Ed Miliband and Caroline Flint have suggested that being employed should be a factor in social housing allocations. It has been suggested that this is an effective ‘message’ to the ‘squeezed middle’, which I commented on in a previous blog. But, whatever the message it conveys, does it stand up as a housing policy?
Guest blogger Sheila Spencer takes up the debate.
There’s been some debate within the Labour Party, at senior levels, and on the pages of Inside Housing, about giving priority to people on the basis of their employment status, and it seems to me that some people are missing the point a bit. Ed Miliband, for example, has pledged to make it easier for voluntary workers and the employed to gain council housing, to fit with the idea that the welfare state should reward those who contribute. But what about those who can’t yet contribute in this way?
I know that some councils have already adopted this policy: Manchester, for example, gives extra priority on the basis of someone in the household being in work or contributing
to their community. Manchester’s allocations policy says that the idea of this is to encourage people to access work. But the person in work has to be employed for 16 hours or more, and must have been in work for at least 9 months in the last year – so it is not
encouraging people to move into work, just giving priority to those who already have work.
It seems to me that this puts those who are out of work and without anywhere to live at a considerable disadvantage. If you are homeless, you are fairly unlikely to be able to get a job until you have an address; and if you are living in temporary accommodation, in most cases the housing and support costs stop people from being able to take on a job whilst they are living there. So this policy puts an additional barrier in the way. It’s really
a Catch 22 – you don’t have priority to get rehoused because you’re not working, but you can’t apply for work because you won’t be able to afford to have anywhere to live in the meantime.
There is one glimmer of light for people in temporary accommodation: many people are now getting involved in some way as a volunteer, as part of “meaningful activity” and tangible support to move on with their lives. But Manchester’s scheme seems to restrict the community contribution to the area you want to be housed in – expecting, I would guess, that this is as part of a neighbourhood or community group there. Again, this could exclude people who are not yet part of a community.
I prefer the schemes which give people an incentive for looking for work by awarding priority for rehousing, or priority for particular places, to those who have pledged to get into work, or training or education once they have somewhere to live, and which supports them to do so. So those who have only just got themselves into a position where they can look for work are able to do that with a steady home to live in. Isn’t that a responsible way
to look at offering social housing? And how can we justify rewarding people who take responsibility for their lives whilst excluding those at the bottom of the heap, and in effect, taking on policies which keep them there?
Category: Blog Post
A holiday in Northumberland normally involves castles.
This year’s selection included Bamburgh (the most dramatic), Lindisfarne (the most beautiful), Dunstanborough (the most ruined), Chillingham (the most eccentric), and Alnwick (the most Hogwarted).
Alnwick castle is the home of the Duke of Northumberland (and his forebears for 700 years). Alongside the fabulous State Rooms – I thought one woman was going to faint when we were told in the dining room that the Queen had recently lunched here with the Duke and Duchess – visitors have the opportunity to watch a video explaining the Duke’s views on Inheritance Tax. He doesn’t think much of it. But I think his progeny will survive on the post-tax pickings of “a growing international commercial property portfolio which is centred on the North East, including over 100,000 acres of land and more than 100 let farms, a large residential portfolio, a number of historical assets including Syon House in London and the Albury Estate in Surrey as well as fine art and treasures, mineral rights, sporting and leisure interests” as the Northumberland Estate website explains it.
An alternative view of Northumbrian life can be found at the fantastic Woodhorn Museum just outside Ashington. In addition to its exhibitions on coal mining and working class history, the museum is home to the permanent picture collection of the Ashington Group, known as the Pitmen Painters, who captured every aspect of life above and below ground, depicting living as well as working conditions.
The exhibition of union banners is fascinating, although we were struck by the banner of the Ellington Branch of the Northumberland Area of the National Union of Mineworkers. On one side is a picture of crowded slum pit housing with the slogan ‘Close The Door On Past Dreariness’. And on the other is a picture of a modern housing development, houses with gardens on a tree-lined street, with the slogan ‘Open It to Future Brightness’. That just about sums it all up.
