Taking the axe to social housing


Ed Turner is a lecturer in politics at Aston University, at the Aston Centre for Europe, and is deputy leader of Oxford city council

The government’s consultation “A fairer future for social housing” says that “social housing – affordable and stable – should act as a springboard to help individuals make a better life for themselves”. Yet the result of this announcement will do the exact opposite – it will ensnare individuals in poverty, create ghettos of deprivation, and prevent future generations getting access to proper affordable housing.

House-being-bulldozedThe centre-piece of the government’s proposals is an end to “security of tenure” whereby, often after an introductory period, a social landlord (be it a council or housing association) makes a tenancy permanent, subject to adherence to satisfactory conditions.

Tenancies can sometimes be passed on to others resident in the property (such as children).  The government proposes that, instead, councils and housing associations should be able to grant tenancies as short as two years.

Two major problems arise from this:

• Social housing will become the preserve of those who have recently faced acute housing problems, and when people start to improve their situation, they will need to move out. Alongside the housing benefit changes – which according to Shelter will lead to concentrations of poverty – social housing will become the preserve of those in severe difficulty.

Rather than promoting mobility, this will entrap people at the bottom of the pile, who will find themselves surrounded only by the very poorest; and

• As David Orr, chief executive of the National Housing Federation, argued: “It’s difficult to imagine a more powerful disincentive to do well than the threat of losing your home if you start earning too much.”

This change will create a raft of perverse incentives, further trapping tenants in poverty.

The government’s changes will destroy established, supportive communities of social housing, instead making it the “tenure of last resort”, where only the very weakest live: a process sometimes known as “residualisation”.

The other major change is the decision to allow rents at 80 per cent of market levels for new tenants. Since these tenants are likely to be in considerable need, the additional cost will be mostly borne by housing benefit, as David Cameron has admitted.

Many people aspiring a social tenancy, notably those in low-paid work, will be reluctant to take on one of higher rental tenancies, so instead tenants on full housing benefit are bound to be concentrated in them, reinforcing the “residualisation effect” mentioned above.

Although the government says it wants to promote mobility in the social housing stock, few tenants will want to sacrifice a lifetime of affordable tenancy for a time-limited or vastly more expensive one, so new tenants in areas where the housing association or council has retained lifetime tenancies or kept rents at a genuinely affordable level will be most reluctant to move. The policy will therefore achieve the exact opposite of what is intended.

The move to 80 per cent of market rents for new social homes will also have major repercussions for the construction of new social housing. Currently, local authorities require a proportion of new homes to be “affordable”, and this is enshrined in their local plans. The requirement is carefully weighed, and judged by a planning inspector, to ensure it is reasonable and reflects market conditions.

But now the rents on these new homes will be twice as high as previously expected, so either housing developers will end up with a greater profit margin (a nice windfall, but one which is paid for by new social tenants and the housing benefit bill) or local authorities will have to redraft their planning policies, with a period of uncertainty while they are doing so.

The government also plans to remove the right to tenancy “succession”. Quite apart from the disruption caused to communities where the family members of tenants have put down roots, is it really the government’s wish that upon death of a parent, someone is greeted not with condolences but with an eviction notice?

Making people homeless because of the death of a parent or someone for whom they cared is hardly the best way of helping an individual “make a better life”, as the paper says it intends to do.

The government is right: this is a radical reform of social housing. It is a radical erosion of the vital pillar of the welfare state, which is badly designed, will entrench poverty and deprivation, blighting the lives of individuals and damaging communities. A rethink is desperately needed.

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  • Mr. Sensible

    Couldn’t agree more Ed.

    This to me is the exact opposit of encouraging aspiration, something I thought the welfare reform agenda was supposed to be about.

    With this, and with Eric Pickles’s statement on Regional Spacial Strategies being overturned in the courts I think the Coalition’s housing policy is in a bit of a mess, like a fair amount else.

