Letting the government off the hook over removal of housing subsidy

Hat tip Redbrick (shame because Dispatches have a good track record)

"With reporter Antony Barnett driving between sites in a flash open top and very sporty white car, trying to link a number of disconnected stories under the disingenuous title of ‘Getting rich from the housing crisis’, the Dispatches programme on housing associations on Monday had the kind of sensationalist style that gives TV documentaries a bad name. I broadly agree with Carl Brown’s comprehensive analysis of the programmes' deficiencies on Inside Housing - principally that the government was totally let off the hook.

Dispatches' Antony Barnett and his irritating sporty white car. (Pic Channel 4)

Executive pay in housing associations is of course an issue – especially large redundancy pay-outs - but the media obsession with it is a pain and rather hypocritical when you look at how much people in the media get paid (the last CE of Channel 4 – a public corporation – received a package of £1m in his last year, and don’t get me started on BBC executive pay). To reduce the motivation for housing association activities – good and bad – to a single driver – pay – is absurd. It would also make a change for the press or TV to take a wider look at people who get rich from housing – the developers, the financiers, the private providers of temporary accommodation and the rest. There is a lot of leakage from residents’ rents and mortgage payments to very rich people, and housing association chief executive pay is only a small part of it.

The programme has been widely condemned in the sector, but a little defensively. The answer to a simplistic attack that you’re doing a bad job is not to simply assert that you are ‘doing a great job, a really great job’ (to quote Donald Trump). Because there is another side to the coin and there are issues that need to more honestly addressed.

Stripping aside the overly-dramatic style of presentation and the crude and untrue linking theme of people 'getting rich', the actual issues selected by the programme should not be lightly dismissed. For example, the Clarion redevelopment of the Sutton Estate in Chelsea has been widely criticised, not just in this programme, estate ‘regeneration’ schemes in general have often led to a major reduction in social rented homes (although more homes overall) and the non-delivery of promises, and the practice of selling hundreds of formerly social rented homes in high value areas at auction is little short of a disgrace even if it has been encouraged by this government. The contributions from Tom Murtha asking if associations have lost sight of their original ‘mission’ to provide homes for the poorest, and from Karen Buck MP about disinvestment in the high value but also high need communities she represents, asked reasonable questions of the sector.

The programme failed to get to the heart of the debate about housing associations. The removal of subsidy by government – the main culprits - has led many associations, and especially the largest ones, to maximise their surpluses to enable them to grow their development programmes and to provide an element of cross-subsidy to keep rents in new homes below market levels. Some councils have done the same thing. Practice varies of course – some associations refused to do ‘conversions’ (whereby empty social rent homes are converted to much higher 'affordable rents' before re-letting), others have maximised the practice – but the bottom line is that surpluses from existing activities have grown. Some of the new homes are being provided by making bigger surpluses from existing tenants, but with virtually no debate about the pros and cons.

Within the new business model, associations have clearly done very well. They have kept housing production going and have expanded their output. They have reapplied large development profits to produce more homes rather than see the money leak out as dividends as it would with private developers. The issue is whether they could have done more a) to oppose the worst aspects of government policy and b) to maintain a bigger flow of homes for social rent even if that meant fewer homes overall. Not all associations have made the same choices and there has clearly been more than one possible outcome. Although we are used to needs analysis for social lettings, I never see a serious assessment of who benefits from the rising proportion of new homes at market or near-market prices. There should be far more debate about the implications of losing so many of the cheapest homes to feed a development programme that comprises more expensive homes.

We should start from the principle that tenants should not be paying – in rent and reduced services – for the government’s failure to provide funding for additional affordable homes. I talk to a lot of people in the business and for several years it was hard to get anyone senior in a big association to talk about tenant services rather than development. At strategic level, housing management seemed to be reduced to little more than a growing source of cash. It was hard to get anyone to talk about social rent – still the only genuinely affordable tenure for people on low incomes – rather than total output and ‘affordable housing’ - often a cover for producing homes that were not affordable at all.

Grenfell changed the terms of the debate, forcing a greater focus on existing social housing and the deal that social tenants get. Groups like CIH and Shelter are reviewing social housing and concluding that providing homes at lower rents for poorer people is a very important policy. Labour has shown the way forward with its Green Paper, and the government’s own Green Paper is due to be sneaked out before the Parliamentary recess. Whether they will put more grant into new social rented homes is the critical thing to look out for. If they do, the way the sector then responds will tell us much more about the mettle of housing associations than how much their chief executives are paid.

"Shifting Housing’s Overton Window"

Another great article by stevehilditch on Redbrick (even though I had to Google "Overton Window")

"It's a sign of a remarkable comeback for social housing that the new CIH report ‘Rethinking Social Housing’ contains few surprises. Only 3 years ago this report would have seemed a radical contradiction of the dominant narrative. It probably would have been attacked for lacking realism and harking back to the long lost 1970s.

Social housing reached its nadir around and after the 2015 General Election. It was unaffordable, past its sell-by date, consigned to the history books as the government and most of the housing industry focused their concerns on ‘the only game in town’, building homes that did not require grant, at significantly higher ‘Affordable rents’ or market prices, pushing forward with policies (right to buy, 'conversions', market sales) that would feed the development programme.

