#Lab16: Axe the Housing Act Fringe

I am still catching up on posts about this year's Labour Party Conference. On the Monday evening of conference I was a UNISON speaker at the "Axe the Housing Act" fringe with Unite Assistant General Secretary, Steve Turner (seen speaking in photo), Salford Councillor, Peter Wheeler, and Eileen Short from Defend Council Housing.

To be clear the mood of this meeting was very angry about what is seen as the failure of Housing Associations to take on the Government over "Right to buy" and "Pay to stay". Councillors and activists from across the country at the fringe condemned this "betrayal".

Steve gave a lively and passionate speech about how this Act will spell disaster for working people on low incomes already in social housing and present day overcrowded and homeless families who desperately need homes. Peter spoke about the Act being a further attack on the deprived communities that he represents, many of whom live in appalling conditions and should have access to good quality, secure and affordable council homes. 

Eileen went through the Housing and Planning Act provisions, pointing out what could happen when social rents rise to market rates for workers on below average incomes, Councils are forced to sell off their properties to pay for the Right to Buy discount for Housing Associations and the disastrous consequences from giving tenants only short term and insecure tenancies.

A huge problem is that no-one really knows how the act will be actually implemented.

The Government have not yet issued regulations and guidance. This does give us campaigning opportunities since they will have to return to Parliament to do so.

I spoke about the need for there to be a coalition of residents, unions and the Labour Party to defeat the Act.  Many UNISON members are relatively low paid caretakers, porters, school cooks, admin officers and teaching assistants who will be caught out by "Pay to stay". They face massive and unaffordable rent increases. UNISON will be surveying its members to find case studies to illustrate what we believe could be many thousands of workers forced to move and leave their homes.

Present and future generations will be cheated out of possible Council homes since these homes will have to be sold off to pay for the Tory General Election bribe of Right to Buy for Housing Associations.

Finally, I asked everyone to understand that this is a political issue. Tell your friends, relatives and neighbours that the housing crisis is a political crisis. The reason why you or your son or your daughter cannot find a decent, affordable home is because of the political decisions made by this government. The only way we will solve this crisis is by supporting a government that makes a political decision to build more affordable and decent homes of all tenures. We must never, ever forget this simple truth - politics matter.

Hat tip photo Glyn Robbins

"Expensive exercise in futility’ Tory plans to evict tens of thousands over "Pay to Stay"

Hat tip to a hard hitting post in "Red Brick" seen below about the Tory plans to evict tens of thousands of working council and Housing Association tenants and their families.

This plan to means test all social tenants will cost millions to administer and result in many including the self-employed, teachers, factory workers and nurses to be thrown out or forced out of their homes.

"Spot the lies in this justification by the government of its pay-to-stay plans: ‘It’s simply not fair that hard-working people are subsidising the lifestyles of those on higher than average incomes’. Aside from the fact that it implies that social tenants aren’t hard-working (how else would they be earning more?), the two outright lies are that they receive taxpayer subsidies and that it is only those on above-average incomes who will pay more.

In fact, all but the lowest ten per cent of earners will be within or very close to the pay-to-stay threshold, because DCLG have been forced to set a very low starting point (£31,000 outside London, £40,000 within) in order to increase the projected income from the scheme. And of course, the government never misses a chance to refer to social tenants as ‘subsidised’, even though those on slightly higher incomes with little or no dependence on housing benefit are among the least subsidised householders in the whole housing market.

Red Brick makes no apology for saying ‘we told you so’ on pay-to-stay since we were among the first to draw attention to the risks. Back in 2011, when first mooted by Grant Shapps, it would have applied only to so-called wealthy people who choose to live in council houses and whose combined earnings came to over £100,000. It was of course aimed at people like the late Bob Crow, who earned £145,000 and had the temerity to live in a housing association flat. In response to widespread criticism that, if set at that threshold, the scheme would cost far more than it would generate, DCLG shifted the starting point downwards.