Alnwick Castle followed by Woodhorn Colliery Museum offers such stark contrasts it really makes you wonder why the class war never caught on.
Image from a picture by Norman Cornish, included in an article by Martin Wainwright, Guardian website, October 2006.
- Lindisfarne community prioritises affordable homes
As you arrive into the village from the causeway out to Lindisfarne, there is a ‘welcome’ notice board. It records the history of the island in timeline form. All the key dates are there, the arrival of St Aidan in 635AD, the death of St Cuthbert in 698, the arrival of the Vikings in 793, and all the rest.
And, given equal status, are the key dates for ‘affordable housing phase 1 completed’ and ‘affordable housing phase 2 completed’.
Simon Schama might not agree, and David Starkey certainly won’t, but that’s what I call a balanced view of history.
Like other areas in rural Northumberland, Lindisfarne has suffered from rocketing house prices, driven by the second homes boom, and rapid rent rises, driven by shortage and competition from the holiday lettings trade. Local people could not afford to buy or to rent on the island, the school closed, and the traditional community was dying. Showing great foresight and determination, the islanders formed the Holy Island of Lindisfarne Community Land Trust (CLT), which raised charitable and community donations to fund the building of a small but vitally important number of homes for social rent.
Later, other small developments were financed by the Housing Corporation/Homes and Communities Agency. The landlord of the Crown and Anchor pub put it simply – “Getting one of these new homes means we’ll be able to stay put, carry on running the pub and be a part of the local community.” The homes will be available for low rent occupation in perpetuity, irrespective of future land value rises.
This inspirational story contrasts with this week’s report from the Countryside Alliance concerning the death of rural communities around the country caused by the shortfall in affordable homes. According to the group, almost 80,000 affordable homes are needed each year in rural areas but just 17,000 were delivered in 2010/11.
The report, ‘The critical shortfall in affordable rural housing in Britain‘, argues that rural housing remains less affordable than in urban areas due to average wages being
£4,655 lower than the national average.
As the Lindisfarne example shows, to survive rural communities need to prioritise low cost housing for rent. As in the cities, the market simply cannot do the job that communities need without positive intervention.
It has been a long time coming, but the end of the national HRA (housing revenue account) subsidy system for council housing is now in sight. A new government paper Self financing: Planning the transition clarifies some of the detail, updates the figures that will be used, and crucially sets the timetable for implementation – 28 March 2012 will be the day on which many billions of pounds will move around between CLG, the Public Works Loans Board and individual local authorities to implement the scheme.
Although the technicality of the new paper will give anyone except a public finance accountant and a few experts a headache, the core proposals are still much the same as
proposed by the Labour Government. Radical change has been made possible due to the fact that the council housing system as a whole has moved into significant surplus, surpluses that are projected to grow in future.
The current system involves central government notionally collecting all rents and
redistributing the income between councils with housing stock according to
increasingly complex formulae. The system has become unsustainable, with some councils losing 50% of their rent income to the national pool, and volatile, with annual determinations making longer term planning very difficult. The central problem was the bad distribution of historic debt – councils that have built most in the past had large debts they couldn’t sustain from local rent income. The new system redistributes the debt permanently between councils, according to their ability to support it within 30 year business plans, removing the need for annual redistribution.
‘Self-financing’, as it is called in the jargon, is a genuinely localist move, supported by all
of the political parties and by the vast majority of councils with stock. It is a major success for the housing lobby, and especially CIH, who have argued for this change for many years to give council housing a sustainable future and to bring key decisions over finance and services closer to tenants.
Of course there are still risks and there are elements of the package that could be improved. There may be dangers in the detail of the redistribution formula that I wouldn’t be able to spot with binoculars, but some others will. One change made by the current government has been to retain the rule that 75% of capital receipts from the right to buy will go to central government rather than stay locally as Labour had decided. They also imposed a cap on borrowing, limiting the scope for councils to use their surpluses to build new homes, and spiking the ambitions of some councils to become major builders again.