Housing’s ‘Overton window’ - the range of ideas tolerated in public discourse – had become very narrow indeed and those of us who argued for social housing were made to feel oddballs well outside mainstream opinion. So it was that the very expensive National Housing Federation ‘Homes for Britain’ campaign prior to the 2015 Election choked on the words social housing. Joining the newly formed SHOUT campaign for social housing felt like heading upstream without a paddle.

So, what explains the turn-round between then and now, when the government is allocating funds specifically for new social housing, everyone is reviewing and rethinking the purpose of social housing - coming to the conclusion that it is an essential component of a fair and functioning housing market - and CIH feels confident enough to describe it as 'a pillar of the welfare state' without provoking guffaws of laughter?

Here are several possible factors. First, the refusal of tenants, campaigners, many people working at the grassroots in housing, and a few brave housing leaders, to stop banging the drum for genuinely affordable (as opposed to joke affordable) housing. Second, over-reaching by the Tories so their housing policies and the consequent rise in homelessness just confirmed their lack of empathy for poor and disadvantaged people. Third, the advent of unashamedly pro-social housing Jeremy Corbyn to the leadership, which changed the nature of the debate in the Labour Party. Fourth, the general public, who did not obey the rules of the Overton window because they never lost sight of the simple idea that council housing was a good thing – even if they also thought it was subsidised and not for them. And fifth, Grenfell, which changed everything.

The new CIH report reflects a lot of background work with tenants and the sector and demonstrates that social housing is firmly back within the spectrum of acceptable thought. It identifies 3 key themes:

Social housing, its affordability and the security it offers to people living there, are highly valued
It has much wider value by allowing residents to prosper and thrive, through its contribution to tackling poverty, the success of local and national economies, and individual health and well-being
However, there is stigma attached to social housing as a ‘product’ and to the organisations providing it and the people living in it

And so,

"Social housing has a unique and positive part to play in housing people, helping to create thriving, mixed communities, and meeting needs that the market will not. Done right it does great things. But it isn’t always the case that homes and neighbourhoods are well managed and well maintained and it’s important that we own and address this.

"It’s time to reclaim the role of social housing as a pillar of the society we want to be, along with free health care and education – and it must be at the centre of government plans to solve the housing crisis. And, having ‘reclaimed’ the role of social housing, we need to push on – creating an ambitious vision of what a plentiful supply of social housing can do help people thrive in communities that prosper."

Some of the information in the report might surprise a general reader. For example, registered unemployment amongst social housing tenants is only 8%. The vast majority are either in work, retired or unable to work due to physical or mental disability or carers. Homeless people also take up around a quarter of lettings, far fewer than might be imagined.

The report contains a helpful discussion of the question ‘who is social housing for?’ based on a wide range of views from the public and the sector. The answer seems to be that ideally people want the sector to be ‘for anyone’ but that pragmatically it will remain highly rationed for many years to come. Given the vital role that security of tenure plays in enabling people to become established in their neighbourhood and having a platform on which to build their future, it is remarkable to note that there are still widely differing views on whether social housing should be a long term solution or, given scarcity, a short-term, reviewable, stepping stone.

CIH look forward by identifying six areas for further action, with some detailed proposals attached to each - including, for example, a call to suspend the right to buy which might become the headline proposal for the report.

• there should be a new definition of social housing to get away from the current confusion.
• tenants must have a greater voice.
• there should be an increase in the supply of ‘genuinely affordable’ homes.
• everyone should be able to afford a place to call home, with a move towards income-related rent-setting.
• homes and neighbourhoods should be better managed.
• there should be greater efforts to challenge the stigma and stereotyping attached to social housing.

It’s a reasonable agenda. And given the general drift back to accepting the importance of social housing it will be fascinating to see how far the government is willing to go when it releases its Green Paper before the summer recess.

Local housing companies: Good, bad or ugly?

This is a fair and balanced post on Local Housing Companies reposted below and here on Redbrick blog. 

While I understand that Councils have to make up somehow the reduction in Central Government grant by making money my concerns are :-

1. Councils are using up their scarce land resources and planning influence to build homes for non residents at market rents

2. "Only around 10% of new LHC supply will be for social rent" This is completely unacceptable.

3. Councils do not have the development experience or resources to design, build, market and manage PRS homes. Those who do not have any partner are putting themselves at risk of a possible financial disaster.

4. LHCs are usually unaccountable, secretive organisations with no meaningful resident involvement nor subject to any open democratic scrutiny.

Local housing companies: opportunities and concerns

By Ross Fraser

The Smith Institute has recently published the first in-depth analysis of one of the most significant new developments in the housing sector.

Delivering the renaissance in council-built homes: the rise of local housing companies estimates that around 150 councils have set up local housing companies (LHCs) over the last five years or so and that, on the current trend, over half of English authorities will have one by 2020. The majority of the current LHCs are in London or the South East. The LHC model has been adopted by authorities regardless of political control.

What can we learn from the research about the opportunities that LHCs provide? How can we evaluate the likely impact of LHCs in helping to solve the housing crisis? Why do concerns remain regarding the role of LHCs?

What are local housing companies?

LHCs are intended to act commercially for a social purpose. The primary purpose of most LHCs is to directly develop or acquire new local housing supply - whilst making a return for the local authority. Profit that might otherwise go to developers can instead be captured by the authority and recycled to help maintain core services or reinvested in further housing provision.

For some councils, the LHC is intended to complement new provision via the Housing Revenue Account (HRA). For others, LHC development is a substitute for HRA-funded development. For stock-transfer authorities, without an HRA or a housing team, LHCs are an alternative to reopening an HRA.

