A Guardian poll claims that nearly 80% of respondents agree with the statement that councils should charge high-earning social tenants higher rents. The Guardian quotes twitter comments including one saying people who can afford to live in the private sector should not be in social housing. ‘Simple. Irrefutable.’
The initial story that provoked such a strong public opinion and huge media coverage came from Westminster City Council. That in itself should raise suspicions. The Guardian leads its poll – and misleads its readers – with ‘facts’: that in Westminster 200 social tenants earn more that £100,000 a year and 2,200 earn more than £50,000. Who then could disagree with the policy they are proposing? But closer scrutiny leads to the information that the figures are estimates based on a survey carried out in 2006. There is no information as to whether these are single earners of couples (if both earn average wages, household income would be £50k) and whether lessees were excluded. Personally I just don’t trust this data and have put in a freedom of information request to get the calculations.
Westminster are using these ‘facts’ as a rapier argument to front their desire to have greater local powers to set council rents. Very successful bit of propaganda so far. But beware – they want the local power because they want to put their rents up for everyone not just ‘the rich’.
It is interesting to ruminate on this story. First, if the figures are correct they show a remarkable amount of social mobility in council housing (2,200 is more than about 1 in 6 of Westminster’s tenants). Well done council housing for helping people achieve their aspirations. Secondly, it shows that council housing, despite everything, can still achieve mixed income communities. Well done council housing. Thirdly, it makes an interesting change, even if it is dodgy, to see some Tories wanting to get rid of people it regards as rich when most of their policies, especially around local housing allowance, are about getting rid of the poor.
Fourthly, beware polls, even in the Guardian. People voted yes to a statement that social housing ‘should be available only to those who need it most and increasing rents for high earners would encourage them to move on’ – a totally different statement from the headline that 4 in 5 agreed that ‘councils should be allowed to charge high-earning social tenants higher rents’. So who was trying to prove what and for what reason?
Fifthly, there would be the small matter of implementation. To charge higher rents to some because of their income, the council would need to know and be able to verify the income of all their tenants. It would be dodgy getting housing benefit information for this purpose, and that wouldn’t identify high earners. I see armies of means-testers knocking on doors, sending out forms and making detailed verification checks. Even if some simpler means were found (eg higher rents for higher tax payers) the information would have to be transferred from HMRC or self-declared – and in any case would not ‘catch’ the 2 income household earning £25K each. And it would make the marginal rate of tax for a person passing the higher tax rate threshold totally unsustainable.
This is a well-worn path trodden by people who like to discredit social housing – there is a fine tradition of stories about council tenants with Jags outside the front door – but in my view it is totally unimplementable even if you like the principle. So, it has been a bit of a propaganda victory for Westminster, rekindling a few old prejudices. But even this government isn’t daft enough to do what Westminster wants. Or is it?
Category: Blog Post
Categories
Heroes fit for homes
Ex-service personnel have always featured highly amongst the homeless. For many years the armed forces seemed particularly bad at helping people re-settle after their discharge. There was no single cause for homelessness: sometimes physical disability made people less able to work and more vulnerable, sometimes mental stresses and post-trauma conditions made life back in civilian life more difficult to bear. Sometimes people had become institutionalised or distanced from their families and an inability to re-settle led to problems with alcohol or drugs. Some faced discrimination.
For decades small charities campaigned to get a fair housing deal for homeless ex-service men and women but it was an uphill struggle. The 1977 homelessness legislation provided one route to a decent home for some: if vulnerability through disability could be demonstrated then a social rented home would be found. But this was not enough: research by Crisis in the mid 1990s found that around one-quarter of the single homeless population had spent time in the armed forces.
Since then, increased awareness and better services, both within the armed forces and in local government and the voluntary sector, have had a demonstrable impact on the problem, with Crisis estimating that ex-service people are now around 6% of the single homeless population. And in a very important step, the Labour Government changed the priority need categories in the homelessness legislation to give clear rights to vulnerable former members of the armed forces.
