Tuesday, 02 September 2014

Inside edge

All posts from: January 2012

Taking the strain

Mon, 30 Jan 2012

Today is the 21st anniversary of perhaps the most significant statement in the recent history of housing.

On 30 January 1991 the then housing minister Sir George Young was asked in parliament what the government was going to do about unaffordable rents. ‘Housing benefit will underpin market rents - we have made that absolutely clear,’ he said. ‘If people cannot afford to pay that market rent, housing benefit will take the strain.’

Housing benefit has indeed taken the strain ever since - of deregulation and soaring rents in the private rented sector and private finance and stock transfer in the social sector. In the process the annual bill has risen from £6bn to £22bn and it has come to underpin not just rents but the entire delivery of affordable housing too. 

But for how much longer? Today, 21 years to the day since Sir George made that statement, a group of housing associations is warning that welfare reform by the DWP could make the housing plans of the DCLG unworkable.

The Consortium of Associations in the South East (CASE) represents nine different landlords providing affordable homes. Their report examines the unintended consequences of three different elements of the Welfare Reform Bill: the under-occupation penalty, direct payment of housing benefit to tenants and the household benefit cap. All three sound superficially sensible until you examine the detail and the implications.

Most of the arguments will be familiar to anyone reading this but in a week that sees the government pledge to reverse House of Lords defeats on under-occupation and the cap when the Bill returns to the Commons it’s worth a re-cap.

On the under-occupation penalty, there may be good reasons why a bedroom is not ‘spare’ and why a landlord has deliberately chosen to reduce child density on a particular estate. 

But it’s the sheer numbers of people affected - 670,000 households  - that are maybe of the greatest concern. 

CASE members say it will simply be unworkable unless introduction is phased from April 2013. There are not enough one-bedroom properties for under-occupying tenants to move to and they would have to spend the next two years on the crazy strategy of building nothing but one-bed flats to make it work. The turnover rate of tenancies is half what would be required to meet the deadline and arrears are bound to increase. 

On direct payments, the associations warn of significantly higher arrears and administrative costs.

They say that once the household benefit cap is in place all four-bedroom properties in the South East built for Affordable Rent will become unaffordable. And they are already reviewing whether to continue building three-bed homes that already threaten the cap and will exceed it if the cap does not rise with inflation. Financial considerations driven by the cap will override any local strategic tenancy policies.

However, the implications of the three measures go well beyond that and will directly impact on associations’ ability to finance and build new homes. They conclude that direct payments and the under-occupation penalty will result will cut new build capacity by 12 per cent and that this could get even worse if lenders react to perceived extra risk by increasing the cost of borrowing. Capacity would fall by 11 per cent for a 0.2 per cent increase in borrowing costs and 28 per cent for a 0.2 per cent drop. 

‘As CLG embarks on a programme to increase housing supply, its sister department - DWP - is preparing to implement a policy that is certain to do the opposite,’ they say.

On under-occupation, the associations want the government to stick with the Lords amendment tenants with only one ‘spare’ bedroom and to phase in the cut for everyone else. On the cap, they want a relaxation for larger properties and a commitment to index it for inflation. On direct payments, they say that none of the concessions announced so far will work and that the plan should just be scrapped.

Hopefully the government is listening to at least some of that and CLG ministers have been making the same arguments to their DWP colleagues that Eric Pickles made in his leaked letter last year.

Or has the idea first proposed by Sir George Young 21 years ago today now itself collapsed under the strain?

Dunce’s cap

Mon, 30 Jan 2012

If history repeats itself, first as tragedy and then as farce, then the politicians seem intent on doing both at the same time with the benefit cap.

This weekend work and pensions secretary Iain Duncan Smith and his Labour shadow Liam Byrne compete with each other to demonstrate either complete ignorance of their brief or a cynical disregard for the facts. Or both.

Byrne kicked off on Saturday by accusing the Conservatives of ‘playing politics’ with the benefits cap. In piece for the Conservative-supporting Daily Telegraph – no hint of playing politics there - he set out Labour’s case for agreeing to the need for a cap in principle but adapting the system with a series of regional caps that could take account of differing housing costs.

He argued: ‘Most of the benefits paid under the cap are for housing. But these are far higher in places like London than in other areas. While all that £500 a week might get you in central London is a one-bedroom apartment, in Rotherham, Yorkshire it would get you a six-bedroom house. How can a “one-size-fits-all” cap be fair to working people in both London and Rotherham?’

All very reasonable, you might think. Except that housing benefit rates are already not just regionalised but localised in broad rental market areas and as anyone who reads Inside Housing knows only too well there are bedroom-size caps on what anyone can receive. The maximum for a one-bedroom flat anywhere in the country is not £500 a week but £250 a week. 

