to go to Stoke or whether it is just the assumption of the programme that anyone who is invited will appear, I just don’t know, and I can think of more important matters to discuss.  For example, in Stoke Shapps gave back a tiny proportion of the money he had previously taken away from some of the Housing Renewal Pathfinders, having caused havoc for the residents of those schemes.  With the Autumn Statement tomorrow, I suspect the theme of giving a little back as we drift from Plan A towards Plan B will be the theme of the week.
Shapps has been in trouble for making the Housing Strategy announcement the day before the worst imaginable affordable housing figures were slipped out.  Of course it was coincidental, and he didn’t know the figures in advance.  Pull the other one.  The figures were unbelievably small, so small in fact that the Minister could have had a report on the progress of each house.  Has the snagging been done on No 26?
Over at the Department the staff were working overtime to big up the new ‘Housing Strategy’.  They put a page on the website called ‘Housing Groups’ reaction to the Housing Strategy’.  Normally you would expect ‘housing groups’ to include CIH, NHF, Shelter and so on.  But not this time.  Of the 9 groups they could find to make a positive comment, 6 were builders, 2 were professional bodies and the last was involved in the mortgage indemnity scheme.  That tells us quite a bit about who the real intended beneficiaries of the strategy are.
So here – in the interests of balance, you understand – is a selection of other views on the Strategy.
Shelter’s Campbell Robb ‘Today’s announcement falls far short of the quarter of a million new homes we need each year just to meet demand…. We are concerned that schemes to help first-time buyers and council tenants will simply encourage people to overextend themselves, while doing nothing to address the sky-high cost of housing.
“This strategy also does almost nothing to help the growing number of families living in insecure private rented housing with hardly any protection from rogue landlords or unexpected rises in rent. Unfortunately these aren’t the bold and radical solutions we need to solve a housing crisis that’s been decades in the making.’
http://england.shelter.org.uk/news/november_2011/housing_strategy_launches
National Housing Federation’s David Orr: “’Today’s announcement of an additional 3,250 affordable homes is a drop in the ocean. Ministers need to be bolder and go much further to fix the broken housing market and they can do it in a way that is effectively cost neutral.
‘A public investment of £1bn – matched by £8bn from housing associations – would build 66,000 shared ownership homes for people on low to middle incomes, create 400,000 jobs and in doing so save the taxpayer £700m in job seekers not to mention the added savings from housing benefit and increased tax revenues.
http://www.housing.org.uk/news/federation_backs_government_ho.aspx
Chartered Institute of Housing’s Grainia Long: “We fear that the government’s strategy does not offer something for everyone, nor does it create a clear vision for the long term future of housing beyond 2015.”
“We fear that the welfare reform changes focusing on reducing the housing benefit bill will force poorer households further away from employment opportunities and this risks undermining the strategy’s aims.”
The Observer’s Heather Stewart: “The housing strategy is only the latest example of the fact that not only is the economy in a far worse state than it was a year and a half ago, but the government has run desperately short of ideas.
“It’s a muddled mix of standing back and letting the market mechanisms rip – and then floundering about desperately when it doesn’t work.”
Mayor of Newham, Sir Robin Wales: “It is nonsense, £400 million is less than 10 per cent of what was cut from housing – and that constitutes a national strategy? I think it would generate less than the Olympic village, let’s get real about it.”
IPPR’s Nick Pearce: “Today’s government intervention makes another lost decade of market stagnation more likely.
“There is a real danger that existing UK house-builders will merely use building on public land with public money to displace activity from less viable market sites – leading to no net increase in output.
“The house building sector in the UK needs greater competition and structural reform if it is to deliver high quality homes at lower cost.”

