Our great housing scandal gets worse


1:10 pm - October 21st 2010

by Jim Jepps    


      Share on Tumblr

The Comprehensive Spending Review spelled some extremely bad news in the housing sector. It’s a review that will cause hardship for many and homelessness for thousands.

It’s not simply that Osbourne scaled back the plans of building new affordable homes by 30%, there has been a general assault on rights and benefits that will lead to misery and homelessness.

The ending of Secure Tenancies for council house tenants is the end of an era. The post-war settlement that created affordable homes for working people was a massive attack upon one of the great divides in society – decent housing.

As council houses have been gradually sold off the stock has more and more become a backstop to house the most vulnerable in society rather than ensuring the majority have somewhere decent to live.

Those secure tenancies were there to give the poor stability and reassurance, a firm base upon which to build a life. These moves entrench the shift towards using council housing as emergency, short term accommodation – a shift already well underway with the breakup of council housing stock a the growing use of ‘Social Landlords’.

As the Telegraph reports there is also a new rise in rents; “new council house tenants face a steep hike in living costs, offering intermediate rents at around 80 per cent of the market rent.”

The attacks on housing benefit have been signalled well in advance and we know they will lead to both a new wave of homelessness and an exodus from high housing areas, like London, which already suffer from a lack of essential workers unable to afford high rents and/or mortgages. Indeed this feeds into the benefit cap of £500 a week per household as a family living in a high rent area will find it very difficult to cope with rising rents.

The Citizens Advice Bureau, in a hard hitting press release condemned the CSR and pointed to the that;

Housing benefit has already been cut back and the extraordinary decision to raise single room rate to 35 year-olds will lead to an explosion of homelessness, and will hit single working people on low incomes as well as the single unemployed. The measure to restrict contribution-based ESA to 12 months betrays people who have paid contributions all their working lives and become sick or disabled.

They told us that their top priorities for the spending review were simplification of welfare benefits, free to use government helplines and affordable housing. We welcome the announcement that the welfare benefits system will be simplified to make it easier to understand and navigate. In the meantime we urge the government to maintain and continue to improve service standards and ensure the new system is designed with the needs of service users in mind.“

The single room rate, which I’d not even been aware of until the CSR, will mean that under-35s will only be able to receive housing benefit if they are living in shared accommodation. So if you’re currently working for the public sector and living in a small flat a redundancy notice will mean you’re out on the street as well as out of work.

The National Housing Federation warned that 1.7 percent of jobs in the construction industry could be lost.

Remember kids,Nick Clegg says the cuts are fair, and I quote “the review is one that promotes fairness, underpins growth, reduces carbon emissions and localises power.”

    Share on Tumblr   submit to reddit  


About the author
Jim Jepps is a socialist in the Green Party and formerly blogged at the Daily (Maybe). He currently writes on London politics, community and the environment at Big Smoke.
· Other posts by


Story Filed Under: Blog ,Equality ,Fight the cuts

Sorry, the comment form is closed at this time.


Reader comments


@Jim Jepps

Interesting article but who is right? You or this LibDem tosser – http://bit.ly/bY6h0S

If you only qualify for the single (aka shared) room rate, you can get housing benefit towards the cost for whatever type of accomodation you rent, but it is capped at the single room rate.

3. Not a scrounger

Extending the single room rate to anyone under 35 is bad, very bad. Especially for those out of work due to illness. Tom’s right, in that you’ll still receive a certain amount of housing benefit if you live on your own, but it’ll only be the amount needed to rent a single room (in the 30th percentile of properties in your area I presume) – the rest you’ll have to top up yourself. They may as well give people magic beans.

It’s outrageous generally but for single sick and disabled people in particular, it’s even worse. If you’re ill, living in shared accommodation can be incredibly stressful. If you have a medical condition, this is private information that you might not want to share with strangers or even some friends. People you share a house with may or may not be understanding of your medical condition, or the needs you may have because of it. Some of these needs might be embarrassing. You may be mentally ill and having strangers around exacerbates this. You may be severely fatigued and have to cope with lazy housemates who don’t pull their weight around the house, thus meaning you have to do more. You may require a lot of sleep and have noisy housemates. The list of how sick and disabled people might be affected by living in a houseshare could be very long indeed.

It makes me wonder whether, if a person is only renting a room, social services would kit the house/flat out with disability aids, as they currently do when someone with disabilities is living by themselves / with a partner.

Those secure tenancies were there to give the poor stability and reassurance,

when what they really needed was mobility and an incentive to improve their lot.

