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Setting the right housing targets will be critical for Scotland

Unlike in England, where the new Government has denounced housing targets as Stalinist in another sign of an uneasy relationship with its own 2019 manifesto (300,000 a year were pledged), the question of how many homes Scotland needs and where to put them is a live policy debate. The National Planning Framework 4 (NPF4), expected to be laid before Parliament this year, will set out for each local authority a minimum requirement of the number of homes for which land should be made available. 

This important decision has taken on added salience because of the cost of living crisis. High rents and massive mortgages have left us little capacity to absorb economic shocks, whether external such as energy costs or the self-inflicted hike in mortgage rates following the budget announcements. Ensuring sufficient land is available for housing is crucial to bringing housing supply and demand into better balance and thereby improving affordability. It is also critical in ensuring there are enough shovel-ready sites to realise the Scottish Government’s commendably ambitious target of 110,000 new affordable homes between 2022-2032.  

Housing targets are partly a practical necessity (aligning housebuilding with infrastructure) and partly a democratic middle ground which balances competing interests. These attributes may not endear them to those seeking ideological purity, but they chart a course through undesirable alternatives. Targets are a compromise between a libertarian free-for-all, where people can build wherever they choose, and an exclusive, communitarian beggar-thy-neighbour approach, where those fortunate to live near undeveloped land in and around cities and towns are able to exercise an absolute veto over its use. The former fails to recognise people’s desire to shape, debate and influence what happens in their local area. The latter fails to give voice to families seeking a home of their own, which meets their needs and aspirations, and most of the population who consider we are facing a housing crisis.  

The housing crisis, while national in nature, must be solved on individual sites across the country. Without a clear target which local authorities are required to meet there will be a high risk of vocal local objectors successfully lobbying Councillors to prevent housebuilding. While those in need of a home make their voices known at a national level (evidenced by the prominence of housing issues in political debate) they do not, and cannot be expected to, lobby in favour of specific developments. Objectors and those commenting on planning applications play a valuable role in the process but without housing targets representing those in need of a home there would be a clear democratic deficit in planning for housing. 

Because land for housing is rationed in this way, unlike the inputs for the other of life’s essentials, it is critical that targets are as accurate as possible with sufficient tolerance for changes over time. The risks of setting targets which are too low are profound – placing upward pressure on affordability and leaving local authorities chasing scarce land at high prices to deliver their affordable housing. 

The Scottish Government is right to set out targets in NPF4. However, the figures in the 2021 draft are based on a flawed default methodology. The defaults have been changed in response to evidence submitted by some local authorities. However, these changes are haphazard; some local authorities put forward detailed, considered evidence such as households surveys, others submitted limited information probably due to pressures on resources. Remarkably, two of the least affordable local authorities in the country, East Renfrewshire and East Dunbartonshire (where house prices are 10 times average earnings) successfully lobbied for targets below the already low defaults.  

There are two components to the Scottish Government’s methodology. Household projections are added to an estimate of households in existing need to give a target. Uncritical reliance on household projections leads to unsatisfactory housing outcomes being projected forward as Professor Glen Bramley has observed “If household growth has been artificially suppressed by the undersupply of new housing, then basing future need calculations on those lower growth figures will by necessity under-estimate that need”. This is acknowledged by the National Records for Scotland who produce the projections. The past decade or more has seen worsening affordability and housing outcomes we should be planning to improve upon, not perpetuate. No attempt has been made in draft NPF4 to quantify the additional homes needed in areas where houses are less affordable and have become less so over the last decade (below).

Image: Average house price multiples of workplace full-time earnings in 2021 (left) and change since 2011 (right). Using Registers of Scotland Average House Price data and ASHE full-time earnings by workplace location

The definition of existing need only recognises it in its most acute form; those in temporary accommodation and households which are both overcrowded and concealed. Concealed and overcrowded households are where two or more families live in one home without sufficient rooms. This is an exceptionally high bar missing many other forms of urgent need such as overcrowded households, adults and adult couples living with their parents, on waiting lists, in unsuitable or physically unfit homes and those in unaffordable homes. It is not fit for purpose and will underestimate the extent of housing need. Household surveys are needed to better understand existing unmet need.

