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Week of Action on Welfare Reform Bill

The Welfare Reform Bill returns to Parliament this week and this may be the last
opportunity to kill or seriously change this unpleasant measure.
To mention just 2 of the proposals:

  • The new benefits cap will heavily penalise larger families and those living in parts of the country with higher rents.
  • The plans to introduce a penalty for under occupancy will mean that any tenants deemed to have one or more spare bedrooms will see benefits slashed.

Congratulations to the National Housing Federation for organising a National Welfare Week of Action starting today.  There are a lot of proposed activities during the week.
Each day has its own theme and many of the activities are aimed at lobbying MPs.  See here for more information.
David Orr, the Federation’s Chief Executive, said:  ‘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.  Hard up families will be left with a stark choice if these proposals go ahead: either move out of your home to a cheaper area or stay put and live in hardship or debt.’
‘We believe these reforms will be hugely damaging to community life and will see people priced out of their homes, away from local schools, and their support networks. With time running out to influence ministers, this week is the chance for anyone who is concerned about these proposals to stand up and be counted.’
Red Brick would urge our readers to spread the word and join in wherever possible.

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The New Rochdale Pioneers

Even though there were many small co-operatives in existence before the Rochdale Society of Equitable Pioneers was founded in 1844, it was their establishment of the Rochdale Principles  that is credited with being the foundation of the Co-operative Movement, especially in the retail sector.
Now Rochdale Council and its arms-legth management organisation, Rochdale Boroughwide Housing, are planning a new pioneering initiative in the town.  They are beginning a formal consultation with tenants on a proposed stock transfer to a unique new
organisation – a housing mutual co-owned by tenants and employees – which they
say ‘draws on the timeless co-operative and mutual principles developed in Rochdale in the 1840s’.
Co-operation is in the air at the moment.  If the Rochdale proposal goes ahead and transfer takes place as planned in 2012, it would coincide with the UN’s International
Year of Co-operatives.  United Nations Secretary-General Ban Ki-moon says “Cooperatives are a reminder to the international community that it is possible to pursue both economic viability and social responsibility.”
Next week, Labour & Co-operative MP Jonathan Reynolds is presenting a ten minute rule bill, the Co-operative Housing (Tenure) Bill 2011, to the House of Commons.  The Bill would enshrine in English law the legal principle that the right of occupation of a dwelling can arise through membership of a housing co-operative which owns property rather than
solely through the grant of a tenancy by a superior (feudal) landlord.
According to David Rogers, the Executive Director of CDS Co-operatives, ‘ Jonathan Reynolds’s Bill will overturn over 1,000 years of feudal land law history which has its
roots in the Dark Ages from whence the only way to gain occupation rights was either as freeholder (of the Crown) or as tenant of a superior feudal landlord: a history which has led to the bi-polar approach to housing ownership and rental as the two only available tenures.‘  He believes that the new tenure would open the door to new institutional investment, especially from Pension Funds, offering long-term investors an attractive secure and assured rate of return.
Mutual housing is one of the few areas of housing policy where there is a degree of consensus at present.  The government has made strong statements in support of mutual ownership because it fits the big society, and co-operatives have long had support on the left and especially amongst those who support tenant control and the widest possible definition of public housing (ie not just the state).
In addition to the strengths of tenant and worker control, models like the Rochdale mutual also have the advantage of being technically outside the public sector in terms of borrowing.  Ridiculous as it is, Rochdale Council borrowing money to build homes that will eventually make a profit from rents is ‘defined’ as being a bad thing because it is public borrowing.  However, a mutual organisation borrowing money and using exactly the same resources for exactly the same purpose is defined as a good thing because it is not classified as public borrowing.
If this fortunate confluence of the political and the technical creates an opportunity for more homes to be built that will meet housing need – and especially one that will unlock institutional investment – we should go for it.

