Monday, 27 February 2017

Inside edge

All posts from: December 2010

2010: This is now

Fri, 31 Dec 2010

The second part of my review of the year looks at how the world changed even more than anyone was expecting following the election in May. 

May

Eric Pickles and Grant Shapps emerged as the key ministers for housing in the Conservative-Liberal Democrat coalition government. A leaked memo to senior officials at the Department for Communities and Local Government advised them to expect the questions from Pickles such as ‘Why are we doing this? How soon can we stop doing it? Can we take 40 per cent of the costs out?’ and to use Tory-friendly words such as ‘families’, ‘neighbourhoods’ and ‘progressive’.

The dynamic duo were quick off the mark in scrapping home information packs and regional spatial strategies. But there was no place in the coalition programme for government for Conservative pledges on the right to move, equity stakes for good social tenants or that promise to ‘respect the tenures and rents of social housing tenants’.

The spin said there was an extra £170m for social housing but the reality of the government’s first cuts announcement saw £230m lopped off the Homes and Communities Agency’s budget and projects worth hundreds of millions of pounds more froze pending the Budget in June.

June

In his first major speech as housing minister, Shapps promised an ‘age of aspiration’ on homeownership but the signs were not good: the proportion of mortgages advanced to first-time buyers fell to its lowest level since the credit crunch. Ominously, he also told his audience that ‘the cash for affordable housing has run out’.

Housing benefit was the big target for cuts in the emergency Budget, with chancellor George Osborne warning that costs were ‘out of control’. Proposals for bedroom size caps on the local housing allowance took most of the headlines but the package of cuts went further and faster than anyone was expecting. The key principle for the coalition was that ‘if you can work you should always be in a better position than if you don’t work’.

July

The dynamic duo ran into some turbulence. Shapps had described the Tenant Services Authority as ‘toast’ but the Treasury insists on a full review of social housing regulation under pressure from lenders. Pickles had scrapped regional strategies but legal uncertainty forced him into another statement saying they were being revoked now and abolished in legislation later in the year. It sounded like a tempting target for lawyers and so it proved in a High Court case later in the year. 

An impact assessment of the housing benefit cuts estimated that 939,000 claimants would lose an average of £12 a week each. And that was just for the first round including the bedroom caps that only accounted for a third of the overall savings being sought by the government.

August

David Cameron came out in favour of fixed-term tenancies.  He told a Q&A session in Birmingham: ‘There is a question mark about whether, in future, should we be asking, actually, when you are given a council home, is it for fixed period, because maybe in five or 10 years you will be doing a different job and be better paid and you won’t need that home, you will be able to go into the private sector?’ Cameron was immediately criticised by Lib Dem deputy leader Simon Hughes and it emerged that more than half of his parliamentary party were on record as opposing the idea. Surely there was nothing in it then?

September

The Lib Dem conference failed to debate Hughes’s motion calling on the government to rule out removing security of tenure. The man himself hit back with an attack on Labour’s record and a startling claim that ‘there’s a commitment across both coalition parties to build more social housing every year under this government than in any year of Labour government’.

Former housing minister John Healey accused the coalition of shedding its duty on housing. ‘On every front they are looking to withdraw national government and we have Tory and Lib Dem ministers washing their hands of any national role or responsibility in meeting the needs and aspirations that people have in this country for their homes for the future,’ he told the Labour conference. ‘Meanwhile, local authorities, increasingly Labour local authorities, will be picking up the pieces. And if we don’t help people see what is happening they’ll be picking up the pieces and picking up the blame.’

October

The spending review brought yet more cuts in housing benefit. Total benefits would be capped at £26,000 a year or £500 a week – effectively an upper limit on housing benefit – and the shared room rent extended from the under-25s to the under-35s.

The TSA was finally killed off in a bonfire of the quangos that would also see the HCA become a ‘smaller enabling and investment body’ and its London role transferred to the mayor. It sounded an awful lot like the recreation of the Housing Corporation and the GLC.

George Osborne cut the affordable housing budget by 60% in the spending review but simultaneously pledged to create 150,000 affordable homes. He got over the apparent contradiction by revealing plans to offer new tenants fixed-term tenancies on intermediate rents set at up to 80% of market rents. Nick Clegg later goes even further by pledging 400,000 ‘affordable’ homes over the next decade.

November

Iain Duncan Smith was forced to issue a clarification after I revealed that statistics on private rents that he claimed came from the Office for National Statistics in fact came from a property website. The Department for Work and Pensions had contrasted a 5% fall in rents recorded by findaproperty.com to a 3% rise in local housing allowance rates over the same period. In fact, the findaproperty index shows asking rents rather than actual rents, it covers a different part of the market to the LHA and it’s seen a strong increase in rents since the period chosen by ministers. 

Grant Shapps launched ‘the most radical reform of social housing for a generation’ with plans to give landlords the option of two-year tenancies and near market rents and local authorities the freedom to discharge their homelessness duty in the private rented sector. The consultation period (normally 12 weeks) was cut to eight including Christmas and it later emerged that the second reading of the legislation was scheduled for the day it ended.

December

In the wake of a highly critical report from the Social Security Advisory Committee, last-minute concessions from the DWP offer transitional relief to existing housing benefit claimants and give local authorities the discretion to offer direct payment to landlords. 

Housebuilders celebrated after the government said it would abolish a range of development standards and regulation. They had previously put the cost of the red tape at £60,000 per plot but even taking that with a pinch of salt the value of their land holdings could rise by hundreds of millions of pounds. The top six companies owned 245,000 plots in 2009 – at £20,000 a plot the combined value of that land would rise by £5bn.

An equality impact assessment on Supporting People and the spending review says that some councils could decided to spend more on services despite a 3% cut in the budget and the end of ringfencing. But the evidence from around the country suggests that they are already raiding it to pay for other services with Nottinghamshire looking at a cut of 67%, Cornwall 40% and Rochdale 30%. 

 

2010: This is now

Fri, 31 Dec 2010

The second part of my review of the year looks at how the world changed even more than anyone was expecting following the election in May. 

May

Eric Pickles and Grant Shapps emerged as the key ministers for housing in the Conservative-Liberal Democrat coalition government. A leaked memo to senior officials at the Department for Communities and Local Government advised them to expect the questions from Pickles such as ‘Why are we doing this? How soon can we stop doing it? Can we take 40 per cent of the costs out?’ and to use Tory-friendly words such as ‘families’, ‘neighbourhoods’ and ‘progressive’.

The dynamic duo were quick off the mark in scrapping home information packs and regional spatial strategies. But there was no place in the coalition programme for government for Conservative pledges on the right to move, equity stakes for good social tenants or that promise to ‘respect the tenures and rents of social housing tenants’.

The spin said there was an extra £170m for social housing but the reality of the government’s first cuts announcement saw £230m lopped off the Homes and Communities Agency’s budget and projects worth hundreds of millions of pounds more froze pending the Budget in June.

June

In his first major speech as housing minister, Shapps promised an ‘age of aspiration’ on homeownership but the signs were not good: the proportion of mortgages advanced to first-time buyers fell to its lowest level since the credit crunch. Ominously, he also told his audience that ‘the cash for affordable housing has run out’.

Housing benefit was the big target for cuts in the emergency Budget, with chancellor George Osborne warning that costs were ‘out of control’. Proposals for bedroom size caps on the local housing allowance took most of the headlines but the package of cuts went further and faster than anyone was expecting. The key principle for the coalition was that ‘if you can work you should always be in a better position than if you don’t work’.

July

The dynamic duo ran into some turbulence. Shapps had described the Tenant Services Authority as ‘toast’ but the Treasury insists on a full review of social housing regulation under pressure from lenders. Pickles had scrapped regional strategies but legal uncertainty forced him into another statement saying they were being revoked now and abolished in legislation later in the year. It sounded like a tempting target for lawyers and so it proved in a High Court case later in the year. 

An impact assessment of the housing benefit cuts estimated that 939,000 claimants would lose an average of £12 a week each. And that was just for the first round including the bedroom caps that only accounted for a third of the overall savings being sought by the government.

August

David Cameron came out in favour of fixed-term tenancies.  He told a Q&A session in Birmingham: ‘There is a question mark about whether, in future, should we be asking, actually, when you are given a council home, is it for fixed period, because maybe in five or 10 years you will be doing a different job and be better paid and you won’t need that home, you will be able to go into the private sector?’ Cameron was immediately criticised by Lib Dem deputy leader Simon Hughes and it emerged that more than half of his parliamentary party were on record as opposing the idea. Surely there was nothing in it then?

September

The Lib Dem conference failed to debate Hughes’s motion calling on the government to rule out removing security of tenure. The man himself hit back with an attack on Labour’s record and a startling claim that ‘there’s a commitment across both coalition parties to build more social housing every year under this government than in any year of Labour government’.