The funding arrangements to complete the decent homes programme also do not seem to be adequate for the job.
It must be said that there are dangers as well as opportunities arising from local control of the housing revenue account. The ring fence is retained but, given that the general fund at most councils is under severe strain, some Directors of Finance and politicians will look avariciously at the HRA and seek to move funds across.
Tenants will need to be vigilant and alert to the many tricks of the trade, and scrutinise carefully all arrangements such as recharging of overheads and central council costs and service level agreements. If council housing is to be a self-financing business in future, the core principle must be that rent income is used for the benefit of tenants and not
council taxpayers generally.
The long-predicted total demise of council housing has been averted. Campaigning tenants and a few councils who were determined to hold on to their stock can take much of the credit for that. Councils with stock should now be able to adopt a sustainable business plan for the future, making decisions locally, with their tenants, to improve their management and performance. Some councils are building again, admittedly in small numbers, and more have the potential to do so.
Given the politics of council housing over the last 30 years, this is a good result.
Red Brick’s first ever post was on security of tenure. And we have argued consistently since that reducing security of tenure would be bad for individuals, bad for communities and bad for social housing.
The government has now relented and moderated some of its worst proposals. Grant Shapps, in a letter to consultees, has ‘caved in’ and accepted a significant amendment to his draft ‘direction’ on tenure. Blogger Jules Birch has reported on the slalom that has been Grant Shapps’ opinion on this in recent times, wavering about under pressure from both sides. In his letter, Shapps puts the change down to ‘concerns expressed during debate on the tenure reform provisions of the Localism Bill at Lords committee’. Step forward those Lords, if this goes on I might have to amend my unicameral views. And well done to the Labour opposition and to those elements of the housing lobby who have fought for the interests of tenants rather than landlords on this one. No accolades seem to be deserved by the Liberals, who have been particularly supine on security despite their long-term party policies.
It is important however to put Shapps’ retreat into perspective. A skirmish has been won but not a battle let alone a war. Instead of a minimum term of 2 years for general needs housing, the policy will in future be that a normal tenancy term will be 5 years, but landlords will still be able to offer a 2 year tenancy ‘in exceptional circumstances’ as long as they set out what that means in their tenancy policy. Some landlords will no doubt try to adopt an elastic definition of ‘exceptional’.
It should be said clearly that the policy is still wrong, just less wrong than it was. At the end of 5 years, tenants will still be at the mercy of a landlord assessment of whether they should keep their home, without being able to make their case to a court. That is where the immorality lies. It gives arbitrary bureaucratic power to people who are often unaccountable, some of whom are very judgemental about tenants and which ones they like (deserving) and don’t like (undeserving). And if virtually all tenancies are renewed, as some argue, what a waste of time and effort it will be. Linked to Shapps wanting to means test all tenants to find out which ones have a high salary so he can charge them more rent, an army of people will be needed to go round checking everyone’s
income and resources and assessing everyone’s suitability to continue as a tenant. Shapps will still need his Snoopers.
This victory should encourage more campaigning over the summer. In particular, the government looks wobbly on the total benefit cap aspect of the welfare reform bill.
Their Lordships have more good work to do.
George Osborne would do well to read more of John Maynard Keynes, and in particular his General Theory of Employment Interest and Money published in 1935. Unlike Osborne and Cameron, Keynes (a capitalist economist and a Liberal) learned lessons from the Great Depression and was determined never to see it repeated.
One of JMK’s well-known sayings – ‘When the facts change, I change my mind. What do you do, sir?’ – was uttered after he was criticised for changing his position on monetary policy during the Great Depression. It applies well now to Osborne’s repetition of the Great Depression mistake (and indeed Japan’s more recently) of cutting demand in a recession.