There are essentially three forms of LHC – wholly-owned by a single authority (the majority), multi-authority owned (such as the North Essex Garden Communities LHC), or a joint venture (JV) between a council and either a housing association or a private developer (such as the Haringey/Lendlease Development Vehicle (HDV)).

The nature of council investment in LHCs varies, but the following approaches are being adopted:

· Using HRA (if this doesn’t conflict with the HRA ‘ring fence’) or general funds to meet ‘start-up’ costs and capitalise the LHC

· On-lending Public Works Loan Board (PWLB) borrowing – at a return to the authority

· Equity investment in the LHC

· Sale or leasing of land

LHCs also offer councils additional New Homes Bonus and council tax. For example, LB Newham expects its LHC (Red Door) – focused on new build for intermediate rent – to deliver an extra £18m council tax (by 2028) plus £17.5m in Community Infrastrucuture (CIL) funding and a direct return once it becomes profitable (within the next 5 to 10 years). Some of the larger LHCs – primarily JV LHCs – have attracted private finance and have established ‘revolving investment’ funds.

Most LHCs are, initially, focusing on developing council-owned land, which might otherwise have been sold to a developer or housing association or developed directly via the HRA. Some are seeking to channel section 106 ‘planning gain’ opportunities, previously offered exclusively to housing associations, to their new LHC.

What new opportunities do these companies provide?

The intention is for LHCs to intervene in local housing markets to compensate for slow or insufficient new supply by developers or housing associations, to undertake specialist provision where this is urgently needed and to disrupt the local private rented sector and in doing so stimulate PRS improvement by offering private lets at higher standards, better terms and greater security.

LHCs are frequently intended to enable authorities to exert a greater stewardship role in place-making. They can undertake new build on smaller sites or in areas currently unattractive to developers and housing associations, with the objective of raising land and property values and making the area more attractive for private investment.

As John Perry of CIH has recently pointed out, “most of the LHCs have been set up since the government reinvigorated the right to buy (RTB), emasculated the HRA and undermined its own self-financing settlement”.

LHC development is attractive because it appears to avoid issues limiting development via the HRA, such as stock loss via RTB, limits on the recyclability of capital receipts from future RTB sales, etc. and controls over borrowing. As LHCs can offer assured shorthold lets, rather than secure tenancies, they enable authorities to offer private rented accommodation at profit.

LHCs are also seen as flexible and dynamic organisations, less constrained by shareholder profit expectations than developers and thus more able to invest counter-cyclically, be flexible over the timing of profit-extraction, ‘flip’ new homes between tenures to meet changes in demand – all whilst acting as a direct instrument of a council’s housing and planning strategy.

What impact might the companies have on solving the housing crisis?

The Smith Institute estimates that, based on current business plans, LHCs could build up to 25,000 new homes by 2022. The scale of ambition varies – RTPI research indicates that some LHCs (notably in rural areas) are planning to provide less than 50 new homes per annum whilst others plan to build more than 1,000 per year within five years.

Provision of 25,000 new homes over five years would be a significant increase on output expected from stock-retaining councils via the HRA. The Smith Institute estimates future council supply at c2,000 homes per year (using DCLG construction statistics) but CIH and the UK Housing Review estimate future provision at c3,000 homes per year (using the more reliable DCLG affordable housing statistics).

However, the real extent of net additional supply is more difficult to determine. Where an LHC develops on HRA land or uses HRA resources or acquires property via section 106, then the new LHC homes will not necessarily be ‘additional supply’ to what, for example, housing association partners might otherwise have delivered.

The area where the ‘additionality’ of LHC provision is least contestable is where it focuses on the PRS. For example, LB Newham set up Red Door Ventures to build 3,158 new PRS homes over the next six years (mainly on council-owned land).

If LHCs can increase PRS provision and change the culture of the local PRS market – by offering higher standards of management and maintenance plus improved security of tenure – this may (in my view) be their most significant legacy.

What ongoing concerns arise from the research?

The Smith Institute takes an overwhelmingly positive approach to LHCs. This is understandable, as the research suggests that LHCs offer councils a ‘triple dividend’ in the form of much-needed extra housing, greater impact in place-making and a financial return to the council.

In any terms, this is an impressive manifesto for LHCs and the sponsoring authorities should be congratulated for their initiative, pragmatism and vision. However, concerns remain about the practical application of the LHC model. Some of these are referred to in the report – others reflect concerns expressed more widely.

· Only around 10% of new LHC supply will be for social rent

The fact that many of the LHCs are in London and the South East reflects the underlying business model of most LHCs – recycling receipts from market sale or revenue from intermediate or market rents – to cross-subsidise ‘affordable’ housing provision. In this sense, LHCs operate exactly like housing associations.

Following this model may boost overall new supply, but Smith Institute research suggests that whilst 30-40% of LHC homes are likely to be ‘affordable’, only around 10% (i.e. between 25% and 33% of the ‘affordable provision’) will be for social rent. Given the cross-subsidy model, it is difficult to see how a higher proportion of social rent can be provided by LHCs.

In its recent report, Building Bridges, CIH estimated that if the housing crisis is to be tackled in a balanced way, around 33% of new supply needs to be at a social rent. Current LHC projections fall well short of that target.

