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?
Founder of Red Brick. Former Head of Policy for Shelter. Select Committee Advisor for Housing and Homelessness. Drafted the first London Mayor’s Housing Strategy under Ken Livingstone. Steve sits on the Editorial Panel of Red Brick.
In trying to look beyond this government’s irksome habit of claiming credit for things agreed before the Election, at least it can be said that the snail’s pace move towards the abolition of the housing revenue account national subsidy system continues in vaguely the right direction.
Having announced already that he planned to stick with most of John Healey’s proposals, announced it again as part of the November consultation on the reform of social housing, and announced it yet again as part of the Localism Bill package, Grant Shapps has now announced a ‘route map’ towards reform – in advance of a more detailed announcement next month! The route map makes it clear that more detail will emerge over the next year before implementation in 2012, no doubt offering Mr Shapps further opportunities to announce his great, but inherited, reform. Who said spin was dead?
Brought up on a council estate in Kenton, Newcastle, I have always had an emotional belief in council housing, and have often been outraged at the stigma attached to the tenure, the appalling media misrepresentations, and the snobbery. Although what Thatcher did to council housing was unforgiveable, I was hugely disappointed that it turned out to be not very New Labour either. But the rationale for council housing is not just emotive. Based on a system of rent pooling, so that surpluses from older homes cross-subsidise the cost of new ones, it was also a robust financial model. It could have provided hundreds of thousands if not millions of extra homes if it had been managed properly over the past 30 years.
The Tories’ failure to invest in managing and maintaining the council stock left Labour with a huge problem in 1997, including a backlog of disrepair estimated at around £19billion and an incoherent rent policy. Labour made some well meaning attempts at reform, such as the introduction of rent restructuring, the Major Repairs Allowance and the Decent Homes Programme, but funding for the latter carried the clear political price tag that direct management of the stock by councils was unacceptable to the government.
As some councils in the national HRA subsidy system had large historic debts and others had none, the system was unbalanced and rent pooling became unmanageable. It also became increasingly unpopular with tenants and councils in those areas where a third or even a half of local rents were taken for distribution elsewhere. Despite producing growing surpluses nationally, all of the participants were unhappy with the outcome, even those that gained from redistribution. As an annual system, there was no certainty about income and it was impossible for councils to plan long term and improve efficiency. Tenants simply could not engage with the key decisions that affected their homes and communities because they were only understood by a tiny number of civil servants and professionals. In its latter years, the Labour government became less hostile to the idea that council housing should have a long term future, and understood that a more local system suited the times. It embarked on the hugely complex exercise of unravelling the system.
The Localism Bill contains powers to implement the local system proposed by Labour. In future, councils will keep their rental income and use it locally to manage and maintain their own homes and service their debt. To get to the point where all councils have sufficient income to meet these costs, there will be a one-off payment between central government and each council, which will reallocate existing housing debt between councils in a final settlement based on 30 year business plans for each landlord. This is possible because the national system is in surplus – ie tenants are paying more in rent than council housing costs to run.
Communities and Local Government department’s task is complicated: they have to incorporate the implications of the new government’s shifting policies, for example on rents, as well as making important assumptions about inflation and the ‘discount rate’ (currently assumed to be 6.5%) used to determine the ‘net present value’ of each council’s housing business.
I have 2 main concerns. First, John Healey planned to allow councils to keep their right to buy capital receipts, whereas the Tories will retain the current system that returns 75% of net receipts to the Treasury. There will also be a cap on councils’ overall housing borrowing. Hope that HRA reform would trigger a resurgence in council housebuilding has been dashed. The overall receipt to the Treasury from all the various calculations is currently projected to be around £6.5b, but tenants may come to view this as being paid for out of a large rent increase next year of over 7%.
Secondly, Labour would have localised the HRA within the clear framework of the regulatory regime. There would have been an external check, through the Tenant Services Authority, and a place for tenants to go if, for example, their council set up backdoor arrangements that took funds out of the HRA to benefit the general fund. It is still not clear how regulation will operate without the TSA, and this will make tenants in some areas nervous about what their landlords will get up to.
At least we can look forward to further announcements.
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…
Founder of Red Brick. Former Head of Policy for Shelter. Select Committee Advisor for Housing and Homelessness. Drafted the first London Mayor’s Housing Strategy under Ken Livingstone. Steve sits on the Editorial Panel of Red Brick.