Striking his most Churchillian pose, Housing Minister Grant Shapps seeks to make the most of today’s announcement by Defence Minister Liam Fox about the improving the ‘military covenant’. Shapps’ statement is littered with pomposity but little practical action: ‘These brave men and women… heroes … we will not stand idly by… our duty as a nation… we must hear their call’. There is nothing wrong with the government giving ex-service people priority (in some as yet undefined way) for the FirstBuy scheme, shared equaity schemes, self-build projects and the like. But it will hardly crack the problem.
In his little list, Shapps included ‘fairer treatment for military personnel applying to live in social housing’. On the surface, fair enough, given their incomes and housing histories, the route into social housing is likely to be more important than the others in ensuring ex-armed forces personnel obtain an affordable secure decent home.
Call me an old cynic, but isn’t this the same Grant Shapps who has ended the production of social housing at target rents in the future? Who has brought about the slashing of ‘supporting people’ budgets – used to support homeless ex-service personnel amongst others – in many areas of the country? Who has promoted legislation that will remove the right of vulnerable ex-service personnel to be rehoused in a social rented home? Like everyone else, in future homeless ex-service personnel are likely to be offered a letting in the higher-cost, insecure private rented sector.
It pays to be careful when you see a Tory waving the flag. In all likelihood they will be up to no good.
Labour Housing Group, Socialist Health Association and Unite the Union are organising a Conference on tackling the housing and health divide, to take place in London on June 13 2011.
PRESCRIPTION FOR A HEALTHY BRITAIN
Speakers are
Alison Seabeck MP – shadow housing minister;
Karen Buck MP – shadow welfare reform minister;
Dr Stephen Battersby – President, Chartered Institute of Environmental Health;
Angela Mawle – Chief Executive, UKPHA
Costs (includes lunch) £50 for statutory or commercial organisations, £25 for voluntary organisations and individuals, £12 for members of LHG or the Socialist Health Association. Unfunded organisations or individuals please contact SHA.
Speakers are
Alison Seabeck MP – shadow housing minister;
Karen Buck MP – shadow welfare reform minister;
Dr Stephen Battersby – President, Chartered Institute of Environmental Health;
Angela Mawle – Chief Executive, UKPHA
Costs (includes lunch) £50 for statutory or commercial organisations, £25 for voluntary organisations and individuals, £12 for members of LHG or the Socialist Health Association. Unfunded organisations or individuals please contact SHA.
Bookings through SHA at http://www.sochealth.co.uk/confs/Booking.php
Categories
Crossroads or Dead End?
Before Blue Labour there was Red Tory. And the think tank ResPublica, directed by the original Red Tory Philip Blonde, has just published an important report which they claim sets out ‘a progressive future’ for housing associations (HAs).
ResPublica says that “At the Crossroads” is a radical new vision for HAs in which they would take on a much wider service role, bringing the big society themes of mutualism, localism and community ownership into the housing debate.
To be fair, the report is well written and well-researched and has a lot of interesting things to say about the work housing associations already do in communities, with some excellent examples of innovative work providing local services, supporting and funding community organisations. I like the idea that HAs should declare a ‘social dividend’, but the rest of it is scarcely new. There is no trend analysis of how community investment by HAs has developed over the years (slowly and often backwards) or of the retrenchment that is going on now. It doesn’t properly consider the example of care services, a key role that HAs have taken on where there are huge cuts in many areas currently. It argues a good case for the rationalisation of stock, devolution of management, and improvements in tenant engagement and control, but this is also a well worn path.
The report gets more challenging in its discussion of governance and the options for community control, arguing that associations that adopt new forms of community accountability, especially through active shareholder participation, should qualify for further deregulation, claiming that they would be ‘set free’.
Despite trying to be unremittingly positive about the coalition’s policies (and failing), the report is deficient on several counts. It acknowledges that coalition policies will cut development, but it has virtually no analysis of the role of HAs in providing homes for people in housing need, which is of course their primary purpose for being. It is hopelessly optimistic that HAs would be transformed by extending shareholding, not recognising that shareholders have few rights and little power, especially as Boards invariably control large numbers of proxy votes at AGMs.
