Tenants and the homeless must not be made to pay for the tower block fire safety crisis

I have found it hard to comment on the Grenfell Tower disaster. Words cannot convey the horror of it, and everything I tried to write felt hopelessly inadequate. Others succeeded where I failed, and I would recommend thoughtful pieces penned by Chris Creegan, Municipal Dreams, and Giles Peaker amongst others.

I was so angry at the ineptitude of the council’s and the government’s response and so in awe of the magnificent response of the emergency services and the local community. They are in total contrast to each other.

grenfell

pic: Metropolitan Police

I was also stunned that within hours some people started to use the fire to attack social housing. One tweeter said: ‘The nature + quality of social housing is probably the single biggest post-war British policy failure’ and there were plenty of a similar ilk. Others reverted to well-worn dystopian myths and Clockwork Orange imagery about council estates. Yesterday, first Theresa May and then Sajid Javid said we should pay more attention to social housing, but I found that menacing rather than reassuring. The dreaded Iain Duncan Smith called for tower blocks to be flattened and replaced by nice houses with gardens, presumably without the council tenant tag.

Grenfell does not tell me that we should have less social housing, or that private housing is somehow superior, or that tower blocks are bad – on the contrary we need more social housing of all types and, whatever its height, it should be of a highest possible standard. And it should be better resourced and better managed.

The best memorial to all those who have lost their lives in Grenfell is that we as a nation choose collectively to invest in safe and secure public housing for all who need it.

Municipal Dreams blog

I do not know if cuts in spending on fire services and deregulation of some aspects of fire safety contributed to the Grenfell fire. But after a long period of decline, fire deaths have been rising again, and fire chiefs have put this down to cuts of up to 50% in some places. The fire statistics do not help us understand if there is a specific problem in social housing, but it seems highly unlikely. In the vast majority of cases, fires in towers are contained and the building does what it is supposed to do. The social factor that seems to have the biggest correlation with death by fire is age, with people over 80 particularly vulnerable. They live in all tenures. In the 1980s at Shelter I spent a lot of time working with the Campaign for Bedsit Rights trying to get standards in multi-occupied property raised after many fire deaths in such properties, including the appalling fire in a rabbit warren terrace of bedsits in Clanricarde Gardens in 1981, where 8 people died a mere mile from Grenfell Tower.

Will the Prime Minister today guarantee that local authorities will be fully funded for an urgent review of tower block safety and all remedial action that is necessary, including the installation of sprinklers when appropriate, so that they can proceed in a matter of days with that comfort? Does she agree that regulation is a necessary element of a safe society, not a burden, and will she legislate swiftly when necessary to ensure that all high-rise residents are safe?

Karen Buck MP, House of Commons, 22 June.

Heightened concern about fire safety in towers can be traced back to the previously worst tower block fire at Lakanal House in Southwark in 2009, when 6 people died. Exterior cladding panels were identified as having helped the fire to spread fast both laterally and vertically, as with Grenfell. Yesterday Mrs May said “All recommendations from the coroner on the Lakanal House inquiry have been acted on” but this was strongly disputed by the local MP, Harriet Harman, and others. It is clear that the requested review of building regulations has not been concluded and published.

Even more damning of government is the lack of action in response to a series of letters from the All Party Parliamentary Group (APPG) on fire safety, chaired by the Conservative Sir David Amess, which included calls for sprinklers to be fitted in all towers. And the Tory obsession with deregulation was highlighted by the Guardian yesterday, reporting that the government-connected Red Tape initiative has been discussing how to reduce ‘the burden’ of fire regulations post-Brexit, including for external cladding.

I have spent much of my working life defending both social housing as a housing model and social tenants as an unfairly derided class of people. Rather than the stereotype of chain-smoking can-carrying foul-mouthed council tenants, after the Grenfell Tower fire  a succession of residents described the events in the tower, the failings of the council and the TMO, and the strength of their community with extraordinary eloquence. As their back-stories emerged, we learned of the remarkable range of people living in the tower, people of all faiths and none, often with amazing and sometimes horrific histories. Their common point was that by some chance they had ended up in the cosmopolitan community of north Kensington (David Cameron’s Notting Hill is a few streets but a world away). In the aftermath of the fire we learned of the extraordinary compassion and dedication of ordinary people willing to help each other.

The surviving residents and those evacuated from surrounding homes were initially treated with callous disregard until the community stepped up and stepped in as the death toll rose. Some of the stories of neglect and indifference by the council tell me that rather more than the chief executive of Kensington and Chelsea should resign. It was the council’s job to organise the non-uniform response and they failed miserably and absolutely. They evidently turned down offers of assistance from neighbouring boroughs and the GLA, arrogantly assuming they could do the minimum required. They appeared not to understand the extent of their duty to all residents in an emergency under the homelessness legislation. Above all, they did not seem to care much. They were overwhelmed and it took days before more competent people were brought in. I am not alone in thinking that a civil emergency on this scale required military expertise: I am sure the army could have sorted communications and logistics in hours especially with so much community help. Traumatised victims could and should have been helped much faster with a range of services to meet both their physical and emotional needs.

Responsibility for the fire will continue to be debated, not least in the House of Commons as it was yesterday. As the Guardian’s John Crace pointed out, Theresa May has had legal advice, but has been found to be ‘morally wanting’, and during questions ‘the sound of backs being covered was all too audible’. Fingers are being pointed, and I suspect responsibility will be located at several stages in the very long chain from building regulations to contractor. The specifics may have to await the criminal investigation and the public inquiry.

