It is being reported this morning (e.g. on Today) that security of tenure for council tenants will be reduced to two and a half years. In what is a fairly typical pattern for DCLG these days, there is nothing in the way of more information or a press release on the website.
It seems that after 2 years or so all tenants will be assessed for whether they ‘need’ council housing anymore; perhaps their income has risen or their household has become smaller. If they don’t ‘need’ it, they’ll have six months to move out. Again, the government will wheel-out a ‘fairness’ argument: why should people receive a subsidised property when they have the means to afford one in the market (probably private rented market) while there are others in need on the waiting list? So far so good?
But this surely is a bit of a disaster for making work pay and providing incentives to get into work; the major problem which IDS and George Osbourne are trying to solve? The government’s basic criticism against social housing is that is underpins dependency, poverty and worklessness: people get a cheap social home for life, with no conditions and no incentive to improve their circumstances.
But surely this reform runs completely counter to this? If you are on a low-income or without a job and you get a social tenancy from next summer onwards, why on earth would you strive to get a job or increase your income? You’d know that it meant, in a couple of years’ time, you’d lose your home because of it.
If you did get a job, most likely not a well paid one, isn’t there quite a big incentive to ‘lose’ it just before you get assessed by the tenancy police?
People’s homes are pretty important to them, especially if they’ve been on a waiting list for years to get one. The unstable and poorly paid jobs that people often get as they first move into work, may well be sacrificed so they can keep their home.
This is such an obvious counter argument that I’m sure there is a government fudge on the issue on the way.
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LHA on a Shoestring (Eddie, that is)
The excellent blogger Jules Birch, of Inside Housing magazine, demonstrates the value of a good journalistic nose and a bit of statistical persistence.
Last week, Ministers made much of the comparison between private sector rents, which they claimed the Office for National Statistics showed were down by 5% in a year, and rents where local housing allowance was being paid, up 3%. This proved, they declared in the House and on the airwaves, that LHA was distorting the market, driving high rents and fuelling profiteering by landlords.
Birch, aka Inspector Clouseau, smelled a rat. And in particular that the ONS produces no such statistics. A few calls later, and Inspector Morse forced the admission from the department that the statistics in fact came from a private property website. And Inspector Frost then discovered that using the website’s stats as an index was dodgy in the extreme, not to be relied on as an indicator of rents in the sector as a whole let alone the LHA market, and that their analyst was in fact predicting rent rises. And finally Inspector Taggart demonstrated that all the available evidence shows that LHA does not distort the market after all. No case to answer.
So, was Ian Duncan Smith misleading the House – sorry, in Parliamentary language, was he ‘inadvertently’ misleading the House? If this had been Labour Ministers it would have been all over the front pages and Paxman and Humphreys would demanding an apology, but so far our forensic investigator, Britain’s answer to the Girl with the Dragon Tattoo, has only managed the pages of Inside Housing and not the Daily Mail.
I’m sure that erstwhile Jane Tennisons and Juliet Bravos on Labour’s front bench will pursue further enquiries in Parliament.
http://www.insidehousing.co.uk/community/blog/mind-the-gap/6512515.blog
(illustration: an inspector’s insignia)
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A nice little earner – or not?
The New Homes Bonus
As a country we have failed to build enough new homes for more than 30 years. The coalition’s scrapping of Labour’s system of regional housebuilding targets, which was only starting to have effect, has caused great concern. Now a little flesh has been put on the bones of their proposed alternative – the New Homes Bonus – in a consultation paper published on 12 November.
The core proposal is that each council will make its own decisions on the scale and nature of housing development, but they will be incentivised to encourage building through a grant that will match the council tax raised on new homes for the first six years after development. The benefit to councils (on current figures) over 6 years would be over £8,000 for a Band D property (using the national average) and over £10,000 for a band E property. An additional flat rate of £350 a year would be paid if a property falls within the definition of ‘affordable’ in PPG3.
Communities and Local Government department estimates that the cost will rise to over £1 billion a year in year 6 even on current housebuilding numbers, but it is likely to be significantly more if the scheme has the desired effect and housebuilding increases. A contribution to the cost will come through scrapping the current Housing and Planning Delivery Grant – about £250m a year for the first 4 years – but all other costs – ie £1 billion or more by year 6 – will come out of local authority Formula Grant, so there will obvious gainers and less obvious losers. Very little is said in the paper about the losers (ie those that will lose more in Formula Grant than they will gain in NHB) and how much impact the overall reduction in Formula Grant will have.
