Saturday, 25 March 2017

Inside edge

All posts from: November 2012

Deja vu

Fri, 30 Nov 2012

Inside Housing’s account of Pat Ritchie’s departure from the HCA only adds to the eerie sense of familiarity that struck me when the news first broke.

According to Nick Duxbury’s story for IH, the interim chief executive turned down the chance to take the job on a permanent basis because the pay was not high enough. The £142,000 salary on offer is lower than other executive salaries at Maple House. It is lower than the £163,904 a year paid to Barry Rowland, who she will succeed as chief executive of Newcastle City Council (a fine city but one that is also facing a budget crisis).

It is also considerably less than the £233,000 paid to her predecessor at the HCA Sir Bob Kerslake. That was before Kerslake took a £50,000 pay cut to become permanent secretary at the DCLG. The job has also changed but the job has grown also changed with the HCA taking over the regulatory functions of the TSA but losing responsibility for London to the mayor.

The problem seems to be the government’s drive to drive down the pay of top public servants. This is on the basis that none of them should be paid more than David Cameron (even though prime ministers get free housing and can cash in with book deals, lucrative speaking engagements and charitable foundations when they leave office).

However, two other things strike me about the situation looking at it from the outside. First, two years is an awfully long time to be an ‘interim’ chief executive. Second, there are huge parallels with what happened five years ago at the Housing Corporation.

Cast your mind back to March 2007. As the merger with English Partnerships loomed (called Communities England at the time but to be renamed the HCA), Corpie chief executive Jon Rouse resigned to become chief executive of a local authority (Croydon).

According to Inside Housing’s account at the time, pay was a big factor then too. The departure came within months of the DCLG turning down a bid by Corpie chair Peter Dixon to get Rouse a 15 per cent rise on his £150,000 salary. The Croydon job reportedly paid £180,000 but it’s interesting that the Corpie one paid more five years ago than the HCA one does now.

Over at English Partnerships, not just the chief executive but most of the other directors were on more than that. Within a year, the new chief executive of the HCA, Sir Bob Kerslake, was appointed on £220,000 plus a £20,000 bonus.

As news emerged of Rouse’s departure, Inside Housing feared a power vacuum and loss of focus at the top. However, that was a time when housing investment was still expanding and the new agency was an enticing enough prospect to attract Sir Bob from local government.

The opposite is true now. The cliff edge of 2015 looms and uncertainty continues about the future of grant funding. Housing associations are battening down the hatches fearing restrictions on future rent increases. Housebuilders are warning that social landlords are reluctant to commit to section 106 purchases. Talk of transferring investment to the regions may also have an impact. And back at the HCA there are fears about the resources devoted to regulation.

Despite all the noises coming out of government about the importance of housing, none of this is sending positive signals about the importance of housing’s principal agency. It can’t be doing much for morale within the organisation. And it would seem to make the search for a high-powered successor to Pat Ritchie both more important and more difficult.

Deja vu

Fri, 30 Nov 2012

Inside Housing’s account of Pat Ritchie’s departure from the HCA only adds to the eerie sense of familiarity that struck me when the news first broke.

According to Nick Duxbury’s story for IH, the interim chief executive turned down the chance to take the job on a permanent basis because the pay was not high enough. The £142,000 salary on offer is lower than other executive salaries at Maple House. It is lower than the £163,904 a year paid to Barry Rowland, who she will succeed as chief executive of Newcastle City Council (a fine city but one that is also facing a budget crisis).

It is also considerably less than the £233,000 paid to her predecessor at the HCA Sir Bob Kerslake. That was before Kerslake took a £50,000 pay cut to become permanent secretary at the DCLG. The job has also changed but the job has grown also changed with the HCA taking over the regulatory functions of the TSA but losing responsibility for London to the mayor.

The problem seems to be the government’s drive to drive down the pay of top public servants. This is on the basis that none of them should be paid more than David Cameron (even though prime ministers get free housing and can cash in with book deals, lucrative speaking engagements and charitable foundations when they leave office).

However, two other things strike me about the situation looking at it from the outside. First, two years is an awfully long time to be an ‘interim’ chief executive. Second, there are huge parallels with what happened five years ago at the Housing Corporation.

Cast your mind back to March 2007. As the merger with English Partnerships loomed (called Communities England at the time but to be renamed the HCA), Corpie chief executive Jon Rouse resigned to become chief executive of a local authority (Croydon).

According to Inside Housing’s account at the time, pay was a big factor then too. The departure came within months of the DCLG turning down a bid by Corpie chair Peter Dixon to get Rouse a 15 per cent rise on his £150,000 salary. The Croydon job reportedly paid £180,000 but it’s interesting that the Corpie one paid more five years ago than the HCA one does now.

Over at English Partnerships, not just the chief executive but most of the other directors were on more than that. Within a year, the new chief executive of the HCA, Sir Bob Kerslake, was appointed on £220,000 plus a £20,000 bonus.

As news emerged of Rouse’s departure, Inside Housing feared a power vacuum and loss of focus at the top. However, that was a time when housing investment was still expanding and the new agency was an enticing enough prospect to attract Sir Bob from local government.

The opposite is true now. The cliff edge of 2015 looms and uncertainty continues about the future of grant funding. Housing associations are battening down the hatches fearing restrictions on future rent increases. Housebuilders are warning that social landlords are reluctant to commit to section 106 purchases. Talk of transferring investment to the regions may also have an impact. And back at the HCA there are fears about the resources devoted to regulation.

Despite all the noises coming out of government about the importance of housing, none of this is sending positive signals about the importance of housing’s principal agency. It can’t be doing much for morale within the organisation. And it would seem to make the search for a high-powered successor to Pat Ritchie both more important and more difficult.

Open verdict

Mon, 26 Nov 2012

The awful story of Malcolm Frost, who was evicted and found dead in his garden shed 10 days later, has implications that go beyond one individual tragedy.

The details as reported from the inquest by The Sentinel are these. The 61-year-old former painter and decorator was evicted from his home in Alsager, Cheshire in March for not paying the rent. Roy Edwards, a friend and neighbour, had called the council to register concern about his welfare three months before but staff took no action. He told the inquest that he had been buying Mr Frost food every day because he had no money. He found him living in his shed after he was evicted and the locks were changed and when he went to check on him a few days later he was dead.

The house from which Mr Frost was evicted was his childhood home. It emerged at the inquest that he had stopped working a few years before his death and money worries had prompted him to sell his house to a private landlord and pay rent to live there. Then he fell into arrears.

The coroner recorded an open verdict in the inquest. According to The Sentinel, the case has already led to changes in Cheshire East council’s adult services department and the council is in the process of trying to trace the landlord that evicted him.

Apart from the identity of the landlord, many of the other details are unclear, including when Mr Frost sold his house and rented it back and what the details of the arrangement were. However, was there a more systemic failure on top of falings in procedures at the council and a human tragedy?

This sounds very much like a sale and rent back (or leaseback) deal of the kind that was more or less outlawed by the Financial Services Authority in February. However, that was four and a half years after the Council of Mortgage Lenders, Citizens Advice and Shelter first called on the Treasury to allow the FSA to regulate.

Comments by former CML director general Michael Coogan in October 2007 seem horribly pertinent now. ‘Controls exist for action taken by mortgage lenders when customers are in arrears but there are no such safeguards for customers entering into sale-and-leaseback schemes,’ he said. ‘In a climate of rising repossession, consumers in financial difficulty need to be well informed and protected. The government needs to consider urgently whether regulation of sale-and-leaseback schemes by the Financial Services Authority is appropriate because it would provide protection for potentially vulnerable consumers.’

As I’ve blogged several times since then for Inside Housing, the action actually taken by the authorities was anything but urgent. The Treasury finally asked the OFT to investigate in March 2008. The FSA launched a consultation in September 2009. The FSA got oversight of the sector in June 2010 and in August 2011 the Treasury introduced new regulations requiring anyone purchasing a sale and rent back home to be authorized by the regulator. In February 2012 the FSA published a report showing that most sale and rent back deals were either unaffordable or unsuitable and should never have been sold and announced what it described as a temporary closure of the sector.  

Whatever the precise circumstances in the case of Mr Frost, this is not the only such tragedy involving housing over the last year or so.

Keith Cooper reported for Inside Housing last month on the child who starved to death in Westminster after a benefits delay. That was blamed on flaws in the support system for successful asylum seekers.

Richard Sanderson, 44, committed suicide at his home in Southfields, south London, in May 2011, weeks after being told that his housing benefit was to be cut by £30 a week. He left a note saying he could not face the thought of his family being homeless. In the background to this case were job centre rules and local housing allowance bedroom caps.

Peter Williams, 63, took his own life in February 2012 on the day he was due to be evicted from his home in Langford, Bedfordshire over non-payment of council tax. According to the most recent press report I can find, he owed £70,000 in legal fees over an original debt of £1,500 from the 1990s.  He was a talented engineer who owned his house of more than 30 years outright but the council refused to drop the case despite being told by his MP, his GP and his friends that he suffered from mental illness.

All of these were individual tragedies and all of them happened in very different circumstances. Looking at them with hindsight, all of them may have been avoidable in the sense that someone somewhere could have done something before it was too late. However, looking at them with foresight, to what extent were they predictable too? 

Consider all that in the context of next year’s welfare reforms. As vulnerable families face cuts in income and an increased risk of rent arrears and eviction, more individual tragedies look not just predictable but inevitable.  The same is already true for other aspects of welfare reform, such as the administration of the work capability assessment by Atos and the case of Brian McArdle, who collapsed and died on the day his benefits were axed. 

To say that is to risk the standard government accusation of ‘scaremongering’. That was the response from the DWP to last month’s warning from three charities that 450,000 disabled people and their families could lose out under the universal credit. It was also how the department described last week’s statement by Community Housing Cymru comparing the impact of the bedroom tax on people in Wales with Hurricane Sandy.

Ministers point to safeguards for vulnerable households and the pot of discretionary housing payments that is there to help. However, as the government, local authorities and landlords grapple with the implementation of next year’s cuts and reforms, tragedies like these are a powerful reminder of the potential human impact of the decisions they make and the procedures they adopt. These can seem very different seen from an office and seen from the home of a vulnerable person affected by the changes.

When issues such as retaining direct payment of housing costs for vulnerable households and the procedure for claiming the universal credit are under discussion, this is why they matter so much. That was brought home to me all too clearly in a reply to one of my tweets on Friday from Bradford District Tenants and Residents Federation quoting the reaction of one addict to the prospect of direct payment to tenants: ’Month one I’ll pay, month two in pub, month three dead.’

Open verdict

Mon, 26 Nov 2012

The awful story of Malcolm Frost, who was evicted and found dead in his garden shed 10 days later, has implications that go beyond one individual tragedy.

