Dr Rosalind Beck is a doctor of Criminology and a Conservative Party member in South Wales.
Sajid Javid, the Communities and Local Government Secretary, announced this week at the annual conference of the National Housing Federation (NHF) that there will be a total rethink on how social housing is managed in this country, promising a Green Paper on this in the coming months.
He stopped short of offering national funding for any new housing; focusing more on a pledge for current stock to be revamped and made into the ‘gold standard of accommodation’ it once was.
One hopes that the Green Paper leads to policies which improve what is now considered to be a very run-down sector; but surely a massive amount of investment will be necessary to achieve this and where will the money come from? Is it also a good use of money to spend vast amounts of taxpayers’ money on stock which may then be sold off to the lucky few at huge discounts through Right to Buy? Will social rents have to increase to help to pay for the expensive works? These are questions which the Green Paper must address, but which, I fear may prevent any progress.
This speech by Javid follows the Prime Minister’s statement this week that housing is also high on her agenda; yet, curiously, the Housing Minister is still not accorded full status in the Cabinet and it is the Communities Secretary who makes an important announcement on housing (if I were Alok Sharma I’d feel a bit demoralised right now). Surely this must change as must the Government’s left-wing housing agenda, which I critiqued in my article last week?
Housing policy is often ill-thought out. Only last month, Jacob Rees-Mogg said that stamp duty (which was increased last year) needs now to be cut ‘as a matter of urgency’ amid reports it is stifling the economy.
This is just one of the interventions aimed at taxing further and stifling the buy-to-let sector; moves which have baffled private landlords who expected a Conservative Government to be of the view that the private sector runs services and businesses more efficiently than the state sector; it seems to make an exception where housing is concerned.
It seems clear to me that if we are to arrive at innovative solutions to the problems we face then we need to challenge conventional wisdom – and not pass knee-jerk legislation with no concern for unintended consequences.
I would like specifically to challenge the conventional view that the social rented sector is, in the modern world, to be seen as a preferred option for the future of rented housing; this is premised on an outdated idealisation of the sector.
It has, nevertheless, been a regular theme of the National Housing Federation (NHF) in their reports and also, with David Orr, its Chief Executive, receiving significant coverage in The Times and also by the BBC this week, ahead of a speech to his annual conference, where he made a statement which many would accept at face value:
“We know we need more, better quality social housing. And yet, rather than putting public money into building the homes we need, we are propping up rents in a failing market.”
There are several problematic elements in this statement, which I will examine in turn as they contain false information, which I believe the current Government also accepts as a basis for policy-making.
Firstly, when was it decided that social housing is inherently ‘a good thing’ which we need more of? Where is the evidence?
Such a sweeping statement seems to me to be remarkable, even outrageous, just a few months after the Grenfell fire exposed huge problems with the sector (the life-threatening safety issues dwarfing any minor safety issues found in the traditional private rented sector (PRS).
To add insult to injury, social tenants’ voicing of concerns about the dangers they faced and also about other problems with their housing went unheard by those whom they might expect to advocate for them; disgracefully, the ideological position on the left has always been to ignore the plight of social housing tenants as it doesn’t fit the narrative of social housing: good; private housing: bad.
Little surprise then that the head of a body representing the social housing sector should attempt to brush aside these inconvenient facts as though the fire never happened and as though the other tower blocks in the UK also did not fail fire safety tests, and resume the now implausible narrative that it is the PRS which is somehow ‘failing’.
Not only this, but David Orr’s statement implied that there is something inherently wrong in paying housing benefit (HB) to private landlords; he gave a questionable statistic that private rentals cost the taxpayer £21 per week more in HB (no idea where the figure came from but I doubt it would have included the fact that landlords then pay tax on their profit and return this sum to ‘the taxpayer;’
something which social landlords don’t do). No-one questions the huge sums paid out in HB to social tenants.
The Labour MP, David Lammy had also attempted to challenge the payment of HB to private landlords in Parliament last week, asking:
‘…what steps the Government is taking to reduce… the total sum of housing benefit being paid to private landlords…’
The written answer supplied to his question, which must have pleased him, was that the Government has frozen Local Housing Allowance levels at their 2015 level and thereby, presumably reduced the HB bill.
Unfortunately, however, his question exposed his ignorance of what Housing Benefit (HB) is; to clarify, it is a payment to tenants in both social and rented housing who otherwise could not afford to pay for housing.