NHF figures show 38,082 housing association completions in 2016/17 of which 12% (4,775) were social rent – 75% delivered using cross-subsidy. Perhaps housing associations are not performing so badly after all?

· Where is the next generation of social rented housing going to be built?

John Perry of CIH has expressed concern that if LHCs do no or very little social rent they may use up council land that might have produced 100% social rent if it had been developed through the HRA. He also points out that by building outside the HRA (where one exists), LHCs are denied the ability to pool rents, thus limiting their ability to dampen rents for new homes.

The provision of council-owned land at less than market value is a vital subsidy towards the provision of social rented housing. So, if scarce council land is being used for LHC development – where exactly is the next generation of social rent housing going to be built?

· Does LHC governance demonstrate an accountability deficit?

As most of the LHCs are still in ‘start-up’ mode, their directors tend to be council officers, often reporting directly to the council chief executive. Some LHCs have also appointed local politicians as directors, but this has been limited by concerns over future conflicts of interest in respect of planning permission.

Whereas ALMOs – an earlier variant of LHC – adopted a transparent approach to governance, involving resident and independent board members, most LHCs have yet to address the issue of accountability.

Reading the Smith Institute research, it appears that only a few LHCs have community representatives on their boards or a formal detailed strategy for community engagement. And, as the Haringey HDV controversy demonstrates, LHCs which are not publicly accountable risk the loss of public and political support.

· What is the risk of government controls over LHCs?

LHC business plans are vulnerable to the risk that the government interferes in the regulatory framework. Senior figures in local government have told me that that there is less concern that the government will insist that LHCs apply the RTB and greater possibility that, if any LHCs fail, controls will be imposed to limit borrowing or to place limits on what wholly-owned LHCs – as distinct from joint-venture LHCs – can do.

· Will LHCs have the capacity to build at scale?

Most of the LHCs are in ‘start-up’ phase, managed directly by council staff with the assistance of consultants. Most have yet to recruit managers with direct development experience and these skills (particularly in the LHC heartland of London and the South East) are expensive and in short supply.

The risk is that authorities and their LHCs lack the commercial and technical skills to develop at scale and at pace and/or that LHCs fail commercially – for example sales receipts or rental surplus are insufficient to repay their borrowing.

Privately, senior figures in local government concede that this skills deficit is the biggest risk to LHC effectiveness and that only a proportion will be able to build at scale. One of the key recommendations in the Smith Institute’s well-balanced report is that a centre of excellence is established to support the development of LHCs – perhaps managed by the LGA.

· LHCs are only part of any local solution to the housing crisis

There is much to commend in the pragmatism and ambition of those authorities setting up LHCs. They have the potential to transform areas of low demand, secure a better mix of housing tenures and products and improve standards and security in the private rented sector.

However, under the current cross-subsidy model, LHCs can only provide limited assistance to people in the greatest housing need.

This means that solving the housing crisis still requires a major social rent contribution by housing associations – underpinned by increased levels of grant.

Equally, the government (or more likely a future Labour government) needs to relax its controls over the HRA to enable stock-retained authorities to harness the remaining HRA asset base to provide social rented housing, and to reduce RTB discounts and allow councils to retain 100% of RTB capital receipts.

A future Labour government would, of course, be wise to follow the lead of the Scottish and Welsh administrations and abolish RTB entirely".

"It’s the 21st century: homes should not be unfit for human habitation"

An excellent post copied from Labour Housing Group "Redbrick" while photo (and list) from "AnotherAngryVoice".

I get to speak at meetings a fair bit, normally Labour Party or tenant campaign meetings around the place. Recently I’ve taken to asking audiences if it is possible for a landlord to let a home that is ‘unfit for human habitation’. Of course not, they usually say (although some think it was probably a new measure brought in by David Cameron….).

If they were right there would be no need for the Homes (Fitness for Human Habitation and Liability for Housing Standards) Bill which Karen Buck MP has introduced as a private member’s Bill. It is scheduled to have its second reading on 19 January 2018.

Having been involved in one successful private member’s Bill in the past (on standards in houses in multiple occupation, which passed the Commons but was lost when the 1983 general election was called) I know how hard it is to make progress with one unless it is something around which there is a strong consensus and government support (or at least acquiescence).

There have been two recent attempts to ban the letting of homes that are unfit – Tories ‘talked out’ a previous Bill and voted against it when it was brought up as an amendment subsequently. However, the electoral arithmetic has changed since June, the government is beginning to be embarrassed by its reputation for being callous in its treatment of poor people, and the time might be right for them to want to be seen to be doing the right thing.

Crucially, for the Bill to proceed there must be 100 MPs present on 19 January to guarantee a vote. It’s not as easy as it sounds because private member’s Bills are debated on a Friday when most MPs have returned to their constituencies. So: that’s where everyone interested in progressive housing policies comes in. Please make sure your MP is there to vote for the Bill!

Karen is advised by a team of legal experts and the Nearly Legal website has had excellent coverage of the detail of the Bill and its progress. Giles Peaker of Anthony Gold solicitors has written a short briefing on the Bill, setting out why it is important and what it does. I’ve extracted key points below, but the Nearly Legal website will be the best destination for detailed information about the Bill.

Giles is asking that you should contact your MP and to ask them to attend on 19 January. You can find your MP here. He also refers to Shelter’s petition in support of the Bill.