So Byrne was talking nonsense (and not for the first time) about a cap that is being imposed on top of a housing benefit system that has already been reformed. But he is not the only one.

On Sunday, Iain Duncan Smith appeared on the Andrew Marr Show and said that the government will look to reverse all its defeats in the Lords when the Welfare Reform Bill comes back to the Commons. You can watch from about 45 minutes in on iPlayer but you may want to move any heavy objects out of throwing range of your computer first.

Pressed by Marr about the cap and the Labour plan, IDS said: ‘The overall level is critical because we’ve got some people living in London in some cases in flats that are costing over £100,000 a year in rent. I know that’s at the extreme but that’s the kind of nonsense we got into under the last government. So it’s important we settle the London issue.’

That line about people on £100,000 a year has been trotted out again and again. The amount paid to the landlords of five families in London has been a devastatingly effective weapon in the debate on welfare reform. 

Except of course that the bedroom caps that IDS himself introduced mean that the maximum that anyone can now receive in housing benefit is £400 a week or £20,800 a year.

In fairness, Byrne did a rather better job of explaining Labour’s position on Murnaghan on Sky on Sunday and IDS did signal that there would be concessions when the Bill returns to the Commons this week. ‘I’ve always been clear from when I made the speech at third reading that we will be looking at transitional measures and where there are people falling out of work we will be looking at grace periods,’ he said.

However, with even some Labour MPs arguing that the cap should be set lower than £26,000, the debate continues to take place in ignorance or disregard of the facts. Little wonder that there is overwhelming public support for the apparently fair proposition that nobody should receive more on benefit than the average amount earned by someone in work. Even as the Lords were voting to exclude child benefit from the cap last week, Lib Dem peer Lord Kirkwood was virtually alone in declaring that he opposed the cap in principle because it distorts the whole basis of the benefit system.

As I’ve argued before, the apparently simple logic for ‘fairness’ that has built a seemingly unstoppable momentum behind the cap is deeply flawed. For starters, that ‘hard-working family’ earning £26,000 a year may well also be receiving thousands of pounds in housing benefit, child benefit, working tax credit and tax credit.

If you still disagree, you might want to read this brilliant blog by Declan Gaffney first about the ‘bait-and-switch’ tactics employed by ministers: the seemingly pragmatic principle that is based on a rigged comparison. Or take a look at this blog by Alex Marsh on the way that ministers have framed the narrative behind the cap by creating division and sowing dischord.

Gaffney argues that ‘the only truly honest proponents of the benefit cap are those who are too ignorant or too far out of the loop to be party to the backroom consensus: the only truly honest critics are those who refuse to say they support it in principle’. 

That backroom consensus sees that the political impetus behind the cap is so strong that it is better to accept false arguments in a pragmatic bid to prevent some of the most arbitrary impacts of the cap. ‘But there are costs attached to this strategy, in terms of the quality of political debate and more generally in the endorsement it gives to a big untruth about the social security system and those who are relying on it. On balance, I think the latter considerations should win out. A little dishonesty only helps if you’ve already decided to go along with the big lie.’

Marsh notes the way the argument has been framed by setting claimants against ‘hard working families’ while ignoring the fact that poverty is dynamic and people’s circumstances change. ‘Yesterday they were the “hard working families” that politicians are so concerned about and so in favour of. Then their luck changed. They haven’t suddenly become benefit-scrounging pondlife overnight. Yet the government proposes to penalise many of them further for their misfortune by rendering them unable to afford to stay in their homes.’

The consequences of all this will be felt not just by claimants and hard-working families and not just in the welfare system. More later on the impact of welfare reform on housing and a report out today from the CASE group of housing associations. 

Winners and losers

Tue, 24 Jan 2012

Who has most to celebrate from last night’s defeat for the government on welfare reform?

The obvious answer is families with children who, thanks to the bishops, Labour peers and a significant rebellion by Lib Dem peers in the Lords last night, will see their child benefit exempted from the £26,000 household benefit cap.

But anyone watching David Cameron’s PM Direct appearance in front of workers at ASDA on BBC News yesterday (watch from 4.35 in if you missed it) might come to a very different conclusion.

‘Are you happy that your taxes are going towards families where no-one is working and they’re earning more than £26,000 in benefits?’ Cameron asked them. ‘Is that fair? No. I don’t think it’s fair either and that’s why it’s right to have a welfare cap.’

Cameron was clearly loving the chance to talk to ‘hard-working families who do the right thing and pay their taxes’. He was comfortable in the knowledge that the cap has 76 per cent support in opinion polls and must also be loving the fact that his Lib Dem coalition partners are split down the middle and the Labour opposition are squirming with discomfort.