We also have to wait to see how many other towers are dressed in flammable cladding, it is possibly quite a few, and not all in social housing. Some Councils, like Camden, have already started removing suspect cladding, and it is hoped that blocks can be made safe quickly without rehousing becoming necessary.

Grenfell Tower alone has required between 100 and 200 replacement homes to be found from a diminishing stock of social housing. Attention has focused on one block of ‘luxury flats’ being bought by the City of London, but it turns out these were always destined to be some form of social housing. No information has been made available on the rents and service charges that will be levied, what form of tenancy will be offered and for how long. The first principles are that residents should be suitably rehoused and not be out of pocket.

As the supply of new genuinely affordable social rented homes has collapsed to a little over 1,000 homes nationally last year, from 36,000 in 2010, most of the homes that are likely to be available will be at so-called ‘affordable rents’ at up to 80% of market rents. Rehoused tenants must not be expected to pay those rents, the difference should be made up by the council. Some DWP rules have been suspended for these residents, but it has also been said that they would have to pay bedroom tax if they ended up with a spare room. That is grotesque.

The numbers matter. Unless extra social housing is provided in total then the people who will actually pay for this crisis will be those homeless families or people on the housing waiting list who will not be rehoused as a consequence. One way round this would be government to fund the purchase of an equivalent number of homes on the open market – as happened in the early 1990s to mitigate the housing market slump.

Theresa May was as slippery as can be when challenged about how the works to blocks like Grenfell will be paid for. It could be hundreds of millions. This should be a central government commitment, a new fund provided by the whole country to avoid another tragedy. May wouldn’t commit, just saying it will be done. What is most likely is that government will allow councils to borrow more to pay for the works, with the cost falling to the housing revenue account. And there’s the rub: unless there is specific subsidy or grant, extra borrowing on the HRA will be funded in the long term by tenants through their rents. Tenants will pay for a fire safety crisis that is not of their making.

It is absolutely right that the victims of the fire should have top priority and should be rehoused as quickly as possible. No-one will disagree that similar panels should be stripped from other blocks. No-one will object to an extensive programme of fire safety improvements, including for example sprinklers, in all towers currently without them. But, whoever is found to be responsible, it is not right that the actual burden of putting things right should fall on existing tenants and homeless people waiting for a home. Central government should foot the bill, sharing the load. That’s why we all pay taxes.

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Housing waits on a new minister – and the deal with the DUP

Below is my piece for the Guardian Housing Network yesterday. A new Housing Minister is yet to be appointed and we have to wait and see if the negotiations between the Tories and the DUP have any implications for housing and social security. Whatever the outcome of the deal, the DUP will have influence over what happens in future. So how might it all pan out?

I’ve always believed that one day housing would be a decisive factor in a UK general election. On 8 June 2017, however, once again, this issue was the dog that didn’t bark.

The Tories had nothing in their manifesto to suggest they are brimming with new ideas in housing. They put all their policy eggs in the housebuilding basket, with one exception – a commitment to halve rough sleeping and to “combat homelessness”. This is a worthy aspiration but there is very little actual policy to make it happen, and their track record to date has been awful.

The defeat of Gavin Barwell, former minister for housing and planning, as well as being London minister, is significant. In terms of housing policy, Barwell was a moderate relative to his predecessors. Some are hoping his re-emergence as Theresa May’s chief of staff will help housing, but his priorities in that job will be Brexit and her political survival.

With Barwell no longer an MP, the sixth housing minister since 2010, when appointed, will have to pick up the baton. There is little reason to suppose they will be any more effective – or long-lasting – than their predecessors. If the Tories are ever to appeal to younger people, the new minister will have to revisit the existing hands-off approach to private renting, make a reality of the promise to halve rough sleeping, and make the case to restore housing benefit for 18-21 year olds.

The future for housing depends on how long this parliament and this prime minister last. Some of us can remember the last time there were two elections in one year. Rather like May and Brexit, in 1974 Edward Heath called a single question election on who runs the country. The firm answer was “not you mate”. The short-lived February 1974 minority Labour government was surprisingly radical on housing. Sadly, May’s stopgap government won’t be.

Increased uncertainty has already hit confidence in the markets, with housebuilders affected more than anyone. If a hard landing out of the EU hits housebuilding and construction, the commitment to increase building to 250,000 a year by 2022 will be toast. Under scrutiny during the election campaign their promised relaunch of council housing turned out to be homes at unaffordable “affordable rents” rather than social rents.

Despite austerity, the Conservatives’ real policy under David Cameron and George Osborne was to pump vast amounts of money into shoring up the housing market – enough to fund Labour’s entire programme many times over – while neglecting the interests of renters and marching on relentlessly with devastating welfare cuts and freezes.

Most commentators have focused on the fact that the Tories’ new partners, the DUP, are socially very illiberal. Indeed, they are. Yet they are economically more progressive than the Tories, reflecting the interests of their Protestant working class base. Although the DUP’s 2017 Westminster manifesto has almost nothing to say on housing, it promises to resist changes to universal benefits and supports the triple lock on pensions. In the past the DUP’s approach to welfare has been far less punitive than the Westminster government. It has, for example, sought to mitigate the bedroom tax and has opposed the government’s funding cuts to supported housing. The party’s policy document says the case for investment in social housing is ”unarguable” and the DUP is committed to building 8,000 social and affordable homes by 2020.

So although the DUP focus will be on Northern Ireland rather than the rest of the UK, any influence the party has in housing might, contrary to expectations, be positive.

