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When averages don’t have to be so mean

With the Tories on the proverbial housing policy ropes, Labour must continue to focus on progressive policies that result in more support for households at lower parts of the income distribution. To roll with the punches Labour must call for an increase in the Local Housing Allowance (LHA) to the median 50th percentile, scrap the discriminatory age restrictions to the Shared Accommodation Rate (SAR), and put those most in need at the heart of any emergency coronavirus plan and comprehensive vision for the future.

Shelter have announced we have a public health crisis on top of an already existing housing emergency. This is because millions of tenants, whether they be private, social, or intermediate, are presently not working due to the fact society has lost confidence in our ability to move around without catching a killer infection. This has happened in the middle of an existential housing emergency that has been significantly exacerbated by the Tories over the past decade.

Vicky Foxcroft, Lewisham Deptford MP, brutally exposed this in the Commons in Julylast year:

“Local housing allowance is supposed to cover the lowest 30% of market rents, but research by Shelter found that that is not possible in 97% of England. For example, in south-east London, local housing allowance will cover only the bottom 10% of rents. We have a housing crisis across the country and local housing allowance is not fit for purpose. Does the Minister agree that it must be raised to reflect the true cost of renting?”

House of Commons | Hansard | 01 July 2019 | Local Housing Allowance

Virendra Sharma, Ealing Southall MP, also explained how a staggering number of members in his constituency had a very real risk of homelessness as they struggle, month after month, to make up the shortfall between their rent and the level of LHA.  

For example, a single young person under the age of 35 in Ealing Southall would have found just 1% of shared properties affordable with the SAR available in 2018. A family with children looking for a two-bedroom property would find the LHA rate covered just 6% of the private market. This would mean they would have to find an extra £150 per month to afford a property within the cheapest third.

In 2019, 88,330 households in England found themselves living in temporary accommodation, a figure tragically up from 48,010 in 2010. That is equivalent to the size of a town like Grimsby, Guildford, or St Albans often having to live in bed and breakfast accommodation in the first instance, until something more suitable can be found.

Figure 1: Total Number of Households in Temporary Accommodation 31st December 2019

The Tories have at least attempted to unwind the horrendous consequences of their own bad policy through reforming “no fault” evictions, removing Section 21 of the Housing Act 1988, and making changes to the grounds for possession. Yet much of this will be a mere sticking a plaster over what are much deeper structural issues, with pressure on the housing benefit system having been exacerbated from years of weak wage growth and domestic price rises

The severity of the impact on households’ living standards has been to an extent normally associated with a severe recession, which has left the huge shortfalls between LHA and the true cost of renting one borne by the poorest.  The result has left the country ill-prepared to face such a crisis, particularly as it braces itself for the biggest economic slump in over 300 years. This was not what Labour had it mind when it introduced LHA back in 2008 following evidence based research.

After an initial three-year pathfinder Labour set the LHA rate at the median 50th percentile of the local private market. Shared Accommodation Rates were applicable for those under 25, which meant that single claimants under 25 were forced to share with others rather than live on their own. It had an aim to give a flat fair allowance for the local area and enabled people to have choice. LHA was argued to increase incentivisation to work, namely through greater clarity of in-work benefits, and most importantly it was simple.

LHA was slashed in 2011 to the 30th percentile by the Coalition government, with the Liberal Democrats crooning it in, like mice singing in the cats choir. A year later LHA rates were delinked from market rents and increases there forth capped by CPI. An uncaring cap on benefits was further introduced in 2012 following George Osborne’s famous Conservative Party conference speech where he asked “where is the fairness?”.

Three years later George Osborne thought it was still not fair enough and pushed the benefit cap even lower in his Summer Budget of 2015.  He brought this alongside an extension of SAR up to the under 35s, with a 5-year freeze to LHA announced in 2016.

Turns out George’s idea of “fairness” leaves poor families with mounting debt and pushes children into deeper poverty, with many families financial circumstances having worsened following the introduction of the policy. In large part having been left with an average gap between rent and housing benefit of £3,750 per year.