Despite the wealth of methodology in the paper, the government has no real idea how many extra homes NHB will generate and how much impact an incentive of say £8k a home over 6 years will have. Is that enough to overcome nimbyism and genuine local concerns? An estimate is made that by 2016-17 there might be an uplift of 8-13% from the base, but this is not convincing.
There is no guarantee that the grant will be used to help communities affected adversely by development or to support infrastructure. It can be spent in any way the beneficiary council chooses – and the document identifies only non-housing uses like council tax discounts, rubbish collection, and providing local facilities like swimming pools. Most likely in the current climate, it will be used to offset the general cut in Formula Grant that is taking place anyway as part of the CSR.
Will the scheme encourage affordable homes? The £350 enhancement for affordable homes appears plucked out of thin air. Who knows if this is a real incentive or not? Using the PPG3 definition of ‘affordable’ means that everything that is sub-market will be included, and there is no specific incentive to encourage homes for those most in need.
The scheme does not distinguish between different areas in terms of the need to build. The benefit will come to those with the greatest capacity to build on easy sites. Councils with little developable land or no need to build will be concerned about the overall impact this might have on the finances.
An interesting oddity is the intention that acquisitions that increase the availability of affordable homes would receive the £350 enhancement but not the core NHB. It is also suggested that the scheme might cover the bringing back into use of empty homes.
I would strongly urge everyone to read the consultation paper and to get comments in. We’d be delighted to report your views here on Red Brick.
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Simply complex
Hands up if you understand the welfare reforms unveiled yesterday by Iain Duncan Smith. How can a simplified system be so complex to understand?
Fortunately the public seem to have a grip and polls show a healthy majority agree with the government’s position. IDS seems to have pulled off a magic trick. He will simplify the system into a single Universal Credit by 2013, he has promised to improve substantially the marginal rate (how much people keep from extra earnings taking account of benefit withdrawal), he has promised there will be no cash losers, and he has got the public onside.
I have little doubt that the golden scenario will begin to unravel with a little more analysis. Labour’s shadow work and pensions secretary, Douglas Alexander, pointed out that the ‘no cash loss’ promise did not appear to apply to new claimants, and of course turnover is high. The Child Poverty Action Group were most concerned about the removal of hardship payments drawing attention to the main difficulty in withdrawing benefits from people who refuse to take jobs – making children suffer for the sins of their parents (Mr Duncan Smith likes to use the word sin).
The simplicity aim has wide support amongst advisers, including the CAB. The government claims that Universal Credit “will support people both in and out of work, replacing Working Tax Credit, Child Tax Credit, Housing Benefit, Income Support, income-based Jobseeker’s Allowance and income-related Employment and Support Allowance”. As always, the devil will be in the detail. UC will be a basic allowance with “additional elements for children, disability, housing and caring”. Experience tells me that none of the add-ons will be simple to understand or to calculate. The devil will also be in implementation. A welfare system that is widely regarded in the media as soft and open to abuse is simultaneously experienced by users as inflexible, harsh and punitive.
With 5 jobseekers chasing each job, how DWP implements the system will be hugely important. There will be much stronger ‘conditionality’ – the new word for punishment – but “conditionality will be responsive to an individual’s circumstances.” As the housing benefit system has been bedevilled by the complexity of handling changes in circumstance, how can the new system become more responsive? The answer unfortunately relies on IT. UC “will be calculated and delivered electronically, automatically adjusting credit payments according to monthly income reported through an upgraded version of the ….. tax system”. I believe this is the same system that has delivered millions of incorrect tax calculations and hundreds of thousands of incorrect tax credits. The test will be how DWP responds to many thousands of calls challenging their calculations and the many real errors that will be made.
The proposal has ambitions that many will agree with – simplicity, the integration of out-of-work and in-work support – but also many dangers and risks for the poorest people in society. And I have a particular fear about administrative chaos. We may not be able to start evaluating those risks properly until the Welfare Reform Bill is published in January.
Quotations from the White Paper, which can be found here:
http://www.dwp.gov.uk/policy/welfare-reform/legislation-and-key-documents/universal-credit/
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Indecently decent
A guest post from Maureen C
Like Red Brick I’m pleased to see so much news coverage of housing and benefit issues as this new government appears to announce new, ill thought out policies, most of which they have no mandate from the electorate for, on a daily basis. Even when the press get things wrong, as they have on some aspects of the HB reforms, it is nevertheless good to get the issues out there.
