Red Brick

A lot of this blog has been dedicated to the effects of the government’s reforms to housing, local government and regeneration. We’ve built up a fair picture of the impacts of these reforms on communities and especially those on low incomes or in need.
But have we neglected something obvious: these rapid and dramatic reforms might just not work. I don’t mean that they may have consequences the government hasn’t foreseen but rather they may entirely unoperational for the various bodies that are supposed to enact them. Or interact in such a way that the (affordable) housing system just fails.
I have been vaguely thinking this but Vince Cable’s latest indiscretions, brought it to the fore. He’s quite clear of the possible impacts of the speed and extent of change:

There is a kind of Maoist revolution happening in a lot of areas like the Health Service, local government, reform, all this kind of stuff, which is in danger of getting out of… We are trying to do too many things, actually. Some of them are Lib Dem inspired, but a lot of it is Tory inspired. Actually, the problem is not that they are Tory-inspired, but that they haven’t thought them through. We should be putting a brake on it.

So what might a systematic failure in the housing system look like. A few initial thoughts:
1. Housing associations going bust, potentially caused by a combination of:

• Housing associations over extending themselves (again), either through their own folly or the HCA/government trying to force too many new units out of the ‘investment agreement’ process.
• Higher 80% rents which aren’t covered by housing benefit/universal credit creating spiralling bad debt, especially as councils maintain allocations policies of putting the poorest and neediest first (the irresponsible bureaucrats that they are) and housing associations not having the stomach or the ability to evict those that can’t pay.
• Unstable and increasing borrowing costs and especially changes to the  existing loans that housing associations have – ramping up their existing debts, not even future ones.

2. Housing associations being reclassified as public bodies.
It may seem smart now for ministers to pontificate on CE pay or demand public sector-levels of transparency. It won’t look so smart if the ONS decide housing associations are public bodies and stick their debt on the public balance sheet. the Treasury I guess would stop all borrowing at once to protect the deficit reduction plan and a swift and full privatisation would likely follow. Who knows what mess would fall out of that.
3. A botched HRA reform:
You may have picked up that I’m broadly supportive of the HRA reform as it stands, but I wouldn’t put it past this government to engage in some last minute political meddling – a level of debt councils can’t support or an attempt to skew the debt to help Tory areas, as we saw in the local government finance settlement. This could see House Revenue Accounts going into the red, needing to be topped up from already diminishing council coffers and/or spending on maintenance and management stopping.
4. Planning reform that stops anything being built
This could be because either the policy impact of the Localism Bill does this or because the change and upheaval stops everything dead for a while. Housing, affordable and otherwise, completely grinds to a halt for years to come.
Update: It just occurs to me that of course in a lot of ways the housing system is already systematically failing. Perhaps I mean a failure in such magnitude or of such speed that requires immediate emergency action – such as the action which was taken during the crash to keep the existing system (and its flaws) going.

Steve’s previous post on HRA reform got me thinking about the government’s claims to devolution and decentralisation.
It seems to me the government’s measures fall into three categories: new centralism, devolving bad news and genuine decentralisation.
New centralism:
Any issues that are high on the government’s agenda are being centralised. Gove’s school reforms take more power and influence away from elected local councils over education. Welfare equally could have been localised or at least adapted to different local circumstances. But being high on the Tory agenda they keep it to themselves. Equally, populist measures like bin collections and banning council magazines are subject to central edict.
Devolving bad news:
So local authorities lose ring fencing at a time of the worst ever local authority cuts – meaning they have the ‘power’ only to decide what to cut. Council tax benefit gets localised, at the same time the government topslices 10% of it, without reference to need. Plenty of examples of this.
Genuine Decentralisation:
The new powers that social housing landlords have over rents and tenancy lengths constitute a genuine loosening of controls from the centre. But, the most extensive of these powers will be exercised by housing associations which may be national in scope and not subject to democratic accountability – so decentralisation yes, but localism or greater democracy?. The HRA reform (I think) is probably the only straight forward and genuinely localist reform so far: it devolves real control (and control over money at that) to a local democratic body.
I am surprised they have gone ahead with the reform given how everything has been sacrificed to deficit reduction. I thought any system which delivered a surplus to the Treasury would be very likely to stay put.
Any other categories of localism I’ve missed, or things I should add?

This is the follow on from my post the other day, arguing that Labour didn’t need housing policies now. But we do need to set out some principles to show how we’d be different and use as a basis for opposition to the government. Here’s my starter for 10, but are these too specific and prescriptive still?

• Defend the principle that the state has a duty to ensure the poorest and most vulnerable are properly housed.

Under attack from the coalition a no brainer for us.

• Promote the principle that the state has a role in ensuring the housing system meets everyone’s aspirations

The government should ensure that the private housing market and the mortgage market works better to meet what people want. And there should be a role helping those who aren’t the most vulnerable, but may struggle to buy, to have housing that meet their needs.

