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New Homes Bonus used to offset cuts

The New Homes Bonus is being used primarily to offset cuts in local authority grants, and not to help increase affordable housing supply.
That’s the conclusion to be reached from the latest piece of propaganda from the Department for Communities and Local Government, which reports (I think we are meant to be impressed) on the uses to which the first payments of the New Homes Bonus – £200m in April 2011 – have been put.
There have already been complaints that the distribution of the bonus is unfair and does not help deprived areas as much as it should.  As a report on progress, the latest document includes no statistics and it has no overall analysis.  However it claims that the Government wants to ‘encourage innovation’ and it includes a ‘ready reckoner’ which makes it clear that the Government does not expect the NHB to be used to boost housing investment but to offset and defray cuts in mainstream service grants.  The ready reckoner tells us

  • 800 new homes could ensure two Sure Start children’s centres remain open;
  • 180 new homes could pay for a day centre to care for the elderly to be kept open;
  • 100 new homes could cover the cost of two trained child social workers and two full time hospital nurses for one year;
  • 30 new homes could save your small public library from closure;
  • 15 new houses could pay for two cricket training nets to be installed.

The document mainly uses ‘case examples’ to show how the money has been used or is proposed to be used.  Examples include:

  • Elmbridge – includes ‘funding for other charitable groups … affected by the cuts in government funding’ and ‘funding for public libraries under threat of closure’,
  • Wychavon – 40% passed to parishes to spend on community facilities – for example, village hall improvements, flood protection, bus subsidies, play areas, allotments and green initiatives.
  • The Vale of White Horse District Council – ‘using the Bonus to introduce free car parking to the three market towns’
  • Bath and North East Somerset Council ‘used the Bonus to help tackle a £12m savings target and protect priority frontline services.’ Includes street cleaning, libraries, paying for foster care places.
  • Rugby Borough Council – NHB ‘has meant that front line services have been maintained and in some cases enhanced.’ Includes refuse collection and Leisure Centre.

Two councils show how the NHB could be used to further enhance housing and other investment:

  • Sheffield City Council – use NHB ‘to promote housing and economic regeneration and minimising the number of long term empty properties.’
  • Plymouth City Council – ring-fence NHB as part of the Plymouth Growth Fund which ‘aims to increase the city’s population by 50,000; create 42,000 new jobs; and deliver 30,000 new homes.’.

Although the Government has always said the money will be not be ringfenced, many people believe that a housing-related payment should be used for housing-related purposes.  Using most of the money to offset cuts in such a blatant way is an abuse of the scheme.  I wonder if Eric Pickles and Grant Shapps actually noticed that affordable housing starts fell by more than 90% in the first 6 months of this year compared to the previous year? 

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Why the Government has made this recession much worse than it needs to be

Guest blogger Graham Martin, a member of the Labour Housing Group Executive, looks at how Government inaction in housing since the election has cost the Treasury a fortune and made the recession worse.
Delays in setting up a housing programme to follow on from Labour’s – due to Government inaction and incompetence over the past 18 months – has cost the economy 200,000 jobs and 100,000 new homes, at a significant cost to the Exchequer, and a net increase in borrowing.
The two key statistics are:
1. The number of new Affordable Homes started on site in England in the six months to 30 September 2011 was just 454 (1), a fall of over 90% on the same period in the previous year.
2. The average Government subsidy required to build a home under the Governments new ‘Affordable Homes Programme’ is below £20,000 per property (2).
Despite the current hiatus between programmes, the Government still says it intends there to be a programme of around 370,000 new ‘Affordable Homes’ to be built and completed from around now to March 2015 (3)– made up of 170,000 in the Homes and Communities Agency ‘Affordable Homes’ programme, the release of 100,000 plots of Government land and the promise of 100,000 new homes from the recycling of right to buy receipts back as ‘Affordable Housing’.  Clearly the Government is able to make available the funding within the current Comprehensive Spending Review period.  So why the delay?  And what’s the cost and damage?
Government figures indicate that every new home built supports 2 additional jobs for a year. The cash benefit to the Government from 2 jobs (one new house) will be around:
From (4):

  • Reduced benefit payments – say a saving of £7,000 per person in reduction in State Benefits claimed
  • From tax and national insurance paid – say extra income of £5,000
  • From Corporation tax payable by developer and ‘trickle down’ suppliers, say £1,000 per property
  • From extra income spent by employees – assume 10% of extra disposable income collected in VAT – say £1,500.

