From the workplace
It's not always right to buy
A few weeks ago an image on Inside Housing’s front page proclaimed that right to buy properties were selling ‘like hotcakes’.
Councils in London are reporting a surge in applications under the new version of the scheme, which offers discounts of up to £75,000 for council tenants wanting to buy their homes.
Housing minister Grant Shapps has tweeted that the revived scheme is ‘set to be a big success’ and just this week one London council, Wandsworth reported it has received more than 1,000 enquiries since April.
Regardless of the rights and wrongs of the policy, there is undeniably a high level of demand for the revamped product.
This makes it all the more curious that the Communities and Local Government department has sent out template letters to councils in order to more aggressively promote the scheme.
The letters, as reported by Inside Housing this week, suggest councils flag up how much a right to buy mortgage costs per week and urges ‘don’t delay’.
Lenders and landlords have both accused the council of promoting the policy in an irresponsible manner, as the letter does not stress the risks and responsibilities involved in home buying.
So why has the CLG done this?
The important thing to remember about the new right to buy is that it will lead to social rented homes being sold off – and they certainly will not be replaced by social rented homes.
Mr Shapps has promised they will be replaced on a one for one basis, but they won’t be social rented homes – they will be homes let under the ‘affordable’ homes programme at up to 80 per cent of market rates, with security of tenure not necessarily guaranteed.
The government, which has already ended capital funding for new social homes, is intent on running down the nation’s stock of social rented homes in favour of the ‘affordable’ homes model and encouraging more home owners. This is aimed at encouraging aspiration and taps into a fairly widely held view that sees social housing as part of a dependency culture that traps people.
It is perhaps this driver that explains the CLG’s desire to aggressively promote the right to buy. Let’s just hope that the CLG will be just as keen to help councils if a few years down the line right to buy homeowners get into trouble with their mortgage payments.
Unfair blame
A difficult funding environment and changes to welfare rules are just two of the things keeping senior housing professionals awake at night.
Two stories reported this week illustrate some of these challenges – and what has been the response of ministers?- to criticise the landlords themselves.
London & Quadrant is not including social rented homes in its controversial Walthamstow scheme due to viability issues. Waltham Forest Council has accepted that L&Q’s paltry offer of 24 affordable homes and no social rented homes (in a 294-home scheme) is the most it can provide.
L&Q, like many landlords in London, now finds it almost impossible to provide social rented homes. This is a direct consequence of the coalition government’s decision to end grant funding for new social homes.
Work and pensions secretary Iain Duncan Smith, with his Chingford constituency hat on, has slammed L&Q for the lack of social rented homes in the scheme. His office refused to explain how he thinks L&Q can deliver social rented homes in the current environment without government grant.
To my mind, Iain Duncan Smith’s comments are nothing short of hypocritical given his own government’s position.
Housing minister Grant Shapps has also warned councils not to break rules restricting B&B use, it emerged this week.
Again, it could be argued very strongly, as many councils have, that the spike in B&B use is in part due to the coalition’s welfare reforms. Benefit caps and rising private rent levels are depleting the pool of available affordable properties in the private rented sector, leading to pressure on council homelessness services.
To his credit, Mr Shapps at least recognises the problems councils face and has offered help and support.
But the fact that two government ministers this week have turned around and blamed social landlords for problems which were arguably created in Whitehall is unlikely to go down well in the sector.
Tough times
You can’t help but feel sorry for the social housing regulator.
After the upheaval caused by the rapid creation and closure of the Tenant Services Authority, staff now have to get used to yet another new system of regulation.
This includes a new focus on ‘economic’ regulation, with the regulator only intervening on tenant complaints in rare cases involving serious harm to tenants.
As Inside Housing reported this week, the regulator has already judged 19 cases to be suitable for assessing against its ‘serious detriment’ test, and found that none of them have met the criteria for intervention.
The regulator, while no longer nominally intervening in consumer regulation, still has to put resources in to assessing potential serious detriment cases. As Ralph Smale, an official at the regulator, said last week, this puts the Homes and Communities Agency in the ‘unfortunate position’ of having to devote resources to justify why it is not acting.