But it might equally be applied to private rented sector rents and the policy of slashing the Local Housing Allowance for private tenants. Minister after minister, from Cameron down, trotted out the line that cutting benefits would reduce rents, that the HB sector was holding rents up high, and that the free market would respond to HB cuts, effectively lowering demand, by lowering price. Iain Duncan Smith frequently said that the fact that his department was responsible for 40 per cent of the private rental market was ‘staggering’ and that the aim of the reforms was ‘to drive down market rents’.
Logical thinkers came to different conclusions. With current levels of excessive demand, tenants forced to move by cuts in their HB payments would be easily replaced by new tenants able to pay market rents. There would be no price reduction in more costly areas. However, the displaced tenants would be looking for homes in lower rent areas, boosting demand and competition for the cheaper homes that come on the market. Rents in those areas would be likely to rise. The problem would be compounded by a proportion of landlords taking family homes off the market to make them available instead to the growing number of single people who would only receive the shared accommodation HB rate in future. Letting to 4 or 5 singles was likely to be more lucrative than letting to a single family.
The anecdotal evidence is that sharing and overcrowding are increasing as people, and especially larger families, try to find cheaper – which often means smaller – accommodation. Harder evidence, from agents and landlords, shows that rents continue to rise above inflation.
Nor are there any signs of rents turning down in the future. The head of research at Savills recently concluded “High rent rises are not confined to the prime market and, as more aspiring buyers are frozen out of home ownership, demand for private rented stock in the country as a whole can only grow. Our prognosis for the private rented sector as a whole remains extremely bullish.”
Even if the government believed its little bit of idiot economics when it started the policy, surely the evidence is accumulating that they are just wrong, rents will not fall and people will be put through endless misery because of it.
The facts have changed. But does Iain Duncan Smith have the bottle to change his mind as JMK suggests he should?
By guest blogger Monimbo.
Inside Housing carries a story about a new guide to Making the Most of Community Led Planning, promoted by the DCLG and created by two pressure groups working in rural areas and in market towns. Without disparaging the work of ACRE and Action for Market Towns, with their rural focus it is perhaps not surprising that the groups involved in this exercise seem to be solely from County Council areas. There is no representation from inner city areas or, indeed, outer ones. The guide carries the endorsement of the minister for decentralisation, Greg Clark, with no mention of its rural bias, and yet it was part financed from the DCLG’s empowerment fund.
The minister hails the guide as helping ‘local people’ exercise the right to prepare a ‘neighbourhood plan’ under the Localism Bill. It strikes me that the guide is an unintentional reminder of how vacuous such plans may turn out to be. There is only the
vaguest discussion of resources, delicate issues like building more local housing are touched on only briefly, and there appear to be very few examples of what neighbourhood plans can actually achieve – surprising given that more than 4,000 community led plans are apparently already in existence.
One gets the impression that neighbourhood plans are intended to be about minor issues that can be readily tackled by parish councils. I looked eagerly, but in vain, for an example of a community that championed the need for more rural housing, overcame local opposition and built some affordable homes using a local housing association. Perhaps they exist – but they are not mentioned here.
You will also look in vain in the guide for any mention of ethnic minorities. There are several references to community plans being ‘inclusive’, but no examples of what this means. As we know, in many rural areas there are marginalised communities who might well miss out on this sort of ‘community led’ planning if it fails to involve them. For example, many of the issues about the housing of migrant workers have cropped up in rural authorities like Breckland in Norfolk and Kerrier in Cornwall, where migrants provide the labour for the ‘pick, pack and pluck’ trades. Is their housing an issue which might be examined in community led plans, or is it better brushed under the carpet?
