Our most popular story on the website last week was about the near 3,000 households who had their incomes slashed as a result of the total benefits cap trialled in four London boroughs.
The roll out of the benefit cap in other areas of the country and the city starts today without much analysis released into the public domain about the lifestyle changes of those who have taken part in these pilot schemes. Government advisors are obviously happy that people can cope, but where is the proof?
Our report in July showed of the 2,432 households which had been affected at that time, 1,897 were single parent households.
While these households have only one adult to keep, Halifax research last year found the average cost of raising a child in 2011 was £8,307. If a single parent has only one child, it leaves them with around £17,000 for all other expenses excluding the child’s.
As anyone who has lived in London on a restrictive budget knows, trying to find affordable accommodation and have any kind of quality of life is a miserable task which most certainly effects both mental and physical health.
Growing up, I was surrounded by council estates in Edinburgh where the common knowledge was if you got pregnant you would get a council house. As a result of this, I back the idea that benefits should not be a lifestyle choice. However leaving society’s most vulnerable in the poverty trap shrouded by misery is not an acceptable, nor responsible, answer. The effects on those the policy is inflicted on are too great.
With the financial constraints people are under at present, it’s easy to see why complaints would be raised about those receiving benefits amounting to around the same amount as the UK’s annual wage (£26,500 in November 2012).
The economy’s potential recovery feels so distant from people on the ground trying to keep a decent standard of life for their families. But all I can see arising from this new cap is a further split between those living on benefits and those not, a rising health care bill and many children, 97.3 per cent of the households in the London pilots had children, who will suffer vast reductions in their quality of life.
The government’s insistence that paying housing benefit to tenants won’t harm the finances of social landlords has always been somewhat puzzling.
It is fairly clear that if you put tenants in charge of paying their rent – rather than having the government do it for them – then arrears are going to increase, and this will have a detrimental impact on the balance sheets of housing providers.
You can argue about the extent of the arrears that will be incurred, and the level of damage to the confidence of housing associations’ financial backers, but surely some impact is undeniable?
And yet denying is exactly what the government has done. In January work and pensions secretary Iain Duncan Smith told Parliament welfare reforms would have no impact on housing association finances, a message repeated since by his officials and ministerial colleagues. How the government intends to deliver on this promise is now becoming clear.
A response from the Communities and Local Government department to a select committee report on the impact of welfare reform on local authorities, published last week, states landlords will be able to contact the Department for Work and Pensions once a tenant has run up enough arrears to request that the debt is recovered through deductions to future payments.
It notes that existing laws allow deductions of up to 5 per cent, but that the government is considering whether this should be increased as part of its flagship welfare reform policy, universal credit.
This mechanism should certainly help to ensure lenders retain their confidence in the sector, and will limit the damage that direct payment can do to housing associations’ finances. However it does not solve all the problems of direct payment.
For tenants who have ended up in rent arrears because they are struggling to make ends meet, having 5 per cent or more of future payments cut until they have paid back the arrears will make life even more difficult.
As our anonymous columnist explains in this week’s issue, getting the message about direct payment across is not straightforward, and the size of the chasm between introducing government policy and making it a workable reality on the frontline should not be underestimated.
For landlords too, the arrears recovery mechanism has problems. Social landlords take the social part of their role seriously, and will still feel the need to employ extra staff to help struggling tenants and ensure arrears do not get out of hand.
If the government hopes this latest addition to the detail of how universal credit will work in practice will allow Mr Duncan Smith to make good on his promise, it is likely to be disappointed.
Welfare reform is back on the national news agenda after a few weeks off with a combination of the suicide of Stephanie Bottrill, High Court action, and emerging non-payment figures all meaning the bedroom tax has once again caught the interest of the mainstream media.
The government’s argument hasn’t changed since the last round of stories, with ministers still citing the somewhat contradictory defences of ‘fairness’ and the need to get control of the housing benefit bill.
The fairness argument is problematic, as it is hard to see what is fair about telling people that have to move to smaller properties when there are none available, but even if you disregard that then the economic defence doesn’t really hold up.
Government lawyers last week argued that the bedroom tax would save £500 million a year, which sounds like a lot of money, but is actually a fairly small proportion of the housing benefit bill. Work and pensions secretary Iain Duncan Smith has even admitted that the government is no longer hoping to cut welfare spending, but simply to manage the increase.
As the London Finance Commission noted last week, however, there could be another way.
What the expert group set up by London mayor Boris Johnson concluded on housing benefit was that there is a strong case for examining if money that is handed out in benefits as ‘personal subsidy’ could be much better spent on subsidising the development of affordable housing.
In theory, it is easy to see how this could work. Housing benefit has spiralled because the shortage of social housing means benefit recipients are increasingly housed in the private rented sector, where rents are much higher than in the social sector – particularly in places like London. If more money was invested in building social housing, then more benefit recipients could be housed by social landlords, with lower rents, therefore allowing more money to be spent on building homes.
This would also have the advantage that money spent on housing benefit would be going to social landlords, who could use it to build more affordable homes, rather than to private landlords, who could use it to buy fast cars and expensive holidays.
In practice though, implementing such an idea is fraught with difficulties. The London Finance Commission stopped short of recommending the move, instead just saying it was worth examining in more detail, because of the problems it could cause.
Part of the problem is that housing development and housing benefit seem to operate almost entirely separately within government. This was illustrated quite neatly last week by the announcement of £800,000 of Communities and Local Government department funding for Crisis to help projects supporting single homeless people find shared accommodation.
This has become an issue since the Department for Work and Pensions raised the age at which single people on housing benefit could only claim for a room in a shared property from 25 to 35 in January last year. So essentially you have one government department paying to find a solution to a problem created by its Whitehall colleagues.
It’s also questionable whether a Conservative or Conservative-led government would ever really be prepared to implement a policy that could do considerable damage to the private rented sector. As Jules Birch argued in a recent Inside Housing blog, the growth of the private rented sector and housing benefit is a key part of Margaret Thatcher’s legacy. Unpicking this would be sure to go down badly with many Tories for both personal and political reasons.
The idea of trying to find a way to channel some money from housing benefit into housing subsidy is not a new one, but the practical problems have always proved too great in the past. As the housing crisis continues to worsen and the housing benefit bill continues to rise, however, it might finally be time for this nettle to be grasped.
The London Finance Commission noted that in the last decade the capital has received £17 billion in capital funding for housing, but £50 billion in revenue funding – the bulk of which is housing benefit. If that situation could be reversed, then it could potentially offer a truly long-term solution to the housing problems faced not just by London but by the UK as a whole.
As more of the government’s welfare reforms come into force the efforts of landlords are changing from opposition to management.
At the start of April the ‘bedroom tax’ came into effect, last week we had disability benefit reforms, and from today the overall benefit cap has been introduced in four London boroughs.
There are still legal challenges to the bedroom tax to be heard, and many more reforms to be introduced, but it seems many councils and housing associations are now thinking more about how they can help people handle the cuts, rather than fighting them.
Today Greenwich has announced it is offering residents who are at risk of losing their home employment. This reminded me of a story from last year, when Liverpool Mutual Homes floated the idea of paying tenants’ bedroom tax in exchange for volunteering. To the irritation of protestors, this ran into difficulties and was shelved.
Other landlords are considering reclassifying their properties, and offering guarantees that no tenants will be evicted if they incur arrears as a result of the bedroom tax. These routes both come with major practical problems, however. Reclassification risks cutting rental income and property value, while identifying which tenants are in arrears because of the bedroom tax, and which are in difficulties because of other reforms, could become impossible once universal credit is introduced.
A more straightforward solution has been taken by Glasgow Housing Association, which has spent £16 million buying 300 one-bedroom flats to help tenants downsize.
Despite all this positive work, the numbers of people that will benefit are only a tiny proportion of those that will be affected by the cuts. With 660,000 households hit by the bedroom tax alone, the housing sector is going to have to push innovation and support to new levels if it hopes to significantly limit the impact of welfare reform.