The temptation for the regulator, especially given cuts to its budget, is to devote more time and energy to its bread and butter activity of monitoring viability, governance and value for money and take its eye off the task of rigorously assessing claims for ‘serious detriment’ when the majority of the time they will not be required to investigate further.
This would be a mistake. The serious detriment test is a higher threshold for intervention – by definition it covers cases where tenants are potentially in danger of serious harm. HCA regulation head Matthew Bailes is absolutely correct to state the regulator has to make sure it identifies serious detriment cases.
Whether the regulator will have the resources to adequately monitor serious detriment claims and deal with them as they arise is yet to be seen.
Contributing to the problem
The old, thorny issue of social housing allocations reared its head again this week.
Frank Field, a right-winger in the Labour party, has called for social housing providers to award priority for housing to British taxpayers.
Various councils across the country are looking to prioritise housing for those who are looking for work, but Mr Field’s assertion that priority should be given to indigenous taxpayers is much more problematic.
The logic behind Mr Field’s view is clear and echoes William Beveridge’s contributory principle for benefits. This, put simply, states that people should be entitled to benefits ‘in return for contributions’.
There are many ordinary people in this country who have been contributing to the system for years but are stuck on housing waiting lists. And for some, there is a perception, real or imagined, that newcomers to the country who have not made the same level of financial contribution to the country’s coffers, can jump the queue. This clearly violates the contributory principle.
But the world is a very different place to the 1940s.
There is much more movement of labour, goods and capital as the world’s economy becomes ever more globalised.
Refusing housing priority to those in need unless they have contributed a given amount, or have gained British citizenship, could risk pushing people into homelessness.
Bringing back a perception of fairness to the allocation of social housing is important but this will not be achieved by the non-prioritising of housing for non-British taxpayers.
David and Goliath
Local councils are often portrayed, especially in the local press, as the bad guys, trampling on tenants and refusing to listen to what residents really want.
This is often crudely exaggerated but does highlight the challenges faced by local authorities in taking borough-wide decisions while not alienating sections of the community. Councils now have added challenges under the new system of self-financing, which will give them a stronger incentive to assess the value of assets, and could lead to more contentious stock transfers.
Inside Housing has been contacted by four tenants groups this week who are unhappy with different London councils for different reasons.
Hackney Council is facing a potential High Court challenge from tenants and residents associations about plans to change its tenancy agreement while housing co-operatives in Lambeth are fighting a move to evict them from ‘shortlife’ properties. Defend Council Housing, a left-wing pressure group, has cried foul over a stock transfer in Lambeth while tenants groups in Hammersmith and Fulham continue to contest a proposal to demolish two estates as part of the Earls Court regeneration project.
It could be argued that all of these ‘David and Goliath’ examples illustrate the Big Society in action, with small co-operatives, TRAs and other tenants groups using their voice to challenge councils’ decisions.
Ultimately however councils are being encouraged to act more like businesses and use their assets (ie, housing stock) more efficiently. This will inevitably lead to more clashes between the so called ‘Big Society’ and small tenants groups.
Strike out
After months of preparation the new social housing regulator launched this week and has already been hit by a potential difficulty.
As Inside Housing reports today, staff transferring across from the Tenant Services Authority to the Homes and Communities Agency are considering strike action.
The union Unite believes staff should receive a one off £500 bonus in recognition of their role in working hard to ease the transition to the HCA with reduced staffing. It is not clear at this stage whether the will is really there among staff to strike or whether the threat of industrial action is a negotiating tactic.
The claim will strike many as unreasonable, and a number of posters on Inside Housing’s website have already parroted the usual lines around ‘they are lucky to have a job’, and that you wouldn’t expect to get a one-off bonus in the private sector (unless you are a high-level banker, obviously).
Personally, I find the argument that we should always level pay and conditions down to those in the private sector, rather than seek ways to improve them across the board, to be misguided and shortsighted. Where does it stop?