As Gary Gibbon put it on Channel 4 News, the defeat is more likely to have ministers ‘popping the champagne corks’ at another chance to demonstrate they are on the side of ‘fairness’ and ‘hard-working taxpayers’ than bemoaning a defeat that they look certain to reverse in the House of Commons.

I’m guessing that a majority of you reading this here, possibly more than 76 per cent, can see the problems with all of this. Not just the dozen that I blogged about yesterday but the very obvious one raised by David Cameron’s appearance.

Because the truth is that as a hard-working taxpayer myself I rather resent the fact that ASDA does not pay many (most?) of its staff enough to live on without receiving tax credits and housing benefit from the state.

The profits, dividends and top salaries of managers at its parent company Walmart are effectively subsidised out of my (and your) pockets. Meanwhile, should any of the 5,000 people who get the new jobs announced yesterday have their hours cut to less than 16 hours a week, they will be caught by the benefit cap.

By far the fairest way to deal with the cap would have been to exclude housing costs altogether. Housing benefit is already capped, after all. As Joe Halewood points out on his blog 75 per cent of the 170,000 new claimants since the election are in work. And that’s before you get to arguments about rent levels.

That’s not going to happen now. Instead we are left with a cap on income that is set at the level of the average take-home earnings of someone in work. That sounds simple but fair. But it does not reflect the extra income someone in work will get on top of that from tax credits, housing benefit and child benefit (an average of another £6,000 or so). And it does not cover everyone: there are exemptions from the cap for people on disability living allowance (DLA), war widows and widowers and people working more than 16 hours a week. Both the level and the scope of the cap are, in other words, subjective choices by the government not objective expressions of fairness.

Arguments like those were being put in the Lords yesterday but they have fallen on deaf ears among the electorate as a whole. The cap, which began life in a conference speech by George Osborne and was reportedly opposed even by Duncan Smith at first, has been a devastatingly effective political weapon that has enabled the government to portray itself as on the side of ‘fairness’ and completely wrong-footed the opposition.

That was summed up for me by the way that Duncan Smith was able to quote the support of a vicar yesterday. ‘Interestingly, I have just had an e-mail from a vicar, who wondered why the bishops fail to recognise that he is paid only £22,000 a year. He wonders why they are getting excited about £26,000 being a poverty-level figure.’ The vicar was, of course, conveniently ignoring the fact that his housing is paid for by his employer.

Attention now switches to the transitional arrangements for the cap and here at least there were enough signs of movement for Lord Best to withdraw his amendments on a 26-week grace period and an exemption for temporary accommodation costs pending further announcements from the minister.

Doubts by the dozen

Mon, 23 Jan 2012

As peers prepare for the key debate on the household benefit cap the policy is still begging as many questions as answers.

Ministers appear to have won the battle for public opinion over the principle of having a cap with 76 per cent of voters backing the idea in an opinion poll over the weekend.

However, the battle will be over the details. Labour has said it will not vote against the cap itself but will try to amend the Bill so that extra costs do not fall on council tax payers. Several Lib Dem peers including former party leader Lord Ashdown have said they cannot support the cap as proposed. And Lord Best will be prominent among crossbenchers pressing for changes.

Extra fuel for the fire came in a revised impact assessment published by the Department for Work and Pensions (DWP) this morning. This admitted that 75,000 families will be affected – 25,000 more than in the first version published last year. They will lose an average of £83 a week each - £10 less than before. And the government will save more than previously estimated (£330m in 2014/15 rather than £275m).

Other new details are that more than 1,000 families will be affected in each of 17 London boroughs plus Birmingham and that 5,000 families receiving carer’s allowance will be affected.

However, in many other ways, the key doubts about the policy remain the same. Here are my top 12. The first nine are updated versions of questions raised in committee stage debates in the Commons by either Lib Dem or Labour MPs that I blogged about last year. The other three come from previous comments on my blog and subsequent developments. I stand ready to be corrected but I’ve not seen answers to any of these points yet. 