The coalition is very good at handing power to local authorities, but it has a nasty habit of getting upset when councils don’t use the powers as it would like. Fixed-term tenancies are the latest example of this.
Inside Housing spent the week before Christmas phoning councils to ask them about their tenancy strategies and allocations policies. What we found out wasn’t entirely surprising, but is interesting nonetheless.
Our research shows the majority of councils – 29 of the 50 that got back to us – don’t intend to introduce fixed-term tenancies. We also found a sharp spilt along political lines, with 25 of the councils that are rejecting fixed-term tenancies being Labour controlled, and 12 of those that aren’t being led by the Conservatives.
When we asked the Communities and Local Government department for a response to this, we got a fairly strong comment from housing minister Mark Prisk saying councils should be using fixed-term tenancies.
This seems odd, because surely the point of giving councils the freedom to set their own policies is to allow them to make policies that meet local need. If they don’t think they need fixed-term tenancies, then shouldn’t they be allowed to just get on with it?
Perhaps what the minister is most concerned about is Labour authorities neutering coalition government plans. Last year we had communities secretary Eric Pickles laying into Labour councils for not buying into his right to buy dream, and this could be the latest example of the Conservative-led government clashing with Labour authorities.
If that is the case – and the political divide in our survey would support that – then it is a pretty worrying development. The whole point about localising housing policy is to ensure those policies help people more effectively. If the agenda is instead being used as a political points scoring exercise then there must be a concern that the decisions being made are not those that would be of most benefit to households.
With the half way point of the coalition government’s initial term in office reached, the next two years could see policies increasingly developed to meet political rather than social aims at both local and national level.
The autumn statement has been preceded by more hype than generally accompanies a full budget, and is almost certain therefore to be something of an anti-climax.
If chancellor George Osborne has been listening, however, there should be something in the announcements for the housing sector, because housing groups have been pretty vocal in putting forward their demands.
Here’s our quick guide to what the leading bodies want to see. See below to find out how they got on.
- Increase income disregards under universal credit and link the payments to inflation
- Provide clarity on the £10 billion guarantee scheme for housing announced in September
- Raise the debt caps imposed on local authorities following reform of the housing revenue account subsidy system
- Begin a review of social housing rents after 2015, and confirm plans by the 2013 Budget
- Adapt existing government funding schemes to allow homeless people to turn empty commercial buildings into homes for their use
- Accelerate the release of public land by launching an open competition for small sites
- Extend the current rent-setting formula for social housing until 2020
- Reduce the VAT rate on work to renovate social housing to 5 per cent
- Raise the debt caps imposed on local authorities following reform of the housing revenue account subsidy system
- Ensure benefits keep pace with living costs, axe plans to cut housing benefit for under 25s, and take a ‘common sense approach’ to direct payment
- Channel money from the funding for lending scheme into house building
- Expand the definition of affordable housing to include homes for discounted market sale, shared equity, and private rent
- Review and simplify the planning process
- Expand the Get Britain building programme for mothballed housing sites
- A moratorium on any new policies that increase the cost of house building
Unpicking the detail of the autumn statement may take some time, but comparing the demands of housing groups with what we know so far, they don’t seem to have fared too well.
- Income disregards were announced, but universal credit is being uprated at 1 per cent, not in line with inflation
- Nothing on the guarantee scheme – except that there have been 60 expressions of interest
- Nothing on debt caps
- Nothing on rents
- Some announcements around empty commercial properties, but not on turning them into accommodation for the homeless
- Some movement on releasing public land, although not quite in the form the NHF wanted
- Nothing on rents
- Nothing on VAT
- Nothing on debt caps
- No mention of cutting benefit for under 25s, but nothing on the other requests either
- Nothing on funding for lending
- Nothing on redefining affordable housing
- Some moves to simplify planning were announced ahead of the autumn statement
- £225 million to free up stalled housing schemes, which sounds very similar to Get Britain building
- Nothing specific on a moratorium on policies that increase the cost of building
We also asked Inside Housing readers what they wanted to see in the statement. From the options below, here’s what you said:
- Halting further welfare cuts – 52 per cent
- Clarify on funding – 18 per cent
- Clarity on rents – 14 per cent
- Releasing more public land – 8 per cent
- Raising the debt cap – 8 per cent
If that was a list of demands, I reckon that would be 2/10 as well.
As councils begin to sign off their new housing allocation policies it is clear that divisions are starting to appear along political lines.
Conservative councils like Hammersmith & Fulham are taking their new-found freedoms as far as they can go, offering tenancies for as little as two years, and barring households with an income of more than £40,200 from even putting their name on the waiting list.
Meanwhile Labour-controlled Camden has decided the best way to meet the housing needs of its residents is to reject fixed-term tenancies entirely and keep the ‘status quo’.
Both councils have produced lengthy documents explaining why their approach is the right one for dealing with the housing issues they are facing, but it is hard to avoid the suspicion that there is also some political point scoring going on here. These boroughs are only a few miles apart, can their housing needs really be so different?
If a political motive is to be found here then that could be a worrying prospect. London boroughs do not exist in little bubbles, so the obvious question is how will such radical differences in allocation policies effect housing across the capital?
Will we see low-income families moving to boroughs where they know a council house is for life, not just for a couple of years? If so councils will no doubt be forced into a rapid reassessment of their policies so they become as hard line as their neighbour – somewhat undermining the whole point of giving councils the power to set their own policies in the first place.
With all the speculation that goes on about the impact of government policies it is always good to get some firm figures from the Communities and Local Government department.
Unfortunately the Social housing lettings and sales in England CORE data published last week doesn’t give us any insight into how one of the coalition’s flagship housing policies is going – the revitalised right to buy.
For a start it covers 2011/12, before the increased discounts kicked in, and even more fundamentally only covers sales for housing associations. Local authority figures are available, but only for 2010/11 at the moment.
As luck would have it, Inside Housing has been carrying out its own research to get some more up to date – if a little less comprehensive – figures, and these raise some concerns. We spoke to 25 councils and found they had completed just 233 sales through the right to buy since the improved discounts began in April, despite 5,697 expressions of interest.
The CLG is putting a brave face on this, telling us it is just taking time for sales to go through, but given the prime minister wants to see 100,000 sales, there is going to have to be a lot of activity in a very short space of time.
With the coalition government approaching the midway point of its existence it may already be time to start rethinking the revitalised right to buy.
Some ideas for improving the policy include introducing a part right to buy – as advocated by Hammersmith and Fulham’s cabinet member for housing, Andrew Johnson. Others including Home Group have argued a more productive route may be to extend the policy to housing associations.
This would certainly make sense as a mechanism to increase sales. Many of the more desirable council houses have already been sold off, so extending right to buy to housing association homes would be likely to see a surge in sales.
There are of course many who oppose the policy outright, and would strongly argue against any move to increase its effectiveness. But it seems unlikely the government is going to perform a u-turn on this one. A change of course is more probable, but if ministers wait until next year’s CORE data it may be too late.
The government’s consultation on whether high-earning social tenants should be charged more rent contained a series of fairly complex questions, but the Chartered Institute of Housing begun its response with a fairly simple comment: ‘No’.
The National Housing Federation was a little more circumspect in its criticism of the scheme, but its response basically comes to the same conclusion. It argues it should be optional, and only apply to new tenancies – effectively meaning it would apply to no-one, as anyone with the income levels required to fall foul of the scheme wouldn’t qualify for social housing in the current environment.
The Association of Retained Council Housing doesn’t even bother to answer the Communities and Local Government department’s questions, instead opting for a one-page response that says the idea is incompatible with localism, and councils should decide individually if they want to raise rents for high earners.
Both the Fed and the CIH go into more detail about why they don’t think it would work, and in so doing uncover the massive complexity that such a seemingly-simple concept would entail. The Fed, for example, raises the question of recovering grant.