However on this occasion, the request for a bonus for staff who are transferring on the same pay and conditions, and sitting in the same offices, does seem a bit bizarre.
Regardless of the rights and wrongs of the claim, Unite’s actions are an unwelcome distraction for the new regulator, which faces a busy period working out how on earth it is going to regulate a sector growing ever more complex.
A lasting legacy?
So that’s it. After three and a half years the Tenant Services Authority will cease to exist from midnight on Saturday.
The regulator was always unlikely to avoid the ‘bonfire of the quangos’ as a body dedicated solely to regulation was a New Labour invention and it was inevitably seen as dispensible by a coalition government committed to austerity.
What will the TSA’s legacy be?
The original intention, to ensure higher standards for tenants by having a body solely dedicated to regulation was laudable and even the infamous pink campervan (which staff used to visit housing estates to promote tenant engagement) was a positive move in championing the importance of services to tenants if a bit gimmicky.
The TSA had barely settled into its role when Grant Shapps said the quango was ‘toast’ and the rest is history. Staff who had been instrumental in setting the quango up then started winding it up.
The last few months has seen the quango work on how to transfer programmes, staff and other functions to the HCA. The regulator has been noticeably quiet on regulation activity, not issuing a single regulatory judgment for four months between August and December last year.
The TSA will perhaps be seen in retrospect as a body that was throughout its short life embroiled in administrative changes.
More realistically though, as housing policy moves on and the sector gets to grips with a shift towards economic regulation, the TSA’s brief life is unlikely to be remembered in housing 10 or 15 years from now.
All due credit
With a little over a week to go before the system of social housing regulation changes, landlords have won what, on paper, looks like a significant victory.
The new regulatory framework, which sets out the standards for social landlords from 1 April, originally caused concern in the sector. The new value for money standard required landlords to demonstrate they have assessed options to improve value for money, including where there are benefits in alternative delivery models, specifically mentioning mergers, partnerships and contracting with third parties.
This was interpreted by many in the sector as an attempt to force them to consider mergers but has now been altered, with mentions of specific structures removed.
The regulator realised fairly early on in the consultation process that landlords were not happy about the value for money standard.
Sources close to the Tenant Services Authority said months ago that it was never the intention to prescribe particular structures, and that it does not favour mergers or partnerships over any other way of working. Instead, TSA insiders say the framework was aimed at ensuring landlords are not complacent about value for money, and merely mentioned mergers as an illustrative example of the kind of thing a landlord might want to consider.
This explanation seems realistic and to be fair, it is not the case that people in the sector thought there was a hidden agenda behind the original framework. The regulator has nothing to gain by favouring mergers or any other kind of structure.
The framework did however give some landlords the impression that they would have to devote resources to considering other forms of structure every year, saddling them with red tape and using up resources.
Julian Ashby and the TSA deserve great credit this week for listening to the sector’s concerns and changing the framework.
Blurring of the boundaries
A large swathe of the sector gathered in Brighton this week for the first major housing conference of the year.
The gathering came in the week when the welfare reform bill has become law and just weeks before the new self-financing system for councils begins.
So what was the mood in Brighton?
The sense from delegates is that the sector now knows exactly how the land will lie over the next few years. The time for complaining about cuts is over (for now), housing providers need to get on and think creatively how they can provide services.
Brighton saw delegates talking about the need for more creative use of assets, different ways of raising money and debates on the purpose of social landlords. Brian Johnson, chief executive of Moat, while acknowledging challenges to tenants, said it is an ‘incredibly exciting time’ to be working in the sector.
As Inside Housing reports this week, more private companies are applying to be registered providers and, conversely, more housing associations are looking at de-registering parts of their businesses to avoid regulation.
The boundaries between social landlords and the wider market are being blurred. As new CIH chief executive Grainia Long said in her keynote speech, the sector does not really understand how housing markets work.
That needs to change. The overwhelming message from the seaside this week is that social housing can no longer exist as a ring-fenced sector protected from the wider market.