Former housing minister John Healey accused the coalition of shedding its duty on housing. ‘On every front they are looking to withdraw national government and we have Tory and Lib Dem ministers washing their hands of any national role or responsibility in meeting the needs and aspirations that people have in this country for their homes for the future,’ he told the Labour conference. ‘Meanwhile, local authorities, increasingly Labour local authorities, will be picking up the pieces. And if we don’t help people see what is happening they’ll be picking up the pieces and picking up the blame.’

October

The spending review brought yet more cuts in housing benefit. Total benefits would be capped at £26,000 a year or £500 a week – effectively an upper limit on housing benefit – and the shared room rent extended from the under-25s to the under-35s.

The TSA was finally killed off in a bonfire of the quangos that would also see the HCA become a ‘smaller enabling and investment body’ and its London role transferred to the mayor. It sounded an awful lot like the recreation of the Housing Corporation and the GLC.

George Osborne cut the affordable housing budget by 60% in the spending review but simultaneously pledged to create 150,000 affordable homes. He got over the apparent contradiction by revealing plans to offer new tenants fixed-term tenancies on intermediate rents set at up to 80% of market rents. Nick Clegg later goes even further by pledging 400,000 ‘affordable’ homes over the next decade.

November

Iain Duncan Smith was forced to issue a clarification after I revealed that statistics on private rents that he claimed came from the Office for National Statistics in fact came from a property website. The Department for Work and Pensions had contrasted a 5% fall in rents recorded by findaproperty.com to a 3% rise in local housing allowance rates over the same period. In fact, the findaproperty index shows asking rents rather than actual rents, it covers a different part of the market to the LHA and it’s seen a strong increase in rents since the period chosen by ministers. 

Grant Shapps launched ‘the most radical reform of social housing for a generation’ with plans to give landlords the option of two-year tenancies and near market rents and local authorities the freedom to discharge their homelessness duty in the private rented sector. The consultation period (normally 12 weeks) was cut to eight including Christmas and it later emerged that the second reading of the legislation was scheduled for the day it ended.

December

In the wake of a highly critical report from the Social Security Advisory Committee, last-minute concessions from the DWP offer transitional relief to existing housing benefit claimants and give local authorities the discretion to offer direct payment to landlords. 

Housebuilders celebrated after the government said it would abolish a range of development standards and regulation. They had previously put the cost of the red tape at £60,000 per plot but even taking that with a pinch of salt the value of their land holdings could rise by hundreds of millions of pounds. The top six companies owned 245,000 plots in 2009 – at £20,000 a plot the combined value of that land would rise by £5bn.

An equality impact assessment on Supporting People and the spending review says that some councils could decided to spend more on services despite a 3% cut in the budget and the end of ringfencing. But the evidence from around the country suggests that they are already raiding it to pay for other services with Nottinghamshire looking at a cut of 67%, Cornwall 40% and Rochdale 30%. 

 

2010: That was then

Wed, 29 Dec 2010

The first part of my review of the year looks back to the days when mighty beasts like the TSA bestrode the land and nobody cared what the Lib Dems thought. 

January

The year began with a subject that would dominate the next 12 months: the cost of housing benefit. Freedom of information requests revealed that one family in Brent had cost £208,000 since July 2008. The total bill was expected to reach £19.6bn in 2009/10, an increase of 14% in a year and 72% since Labour took power in 1997. To put that in perspective, the bill trebled under a decade of Conservative rule between 1986/87 and 1996/97 and rose 27% in 12 months of recession between 1990/91 and 1991/92.

In the days before it was toast, the Tenant Services Authority was consulting on its new regulatory framework for social housing in England and proposals for a tenant involvement and empowerment standard. Ominously for the quango, the Conservatives and the tabloids were keeping up the pressure with claims that it had resolved just 12 complaints in a year and was a waste of £38m of taxpayers money.

A report from the National Equality Panel revealed a startling contrast between the median household wealth of homeowners (£411,000) and social housing tenants (£15,000). In the wake of the the recession, it pointed out: ‘A fundamental question is now whether the costs of recovery will be borne by those who gained least in the period before the crisis, or by those who gained most, and are in the strongest position to bear them.’

February

Ominous signs for Labour as the Conservatives moved their tanks on to its lawn with an attack on its ‘truly shocking’ record on housing. Labour’s Two Nations cited housebuilding at its lowest since the war, falling homeownership, waiting lists up 80% and the fact that the Major government had built twice as much social housing as Blair and Brown. ‘Conservatives recognise the importance of social housing and the security it provides,’ it said, a statement that I wrongly thought might make it more difficult to attack security of tenure.

Official stats confirmed that the number of private tenants increased by more than 50% in the noughties. Neither mortgage lending figures nor stats showing that the number of net additional homes was running at half the government’s target suggested that was going to change any time soon. 

March

Alistair Darling (remember him?) came under attack for a Budget that did nothing for affordable homes. ‘The Chancellor has added to that by a change to housing benefit announced today that will make life impossible for low-income families in high-price areas such as London,’ said a then rather less well-known politician. Name of Clegg. 

April

The election campaign finally began. Labour promised to build 10,000 council homes a year after spending most of the previous 18 years resisting any such idea. The Conservatives accused Labour of spreading ‘unfounded and baseless statements’ that they planned to change security of tenure for current or future tenants or raise rents to market levels. The Lib Dem manifesto included a pledge to scrap ‘Westminister knows best’ housebuilding targets that sounded very Tory-friendly. Surely nothing could come of that?

I compared the Lib Dems to intermediate renting – new ideas that sound attractive to most people without knowing exactly what they stand for and constantly seem like their time has come without ever actually arriving. Not any more, of course. On renting, a CIH report presciently highlighted the controversial ‘trade off between security of tenure and ability to churn assets to produce the required overall return’ while I speculated that ‘who knows, if we get a hung parliament we could even have a Lib Dem housing minister in a month’s time.’

None of the parties was talking about the open secret of the huge cuts in public spending to come. According to the Instiutute for Fiscal Studies, we were in for the biggest cuts in public spending since the late 1970s, which led to a 68% fall in social housing starts. None of the parties’ plans for cuts added up, it said, implying that even bigger cuts in welfare were to come. I asked rather too tentatively as it turns out whether the battle would be about housing benefit as much as housing investment.

May

The undebated massive cuts to come were obvious in what the politicians did not say. ‘Housing is essentially a private sector activity,’ Gordon Brown told Jeremy Paxman. And when David Cameron was asked by Inside Housing what assurances he could give to the housing sector about the spending settlement his non-answer was all too plain: ‘Whoever wins this election is going to face some of the worst public finances ever seen and the biggest budget deficit in our peacetime history. So the truth is we’ve got to deal with this and sort out Labour’s debt crisis to get our economy moving.’ 

2010: That was then

Wed, 29 Dec 2010

The first part of my review of the year looks back to the days when mighty beasts like the TSA bestrode the land and nobody cared what the Lib Dems thought. 

January

The year began with a subject that would dominate the next 12 months: the cost of housing benefit. Freedom of information requests revealed that one family in Brent had cost £208,000 since July 2008. The total bill was expected to reach £19.6bn in 2009/10, an increase of 14% in a year and 72% since Labour took power in 1997. To put that in perspective, the bill trebled under a decade of Conservative rule between 1986/87 and 1996/97 and rose 27% in 12 months of recession between 1990/91 and 1991/92.

In the days before it was toast, the Tenant Services Authority was consulting on its new regulatory framework for social housing in England and proposals for a tenant involvement and empowerment standard. Ominously for the quango, the Conservatives and the tabloids were keeping up the pressure with claims that it had resolved just 12 complaints in a year and was a waste of £38m of taxpayers money.

A report from the National Equality Panel revealed a startling contrast between the median household wealth of homeowners (£411,000) and social housing tenants (£15,000). In the wake of the the recession, it pointed out: ‘A fundamental question is now whether the costs of recovery will be borne by those who gained least in the period before the crisis, or by those who gained most, and are in the strongest position to bear them.’

February

Ominous signs for Labour as the Conservatives moved their tanks on to its lawn with an attack on its ‘truly shocking’ record on housing. Labour’s Two Nations cited housebuilding at its lowest since the war, falling homeownership, waiting lists up 80% and the fact that the Major government had built twice as much social housing as Blair and Brown. ‘Conservatives recognise the importance of social housing and the security it provides,’ it said, a statement that I wrongly thought might make it more difficult to attack security of tenure.

Official stats confirmed that the number of private tenants increased by more than 50% in the noughties. Neither mortgage lending figures nor stats showing that the number of net additional homes was running at half the government’s target suggested that was going to change any time soon. 

March

Alistair Darling (remember him?) came under attack for a Budget that did nothing for affordable homes. ‘The Chancellor has added to that by a change to housing benefit announced today that will make life impossible for low-income families in high-price areas such as London,’ said a then rather less well-known politician. Name of Clegg. 

