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A price worth paying…

I’ve just read a measured and eloquent piece which demolishes the government’s claims for housing and welfare reform – a piece worthy of Red Brick – courtesy of Eric Pickles.
A formal letter from Eric Pickles’ Office to the Prime Minister details the range of problems with the government’s housing and welfare policies that casual readers will be well aware of:

  • Increases in homelessness
  • Increases in public spending to deal with homelessness
  • Fewer homes being built, especially family homes
  • The disproportionate impact in the south and on children

All the issues which ministers have denied point blank will be a problem. They have constantly claimed that criticisms of their housing policy are overblown, extreme or just untruthful. They have exhorted us to trust them, because they have thought through the impacts and have been satisfied that the effects won’t be as bad as everyone is saying.
How about this from Grant Shapps:

“People like me – who set up a homelessness foundation, worked with all the homeless charities, authored probably six of seven homelessness papers – don’t make changes without thinking through the impact of them on the homeless”

And true to his word, he (and Eric Pickles) had done a lot of detailed work to show the impact of their policies on homelessness. As Eric’s letter to the PM says:

“Our modelling indicates that we could see an additional 20,000 homelessness acceptances as a result of the total benefit cap. This on top of the of the 20,000 additional acceptances already anticipated as a result of other changes to Housing Benefit. We are already seeing increased pressures on homelessness services. … It is important not to underestimate the level of controversy that this would generate (likely to dwarf anything already seen on the HB only caps) and the difficulty of justifying this in policy terms as well as implementation.”

They know the impact of their policies, but they just don’t care. It is a price worth paying. Even after this letter  had come to light, we hear from Eric that “We are fully supportive of all the government’s policies on benefits.”
I believe him. They support the policies and they support the effects of those policies. The retoxification of the Tories continues apace.

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Jon Snow's 'shocking eye opener'

I doubt very much if he will recall it, but I met Jon Snow in 1973 when I organised a
conference on homelessness in London’s West End on behalf of Voluntary Action Westminster and he was the main guest speaker.  Jon worked at New Horizon Youth Centre but he was already a stunningly charismatic and committed man.  I understand
he has kept in touch with New Horizon ever since.  I have only come across him once since, when he devoted almost the entire Channel 4 News to a brilliant analysis of the Westminster Auditor’s guilty verdict on Dame Shirley Porter’s gerrymandering.
On the basis of these two little episodes I have taken it as read that he had a feel for housing issues as they affect people at the very sharp end.  He himself says that what he saw of poverty and homelessness in the West End in the 1970s has informed his life ever since.
Jon has now revisited the bad end of the housing market for a Dispatches programme which airs next Monday.  He calls it ‘a shocking eye opener’.
On his blog, Jon says;

This month I have spent hours in flats and houses in which you would not leave a dog for an hour. I have smelt the dank fungi that leaches its way across the walls of a two-bedroom flat in Rochdale and wandered between rows of garden sheds to the West of London in which rafts of men live two, three, and four, to a shed. At night you hear the voices in the dark, see the chinks of light through the boards, hear the clank of cooking pots as they prepare supper at the end of a working day.
It perplexes me that society can be so consumed with the state of education and health provision in Britain, and yet turn so active a blind eye to the true state of where people actually live.

At a time when it seems to be increasingly acceptable to blame the poor for their poverty and the homeless for their homelessness, and politicians line up to talk about housing benefit as if everyone was getting tens of thousands of pounds to live in luxury, the programme will show what life is really like at the bottom of the housing market in the worst of the private rented sector.
It is, says Jon, ‘a shocking and upsetting watch’.  And as the government rips the homelessness safety net to shreds and cuts housing benefit to the bone, lets hope it makes them feel just a little embarrassed.

