Social Housing White paper – no more money for council housing

Martin Wicks gives an initial assessment of the Social Housing White Paper

The so-called Social Housing White paper, instead of being as wide-ranging as previously promised has been turned into a “Charter for Social Housing tenants”. The core of the document is a 7 point Charter which sets out “what every social housing tenant should expect”.

1. To be safe in your home. We will work with industry and landlords to ensure every home is safe and secure.

2. To know how your landlord is performing, including on repairs, complaints and safety, and how it spends its money, so you can hold it to account.

3. To have your complaints dealt with promptly and fairly, with access to a strong Ombudsman who will give you swift and fair redress when needed.

4. To be treated with respect, backed by a strong consumer regulator and improved consumer standards for tenants.

5. To have your voice heard by your landlord, for example through regular meetings, scrutiny panels or being on its Board. The Government will provide help, if you want it, to give you the tools to ensure your landlord listens.

6. To have a good quality home and neighbourhood to live in, with your landlord keeping your home in good repair.

7. To be supported to take your first step to ownership, so it is a ladder to other opportunities, should your circumstances allow.

Whilst the government feigns concern at the stigmatisation of ‘social housing’ and its tenants, it fails to recognise that it is the worship of home ownership, dating from Thatcher’s 1980 Housing Act, and the introduction of right to buy, which has created the conditions in which, instead of council estates being mixed communities as they used to be (tenants who were school teachers and school cleaners, clerical workers and factory workers), they have become homes for only the very poor. The way to tackle stigmatisation is ultimately to stop the haemorrhaging of council housing stock and to increase it such that it is not treated as a lesser tenure than home ownership.

I’ll look at the infamous ‘tenant engagement’ in a separate article. The way that tenants are treated by their landlords reflects the power relationship. The landlord has power over the the tenant. The tenant has no power unless they can organise collectively. In the case of housing associations tenants on the board have a legal duty to the business. They are not therefore representatives of the tenants subject to their control. Council tenant reps, even where they are elected by the tenant body, tend to have to struggle for ‘consultation’ to be more than ‘going therough the motions’. Good and timely information is important but it is not the same as having a real influence on decisions made.

I will look at ‘tenant engagement’ in a separate article.

Decent Homes Standard

There are some important issues here. For instance the government is proposing a review by Autumn 2021 of the Decent Homes Standard which was introduced by New Labour. The standard sets out four criteria for evaluating decency – it requires that homes are free of serious hazards, are in a reasonable state of repair, have reasonably modern facilities and services such as kitchens and bathrooms, and have efficient heating and effective insulation. The standard is not actually that high and needs improving but there would be a cost attached to doing so. For instance renewal of components such as bathrooms, kitchens and so on, are given a standard lifetime; 15 years for a central heating boiler, 30 years for a bathroom, 40 years for a kitchen, 50 years for a roof and so on. Obviously some components will need renewal before these rather long timescales. But shortening the period of renewal will cost more money.

The White Paper says that “If the evidence demonstrates that we need to revise the Standard, we will consider the strategic, economic and management case for new criteria as a second stage of the review.” However, it says “It is important that any changes to the Standard are affordable and deliverable.” This looks like a get-out clause. You cannot have a policy of ensuring everybody has a good quality home and then say, sorry, we can’t afford it.

In fact the White Paper does not even address the finances of local housing revenue accounts, which are underfunded as a result of the new finance system introduced in 2012, ‘self-financing’, and government policies such as the four year rent cut. You cannot seriously consider ensuring good quality homes without assessing the current condition of the stock and the estimated cost of bringing them up to standard and maintaining them. For council homes this requires looking at HRA finances.

Back in 2018 the original Social Housing Green Paper included a review of the DHS. At the time ARCH (the Association of Retained Council Homes) made the point that the amount of so-called debt that councils were given in 2012, under the ‘debt settlement’, was in part based on the Decent Homes Standard as it was then. John Bibby, of ARCH said:

“The problem comes with resources. The self-financing settlement of the housing revenue account was predicated on local authorities having the income and borrowing to deliver and maintain the standard over a 30 year business plan period, and if there is a significant change that could make those plans not sustainable. The government would need to revisit the settlement if it did make major changes.”

