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Grant Shapps for the Treasury

I’m a bit behind Steve on catching up with the government’s new Right-to-Buy announcement. He’s right: there’s no serious provision for replacing the homes being sold. It’s just flogging off the community’s assets.
Here’s a worked example direct from the government’s consultation paper:

Don’t worry about most of it. Just look at the top-line: The sale of 16 homes for this council earns them £800,000.
Then look at the bottom line: that then turns into £92,000 to fund the replacement homes (after sales costs and the government taking a great big chunk back to the Treasury (£420,000)).
So the housing minister is going to build 16 affordable homes for £93,000 is he?
With that kind of financial wizardry, he should be in the Treasury – the deficit will be conjured away in no time.*
 
*I wondered if this could be part of his houseboat strategy, but it turns out you can’t even get 16 second-hand boats for that:

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Will housing ride to the Tories' rescue again?

I was reading a very interesting pamphlet this morning by Labour MP Gregg McClymont and Ben Jackson.
The pamphlet tries to look at the lessons of past periods of economic austerity and Tory government.
They ask a key question: How have Tory governments succeeded in being re-elected in the past, during periods of high unemployment, economic stagnation and deep government cuts in public services?
It’s a good question. Britain’s worst economic periods have been presided over by Tory governments racking up consecutive election victories. In the 1930s The Tories won in 1931 (Tory dominated National Government) and 1935 (the largest ever Tory majority). In the 1980s and early 1990s of course they won four in a row.
The authors give a range of reasons for this. One of these is that even in economically dire times the Conservatives have managed to increase the prosperity and stability of some key groups in society, who then supported them strongly. Critical to this has been increasing homeownership.
In the 1930s the boom in suburban house building created a new class of homeowners and pushed homeownership further down the income scale. In the 1980s, the Conservatives repeated the trick, not by building more homes, but creating 2 million working class homeowners through right-to-buy.
Could that happen again? Well, they may manage to build a coalition of those less affected by austerity and stagnation, but I can’t see how housing will be part of it. The prospects for more house building are grim and despite their attempt to warm-up right-to-buy this could only be at a fraction of the scale of the 1980s.
But it is a lesson for Labour too. If you can provide people with a quality, secure home that they feel they can call their own, you can change the shape of the political landscape in fundamental ways.

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Homelessness and the Total Benefit Cap

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.

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Another year, another free hit for the Tories

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!!

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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.
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RTB: not ‘one for one’ and definitely not ‘like for like’.

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.

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Oh yes he is: Tebbit stars as Jacob Marley

The news that Lord Tebbitt is supporting amendments to the Legal Aid Bill, which brings about huge cuts in entitlement, especially for civil cases, is a good example of a politician following a special interest then realising there is a bigger picture.  Admirably (I assume), he has a long term interest in medical negligence claims made on behalf of children, so he has joined a group of Peers seeking to change the Bill.  The problem for Kenneth Clarke is that a lot of people with special interests, who each oppose his Bill because of the impact it will have in their own policy area, might coalesce into a generic opposition to his main provisions.  Then he will be in trouble.
The Bill will have a big impact on housing and a number of organisations have been raising this for some time, including Shelter, Justice for All, the Advice Services Alliance, Advice UK, and the Housing Law Practitioners Association.  I recommend Shelter’s excellent briefing.  
Shelter estimate that the Bill will mean that around 40% of housing cases will no longer qualify for legal aid, around 42,000 cases, saving a miserable £10m.  Cases that will not qualify in future include damages claims for illegal eviction and many housing benefit cases.  Tenants will have fewer remedies against rogue landlords , and this will remove one of the key deterrents against illegal eviction and harassment.  The exclusion of all benefits work, except where the home is threatened, will prevent early intervention action that resolves problems before they reach the extreme: this has been an important aspect in the improvement in homelessnesss prevention over the last few years.
So in this one case we wish more power to the elbow of Lord Tebbitt.  The old Thatcherite, who did so much damage in Government, has a last chance to redeem himself and do something worthwhile.
I doubt that Kenneth Clarke can or will ever undertake the transformation of Ebenezer Scrooge, but Norman may yet prove to be perfectly cast as the ghostly Jacob Marley.  The hope for Bob Cratchit and Tiny Tim is that the House of Lords contains a very large number of lawyers who seem to be horrified by this attack on fundamental civic rights.