I can see the model working, indeed would welcome it, for smaller or geographically based associations. I would welcome mass membership of such organisations, the much wider development of mutuals, and a huge extension of tenant influence. But it ducks the challenge posed by the least accountable and most problematic HAs – the very large associations who own a major proportion of the stock, work in dozens and sometimes hundreds of council areas, and are hugely complex finance-driven organisations. It is not just a matter of devolving management, the financial centre would always retain control. They would have to be broken up and I can’t see that happening, especially as some are hell-bent on becoming plcs not community organisations.
The form of deregulation that the report says should be on offer to HAs that adopt the community model is also extremely dangerous. Organisations that are community influenced or indeed community controlled can fail just like others can, they embody large amounts of public resources and should be subject to external regulation to ensure they are meeting their purposes and maintaining efficiency and probity. Good organisations should welcome good regulation and not see it as red tape or some unfortunate additional cost. Localised tenant scrutiny is a good thing but it is open to manipulation and has no chance of working unless a lot of resources are thrown at it. It is not a substitute for external regulation. The history of HAs is full of chief executives who talked a good service until the inspectors called and revealed the reality.
It is also important to look at what ResPublica mean by HAs being ‘set free’. Localisation of rent setting. No thanks. Use of flexible tenancies. No thanks. More flexible use of historic ‘recycled’ grant. No thanks. Converting existing homes to flexible tenancies. No thanks. These are not freedoms, they would amount to tenants giving away their rights.
It is hard to predict what will happen to HA finances under the new regime. Those that will build anything anywhere because they are little different from private developers may see rising rents and more cash to spend, but they are the least likely to give themselves over to community control. Others foresee less development and therefore a reduced ability to spread their overheads, leaving less money to spend on anything but the basics. If the money isn’t there, the community extras will gradually be stripped away and no amount of big society coalition-speak will make any difference.
Categories
Reform or privatise?
Our guest blogger Monimbo assesses the Government’s chances of achieving ‘cuddly privatisation’.
One side effect of the coalition’s troubles in persuading people about their NHS reforms is that they also seem to be having second thoughts about wider ‘reform’ of public services. Cameron signalled in February that he wanted all public services to be open in principle to outside competition. But Francis Maude, in a leaked memo, has now said this would be ‘politically unpalatable’. Instead, the government now apparently contemplates a sort of semi-privatisation, where services will be run by cuddlier voluntary bodies, mutuals and social enterprises, rather than the less-cuddly Serco or Capita.
This, to put it mildly, seems to show confused objectives. The one virtue of the NHS proposals was that they were crystal clear in their goal of providing bigger opportunities to private health suppliers – perhaps too clear from the viewpoint of trying to convince the public to accept the reforms. Cameron’s Telegraph article in February seemed to show a similar desire, surrounded of course by much talk about the big society and freeing services from the ‘grip’ of state control (if someone needs to have a grip on public services, shouldn’t it be the state?).
Now two things have happened. One is that the public service reform white paper has been postponed. The other is that, according to the leaked memo, in the white paper the government won’t take ‘the political risk of fully transferring services to the private sector with the result that they could be accused of being naive or allowing excess profit making by private sector firms’.
So now what seems to be on offer is half-privatisation, which is presumably judged to be more acceptable to the public. While this is possibly true, is it achievable? Both in the NHS reforms and what is allegedly proposed for public services generally, the government seems to be unaware of or to be ignoring the EU procurement rules. These come into play if a service is put out to tender, rather than being run in-house as a normal part of central or local government. There is nothing discretionary about them: they have to be applied, unless (as in housing, for example, with ALMOs) the service is to be run by a company still owned by the public authority. There are exemptions for small contracts, but it’s not permitted to split what otherwise would be a big contract into multiple small ones to get round the rules. The rules are set out inUK law which itself is based on European law.