April

The election campaign finally began. Labour promised to build 10,000 council homes a year after spending most of the previous 18 years resisting any such idea. The Conservatives accused Labour of spreading ‘unfounded and baseless statements’ that they planned to change security of tenure for current or future tenants or raise rents to market levels. The Lib Dem manifesto included a pledge to scrap ‘Westminister knows best’ housebuilding targets that sounded very Tory-friendly. Surely nothing could come of that?

I compared the Lib Dems to intermediate renting – new ideas that sound attractive to most people without knowing exactly what they stand for and constantly seem like their time has come without ever actually arriving. Not any more, of course. On renting, a CIH report presciently highlighted the controversial ‘trade off between security of tenure and ability to churn assets to produce the required overall return’ while I speculated that ‘who knows, if we get a hung parliament we could even have a Lib Dem housing minister in a month’s time.’

None of the parties was talking about the open secret of the huge cuts in public spending to come. According to the Instiutute for Fiscal Studies, we were in for the biggest cuts in public spending since the late 1970s, which led to a 68% fall in social housing starts. None of the parties’ plans for cuts added up, it said, implying that even bigger cuts in welfare were to come. I asked rather too tentatively as it turns out whether the battle would be about housing benefit as much as housing investment.

May

The undebated massive cuts to come were obvious in what the politicians did not say. ‘Housing is essentially a private sector activity,’ Gordon Brown told Jeremy Paxman. And when David Cameron was asked by Inside Housing what assurances he could give to the housing sector about the spending settlement his non-answer was all too plain: ‘Whoever wins this election is going to face some of the worst public finances ever seen and the biggest budget deficit in our peacetime history. So the truth is we’ve got to deal with this and sort out Labour’s debt crisis to get our economy moving.’ 

Uncertain age

Wed, 22 Dec 2010

As Donald Rumsfeld might have put it, there are known knowns, known unknowns and unknown unknowns - and then there are cuts in housing benefit.

The big theme running through today’s report by MPs on the work and pensions select committee is just how much we don’t know about the way the cuts will work, the way claimants and landlords will respond to them and the wider social consequences. It’s a theme they keep coming back to again and again.

We don’t know whether the government will succeed in influencing the rents of private rented sector homes available to claimants and ‘further detailed research should be undertaken on this issue as the policy is implemented’.

We don’t really know why claimant rents increased after the introduction of the local housing allowance (despite the DWP’s best efforts with dodgy statistics) and the department should ‘undertake further research into the reasons for the increased rent levels and the methodologies used to measure them’.  

In terms of the effects on different groups of people, the committee calls for monitoring and/or more support for families with children, disabled people, the elderly and people under 35.

There is ‘inevitable uncertainty over the impact of expected shortfalls on possible levels of evictions and homelessness’. Will landlords be willing to renegotiate their rents? Will claimants be able to find accommodation? Here the department has already committed to a full review of the changes.

We don’t know how many households will have to move - though the evidence suggests the numbers will be far greater than the government expects - and the department should monitor the extent of enforced moves.

We don’t know how much homelessness will rise as a result of the cuts or what the costs of that will be. The government says there will not be a substantial increase; the Mayor of London says a 50% increase at a cost of £78m.

We don’t really know how much the cuts will save because we don’t know the extent of the extra costs that will local authorities incur from increased pressure on their other services. ‘We recommend that the Department takes these broader considerations into account when estimating the likely savings to be achieved and  overall taxpayer value for money.’

Will £180m of discretionary housing payments over the next four years be enough to cope? We don’t know and ‘we recommend that DWP carries out robust monitoring of DHP to ensure that any shortfalls and unmet needs are identified and acted upon swiftly’.

Will enough cheaper homes be available? The evidence of a continuing shortage in social housing and high demand for private rentals suggests not and claimants may be forced to accept overcrowded or unfit accommodation and the DWP needs to carry out a review of the impact of the changes. 

Given all those known unknowns, the committee has a strong warning for the government about the potential effects of cuts that are further back in the pipeline. 

In response to fears about the effects of the change to uprating the local housing allowance according to the CPI inflation measure from 2013, the DWP should ‘fully evaluate the impact of the changes in housing benefit introduced in 2011’.

And the committee highlights a range of concerns about the proposal to cut by 10% the housing benefit of anyone who’s been on job seeker’s allowance (JSA) for more than 12 months. TLone parents will be disproportionately affected, by the time the cut is introduced it will affect far more people than are currently on JSA because of the number of people being moved off incapacity benefit, and hostel providers fear they could be forced to close facilities or evict clients. 

The committee concludes its report: ‘Many Housing Benefit claimants are amongst the most vulnerable members of society. Given the level of uncertainty about how different groups of people and different regions of the country will be affected by the changes, it is vital that the Department for Work and Pensions monitors the impact of each of the proposed changes on each client groups across the different regions of the country. Appropriate further mitigating measures should then be swiftly taken to protect people from homelessness and hardship.’

Donald Rumsfeld famously had a plan for the invasion of Iraq but no plan for the occupation that followed.

The DWP seems to have a plan for the housing benefit cuts. But does it have a plan for the effects of the cuts? Does it have the resources to do all that monitoring? 

The committee says the cuts will need to be reviewed after two years and the Telegraph today reveals some potentially choppy political waters ahead with Lib Dem minister Ed Davey telling undercover reporters that the cuts are something he is ‘working with colleagues behind the scenes to get stopped’.

As the great man said, there are things we know that we know. There are things that we know we don’t know. There are things we do not know that we don’t know. 

 

Uncertain age

Wed, 22 Dec 2010

As Donald Rumsfeld might have put it, there are known knowns, known unknowns and unknown unknowns - and then there are cuts in housing benefit.

The big theme running through today’s report by MPs on the work and pensions select committee is just how much we don’t know about the way the cuts will work, the way claimants and landlords will respond to them and the wider social consequences. It’s a theme they keep coming back to again and again.

We don’t know whether the government will succeed in influencing the rents of private rented sector homes available to claimants and ‘further detailed research should be undertaken on this issue as the policy is implemented’.

We don’t really know why claimant rents increased after the introduction of the local housing allowance (despite the DWP’s best efforts with dodgy statistics) and the department should ‘undertake further research into the reasons for the increased rent levels and the methodologies used to measure them’.  

In terms of the effects on different groups of people, the committee calls for monitoring and/or more support for families with children, disabled people, the elderly and people under 35.

There is ‘inevitable uncertainty over the impact of expected shortfalls on possible levels of evictions and homelessness’. Will landlords be willing to renegotiate their rents? Will claimants be able to find accommodation? Here the department has already committed to a full review of the changes.

We don’t know how many households will have to move - though the evidence suggests the numbers will be far greater than the government expects - and the department should monitor the extent of enforced moves.

We don’t know how much homelessness will rise as a result of the cuts or what the costs of that will be. The government says there will not be a substantial increase; the Mayor of London says a 50% increase at a cost of £78m.

We don’t really know how much the cuts will save because we don’t know the extent of the extra costs that will local authorities incur from increased pressure on their other services. ‘We recommend that the Department takes these broader considerations into account when estimating the likely savings to be achieved and  overall taxpayer value for money.’

Will £180m of discretionary housing payments over the next four years be enough to cope? We don’t know and ‘we recommend that DWP carries out robust monitoring of DHP to ensure that any shortfalls and unmet needs are identified and acted upon swiftly’.

Will enough cheaper homes be available? The evidence of a continuing shortage in social housing and high demand for private rentals suggests not and claimants may be forced to accept overcrowded or unfit accommodation and the DWP needs to carry out a review of the impact of the changes. 

Given all those known unknowns, the committee has a strong warning for the government about the potential effects of cuts that are further back in the pipeline. 

In response to fears about the effects of the change to uprating the local housing allowance according to the CPI inflation measure from 2013, the DWP should ‘fully evaluate the impact of the changes in housing benefit introduced in 2011’.

And the committee highlights a range of concerns about the proposal to cut by 10% the housing benefit of anyone who’s been on job seeker’s allowance (JSA) for more than 12 months. TLone parents will be disproportionately affected, by the time the cut is introduced it will affect far more people than are currently on JSA because of the number of people being moved off incapacity benefit, and hostel providers fear they could be forced to close facilities or evict clients. 

The committee concludes its report: ‘Many Housing Benefit claimants are amongst the most vulnerable members of society. Given the level of uncertainty about how different groups of people and different regions of the country will be affected by the changes, it is vital that the Department for Work and Pensions monitors the impact of each of the proposed changes on each client groups across the different regions of the country. Appropriate further mitigating measures should then be swiftly taken to protect people from homelessness and hardship.’

Donald Rumsfeld famously had a plan for the invasion of Iraq but no plan for the occupation that followed.

