Housing Action Collapse - the shape of things to come?
18/04/2012 7:37 pm
Does the collapse of Housing Action indicate that relying on charity to meet social need risks failure?
Suffolk-based Housing Action – which leased 300 properties from landlords and let them to vulnerable tenants in the East of England – has been put into liquidation. The charity was acting as a link between local authorities and private landlords. It used to receive local housing allowance for their tenants which it then redistributed to private landlords.
A statement released by the liquidators and the Housing Action board to the Norwich Evening News said that “The trustees sought appropriate advice and came to the conclusion that while the charity was not insolvent, the risks associated with trying to continue as a going concern were too great.”
Though they were receiving rents below market rate, the scheme proved attractive to many landlords in the area. The Eastern Landlords Association has warned that some of its members might choose to replace their vulnerable tenants to bring in new people.
My own view that this is an early indication of what will be the outcome of the combined housing and welfare policy of this government, but what do others think?
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23/04/2012 12:37 pm
"Does the collapse of Housing Action indicate that relying on charity to meet social need risks failure?"
In a word - no. Any endeavour has a risk of failure - so this does not indicate anything new.
Let's focus on positives - what is likely to make 'private charities' more successful at meeting social need (as defined by individual charities and whoever contributes to funding them)? The Government is actually a large monopolistic competitor to charities meeting social need. Let me explain this.
There are many people who would choose to be benevolent. However, a lot of their income and spending is taxed which reduces the amount left over for supporting charities. Individuals can't opt out of 'Government charity' otherwise known as the welfare system, as tax evasion is considered a crime. Individuals don't have a meaningful say in how their contributions to the welfare system will be spent, meaning they have little involvement in directing what social needs their money will go on. The Government is monopolistic when it comes to meeting social needs - does it have to be?
A lot of talk goes on about how the Government should emulate the private market and be competitive. Why not make it discretionary whether or not individuals fund the welfare system (through 'Additional Voluntary Taxation'), or direct their tax money to charities meeting social needs instead (as judged individually). At the moment, charities are so starved of contributions that they are constantly begging for crumbs from the Government, and there is no good reason why the system must be so.
Give people the choice of which charity to fund, and let them keep more of their earnings so they have the means to act on that choice. I think we would see 'private charities' grow and become very successful, and meet more social needs than are met now. Not that the Government will entertain any withdrawal of its interference into our economic affairs. After all, little people like us are too stupid and incompetent to be trusted with making such decisions - we need high salaried bureaucrats to make them for us... let's challenge this thinking.
23/04/2012 3:54 pm
Meritable, and a potential starting point for thinking when approaching a new way forward Jono, but as currently expressed what you are saying would just be a massive backwards step.
The circumstance and situation you are calling for is exactly that which predated the Poor Law - yet charitable giving failed the poor, life expectancy was appalling, and living conditions for the many equally bad.
Surely what needs to be considered is how tax charged is minimised whilst the value of the tax paid is maximised. The same is true in terms of charity. I'd never donate through a street collector, nor at all to the likes of the NSPCC, where so much is expended on collecting donations that the value is minimised. However arrived at, taxation, charitable donation, or a mixture of both, it is the value of that expended from that collected that needs to the attention. The philosophical debate of the primacy of the individual does not do this.
24/04/2012 2:07 pm
Chris - of course whenever you change from one system to another there are difficulties. People are notorious for reacting badly to change.
What I am calling for is nothing like the situation which preceded the Poor Laws. I am not calling for a Feudal system, or for most individuals to fear God, or for a reversal of modern technology back to the time when the printing press hadn't been around very long, or for an economy in which there is mass starvation, etc. Now and then are two incomparable periods. We can achieve things now we couldn't over 400 years ago.
It's interesting because the system I propose would enable you to exercise the judgement you arrived at - you could decide to fund the Government using your earnings through Additional Voluntary Taxation to support its Welfare system. Or instead, you could choose how much, if any, to give to private charities - according to whether you judge the money to be well spent or not. Currently you do not even have this choice.
This is why private charities are failing, and the welfare state continues to be the tax funded wrecking machine that it is. There is no choice. Our disposable incomes are being exhausted through taxes (both direct and stealth) and we have no real say. Government workers are spending our money on meeting the social needs they judge are important. I say we individually should be the ones judging what social needs are important to us, and back that judgement up with our own money.