That said, evidence from Crisis identified that investing in LHA rates to cover 30% would prevent 6,000 households from becoming homeless over a three year period. It would also lift 32,000 households out of poverty, which would include 35,000 children. Off the back of this research, and vociferous campaigning by Labour Party politicians the Tories buckled, and ended their very own LHA freeze one year early.


Announced in January 2020 under The Social Security (Coronavirus) (Further Measures) Regulations 2020 the Government stated it would relink the LHA to the 30th percentile, which was set at the same level seen in the 2019 Labour Party manifesto.

But was this rate high enough?

The Liberal Democrats thought not. Their manifesto included a call to increase LHA in line with average rents in an area. Though fell short on whether this was the mean average, or the more robust to statistical outliers mean average. In any case nobody was going to believe that commitment with the Liberal Democrats having been the hand maiden for such cuts in the first place.

Yet their policymakers did have a point, as a move back to the average rent level for LHA is one backed by credible research. In August 2019 Crisis demonstrated a higher cost benefit could be achieved if LHA was restored to the 50th percentile rate in areas where the rates fall behind rents the most, and to 30th percentile everywhere else. The research also gave a nod to restoring all the rates to the cheapest half, which would bring the highest overall benefit. In effect restoring LHA to the progressive median average, not seen since the last Labour government, would be more equitable and more cost effective.

This begs the question why previously Labour only sought an increase to the 30th percentile when, under the previous Labour Government, the median average left fewer people choosing between eating or paying rent. Shelter have recently joining the ranks call for an increase in housing benefit to cover the cost of average rents and to lift of the benefit cap.

Labour’s recent announcements chime well. Thangam Debbonaire’s emergency five-point plan echoed such calls through laying out increases to LHA rates and an improved provision of Universal Credit. Shadow Secretary of State for Work and Pensions, Jonathan Reynolds, also called for urgent action on social security. Through a suspension of the benefit cap and removing the savings and two-child limit to Universal Credit.

At least now renters can take comfort both Labour and the experts are on their side.

Sadly, the Tories will be difficult to move on from the below average LHA rate and age discriminatory SAR policy, which will remain unfair and incredibly impudent towards those on the breadline. Yet Labour must continue to be bolder than its Tory counterparts on housing. For it to work effectively for a just society, it must call for an increase in LHA to the median 50th percentile rate, not the mean, and in the interest of fairness push for the abolishment of age discriminatory housing benefit criteria.

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

Co-Editor of Red Brick. Non-Executive Director of Housing for Women. Labour Housing Group, Executive Committee. Exploring innovative new models in housing with care in the for Guild Living. Previously Investment and Finance Manager at Quintain and Thor Equities.

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Stunell's subterfuge

Andrew Stunell seems such a nice man, and he’s a Methodist Lay Preacher to boot.
But an observer of his speech to the LibDem Conference yesterday might be forgiven for thinking he was stretching the truth just a little.  Given the LibDems good track record in
supporting social housing over many years, and their general embarrassment over the housing policies of the government, I can only assume he was struggling to find anything to say that shows that the LibDems have some influence over Pickles and Shapps.
He started off in the right territory by calling housing the ‘Cinderella’ policy.  “It is one of the most important issues facing the entire country”  he said. “The record of previous governments on social housing was nothing short of a disgrace……Social Housing just wasn’t important enough for the last government.”  Now I agree that far too few social homes in particular were built under Labour, but surely Mr Stunnell realises that you can’t build more social homes with a 60% cut in funding?
But then comes the subterfuge.  “That’s why we’ve introduced the Affordable Rent programme…. we’re on course to build 170,000 new social homes in the next four years…… thanks to Liberal Democrat influence in government, we have a social housing target that we can and will meet…. ..the first government to deliver an increase in social housing during its term of office for more than thirty years.”
So affordable rent is the new social rent.  Despite the fact that they bear no relation to each other at all.  The rents are much higher, up to 80% of market rent, and the terms are not secure.  Not only are new homes to be let at ‘affordable rent’ levels, but many re-lets of existing social rented homes are going to be as well.
Boris Johnson is the expert at smoke and mirrors in terms of housing statistics.  He is
very clever about including almost everything built under the much abused term ‘affordable’.  But even he hasn’t had the gall to claim that affordable rent and social rent are the same thing.  At least not yet.