The details as reported from the inquest by The Sentinel are these. The 61-year-old former painter and decorator was evicted from his home in Alsager, Cheshire in March for not paying the rent. Roy Edwards, a friend and neighbour, had called the council to register concern about his welfare three months before but staff took no action. He told the inquest that he had been buying Mr Frost food every day because he had no money. He found him living in his shed after he was evicted and the locks were changed and when he went to check on him a few days later he was dead.

The house from which Mr Frost was evicted was his childhood home. It emerged at the inquest that he had stopped working a few years before his death and money worries had prompted him to sell his house to a private landlord and pay rent to live there. Then he fell into arrears.

The coroner recorded an open verdict in the inquest. According to The Sentinel, the case has already led to changes in Cheshire East council’s adult services department and the council is in the process of trying to trace the landlord that evicted him.

Apart from the identity of the landlord, many of the other details are unclear, including when Mr Frost sold his house and rented it back and what the details of the arrangement were. However, was there a more systemic failure on top of falings in procedures at the council and a human tragedy?

This sounds very much like a sale and rent back (or leaseback) deal of the kind that was more or less outlawed by the Financial Services Authority in February. However, that was four and a half years after the Council of Mortgage Lenders, Citizens Advice and Shelter first called on the Treasury to allow the FSA to regulate.

Comments by former CML director general Michael Coogan in October 2007 seem horribly pertinent now. ‘Controls exist for action taken by mortgage lenders when customers are in arrears but there are no such safeguards for customers entering into sale-and-leaseback schemes,’ he said. ‘In a climate of rising repossession, consumers in financial difficulty need to be well informed and protected. The government needs to consider urgently whether regulation of sale-and-leaseback schemes by the Financial Services Authority is appropriate because it would provide protection for potentially vulnerable consumers.’

As I’ve blogged several times since then for Inside Housing, the action actually taken by the authorities was anything but urgent. The Treasury finally asked the OFT to investigate in March 2008. The FSA launched a consultation in September 2009. The FSA got oversight of the sector in June 2010 and in August 2011 the Treasury introduced new regulations requiring anyone purchasing a sale and rent back home to be authorized by the regulator. In February 2012 the FSA published a report showing that most sale and rent back deals were either unaffordable or unsuitable and should never have been sold and announced what it described as a temporary closure of the sector.  

Whatever the precise circumstances in the case of Mr Frost, this is not the only such tragedy involving housing over the last year or so.

Keith Cooper reported for Inside Housing last month on the child who starved to death in Westminster after a benefits delay. That was blamed on flaws in the support system for successful asylum seekers.

Richard Sanderson, 44, committed suicide at his home in Southfields, south London, in May 2011, weeks after being told that his housing benefit was to be cut by £30 a week. He left a note saying he could not face the thought of his family being homeless. In the background to this case were job centre rules and local housing allowance bedroom caps.

Peter Williams, 63, took his own life in February 2012 on the day he was due to be evicted from his home in Langford, Bedfordshire over non-payment of council tax. According to the most recent press report I can find, he owed £70,000 in legal fees over an original debt of £1,500 from the 1990s.  He was a talented engineer who owned his house of more than 30 years outright but the council refused to drop the case despite being told by his MP, his GP and his friends that he suffered from mental illness.

All of these were individual tragedies and all of them happened in very different circumstances. Looking at them with hindsight, all of them may have been avoidable in the sense that someone somewhere could have done something before it was too late. However, looking at them with foresight, to what extent were they predictable too? 

Consider all that in the context of next year’s welfare reforms. As vulnerable families face cuts in income and an increased risk of rent arrears and eviction, more individual tragedies look not just predictable but inevitable.  The same is already true for other aspects of welfare reform, such as the administration of the work capability assessment by Atos and the case of Brian McArdle, who collapsed and died on the day his benefits were axed. 

To say that is to risk the standard government accusation of ‘scaremongering’. That was the response from the DWP to last month’s warning from three charities that 450,000 disabled people and their families could lose out under the universal credit. It was also how the department described last week’s statement by Community Housing Cymru comparing the impact of the bedroom tax on people in Wales with Hurricane Sandy.

Ministers point to safeguards for vulnerable households and the pot of discretionary housing payments that is there to help. However, as the government, local authorities and landlords grapple with the implementation of next year’s cuts and reforms, tragedies like these are a powerful reminder of the potential human impact of the decisions they make and the procedures they adopt. These can seem very different seen from an office and seen from the home of a vulnerable person affected by the changes.

When issues such as retaining direct payment of housing costs for vulnerable households and the procedure for claiming the universal credit are under discussion, this is why they matter so much. That was brought home to me all too clearly in a reply to one of my tweets on Friday from Bradford District Tenants and Residents Federation quoting the reaction of one addict to the prospect of direct payment to tenants: ’Month one I’ll pay, month two in pub, month three dead.’

Facing both ways

Thu, 22 Nov 2012

Decidedly mixed signals are emerging from different parts of the government over cutting housing benefit for the under-25s.

David Cameron seems determined to press ahead with the idea he first raised in April and then again at the Conservative conference in October. At prime minister’s questions yesterday he told Labour MP Mary Glindon: ‘I know that housing benefit is a very important issue, but there is a problem, which needs proper attention: we seem to give some young people a choice today, in that if they are on jobseeker’s allowance they can have access to housing benefit, but if they are living at home and trying to work they cannot. We need to recognise that in many cases we are sending a negative signal to young people through our welfare system.’

If that sounds like full steam ahead, Mary Glindon was getting some very different signals barely an hour earlier during a Westminster Hall debate she secured on the issue. Lib Dem communities minister Don Foster told her: ‘The hon. Member for North Tyneside said that the idea is something that the Government might effect, but the fact that something was said at a Conservative party conference does not mean that it becomes coalition policy. At the moment, it certainly is not.’

MPs had been briefed with arguments against the cut put not just by Crisis as part of its No Going Home campaign but also by Shelter, the National Housing Federation, Places for People and the Prince’s Trust, the charity founded by Prince Charles to help young people start their own business.

Out of 383,000 people under 25 claiming housing benefit, 204,000 have children themselves and 66,000 are in work. ‘Most young people who claim housing benefit are not in work, but young people all want to work,’ said Glindon. ‘In a recent survey by the Prince’s Trust, young people who had previously been unemployed were asked how many jobs they had applied for, and the most common response was that they had made more than 100 applications… The Prince’s Trust has also pointed out that young people who want to strike out on their own in business, and take up the trust’s enterprise programme, are often lone parents who claim housing benefit. They need housing benefit to supplement their incomes until their business is profitable enough to allow them enough salary to cover accommodation costs.’

Another key issue is what would happen to vulnerable young people who do not have a parental home to go back to or who have been forced to leave. Conservative backbencher Steve Brine raised his concern about the impact on a night shelter in his Winchester constituency and the possibility of exemptions for supported accommodation. And Mary Glindon cited the work of a support project run by Places for People in her constituency with case studies of a young woman who had suffered domestic abuse and of a young man with cerebral palsy whose support had relied on housing benefit.

In his response, Foster said that both Cameron and Nick Clegg had stressed that ‘were such a move to become reality, vulnerable groups, particularly those in care, will be protected’. He listed everything that the government is doing on youth homelessness and argued: ‘England has one of the strongest safety nets in the world for families with children and for vulnerable people who become homeless through no fault of their own. Sixteen and 17-year-olds, care leavers under the age of 21 and people over 21 who are vulnerable as a result of being in care are priority groups and, as such, should they find themselves without a roof over their head, they will be housed by local authorities.’

That sounds at first like the usual ministerial bluster that does not address the issue. However, Foster was warming to his theme: ‘We have funded youth homelessness charity St Basils to support local authorities and their partners in that work. Thanks to the work of young people’s homelessness charities such as St Basils, Centrepoint and Depaul… and to the work of local authorities, it is now very rare for young people under 18 to end up on our streets.

‘Many people experiencing homelessness have had a range of negative experiences in their childhood or youth. We accept that young people are a key risk group—35 per cent of those accepted by local authorities as homeless in 2011-12 were under 25. As the hon. Lady rightly said, family breakdown is a prime cause of youth homelessness. Young people with experience of care are particularly vulnerable, with 16 per cent of rough sleepers surveyed by a recent study having experienced care at some point during their childhood.’

It was not exactly off message – since there is no agreed coalition message – but in defence of a hypothetical coalition policy that has not yet been agreed Foster was actually putting some very impressive arguments against the cut. As Mary Glindon pointed out: ‘What commitment is there to keeping housing benefit for those young people under 25? Once they have benefited from all the support, not being able to work may stop those in rented accommodation being able to pay the full rent. What assurance is there that that cushion will remain for as long as people need it so they can live in a home of their own?’

Behind the scenes, and sometimes in front of them, talks continue between the Conservatives and Liberal Democrats about the extra £10 billion of welfare cuts (and maybe even more) that projections of the public finances say will be needed after 2015. Cutting housing benefit for the under-25s is the most prominent of the Tory suggestions and obviously has Cameron’s personal backing. However, work and pensions secretary Iain Duncan Smith has already said that any cut would only apply to new claimants, which dramatically reduces the scope for savings and will put the pressure on other parts of the budget, and as the debate showed the campaign against is gaining momentum. The Lib Dems say they will only agree to more welfare cuts for the poor if they are accompanied by tax increases on the rich.

As Foster replied to Mary Glindon’s questions: ‘I cannot give her an assurance one way or the other. All I can do is tell her that that is not currently the Government’s policy. We will both have to wait to see what emerges.’

Facing both ways

Thu, 22 Nov 2012

Decidedly mixed signals are emerging from different parts of the government over cutting housing benefit for the under-25s.

David Cameron seems determined to press ahead with the idea he first raised in April and then again at the Conservative conference in October. At prime minister’s questions yesterday he told Labour MP Mary Glindon: ‘I know that housing benefit is a very important issue, but there is a problem, which needs proper attention: we seem to give some young people a choice today, in that if they are on jobseeker’s allowance they can have access to housing benefit, but if they are living at home and trying to work they cannot. We need to recognise that in many cases we are sending a negative signal to young people through our welfare system.’

If that sounds like full steam ahead, Mary Glindon was getting some very different signals barely an hour earlier during a Westminster Hall debate she secured on the issue. Lib Dem communities minister Don Foster told her: ‘The hon. Member for North Tyneside said that the idea is something that the Government might effect, but the fact that something was said at a Conservative party conference does not mean that it becomes coalition policy. At the moment, it certainly is not.’

MPs had been briefed with arguments against the cut put not just by Crisis as part of its No Going Home campaign but also by Shelter, the National Housing Federation, Places for People and the Prince’s Trust, the charity founded by Prince Charles to help young people start their own business.