Total headline benefits to Treasury would amount to around £21,500, compared to the estimated average subsidy of £20,000, equalling a surplus of £1,500 per property commissioned.
In practice most of these figures are probably an underestimate: I have tried to veer on the side of prudence.
There are also so other indirect but very significant savings, including:

  • The extra say £13,500 net extra spending power (after VAT) of the two extra employees (per extra property) will feed into extra income for local shops and businesses, and in turn generate extra earnings, employment and tax income
  • Building an extra 50,000 homes in the missed six months (or extra 100,000 homes in the probable missed year) will also generate substantial further savings not least through:
    • Saving in Housing Benefit reflecting difference in rents of ‘Affordable Homes’ and alternatives at full market rent in private sector
    • Marginal reduction in total Housing Benefit bill from extra 100,000 homes reducing upward rental pressure on private sector renting
    • Much larger savings where families moved from/avoid need for temporary (and very expensive!) homeless accommodation to an ’Affordable Home’,

If the Government had got ahead and put a programme in place earlier, the spending would have resulted in an immediate saving to Treasury in short term (so reducing borrowing) and a marginal longer term reduction in future benefit costs. I would welcome feedback on these calculations and the argument underlying them.
Notes
1 These are properties built by Housing Associations (and to a lesser extent Councils and Private Builders) either for below market renting or for Assisted Purchase (Affordable Home Ownership]. Source Homes and Communities Agency Press release and Website.
2 Figure derived by dividing total grant awarded by properties contracted for figures have been released in batches so no single source, but average clearly below £20,000 per property from batches sampled. A lot of individual examples exist of Housing Associations being able to build at well below the stated £20,000 subsidy per new home.
3 Approximate figure from totalling all the initiatives announced.
4 Benefit savings derived from benefit tables, income to treasury conservative estimate (I have found references to some work by Mark Hoban MP (now a Treasury Minister ) in 2007 using HoC Library data to calculate loss of tax at around £7,300pa per person, but figures not necessarily fully comparable. I am assuming average earnings of employment generated at £20,000 per person.

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Red Brick one of Guardian's 'blogs of the year'

Best of the web: a year in housing

The Guardian’s Housing Network has reviewed its first year of operation and has picked  their ‘blogs of the year’, including one from Red Brick.

Man's hand writing.
Photograph: Acestock/Alamy
On their own housing network blog, Hannah Fearn writes:
“To celebrate our first birthday, we pick our favourite news, views and analysis from the housing blogosphere this year. From the resurgence of right-to-buy and the media maelstrom over the housing strategy to campaigning over the impact of housing benefit reform, it’s been a turbulent year for the housing sector. There has been much for writers, bloggers and housing professionals to deliberate over during our first year as a professional network. To celebrate our first birthday, we select our favourite posts from around the web.”