If a property that had been built with grant was let at market rate – because the household breached the earning threshold – the property would no longer be a social home, so the grant would have to be paid back to the government. If the property later reverted to social housing, the grant would then have to be returned to the landlord.
The Fed’s description of this as ‘extremely problematic’ doesn’t even begin to address the scope of the difficulties.
‘Pay to stay’ is a classic example of a policy dreamed up to make good headlines. It sounds great on paper, looks great in a paper, but ignores a whole host of problems that would make it completely ineffective and unworkable.
Hopefully our new housing minister – who so far seems a little less concerned with headlines than his predecessor – will see the sense in the consultation responses and ditch the policy before it goes any further.
To some on the Inside Housing newsdesk the announcement of 12 universal credit pathfinders last week sounded a little like old news. Hadn’t we already been told this?
No, it transpired, we hadn’t. What we’d been told about before was the four pathfinders for universal credit, which will begin the full scheme six months ahead of the national roll out in October 2013, and the six direct payment ‘demonstrations’. This was different.
Could the existence of four pathfinders, six demonstrations, and 12 pilots suggest the government is a little nervous about the introduction of its flagship welfare reform policy? Perhaps it is just being careful, but it if does have concerns these could well be justified.
The purpose of the pilots is to look at how certain aspects of universal credit could cause problems for some groups in society, with several of them concentrating on aspects of financial and digital inclusion.
Research being carried out by housing providers suggests the government is right to identify these areas as potential problems.
Under universal credit some payments that are currently made direct to the intended beneficiary – for example housing benefit payments going to landlords – will go to tenants. Although mechanisms will be in place for tenants that don’t have bank accounts, the way the system is designed will make it easier to manage for those that do.
Likewise the new system is going to place an increasing pressure on benefit recipients to have access to the internet, and be reasonably proficient in its use. It is designed to be managed online, and although support will be in place to help people who can’t get to grips with the technology, this will be based around helping people to get online rather than giving them an alternative way of managing their account.
Figures from one landlord who has been investigating the impact welfare reform will have on its tenants reveal the scale of the challenge. So far it has found only 53 per cent of its tenants have a bank account, and only 29 per cent have access to the internet.
These figures are unlikely to be representative of benefit recipients nationally, but they do give some indication of the scale of the challenge facing landlords in the run up to the implementation of universal credit. It’s good to see the government’s pilots looking at these issues, but with just over a year to go it seems doubtful that all the problems can be resolved before the scheme gets off the ground – regardless of how many pilots are thrown at it.
There’s always been a nagging suspicion that the reason the government is so keen to pay the housing element of universal credit to tenants is that it is too difficult to do otherwise.
If the minister for employment is to believed, however, this is not the case. In parliament last week Chris Grayling categorically stated that the IT system that underpins universal credit will not only be able to make payments of the housing element to tenants or landlords, but will be ready to go by October 2013.
Interesting though this little statement is, it doesn’t get us any closer to understanding why the government is so determined not to make housing welfare payments to landlords.
It has been presented with clear warnings that taking this route could damage the business case of housing associations, making it more expensive for them to borrow money and therefore build much-needed homes, but has offered little in the way of support beyond a few vague promises.
Private landlords have also expressed their concerns. A group has set up a petition warning many will stop housing tenants who are in receipt of benefits if payments go to the tenant.
It is hard to understand why the government has not backed down on this. It argues tenants should have control of their finances, but most landlords aren’t asking for payments to go to them automatically, they just want tenants to have the option of specifying that payments should go to the landlord. By not allowing this, the government is taking choice and control away from tenants, as well as risking increasing arrears and management costs for landlords.
These arguments have been made many times, so perhaps it is time for social landlords to accept the inevitable and get on with working out what to do about it. There might be time for one more attempt to change thinking though, maybe Mr Grayling’s answer providers a glimmer of hope.
We’ve had a few u-turns from the government recently, surely one more wouldn’t hurt.
After a bit of a false start the government’s guidance on the allocation of social housing made it out of the starting blocks on Friday, but the result of the race is far from certain.
We had been hoping for the document on Wednesday, and a wave of national newspaper articles suggested the more privileged members of the media had received a similar tip off, but nothing appeared until Friday, when housing minister Grant Shapps once again popped up in the papers and on Conservative Home to tell us what he’d been up to.
What the hold up might have been is unclear from the document, as it is broadly in line with the consultation paper published in January, and retains the basic principles of allocation policy from previous versions of the guidance.
First and foremost, authorities still have to base their allocations policy on the ‘reasonable preference’ categories, which are things like being homeless, or living in unsanitary or overcrowded conditions.
In the unlikely event that there are any homes left after these problems have been dealt with, then councils move on to the ‘additional preference’ categories. Here there is some potential for change from the old allocations policies, with authorities urged to consider factors such as a link with the community, and whether a family is in work.
However these rules aren’t binding, and a fairly high proportion of the authorities that responded to the consultation said they weren’t thinking about changing their policies to take the government’s recommendations into account.
What will be binding - once the necessary legislation is in place - is a new requirement that former members of the armed forces, injured servicemen and women, and bereaved spouses or civil partners should be given additional preference if they fall within the reasonable preference categories.
Even this could have limited impact, however, as it seems likely to only affect a fairly small number of people.
The allocations guidance is intended to give councils more freedom to set their own policies, but in the absence of a major house building programme, it seems likely most local authorities will continue to give precedence to the kind of families they house under the existing system.
Last week the housing minister Grant Shapps said he would back a private members bill put forward by Conservative MP for Watford Richard Harrington to making subletting a criminal – rather than civil - offence. This sounds fairly straightforward, but there are a couple of issues.
Firstly, as has been argued before on this blog, and somewhat more authoritatively on Nearly Legal, subletting is already frequently prosecuted as fraud – which is a criminal offence. Creating a specific offence of tenancy fraud might help a little bit, but it isn’t going to eradicate subletting in one fell swoop, as the government’s press releases on the subject seem to suggest.
The other problem is to do with process. Ministers have been talking about making subletting illegal for years, but in January this year we finally got some concrete proposals. These were put out for consultation, with a summary of responses published in April.
We are still waiting for the government response to the consultation, saying whether or not it will go ahead with the plans. So if the government hasn’t yet decided what to do on subletting, why is it backing a private members bill on the subject?
It feels a bit like this is being done through the back door, and is vaguely reminiscent of the feed-in tariff fiasco where the government got itself into all sorts of legal trouble by cutting payments for electricity generated from photovoltaic panels before a consultation on the subject had even closed.
If the government feels there are genuine gains to be made by creating a specific offence of tenancy fraud, despite legal claims to the contrary, then it should bring forward legislation in the usual manner to prove it rather than supporting a backbench bill.
There is clearly some appetite from housing professionals for setting tough limits on the amount tenants in social housing can earn.
When we asked readers recently what they thought the earning limit for social housing should be the biggest group – 38 per cent – favoured a limit of just £40,000. And a poll conducted at last week’s Chartered Institute of Housing conference found 87 per cent of delegates agreed with the principle of charging high-earning tenants more rent.
But the consultation on the proposals, published by the government last week, makes it clear just how difficult coming up with any workable option will be.
Even deciding what the earning limit should be is complicated. The paper suggests between £60,000 and £100,000, but housing minister Grant Shapps said he was keen not to introduce a ‘break on aspiration’. A lower limit could do just that, but a higher limit would limit the effectiveness of the policy.
Then you have the whole question of implementation. Who is going to monitor household income, and how is it going to be policed? And how can the policy be applied to existing tenants? Mr Shapps said he was prepared to rewrite the law to make it work, but this could be a lengthy process.
In the short term the government is hoping it might be able to raise rents for high earners to 80 per cent of market level through secondary legislation, rather than the primary legislation required for its preferred option of raising rents to full market level.