The Scottish Government has been less bombastic than the UK Government in its growth ambitions, but its Strategy for Economic Transformation is clear and aims “to deliver economic growth that significantly outperforms the last decade, so that the Scottish economy is more prosperous, more productive and more internationally competitive”. Draft NPF4 should be changed to provide targets which are fit for purpose, fully understand existing need and address affordability challenges. These will be essential in providing the homes Scotland needs to deliver housing outcomes which significantly outperform those of the last decade and take pressure off household budgets. 

Joe Larner is an Associate Director at Holder Planning based in Edinburgh, with around 8 years of experience focused on housing projects of all tenures in Scotland and England.

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We can’t end homelessness without sweeping legal reform

The four nations of the UK have some of the most generous legal entitlements for people facing homelessness. The legacy of Cathy Come Home is the Housing (Homeless Persons) Act of 1977. Since then more than four million households have been helped into alternative housing because they qualify for this almost unique addition to a western welfare state.

Over the years, this settlement has been changed and expanded. Devolved government in Scotland and Wales has charged progress with the former abolishing the idea of non-priority homelessness between 2003 and 2012, and the latter legislating for homelessness prevention in 2014. The landmark Homelessness Reduction Act (2017) introduced prevention formally into law in a similar way in England.

This seemingly progressive settlement hides a multitude of sins. Under the surface it is largely a battleground between homeless ‘applicants’, and local councils who are charged with using the legalistic framework as a rationing tool for scarce housing stock and social support.

Should you find yourself homeless in 21st century Britain here is your challenge:

Are you someone with the right immigration status? Living and working in the UK for years, paying taxes for decades even, is not a guarantee, especially if the state tells you that you have ‘no recourse to public funds’.

Are you at fault for your own homelessness? This bizarre concept of ‘intentionality’ exists to stop the mythical scrounging masses from claiming falsely, but if for example you have rent arears, as thousands do through no fault of their own, then bad luck.

Are you from the local council area you are applying to? Do you have uninterrupted proof over a period of years? If not, you’re out.

Are you in one of the stated ‘priority need’ groups? This one has been seen off in Scotland, but everywhere else you have to have dependent children or qualify under one of the other limited descriptions. If your situation isn’t on the list, then your last shot at this one is appealing to the council to deem you in some way ‘vulnerable’.

Let’s say you haven’t fallen foul of one or more of these – and here is the real kicker – what if the council has nowhere to offer you anyway?!

The system is quixotic. Cash and housing strapped councils are spending their time fighting off legal challenges that their decisions were unlawful. People are sent hundreds of miles to live in squalor because local social housing has been converted or sold, or because the private rental market is too expensive. Private consultants scurry about the system, offering new innovations in gatekeeping it from applicants to grateful housing officers.

The pandemic has brought this murky system into the light. When Louise Casey sent her now famous ‘Everyone In’ email to English councils at the end of March, she basically told them to forget the last 43 years of litigious argument. The instruction on a Wednesday evening to get everyone off the street by the weekend was an instruction to do the right thing and ignore the rules. And in Scotland and Wales, the pandemic responses went even further, with councils given more generous funding settlements and directives from ministers about the public health emergency.

These efforts have been the exception that proves an important rule – that if you offer legal routes out of homelessness for some, you make it inevitable for others.  

For a few weeks the numbers on the street went dramatically down, and gave the public a glimpse of a future without rough sleeping. Politicians have seen that decisive intervention can have dramatic and positive results. And as an unnamed Conservative politician said in the Times last week: ‘My worry is that we’ve shown it is possible to get everyone off the streets during the Covid crisis so if homelessness goes up now people will know it’s as a consequence of government’s actions.’

So, what now? How should we build on the extraordinary efforts of the last six months? And how do we apply the short-term successes of reductions in rough sleeping to the wider homelessness response?

Our first principle should be to move from incomplete legal entitlements, to a universal model of guarantee that anyone facing homelessness is helped to avoid or quickly resolve it. The current model is cruel in its legally sanctioned denial of help to thousands every year. But it also labels people. You are ‘the homeless’, you should be grateful for what you get, and if you get nothing, soon the labels keep coming: single homeless, entrenched, complex, service-resistant, etc.

Let’s abolish the legal tests that create and sustain homelessness.