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Housing Voice – raising affordable housing up the political agenda

This afternoon saw the launch of Housing Voice, an alliance of organisations promoting affordable housing. 
In a special post for Red Brick, the chair of Housing Voice, Lord Larry Whitty, explains the thinking behind the new organisation and what it hopes to achieve.
The current generation of young families face impossible hurdles as first time buyers.  Deposit requirements are at a multiple of annual salaries and the average house costs more than 10 times the median wage.  Banks and building societies are reluctant to lend. On top of all this more defaults and repossessions are threatened as the cushion Labour set up comes under attack.
The apparent benefit of low interest rates is pretty meaningless to those not already on a mortgage and will in any case soon end.
So what do those who in the last two generations would have been first time buyers by the time they were 30 do now?
Some stay and live with their parents.  Some live in overcrowded private rented accommodation.  But even in decent private rented accommodation in London and many cities the rents are soaring.
Social housing is not a realistic option.  With 1.7 household – 4.4m people already on social housing lists the chances of a young family getting social housing is pretty remote.
Yet new home completions is at its lowest level since the 1920s and the affordable housing budget has been hit by a 60 per cent cut.
All this when household formation is running at twice the rate of new home completions and accelerating.
These are classic indicators of near catastrophic market failure in all three sectors.
The Labour Government’s legacy on housing is not glorious.  Labour made serious strategic mistakes on housing almost from the beginning.  All the social housing capital went to refurbishment through the Decent Homes programme, rather than half of it going to new build. Right to Buy capital receipts weren’t recycled on any significant scale.  There was an obsession with transfer of social housing stock to RSLs or its management by ALMOs — with variable results for existing tenants and no increase in provision.  Rent restructuring contributed to social housing being predominantly for those on housing benefit without work.  Housing Benefit was not reformed.  Regional targets for new housing were set without the means to deliver them.  Various commendable schemes for partial ownership and partial equity foundered and affordable housing quotas on developments were only belatedly enforced.
All this has of course been aggravated by wider developments – the credit crunch, the atomisation of society as households form and re-form and get on average smaller, the effects of immigration, the failure of regional policy and the creakiness of our welfare system.
Unfortunately the Coalition’s policies simply aggravate the situation further.  The abolition of regional housing targets and regional spatial planning along with other planning changes is making new developments less likely. Capital controls will lead to restrictions on bank advances.  And in the social sector affordable rents, proposals to end security of tenure, caps on Housing Benefit driving lower paid workers out of central cities and a general political and media demonisation of social tenants are destroying the very idea of public housing.
This then undermines those councils and housing associations who want to engage in new build of social housing or to require higher proportions of affordable housing in all tenures in new developments.
All this is happening and hitting families up and down the country. Yet, in contrast to elections in the 1950s and 60s, when housing was always one of the top three political issues, housing has not featured significantly in public debate in recent elections. This could be because electors have regarded housing as a private issue and not communal or political one.  But the scale of need means that this is changing. A YouGov poll released today shows that people now see affordable housing as a bigger issue for them and their families than education or crime.
The poll also shows an appetite for fresh thinking, including requiring local authorities to ensure there is housing available in their areas to meet housing need that relates to local wage rates, for councils to build homes to rent and for the government to tax bankers bonuses to pay for new public housing.
We need to build on these findings – to provide a broad civil society voice calling for housing to be a top political priority and to provide a forum for new and fresh thinking.
That is why we have proposed a new organisation – Housing Voice – the affordable housing alliance.  This is a loose association of those interested in housing who want to try to ensure the Government and Opposition bring the issue further up the list of priorities and develop new policies and new strategies for delivering decent homes to the
people.
My first House of Lords speech was in favour of reform of Housing Benefit – under the last Tory Government.  As a Minister in DETR in 1999 I unsuccessfully argued for more social housing new build than as well as refurbishment.  Twelve years on our housing market is in deep disfunction.    Labour policies largely failed.  The coalition is seriously aggravating that failure.  We need new pressure to raise housing policy up the political agenda. And new ideas to help solve the problem.
That is why we are launching Housing Voice – as a forum for ideas and a base for campaigns.
If you would like  further details about Housing Voice please contact David Arnold on [email protected]

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The patchwork of irresponsibility

If top down targets ‘indisputably failed’ according to the housing minister what can we say about the emerging alternative?
More and more small local stories are coming out which show that for many councils local freedom means the freedom not to provide homes for their residents, especially those on lower incomes (as many predicted).  
Take this from the Basingstoke Gazette:

At a meeting of councillors last week, the ruling Tories called on officers to explore the “lowest possible” annual housing target after residents said too many new homes are built every year.