As Giles says:

“I make no apology for going on about this. It is a relatively simple change to the law, but one that could have significant and lasting effects. It is too important to be allowed to be filibustered out. Some one million rented homes in England, social and private, have category 1 HHSRS hazards, amounting to a serious risk to health.”

Please support this important Bill.

Thanks

Steve

Homes (Fitness for Human Habitation and Liability for Housing Standards) Bill promoted by Karen Buck MP

Why is the Bill needed?

Currently, landlords have no obligation to their tenants to put or keep the property in a condition fit for habitation. There is an obligation on the landlord to repair the structure of the property, and keep in repair, heating, gas, water and electricity installations, but that only applies where something is broken or damaged. It does not cover things like fire safety, or inadequate heating, or poor ventilation causing condensation and mould growth.

There are a whole range of ‘fitness’ issues, which seriously affect the well-being and safety of tenants, about which tenants can do nothing at all. For private sector tenants, or housing association tenants, it is possible for the local authority to enforce fitness standards under the Housing Health and Safety Rating System and Housing Act 2004.

However, there is a huge degree of variability in inspection, notices and enforcement rates by councils. About 50% of councils have served none or only one HA 2004 notice in the last year. One London council, which has an active enforcement policy, amounted to 50% of notices served nationally and 70% in London. What this means is that there is a complete postcode lottery on the prospects of councils taking steps – with the real prospect being that the council won’t do so.

For council tenants, the Housing Act 2004/HHSRS standards are all but pointless. Local Housing Authorities cannot enforce against themselves. So council tenants have no way to enforce or seek to have enforced basic fitness standards, including fire safety, if their landlord doesn’t do anything.

Poor standards are a widespread problem. According to the latest English Housing Survey, 16.8% of private tenanted properties have Category 1 HHSRS hazards (which are classed as a serious risk to the occupiers’ health). That is 756,000 households, at least 36% of which contain children, and there are a further 244,000 social tenanted properties which have Category 1 HHSRS hazards. That is a million properties altogether. It is likely that more than 3 million people, including children, live in rented properties that present a serious risk to their health and safety.

What does the Bill do?

The Bill aims to complement local authority enforcement powers, by enabling all tenants to take action on the same issues and standards as local authorities can, and to give council tenants recourse. It follows the recommendations of the Law Commission and the Court of Appeal.

For any tenancy granted for less than 7 years term (including all periodic tenancies), the Bill will add an implied term that

(a) that the dwelling is fit for human habitation at the time of the grant; and,

(b) that the lessor will thereafter keep it fit for human habitation.

If the property is a flat, the obligation extends to all parts of the building in which the landlord has an interest, so it would include the common parts and the outside of a block of flats if all owned by the same landlord.

There are some exceptions, where the problem is caused by the tenant, or where the landlord can’t do anything to fix the problem without breaking the law, or where they can’t do anything without the permission of a superior landlord and that has been refused.

What this would mean is that the tenant could take action against the landlord to make them put right any problems or hazards that make the property unfit and could seek compensation when the landlord hasn’t done so.

It is not a replacement for the council’s own powers, but works alongside them, enabling tenants to take action where the council hasn’t, or can’t. For all new tenancies after the Bill comes into force, it will make it a right to have a home fit for living in".

Excellent update on extending the "right to buy" to Housing associations by enforced sale council assets - Redbrick blog

The strange case of a government housing policy that won’t happen by stevehilditch

By Ross Fraser

Everyone in the sector will recall the surprise late insertion into the 2015 Conservative election manifesto of a policy to extend the right to buy to housing association tenants – funded by the enforced sale of council assets.

I recall chairing a post-election consultation meeting between DCLG and housing association CEOs and local authority directors of housing in July 2015 – when DCLG asked for advice on how to implement the sale of council assets.

Over two years on, DCLG still hasn’t arrived at a formula setting out how it will calculate the value of assets to be disposed by each authority – let alone consult the sector on it.   There is a simple reason for this – developing the formula is extremely difficult and ensuring that all authorities will deem it ‘fair’ is simply impossible.

Then there is the issue that the bulk of asset sales are likely to fall on the London stock-retaining boroughs.  A flat rate formula (requiring say the top 5% in value of all English retained council stock to be sold when vacant) will not raise enough money to fund the extension of right to buy to associations, so any levy is likely to be tougher on London. The authorities most-affected will be Conservative controlled councils such as Kensington & Chelsea, Westminster and Wandsworth.   The leadership of these councils has indicated complete opposition to the government’s proposals.

It is unsurprising, therefore, that there was no reference in the 2017 Conservative election manifesto to housing association right to buy or forced council asset sales.

Post-Grenfell – and DCLG’s apparent refusal to support council (and housing association) reinvestment in fire safety – the concept of forced asset sales has become even more toxic.

Then there is the fact that the policy requires secondary Parliamentary approval before it can be enacted.  The government only has a simple majority with DUP support.  Inside Housing has reported that up to 15 Conservative MPS are prepared to either vote against the measure or abstain – presumably including members whose constituencies fall within Conservative-controlled London boroughs.  And as we have been recently reminded, DUP support for the government’s legislative programme does not extend to social or welfare legislation.

The simple fact is that the forced asset sales measure will never gain Parliamentary approval and will eventually go the way of the now discarded Pay to Stay proposals.    And if there are no forced asset sales there will be no extension of the right to buy to housing association tenants.