Grant Snapps made some statements yesterday on proposals to alter funding arrangements for Decent Homes which do not seem to have attracted attention yet. These represent more bad news for the many tenants who still live in homes that do not meet the decent homes standard. Interestingly the background papers on this state ‘46% of council owned non-decent homes will lie in London at end March 2011.’
The decent homes standard is fairly basic – it includes having modern kitchens, bathrooms and electrical systems. But the previous government’s arrangements have quietly transformed standards in social housing all over the country. Millions of council properties in particular have been brought up to a decent standard after decades of under investment.
Some councils have done this by transferring their stock to housing associations. But where council tenants, understandably in many cases, voted against wholesale transfers , councils could get access to funding (largely loans) if the arms length management companies (ALMOs) they formed to run the housing got 2 stars in an Audit Commission inspection. The rationale was to incentivise councils to provide better quality, VFM services for their residents and ensure services were built around residents’ needs and preferences. As anyone who lives and works in this area knows -better housing, opportunities and stronger communities need much more than bricks and mortar. But decades of tenants’ pressure to improve services and design fell on deaf ears. No teeth and no real market to power better services.
Inspections assessed this independently and were widely credited with driving up services and standards. The reality is that housing organisations had to up their game and provide better, more customer orientated, VFM services to get 2 stars. These efforts produced good results for tenants that sadly previous decades of tenant and political pressure had failed to deliver. Over 20 ALMOs got top scores of 3 stars for excellent service and 40 have 2 stars – making them the best performing in the sector.
Now Grant Snapps has slashed the funding for future programmes to meet decency standards – down from £680 million to £260 million in 2011/12.
And the pressure is off landlords to improve their services as they no longer need to get 2 stars to access what little funding remains. Under the banner of reducing the ‘hoops to go through’ funding will be decided upon by the regulator (what’s left of the regulator anyway). The proposals, published by HCA, state ‘We will work with the regulator to achieve appropriate assurance on value for money in the use of funding.’
So much for transparency and accountability.
They had a system that produced better services for tenants and decent homes. It wasn’t perfect but it did produce some of the best outcomes for tenants in social housing we’ve seen for decades. Now we can have no assurance that the reduced funding will fuel better services and choices for tenants who deserve much better than this. Will this get picked up by the national media?
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HB: more heat than light
Yesterday’s marathon Commons debate on the proposed housing benefit changes produced more heat than light. There were a lot of apparently conflicting statistics, especially about the number of people affected and the number of people likely to have to move home as a result.
The main government theme – sorry, but I can no longer distinguish between Tory and Liberal members of the government, I had thought the Minister, Steve Webb, was a Liberal Democrat until I heard his speech – was to attack Labour’s ‘scaremongering’. But as the government has yet to publish any meaningful analysis of the proposals, or to demonstrate how the savings are calculated, the opposition has to rely on its own analysis and that of the housing organisations like the National Housing Federation and Shelter, and all have predicted dire outcomes.
There was an interesting debate about the impact the Local Housing Allowance has had on rent levels in the private rented sector. In short, Labour argued that rent levels, especially in higher rent areas, have been dragged up by buoyant and growing demand from non-HB tenants, especially the growing group of people who would have become owner occupiers in previous times who now can’t or won’t take a risk on buying. Therefore LHA, being linked to the median rent, follows the market rather than leads it. Labour in office had decided to remove the highest rents from the calculation of the median to reduce the impact the top of the market was having on the measure that determined the going LHA rate.
The government benches took two slightly different views; on the backbenches several claimed that the LHA level was determining the rent levels, driving the market up, but the Minister relied on the more limited construction that, as the LHA supported 40% of rent payers in the sector, it must therefore have some effect on the price.
This seems to me to be a proper debate about a fundamental issue. How does state intervention impact on a market, especially one with inelastic supply, which caters for the very rich and the very poor and lots in between and has little consumer protection? We will be more and more dependant on private renting in the future, and this is a question worthy of proper study and analysis. One factor may be the differences between the market in high rent areas and those in areas where the gap between social and market rents is really quite small and where there are fewer richer people entering the market.
Another noteworthy feature of the debate was the number of speakers from places well away from London. The government has been keen to keep the debate focused on the more extreme cases where the national cap will now apply, but there were speeches about Glasgow and Sheffield and Sunderland and elsewhere identifying the likely losers and the impact the losses might have on families.
The only real sign of dissent on the government side concerned the proposal to cut HB by 10% for anyone on job seekers allowance for more than a year, irrespective of how hard they had looked for a job, and LibDem Simon Hughes said he would oppose this – although the remainer of his interventions gave me the impression that he might end up supporting the rest of the package, making it much more likely that it will go through.
