Coronavirus and housing: Government doing nothing much.

The government has been accused of being unclear in its communications around Coronavirus. But this headline appears on the Ministry of Housing website; ‘Complete ban on evictions and additional protection for renters’. Poor communication or a straightforward lie?

The policy is actually to ‘suspend new evictions’ until after the crisis, initially 3 months. So, Minister Robert Jenrick’s statement that ‘no renter who has lost income due to coronavirus will be forced out of their home’ is a short-lived commitment.

They call it a ‘radical package’ which it plainly is not. They fail to address basic questions about possession proceedings that are already underway. Surely no-one should be evicted in the current crisis.

So far, no additional measures have been introduced to enable tenants to pay their rent, whether they are in work with reduced pay, laid off from work, or already not working. So, the best that can be said for the policy is that it will defer possession proceedings from starting and will therefore delay eviction. Protection from eviction during the crisis is of course important (although some people have noted that the Courts may well be closed anyway), but what is needed is a policy to prevent tenants being forced into arrears during the crisis, for which they may be evicted afterwards.

Landlords with buy to let mortgages have had the ‘mortgage holiday’ policy extended to them. This is something they can apply for and the devil might be in the detail. But if a landlord qualifies for a holiday, no arrangements have been announced to make sure the benefit of this is passed on or at least shared. Landlords who qualify will of course need to catch up with their mortgage afterwards, although many will add the 3 months to the end of their term, which might be 20 years away. It could be that tenants who pay rent will essentially be creating a short-term cash-flow boost for landlords. Meanwhile, those tenants who cannot pay will accrue arrears, which they may not have the income to repay, and might face possession proceedings when the crisis is over.

At that point the policy falls apart entirely. There will be a strengthened ‘pre-action protocol’ before possession proceedings – engagement between landlords and tenants to establish a repayment plan and to ‘resolve disputes’, during which landlords should ‘reach out’ to tenants to ‘understand the financial position they are in’.  Almost unbelievably, “The government will also issue guidance which asks landlords to show compassion and to allow tenants who are affected by this to remain in their homes wherever possible.” I have little belief that the protocol will work in practice as intended. And it not a criticism of landlords – Twitter is full of both good and bad examples of landlord behaviour, that’s how the sector works – to say that NO policy should be determined by hoped-for ‘compassion’ rather than rights and obligations in law.

In practice, many tenants may be saved by the fact that landlords will see value in hanging on to existing tenants even if they get into Coronavirus arrears. Given the broadly-based reduction in incomes and hence savings that is likely over the next few months, one predictable market correction might be a reduction in rents and the costs of starting up new tenancies. Under these circumstances, keeping a tenant on an existing contract might be an attractive option.

Given that the Chancellor was talking in terms of hundreds of billions of pounds in loans for businesses, the government should be pushed into actions like those taken in other countries to guarantee incomes, putting money directly into the hands of those who are affected by the crisis to enable them to maintain the basics of existence. I would argue that the same should apply to the biggest cost of all, housing. Affected renters must be enabled to pay their rent through direct support from government, not the goodwill of landlords (private and social) – although that is also to be encouraged.

I’m not expert enough to know the best detailed mechanism for achieving the aim of enabling people to pay rent, I assume it’s a mix of entertaining new emergency housing benefit claims, changing Universal Credit rules (paying it immediately, guaranteeing that the housing element will cover all of the rent), and relaxing current policies like the bedroom tax (otherwise how are people to obey the government and ‘sleep in the spare room’ if they get Covid19?). But the purpose of policy must be to enable people to pay their rent during the crisis and to avoid the debt which will create a crisis later. Even the awful Iain Duncan Smith has called for benefit rates to be increased.

Jenrick’s performance as Housing Minister during all this has been exceptionally poor and uncaring. Homeless people and tenants have been inconvenient afterthoughts with half-baked inadequate policy responses. Some loose change for rough sleepers, nothing that I have seen for people living in temporary accommodation (eg extra rooms), no workable special arrangements for people living in shared accommodation or overcrowded housing.

Of one thing I have no doubt: Jeremy Corbyn and John McDonnell would have risen to the challenge – indeed they are doing so in opposition – in a way that Johnson is incapable of doing. Because today’s Tories have not learned the lesson that was learned by the Victorians – as we are reminded by Jules Birch

Go back a century and more, and it was public health concerns about infectious disease spreading from insanitary slums that led to the rise of council housing and the birth of the welfare state in the first place.

If the Coronavirus is as bad as some are predicting, this lesson will have to be learned all over again.

As the government publishes the required legislation, keep in touch with commentary via the excellent @nearlylegal twitter feed and blog and of course @insidehousing 

 

Posted in Uncategorized | 2 Comments

OFFICIAL CRACKDOWN ON “FLEECEHOLD”

By Dermot Mckibbin

Get Commonhold Done!

dermot1

The Competition and Market Authority (CMA) is about to take legal action against housing developers on behalf of leaseholders who were mis-sold their properties by leading housing developers. Such a move is unprecedented and if fully supported by all progressive opinion in England and Wales would be an important step in abolishing and not merely “polishing up” the antiquated leasehold tenure system in England and Wales.

The CMA has wide powers to require business organisations to remove unfair contract terms from consumer contracts and can apply to court for an injunction to prevent their continued use.

The CMA is concerned that leasehold “homeowners” have been unfairly treated and prospective buyers misled by housing developers.

These concerns include:

  • Ground rents: homeowners having to pay escalating ground rents, which in some cases can double every 10 years. This increase is often built into contracts, meaning people can often struggle to sell their homes and find themselves trapped.
  • Cost of the freehold: the CMA has seen evidence that people have been misled about the cost of converting their leasehold to freehold ownership. When buying their home, some people were told the freehold would cost only a small sum, but later down the line this price had increased by thousands of pounds with little to no warning.
  • Misleading information: not being told upfront that a property is leasehold and what that means. Some developers are failing to explain the differences between leasehold and freehold when directly asked, and some tell potential buyers that there is no difference. By the time people find out the realities of owning a leasehold, including the regular charges to be paid, they are often unable to pull out of the purchase, or would face significant difficulties if they tried to do so.
  • Unreasonable fees: being charged excessive and disproportionate fees for things like the routine maintenance of a building’s shared spaces or making home improvements. If people want to challenge such charges, the process is often difficult and costly, meaning few people decide to go through with it.

In some ways the CMA intervention is surprising. A 2014 report by the CMA into the leasehold housing market gave it a clean bill of health. Cardiff Trading Standards has already settled a mis-selling case against Persimmons one of the biggest housing developers. An out of court settlement meant that the company agreed to give freehold title to leaseholders who complained that they had been sold leases instead of full ownership of their properties.

The truth is that the CMA has been sat on by the powerful all-party House of Commons Select Committee in its bi-partisan critical inquiry into the leasehold system in March 2019. The leasehold lobby is increasingly influential. The Facebook page for the National Leasehold Campaign now has over 17,000 followers and growing. The All Parliamentary Group on Leasehold reform currently stands at 153 members.

The CMA have correctly picked up that some leaseholders will come within the scope of the 1988 Housing Act. Where ground rents exceed £250 per year or £1,000 per year in London, a leaseholder is classed as an assured tenant. This means, for even small sums of arrears, leaseholders can be subject to a mandatory possession order.

