Affordable housing and the Ministry of Truth

Even 18 months in, this Government’s most commonly-used phrase is ‘the mess we were
left by the last administration’.  It’s beginning to wear thin, especially as the imminent new recession is clearly the result of events and actions that have taken place since Cameron entered No 10.

It is no surprise that any good news is not credited to the last Government.  And one area where there has been a bit of good news is in annual housing completions.  What is absolutely clear is that these are the legacy of Labour and have little if anything to do with Messrs Pickles and Shapps, whatever they say.

The number of social rented homes added to the stock in 2010/11 (therefore started under
Labour) was 39,170 (of which 30,780 were funded through the Homes and Communities Agency), continuing an upward trend that started in 2004.  In addition there were 21,460 additional ‘intermediate homes’ including intermediate rent and low cost home ownership.  Total additional ‘affordable’ homes topped 60,000 and the mix between social rent and intermediate homes of roughly two-thirds to one-third seems about right when judged against needs.

Of course even this scale of output is not enough, but the trend was in the right direction despite the recession.  The Labour Government had realised that the most effective way to get growth in the economy and meet needs in the community at the same time was to boost housing construction.  60% cuts in the programme showed that the Coalition did not share this analysis.

The legacy of this Government in 2015/16 will look very different.  They will bust a gut (and housing association finances while they’re at it) to try to keep the total affordable figure as high as possible, but the sub-headings will look very different.  The new, mis-named, ‘Affordable Rent’ programme will be there, at rents of up to 80% of market rent and possibly averaging about 65-70% depending on the outcome of the negotiations between associations and the HCA after the intervention of many councils trying to keep rents down.

The figure for ‘social rent’, let within the current ‘target rents’ policy, will inevitably plummet.  From the patchy information available, there appear to be virtually no social rented homes in the ‘affordable housing’ contracts awarded by the HCA so far, so new social rent homes will only become available from planning gain schemes, councils building directly, and the few councils who have refused to have anything to do with ‘Affordable Rent’.

The picture on the ground – social rented lettings coming through to homeless people and
people on the waiting list – will be even worse than the new build programme implies.  A proportion of social rent lettings (no-one knows how many yet) will be stolen from the social rent pool and put into the ‘Affordable Rent’ pool to help pay for the programme.

The Government will continue to mask the real implications of their policy with bluster.  They will use the figures for ‘affordable housing’ and ignore the importance of social rent to people on low incomes and to the policy of encouraging people into work.  They will continue to claim that the same people will benefit from ‘Affordable Rent’ as benefit from ‘social rent’ despite the fact that people on the ground know that this just isn’t true in most parts of the country where market rents are high and rising rapidly.  To add to the confusion, they will continue to say that ‘Affordable Rent’ is ‘social housing’.  Orwell’s Ministry of Truth would be pleased by these efforts.

The debate needs to shift from numbers alone, important though they are, to the genuine affordability of the homes coming out of the programme.  The idea being worked on by the London Labour Housing Group, defining a London Living Rent as a benchmark by which to assess whether rents are affordable or not, is attracting a lot of interest.  Like the London Living Wage when it started, it would not be a technique for directly controlling rents but a campaigning tool which will have influence over rent-setting policies in the longer term.

The Government, the HCA and the housing associations who have signed up to HCA
contracts remain extremely coy about the rents they will charge for ‘Affordable Rent’ homes – one housing association board member I know says their officers even refuse to tell the board because of HCA confidentiality rules.

But the information will eventually come out and the ‘affordable’ in ‘Affordable Rent’
will be seen to be a complete con.  And it will fall to the next Labour Government to deal with ‘the mess we were left by the last administration.’

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