Meanwhile, a reinvigorated opposition will be able to build and work from a coherent housing plan (pdf). Perhaps next time we will finally be able to “release the hounds”.

 

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Ten good (housing) reasons for not voting Tory

The Tories have been a disaster for housing policy, pouring billions into trying – and failing – to prop up home ownership while neglecting the rented sector. Here’s why you should vote to keep them out of power on Thursday.

  1. They haven’t built enough homes

Disregarding the two years of the global crash, Labour presided over 186,000 net housing completions per year from 2001/02 while the Tories (from 2010/11) could only manage an average of 148,000. Obviously, a large part of the reason is their failure to stimulate the economy. They may bend over backwards to create a favourable climate for their friends the housing developers, but without a prosperous economy they simply won’t build the homes needed.

  1. They are obsessed with home ownership

The policy imbalance is nowhere clearer than in the Tories’ spending plans: over £50 billion being pumped into stimulating the housing market, almost all of it (84%) going into the private market. This is a legacy from George Osborne as chancellor which Theresa May’s government has barely changed. The outcome seems to be that the market becomes ever more dependent on government subsidies, even while the proportion of people who are home owners – especially in younger age groups – continues to fall.

  1. Renters are being neglected

In whichever sector you’re a tenant, your interests are not shared by those in government. Modest tax changes have (eventually) restrained the buy to let market and seem to have started to hold back the relentless rise in rents, but the rip-offs of large deposits and agents’ fees continue. The Tory government has only tinkered at the edges – trying to curb ‘rogue landlords’ with measures that will never be effective because local authorities don’t have the resources. Meanwhile, the bulk of renters live in a policy-free, virtually uncontrolled, market. Labour promises to change this via a ‘consumer rights revolution’ for private tenants.

The Tories also brought in higher ‘affordable’ rents and have presided over the decline in the social rented sector since 2011. Nearly 200,000 ‘social’ homes are now let at up to 80% of market rents. As we have seen during the election campaign, the Tories don’t even understand their own policies, with Theresa May promising a ‘new generation of homes for social rent’ and the Tory minister having to explain that she really meant homes let at higher, ‘affordable’ rents.

  1. ‘Municipal’ house building won’t recover from the Tories ditching the self-financing settlement

For all that Theresa May claims to want more ‘municipal’ housing, a few deals to create homes that will only be rented out for 10-15 years before being sold will hardly be attractive to councils, and especially not to applicants on their waiting lists. The truth is that the Tories, who (to be fair) implemented the self-financing settlement for council housing developed by Labour’s John Healey, went on to destroy it by rent cuts, the ‘reinvigorated’ right to buy, and much else. Labour, in contrast, have promised to build up to an annual programme of 100,000 genuinely affordable homes.

  1. Welfare cuts march relentlessly on

As Mrs May showed when confronted by people who’d suffered cuts in their welfare benefits, she’s totally unable to engage sympathetically with people in desperate need. That’s why, despite the change in welfare secretary, the cuts set in motion by Iain Duncan Smith continue, disregarding all the evidence of their devastating effects. In housing, this will manifest itself in more tenants being unable to pay their rents, further rises in homelessness, continued uncertainty over future provision of supported housing and a crisis in provision for under-35s who are (effectively) being denied housing benefit at levels sufficient to pay their rents.

  1. Austerity continues, local government pays the price

Mrs May wants to continue to shrink the state until it accounts for only 35% of GDP. As ever, it’s local government services that will be hit hardest. Related to housing, this has already affected planning and housing strategy services, homelessness and housing advice, housing support and help for the voluntary sector, all services that depend on government revenue grant which is to be rapidly phased out. Who will ‘prevent’ homelessness under the new legislation due to take effect in 2019, if there is no money to pay for staff or offices?

  1. Communities will continue to suffer

If local government can barely maintain services, the effects are even worse in the neighbourhoods where poorer people live, as cuts in youth services, community centres, Sure Start and just about every other local service are made not only by councils but by cash-starved local charities. This makes a nonsense of Mrs May’s claim after the terror attacks that she wanted to end segregation. The modest funding supplied by the last Labour government to promote integration in mixed-race areas has disappeared, English-language teaching has been cut, the government’s ‘hostile environment’ for migrants pits newcomers against long-standing residents, and its wider policies ensure that inequality will get even worse.

  1. Theresa May isn’t interested in tackling climate change

As we saw in her muted response to Trump’s withdrawal from the Paris Agreement, May isn’t motivated to address climate change. This is important for housing because – amazing as it may seem – to meet our legally binding carbon targets we need to comprehensively retrofit our housing stock at the rate of one house per minute. These obligations will still be there when we leave the EU, unless a right-wing government ditches them. And of course the climate will continue to change too, if no concerted action is taken. Housing is the place to start because energy efficiency saves on heating bills, too.

  1. Brexit is going to hit housing hard

Apart from its general economic effects, if there is a tough Brexit deal with much reduced European migration, key sectors to be hit will include construction and social care, which both depend heavily on EU workers (especially in London). Contrary to the superficial idea that reduced migration will help us solve our housing problems, it could actually make them far worse.

  1. Labour has a much better plan

As Steve pointed out earlier this week, Labour’s detailed housing policy manifesto may not be perfect but it is a hell of a lot better than anything on offer from the Tories. Just compare it with the January white paper – which amounted to 100 pages of not very much and with no extra money to pay for it anyway. Labour has a much better plan: let’s get them into office with a chance to implement it and start the transformation of England’s housing that is so urgently needed.