Unfortunately, the CMA have given the solicitors involved a clean bill of health. Builders required prospective purchasers to use their own solicitors who failed to tell their clients that they were not in fact buying a freehold property. It is remarkable that this conflict of interest is compatible with professional conduct rules. These solicitors are now subject to negligence claims by fresh lawyers.

This pending enforcement action is embarrassing for the Government who had persuaded housing developers to sign up to a voluntary code of practice in order to “limit” the damage of toxic leases. There are links between housing developers and the Conservative party.

Unlike the rest of the English-speaking world, England and Wales has the leasehold tenure system. This originates from 1066. William the Conqueror seized all the land after his invasion. He leased land to his barons in return for services. They in return leased land to their supporters in return for services. This ultimately led to the freeholder and tenant relationship.

In America, riots and the formation of the Anti-Rent Party in the nineteenth century lead to the abolition of feudal tenures.

dermot2

A lease is a wasting asset. Once it runs out, a leaseholder becomes a mere tenant. Lenders are reluctant to lend on short leases. Leasehold do not own the land their property is built on. This is owned by the freeholder for which they pay a ground rent. The freehold title can be sold on a third party without the knowledge or consent of the leaseholder. If a leaseholder breaks the lease, the freeholder can exercise the nuclear right of forfeiture and if successful the leaseholder is evicted thereby losing any equity in the property. There are problems with high service charges and permission fees.

Leasehold reform is rapidly moving up the political agenda. The House of Commons Select Committee is launching an inquiry into the cladding scandal in residential blocks. The Law Commission is about to publish a report on how to develop the Commonhold tenure. Commonhold is a form of tenure whereby all the residents in a block own the freehold title. Each flat owner automatically becomes a director of the company that owns and manages the shared areas. There is no freeholder or ground rent. Commonhold is in effect a type of property-owning housing co-operative.

Surprisingly there are no accurate figures for the precise number of leasehold properties in England and Wales. Estimates vary from 4 million to 7 million properties. It is thought that two thirds are flats and one third houses. Of the 20 parliamentary constituencies with the highest number of leasehold properties, all of them are in London. 18 are held by Labour and 2 by the Conservatives. The 20 parliamentary constituencies with the highest number of leasehold houses are in the North-west of England. 10 are held by Labour. The other ten were won by the Tories in the last two general elections.

If all leasehold properties were converted to the Commonhold tenure over the lifetime of a Parliament as envisaged by the Labour Manifesto in 2019 this would lead to the biggest ever increase in the number of properties that are owned co-operatively. All sections of the Labour and Co-Operative Parties need to be seen to be campaigning with leaseholders if their votes are to be won.

See also – The Truth about leasehold – an unjust and immoral system

Dermot Mckibbin

Beckenham Constituency Labour party.

Twitter @dermotmckibbin1

 

Posted in Uncategorized | Leave a comment

Unsafe cladding, Leaseholders, Government inaction, Labour’s response

By Dermot Mckibbin

On 12 February 2020, Hilary Benn, the Labour MP for Leeds Central, hosted a short but significant parliamentary debate in Westminster Hall on unsafe cladding in residential accommodation occupied by leaseholders. The debate looked at the development of Government policy to deal with fire safety in private blocks since the tragic fire at the Grenfell Tower block on 14 June 2017.

Leaseholders save up to buy their flat only to discover that the cladding is dangerous. Some of these purchases will have received assistance from the Government’s help to buy scheme. The Fire Brigade tells residents in the block that they must set up a waking watch 24 hours per day to patrol the block. If they do not do so, they must vacate the block. In one block in Leeds such a watch is costing each flat-owner £670 a month plus VAT on top of mortgage payments and service charges.

claddingThe leaseholder may then be asked to meet the cost of putting in a fire alarm. Then to their absolute horror they are asked to pay for the cost of replacing the dangerous cladding to make their home safe. They simply do not have that amount of money. Their flat becomes worthless and they cannot remortgage. The UK Cladding Group has reported insurance costs for these blocks going up from £40,000 to £200,000. Leaseholders run the risk of becoming bankrupt, and if they work for the police or are lawyers they will lose their jobs as well.  They will become homeless. This is not a situation of the making of leaseholders. They are the innocent victims of Government policy.

In May 2019 the Government set up a fund of £200 million to support the removal of ACM style cladding from private residential blocks to protect leaseholders from bearing the cost. Leaseholders in blocks with other types of cladding were excluded. However local fire brigades do not differentiate between ACM and other forms of cladding that are equally dangerous. They take the view that there is no difference between different types of cladding if they were dangerous. In January 2020 Government Ministers were talking about loans to leaseholders to pay for cladding removal. This was a clear departure from the Government’s previous position that leaseholders should be protected from paying for these costs.

MPs from all parties and all parts of the country queued up to contribute to the debate. They reported problems with privately owned blocks in Leeds, Manchester, Sheffield, Liverpool, London, Birmingham. Ellesmere Port, Ipswich, Newton Abbot and Glasgow.

14 MPs from London spoke in the debate. In Greenwich and Woolwich 20 privately owned buildings were found to have ACM cladding. Greenwich Council has found at least 24 buildings with high pressure laminate cladding. In many cases the property is no longer owned by the original developer. The new Labour MP for Putney, Fleur Anderson, reported 2 blocks in her constituency with cladding that is a mix of ACM and HPL. Her constituents have been informed that their liability will be between £50,000 and £80,000 per flat!

Scotland has an unusual problem. Even though there is no leasehold/freehold distinction north of the border, the Scottish Government has limited influence on the actions of mortgage lenders since this power is reserved to Westminster. The London Government has issued an advice note that deals with fire safety in buildings post Grenfell throughout the United Kingdom. Even though building standards are higher in Scotland than in England, lending organisations now require home inspection reports to reflect the new London imposed standards. Consequently, some leaseholders in Scotland who wish to sell or remortgage have found that they have been imposed with a nil valuation.

Sarah Jones, MP for Croydon Central, responded for Labour’s front bench. Nine in ten private blocks with Grenfell-style cladding are still covered in cladding.  Government data indicates that 75 private block owners do not even have a plan to remove this cladding. Labour has for years called on the Government to legislate to ensure that building owners cannot pass costs on to innocent leaseholders. The Government cannot justify the distinction between ACM and other forms of cladding.  In November 2019 fire swept rapidly through a student accommodation block in Bolton with fortunately no fatalities. The block had non-ACM cladding.

Ministers have failed to audit residential blocks, so the public do not know how many blocks are still covered in non-ACM but still dangerous cladding. According to Inside Housing the façade materials of 3,708 out of 5,320 tower blocks has yet to be established. The Government announcement in December 2019 that the height limit for removing ACM had changed from 18 metres to 11 metres means that potentially more blocks and leaseholders are covered. The Minister declined to answer the question whether the Government even knew how many blocks will now be covered by this rule change or why it took the Government over two and half years to make this decision.

Esther McVey MP responded for the Government as the then Housing Minister with the clear knowledge that she was about to be sacked from her position. Legislation is promised in a new fire safety bill.  Discussions are pending with the Treasury to increase the size of the fund. The Government has failed to name and shame the freeholders of relevant blocks with unsafe cladding.

The situation is about to get worse for the new Housing Minster. Leasehold Knowledge Partnership are now pointing out that Government answers to Members of Parliament do not accurately reflected what is happening on the ground.