This seems to send a rather odd message though. Eighty per cent is, of course, the maximum level that can be charged under the affordable homes programme, so is that the right amount to charge high-earning households?
No doubt all of these problems could be overcome, but would it be worth the effort? Answering that question would be a lot easier if we had some clear data on how many households would be affected, but that is hard to come by.
The government says between 1,000 and 6,000 households would be hit by a £100,000 cap, 2,000 to 11,000 by £80,000, and 12,000 to 34,000 by £60,0000, but the wide variation in the figures doesn’t create confidence.
It’s easy to see why housing professionals and the public might support ‘pay to stay’ but there is a danger this could be a policy minefield with little of any value on the other side.
There was a brief flurry of excitement after Grant Shapps’ speech at the Chartered Institute of Housing’s annual conference last year when it looked like he’d promised tougher standards for the private rented sector.
During a question and answer session after his speech the housing minister said he would not ‘let the private sector be a poor quality alternative to the high quality social rented sector’.
This naturally led to a few more questions to be followed up after the event. What was the minister referring to? Were more standards going to be introduced? Who was going to police them? How did this fit in with wider government policy to slash red tape and regulation?
What the minister was talking about, it later emerged, was standards for private properties that councils use when discharging their duty to house people who would otherwise be homeless.
Under the Localism Act – as it has since become – people presenting to councils as homeless cannot refuse accommodation in the private rented sector. If they do so they are regarded as intentionally homeless, and the council is absolved of its responsibilities.
This change in law clearly required some kind of safeguards regarding the private rented sector homes that could be used, and this materialised last week in the form of a Communities and Local Government department consultation on an order governing the ‘suitability of accommodation’ used under the Act.
Broadly speaking, it is all very sensible stuff. Landlords must have a current gas safety record, ensure appliances and furnishings comply with fire and safety standards, take precautions around carbon monoxide, and offer 12 month tenancies with a written agreement ‘that the local authority considers adequate’.
There is also a section in the consultation designed to stop councils placing families a long distance away from their local area, which the minister promised to introduce after it emerged some London boroughs were looking to house people hundreds of miles away from the capital.
The only problem is these standards will only apply to a minority of private rented sector homes, and landlords who don’t meet the requirements can simply avoid taking on homeless people.
In the CLG press release that accompanied the consultation Mr Shapps was once again talking about ensuring ‘vulnerable families have this reassurance whether they’re placed in the private or social rented sector’, but these proposals will only provide the protection in a small number of cases.
If the government really wants to get to grips with the private rented sector it must look at tougher standards across the board, and a mechanism for enforcement. Unless it does so Mr Shapps’ pledges will continue to sound a little hollow.
When a government minister hails an agreement his department has thrashed out with trade bodies as a ‘step in the right direction’ it doesn’t fill you with confidence.
There are some clear benefits in the code of practice Norman Lamb and his colleagues at the Department for Business, Innovation and Skills have agreed with the four trade associations representing the bulk of payday lenders.
In particular moves to improve transparency and freeze charges and interest when customers get into problems are welcome. But is it really going to make a difference?
It is hard to see why we need payday lenders at all. If you haven’t been able to buy something you want from your salary one month, you are unlikely to be able to buy it the next month, so you should probably go without.
In situations where people are really in need of short-term financial help to meet genuine need there are alternative ways to get hold of cash, with credit unions being the most obvious example.
If the government really wants to protect people from short-term lenders it should be looking for much tougher regulation, or to abolish payday lending altogether.
The biggest round of applause at this morning’s welfare conference was reserved for a peer, but it wasn’t Lord Freud.
Instead Baroness Patricia Hollis, Labour peer and chair of Broadland Housing, got the audience on her side with her eloquent summary of the impact the welfare reform minister’s bedroom tax would have on struggling tenants.
She wasn’t the first audience member during the National Housing Federation conference question and answer session to try to impress on the minister the impact his policy changes will have on the ground.
Another delegate highlighted the case of a 56-year-old woman, currently surviving on £71 a week, who faces a £15 cut in council tax support, and a further £11 cut as a result of the bedroom tax. How could this woman survive on £45 a week, with £20 of fuel payments, the minister was asked. And how could she afford the removal costs, in the unlikely event that a one bedroom bungalow for her could be found?
His answer was that the government is making funding available through discretionary housing payments, and that it is up to housing associations to handle particular cases. He talked about the benefits of using housing stock as efficiently as possible, ‘don’t forget we are chronically short of housing in this country’ he remarked at one point, somewhat unnecessarily.
Then he talked some more. ‘He’s mumbling now, he doesn’t have an answer,’ muttered my neighbour. Others were more vocal: ‘Cut the crap and own up’, a voice from the back of the room demanded.
The minister continued to try to defend the under-occupation penalty on the grounds that it would encourage better use of stock, an argument even chair NHF chief executive David Orr dismissed as a ‘ruse’ to divert attention from the true money saving aim.
Whether Lord Freud believes his own spin or not didn’t become clear. What was obvious was that if he was in any doubt about the view of the housing sector about the bedroom tax before the conference, he wouldn’t have been so afterwards.
Protestors outside the building delivered the message before he even got through the door, and Mr Orr noted: ‘I would imagine there are some people here who would have some sympathy with the people waving leaflets outside.’ The openly hostile reaction from the audience should have confirmed what Lord Freud already knew.
On 19 April 1976 an individual put their name down for housing in Hammersmith and Fulham. They’re still waiting.
The council won’t say any more about who this person is, for confidentiality reasons, but they have said the person has been on the waiting list for 36 years.
For the council this little fact illustrates that the current allocations system – where anyone can go on the waiting list regardless of need – needs to be scrapped.
A draft housing strategy going before the council’s cabinet next week proposes a radical overhaul of housing allocation and tenancy management. Gone is choice-based letting, and a guarantee of social housing for homeless families.
Instead you will have to meet priority need categories just to go on the list, and successful applicants will be offered a choice of ‘housing options’ including social housing, accommodation in the private rented sector, or low-cost homeownership.
If households don’t fancy the ‘offer’ then they’ll drop down the priority scale.
In common with other councils who are reviewing their allocation policies, H&F is looking to favour those in work, people with a local connection, ex-armed forces, and foster carers. It’ll offer five year tenancies to most, but two-years for the young, or anti-social, or anyone who is going into a property the landlord might want to sell.
It is also planning to set an income threshold of £40,200 for social housing (the angle picked up in today’s Times), and potentially shift homeless households out of London (which the Guardian covered when it got hold of a leaked – but accurate – version of the papers a couple of weeks ago).
The newspapers are interested in this one because it is H&F, which is seen as a hotbed of Conservative Party policy development, especially on housing. Its departing leader, Stephen Greenhalgh, has just been appointed as London mayor Boris Johnson’s deputy for policing.
But the reality is there isn’t much that is unusual in what H&F is up to. It’s plans are pretty similar to those being considered in Wandsworth, Barnet, Richmond, or a host of other councils in London and beyond.
It’s quite noticeable that having been given the freedom to manage their own allocation policies, councils seem to be coming to very similar conclusions about the best way to do this.
That could be because the answer is obvious, and they’ve all seen it, or it could be because central government has given quite a clear line about how it sees allocations reform, and councils are beginning to understand that localism doesn’t mean quite what they thought it did.
Either way it’ll be interesting to see how it works out. Will these new policies really result in people getting the housing that is best suited to their needs? Or is this just a very complicated way of disguising the fact that there aren’t enough homes?
Perhaps that person who has been on the H&F waiting list since 1976 knows the answer. Please get in touch if it is you.
Basing housing allocations on merit is gaining support, but it should not be at the expense of need.
This claimed in some London boroughs more than half of lets went to non-UK nationals, despite also admitting that data on the subject is incomplete because social housing applicants aren’t required to declare their nationality.
Labour MP and government ‘poverty czar’ Frank Field fuelled the debate by using the Migration Watch report as a platform to promote his own calls for an allocation system that favours ‘good citizens’. His proposals are set out in a private members bill he has introduced to parliament.