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GE2017: At last someone talks seriously about housing

There may be good reasons – in particular murder and mayhem on our streets – but another Election has passed in which housing has been the dog that didn’t bark.

Sadly too late to have the impact it deserves in the Election campaign, Labour yesterday published its Housing Manifesto, enlarging on and extending the housing section of the main Manifesto put out a couple of weeks ago.

References to housing in the campaign so far have mainly consisted of the bandying about of some impressively large numbers. The LibDems played their trump card with the biggest housebuilding offer (300K a year), although their promise has been inflating as fast as their support has been falling. It quickly became apparent that the Tories have spent the last seven years muddling up their housing target (hundreds of thousands) with their immigration target (tens of thousands) and just promised again what they failed to deliver in the past.

The housing section of Labour’s main Manifesto was quite well received, and this fuller version deserves praise for tackling the issues in a comprehensive way. When it comes to housing policy, the word comprehensive is important: it’s not just a numbers game, it’s about getting lots of elements of policy right so it adds up to an effective strategy.

The document covers all the tenures. In home ownership it focuses help specifically on first time buyers, following up on the Redfearn review. It makes the important proposal to remove stamp duty on homes of less that £300K for two years, introduces permanently discounted FirstBuy homes, and restricts Help to Buy to first time buyers only. It implies that developers will qualify for Help to Buy only if they enter agreements on their building rates, which could be a game changing idea. And it borrows from Sadiq Khan in giving ‘first dibs’ to locals when homes go on sale.

Labour will also back existing home owners with a range of new initiatives. The safety net for low income home owners will be strengthened, long forgotten leaseholders will get new rights, and there will be new controls on variable rate mortgages. A new housing renewal programme is signalled alongside a new drive to insulate existing homes. There will be a review of housing options for older people wishing to downsize.

Building on the solid base of the Lyons Commission report, major changes to the operation of the housebuilding industry are proposed. The role of the Homes and Communities Agency will be strengthened, as will be the powers of local councils to assemble land at closer to existing value. We are promised the biggest council housebuilding programme for30 years. Help to Buy will be used as a bargaining chip to secure a wide-ranging agreement with the sector on output and standards in design and quality. There will be a review of the post-Brexit capacity of the construction industry.

To my great relief, Labour unambiguously promises a new programme of affordable homes for social rent, and the target will be to achieve 100,000 ‘genuinely affordable’ homes to rent or buy by 2022, which we have argued before on Red Brick is a sensible and realistic gearing up from the current abysmal position. Long term tenancies will be unbanned and right to buy will be suspended – to be reinstated only where full replacement can be guaranteed. More affordable housing will lead to housing benefit savings, which will be ploughed back to ease the worst aspects of the Tories’ benefits policy – like ending the Bedroom Tax.

There is a promise of a ‘consumer rights revolution’ for private renters. There will be new legal minimum standards with stronger enforcement and an extension of licensing. Three year tenancies will become the norm, with inflation-controlled rent rises. Lettings charges for tenants will be banned and councils will be encouraged to set up local lettings agencies in their areas.

Homelessness is seen as the most visible sign of the Tories’ failure. A target will be set to end rough sleeping in a campaign which will be led by the new Prime Minister in a Labour Government. There will be a gradual shift to a ‘Housing First’ policy seen to be effective in other countries. They will halt the plans to change funding for supported housing to avoid the closure of homeless hostels.

All in all, this is a decent attempt at a comprehensive new housing policy in less than 20 pages. It has gaps, undoubtedly, in particular it could have said much more about planning and it looks at homelessness almost entirely from the perspective of rough sleeping – only one element of the growing problem. It has weaknesses – for example not addressing the long term balance of tenures and glossing over regional disparities, and it has a touching sense of confidence which I don’t share that the Homes and Communities Agency can become the driving force behind housebuilding delivery.  And there will be many detailed  financial questions that need to be considered and answered.

Whether the document could have sparked a real debate around housing if it had been published earlier is open to question. Regrettably I can see very little converage of it today except in specialist media. It is an area where Labour is strong – Jeremy Corbyn and John Healey in particular – and the Tories weak and threadbare. I guess we will never know, but, win or lose, Labour has at least got its housing policy into a good place.

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The myth of the war between generations: the Tories punish them all equally

As campaigning was temporarily suspended today in memory of the murdered MP Jo Cox, many will recall her watchwords ‘There is more that unites us than divides us.’

There have been lots of phoney wars in this election, especially with the new Leader of UKIP/Tory Theresa May blaming foreigners and immigrants for most of our problems. One false dividing line is the so-called war between the generations. This morning on the Marr show, DWP Secretary of State Damian Green claimed that the Tories’ new social care for the elderly policy is about promoting ‘inter-generational fairness’.

It is fashionable (but wrong) to say that the older generation are having it easy at the expense of the younger generation. People over 65 have paid into the state system all of their working lives in a social contract that should mean they are looked after through their old age. Even now 1.6 million pensioners officially live in poverty according to Age UK. The issue is not inter-generational, it is that the few have got richer and the many have got poorer across all generations.

I do not suffer from the seemingly natural tendency towards conservatism amongst older people, nor do I share the nostalgia of many for an imagined better past. But these feelings have been exploited by the Conservatives. With their friends at the Daily Mail, they have convinced many elderly voters that they are on their side. The evidence is less convincing: it was Cameron’s ‘triple lock’ on pensions that established their pro-elderly credentials, but at the same time they were stripping away funding for social care and raising the pension age. Women have been hit very hard by deferring the pension age. There are also many people in physical and draining jobs – my Dad worked on building sites all his life and was exhausted when he retired at 65 – who will fall out of work in their 60s and spend years waiting for their pension, being subjected to the humiliation of seeking benefits in the nasty and vindictive climate created by Iain Duncan Smith.