Why is this issue of political importance for Labour? John Healey MP, the Shadow Housing Minister, has pointed out that Labour has double digit lead over the Tories on housing. Amongst owner -occupiers the Conservatives poll better than Labour. If Labour can persuade one conservative owner-occupier to change their vote, this will increase Labour’s poll lead even further. The Tories are too close to the interests of property to tackle this issue effectively.

The difficulties that leaseholders face on cladding issues is separate from the problems that leaseholders living in houses face who have been mis-sold dodgy ground rents. There is an investigation by the Competition and Market Authority due to be released later this year. Many leaseholders live in parliamentary seats in the North of England that were once held by Labour. The National Leasehold Campaign Group Facebook followers has grown to 16,500 in less than 3 years.

The 2019 Labour Manifesto contained positive polices to abolish the leasehold tenure system over the lifetime of the new Parliament. Commonhold would be compulsory for all new builds. All high-rise residential blocks would be made safe.

Unfortunately, the problems of leaseholders, despite being a vote winner for Labour is hardly ever discussed at Labour Party Conferences. The Co-operative Party fringe meeting on leasehold reform at the 2019 conference was a welcome exception.

If Labour is ever to win another election, the new Party leader needs to come out positively on the side of the 5 million leaseholders in England and Wales. S/he must work collaboratively with senior shadow Cabinet figures. There should be an Opposition debate in the Commons on this issue as well as a party-political broadcast.

With over 580,000 party members, Labour should consider using the talents of these members to set up support groups for leaseholders in relevant areas such as the North West. The party needs to produce maps of where leaseholders live and in which parliamentary constituency. Work is needed to expose the links between the Tory Party and freeholders such as David Cameron’s brother in law. Sympathetic lawyers should be contacted to draft possible legal solutions.

Dermot Mckibbin

Vice-Chair Beckenham CLP in a personal capacity.

 

Footnotes:

1>https://hansard.parliament.uk/Commons/2020-02-12/debates/6D6EFAB8-F69B-4FEC-9709-17E30601974C/details

2> https://www.gov.uk/government/news/new-measures-to-improve-building-safety-standards

3> See https://www.databoy.co.uk/words/mapping-the-leasehold-scandal

4> See https://www.leighday.co.uk/News/2019/June-2019/Leaseholders-of-flats-covered-in-Grenfell-type-fla

Posted in Uncategorized | 2 Comments

Red Brick Long Read: Getting Back to Being Connected: How Housing Associations Should Change

Innovation-and-Change-in-nonprofit-organisations.png.pagespeed.ic.3R3y75Jc6C

 

Just published is a book on non-profit organisations by a committed group of community workers; it includes two chapters by Charles Fraser, the first on his 20 years as CEO of St Mungos grappling with different governments to develop services for an unpopular group, single homeless people. His second piece criticises the role of large housing associations, suggesting changes.

 

Red Brick is delighted to re-publish the second of these chapters below.

 

The book “Innovation and Change in Non-Profit Organizations” was edited by Don Macdonald (former CEO of the Foyer Federation).

 

Other chapters cover campaigns (Windrush, Women Refugees), community development, leadership and management and quality improvement. Contributors, all respected practitioners in their fields, include Patrick Vernon (Windrush Campaign), Marchu Girma (Women for Women Refugees), Sian Lockwood (CEO Community Catalysts) and Shaks Ghosh (CEO Clore Social Leadership).

 

Getting Back to Being Connected: How Housing Associations Should Change

By Charles Fraser

 

Introduction

 

For 35 years after the war, the responsibility for building new homes on any scale rested with the private sector and local councils. The high point of council house building was reached in 1953, when 220,000 homes were built. 1978 was the last year when the total number of new homes built (private sector, council and housing association) reached 250,000.

 

While new public house-building was seen as the job of councils, housing associations had a different purpose. Social reformers and philanthropists had played a pioneering role in the 19th century in developing high-quality housing for the working poor; this provision was not that extensive, with the result that by the 1960s many households had no option but private sector landlords, some of whom were notoriously exploitative. A new grass-roots social activism emerged in response to this, where locally credible groups competed with these landlords in order to provide housing free from harassment and overcrowding. They formed housing associations, and surfed the wave of determination to tackle the cruel human consequences of housing shortage which had been so vividly exposed in Cathy Come Home. They were close to the communities they served, as could be seen in their names (Notting Hill Housing Trust, Brent People’s HA, Paddington Churches HA etc). The cornerstones of their professional and emotional appeal were good quality housing, community engagement, hands-on management and human-scale accountability.

 

Thatcher government

 

A step-change took place in 1980 with the election of Mrs Thatcher and the introduction of Right to Buy: between 1980 and 2013, 1.6 million council homes were sold. More than that, they were not replaced – councils stopped building. By 2016 just under 8% of us were living in council housing (compared to 42% in 1979). By the 1990s housing associations were being encouraged by government to assume the responsibility for building public housing, and, under political pressure to cut public spending, government also expected housing associations to compensate for reduced grant levels by borrowing private money – a precursor to the rather idiotic and lazy slogan of ‘more for less’, one consequence of which was to significantly curtail risk-taking.

 

Backing the housing association sector became ideological, but not just along party political lines: the Blair/Brown governments of 1997–2010 only built 7870 council homes. Housing associations did a reasonable job of delivering new housing, within the limits of available finance; but their supply was inevitably not adequate to the demand. For decades Britain has produced insufficient housing to accommodate not just population growth but also the changing demographics of household composition. Politicians have been slow to understand the imperative of new housing supply, and ideology has held sway over action. It is widely accepted that about 250,000 new homes need to be built each year in England: since the turn of the century the average has fallen about 75,000 short each year.

 

Housing associations

 

It is now quite common to hear complaints about housing associations being remote, empire-building megaliths, interested much more in development than in management. But if housing associations are so unloved, why is this? There are, of course, a variety of reasons – a belief that size has not generated efficiency of scale but remoteness and an uninterested arrogance; instances of poor quality workmanship in new-build and then, critically, an unwillingness to take complaints seriously, take responsibility and put things right; an insensitive bureaucracy; and that old perennial, poor maintenance. Perhaps underlying all of these is a disappointment that they so willingly forfeited any sense of independence, and acted largely as sub-contractors to the local state, which swallowed up all the nomination rights to new lettings.

 

Some of the charges do justifiably stick. With their stupid ‘re-branded’ names and vacuous assertions about tenants/services/communities ‘being at the heart of all we do’, one is right to be unimpressed, even suspicious. But at the same time one needs to beware of a simplistic approach which equates ‘small’ with ‘good’ and ‘large’ with ‘bad’. It is not the fault of large housing associations that government abandoned its role of funding council housing. That withdrawal left a vacuum which housing associations have partially filled. It was government which collapsed the grant rate, forcing associations to borrow privately. Avoiding a default became the absolute priority of the regulator so as to ensure that all the wheels didn’t come off the sector’s credibility with private lenders. Big associations do use their financial muscle to build new homes, and a good thing too – but isn’t that the least that they should be doing with financial muscle?