  1. It may not save much money overall. The new estimate is for cost savings of £330m in 2014/15 but Lib Dem MP Jenny Willott claimed last year that the DCLG estimates that it will increase homelessness by 20,000 people, costing £300m in emergency housing. This was subsequently confirmed in the leaked Pickles letter.
  2. It may not increase work incentives. Labour’s Karen Buck and Lib Dem Ian Swales both argued that it will incentivise people to move from high-cost housing areas to lower-cost ones where there are fewer jobs.
  3. It contradicts the aims of the Universal Credit to make it easier into work or work more or less hours without suffering a big drop in income. ‘It creates cliff edges and makes a temporary period of unemployment a catastrophe,’ said Buck last year.
  4. Even if it does incentivise work, many of the families affected are people the state does not expect to work or who are too sick to work.
  5. It could penalise people in work who lose hours and cease to qualify for working tax credit and their exemption from the cap.
  6. It will encourage couples to split up. In the very opposite of a family-friendly policy, a couple’s income will be capped at £500 a week but if they split up into two single households they will each get a maximum of £500 a week if there are children or £350 a week if there are no children.
  7. It will penalise families with children. Willott said it would hit hard-working families who suddenly lost their job and could not pay their rent. Even two-child families in London face losing a third of their housing benefit. It will push more children into poverty just as the universal credit promises to lift them out of it. The new impact assessment says 90,000 families with 200,000 children will be affected
  8. It will have a damaging impact on social tenants and landlords. In the committee stage debates MP said that 70% of the 50,000 families affected will be in social housing (or 35,000). The new impact assessment puts this at 40 per cent of 75,000 (or 30,000). The inevitable rent arrears will threaten homelessness for tenants and damage the finances of landlords.
  9. It contradicts other housing policies like affordable rent - housing associations building homes at up to 80% market rents will find their existing client group will be unable to afford them. There is already anecdotal evidence of associations eliminating larger homes from their schemes.
  10. It threatens to undermine the economics of refuges and other forms of temporary accommodation. Women fleeing domestic violence will not have their rent paid in full and the consequences of refuges closing or becoming too expensive do not bear thinking about.
  11. It raises exactly the same issues as the cut to child benefit for higher rate taxpayers that is reportedly the subject of a rethink in government: cliff edges where people risk losing out above a threshold and incentives to split up and form two separate households.
  12. The ‘fairness’ argument for the cap being set at £26,000 as the take-home pay of the average working household sounds simple – and it seems to be convincing the voters. But it doesn’t include the in-work benefits that those average working households will also receive. And it doesn’t reflect the real world of how high housing costs can turn that into living on 62p a day – as Tim Leunig explains only too well.

Ministers do not seem in much of a mood for compromise if Iain Duncan Smith’s interview on Today this morning was anything to go by (the work and pensions secretary managing to redefine homelessness as ‘about children sharing rooms’.)

However, there were also possible hints of transitional help and it will be interesting to hear more this afternoon when peers debate the key amendments seeking to exclude child benefit from the cap and introduce a 26-week grace period.

Peers showed in the second reading debate last September that they are looking for much more from the government. Let’s hope they get at least some of it. 

The other Bill

Fri, 20 Jan 2012

As we gear up for more battles over the Welfare Reform Bill in the House of Lords, it’s worth remembering it’s not the only controversial Bill currently before their lordships that will have a big effect on housing.

Among a range of measures designed to cut costs, the Legal Aid Bill will limit legal aid in housing cases to cases involving homelessness or imminent loss of home and serious disrepair that poses a serious risk to life and remove most benefits work from the scope of the scheme. (Any lawyers out there feel free to correct this summary). 

So far the housing aspects have not received as much attention as they should, which is perhaps not surprising when you consider the potential impact of restrictions of legal aid in family cases on victims of domestic violence and a rebellion by Conservative peers including Lord Tebbit against cuts in legal aid in cases of medical negligence. 

On Wednesday the implications became much clearer (to me anyway) when the Lords debated the housing aspects at the committee stage.  The ministerial villain may be different (former Labour and SDP MP Lord McNally) but the rest of the cast is similar to the one that will feature in the report stage debate on the Welfare Reform Bill on Monday.

Opponents of the Bill successfully teased out the way that its tightly drawn definitions of who will be entitled to legal aid under the new system risk excluding large numbers of people with serious housing problems without necessarily saving anything like the amount the government claims. 

One big problem, said Lib Dem peer Lord Shipley, is that means that ‘although the government have said that the loss of the home will continue to be prioritised for legal aid funding, the Bill will in fact prevent advisors from resolving benefits problems that lead to eviction proceedings’.

Despite clear evidence that early intervention to resolve benefits issues can stop evictions, he went on:

‘The danger is that the exclusion of benefits work from legal aid will tie the hands of advisers who are trying to prevent homelessness and will lead to many more unresolved cases filling the county courts. The courts will have more adjourned hearings and will ultimately have to make more possession orders because there is no one to resolve the benefits issue. This could result in higher costs to the taxpayer as a consequence.’

A second problem is the drafting of the Bill to ensure that squatters cannot get legal aid to fight the loss of their home also means that anyone legally defined as a ‘trespasser’ cannot get help either. That could potentially affect all sub-tenants, tenants of landlords who are in default on their mortgages and joint tenants whose relationship breaks down.