The Tories were warned constantly about the damage being done to social care by their cuts. Cameron liked to pretend that austerity would be met by efficiencies and savings in the back room. This was never true and front-line services have been savaged, especially when they were not backed by specific statutory rights. The cuts in social care have had a serious knock-on to the NHS, due to (the rather unpleasantly named) ‘bed blocking’ – where people are not able to leave hospital because even short-term care is not available at home.

Many councils tackled the cuts by first removing low level services like garden maintenance and shopping. Low level they may have been, but for many these were a lifeline and the watershed between independence and dependence. Such services were often provided through local charities who offered volunteering opportunities for young people and some great inter-generational work was done. As the cuts deepened, even services for those most in need were pared back and scandals like the ’15 minute visit’ and poverty wages (many carers are not paid for the time spent travelling between appointments) became more common. Everyone agrees it is both better and cheaper to enable an older person to stay at home, and it is normally their wish to do so.

In housing, older people have been failed too. There have been far too few options for older people, whether tenants or owners, to downsize into more suitable accommodation, releasing larger homes for others to rent or buy. Although May’s current proposals will hit at home owners, the extraordinarily successful sheltered accommodation service run mainly by councils and new supported housing projects have been fatally undermined by changes in funding regimes.

dementia tax

So, having captured the grey vote, they think securely, the Tories feel they can now take it for granted. Their ‘triple whammy’ – ending the pensions triple lock, removing winter fuel payments for most, and requiring people to pay for care at home with their house – means they have lost any claim to be the pensioners’ friend.

Their social care policy is perverse. In many cases a family carer lives with the older person, doing much of the care but relying on council services a lot of the time. If these external care needs are high, the carer’s sacrifice will now be rewarded, when the older person dies, by having to sell the house to repay the cost of the care received. The carer, who may have devoted years of their life to this role, will be both grieving and having to oversee the sale of the home. They will in effect make themselves homeless, and in most  of the country they will not inherit enough to buy another home. It is a callous mind that could invent such a system.

The new system contains no incentive to enable an older person to remain in their home. If their care needs are high, for example if they have dementia but are physically able, their estate will be diminished to £100,000 whatever they do. They might as well go into an expensive care home. Yet Theresa May has the gall to say that her plan is ‘the best way to enable more people to stay in their homes because they won’t be worried about the cost of care because they will know that will be sorted after they have died’. She appears not to know anything about older people and how they see the world.

And remember, not one penny piece of the exchequer savings made by this policy will be redirected into support for young people, who are being punished at the same time with policies ranging from tuition fees to the removal of housing benefit for 18-21 year olds. Instead, the money will actually be used for the Tory priorities of reducing corporate taxes and taxes on high earners. As the Tories take it out on older people, the myth of the war between generations deserves to be exposed.

dementia tax 2

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Can Labour deliver 100,000 social homes annually within five years?

This was the headline promise from the leaked version of Labour’s manifesto. How feasible is it?

Labour seems to have stepped back from a much more ambitious – arguably, far too ambitious – target of delivering 500,000 affordable homes over a five-year parliament. The new pledge – if it is included in the final manifesto – is still ambitious but appears much more realistic. It says ‘By the end of the next Parliament we will be building at least 100,000 council and housing association homes a year for genuinely affordable rent or sale’. Let’s have a closer look at what it would require.

Assuming for the moment that ‘genuinely affordable’ has the same meaning as under the coalition, the statistics show that neither Labour nor the coalition came close to delivering 100,000 units in recent years. DCLG’s live table 1000 shows that Labour’s peak output was 61,090 in 2010/11, and the coalition managed 66,700 in 2014/15. Output fell sharply in the following year, to only 32,630, because the end of the previous financial year had been the cut-off date for the previous Affordable Homes Programme.

The pre-election Tory government had a target of ‘delivering 275,000 new affordable homes between 2015 and 2020’, suggesting output of 55,000 per year, far below Labour’s new target but higher than current performance (albeit, of course, the definition of ‘affordable’ is now widening and its meaning in the this context isn’t defined). In crude terms, therefore, Labour is both aiming to almost double the Tories’ planned output and tighten the definitions to make affordability ‘genuine’.

Can it be done? The first and most obvious requirement is money. John Healey, Labour’s housing spokesperson, developed his ideas on a Labour building programme in reports for the Fabian Society and for the Smith Institute a couple of years ago. The chart shows how the programme would build up over 5 years, from about the level that it’s at now.

Roll this forward to start two years later, in 2017/18, and you get an idea of what Labour’s programme might be. Just over a fifth would be non-grant-funded, which now seems a little unambitious given that the NHF’s regular bulletins show about 40% of homes get no grant funding. Healey’s Smith Institute paper also forecast 16,000 homes coming from developer contributions, of which 80% would require grant: in fact, NHF figures suggest about 40% of homes come via developer contributions, most without grant funding. The proportions with nil grant and via developer contributions heavily overlap, and of course more grant would be needed if rents were to be ‘genuinely affordable’, but the NHF figures suggest that the Healey plan is far from unrealistic in its expectations of how much can be achieved without grant.

