Affordable rent shambles continues

Over the past few months I have been pursuing Freedom of Information requests concerning the Government’s ‘Affordable Rent’ programme.  We have expressed concern about this programme ever since it was scribbled on the back of a fag packet in a hurried response to George Osborne cutting the housing investment budget by more than 60%.

The basic idea was to slash the amount of subsidy per rented home by requiring providers to borrow a larger share of the cost privately, recouping this through a huge increase in rent.  There were many in-principle objections to the policy: it would use up housing associations’ capacity to borrow and significantly increase their risks; it would be unaffordable for most people coming in to social housing (despite the Government claiming disingenuously that it would meet the same needs); it would make more people – in and out of work – dependent on housing benefit and increase the benefit bill, which would have to ‘take the strain’; and it was allied to the Government’s policy of reducing security of tenure for new social tenants.

The policy did however expose a fault-line in the social housing world.  The cynical branding of the scheme as ‘Affordable Rent’ caused endless confusion and still does.  Some providers and some councils were hostile to the new scheme, mainly due to high rents, but others embraced it enthusiastically, notably those that were already dropping social rented housing and moving towards market-based rents.  Even those that were hostile were seduced by the argument that this was ‘the only game in town’ – it was better to build ‘Affordable Rent’ because the alternative would be to build nothing.  Some exceptional councils like Islington found ways of keeping a social rented programme going.  The policy also had widely different impact in the regions – rents at up to 80% of market levels is a disaster in the south but were lower than some existing social rents in parts of the north.  So a nationally consistent response was hard to achieve.

Two factors characterised the policy from the start: incompetence and delay.  Virtually a whole year of output was lost as providers struggled to understand the new rules and prepare complex financial plans and risk assessments.  As a result, ‘affordable’ housing starts tumbled towards zero and the programme became hugely back-loaded into the final year, substantially increasing the risk.  Even now most of the schemes are ’indicative’ not real planned homes on real sites.  The programme had unclear objectives: Who was it for? What size mix was required? (for example Boris Johnson in London has consistently said he wants more family homes).  To what extent should providers cross-subsidise from small homes to family homes to keep those rents down?  Who was making the decisions – the provider, the government and HCA, or the local council?  Was social rent excluded entirely?  What would happen in existing schemes subject to s 106 deals?

Endless negotiations and threatened stand-offs followed, to the extent that only this week the HCA announced that the final contract has at last been signed.  Information about the programme has been scarce and questions were met with the reply that the information was commercially confidential.  The CORE statistics on new lettings revealed some information about the small sample of properties that had come through the system, but we need to know what it is planned for the whole programme.  When Ministers started bragging about how many ‘affordable homes’ would be produced, and Boris Johnson boasted that rents would be ‘only’ 65% of market rates in London, the door opened for FoI requests seeking information about the basis on which these claims were made.

Communities and Local Government responded properly with the information that they had, which wasn’t much.  But it did reveal that across England 82,000 existing social rented homes would be ’converted’ from social rents to ‘affordable rents’ to help pay for the programme.  That is a significant share of re-lets – homes that were provided under previous schemes to be let at genuinely affordable social rents that have been hijacked for this purpose.  CLG also revealed the national average rent and the regional distribution.  However, their information was based on the initial bids of providers and not the signed contracts which followed negotiations, and it became clear that CLG had little idea of how the programme was developing. The FoI response did however reveal more information about ‘Affordable Rent’ than CLG revealed to the Public Accounts Committee when it prepared its recent report into the programme.

The Mayor of London was altogether more slippery about responding to the FoI requests.  Sometimes the more someone talks about transparency the less they practice it.  The GLA argued that it was too expensive to collect the information until I pointed out that the Mayor had already made statements on issues like output and rents, so he had clearly been briefed.  They argued that the information was commercially sensitive but I made clear I was after monitoring data not details of contracts.  Finally they released anonymous information about provider contracts, the average rents they would charge and the relationship between these rents and market rates.

But then it became clear that the information was wrong.  When Inside Housing magazine tracked down the provider with the highest average rents they claimed the information was wildly incorrect.  Of course, both Red Brick and Inside Housing are entitled to rely on information provided by statutory agencies and the error belonged totally to the Mayor, who has now been forced to re-issue the information with an apology.

I am relieved to discover the highest average rent for a provider is not over £440 per week as the original information said.  But this experience reiterates the point that the amount of public information available about the programme, and especially the biggest segment of it in London, is inadequate, as the Public Accounts Committee found.  The HCA has published more information, on providers, funding and numbers of homes, but not rents and not expected completion dates.  The GLA has published much less about London.  Even though it is much smaller than previous programmes, ‘Affordable Rent’ is the main Government effort; it is still a large amount of public money and we are entitled to scrutinise what is being provided with it and whether it meets proper housing objectives.

Omnishambles, did I hear you say?

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