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Know any Lords?

The Opposition was defeated and the hand-wringers in the Liberal Democratic Party have done nothing yet.  So the Localism Bill (see here and here and here) went through the House of Commons and now heads off to the House of Lords.  There it will meet a few people who know a lot about housing, and it is time for them to take a firm stand.
There is encouragement from what a few LibDem MPs said during the second reading debate that a concerted attempt to remove or at least dilute some of the housing aspects of Bill could have some success. 
For example,

  • LibDem MP Annette Brooke said that she wanted “to put on record my concern about the two-year tenancies…… The Liberal Democrats want this issue to be revisited in the House of Lords.  It is incredibly important to get it right….. as we pass this Bill to the other place, we do so with a lot of questions.”
  • President of the LibDems Simon Hughes MP said he was “very supportive of the comments of my hon. Friend Annette Brooke, who expressed her concern not that the Government are not listening, but that they may need to go further in the House of Lords to accommodate the points made by those of us who for years have had a passionate concern for social housing and council housing.”
  • And another LibDem Dan Rogerson set out a principle that shows what the debate is all about: “The key to social housing is longer-term tenure, which gives families, and particularly those with young children, confidence that they have a home for their family for the future. That is why we need to focus on the fact that social housing is meant to be not for short-term crisis accommodation but for family homes…… I should like a great deal of reassurance in that regard from those on the Treasury Bench before I join the Government in the Division Lobby” (for Third Reading).

So now is the time, if you know any members of the House of Lords, to get writing and lobbying to make sure that this nasty Bill doesn’t come back to the Commons without some substantial amendment. 
Combining those that take the Labour Whip, concerned LibDem Peers and the many cross-benchers who take an interested in housing, there are enough votes to force the government into change.
Despite my many reservations about the House of Lords, forcing changes to the Bill would not be an undemocratic step.  None of the Bill’s housing policies appeared in the Lib Dem Manifesto.  Apart from housing mobility, none appeared in the Conservative Manifesto, which promised to “respect the tenures and rents of social housing tenants”.  Apart from HRA reform and empty homes, none made it into the coalition agreement.  This Bill is borne of thoroughly undemocratic practice: the British people were not told any of it at the Election and should not have to put up with it now.

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What the LibDems should do next on housing

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.

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Localism Bill holes homelessness safety net

<strong><span class="has-inline-color has-accent-color">Steve Hilditch</span></strong>
Steve Hilditch

Founder of Red Brick. Former Head of Policy for Shelter. Select Committee Advisor for Housing and Homelessness. Drafted the first London Mayor’s Housing Strategy under Ken Livingstone. Steve sits on the Editorial Panel of Red Brick.

Most people will never get to know about the work that many MPs put in, in quality and in quantity.  But anyone following the Committee stage of the Localism Bill would be impressed by the hard graft put in by the key members of the Labour opposition, their analysis of the issues and their knowledge of the subjects under discussion. 

The Bill covers such a wide range of topics and working out the ramifications of over 200 specific clauses and more than 20 schedules is a herculean task.  As of 10 March there had been 24 sittings of the Bill Committee, and the leading Labour members have attended just about all of them, making dozens of amendments and speeches.    

I have been following the debate on the homelessness sections of the Bill – see my previous post for more background here.  The government’s policy of allowing councils to discharge their homelessness duty by obtaining a private rented sector letting for the applicant drives a coach and horses through the homelessness safety net, legislation that is arguably one of the legs of the welfare state.  The whole debate can be read here

On 10 March Nick Raynsford made a powerful speech on this section of the Bill – unfortunately to no avail.  It traces the history of the homelessness legislation, how the Tories have always opposed it, and how the Lib Dems have always supported it – until now.  Raynsford was of course heavily involved in achieving the passage of the original homelessness legislation in 1977.  Here are a few highlights from what he said.