My advice to DCLG is ‘come clean’ and formally drop the policy – any further work is a waste of time.  Councils need to know where they stand as, according to senior sources in local government, the uncertainty is holding back their ability to invest in new housing, essential maintenance and fire safety remedial works.   It’s in no-one’s interest to maintain this facade any longer.

Redbrick on "Housing white paper: Government reinvents the wheel"

Check out "Here are some initial reactions to the White Paper published today, having also listened to Sajid Javid’s statement at lunchtime. 

Almost every news programme and every newspaper has previewed the Housing White Paper, published today, in excitable terms, building expectations that something dramatic was about to happen. It seems they all believed the spin that the Government was to take radical and bold action to ‘fix the broken housing market’. Housing Minister Gavin Barwell in particular has been talking a good game over the weekend, and nearly sounded convincing.

But in the event the 100+ page White Paper is a huge disappointment, a damp squib, a fuss about nothing. It reinvents the idea that local authorities should undertake standardised housing needs assessments, pinches but waters down some private rented sector proposals made by Ed Miliband at the 2015 General Election and promises a huge number of consultations on future changes (mainly to detailed planning regulations) – well, they’ve only been in for 7 years, it’s too much to hope they know what they’re doing by now.

Most of the rest of it is the same old words, spoken by Housing Ministers back to the venerable Grant Shapps, but in a slightly different order: simplify planning, make more land available, release public land, strong protection for green belt, stronger voice for communities, better use of land, providing infrastructure, tackling skills shortages, more small builders, custom building, more institutional investors, making renting fairer, it goes on and on.

The Government is reinventing a square wheel. It didn’t work the first time and it won’t work now.

The White Paper is mainly about housebuilding, and a bit about private renting. It has next to nothing to say about making housing genuinely affordable. It continues the failed policy of pouring money into supporting demand for home ownership whilst allocating a pittance to new genuinely affordable supply. It has nothing to say about the horrific implications of welfare reform or the relationship between housing affordability and the benefits system.

Social rented housing make a single appearance in the White Paper, but only in the section on plans to ‘redefine’ affordable housing.

Continuing the current debasement of the language, affordable housing is to be defined as including many things that are not affordable at all.

Affordable housing will be defined as including:

• Social rented housing (determined by guideline target rents)
• Affordable Rented housing (let to the same eligible people as social rented but with rents at no more than 80% of local market rents)
• Starter homes (to be restricted to those with maximum household incomes of £80K, £90K in London)
• Discounted market sales housing (discount of at least 20% from market value)
• Affordable private rent housing (at least 20% below market rent)
• Intermediate housing (sale or rent at costs above social rent but below market).

The complete absence of any proposals to re-establish a major programme of building of social rented homes at genuinely affordable rents is the central failure of the White Paper. It might get boring to repeat this so often but as George Orwell said:

We have now sunk to a depth at which restatement of the obvious is the first duty of intelligent men.

The end of social housing? 10 Tory plans to finish it off

Hat tip to progressive Housing blog "Redbrick" where I have stolen their arguments about Government housing plans and put my own slant on it.  They highlight 10 problems with these plans for social housing :-

1. "The new Affordable Homes Programme (AHP) – which precludes building for letting at social rents. 
2. Conversions – the last AHP (which ended in March) led to 80,000 homes being built but at the cost of converting more than 80,000 existing homes from social rents to ‘Affordable Rents’. Even more conversions will be needed for the new AHP. 
3. Right to buy sales – council starts (see above) have been vastly exceeded by sales and the gap will grow as discounts are increased. 
4. Right to buy 2 for housing associations – like RTB1, it will see social rented homes sold and (perhaps) replaced by units at Affordable Rents. 
5. Planning gain (section 106) – numbers of units delivered will fall as more loopholes open up, allowing obligations to be reduced or avoided completely. 
6. Estate redevelopment – with encouragement from the housing minister, more homes will be demolished and the new units will be less affordable and fewer still will be let at social rents. 
7. Welfare reforms – the next wave will hit social housing even harder, making it especially difficult to house larger families and pushing more low-income tenants out of their homes. 
8. Discretionary housing payments – helping to mitigate the effects of the bedroom tax and other ‘reforms’, are being cut year-on-year. 
9. High-value council house sales – yet-to-be-defined plans will force councils to sell off their most valuable properties as they fall vacant; if replaced, they will be with homes at Affordable Rents.
10. (If we add the possible end of prudential borrowing to this list").

Redbrick concludes that this "starts to look like a concerted attack on social housing (and particularly on council housing)" I think if all above happens then this will effectively mean the end of social housing. High rent areas such as London will be "cleansed" of the poor first. The poor will be forced to move to low cost areas but this increase in demand which will eventually force up rents even in traditional low cost areas. One day there will be virtually no "social housing" anywhere since everywhere will be at some 80% of market rents (so called "affordable rents").

Ironically, this will also result in life long dependency on housing and state benefits for all low income workers at a massive cost to the taxpayer.

(Photo of Labour canvassers in a Tower Hamlets social housing block last month.  If these 2 and 3 bedroom flats are let at 80% market rent, then families on benefits will not be able to live here)

"They’re all the same. Oh no they’re not"

This is a great post on Redbrick defending Ed Miliband and the Labour Party on its housing policies. I am afraid that my old libel mucker, Alex Hilton, is on the wrong side of this argument.

Fantastic May Day news - Return of rent protection & security of tenure

I missed Ed Miliband's launch of Labour's Local Government election campaign this morning in next door London borough Redbridge.