Red Brick predicted four years ago that this would be even more of a bureaucratic nightmare, since it would draw all tenants into having to declare their incomes and any changes to them. This point is now confirmed by Southwark council, who say that means testing tenants is an ‘expensive exercise in futility’ that could cost authorities millions to administer. If it has to be done, they want HM Revenue and Customs to do it for them.

And in any case, the extra red tape could now generate only £75 million annually, according to the LGA, rather than the £365 million that the government projects. This would add less than a paltry 0.8% to rental income, before admin costs are deducted, meaning the scheme could potentially produce no net income at all. As Jules Birch has pointed out, the government’s own assessment indicated that (at least in the first year) admin costs could be as high as £65 million, and Southwark’s warning shows that in practice this is very likely an underestimate, especially given the increasing variability of household earnings among those on modest incomes.

Even if the scheme does produce a small surplus, in a travesty of the principle that council housing is now self-financing, the money will have to be repaid to government. When council housing bought its financial independence in April 2012 by paying £7 billion to the Treasury, the government said this meant councils would ‘keep all the money they receive from rent’ and for tenants that ‘the level of rent you pay will continue to be a decision for your council’. It took barely a year for the government to issue the consultation paper which broke both these promises.

There are plenty more arguments against pay-to-stay too. It will be a disincentive to precisely those people who have jobs that pay modest salaries and who might want to try to earn more. It will encourage more tenants to exercise their right to buy, at which point of course they really will get a massive subsidy to help them buy their house, of a size unavailable to other first-time buyers. And it will lead to the further residualisation of social housing, eroding the mixed communities which were until recently an important aim of housing policy. As Natalie Bloomer commented on politics.co.uk, social tenants are now penalised for having too many bedrooms, penalised (by the benefits cap) if they don’t have jobs, and will soon be penalised if they do. The message to social housing tenants is: ‘If you don’t work, we’ll punish you. If you do work, we’ll punish you’. And as evidence of how struggling households will suffer, the Guardian has helpfully compiled some tenant stories of what the scheme’s consequences might be.

Fortunately, opponents of this daft policy appear to have an ally, someone who says that ‘while we continue to help the worst off we will also be focused on the millions of people for whom life is a struggle and who work all hours to keep their heads above water.’ She (and that’s a clue) has set up a powerful working group that will aim to make ‘life easier for the majority of people in this country who just about manage’.

Yes, it’s Theresa May, whose newly stated policy aims appear to run counter to those of the pay-to-stay scheme, and it’s Sajid Javid, the communities secretary, who joins her on the new working group. Ditching pay-to-stay would be an excellent no-brainer for the group when it first meets. After all, ending it would cost practically nothing while saving the government from a potentially embarrassing policy failure.

Newham UNISON AGM 2016: Right to Buy and Pay to Stay

Last Friday I was a guest speaker at the UNISON Newham Local Government branch AGM in East Ham Town Hall. I spoke about the Housing Bill which is currently going through the House of Lords. I was there as a Housing Worker and UNISON Regional Council Officer.

Gloria Hanson (2nd left) and Kim Silver (3rd left) had been re-elected unopposed as Branch Secretary and Chair.

There was a really good presentation first by Thompson Solicitors (left) on "How to win a personal injury claim and how the union can help". After I spoke, UNISON Regional manager Vicky Easton gave an update on the Trade Union Bill.


Before my speech I asked how many people present had heard about "Pay to Stay" and only about half put their hands up. I then asked how many were Council or Housing Association's tenants and again about half put their hands up.

This is really frightening. Leaving aside for the moment that the Government is stealing property belonging to hard pressed Councils to pay for its right to buy discount election bribe for Housing Association tenants (and London will be used to pay for discount in Councils all over the Country that has sold or transferred its housing stock)

What tenants do not understand is under "Pay to Stay" if they have an household income of £40k per year in London (and £30k elsewhere) their rent may double or even treble! Since they will have to pay market rents for their homes. In London this will mean that two NHS nurses earning £20k per year would have to pay up to an incredible £12k extra per year for their home.

In the Q&A there was an interesting discussion about what politics actually means and why there is apathy amongst some union members even if government policies have a huge impact on their lives.