The famous American Pickle Family Circus was known for its ‘Big Juggle’ that ended every performance in an intricate club passing pattern. As the Localism Bill, published yesterdy, passes ‘powers’ (ie the blame for cuts) down to councils, ‘Pickles Big Juggle’ seems an appropriate metaphor.
For social housing and homelessness, the Bill had few real surprises as everything had been widely trailed or pre-announced. We’ll pick up on specifics in later posts but here’s an initial reaction to the Social Housing Reform chapter of the Bill.
On allocations, councils will be able to decide who goes on waiting lists, which will no doubt lead to great claims in the future about ‘cutting waiting lists’. We will be back to local manipulation of the list for political ends. Transferring tenants will be moved outside the waiting list, but there is no evidence to support the claim that this will make it ‘easier for them to move’.
On homelessness, its a nerve to call this reform rather than virtual repeal. Come on Shelter, time to wake up to what is actually happening here! And come on LibDems, the homelessness legislation was a Liberal private member’s Bill in the first place, something the Party has always been proud of – time for you to speak up. The government complains that 20% of social lettings go to homeless people ‘at the expense of other people in need on the housing waiting list’. A miserable and ‘divide and rule’ justification for an extraordinarily backward step.
The introduction of ‘flexible tenancies’ (insecure fixed term tenancies) which will gradually turn social housing into transit camp accommodation. Some housing association chief executives really like this, so I am even more concerned.
Reform of council housing finance is something I welcome but we still have to be careful about how much will be returned to the Treasury and how the detailed formulae will apply to different councils with stock. Called a ‘key plank of localism’ but a previous Labour measure.
The proposed Homeswap Scheme again is something to welcome as mobility arrangements need a boost. Landlords will be required to participate in home swap schemes.
‘Reform’ of the regulatory system and abolishing the Tenant Services Authority will, in some magical and as yet unexplained way, “put local people in control of driving up standards of social housing management and resolving most failings.” Social tenants will receive ‘stronger tools to hold landlords to account’ but I’ll believe it when I see it. The more likely explanation lies in the statement that ‘State intervention will be reduced’. A positive change will be to end the system of two separate ombudsmen handling complaints, providing a common route for all social housing tenants.
In London, new powers for the Mayor will include full control over housing investment, a good step, and the devolution of more planning decisions to the boroughs.
Watch this space for more discussion of these issues over the coming few weeks.
Founder of Red Brick. Former Head of Policy for Shelter. Select Committee Advisor for Housing and Homelessness. Drafted the first London Mayor’s Housing Strategy under Ken Livingstone. Steve sits on the Editorial Panel of Red Brick.
Did anyone really believe it when the coalition claimed to be ‘progressive’ and that it would stand up for the worst off in society? The local government cuts are an extraordinarily clear example of the vindictiveness of the government and its wholly political approach to funding. Their motto should be ‘we look after our own’.
Where do the biggest cuts fall? From South Tyneside, Sunderland and Hartlepool in the north east to Southwark, Hackney and Tower Hamlets in London, those getting the biggest cuts of over 8% read like a list of the most deprived communities in the country. And who does well? Little surprise here as well. It’s Dorset, Kent, Bucks and the Tory shires. You can get figures for all councils here.
If the division isn’t strictly political, there is a clear inverse correlation between the size of the cuts and the level of deprivation.
Nationally, the LibDems seem to be getting all the flak while hard core Tory policies just steamroller through. Even if they support cuts of this scale, surely they don’t support this distribution between councils?
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.
Founder of Red Brick. Former Head of Policy for Shelter. Select Committee Advisor for Housing and Homelessness. Drafted the first London Mayor’s Housing Strategy under Ken Livingstone. Steve sits on the Editorial Panel of Red Brick.
Feeling (uncharacteristically since May) in a positive frame of mind, I had planned three posts this week all of which intended to say something good about government policy. It was only after some cogitation that I realised all three of the ideas I liked were leftovers from Labour administrations but I am willing to give credit where it is due if the coalition picks up and implements sensible reforms. Unfortunately, of the three – Boris Johnson’s plans for social housing mobility in London, the council housing finance proposals, and strong steps towards encouraging mutualisation in housing – the latter two announcements have been deferred with the Localism Bill from this week until a point in the future. I certainly don’t feel able to commend the coalition until I’ve seen confirmation of the plans in writing.
So, for the moment, that leaves Mayor Johnson and mobility for social tenants, which will hopefully be a precursor to improvements in mobility for tenants nationally as well. His consultation paper, introduced in the Mayor’s usual combative style, can in fact be sourced back to Mayor Livingstone’s housing strategy. Of course, Johnson eschews the opportunity to highlight a bipartisan measure in favour of trying to take all the credit for himself.
