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Squalor and The Return of Real Capitalism

ITV’s releases ‘Surviving Squalor: Britain’s Housing Shame’ on Sunday at 10:15pm. Unquestionably highlighting some of the most horrific housing conditions endures by people and families living in social housing in the UK. 

Red Brick has long forewarned about the return of squalor. The national scandal that has been the neglect of housing. But as housing associations and local authorities are the only owner operator game in town, is it time for a rethink?

For many, these conditions are everyday norms. The perpetrators are not rogue private landlords, but housing associations and local authorities. And calls for regulatory intervention are falling on deaf ears.

Some of the worst offenders are receiving the most funding

The need for social housing has never been starker. So stark even the Tory Government has made an allocation to fund 30,000 new social homes. Notably following a recent funding announcement under the Affordable Homes Programme. In London, Sadiq Khan has seen £3.46bn distributed. The bulk of the funding is conditional on an emphasis towards social rent.

This funding comes with new conditions attached. These include all new buildings requiring sprinklers and that no combustible materials exist in the facades. Nevertheless, it must be noted that the biggest beneficiary for funding affordable housing in the capital was not a local authority. Instead Europe’s largest housing association, Clarion Housing will receive £240m to deliver 2,000 homes, of which 1,250 are for social rent.

Previous concerns over controversial mega mergers are coming home to roost

Clarion Housing was a merger between Affinity Sutton and Circle Housing Group in 2016. This occurred under the then Minister of State for Housing and Planning Gavin Barwell. Two of the housing associations in the Circle group had chronic problems with its repairs and maintenance services.

Circle had found itself downgraded as a result of ‘serious issues of disrepair’. Nevertheless, the mega merger went ahead. This was despite John Biggs, the Mayor of Tower Hamlets, condemning the lack of local accountability in the transfer to Clarion of Old Ford (Circle). The original stock transfer from the local authority crucially had this as a term in the original transfer agreement, which was completely disregarded.

Highlighting local concerns about the merger, and lack of local accountability, Labour MP for Bethnal Green and Bow, Rushanara Ali questioned the Government. In response, Barwell argued that the housing associations involved believed the merger “will create a more efficient organization”.

Board’s lack tenant and resident representation

Two years after the merger, the now Lord Barwell found himself welcomed onto the board of Clarion Housing. In addition to David Orr, who had served 13 years as CEO of the housing association trade body the National Housing Federation, in addition to Graham Farrant – who has previously worked  for Dame Shirley Porter when the council moved homeless people into asbestos-ridden tower blocks. At present no tenant or resident sits on the board of Clarion Housing.

Red Brick has long argued for the Mayor to undertake a full audit of board membership of housing associations. While not against those with private sector experience, we need to balance this with expertise in social housing, alongside experiences of tenants and residents.

Clarion Housing continues to dodge regulator judgement despite serious controversies

Clarion Housing have been constantly in the news for all the wrong reasons. Not least down to the tireless campaigning of those affected, particularly across London. ITV Political Correspondent, Daniel Hewitt, has been legendary in his journalism. In particular through coverage of the appalling conditions on a housing estate of 500 homes in South London.

It appears too many residents in 2021 are living in squalor. In this situation finding themselves infested with vermin and plagued with damp issues. The scale of the most recent case prompted consideration whether Clarion Housing breached standards by the Regulator for Social Housing (RSH). The RSH had cleared Clarion just three months prior following an investigation into a major repairs scandal 5 years before. That time concerning buildings in Tower Hamlets.

On the 12th August 2021 the RSH curiously once again found no issues, citing there is no “evidence of systemic or organizational failure which indicates a breach of the consumer standards” . Weeks later Sadiq handed them almost a quarter of a billion pounds to go onto acquire and manage more properties. All the while living conditions remain dire for those affected.

But that is only the tip of the iceberg, red tape and bureaucracy in the Housing Ombudsman is holding back a tide of cases

Last November, Clarion featured in another investigation, this time by the BBC, investigating how they manage complaints handling and service charges. To date, further action has been actively delayed by the Housing Ombudsman, giving excuses such as not being able to take it on given the different tenures of those effected within a group complaint. The Housing Ombudsman is the ultimate gatekeeper to the RSH.

Still to this date, both shared owners and social tenants continue to pursue their case with the Housing Ombudsman. Almost three years after originally raising concerns with the landlord. Yet these recent regulatory judgements do not fill them with much hope.

But what does this achieve? Cases with the Housing Ombudsman can take up to in excess of a year to process. Even after having to slog through a complaints process that can be manipulated to take over a year in itself. Experiences all too familiar for those whose landlord is Clarion Housing. Along with other dysfunctional housing associations and local authorities.

For those living in the rat infested damp ridden flats that don’t even break social housing regulations, they are left to despair. For those currently living in temporary accommodation, or those who have been made homeless for weeks on end, after repeated leaks and floods of sewage water, lack of action from the Housing Ombudsman or RSH evaporates any sense of hope.

Clarion Housing Resident, Tower Hamlets 2021
Sector needs to do more to prioritise existing housing conditions

But what is the sector doing to tackle the problem of poor housing conditions? The short answer is not enough. Co-Founder of the Social Housing Under Threat campaign (SHOUT), Tom Murtha, aptly pointed out something did not quite sit right as to why housing conditions were not even on the agenda at the Chartered Institute of Housing’s ‘Housing 2021’ annual conference. This was an event that Housing Minister Christopher Pincher could not be bothered to attend in person. Coupled with Daniel Hewitt’s lack of invitation to speak, as pointed out by Tom Murtha below:

What was on the agenda was housing’s role in health and wellbeing. In addition to this was a panel featuring the RSH’s new Director of Consumer Regulation. Since January 2021 Kate Dodsworth has taken up the mantel. She has also talked about “the road to consumer regulation”, Although called for housing associations to fix their issues now and to “not wait for the regulator to come round in a couple years”.