Next out of the blocks was crossbencher Lord (Richard) Best, the hero of the successful Lords rebellion against the bedroom tax before Christmas. The private rented sector has no regulator or ombudsman, he pointed out, which put tenants in a completely different position to customers of utilities or the banks. ‘If tenants are in dispute with their landlords, the only way of obtaining redress may well be to go to court,’ he said.

Problem number three is therefore that disreputable landlords will see that any threats of legal action from their tenants were empty threats unless the case concerned the imminent loss of their home. He went on:

‘Informing bad landlords that, however awful their behaviour, they will not be taken to court is like telling Somali pirates that they will never be held to account if they board ships and demand fantastic ransoms. It seems bound to lead to an escalation of criminality.’

Problem number four was the sheer complexity of housing cases, meaning that there is no way tenants can cope without professional advice. ‘Take this away and not only will landlords be able to break the law with impunity but tenants who are ignorant of their entitlements or who are victims of incompetence at the hands of bureaucrats will never see justice.’

Lord Best concluded: ‘With benefits advice being taken out of scope and the likely closure of many citizens advice bureaux as a result, housing is badly affected by the Bill. This surely is one area of our national life where legal aid is essential. Its withdrawal will not only cause misery but will cost central and local government money in picking up the pieces.’

Problem number five was summed up by Labour peer Lord Howarth of Newport. While there would still be legal aid to fight illegal eviction, few tenants would want to go back to the same landlord. ‘Under the Government’s proposals, the worst landlords will be able to get away with the worst behaviour and their victims will not be protected and will not be able to obtain compensation.’

Problem number six is that all of this may not save much money. Peers raised again and again to the way that changes to save money on the Ministry of Justice’s budget will just shunt extra costs around Whitehall. An independent report by King’s College estimates that the government will save less than half of the £240m claimed from cuts in legal aid in family law, social welfare and clinical negligence cases. A report by Citizens Advice estimates that every £1 spent on advice on housing advice saves the government £2.34. 

Needless to say, these arguments were rejected by Lord McNally for the government and opposition amendments were either withdrawn or not moved. However, exactly as with the Welfare Reform Bill, you sense that their lordships are not going to let this go without a fight further down the line. 

Time to grow up

Thu, 19 Jan 2012

Within the next month official figures will confirm that there are now more private rented than social rented homes in England. This will be hailed as a triumph for the market.

In strictly numerical terms it is. When private renting was deregulated with the introduction of assured shorthold tenancies in 1988 there were 1.8m homes in the sector.

By March 2010 (the most recent figure currently available) there were 3.9m and, with each of the last four years seeing growth of over 200,000, the March 2011 total will almost certainly be over 4m. 

In contrast, the social sector shrank from 4.7m in 1988 to 4.3m in 2000 to 4.0m in March 2011. And home ownership has fallen for each of the last four years.

Whether you attribute all this to lack of investment in social housing, high house prices, restricted mortgage lending or the creation of buy to let (in 1996), the transformation is little short of remarkable. And it reverses the seemingly irreversible trend from private renting to social renting seen in the 1960s (in 1961 there were 3.2m social rented homes and 4.7m private rented, by 1971 there were 4.6m social and 3.2m private).

But the real question - and this is my third key question for 2012 - is what happens next. The government’s answer so far is nothing. Nothing should be allowed to interfere with such a market success story. 

One of its first acts when it came to power was to reject the modest proposals for regulation put forward by the Rugg Review as ‘red tape’. As Grant Shapps put it at the time:

‘With the vast majority of England’s three million private tenants happy with the service they receive, I am satisfied that the current system strikes the right balance between the rights and responsibilities of tenants and landlords.’

In November the housing strategy said that:

‘The Government is committed to supporting growth and innovation by avoiding unnecessary regulatory burdens on landlords. But we are also looking at measures to deal with rogue landlords and encouraging local authorities to make full use of the robust powers they already have to tackle dangerous and poorly maintained homes.’

Yet there are growing calls from reform - and not just from the quarters you might expect.

Over Christmas The Economist, normally an advocate of deregulation in everything, argued that:

‘When demand outstrips supply against a background of profound housing need, tough action is required.’ 

Visiting a family living in a rented garage in Newham, it dismissed the usual arguments against regulation (free markets work better, self-regulation works better, tenants are as bad as landlords) and concluded: 

‘Seen from inside the Hamids’ mouldy garage, these arguments are not persuasive.’

In London as a whole, regulation of private renting has emerged as a key issue in the mayoral election campaign. Ken Livingstone has pledged to ‘campaign for’ a form of rent control. Boris Johnson has attacked that idea but he is also pledging a single badge of accreditation for all landlords, letting agents and management agents. 