Monimbo
Steve and Tony’s excellent posts on the government’s housing ‘strategy’ have hit the nail on the head.  As Steve said, writing down lots of little policies in one place is not the same as writing a strategy.  Here are some more reflections on the gaps and contradictions, from someone who had the misfortune to spend Monday going through the 88 pages in detail.
First, it’s not quite true to say that the strategy does not assess the size of the task.  It notes early on that household numbers are projected to grow by 232,000 per year. True, it ignores the backlog of unmet need which was put at almost 2m households in a report slipped out by DCLG last November.  But having made a stab at saying how many houses are needed in future it effectively says that the worst way of getting that number built is to… say how many houses are needed in future.  It made me wonder whether, at Cameron’s no doubt sumptuous wedding to Samantha, he bothered to tell the hotel how many guests had been invited or whether he thought the best solution was for them to make an intelligent guess.
Second, as Steve said, the report belatedly recognises the importance of housing, encapsulated in that magic moment when (as Cameron said) the young couple turns the key in the door of their first flat.  Well the reader is entitled to ask whether, as a result of the strategy, a lot more Daves and Sams will be able to do this.  Frankly, we don’t know, but the size of the task is so huge that it is most unlikely.  As Steve Wilcox said in last year’s UK Housing Review, first-time buyers are being kept out of the market at the rate of a staggering 100,000 per year.  Yet what the strategy offers them is a mortgage indemnity – in a scheme yet to be established – providing they buy a new house.  How many of the 100,000 Daves and Sams will be able to do that?
Much more likely, of course, is that they will rent privately.  Here, the silence of government policy is deafening.  We have a sector that has grown from just over two million to nearly four million households in a decade. It houses one in six households and by 2020 may well house one in five.  All of this is the largely accidental result of buy to let mortgages followed by the credit crunch. But this surely raises some policy issues?  Despite recent progress it remains a sector with a lot of poor properties and poor landlords, to whom vulnerable households are going to have to turn much more than they did before.  At the other end of the market, will still have a situation where the Daves and Sams can be booted out at two months’ notice.  Yet as the recent LSE report Towards a Sustainable Private Rented Sector made clear, in other countries which make heavy use of private renting, more tenure security is common and seems not to deter investment.  Why not at least announce a review of the future of the sector, given it is now playing such a vital role?
Finally, in contrast to private renting, the social sector warrants a plethora of policies, although almost none of them are new.  Here the government’s confusion of purpose becomes more apparent by the hour.  The strategy aims to challenge the ‘complacent consensus’ about social housing, and ensure that it goes only to those in genuine need. Indeed, councils are to be told that houses are not to go to ‘people who don’t need them’.  Yet what are the government’s flagship policies? Its main one, the ‘affordable rent’ programme, aims new homes and relets of existing ones at people who can pay more, not the most needy.  Its welfare reforms will make it more difficult for low-wage tenants to keep their homes.  And now, the government plans to revive the right to buy, which will provide a massive subsidy for a select few better-off tenants to keep their homes in perpetuity.  This is not so much a strategy as an anti-strategy: setting aims for the sector, then choosing measures which will achieve precisely the opposite effect.
The best thing about this ‘strategy’ is that it raises the stakes for the government, puts housing higher on the agenda and provides a golden opportunity for Labour to make its mark.  As Tony said, it’s a feeble attempt at a Keynesian stimulus. There are plenty of aspirations in the 88 pages, even if there are few targets.  The challenge for Labour is to develop a real strategy that addresses the massive problems that are building up and – even more important – shows how they can start to be solved.  To do this it can’t avoid the most glaring gap of all – investment.

That dodgy building company Cameron and Clegg (est 2010) today tried to sell us a bogus new housing strategy called ‘Laying the Foundations’.
Deals for first time buyers!  Council homes nearly free!  Free infrastructure on us!  Front door keys for all!  But just like that shiny new tarmac front drive built by a scammer, very soon the cracks will emerge and we will realise no hard core has been laid.

Sick joke of the day – we are all in this together

“You always remember that moment, if you’ve done it, when you get that key and you walk into your first flat, it’s a magic moment. It’s a moment I want everyone in this country to have, not just better-off people.”

David Cameron

I was bowled over to hear Grant Shapps on BBC Breakfast this morning sounding like a late convert to Keynesian economics – arguing that housing investment was a good way to stimulate the economy (I agree!).  But the new sums announced today are tiny (and we need to check that the money really is new) and a drop in the ocean compared to the 60% cut already made to the housing programme.
It may be Plan Aplus but it’s not yet Plan B.  As Ed Miliband commented: ‘These measures are too little, too late from the man who was responsible for choking off growth in the British economy when he came to power. Putting back just 10% of the £4 billion he cut from housing investment last year will convince no-one he is serious about getting growth back into the economy.’
Reading the strategy document is a bit like watching rolling 24 hour news, as the same few points are repeated endlessly.  The occasional piece of wisdom – “we have not built enough homes for more than a generation” – is lost in a sea of false claims, like trying to take credit for an increase in housing starts in 2010/11 which could have had nothing whatever to do with the coalition.
There are a few worthy things and some ideas for further consideration – for example, indemnities for first time buyers, a new fund for infrastructure, development finance for smaller building companies, ‘build now pay later’ for land purchases, a loan fund for self-builders, more support for locally planned major development, build to let.  But every plus has several minuses, and the bulk of the document is a restatement of previous announcements.  Flexible tenancies, more evictions for criminal action away from the home, means-testing all social tenants, changing allocations priorities, reducing homeless rights, etc, are rehearsed again.
So what are some of the missing big things?  Here are four for starters:

• There is no overall assessment of housing need – the requirement to build new market and sub-market homes and the level of private and public investment needed to maintain the housing stock and improve its energy efficiency.
• There is no assessment of housing affordability – it describes how the affordability of home ownership has worsened, but sets no expectation or objective for the future.  It expresses no concern at all about the affordability of so-called ‘affordable rent’ homes, nor about the plan to increase social rents at a rate faster than the growth in incomes.
• There are lots of warm words about home ownership, but no analysis of the dramatic changes in tenure taking place right now and whether the rapid rise in private renting is sustainable.
• There is virtually nothing that ties together housing policy, taxation and benefits.  And in particular no acknowledgement that higher rents means higher benefits – or greater poverty.