 

The problem perhaps lies in the fact that the sector (and the regulator) has allowed power and influence to flow from spreadsheets – the number of units; the asset base; and strong cash flows – rather than from successfully identifying what makes associations different from other housing providers, and then strengthening that. Tenants risk simply being viewed as rent-paying units. At the same time there is far too little protest about the relentless cuts in government funding – down (for example) from £11.4bn in 2009 to £5.3bn in 2015 (a reduction of 47%!) –as well as cuts to ‘adjacent’ services (e.g. health and employment) which are so critical to the prospects and well-being of their tenants. The sector has lost any radical edge it had, and is felt by some to be too cosy with governments which do not put housing, or people, first.

 

Then Boris Johnson lobbed a pebble into the pond: when he campaigned to become Mayor of London, he struck a chord when he complained that the label of ‘affordable housing’ was applied too narrowly to housing for people on low incomes or state benefits alone and that, given the high cost of housing in London, it should be extended to (for example) young couples with a joint income of up to £60,000. As the ‘cake’ was shared out more widely to address this hitherto unheralded example of housing need, it was inevitable that some resource would be diverted from building for social rent. The sweetener for associations – but not tenants! – was that ‘affordable rent’ was defined as a rental level up to 80% of market rent.

 

Funding models

 

I do not pretend to have an insider’s understanding of the funding models of large housing associations. Many of them seem to have raised money using very complex financial instruments: the business model is paramount. But there is an issue of mission drift: in 2015/16, out of almost 190,000 new homes built in England, only 6500 (3.6%) were for social rent, i.e. low-cost housing for people on low incomes. A year later the comparable figure was below 5400, or 2.5% of all completions. It looks as if the profits from developments for sale on the open market are going to ‘affordable rent’ programmes rather than to social rent, and that people who need social rent housing are being left to the tender mercies of the private sector.

 

It is not completely fair to criticise all large housing associations for being in some ways unresponsive. Some have been genuinely innovative, and have sought new approaches to the rapidly evolving needs of their tenants. And yet, and yet … there is a problem. It lurks within the very terminology ‘housing association’. The term covers too many disparate types of organisation. It is very hard to see what it is that links together a large association, a medium-sized one and a small specialist one – beyond a commonality of constitution and a common (but ‘one-size-fits-all’ and unimaginative) regulator. ‘Association’ is defined as ‘a connection or cooperative link between people or organisations’, or ‘uniting in a common purpose’. It is increasingly unclear how that concept applies to housing associations – should there be a commonality of purpose between landlord and tenant? That seems to be increasingly rare. Customer care programmes and call centres may well have cut costs, but they are extremely impersonal, and entirely unaccountable. They only partly answer human-scale needs.

 

We seem to have forgotten that housing is not just about bricks and mortar, it is about people. In the early 1980s some London local authorities still had housing welfare officers, whose job it was to help new tenants deal with practical issues so as to aid their settling in. That seems like a very distant dream today. Housing associations with their roots in the 1960s were not set up in order to build an asset base – they were a front-line, humane response to the abominations of landlords like Rachman, offering security of tenure and dependable housing management. One of the great lies of recent times was the fatuous assertion by the DoE (as it then was) that it was ‘the department of place’ – all government departments are departments of people, and it behoves them to remember that fact.

 

Are housing associations private or public?

 

An interesting question is whether housing associations are private or public organisations. The answer varies, and will depend on the size and focus of each association. The reality, though, is that nowadays most housing associations are indistinguishable. They have lost local connectedness, which does not mean connectedness with an area on Google Maps, but with real people living in a locality. While it is true that the big associations re-invest their profits – sorry, ‘surpluses’ – into providing more units of housing, they behave in many ways like private housing companies. Nothing wrong with that, perhaps, but it then becomes questionable whether they can justify their charitable status, especially since most of them pay their board members. It looks more and more as if ‘charitable’ describes their privileges, not their obligations.

 

The supported housing sector (‘supported housing’ refers to the integrated provision of housing with support, which can sometimes be so intensive as to border on care) has been struggling badly due to unsympathetic government and generally uninterested (and sometimes downright hostile) local government, but there is precious little show of solidarity between the different ‘wings’ of what likes to portray itself as a single sector. Indifference does, though, seem to have been sanctioned – the regulator has failed to promote the wellbeing of small and medium-sized associations, and especially specialist supported housing providers. But then this is the same regulator which has consistently refused to countenance any nuance of designation, which in turn has led to the endless idiocy of small supported associations being exploited by their larger, property-owning ‘peers’, and of being assessed by the regulator against criteria which are patently irrelevant.

 

Perhaps this is not all the regulator’s fault – after all, it was central government which abdicated its responsibilities in 2003 by handing control of funding streams for vulnerable people to local councils, despite pretty clear evidence that they had a negligible track record in assisting the client groups which are covered by that rather unforgiving label. What started off as a ring-fenced fund of £1.8bn had by 2014 become an un-ring-fenced fund of £1.6bn.

 

Funding cuts

 

Many councils took proactive steps to cut the funding further. Nottinghamshire was one of the most celebrated and brutal councils: an SP budget of £27m in 2004 was cut by 65% in 2012; a further 35% cut was planned for 2014, leaving an overall budget of £8m in 2017. Derbyshire cut its budget by 81% over three years. These were by no means the only councils which, when faced with the need to save money, visited savage cuts disproportionately on those least able to fend for themselves. Local government claims to be the natural strategic housing body, a claim which is tested by the fact that homelessness has risen by 169% since 2010. The great difficulty for the providers caught in these cross-hairs, of course, is that organisations which seek to support people who fall between the gaps in services are themselves likely to fall between the gaps in funding. It is a cruel irony that supported housing should be cut when it saves money: the problem is that it saves money to the public purse, rather than only (or mainly) to its funder. Thanks to the embers of localism, the local tail wags the national dog.

 

These cuts matter, for two reasons. First, supported housing providers work with and on behalf of those whom mainstream housing associations choose to ignore; second, they maintain a close relationship with their clients, thereby ensuring the sort of connectedness and advocacy which the best housing associations once promoted more routinely. By working with marginalised groups, however, these providers risk themselves becoming marginalised. We are frequently reminded of the benefits of communities, without seeing their drawbacks. I recall a colleague from a homelessness agency who sought planning consent for a development of six flats in central London, for which the council received 840 written objections! Apart from the obvious disappointment in realising that 840 people had such strong feelings against homeless people that they were moved to put pen to paper, this does raise compelling questions about the validity of a planning system which is so immune to social progress. Is there a case for taking social housing developments outside the remit of the planning framework? But of course communities rarely define themselves by what they are, and much more frequently by what they oppose. They are intrinsically excluding: and it is at least arguable that social innovation takes place despite communities, not thanks to them.

 

Connected organisations

 

This is why it is important to have organisations which ‘smell the cordite’, that is, which are able and willing to stand up to powerful interests on behalf of their client groups, and which are able to harness the talents and experiences of their client groups in themselves helping to shape the services they receive.

 

I am not trying to argue that ‘small is beautiful’. Just because an organisation is small does not mean that its connections to its client base are exemplary: on the contrary, small organisations are just as capable as large ones of being manipulative, ineffectual and self-important. The important factor is the quality of their relationships with their clients, and then whether those relationships assist their clients towards Maslow’s notion of self-actualisation. At its best, that is the strength of the voluntary sector.