Second, the Everyone In initiative was a fleeting glimpse of assertive state action on homelessness in England. Louise Casey has come and now gone again, officially moving on in late July, leaving the UK government rudderless once again. Devolving the problem to the myriad responses of each local council is fundamentally flawed and we know all too well what that leads to – with every measure of homelessness in England going up in the last ‘decade of disaster’, under the cloak of decentralised but declining resources.

Governments in Scotland and Wales have recently begun an overhaul of their homelessness systems. This rediscovery of assertiveness and vision is desperately needed in England too, and a blueprint is written in the Crisis plan for ending homelessness. There are solutions ready and waiting, from scaling up Housing First, to the case for social housing at scale, PRS reform, etc. And the good news is that financially these reforms easily pay for themselves over a 10-year period.

The current government target of ending rough sleeping by the end of the parliament is the first of its kind. Rough sleeping is of course the most damaging for of homelessness. But in order to reach this goal, we need a consensus across all political parties on wider basis.

Since 1977 the legal system has designed in homelessness. This must be reversed, and replaced with a universal guarantee of housing support, and then backed by an assertive government strategy to make homelessness in all its guises a thing of the past.

<strong><span class="has-inline-color has-accent-color">Matthew Downie</span></strong>
Matthew Downie

Director of Policy and External Affairs, Crisis. Matt, who joined Crisis in 2014, played a leading role in the introduction of the Homelessness Reduction Act – one of the biggest reforms to homelessness legislation in England in a generation – as well as the publication of ‘Everybody In: How to end homelessness in Great Britain’, a landmark body of work showing how homelessness can be ended for good. He was awarded an MBE for his services to tackling homelessness in June 2019.

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Post COVID-19 we must build back better

Commentators from the International Energy Agency, to Green NGO’s as well as a number of leading economists, such as Nick Stern, are calling upon Governments to align their climate change policies with investment in a Post COVID-19 economic recovery by ‘building back better’. As with the Green New Deal this can cover a very broad range of policies and politics. The challenge is to make it relevant, practical and politically achievable.

Many of us have long argued the case for a national programme to retrofit the nation’s homes with practical measures to improve their energy efficiency, cut fuel bills and lift households out of fuel poverty. Now fresh work is showing that to get spending back into voters’ pockets from Blyth to Bridport we should invest in just such a programme.

A new paper from the climate change focused ‘insider’ policy group, E3G, is the latest to highlight:

“Retrofitting buildings to high energy efficiency standards can quickly and reliably ‘level up’ employment opportunities creating 150,000 jobs to 2030 and deliver household savings of £7.5 billion per year that translate into consumer spending”.

‘Investing in a resilient net zero UK recovery’. E3G. May 2020

This spending would, as Labour highlighted at the last election, represent a very real commitment to improving the UK’s housing stock. The question is how to do it.

The Scottish, Welsh and to some extent the Northern Ireland Government all have structured, tax payer funded, energy efficiency programmes. Only England does not.

Here the Tory led coalition introduced the failed ‘Green Deal’ (which was largely a pale imitation of the ‘Pay as You Save’ scheme driven forward by Ed Miliband’s team prior to the 2010 election). Labour’s ‘Warm Front’ went and, following pressure  from the ‘Big 6’ incumbent energy suppliers, the Conservative Government also dramatically cut the consumer funded ‘Energy Company Obligation’ which obliges energy companies to do at least something to lift households out of fuel poverty.

Scotland has a multilevel, multi-year, £280m programme that includes:

  • Warmworks – A tax payer funded national programme rolling out insulation and heating to vulnerable households in the owner occupied and private rented sector. This includes rigorous standards enforcement across the 29 local contracting firms who carry out the work.
  • Area based, ring fenced, funding to Scottish local authorities to retrofit public sector housing using predominantly local contractors.
  • Low interest loans for owner occupiers and others to commission their own work.
  • An overarching and enforceable target to achieve zero carbon homes including.
  • A (new) legal obligation on Private Landlords to significantly improve the energy rating of their property before it can be (re)let.
  • Retained Building Standards as a local authority function.
  • A distributed network of advice centres with a national call centre to access all the programmes.

In England we need a similarly structured programme that not only harnesses the local knowledge of Councils, but also focus on high quality work, backed by effective, training and easy access to all aspects of the programme. The existing national programmes of the devolved nations could be boosted directly with dedicated Treasury funding.