The effects on housing are, as yet, even less clear as we wait to see whether new rules will be imposed on local authorities and, within them, on council housing services. Given that the government has imposed a tight timetable for council housing finance reform, any further imposition on councils would be unwelcome, to say the least. Ironically, housing associations (presumably unaffected by the latest proposals) have themselves complained about the bureaucracy associated with EU procurement rules.
Either the government is being disingenuous about its real plans for public services, or it thinks it can achieve something that in practice looks impossible: cuddly privatisation. It seems to think that this will both drive down costs and make services more user-friendly, and as usual it has a handful of examples (the one in the memo is apparently a mutual called the Sandwell Community Caring Trust) that seem to be prove its point. But of course they don’t: all they prove is that a particular solution works in one place, not that the same approach can be used for services as diverse as supplying driving licences or collecting taxes (two of the examples given in the leaked memo).
Once again we seem to be on the brink of public service ‘reform’ whose end result is likely to be full privatisation.
One of the tragedies of the last Election and the coming of the coalition has been the way the LibDems have felt it necessary to stand by every government policy even if it wasn’t in the coalition agreement and even if it totally contradicted what the Party said before.
So previously decent people like Andrew Stunell, who took on a Ministerial role at Communities and Local Government, and Steve Webb, who did the same at Work and Pensions, have frequently had to defend the indefensible. Sometimes, it must be said, they have done it with the fervour of converts.
Collective responsibility in government makes it inevitable that people argue for, and support in public, policies that they privately disagree with – you only have to read any political diary to see this happen again and again. With a coalition you would expect people to show more consistency with their previous statements in opposition, and for more disagreement on policy to be expressed publicly. That surely is the only way that the junior partner in a coalition can preserve their separate identity and their integrity.
The conventional wisdom is that the local Election results in England tell us that the electorate has punished the LibDems for breaking promises made at the Election. I think the electorate are also saying that if we are going to vote for Tory policies we might as well vote for the real deal and not the pretend ones. That’s why a share of the LibDem vote seems to have gone Tory, bolstering their position.
The LibDems are the human shield, but the Tories are still the real enemy. A collapse in the LibDem vote will not help Labour to win the next Election, especially if a lot of LibDem voters get a taste for voting Tory instead.
Realistically, the LibDems are stuck with the coalition but they can and should assert their own identity more vigorously and contradict the Tories more openly. That’s where housing comes in.
It was depressing to watch LibDem members voting with the Tory Whip on the Bill Committees looking at both the CLG’s Localism Bill and DWP’s Welfare Reform Bill. If they had combined with Labour on specific amendments, they could have forced a rethink on some of the crazier and more damaging policies – policies that were not in the LibDem Manifesto or the coalition agreement.
If those opportunities have now passed, there will be others in future. It would do the LibDems a lot of good to rebel against items in the Welfare Reform Bill such as the total benefit cap, the underoccupation penalty, the linking of housing benefit to CPI rather than RPI and so on. When the Localism Bill goes through its next stages, LibDems could vote against 2 year tenancies and 80% market rents and they could tell the government that they will vote against the Bill as a whole unless funding is switched into social rented housing rather than the So-Called Affordable Rent product. None of these actions would bring the coalition down but they would in my view force the government to backtrack on some of their more unpleasant policies. And the LibDems might get some credit, even on Red Brick.
I suspect secretly many LibDems would quite like the chance to stick two fingers up to Pickles and Shapps and to Duncan Smith, the real villains. But in the cold light of the election results, such enjoyment may also the only route back to a respectable share of the vote.
Council housing has a rich history. It transformed the housing conditions of millions of people. It owed its origins to a small number of visionary pioneers. In a special post, Steve Schifferes recalls the life of a pivotal figure, John Wheatley.
John Wheatley, a leader of the “Red Clydeside” group of Labour MPs in the 1920s, was a key figure in the development of housing policy in the UK, and the architect of the 1924 Housing Act which built nearly 500,000 homes in the interwar years and put council housing on a firm financial and political basis for the next 50 years.
At a time when the very concept of council housing is under unprecedented attack, it is useful to look again at Wheatley’s legacy.