 

It is beyond doubt that there are sub-sections of the population who have been left behind. The cliché declares that ‘a rising tide floats all boats’ – not if they are holed below the water-line it doesn’t. These sub-sections have been failed: they have been failed by public services; they have been failed by the market; tragically, they may also have been failed by their own families. The voluntary sector, in the form of specialist supported housing providers, may well represent their best (and last) chance of having a future.

 

And it is here that the large housing associations can have a valuable role to play. They should stick to what they do best – but they could and should offer more practical assistance and financial support to their more precarious colleagues in the supported housing world who are trying to maintain that connectedness with their clients in housing need (and ‘financial support’ does not mean clever wheezes to make a quick buck out of them!).

 

What matters is almost always that which cannot be counted. When George Peabody established the Peabody Donation Fund he declared that the aim of the organisation would be to ‘ameliorate the condition of the poor and needy of this great metropolis, and to promote their comfort and happiness’. Promoting happiness would be a noble goal for today’s housing associations – but are any of them up to the challenge?

 

 

Charles Fraser was CEO of St Mungo’s (1994-2014).  This chapter is from Innovation and Change in Non-Profit Organisations, Ed. Don Macdonald, Pavilion Publishing and Media Ltd, 2019.

Posted in Uncategorized | 1 Comment

A handy guide to Labour’s manifesto housing pledges

By Sheila Spencer, Secretary, Labour Housing Group

Take this with you on the doorstep! A handy guide to Labour’s manifesto housing pledges.  LHG Housing Policy Guide GE 2019LHG has produced a quick guide to the main manifesto promises for housing. Please share it round to all your Labour friends!

For a more easily printable version go to the doorstep guide on LHG website.

We couldn’t mention everything in this 1 page guide, but there’s something in our policies for everyone:

  • young people stuck in private rented homes, paying exorbitant rents, having to move every 6 months or year, and facing landlords who don’t maintain their properties
  • families moving from one private rented home to another, with no stability for their children and no hope of a secure, affordable, council or Housing Association home
  • leaseholders having to pay through the nose for ground rents
  • anyone facing homelessness
  • people in high rise tower blocks worried about fire safety in their homes
  • families who are anxious about where their children will be able to afford to live when they grow up
  • first-time buyers wanting low cost homes so they can stay near their work and families
  • those wanting to live in environmentally sustainable homes

We know that young people in particular are desperate for hope that the housing market can be made to work for them. We want to see the end of “young” people (under 35??) being forced to share flats and houses with people they don’t know, forced to move on a frequent basis, and facing huge battles to get decent living conditions. So when Labour gets into power, we’ll make all private tenancies indefinite ones as a matter of course (as they were before the Tories changed the rules in 1988). This won’t stop you agreeing a fixed term tenancy with your landlord – but you won’t any longer be forced into this.

No-fault evictions go out with this change too. And the 2019 Manifesto says that we’ll cap rent increases, bring in binding minimum standards, more money for enforcement, and funding for renters’ unions. The work of Acorn and Generation Rent can be replicated around the country, protecting tenants from the excesses of the worst landlords.

Other big stories are, of course, the pledge to build an average 100,000 council homes a year, the Green Deal which means retrofitting older homes can become a reality, and the pledge to reform leasehold.

My other favourites are getting rid of Bedroom Tax (alongside LHA caps, and reforming Universal Credit), ending the Right to Buy, and, of course, funding for fitting sprinklers and other fire safety measures in all high-rise council and housing association tower blocks. And if you’re on the doorstep and people ask how we can deliver all of this at once, tell them that the draft legislation to repeal the Bedroom Tax is already written so it will take only days to get this into force, once we are elected!

As the Labour Party says, Labour is on the side of the tenants. We need to broadcast this loud and clear for the next 2 weeks. Please help to get this message across!

Labour on the side of tenants

For a more easily printable version go to the doorstep guide on LHG website.

Posted in Uncategorized | 1 Comment

A look back at Labour’s Annual Conference 2019, from a housing perspective

By Sheila Spencer, Secretary, Labour Housing Group

 

Healey at LHG 2019

Labour Shadow Secretary of State for Housing, John Healey MP, addressing the LHG fringe meeting.

 

Amid the gloom of Brexit, climate change, and reselection fever, Annual Conference this year was a rather more cheery experience for those who care about housing issues. For one thing, there were more fringe meetings about housing and homelessness (at least 20) than any other subject – even Brexit and the NHS. And the Priority Ballot for delegates to vote on which topics they want to see discussed at Conference saw housing get the highest vote in the Constituency ballot, and one of the highest in the Trade Union one. Finally, a large number of motions had been submitted about both housing and homelessness.

So we were off to a good start, with the compositing meeting coming straightaway on the Saturday evening. Quite a few CLPs and some affiliated organisations had submitted the Labour Campaign for Council Housing model resolution, or variations of it. Labour Housing Group’s own resolution, put together following a lively discussion of the outcomes of Shelter’s Social Housing Commission at our AGM in March, contained many of the same issues.

There was fundamentally little disagreement between many of the delegates about what we should be doing to address the housing crisis. All agreed that we need a major programme of council house building, that housing should be at the heart of our campaigning efforts to win the next general election, and that the Right To Buy must end, though this could be accompanied by an option to buy a discounted home from private sector stock.

To my delight, no-one argued against compulsory purchase of unoccupied empty tower blocks, removing restrictions for councils to build new homes (by which LHG had meant counting investment against the PSBR), or abolishing Assured Shorthold Tenancies (ASTs). Nor was there any major falling out about the need for indefinite tenancies and the introduction of rent caps in the private rented sector whether Bedroom Tax should be abolished, or the need to build energy efficient homes.

There were, however, several contentious issues, and we took some time to explore them. Key amongst these were the question of whether it is necessary to state how much to spend on building the 155,000 public (social) rented homes to be built each year by the next Labour Government, and whether all new homes should be built to a lifetime homes standard.

Two other issues proved worthy of longer discussion, the first of which – retrofitting sprinklers and replacing combustible cladding in high rise tower blocks – will cause no surprise. Arguments were put forward for this to happen in all social housing tower blocks, to be paid for by the Government, and this view won the day.

The second issue was whether Housing Associations should be brought back under local authority control. From amongst the delegates present, there were several horror stories about the behaviour of these housing bodies which started their lives aiming to help to meet housing need and now seem, in the case of at least a number of the larger ones, to see themselves as private businesses beyond the reach of tenants, local councillors or indeed the government. The final wording in the composite, to “Give councils the powers and resources to take housing associations under direct council control” was intended as a last resort where the housing provider did not pay attention to the case made for them to mend their ways!

When it came to the housing session at Conference, the Housing and Homelessness composites came on the very last day, somewhat overshadowed by the dramatic events at the Supreme Court the day before and the recall of MPs to Parliament that day. So in the event it was just as well that John Healey had not been down on the programme to speak – but I felt this was quite a disappointment, given the profile that housing should have in our General Election campaign. I was also disappointed that Jeremy Corbyn mentioned only building council houses in his speech, ignoring the impact that could have come from telling young people that we will abolish ASTs and stop them having to move every 5 minutes. As John Healey often points out, for once, our current Leader needs no convincing about the importance of progressive Labour housing policies.

The housing composite resolutions passed by Conference can be found here.