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DWP vs. CLG Again

This exchange in the House of Lords caught my attention recently:
Lord Kennedy of Southwark: So, who’s responsible here for joined-up government?
Baroness Hanham: Dunno, it’s not my department.
 
Actually, that’s not quite what they said. In full:
Lord Kennedy of Southwark: There is also the impact of 80 per cent of market rent, which means that a family of two adults and two children living in the London Borough of Newham needs an income of £48,000 a year to afford a home without claiming universal credit. Does the noble Baroness understand that, because of the lack of joined-up thinking across government and failed policies, hard-working families are paying the price?
Baroness Hanham: My Lords, that scoops up a whole lot of things, some of which are not entirely to do with me. The universal credit is not part of my department, although I recognise that the housing benefit goes towards the contribution of housing facilities. We are trying to provide, and will provide, affordable housing for as many people as we can. The universal credit and the amount of money paid in housing benefit is something that my noble friend Lord Freud will deal with in due course.
 
Over the course of the last few months, we’ve seen how the government’s benefits policies clash with their housing policies.  This is just one example. Lord Freud tells us that housing benefit must be cut for private renters, because it creates too much benefit dependency. Yet, the combination of his welfare policies and the government ramping up social rents creates vastly more benefit dependency in the so-called affordable housing sector – as Roy Kennedy pointed out.
It would be good if there was a parliamentary way for our MPs or noble Lords to get Grant Shapps and Iain Duncan Smith to sit together and explain how their policies add up. At the moment, DWP says it’s CLG’s responsibility and vice versa.
This is too convenient for them.

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Shooting the troubled

Cameron and Pickles finally flipped this week.  Only they could tell the world, without a shred of humour, that they were going to tackle ‘troubled families’ by appointing ‘trouble shooters’.  Of course this might appeal to some of their backbenchers when they have finished with their Nazi-dress stag parties.
When interviewed, Pickles seemed not to have a clue what he was talking about and couldn’t even describe what the ‘trouble shooters’ would do.  Frankly, he didn’t seem up to the task set by Cameron a year ago when he said he wanted to ‘turn round every troubled family in the country’ by the end of the current parliament.
There is of course a serious point here, and no-one would complain about developing the good work done in Labour’s family intervention projects.  But many of the services that are most relevant to these families are precisely those that are being cut as the Government’s deficit reduction plan bites.
Serious doubts have emerged about the figure of ‘120,000 most troubled families’ who ‘cost the state £8 billion a year’.
Who are these families?  Well, according to much of the media, they are the ‘Shameless’ families who live on benefits, refuse to work, don’t send their children to school, adopt ASB as the family sport, etc etc, the typical everyday Daily Mail stereotype of the feckless working class.  John Redwood MP calls them ‘the worst problem families’ who use up ‘a small army of state employees’.  Even the better news organisations said these were ‘dysfunctional’ ‘problem’ families.  Sky News used examples of domestic violence, repeat offenders, people who have been in care, and children excluded from school.
Really, who are these families?  Over at Fullfact they have tried to track down the figures, stretching back to research done for the Social Exclusion Unit many years ago.  The ‘120,000 families‘ figure turns out to be a reworking of the SEU’s estimate of the number of households who scored on five out of seven indicators or disadvantages.  But none of the indicators concerned ASB or criminality or school exclusions or benefit fraud convictions, and it would be possible to be one of the 120,000 without being on out-of-work benefits at all.  The SEU indicators are not measures of bad behaviour but of poverty, overcrowding, disability, mental ill-health and low income as well as worklessness.  It’s not even clear whether we are talking exclusively about families with children at all and whether, for example, older people are included.
Cameron said the Government has estimated how many troubled families are in each area but this sounds like a very dodgy bit of arithmetic, taking an old figure based on different criteria and dividing by the number of local authority areas.  It is very different from having a list of households to work with and councils will struggle to operationalise the new policy even if they wanted to and even if they could afford to.
I’m happy to support more money being spent on co-ordinating services to low income households, although it is the height of cynicism for the Government to expect local government to put in 60% of the cost.  There are a lot of agencies involved offering a bewildering array of services with different eligibility criteria, so better co-ordination and more targeted service delivery seems like a good thing to do.  I suspect however that if the ‘trouble shooter’ starts by assessing the services received by the household then looking at what they need and what they are entitled to the cost will go up rather than down.
The ‘Shameless’ stereotype is now so strong that the automatic assumption in all debates is that it is a true depiction of the workless poor – see the newspapers but also watch/listen to the supposedly intelligent programmes like Any Questions and Question Time which are stuffed full of right wing demagogues peddling these myths.
Family intervention was indeed aimed at the tiny number of families who really could not cope with raising a family and needed intensive (and non-judgemental) support.  But this is not what Cameron and Pickles are up to.  They are on a propaganda mission, to convince the public (with the mighty media machine behind them) that the real issues are fecklessness and inadequacy and not poverty and unemployment.  In short, blame the poor and not the bankers, and certainly not the Tories.
And slightly off-piste: was anyone else rather shocked to hear Boris Johnson on the Marr show this morning say that he expected one nation to drop out of the Euro, but then comment that the upside would be that ouzo would be  lot cheaper.  Hilarious or not, isn’t he meant to be leading our capital city with a little integrity and dignity?  I wonder what the many Greeks living in London think of his little joke?