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  • janie_s

    Shouldn’t social housing be based on need? If so I can’t see how that can be reconciled with council houses for life.

  • Ed T

    Thanks Mr. Sensible!

    Janie – access to social housing is based on need, the question is how often that need should be reassessed. In the case of housing benefit, if somebody’s income increases the money can be taken away pretty quickly (arguably too quickly at the moment!), but turfing someone out of his/her home is a much bigger step, and as I tried to explain brings with it other highly unwelcome consequences (perverse incentives, concentrations of deprivation etc).

    There’s a broader debate about the role of social housing though. If you think that the state should only intervene to support the very needy, as a landlord of last resort, then the coalition’s approach is for you. I support a more ambitious view, that wants to extend investment in bricks-and-mortar rather than housing benefit, building more social housing, and expanding the number of people who can benefit from it, so that it becomes a general needs landlord for those who can’t afford to buy, rather than residual landlord for those in dire straites.

  • http://www.forengland.org Wyrdtimes

    Is there anything we should know about the territorial extent of this article?

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  • Robert

    Would you please remind people this is all in England not in the rest of the country as social housing if I have it right was devolved in April, Wales has for example ended the right to buy of council houses, and have stated they will look at the Tories plans, which it seem will be put in place only if councils agree.

  • janie_s

    why don’t we just aim for more people buying houses by bringing down the price – supply/demand and all that. get a stable or slowly reducing population as a policy (through migration controls), allow limited building on greenfield sites (to individuals who don’t own a home rather than big developers) and everyone will be happy. In 20 years we’ll be buying second homes in Wales and Scotland again! whoopee!

  • Chris

    @janie_s

    “why don’t we just aim for more people buying houses by bringing down the price – supply/demand and all that.”

    A big drop in house prices would leave a lot of people in negative equity.

    “get a stable or slowly reducing population as a policy (through migration controls),”

    How do you stop people making babies? Who is going to pay for the baby boomers pensions, healthcare and social care? And who is going to do the dirty work of actually providing health and social care for an ageing population?

    “allow limited building on greenfield sites (to individuals who don’t own a home rather than big developers)”

    WTF? Earth to janie_s, the vast majority don’t have the time nor money to built their home. Somebody has to put up the wonga to actually design and built the communities on green field sites. Generally, this is best done by local and national government, if the developers are left on their own they won’t build anything but houses with any local amenities a brief after thought.

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  • DB89ss

    ‘The government also plans to remove the right to tenancy “succession”. Quite apart from the disruption caused to communities where the family members of tenants have put down roots, is it really the government’s wish that upon death of a parent, someone is greeted not with condolences but with an eviction notice?’

    This isn’t actually true. The new proposals would allow tenants the right of succession to their children once, while further successions are possible through discussion with the landlord.

    What you’ve written is badly-researched misinformation, which undermines the entire article. It’s a shame because you present a fairly convincing argument in the most part. Maybe you should try actually reading the consultation report next time, before making your comments.

  • http://wikimapia.org/4757071/LSM-Insurance-Toronto-Life-Insurance-Company Lorne

    Even though I clearly understand that cuts in public spending must be made in order to keep the state finances balanced, I really feel that the legacy of welfare state is being thrown away too rapidly for my taste. I generally relate to your post, but let’s not jump to conclusions too quickly…

  • Ed Turner

    @db89ss

    I went back to check, and stand by what I wrote. The minimum requirement (p.25) is for one succession to a “spouse or partner”, i.e. no such right exists for children, as far as I can see.

    Of course there is the ability to do more than this minimum, but some places won’t do that.

  • DB89ss

    Ok sorry, it does seem like I made a mistake there, and I apologise for the aggressive tone of my earlier comment. Still, your post does seem to assume that landlords will generally be inflexible, which I wouldn’t say it is fair to assume. I also generally take issue with the way in which the whole situation is framed in such an emotive way – does it really help the argument to present the worst case scenario as the potential norm?

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