Out of 383,000 people under 25 claiming housing benefit, 204,000 have children themselves and 66,000 are in work. ‘Most young people who claim housing benefit are not in work, but young people all want to work,’ said Glindon. ‘In a recent survey by the Prince’s Trust, young people who had previously been unemployed were asked how many jobs they had applied for, and the most common response was that they had made more than 100 applications… The Prince’s Trust has also pointed out that young people who want to strike out on their own in business, and take up the trust’s enterprise programme, are often lone parents who claim housing benefit. They need housing benefit to supplement their incomes until their business is profitable enough to allow them enough salary to cover accommodation costs.’

Another key issue is what would happen to vulnerable young people who do not have a parental home to go back to or who have been forced to leave. Conservative backbencher Steve Brine raised his concern about the impact on a night shelter in his Winchester constituency and the possibility of exemptions for supported accommodation. And Mary Glindon cited the work of a support project run by Places for People in her constituency with case studies of a young woman who had suffered domestic abuse and of a young man with cerebral palsy whose support had relied on housing benefit.

In his response, Foster said that both Cameron and Nick Clegg had stressed that ‘were such a move to become reality, vulnerable groups, particularly those in care, will be protected’. He listed everything that the government is doing on youth homelessness and argued: ‘England has one of the strongest safety nets in the world for families with children and for vulnerable people who become homeless through no fault of their own. Sixteen and 17-year-olds, care leavers under the age of 21 and people over 21 who are vulnerable as a result of being in care are priority groups and, as such, should they find themselves without a roof over their head, they will be housed by local authorities.’

That sounds at first like the usual ministerial bluster that does not address the issue. However, Foster was warming to his theme: ‘We have funded youth homelessness charity St Basils to support local authorities and their partners in that work. Thanks to the work of young people’s homelessness charities such as St Basils, Centrepoint and Depaul… and to the work of local authorities, it is now very rare for young people under 18 to end up on our streets.

‘Many people experiencing homelessness have had a range of negative experiences in their childhood or youth. We accept that young people are a key risk group—35 per cent of those accepted by local authorities as homeless in 2011-12 were under 25. As the hon. Lady rightly said, family breakdown is a prime cause of youth homelessness. Young people with experience of care are particularly vulnerable, with 16 per cent of rough sleepers surveyed by a recent study having experienced care at some point during their childhood.’

It was not exactly off message – since there is no agreed coalition message – but in defence of a hypothetical coalition policy that has not yet been agreed Foster was actually putting some very impressive arguments against the cut. As Mary Glindon pointed out: ‘What commitment is there to keeping housing benefit for those young people under 25? Once they have benefited from all the support, not being able to work may stop those in rented accommodation being able to pay the full rent. What assurance is there that that cushion will remain for as long as people need it so they can live in a home of their own?’

Behind the scenes, and sometimes in front of them, talks continue between the Conservatives and Liberal Democrats about the extra £10 billion of welfare cuts (and maybe even more) that projections of the public finances say will be needed after 2015. Cutting housing benefit for the under-25s is the most prominent of the Tory suggestions and obviously has Cameron’s personal backing. However, work and pensions secretary Iain Duncan Smith has already said that any cut would only apply to new claimants, which dramatically reduces the scope for savings and will put the pressure on other parts of the budget, and as the debate showed the campaign against is gaining momentum. The Lib Dems say they will only agree to more welfare cuts for the poor if they are accompanied by tax increases on the rich.

As Foster replied to Mary Glindon’s questions: ‘I cannot give her an assurance one way or the other. All I can do is tell her that that is not currently the Government’s policy. We will both have to wait to see what emerges.’

After the fall

Tue, 20 Nov 2012

A year ago this week some devastating statistics were published that undermined everything that the government was saying in its housing strategy. Has anything changed 12 months on?

The 97 per cent fall in starts of affordable homes (to just 454 in the whole of England) between April to September 2010 and the same six months in 2011 was published the day after David Cameron and Grant Shapps launched a strategy they claimed was ‘radical and unashamedly ambitious’. Whether the timing was coincidence, cock-up or conspiracy it caused acute embarrassment for the government.

After that, the only way was up. Starts duly picked up in the second half of the year but the acid test was always going to be the number of starts a year later.

Stats published by the DCLG reveal that there were 3,735 starts of affordable homes in April-September 2012. The good news for the government is that is almost eight times more than the record low of April to September 2011 (now revised upwards slightly to 480). Starts of homes for social rent and affordable home ownership both improved but most of the increase came from 2,608 homes for affordable rent.

The bad news is that the total is still 72 per cent down on April to September 2010. Starts for affordable home ownership are down 80 per cent from 3,197 to 629 over the last two years while starts for social rent are down 95 per cent at 490.

The pattern is clearly illustrated in the graph below showing the 12-month rolling totals of starts every six months since the end of March 2010 (just before the election). The Labour programme dominated by social rent but also including significant number of homes for affordable home ownership and intermediate rent has tailed away and the smaller coalition one dominated by affordable rent is only just getting going.

Affordable homes starts in England

This is also the first set of stats since the London mayor Boris Johnson took over responsibility for the affordable housing programme in the capital from the HCA in April. No London-only figures have yet been published that I can find but it’s simple enough to work them out from the DCLG stats for the whole of England and the HCA stats for England outside of London. [EDIT: The London stats with borough breakdown are available here.]

Affordable housing starts totalled 4,341 in London in April-September 2010 and fell to just 56 a year ago (all of them for social rent). The figures for April-September 2012 show an improvement but only to 425 for the whole of London.

This second graph shows the 12-month rolling totals for starts of affordable homes in London for each six-month period back to March 2010. The pattern is the same as for the national graph, with a steep decline setting in from April 2011 as social rent starts fall away dramatically from 2,563 in April to September 2010 to 56 in the same period last year and 117 in April to September 2012.

However, the fall in starts in London has been much steeper than in the rest of the country. In April-September 2010 33 per cent of all starts were in the capital. That proportion fell to 12 per cent in 2011 and fell again to 11 per cent in 2012.

Affordable home starts in London

The stats for completions in England (which I don’t have space to go into in detail here) show a decline from 19,565 in April to September 2010 to 12,788 in 2011 and 11,432 in 2012. For London only, completions fell from 3,965 in 2010 to 2887 in 2011 and 1,558 in 2012. The capital accounted for more than 20 per cent of completions between 2009 and 2011 but its share fell to just 14 per cent in 2012.

If the affordable rent programme delivers as planned, we can expect to see the numbers improve in the run-up to 2015. The public accounts committee said last month that delays in agreeing contracts mean delivery is skewed to the final year of the programme.

What’s striking is that the biggest falls so far are in the most affordable type of home (social rent) and in the least affordable region (London). That’s not a big surprise given that the focus of the programme is on keeping numbers up despite a 60 per cent cut in investment. Some of the lost ground should be made up by 2015. However, it’s still a stark illustration of the impact on affordable housing construction – and this at a time when it could have made the most difference to the economy. 

After the fall

Tue, 20 Nov 2012

A year ago this week some devastating statistics were published that undermined everything that the government was saying in its housing strategy. Has anything changed 12 months on?

The 97 per cent fall in starts of affordable homes (to just 454 in the whole of England) between April to September 2010 and the same six months in 2011 was published the day after David Cameron and Grant Shapps launched a strategy they claimed was ‘radical and unashamedly ambitious’. Whether the timing was coincidence, cock-up or conspiracy it caused acute embarrassment for the government.

After that, the only way was up. Starts duly picked up in the second half of the year but the acid test was always going to be the number of starts a year later.

Stats published by the DCLG reveal that there were 3,735 starts of affordable homes in April-September 2012. The good news for the government is that is almost eight times more than the record low of April to September 2011 (now revised upwards slightly to 480). Starts of homes for social rent and affordable home ownership both improved but most of the increase came from 2,608 homes for affordable rent.

The bad news is that the total is still 72 per cent down on April to September 2010. Starts for affordable home ownership are down 80 per cent from 3,197 to 629 over the last two years while starts for social rent are down 95 per cent at 490.

The pattern is clearly illustrated in the graph below showing the 12-month rolling totals of starts every six months since the end of March 2010 (just before the election). The Labour programme dominated by social rent but also including significant number of homes for affordable home ownership and intermediate rent has tailed away and the smaller coalition one dominated by affordable rent is only just getting going.

Affordable homes starts in England

This is also the first set of stats since the London mayor Boris Johnson took over responsibility for the affordable housing programme in the capital from the HCA in April. No London-only figures have yet been published that I can find but it’s simple enough to work them out from the DCLG stats for the whole of England and the HCA stats for England outside of London. [EDIT: The London stats with borough breakdown are available here.]

Affordable housing starts totalled 4,341 in London in April-September 2010 and fell to just 56 a year ago (all of them for social rent). The figures for April-September 2012 show an improvement but only to 425 for the whole of London.

This second graph shows the 12-month rolling totals for starts of affordable homes in London for each six-month period back to March 2010. The pattern is the same as for the national graph, with a steep decline setting in from April 2011 as social rent starts fall away dramatically from 2,563 in April to September 2010 to 56 in the same period last year and 117 in April to September 2012.

However, the fall in starts in London has been much steeper than in the rest of the country. In April-September 2010 33 per cent of all starts were in the capital. That proportion fell to 12 per cent in 2011 and fell again to 11 per cent in 2012.

Affordable home starts in London

The stats for completions in England (which I don’t have space to go into in detail here) show a decline from 19,565 in April to September 2010 to 12,788 in 2011 and 11,432 in 2012. For London only, completions fell from 3,965 in 2010 to 2887 in 2011 and 1,558 in 2012. The capital accounted for more than 20 per cent of completions between 2009 and 2011 but its share fell to just 14 per cent in 2012.

If the affordable rent programme delivers as planned, we can expect to see the numbers improve in the run-up to 2015. The public accounts committee said last month that delays in agreeing contracts mean delivery is skewed to the final year of the programme.

What’s striking is that the biggest falls so far are in the most affordable type of home (social rent) and in the least affordable region (London). That’s not a big surprise given that the focus of the programme is on keeping numbers up despite a 60 per cent cut in investment. Some of the lost ground should be made up by 2015. However, it’s still a stark illustration of the impact on affordable housing construction – and this at a time when it could have made the most difference to the economy. 

Running a red light

Thu, 15 Nov 2012

Halfway through the parliament and the traffic lights seem to be taking for ever to change from red to green for housing.

It also looks like a good time to judge the record of this government and a time to stand back and admit that whoever had been in charge over the last two and a half years would have struggled against the grim backdrop of austerity.

Those are points well made by the CIH, NHF and Shelter in their third Housing Report. The good news is that ministers are at last making the right noises about the positive effects of housing investment but, as the report says, pledges and policies are not proof of progress. 