Livingstone’s approach to mobility had two drivers in addition to the principle that more mobility for social tenants was a good thing in itself. First, The London Plan had a major focus on redeveloping swathes of east London where very large housing sites were available and there were huge opportunities to create sustainable new communities (including the Olympic sites). But if a large and increasing share of London’s available capital resources went to support new affordable homes in only a few boroughs, a mechanism had to found to ensure that the benefits of new development were more widely shared amongst Londoners as a whole.
Existing sub-regional arrangements, good in themselves, were not enough and a pan-London mobility scheme, starting with a share of new development and growing gradually to take in a share of re-lets across the capital, became an essential element of the Plan. Secondly, Livingstone identified a particular problem with wheelchair standard and other homes adapted for disabled people. Frequently such homes were being let to people not in need of them whilst others in dire need were not eligible because they did not live in the same borough. A wider geographic system and pan-London register of dwellings and households was needed to make best use of these scarce resources.
These are good examples of circumstances where localism is not enough and a wider area or regional approach is essential for good policy. Anyone reading the consultation paper will be struck by how complex it can be to achieve a balance between local, sub-regional, regional and cross-regional needs.
The consultation paper shows some concern that the government’s proposals on tenure (with much more flexibility given to landlords to vary the length and terms of some tenancies) will make mobility schemes harder to operate: users are already often bewildered by the complexity of existing schemes. And it is also sensible in arguing that the scheme should not incorporate much by way of ‘conditionality’ – such as a requirement that tenants moving must be in or accessing work or training.
Overall, it must be said, the consultation paper shows little actual progress since Johnson took over, now 2 ½ years ago. Livingstone had put in place the necessary requirements on landlords as part of the 2008-11 London affordable housing programme. We should be well beyond the stage of a consultation paper. The paper itself is still aspirational in tone and a long way from real fruition. It may be that it will not be implemented until Mayor Livingstone is back on the throne in 2012.
Mobility for London’s social tenants: An HCA London Board Consultation, December 2010.
Founder of Red Brick. Former Head of Policy for Shelter. Select Committee Advisor for Housing and Homelessness. Drafted the first London Mayor’s Housing Strategy under Ken Livingstone. Steve sits on the Editorial Panel of Red Brick.
In a recent post I made the observation that government impact assessments, and especially equality impact assessments, tended to reveal more about a policy than all the other official documents put together, and that looking at any policy from the point of view of those most likely to be worst affected tends to expose the downside or weak links in the argument.
The point is well supported by the DWP impact assessments on the housing benefit changes, or more correctly the Local Housing Allowance changes, published last week.
At constant prices, and taking account of the recent minor concessions in the proposals, the LHA savings will start in 2012/13 and build up to £1040m in 2014/15, slightly offset by piddling amounts for increased discretionary payments and an (extremely welcome) allowance for an extra room for a carer. In 2014/15:
– removing the £15 bonus for people achieving a rent below the LHA rate (the shopping around incentive) will save £550m
– setting Local Housing Allowance at the 30th percentile of local rents will save £425m, and
– capping LHA rates will save £65m.
The first point to note is the relatively small saving from the ‘cap’, given that virtually all government comment on the LHA issue has focused on excessive benefit payments to people in high rent areas, especially in central London. 17,400 households are affected – often very severely – by the caps. The much higher saving from the ‘30th percentile’ change will have far more impact. It will affect more than three-quarters of a million households in all parts of the country.
Nearly everyone will lose: over 900,000 households, a stunning figure. The national average loss is £12 per week, from an average benefit of £126, but the hardest-hit group, households needing a 5 bedroom property, will lose an average of £57 per week as the 5 bed rate is withdrawn entirely. All the regions/nations are hit, with London top with an average loss of £22 per week. The biggest groups numerically are those in the 1 and 2 bedroom categories, who will face average losses of £11 and £15 respectively. The lack of grip on the reality of what it is like to live on a very low income is illustrated by the argument that “only four per cent of cases will have a shortfall of over £20 a week” – well, that’s all right then.
DWP refuse to make an assessment of the number of households that will have to move. They say they can’t predict behaviour, and customers have options – for example, “some may start work or increase working hours”, others “may be able to renegotiate their rent with their landlord and others may have resources such as savings they can fall back on”. To be fair, they do note that the Greater London Authority’s estimate that over 9,000 households may need to move in London as a consequence of the caps, and that 6,800 of those will be families; and Shelter’s estimate that between 68,000 and 134,000 households may have to move nationally.