Meanwhile the Lib Dem half of the coalition does not seem as satisfied with things as they are as the Conservative half. Richard Kemp, co-chair of the Lib Dem housing policy group, says that:

‘The key new area that I want the Party to tackle is the whole area of private landlords. Some have complained that this will drive a wedge between us and the free market, no holds barred section of the coalition. If that is the case bring it on!’

He goes on:

‘I believe that no-one should be allowed to let a property unless that property has been inspected and that inspection is regularly updated. I believe that to be a landlord individuals or companies must either be registered or have to let solely through registered lettings agencies.

‘Some will say that this is a restriction on fair trade. I believe that it is a restriction of unfair trade. Out of desperation hundreds of thousands of people are living in squalid conditions which are funded by the tax payer through housing benefit. Some of the key supporters of such registration are good landlords who have to compete on price with modern day Rachmans and who get tarred with the brush of “racketeer”.’

So regulation of the private rented sector is an issue that is not going to go away. Getting the system right, and avoiding an over-prescriptive one that would kill off the growing signs of interest in the sector from institutional investors, will not be easy and cannot happen in isolation of wider reform of the housing system.

However, good landlords and letting agents have nothing to fear from sensitive regulation and know that it will work their their advantage by driving out competitors who cut corners to undercut them. 

Because the truth is that the explosive growth of private renting over the last decade is evidence not of market success but of market failure: the failure of a rental market in which millions of tenants can only afford their rent thanks to billions of pounds a year in housing benefit; the failure of  housing and mortgage markets that have priced hundreds of thousands of younger people out of owner-occupation;  the failure of the current system to protect tenants from rogue landlords and agents; and the failure of six- and 12-month tenancies to be remotely adequate for the 1m families with children (an increase of 77 per cent in the last two years) now living in private rented accommodation.

The deregulated system invented 24 years ago has run its course. Much like the 20-somethings stuck living at home with their parents because of the state of the housing and rental markets must be getting sick of being told, it’s time it grew up and took some responsibility. 

Double standards

Wed, 11 Jan 2012

Two men with double barrelled names admit their guilt. One gets ridicule and a caution and says sorry to his family. The other?

The other gets 11 months and knows that by the time he gets out his family may have been evicted. No prizes for guessing that the first man is Antony Worrall Thompson and that the second is Daniel Sartain-Clarke. 

Earlier this week, the 60-year-old celebrity chef admitted to shoplifting from Tescos on five separate occasions over Christmas. He accepted a police caution and promised to seek treatment after sneaking out blocks or cheese, onions and bottles of wine without paying. 

Cue viral jokes on the internet plus lots of tweets and blogs highlighting the contrastingly harsh treatment of looters in last summer’s riots (the man who got six months for stealing £3.50 worth of water, for example) and even a Daily Mail web debate about whether the middle classes get off lightly. 

Yesterday 18-year-old Daniel Sartain-Clarke was sentenced to 11 months in a young offender’s institute for his part in last year’s looting. He pleaded guilty to a charge of burglary at his local Curry’s. 

The Daily Mail suggests somewhat confusingly that he both broke into the store and was discovered by police in the stockroom two hours after it was broken into by others. The BBC and others report the comments of the judge following evidence about his background that: ‘You are a committed Christian and an aid worker. I have reams of references attesting to you. You are a helper and a doer. This is as out of character as it’s possible to imagine.’

The contrast between the two cases would be debatable even if it was just confined to the criminal justice system and the difference between theft and burglary - but it’s what will happen next that really distinguishes them.

Worrall Thompson told the Express yesterday that he is back in his rented High Wycombe home crying himself to sleep. ‘I feel very guilty and want to know why I’ve done this,’ he said. ‘This has all been so humiliating but it’s a punishment I have to take on the chin. My wife, Jay, has been fantastic. She picked me up from the police station and we stayed up late into the night talking and trying to work out why I did it.’ His children knew and had been very supportive.

Sartain-Clarke has been at a bail hostel 100 miles away from home for the last few months. And as he begins his sentence, his mother Maite de la Calva and eight-year-old sister are facing eviction from their rented Wandsworth council home. 

As Inside Housing reports, the council appears determined to press ahead with the next stage of the eviction process after issuing a notice seeking possession in August. ‘His actions that night were a clear and unequivocal breach of our tenancy conditions and as a result we will now be moving on to the next stage of the legal process.’ said a spokesman. 

The family are being represented by the human rights group Liberty, which accuses the council of ‘shameless self-promotion’.  As lawyer Emma Norton put it in October: ‘Ms de la Calva has committed no crime and if she lived in a mortgaged house she would not face such bullying.  Whether in a mansion or a flat everyone should be equal before the law.’