On a traffic light system, the report gives the coalition four red lights, four ambers and two greens. On the face of it, not much has changed since the first report in October 2011 (four red lights, three ambers, two greens) and the second in May 2012 (five reds, three ambers and two greens).

It’s certainly hard to argue with the red light verdicts on overcrowding, homelessness, help with housing costs and affordability in the private rented sector. Green looks right on empty homes and evictions, repossessions and arrears while a non-committal amber looks appropriate for planning and mobility.

So for the real debate is about the final two categories given amber. On home ownership, that’s unchanged on the previous two reports and this one balances the continuing fall in home ownership with a slight improvement in house sales and relative stability in house prices.

It’s true that existing home owners are doing quite nicely thanks to low interest rates but that is reflected in the stats on arrears and repossessions. All the political rhetoric about Right to Buy 2 and all the millions of pounds poured into initiatives like FirstBuy and NewBuy have not made much difference to people who want to buy and are stuck paying extortionate rents. And the slow decline in owner-occupation masks a more pronounced fall in those buying with a mortgage rather than owning outright.

If the colour of the traffic light is debatable there, I find it harder to understand why the CIH, NHF and Shelter conclude that housing supply has improved from red in the first two reports to amber now. (Though I do now with the comment below from Toby Lloyd: amber means no progress whereas red means getting worse). 

True, David Cameron promised in September ‘to unleash one of the biggest housebuilding programmes this country has seen in a generation’ but the rhetoric only showed up the stunning lack of progress since the original housing strategy in November 2011. True, ministers have made themselves busy announcing the initiatives like the Get Britain Building Fund, the debt guarantee, the Montague report and the self-build fund the progress on the ground has been modest at best.

As I blogged a couple of weeks ago there is some good news, some bad news and some very bad news in the latest figures on net additional housing supply. Total supply in 2011/12 was up 11 per cent on 2010/11 at 135,000 but that is still more than 100,000 short of the level needed to meet demand, which means the housing shortage is still getting worse. Affordable housing supply was down 4 per cent.

And what is there to show for all the initiatives and money ploughed into housebuilding? Figures on construction output released earlier this month show that new work on housing is down by 13 per cent since the government launched its Plan for Growth in March 2011 and 12 per cent since the housing strategy a year ago.

However, I may be looking in the wrong place for good news. The Financial Times reported earlier this week that the major housebuilders say government incentives to boost housebuilding are paying off. Sales numbers are up but it’s telling that the article sees rising sale prices (and margins) as a yardstick for success.

According to one city analyst: ‘Rising profits translated into rising share prices in 2012 and we would expect this to repeat in 2013, although it is unlikely that the sector would record another increase of over 50 per cent in the year.’

A 50 per cent increase in share prices in the first year of the housing strategy certainly seems to deserve a green light. The boss of Persimmon predicts a wave of takeovers as housebuilders chase land and prepares to return £1.9 billion to shareholders. Profits at Barratt are up 159 per cent over the last year on the back of 24 per cent of sales supported by the taxpayer.

As the housing sector sits at the traffic lights waiting for them to change, housebuilders are shooting straight through them in the inside lane.  

Running a red light

Thu, 15 Nov 2012

Halfway through the parliament and the traffic lights seem to be taking for ever to change from red to green for housing.

It also looks like a good time to judge the record of this government and a time to stand back and admit that whoever had been in charge over the last two and a half years would have struggled against the grim backdrop of austerity.

Those are points well made by the CIH, NHF and Shelter in their third Housing Report. The good news is that ministers are at last making the right noises about the positive effects of housing investment but, as the report says, pledges and policies are not proof of progress. 

On a traffic light system, the report gives the coalition four red lights, four ambers and two greens. On the face of it, not much has changed since the first report in October 2011 (four red lights, three ambers, two greens) and the second in May 2012 (five reds, three ambers and two greens).

It’s certainly hard to argue with the red light verdicts on overcrowding, homelessness, help with housing costs and affordability in the private rented sector. Green looks right on empty homes and evictions, repossessions and arrears while a non-committal amber looks appropriate for planning and mobility.

So for the real debate is about the final two categories given amber. On home ownership, that’s unchanged on the previous two reports and this one balances the continuing fall in home ownership with a slight improvement in house sales and relative stability in house prices.

It’s true that existing home owners are doing quite nicely thanks to low interest rates but that is reflected in the stats on arrears and repossessions. All the political rhetoric about Right to Buy 2 and all the millions of pounds poured into initiatives like FirstBuy and NewBuy have not made much difference to people who want to buy and are stuck paying extortionate rents. And the slow decline in owner-occupation masks a more pronounced fall in those buying with a mortgage rather than owning outright.

If the colour of the traffic light is debatable there, I find it harder to understand why the CIH, NHF and Shelter conclude that housing supply has improved from red in the first two reports to amber now. (Though I do now with the comment below from Toby Lloyd: amber means no progress whereas red means getting worse). 

True, David Cameron promised in September ‘to unleash one of the biggest housebuilding programmes this country has seen in a generation’ but the rhetoric only showed up the stunning lack of progress since the original housing strategy in November 2011. True, ministers have made themselves busy announcing the initiatives like the Get Britain Building Fund, the debt guarantee, the Montague report and the self-build fund the progress on the ground has been modest at best.

As I blogged a couple of weeks ago there is some good news, some bad news and some very bad news in the latest figures on net additional housing supply. Total supply in 2011/12 was up 11 per cent on 2010/11 at 135,000 but that is still more than 100,000 short of the level needed to meet demand, which means the housing shortage is still getting worse. Affordable housing supply was down 4 per cent.

And what is there to show for all the initiatives and money ploughed into housebuilding? Figures on construction output released earlier this month show that new work on housing is down by 13 per cent since the government launched its Plan for Growth in March 2011 and 12 per cent since the housing strategy a year ago.

However, I may be looking in the wrong place for good news. The Financial Times reported earlier this week that the major housebuilders say government incentives to boost housebuilding are paying off. Sales numbers are up but it’s telling that the article sees rising sale prices (and margins) as a yardstick for success.

According to one city analyst: ‘Rising profits translated into rising share prices in 2012 and we would expect this to repeat in 2013, although it is unlikely that the sector would record another increase of over 50 per cent in the year.’

A 50 per cent increase in share prices in the first year of the housing strategy certainly seems to deserve a green light. The boss of Persimmon predicts a wave of takeovers as housebuilders chase land and prepares to return £1.9 billion to shareholders. Profits at Barratt are up 159 per cent over the last year on the back of 24 per cent of sales supported by the taxpayer.

As the housing sector sits at the traffic lights waiting for them to change, housebuilders are shooting straight through them in the inside lane.  

Yet more cuts

Tue, 13 Nov 2012

As Crisis launches a campaign against ‘unworkable and irresponsible’ cuts in housing benefit for the under-25s, there is another scary reminder today of the bleak prospects for the next spending review.

Fiscal Fallout, a report from the Social Market Foundation and Royal Society of the Arts, concludes that the flat-lining economy will make the structural deficit significantly higher than forecast in the Budget in March.

Things were already bad enough then, with £26 billion of cuts from annual spending pencilled in for the three years after 2014/15 and the detail left until the next spending review. But the report warns that lower than forecast growth and higher borrowing means the government will need to make another £22 billion of cuts on top of that to get its public spending plans back on truck to meet its deficit reduction target.

The current government plan is to leave taxes unchanged and cut welfare payments by £10.5 billion a year, which is where the proposal that Crisis is campaigning against comes from. According to estimates by the Institute for Fiscal Studies, Cutting housing benefit for the under 25s would save £2.3 billion a year while a two-year freeze in working age benefits, another proposal with major implications for housing, would save £4.5 billion. Cuts to pensioner benefits and child benefit could make up the rest of the total. If pensioner benefits were protected, as they have been so far, then the impact elsewhere would be much higher.

And that is not the end of it. Departmental expenditure would still have to fall by £37 billion between 2014/15 and 2017/18 – a fall of 11 per cent a year in real terms. For the Department for Communities and Local Government that translates as cuts of either £2.8 billion. If health, education and international aid continue to be protected, the real terms cut would be 23 per cent and £5.9 billion at the DCLG. With figures like this, the 2010 spending review begins to look generous and the chances of further grant for new homes begin to look even more slender.  

Ahead of the autumn statement on December 5, the Crisis campaign includes a parliamentary briefing that reveals just how ‘arbitrary, unworkable and irresponsible’ a housing benefit cut for the under-25s would be. As I’ve blogged before (here and here), the effects would be felt by people with no parents to go back to, by victims of abuse, by people who are working but can’t afford their rent and by people who have children themselves. The briefing groups all the stats together on the 383,440 people under 25 currently claiming housing benefit.

With other policies like the bedroom tax meaning that downsizing parents will have even less room for their grown-up children, the result would be an explosion of youth homelessness and rough sleeping. As the briefing argues: ‘If this cut is brought in then there will be significant knock on costs which would potentially outweigh any savings. Homelessness is expensive to the taxpayer and society and this proposal would also risk frustrating claimants’ attempts to secure training and employment undermining their potential to contribute to the economy.’

In public statements, the DWP insists that it any cut for the under-25s would only apply to new claimants. Iain Duncan Smith repeated this at work and pensions questions last week:

‘As I said previously, we are looking at all this. Anyway, entitlement would never be removed from those who are already on housing benefit. The review is about flow and about re-establishing fairness in a system which many think has become unfair and does not help those who are not eligible for such benefits. I accept that there would be people who would be ineligible. That is the point of examining the system and figuring out how the policy would go, but like all policy reports, it is worth looking at. It deals with an element of unfairness and the thing about the benefits system is that if it is unfair, people who should support it will not support it, such as taxpayers.’

Whether you believe the assurances and that rather convoluted answer or not, it still raises a big question about what else would have to be cut given that the bulk of the £2.3 billion would still be going to existing claimants. That implies that virtually everything about the welfare budget in general and the housing benefit budget in particular will be up for grabs and nothing is safe.

Fiscal Fallout concludes that neither the cuts in annual managed expenditure nor more cuts in departmental expenditure limits ‘are sustainable fiscal solutions’ and calls for ‘a frank discussion about the way we make policy, how we deliver it, and what we measure and value in public services’.

I don’t have space to go into the details here, and the report is more about principles than specifics, but the gist appears to be to build on the Total Place approach to local budgeting, with decision making devolved from Whitehall so that growth can be driven by several cities not just London. Cities and counties would get more control over spending and maybe the chance to keep some of the savings in return for efficiencies gained from integrated working and preventative spending. ‘Future demand will swamp the health, social care and housing sectors without better integration across organisations and sectors,’ warns the report.

All of which could be an opportunity for housing to argue the case for the wider benefits of investment in a way that is not possible as things stand, perhaps along the lines of the ‘progressive localism’ proposed by the IPPR in the summer. However, the report concludes that this is all a debate for the future and that the 2013 spending review is more likely to on conventional departmental lines.