“David Cameron insisted today
no one will be made homeless
by limiting ‘extravagant’ housing benefits”
Daily Mail
Contrary to the assertions of leading members of the coalition, including David Cameron, the impact assessment notes “a risk of households falling into rent arrears leading to eviction and an increase in the numbers of households that present themselves as homeless”…. and that “any resulting population movement could have wider impacts. People who move may need to rearrange their children’s schooling, healthcare arrangements or, where relevant, social services support; they may also need assistance with finding accommodation.”
Other specific groups affected by the changes include:
Disabled people, especially those who may have to move across a council boundary, because care and support packages do not move with the person and settled arrangements will be disrupted as the new authority carries out a new assessment. This “could lead to gaps and delays in new arrangements being put in place and consequential distress for the individual.”
Large families, who often have poor employment prospects and a much increased risk of poverty: for them, the “cap could affect their risk of overcrowding and the associated health and educational effects.”
Ethnic minority groups, who tend to have a higher proportion of large families, will be likely to be affected disproportionately. Further research may be commissioned in this field as there are “limitations in current data.”
Quotable quote from the impact assessment
“the impact assessment recognises that there are a number or risks as follows:
– increases in the number of households with rent arrears, eviction and households presenting themselves as homeless;
– disruption to children’s education and reduced attainment;
– disruption to support services for people with disabilities and other households with care and support needs;
– increase in the number of households living in overcrowded conditions; and
– a decrease in the number of and quality of private rented sector properties available to Housing Benefit tenants.”
Founder of Red Brick. Former Head of Policy for Shelter. Select Committee Advisor for Housing and Homelessness. Drafted the first London Mayor’s Housing Strategy under Ken Livingstone. Steve sits on the Editorial Panel of Red Brick.
In my first ever post on Red Brick I traced the development of security of tenure in social housing and the reasons for the introduction of secure tenancies to council housing in 1980. To put it mildly, landlords did not always behave well and tenants needed basic consumer protection against arbitrary or unfair actions. As I said there, without security tenants have fewer rights in relation to losing their homes than drivers have in relation to parking tickets.
Are social landlords better now? Yes they are, indeed much much better, but they are still highly variable and some, frankly, just can’t be trusted. It has taken years of regulation and inspection to change the attitude and practice of some of them, and that pressure is about to be stripped away. At the bottom of it is respect for tenants, who are now informed customers rather than grateful serfs*, tugging the forelock to the landlord.
I am hugely impressed by the humanity and commitment of most people who work in social housing. It can be a hard and challenging sector to work in. But I also have little doubt that some will slip back into old ways given half a chance. I have sat in many a room with senior managers moaning that their basic problem is the tenants. Nothing wrong with the properties, one housing director said, it’s the people that need fixing. Or the housing association chief who said that the problem nowadays was that tenants no longer feared their landlord.
Security of tenure regulates the relationship. Bad tenants can be removed, so it is not a tenancy for life as then propagandists say. The landlord has to go to Court and provide evidence against a set of rules fixed by Parliament. A serious decision – to remove somebody from their home – is taken seriously and with proper process; people have clear rights to object and put their case.
Landlords hate the Courts, partly because the wheels of justice are slow, cumbersome, bureaucratic and not always rational in outcome (here they have a fair point), and partly because the Courts are a check and balance on their administrative power. The Courts don’t always throw tenants out just because the landlord says so.
With temporary tenancies the decision to remove the tenant from their home will be taken administratively by the landlord. No doubt there will be rules, but these will be locally determined and I doubt if there will be much transparency and there will be no effective external regulation. Internally, the power to make decisions will be delegated. Housing officers will be required to make decisions I do not believe they are equipped to take or ever will be: whether a tenant stays or goes, whether they pass or fail a means test, whether a tenant still needs or, worst of all, deserves the tenancy. It will change the whole basis of the relationship between tenants and front-line housing staff. Tenants will feel more fearful, deferential, and uncertain. The scope for bad practice and error, discrimination and bad behaviour by landlords will increase. By mirroring the arrangements in the private rented sector, the social sector will import more of the failings of that sector as well.
This is why I think the housing lobby will make a serious mistake if it gets into an argument with the government about the minimum length of the new tenancies – 3 years is better than 2 – rather than articulate and defend the core principle of security of tenure itself.
*Even under feudalism landlords could not dispossess serfs without cause.