It’s easy to dismiss these proposals out of hand, arguing that there is such limited social housing stock available that by the time you’ve allocated homes to people in the highest priority need categories there are so few homes available that any argument about merit becomes irrelevant.
In some cases, however, a merit based approach has been shown to work. Manchester is one of the first councils to have put this into practice, and has figures to show its prioritisation of applicants who are in work is effective. Other authorities are set to follow its lead.
Where the Manchester example differs from the ideas advocated by Mr Field, however is that the merit criteria sit alongside need. If two families are equally in need of housing, but one family is in work while the other is not, then the working family might get priority.
Under Mr Field’s proposals a family that is deemed to be deserving of housing might get a home, while a household that is in greater need – but has a less good record of behaviour – might be refused.
That seems to be recipe for disaster, with troublesome families pushed into temporary accommodation or onto the street, where they are likely to become a greater burden on society and continue to create problems in the communities where they are placed, rather than getting the support they need.
Local elections are all about getting to grips with the issues that matter to communities, so it was no surprise that Ed Miliband chose to focus on crime today.
Launching Labour’s campaign for the English elections on 3 May, the party leader sounded vaguely familiar.
He talked about ‘common sense policing’ and taking a ‘tougher’ line on anti-social behaviour. He even said there is a need for more ‘respect’. He didn’t quite say ‘tough on crime, tough on the causes of crime’ but he might as well have done.
If the rhetoric was a little unoriginal, then the ideas were similarly uninspired. Keep anti-social behaviour orders. Put more police on the streets. Make offenders repair damage caused in their communities, and meet their victims.
It could all have come straight out of New Labour’s 2006 Respect Action Plan, and if those ideas had worked then, local politicians wouldn’t be raising the same issues again now.
That isn’t to say they are bad ideas. Restorative justice – as the idea of arranging meetings between offenders and their victims is often known – has been shown to work, and it is hard to argue with putting more police on the streets.
Where Labour went wrong in the past, however, was failing to live up to the second part of its mantra. The party was ‘tough on crime’ - as prison overcrowding demonstrated - but it didn’t do enough to address the causes of the problem.
Getting to grips with poor quality housing and worklessness would do a lot more to tackle crime than hitting offenders with increasingly harsh punishments, but that kind of message doesn’t tend to go down too well on the campaign doorstep.
Across the UK there are 500,000 ‘forgotten families’ that need support in order to turn their lives around, said the Independent Riots, Communities and Victims Panel’s final report After the riots, published today.
It says that public services need to work together to develop a strategy for helping these people who are “bumping along the bottom” and unable to change their lives. The work many social landlords are already doing would be a good starting point.
Housing professionals are already well aware that this is the case, and have numerous initiatives in place to help supporting some of these families to turn their lives around.
As Inside Housing, the Chartered Institute of Housing and the National Housing Federation pointed out in The Riot Report: How housing providers are building stronger communities, published in February, social landlord are often closer to communities than other service providers, meaning they are able to lead the way.
It was Nick Clegg who asked the Independent Riots, Communities and Victims Panel, led by former housing boss Darra Singh, to go away and investigate the causes of the riots. Now that he and David Cameron have been presented with its final report, a good next step would be for them to take a look at the successful projects that are already being worked on in the housing sector.
Many housing professionals have already commented that the government’s troubled families programme, which has recently been set up to target the 120,000 families with the most problems, will only address the tip of the iceberg, and that there are many more families that need support.
Some social landlords are working on targeted interventions along with other agencies in order to prevent families reaching crisis point. These family intervention projects have a high success rate, with most recent figures showing that 70 per cent of families exit them left for a successful reason, such as a reduction in anti-social behaviour and achieving their support plan goals.
For example, Stafford and Rural Homes set up a FIP in 2010 in which one key worker supports up to six families at a time providing intensive support.
The scheme cost £45,000 in its first year – but using the Family Savings Calculator, a tool developed by the Department for Education, which quantifies the preventative savings for society based on an individuals’ previous behaviour, the housing association is able to show that the scheme has saved the criminal justice system and organisations including social services £420,000 for just the first six families its helped.
Housing providers are ahead of the game on this one – and they have evidence to prove it.
Will history look more favourably on the Tenant Services Authority than Grant Shapps did?
The housing minister made it pretty clear what he thought of the social housing regulator before he even made it to government. And when the coalition government came to power and he switched from being shadow housing minister to housing minister it always looked like the agency’s days were numbered.
There was of course the required consultation to go through first, but Mr Shapps did rather undermine this by referring to the regulator as ‘toast’ before the supposed scrutiny had got underway. The coalition government has always had a rather different view of the term ‘consultation’ than other organisations, as the recent debacle over feed-in tariffs has shown.
One of the final acts of the TSA, which closes for business this week, was to publish a short history of its existence. Needless to say this didn’t go down particularly well with Mr Shapps, who tweeted on Friday: ‘I’ve scrapped this wasteful Lab £100m quango, but they’ve still found time to write their own 7pg history before going.’
The history doesn’t appear to contain any mention of the term ‘toast’ or indeed much reference to the rather chaotic demise of the agency. It also fails to mention that the regulator was, for a short period of time before it started work, to be known as ‘Oftenant’.
Source: Anna Branthwaite
Its highly entertaining publicity campaign that featured then chief executive Peter Marsh touring the country in a bright pink VW camper van to talk to tenants is also strangely absent from the TSA’s own version of events.
From a personal point of view I’ll be sorry to see the TSA go. Stories about its creation, future and demise have given a steady boost to website traffic over the last few years, and our exclusive story confirming that it was to be axed remains one of the most read items we’ve ever run.
From the – significantly more important – point of view of the social housing sector, it is harder to judge what impact the end of the regulator will have. In its ‘history’ document the regulator focuses on the standards it has developed, and how these will be taken forward by the regulatory committee of the Homes and Communities Agency.
It could be argued that a little over three years is a long time to spend developing some standards, and perhaps the regulator could have achieved more, but then it was always going to be struggling once the government made clear it had the life expectancy of a mayfly.
Whatever history makes of the TSA, its demise is certainly going to see major changes to the way social housing is regulated. We know the new regulator is going to be much more concerned with economic regulation than housing management issues. And we know tenant panels will be expected to pick up some of the slack.
What we don’t know is whether or not this will result in an effective system of regulation that will offer protection to tenants while allowing landlords to flourish. We may have to wait another few years for our next history lesson to find out.
Research showing the government’s flagship home energy efficiency projects won’t meet carbon reduction or fuel poverty targets doesn’t come as any great surprise.
Energy consultancy Camco, which published its findings this morning as part of the Energy Bill Revolution campaign, issued a similar warning in research it produced for the National Housing Federation nearly a year ago.
What is striking about today’s research is the scale of the predicted failure.
The government has a target of eliminating fuel poverty in 2016. Camco’s study suggests that far from meeting the target, the problem will actually get 40 per cent worse, meaning a third of UK households will be in fuel poverty, rather than the current figure of a quarter.
The claim from Ed Matthew, director of Transform UK, which is running the campaign, that ‘more people die every year in the UK from living in a cold home than die on our roads’ is also striking.
The rise in fuel poverty is partly due to rising energy prices, over which governments have limited control, but there are a range of other factors that can be changed – most notably the energy efficiency of our homes.
The concern here is that the solution isn’t anywhere near good enough to deal with the problem.
When the green deal was first mooted it was as a voluntary scheme to allow households to get energy efficiency improvements at no up front costs, with the expense of installation recouped through fuel bill savings.
Since then it has become a little tougher, with a few sticks introduced alongside the efficiency carrot. The most significant of these will probably be changes to building regulations, although requirements for feed-in tariff recipients and private landlords could also have some influence.