10 October 2011: ‘Welfare reform – there is a choice’, David Orr for the National Housing Federation blog
This post could have come at any time during the last nine month debate over welfare and public spending cuts, but it proved poignant as welfare minister Lord Freud faced growing criticism over the impact of his reforms on the most marginalised communities.
“The problem is that the reality of the debt has become an excuse to make decisions which will have profoundly bad consequences for some of the poorest people in our society,” argued David Orr, chief executive of the National Housing Federation. “The very people the Government should be helping during these tough economic times: the disabled, foster carers and families – are exactly the people who will be hammered by these measures.”
His powerful conclusion? “Ministers will tell you there is no choice. That’s rubbish. There are always choices.”
29 July 2011: ‘From festival trash to housing stash’, The Social Issue
At a time of growing pressure on housing and support services and a pervasive mood of doom and gloom across the sector, how refreshing to hear a good news story. Saba Salman’s blog showcased a captivating example of the kind of innovative thinking that will see the housing sector not only survive but flourish despite a lack of public funding.
St Mary’s, a homeless hostel in Bangor, launched a scheme to redistribute tents, camping equipment and sleeping bags abandoned in Cardigan Bay after a music festival to hostels and drop-in centres across North Wales.
“The equipment by the housing association staff and hostel users includes some 79 pop up tents, 38 normal tents, 47 sleeping bags, 54 inflatable beds, 51 camping chairs, 45 roll mats including thermo rests, 17 pairs of wellies and eight new pillows,” Salman wrote.
We welcomed the chance to share a feel good example of the simple ways in which the housing sector can support itself, and its clients, during the coming months.
17 June 2011: ‘You can’t defeat stereotypes by repeating stereotypes’, Red Brick Blog
In June, housing veteran Steve Hilditch shared his disappointment at Labour leader Ed Miliband’s willingness to repeat the very sentiments about social tenants and their communities that can make the job of the housing sector so difficult.
“Ed makes the point that he wants to reward contribution and not punish people. But there is shortage and the people who get punished are those that won’t get a home as a result of a change in priorities – your grannie who needs sheltered housing, your cousin with a severe medical condition who can’t stay in a private bedsit in a shared house, your son or daughter who has had a breakdown and needs supported housing, your sister with 3 kids evicted from her home because she can’t keep up with the mortgage. None of them working and none of them able to volunteer. These are not tearjerkers, this is the real life business of allocating social housing.
“We fall into the hands of the forces of darkness every time we play the undeserving poor game, every time we add to the negativity around ‘welfare recipients’ without explaining who they are,” Hilditch explained.
22 November 2011: ‘The strange death of social housing’, Patrick Butler’s Cuts Blog
In an insightful post on the brave new world of social housing under the coalition government, the Guardian’s own Patrick Butler spelled out the perverse choice that the government – indeed, any government – now faces in funding homes for social rent:
“If it wants to build new properties for social tenants, it has just two options: to raise its own investment capital (by selling off a couple of its million-pound properties to bankers or city lawyers); or to apply for investment under the affordable housing programme.
“If it does the former, it knows it risks abandoning its social mission to help provide homes for low-paid young people in the areas in which it operates… if it does the latter, it knows that any homes it builds or acquires in its core north London areas will never be rented by the people it was set up to help.”
If a housing provider charges 80% of market rent under the Affordable Rent scheme, “what would be the point of its existence as a housing association?” Difficult questions that all our members now face, and no easy answer.
13 July 2011: ‘You know you’re an innovator when…’, Social Housing Comms
In tough times, how do you know when your organisation – and staff – is performing well? Kat Hughes, head of communications at Wolverhampton Homes and a prolific housing blogger, shared her top tips on how to recognise the innovators in your workplace.
You are an innovator, she claims, if:
* You have your best ideas in the shower * People describe you as tenacious – and you’re never sure if it’s a compliment * You love change * You bookmark web pages, favourite tweets or tear out pages of magazines obsessively * You talk a lot but you listen more *Your friends are all cleverer than you *You’re willing to take the hit if an idea doesn’t work out     *You never feel like you’ve reached the top
But our particular favourite has to be: “You know you’re an innovator if you wake up in the middle of the night and email or text yourself.”
This content is taken from Guardian Professional.  You can sign up as a member of the housing network and receive news, views and jobs direct to your inbox.
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One Billion people live in slums