Wheatley’s concern about housing stemmed from his own impoverished background as the son of an Irish miner in the Lanarkshire coalfields. Wheatley himself went down the pits at age 12, and lived in a one-room terraced house with his eight brothers and sisters, parents, and lodgers. The children all slept together in a bed that was rolled out at night. There was only a communal toilet and water had to be hauled from a common tap. Wheatley later described the degrading conditions of such housing in his pamphlet ‘Mines, Miners, and Misery’, where he blamed the mine owners for dehumanising their workforce.
Wheatley managed to escape from the pits through self-education and eventually managed to become a successful businessman, setting up a printing firm which printed religious calendars and local papers. His financial success allowed him the freedom to carry out his political activities without interference, and he was able to subsidize the printing of leaflets and the organisation of meetings.
Wheatley had not started out as socialist but as an Irish Nationalist, and was a leading member of the United Irish League in Glasgow before he joined the Independent Labour Party in 1906. Wheatley was also a devout Catholic, and his first act was to set up a Catholic Socialist Society, to convince the Irish Catholic community that there was no incompability between religion and socialism. He ran foul of the Catholic establishment in the City, and in 1912 an angry mob converged on his houses to burn him in effigy for his heretical beliefs – an event he watched with equanimity from his front porch.
Wheatley soon became active in local politics, serving as a councillor for Shettleston, and when it was amalgamated with Glasgow, as leader of the Labour group on the City Council. Glasgow had the worst housing of any major UK city, with the majority of its population living in unheathly one or two room tenement blocks with little sanitation. Death rates for the poorer wards were very much higher than in the affluent West End. And housebuilding had virtually ceased as the “housing famine” increased, putting pressure on accommodation and rents.
From the outset, Wheatley argued that only the government could supply the answer to the housing problem by building reasonably priced housing for workers. He sought to capitalise on the successful activities of the Glasgow City council to help subsidise the cost of building such housing, proposing that the surplus from the municipal tramways be used to build “Eight pound (per year) cottages for Glasgow citizens.”
What transformed the housing issue in Glasgow was the First World War. As a major munitions centre, Glasgow’s population expanded rapidly with an influx of workers to the shipyards and armaments factories. The result was a squeeze on housing, especially affecting existing tenants whose husbands were in the armed forces. The ILP under Wheatley – despite its anti war stance – began agitating over the evictions of servicemen’s wives, calling the landlords the “huns at home.” By October 1915 they had built a mass movement, led by women, of rent strikers who prevented evictions and marched on the sherriff’s court. When the workers at the Parkhead Forge (led by a Wheatley ally, David Kirkwood) threatened to go on strike to support the rent strikers, the government conceded and introduced rent control throughout the UK for the duration of the war.
Wheatley himself was always clear that rent control was a temporary measure due to the failure of the private rented sector, and the real answer was the provision of state-subsidised housing. In 1922 he was elected to Parliament, and in 1924 he had a chance to put his ideas into practice when he was appointed Minister of Health in the first Labour government.
There had already been two failed attempts to involve the national government in the provision of housing after the war – the Addison Act in 1919, which aimed at providing “Homes Fit for Heroes” but fell victim to the Geddes Axe and was cut by the Coalition Government as too expensive. In 1923 Neville Chamberlain introduced a housing act designed to subsidise private sector provision, but little housing was built.
Wheatley built the foundations of his housing policy carefully, first working to gain an agreement between builders and the building trades on the expansion of the apprentice system to ensure there was the workforce to expand housing production. He also sought agreement with building materials suppliers to limit any price increases, and carefully consulted the local authorities. Under Wheatley’s plans, local authorities would receive long term 40 year subsidies to build council housing under municipal control with a guarantee against any losses. Wheatley aimed to eliminate the housing shortage in ten years, with house building rising from 135,000 per year to 450,000 houses per year in the final year of his plan. Wheatley aimed at a high standard of housing suitable for skilled workers and available to all, “homes not hutches” as he called it.