Despite the fact that further work on the right to buy was the reason given for the delay in publishing the strategy, the plan to ‘double’ RTB discounts on average remains mysterious and there are no real figures.  The same can be said about the use of receipts.  The strategy says that the first call on receipts will be ‘to meet debt on additional properties sold’, and the second call will be to meet assumptions already made about the contribution receipts will make to the government’s deficit reduction plan.  But it still boasts that ‘the expected receipts will provide a sufficient contribution to the cost of replacement homes’.  Exactly how they will deliver the commitment to replace each home sold with an affordable home (nb not a social rented home) will not be answered until there is a further round of consultation.
The chapter on the private rented sector is perhaps the most disappointing of all.  Having dismissed Labour’s proposed reforms as ‘red tape’ there has been growing pressure to bring in some form of regulation of private renting and even to find a way of mitigating runaway rent increases.  It appears the Government has been sitting on its hands, saying ‘we are also looking at measures to deal with rogue landlords and encouraging local authorities to make full use of the robust powers they already have to tackle dangerous and poorly maintained homes.’  ‘Looking at’ is not good enough: it means the Government has nothing at all to say to private tenants.  As it is the only tenure that is growing in numbers, it demonstrates that this is not much of a strategy.
This document proves once again that writing down lots of little policies in one place is different from writing a strategy.  A strategy should have a vision for where you want to be, a detailed analysis of all the trends and information, clear objectives and an ordered set of priorities.  This document has none of these.
In a strategy that uses the word ‘radical’ so often, I give the final word to Campbell Robb of Shelter, so right but very understated when he says ‘Unfortunately these aren’t the bold and radical solutions we need to solve a housing crisis that’s been decades in the making.’

The Government has been trailing the fact that they will finally publish their delayed national housing strategy next week.  It is likely to be launched by David Cameron, which at least shows that the issue is rising up the political agenda.
The spin so far is that the strategy will be announced with a little bit of new money for housebuilding.  Any boost will be welcome, but given that the coalition started with a 60% cut in the housing programme, it will just be a small offset.  There will also be some details about how the revised right to buy will work and whether, and how, the capital receipts might be used.  There has also been some interesting spin that there might be proposals for a bit of ‘light touch’ regulation to the private rented sector.
New money, reinvesting receipts, and PRS regulation would all be significant U turns from the Government.  But if it is to be a genuine housing strategy, there are bigger issues at stake.  A strategy should be needs-led, with a thorough-going analysis of the housing requirements of the country leading to detailed policies which will impact on those needs over time.  I suspect this strategy will be policy-led, by which I mean that they will justify the policies they have already adopted and gloss over the needs that they are not interested in meeting.
Here are 10 questions for the Government, questions that I think the strategy must address if it is to be of any value at all.

1. Will there be a full assessment of how many homes are needed in England over the next 20 years and how and where they will be provided, with a proper emphasis on the differences between regions?
2. What approach will they take to long term property and land values, the underlying but fundamental issue in the housing market?
3. Will there be a strategy for reforming taxation and subsidy across tenures in housing both to encourage investment in all sectors and the greening of all our homes and to discourage wasteful over-consumption?
4. What will they do to provide homes to people on the lowest incomes, whether in or out of work, who cannot afford ‘affordable rents’, private rents, or home ownership?
5. Will they be frank about their policy of virtually ending new build for social rent and will they phase out security of tenure and ‘target rents’ for existing social rented housing?
6. How will they ensure that the private rented sector is modernised and joins the rest of the economy in the 21^st century with a clear set of rights and responsibilities for landlords and tenants based on consumer protection principles?
7. Given that they set a target for reducing the housing benefit bill, what will they do next to achieve the cuts given that many of their policies are leading to increases in HB costs not reductions?
8. How will they respond strategically to the rapid rise in homelessness that has taken place over the last year?
9. Will there be a real policy to tackle overcrowding or just more of the same in punishing underoccupiers in the rented sectors?
10. How will they help first-time buyers and in particular will they boost the supply of mortgages and support new deposit protection schemes?

I fear we will have many pages of Pickles prejudices and Shapps spin, But it will be interesting to judge whether there is a strategic attempt to address needs – or more of the same.