One Billion people live in slums, and the number is growing each year.  Read about and support Homeless International’s End World Slums campaign.
Homeless International are part of the Big Give Charity Xmas Auction on ebay and are auctioning a set of 3 signed Ralph Steadman prints.  Bidding ends on 4 December.  You can pick up the bidding here.  You can find out more about Big Give through Twitter @BigGive or through their website.
Homeless International supports slum dwellers to improve their lives and find lasting solutions to urban poverty.  It is the only UK charity devoted to the challenge of housing and basic services in slums.
HI’s Vision is a world in which all people can exercise their right to land, basic services and shelter. Shelter is more than a house: it is a space for privacy, economic activity, social care and personal fulfilment.  HI helps communities transform slums by supporting them to work together to secure land, build homes, access safe water and sanitation, and negotiate with governments – ensuring that they have a voice that gets heard.
HI helps slum dwellers by supporting the development of local organisations in Arica and Asia, which have their roots in poor communities. These organisations often grow from small social movements into self-reliant organisations that are able provide shelter and basic services solutions that are economically, socially and environmentally sustainable.
HI believes that sustainable solutions to homelessness can be created only if people have access to land, finance, information, organisation and technology – and if they have an opportunity to play a lead role in designing solutions that work for them.
HI was formed following the 1987 United Nations’ International Year of Shelter for the Homeless as a permanent UK based organisation with the specific remit of supporting community-led shelter and settlement initiatives in the developing world.
HI sends grants to partner organisations in Africa and Asia to develop and implement initiatives that tackle urban poverty. This work is funded by a range of donors including many housing organisations, the UK Government’s Department for International Development (DFID), Comic Relief, Big Lottery Fund and the European Commission.
You can join HI as an individual or as an organisation.  Find out more about the work of Homeless International here.  

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Desperately short of ideas

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.”

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Implausible Denial and What if Grant Shapps was a Health Minister?

I was catching up on Grant Shapps’ interview on the Today programme, where he managed to distract John Humphrys from the key questions for a good few minutes arguing about his diary.
The interview centred on whether he was trying to hide the recent appalling house building statistics behind the Housing Strategy launch or get the strategy out before the stats.
The minister claimed he knew nothing about the figures until after the strategy was launched. Ministers don’t see them before anyone else he told Radio 4 listeners. At the risk of falling into the trap of being too distracted by the ‘process’ – that’s only kind of true.
As with all government statistics, there is a pre-release list of people who get the statistics in advance of their publication. That doesn’t include the minister directly, but it does include his departmental officials and his political advisors. Here’s the copied text from this announcement:
 

Homes and Communities Agency National Housing Statistics
22 November 2011: Pre-release access list
 Homes and Communities Agency
Post
Chief Executive
Executive Office Manager
Executive Director – Finance & Corporate Services
Executive Director – Programmes & Deputy Chief Executive
Senior Manager – National Communications
 Department for Communities and Local Government
Post
Special Advisor to Secretary of State for Communities and Local Government
Branch Head for Physical Regeneration, Coalfields, Brownfield and Land Stabilisation Programmes
Team Leader: Affordable Housing Delivery and Investment
Policy Officer, Affordable Housing Division
Team Leader: Finance and Governance
Press Officer

 So did all these people who work with the minster on a daily basis, his political advisors who, after all, are supposed to help him manage difficult media issues, did none of them think to mention the imminent release of highly damaging figures? Did he not think to ask?
Perhaps he was all too aware of needing plausible denial, but it all still sounds pretty implausible to me.
Process aside, the most remarkable thing about the interview was his breezy reaction to the figures. Imagine if he was a health minister announcing a 97% fall in cancer survival rates, or an education minister admitting to a 97% drop in GCSE passes, or a Home Secretary announcing that 97% of all passports were not being checked at our borders? He’d at the very least get a harder time from John Humphrys.
The point of a housing minister is to build houses for people. What is the point of one whose ‘reforms’ cause a collapse in house building within a year of taking over?

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Homeless people are 'the likes of us'.