The DWP seems to have a plan for the housing benefit cuts. But does it have a plan for the effects of the cuts? Does it have the resources to do all that monitoring? 

The committee says the cuts will need to be reviewed after two years and the Telegraph today reveals some potentially choppy political waters ahead with Lib Dem minister Ed Davey telling undercover reporters that the cuts are something he is ‘working with colleagues behind the scenes to get stopped’.

As the great man said, there are things we know that we know. There are things that we know we don’t know. There are things we do not know that we don’t know. 

 

Act in haste

Tue, 21 Dec 2010

The consultation on social housing reform ends on January 17. Guess when the government has scheduled the second reading of the Bill that will introduce them.

The debate on the Localism Bill scheduled for the same day means that the vote on the general principles of the reforms will be taken before there has been any chance to consider the responses to the consultation.

As I blogged when the reform paper was first published, the rushed consultation period of eight weeks (seven if you take off the Christmas and New Year week) breaches the government’s own code of practice. Now we know why.

The code drawn up by the Department for Business Innovation and Skills states that: ‘Consultations should normally last for at least 12 weeks with consideration given to longer timescales where feasible and sensible.’

It goes on: ‘If a consultation exercise is to take place over a period when consultees are less able to respond, e.g. over the summer or Christmas break, or if the policy under consideration is particularly complex, consideration should be given to the feasibility of allowing a longer period for the consultation.’

Over the Christmas break? Check. Particularly complex? On the government’s own description this is ‘the most radical reform of social housing in a generation’.

In the reform paper, the government justifies the haste on the grounds that: ‘The consultation period has been set at eight weeks to provide the greatest possible opportunities for comment and allow for a draft Direction on a new Tenancy Standard to be considered alongside the Localism Bill.’

However, even that does not seem to stand up to scrutiny. The consultation period on the new tenancy standard launched last week by the Tenant Services Authority (TSA) lasts until March 2.

The TSA admits that the consultation is 11 weeks rather than 12 but says it needs enough time to allow housing associations to implement the new Affordable Rent model from April 1.

In contrast, the housing reform paper promises: ‘A summary of the responses to consultation will be published on the Department’s website within three months of the end of the consultation period.’

Which implies that, just as the second reading will take place before the government has considered any objections to the reforms, the committee stage and third reading will happen before it has published the responses to the consultation.

That seems in flagrant breach of two more parts of the code – that ‘formal consultation should take place at a stage when there is scope to influence the policy outcome’ and that the summary of responses ‘should normally be published before or alongside any further action, e.g. laying legislation before Parliament’.

The code is not legally enforceable and ministers do have discretion to ignore it if they wish. The important point is what underlies it though – the idea that good consultation leads to good legislation and poor consultation leads to the exact opposite.

While many people will welcome reform of the housing revenue account at last, many of the other reforms are complex in their own right and in the way they interact with each other, not to mention cuts in housing benefit and wider welfare reform.

So what’s the rush? After all, there is no urgent electoral mandate for the reforms. There was no hint of the most controversial proposals in the coalition programme for government or in the Conservative or Liberal Democrat manifestoes.

As I may have mentioned once or twice before, the Conservative manifesto pledged to ‘respect the tenures and rents of social housing tenants’. Party spokespeople stressed during the election campaign that this applied to future as well as current tenants.

And more than half of current Lib Dem MPs signed early day motions in the last parliament opposing the idea of time-limited tenancies.

It’s true that the Localism Bill does not impose the changes across the board but allows local authorities and housing associations the freedom to apply them where they wish. Maybe the vast majority will not use the new powers – as a survey out yesterday on tenancies suggests – but whether it will turn out to be quite as voluntary as that in the long term remains to be seen.

The rush certainly seems to fit with the idea of ‘creative chaos’, the description that influential Conservative backbencher Nick Boles applies to the coalition’s reforms of public services. These are far from the only reforms that the coalition is rushing through.

The Lib Dem-supporting academic Alex Marsh says on his excellent blog that the unseemly haste suggests that ‘the Coalition seem to be trying to do as much – I am tempted to say “as much damage” – as fast as possible because they suspect it won’t last’.

But it’s hard to escape the impression that the real consultation on the housing reform plans happened before the election and over the summer – the one with Conservative local authorities in west London.

Act in haste

Tue, 21 Dec 2010

The consultation on social housing reform ends on January 17. Guess when the government has scheduled the second reading of the Bill that will introduce them.

The debate on the Localism Bill scheduled for the same day means that the vote on the general principles of the reforms will be taken before there has been any chance to consider the responses to the consultation.

As I blogged when the reform paper was first published, the rushed consultation period of eight weeks (seven if you take off the Christmas and New Year week) breaches the government’s own code of practice. Now we know why.

The code drawn up by the Department for Business Innovation and Skills states that: ‘Consultations should normally last for at least 12 weeks with consideration given to longer timescales where feasible and sensible.’

It goes on: ‘If a consultation exercise is to take place over a period when consultees are less able to respond, e.g. over the summer or Christmas break, or if the policy under consideration is particularly complex, consideration should be given to the feasibility of allowing a longer period for the consultation.’

Over the Christmas break? Check. Particularly complex? On the government’s own description this is ‘the most radical reform of social housing in a generation’.

In the reform paper, the government justifies the haste on the grounds that: ‘The consultation period has been set at eight weeks to provide the greatest possible opportunities for comment and allow for a draft Direction on a new Tenancy Standard to be considered alongside the Localism Bill.’

However, even that does not seem to stand up to scrutiny. The consultation period on the new tenancy standard launched last week by the Tenant Services Authority (TSA) lasts until March 2.

The TSA admits that the consultation is 11 weeks rather than 12 but says it needs enough time to allow housing associations to implement the new Affordable Rent model from April 1.

In contrast, the housing reform paper promises: ‘A summary of the responses to consultation will be published on the Department’s website within three months of the end of the consultation period.’

Which implies that, just as the second reading will take place before the government has considered any objections to the reforms, the committee stage and third reading will happen before it has published the responses to the consultation.

That seems in flagrant breach of two more parts of the code – that ‘formal consultation should take place at a stage when there is scope to influence the policy outcome’ and that the summary of responses ‘should normally be published before or alongside any further action, e.g. laying legislation before Parliament’.

The code is not legally enforceable and ministers do have discretion to ignore it if they wish. The important point is what underlies it though – the idea that good consultation leads to good legislation and poor consultation leads to the exact opposite.

While many people will welcome reform of the housing revenue account at last, many of the other reforms are complex in their own right and in the way they interact with each other, not to mention cuts in housing benefit and wider welfare reform.

So what’s the rush? After all, there is no urgent electoral mandate for the reforms. There was no hint of the most controversial proposals in the coalition programme for government or in the Conservative or Liberal Democrat manifestoes.

As I may have mentioned once or twice before, the Conservative manifesto pledged to ‘respect the tenures and rents of social housing tenants’. Party spokespeople stressed during the election campaign that this applied to future as well as current tenants.

And more than half of current Lib Dem MPs signed early day motions in the last parliament opposing the idea of time-limited tenancies.

It’s true that the Localism Bill does not impose the changes across the board but allows local authorities and housing associations the freedom to apply them where they wish. Maybe the vast majority will not use the new powers – as a survey out yesterday on tenancies suggests – but whether it will turn out to be quite as voluntary as that in the long term remains to be seen.

The rush certainly seems to fit with the idea of ‘creative chaos’, the description that influential Conservative backbencher Nick Boles applies to the coalition’s reforms of public services. These are far from the only reforms that the coalition is rushing through.

The Lib Dem-supporting academic Alex Marsh says on his excellent blog that the unseemly haste suggests that ‘the Coalition seem to be trying to do as much – I am tempted to say “as much damage” – as fast as possible because they suspect it won’t last’.

But it’s hard to escape the impression that the real consultation on the housing reform plans happened before the election and over the summer – the one with Conservative local authorities in west London.

That was then...

Wed, 15 Dec 2010

What a difference a year makes when you’re talking about cuts in housing benefit. 

Flash back exactly 12 months to December 15, 2009 and MPs were debating the first cuts in the local housing allowance planned by Labour - the removal of the £15 a week shopping incentive and the exclusion of high rents from the calculations in some areas.

Work and pensions secretary Yvette Cooper argued: ‘We think it is possible to exclude some of the highest rents that are distorting the system and leading to unfairness without jeopardising the existence of mixed communities, because it is right that we continue to support decent housing in mixed communities across London and many of our areas.’

A year later of course and it’s Labour fighting the much bigger cuts proposed by the coalition - despite a similar-sounding promise in its manifesto to reform housing benefit ‘to ensure that we do not subsidise people to live in the private sector on rents that other ordinary working families could not afford’.

A year ago shadow work and pensions secretary Theresa May berated Cooper over direct payment. ‘Why will the Government not adopt our policy of letting tenants choose whether the allowance is paid to them or directly to the landlord?’ she asks.