Landlords need to be thinking about how they use their assets more effectively, how they can be more efficient and how they can operate in a more corporate way without diluting their core purpose of building and maintaining homes for those on low incomes.
Damage limitation
So after weeks of ‘ping-ponging’ between the two houses of parliament and months of, at times, ferocious debate, the welfare reform bill is finally on the verge of becoming an act.
It would be tempting to think royal assent will draw a line under the controversial bill, which is aimed at simplifying and reducing benefits, but for social landlords the hard work starts now.
Lord David Freud, in parliament two week ago attempted to rubbish suggestions that social landlords will have to ‘employ an army of snoopers’ to work out who is going to be hit by the ‘bedroom tax’ for underoccupying social tenants. The welfare reform minister said this is not the case as the department for work and pensions will rely on tenants to report their circumstances to the government.
However, this is to miss the point.
A significant proportion of the 670,000 tenants expected to be hit by the tax will find it more difficult to pay their rent – leading to an increased likelihood of arrears.
Social landlords, now that any hope of watering down the tax has gone, need to start identifying where their affected tenants are, and how many of them there are.
Landlords can only be confident they have put adequate resources in place to cope with increased arrears if they can predict the impact.
For this reason the tax is not only a cost for tenants, but will also have a financial impact on councils and housing associations which need to find more money to prevent or mitigate against arrears.
Lord Freud’s agreement to a research project to monitor the impact of the policy is welcome, but social landlords should be under no illusions about the task they now face.
A complex future
For-profit arms, registered non-profit companies, unregistered profit-making parents, entirely for-profit housing associations - the days of the simple, traditional social housing provider look to be coming to an end.
As Julian Ashby, who will chair the Homes and Communities regulation committee, says, the sector is going to be a lot more complex in future.
For this reason, committee members with experience of other sectors, such as Jane May, who has sat on the board of Ofwat, have been recruited to help the regulator cope with the changing face of the sector.
The Communities and Local Government department has hedged its bets by leaving two of the six committee positions vacant, allowing it to appoint relevant members as specific, unforeseen challenges, arise.
More surprisingly the CLG has decided to appoint members for just 12 months initially, instead of the two to three years as originally planned.
This has already caused a few grumbles from professionals hoping for the regulator to provide certainty in a rapidly changing sector operating in an era of austerity and economic unpredictability.
There is a fine line between the CLG leaving the regulator room to be flexible and it giving the impression that it does not know what the committee’s approach should be, or even worse, that it does not trust the committee it has appointed.
From April 1, all eyes will be on the committee, with many in the sector sceptical about its ability to provide robust regulation. The shortening of committee members’ terms, designed to allow the committee to adapt to changing circumstances, could simply send the message that we may not get the stable regulation the sector needs.
Risky business
Swan Housing Group became the latest housing association this week to reveal its response to the challenges of a new financial model for housing.
SHG has been awarded the 11th largest allocation under the affordable homes programme - £38 million - despite only having 10,000 homes. Indeed it does not even appear in the top 60 largest associations by stock owned, according to the Tenant Services Authority.
SHG then, is punching above its weight.
In order to deliver its ambitious 1,500-home plan it has set up a new non-registered vehicle to manage its profit-making arms and avoid regulation.
The organisation is adamant that the vehicle will allow it to ringfence risk and that there is no threat to the core housing association’s finances.
Inside Housing has now learnt that there are around half a dozen other landlords looking at the same sort of model.
The TSA has yet to develop its strategy for regulating organisations that have non-profit, non-registered companies sitting alongside profit-making, non-TSA regulated entities.
The question of whether and how risk is ringfenced in profit-making arms is likely to be a talking point in the sector over the coming months.
It is important to recognise that simply putting risky activity in a non-registered entity does not mean it is not risky.
If an organisation has bid for development money on the assumption that it can raise a specific amount of cross-subsidy from profit-making activities, it needs those profit-making companies to perform. If they don’t, the organisation could fail to deliver its affordable homes programme -and therefore could fail to receive its grant allocation.