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‘Affordable rent’ chaos

It was all too clear when providers were asked to put in bids to provide new homes under
the ‘affordable rent’ programme that the timetable was tight, the risks were high, and that there was a lot of confusion about who would actually have influence over issues such as rent levels.
Housing associations, in particular, had hugely complex assessments to make of the financial implications for their organisations.  Subsidy per unit would be tiny and associations would have to use up a high percentage of their private borrowing capacity to make the schemes work.  Many were extremely concerned about the levels of rent that would be required, which could be up to 80% of market rents, and the fact that they would be completely unaffordable to their normal profile of new tenants.  Privately, quite a few were outraged that a share of their re-lets of social rented homes would have to go into the ‘affordable rent’ pool to fund the developments.
During the period when the bids were being prepared and put in, it became obvious that many local authorities were being bypassed and that quite a few of them were not on the ball and influencing what was happening.  There were genuine problems for housing associations, who might have been looking at schemes in a large number of different council areas, often dealing with indicative figures for future years and not real schemes on specific sites.
It must be said that some housing associations, but not all, have tried hard to make some
sense of the scheme, appreciating that the scheme will work less badly in some places
than in others and trying to keep rents, especially for family homes, down wherever possible.  It has been said by the mayor in London that the average rent will be 65% of market but there seem to be no published official statistics to see how this is calculated.
A little late in the day in some cases, councils have realised that new development in their
district was being determined in confidential contract negotiations between individual providers and the Homes and Communities Agency, and that final decisions would be made by Ministers, no doubt taking due account of the political implications.
There are now some unholy rows going on as councils see sites that they thought would produce some units of social rented housing going for ‘affordable rent’ and they are
sticking to their guns and insisting that rent levels should come down.  This might then make individual schemes unviable.  Some are demanding that re-lets of existing social rented homes should not be taken out of the genuinely affordable housing pool just to finance new expensive homes.  Providers thought they had deals with Government which may now unravel and are unclear what impact this might have on their total borrowing.  Councils may face a choice between having homes that are far too expensive or having developments drop out of the scheme altogether.
It is not entirely clear who has the final say.  Councils think they have a veto.  Providers
thought it was a done deal and won’t do schemes they think are not viable.  The HCA is trying to negotiate a brand new scheme with a lot of risk under strict political instructions.  And CLG Ministers have the final sign-off on the schemes.  There have already been
significant delays.
Perhaps Grant Shapps should tweet less and manage his portfolio more effectively?

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Struggling homeowners and assisted voluntary sales

Polls and surveys show that most homeowners are able to manage their mortgage and other housing costs reasonably comfortably, and many are sitting on a potential capital gain which they may be able to access later in their lives to fund their retirement or
care.
But a minority struggle to meet their monthly outgoings and live in fear of an interest rate rise or redundancy or reduced hours at work that could tip them over the financial edge.
Getting good and – crucially – independent advice as early as possible is important for
these families.  The National Homelessness Advice Service, a partnership between Shelter and Citizens Advice, is a crucial resource.  It provides local authority front-line staff with
specialist support, information and expertise so that advisers can in turn provide accurate and timely housing advice to residents, and it has a specialist team of mortgage debt caseworkers who can advise on homeowners in debt.
For some, better management of their debts and bills can make all the difference and help them stay in their home.  But for others, homeownership becomes unsustainable and there comes a point when a decision needs to be made to give up the home and get out of the debt before an enforced repossession takes place.
Research for the charity by the University of York has explored the various routes open to
struggling homeowners and the support provided by lenders, especially to help people to sell their properties voluntarily.  The process, known as assisted voluntary sale (AVS) is a relatively new development in the sector and is not available from all lenders, but can deliver positive results that can benefit both lenders and borrowers.  If it is a suitable option, it can enable the homeowner to keep control of the sale process and provide time to calculate the financial pros and cons and consider options for alternative accommodation, including if necessary a local authority homelessness application.
Shelter and NHAS have now published a good practice guide to AVS to help people and their advisers through the process.  There can be few harder decisions for a family to make and the guide goes step by step through the options available and the factors to take into account.
If economic circumstances worsen, unemployment rises further, or there is a sudden lurch in interest rates, this guide might prove to be an increasingly valuable tool.