We have long argued for cancellation of this bogus debt which is the result of manipulation by the Treasury rather than of actual borrowing. An improvement of the DHS, which is certainly necessary, underlines the need for debt cancellation since council HRAs do not have the resources to maintain the current DHS, never mind an improved one1.

The mythical ownership ladder

The White Paper gives no consideration to the housing crisis and the shortage of ‘social housing’. It’s main emphasis remains on home ownership (what Boris Johnson called ‘liberating’). Although point 7 provides the caveat “should your circumstances prevail”, they want to give as many tenants as possible the right to get on that famous ladder. It’s always been a crass analogy. You can always fall off ladders .

The tenor is set in the Executive Summary:

“From the 1980s, social housing became not only a crucial safety net for those in need, but also, for many, a vital step on the ladder towards home ownership. The introduction of the Right to Buy and shared ownership enabled millions of social tenants to buy a home of their own. We want to support even more social housing residents to own a home. This is why we are introducing a simpler and fairer shared ownership offer, allowing people to get on the first rung by buying only 10% of their home – and why we have introduced the Right to Shared Ownership, which will enable people living in rental homes built under the new Affordable Homes Programme to purchase their own home through shared ownership.”

With their Affordable Homes programme, 2021-6, of 180,000 homes, half will be “affordable ownership” and the rest reputedly affordable (up to 80% of market rents) or social rent. However, over the last five years, of all the “affordable housing” built with the help of government grant from Homes England, less than 5% have been social rent council homes (see Table below).

It appears that the government is proposing to introduce a new Right to Shared ownership for tenants of “most” newly built housing associations homes (“who live in new grant funded homes”). The minimum stake is being lowered from 25% to 10%. These lucky people will be able to increase their stake by instalments of as little as 1% a year! Shared ownership includes the obligation that the owner/tenant (they pay mortgage and rent at the same time) carries out repairs themselves. However, the government is proposing to introduce a “10 year repair free guarantee” though this will only cover “major” repairs.

It has also just been announced that the government’s new Help to Buy scheme begins on December 16th. A report by the National Audit Office last year found that 63% of people who have bought homes with the scheme could have afforded to buy one without recourse to it.

The government refuses to listen

The government is clinging to its ideological straight-jacket of worship of home ownership. It continues to ignore even its own councillors in the Local Government Association (LGA). The recent report commissioned by the LGA and other organisations called for government funding for a programme of 100,000 council homes a year (see the Labour Campaign for Council Housing media release). With an expected increase of evictions from the private rented sector in the new year, councils will be unable to handle the number of households knocking on their door because of homelessness. They do not have the finances to manage a big increase in the number of people they have to place in temporary accommodation because, unlike the previous system where the rent for each household placed was covered by central government, they only receive a fixed sum regardless of how many households they have to place.

Given the economic impact of the pandemic, with a likely spike of unemployment, the shortage of council housing will be even more acutely felt. Private lobbying of the government by the LGA will not shift them. What’s required is a campaign drawing together all those organisations which understand the need for a return to a large scale council house building programme. Councils should pass resolutions along the lines of demanding central government funding for building 100,000 social rent homes a year. MPs should be put under pressure.

The White Paper offers no extra money for council housing. What is available is largely provided for “affordable rent” and for shared ownership and other forms of “affordable home ownership”. From 2010 to 2019 the number of council homes in England fell by 199,000. There can be no resolution of the housing crisis without a return to large scale council house building.

Martin Wicks

November 23rd 2020

Affordable homes part funded by Homes England

Affordable RentSocial RentIntermediate RentAffordable home ownershipTotal Affordable

1See The Case for Cancelling HRA ‘Debt’

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s