Not much controversy here

Jeremy Corbyn’s speech to Labour Party Conference on Wednesday has caused a bit of a stir, notably his comments on regeneration and rent control. So what did he actually say and are they new departures?

He said a lot about Grenfell, focusing on the fact that it was an avoidable disaster and looking at events from the tenants’ perspective. He said it indicted ‘failed housing policies… and yawning inequality’. I don’t disagree, but I would repeat my warning that we have to be careful how we talk about the disaster. Grenfell does not tell us that social housing is a bad idea. When the Tories say ‘we must now talk about social housing’ I don’t think they want to have more of it and to make it better.

The most important announcement in Corbyn’s speech was that there would be a Labour enquiry into social housing policy – parallel to the government’s – with Shadow Housing minister John Healey looking at its building, planning, regulation and management. He promised that Labour would listen to tenants across the country and bring forward a radical programme of action.

In support of his core contention that ‘a decent home is a right for everyone whatever their income or background’ Corbyn listed a number of policies which I don’t think are controversial within Labour:

  • insist that every home is fit for human habitation (which the Tories have consistently voted down).
  • ‘control rents’ – despite much of the comment since the speech I suspect this is not a major new departure but a reiteration of the Manifesto commitments, possibly with some strengthened ‘Berlin-style’ delegated powers for large cities, and perhaps more interventionist policies like the London controls on Airbnb – which is of course a form of rent control.
  • tax undeveloped land held by developers – using the Ed Miliband formulation of “Use it or lose it”.

Corbyn’s most significant area of new policy, and possibly controversy, concerned regeneration, where his comments mirrored a resolution passed by Conference. He said ‘Regeneration is a much abused word. Too often what it really means is forced gentrification and social cleansing, as private developers move in and tenants and leaseholders are moved out.’

He established a basic principle: Regeneration should be for the benefit of the local people, not private developers. So, people must get a home on the same site and the same terms as before with ‘No social cleansing, no jacking up rents, no exorbitant ground rents’. And there should be a ballot of existing tenants and leaseholders before any redevelopment scheme can take place.

I thought Aditya Chakrabortty, in an otherwise interesting column for the Guardian, over-egged the new policy by claiming that Corbyn had declared war on some Labour Councils. Personally, I think Corbyn’s requirements are the minimum and I would go further. It is not enough simply to offer a new home to those who wish to return after regeneration – and some councils have had to be dragged into doing that – with the majority of new homes being for private sale. Regeneration – where it involves providing more homes in total – must make a net contribution towards meeting the housing needs of the district in question. Homes taken from the pool of rented homes to ‘decant’ residents from the area to be regenerated must as an absolute minimum be replaced in number and in kind within the completed scheme. Otherwise it is the homeless and badly housed who pay the real price of the regeneration scheme. There should be no dodges like replacing social rent with so-called ‘affordable rent’ or even ‘affordable home ownership’ – there should be a requirement that new social rent homes will replace those that have been lost. If that cannot be achieved through comprehensive redevelopment, then other options should be pursued, including partial redevelopment and infill. Many perfectly good estates are being proposed for redevelopment when what they need is better management and some investment to make them better places to live.

It was good to see Jeremy focus on housing in his speech, but all I see are sensible pragmatic policies that are a million miles better than what we have to suffer now. Not much controversy here. It is the review of social housing policy that carries most hope of future radical steps.  

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Investment to beat the housing crisis

Current policy of increasing reliance on the private rented sector and allowing the stock of sub-market rental housing to dwindle is not “fiscally sustainable and economically efficient” says the SHOUT** campaign in its submission to the 2017 Budget.

SHOUT’s core proposition is that there should be a long term government commitment to a sponsored programme rising to 100,000 new units a year of housing at genuinely affordable rents, alongside other tenures, which would:

  • bring down the cost to government of supporting low-income households
  • address the longstanding and serious economic weakness of under-supply of housing which has been so resistant to other policy approaches
  • via Right to Buy or formal rent to buy schemes, offer a pathway towards home ownership;
  • help address pressures on public services, notably health and social care.

The long term case for building social rented homes was set out in 2015 in the report for SHOUT by Capital Economics ‘Building New Social Rent Homes: an Economic Appraisal’, updated in 2016 to add additional analysis of the implications of alternative possible outcomes from the UK’s exit from the European Union.

shout report

SHOUT’s programme would increase the requirement for public borrowing in the short term, with a peak impact on the PSBR of 0.13% in 2020 as the costs kick in but the benefits are yet to be realised. SHOUT points out that the positive impact on the public finances in the longer term are extremely strong and that there would be significant benefits in other programmes, especially in health, education, and social care.

They also point out that the government is already committed to spending over £40 billion by 2020-21 on programmes and incentives designed (not always very effectively) to boost housing supply – there is scope for reallocation within this total to fund the proposed increase in social rented supply. Homes are also an asset on the public balance sheet and generate a permanent income stream.

