Labour must resolve the financial crisis in social housing

Labour’s future proposals will need to give people a stronger sense of security in their own homes.

Christopher Worrall is a housing columnist for LFF. He is on the Executive Committee of the Labour Housing Group, Co-Host of the Priced Out Podcast, and Chair of the Local Government and Housing Member Policy Group of the Fabian Society. 

When the last Labour government took power it undertook the first comprehensive review of housing in 23 years, namely the “Quality and Choice: A Decent Home for All” report in April 2000. It came at a time where, despite Britain’s mild winters, it had one of the worst records of winter deaths in Europe, and the number of homeless people and those sleeping rough had doubled.

Fast forward another 23 years and sadly comprehensive reviews are still being deemed necessary, as five year trends in winter deaths remain higher than 2010, as well as spikes as high as 29 per cent in rough sleeping owing to the cost of living crisis in London alone. Across England these statistics show a rise of 26 per cent. If Labour is to take power at the next general election it needs to make sure its housing offer responds to the needs of the country. And most importantly, resolves the finances of social housing.

Awaab Ishaak’s death may have prompted the Conservatives to review damp and mould guidance, resulting in Awaab’s Law being tabled as one of the amendments to the Social Housing Regulation Bill in March. To note, these suggestions only came about after a coroner, Joanne Kearsley, issued a Regulation 28 report that focuses on the prevention of future deaths. As opposed to a pragmatic approach from the Tories, who have been wading through treacle on the issue of housing for a number of years having reaped what they have sewed in social housing financing reform.

Looking back, the Tories social housing green paper was first published in August 2018. One year after the Grenfell Tower fire. 4 and a half years later, two and a half after the social housing white paper, we are now finally beginning to arrive at a stage where tenants may have greater powers and improved access to swift and fair redress.

But to what extent will these changes be effective?

Awaab Ishak’s coroner had to look back to 2006 to find a document of any relevance to what a decent home looked like, sadly it did not give any consideration to the issue of damp and mould, nor guidance on proper ventilation. In addition to which, the Housing Ombudsman plays no role with private rented landlords who house those on housing benefit. Since the report, Michael Gove has written to social landlords stating the fact all social homes must meet the Decent Homes Standard, as well as calling on them to assess the extent of damp and mould issues affecting their properties.

Awaab’s Law will require social landlords to investigate and fix reported hazards in their homes within a specified timeframe, or rehouse them where a home cannot be made safe. The bill has suggested all social housing managers now require a “professional qualification”, which is all good and well for the trade bodies accrediting them. But was not what the coroner’s report highlighted.

Nor is simply highlighting information to tenants about how to make a complaint enough, given that complaints are all too often flagrantly ignored by social landlords. For too long it has been convenient for the social housing sector, hiding behind ineffective regulation, to avoid their duties. Back slapping each other while standards severely slip. Whether this is down to the qualifications of housing managers, or more systemic funding issues, should become a lot clearer in due course.

A recent new inquiry into the finances and sustainability of the social housing sector has begun with a call for evidence by the Levelling Up, Housing and Communities (LUHC) Committee, Chaired by Clive Betts. It follows the Committee’s report into the Regulation of Social Housing in July 2022. Clive Betts has said “the social housing sector is in crisis”, noting the reality of social landlords facing a range of “significant financial pressures”.  The inquiry’s call for evidence will assess whether the cross-subsidy model has any continuing viability, as well as exploring what challenges (if any) private equity and international investors entering the market have created. The inquiry asks whether the collapse of Brick by Brick, a wholly council owned company by the London Borough of Croydon, was a one off – or the “tip of the iceberg”. In addition it will look at what contribution such organisations have made to increasing social housing supply. It also calls on evidence for understanding the challenges faced by the regulator, i.e. whether it has enough powers. Perhaps it should also ask if it has ever been inclined to use them. One of the more pertinent questions are around housing association mergers creating umbrella groups too large to discharge its duties. A question many of us have asked for some time.

Notwithstanding the above, I suspect the findings of this inquiry will set out a minefield of potential policy proposals for consideration by Labour’s housing team. Housing is a basic requirement for everyone, or as Labour sloganeers a “human right”. But turning these rights into meaningful policy proposals requires evidence and innovation. The social housing sector has failed to innovate mechanisms that balance the power of provider, tenant, local and national government, while ensuring financing of such endeavours are sustainable.

Yes, when the last Labour government was in power, it had to look to meaningful capital borrowing to renovate homes. But it also took four years for the definition and guidance of decent homes to be implemented following the April 2000 green paper. It can start to look towards the “Homes for Britain” report produced by the Fabian Society member policy group focused on local government and housing. In it, proposals for a housing first approach and innovative ways to fund the renovation and construction of new social housing have been made.

In particular, a pay for success model utilizing Low-Income Housing Tax Credits and reform to Right to Buy. The latter Michael Gove has now already promised to allow local authorities to be able to keep all the money from council housing sales for at least two years. Good news for councils and arguably a (short-term) progressive step from the Conservatives.

Labour’s future proposals will need to give people a stronger sense of security in their own homes. Solutions that provide a better setting in which to raise families. And one that can ensure the political football of housing policy moves beyond the councils and the third sector simply asking for more money, avoiding all too common knee jerk ham fisted “left-wing” regulation for regulations sake.

Labour must comprehensively review housing policy and take swift action.

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