 And Windsor and Maidenhead Conservatives are brazen in saying they want no social rented homes. Their election manifesto tells us they will:

 “Only support shared equity and staircased home ownership options for affordable housing delivery”.

 To give them their due, the Royal Borough does claim the construction of 157 shared ownership homes since 2007. Red Brick can only caution them that if such largess continues they should prepare for the stampede of first-time buyers heading their way.
A clear picture is emerging of a patchwork of local policies which add up in total to very few homes being built, especially for those on lower incomes.
 
I’m all for localism as it happens and believe we should live in a country where communities have greater local freedom to make their own decisions. I would echo Sam Elliot at the excellent ‘Unnecessary Role’ blog when he says:

“If we are an egalitarian party then not only are we fighting for equality of opportunity but we’re also fighting for equality of power (it says so on the back of the membership card). Isn’t part of that making sure that all communities have the ability to make decisions about their local area?”

 But, to offer a hackneyed quote from an almost as insightful figure (Spiderman):

 “With great power comes great responsibility”

We must oppose a localism which excludes the absolute responsibility to provide enough homes and enough affordable homes for your residents. The coalition’s localism is an invitation to do just that, leaving other areas to carry the burden.

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ALMOs come into their own?

Monimbo
A short while ago some commentators were tempted to write-off ALMOs, given the numbers of councils who’d taken housing management back in-house or – in a few cases – opted instead for stock transfer.
The key blow looked likely to be the cutting of finance for the decent homes programme, and – even more damaging – the government’s ending of Labour’s requirement that councils getting finance should have an established arms length management company with at least a ‘two-star’ performance.
In fact, announcements of the death of the ALMO proved premature.  Many have strong tenant support and indeed several now have tenant chairs.  A number of councils have recently extended their contracts with ALMOs, and two have set up new ones even though they no longer provide a route to extra funding.  And now a potential new lease of life has been provided – almost certainly by accident – as a consequence of one of the key features of council housing finance reform.
When councils become self-financing next April, they will gain a lot of financial autonomy but will continue to be subject to a cap on their borrowing.  As assiduous readers of Red Brick know only too well, this is because their debt is still part of public borrowing.
However, a new report from the National Federation of ALMOs offers three ways in which much-needed investment might be achieved, despite the cap, by authorities who have ALMOs (or decide to create them).
The essence of all three proposals is to reconstitute the ALMO so that is no longer exclusively owned by the council.  Indeed, the proposals offer an excellent opportunity for tenants to build on the strong role which they already have in most ALMOs, taking a larger ownership share and a bigger role in the governing board.  The ALMO could stay as simply the manager of the housing, as it is now, but as a result of its new constitution be able to borrow privately to supplement the council’s borrowing. It would do so on the strength of its income stream.  A second option is the same but with the added assets of
some transfer of land or (perhaps redundant) stock to the ALMO, to give it a partial asset base.
A third, and more radical, option is for the ALMO to take over the stock, but keeping a financial relationship to the council that wouldn’t exist in a conventional stock transfer.  The key here is that, instead of paying off the council’s housing debt, the new ALMO (now named a ‘CoCo’ – Community- and Council-Owned Company) covenants to pay the council’s debt charges over the long term.  This preserves the advantage of the cheaper debt which councils invariable already have, while creating headroom for new investment that doesn’t count towards the council’s borrowing ‘cap’, and ensuring that the council has a permanent interest in the ALMO’s performance and financial health.
In the next few months councils are going to be so preoccupied with getting ready for self-financing that none of these options are likely to be much explored.  However, one of councils’ key tasks will – for the first time – be to produce proper, long-term business
plans.  In many cases this will reveal the extent of the investment shortfall facing them if they have to stay within the borrowing ‘cap’.
One of the new ALMO options proposed this week, giving them the potential to invest more in stock improvements, regenerate estates, or even recommence new build, might then start to look very attractive, both to councils and to tenants.