SHOUT’s submission also addresses two other important issues, both of which require policy to be set consistently across both CLG and DWP programmes.

  • the need for a stable, fair and sustainable settlement for social housing rents – the rent regime has become muddled with unclear objectives and unpredictable outcomes as important changes in rents and social security payments have been introduced. Policies for housing investment, rents and welfare must be properly co-ordinated. SHOUT is doing more work on rent policy for publication at a later date.
  • ensuring that existing and new supported housing is viable: the current uncertainty caused by restricting benefit to the local LHA rate needs to be lifted in the Budget, and SHOUT supports recommendations made by the DWP and CLG Select Committees for a new funding mechanism for supported housing.

The Budget submission is an excellent summary of the case for additional investment including many charts.

**SHOUT  is a volunteer – run campaign making the case for investment in genuinely affordable homes and demonstrating the positive effects that such housing has on people and communities. SHOUT can be followed on Twitter at @4socialhousing and its website is  http://www.4socialhousing.co.uk

 

 

 

 

 

 

 

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Why Labour needs to get serious about community housing

Red Brick is delighted to publish a guest blog by the St. Ann’s Redevelopment Trust (StART), the community land trust in Haringey, about the work they are doing and the broader case for CLTs.

Across the capital, Labour councils have long been aware of the growing housing crisis that has seen homeownership falling, a massive growth in the numbers of private renters living in poverty, and a lack of social housing for ordinary Londoners.

Everyone knows that major action is needed, yet this is leading to a ‘regeneration predicament’, where because something must be done, doing anything to build new homes is seen as progress.

This attitude, combined with a lack of central government funding for housing associations, and the continued bar on councils borrowing the amounts required for a new generation of council housing, has led many labour councils to rely too heavily on private developers as the only means of driving up housing starts.

But increasing the number of homes built in London is only one part of the solution, as Sadiq Khan recognised when he said we need to build ‘the right kinds of homes’. As the market is so out of control, simply building any number of homes for market sale or rent will not be a housing solution for most people.

And with regeneration projects leading to a net loss of social housing across the city, and a lack of transparency about how levels of affordable housing are decided on new developments, it’s no wonder that residents are angry and suspicious, while councils say they are just trying to build new homes.

The current model isn’t working, and if councils want to deliver the largest amount of affordable homes, which will be accessible to future generations, while being supported by their residents, they need to start focusing on large-scale community housing.

Community land trusts (CLTs) can provide higher levels of genuinely affordable homes because they do not seek a profit and are based on long-term investment; furthermore, the model of creating homes that don’t inflate in value with the open market means they remain affordable for future purchasers and renters.

The vital nature of genuine affordability aside, though, what’s so exciting about community-led housing is the way it ensures locals have a proper stake in any future development, whether they are living on the site or not.

Community-led housing takes in the concerns of people in an area and translates them into projects that meet local needs, on a design basis that suits the area and with the ability to provide a range of other community facilities so that these developments create long-term benefit for the whole neighbourhood.

st anns

Our project, St. Ann’s Redevelopment Trust (StART), seeks to build 800 homes on NHS land in the London Borough of Haringey. Homes will be for sale and rent, with 75% genuinely affordable, controlled by the community and remaining affordable in perpetuity.

Our plans include maintaining and supporting the unique biodiversity that currently exists on the site, as well as ensuring that a health legacy is retained, by ensuring the development complements the adjoining NHS facilities that will be renewed following the sale of the land. We will also be retaining a number of the historic buildings on the site that previously formed part of the old hospital.

Our vison has been developed though public events, on and offline surveys, and interactions with 100s of local residents, meaning we are able to bring forward a locally-supported proposal with much higher density than was proposed when the site got outline planning permission.

We also believe that creating a community asset that will put a dent in Haringey’s housing crisis and make links with its surroundings is a much better use of public land than just selling off the site to the highest private bidder.

Across the country, land belonging to the NHS, Ministry of Defence, Ministry of Justice, and of course councils, is being sold off to private developers when it could remain in the community.

A number of CLTs have been developed in recent years, but it’s time for councils and the Labour Party to support them at scale, and recognise the important ways they can contribute to a sustainable housing supply.

London’s communities need a new approach that makes housing about their needs and aspirations, and remains affordable in the long-term.

As we move towards the 2018 local elections, all Labour councils should be thinking about how they can support community housing, and we hope that StART can be part of the change in direction that London so desperately needs.

You can find out more about StART at www.startharingey.co.uk or on Twitter @startharingey

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Who will pay to reclad the tower blocks?

Media coverage of the Grenfell Tower fire has been dogged by confusion as to where the money came from for the original work and who will pay for the remedial work now needed to the country’s tower blocks. This is understandable: council housing finance is complicated, but the danger is that the confusion could let the government off the hook.