Which means that the battle over housing benefit for the under-25s could be just the start of much, much worse to come.

Yet more cuts

Tue, 13 Nov 2012

As Crisis launches a campaign against ‘unworkable and irresponsible’ cuts in housing benefit for the under-25s, there is another scary reminder today of the bleak prospects for the next spending review.

Fiscal Fallout, a report from the Social Market Foundation and Royal Society of the Arts, concludes that the flat-lining economy will make the structural deficit significantly higher than forecast in the Budget in March.

Things were already bad enough then, with £26 billion of cuts from annual spending pencilled in for the three years after 2014/15 and the detail left until the next spending review. But the report warns that lower than forecast growth and higher borrowing means the government will need to make another £22 billion of cuts on top of that to get its public spending plans back on truck to meet its deficit reduction target.

The current government plan is to leave taxes unchanged and cut welfare payments by £10.5 billion a year, which is where the proposal that Crisis is campaigning against comes from. According to estimates by the Institute for Fiscal Studies, Cutting housing benefit for the under 25s would save £2.3 billion a year while a two-year freeze in working age benefits, another proposal with major implications for housing, would save £4.5 billion. Cuts to pensioner benefits and child benefit could make up the rest of the total. If pensioner benefits were protected, as they have been so far, then the impact elsewhere would be much higher.

And that is not the end of it. Departmental expenditure would still have to fall by £37 billion between 2014/15 and 2017/18 – a fall of 11 per cent a year in real terms. For the Department for Communities and Local Government that translates as cuts of either £2.8 billion. If health, education and international aid continue to be protected, the real terms cut would be 23 per cent and £5.9 billion at the DCLG. With figures like this, the 2010 spending review begins to look generous and the chances of further grant for new homes begin to look even more slender.  

Ahead of the autumn statement on December 5, the Crisis campaign includes a parliamentary briefing that reveals just how ‘arbitrary, unworkable and irresponsible’ a housing benefit cut for the under-25s would be. As I’ve blogged before (here and here), the effects would be felt by people with no parents to go back to, by victims of abuse, by people who are working but can’t afford their rent and by people who have children themselves. The briefing groups all the stats together on the 383,440 people under 25 currently claiming housing benefit.

With other policies like the bedroom tax meaning that downsizing parents will have even less room for their grown-up children, the result would be an explosion of youth homelessness and rough sleeping. As the briefing argues: ‘If this cut is brought in then there will be significant knock on costs which would potentially outweigh any savings. Homelessness is expensive to the taxpayer and society and this proposal would also risk frustrating claimants’ attempts to secure training and employment undermining their potential to contribute to the economy.’

In public statements, the DWP insists that it any cut for the under-25s would only apply to new claimants. Iain Duncan Smith repeated this at work and pensions questions last week:

‘As I said previously, we are looking at all this. Anyway, entitlement would never be removed from those who are already on housing benefit. The review is about flow and about re-establishing fairness in a system which many think has become unfair and does not help those who are not eligible for such benefits. I accept that there would be people who would be ineligible. That is the point of examining the system and figuring out how the policy would go, but like all policy reports, it is worth looking at. It deals with an element of unfairness and the thing about the benefits system is that if it is unfair, people who should support it will not support it, such as taxpayers.’

Whether you believe the assurances and that rather convoluted answer or not, it still raises a big question about what else would have to be cut given that the bulk of the £2.3 billion would still be going to existing claimants. That implies that virtually everything about the welfare budget in general and the housing benefit budget in particular will be up for grabs and nothing is safe.

Fiscal Fallout concludes that neither the cuts in annual managed expenditure nor more cuts in departmental expenditure limits ‘are sustainable fiscal solutions’ and calls for ‘a frank discussion about the way we make policy, how we deliver it, and what we measure and value in public services’.

I don’t have space to go into the details here, and the report is more about principles than specifics, but the gist appears to be to build on the Total Place approach to local budgeting, with decision making devolved from Whitehall so that growth can be driven by several cities not just London. Cities and counties would get more control over spending and maybe the chance to keep some of the savings in return for efficiencies gained from integrated working and preventative spending. ‘Future demand will swamp the health, social care and housing sectors without better integration across organisations and sectors,’ warns the report.

All of which could be an opportunity for housing to argue the case for the wider benefits of investment in a way that is not possible as things stand, perhaps along the lines of the ‘progressive localism’ proposed by the IPPR in the summer. However, the report concludes that this is all a debate for the future and that the 2013 spending review is more likely to on conventional departmental lines.

Which means that the battle over housing benefit for the under-25s could be just the start of much, much worse to come.

Regime change

Fri, 9 Nov 2012

Anyone applying to their local authority as homeless faces a new regime from today and there are real doubts about how it will work on the ground.

The new power for local authorities to discharge their duty to homeless people into the private rented sector represents a fundamental break with the system established in the Housng (Homeless Persons) Act in 1977.

Under the previous law, anyone accepted as homeless could wait for a social tenancy and the council had to provide temporary accommodation until one came up. Increasingly, councils have offered applicants private tenancies under housing options work but people could still choose to reject them and apply as homeless instead.

The crucial change under the new regulations is that councils now have the power to discharge their duty into the private sector without the applicant’s consent. The private tenancy must be for at least 12 months and if the family becomes unintentionally homeless again within two years then the duty recurs.

This would once have been hugely controversial. The 1977 Act was the end product of a long campaign that followed Cathy Come Home and the establishment of Shelter. When the Conservative government introduced something similar in the 1990s there were a record number of objections and the legislation was quickly repealed under Labour. This time around protests have been much more muted and few people are even talking about it. The change seems to have quiet acquiescence from most of the housing world and enthusiastic support from local authorities in high demand areas.

The new regime comes complete with regulations and guidance that in theory should provide some protection and guarantees of basic standards for homeless people. However, nobody really knows how it will work out in practice. The government estimates around 18,000 homeless people a year will go through the new system but that’s only an estimate. It’s even possible, ironically, that this could lead to a reduction in homelessness as more people accept housing options offers rather than apply as homeless and risk getting no help if they are turned down.

The final version of the supplementary guidance on the suitability of the private accommodation was only published yesterday. This stresses that this is a power, not a duty, and councils should consider whether to arrange a private tenancy based on individual circumstances and have clear policies on its use.

On location – the most controversial aspect of the new regime after successive controversies about London councils exporting their homeless people – the supplementary guidance significantly strengthens previous guidance. This follows the pledges by Grant Shapps in response to the Newham controversy in April that homeless people would not be sent miles away from home.

The supplementary guidance says that ‘in so far as is reasonably practical, secure accommodation within the authority’s own district’. Where that is not possible ‘the authority is required to take into account the distance of that accommodation from the district of the authority’. The accommodation is ‘not likely to be suitable’ if other accommodation is available nearer to the authority’s district.

Authorities are also required to:

  • try to secure accommodation ‘as close as possible to where an applicant was previously living’
  • take into account ‘the significance of any disruption’ to employment, caring and education and links to medical facilities and other support. This has to include consideration of the applicant’s need to reach their normal workplace, the education of young people especially at critical points like GCSEs.

There are also clauses covering the physical condition of the property, health and safety, landlord behaviour and managemement and tenancy deposits.

In its now familiar style the government published its response to the consultation on the suitability order today – after the new regime had already come into effect. Among the dissenting voices, a quarter of consulteees wanted stronger guidance on health and safety and a number of local authorities wanted guidance on affordability updated to reflect welfare reform and the balance between affordability and location. It’s perhaps telling that although 57 per cent of local authorities were in favour of strengthening the guidance on suitability of location, 33 per cent felt it should not be changed on the grounds that it would make the new discharge power more difficult to use. 

In its response, the government stresses that the power is not a requirement and some authorities may choose not to use it at all. It argues that ‘the order strikes the right balance between the protecting of the individual and allowing local authorities the freedoms they need to effectively use the Localism Act power and better manage their housing stock’. On location, it says:

‘Government has made it clear that it is neither acceptable nor fair for local authorities to place households many miles away from their previous home where it is avoidable. Given the vulnerability of this group it is essential that local authorities take into account the potential disruption such a move could have on the household. This Order will strengthen existing legislation in that it states the specific matters local authorities must take into account when considering the suitability of accommodation. This Order does not prevent or prohibit out of borough placements where they are unavoidable nor where they are the choice of the applicant. Some households will wish to leave their current district as such a move can have a positive effect for those escaping violence or those seeking to move to take advantage of employment opportunities.’

All of which sounds great in theory and like it should be enough to stop homeless people being put in sub-standard homes and prevent councils like Newham and Westminster from sending their homeless people to places like Stoke and Nottingham.

Or will it? This is the crucial question examined in this week’s report by the Child Poverty Action Group (CPAG) and to which the answer could well be no based on The Guardian’s story about London councils acquiring properties in cheaper areas all over the country. The crucial thing, which I examine in more detail on my other blog, is the interaction between the new homelessness regime and cuts in housing benefit. It is already impossible in many parts of London to find private tenancies affordable within the local housing allowance cuts and caps introduced in April 2011 and this situation will get dramatically worse with a new round of cuts in April 2013.

Given the conflict between affordability and suitability of location, the CPAG report says that authorities will be caught between a rock and a hard place and could face a wave of legal challenges. For individual families it will all boil down to individual circumstances and some heartbreaking questions such as: is disruption to a child’s education significant if it is not a GCSE year; does travel from home to job reflect the cost of train fares; is being miles away from family a significant enough impact on caring responsibilities and so on.

Clearly many London authorities feel they have to look outside London to find affordable temporary accommodation and private tenancies. The consequences of this for the homeless families concerned remain to be seen as does the long-term potential for even greater concentration of deprivation in poor areas. Add the April 2013 cuts to the equation and things look even bleaker.

In the Lords this week, welfare reform minister Lord Freud gave his optimistic gloss on things. He suggested rather disingenuously that the latest round of stories about people being sent out of London concerns people who arrive in the capital from elsewhere without a local connection. In fact, as Baroness Lister reminded him ‘we are talking about people with local links that matter to them for all sorts of reasons. This policy will destroy those links’. 

Freud reiterated that under today’s homelessness changes ‘the council has to consider whether the location is suitable for the household’s individual circumstances, including the significance of any disruption to employment, education and caring responsibilities. Local authorities are required to carry out a full impact assessment before moving people out to other boroughs.’

On the particular issue of temporary accommodation, he said that the DWP was consulting on how rents and management costs will be paid under universal credit – while quietly ignoring the fact that it will not even begin to be introduced until six months after the April 2013 cuts that will cause the problems that councils are worried about.