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A big ask and no answers

One traditional feature of housing’s annual trip to Harrogate for the Chartered Institute of Housing Conference – apart that is from the disco – is a ministerial speech.  These are often disappointing, over the last 20 years or so most of them have started “I’m new in the job, housing is really important, I have come here to listen and learn.”
This year, as an interesting variation, the Minister listened to a speech instead of delivering one.  And in the middle of her remarks, the estimable chief of the CIH Sarah Webb summed it all up in a simple sentence.  She said to Grant Shapps:

“I’m asking you to resist those small, popularist issues at the extreme ends of the debate and prioritise the really big ones – the demographic time bomb, persistent unaffordability, land supply, the complex role housing plays in our economy; ways to lever in new investment to fund new supply.”

Never one to face up to such fundamentals, Grant Shapps had his own diversionary tactic in place.  This time it was his announcement on transparency: the Ministry of Justice will consult on making housing associations subject to the Freedom of Information Act and he wants all associations to publish all spending over £500.
Now, on the specific issue of FoI, I agree with the government, and I can’t for a moment understand why the sector doesn’t just embrace it and move on.  Instead, his announcement seems to have succeeded in getting the housing association sector hot under the collar on a less than critical matter, which I suspect was the aim.
I bet he had a chuckle that his diversion worked.  It’s certainly a lot easier than addressing Sarah Webb’s little list of really big questions.

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On yer bus

Rarely have I been less impressed by a minister than when I saw Lord Freud speak last week at the Chartered Institute of Housing Conference. It was a virtuoso performance of refusing to engage with any of the issues, however reasonably raised, all to the end of irritating a room full of people. He’d have been as well to stay in Whitehall.
He did however (accidentally I’m sure) stray into making a couple of relevant comments. We have constantly heard from Shapps et al that everyone is being ridiculous saying that the poor will be pushed out of expensive parts of London. Lord Freud took a different tack when questioned. London is a city of commuters he told us. It’s highly inter-connected. You can get around easily and cheaply. A bus fare is only £1.30 and – by the way – he often gets the bus. The average London commute is 68 minutes. Why should people in social housing get special privileges to be able to live next to their jobs?
In making this argument he acknowledges that the government is fully aware that people will stop being able to afford to live in large parts of London. It’ll be a price worth paying to get the benefit bill down and what we heard from Lord Freud was their rationalisation for why that was OK.
Second thing of interest was the staggeringly disingenuous argument that the welfare reforms were being driven by the need to support people into work, and not the reduction of the benefit bill. Frankly, it’s insulting people’s intelligence to tell them the removal of £18bn in a side effect of helping people into work.
He told the audience that the reason for reducing people’s benefit in the private rented sector is to put people in cheaper homes and keep people out of the benefits trap. He correctly said that benefits allowed people to afford very high rents which meant that some families never had a realistic chance of earning enough to pay their rent without housing benefit.
What is remarkable about this argument is they are duplicating exactly this problem through the ‘affordable rent’ model. They are raising rents in social housing to near-market levels where workless and low earning families are unlikely to ever earn enough to pay the rents without benefit. Ministerial double-think at its worst.
As I’ve said frequently on this blog and elsewhere –rent that people can afford from their own means supports aspiration and employment. Low rents keep people out of the benefits system and means they keep any extra money they earn – from overtime, promotions or someone else in the house getting a job.
The fact that the Tories don’t recognise this is the giveaway that it’s cuts and adherence to the market that drives their approach – regardless of the consequences on employment.

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The Future of Social Housing – Is Newham’s answer THE answer?