The fact that Grenfell Tower is owned by a wealthy borough with buoyant council tax income is an important factor in the moral argument about how the fire could have been allowed to happen. But in accounting terms Kensington and Chelsea’s council tax is irrelevant, since its council housing finance (its Housing Revenue Account) is ring-fenced and can’t legally be subsidised through taxes on residents. Like any other council, K&C borrows the money for capital works such as recladding a tower block, and the costs are met either from rents, from the sale of homes under the right to buy (after the Treasury has taken its cut) or – if available – from government grant.

The last Labour government made substantial subsidy available to bring council housing up to its Decent Homes Standard, but this ended under the coalition. With the decline in funding for energy-efficiency work, councils now pay for refurbishment of most tower blocks and other council housing from the rents they receive from tenants. The financing of a project like cladding a tower block is also complicated by flats having been sold under the right to buy, now owned on leasehold, very likely by private landlords. Leaseholders have to pay their share of the cost of major works, often supported by loans from the council.

What are the implications for the massive remedial works now likely to be needed to the country’s tower blocks? Even local politicians, like Julie Dore, leader of Sheffield City Council, seem to misunderstand housing finance, saying that if councils fund the work themselves it will be at the cost school building and other infrastructure investment. However, without a significant change in legislation, councils won’t be able to tap into other capital budgets to get the work done: if their Housing Revenue Accounts won’t support it, their only other source is government grant.

This is where things get even trickier, because having initially appeared to promise financial support the government is now backtracking. It says there is ‘no guarantee’ of any money, that councils will have to look to their own funds first, and extra support will be on a ‘case by case’ basis. So let’s spell out what the options are.

First, councils and housing associations could in theory dip into their Housing Revenue Accounts, principally financed from rents. Council housing is self-financing, and like housing associations receives no day-to-day government subsidy. When councils made their self-financing settlement with the government in April 2012, it was on the basis that they’d be left with sufficient resources to meet foreseeable needs. There are two problems with this, however: the potentially huge volume of extra investment now required after the Grenfell fire was hardly foreseeable, and – as Red Brick has been pointing out – the Treasury has systematically undermined the self-financing settlement over the last five years. They’ve forced councils and housing associations to cut rents, not to help tenants but (as IFS has shown) largely to reduce Treasury spending on benefits. As a result, by 2020 councils will have lost the equivalent of 60% of their maintenance funding. Those that had built up reserves to deal with eventualities like Grenfell are eating into them to keep services going. And their capacity to borrow for new investment has been drastically reduced.

Second, councils might get ‘case by case’ help, as DCLG has suggested. But will this be extra money? DCLG might simply lift the caps that restrict councils’ borrowing (if not being able to borrow is the issue) or let them raise rents (if they need extra income to pay for the new investment). If not accompanied by government grant, this is simply another way of forcing the cost back onto tenants. Some suggest that extra money might come from the so-called Bellwin scheme. This could be useful, but it is only for emergency work (e.g. stripping off old cladding) not for new investment. Also, it is paid in arrears, so councils will be unsure whether they can recover their costs or not.

Third, the government might indeed offer some form of subsidy, which might or might not cover 100% of the extra costs. But beware of which pot this money comes from. If there is no increase in the government’s capital budget for housing, then it will be at the expense of building new affordable homes. It will be a while before anyone has a proper estimate of what the cost of remedial works might be. One expert says that to reclad an individual tower block costs about £1.2 million, and others have suggested that this means a total cost exceeding £600 million. If costs were were to be of this order, and had to be met from existing capital budgets, they would absorb over 40% of the new money earmarked for rented housing in the last Autumn Statement.

Why should tower blocks be reclad, anyway? Isn’t it better just to leave them unclad? Much has been made of Grenfell Tower being refurbished for cosmetic reasons, but of course the main reason for cladding is to improve the thermal insulation of the dwellings. This has led to stupid headlines such as Grenfell: Clad in Climate-Change Politics. However, only this week we have been reminded that fuel poverty will kill 80 elderly people every day this winter. Insulation is vital to help reduce fuel bills, providing of course that it is done properly. As Colin Wiles has pointed out, this means that unsafe cladding must be replaced by non-combustible materials installed according to thorough safety practices. A debate has already started in the insulation industry about the massive implications of the Grenfell fire for their work. And one lesson for government must surely be that it is much better to build homes to high energy-efficiency standards in the first place, rather than have to stick insulation on their outside walls at a later date.

Apart from the tragic consequences of the Grenfell fire for the residents affected, it’s clear not only that the effects are very reaching but also that we are only in the early stages of assessing what they might be, what will be the costs, and what changes will be required to policies and practice in housing design, housing management, fire safety, building regulations, energy efficiency work and other aspects of public administration. Many have said that the disaster is a ‘wake-up call’. One aspect that we must be wide awake to is how Grenfell’s aftermath is to be paid for across the social housing sector:  it mustn’t be paid for by tenants, and it mustn’t be paid for at the expense of new investment in affordable homes. Or as Steve said a week ago, ‘Central government should foot the bill, sharing the load. That’s why we all pay taxes.’

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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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