Healey’s costings rely heavily on savings in housing benefit, which of course are real but accrue over the long term, and the credibility of the plan when judged by bodies like the OBR and IFS hangs on the immediate capital and revenue costs. The main element of his plan would require grant levels of £60,000 per unit to deliver many more dwellings for let at social rents, rising to about 78,000 (out of the total 100,000 target) in the fifth year. This would cost about £4.6 billion in capital in the final year, without taking account of savings in the benefits bill.

How feasible is that level of expenditure? As it happens, it’s comparable to spending in the last year of Labour’s National Affordable Housing Programme, which invested an average £3 billion per year and reached close to £4 billion in 2010/11. After taking into account the limited inflation since then, there is hardly any difference between to two. Furthermore, as Red Brick readers know, the Tory government is currently investing a massive £50 billion in housing, via grants, loans and guarantees, over the period to 2020/21. Only some 16% of this is destined for affordable housing. Even with Labour’s apparent commitment to keeping the Help to Buy scheme, there is plenty of scope for redirecting more of this money into social housing.

Of course there are many other pieces of the jigsaw that need to be put in place, not all of which can be examined here. First, social landlords’ finances have to be stabilised, which means a coherent policy on social rents to replace the frequent changes and recent drastic cuts made by the Tories. Second, the council housing finance settlement, which John Healey pioneered as minister, needs to be reinstated as he originally intended (it has been ripped to shreds by the Tories). Third, reforms will be needed to achieve more planning permissions, developer contributions and land supply, building on the work of the Lyons commission. Fourth, especially following the EU referendum, there is a growing problem in the building industry of both capacity and standards. Fifth, there is urgent work needed on the Tories’ so-called welfare reforms to ensure that the worst elements are curbed and that tenants can pay their rents. And sixth, we must not (like the Tories) neglect the existing stock, which also needs massive investment to maintain and exceed Labour’s very successful Decent Homes Standard.

This is why building up to higher output over five years, making full use of housing associations, councils and developer contributions, is very sensible. It not only allows the financial contribution to be stepped up progressively but also gives time to tackle the other massive challenges of delivering such a big change in government housing investment priorities. But no one should argue either that the programme isn’t feasible financially or that it’s not needed. This programme is ambitious but, with care and effort by a new dedicated Minister of Housing, it could be delivered.

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Dissolution disillusion

In a splendid journalistic error*, the Times reported that Sir Eric Pickles is expected to be given a seat in the House of Lords ‘as part of Mrs May’s disillusion honours list’. It may of course have been a deliberate choice of words, as Eric contributed quite a lot to the failure of housing policy during his years in charge.

In and around his former housing brief, the dissolution of Parliament meant a deluge of last minute actions. Most important, the Homelessness Reduction Bill became an Act just in time. Red Brick’s line has been that the Act is very worthwhile but underfunded and has virtually no chance of succeeding in its basic aims in the high-pressure areas of the country, and especially in London. This is because every other aspect of Government policy, from the lack of supply of social housing to the dreadfully punitive changes in benefits, will lead inexorably to an increase in homelessness at the same time as local authorities’ ability to respond is reducing fast. The Act will need a lot of scrutiny as it is implemented, but for those who have the energy to read the whole thing, it can be found here.

The Communities and Local Government and Work and Pensions Select Committees managed to publish their joint inquiry report on The  Future of Supported Housing. They conclude that the Government’s proposed funding model for supported housing is unlikely to achieve the objective of establishing long-term and sustainable funding, echoing the unanimous view of the sector itself. Rather than relying on housing benefit or universal credit up to the local housing allowance level, with a top-up fund available for disbursement to councils, the Committees support the introduction of a Supported Housing Allowance which would reflect the diversity of the sector, with separate funding mechanisms for emergency accommodation and refuges.

The CLG Committee also published its report on Capacity in the Homebuilding Industry. Starting with the now unanimous view that ‘the housing market is broken’ the Committee sought to find out whether the homebuilding industry was capable of boosting housebuilding output to the levels required. Their conclusions suggest that it is not! They found the industry dominated by a small number of volume housebuilders, and that their commercial self-interest means they have ‘little incentive to build any quicker’. A far greater mix of builders and more competition is needed. They identify the speculative land market as a particular problem, with high prices leading to increased densities and less affordable housing, and recommend that their successors return to this issue. They want to increase the role of local councils and call for changes to the limitations on councils’ ability to borrow to build. Local authorities, they conclude, do not have the tools they need to make an effective contribution to solving our housing crisis. They support growth in housing association activity, but note that they ‘require greater certainty over their income from social rent’ and that ‘they must remain conscious of their charitable objectives’. They also caution about the growing skills crisis facing the industry and the dangers posed by the process of leaving the European Union.

And finally in this little round-up, the Public Accounts Committee published its report entitled Housing: The State of the Nation. Despite the slightly grand title, the report looks at two main issues – the ‘housing gap’ (England) and ‘getting more out of housing benefit’. The housing gap section has a familiar analysis of the huge failure in housebuilding compared to need, and its effects. Even if the Government meets its objective of 1 million homes over five years, it will not come close to meeting the actual level of need. The Committee criticises ‘The Department’s lack of ambition on such a fundamental issue’. The section on housing benefit complains specifically about the lack of information available ‘on the impacts and value for money of the roughly £21 billion that the Government spends each year on housing benefit’, and highlights in particular ‘the poor value for money obtained from the £8 billion or so of housing benefit with which it annually subsidises private landlords’.

With the Election underway, Labour has already made a number of announcements about its housing policies, including a commitment to providing 500k genuinely affordable homes during a Parliament and a raft of policies to improve standards in the private rented sector. It’s a good start, and we will try to look at all of the main Manifestoes as they are published.