Cooper said she would consult on giving tenants more choice about having their rent paid direct and about requiring action from landlords on things like energy efficiency in return. 

One year on and direct payment has been dropped and then grudgingly and temporarily reinstated by the coalition.

And a year ago Steve Webb,  the Lib Dem shadow on work and pensions,  was attacking the government over media coverage of claimants receiving high pay-outs and warning of the human consequences in London.

He said: ‘As for the issue of high housing benefit for people in high-rent areas, I can see that this makes a bad newspaper headline, but if —especially in London—people in high-rent areas are shunted into low-rent areas, is there not a risk that family networks that can provide child care will be broken up, that children will be moved from their existing schools, and that ghettoes will be created when everyone in temporary accommodation ends up in bits of London where the rents are cheap? Is that really a good by-product of policy?’

Judging by today’s news that Westminster is planning to ship 80% of its homeless housing benefit claimants into temporary accommodation outside of the borough, he might have had a point.

Except of course that as work and pensions minister he is now one of the main people responsible for denying that the housing benefit cuts will result in any such thing and attacking critics for scaremongering.

As he told MPs in the housing benefit debate last month: ‘The impact of these changes has been grossly exaggerated…Talk of highland clearances and the final solution is a disgrace. My hon. Friend the Member for Wolverhampton South West (Paul Uppal) pointed out how offensive such language is to people, but even in this debate we have heard talk of highland clearances, and of Paris.’

That was then...

Wed, 15 Dec 2010

What a difference a year makes when you’re talking about cuts in housing benefit. 

Flash back exactly 12 months to December 15, 2009 and MPs were debating the first cuts in the local housing allowance planned by Labour - the removal of the £15 a week shopping incentive and the exclusion of high rents from the calculations in some areas.

Work and pensions secretary Yvette Cooper argued: ‘We think it is possible to exclude some of the highest rents that are distorting the system and leading to unfairness without jeopardising the existence of mixed communities, because it is right that we continue to support decent housing in mixed communities across London and many of our areas.’

A year later of course and it’s Labour fighting the much bigger cuts proposed by the coalition - despite a similar-sounding promise in its manifesto to reform housing benefit ‘to ensure that we do not subsidise people to live in the private sector on rents that other ordinary working families could not afford’.

A year ago shadow work and pensions secretary Theresa May berated Cooper over direct payment. ‘Why will the Government not adopt our policy of letting tenants choose whether the allowance is paid to them or directly to the landlord?’ she asks.

Cooper said she would consult on giving tenants more choice about having their rent paid direct and about requiring action from landlords on things like energy efficiency in return. 

One year on and direct payment has been dropped and then grudgingly and temporarily reinstated by the coalition.

And a year ago Steve Webb,  the Lib Dem shadow on work and pensions,  was attacking the government over media coverage of claimants receiving high pay-outs and warning of the human consequences in London.

He said: ‘As for the issue of high housing benefit for people in high-rent areas, I can see that this makes a bad newspaper headline, but if —especially in London—people in high-rent areas are shunted into low-rent areas, is there not a risk that family networks that can provide child care will be broken up, that children will be moved from their existing schools, and that ghettoes will be created when everyone in temporary accommodation ends up in bits of London where the rents are cheap? Is that really a good by-product of policy?’

Judging by today’s news that Westminster is planning to ship 80% of its homeless housing benefit claimants into temporary accommodation outside of the borough, he might have had a point.

Except of course that as work and pensions minister he is now one of the main people responsible for denying that the housing benefit cuts will result in any such thing and attacking critics for scaremongering.

As he told MPs in the housing benefit debate last month: ‘The impact of these changes has been grossly exaggerated…Talk of highland clearances and the final solution is a disgrace. My hon. Friend the Member for Wolverhampton South West (Paul Uppal) pointed out how offensive such language is to people, but even in this debate we have heard talk of highland clearances, and of Paris.’

Clean hands

Wed, 15 Dec 2010

In central government? Worried about the consequences of the spending review? Just wash and go with brand new Localism.

A clutch of equality impact assessments published by the DCLG today show how much it is using its flagship idea to play Pontius Pilate over the implications of the cuts.

The assessments cover spending decisions on Supporting People, Decent Homes, the Working Neighbourhoods Fund, Private Sector Renewal and the Local Enterprise Growth Initiative and justify the cuts on the basis that they are necessary to meet the coalition’s top priority of cutting the deficit.

More controverisally, and unlike the assessment on changes to housing benefit published two weeks ago by the DWP, each of them delegates responsibility for the impact of any cuts to local authorities. They will have to carry out their own equality impact assessments and, presumably, face any legal consequences.

On Supporting People, the assessment spells out a 3% reduction in national funding from £1,636m in 2010/11 to £1,590m in 2014/15.

And it points out that it ‘funds frontline support services to disadvantaged and vulnerable people’ and ‘is already un-ringfenced, and so spending decisions are made by individual councils’.

The good news, according to the DCLG, is that ‘as part of the Spending Review, councils will have greater freedom and flexibility to make local spending decisions according to local priorities – some councils may decide to spend more funding on Supporting People services’.  

Anyone involved in the sector, or even anyone who read last week’s Inside Housing, will find that incredible. As Emily Twinch revealed, far from prioritising Supporting People, councils around the country are raiding the budget to pay for other services. Nottinghamshire is looking at a cut of 67%, Cornwall 40%, Rochdale 30%. Providers report that the minimum cut being considered is 10%.

The assessment dryly notes: ‘If any changes to the Supporting People programme national budget cannot be met through councils making efficiencies and/or pooling resources, services for vulnerable people may have to be decommissioned, re-modelled or scaled back.  This would impact on those who currently receive a Supporting People service.’

It’s much the same story on the other programmes too.  

Funding for Private Sector Renewal has been discontinued altogether and the government believes that ‘owner-occupiers are primarily responsible for the upkeep of their own properties’.  

The assessment notes that in 2008 there were 1.2m vulnerable private sector households living in non-decent homes, 1.1m of whom were over 60. But because the government does not know how unringfenced renewal funding was spent previously it cannot know what the impacts will be of its removal.  

And here’s that argument again: ‘The increased freedoms and flexibilities being provided to local authorities as part of the Spending Review mean that they will have greater freedom to prioritise and allocate budgets to support public services in ways which meet the needs of local people and communities.  Therefore, it is feasible that local authorities spend more money on repairs to private sector housing, if it is deemed a real priority.’

The £1.5bn Working Neighbourhoods Fund will end in March 2011 but the DCLG argues this has to be seen in the context of decisions on spending in other areas.

‘We have made sure that no council will see their overall spending power decrease by more than 8.9 per cent in 2011-12 or 2012-13,’ says the assessment. ‘We have done this by making available a transition grant in those years.’

That of course ignores the emerging evidence that many of the most deprived areas covered by the Fund will see the most substantial reductions.

And the assessment refers to earlier evidence that half of people from ethnic minorities live in deprived areas and that levels of disability are also significantly higher than the national average.  

Instead, the new Work Programme will ‘provide greater freedom for suppliers to give people the support they need’ from Summer 2011 and localism will come to the rescue.  

‘The drivers of deprivation, economic decline and social exclusion are place-specific. The circumstances and challenges faced by deprived neighbourhoods in Lancashire are very different to those of the poorest London boroughs.  The challenges are therefore best understood and addressed locally. In addition, communities are strongest when everyone has a free and fair say in the decisions that affect them.’

Clean hands

Wed, 15 Dec 2010

In central government? Worried about the consequences of the spending review? Just wash and go with brand new Localism.

A clutch of equality impact assessments published by the DCLG today show how much it is using its flagship idea to play Pontius Pilate over the implications of the cuts.

The assessments cover spending decisions on Supporting People, Decent Homes, the Working Neighbourhoods Fund, Private Sector Renewal and the Local Enterprise Growth Initiative and justify the cuts on the basis that they are necessary to meet the coalition’s top priority of cutting the deficit.

More controverisally, and unlike the assessment on changes to housing benefit published two weeks ago by the DWP, each of them delegates responsibility for the impact of any cuts to local authorities. They will have to carry out their own equality impact assessments and, presumably, face any legal consequences.

On Supporting People, the assessment spells out a 3% reduction in national funding from £1,636m in 2010/11 to £1,590m in 2014/15.

And it points out that it ‘funds frontline support services to disadvantaged and vulnerable people’ and ‘is already un-ringfenced, and so spending decisions are made by individual councils’.

The good news, according to the DCLG, is that ‘as part of the Spending Review, councils will have greater freedom and flexibility to make local spending decisions according to local priorities – some councils may decide to spend more funding on Supporting People services’.  