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Social Tenants' Bedroom Tax: now it’s up to Lib Dem MPs

Yesterday’s defeat of the Government in the House of Lords on the ‘Bedroom Tax’ – the punitive proposal to remove benefit from social tenants deemed to be underoccupying their homes (on very strict definitions) even when they have no possibility of being able to move to a smaller home – gives the Coalition a decision to make.  They can either accept the amendment agreed by the Lords or seek to overturn it when it goes back to the Commons.
The electoral arithmetic is such that the Government will not be able to get this nasty little proposal though the Commons if all Lib Dems MPs oppose it and threaten to join Labour in the voting lobby.  This is what should happen because there is nothing in Lib Dem policy or in the coalition agreement that would suggest they are required to support the Government on this.  Given that Cameron’s favourite game, no doubt learned at his educational institutions, seems to be the ritual humiliation of his fag, it is time for Clegg to make a stand on a matter of principle.
The amendment means that the bedroom tax – loss of £13 per week on average for some 670,000 working age social tenants on housing benefit – would not apply to social tenants with only one bedroom additional to their needs and would not apply unless they had been made an offer of suitable alternative accommodation.
The bedroom tax proposal aims to save some £500m a year on the housing benefit bill, a figure that seems unachievable given that a proportion of households would inevitably become unintentionally homeless at considerable expense to the public purse and a proportion of those having to pay the tax would move into private rented accommodation at higher rents and higher benefit costs.  It has also been argued that it would be counterproductive in tackling underoccupation because it excludes older tenants who are more likely to underoccupy.
Many examples were given during the debate of households that require additional space for entirely justifiable reasons.  Lords also quoted the work done by the National Housing Federation which showed that the number of hosueholds needing to move to one bedroom accommodation to escape the tax would far exceed the total supply of one bedroom properties available to meet all needs.
The whole debate can be found in the House of Lords Hansard .
The amendment was moved in the Lords by Lord Best.  He said:

Under the fierce new test, a family would be counted as underoccupying if, for example, two teenage girls were not sharing the same room, or if an older couple, one of whom is below pension age, have a two-bedroom flat. All those deemed to be underoccupying will have to move and downsize to somewhere smaller. If they do not, even if there is simply nowhere smaller for them to move to, then they must pay the new penalty.
Six hundred and seventy thousand households receiving housing benefit will be caught in this trap, rising to some 740,000 in the years ahead. If they do not move out, they will be charged an average of £13 per week, which will have to come out of their low earnings or their other benefits, which are meant to cover food, fuel, clothing, and specifically not housing. These areby definition very poor households, and the new tax will represent a significant reduction in their living standards.

Speaking in support, Lord McKenzie of Luton said

No one doubts that underoccupation is a problem. We have a chronic shortage of housing stock and a huge demand for affordable housing. Yet the Government’s policy is the wrong way to go about tackling the problem, as it punishes people for housing choices over which they have little control rather than enabling the best fit between the available properties and the needs of households.

Also speaking in support, Baroness Hollis of Heigham said

Grant Shapps said that we should not bully people out of their homes. He is right. Yet in this Bill we are saying to people who have lived in their homes all their lives, done what was asked of them and behaved responsibly-two-thirds of them having some disability-that their benefit is being cut from underneath them through no fault of their own but just because we in Westminster are changing the rules. We tell them to downsize while knowing that they cannot do so, so we fine them instead for what is not their fault and for what they cannot change. It is morally wrong to punish people for something that is not their fault and to punish them when they are innocent. That is not decent, it is profoundly unfair, and we should not do it.