 

*spotted by Private Eye

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Why I care so much about housing associations: they will be critical to delivering Jeremy Corbyn’s housebuilding target

While Boris Johnson mutters inanely about mugwumps, Jeremy Corbyn has tried hard to raise the housing issue in the election over the last couple of days and has started to trail Labour’s manifesto commitment to build a million homes.

Despite the media fascination with Johnson’s clowning, I think Jeremy’s core point – Labour will build more homes and more social rented homes – has come across well.  It was good to see his real passion for the subject during his visit to Harlow today.

It seems any debate about housing during elections – the same happened in 2010 and 2015 – is dogged by deliberate obfuscation about what is being discussed. At PMQs on Wednesday, Corbyn’s question to Theresa May was met by the well-rehearsed stock answer that Cameron delivered so many times before – the Tories have built more council houses than Labour did when it was in office.

It happens to be true, but what does it tell us? It tells us that the Labour Government didn’t want councils to be major builders – it’s one of my main beefs with Labour during the Government years. Instead, the money was put into housing associations to provide social rented housing and shared ownership. Mrs May never addresses that. The only comparison that matters between the two governments is how many homes for social rent were provided by councils AND housing associations together. Here the Labour Government wins hands down and many times over.

Sadly, the same confusion dogged the interview at lunchtime between Andrew Neil and Jack Dromey on the Daily Politics. Neil is just about the only interviewer who asks intelligent questions about housing because he has bothered to look up the figures and learn the difference between starts and completions. But even Neil compared apples and bananas in his questions. Mr Corbyn, he said, has committed to 500,000 new council and housing association homes over a Parliament but the only evidence we have to go on is Labour’s record in office. And then, the switch – he quoted the figures for council homes only. And he repeated the point a few times – the Tories build more council houses than Labour, so why should we believe Corbyn’s commitment?  And that was followed by another confusion, as Sayeeda Warsi started quoting housebuilding figures for the UK while Neil was talking England (or was it England and Wales?).

The viewer sadly must be left completely bewildered, and I hope Andrew Neil will return to the issue again.

Fortunately, Jeremy Corbyn managed to be very clear in his speech in Harlow that the commitment is to build 500,000 new council and housing association homes over the next Parliament. I know it’s a mouthful, but truncating the commitment to ‘council houses’ removes the meaning. Most people involved with housebuilding know that it would be virtually impossible to reach a target of completing 100,000 council homes a year even by the end of the Parliament, and certainly impossible to do it each year starting this year. Even if the resources and borrowing powers were available, it would take several years to gear up, to assemble the land, design the schemes, procure the building contracts, and get started on site. It would be a very good thing to do, but it would not produce the homes fast enough.

So, meeting Labour’s target will be dependent on getting housing associations to provide the homes. They are in a much stronger position than councils to accelerate housebuilding and have a track record of being able to produce homes for social rent and for shared ownership. To meet the target, councils will need to be the planners and the strategists and housing associations will need to be the primary deliverers.

As readers will be aware, I have my criticisms of housing associations. But if a new Labour Government had a clear direction and policy, and made the resources and powers available, I believe housing associations would respond. Most will do so with great enthusiasm, but even those associations who (shall we say) aren’t keen ‘to do social rent’ anymore would follow the money.

John Healey has also been all across the media promoting Labour’s message and has published his new report on Housing Innovations being undertaken by Labour Councils. It’s a recommended read.

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It is critically important that housing associations rediscover their mission of meeting housing need

Below is the article I wrote for the Guardian this week on the changing role of housing associations, following a series of articles by the Guardian’s John Harris.

The article has caused a lot of interest, including nearly 400 shares and 130 comments below the line on the article, Twitter responses and personal messages of agreement sent to me. The chief executive of the National Housing Federation, David Orr, also wrote a response for the Guardian, for which I provide the relevant link below so people can make up their own minds.

The relevant links are as follows –

My article (see also comments submitted)

David Orr’s response

John Harris’ articles

Housing associations face storm of complaints over new-build homes
Leaking sewage and rotten floorboards: life on a ‘flagship’ housing estate
Guilt by association: the housing developments that went sour
MPs call for sweeping changes to housing association regulation

Housing associations are critically important, but have lost their way

Too many housing associations have focused on being developers. They have lost sight of their mission to provide good homes at genuinely affordable prices.

Housing associations vary a lot and it is not easy to generalise. Most small and medium-sized associations retain their overriding commitment to meeting housing need and to providing good services to their tenants and residents. But there is growing concern at the attitude of some – I emphasise not all – that have become developers first and foremost.

Ten to 15 years ago, associations started getting into private development as a way of generating surpluses, which could be added to the significant grant they received from central government to provide more social housing and affordable home ownership.

Now what was once the tail wags the dog. The primary interest is maxing numbers of new homes irrespective of who they are for and they have all but abandoned their mission to provide social rented homes for the poorest. One of the worst practices – encouraged by the government – has been to convert homes previously let at a social rent rate, typically 50% of market rates, into so-called “affordable” rent, at up to 80% of market rates, so they can make more money out of them.

In the early 2000s the work of housing associations was brought into the light by a new regulatory regime. Associations that had talked a great job for years were shown to have only “one star” services (out of three) following Audit Commission inspections. External scrutiny led to a fast rate of improvement and by the end of the decade, most had achieved three stars: a great example of regulator and regulated working together for the benefit of the customer.