The overall problem with the green deal, however, is that it is a ‘deal’, and a commercially-orientated one at that. If the government wants to make real progress on tackling fuel poverty then it is probably going to require a fair degree of enforcement and subsidy.
The Energy Company Obligation will play a role, and there is also some finance expected through the Green Investment Bank, but Camco does not think this will be enough.
The Energy Bill Revolution campaign wants to see the government invest £4 billion a year that Camco has calculated will be raised through carbon taxes in energy efficiency measures. That seems unlikely to happen, but something a lot more radical that the green deal may be needed if the government is to get anywhere near its 2016 fuel poverty target.
The president of the Chartered Institute of Housing warned this week that welfare reform is the biggest challenge facing the housing sector, but the full scale of that challenge isn’t even clear yet.
Any major policy change from central government has knock on effects, so a change of the magnitude of the reforms contained in the Welfare Reform Bill is always going to be a bit of an unknown quantity.
An interesting piece of research from Haringey Council, for example, looks at the impact of housing benefit reform on temporary accommodation. Haringey is predicting hundreds of families could be made homeless as a result of plans to bring temporary accommodation payments in line with the local housing allowance, and that it would lose out on millions of pounds of rental income each year.
Then there are all the other changes – the bedroom tax, the shared accommodation rate, and of course – the big one – universal credit and the £26,000 cap. Couple those with the wider reform of the housing sector and the details of the outcome are anyone’s guess.
General predictions of increasing homelessness and deprivation seem fairly likely to come true, ministerial promises of falling rents and benefit bills seem slightly more optimistic.
A prime example of the kind of unintended consequences policies can have is the question over the impact of paying housing benefit direct to tenants. In the context of the wider reforms this seems a fairly small issue – a side effect of universal credit, perhaps – but for the housing sector it could be massive, with the most dire predictions being a huge surge in arrears and evictions and irreparable damage to the viability of developing housing associations.
Surely the government didn’t intend that when it came up with the policy, and you have to wonder if they were even aware of the potential harm it could do. They are certainly aware now, and are set to pilot a number of approaches to limit the damage.
But with the Welfare Reform Bill nearing the end of its passage through parliament, the time for arguments is over. It is now up to the housing sector to figure out what the consequences will be, and how it is going to deal with them.
Anyone of the view that Labour politicians are in favour of helping the least well off in society might want to reconsider after studying proposals put forward by Frank Field last week.
The backbencher has introduced a private members bill to Parliament that he claims would create a ‘premier league’ for housing allocation, where well behaved members of society would get precedence over their less respectable peers, regardless of need.
Under Mr Field’s plans ‘good citizens’ who fall into the six priority categories for the allocation of social housing would be given homes before other families. Writing for Inside Housing he even suggests respectable families who do not fall into priority categories could get precedence over poorly behaved families who meet the normal criteria.
Clearly this would create a few problems. Who decides who is a good citizen and who is not? How do you keep track of changes in behaviour? What happens to bad citizens who become homeless if there are no homes left for them because they’ve been taken by all the good citizens?
But possibly the most difficult thing about Mr Field’s proposals is that the underlying premise that there are some people who deserve the support of the state, and some who do not. It all seems rather Victorian.
People aren’t born as good citizens or bad citizens. They behave in a certain way because of the influences, opportunities and upbringing they’ve had. ‘Neighbours from hell’, as the tabloids like to brand them, need to be supported by the housing sector, not excluded from it.
It started with the bins, but now seems to be spreading to housing policy.
Just weeks after announcing the coalition government would let councils do what they wanted communities secretary Eric Pickles was on the warpath, making it clear such freedoms did not include the power to have fortnightly rubbish collections.
And now the centralisation of localism seems to have spread to the allocation of social housing.
Last week’s ‘consultation’ on ‘guidance’ for local housing authorities in England on the allocation of accommodation reads more like an instruction manual.
Normally government consultations ask the public what they think of ideas. This one instead asks what housing providers are doing, and makes it pretty clear whether the government is likely to approve of their actions.
‘Does your allocation scheme already provide for some priority to be given to people who are in work, seeking work, or otherwise contributing to the community?’ asks one of the fifteen questions.
It might as well add: ‘If not, why not – do you want a visit from Pickles?’
The guidance outlines the various existing ‘reasonable preference’ categories that housing authorities are legally obliged to have regard to, before going on to make the government’s view clear on what should be done with any leftover homes.
Authorities are ‘strongly encouraged’ to favour members or ex-members of the armed forces, and ‘urged to consider’ how they can use allocation policies to encourage people into work.
The paper also spells out that plans in the Welfare Reform Bill will penalise working-age tenants on housing benefit who under occupy homes, and suggests authorities should ‘explore the implications of this’.
You could argue these are perfectly reasonable aims (you could also argue the opposite, but that is one for another day), but the whole point of localism was that local authorities are in the best position to make decisions about what is best for their area.
Issuing them with tightly worded guidance making it clear exactly what the government wants them to do not only undermines localism, but also casts doubt on the whole way policy is formulated. If central government wants to tell local authorities how to operate it might as well just get on with it and ditch the pretence.
How unusual is it to be under 25, single, and in need of social housing? Not particularly, you might think.
But in the London borough of Barnet it appears to be quite a rare occurrence, at least if the council’s reform of its housing allocations policy is anything to go by.
Barnet is proposing to limit all new tenancies given to single under 25s to two years from April this year, despite government directions to the Tenant Services Authority stating that two year tenancies should only be issued in ‘exceptional circumstances’.
Housing policy watchers may remember this caused a bit of a fuss last year. Housing minister Grant Shapps resisted calls to add the ‘exceptional circumstances’ restriction to the Localism Bill during its passage through Parliament, but later promised MPs it would be set out in the directions to the regulator.
When the directions appeared, however, there was no sign of the two year clarification. Various people accused the minister of breaking his promises, and then, a few weeks later, an amendment to the directions appeared including the ‘exceptional circumstances’ clause.
All of which now appears a little pointless if councils are going to define being single and under 25 as exceptional.
Mulled wine induced memory loss appears to have set in at some national news outlets in recent days, with the reappearance of a couple of stories from last year.
Westminster Council’s plans to link behaviour to benefits were featured by the BBC the Financial Times and others on Friday. Even readers with not particularly long memories might recall a similar wave of stories published just a few weeks before when the council issued its plans.
Then on Sunday we were treated to a reprisal of housing minister Grant Shapps’ plans to criminalise the subletting of council properties and make social tenants who earn more than £100,000 a year pay market rents.
The subletting plan was first raised in March 2010, by Labour housing minister John Healey, and has been championed by Mr Shapps ever since. Raising rents for high earners – most recently dubbed ‘pay to stay’ by the housing minister – has also been on the cards since June and was set out in the Laying the foundations housing strategy in November.
This tells us a few things about the way the major news outlets in this country operate, but more interestingly also reveals a bit about attitudes to social housing. The Express’ take on the benefits story was ‘Families from hell could lose council-tax benefits’, while the FT went with a slightly more restrained ‘Council eyes loss of benefits for work-shy’.
On subletting the Sun went with ‘Rent scam tenants face jail’ and other papers were quick to condemn the ‘scandal’ of sublet homes.
Clearly subletting homes for financial gain should be stopped, and it also makes little sense for councils to be housing tenants who are earning more than £100,000, but the reality is these problems are pretty insignificant compared to the wider issues facing the sector.
Rising unemployment, housing benefit cuts, declining grant, and a chronic shortage of homes are much more fundamental issues that the sector will need to get to grips with in 2012. It is easy to see why papers pick up on topics like subletting and high earners, but the housing sector needs to make sure some of the other issues also get onto the national news agenda.
2011 saw housing gain much more prominence as a political and social issue. The battle for 2012 will be to turn this publicity into a realistic appraisal of the challenges facing housing, and the contribution the sector can make to improving society as a whole.
Councils and the government are taking a hard line on making the best use of existing social housing stock.
