Is this England’s worst-ever Housing Bill? Quite possibly. Past legislation has often included useless measures (the rent-to-mortgage scheme in 1993 comes to mind) but they often sat alongside worthwhile ones (in that case, defining the welfare role of social housing). This one has nothing to offer the housing crisis, is malicious in intent and – as lawyers have pointed out – atrociously drafted. It was sketchy from the start and new measures have been tacked on since, worsening the backlog of details we’ve yet to see and making the full impact difficult to assess. It’s a truly noxious mix.
The Bill has just completed its passage through the Commons, so let’s recap. We’ll concentrate on the bits that are most damaging to social housing (and note in passing that there are indeed some useful measures aimed at private renting, even if councils will struggle to take advantage of them).
First, councils will have to sell off higher value stock when it falls vacant. They’ve been given no idea how this will be implemented only that – whether or not they actually sell the houses – they’ll have to pay the money across to the Treasury as if they had sold them. We don’t know if there’ll be any exemptions – for example, will tenant transfers still be allowed? We have a vague promise of two-for-one replacement in London, with no detail on how it will work. And why, if maintaining affordable housing in London is so important, does it have to be sold in the first place?
Second, better-off tenants – defined ridiculously narrowly – will pay much higher rents via pay to stay. Policy on rents has effectively been thrown to the winds, since both councils and housing associations will have to reduce their social rents for the next four years, and yet can still convert existing stock to much higher ‘affordable rents’ to provide income for new development. Associations – but not councils – can keep the money from ‘pay to stay’ (which is optional for associations, but not councils). Labour’s policy of ‘converging’ rents to give a logical rent structure across the social sector is, to put it mildly, a thing of the past.
Third, new social tenancies will now have to be offered on fixed terms – again, a measure that is compulsory for councils but optional for associations. The Tories had the gall to make this fundamental change to secure tenancies in an amendment to the Bill. Not only that, but they describe it as a measure to promote social mobility (well, I suppose being booted out of your home is mobility of sorts). And as the minister said in introducing the amendment, the change ‘may prompt people who may otherwise not have thought about purchasing their own home to do so where they feel they are able to’.
Fourth – and another measure which is optional for associations – is of course the much-weakened housing association right to buy, now only to be piloted and likely to result in only a few hundred sales in the first year. So a much-trumpeted election promise, rushed into the manifesto at the last minute, has effectively fallen apart. The Tories could have foreseen the difficulties themselves if they’d only looked back at what happened in the 1980s when they first tried it. Now they are stuck with a half-baked scheme, loosely connected in an undisclosed way to high-value council house sales, which will supposedly still pay the cost of discounts.
Fifth – and yet another measure which applies only to associations – is the weakened regulatory regime, made necessary by the ham-fisted introduction of right to buy and other changes. Here we have another set of amendments driven entirely by expediency, not by what is right for the sector. As CIH has said in looking at the whole issue of reclassification of housing association debt, the government’s blundering has led to the wrong debate about regulation, which should be driven by ensuring high quality services for tenants, not by the need to meet outdated accounting conventions and saving the Treasury’s face.
Sixth, and coming from right field, we have starter homes, noted here because the government thinks they constitute ‘affordable housing’ and should replace social and ‘affordable’ rented homes in new developments. Starter homes and their likely price levels led to one of the choicer exchanges in the debates on the Bill. New-boy Tory MP Chris Philp said that in ‘his’ borough of Croydon, the average 20% discount means a starter home will be ‘only’ about £220,000 or £250,000 which, he claimed, ‘is extremely affordable’. Sadiq Khan had a quick-fire response: ‘It usually takes a parliamentarian years to become out of touch, but the hon. Gentleman has done it in six months’. Starter homes trash the definition of affordability in two ways: they are too expensive, and they subsidise only the first buyer, not all subsequent occupiers like genuinely affordable homes.
It’s tempting to conclude that these six key measures show that the government as a whole is out of touch, but while this is true it doesn’t mean that their aims are unclear. And one of the clearest of those aims is to destroy council housing in its present form. (We might have said ‘social housing’ here, but housing associations – as we’ve seen – have been given a number of escape clauses.) The Bill reduces security for tenants, will push a lot of them out of the sector and will mean there are far fewer opportunities for new tenants to get good quality homes. It shows the Tories’ true contempt for council tenants: can anyone imagine similar punitive measures being taken against any other large segment of the population?
But its real significance is the way it links to the decisions in the July Budget and the Autumn Statement, which together undermine investment in the existing stock and will likely bring to a halt most councils’ plans for new building (certainly at social rents). Not only must councils cope with less rental income, but grant towards new rented homes has now been stopped (in favour of shared ownership schemes). The Bill further undermines the self-financing settlement (not yet fours old) by taking back into the Treasury the extra money from pay to stay and most of the receipts from high value sales. One housing director has already said she wouldn’t be surprised to see the ‘ring fence’ around council housing budgets disappear, given that it already has gaping holes in it. The Treasury, which hated self-financing from the start, is gleefully making the holes bigger.
Red Brick has pointed out before the dangers of social housing – and especially council housing – being reduced to what Mark Stephens calls ‘an ambulance service’, like social housing in Canada and the US. To achieve this, the Tories need to cut the size of the sector, remove tenants’ security, make tenancies turn over more quickly, let the stock deteriorate and stop adding to it. Until last summer they’d only begun the first of these: once the Bill becomes law, and the Autumn Statement starts to take effect, the attack will be launched on all fronts. Far from tackling ‘sink estates’ as Cameron recently claimed, isn’t it now clear that their real aim is to create them?