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Empty homes and empty gestures
One of the curious things about the Ministry of Justice’s advice on dealing with squatters in your home, published yesterday, is that it has a section called “How can I evict a tenant who won’t leave?” It then offers advice on the “difficult procedural requirements to be followed”.
Another is the starting point: “If you return from holiday or walking the dog to find squatters in your home and they refuse to leave, you can call the police and report a criminal offence”. Of course, this stirred the media juices and Grant Shapps got himself on the telly, where he denounced the Advisory Service for Squatters as a fully staffed organisation, whereas ASS say they are run entirely by unpaid volunteers and therefore must be part of the ‘Big Society’. ASS are adamant that they do not promote lawlessness. I suspect they will welcome the publicity and free advertising for what they do.
You may not like it but squatting, in defined circumstances, is still a legal activity. I suspect that the number of cases of people squatting other people’s homes while they are walking the dog is really quite small, and insignificant compared to the number of squatters in the country. It’s also insignificant compared to the number of homeless people and the number of empty properties, and there is the real issue.
That some squatters do some bad things is beyond doubt, and there has been an amount of difficult-to-justify squatter tourism in the past, but history tells us that squatting in this country has had a big impact on housing policy and pushing public authorities into tackling the waste of homes being kept empty. Historically, the occupation of the Centrepoint tower block, a political squat, raised awareness of homelessness more than any other single act, apart possibly from the screening of Cathy Come Home.
Big landlords and councils who kept homes empty deliberately awaiting development or sale, smashing facilities to make them uninhabitable, found themselves challenged by squatters who made them habitable again and showed that they could provide acceptable accommodation for people who needed it in the meanwhile. Many sought to come to an arrangement with the property owners, seeking licenses and agreements to occupy, leading to the creation of a self-help housing movement in short-life housing. In one of the biggest and longest squats, Elgin Avenue in West London, a terrace of large houses would have been left empty by the GLC for many years; instead an extraordinary community was formed and the GLC mended its ways, to the benefit of all concerned including the neighbours.
Attacking squatters for a cheap bit of publicity is one thing. But all of the political parties in the Election highlighted new initiatives to deal with empty homes, and they all denounced it as a scandal. Yet none acknowledged that it is down to the squatters of the past that this issue strikes such a chord with the public today.
http://www.communities.gov.uk/publications/housing/advicesquatters
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Is homelessness next on the hit list?
In the absence of a proper statement as to what the ConDem government’s housing policy is, we are left to pick up jigsaw pieces and try to make a coherent picture out of them.
Lord Freud of Benefit Reform, speaking to the work and pensions select committee, seems to have let one particular cat out of the bag.
Flying in the face of expert opinion and echoing what David Cameron said on the subject, he argued that the housing benefit reforms would not cause additional homelessness or a need for additional temporary accommodation. But then, in rather contradictory terms, he argued that it would be very valuable to change the definition of homelessness. The statutory definition is not as it should be, he complained, because it is more than not having a roof over your head.
If this is a signal that the government is working on a change in the statutory definition, which has been broadly the same since landmark private member’s legislation in 1977, promoted by a Liberal, then yet more of the most dire forecasts of the housing world will come true. Freud complains that housing experts are stirring up fears and frightening people, but the pattern at the moment is that, when the worst fears are expressed, they are condemned as scaremongering by Ministers one day only to be confirmed as policy the next.
As we have noted before, the homelessness legislation is indeed a barrier to the government’s plans to cut housing benefit support, because local authorities will have to take responsibility for some of those displaced. So the next obvious step is to change the homelessness legislation to enable the HB cuts to be delivered without so many knock-on effects. In effect, many more people will become homeless under the existing definition, but will not be regarded as homeless by a new definition. So there is no additional homelessness. Clever trick, but a trick nonetheless.
There is a large constituency in this country that believes that the homelessness safety net, imperfect though it is, is one of the core pillars of the welfare state, not just a nice add-on that we can no longer afford. Out there in the real world there are countless voluntary organisations, faith groups, and concerned citizens who work with homeless people daily and know the real story. Many regard the manner in which we treat homeless people as a benchmark of our civilisation. When mobilised, they can be a huge political force, and if I was the coalition government, I wouldn’t want to upset them.
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Winning the political argument on HB
I was unsurprised to see that a large majority of people support the cap on housing benefit, including over half of Labour voters.
I’m not really surprised by that. The argument on ‘fairness’ is compelling; why should those out of work be able to afford more expensive housing than those on work?