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Tories up to their usual tricks

A horrible cough and cold picked up in Liverpool meant a weekend with a box of lemsip, a
Henning Mankell novel and watching lots of football without feeling guilty.  It was an error to switch on the computer and risk my temperature going even higher because the name Grant Shapps appeared in several places.
We are used to the parade of statistics about social housing claiming to show that it is
full of benefit dependent scroungers, caused so we are told by the policy of allocating housing according to housing need.  Having set up the Aunt Sally to throw sticks at, the Tories are feeling confident enough to take more steps in their campaign to end social
housing.  Westminster has elbowed its way to the front with their apparently reasonable new allocations policy giving significantly higher priority to employed people.  Shapps was quick to congratulate them, saying that he plans to extend the policy nationally.
Westminster’s cabinet member for housing, Jonathan Glanz, said the scheme “acknowledges and rewards” people who are “contributing to the economy…. We have
got so many people not working that it gives worklessness an attractiveness as a way of life.”  The  ex-Guardian journalist David Henke has shown what the implications of rents policies might be in changing the the social composition of Lady Porter-land – a long term ambition of the Council – and Guthrie McKie, Labour’s housing spokesperson, said: “The Council is shifting its housing failures on to the most vulnerable people in our community.  Due to its failure to provide sufficient social housing, the Council is doctoring its allocation policy… The Council is hell-bent on turning Westminster into a ‘no go’ area for the poor and low-income families.”
Shapps popped up in several papers, including the Telegraph where he said: “Up until now, access to council housing has too often been blocked for hard-working families who do the right thing.  So I’m determined to end the something-for-nothing culture and replace it with a system that actively recognises individuals who work hard and play by the rules.”
A conspiracy theorist, which I am normally not, might see a link between this and the other housing story given major prominence in advance of the Tory Party Conference – giving new impetus to the Right to Buy by massively increasing discounts.  The link is that people on benefits are highly unlikely to exercise the Right to Buy.
It has been a feature of council housing since the RTB was introduced in 1980 that, as council homes are bought by tenants who work, the proportion of remaining tenants who are economically inactive rises.  Many buyers still live in the same home on the same estate with the same social composition, and others have sold on to new occupiers who could afford to buy them out.  But the headline statistics show that council tenants are less likely to be in work, therefore more reform is justified because the tenure has failed.
Shapps’ thumbs were itching to tell us all about it on Twitter: “The right to buy is back” proclaimed The Great Builder.  And he provided a helpful link to a CLG webpage of questions and answers.
You might think given everything that has previously been said about council tenants that there is no-one left, apart from Frank Dobson, with anything other than housing benefit to live on.  But to justify the new RTB policy the Government has to employ reverse spin: suddenly there are plenty of tenants earning money through work who may have a bit to
spend.  CLG tell us that “38% of social tenants are well-off enough not to need Housing Benefit and over 800,000 tenants are in full-time work. Nearly 60% of social housing tenants who are couples with children do not claim housing benefit. Therefore many social tenants will be able to meet the cost of the mortgage after allowing for the discount.”
Pass the lemsip.  Perhaps Kurt Wallender has the answers.

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Musical tenancies

Labour Housing Group Executive member Graham Martin moved the housing resolution passed unanimously yesterday at Labour Conference in Liverpool.
The resolution notes the growing housing crisis that will be created by the Government’s policies, falling housing starts, huge cuts to the social housebuilding programme, a jump in homelessness, and the rising costs of housing benefit caused by increased dependence on the private rented sector and escalating rents.
Specifically it calls for a shift in financing of private landlords away from buying existing homes, causing unfair competition with first time buyers, towards investment in new properties which would add to the stock and boost growth.
It welcomes the initiative by Ed Miliband and Ed Balls to extend the tax on bankers’ bonuses to invest in new affordable homes. It calls for the defence of the rights of social tenants and the delivery of more social housing to be campaigning priorities for Labour in opposition.
In his speech, Graham warned that the Government’s policies run the risk of triggering ‘an
avalanche of mortgage repossessions’.  In reference to private renting, he said ‘It is like the game musical chairs but now it is musical tenancies and as your private sector tenancy comes to an end you have to go and move. And as you play musical tenancies, your child has to play musical schools and musical doctors…. And if you are unlucky enough to need housing benefit to help pay the rent, hey presto this government has taken half the empty homes away. And now this government thinks it is such a good idea they are trying to bring in musical tenancies for council and housing association tenants.’
‘Our children need stable homes, strong communities need stable homes, and what is going on is a way to break communities.’

