Focus
Crunching the numbers
The votes are in: it looks increasingly likely that the bedroom tax is here to stay.
Social landlords are starting to crunch numbers on what the impact will be of the policy, which will see housing benefits cut for tenants with one or more spare rooms. The problem is expected to be particularly acute in the north of England, where there are simply not enough one and two bedroom homes to meet demand.
This was the topic of our Focus discussion this week, and Geraldine Howley kicked us off by crunching some numbers.
She is the chief executive of Incommunities, which lets 25,000 homes in Bradford. As the district’s largest social landlord, the association has identified 3,800 tenants who are under-occupying, and will have to pay extra if they want to stay in their current home.
But even if Incommunities stops letting the one and two-bed homes to new tenants, it will take more than two years to rehome all those who will have to pay the ‘bedroom tax’.
On our forum and on Twitter, where we continued the discussion, other landlords began to weigh in with their numbers.
Riverside Group, for example, has zoomed in to examine what the impact will be on under-occupiers in a single neighbourhood where they let out homes to 421 tenants, Tranmere and Rock Ferry
One in four will be affected by housing benefit cuts to under-occupiers of working age. The association has worked out that just under nine in 10 of these under-occupy by one bedroom.
It would take the association six years to move all the tenants who want to downsize into one-bedroom vacancies.
We also got sent this report by the Housing Futures Network, which looked at some other parts of the country. In Sunderland, it would take more than eight years to move under-occupiers into one-bedroom homes as they become vacant. The chances of this happening are slim. The report concludes: ‘It will therefore be impossible for many social landlords to offer most under-occupying tenants a chance to move anywhere smaller in the foreseeable future.’
So what will the impact be? In Riverside’s study, they calculate that underoccuping tenants may move into the private sector – and have the increase in rents covered by housing benefits – or if they stay in their homes, they will have to ‘cope with significantly reduced income levels - nearly 30 per cent of weekly disposable income in the case of a single person job seeker’.
It adds: ‘This will cause significant hardship for households already living in a low income community, with residents suggesting that harsh choices will have to be made between basic necessities and paying the rent’.
And lots of contributors on the forum pointed out the many practical barriers people face in moving house. For example, Steve Clarke, who is managing director of the Welsh Tenants Federation, talked about tenants getting caught in a Catch-22 situation where they are in too much debt and can’t afford to move:
‘One of the other major barriers is debt, if you have debt then you can’t move! so you’re under-occupied in debt, burning money on fuel and bedrooms you don’t need or indeed want.’
Now the bedroom tax is certainly on its way, more landlords – particularly those in the north of England without the stock to precisely meet housing need – will be making this type of calculation.
To pay or not to pay
There is a saying about volunteering that goes, ‘You vote in elections once a year, but when you volunteer, you vote every day about the kind of community you want to live in.’
There’s another perspective, however: what gets paid, gets valued.
This conflict is perhaps at the heart of the debate that housing associations - along with other types of non-profit and charity - are engaged in when they consider if board members should be recompensed for their time, energy and expertise.
Steve Gough, a lecturer on housing, and also a board member himself, put the case very strongly this week in our discussion on boardroom pay, in support of the ethos of volunteerism and even the Big Society.
As the issue has been at the top of our minds this week here at Inside Housing, when I’ve been out and about meeting people I’ve been asking the awkward question, ‘do you think you should be paid?’
I haven’t met any board members strongly in favour of being paid. One older gent told me he is a member of several boards - for some, he is paid, for some, he is not. It doesn’t affect the amount of time and energy he puts into the post, he told me. But it does reflect the level of responsibility he’s taking on.
Another reason for paying, of course, might be board diversity: whether you want to attract members with specific skills in finance, or parents with young children.
Interestingly, some of the board members I met this week were very strongly against being remunerated. Clearly they do view the time spent in board meetings as making a statement about the kind of community they want to live in. One person wondered if the housing associations couldn’t find a better use for a few thousand quid.
Obviously we are having this debate as the issue of pay is in the headlines. Bank bonuses have prompted another re-evaluation of what it is that determines how well someone gets paid. Commenter Gavin Rider put in:
“There are plenty of examples of very highly paid executives who have overseen disastrous performance. Like you, I don’t see the automatic link between pay and performance.”
And it made me think of a study from a few years back by the new economics foundation about the relation between pay and value to society. Leading City bankers for example, take home between £500,000 and £10 million a year (or did in 2009). For this, NEF says they destroy £7 in ‘social value’ for every pound they are paid.
Hospital cleaners, meanwhile, generate £10 in social value for each pound they take home, and society benefits to the tune of £12 for every £1 that workers in recycling plants get paid. The study, unfortunately, was silent on the worth of housing association board members. Or, thank goodness, journalists!
It’s a topsy turvy world, as the NEF shows - many people’s salaries have no real relation to the benefit to society of the work they’re doing. But this is the flipside of the coin - volunteering is great, but pay does matter. It’s not just about attracting the best people, or those whose caring responsibilities mean they otherwise just can’t afford to be at the table. Volunteering is about values, but pay sends a message about value too.
Or, as Philippa Jones put it:
“It is for each organisation to reach its own view on whether to pay their board members. No one approach is right for all. At Bromford our board took the view that payment reinforces the serious nature of the non executive director responsibility & helps us set out clearly our expectations of the role. The payments are far lower than for commercial boards but the principle is rightly the same.”
But, as the discussion progressed in the comments, Steve remarked: “I’m still looking for evidence of the strange alchemy that changes someone from being an uninvolved board member to a keen one for £x000/year.”
Next week’s Focus is on Building Stronger Communities. Visit the Focus page from Monday for details.
Cash questions
I am DIY challenged. Assembling flatpack IKEA furniture is as advanced as my efforts get.
But plenty of people are only too happy fixing their own doorhandles or painting their walls, and housing minister Greg Barker’s tenant cashback policy is aimed at these folks.
Under the scheme, currently being piloted by a handful of housing associations, social housing tenants can earn money for doing simple repairs themselves, rather than phoning up their landlord’s repairs service for help.
We held a debate this week, on the forum and on Twitter, about whether the policy will work. Some landlords sung its praises; others labelled the idea ‘patronising’.
Numerous practical issues were also discussed and dealt with – is there a risk of fraud, with tenants breaking things in order to be paid to repair them? How will landlords save money if they have to inspect the property before and after?
I’ve pulled together some of the highlights of the discussion below in this Storify. Next week’s Focus will be on the role and renumeration of board members, you’ll find details here from Monday.