I am really pleased with the commitments he made to reform the private rented sector.  Insecure tenancies, unaffordable rent rises and rip off letting agency fees are the top 3 complaints I get as a Councillor from private tenants.

Also more UNISON members now live in the private rented sector than in Social Housing.

Check out this report by progressive housing blog RedBrick.

"The three elements of the reform package are:

• three year tenancies to be the norm, with suitable exemptions (eg a mortgage covenant and students) and a 6 month probationary period.
• an upper limit on rent increases during a tenancy.
• scrapping extortionate letting agent fees to tenants, saving tenants an average of £350 for each letting".  

Finally, together with the commitment to build 200,000 homes a year by 2020, the Party is going to stop just moaning about the broken housing market we live in and do something about it.

The Tories obviously want to do nothing and just let the rip off continue. Even though I know privately many think we should adopt such policies that even right wing governments in Germany don't even blink about. 

I look forward to more announcements on Labour spending more on capital investment and social rents than continuing to waste money on housing benefit.

How wrong public opinion can be on key social issues

Hat tip Redbrick "A fascinating paper published yesterday by the Royal Statistical Society and King’s College London – The Power of Perception - reported on a survey undertaken by Ipsos MORI which ‘shows just how wrong public opinion can be on key social issues’.

1. Teenage pregnancy: on average, we think teenage pregnancy is 25 times higher than official estimates: we think that 15% of girls under 16 get pregnant each year, when official figures suggest it is around 0.6%.
2. Crime: 58% do not believe that crime is falling, when the Crime Survey for England and Wales shows that incidents of crime were 19% lower in 2012 than in 2006/07 and 53% lower than in 1995. 51% think violent crime is rising, when it has fallen from almost 2.5 million incidents in 2006/07 to under 2 million in 2012.
3. Job-seekers allowance: 29% of people think we spend more on JSA than pensions, when in fact we spend 15 times more on pensions (£4.9bn vs £74.2bn).
4. Benefit fraud: people estimate that 34 times more benefit money is claimed fraudulently than official estimates: the public think that £24 out of every £100 spent on benefits is claimed fraudulently, compared with official estimates of £0.70 per £100.
5. Foreign aid: 26% of people think foreign aid is one of the top 2-3 items government spends most money on, when it actually made up 1.1% of expenditure (£7.9bn) in the 2011/12 financial year. More people select this as a top item of expenditure than pensions (which cost nearly ten times as much, £74bn) and education in the UK (£51.5bn).
6. Religion: we greatly overestimate the proportion of the population who are Muslims: on average we say 24%, compared with 5% in England and Wales. And we underestimate the proportion of Christians: we estimate 34% on average, compared with the actual proportion of 59% in England and Wales.
7. Immigration and ethnicity: the public think that 31% of the population are immigrants, when the official figures are 13%. Even estimates that attempt to account for illegal immigration suggest a figure closer to 15%. There are similar misperceptions on ethnicity: the average estimate is that black and Asian people make up 30% of the population, when it is actually 11% (or 14% if we include mixed and other non-white ethnic groups).
8. Age: we think the population is much older than it actually is – the average estimate is that 36% of the population are 65+, when only 16% are.
9. Benefit bill: people are most likely to think that capping benefits at £26,000 per household will save most money from a list provided (33% pick this option), over twice the level that select raising the pension age to 66 for both men and women or stopping child benefit when someone in the household earns £50k+. In fact, capping household benefits is estimated to save £290m, compared with £5bn for raising the pension age and £1.7bn for stopping child benefit for wealthier households.
10. Voting: we underestimate the proportion of people who voted in the last general election – our average guess is 43%, when 65% actually did.

Tory Whitehall crib sheet for attacks on poor and vulnerable

Great post stolen from Redbrick blog.
"From an anonymous correspondent

As welfare ‘reform’ and housing cuts bite ever harder, when do we reach the point where the government concedes that the hardship caused is an inevitable consequence of rebalancing the public finances and reducing the deficit? So far, they seem to be in deep denial.

This contrasts with the Thatcher era, because when she increased unemployment as a tool of economic policy, she at least admitted that the growth in joblessness was a price which was (on her reasoning) worth paying.

The Cameron government seems either to deny that there is any hardship or to blame anyone other than the ministers who have instituted the cuts. Whenever some new example of the horrendous effects of their policies (here’s a good example - Ed) is presented to them they have a range of stock responses.

We’ve been wondering if there is a standard Whitehall crib sheet for ministers. Well by sheer chance, we’ve been sent what looks like the housing and welfare crib sheet in a plain brown envelope.

In the interests of open government, here it is…

Say the cuts are avoidable. This is Eric’s favourite. The trick is to give the impression that all the cuts can be made painlessly by eliminating luxuries and sacking backroom staff. You can use his little list. Even the Prime Minister makes this excuse: at PMQs last week he accused councils of making high-profile cuts ‘to try to make a point’, not because they need to. Some people will believe him.

Blame the victims. This works well too. Extravagant housing benefit claims may only happen in a few isolated cases, but even so the press will lap them up, especially if they are large families, unemployed, migrants or – even better – all three. Give the impression that such claims make up most of the welfare budget. Whatever you do, don’t admit that over half of welfare spending goes to older people as they are seen as deserving of it. If talking about housing benefit, try to give the impression that it’s spent by the tenants themselves to fund their indolent lifestyles – whatever you do, don’t admit that the money goes to landlords who are pushing up rents because there are insufficient houses.