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Ed’s error – opening the social housing allocations can of worms

I supported Ed Miliband for the Labour leadership and I firmly believe he will become the next Prime Minister.  But in my policy area, housing, I think he has just made a major policy error.  His people should realise that you’re politically in the wrong place when you share territory with Tory Westminster Council.  In the land of Lady Porter they have been looking to export their poorest people for many years, long before the Coalition’s housing benefit policies were described by Boris Johnson as ‘Kosovo-style cleansing’.  By stressing employment as a factor in social housing allocation, Westminster’s new housing allocations policy is just a more extreme version of what Ed is suggesting.
Regrettably, a couple of Labour boroughs have also taken up the theme that they have too many unemployed and poor people and that they should live somewhere else (where? is not a question they ever answer).  Now they have cover – the Labour Leader approves that they should by allocating homes to people who make some kind of vague contribution to society.
As with the argument about evicting rioters whose family are council tenants, there is no rhyme or reason as to why this special preference should be targeted at social housing.  Why isn’t it a requirement in other policy areas as well?  For example, only people who make a contribution to society should get free health care or have their bins collected or go to Oxford or get pension tax relief or be able to drive on motorways.
On these grounds, bankers, journalists, many politicians and anyone called Murdoch would fail to qualify for any services at all.
Over many years politicians and the media have been good at saying who should get social housing.  But ultimately, with extreme shortage, if you want to change priorities it is dishonest just to say who you think should get the homes: you also have to say who will NOT get them as a result of your new policy.  Vague statements, reminiscent of the old distinction between the deserving and the undeserving poor, or the poor we like versus the poor we don’t like, make bad policy.
Anyone who has ever been involved in the process of housing allocations knows that only people in extreme and acute housing need get anywhere near being allocated a social home.  I would set Ed Miliband a test: go into an allocations department, look through the cases, meet up with the people concerned and then pick the family that will not get a home because you have decided to allocate it to someone who has less housing need but meets some test of their ‘contribution’.
Allocating extremely scarce housing has to be done transparently against clear rules, and judgements are often subject to Ombudsman cases or judicial review.  So vague principles are not enough.  How many points will ‘being in a job’ be worth compared to being overcrowded to the point where your health is failing and your children are falling behind at school?  How many points will ‘being a school governor’ get compared to having a severe disability and high medical priority?  How will you deal with people who were in work but had to give up because of redundancy or age or illness?  Will you revert to the 1950s test where inspectors came round to judge your housekeeping standards before you got a home?
Believe me, Ed, this is a can of worms you will regret ever opening.  And I suspect you only got into it because it is a policy where it feels like you can make change without it costing anything.
There has been a lot of talk at Labour Conference this year about offering apologies for the failures of the last government.  New affordable housebuilding was the Titanic of policy failures, only addressed towards the end of our term: if we want to impress the electorate with our housing policies we have to talk about how we can build hundreds of thousands of additional homes in the future.  Rearranging the deckchairs on the housing allocations sub-deck is a futile gesture and a diversion from the real issues in housing

This post has also appeared on LabourList at
http://labourlist.org/eds-error–opening-the-social-housing-allocations-can-of-worms
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LP Conference: housing policy comes centre stage on Thursday