At LHG’s two fringe meetings (“Time for Public Housing Revolution”, and a second meeting with SERA and others, “A home shouldn’t cost the earth: How Labour can address the housing and climate crises), people were in no doubt about the need for housing to be at the heart of our campaigning. As John Healey said, we must get across that only Labour can put in place what is needed, and give people hope once more.

And giving hope back to people about a decent approach to providing housing was very much called for this year at Conference. The visible need for this was obvious, since no-one can have failed to be dismayed by the large number of tents, people sleeping in doorways, and people begging that we passed every day on our way to and from the conference centre in Brighton.  Despite going to several fringe meetings where homelessness was discussed, I uncovered no explanation for this big increase in the system failing to prevent people becoming homelessness other than the ones we all know about: sanctions, Universal Credit, Local Housing Allowance rates; sky-high PRS rents; and not building enough affordable public housing in the city.

I left Brighton feeling that we had done a good job on outlining what we must do when we are in office – but a little dismayed at what there is still to do to bring housing to the forefront of Labour’s collective campaigning mind. Oh well, back to the doorstep for me, then!

 

 

Posted in Uncategorized | 2 Comments

Labour to modernise feudal leasehold system in response to Tory inaction

By Dermot McKibbin

On 11 July there was a debate in the Commons on the Government’s response to the House of Commons Select Committee critical report on the leasehold tenure.

The Government claims to be bringing forward reforms to:

  1. Ban the granting of new leases on houses other than in exceptional circumstances.
  2. Restricting ground rents on newly established leases to zero.
  3. Working with the Law Commission to look at ways to reinvigorate commonhold and improving the process for buying a freehold or extending a lease, or exercising The Right to Manage.
  4. By reviewing charges faced by both leaseholders and freeholders and professionalising and regulating property agents.
  5. By clamping down on unjustified legal costs for leaseholders, ensuring all landlord freeholders belong to a redress scheme and giving freeholders on private estates equivalent rights to leaseholders to challenge communal costs.
  6. By persuading developers to sign up a to public pledge to help existing leaseholders trapped in unfair and costly agreements.

The Government claim to be committed to introducing legislation as soon as parliamentary times allow. However due to the Brexit debate Parliament has been clocking off early and few bills are in fact currently going through Parliament. Ministers have repeatedly promised action to tackle the abuses that leaseholders face, yet with over 60 official announcements since 2010, no new legislation has been introduced. The Government lacks the political inclination to progress this issue as it is too close to the interests of property.

The Government claim in their response that leasehold is a legitimate form of home ownership. However, England is about the only country in the world that has not yet moved away from this feudal form of tenure. The leaseholder has to pay a ground rent to the freeholder and at the end of the lease the leaseholder becomes a mere tenant if no action is taken. The leaseholder can forfeit their lease if they break a term of the lease. There is no legal defence to the freeholder’s right to remove the lease. The relationship is a landlord/tenant one which is feudal in nature and no longer appropriate for the 21st century

Memes, Masters, and Liberalism: RADICAL PEASANT  WE'VE GOT TOGET  RID OF THIS FEUDAL  SYSTEM  IT'S KILLING US.  ARE YOU WITH US?  LIBERAL PEASANT  NO, NO, THAT'S  TOO EXTREME.  JUST WAIT UNTIL  WE GET A NEW LORD.  I HEAR THE MASTER'S  SON HAS SOME  GOOD IDEAS ABOUT

Alternatives to leasehold are available through co-operative flat ownership in Europe, strata title in Australia and condominium ownership in the USA. Closer to home, Scotland, Wales and Northern Ireland have all taken steps towards ending leasehold.

The Shadow housing front bench has recently produced an excellent consultation document called ‘Ending the Scandal: Labour’s new deal for Leaseholders’.

Labour plans five radical changes:

  1. Ending the sale of new private leasehold houses with direct effect and the sale of private leasehold flats by the end of the first term in office.
  2. Ending the ground rent for new leasehold homes, cap the ground rent for existing leaseholders at 0.1% of the property value, up a to a maximum of £250 per year.
  3. Set a simple formula for leaseholders to buy the freehold to their home, or commonhold in the case of a flat, capped at 1% of the property value.
  4. Crack down on unfair fees and contract terms by publishing a reference list of reasonable charges, requiring transparency of service charges and giving leaseholders a right to challenge rip-off fees and conditions or poor performance from service companies.
  5. Give residents greater powers over the management of their homes, with new rights for flat-owners to form residents’ associations and by simplifying the Right to Manage.

The report poses 11 consultation questions which require a response by 30 September to leaseholdconsultation@labour.org.uk.

The document correctly refers to the growth in the number of leaseholders. The precise number is still surprisingly unknown, but is estimated at between 4.3 and 6.6 million: up to one in four of all homes. Over the past 20 years, the proportion of houses built as leasehold is thought to have doubled.

Over 90% of all leasehold house owners say they regret buying a leasehold property and almost two-thirds feel like they were mis-sold. Many leaseholders thought they had brought on the basis they could easily and cheaply convert to freehold ownership, only to later find that a complex and often expensive process makes enfranchisement impossible for them to afford.

According to the report it is increasingly clear that there is a systematic problem with the selling of properties on a leasehold basis. Leasehold mis-selling has the potential to be a new PFI scandal.

In 2018, the Conveyancing Association published research suggesting that 98% of sales of leasehold properties with onerous or doubling ground rents had been in breach of consumer protection regulations. The campaign group Leasehold Knowledge Partnership have estimated that up to 100,000 homes cannot be sold due to a high ground rents and other onerous lease conditions.

At the heart of Labour’s plans to help leaseholders is the opportunity to obtain true ownership of their property through conversion to freehold or commonhold in the case of flat owners. Labour will legislate for a simple buy-out formula that will apply to longer leases, set at a proportion of freehold capital value. Labour will set the maximum ground rent chargeable at 0.1% of the ground rent, with a cap of £250 per year.

For a leaseholder currently living in a house or flat worth £200,000, Labour’s simple new formula would mean they can buy their freehold for just £2,000. This is a significant saving compared to leasehold enfranchisement for a £200,000 property: with 90 years left on the lease and a £250 per year ground rent, the current cost for enfranchisement would be over £6,000 plus expensive legal fees. For properties with ground rents above £250, the cost would be significantly higher still.

Mis-selling of leases is a big issue in the North West. This region has 75 MP’s of whom 20 are Conservative. Approximately two thirds of leaseholders live in London where there are elections in 2020.Hopefully this report will be read and acted upon by all Labour Party members. A House of Commons briefing paper is helpful and the accompanying table has useful regional and constituency statistics. (2)

Dermot Mckibbin, Beckenham CLP

For more information see:

https://researchbriefings.parliament.uk/ResearchBriefing/Summary/CBP-8047 and its associated tables (Excel Spreadsheet) http://researchbriefings.files.parliament.uk/documents/CBP-8047/CBP08047—Tables-for-download.xlsx

Image credit me.me – https://me.me/i/radical-peasant-weve-got-toget-rid-of-this-feudal-system-4506989

Posted in Uncategorized | 2 Comments

From social mobility to social justice: how a simple policy announcement started a small war

Most people reading or watching the media during the last few days would have been left with the impression that Jeremy Corbyn had launched a major attack on the last Labour Government. In fact, he made a forward-looking speech to teachers on moving away from an emphasis on social mobility to talking about wider social justice instead.