However, Liberty also notes: ‘It is one of the standard terms of a Wandsworth tenancy agreement that the tenant, lodgers, friends, relatives, visitors and any other person living at the property refrain from doing anything which interferes with the “convenience” of other people living in Wandsworth. The Housing Act 1985 also suggests a basis for eviction where the tenant or a person living in or visiting her household has been convicted of an indictable offence.’

The Financial Times report of the illegal subletting consultation this morning says the government has admitted that no council has yet taken up its call to evict rioters and that Wandsworth is the only one that has pursued someone publicly. It also quotes Wandsworth as saying it will give the mother a chance to ‘tell her side of the story’ before a final decision is taken.

Hopefully those are signs of a climbdown to come. If not, it will be up to the courts to decide whether the arguments made for an eviction (nuisance in the neighbourhood, setting an example, or just a breach of the tenancy conditions) can justify what will be both a double punishment and a collective punishment. And that will leave the rest of us wondering whether collective punishment can ever teach the sense of individual responsibility we were told was so lacking in the wake of the riots. 

The problem of rent

Thu, 5 Jan 2012

The second of my blogs on five key housing issues for 2012 looks at the debate about the Beveridge report taking place in seeming ignorance of what it actually said.

The 70th anniversary is not till December but politicians are already claiming it as justification for their welfare reforms. Shadow work and pensions secretary Liam Byrne was first out of the traps for Labour with a briefing to the Mail on Sunday which reported that that Labour leader Ed Miliband intends to get tough on ‘scroungers’ and that Byrne thinks Beveridge would ‘turn in his grave’ at the thought of billions in benefits going to ‘lifelong spongers’.  

The piece quoted a source close to Byrne as saying: ‘When Beveridge wrote his report, the main idea was that you only got paid by the state if you paid in first. He would never have agreed with anyone choosing to spend a lifetime on benefits. Idleness was one of his “giant evils”. The benefits system has expanded in a way that Beveridge would never have foreseen, such as the new evil of benefits dependency. He would be turning in his grave if he knew we spend £20 billion a year on housing benefits.’

On Tuesday, Byrne wrote a piece for The Guardian that makes the same point from a different angle. ‘Beveridge’s system was built on the idea of full employment,’ he said. ‘For him, “idleness” was an evil every bit as insidious as disease or squalor. So he would have been horrified at the long-term unemployment breaking out all over Britain, with over a million young people without work, and appalled at the spiralling cost of benefits. He would scarcely have believed housing benefit alone is costing the UK over £20 billion a year. That is simply too high.’

Byrne did not mention the words ‘scroungers’ or ‘spongers’ and attacked government plans to scrap disability benefits that people have paid in for. ‘But beyond this, “something for something” means reward for those who are desperately trying to do the right thing, saving for the future and trying to build a stable, secure home. Right now, these families are offered too little reward and incentive – in social housing and long-term savings – for the kind of behaviour that is the bedrock of a decent society.’

On its front page, The Guardian reported that he was arguing that ‘the ballooning of the system has provided support that is unearned, and mislaid the original ideal of providing help to those that contribute’ and that the three key flaws in the current welfare state are ‘the spiralling housing benefit budget, benefits for long-term unemployment, and the lack of proper incentives to reward responsible long-term savers’.

All of this has not surprisingly provoked a strong reaction on the Left - one that Byrne might actually welcome as reinforcing his message to the mainstream. For a flavour of the reaction in the blogosphere, go herehere and here and for more comment in The Guardian go here

My own reaction - especially when it came to the point about housing benefit - was that Beveridge said nothing of the sort and it sent me back to the history books to check.

To give him his due, Byrne does point out that Beveridge detested the term ‘welfare state’ (he preferred ‘social security state’) but his interpretation seems otherwise wide of the mark. 

Here’s what Beveridge actually said about rents: ‘The attempt to fix rates of insurance benefit and pension on a scientific basis with regard to subsistence needs has brought to notice a serious difficulty in doing so in the conditions of modern Britain. This is the problem of rent. In this as in other respects, the framing of a satisfactory scheme of social security depends on the solution of other problems of economic and social organisation.’

The ‘problem of rent’ was the way that there were so many variations between regions that it was impossible to design a flat-rate benefit to accommodate them all.

Beveridge published his report in the context of private sector rent control and subsidised council housing. By ‘the solution of other problems of economic and social organisation’ he meant not just full employment - which he assumed as one of the conditions for the success of his report alongside a national health service and family allowances - but a post-war programme of council house building too.

