Perhaps the real flaw here though is the fundamental argument - namely, that "...tenancies for life disincentivise people to find work and fuel unsustainable dependency on a limited social housing resource. Under fixed-term tenancies, the government says, tenants will be more likely to improve their circumstances and leave the sector."
This argument is based on the Hills' report of 2007. He pointed out that low levels of employment across a range of groups in social housing (compared to the non-social sector) indicated that low rents and secure tenancies were not supporting people into the labour market in anything like the numbers we might expect. He also explores some of the reasons why employment levels are comparatively low in the social sector. One of his conclusions is that we would expect to see people in the greatest need living in social housing, and that, logically enough, high levels of vulnerability will impact negatively on employment levels.
And there's the rub: it's not secure tenancies or low rents that are the problem - it's the high levels of need in the sector.
If one compared levels of employment in the social housing sector pre-1977 (when allocation on the basis of need was introduced) with the picture today, then levels of employment pre-1977 would be significantly higher. This strongly suggests that secure tenancies and 'sub-market' rents were in fact performing their function of providing a secure base for entering the labour market.
On this argument, a better return on the investment would actually result from a more diversified group of tenants entering - and remaining in - social housing.
The current proposals run the risk of reducing incentives to find work - which is precisely what secure tenancies and low rents are accused of doing!