Housing and welfare policy – still pale and stale

Does that fact that both Eric Pickles and Iain Duncan Smith are still in the same cabinet seats mean that David Cameron thinks they are doing a good job? Two prime candidates for the chop this week seem to have successfully defied their critics. What does this say about housing and welfare policy?

If the prime role of the DWP was seen as delivering welfare reform and that of the DCLG was to deliver more housing and more effective local government, then clearly both IDS and Eric have failed miserably. Welfare reform is being haltingly rolled out, it’s beset by administrative problems and its talisman project, universal credit, looks like a disaster that has been prevented only by the continuing delays in its implementation. To coincide with the reshuffle, the DWP brought out the first round of research into the impact of the bedroom tax, showing that only 4.5% of those affected had actually moved to smaller properties, yet this was one of the main stated aims of the policy. Almost at the same time, the Institute of Fiscal Studies reported that changes to the local housing allowance have had no impact on curbing private sector rents, another policy objective: instead they’ve simply hit claimants’ pockets.

Unlike DWP, Eric’s department seems to have gone in for remarkably little independent scrutiny. Perhaps it’s just as well. As the just-departed housing minister struggled in the recent Commons housing debate to claim that housebuilding is increasing, he was assailed by evidence to the contrary. Reports which foresee the end of local government as we know it, such as this recent one from the LGA, go ignored.

However, I suspect we’re judging both men by the wrong yardsticks. In considering IDS’s survival, Jules Birch suggests it’s an example of ‘wet-bed syndrome’. For an explanation, he directs the reader to the Stumbling and Mumbling blog, which uses IDS as an example of why idiots succeed. However, my eye was caught by one of the comments at the end of the blog. It suggests the most likely reason that IDS remains in post because he is, in Cameron’s eyes, actually a success. Perhaps his brief was ‘to knacker the benefits system so that claimants increasingly give up, while shovelling large amounts of public money to favoured suppliers’, and in so doing demonstrate ‘the incompetence of the state in managing services’. If that was really the brief, the commentator points out, he’s done startlingly well.

Similarly, if Pickles was sent to DCLG to preside over the biggest cuts in any government department, and start the process of marginalising both social housing and local government, depriving them of resources and winding them down, he seems to be halfway there.

Perhaps though, both mens’ success factors are even more subtle than that. IDS seems to believe he’s successfully pursuing a completely new strategy of welfare reform that will replace a ‘broken system’. This enables him to look genuinely baffled when anyone suggests that he might, instead, be simply destroying the one we already have. Pickles’ talent is the opposite one: while local government cries out for a strategy for how it can reconfigure so as to operate with only a slim proportion of its present income, Pickles busies himself with the issues that really bother him, like the continued production of free council newsletters. Has there ever been a local government minister who has turned such a deaf ear to the concerns of local government? Aren’t both secretaries of state, in their different ways, brilliant at putting up smokescreens to hide the destruction they’re carrying out?

Among the serious consequences of their activities is one that’s overlooked by most of the media. It’s been said often enough in the past that the two departments (responsible for welfare and housing) are dealing with two aspects of the same policy area: you can’t separate benefits policy from policy on rents, allocations, regulation of landlords or a whole host of housing issues. To state the obvious, if you cut benefits, tenants get into arrears and landlords’ income falls; similarly if housing policies lead to higher rents then this pushes up the benefits bill. One of the big consequences of both departments’ apparent indifference to the real effects of their policies is the widening gap between them on these key areas of overlap.

For example, the bedroom tax (sorry, the ‘removal of the spare room subsidy’) had four objectives: save money, improve work incentives, encourage mobility (i.e. get people to move around more) in the social sector and make better use of the housing stock. The last two are housing objectives, but were the DWP’s colleagues in DCLG asked about them? It goes without saying that DWP didn’t listen to warnings from the sector itself that moves on the required scale would be impossible. There were also warnings about the impact on landlords’ earnings, and lo and behold the research shows that arrears were up 16% in the months after the tax started.

Over at DCLG the policy to impose Affordable Rents is also being rolled out, with 40,000 homes let at the higher rents last year that would previously have been let at social rents. Given that the proportion of the new tenants dependent on benefits is exactly the same as for social lettings, 80% of the cost of the new policy is being passed straight back to DWP.

So the bedroom tax cuts social landlords’ income and saves DWP money, while Affordable Rent increases landlords’ income and costs DWP money. Not to worry: IDS thinks the evidence shows that the bedroom tax has made a ‘promising start’ while Eric… continues to fret about fortnightly bin collections.

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One Response to Housing and welfare policy – still pale and stale

  1. grahamangus says:

    Quite Right. Two of the most incompetent Secretaries of State survived the reshuffle, IDS may have the right objective with Universal Credit but the DWP has proved that its administration of UC is utterly incompetent. Pickles appears to have absolutely no sympathy for Local Government or appreciation of the difficulties that Councils of all political colours are having, so why is he still there ?

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