He was a Liberal but not a wet one (he favoured training camps for ‘malingerers’). He took a narrow brief about making a survey of ‘existing national schemes of social insurance schemes of social insurance and allied services, including workmen’s compensation, and to make recommendations’ and turned it into a radical plan for slaying the five giants of want, disease, ignorance, squalor and idleness.

In the process, incidentally, and helped by the fact that it was published in December 1942 within weeks of the victory at El Alamein that marked the turning point of the war, it sold 630,000 copies and 92 per cent of the population were aware of his recommendations. 

So Beveridge would indeed be turning in his grave if he knew we were spending £20 billion a year on housing benefits - but not on the grounds that this was reinforcing ‘idleness’ and scrounging but that it was demonstrating crass stupidity and waste by successive governments of both parties and ignorance by those attempting to claim his mantle.

The reasons why the bill is £20 billion are that housing benefit has been made to take the strain of inadequate social housing investment and rising social and private rents over the last 35 years, because the claimant count has risen over the last three because of the recession and because millions of people are on pensions and wages too low to be able to afford to pay their rent without assistance.

Far from reinforcing idleness, housing benefit is actually essential to helping people into work. Cuts to it will increase want rather than reduce idleness.

There were problems with the Beveridge plan and the way it was implemented and lots more strains that emerged as the structure of society changed in subsequent decades but pretending that you can deal with ‘the problem of rent’ by wishing it away or blaming it on fecklessness was not one of them.

The year of reckoning

Mon, 2 Jan 2012

I’m kicking off my blog with five key questions for 2012. There is only one place to begin.

Two days into the new year and already it’s clear that 2011 was merely a dress rehearsal for the changes to come.

Last year was dominated by battles over a welter of legislation and cuts that will dramatically transform the prospects of anyone living in or looking for rented housing. 2012 sees those changes start to take effect across the country.

Chartered Institute of Housing research reported in The Guardian today concentrating on just two of the changes makes the point only too clearly.

The CIH estimates that bedroom caps (starting yesterday for existing claimants) and 30th percentile (from April) restrictions will make 800,000 private rented homes unaffordable for anyone on the local housing allowance.

As this map shows, the effects will be greatest in inner London. In Westminster 20,700 homes will disappear, leaving 8,700 families on LHA chasing just 3,200 homes.

But the effects ripple out to supposedly more affordable Outer London, with 5,500 homes disappearing in Croydon and 16,900 families chasing 9,600 homes and 5,400 going in Newham to leave 14,400 families after 7,800 homes.

And this is not just an issue for London or even the South East. In Birmingham, 34,500 families will be left chasing 23,300 homes, in Liverpool 21,000 families will be after 12,000 homes and in Glasgow 14,800 will be competing for 13,600 homes.

In total 1.3m private tenants around the country are facing a choice between cutting spending on other essentials, going into rent arrears or moving to a cheaper home or a cheaper area. Or perhaps between staying where the work is and making up the rent shortfall or moving to where there are fewer jobs and having the rent paid in full.

That in turn will have a knock-on effect on cheaper areas that the CIH warns are at risk of becoming benefit ghettoes. Interim chief executive Grainia Long warns that the whole of the South East has only a few low-cost places like Margate and Hastings that could face increased social problems and a breakdown in community cohesion.

The Department for Work and Pensions counters that ‘early indications are that people are not moving out of cities in their droves to cheaper rural areas’ and that ‘for the vast majority of areas except the most expensive parts of inner and central London, at least 30 per cent of all private rented properties will be affordable’.

However, note the careful choice of words employed there - I’m not sure anyone has ever suggested people would move in droves to rural areas, more that they would be uprooted to cheaper urban ones.

And this study reflects only two of the cuts that start to bite this year. From yesterday, the age threshold for the shared accommodation rate was extended from 25 to 35. The DWP estimates that 62,500 people will lose an average of £41 per week as a result. As Crisis points out, that will almost double the number of people on the shared rate and force tens of thousands of people in self-contained homes to look for shared accommodation that will be in short supply in most areas and simply not available in some.

Exactly how all this will pan out remains to be seen. Some tenants and landlords will adapt and find ways to cope. Perhaps much of the problem will be hidden in overcrowded homes and yet more rented sheds and garages. But it’s hard to believe that these cuts will not add to an already growing problem of homelessness and lead to escalating pressure on public services in areas that become benefit ghettoes.

And all this will be happening at the same time as last year’s cuts in housing investment reduce the supply of affordable homes, unemployment is rising, household incomes are falling and changes in the Localism Bill allow local authorities to discharge their homelessness duty into a private rented sector with thousands more tenants than there are homes.

So 2012 will be the year of reckoning - with more cuts to come in 2013.

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