The cap, reduction of benefit to the level of the 30th percentile and the move from pegging benefits to CPI rather than RPI (meaning benefit rise at a slower rate than rents) will cause many poorer people to lose their home and force people out of communities where they’ve lived for years and have roots and family support.
So when Ed Miliband and others make this argument they are rightly defending people who will really suffer as a result of these reforms. But I do worry that it makes us look like, beyond the housing and policy world, as if Labour is defending high benefit budgets and only defends those on the lowest incomes who claim benefit (nevermind that around 40% of benefit claimants are in work).
This is not a good strategy for winning back the marginal seats in the south and midlands that we need to return to government.
So how should we oppose these moves?
We need to argue back from a vision of what communities should be like and then use that as the yardstick to measure and oppose these policies. In doing so, we present an alternative vision of a Labour future and argue for something beyond opposing particular measures.
Central to any vision of a sustainable community is that they are mixed. People accept and strongly support the idea that communities and neighbourhoods should be mixed – with no one segregated by wealth and race. Such segregation as exists in the USA and France rightly draws disaaproval. In London, the fact that the rich and poor have always lived ‘cheak by jowl’ is part of the city’s identity. On a policy front, let’s use the Tory rhetoric against them: both Cameron and IDS have spoken about the problems of concentrated poverty. They are right.
These HB reforms are a fundamental attack on the notion that people should live together in mixed income communities. And it is on that ground that we should oppose government measures, in a way that has wider appeal to even those who will not be affected by these changes.
What we would do instead to reduce the HB bill and maintain mixed communities is another question. Building more affordable homes in wealthier areas is part of the answer, but not the whole answer.
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Mean and nasty
The Conservative Party never apologised for the corruption and gerrymandering practised by Dame Shirley Porter at the expense of the homeless and badly housed people of Westminster. John Major once promised to do so when the legal process was complete and if the case was finally found against her, but it has never been forthcoming. There is a deep and abiding suspicion that the Tories have never forgiven the Audit Commission for its role in bringing her to book and the constant embarrassment that the case caused them. Some even think that the decision to abolish the Audit Commission could be some macabre form of revenge.
More important however is the strain of thought that has survived down the years: poor people should not be allowed to live in places like Westminster and, in Porter’s words, you have to be ‘mean and nasty’ to homeless people.
One of the clear impediments in the way of the Government’s housing benefit reforms – the 21st century clearances – is the homelessness legislation. Many of the people who will not be able to afford their homes after the HB changes will have rights under the 2002 Homelessness Act. And Westminster Council is very alive to this.
An exchange of letters between the Westminster Cabinet Member for Housing, Cllr Philippa Roe, and Grant Shapps, disclosed in Dave Hill’s London Blog yesterday and also seen by Red Brick, couldn’t be clearer.
Roe essentially has 3 demands, which taken together would gut the legislative safety net for homeless people.
First, she wants to tighten the local connection rules. Currently, an applicant with 6 months residency in the borough could claim a local connection if they became homeless, and she wants this extended to 3 years. 6 months happens to be the length of the typical assured shorthold tenancy, and Westminster has long believed that the masses move into Westminster on a short tenancy just so they can make a homelessness claim on the City at the end of it. In fact anyone with any knowledge of Westminster’s approach to temporary accommodation and the extraordinary length of time people have to wait for a home would avoid them like the plague if they had the choice.
Secondly, and more worrying, is her demand that the main homelessness duty under s.193 should be discharged by finding someone an assured shorthold tenancy in the private rented sector. This would effectively remove the safety net that has been in place since 1977. This is a possible outcome under the current Act and Guidance, but only if the tenancy meets conditions and the applicant signs a statement accepting the offer and saying that they understand it discharges the s.193 duty.
Thirdly, she wants to end the requirement in most cases to offer temporary accommodation in borough. The guidance seems to be widely ignored already and most of Westminster’s TA is out of borough and often the other side of London, but the change would give them more freedom to dump people far from their support networks, schools and jobs.
Shapps’ reply is non-committal although his promise to give the points ‘careful consideration’ is not as comforting as a rejection would be. Even giving them ‘consideration’ risks undermining his carefully created reputation for being ok on homelessness.
The wheels are starting to come off the HB proposals. First, because even this Government might baulk at the prospect of having to tackle the homelessness safety net to make them work. Secondly because they simply have not thought through the parallel policies of cutting HB at the same time as increasing rents rapidly. And thirdly, because councils are beginning to get nervous about the unintended consequences that a rapid churn of poorer tenants might have for their budgets. It’s not over yet.