The increased ability to benefit from profit-making arms has great potential for bringing rewards to the sector and could be essential in a landscape with vastly reduced government grant.
But, as in all private business, the prospect of reward carries the risk of failure, and the TSA needs to ensure associations’ core activity of building and maintaining much needed affordable housing does not come under threat.
The penny drops
Grant Shapps’ attempts to use new regulatory standards for landlords to promote his tenant cashback policy appear to be coming unstuck – because of localism.
The Tenant Services Authority’s revised regulatory framework for England requires landlords to ensure tenants have the opportunity to carry out repairs. This particular standard was included on the orders of the Communities and Local Government department.
Landlords were initially annoyed by this and felt the government was seeking to use regulations aimed at maintaining standards for tenants in order to implement policy through the backdoor.
That feeling remains, but the sector has relaxed as the penny has dropped that the regulator will not be able to enforce tenant cashback standard in reality anyway.
Under the new regulatory framework, the regulator will only intervene on consumer issues in cases of ‘serious detriment.’ Instead most consumer cases which can’t be resolved by a landlords internal complaints department will be considered by a tenant panel, MP or councillor.
‘Serious detriment’ has not been defined clearly, but the TSA has said it refers to action that is likely to cause harm to tenants.
Not ensuring tenants can do their own repairs is hardly likely to cause them harm – so the tenant cash back requirement is essentially unenforceable and meaningless. This point has been made by the G15 group of housing associations in London, which in its response said it ‘questions the value’ of including the requirement in the framework.
Final acts
After months of lobbying, debates and shock government defeats in the Lords it seems the Welfare Reform Bill will be pushed through amid controversy over use of parliamentary procedure.
The government’s decision to seek financial privilege to prevent Lords from insisting on their amendments has prompted howls of protest from the upper chamber. Lord Richard Best says there is no point in having a revising chamber if the Commons can simply use procedures to restrict it from having a say.
The ironic thing about this use of financial privilege, which is usually invoked for money bills involving major public expenditure, is that the government has been at pains to stress that saving money is not the sole motivation for the bill.
Employment minister Chris Grayling said in the Commons on Wednesday that the debate over the £26,000 total benefits cap ‘is not simply about the financial aspects’ but about fairness. The financial privilege move risks giving the impression that the hit on the public purse is the main aim of the policy and severely dents the coalition’s claims that combating unfairness is its primary objective.
While the coalition was overturning the Lords amendments and seeking to use privilege to railroad the bill through, Labour put forward its own last-ditch attempt to force changes to the way the benefits cap will be set. Labour called for an independent body to set different caps across the country according to local circumstances.
This idea has some merit, but lost credibility as Labour refused to say the level at which it thought the cap should be set, insisting it would be a decision for the new body.
It was also not able to say whether it would retain the overall level of savings from the cap (around £305 million) or seek to reduce them.
Labour was perhaps mindful of the fact that if a regionalised cap was introduced, but with the same overall savings level, benefit levels would be effectively reduced in low rental value areas, the party’s heartlands.
The bill therefore did not receive adequate opposition in the Commons, while opposition in the Lords has been effectively nullified by privilege.
Detrimental regulation
We are now just eight weeks away from the end of the Tenant Services Authority and the beginning of a new era for social housing regulation.
From April 1 the new regulator, a Homes and Communities Agency committee, will no longer routinely monitor consumer regulation, ie, tenant complaints.
Instead, it will only become involved in cases of ‘serious detriment’.
It will be fascinating over the next few years to see what the regulator means by this phrase. TSA director Deborah Ilott, this week admitted the regulator is not going to define the phrase specifically.
When pushed, she said serious detriment will refer to a breach of the standards where there is likely to be harm to tenants. She cited gas safety as an obvious example.
The challenge for the regulator will be ensuring consistency in its classification of problems as ‘serious detriment’ without a specified definition. Even trickier, potentially, will be convincing landlords that it is right to evoke the serious detriment rule in individual cases without a definite benchmark.
