Just Say No

The HCA prospectus for the 2015/18 bidding round has just been published and the thumbscrews are tightening.

The first things to say is that this is the end of the road  for new social rented housing. Para 204 states “Social rent provision will only be supported in very limited circumstances. For example, social rent could be considered where decanting existing social tenants into new homes is necessary” Para 92 states  “…Government policy does not support the argument that only rents at or close to social rent levels are capable of meeting local needs – particularly when support for housing costs through Housing Benefit and Universal Credit is taken into account” 

What’s more, local authorities will not be allowed to use high “Affordable” rents as a valid reason to oppose a scheme on their patch. “…a view that Affordable Rent prevents an authority from meeting local need would not be considered a robust reason not to support a bid.“ So this prospectus more or less accepts that, for the sake of a few more units, the “Affordable Rent” programme will condemn many people to a life on benefits. Housing benefit will take the strain. Shameful.

Secondly, ex-Policy Exchange guru Alex Morton (now in Number 10) has his fingerprints all over this prospectus, because not only are providers required to maximise the number of conversions of voids to the “Affordable Rent” model but they are also required to show that they are selling off expensive properties to fund new homes in poorer areas. This is something that Policy Exchange first floated in 2012 and I wrote about it here. If carried out on any major scale it is profoundly wrong, because it damages diversity and is socially divisive. The entire thrust of the prospectus is about building the greatest number of homes for the lowest level of grant, by selling assets, diversification, pumping up the level of debt and converting social housing to unaffordable “Affordable Rents”. This is not sweating assets, it’s sticking them in the oven until they are dessicated.

To prove the point about unaffordable rents, just take a look at average 2-bed market rents published by the VOA At October 2013. If you convert these to the 80 percent “Affordable Rent” you achieve the following weekly rents for selected districts in London and the south east. 

• Westminster £460
• Camden  £377
• Hammersmith £324
• Redbridge  £190
• Oxford  £189
• Cambridge £177
• Broxbourne £154
• St Albans £153

On a minimum wage, no one could possibly afford these rents without recourse to benefits (and no poor person would be able to afford to live iin the first three boroughs under any circulmstances). This programme forces people into welfare dependency. It is only when you move out to somewhere like Thanet (£103 per week) that the “Affordable Rent” model starts to become affordable. This model simply does not work for much of southern England.

Finally, the prospectus includes all kinds of nonsense about driving down procurement and construction costs and driving up quality. It’s Alice in Wonderland. You cannot provide decent, affordable housing without a decent level of subsidy.

The question is, how many housing providers will co-operate with this latest programme? Are they prepared to sell their souls and their assets for a few more homes? How many will take a long-term view of their role and say, “Sorry, this is not for us. We want to provide homes that people can afford. We will bide our time until a more favourable grant settlement comes along”? How many will have the courage and the decency to say no to a programme that will load them with debt, force the sale of their most valuable assets and tie their tenants into the benefits’ system for years to come?

You know it makes sense. Just Say No.

(Note: I amended this blog on the 30th January to remove a reference to the definition of "social housing" because theire is some confusion between the defiintion set out on the CLG website and within section 68 of the 2008 Housing and Regeneration Act.)