Time to get even

Banking and inequality are key battlegrounds for the forthcoming general election and they collide in social housing.

The wealth gulf between social renters and homeowners - £380,000 according to the National Equality Panel - now characterises tenure as a metaphor for inequality. And poor tenant access to banking services calls for a new approach to financial exclusion. A report by the Human City Institute proposes tackling these issues together.

Reducing wealth inequality is imperative since it contributes to inefficient economies, poor health, crime, low educational performance and stalled social mobility - acute concerns in more unequal countries like the UK.

Active promotion of homeownership has intensified wealth inequalities. And homeownership imparts a psychological ‘lift’. Such asset accumulation and societal endorsement combine to make homeownership more attractive with social housing often perceived as for a minority with little choice.
Given the scale of inequality, HCI proposes a ‘new deal’ to enable tenants to accumulate assets through the creation of savings accounts, aggregated in a new deal fund managed by a tenants’ mutual community bank, like The Children’s Mutual. The bank would lend to social landlords and third sector agencies to provide housing, develop community infrastructure and enhance local environments.

Tenants’ savings would be ‘safe’, financial exclusion reduced and increased social investment in tenants’ neighbourhoods would create a virtuous, cost-effective cycle of improving the quality of community life while enabling tenants to accumulate a nest egg for the future.

Kevin Gulliver is director of the Human City Institute