Michael Collins is styled as a biographer of the working class, with his best known work being ‘The Likes of Us’ published in 2004.  The book’s rosy view of working class culture in history and how it was destroyed by social change was controversial, with black writer Mike Philips saying ‘the book… appeals to the most destructive form of nostalgia.’
Recently Collins has meandered through the history of council housing.  I mainly enjoyed his TV film history ‘The Great Estate: The Rise and Fall of the Council House’ earlier in the year, but took issue with his analysis of what had gone wrong over the last 40 years and in particular the blame he attaches to the 1977 Housing (Homeless Persons) Act, an argument he returned to this week in a piece for the Independent.  The core of our difference is that I think the homeless are ‘us’ too.
Comparing a distorted view of how awful council housing is now with an exaggerated view of how great it used to be only benefits those who wish to undermine its future.  The  golden era was just as mythical as the right wing press’s modern view that it is a failed sector populated by ‘Shameless’ characters, everyone skiving, dependent on benefits and getting their home by conning the State that they were homeless.
I don’t look back on my childhood in Newcastle, on the Montagu Estate in Kenton, as some great heyday when everything was right in the world.  Still in the desperation of the post-War housing shortage, it was without doubt a pretty good deal: a brand new Bevan house, with partial central heating, front and back garden, close to both the Town Moor and the countryside stretching towards the tin hut called the airport.  Virtually all the men were in work, most had skilled trades or were clerks, so I suspect there had been social selection going on.  It could still be a tough place, with gangs and fights and flick-knives, and we didn’t venture onto neighbouring estates.  Periods when men fell out of work, as most did from time to time, were hard.  There were no shops, just travelling vans, and no community facilities apart from the neighbourhood school.  The front door was the colour the council said it would be, no-one had security of tenure and anyone not paying their rent got kicked out.  So my nostalgic memories are reserved for Len White or Stan Anderson playing at St James’s Park (now forgodsake the Sports Direct Arena) and a youthful visit to the Club A Gogo to see Eric Burden and the Animals.
So where specifically do I think Collins gets it wrong?  Let’s start with his tirade against the homeless persons’ act. “It was Labour who demolished a fair letting system. In 1977, the homeless were made a priority and a system of “need” was introduced that was open to abuse. Unsurprisingly, a lot of “homeless” people appeared, to the annoyance of locals who had waited patiently for years on the housing lists.’ 
This revision of history, that allocating council housing according to housing need is the root of the sector’s perceived problems, has been gaining currency, influencing ‘Blue Labour’ and the Labour’s front bench.  The reality is that the impact of the homelessness legislation on allocations after 1978 was slow.  The Act encouraged a high degree of gatekeeping (and still does), and there was a high refusal rate for applications, rigorous application of the ‘intentionality’ rule, and many people suffered the purgatory of a period spent in bed and breakfast or single mother’s hostels.  It was a process no-one would choose to go through if they had any real alternative.  Local connection was vigorously applied and people with a connection to another place were sent back.  Virtually all homeless applicants were local and on the waiting list.  Crucially, the homeless only became a significant proportion of total allocations when supply collapsed in the 1980s as homes were sold and not replaced.  Most homeless people would have been rehoused off the waiting list before becoming homeless in the 1970s when supply was much better.
I also disagree with Collins when he says ‘The Government should clarify who the houses are for. In the past it was clear who was entitled.’  My view is that it was only in late 1960s and early 1970s, following ‘Cathy Come Home’ and the rise of Shelter, that council allocations policies came under greater scrutiny.  Before that there was a variety of local practices, but rarely were they transparent.  Applicants were subject to subjective assessments of their housekeeping standards by home visitors, and the practice was often discriminatory as the poorest were kept out.  In many areas, individual house allocations were made by councillors, a practice that would be condemned today.
Collins lauds ‘sons and daughters’ schemes which ‘ensured extended families remained on the same estates, in the expectation that further generations would remain locally.’  But it is worth remembering that in many places black people were excluded either by schemes that favoured existing families or by direct discrimination.  The National Front used the phrase ‘sons and daughters’ to mean ‘no blacks’.  It was right that these practices were challenged vigorously by the Community Relations Commission and others.
There’s plenty wrong with council housing, now as in the past.  But it is better run and managed than it ever has been.  Tenants have gained security of tenure and reasonable rents in a profit-making and improving  sector.  5 million households have expressed their demand to live in it.  Council housing is a success story, just as it was in the past, and could have a great future.  Its role in providing decent housing to millions of ordinary people deserves proper recognition and proper assessment – with a lot less spin.