Wheatley fell out with the Labour leadership under Ramsay MacDonald over his attitude to the 1926 General Strike, and due to his left wing views was not reappointed in the 1929 Labour government – and remained a fierce critic of its orthodox economic policy in the face of the growing world economic crisis. He died in 1930, just before the Labour government fell and the pound was devalued.
MacDonald joined a new National government dominated by the Conservatives. That government abolished the Wheatley Act as too expensive and returned to a policy of slum clearance with its emphasis on the rehousing of “slum dwellers” in houses and flats of lower quality. This led to a number of rent strikes by existing tenants, who objected to having their rents increased in order to subsidize the rents of the new tenants, who at that time could not afford council housing.
Wheatley’s legacy lived on, however, through the post World War II expansion of council house building – and council housing became the basis for Labour’s rise to power in the major urban centres.
Steve Schifferes is Professor of financial journalism at City University. Formerly a producer at London Weekend Television and a BBC journalist, he also worked at Shelter, the National Campaign for the Homeless.
Labour Housing Group, Socialist Health Association and Unite the Union are organising a Conference on tackling the housing and health divide, to take place in London on June 13 2011.
PRESCRIPTION FOR A HEALTHY BRITAIN
Speakers are Alison Seabeck MP – shadow housing minister; Karen Buck MP – shadow welfare reform minister; Dr Stephen Battersby – President, Chartered Institute of Environmental Health; Angela Mawle – Chief Executive, UKPHA
Costs (includes lunch) £50 for statutory or commercial organisations, £25 for voluntary organisations and individuals, £12 for members of LHG or the Socialist Health Association. Unfunded organisations or individuals please contact us.
Bookings through SHA at http://www.sochealth.co.uk/confs/Booking.php
Categories
Waiting for the Barbarians
We don’t often delve into the world of poetry on Red Brick – a bit of Burns prompted by a literate Scottish friend is all I can recall. But I was struck by references to a poem by the C20th Greek poet CP Cavafy in a recent speech by Julia Unwin, head of the Joseph Rowntree Foundation.
The poem ‘Waiting for the Barbarians’ was written in 1904, the same year that Joseph Rowntree wrote his founding document for the three Rowntree Trusts. Julia interprets the poem like this:
“Cavafy describes a town threatened by barbarians, where fear of what is to happen closes down the small town. The orators stop declaiming, the poets stop writing, people hide away and the marketplace empties. The barbarians are coming and there is no point in any creativity, any beauty, and any values. No point in enterprise. No point in education. But the poem concludes, once the word has come that there are no barbarians: and now what shall become of us without any barbarians? These people were some kind of a solution.
“It seems to me that the biggest risk we face is to see the outside world as so frightening that we allow it to paralyse us, and therefore step back from our historic role of speaking truth to power, and making sure that the social contract for the 21st century is one that allows us to describe clearly the social good that JRF and JRHT were established to promote.”
Joseph Rowntree himself, in his founding memorandum, stressed the need to look beyond ‘superficial manifestations of weakness or evil’ and to direct more thought and effort into searching out ‘their underlying causes’.
There are lessons to be taken from this as Labour cranks up its policy-making machine. Especially in housing – Rowntree himself took a big interest in the land question, an issue that has never gone away – Labour could suffer from a poverty of ambition due to the sheer scale of the housing problems that will have to be addressed. As Labour surveys the huge and seemingly irreversible changes being brought in by the Tories, it risks policy paralysis because of the dominance of the deficit in political debate (housing will never be tackled without huge expenditure of capital, which implies borrowing).
Unfortunately this time the barbarians have made it into town, but there is strong resistance. And they won’t be in charge forever – today they will lose many more council seats, next May they will lose London. The challenge for all of us in housing is to grab Ed Miliband’s blank sheet of paper, apply our collective creativity and values (less sure about beauty) and write a whole new housing chapter that really does go beyond the superficial manifestations to tackle the underlying causes.
May 3, 2011. Today is the deadline for housing associations to submit their ‘offers’ to the Homes and Communities Agency about what homes they might build over the next four years. Islington Council in London has thought long and hard about its strategy for delivering affordable homes. In an exclusive article for Red Brick, Councillor James Murray, Executive Member for Housing at Islington, sets out the borough’s plan.
