Posted by: Colin Wiles03/08/2012
If you haven’t responded to the CLG “Pay to Stay” consultation, I suggest you do so because it may save you a lot of unnecessary hassle in the long run. The consultation paper is a wonderful example of the civil service struggling to interpret the prejudices and half-baked opinions of a minister. You can almost hear the civil servant who drafted the paper muttering “why me?” as they struggle with the complexities and absurdities of the subject.
In brief, Grant Shapps thinks it’s a scandal that people like Bob Crow and Frank Dobson live in “subsidised” social housing and he want them out, or if they won’t go he wants their rents increased to market levels. “This is an issue of principle and fairness,” says the paper. CLG estimates that up to 6,000 households in England have a combined income over £100,000 per annum, and between 12,000 and 34,000 earn £60,000 or more. Subsidised housing is worth around £3,600 per annum for every tenant.
The proposals raise a number of fundamental questions about the purpose and scope of social housing, not least the argument about what is or is not “subsidised” housing. Steve Hilditch at Red Brick has covered the key objection to Pay to Stay, namely the huge bureaucratic exercise that would be required to assess the incomes of every tenant. The CLG admits that, “Linking rents to income would be breaking new ground. Our present view is that primary legislation will be required to enable landlords to access tenant income data if this policy is to be fully effective.” There are also issues raised in the paper about the potential handback of social housing grant and the fact that registered providers could charge no more than 80% of market rents without falling foul of charity rules. So it’s a tricky issue.
I accept that the proposal has the potential to free up some homes and to raise additional income for landlords (up to £1.2 billion per annum if you accept the government’s very best estimates of the numbers involved, although this is still a piffling amount in comparison to the housing beneefit bill).
But there are several other objections to the Pay to Stay proposals, quite apart from the bureaucracy involved in checking the income of every tenant. Firstly, I would guess that high earners are likely to be long-standing tenants who have probably paid their rent, been no trouble to their landlord, improved their properties, carried out their own repairs and paid for the historic costs of their property many times over, so the notion that they are “subsidised” is questionable. Second, linking rents to income is yet another attack upon the principles of social housing and will eventually lead to the Americanisation and ghettoisation of social housing, something we should resist at all costs - we want diversity and mixed income communities in our housing stock. I’m no fan of Bob Crow or Lee Jasper but I quite like the notion that these people are happy to live in social housing and contribute to their communities. Third, this is yet another example of making policy on the basis of exceptional cases, which is always a bad idea. Fourth, if we want to have an honest debate about “principle and fairness” let’s discuss the far greater subsidies that the wealthy enjoy in areas such as land ownership or the arts, or the damage done to our society by the greed and incompetence of bankers. As always, this seems to be the classic conjurer’s trick of trying to divert attention from the big issue onto a smaller detail.
If the government really wants to encourage richer tenants out of social housing this is not the way to do it. It’s a sledgehammer to crack a nut. A more subtle approach would be to appeal to the moral conscience of high earners and allow them to make their own decisions. You will need to respond to the consultation by the 12th September if you want to avoid another daft policy being imposed upon you.
From Inside out
An independent look at the housing sector and beyond from Colin Wiles