Anyone involved in the sector, or even anyone who read last week’s Inside Housing, will find that incredible. As Emily Twinch revealed, far from prioritising Supporting People, councils around the country are raiding the budget to pay for other services. Nottinghamshire is looking at a cut of 67%, Cornwall 40%, Rochdale 30%. Providers report that the minimum cut being considered is 10%.

The assessment dryly notes: ‘If any changes to the Supporting People programme national budget cannot be met through councils making efficiencies and/or pooling resources, services for vulnerable people may have to be decommissioned, re-modelled or scaled back.  This would impact on those who currently receive a Supporting People service.’

It’s much the same story on the other programmes too.  

Funding for Private Sector Renewal has been discontinued altogether and the government believes that ‘owner-occupiers are primarily responsible for the upkeep of their own properties’.  

The assessment notes that in 2008 there were 1.2m vulnerable private sector households living in non-decent homes, 1.1m of whom were over 60. But because the government does not know how unringfenced renewal funding was spent previously it cannot know what the impacts will be of its removal.  

And here’s that argument again: ‘The increased freedoms and flexibilities being provided to local authorities as part of the Spending Review mean that they will have greater freedom to prioritise and allocate budgets to support public services in ways which meet the needs of local people and communities.  Therefore, it is feasible that local authorities spend more money on repairs to private sector housing, if it is deemed a real priority.’

The £1.5bn Working Neighbourhoods Fund will end in March 2011 but the DCLG argues this has to be seen in the context of decisions on spending in other areas.

‘We have made sure that no council will see their overall spending power decrease by more than 8.9 per cent in 2011-12 or 2012-13,’ says the assessment. ‘We have done this by making available a transition grant in those years.’

That of course ignores the emerging evidence that many of the most deprived areas covered by the Fund will see the most substantial reductions.

And the assessment refers to earlier evidence that half of people from ethnic minorities live in deprived areas and that levels of disability are also significantly higher than the national average.  

Instead, the new Work Programme will ‘provide greater freedom for suppliers to give people the support they need’ from Summer 2011 and localism will come to the rescue.  

‘The drivers of deprivation, economic decline and social exclusion are place-specific. The circumstances and challenges faced by deprived neighbourhoods in Lancashire are very different to those of the poorest London boroughs.  The challenges are therefore best understood and addressed locally. In addition, communities are strongest when everyone has a free and fair say in the decisions that affect them.’

Crying Wolfie

Mon, 13 Dec 2010

It’s launched under the slogan ‘Power to the People’ but today’s Localism Bill seems to me to have a little bit of Winston Smith as well as Citizen Smith about it.

Taking Citizen Smith first [readers not familiar with late 70s sitcoms go here], the Tooting Liberation Front might not have approved at the time but 30 years on maybe Wolfie would now be the first to use the new community right to buy powers to take over the local library. 

If you can’t quite imagine Eric Pickles in the role created by Robert Lindsay, Conservative bloggers seem to be relishing it. Go here for more. 

And Winston Smith? Ok, localism is meant to be the exact opposite of Big Brother totalitarianism in George Orwell’s 1984, but Smith’s job at the Ministry of Truth in  is to rewrite history so that it fits with the party line. He eventually betrays those around him and comes to accept that 2 + 2 = 5.

I’m not just talking about the Newspeak involved in the way that publication was delayed until today. That took some organisations so much by surprise that they welcomed the Bill prematurely on Friday but it doesn’t take a complete cynic to wonder if the delay was designed to give a good news spin to today’s other announcement of cuts.

Because there’s something about the Localism Bill that does not quite add up.

It’s true that there are some potentially very good things like encouragement for local housing trusts and the right to build (the government cut the threshold for approval from 75% to 50% today). But I can’t help noticing that the freedoms for local communities to act are all on things that the coalition approves of - the freedom of property owners to build conservatories while objecting to new homes for outsiders.

Alright, the Bill will finally kill off regional strategies and introduce the new homes bonus. Ok, local communities will find it easier to clamp down on illegal traveller sites. And, yes, individual householders will be able to build extensions without planning permission. 

But there are other, less convenient, freedoms that local communities might choose to exercise. One example has ironically just become law in Scotland.

Many English local authorities in urban areas, especially Labour ones, would love to follow the Scottish example and scrap the right to buy for new tenants. Given that Welsh councils also now have the power to suspend the right to buy in areas of high demand, it’s perhaps the best example we have of localism in action in housing.

But the proposals in the social housing reform paper that will be enacted in the Bill do not just stop English authorities from following suit - they also extend the right to buy to the new fixed-term tenancies that are part of their freedom to deal with allocations and homelessness more flexibly. 

Likewise many councils and local communities in rural areas would love to restrict the growth of second homes. The Lib Dems promised to give local authorities the option to charge higher council tax for existing second homes and require planning permission for new ones by creating a new use class order. Those policies never made it into the coalition programme and (although i could be wrong) I don’t see much sign of them in the Bill either.

And Labour, Lib Dem and even some Conservatives local authorities would welcome much more freedom to borrow against their housing stock on top of reform of the housing revenue account. Big Brother public borrowing rules at the Treasury still prevent that. 

More to come as more detail emerges later. 

Crying Wolfie

Mon, 13 Dec 2010

It’s launched under the slogan ‘Power to the People’ but today’s Localism Bill seems to me to have a little bit of Winston Smith as well as Citizen Smith about it.

Taking Citizen Smith first [readers not familiar with late 70s sitcoms go here], the Tooting Liberation Front might not have approved at the time but 30 years on maybe Wolfie would now be the first to use the new community right to buy powers to take over the local library. 

If you can’t quite imagine Eric Pickles in the role created by Robert Lindsay, Conservative bloggers seem to be relishing it. Go here for more. 

And Winston Smith? Ok, localism is meant to be the exact opposite of Big Brother totalitarianism in George Orwell’s 1984, but Smith’s job at the Ministry of Truth in  is to rewrite history so that it fits with the party line. He eventually betrays those around him and comes to accept that 2 + 2 = 5.

I’m not just talking about the Newspeak involved in the way that publication was delayed until today. That took some organisations so much by surprise that they welcomed the Bill prematurely on Friday but it doesn’t take a complete cynic to wonder if the delay was designed to give a good news spin to today’s other announcement of cuts.

Because there’s something about the Localism Bill that does not quite add up.

It’s true that there are some potentially very good things like encouragement for local housing trusts and the right to build (the government cut the threshold for approval from 75% to 50% today). But I can’t help noticing that the freedoms for local communities to act are all on things that the coalition approves of - the freedom of property owners to build conservatories while objecting to new homes for outsiders.

Alright, the Bill will finally kill off regional strategies and introduce the new homes bonus. Ok, local communities will find it easier to clamp down on illegal traveller sites. And, yes, individual householders will be able to build extensions without planning permission. 

But there are other, less convenient, freedoms that local communities might choose to exercise. One example has ironically just become law in Scotland.

Many English local authorities in urban areas, especially Labour ones, would love to follow the Scottish example and scrap the right to buy for new tenants. Given that Welsh councils also now have the power to suspend the right to buy in areas of high demand, it’s perhaps the best example we have of localism in action in housing.

But the proposals in the social housing reform paper that will be enacted in the Bill do not just stop English authorities from following suit - they also extend the right to buy to the new fixed-term tenancies that are part of their freedom to deal with allocations and homelessness more flexibly. 

Likewise many councils and local communities in rural areas would love to restrict the growth of second homes. The Lib Dems promised to give local authorities the option to charge higher council tax for existing second homes and require planning permission for new ones by creating a new use class order. Those policies never made it into the coalition programme and (although i could be wrong) I don’t see much sign of them in the Bill either.

And Labour, Lib Dem and even some Conservatives local authorities would welcome much more freedom to borrow against their housing stock on top of reform of the housing revenue account. Big Brother public borrowing rules at the Treasury still prevent that. 

More to come as more detail emerges later. 

Local heroes

Sun, 12 Dec 2010

Where exactly does localism fit with concentrating even more development in the hands of the largest housing associations?

The trend away from locally-based housing associations and local authorities was already pretty much inexorable but, only days before the government launches its Decentralisation and Localism Bill and its drive to restore power to local communities, we might have expected some sort of retreat from it.

Instead, according to today’s Inside Housing, the process is apparently to be accelerated through a new Homes and Communities Agency Funding regime that will allow associations to bid for the development of an agreed number of homes over the next four years rather than scheme by scheme.

I say apparently given that the HCA has not yet published details of the new bidding process and denies that the intention is to restrict bidding to a handful of landlords. However, that has not stopped fears about the future of smaller developing associations who must already be wondering whether they want to take part in the new era of ‘affordable’ rent. 

With only £1.9bn of development funding to play with, there are good arguments for concentrating both grant and the new funding from ‘affordable’ rents in the hands of the largest players to maximise the number of new homes. 

But when you measure that against the declared aims of localism it does not quite compute.