Our special correspondent, Bill D’Amore, has been at the Chartered Institute of Housing Conference this week, and was moved to write this post.
The Mayor of Newham, Sir Robin Wales, spoke at Wednesday’s session of the Chartered Institute of Housing conference and set out his – and Newham’s – stall for social housing that builds resilience, aspiration and fairness for residents and communities. Sir Robin is one of Labour’s most outspoken politians calling for an end  to what he has called ‘the race to the bottom’. The social housing and benefit system has created a ghetto that makes the poor poorer and creates a culture of dependency, excluding people from work. Never avoiding controversy, Robin is a stalwart champion of his part of East London, and for what  his community needs:  robust access to employment, strong place-making, and prioritising social rented housing to those in work to “stop Newham’s revolving door”.
Robin’s position has been well known for some time, but he has courted particular interest because he tries to set out the socialist case for change – and a role for social housing that is, to some, not a million miles from Conservative boroughs like Hammersmith and Fulham and Westminster. He argues that  it isn’t – precisely because Newham has some of the most deprived communities in Britain that need stability and resilience, whereas other affluent Tory councils are actively excluding the poorest in areas where they work and live. Robin’s argument is both moral and economic. As he said: ”driving people out of rich areas seems to me to be just plain nuts”.
So far so plausible, to this party member, but as coalition policy starts to ramp up a vision for social housing as merely a short term  safety net ( as articulated on Wednesday by Matt Oakley from Policy Exchange)it’s important that Robin – and others – sharpen up their argument for a Labour housing policy that doesn’t just leave an open goal to the Tories. As I listened, three political challenges seemed imminent:
1) Some of us, Robin included, seem to have adopted the Tory narrative of the dependency culture, and invidious insinuations, denied by IDS but run week-in, week-out in the Mail and Express, that those in social housing are scroungers and the ‘feckless poor’.  I do not think Robin believes this, but we need a consistent challenge to this narrative – the Hill’s report did not draw this conclusion, and indeed other evidence suggests that the barriers to work are 80% circumstance / capability and 20% motivation, not the other way around. The third speaker on Wednesday, Diane Lee, tenant chair of Watford Community Housing Trust, gained the loudest applause of the session went she expressed just how much tenants resent this suggestion.
2) I am not sure Robin’s analysis does always lead to the need for social  lettings solely to those in work. As he says, the social tenants in Newham are the most stable, whilst it’s the private rented sector that sees the lowest standards and highest churn. What Newham, and places like it, may need is a far more robust set of tools to intervene in the private rented sector (PRS). What he can most readily influence is the easy option of his own lettings policy. To be fair, Robin does talk about the PRS, but only in terms of small pilots, and this part of the housing sector repeatedly never gets the attention in Labour policy that it ought to.
3) Most critically, Robin is always stuck within the localist position. If Newham can change its lettings policy to only allocate to working families, how can these flexibilities be denied to Hammersmith and Fulham? This is where we need the clearest thinking.  If ordinary working families are not to be driven into overcrowded slums or out of vast swathes of London and the South East, we need a policy that does not just help Newham, but all of the South East. The answer has to be one, or possibly both, of two possibilities:  in some way, a prescribed minimum tenure mix – a limit at the edge of localism however much local communities may squeal; or, some form of positive incentives to encourage genuinely mixed communities (and not merely the desultory bribe of the new homes bonus).
Neither of these will be simple, or uncontroversial, but our best advocates – like Sir Robin, and Labour’s national housing policy need to get passionately behind the reasons why we value mixed communities, whether of race, faith or economic circumstance, and a serious set of policy tools to achieve this. For Newham’s sake, and the rest of us.
Bill D’Amore.