Use the keywords. We know it sounds boring, but you have to repeatedly refer to ‘scroungers’, ‘strivers not skivers’ and talk about ‘subsidised housing’ not council homes. This helps confirm the impression that most welfare spending is a waste of money. Suggestions for new and even more derogative terms are always welcome. IDS has made a good attempt to link welfare recipients in the public mind with drug addicts and alcoholics. Follow his lead.

Blame the previous government. It’s their fault we have too few homes. Focus on the fact that housebuilding in Labour’s last year was the worst they achieved, even though we know that was because of the credit crunch. Don’t admit either that (a) housebuilding under the coalition is on average 45,000 homes less per year than the output under Labour, or (b) that 2010/11 and 2011/12 were the two worst years since the war for English housebuilding.

Blame local government. So Westminster’s putting homeless families up in expensive hotels and Camden’s sending them to Coventry (or Leicester, or somewhere else absurdly far from London). Brilliant: we can say how stupid this is and tell them to stop, even though we know they can’t.

Don’t admit that policies to cut the welfare budget affect anything else. For example, some academics argue that cuts in benefits for private tenants mean that more of them will become homeless, or that more people will need accommodation with lower rents in the social sector. Deny that this will happen. If any evidence emerges that shows you’re wrong, under no circumstances must you agree with it. Better still, don’t read the evidence then no one can accuse you of knowing the facts but ignoring them. Alternatively, officials may be able to find an obscure or outdated source that on the surface appears to contradict the evidence: use it!

Deny that cuts are taking place. For example, is there any part of your budget that you have decided to protect, however small? Grossly exaggerate its importance. Take a lesson from Grant Shapps: every time someone said funding for homelessness was being cut and decimating services he would point to his department’s small fund for homelessness prevention, and claim that because it hadn’t been reduced then either services had been unaffected or – yes! – any cuts were local councils’ fault.

Apply a sticking plaster. It’s obvious to a fool that the scale of the welfare cuts must – in reality – mean massive hardship. Furthermore, Labour will find deserving cases (people dying of cancer, homeless ex-servicemen, that sort of thing). First, always offer to investigate the particular case, implying you might do something (even if you won’t). Second, point to the money that’s been set aside for special cases (e.g. discretionary housing payments). Never fail to give the impression that this is sufficient to deal with any genuine hardship. Mention the amount e.g. DHPs total £60 million in 2012/13. This will seem a large sum to the public even though it’s only a tiny fraction of the cuts taking place.

We’re dealing with it. Unfortunately some problems are so big and so obvious that you’ll have to pretend you’re doing something about them. For example, every fool knows builders have virtually stopped building. Given that the housing budget had one of the biggest cuts of all in the Spending Review there’s precious little we can do, but you must pretend otherwise. First, argue that output is going up even when it’s going down (NB. Don’t appear on Sunday Politics, choose programmes where they don’t do their research). Second, have some useful initiative available that sounds like it might solve the problem even if it’s far too small to make any difference.

Grant gave us NewBuy and FirstBuy, which both sound sufficiently impressive, but we might need to invent one or two more when people realise how inconsequential they are. Say we are selling more homes under right to buy as if this helps solve the problems, even if we aren’t and it doesn’t.

Joking aside, Richard Vize made the excellent point in the Guardian last week that Cameron and Co. are undermining local government and failing to prepare people for the depth of the cuts that are now hitting them – with much worse still in the pipeline. He says that ministers are ‘giving the impression that public services can indeed manage cuts without pain or profound change. They can’t.’ How can the coalition expect to be taken seriously as a government, if they make cuts on an unprecedented scale over a dangerously tight timescale, but refuse even to admit there might be consequences for public services?"

How the bedroom tax works....

Search the Internet for "bedroom tax" and you will find mind bogglingly awful stories of families facing eviction and hardship because of it.

Steve Hilditch from Redbrick thinks that the Tory coalition may finally be politically vulnerable over this issue since it will impact all MPs constituencies.

Families whose children have died won't be able to pay the rent since their housing benefit will be restricted. They are deemed to be "under-occupying" (it's too big for them) their properties following the deaths of their children.

The mother whose son has joined the Army and is due to go to Afghanistan was told by Tory MP to "get a lodger".

I hope it does.

UNISON members who work in housing management will be placed in an impossible position. They will be expected to evict tenants on housing benefit whose children have left home even if they have been exemplary residents and have lived there all their lives. Established communities will be shattered.

This and the other "reforms" will also cost Councils and Housing Associations millions of pounds in arrears and extra administration. Money better spent on building new homes and kick starting the economy?

Click on picture to bring up details and decide for yourself who has too many bedrooms.

Oxford Economics or Mickeymouseonomics?

I enjoyed this demolition in "Redbrick" of the so-called "report" issued yesterday by the CBI on apparent cost savings in the public sector from outsourcing.   Steve Hilditch pulls it to pieces with regard to Social Housing management.

The Right are coming out with some really desperate rubbish lately. While I blame the tax evaders alliance for starting this trend we must also wonder why the media chases headlines regardless of merit?

London Labour Housing Group Launch: 26 January 2011

This should be a really good event to anyone interested in winning "the battle of ideas" in housing policy.  Demand has been really high.  Please RSVP to ensure there is space (this is essential - Labour Party members only for this launch event).