Here’s how James Morris, Conservative MP and former chief executive of the Localis think-tank, sees it as a reaction to an inexorable march to centralisation over the last few years.  ‘Indeed, I would argue that this long march of centralisation has been one of the main causes of the problems that have manifested themselves over the last two decades – the collapse of trust in politics and the effectiveness of political decision making; the ineffective way in which central government has handled the management of public services and the general sense within local communities that political decision making has become remote from the grass-roots of social life. These forces also had the affect of snuffing out the culture of volunteering, of mutuality and sense of community which had previously been characteristic of many local areas.’

And Philip Blond, the Tory guru behind the big society, was quick to point out the housing contradiction in a report for the Respublica think-tank last month. 

To Buy, to Bid, to Build, co-written with Steve Wyler, called for a radical transfer of assets from the public sector to the community. The launch was attended by Greg Clark, one of the key ministers involved in drawing up the Localism Bill.

Blond and Wyler argue that the introduction of state finance in the 1970s and leveraged private finance in the late 1980s ‘led to a consolidation of the housing association sector into fewer, larger management units, and a gradual separation between housing development and community 

development. In effect, the housing associations that came to dominate the market became accountable in the first instance to their investors and regulators, and on a secondary level to their tenants – but no longer to the local community. The result: housing as a community asset was lost.’

Attempts have been made to redress the situation, they say, though community-owned housing schemes and community land trust initiatives, but ‘despite considerable energy being expended, these efforts have to date remained relatively marginal, and the consolidation of the existing 

housing association movement has continued, with recent changes in housing finance threatening to increase further the pressure on associations to focus resources towards mainstream housing rather than community development. Although some do run exemplary community benefit initiatives, many housing associations have become remote from the communities they serve, in terms of ownership and control.’

The big chance, as they put it, for community-owned housing ‘to move from the margins to the mainstream’ is Monday’s Bill. Ironically, of course, many of the big associations have their roots in ‘big society’-style philanthropy and community action. 

We know that it will include legislation on local housing trusts - but no additional money. It’s going to take a lot more than warm words to deliver real localism in housing. 

Local heroes

Sun, 12 Dec 2010

Where exactly does localism fit with concentrating even more development in the hands of the largest housing associations?

The trend away from locally-based housing associations and local authorities was already pretty much inexorable but, only days before the government launches its Decentralisation and Localism Bill and its drive to restore power to local communities, we might have expected some sort of retreat from it.

Instead, according to today’s Inside Housing, the process is apparently to be accelerated through a new Homes and Communities Agency Funding regime that will allow associations to bid for the development of an agreed number of homes over the next four years rather than scheme by scheme.

I say apparently given that the HCA has not yet published details of the new bidding process and denies that the intention is to restrict bidding to a handful of landlords. However, that has not stopped fears about the future of smaller developing associations who must already be wondering whether they want to take part in the new era of ‘affordable’ rent. 

With only £1.9bn of development funding to play with, there are good arguments for concentrating both grant and the new funding from ‘affordable’ rents in the hands of the largest players to maximise the number of new homes. 

But when you measure that against the declared aims of localism it does not quite compute.

Here’s how James Morris, Conservative MP and former chief executive of the Localis think-tank, sees it as a reaction to an inexorable march to centralisation over the last few years.  ‘Indeed, I would argue that this long march of centralisation has been one of the main causes of the problems that have manifested themselves over the last two decades – the collapse of trust in politics and the effectiveness of political decision making; the ineffective way in which central government has handled the management of public services and the general sense within local communities that political decision making has become remote from the grass-roots of social life. These forces also had the affect of snuffing out the culture of volunteering, of mutuality and sense of community which had previously been characteristic of many local areas.’

And Philip Blond, the Tory guru behind the big society, was quick to point out the housing contradiction in a report for the Respublica think-tank last month. 

To Buy, to Bid, to Build, co-written with Steve Wyler, called for a radical transfer of assets from the public sector to the community. The launch was attended by Greg Clark, one of the key ministers involved in drawing up the Localism Bill.

Blond and Wyler argue that the introduction of state finance in the 1970s and leveraged private finance in the late 1980s ‘led to a consolidation of the housing association sector into fewer, larger management units, and a gradual separation between housing development and community 

development. In effect, the housing associations that came to dominate the market became accountable in the first instance to their investors and regulators, and on a secondary level to their tenants – but no longer to the local community. The result: housing as a community asset was lost.’

Attempts have been made to redress the situation, they say, though community-owned housing schemes and community land trust initiatives, but ‘despite considerable energy being expended, these efforts have to date remained relatively marginal, and the consolidation of the existing 

housing association movement has continued, with recent changes in housing finance threatening to increase further the pressure on associations to focus resources towards mainstream housing rather than community development. Although some do run exemplary community benefit initiatives, many housing associations have become remote from the communities they serve, in terms of ownership and control.’

The big chance, as they put it, for community-owned housing ‘to move from the margins to the mainstream’ is Monday’s Bill. Ironically, of course, many of the big associations have their roots in ‘big society’-style philanthropy and community action. 

We know that it will include legislation on local housing trusts - but no additional money. It’s going to take a lot more than warm words to deliver real localism in housing. 

Gaining the plot

Thu, 9 Dec 2010

Britain’s biggest housebuilders could see the value of their land holdings rise by hundreds of millions of pounds as a result of the government’s drive to cut red tape.

As I blogged yesterday, the last month alone has seen the scrapping of the HCA’s core standards, a pledge to get rid of an ‘alphabet soup’ of local building standards and simplification of the Code for Sustainable Homes.

Add a re-definition of zero carbon due early next year and the way that the housing reform paper stretched the definition of ‘affordable’ homes and it’s clear that housebuilders’ longstanding call for a reduction in the regulatory burden has been answered.

That makes sense to some extent. They had a point when they complained about the way that the last government imposed an ever-increasing list of regulations and obligations to pay for affordable homes, infrastructure and sustainability on the assumption that rising land values would pay for them. In a recession and housing market downturn, and with housebuilding at its lowest level since the war, there are good arguments for reducing that burden to make more developments viable.

It’s hard to come up with an accurate figure for the regulatory costs involved. However, Grant Shapps said that scrapping the core standards would save £8,000 per home on schemes built with public funding or on public land. And studies by quantity surveyors of the Code for Sustainable Homes have estimated the cost of meeting levels 4 to 5 at more than £30,000 per home. 

Making the case against the regulatory burden in 2008, John Stewart, economic affairs director of the Home Builders Federation (HBF), made what he described as a conservative estimate that the affordable housing land subsidy was £30,000 per plot or £1.2m per hectare. He put the total cost of affordable housing, zero carbon and community infrastructure at £2.5m per hectare - on top of other section 106 demands, remediation costs, on-site infrastructure and rising building regulation costs.

On that basis up to £60,000 per plot could potentially be at stake in the drive to cut red tape. Not all regulations will go of course: some such as Boris Johnson’s new standards in London will be retained and some will be relaxed rather than scrapped. However, huge amounts of money are involved if even a fraction of those savings are achieved.

The biggest five housebuilders (Barratt, Taylor Wimpey, Persimmon, Bellway and Berkeley) owned a combined total of 245,000 plots in 2009. At a saving of £10,000 per plot, the value of their land could potentially rise by £2.5bn. At £20,000 per plot, it could rise by £5bn. To put that in perspective, their combined turnover was £6.6bn in 2008/09. 

Smaller companies (and housing associations with significant land holdings) would also see their value of their land rise

In the real world, of course, values will not rise on all sites and the overall outcome will depend on what happens in the wider land and housing markets. 

However, the good news for anyone that wants to see more homes is that sites that were not viable before should become viable. Housebuilders should be able to build and sell more homes at more affordable prices. At worst, they should be able to cope with any new downturn in the market.

The downside is that much of what’s now dismissed as red tape was put their there for a reason. Those numbers could come at the expense of standards - and contributions to genuinely affordable homes.

Gaining the plot

Thu, 9 Dec 2010

Britain’s biggest housebuilders could see the value of their land holdings rise by hundreds of millions of pounds as a result of the government’s drive to cut red tape.

As I blogged yesterday, the last month alone has seen the scrapping of the HCA’s core standards, a pledge to get rid of an ‘alphabet soup’ of local building standards and simplification of the Code for Sustainable Homes.

Add a re-definition of zero carbon due early next year and the way that the housing reform paper stretched the definition of ‘affordable’ homes and it’s clear that housebuilders’ longstanding call for a reduction in the regulatory burden has been answered.

That makes sense to some extent. They had a point when they complained about the way that the last government imposed an ever-increasing list of regulations and obligations to pay for affordable homes, infrastructure and sustainability on the assumption that rising land values would pay for them. In a recession and housing market downturn, and with housebuilding at its lowest level since the war, there are good arguments for reducing that burden to make more developments viable.