Social housing blighted many lives, I’m afraid.

5. scandalousbill

Pagar,

The equating of homelessness to mobilty is somewhat bizarre. While there are no shortages of right wing apologists who will point out that social housing previously provided homes for workers in factories, mines, etc. that have now become defunct. And that while these industries disappeared the social housing provided rooted the discarded workers to the location, the “get on your bike” notion you allude to is totally inappropriate. The more apt slogan would be “get on the boat!” as most of thes jobs have relocated to the Indian sub continent, China or the Paciofic Rim nations.

The decine of these UK areas relates more to a combination of the decline of the UK manufacturing sector coupled with inefffective regional development and regeneration policies. It was a trend begun under the Thacher regime.

“Social housing blighted many lives”

Yeah, that’s why the waiting lists are so long for most on them there’s no chance of getting housed.

Re. the article:

It’s not just council rents that will go to 80% market rent and lose security of tenure – Osbourne clearly said ‘social housing’ so clearly it’s also Housing Association (and similar organisations).

It raises a question of fairness when a new tenant will be paying perhaps double the rent and have less security than their neighbour with the same landlord. How can that be fair?

The author also misses another key announcement – the end of ring-fencing of the Housing Revenue Account within councils. This raises the intriguing possibility of councils – particularly in west London – raising their rents up to the maximum and using the surplus income to pretty much eliminate the council tax across the whole borough.

Clearly the government intends any surplus rental income to be spent on more social housing but having removed the HRA ring fence, dropped local area agreements and abolished the Audit Commission not only do they have no way to enforce this, they won’t even be aware of it.

I can see the unemployed being blamed for moving away from high employment areas to areas of low employmet now that they can no longer afford to live in areas where employment levels are still high.

Kevin

I said it before when these proposals were first being drafted: if the Gov had plans to clamp down on awful private landlords and letting agencies I’d have slightly more sympathy with their plans. As they make no such provision these attacks on social housing look like nothing more than yet another shot in the class war being waged upon the poor by this wealthiest of governments.

“an incentive to improve their lot.”

Like the idea of means testing?

Right, so I’m in a council house. If i get promoted at work and earn a pay rise, I become no longer entitled to live there as it is means tested.

That is some incentive for earning more isn’t it?

10. the a&e charge nurse

[9] you live in a council house – one of the nouveau riche, eh?

This business of new social tenancies to be let at 80% of the market rent is an odd one. Osborne implied in the announcement that all new tenancies would be let at this level. The CSR itself simply said that landlords would have the flexibility to raise rents to a level between target rents and market rents.

Not that these two positions are mutually exclusive but the CSR document seems incremental wheras Osborne’s would be, well, er.. mental, I suppose.

Roughly 75% of all social tenants have their rents paid through HB and the figure for new tenancies is higher still (because if you have sufficient income not to need HB, you’re unlikely to get a social rented tenancy in most areas). So, if the rent on all new tenancies were raised to 80% of the open market rent then almost all of that extra rent would need to be paid by HB. However, look how much additional HB has been set aside to fund this change and you find, that the answer is not a penny.

It looks as though what the coalition is trying to do is to say that, if you are allocated a social tenancy but could afford to pay 80% of the market rent, your landlord could charge you rent at up to that level.However, if you could afford 80% of the market rent, you wouldn’t get allocated a home at all in most cases.

Osborne appears to think this new wheeze will raise lots of money to be funnelled into the provision of new housing. In practice, however, the only areas where people get given council tenancies even though they can almost afford market housing are those where there isn’t much of a shortage of affordable housing.

That is, it won’t raise much money at all and the only places where any money is raised will be places that don’t really need new affordable homes.

This is like being asked for directions and saying “well, I wouldn’t start from here…”

12. Mike Killingworth

The likelihood is that the target for the new “80% rent” homes will be missed – a lot of Councils will think that they may have other things to do than create this class of tenant (I’m assuming that, in line with the general tenor of the policy) that it will be a power not a duty. In particular, if Labour refuse to endorse the policy (and why should they?) the temptation to “sit it out” and wait for fairer arrangements under the next Government will be strong.

There is certainly room for think tanks to look at housing finance more generally, including all tenures, as no one pretends that the previous arrangements were perfect, either. FWIW I think we could do worse than follow the Cuban model where your housing cost is a %age of your income – or probably two % rates, one for renting and one for owner-occupation. If your actual housing cost was less, you’d pay a tax of the difference (this might be packaged as an investment bond redeemable against your care costs when elderly), if more (unless you were underoccupying by, say, more than one room) you’d get a rebate.