As we have reported on Red Brick already, housing has been a big theme at this year’s Labour Party Conference.  Much of the discussion has been good and positive – although unfortunately not all.  The housing debate will come to the main Conference on Thursday morning.  There will be a debate around a ‘composite’ housing motion (ie assembled into one from a number of motions submitted by Labour Party organisations) and it is likely to be moved by Graham Martin from the Labour Housing Group Executive.  There will also be a speech from Caroline Flint.
The debate should be carried live on the BBC Parliamentary Channel (which I much prefer to the BBC2 coverage, where speakers are constantly interrupted by presenters and
commentators who seem to think they are the attraction).
Anyway, to help Red Brick readers follow the debate, below is the composite motion that
will be debated (NB it may be subject to a little grammatical tidying up before Thursday).
I think it is a motion we can all support.
Composite 4 – Housing
Conference notes with alarm the independently-commissioned forecast of the National  Housing Federation (30th August 2011) that the housing market will be plunged into a unprecedented crisis as steep rises in the private rental sector, huge social housing waiting lists, and a house price boom are fuelled by a chronic under-supply of homes.
Conference notes the publication of national house building statistics on 18 August,
showing falling housing starts and completions, and the Home Builders Federation’s ‘Housing Pipeline’ report on 26 August showing that planning permissions for new housing are also falling, the sharp fall in house building to just 23,400 homes last quarter, the 18% jump in homelessness over 12 months and the £1.3 billion pa rise in Housing Benefit payments. In the last five years of Labour Government over 250,000 new affordable homes were delivered in England, while the Tory-led government is aiming to deliver just 150,000 by 2015.
In 2010/11 just 105,000 homes were built in England – the lowest level since the 1920s. These figures are an indictment of the Government which is blind to its inevitable
consequences – increased homelessness and joblessness, rising market rents, and the inability of young and middle aged households the opportunity to either buy or rent a decent home.
Conference believes that by failing to deliver the new affordable housing to buy and to
rent that young people and families need, the Tory-led Government is holding back the aspirations of people up and down the country and failing those in need of social housing.
Conference believes the Government’s plans to abolish secure tenancies, and put social tenants at risk of eviction should they get a promotion or a pay rise will create fear and uncertainty and will create a disincentive to work.
Conference believes that with nearly 2 million households (around 4.5 million people)
nationally on council housing waiting lists and the Tory/Lib Dem government threatening security of tenure, the Government is letting down young people and families who need new affordable homes in the rented sector and in the sales market urgently.
Given the huge increase in housing benefit going to fund private landlords, we also call for a shift of financing of private sector landlord investment away from purchasing existing second hand homes (in competition with first time buyers), and towards investment in New Properties. This will result in an increase in quality supply, and better opportunities for younger and middle aged families to purchase a home.
Conference strongly believes that Labour should be on the side of all those in need of decent affordable housing, whatever their circumstances.  Conference firmly believes that the development of new housing not only meets the needs of our community but is crucial if we are to see the construction sector as a leading player in bringing strong growth back to our economy.
Conference supports measures to tackle the fraudulent sub-letting of social housing, which
deprives many in genuine need of affordable housing, and notes that in Government Labour launched a national crack down on this type of fraud.
Conference welcomes Labour’s initiative to introduce a new tax on bankers’ bonuses to
raise enough money to boost affordable housing supply.
Conference urges the Labour Party to call for a programme of investment in quality new
homes, which will provide employment, generate tax income, reduce homelessness and the cost of emergency accommodation, and reduce expenditure on unemployment and housing benefits.
Conference calls upon Labour’s Shadow Cabinet and the wider Party to make an increase in quality, sustainable, affordable housing supply including social housing and housing for first time buyers, and better opportunities for younger and middle aged families to purchase a home, key themes in policy development, and to prioritise in its housing policy review an allocations policy that is fair to everyone.
Conference resolves that defending the rights of social tenants and the delivery of more
social housing must be campaigning priorities for Labour in opposition.