• A commitment to mixed communities

 There are good policy reasons to ensure a mixture of incomes, class and ethnicities in a neighbourhood. It helps build understanding and solidarity between different types of people. And I believe the type of segregation you see in the US, France or elsewhere is culturally alien to us in Britain. For example, part of London’s identity has always been that rich and poor could live ‘cheek by jowl.’

• Maintain some ‘Bricks and Mortar’ subsidy, i.e. grant to build affordable homes

The government has shifted financial support for those who can’t afford a home from building affordable homes (bricks and mortar subsidy) to housing benefit to allow people to pay private or near private rents (personal subsidy). This will be difficult even in five years’ time, but we shouldn’t give it up. Mixed communities depend on it and it means we support a wider range of providers.

• A commitment to a mixed economy of housing; more products, more choice from more providers.

Labour should promote a more diverse sector: a wider range of private builders and more opportunities for smaller firms, more space for co-ops and mutuals, get more housing associations of different sizes building and free councils to build again. Encourage, support, cajole and compel providers to offer a diverse range of products from supported housing for those with extensive needs, to traditional social rents, to a variety of sub-market rents, to well managed professional private rent and a range of ways to get into homeownership.

• Embrace localism; free councils.

Tricky this one. The government’s localism is a front for neglecting their responsibilities for ensuring everyone is well housed. But, support for new housing best comes from a local area and housing provision should respond to local needs, the type of community and people’s aspirations. One popular way would be to free councils to start building again and putting their housing business on the same footing as housing associations with the ability to borrow (someone with better knowledge needs to correct me as to why this is so impossible, as I’m often told). They should be able to build for a range of needs and aspirations and not just social rent. We will need to find a credible way to square this with 1. What happens when local areas make decisions that make it impossible to house everyone well?

• Intervene to prevent another property bubble

If house prices ever start running away again, let’s be brave and act. And let’s tell people now that we will curb excessive house price rises. Making this argument successfully should be done immediately while the economic crisis is still fresh in people’s minds. You won’t convince homeowners just at the time when you need to do it that it’s needed.
There may be more things I think of…

There seem to be some calls for Labour to have a worked out housing policy as an alternative to the government’s now.
That would be a daft move.
It’s four and a half years to the next election and the government is starting the most radical process of reform to housing in a generation. Whether these reforms are successful in their own terms or not, the housing system will be very different when Labour next has a chance to implement an alternative (I assume that the Coalition will run the course).
Writing a housing policy that’s credible now is unlikely to work five years on. And trying to write a policy for five years’ time requires too much guess-work and will sounds out of touch now.
Ed Miliband and Alison Seabeck are absolutely right to wait, think and develop their ideas.
So, in the long meantime, how do we oppose the government? Here’s what I think:

• Firstly, we take the government at their word and hold them to it.

The government has some laudable rhetoric: to build more mixed communities, to build more homes and more affordable homes, to tackle worklessness in social housing, to make it easier to move within social housing. Let’s exploit the differences between their words and the effects of their policies.

• Secondly, avoid falling into any elephant traps that we live to regret, especially promises to reverse particular measures.

Reinstate security of tenure? Cut rents back to ‘traditional’ social rent? Restore the duty to house the homeless in the social sector? They might sound great ideas now, but on entering office, they probably won’t be so attractive. The future businesses of housing associations are likely to be built on these measures, as will housing provision by local authorities.
Do we want to re-enter office with pledges that immediately threaten the basis of our main housing providers? No, we don’t.  And this path leaves us the defenders of a status quo which had some pretty serious faults. Needless to say that’s not a winning position.

• Set out the principles of a Labour housing policy, and one which is not beholden to what we have done in the past.

That’s the hardest task. I’ll give my starter for 10 in my next post.

It’s no exaggeration to say that the changes that the government are introducing to affordable housing are the most extensive and far-reaching since 1945. They’re also implementing them at real pace.
That means they can’t really work through the impacts of what will happen on the ground when all these reforms start working together. Some of the effects are going to be pretty perverse, from what I hear from housing people. Here’s one:
In the private rented sector, families are going to be forced out of family-sized homes, and these same homes will become the preserve of single people.
Why?
1. The cap on housing benefit and the cap on overall benefits to £26,000, are likely to force larger families into smaller homes as family homes for them become unaffordable. There’s a strong chance that this measure will considerably increase overcrowding.  
2. The government’s reforms to single people’s benefits will give people under-35 enough housing benefit to afford a room is a shared home. So, as families stop being able to afford to live in family homes, private landlords will find it easier to let larger homes to several single people.
So, it would seem to the centre that these are consistent policies to reducing the benefits bill – imposing benefit limits on families and single people. On the ground, it creates the perverse situation where poorer families get forced out of family homes which are then colonised by poorer single people.
The Mayor of London and the government have said it’s a problem that there are not enough family homes for families and we don’t build enough of them. It’s true. But, family homes in the private sector for poorer people are going to become more scarce.