Perhaps after ITV’s ‘Surviving Squalor’ is released they should come knocking somewhat sooner.

Lacking transparency, Housing Ombudsman statistics are massaged to cover the backs of its largest members

Kate is the former CEO of Gateway Housing, who topped the tables in the Housing Ombudsman own “complaints failures index”. This is despite only having found to be 9 times at fault between 2017/18 and 2019/20. Clarion Housing in comparison were at fault a staggering 129 times.

Determinations by Housing Ombudsman 2017/18 to 2019/20

Oddly, the index weights the number of determinations by how many homes each social landlord manages. In a way, this makes larger landlords appear lower down the rankings, despite having higher total numbers. Larger organisations claim they are more efficient – as aforementioned by Lord Barwell. But if true, bigger organisations should be indexed more heavily based on size. As opposed to the other way round.

In the latest landlord performance data published by the Housing Ombudsman, complaints received on Clarion Housing about complaint handling has seen a 250% increase in 2019/20 compared to 2017/18. Over the past three years Clarion Housing has received 1,899 complaints, of which 42.5% are related to property conditions.

What is not transparent from these figures is the number of tenant’s and leaseholders impacted by the complaints. By way of example, over 500 homes were affected in the ITV investigation, but these are not logged as individual complaints. Nor are they split out by tenure.

Social media is making prevalence of cases harder to ignore

In Channel 4’s ‘Grenfell: The Untold Story’ the poor treatment of residents by both landlord and local politician was all too revealing. It revealed how the then MP Victoria Borwick urged a mother concerned about being without water for days to “take baths with people next door”. This exemplifies the growing sense of the “us and them” society that we know is so deeply corrosive to our cohesion as a nation.

This remarkable footage emerged from a meeting concerning repairs and maintenance. It provides such crucial evidence of the plight put forward by many residents, many of whom are no longer around.

Snippets from this weekend’s ‘Surviving Squalor’ also highlight the ineptitudes of some local authorities too. Chronically ill Mehdi was living with water leaks contaminated with “significant faecal contamination”.

His landlord?

Lewisham Homes – a recent nominee for the Tpas England Awards Shortlist. While TPAS expressed their shame at the conditions some tenants are having to endure, they highlighted that their awards cover a range of categories. Admittedly, not just “managing homes”.

Real capitalism in the interest of humanity can help solve our low-income housing issues

So herein lies Sadiq’s funding conundrum. At present grant can only be provided to local authorities or housing associations. Some of which face reputational damage resulting from serious causes of concern and ESG related controversies.

Under the Labour-led Wheatley Act 1924 we as a country subsidised private builders to create homes for those on low-incomes. If we are to provide grant to the private sector conditional on owner operation at social rent levels, we would enable funding packages to be less reliant on those guilty of such poor management. Instead, we see the lion’s share of London’s funding for example go to a housing association with the most complaint determinations against its name. Clarion Housing.

At present we are dealing with the inability of the country to meet the heavy burdens now placed upon it. Back in 1924 private enterprise had little to no interest investing money in houses for letting purposes. Yet today we see operators indeed willing to invest. Whether this be through the burgeoning Build-to-Rent sector, or the nascent Single Family Rental sector, the local authority and housing association is no longer the only possible investment partner to bear these costs.

At the time, John Wheatley described his socialist housing funding proposals as “real capitalism – an attempt to patch up, in the interests of humanity, a capitalist ordered society”. Yes you read that correctly. The first socialist Labour government knew it had to patch up these interests through what it described “real capitalism”. For this reason, it is not outside Labour principles to fund housing at social rent levels for direct provision by the private sector. Nor has it ever been.

We need to diversify who owns and operates social housing

At present, only Registered Social Landlords can own and operate affordable housing under the eye of the regulator. Often forward funding from housebuilders and developers who do not have a long-term interest in the construction of the property. We have seen Clarion Housing’s own Group Director of Development highlight the “lack of commerciality in the sector”. It comes as no surprise that we see just as many issues with new build social housing, as we do with buildings coming to the end of their life.

In America federal states fund the construction of affordable rental housing for those on low-incomes through conditional tax credits. They provide this to both for-profit and not-for-profit owner operators through its Low-Income Housing Tax Credit (LIHTC) programme. By being sector agnostic both state and federal government drive competition, and thus commerciality, into funding programmes.

We should explore progressive innovative new funding models of low-income rental housing. For those on the left we cannot shun the private sector. We must work progressively with it to provide more options for those in most housing need. This will allow government to be less reliant on some of the worst offenders to deliver housing for those on low-incomes.

The ultimate goal?

To make fewer people have to survive squalor.

<strong><span class="has-inline-color has-accent-color">Christopher Worrall</span></strong>
Christopher Worrall

Editor of Red Brick.

He sits on the Labour Housing Group Executive Committee, is Chair of Poplar and Limehouse CLP, and co-hosts the Priced Out podcast.

He writes in a personal capacity.

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John Wheatley and the Origins of Council Housing

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.