24/04/2012 2:37 pm
I'm not convinced Jono.
Whilst you are not proposing a return of feudalism, and indeed times have changed, the reason that they have changed has been, in part, as an outcome of the actions of the State. The State has used its period of being in control of the levers of the economy to shape society into that which we know today. Part of that has been the evolution of the complex and (we agree) out of control tax system. Equally, what started as a means to ensure a suitably fit and educated workforce now costs in the extremis but produces a population ill suited to commercial requirements.
As you know, I'm on the 'flat-tax' side of the argument, and we've covered that previously at length. It is clear to me to continue to tweek what is failing is folly, but to revolutionise will have the change consequences that you point to. Thinking of how times have changed, I can not see any indication that people have socially evolved such as to support the change you would see introduced. Only recently it has been made clear that the elite (who some thought were paying so much into the tax pot, and now find that they are not) use charity to reduce taxation - yet offered lower taxation but a cap on further tax reduction from 'excesive' charitable giving chose not to give. They want the low tax and low donation option - i.e. given the choice those with the most would prefer to keep it thatnk you very much.
So I remain of the opinion that what we have seen with Housing Action is the shape of things to come - just as I forecast the consequences of Tory social and housing policy, the details of which are now becoming reality to the shock and horror of the less astute.
Not that I call you less astute, for you are, as has been seen, one of the most astute avatars to post on IH. What I mean though is that your faith in people to donate is misplaced, based on the evidence around.
25/04/2012 1:53 pm
Two points to respond to.
1) by your social evolution comment, I think what you are saying is that people would choose to keep their money and not help anyone. It is a matter of their earnings; my view is they should judge how to spend it and on what. Just because my neighbour is unkind, I do not have any right to take his money so that I can be more kind.
Many people in this country are kind though. For example, the Tsunami appeal saw generous, voluntary giving of support. Look at the latest generosity following the sad death of the marathon runner Claire Squires. Despite high levels of tax, people are generous in their support of charities as it stands now.
2) Charitable donations and tax 'efficiency' - under the system I think we both support - one with a flat % tax rate on earned income only, it would be impossible to engage in this sort of behaviour. Either you would pay Additional Voluntary Tax to support the welfare system, or donate to charities. There would be no tax advantage from donating. You would only donate to charities because you want them to be successful in their purpose.
The rich of the moral fibre you describe have those values of ethics because our system rewards them. We have a system which rewards people for coercing rules in favour of one collective or another. That is one reason why I believe in the primacy of the individual and dislike collectives backed with the force of Government. If you have a system which is premised on respect for the individual rights of every individual, you will not have one that passes laws, regulation, directives, grants, subsidies etc to the benefit of some individuals but to the cost of others. You will instead have a truly laissez-faire capitalism - not the corrupt and mixed economy we have now.
Those with the ethics you describe will find what they once considered to be virtues have now become impractical - because the state would have no power to interfere in the economy (other than perhaps through the money supply and general level of taxation). This would be far more powerful agent of 'social evolution' than all the regulation and compulsion we are faced with now as a restraining jacket.
26/04/2012 1:04 pm
I would tend to agree with you on this Jono. Indeed, from a Christian basis Jesus teaches that if you have something another person needs then you should give it to them, having faith that God will see to your own needs. This is not as silly as some may consider it in an ideal sense because if everyone behaved that way we would each be looking out for each others' needs and nobody would be left wanting.
Likewise, the sort of society you describe is equally viable. My response however was to point out that the consumerist society we have, that has been taught through generations to look out for number one, charity begins at home, family comes first, and the ultimate Conservatism no such thing as society, all suggest that neither the version of humanity that Jesus directed us to become, nor the version you would like to see, are likely without massive change in human outlook and far more people having more positive priorities beyond the selfish and the individual.
People misquote 'money is the root of all evil', when in fact it is the pursuit of wealth for wealth sake that we are told is wrong, coupled with wealth only has value if it is put to work for good causes. In that way Jono, your belief set, my belief set, and even the misguided antics of Cameron do share a common basis.
However, in the here and now, and with the failing of Plan A (not a surprise to many) the charitable sector is facing compounding crisis as more is demanded of it with less resources from State and individuals to fund the work.