All of which means an uncertain future for homeless families and some tough choices for local authorities. However, trapped as they are between sky-high private rents, rising homelessness and cuts in housing benefit they do still have choices. In the short term, they can choose how to spend their discretionary housing payments. In the longer term they can choose how they manage their scarce social tenancies. Do they prioritise basic housing need or people who are working? Do they retain and increase their social stock or sacrifice it to new development? As Westminster plans new council homes for people earning £40,000 to £60,000 and Newham plans to knock down a council estate to build a new university campus, it seems some have already decided. 

EDIT Monday, November 12: This post was written before the Guardian’s story on Saturday about the DCLG’s briefing to council officers that confirms many of the inferences I was drawing about how the new system will work in practice. See this post at Nearly Legal for more detail on that and this post on Shelter’s blog on the prospects of a return to revolving door homelessness. 

Regime change

Fri, 9 Nov 2012

Anyone applying to their local authority as homeless faces a new regime from today and there are real doubts about how it will work on the ground.

The new power for local authorities to discharge their duty to homeless people into the private rented sector represents a fundamental break with the system established in the Housng (Homeless Persons) Act in 1977.

Under the previous law, anyone accepted as homeless could wait for a social tenancy and the council had to provide temporary accommodation until one came up. Increasingly, councils have offered applicants private tenancies under housing options work but people could still choose to reject them and apply as homeless instead.

The crucial change under the new regulations is that councils now have the power to discharge their duty into the private sector without the applicant’s consent. The private tenancy must be for at least 12 months and if the family becomes unintentionally homeless again within two years then the duty recurs.

This would once have been hugely controversial. The 1977 Act was the end product of a long campaign that followed Cathy Come Home and the establishment of Shelter. When the Conservative government introduced something similar in the 1990s there were a record number of objections and the legislation was quickly repealed under Labour. This time around protests have been much more muted and few people are even talking about it. The change seems to have quiet acquiescence from most of the housing world and enthusiastic support from local authorities in high demand areas.

The new regime comes complete with regulations and guidance that in theory should provide some protection and guarantees of basic standards for homeless people. However, nobody really knows how it will work out in practice. The government estimates around 18,000 homeless people a year will go through the new system but that’s only an estimate. It’s even possible, ironically, that this could lead to a reduction in homelessness as more people accept housing options offers rather than apply as homeless and risk getting no help if they are turned down.

The final version of the supplementary guidance on the suitability of the private accommodation was only published yesterday. This stresses that this is a power, not a duty, and councils should consider whether to arrange a private tenancy based on individual circumstances and have clear policies on its use.

On location – the most controversial aspect of the new regime after successive controversies about London councils exporting their homeless people – the supplementary guidance significantly strengthens previous guidance. This follows the pledges by Grant Shapps in response to the Newham controversy in April that homeless people would not be sent miles away from home.

The supplementary guidance says that ‘in so far as is reasonably practical, secure accommodation within the authority’s own district’. Where that is not possible ‘the authority is required to take into account the distance of that accommodation from the district of the authority’. The accommodation is ‘not likely to be suitable’ if other accommodation is available nearer to the authority’s district.

Authorities are also required to:

  • try to secure accommodation ‘as close as possible to where an applicant was previously living’
  • take into account ‘the significance of any disruption’ to employment, caring and education and links to medical facilities and other support. This has to include consideration of the applicant’s need to reach their normal workplace, the education of young people especially at critical points like GCSEs.

There are also clauses covering the physical condition of the property, health and safety, landlord behaviour and managemement and tenancy deposits.

In its now familiar style the government published its response to the consultation on the suitability order today – after the new regime had already come into effect. Among the dissenting voices, a quarter of consulteees wanted stronger guidance on health and safety and a number of local authorities wanted guidance on affordability updated to reflect welfare reform and the balance between affordability and location. It’s perhaps telling that although 57 per cent of local authorities were in favour of strengthening the guidance on suitability of location, 33 per cent felt it should not be changed on the grounds that it would make the new discharge power more difficult to use. 

In its response, the government stresses that the power is not a requirement and some authorities may choose not to use it at all. It argues that ‘the order strikes the right balance between the protecting of the individual and allowing local authorities the freedoms they need to effectively use the Localism Act power and better manage their housing stock’. On location, it says:

‘Government has made it clear that it is neither acceptable nor fair for local authorities to place households many miles away from their previous home where it is avoidable. Given the vulnerability of this group it is essential that local authorities take into account the potential disruption such a move could have on the household. This Order will strengthen existing legislation in that it states the specific matters local authorities must take into account when considering the suitability of accommodation. This Order does not prevent or prohibit out of borough placements where they are unavoidable nor where they are the choice of the applicant. Some households will wish to leave their current district as such a move can have a positive effect for those escaping violence or those seeking to move to take advantage of employment opportunities.’

All of which sounds great in theory and like it should be enough to stop homeless people being put in sub-standard homes and prevent councils like Newham and Westminster from sending their homeless people to places like Stoke and Nottingham.

Or will it? This is the crucial question examined in this week’s report by the Child Poverty Action Group (CPAG) and to which the answer could well be no based on The Guardian’s story about London councils acquiring properties in cheaper areas all over the country. The crucial thing, which I examine in more detail on my other blog, is the interaction between the new homelessness regime and cuts in housing benefit. It is already impossible in many parts of London to find private tenancies affordable within the local housing allowance cuts and caps introduced in April 2011 and this situation will get dramatically worse with a new round of cuts in April 2013.

Given the conflict between affordability and suitability of location, the CPAG report says that authorities will be caught between a rock and a hard place and could face a wave of legal challenges. For individual families it will all boil down to individual circumstances and some heartbreaking questions such as: is disruption to a child’s education significant if it is not a GCSE year; does travel from home to job reflect the cost of train fares; is being miles away from family a significant enough impact on caring responsibilities and so on.

Clearly many London authorities feel they have to look outside London to find affordable temporary accommodation and private tenancies. The consequences of this for the homeless families concerned remain to be seen as does the long-term potential for even greater concentration of deprivation in poor areas. Add the April 2013 cuts to the equation and things look even bleaker.

In the Lords this week, welfare reform minister Lord Freud gave his optimistic gloss on things. He suggested rather disingenuously that the latest round of stories about people being sent out of London concerns people who arrive in the capital from elsewhere without a local connection. In fact, as Baroness Lister reminded him ‘we are talking about people with local links that matter to them for all sorts of reasons. This policy will destroy those links’. 

Freud reiterated that under today’s homelessness changes ‘the council has to consider whether the location is suitable for the household’s individual circumstances, including the significance of any disruption to employment, education and caring responsibilities. Local authorities are required to carry out a full impact assessment before moving people out to other boroughs.’

On the particular issue of temporary accommodation, he said that the DWP was consulting on how rents and management costs will be paid under universal credit – while quietly ignoring the fact that it will not even begin to be introduced until six months after the April 2013 cuts that will cause the problems that councils are worried about.

All of which means an uncertain future for homeless families and some tough choices for local authorities. However, trapped as they are between sky-high private rents, rising homelessness and cuts in housing benefit they do still have choices. In the short term, they can choose how to spend their discretionary housing payments. In the longer term they can choose how they manage their scarce social tenancies. Do they prioritise basic housing need or people who are working? Do they retain and increase their social stock or sacrifice it to new development? As Westminster plans new council homes for people earning £40,000 to £60,000 and Newham plans to knock down a council estate to build a new university campus, it seems some have already decided. 

EDIT Monday, November 12: This post was written before the Guardian’s story on Saturday about the DCLG’s briefing to council officers that confirms many of the inferences I was drawing about how the new system will work in practice. See this post at Nearly Legal for more detail on that and this post on Shelter’s blog on the prospects of a return to revolving door homelessness. 

We need evidence

Wed, 7 Nov 2012

The government’s plans on section 106 and affordable housing came under fire from all sides of both houses of parliament this week – and no wonder.

In the Commons, communities secretary Eric Pickles said the Growth and Infrastructure Bill would cut red tape by allowing the renegotiation of ‘economically unrealistic’ section 106 agreements. ‘In our sights particularly are affordable housing requirements that were negotiated at the height of Labour’s unsustainable housing boom. Now that the Brown bubble has burst, bringing us back to reality with a bump, we recognise that 75,000 homes, with planning permission, are lying unbuilt.’

Pickles dismissed the argument made by the National Housing Federation that abolition of section 106 agreements would cost 35,000 affordable homes a year as ‘only in the fantasy housing figures’. The truth was that 41 per cent of planning authorities had already started negotiations and dropped their affordable homes targets, he said.

But how do we know all this? Lib Dem deputy leader Simon Hughes said that nobody wanted stalled sites but he called for much more transparency to check what developers say about viability. ‘Our experience on the south bank is that they say certain things are not economically viable. They then build the housing and flog it off at higher prices that were not revealed at the beginning.’

Pickles responded that viability would not just be judged on the basis of a developer’s word but would have to be proved to the satisfaction of a planning inspector.

Shadow communities secretary Hilary Benn questioned the focus on affordable housing. ‘If section 106 really was the cause of stalled housing developments, why does the clause focus only on the affordable housing requirements, rather than other section 106 requirements— for example, contributing to transport, other infrastructure or new schools?’

He went on: ‘Where is the evidence? This will be a familiar theme in this debate. We are told that there are 1,200 sites and 75,000 homes that are stalled. Apparently the figure comes from something called the Glenigan database. When I asked the planning minister if he would publish it so that we could see for ourselves the information on which the statement is based, he refused to do so.’

Benn argued that the result could actually be further stalling: ‘A developer that hopes to reduce the affordable housing obligation will now have a clear incentive to wait for the Bill to reach the statute book rather than entering into negotiations with the local authority—in other words, delay.’

Concern about lack of evidence did not just come from Labour MPs. Lib Dem Annette Brooke was also worried: ‘If renegotiation outcomes were in line with local planning policies, I cannot see why a local council would not renegotiate on a voluntary basis. Developers’ profits will rise, but how transparent and independent will the appraisals be of the viability of a development with and without the section 106 obligations?’

Labour’s Clive Betts, chair of the communities and local government select committee, took up the same theme: ‘Where is the evidence that there is a problem? Local authorities are renegotiating the agreements where appropriate and in line with local circumstances, but why determine the viability of individual schemes in different localities on a national basis? That is simply not acceptable. The danger is that if developers think they will get a better deal by delaying and going to the Planning Inspectorate once the Bill is enacted because fewer affordable homes will be required, the result of the measure will be the opposite of that intended.’

Tory MP Mark Pawsey, another member of the select committee, said the measure was necessary but he still had concerns. ‘I would like the minister’s reassurance that, when a developer comes forward with a request to renegotiate a section 106 agreement, there will be an evidence base when making a determination. We heard about the issue of developers coming forward looking for a better deal. One concern I have is that that opportunity to come forward for a better deal may prevent some developers from going ahead with an existing section 106 agreement that is eminently deliverable.’