Jeremy Corbyn (pic: Guardian)

It got little coverage, no surprise there, until it was attacked by Tony Blair with a video and a fanfare, after which Corbyn was widely denounced for disparaging the last Labour government. Much of the vitriol was not in response to what he actually said, or even his own tweets on the issue, but to a strange and incoherent tweet from Momentum in reply to Blair’s video, saying in effect that austerity was Blair’s legacy. A little bit of displacement was all that was needed to make the charge that Corbyn had had a go at the last Labour government.

Blair’s video is a hallmarked example of the spin at which he is so adept (a political talent Corbyn lacks). He takes one line from the social mobility speech – “for decades we have been told that inequality does not matter” – adds in a couple of quotes carefully selected from other speeches in the past, then claims Corbyn is constantly attacking the last Labour government and ‘enough is enough’, before laying out some of Labour’s relatively good record on taking people out of poverty, spending on public services (focusing on health and education), throwing in Labour’s excellent performance on overseas aid as well. So far as I know, none of these are disputed by Corbyn, indeed I frequently hear him attack the Tory record by quoting Labour’s achievements in these areas.

But the facts of Labour’s record was not what this was about. The media skirmish that ensued was remarkable for the lack of nuance. An exception was Sean Fitzsimons‏ (@CroydonSean) who tweeted “My take on the Blair/Brown Government. Solid performer on most fronts. Excellent on NHS, education, and improving incomes of pensioners and middle/low pay with children. Poor on house building, class and wealth inequalities, and North/South divide. 7.5/10.”

For virtually everyone else it was either 0/10 or 10/10. Hatred of Blair on the one hand and hatred of Corbyn on the other. The result of this madness will be no Labour government at the next election.

So, what about the substance of what Corbyn said? He was talking about inequality not just tackling poverty and he was talking about the weaknesses of the social mobility idea. Blair counters by saying inequality diminished under Labour. He compares the bottom decile with the top decile, but it is the top 1% that has become detached from the rest of society and that is what Corbyn concentrates on. Then again, this was not mentioned in his speech. Whether inequality rose or fell largely depends on which figures you pick, and it depends whether you include wealth as well as income. Blair also stresses that social mobility improved under Labour, rather missing Corbyn’s central point.

Whether it is fair to include 1997-2010 in the ‘30 years in which we were told inequality doesn’t matter’ or ‘dropping 40 years of political consensus’ is of course a matter of judgement, but in my view it is fair because it has proved possible to reduce poverty (normally measured by comparing the poorest with the average) without reducing inequality. Andy Burnham on Marr yesterday used a similar rhetorical flourish, saying  that governments have ‘failed the north for many decades’ including when he was in government. Is he to be denounced? Another expert in rhetorical flourishes, Peter Mandelson, probably did the most damage to Labour’s reputation in this area with his notorious comment that he was “intensely relaxed about people getting filthy rich as long as they pay their taxes”.

The idea of social mobility relies too much on counting how many people born into poor circumstances ‘make it’ into the richest group or into political power. Media often reduce it to whether someone born into poverty could become prime minister or find a ‘route out’ though football or boxing – the topic of many a film. It is often associated with the idea of ‘meritocracy’ and has been used to justify a wide range of both progressive and reactionary policies – including grammar schools and paid-for places in private schools, both of which are said to improve ‘social mobility’.

Corbyn was building intelligently on a substantial debate about social mobility in recent months, including important reports by IPPR and by CLASS think tanks.  There has also been debate in and around the current Social Mobility Commission, which has  commented on issues to do with inequality, warning that without major reform social and economic divisions within Britain’s society are set to widen. One of the current Commissioners,  tweeted that “I would personally welcome a shift of political narrative away from upward mobility for some and toward a greater emphasis on inequality, individual flourishing, and tackling the reproduction of privilege.”

I suppose I’m a good example of social mobility, brought up on a council estate in a one-illness-away-from-poverty family and ending up with degrees and well-paying jobs. But nearly all of the young people I grew up with left school at 16 and did not have the luck that came my way. In my view, the social mobility approach focuses on people like me and ‘the ladder out’, changing nothing structural, whereas the social justice approach cares about all the rest and how to create a rising tide that lifts all boats.

Corbyn plans to replace the social mobility commission with a social justice commission, sponsored by the Treasury, which would have a wider brief to undertake audits and impact assessments of policy and suggest changes to legislation.

The quote that caused the uproar was taken from this part of Corbyn’s speech:

“For decades we’ve been told that inequality doesn’t matter because the education system will allow talented and hard-working people to succeed whatever their background. But the greater inequality has become, the more entrenched it has become.”

“The idea that only a few talented or lucky people deserve to escape the disadvantage they were born into, leaving in place a social hierarchy in which millions are consigned to the scrap heap, results in the talents of millions of children being squandered.”

I think this is uncontroversial, not worthy of the fuss that’s been made, yet grounded in reality, and the right way to go.

And the legacy of past Labour governments was fairly judged by shadow education secretary Angela Rayner, speaking with Corbyn, who said

“The Tories like to talk about people like me who had a difficult start but got on in life as evidence that anyone can succeed on their own. But actually my life shows the exact opposite. Any success I have had is thanks to Labour governments that provided the council house, minimum wage, tax credits and Sure Start children’s centre that enabled me to achieve it. That is social justice.”

Rayner also published an article making the case for the change in New Statesman.

So, despite the fury and the apparent division, this shift in emphasis away from social mobility towards social justice is actually something the whole Labour Party should be capable of uniting around.

There are many battlegrounds within the party, but this shouldn’t be one of them. 

 

Posted in Uncategorized | 1 Comment

Labour’s ‘Land Grab’

In the middle of all the fawning over Trump, the newspapers got their teeth into a Labour story this morning. According to the Daily Mail it was about “the policies of Venezuela” and “Labour’s garden tax: Party unveils new Corbyn cash-grab on your private green space and force the sale of vacant land on the cheap.” The Daily Express said “Jeremy Corbyn proposes ‘bombshell’ tax RAID on hard-working homeowners who have a garden.” The Telegraph’s slightly more moderate headline but equally inaccurate story was: “Jeremy Corbyn unveils plans for ‘progressive’ tax raid on homes and gardens of the middle class.”

Such disgraceful behaviour by Corbyn and the Labour Party attracted my interest, but when I tracked the actual report down I found it was a detailed and thoughtful analysis and set of recommendations around an issue which has huge implications for people who want affordable homes.

Called ‘Land for the Many’: Changing the way our fundamental asset is used, owned and governed it was produced for the Labour Party by seven contributors* including George Monbiot and Laurie Macfarlane – whose work we have covered on Red Brick before. Land is the hidden issue behind the housing crisis and the full report is well worth a read – because if you rely on media portrayals you might get the wrong impression of it.

George-Monbiot

Monbiot sets out his stall in a powerful preface, worth quoting at some length:

Dig deep enough into many of the problems this country faces, and you will soon hit land. Soaring inequality and exclusion; the massive cost of renting or buying a decent home; repeated financial crises, sparked by housing asset bubbles; the collapse of wildlife and ecosystems; the lack of public amenities – the way land is owned and controlled underlies them all. Yet it scarcely features in political discussions.