The Labour Party is building of its commitment to a major programme of home insulation and inviting party members and others to respond to its newly launched ‘Green Recovery’ consultation. It emphasizes that in response to the pandemic

“We also need action to combat the economic crisis that is facing so many communities across our country while ensuring that we take bold and ambitious steps to tackle the climate crisis” it concludes that “The impact of coronavirus will be felt sharply over the coming months and we need to be ready to present our plans to government”.

Labour Party Green Recovery Consultation, National Policy Forum 2020

The Chancellor is reputably looking for ‘shovel ready projects’. Boosting job creating action on thermally improving the nation’s housing stock is just such a project. In England from commit to action on the ground would take about 6 months – in Scotland, Wales and North Ireland it would be almost immediate given their existing programmes.

This is essentially about a practical programme of housing improvement that puts jobs and investment into constituencies across the UK and takes us all a long way towards the UK’s legal commitment to a zero carbon future. It is the proverbial win-win for the thousands who would work on the programme, the climate, and significantly the voters who would see the benefit through a warmer home and lower energy bills for the longer term.

Let’s do it!

<strong><span class="has-inline-color has-accent-color">David Green </span></strong>
David Green

David currently acts as Chairman for Warmworks Scotland, PRASEG – the All-Party Parliamentary Group for Renewable and Sustainability Energy, and is an advisor to Energy Consumers Australia.

He co-founded leading fuel poverty charity National Energy Action in 1981, is the former Chief Executive of the federal Clean Energy Council in Australia, and former Chair of the Mayor of London’s Energy Partnership. He has previously worked for Friends of the Earth and the Housing Department of Newcastle City Council.

He writes for Red Brick in a personal capacity.

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How come Scotland can build council houses then?

Monimbo
Peter Hetherington writes in the Guardian that more than faith is needed to build council houses, and asks why Scotland manages to build almost as many as England when its housing market is a tenth of the size of its southern neighbour?
The reasons are set out in today’s UK Housing Review Briefing, which updates many of the figures in the annual publication and draws attention to recent trends. One of these is that the 32 councils in Scotland built over a thousand houses last year, and may well build the same number or more this year, while English council house building will probably peak at only a little higher than this, before heading back to the miserable output levels of 2-3 years ago.
So why is this? It turns out that the answer is in the spending rules. Scottish councils have several big advantages over their English cousins.
First, they’ve had local control of council housing finances for years, for the simple reason that Scotland stopped subsidising council housing revenue accounts and so the ridiculous ‘HRA subsidy’ system which is in its last year of operation south of the border fell into disuse in Scotland many years ago.
Second, they have had no rents policy for council housing, which may have been an oversight but has had the happy side-effect of low rents which councils can now raise – if they choose to – to pay for new investment.
And third, a quirk in the spending formula by which the Treasury controls Holyrood means that any extra borrowing is counted as what’s called ‘Annual Managed  Expenditure’ (AME) rather than the more tightly controlled Departmental Expenditure Limits (DEL). In England and Wales, the opposite applies.
Even more surprisingly, councils are predicted to soon have the same building potential as Scottish housing associations. This is, of course, because their borrowing is cheaper than new borrowing by associations. It’s counted as public borrowing, though, which doesn’t worry Holyrood but might one day trouble the Treasury if volumes are perceived to get too high.
Even after council housing finance reform in England in April next year, councils will still be restricted in what they can do and won’t be able to emulate Scotland. In theory, English councils can also borrow prudentially, but HM Treasury is placing a cap on their borrowing from April onwards so they won’t be able to use this freedom to the extent they could support from their income. Some will continue building, but most won’t be able to do so on any scale.
There’s a sting in this tale, of course: someone is paying for the new houses and while there is a grant system in Scotland part of the cost falls on rents. So existing tenants are partly paying for the new homes. However, so far there has been no suggestion that Scotland follows England in jacking rents up to 80 per cent of market levels – or anywhere near them. So the pain is probably tolerable and councils must judge that they have tenants on their side.
The odd thing is that it’s in England rather than Scotland that the government is making a big fuss about cutting red tape and freeing up councils to do more. Looking north of the border might be a bit unpalatable since May’s elections, but even so the English housing minister could take a leaf out of Scotland’s spending rulebook.