Over in the Lords, peers were making similar concerns in a debate about planning. Lib Dem peer Lord Shipley highlighted the cross-party call from the Local Government Association for a rethink on section 106. ‘Who will be the judge of viability of a scheme containing affordable homes?’ he asked. ‘Is there evidence that central government knows better than local government? I do not think that the case is proven. There is now evidence to suggest that, when voluntary renegotiation has happened, on average councils are accepting a level of affordable housing around one-third lower than stated in their local plan. If plans in relation to Section 106 renegotiations are continued, a system of independent verification of claims of unviability should be established, possibly through the Homes and Communities Agency.’

Cross-bencher Lord Best said there are 400,000 homes with planning permission and local authorities are approving 87 per cent of planning applications. ‘It does not sound as if local authorities are putting up unreasonable barriers to housing activity,’ he argued. ‘I think that 75,000 homes are supposedly held up because the Section 106 agreements now look too onerous. The hope on the part of many developers is that, having got their planning consent, they will be able to negotiate down the affordable elements within those sites and therefore obviously increase the profit margins for those developments.

And Tory peer Lord True, the leader of Richmond council in London, said he supported other government planning changes but was ‘far more cautious’ on section 106 and affordable housing. ‘This is already possible and many local authorities are doing it; some developers engage and some do not. I am not sure that we should reward speculators who are unwilling to play by the rules that other developers accept.’

Labour’s Lord Mackenzie pressed communities minister Baroness Hanham directly on the issue: ‘Could the minister confirm that the 1,400 sites are all stalled for economic reasons because of affordable housing? Or is it for other reasons as well?’

Her less than convincing reply was: ‘There are 1,400 sites with 75,000 units on them. It does not necessarily say that they are stalled for any reason. They need to be unlocked to get that housing out but there may be other things that are also tied up with it as well. However, that is the number of units that we know could be built.’

If that sounds a weak argument for a change in the law, back in the Commons business minister Michael Fallon summed up the debate on the Bill like this: ‘Affordable housing that is stalled for a minimum period of five years is not affordable housing—it is non-existent housing. We already know there are 1,400 sites comprising some 75,000 homes waiting to be unlocked.’

Except of course that we don’t really know that at all. The source for the claim that there are 1,400 stalled sites and 75,000 stalled homes is research by the construction information firm Glenigan based on its database of planning applications. I can find no details anywhere of how ‘stalled sites’ was defined or the reasons why they stalled. Odder still, I have yet to see a specific example cited of a site that is stalled solely because a local authority refuses to budge on affordable housing (if there was one then you can be sure that ministers would have mentioned it over and over again on Monday) but I have seen plenty of cases where the section 106 has been successfully renegotiated.  

All of which brings us back to the real reasons why those sites are now unviable. There are lots of sites out there where housebuilders paid too much for the land at the peak of the market and/or the scheme as originally planned is uneconomic because of the mix and density. However, any section 106 agreement that is now seen as uneconomic was freely entered into by private housebuilders based on market conditions at the time. In addition, the price they paid for the land will have been lower to reflect the lower development value as a result of this over-burden.

The consultation paper over the summer proposed forced renegotiation of agreements signed before April 2010 by allowing an appeal on viability grounds to the Planning Inspectorate. However, the Bill goes further and applies to all section 106s that have an affordable housing requirement. Lobbying by housing organisations may have helped to stop the government introducing a complete section 106 holiday and Lib Dem pressure may have secured an extra £300 million of funding to make up for the loss of affordable homes, but the net effect is stil highly favourable to housebuilders.

Even if you justify all of this on the pragmatic grounds that the country needs homes to be built, then surely any renegotiation must recognise the potential windfall gain being made by the companies and their shareholders rather than simply hand them all the best cards and bail them out from their own poor commercial decisions.

The Growth and Infrastructure Bill duly received its second reading in the Commons on Monday but the doubts about this change in policy and the breathtaking lack of evidence for it are not going away.

We need evidence

Wed, 7 Nov 2012

The government’s plans on section 106 and affordable housing came under fire from all sides of both houses of parliament this week – and no wonder.

In the Commons, communities secretary Eric Pickles said the Growth and Infrastructure Bill would cut red tape by allowing the renegotiation of ‘economically unrealistic’ section 106 agreements. ‘In our sights particularly are affordable housing requirements that were negotiated at the height of Labour’s unsustainable housing boom. Now that the Brown bubble has burst, bringing us back to reality with a bump, we recognise that 75,000 homes, with planning permission, are lying unbuilt.’

Pickles dismissed the argument made by the National Housing Federation that abolition of section 106 agreements would cost 35,000 affordable homes a year as ‘only in the fantasy housing figures’. The truth was that 41 per cent of planning authorities had already started negotiations and dropped their affordable homes targets, he said.

But how do we know all this? Lib Dem deputy leader Simon Hughes said that nobody wanted stalled sites but he called for much more transparency to check what developers say about viability. ‘Our experience on the south bank is that they say certain things are not economically viable. They then build the housing and flog it off at higher prices that were not revealed at the beginning.’

Pickles responded that viability would not just be judged on the basis of a developer’s word but would have to be proved to the satisfaction of a planning inspector.

Shadow communities secretary Hilary Benn questioned the focus on affordable housing. ‘If section 106 really was the cause of stalled housing developments, why does the clause focus only on the affordable housing requirements, rather than other section 106 requirements— for example, contributing to transport, other infrastructure or new schools?’

He went on: ‘Where is the evidence? This will be a familiar theme in this debate. We are told that there are 1,200 sites and 75,000 homes that are stalled. Apparently the figure comes from something called the Glenigan database. When I asked the planning minister if he would publish it so that we could see for ourselves the information on which the statement is based, he refused to do so.’

Benn argued that the result could actually be further stalling: ‘A developer that hopes to reduce the affordable housing obligation will now have a clear incentive to wait for the Bill to reach the statute book rather than entering into negotiations with the local authority—in other words, delay.’

Concern about lack of evidence did not just come from Labour MPs. Lib Dem Annette Brooke was also worried: ‘If renegotiation outcomes were in line with local planning policies, I cannot see why a local council would not renegotiate on a voluntary basis. Developers’ profits will rise, but how transparent and independent will the appraisals be of the viability of a development with and without the section 106 obligations?’

Labour’s Clive Betts, chair of the communities and local government select committee, took up the same theme: ‘Where is the evidence that there is a problem? Local authorities are renegotiating the agreements where appropriate and in line with local circumstances, but why determine the viability of individual schemes in different localities on a national basis? That is simply not acceptable. The danger is that if developers think they will get a better deal by delaying and going to the Planning Inspectorate once the Bill is enacted because fewer affordable homes will be required, the result of the measure will be the opposite of that intended.’

Tory MP Mark Pawsey, another member of the select committee, said the measure was necessary but he still had concerns. ‘I would like the minister’s reassurance that, when a developer comes forward with a request to renegotiate a section 106 agreement, there will be an evidence base when making a determination. We heard about the issue of developers coming forward looking for a better deal. One concern I have is that that opportunity to come forward for a better deal may prevent some developers from going ahead with an existing section 106 agreement that is eminently deliverable.’

Over in the Lords, peers were making similar concerns in a debate about planning. Lib Dem peer Lord Shipley highlighted the cross-party call from the Local Government Association for a rethink on section 106. ‘Who will be the judge of viability of a scheme containing affordable homes?’ he asked. ‘Is there evidence that central government knows better than local government? I do not think that the case is proven. There is now evidence to suggest that, when voluntary renegotiation has happened, on average councils are accepting a level of affordable housing around one-third lower than stated in their local plan. If plans in relation to Section 106 renegotiations are continued, a system of independent verification of claims of unviability should be established, possibly through the Homes and Communities Agency.’

Cross-bencher Lord Best said there are 400,000 homes with planning permission and local authorities are approving 87 per cent of planning applications. ‘It does not sound as if local authorities are putting up unreasonable barriers to housing activity,’ he argued. ‘I think that 75,000 homes are supposedly held up because the Section 106 agreements now look too onerous. The hope on the part of many developers is that, having got their planning consent, they will be able to negotiate down the affordable elements within those sites and therefore obviously increase the profit margins for those developments.

And Tory peer Lord True, the leader of Richmond council in London, said he supported other government planning changes but was ‘far more cautious’ on section 106 and affordable housing. ‘This is already possible and many local authorities are doing it; some developers engage and some do not. I am not sure that we should reward speculators who are unwilling to play by the rules that other developers accept.’

Labour’s Lord Mackenzie pressed communities minister Baroness Hanham directly on the issue: ‘Could the minister confirm that the 1,400 sites are all stalled for economic reasons because of affordable housing? Or is it for other reasons as well?’

Her less than convincing reply was: ‘There are 1,400 sites with 75,000 units on them. It does not necessarily say that they are stalled for any reason. They need to be unlocked to get that housing out but there may be other things that are also tied up with it as well. However, that is the number of units that we know could be built.’

If that sounds a weak argument for a change in the law, back in the Commons business minister Michael Fallon summed up the debate on the Bill like this: ‘Affordable housing that is stalled for a minimum period of five years is not affordable housing—it is non-existent housing. We already know there are 1,400 sites comprising some 75,000 homes waiting to be unlocked.’

Except of course that we don’t really know that at all. The source for the claim that there are 1,400 stalled sites and 75,000 stalled homes is research by the construction information firm Glenigan based on its database of planning applications. I can find no details anywhere of how ‘stalled sites’ was defined or the reasons why they stalled. Odder still, I have yet to see a specific example cited of a site that is stalled solely because a local authority refuses to budge on affordable housing (if there was one then you can be sure that ministers would have mentioned it over and over again on Monday) but I have seen plenty of cases where the section 106 has been successfully renegotiated.  

All of which brings us back to the real reasons why those sites are now unviable. There are lots of sites out there where housebuilders paid too much for the land at the peak of the market and/or the scheme as originally planned is uneconomic because of the mix and density. However, any section 106 agreement that is now seen as uneconomic was freely entered into by private housebuilders based on market conditions at the time. In addition, the price they paid for the land will have been lower to reflect the lower development value as a result of this over-burden.

The consultation paper over the summer proposed forced renegotiation of agreements signed before April 2010 by allowing an appeal on viability grounds to the Planning Inspectorate. However, the Bill goes further and applies to all section 106s that have an affordable housing requirement. Lobbying by housing organisations may have helped to stop the government introducing a complete section 106 holiday and Lib Dem pressure may have secured an extra £300 million of funding to make up for the loss of affordable homes, but the net effect is stil highly favourable to housebuilders.

Even if you justify all of this on the pragmatic grounds that the country needs homes to be built, then surely any renegotiation must recognise the potential windfall gain being made by the companies and their shareholders rather than simply hand them all the best cards and bail them out from their own poor commercial decisions.