Granted, I recognise that the government might be mulling a radical change to allocations policy which they haven’t yet told anyone about. They might say, “no job, no social tenancy” – it’s possible but, without reppealling the statutory duty on local authorities to house the homeless, it wouldn’t make a lot of sense. And, since that would require primary legislation which wouldn’t have a cat’s chance in hell of making it through parliament, it doesn’t seem likely.

I think it’s a cock up but, given the tin ear the coalition has so far shown in sorting out housing policy, I might be wrong.

14. Mike Killingworth

If, however, the “80% rent” policy works, the temptation to marketise Housing Associations will be strong.

Right, so I’m in a council house. If I get promoted at work and earn a pay rise, I become no longer entitled to live there as it is means tested.

That’s exactly why social housing is so pernicious. It is not means tested and you will stay there even if you win the lottery..

How is it fair to give you a house for life at a subsidised rent when that subsidy is effectively being paid for by your neighbour who is a home owner or is renting privately?

This is how the current system of social housing distorts the market.

@12

Have you seen something I haven’t about a target for this new form of tenancy?

15
The existence of social housing might distort the market but the ‘right-to-buy’, having depleted the housing stocks, has meant that more HB is being paid out for the higher rents paid to private landlords by unemployed people and those on low pay.
So we are all still subsidizing that person, if they are unemployed or on low pay, but by many thousands of pounds per year extra.
The fact is that most people who rent a council house, and then find themselves to be better-off financially, either buy the house or buy on the open-market. In fact there are cases where people have bought their council house and then let it out privately.

@ jojo

more HB is being paid out for the higher rents paid to private landlords by unemployed people and those on low pay.
So we are all still subsidizing that person, if they are unemployed or on low pay, but by many thousands of pounds per year extra.

And that distortion of the housing market is wrong too but will be corrected when HB is abolished and becomes part of a universal benefit.

19. scandalousbill

Pagar,

Again I do not understand your reasoning. For your point to be valid the assumption of a robust private housing market must be in place. There are very few indicators that this is so.

Further, if you consider the ConDem/Boris the menace movements to extracate the HB claimants from the more well heeled sections of London for the benefit of selected landlords and developers, your point becomes more curious.

It seems to me that the distortions you mention pertain more to the induced shortages in social housing predicated by the CSR. From what I hgave read there seems to be no distinction made between a “ground up” new build and the acquired property from a third party in the definition of new housing starts as introduced by the ConDem CSR.

Given the large contractions in local council funding, it would seem disposal of such assets would be likely on a national basis, to create a situation where new starts and outsourced starts could compete head to head under full legislative compliance. The most basic reason is that councils can sell under “greater flexibilty” and build as per CSR mandate.

The market distortion then occurs with an influx of properties, with a subsidized cost base competing with private, mortgage holder properties in a market where buyers, by virtue of dwindling mortage availibilty, are a scarce commodity.

@ sb

For your point to be valid the assumption of a robust private housing market must be in place. There are very few indicators that this is so.

Whether or not the market is robust, it is a market. As is the rented sector. What skews everything is when subsidised housing distorts both of those. There will always be a ‘shortage’ of social housing no matter how many are built because it is better value because of the subsidy.

The market distortion then occurs with an influx of properties, with a subsidized cost base competing with private, mortgage holder properties in a market where buyers, by virtue of dwindling mortage availibilty, are a scarce commodity.

Agreed, but that bullet has to be bitten.

The real key to solving housing needs is to free up land to build more- nobody promised property owners that buying a house was a one way bet.

21. Mike Killingworth

[20] If you want to have Pagar’s religious faith in markets, you also need to have a religious faith in market failure. Why isn’t Pagar suggesting the evicting of all social housing tenants and the sale of their homes? Why does he think that the Tories promised to build more subsidised housing than Labour at the 1951 election?

As for his last paragraph, perhaps he’d like to explain why the last Coalition government we had (in the War) signed off the land-use planning system we have to-day.

@ Mike

Why isn’t Pagar suggesting the evicting of all social housing tenants and the sale of their homes?

Social housing should be available only as a temporary backstop for those that need it.

Why does he think that the Tories promised to build more subsidised housing than Labour at the 1951 election?

They probably wanted to win an election but they were misguided.

perhaps he’d like to explain why the last Coalition government we had (in the War) signed off the land-use planning system we have to-day.

Perhaps they wanted to defend their country estates from encroachment by the teeming masses?