I said what many people don't realise is that politics is all about choices. The current government has made a political choice to double or even triple the rents for millions of workers. They made this choice because they ideologically believe in the "market" and everyone should pay the market rate. If you don't think that this is right then you should either support another political party who opposes it or just pay up and don't whinge about it. Your choice!

Extending the "Right to Buy" to Housing Associations and "Pay to Stay".

"Pay to Stay" seems to be finally making the news. This is the speech I made at the UNISON London regional AGM this month, while moving my branches motion on this and "Right to buy". The motion was passed unanimously and will go to the UNISON national delegate conference in June.

"Council, John Gray, speaking as a delegate from Greater London Housing Association branch but who is also a Community NEC member, moving motion 4, on extending the right to buy to Housing associations and the so called “pay to stay”.

Council, I have always suspected that these modern day Tories don’t like, don’t understand and don’t care about working class people but their current plans for social housing certainly proves it.

The Tory plan is simple, it is to make future generations pay for their pre-General election bribes, on extending the right to buy by stealing homes from Councils and making them sell these already scarce and inadequate resources, on the open market to pay for it.

Let us be very clear here. At a time of chronic housing shortage. The Tories are going to make Councils sell their homes, their stock to pay for this discount for Housing association tenants? This cannot be right.

London is most at risk from this. Since it seems, we will be forced to sell our London Council homes to pay for the discount in other parts of the country where there is no Council housing, since they have already been sold off or transferred their homes to housing association. Since they have no Council housing they have nothing to sell.

Council, make no mistake, The Tories are coming to London for your homes and those that should have been let in the future for your children.

This also means that while a number of existing Housing association tenants may feel they have no choice but to buy and take on huge mortgages and communal repair risk, it will mean that their children and everyone else's, will have even less of a chance of obtaining a social home in the future.

Of course many tenants will simply not earn enough money to buy a home in London regardless of discount and will not be allowed a mortgage.

Not only this, but the so called “pay to stay” scheme, which will be compulsory for all Council tenants and probably compulsory for housing associations tenants, will result in double or triple or even more rises in their rents. If you or your family household income is more than £40,000 per year (or £30,00 out of the capital) in London (remember family income would be if you and your partner both work or have grown up children who work) you will have to “Pay-to-Stay” full market rental rates to stay in your home.

This could mean your rent for a 2 bed room flat in inner London increasing from £150 per week to as much as £600 per week or more.

If you don’t pay for “pay-to-stay”, be under no illusions, that you and your family will eventually be evicted and could be thrown on the streets.

Council, we have to oppose and campaign against this attack - and all the other Tory attacks on working people.

We shouldn’t really be that horrified or surprised about all this, since this what Tories do when they are in power.

We have to make the case that secure and affordable housing is a basic human right and an absolute duty of the state to make sure their citizens are decently housed.

Council, please, not only support this motion but join us and campaign together against this recipe for housing misery for our members now and in the future.

Council, I move. 

Evidence from the UNISON Housing Associations Branch to the Select Committee

"We are a London-based branch of the national trade union UNISON, which organises workers providing public services. 

We organise over 3,000 workers across Greater London who are employed by housing associations and are recognised by most of the G15 housing associations as well as a number of smaller housing organisations. 

We welcome the opportunity to submit evidence to the Communities and Local Government Select Committee and have consulted with our members and activists in order to compile this response.

Background
·                     Last year housing associations were assured that they could plan ahead for the future with a new rent increase model of CPI inflation plus 1% increases per year. Instead they have now been instructed to apply a 1% cut in rent every year for the next 4 years. This could mean that some will go bust since they modelled an increase into their business plans when they took loans and bonds to pay for new building. There is an advantage to social tenants in receiving a cut in rents but not if it leads to a net decrease in the social housing stock. 

·                      The reductions in rents will also inevitably mean threats to jobs and services. Housing associations have been for many years been providing additional services to residents such as floating support to vulnerable tenants, job training and youth clubs. These will all be at risk. 