One housing co-operative has already contacted Inside Housing with concerns about the lack of clarity.
But perhaps the most telling statement by Ms Ilott was a comment that the serious detriment threshold will be ‘very high’, resulting in few cases requiring the regulator’s involvement.
The regulator will have its work cut out with regulating the governance and viability of social landlords at a time of economic volatility and pressure from the government to extract more value for money from the sector.
There is a strong likelihood therefore that it could be sometime before we find out what serious detriment means.
The local way to centralism
Two different localist policies could come into conflict over the next few months.
The government this week said it intends to publish a consultation on regulations to make it easier for tenants to take over their estates ‘very shortly’, while from April councils will be able to keep rental income.
Both policies are part of the coalition government’s attempt to decentralise power from Westminster and give power to communities.
The ‘right-to-own’ regulations would effectively force councils to work with tenants groups’ which have proposals for stock transfer. This is likely to include helping them conduct a feasibility study and providing financial support and advice. Inside Housing understands that the onus is likely to fall on a council to explain to the secretary of state why a stock transfer should not go ahead, whereas at the moment they can simply not co-operate.
The devil will be in the detail around what a council needs to show in order to prove a scheme should not go ahead.
Would it be able to resist a tenant-led stock transfer if the homes in question are needed as part of a regeneration scheme, for example? Or could a council make a case for not allowing the homes to be transferred on financial grounds?
This is where the policy could conflict with housing revenue account reform. Councils from April will have much more freedom over their housing assets. As they will keep rental income, they will have a financial interest in keeping ‘valuable’ homes. This could mean councils being more amenable to tenant-led stock transfers in some cases rather than others.
This may lead to situations where democratically-elected councils’ plans to manage their assets and tenants groups’ desire for stock transfer could clash.
It is ironic that the outcome of two localist policies could be a referral to the secretary of state – a bastion of centralist power.
Lording it up
‘The Lords is not like the Commons, they actually listen to what’s said before deciding how to vote,’ one peer told Inside Housing this week.
The lord was explaining how difficult it can be to predict the outcome of votes in the upper chamber, where there are more independent operators and members are not subject to the same level of whipping as the House of Commons.
Nevertheless, the fact that opposition has been slowly building in the Lords to measures in the Welfare Reform Bill has been obvious for weeks.
The government’s defeat on Wednesday on three votes relating to plans to restrict Employment and Support Allowance, which is paid to people who can’t work because of sickness or disability, has left the government with a headache. It has now lost four votes on the bill, which is a flagship piece of legislation for David Cameron’s government.
On the face of it, that the government is having problems with the bill is good news for those hoping for further amendments when the Lords move on to debate the total benefits cap on 23 January.
Unless changes are made to the way the cap is calculated, there is a good chance Liberal Democrat and Labour peers will join with crossbenchers to defeat the government again.
Each amendment would reduce the amount of savings the government is hoping to make by cutting expenditure and it is unlikely the treasury will allow the Department of Work and Pensions to forfeit the estimated £2 billion the measures would save.
The DWP will be keen to press on with the bill and will probably accept some of the amendments to prevent it from getting bogged down in parliament. The danger for the housing sector is that the government will accept amendments around ESA but overturn those relating to the housing benefit.
Tax avoidance
2012 is less than a week old and we have already had a dispute which has illustrated the motives behind a controversial government policy.
The row focuses on the amount of savings the government will lose if its plan for a ‘bedroom tax’ for under occupying social housing tenants is watered down. The amendment passed by the Lords exempts tenants with one spare room if no other suitable homes are available for them to move into.
The Department for Work and Pensions says this, if it is not overturned in the Commons later in the year, will result in around £300 million being lost to the exchequer, a claim dismissed by the National Housing Federation as ‘incorrect’.
The NHF argues that the £300 million figure is based on an earlier version of the amendment which excluded all households with one spare room. But it goes further and says even the claim about the original amendment is questionable because the government is assuming that almost everyone will choose, or be able to, stay put and pay the charge. They say in reality some will move, and some homes will be re-let at higher ‘affordable rents’, thus reducing the money saved.