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For a change, more light than heat on the PRS

Tony has pointed out that amongst the soggy canapés there are loads of meetings and discussions about housing at this year’s Labour conference.  Tomorrow we will find out
what if anything about housing makes the Leader’s speech, but today two of Ed Balls’ key initiatives involved housing: a specific commitment to use a repeat Banker’s bonus tax to fund affordable housing and a new commitment to reduce VAT on maintenance to encourage owners to repair homes.
One meeting Tony didn’t highlight attracted my attention and I went along to a meeting sponsored by New Statesman and the National Landlords Association on the future of the private rented sector.  Although I don’t always agree with what Caroline Flint has to say about social housing, I thought she was spot on in her analysis of the PRS, the need for regulation and how it might work.  I had forgotten that she was Minister when the Rugg Review was commissioned, so she has some background in this issue.  She also rather shamelessly plugged her chapter in the so-called purple book just published by Progress, in which she evidently sets out her views on PRS reform.
Although the NLA seems to favour accreditation rather than registration as the basis of a regulatory system, there was a surprising degree of consensus in the room about what a regulatory system should seek to achieve: an expanding and increasingly professionalised PRS, support and help for good landlords who want to meet good standards, and strong enforcement against bad landlords who exploit tenants and refuse to bring their properties up to scratch.  Despite the presence of several landlords and landlords’ representatives, there was no support from anyone for the current government’s laissez-faire (or is it couldn’t care less?) approach.
I was particularly impressed by a letting agent present in the audience who spoke strongly in favour of registration as the way forward, and there were good contributions on how to achieve longer tenancy terms, especially for families needing security and stability, how to control subsidy flowing to bad landlords through housing benefit, and enforcement by environmental health officers.
Sometimes a discussion hits the right tone of seriousness without ladles of rhetoric and generates more light than heat.  Here was one and I hope there will be more, especially during the housing debate scheduled for Thursday morning – housing was one of the four issues chosen through a ballot of delegates for debate on the floor of the Conference.

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LibDems in denial

They say politics is a rough old trade, but any hope that there might be a frank debate on housing during the Party Conference season were dashed immediately at the LibDem conference in Birmingham.  The line was just to deny that their policies have any downside at all.
LibDem President Simon Hughes MP knows that attack is often the best form of defence.
He set the tone at the start of the week by giving the impression that the worst thing happening in housing at the moment is that Frank Dobson MP is a council tenant, or as Inside Housing quoted Hughes as saying, he lives in ‘a bloody Camden Council flat’.
Then we had Andrew Stunell MP’s subterfuge: trying to pretend that ‘affordable rent’ homes are social housing, stretching credulity to the limit.   He also made much of the Coalition’s efforts to bring empty homes back into use without mentioning Eric Pickles restrictions on the use of Empty Dwelling Management Orders to protect property owners’ ‘fundamental rights’.
Finally we had Pensions Minister Steve Webb MP.  Surely a man with such expertise in
the field of tax and benefits would have something intelligent to say about the housing benefit reforms.  None of it.  His line was that while Labour accused him of adopting a policy akin to the slaughter of the first born, the truth was that cash spending on housing benefit at the end of the Parliament would be the same as at the start, around £22bn.  So
all is well, he is just ‘reigning in the remorseless growth in spending’.  No mention of rent inflation, or of policies, like affordable rent, that are driving up housing benefit costs, or of the increasing caseload of private tenants having to share the available cash, or of the policy of pushing homeless families into the more expensive private rented sector.  And certainly no mention of Boris Johnson’s description of the policy as ‘Kosovo-style cleansing’.
Never can a LibDem audience have been so supine.  It looked to me like they think that
the only hope of political survival is to keep their heads down and claim that they are having influence.  In housing they have nothing to show for their efforts because they have gone along with the Tory agenda in its entirety – the end of social rent, moving towards market rents, reducing tenants’ rights, laissez-faire in the private rented sector.
It will be interesting to see how the Labour Conference pans out.  We are told that there will be honesty about the record in office, which should start with an admission that far too few homes were built.  But this has to lead to new policies that will produce many more homes – market homes and genuinely affordable homes.  There will need to be a radically new approach to capital investment, so I will be paying as much attention to Ed Balls as I will to Caroline Flint.