In any event, they were wrong to do so.

23. Mike Killingworth

[22] Logically, those are the only replies to my questions that you could make, Pagar.

Life, however, is a good deal messier than that, as you will surely discover if you live long enough.

Unfortunately for Pagar and his fantasy world all this will actually lead to is homelessness, misery, suicides and crime.

‘Social Housing should only be a temporary backstop for those that need it’

Says who? No it shouldn’t. We have social housing because before it workers lived in disgusting slums and whilst some council estates have become trapped in various kinds of poverty, many people do work in council houses and given the disgusting price of a home in this country, many educated young people already saddled with tens of thousands of pounds debt would kill for an affordable one bed flat.

Social Housing came about in the first place because the market cannot and will not provide decent housing for the people. A mass of people are basically going to end up living how economic migrants have been living, stuck in rachman like HMO’s open to abuse and with no real opportunity to move on.

The reality of the situation will be:

>Buying a home will simply be out of reach for anyone without rich parents and an above average income (were pretty much already here on this one)
> Social Housing will not be able to alleviate this problem for the working poor as the earnings rate set is highly likely to be well below the level of earnings needed to rent privately or buy and still be able to clothe and feed oneself to a reasonable standard.
>This social housing now only for supposed ingrates will have rents set that HB in many places won’t cover for anyone under 25 at least.

Only a lunatic or a market fantasist could think this is a good thing.
Why even pay tax to a government that provides neither clean free drinking water or is able to home is people properly.

Much more sensible would have been to have simply restricted the length of time one can claim HB in a given period, a realistic timeframe of 6 months would suffice the aim being that social housing (apart from taking into account the sick) is in really for working people on low wages, which is what it was designed to be in the first place, not just somewhere for the utterly destitute, the irony is that these policies will push many of the former into the latter category.

That this comes from the cabinet of multi-millionaires is simply upsetting. We have psychopaths in government that much is clear.

25. Richard Lock

Whilst I agree with the general thrust of the argument and also that something just has to be done, what I do object to is politicians indulging in this sort of ‘campaign’.
All political parties – and I do include the Liberals- are just as culpable for the current situation.
I firmly believe that the Labour Party bears a huge amount of responsibility, after all, they have presided over a healthy economy and allowed itself to become
so incompetent that it had no money left when finally ejected from office.
They had a golden opportunity to do something really effective for the social housing sector but in the end caused huge disruption through the Housing Options policy.
Sorry, do not have time to back every single argument here as I am sure you will appreciate but the costs of going through the Housing Options exercise – backed by the policy of severely restricting Councils ability to spend proceeds from house sales – and denying Councils the opportunity of borrowing the money, effectively torpedoed Council Housing across the country. Housing Associations have money to spend but it is at a greater cost than should have been the case.
Yes, Housing must be a priority but there are so many excuses/reasons used to prevent a national policy which there really needs to be. Too many people in the country, too little investment in housing (the amounts HA’s might claim are pathetic) and worst of all the assertion that we need hundreds of thousands of new homes when there are more than that lying empty. The appalling lack of care for those truly unfortunate people – some mentioned below – goes hand in hand with
the ignorance and self-interest of politicians, landlords and landowners. Ask yourself who is going to win!!

26. Richard Lock

Tight rules??? So tight that you cannot accept proper criticism….I did not swear,
I was not abusive, I did not ‘rant’ So why was my comment removed??????
It proves that politicians are corrupt.


Reactions: Twitter, blogs
  1. Liberal Conspiracy

    Our great housing scandal gets worse http://bit.ly/agIrDc

  2. Finola Kerrigan

    RT @libcon: Our great housing scandal gets worse http://bit.ly/agIrDc

  3. Oxford Kevin

    And another fantastic piece by @Jim_Jepps on housing: http://bit.ly/agIrDc

  4. Pucci Dellanno

    RT @libcon: Our great housing scandal gets worse http://bit.ly/agIrDc

  5. richardbrennan

    Our great housing scandal gets worse | Liberal Conspiracy http://t.co/kcGIgRO via @libcon

  6. Pamela Heywood

    Our great housing scandal gets worse http://twurl.nl/neff2x

  7. On Housing Benefit Cuts, British Public Reveals Shocking Lack of Empathy and Compassion | Andy Worthington

    […] live in shared housing. The government has now raised the age to 35, which prompted Jim Jepps of Liberal Conspiracy to state, “So if you’re currently working for the public sector and living in a small flat […]





Sorry, the comment form is closed at this time.