Westminster has released details of plans to prioritise housing for families who behave as it wants them to, and penalise those who don’t.
Its proposals, put out to consultation today, include means testing existing tenants and increasing rents for high earners, docking housing allocation credits for anti-social behaviour, and giving extra points for volunteering or adoption and fostering.
At a national level the government’s plans on under-occupation, which are due to be debated in the House of Lords this week, show a similar desire to control the behaviour of social tenants.
Under the plans working-age tenants on housing benefit who are deemed to be under-occupying would see their benefits cut. The exact levels have yet to be determined, but 15 per cent for one spare room, and 25 per cent for two, seem to be likely.
The criteria for what rooms are required are strict. One bedroom per adult or couple, and children should share with one other child – of any gender if under nine, or the same gender if under 15.
Clearly this leaves little scope for having friends or grandparents to stay – a luxury most homeowners would probably take for granted – but faced with sharp cuts to benefits many tenants may have little option but to downsize.
A more positive approach is outlined by housing association A2 Dominion. It is offering tenants a financial incentive to move to smaller properties - £1,000 per room given up, plus £500 towards decorating and £700 towards removal costs. It’s not a bad offer, but it is hard to see it appealing to anyone who doesn’t already want to downsize.
Using the kind of punitive techniques outlined by Westminster and the government to control the behaviour of social tenants feels wrong. But at the same time the limited availability of housing does mean it is vital the best use is made of existing stock.
Perhaps sanctions are the only way to really get to grips with under-occupation, although it would be good if the government could take slightly more generous line when defining what families really need.
Work and pensions secretary Iain Duncan Smith suggested the government could be prepared to give some ground on this issue during a lecture to the London School of Economics earlier this month.
Let’s hope that hint of a change of heart turns into something more concrete as the Welfare Reform Bill continues its journey through parliament this week.
Stock transfer seems to be undergoing a bit of a revival, and it is causing the same arguments as ever.
The most notable row at the moment features Wycombe District Council, where campaign group Defend Council Housing is threatening legal action to block the move despite a ballot showing strong support from tenants.
The campaigners argue the information given to tenants in the run up to the ballot, which took place in April, was misleading. The council makes a strong case that the transfer has been led by tenants from the outset, and will be to a community-led organisation headed up by a council tenant.
At the moment a final decision on the transfer is with Grant Shapps, but if the housing minister gives the go ahead then the transfer is scheduled for the 12 December.
DCH is planning to make a final decision on whether to push for a judicial review this week. The campaigners feel there is growing local opposition to the move and they could make a strong case, but timing is now very tight.
Regardless of who is in the right on this one, an interesting figure has emerged from the discussions. Wycombe will avoid taking on £202.36 million of debt through the reform of the housing revenue account subsidy system if the transfer goes ahead.
That wasn’t the original motivation for the Wycombe transfer – which was set in motion by tenants several years ago – but it is something the council clearly sees as a benefit.
In recent months there has been an upsurge in councils seeking to transfer stock. Perhaps some councils are concluding that the cost of debt outweighs the freedoms that comes with self financing, and stock transfer offers a way out.
One of the more interesting bits of David Cameron’s ‘radical’ vision for housing is his reinvention of the 1980’s policy right to buy.
At his party’s conference in October the prime minister promised a ‘revolution’ on housing, and yesterday he was similarly full of rhetoric. In reality though, much of the Laying the foundations strategy is a reworking or extension of existing ideas.
That isn’t necessarily a bad thing. In the last 18 months we’ve had such an avalanche of housing policy initiatives that a paper bringing it all together into a coherent whole would be very useful. The strategy has a good stab at that task, but whether it truly succeeds remains to be seen.
What it does do is give more detail about how the revitalised right to buy will work. When Mr Cameron first raised the policy in Manchester there was some confusion about how discounts could be increased and still allow a replacement home to be built for every one sold. Questions were also asked about how the move fitted in with reform of the housing revenue account subsidy system, and the move to self-financing.
While the strategy doesn’t have all the answers, it does give some clues. On the first point, it is clear the government doesn’t intend the sale of a council home to generate enough money to build another one outright. Instead enough money should be left over once discounts have been applied, and debts paid off, to be roughly equivalent to the subsidy given for development through the affordable rent programme – about 20 per cent of the cost.
It also promises that the right to buy reforms will not have an impact on the viability of councils managing their own revenue from housing under self-financing. Under existing rules 75 per cent of right to buy receipts go back to the Treasury. The changes will see the money from sales used to pay off housing debt, then Treasury and council forecast receipts, then used to build more homes.
Much of the detail remains to be decided. How the money for new homes is handled, for example, will be subject to a consultation expected next month. Clearly some progress has been made though, and you get the feeling the government will find a way to resolve any outstanding financial and legislative issues.
What could be a greater concern is appetite for the new product. Even with the discount rate upped to 50 per cent there is some concern in the sector that tenants won’t want to exercise their enhanced right to buy. Are the declining right to buy sales the consequence of declining discounts – as the government claims – or simply a reflection of the fact that many of the most desirable council homes have already been bought?
The government wants to see the right to buy result in 100,000 new homes, but that relies on there being 100,000 sales. With just 8,410 council homes sold in England last year, quite a jump will be needed if that figure is to be achieved any time soon.
An interesting potential solution to the demand problem comes from Home Group. The association, which has endeared itself to Conservative ministers through its transparency initiative, is calling for the right to buy to be extended to housing association homes.
It believes this could result in an extra 100,000 properties if homes sold were replaced on a like for like basis.
Such a move could create a genuine resurgence in right to buy sales by extending the mechanism to tenants and homes that are currently excluded. It would also present a whole range of new financial and legislative problems, but if enough new homes could be built then it might be worth it.
Perhaps Mr Cameron’s radical vision for housing just isn’t radical enough.
The passage of the Localism Bill through parliament marks a major shift for the social housing sector, but in which direction?
After months of negotiation and disagreement the final version of the bill was agreed last week, and is now waiting for royal assent before it becomes the Localism Act.
One of the most vital issues for social landlords will be deciding what to do about the length of tenancies.
The bill introduces fixed-term tenancies, but leaves landlords free to decide if they want to implement them. Guidance on the subject has been somewhat vague.
Housing minister Grant Shapps resisted calls at the committee stage of the bill to clarify the circumstances in which the shortest permitted tenancies – lasting just two years – could be used, but later promised to confirm that five years should be the usual minimum in directions to the social housing regulator.
When these directions materialised the five-year commitment was nowhere to be seen, prompting accusations of a u-turn. Then, a few weeks later, the directions were amended to include the five-year statement.
Following this confusing chain of events we are still none the wiser about how the new rules will be interpreted on the ground.
Inside Housing hosted a round table on localism last week with representatives from across the sector, and views on the tenancy question were varied.
Most of those who are looking to implement flexible tenancies were talking about five years or more, but we’ve also heard some providers may go lower, while some may not implement the proposals at all.
Questions have also been raised about the financial implications for providers of switching to flexible tenancies, with doubts about how lenders might view changes to the security of income streams.
The Localism Bill may have finished its political journey, but its legal one is just beginning.
Camden claimed a legal first last week for securing a criminal conviction against one of its tenants who had been subletting their council home.
Oladapo Talabi pleaded guilty to the charges against him, and was given a 12 month community order to do 100 hours of unpaid work.
The case is unusual – although perhaps not as unusual as Camden claims – because the council has decided to go through the criminal rather than civil courts to pursue a subletter.
Generally subletting is treated as a breach of a tenancy agreement, which is a civil matter that can result in eviction, but little more.
In the case of Mr Talabi, Camden used the Fraud Act 2006 to prosecute for failure to disclose information and exposing the council to loss.
In a similar case in 1991 Ealing used the Theft Act to prosecute one of its tenants who had used false papers and a false identity to obtain a council flat. In this instance the tenant was sentenced to 12 months in prison.