·                     Housing costs in London are high and decent housing is scarce. The cost of non-socially provided housing in London outside is unsustainable, with private rents averaging £1,500/month, and the average cost of buying a house at around £480,000 (nearly 20 x average wages). Extending the Right to Buy to HA tenants is therefore likely to be extremely popular with London residents; for many this may be their only hope of every buying a property. For some inner London boroughs the number of properties purchased under Right to Buy is over 60%.

Implications of extending Right to Buy to housing associations

·                     Extending Right to Buy will also mean some housing associations going to the wall especially if the government does not fully refund any discount (which will be over £100k in London). Others will have financial problems with paying off early fixed rate loans (such as LOBOs) and meeting their convenants, even if they get the full value of any sale. 

·                     Many housing associations currently have charitable status and many of them have benefited from money or gifts of land in the past. This could cause problems with their status if they sell property in this way. This is a real threat to the existence of many associations and means that after years of real-terms pay cuts or stagnation our members may find themselves out of work altogether.

·                      If local authorities have to sell their housing stock in order to fund the discount then that will be not only unfair but financially disastrous for them and their tenants. The 3 year settlement on council housing finances has also been ripped up.  

·                     It has been rumoured that instead the government will take away the remaining subsidy for new investment and use it to fund the discount. This will pretty much end the supply of new homes at sub-market rents in expensive areas such as London. 

·                     Even if the government does fully refund the cost of Right to Buy (which has not yet been clarified) then since new homes costs more to build than existing properties there will still be an overall reduction in social homes. With high land prices and opportunities for development in inner London low, selling off housing association properties through Right to Buy would mean a net decrease in the numbers of social housing properties across the capital, as properties are sold and not replaced.

Changes to benefits

·                     The proposed maximum benefit cap of £23k per family in London and £20k outside will not only result in more evictions and rent arrears especially for tenants with children. It will also make it harder for landlords to let their empty properties to residents on waiting lists since many will not be able to afford the rent due to the cap. This is crazy.

·                     The so called "pay to stay" will mean that tenants who earn over £40k in London (and £30k outside) will have to pay "market rates". This will be unworkable unless housing associations are given the powers to demand income details from tenants with criminal sanctions, which will of course, go down badly with all tenants. Changes to benefits such as the bedroom tax have already increased the workloads and stress levels of our members, who do a difficult job at the frontline of the government’s austerity regime.

·                     If "pay to stay" does go ahead and means that renters are charged full market rent they will be effectively forced to try and exercise the right to buy in order to stay in their homes. Even if you are on £40k per year salary in London, you will find it difficult to get a mortgage even with a discount – the Islington and Shoreditch Housing Association recently advertised a property in Hackney for sale under a supposedly ‘affordable’ shared ownership scheme for £1,000,000. Market rents will be completely unaffordable in parts of the city. This will increase social cleansing leaving large parts of London available only to the very rich.

·                     Inside Housing recently showed that around 40% of council houses sold under Right to Buy are currently being rented privately. There is no reason why this pattern should not be repeated in the housing association sector, meaning that private landlords will benefit from homes built through public subsidy. Furthermore, many of these properties are occupied by tenants who are claiming housing benefit – a transfer of wealth from the state to private landlords which would be completely unnecessary if these properties were still owned by local authorities.  It is this transfer of housing benefit to private landlords which has led to the Conservative government claiming that the welfare bill is unsustainable and to their cuts to the social security system – a problem that could be solving by relieving the pressure on housing both in London and nationwide.

·                     It is also possible that the certain individuals and rogue companies will be looking to make deals with vulnerable tenants into "loans" to enable them to buy their property in order to get hold of the £100k discount.

Sustainable future
·         The UNISON Housing Associations branch believes that the housing crisis, particularly in London, will not be solved and indeed will be worsened by extending Right to Buy to housing associations. As workers we feel this will remove or dilute the social aspects of our work and lead to increased stress, job losses and the forced closures of many associations. As housing workers and as London residents we do not feel this is the way to solve the housing crisis.

·         We call for a programme of mass house-building in the capital, both for social rent and for private ownership. We also call for greatly increased regulation in the private rented sector to give tenants greater protection and security of tenure, and for rent controls to be reintroduced and rents capped at a “Living Rent” set by an independent commission.