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Runaway Cameron should be stigmatised too

Lone parents make up around 10% of households in this country.  Demonised in the media as responsible for many of society’s ills including the breakdown in law and order, the facts do not fit the stereotype of teenage girls in a feral underclass getting pregnant and taking all the social housing.  Divorce and separation are the real factors behind the growth in numbers. 
People take different views on David Cameron’s call that ‘runaway dads’ should be ‘stigmatised’ in the same way as drink-drivers and face ‘the full force of shame’, but a new report from the Fawcett Society prepared by the Institute for Fiscal Studies shows that lone parents are being hit hardest by the government’s cuts.  Lone parents may, as Cameron said, be doing ‘a heroic job against the odds’ but he is stacking the odds against them in a highly damaging way.  Far from being the father of the nation, Cameron is the nearest political equivalent to the runaway dad.
The report shows that lone parents, 92% of whom are women, are suffering the greatest cumulative loss as a result of the cuts in public services.  Reductions in housing benefit are a major factor as single women are particularly reliant on HB either because they do not work or because they are in casual or part-time work and rely on HB as an in-work benefit.  
Lone parents will come under increasing pressure to work – the expectation that they will work will shortly be reduced to those with children over 5 – just as rents are rising, housing benefit is being cut, working tax credit coverage of child care costs is being reduced.  Lack of childcare is already a particular barrier to lone parents wishing to work. As the report states: “At the same time as the coalition government introduces wide-scale welfare reform with the intention of “making work pay”, they are reducing the level of support for childcare and training costs that help lone parents into work.”
The report highlights the contradictions in government policy and how cutting the deficit is a much higher priority than other objectives such as helping people into work or improving educational attainment.  The contradiction in policy says Fawcett “fails to recognize the needs, interests and circumstances of the diverse women who fall into each group and risks reinforcing outdated stereotypes and penalizing those who do not conform to them.”  Quite.

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How come Scotland can build council houses then?

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Peter Hetherington writes in the Guardian that more than faith is needed to build council houses, and asks why Scotland manages to build almost as many as England when its housing market is a tenth of the size of its southern neighbour?
The reasons are set out in today’s UK Housing Review Briefing, which updates many of the figures in the annual publication and draws attention to recent trends. One of these is that the 32 councils in Scotland built over a thousand houses last year, and may well build the same number or more this year, while English council house building will probably peak at only a little higher than this, before heading back to the miserable output levels of 2-3 years ago.
So why is this? It turns out that the answer is in the spending rules. Scottish councils have several big advantages over their English cousins.
First, they’ve had local control of council housing finances for years, for the simple reason that Scotland stopped subsidising council housing revenue accounts and so the ridiculous ‘HRA subsidy’ system which is in its last year of operation south of the border fell into disuse in Scotland many years ago.
Second, they have had no rents policy for council housing, which may have been an oversight but has had the happy side-effect of low rents which councils can now raise – if they choose to – to pay for new investment.
And third, a quirk in the spending formula by which the Treasury controls Holyrood means that any extra borrowing is counted as what’s called ‘Annual Managed  Expenditure’ (AME) rather than the more tightly controlled Departmental Expenditure Limits (DEL). In England and Wales, the opposite applies.
Even more surprisingly, councils are predicted to soon have the same building potential as Scottish housing associations. This is, of course, because their borrowing is cheaper than new borrowing by associations. It’s counted as public borrowing, though, which doesn’t worry Holyrood but might one day trouble the Treasury if volumes are perceived to get too high.
Even after council housing finance reform in England in April next year, councils will still be restricted in what they can do and won’t be able to emulate Scotland. In theory, English councils can also borrow prudentially, but HM Treasury is placing a cap on their borrowing from April onwards so they won’t be able to use this freedom to the extent they could support from their income. Some will continue building, but most won’t be able to do so on any scale.
There’s a sting in this tale, of course: someone is paying for the new houses and while there is a grant system in Scotland part of the cost falls on rents. So existing tenants are partly paying for the new homes. However, so far there has been no suggestion that Scotland follows England in jacking rents up to 80 per cent of market levels – or anywhere near them. So the pain is probably tolerable and councils must judge that they have tenants on their side.
The odd thing is that it’s in England rather than Scotland that the government is making a big fuss about cutting red tape and freeing up councils to do more. Looking north of the border might be a bit unpalatable since May’s elections, but even so the English housing minister could take a leaf out of Scotland’s spending rulebook.