Both the current housing minister, Grant Shapps, and his Labour predecessor John Healey have expressed a desire to make subletting a criminal offence.
The obvious question posed by the Camden case, is why bother if you can already get a criminal prosecution against a subletting tenant?
Mr Shapps has argued that the prospect of a prison sentence would deter potential subletters. It is hard to judge if this would really make a difference though. Are subletters aware they are not committing a criminal offence?
Mr Talabi didn’t even get a custodial sentence, because the judge looked favourable on the fact that he was using the rental income to pay off debts, including rent arrears. But even if he had been given a long stretch at her majesty’s pleasure, it’s hard to believe many others would be put off.
It started off as the ‘right to move’ then it was the ‘freedom pass’ now it has become ‘homeswap direct’.
If the rhetoric used for the government’s scheme to help social tenants move house sounds like it has been toned down, then perhaps that mirrors the scheme itself.
When the Conservatives were in opposition we had the ‘right to move’, under which social tenants would be able to demand their landlord sell their home and buy them one of equivalent value anywhere they wanted.
It was condemned by landlords concerned they would end up managing properties pepper potted across the UK and never saw the light of day.
Instead, once the Conservatives were in power, we got the ‘freedom pass’, a national database listing every household in social housing that wanted to move. This too was ditched.
What we have ended up with is an agreement between four commercial home swap agencies to share data, and some new directions to the social housing regulator to ensure landlords allow tenants to move.
Even this has its problems. For starters it’s a web-based system, so will tend to exclude some households, particularly the elderly.
Some of the government’s assumptions are also questionable. Are there really large numbers of tenants who are desperate to move to find employment, and if there are, are homes available in these areas?
And are the elderly – those who are internet savvy – really going to want to downsize to smaller properties? Given the hard line the government is taking on under occupation through its housing benefit reforms, it is surprising to see it expects voluntary downsizing to realise any significant gains in availability of larger homes.
As ever there are also numerous questions about how this policy interacts with other policies, most notably the reforms to social housing tenancies. The Localism Bill states tenants who wish to transfer will ‘surrender’ their existing agreement and be granted a new one by their next landlord.
How will that work? Tenants will be concerned they could be switched to a less secure agreement, and landlords will be worried about being landed with an administrative nightmare with tenants on a whole host of different contracts.
Admittedly these hurdles are as nothing compared with the problems the right to move would have created, but they are still significant, and you have to wonder if dealing with them will really deliver the kind of gains the government anticipates.
Grant Shapps’ promise that the coalition government would deliver a net increase in affordable homes has always sounded a little hollow.
As the housing minister more or less admitted during a press briefing at the Chartered Institute of Housing’s Harrogate conference earlier this year, it would be hard not to meet the commitment because of the decline in right to buy sales.
That could be about to change, however, with prime minister David Cameron’s announcement yesterday that he intends to breathe new life into right to buy by offering ‘proper discounts’.
Mr Shapps was quick to respond to the threat to his promise, telling Inside Housing editor Stuart Macdonald that there would still be no net decrease in affordable homes under the coalition. Mr Cameron has also made clear he expects a new home to be built for every one sold, but the policy presents a whole range of questions.
With details of the new right to buy discount yet to be released, the first obvious one is how much of a discount can the government offer if it wants to have enough money left to build replacement homes.
Communities secretary Eric Pickles told the Independent it would ‘be a combination of how long somebody’s been in [the home] and there will be a ceiling on the total amount’, but there can’t be too much room for manoeuvre if we are going to see similarly sized houses to those being sold built in similar locations.
There are plenty of other questions as well. How does this fit in with the reform of the housing revenue account, under which 75 per cent of right to buy receipts will go to the Treasury. And how does it fit in with the localism agenda? If this is council money, is the government really going to force them to use it to build homes? One council has already suggested it would rather use it to set up a deposit scheme for first-time buyers, and others will be sure to have alternative uses for the cash.
Hopefully more details will emerge during the course of the Conservative Party conference this week. If not we will have to wait for the promised housing policy paper, which is now due in November.
Despite the questions, it is encouraging to see housing being raised as such a crucial issue at the conference. Now we just need to see the talk translated into a real increase in genuinely affordable homes.
Affordable rent isn’t affordable. That seems to be the message emerging from studies into the impact of the government’s new regime.
The first hard evidence that charging tenants up to 80 per cent of market rent would be unaffordable for many without benefit rises emerged in February.
Housing association Family Mosaic looked at how affordable rent would affect 50 of its tenants in London and the south east. It found their benefit costs would have to rise by 151 per cent to £411,372 a year to meet the higher rents.
Last week we had a similar study from East Thames, which looked at the six east London boroughs where it operates. This found that in areas such as Newham affordable rent would mean housing costs would exceed 45 per cent of income for more than half of tenants.
Today we have yet more evidence, this time carried out by Cambridge University for Affinity Sutton. This looked at five local authority areas – Brighton and Hove, Bromley, Hertsmere, Mid Sussex and Plymouth. It found a couple with three or more children would breach the new £26,000 a year benefit cap in four of the five areas if they had to pay 80 per cent of market rent.
At a seminar earlier in the year, Affinity Sutton chief executive Keith Exford described the interaction between benefit reforms and affordable rent as ‘ill considered’. On the basis of the evidence the association has now published it is easy to see why.
The government argues many affordable rent tenants will come from the private sector, not existing social properties, so benefit payments will fall. If it is wrong it could find itself facing soaring homelessness unless it backs down on some of its key social policies.
Labour’s plans for social housing have received some support on this site, since they were outlined here last week.
But whilst the idea of favouring applicants who are in work proved popular with some, any support was always accompanied by a caveat: this won’t work unless we build more homes.
The paper, which is penned jointly by shadow communities secretary Caroline Flint and Newham mayor Sir Robin Wales, notes that in 1981 47 per cent of people in social housing were employed, but by 2006 the figure had dropped to 32 per cent.
The argument that this trend should be reversed is hardly new, and not particularly controversial. But the problems here run a lot deeper than allocations policy.
With 1.8 million people on waiting lists, there are clearly not enough homes to go round.
The paper states that ‘progressive local authorities…will be giving priority to those in employment as well as supporting the most vulnerable when allocating social housing’.
If these local authorities are serious about ‘supporting the most vulnerable’ then it is hard to imagine there will be many homes left for low-paid workers, regardless of how much they deserve a decent home.
The government’s decision to amend is regulatory directions to include a reference to five-year tenancies is a puzzling one.
Housing minister Grant Shapps has always been clear flexible tenancies should be for a minimum of five years, and two years would be exceptional.
He turned down amendments to the Localism Bill that would have enshrined this in law, but promised to ensure it was explicit in the directions to the social housing regulator on tenancy standards.
When the draft standards were published, there was initially no mention of five-year tenancies. But then last week the consultation was updated with the five-year rule.
The official reason given was that the change had been made in response to the discussion of the bill at committee stage in the House of Lords. But a quick read of the relevant pages of Hansard reveals the Lords were concerned about a lot more than two-year tenancies.
Peers put forward a range of amendments to the bill, designed to protect vulnerable groups, introduce greater protection for tenants, ensure tenants are not penalised for bureaucratic mistakes, clarify what happens to secure tenants when they move, and deal with a host of other complex issues that will result from the introduction of flexible tenancies.
The government refused to accept any of the changes, arguing either that they were not needed, or if they were, then they would be better covered through guidance rather than legislation. This point was disputed by Lord Rix, who was clear he felt protection for vulnerable people should be on the face of the bill.
The decision to amend the consultation document to include five-year tenancies is welcome, but it leaves many of the issues raised by peers, and a host of others, unresolved.
Admittedly it would be absurd to seek to set out every nuance of how flexible tenancies will operate in the bill, but it would be helpful to have more clarity. And it is hard not to be slightly suspicious that this rather odd row over five-year tenancies is a smoke screen to divert attention from other important issues that have yet to be resolved.