·         We note that Right to Buy for housing associations was defeated in the 1990s following a broad based campaign against it. The UNISON Housing Associations branch will continue to campaign against Right to Buy in housing associations and for a fair and sustainable solution to the housing crisis.

The Future of Housing Associations & Social Housing

Yesterday we had the news that Genesis, a large Housing Association is to stop building homes for rent following the recent Government budget.

Today, Inside Housing magazine reports that other housing associations are seeking advice on how to deregister as social landlords and become completely private bodies. By doing so they think they can avoid the recent measures.

This is a watershed moment. Not only for housing associations but for all social housing including council stock as well.

The Communities and Local Government Select Committee is looking into the future of Housing Associations and there is a call for written evidence by Friday 28 August 2015. I am sure that UNISON will be sending a submission and I will also be consulting with my branch (Greater London Housing Associations Branch) on making a response.

The key threats are :-

• 1% cut in rents that Housing Associations can charge for the next 4 years when only last year they were told that they can plan ahead assuming a 1% increase plus inflation for the next 10 years. This could mean that some will go bust since they modelled an increase into their business plans when they took loans and bonds to pay for new build. Good news for Housing benefit and tenants but not if it means they get Rachman & Sons as their new landlord. 

•  The reduction in rents will also inevitable mean threats to jobs and services. Housing associations have been for many years been providing additional services to residents such as floating support to vulnerable tenants, job training and youth clubs. These will all be at risk. 

• The proposed maximum benefit cap of £23k per family in London and £20k outside will not only result in more evictions and rent arrears especially for tenants with children. It will also make it harder for landlords to let their empty properties to residents on waiting lists since many will not be able to afford the rent due to the cap. This is crazy.

• Extending the Right to Buy will also mean some housing associations going to the wall especailly if the government does not fully refund any discount (100k in London). Others will have financial problems with paying off early fixed rate loans (such as LOBOs) and meeting their convenants even if they get the full value of any sale. 

• Housing associations are at the moment "charities" and many of them have benefited from money or gifts of land in the past and this could cause problems with their status if they sell property in this way.

•  If local authorities have to sell their stock in order to fund the discount then that will be not only unfair but financially disastrous for them and their tenants. The 3 year settlement on council housing finances has also been ripped up.  

• It is rumoured that instead the government will take away the remaining subsidy for new investment and use it to fund the discount. This will pretty much end the supply of new homes at sub market rents in expensive areas such as London. 

• Even if the government does fully refund the cost of Right to Buy (which I doubt) then since new homes costs more to build than exisitng properties there will still be an overall reduction in social homes.

• The so called "pay to stay" will mean that tenants who earn over £40k in London (and £30k outside) will have to pay "market rates". This will be unworkable unless Housing Associations are given the powers to demand income details from tenants with criminal sanctions, which will of course, go down badly with all tenants. I thought this government was against means testing? 

• If "pay to stay" does go ahead and means that renters are charged full market rent they will be effectively forced to try and exercise the right to buy in order to stay in their homes. Even if you are on £40k per year salary in London, you will find it difficult to get a mortgage even with a discount. Market rents will be completely unaffordable in parts of the City.

• I have no doubt that the certain individuals and rogue companies will be looking to making deals with vulnerable tenants into "loans" to enable them to buy their property in order to get hold of the £100k discount.

All in all, the sector is facing a crisis and a threat to its future but we have been here before. Right to Buy for housing associations was defeated in the 1990s following a broadbased campaign against it. The government is vulnerable to pressure on housing. We must campaign against these changes.

Even Tory MPs must understand that if government grant is taken away from building new homes and rents reduced then the current grossly inadeaquate supply of housing will get even worse. The leader of Tory Westminster Council, Phillipa Roe, said it would wipe out "swathes" of social housing and leave it unable to house residents in need.

The issue is not just the future of housing associations or council housing but where will the elderly poor, the disabled, the unemployed and the low paid live in the future? In workhouses, in "barracks for the poor" or in British versions of Les banlieues slums?