Today marks the latest stage (and by no means the final one) in attempts by housing associations and others to steer a course through the government’s new ‘Affordable Rent’ programme. This programme’s headline has been known for a while: that housing associations would be allowed to charge up to 80 per cent of market rent on new build homes and a percentage of their relets. But teasing out the practicalities and implications of how this works in practice is taking a lot more discussion.
And in London, the acute implications of rent levels being set at 80 per cent of market – particularly in the inner-London boroughs and particularly for family-sized properties – have inspired months of discussion between London boroughs, the Homes and Communities Agency, and housing associations operating in the capital.
As part of this discussion, many London boroughs have set out their initial positions on ‘Affordable Rent’. In Islington, our position has focused on how we can respond to the concerns we have about the difficulty of using ‘Affordable Rent’ to address housing needs in our very high value borough.
We believe a different model is more appropriate for Islington. We are asking housing associations to work with us and use grant from the local authority – in the form of public land at discounted rates and capital from our new homes bonus – rather than grant from the government’s main ‘Affordable Rent’ programme. In return for this, we ask that housing associations build homes at social rents.
We believe that this is the best way to tackle our housing crisis in Islington. Like many London boroughs we have thousands of overcrowded families, and several hundred who are severely overcrowded (lacking two or more bedrooms). It is clear that tackling this means prioritising more family homes for social rent.
Since the election in May, 2010, we have prioritised a new council home building programme that means we will be on-site for over 100 new homes this year. Alongside our council-owned stock, we want to continue to work with our housing association partners.
In Islington we have a strong relationship with a number of housing associations. Through historical links, stock transfers, and new build projects, housing associations have played and continue to play a vital and positive role in Islington’s affordable housing stock.
We want this relationship to continue, and we believe that our plan for social rent with local authority grant will be the best way to enable willing housing associations to continue to build the kind of homes we need.
It goes without saying that the 80 per cent of market rent ‘Affordable Rent’ properties would be completely unaffordable in Islington. Our social rents are currently between 30 – 35 per cent of market rent, and so this would represent more than a doubling of the current levels.
Allowing properties to be developed at 80 per cent market rent would mean the new tenants either face an enormous rent hike or a deep benefits trap. Those not on benefits may decline to move into a new flat in future – even if doing so would relieve overcrowding or reduce under occupation – because of the unattractiveness of higher rents for new build properties. And for those on benefits, the looming prospect of caps makes the outlook uncertain and grim.
Some have suggested allowing 80 per cent market rent on, say, one-bed properties, and offering a rent level less than 80 per cent on the larger family dwellings. This may work in some places, but we do not believe it works in Islington. Our planning policy is explicit that we need the family homes rather than new one-bedroom flats. Our current council-owned stock is over 40 per cent one-bed properties – we are in fact piloting a separate programme of selling certain one-beds through shared ownership and using the capital raised to build new family homes.
So our priority in Islington has to be family homes at genuinely affordable rents. With our well-known high property prices in Islington, we believe that social rents, offering close to a level playing field with council rents, are the right level for this.
That is why we have said we will support schemes from housing associations that offer homes at social rent, and that are subsidised where necessary through our grant in the form of public land or capital. We have a pipeline of sites identified from public land – enough land for over 500 homes immediately, with several hundred more being looked at for the future. And our decision to dedicate almost all the borough’s new homes bonus to new home building means this year we can offer £1 million capital grant.
We have been pleased by the positive reaction from a number of housing associations to our plans. We are currently in negotiation with one of our housing associations on the details for a new scheme that would be the first under the new regime to offer social rent with land subsidy from the borough.
Our model will not be appropriate for allLondonboroughs – just as the ‘Affordable Rent’ model is not appropriate for Islington. But although it is self-evident that our position is outside the government’s main programme, we are committed to working with willing housing associations to make this work for them and for those in our borough with the most acute housing need.