The Growth and Infrastructure Bill duly received its second reading in the Commons on Monday but the doubts about this change in policy and the breathtaking lack of evidence for it are not going away.

April is the cruellest month

Mon, 5 Nov 2012

Every time you think you have got your head around the impact of the April 2013 welfare changes you realise you have forgotten something that makes it even worse.

I don’t need reminding that there are now just 147 days until the bedroom tax and overall benefit cap take affect. I know that increases in the local housing allowance will be restricted to CPI inflation from the same date. I realise that a range of other cuts in benefits and the localisation of council tax benefit and the social fund with reduced funding come in at the same time.

However, that is only the changes introduced by the Department for Work and Pensions. On top of that, I knew that local authorities had suffered deep cuts in their overall funding and I’ve been following closely the change in the Localism Act to allow them to discharge their homelessness duty into the private rented sector (which applies from this time next week). And I was aware that the Ministry of Justice was cutting legal aid to remove funding for most housing and welfare cases without quite realising that also applied from April (for obvious reasons).

The potential for all of those individual factors to interact with each other and the potential for unintended consequences is clear. However, until I read today’s report from the Child Poverty Action Group (CPAG), I had not fully thought through the extent to which this will create difficult and sometimes impossible dilemmas on the ground.

Even then, the focus of the report is mainly on London (because that is where the biggest impacts will be felt) and on the private rented sector (because that will have to cope – or not – with the fall-out). So it does not really cover concerns about the bedroom tax and the switch to universal credit.

The headlines generated by the report include warnings about the extent of out-of-area placements being planned by councils (with a Guardian survey finding widespread plans) and the potential for conflict with the troubled families programme (in Inside Housing). In the first case, the concern is that Newham was just ahead of the game when it contacted housing organisations throughout the Midlands and North about housing its homeless families. In the second, the worry is that councils face a choice between keeping ‘troubled families’ in their homes and potentially rewarding anti-social behaviour or allowing them to be evicted and to lose contact with the intensive programme of support that is meant to help them.

The most immediate priority, according to CPAG, is changing the regulations for the overall benefit cap so that it does not apply to temporary accommodation. Otherwise, with rising private rents making the procurement of affordable accommodation in London unsustainable, both families made homeless by the cap and those already in temporary accommodation could face double homelessness as they are evicted for rent arrears.

Little wonder then that the report found that London councils are looking to the North and Midlands for both private and temporary accommodation. Except that the whole thing could be open to legal challenge under strengthened guidance on ‘suitability’ proposed by Grant Shapps after the original furore about Newham.

The consequences for tenants are grim even with moves that are closer to home – as revealed in The Guardian’s story about a mother with two children from Waltham Forest. She was rehoused 37 miles away in Luton but the move split up her family so that her older daughter could stay in school.

However, the report reveals the pressures that will leave councils ‘between a rock and a hard place’. London Councils has already estimated that 133,000 workless households in London, including 63,000 with children, will be unable to afford their current rent as a result of the bedroom caps and overall benefit cap. Surveys also show a growing proportion of London landlords will either not extend existing tenancies or consider not renting at all to people on benefit.

Research so far into the impact of the 2011 changes (the bedroom caps and cut to 30th percentile) suggests that most tenants will look to make up rent shortfalls from elsewhere rather than move. The proportion moving out of the borough has been lower than expected so far, perhaps because transitional protection means the impact of the bedroom caps on existing claimants is only just being felt. However, staying put will become increasingly difficult as further cuts bite and larger families face the biggest shortfalls – and there is no transitional protection under the April 2013 cuts.

The officers interviewed for the report said that elected councillors had yet to realise the full implications of the changes. ‘While several officers had received a strong steer from elected members that they did not want to see families moved out of the borough, officers are struggling to see how they could achieve this,’ says the report. Officers were ‘unclear’ as to how claimants could avoid moving out of the borough without significantly increased overcrowding.

Come April 2013, families will have three options: look for cheaper accommodation near to home or elsewhere; look for work of over 24 hours a week to avoid the benefit cap; or present as homeless to their local authority. If they are vulnerable and not intentionally homeless, then the council has to find them a suitable home and provide temporary accommodation in the meantime. From next week the home can be private rented.

Some councils are using discretionary housing payments to pay deposits or offer incentives to encourage landlords to take claimants – but this is only ever a short-term solution. Meanwhile, even outer London boroughs are finding they cannot match a supply of affordable accommodation to demand.

The report goes on: ‘Given the pressures on private rents, most authorities felt that it would not be possible to do this to any large scale within London, particularly for families whose benefits are capped at £500 a week. This led to discussions about procurement of private sector properties elsewhere – locations cited included Nottingham, Derby, the Midlands and Wales.’

Many councils believe that the government’s suitability consultation on the discharged duty, which says that ‘it is not acceptable for local authorities to make compulsory placements automatically hundreds of miles away’, leaves them in an impossible position.

The benefit cap will leave families in temporary accommodation with a shortfall against their rent that councils cannot ask them to make up if it would deprive them of other essentials. The report goes on: ‘Applying the benefit cap to families in temporary accommodation effectively means that families who are accepted as homeless, could be made homeless once more due to their inability to pay the costs of temporary accommodation.’

And what about people who local authorities persuade not to make a homelessness application and accept help through prevention and relief work? Do they accept stay put and find a way to make up the rent shortfall, move into sub-standard and overcrowded accommodation or move far away from their communities and children’s schools? None of the choices look good and the scope for choice is narrowing all the time.  

April is the cruellest month

Mon, 5 Nov 2012

Every time you think you have got your head around the impact of the April 2013 welfare changes you realise you have forgotten something that makes it even worse.

I don’t need reminding that there are now just 147 days until the bedroom tax and overall benefit cap take affect. I know that increases in the local housing allowance will be restricted to CPI inflation from the same date. I realise that a range of other cuts in benefits and the localisation of council tax benefit and the social fund with reduced funding come in at the same time.

However, that is only the changes introduced by the Department for Work and Pensions. On top of that, I knew that local authorities had suffered deep cuts in their overall funding and I’ve been following closely the change in the Localism Act to allow them to discharge their homelessness duty into the private rented sector (which applies from this time next week). And I was aware that the Ministry of Justice was cutting legal aid to remove funding for most housing and welfare cases without quite realising that also applied from April (for obvious reasons).

The potential for all of those individual factors to interact with each other and the potential for unintended consequences is clear. However, until I read today’s report from the Child Poverty Action Group (CPAG), I had not fully thought through the extent to which this will create difficult and sometimes impossible dilemmas on the ground.

Even then, the focus of the report is mainly on London (because that is where the biggest impacts will be felt) and on the private rented sector (because that will have to cope – or not – with the fall-out). So it does not really cover concerns about the bedroom tax and the switch to universal credit.

The headlines generated by the report include warnings about the extent of out-of-area placements being planned by councils (with a Guardian survey finding widespread plans) and the potential for conflict with the troubled families programme (in Inside Housing). In the first case, the concern is that Newham was just ahead of the game when it contacted housing organisations throughout the Midlands and North about housing its homeless families. In the second, the worry is that councils face a choice between keeping ‘troubled families’ in their homes and potentially rewarding anti-social behaviour or allowing them to be evicted and to lose contact with the intensive programme of support that is meant to help them.

The most immediate priority, according to CPAG, is changing the regulations for the overall benefit cap so that it does not apply to temporary accommodation. Otherwise, with rising private rents making the procurement of affordable accommodation in London unsustainable, both families made homeless by the cap and those already in temporary accommodation could face double homelessness as they are evicted for rent arrears.

Little wonder then that the report found that London councils are looking to the North and Midlands for both private and temporary accommodation. Except that the whole thing could be open to legal challenge under strengthened guidance on ‘suitability’ proposed by Grant Shapps after the original furore about Newham.

The consequences for tenants are grim even with moves that are closer to home – as revealed in The Guardian’s story about a mother with two children from Waltham Forest. She was rehoused 37 miles away in Luton but the move split up her family so that her older daughter could stay in school.

However, the report reveals the pressures that will leave councils ‘between a rock and a hard place’. London Councils has already estimated that 133,000 workless households in London, including 63,000 with children, will be unable to afford their current rent as a result of the bedroom caps and overall benefit cap. Surveys also show a growing proportion of London landlords will either not extend existing tenancies or consider not renting at all to people on benefit.

Research so far into the impact of the 2011 changes (the bedroom caps and cut to 30th percentile) suggests that most tenants will look to make up rent shortfalls from elsewhere rather than move. The proportion moving out of the borough has been lower than expected so far, perhaps because transitional protection means the impact of the bedroom caps on existing claimants is only just being felt. However, staying put will become increasingly difficult as further cuts bite and larger families face the biggest shortfalls – and there is no transitional protection under the April 2013 cuts.

The officers interviewed for the report said that elected councillors had yet to realise the full implications of the changes. ‘While several officers had received a strong steer from elected members that they did not want to see families moved out of the borough, officers are struggling to see how they could achieve this,’ says the report. Officers were ‘unclear’ as to how claimants could avoid moving out of the borough without significantly increased overcrowding.

Come April 2013, families will have three options: look for cheaper accommodation near to home or elsewhere; look for work of over 24 hours a week to avoid the benefit cap; or present as homeless to their local authority. If they are vulnerable and not intentionally homeless, then the council has to find them a suitable home and provide temporary accommodation in the meantime. From next week the home can be private rented.

Some councils are using discretionary housing payments to pay deposits or offer incentives to encourage landlords to take claimants – but this is only ever a short-term solution. Meanwhile, even outer London boroughs are finding they cannot match a supply of affordable accommodation to demand.

The report goes on: ‘Given the pressures on private rents, most authorities felt that it would not be possible to do this to any large scale within London, particularly for families whose benefits are capped at £500 a week. This led to discussions about procurement of private sector properties elsewhere – locations cited included Nottingham, Derby, the Midlands and Wales.’

Many councils believe that the government’s suitability consultation on the discharged duty, which says that ‘it is not acceptable for local authorities to make compulsory placements automatically hundreds of miles away’, leaves them in an impossible position.

The benefit cap will leave families in temporary accommodation with a shortfall against their rent that councils cannot ask them to make up if it would deprive them of other essentials. The report goes on: ‘Applying the benefit cap to families in temporary accommodation effectively means that families who are accepted as homeless, could be made homeless once more due to their inability to pay the costs of temporary accommodation.’

And what about people who local authorities persuade not to make a homelessness application and accept help through prevention and relief work? Do they accept stay put and find a way to make up the rent shortfall, move into sub-standard and overcrowded accommodation or move far away from their communities and children’s schools? None of the choices look good and the scope for choice is narrowing all the time.  

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