Community led planning is a good idea, and I would be surprised if many of the projects championed by ACRE and AMT aren’t good examples of rural communities getting things done. But there are dangers if this becomes the exclusive vision for neighbourhood planning, and more widely for the government’s ambition (repeated by Greg Clark) of replacing ‘big state’ with the ‘big society’. There are some advantages to the state: it is open to lobbying, it is governed by equality laws, it has elected councillors and – even in troubled times – it has real resources and statutory powers to use them. If neighbourhood plans are to work properly, they must be about delivering real change in real communities where all groups are involved. And this must include challenging inner city areas, neglected outer estates, and hard-to-reach groups in both.
Neighbourhood plans that merely sustain a comforting image of rural and small-town life will not fit the bill.
It’s always a mistake to buy a Murdoch newspaper. But yesterday I couldn’t get an Observer so I bought the Sunday Times. My defence is that it was an impulse buy. Given that I normally read newspapers online I am now really pleased his papers are behind a
paywall that I will never breach.
My ire was stirred by an article by columnist Minette Marrin called ‘Crisis solved: ship the poor out of their costly homes and sell them’. Seriously. It must be a cosy number writing a column like that, you take a report from a right wing think tank (in this case Policy Exchange’s ‘Making Housing Affordable’ ), add a couple of anecdotes and a bit of prejudice, and off you go. It’s a bit like writing a blog but you get paid for it.
Anyway, her central thesis rests on 2 facts. First that some social tenants live in valuable houses that could be sold and other housing provided ‘elsewhere’ with the money. And secondly that old canard that social housing somehow causes poverty and unemployment. So, the thesis emerges: “to put it crudely, if people in social housing are not working and not thriving in one place, they might as well do the same thing somewhere much less expensive.” At least it’s honest.
Now, we’ve spent a lot of time on this blog trying to tackle the myths in housing, and in particular in social housing, so I don’t intend to repeat all the points. Suffice to say that the fact that there is an association between 2 factors (in this case social housing and worklessness) tells us nothing about the causal relationship (ie social housing tends to house people who do not work, because they are in housing need, rather than causing them to be workless). And most of the tenants who do not work are not unemployed but economically inactive – the biggest group are retired (how shocking is that) and many others do not work because of disability, ill health or vulnerability and are unable to compete in the housing market. In other words, social housing is doing its job.
What adds unpleasantness to inaccuracy is the line that ‘mixed communities do not work’ therefore it is a better use of money to ‘ship people out’ (the London example is used but all cities have social housing in their more valuable areas, and the arguments apply equally to unaffordable small towns and villages). So the ground is prepared for social segregation, the concentration of poorer people in some areas and richer people in others, and the forced removal of people from communities where they might have spent their whole lives.
The concept of ‘elsewhere’ is central to the NIMBY’s cry – we need housing but somewhere else, not here. But ‘elsewhere’ is already a poorer part of town with a higher proportion of social housing. No doubt next week Marrin will condemning social housing ghettoes for breeding criminality and calling for more home ownership as the solution not more social housing.
The poor should not live here next to the rich, they can live elsewhere, this attitude was the
driving force behind Shirley Porter’s gerrymandering in the 1980s. She may be disgraced, but she might also be quietly satisfied that her approach is now mainstream on the Tory right and increasingly central to government housing policy.
The Government’s announcement of the new ‘Affordable Rent’ programme gets more and more curious.
We commented last week that although they and the HCA listed the 146 organisations that would receive money for the high rent initiative, both had failed to say who would build how many homes and failed to provide any information at all about the two key criticisms of the scheme – the rent levels that would be charged for the properties (they could be ‘up to 80%’ of market rents) – and the number of re-lets of existing social rent homes that will instead be let at so-called ‘affordable rents’ to pay for the programme – ie taken out of the existing pool of genuinely affordable homes. Nor, when we think about it, is there any
information about how many will be let on flexible (ie possibly short term) rather than permanent tenancies.