Then, in 2010, the incoming coalition government abolished the regulator, abolished the Audit Commission, and slashed public support for affordable housing by 60% in the first year alone. The results were predictable: rapid commercialisation, a speedy departure from the traditional mission to house the homeless, a decline in service responsiveness, and a desire to switch every available penny into new development.

Why does this matter so much? Simple: housing associations are critically important institutions. They never replaced council housing, as was once intended, but they provided good homes at genuinely affordable rents and prices to people who could not compete in the housing market. Homeless and badly-housed people depended on them to deliver because no one else would.

There is some hope that London mayor Sadiq Khan will pull big associations back from the brink and make them relevant again. He is insisting on more genuinely affordable homes, including social rent, in new developments and is targeting his budget accordingly.

It is desperately important that housing associations – built on public subsidy and mostly charities – gear up to meeting housing need and providing high-quality services again. We also need a new generation of council housing. If we could get both these things, we would stand a hope of tackling the housing crisis.

Steve Hilditch

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Ambition to Build

Below is my contribution to the Spring Edition of Fabian Review, Ambition to Build. Labour has a strong set of policies which command a lot of support across the Party, but we need to do more to ensure that our strategy will meet the scale of our housing crisis.

 

To mark the recent 40th anniversary of the death of Anthony Crosland, I re-read his influential 1971 Fabian Pamphlet  ‘Towards a Labour Housing Policy.’, which led to a serious re-think within the Labour Party.

It made me conclude that, although Labour has developed a substantial set of housing policies which attract wide support, skilfully marshalled by shadow Secretary of State John Healey MP, I have growing doubts that they will meet the scale of the task, which is so much bigger than any of us could have imagined possible a decade ago. To meet the challenge, we must find more ambitious, radical and transformative solutions. Of the many areas to explore, there are five I would like to highlight here.

First – where will the money for investment come from? After 2010 the Coalition massively cut traditional housing investment – 60% in the 2010 budget alone. We are now building virtually no new social rented homes. Despite austerity, the Tories have propped up the failing housing market, throwing money at it in the form of subsidies, loans and guarantees. Yet most economists agree that their action on the demand side will increase prices in the longer term, intensifying unaffordability with little impact on supply. The main rented programme – so-called ‘affordable rent’ – was an abuse of language with very high rents.

Based on Treasury figures, a new Government reverting to Labour’s balanced 2010 priorities would have a bonanza of £32 billion available as subsidy for genuinely affordable housing including a major new programme of social rent. That is a transformative amount.

Secondly, and linked, we must finally end the Treasury conventions that discriminate against public investment. It’s an old story, but a good one. No other country in Europe accounts for public investment as we do. That’s why foreign state-owned companies can invest in our utilities when we can’t. Council borrowing for housing, which pays for itself by generating an income stream (rents), should be taken out of the main measure of public borrowing – as happens across Europe. Councils, controlled by effective prudential rules, could become major contributors to housing supply once more.

Thirdly, a century ago Winston Churchill called land ownership ‘the mother of all monopolies’, describing owners as benefitting from ‘enrichment without service’. Land values are not created by owners but by all of us. The public should share in land value appreciation, especially when planning permission – the process by which the community takes on the costs and externalities of development – is provided. Instead of selling land, public sector land purchase and effective value capture would give greater control over outcomes and moderate the high cost of land that underpins the housing crisis.

Fourthly, private renting is the last great unmodernised industry, with outdated standards and management. Labour should now go well beyond the 2015 ‘Miliband’ reforms. There is better understanding now of how other countries successfully regulate rents without undermining the market. Tenancies should be longer, grounds for eviction clearer and rules concerning harassment and illegal eviction tougher. Crucially, there should be a revolution in standards. Landlords should be licensed, with a crack-down on letting hazardous or non-decent homes. We don’t accept hazardous food or cars, why allow hazardous homes?

Fifthly, there is the whole question of rents and benefits. Out of control house values and dysfunctionality mean that intervention in ‘market’ rents is justified. The Tory policy of linking public rents to market rents is not rational. Instead, council and housing association charges should be linked to the collective cost of provision plus a return to encourage further investment. Subsidy is needed to get the homes built but then they will ‘wash their own face’ for decades to come. Rent setting should be open and predictable with tenants in comparable properties paying comparable rents. Vicious benefit caps, which penalise people with little or no choice in the housing market – should be ended. Over time the subsidy system should move ‘from benefits to bricks’ – supporting greater supply at lower rents, reducing the need for benefits.

That’s five for starters. So many other areas could be mentioned – including rights for homeless people, the crisis in estate regeneration, construction standards, the use of energy, and how to promote ‘yimbyism’ (yes in my backyard). It’s a debate to which we can all contribute.

Finally, Tory policies have been piecemeal, forged around soundbites. The more they mention strategy the less there is of it. Labour should develop a comprehensive housing strategy, with a strong emphasis on important regional variations, which takes a clear view of future investment needs and how they will be met, adopts a balanced view of tenure with fair treatment for renters and owners, and has as a core principle that there must be a decent housing solution for everyone, irrespective of their position on the income distribution.

Housing is central to the pursuit of equality, social justice, economic progress, health and well-being. We do not have to go on as we are. As Anthony Crosland showed all those years ago, other choices are available.

March 2017

A previous post on the legacy of Anthony Crosland – A Basic Right of Citizenship – can be found here, together with a fascinating comment from Brian Lund, who very fairly disagrees with some of my points. Brian’s latest excellent book – Understanding housing policy (Understanding Welfare: Social Issues, Policy and Practice series) is now available on Amazon and on Kindle.

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