“Homeless people are not different from other people. There are some who have special problems, but the vast majority of homeless people are those who have fallen on difficult times. They may have lost their home through a variety of different circumstances, and they are exposed to all the horrors of not having a home. Above all, they need help and support to get back on their feet and to move back into the mainstream and normal life.

“That is what brought me into working in housing in the late 1960s. I was of the generation that saw “Cathy Come Home” and was horrified by the revelation in that powerful programme of just how badly we as a society treated homeless people in the 1960s. It was a revelation. I was not aware that old workhouses were still being used as accommodation, or that families were routinely split up and husbands were not allowed to go into accommodation for homeless families—only the women and children could go in, and the husbands were split away. There was no proper safeguard for homeless families or people. That led me not only to work in the voluntary housing sector, but to campaign in the 1970s for a law that would give hope and security to homeless people and help the process that I have just described.

“That process involved helping homeless people through the difficulty and back into the mainstream of society, rather than allowing them to be stigmatised, marginalised and punished, as was the case before the Housing (Homeless Persons) Act 1977. That Act was very important, and I helped Stephen Ross, the Liberal MP for the Isle of Wight, who bravely undertook to promote that as a private Member’s Bill in 1976, a time when he could have easily adopted other causes that might have been more popular in his constituency. I know from talking to him at the time that he was determined to do something hugely important for society, not just take on something that would be popular and help him to win a marginal seat in the ensuing general election, so I pay huge tribute to him. He did so with the support of the then Labour Government, which had a wafer-thin majority, so Liberal support was important. The two parties worked together, and that legislation was the product of Labour and Liberals working together to give rights to homeless people.

“I am sorry to say that the Conservative party at the time opposed that legislation. It voted against it and fought it literally clause by clause through this House. However, it got onto the statute book and made a difference. It changed attitudes towards the homeless, and it ensured that provision for homeless people was brought into the mainstream of housing provision, rather than being something on the margins that separated them from the rest of society. That continued throughout the 1980s, until in 1996 a Conservative Government sought to weaken the safeguards for homeless people. In Opposition, we in the Labour party fought that unsuccessfully, supported by the Liberal party—I think they were the Liberal Democrats by then—who were absolutely at one with us in defending the 1977 Act against the Tory Government’s attempt to weaken it. I welcomed that support.

“In 2000-01, when I was Minister for Housing and Planning, I had the privilege of introducing the Homes Bill, which reinstated the principal safeguards of the 1977 Act which had been weakened by the 1996 legislation, and also introduced the concept of local authorities developing homelessness prevention strategies. That Bill did not reach the statute books immediately—it fell because of the 2001 general election—but it was re-introduced by my successor immediately after that election, when I had moved to another responsibility, and made it on to the statute book. That was passed by a Labour Government with the support of the Liberal Democrats. In fact, I well remember the right hon. Member for Bath (Mr Foster), who led the Opposition for the Liberal Democrats in the Committee that discussed the Homes Bill in the run-up to the 2001 general election. He was pressing us to go further, rather than saying we should weaken in any way our commitment to homeless people.

“This is what really saddens me about what is happening now, because we are seeing here a coalition of Conservatives and Liberal Democrats weakening a piece of legislation that should be a proud monument to parties working together to advance the prospects of disadvantaged people and help those in difficult circumstances to get  back on their feet. I am delighted that the hon. Member for St Austell and Newquay has—to a degree—maintained the honourable tradition of his party in seeking to safeguard the position of homeless people. I hope when on Report he will continue to do so with a commitment to voting for his views, rather than simply articulating them.

“I say to this Committee, and to all Members of this House, that this is a retrograde step. This is weakening the safeguards for homeless people…. it will expose more people to a position where they are subject to a dependence on benefits; where the work incentives are to very large degree taken away by punitive rates of taxation because of the withdrawal of benefits; and where they do not have the security to be able to rebuild their lives because they live in insecure lettings where they cannot be certain they can stay from one year to the next and continue to occupy it as their home, providing they pay the rent and meet the tenancy obligations. This is a sad, retrograde step, and I believe that the House will ultimately regret it and will come to realise that if it passes the clause, and the Bill, it will have made a serious mistake.”

Localism Bill Clause 124 3 March 2011