The information is clearly available, as London mayor ‘Codswallop’ Johnson tried to make political capital by saying the average rent in London would be ‘65%’ – ie much higher than social rents now but not as disastrous as it could be, reflecting a big effort by housing providers in London to make sense out of the whole thing. Johnson continues to obscure the real truth about the housing programme in London and still has the cheek to claim credit for the continuing completions of social rented homes from the programme inherited from Ken Livingstone.
Today, Inside Housing claims that housing providers have been ‘told to keep quiet’ about their allocations – ‘HCA tries to silence landlords’. Keith Exford, chief executive of Affinity Sutton, is quoted as saying that Ministers got ‘carried away’ in their announcements.
The ‘affordable rent’ programme is intermediate housing masquerading as social rent. As Johnson already has, the government will make great claims about their achievements in
producing affordable homes. But ‘affordable rent’ is not affordable in many parts of the country, however hard providers try to let it to people who would previously have been offered social rented homes, and in many cases it will not be secure.
With key information withheld and providers apparently silenced by the paymaster, the government are taking the public for fools.
Boris ‘codswallop’ Johnson’s failures in housing are becoming clearer as the London mayoral Election campaign hots up. It may be that his calamities in other areas achieve bigger headlines – dismissing the importance of the hacking scandal was a very big misjudgement, and losing so many senior police officers seems slightly careless – and he has begun to show a grumpy side to his character that belies his carefully crafted jovial upper class twit image.
London was starting to do well in housing when Johnson took over in 2008. Ken Livingstone’s London Plan and Housing Strategy policies were beginning to bite and have real effect, policies such as the 50% affordable target across London were well known and understood by developers, and, despite the global financial crisis, Ken had secured the largest housing budget for decades from the Labour Government. The Homes and Communities Agency outturn statement confirms that expenditure between 2008 and 2011 (ie the period covering Ken’s planned programme) in London was £3,753m, £1,251m a year over three years.
The newly announced programme of £157m a year for four years represents a cut of 87% and the gap will have to be made up by much greater housing association borrowing. In April Stephen Howlett, then Chair of the G15 Group of major Housing Associations, told the London Assembly Planning and Housing Committee: “I think one calculation is that, to deliver the Mayor’s programme, will take as much private money over the next four years as associations have borrowed since 1988 to deliver the homes in London. Those exact figures are open to comment but I have to emphasise that housing associations in London will be taking on enormously increased debt and risk as a result of this.”
Commenting on the announcement by the Mayor and the Homes and Communities Agency on the allocation of funding for affordable house building to London, Nicky Gavron AM, Labour Group Spokesperson for Planning and Housing on the London Assembly, said:
Despite the Mayor putting a brave face on it, London is getting less for less.
The new information is that the Mayor has been given only £627 million to spend on affordable housing between 2011 and 2015. This is a cut to London of 87% compared with the previous funding round.
From 2008 the last Government gave London £5bn† to spend on affordable housing, of which £3.7bn was used to deliver 50,000 affordable homes by 2011. Johnson missed this deadline and £1.1bn of this new package is to finish the job and is committed to homes already in the pipeline.
To make up for the Government’s cuts, the private sector contributions of £2.5bn announced in his press release will come from borrowing by housing associations. This is more in four years than they have collectively borrowed since the late 80s. This model of funding is not sustainable.
The settlement also confirms that 1,500 homes in the pipeline and funded under the previous Government’s programme as social housing – the lowest-cost housing for rent, which is so desperately needed – have been lost in London because they will now be converted to the so called ‘Affordable Rent’* model. In many cases this will double rents for low-income households in London and price many families out of the housing market.
In the context of housing benefit caps, welfare reforms and rising homelessness, the growing need in London is for low rent family housing. But this deal is particularly damaging for families. We understand that only around 30% of the homes will be family sized. This seriously undermines Boris Johnson’s pledge that 42% of new homes should be for families, a fact omitted from his announcement.
*The London Assembly Planning and Housing Committee recently published a report on the impact of the Affordable Rent model on London, the findings of which are summarised here.