The row has thrown into sharp focus the key drivers behind the government’s intended policy. The DWP’s focus on the savings lost, Lord David Freud’s strong insistence that ‘the fiscal case driving this measure forward must not be underestimated’, and the admission that the DWP expects few tenants to move, reveals that saving money is the key objective.
The other stated aims of the policy, to reduce overcrowding and encourage mobility in the social housing sector, are completely undermined if the government is hoping for affected tenants to stay where they are.
Peers are correct to call the under occupation penalty a tax, as that is exactly what it is. The DWP is using the charge to raise money to pay down the benefit bill.
It is a tax which most of the people affected, by the DWP’s own admission, will find difficult to avoid.
The government is now considering whether to overturn the amendment, accept it or seek to mitigate the effects of the ‘bedroom tax’ in another way.
If the amendment stands it amounts to a tax cut of up to £300 million, which will need to be paid for elsewhere if the government is to meet its housing benefit bill reduction targets.
Bedroom revolution
The dust is settling on the government’s defeat over its plans for a bedroom tax for underoccupying social tenants.
The focus is now moving on to what the impact of the Lords amendment might be and what the government will seek to do next.
During the debate, welfare reform minister Lord David Freud said the proposal by Lord Richard Best to exempt households with a spare room from the tax would cost the government around £300 million in savings.
The eventual amendment passed watered down Lord Best’s amendment so that only those with a spare room who are not able to find ‘suitable alternative accommodation’ will be exempt.
This would, you imagine, substantially reduce the amount of savings lost. But the Department for Work and Pensions is still sticking to the ‘around £300 million’ claim.
This could mean one of two things.
1) The government is effectively admitting that there will be little or no alternative accommodation for tenants to move in to – in which case the claims of Baroness Patricia Hollis and others that tenants would be effectively punished for something that is not their fault carries weight.
2) The government is overstating the amount by which the amendment will cost the taxpayer. While not exactly an exaggeration to rank alongside the late Kim Jong-Il’s boast about his debut golf attempt (11 hole-in-ones, 38 under par), it nevertheless seems to be over-egging things somewhat.
The bottom line is that we will not know for sure the amount of savings to be lost as a result of Lord Best’s amendment until ‘suitable alternative accommodation’ is defined.
The debate over the bedroom tax is likely to increase over the next few months and it will be fascinating to whether the government will seek to overturn the amendment, and if so, whether it will compromise elsewhere to get the Lords on side.
Lords love-in
Inside Housing today received a picture of Lord Richard Best surrounded by a pink heart with the words ‘Love You’ above it (see right).
The bizarre picture was Accent Housing Group’s touching way of saying thanks to Lord Best and his fellow peers for defeating the government on a crucial welfare reform bill vote this week.
Plans to restrict housing benefit for underoccupying social tenants were amended to exclude those with one spare room where no suitable alternative accommodation is available.
The moral and social case for watering down the tax, which would have unfairly cut the income of hundreds of thousands of vulnerable people has been well publicised.
But the impact on landlords should also not be underestimated.
The measure would have meant landlords having to dedicate more resources to monitoring which tenants are eligible for a spare room.
This means actively monitoring the age and gender of children, measuring rooms to see if an extra bed can be fit in and keeping tabs on whether family members have moved out or not. As Lord Best said on Wednesday it would be a bureaucratic nightmare and require ‘an army of snoopers’ to determine who has to pay the bedroom tax.
This extra administration and bureaucracy is the last thing landlords need when they are getting to grips with a new funding regime, new regulatory framework, planning changes and a turbulent and unpredictable economic climate.
The government will almost certainly seek to overturn Lord Best’s amendment when the bill returns to the Commons in the New Year. But the size of the government defeat - 68 votes - means there is leverage to persuade the coalition to look at other ways of reducing the impact on tenants and social landlords.
Measures to water down the bedroom tax are sorely needed and it is no wonder that, following Wednesday night’s drama, landlords are saying they love Lord Best.
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