It’s hard to come up with an accurate figure for the regulatory costs involved. However, Grant Shapps said that scrapping the core standards would save £8,000 per home on schemes built with public funding or on public land. And studies by quantity surveyors of the Code for Sustainable Homes have estimated the cost of meeting levels 4 to 5 at more than £30,000 per home. 

Making the case against the regulatory burden in 2008, John Stewart, economic affairs director of the Home Builders Federation (HBF), made what he described as a conservative estimate that the affordable housing land subsidy was £30,000 per plot or £1.2m per hectare. He put the total cost of affordable housing, zero carbon and community infrastructure at £2.5m per hectare - on top of other section 106 demands, remediation costs, on-site infrastructure and rising building regulation costs.

On that basis up to £60,000 per plot could potentially be at stake in the drive to cut red tape. Not all regulations will go of course: some such as Boris Johnson’s new standards in London will be retained and some will be relaxed rather than scrapped. However, huge amounts of money are involved if even a fraction of those savings are achieved.

The biggest five housebuilders (Barratt, Taylor Wimpey, Persimmon, Bellway and Berkeley) owned a combined total of 245,000 plots in 2009. At a saving of £10,000 per plot, the value of their land could potentially rise by £2.5bn. At £20,000 per plot, it could rise by £5bn. To put that in perspective, their combined turnover was £6.6bn in 2008/09. 

Smaller companies (and housing associations with significant land holdings) would also see their value of their land rise

In the real world, of course, values will not rise on all sites and the overall outcome will depend on what happens in the wider land and housing markets. 

However, the good news for anyone that wants to see more homes is that sites that were not viable before should become viable. Housebuilders should be able to build and sell more homes at more affordable prices. At worst, they should be able to cope with any new downturn in the market.

The downside is that much of what’s now dismissed as red tape was put their there for a reason. Those numbers could come at the expense of standards - and contributions to genuinely affordable homes.

Merry Xmas

Tue, 7 Dec 2010

After a tough three years, housebuilders must be starting to think Christmas has come early. 

The scrapping of new core building standards announced by Grant Shapps last month is the obvious neatly gift-wrapped present nestling beneath the tree but it is far from the only one.

The housing minister told the annual lunch of the National House-Building Council that the standards proposed by the Homes and Communities Agency (HCA) for homes built on public land or with government funding were an ‘unfair and unnecessary expense’ that would have cost builders an extra £8,000 per home.

But he also pledged to get rid of an ‘alphabet soup’ of local building standards and red tape and invited housebuilders to ‘be in charge of developing a new framework for local building standards - one which enables communities to get the high quality homes they demand, but without causing unnecessary costs and delays for developers’.

The Royal Institute of British Architects (RIBA) was quick to condemn a move it said would condemn thousands to poor housing and pointed out that the core standards were actually designed to harmonise regulation and give the industry more clarity.

But you don’t have to be an architect to wonder about the future of a system after a month in which we also learned that a third of new social housing schemes were given exemptions from national sustainabilty standards and a quarter of schemes funded in the latest round of Kickstart were rated ‘poor’ (CABE, the agency that delivered that verdict, is being scrapped).

Earlier - and also part of the drive to eliminate red tape - the government simplified the code for sustainable homes and a re-definition of the zero carbon status that all new housing will have to meet by 2016 is due early next year. 

On Monday Shapps denied claims by environmental campaigner George Monbiot that the government had effectively abandoned its commitment to zero carbon by reducing the amount that emissions will have to fall compared to 2006 levels. The minister drew a clear distinction between environmental standards and ‘the minefield of overlapping and confusing building standards that have built up in recent years’.

And then there are those 150,000 new ‘affordable’ homes promised in the spending review. Stretching the definition of ‘affordable’ could have an impact on builders that goes far beyond the obvious one of generating more work for the same money.

Housebuilders already had more than a finger in the affordable housing pie through social housing grant, Kickstart and HomeBuy Direct. While they will continue to face section 106 demands for affordable homes, they could have much more flexibility over what counts as affordable. Could they even be able to assure potential buyers that there will be no ‘social housing’ near their new home - just ‘affordable’ housing like HomeBuy Direct?

As Brian Green first pointed out rather counter-intuitively on his Brickonomics blog, the spending review could actually turn out to be very good news for housebuilders despite huge cuts in investment. 

He quoted the reaction from the Home Builders Federation (HBF) at the time which seems even more significant in retrospect: ‘Today’s statement by George Osborne included a welcome commitment to reducing regulation – something HBF has been pressing Government to tackle long and hard. We now need to see this implemented. This must include; an affordable and deliverable decision on the definition of zero carbon; and a more flexible approach to the definition of ‘affordable housing’, allowing developers to play their part in providing innovative solutions to meet peoples’ needs.’

It have a point about the amount of regulation introduced during the boom but the recession and housing market downturn have strengthened housebuilders’ hand in planning talks with local authorities. Anecdotal evidence suggests that they have been able to replan existing schemes and renegotiate section 106 agreements with lower developer contributions. Deregulation will given them even more incentive to do so. 

The introduction of the New Homes Bonus could put them in an even stronger position because local authorities will need to maximise the number of homes to gain bonus and avoid being penalised through the formula grant system. 

Housebuilders may have had to swallow the end of regional building targets. They are still complaining about a lack of guidance during the transition from the old system to the new. But in an age of austerity all that red tape makes great gift wrap for Christmas. 

Merry Xmas

Tue, 7 Dec 2010

After a tough three years, housebuilders must be starting to think Christmas has come early. 

The scrapping of new core building standards announced by Grant Shapps last month is the obvious neatly gift-wrapped present nestling beneath the tree but it is far from the only one.

The housing minister told the annual lunch of the National House-Building Council that the standards proposed by the Homes and Communities Agency (HCA) for homes built on public land or with government funding were an ‘unfair and unnecessary expense’ that would have cost builders an extra £8,000 per home.

But he also pledged to get rid of an ‘alphabet soup’ of local building standards and red tape and invited housebuilders to ‘be in charge of developing a new framework for local building standards - one which enables communities to get the high quality homes they demand, but without causing unnecessary costs and delays for developers’.

The Royal Institute of British Architects (RIBA) was quick to condemn a move it said would condemn thousands to poor housing and pointed out that the core standards were actually designed to harmonise regulation and give the industry more clarity.

But you don’t have to be an architect to wonder about the future of a system after a month in which we also learned that a third of new social housing schemes were given exemptions from national sustainabilty standards and a quarter of schemes funded in the latest round of Kickstart were rated ‘poor’ (CABE, the agency that delivered that verdict, is being scrapped).

Earlier - and also part of the drive to eliminate red tape - the government simplified the code for sustainable homes and a re-definition of the zero carbon status that all new housing will have to meet by 2016 is due early next year. 

On Monday Shapps denied claims by environmental campaigner George Monbiot that the government had effectively abandoned its commitment to zero carbon by reducing the amount that emissions will have to fall compared to 2006 levels. The minister drew a clear distinction between environmental standards and ‘the minefield of overlapping and confusing building standards that have built up in recent years’.

And then there are those 150,000 new ‘affordable’ homes promised in the spending review. Stretching the definition of ‘affordable’ could have an impact on builders that goes far beyond the obvious one of generating more work for the same money.

Housebuilders already had more than a finger in the affordable housing pie through social housing grant, Kickstart and HomeBuy Direct. While they will continue to face section 106 demands for affordable homes, they could have much more flexibility over what counts as affordable. Could they even be able to assure potential buyers that there will be no ‘social housing’ near their new home - just ‘affordable’ housing like HomeBuy Direct?

As Brian Green first pointed out rather counter-intuitively on his Brickonomics blog, the spending review could actually turn out to be very good news for housebuilders despite huge cuts in investment. 

He quoted the reaction from the Home Builders Federation (HBF) at the time which seems even more significant in retrospect: ‘Today’s statement by George Osborne included a welcome commitment to reducing regulation – something HBF has been pressing Government to tackle long and hard. We now need to see this implemented. This must include; an affordable and deliverable decision on the definition of zero carbon; and a more flexible approach to the definition of ‘affordable housing’, allowing developers to play their part in providing innovative solutions to meet peoples’ needs.’

It have a point about the amount of regulation introduced during the boom but the recession and housing market downturn have strengthened housebuilders’ hand in planning talks with local authorities. Anecdotal evidence suggests that they have been able to replan existing schemes and renegotiate section 106 agreements with lower developer contributions. Deregulation will given them even more incentive to do so. 

The introduction of the New Homes Bonus could put them in an even stronger position because local authorities will need to maximise the number of homes to gain bonus and avoid being penalised through the formula grant system. 

Housebuilders may have had to swallow the end of regional building targets. They are still complaining about a lack of guidance during the transition from the old system to the new. But in an age of austerity all that red tape makes great gift wrap for Christmas. 

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