The sense that even in discussing land we are trespassing is so strong that this critical issue remains off the agenda. Yet we cannot solve our many dysfunctions without addressing it. This report aims to put land where it belongs: at the heart of political debate and discussion. It proposes radical but practical changes in the way land in the UK is used and governed. By these means, it seeks to make this a nation that works for everyone, with a better distribution of wealth and power, greater financial stability, economic security and environmental quality, greater participation in the decisions that affect our lives, an enhanced ability to create our own homes and neighbourhoods and a stronger sense of community and belonging.

Despite the hysterical headlines, the report is not yet Labour policy: it contains proposals that will considered between now and the general election. But the reaction shows what a mountain of bias and misrepresentation Labour has to climb to get a serious debate going on this vitally important topic.

Is any of hysteria justified? Let’s look at the key proposals

  • free and open access to data on land ownership
  • an explicit government goal to stabilise house prices to improve the long-term house-price-to-income ratio.
  • redirect bank lending to productive sectors and reduce speculative demand for land.
  • proposals for a Common Ground Trust to buy land underlying a house, to reduce house prices and bring in the idea of socialised land rents.
  • major reforms to private renting with a cap on rent increases and an ambitious social housing programme.
  • replace council tax with a progressive property tax payable by owners not tenants – with surcharges for empty and second homes and non-UK residents.
  • phase out stamp duty land tax for owner occupiers.
  • replace business rates with a commercial Land Value Tax.
  • new Development Corporations buy sell and develop land to crate new towns.
  • enable public bodies to buy land at closer to current use value, estimated to be able to reduce the cost of affordable housing by 50%.
  • remove permitted development rights that allow offices to be converted to homes without needing planning permission.
  • stronger public involvement in planning.
  • proposals to promote community ownership and control of land and buildings.
  • greater provision of parks and stronger use of the public realm. And a stronger right to roam.

It’s a detailed report, an instructive read, and in my view spot on in its analysis. It follows on from a lot of good work on the land question done by others in the recent past and covered on Red Brick, see Dave Treanor here, London Assembly Housing Committee here and Josh Ryan-Collins, Toby Lloyd and Laurie Macfarlane for the New Economics Foundation here.

The Monbiot et al report is a serious contribution to a genuine debate, so it is enlightening to see how it is treated by the media. Most of it was hugely hostile, and I couldn’t find a word about it on the BBC News or Sky News website. Let’s see if Channel 4 can do a little better. But it shows the real difficulty Labour has in promoting progressive policies for wider debate, and the inherent bias in the mainstream media against leftish proposals, even when they are as strong and beneficial as these.

When the headlines say ‘an end to council tax’ or ‘an end to stamp duty’ then the public might have a chance of understanding what it’s about.

 

* The seven authors are : George Monbiot (editor), Robin Grey, Tom Kenny, Laurie Macfarlane, Anna Powell-Smith, Guy Shrubsole, Beth Stratford.

Posted in Uncategorized | 2 Comments

How many council houses should Labour plan to build?

Labour’s programme for the next general election needs to be bold and radical but also practical and achievable. There are a number of different estimates of how many affordable homes are needed and of what type. Here we try to unravel the figures and ask – how many council homes should Labour plan to build?

A new group called Labour Campaign for Council Housing aims to ‘radicalise Labour’s housing policy to ensure our party tackles the housing crisis when in government’. Fair enough. It rightly says that there is a crisis of availability of affordable housing, and that Labour’s priority should be to build social rented homes. It wants councils to build ‘at least’ 100,000 of these, with an extra 55,000 contributed by housing associations. It argues for £10 billion grant a year to fund councils to build them, or £100,000 per home.

No one can argue that this isn’t ambitious. The government currently spends less than £2 billion annually on building affordable homes, and few of these are let at social rents. Labour’s green paper, Housing for the Many, promises a programme of 100,000 affordable homes annually of which ‘the majority’ will be for social rent. It would finance this, in part, by raising grant to £4 billion annually, the level achieved by the last Labour Government in its final years. But the new campaign believes this is not enough: ‘these commitments would not meet the scale of ambition needed to solve our housing crisis’.

So they call for 155,000 social rented homes to be built, and expect two-thirds of these to be new council housing. The target comes from a Shelter report published earlier this year, A Vision for Social Housing. However, the report was out of step with other projections of housing need. For example, Crisis and the NHF published a detailed assessment by Glen Bramley showing the annual need for new social rented homes to be 100,000 across Great Britain, with 90,000 needed in England. There are various differences in the ways the two projections were done. Bramley’s assesses a much bigger existing backlog of unmet need, for example. But the main difference is that Shelter assumes that all new needs in the categories it identifies have to be met by building more social housing, whereas Crisis provides a dynamic assessment in which new building influences the whole housing market – as indeed it would in practice – changing the behaviour of landlords and renters as more affordable homes are provided. As might be expected from someone who has been modelling housing needs for years, Bramley’s model gets closer to the real dynamics of the housing market.

Another report calling for a similar level of social rented output came from Capital Economics, written for SHOUT and the National Federation of ALMOs. They argued that building 100,000 social rented homes a year would be justifiable in terms of savings in benefits and the wider effects of the extra construction activity on the economy and on government incomes. Essentially, while Crisis addressed the demographics and affordability, Capital Economics shows the feasibility of the programme. Both, in broad terms, back up Labour’s target.

Let’s have a closer look at the target suggested by the new campaign. For housing associations to contribute 55,000 homes would mean a huge shift away from affordable rent and shared ownership, but at least they have built close to that overall number in the recent past. But in calling for 100,000 new council houses to be built annually the new campaign seems to take little account of councils’ capacity. The last time they built as many as 100,000 homes per year was in the mid-1970s: in fact, you have to add up all the council houses built since 1985 before you get a figure exceeding 100,000, amounting to over 30 years of councils’ output.

Of course, many local authorities are now gearing up to bigger building programmes, taking advantage of the government’s removal of the caps on their borrowing last November. The government believes that within a few years they might build 10,000 units annually, as compared to fewer than 5,000 now. This looks a reasonable assessment, but any progress beyond that depends on overcoming a number of serious constraints. These include access to land, having the skills to run a large new-build programme and being able to finance the extra borrowing involved from rental income. But the biggest constraint is access to grant. Labour’s plan to increase grant to £4 billion annually would help enormously if the money were to be refocussed on social rented homes. Councils could also continue to make use of developer contributions, which already finance nearly half of affordable housing output. Nevertheless Labour’s 100,000 affordable homes target is already an ambitious one, especially if the social rented element is to be close to 90,000 annually.

Now the new campaign argues for a target more than 50% higher, and one which relies much more on councils building than on housing associations. They want to raise the affordable homes budget to £10 billion annually, with grants of £100,000 per unit. The ambition is commendable, but why set a target that many will regard as far too high, and one which bears no relation to the sector’s capacity – especially that of local authorities? Do they really expect an incoming Labour chancellor to set a housing budget which is five times its current level and to be able to spend it from virtually a standing start?

The advantage of the target set in ‘Housing for the Many’ is that it is realistic, costed and grounded in reality: it’s rightly ambitious without being pie in the sky. With strong commitment, it’s capable of being delivered over a five-year period. The new campaign arguing the case for council housing is warmly welcome, but we have to make sure that Labour is able to deliver its current target before we set an even higher one that might be a step too far.

Posted in Uncategorized | 2 Comments