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Burying Bad News

For those Red Brick readers not on twitter, you may have missed the piece of news the government tried to hide under its housing strategy. After a reasonable amount of media interest and a few good reports on housing on Newsnight and Channel Four news in recent days, the mainstream media didn’t give any attention to the impact that the coalition is already having on housing and affordable housing. It’s worse really than many critics (me included) imagined.
The number of new affordable homes being built for the first half of this year have fallen by 97% on the same time last year, to a mere 454 homes:

It can’t be a surprise that unemployment is rising, when one of our most labour-intensive industries is collapsing.
The government can’t blame that on the Eurozone.
Link to the official statistical release is here.

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Gaps and contradictions… and a challenge for Labour

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.

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Clutching at Straws

The government’s housing strategy has gone down like a bucket of cold sick and not just with the Left. Its most vociferous critics have come from the Right. James Dellingpole in the Telegraph and City Am’s Allister Heath are two examples.
The key thing to recognise in this housing strategy is that it isn’t a housing strategy. It’s a poor and desperate attempt at a housing stimulus to support a beleaguered economy.
The government has come round to extolling the economic benefits of housebuilding. We’re all Keynesians now. No wonder the Right don’t like it.
We’ve seen some U-turns previously: Labour’s Homebuy Direct providing equity loans to first-time buyers was a ‘very expensive flop’. The Coalition FirstBuy providing equity loans to first-time buyers is ‘supporting our construction industry to build more homes, create new jobs and increase the pace of economic growth.’
Now, we’re seeing a broader and more remarkable about-turn, overtly seeking to provide a housing stimulus to support economic activity and create jobs. Allister Heath even told the housing Minister on Newsnight, he was pursuing a ‘neo-Brownite’ economic policy. (Now there’s an endorsement to go on Grant’s CV).
But the government has tied its hands and the Keynesianism will stay in the rhetoric. The extremism of its deficit reduction plans (in the face of all the evidence of its impact) means they can’t commit real public money to a stimulus in housebuilding.
They dare not touch planning reform again, in case the political fall-out from their own voters does the same damage as their forest-sell off plans. This is despite the chaos of planning policies which resulted in a quarter of a million planned homes being stripped out of the economy, with the hundreds of thousands of jobs that went with them.
So what they’re left with is largely a package of re-announcements. What’s new are schemes designed specifically for (and by?) the large housebuilders to underwrite their risks so they’ll develop more. The government is underwriting mortgages for first-time buyers (for new build only), underwriting the risks of development by providing public land at no up-front cost, committing a fund of £400m to the industry and trying to get local authorities to strip out affordable housing requirements.
This has attracted plenty of criticism for helping simply to prop-up a dysfunctional system and keep house-prices too high. And neither will it work in its own terms. The fund of £400m is ‘small beer’ compared to the £4bn cut from the housing budgets, and will be subject to bidding on the basis of a prospectus to be issued at some point. Hardly the rapid economic impact we need. Public land is constantly cited as a solution, but how long will it be before the ‘buy now, pay later schemes’ will be on site and building homes? As for warming-up Right-to-Buy to generate capital for new homes, the impact will be small given the few social tenants who can afford and will be lent mortgages. That again is out for consultation first.
 As unemployment rises ever upwards, the economy continues to flat-line and the government faces home-grown and international crises, they’ve realised they need to do something. But they don’t know what. The most striking thing about this housing strategy is the whiff of economic desperation.