If it gets reduced, as he wishes, then the likely consequence is that the tenants will no longer be able to afford their accommodation. I wonder where he thinks they will live. He may assume that as benefits reduce, private and social landlords will reduce their rents; in fact, both sectors are more likely, given current high demand and fiscal pressures, to replace the tenants with other tenants with greater
means to pay.
There are additional problems with the social sector which bring into question its desirability; notably that social housing impedes job mobility and is therefore bad for the economy. When people access social housing they often feel disinclined to move for work. If they lose their job, there is then a strong push towards claiming benefits rather than moving and losing their ‘home for life.’
This is bad news not only for the economy, but for the welfare bill. When simplistic comparisons between rent levels in the social sector and private sector are made by bodies such as the NHF, they do not take into account these complicating cost implications.
On the other hand, in the private sector, tenants can simply move house by giving a month’s notice and continue along their career path, hopefully achieving their dreams and aspirations in the process.
As Sajid Javid said in his speech:
“An adult who is unable to relocate may miss out on a life-changing promotion at work.”
One might expect the Conservative Party, as the ‘party of aspiration’ to therefore promote the role of the PRS in this support of both hard-working individuals and of the economy as a whole, especially as such tenants are far more likely to then vote Conservative (if only the Conservative Party could once more be and present itself as the party of aspiration; it no longer unequivocally is).
The second part of David Orr’s statement contains another important notion which cannot be left unaddressed; namely, the idea that if only the money being paid to the PRS could instead be used to build social housing then the State would massively slash its HB bill. Jeremy Corbyn, amongst others, has also been fond of pushing the idea that the HB could somehow be allocated to a house-building budget.
Putting aside for a moment my suggestion that the further development of social housing is not necessarily the way to go, how would this process occur, if it were the way forward? Would the Government say: ‘Right, we are now going to use the money that would have gone on Housing Benefit to build new homes so we are stopping the payments and giving the money to builders instead’?
This would lead to mass evictions of millions of people. It is ludicrous.
On the other hand, not even a shake of the magic money tree could make billions of upfront capital appear and then magic up the millions of new properties in super-quick time.
When the Government entertains left-wing visions for the future it makes it clear it has lost the plot on housing policy. It needs to ask: does it want more of the life-limiting option of social housing?
The fact is that the private sector has also provided huge amounts of essential ‘social-type’ housing in recent years, but this contribution has gone largely unrecognised (except to slag off landlords if benefits are used to pay for it). It has had its death knell sounded however because, as I argued last week, providing affordable housing (often on a par with Housing Association rents) to the lowest-income tenants is no longer viable for most landlords.
So the likes of David Orr and David Lammy and many others will soon not be able to blame private landlords for the HB bill, as they move away from housing people on benefits.
I do find it supremely ironic though that:
1. Landlords are criticised for housing people who rely on state help to access housing, whilst:
2. They are begged to house those same people by local councils whilst:
3.They are accused by others of discriminating by saying they will accept ‘no DSS.’
Indeed, the relationship between local councils and landlords (as well as between national Government and landlords) has hit an all-time low for various reasons; notably the ‘we write the cheque, you sign it’ approach to local licensing (which the former Housing Minister Gavin Barwell pointed out was a pernicious development), the move by some councils to charge landlords huge sums in extra council tax if they have ensuites in shared houses (each room can then be taxed as though it were a separate house, leading to phenomenal bills) and also the advice councils give to non-paying tenants to remain rent-free in landlords’ properties during eviction proceedings, for as long as they can.
The Labour MP, Siobhain McDonagh even, scandalously, pointed out how, when she worked ‘at the coal face’ in Wandsworth Council she used to persuade landlords to take on homeless tenants and then, when the tenants were being evicted (this is invariably done for arrears and/or damage) she implied that they should remain after the Section 21 until the legal case was exhausted – costing innocent and decent landlords thousands in the process. In fact, private landlords lose about £9 billion each year in unpaid rent and damages.
When landlords leave the bottom part of the market the tenants who cause these losses will presumably be causing havoc elsewhere and no doubt it will be the State which picks up the tab.
These destructive approaches, epitomised by McDonagh and long prevalent on the left, have seeped into Conservative rhetoric and policy-making, with Neil O’Brien, the Conservative MP for Harborough calling this week in the Financial Times for a halt to the expansion of the PRS and a halt in new buy-to-let lending; a remarkably negative view of private enterprise for a Conservative and at a point when an increase in all kinds of housing is needed.
In such interventions, there is no recognition of the contribution private individuals have made to this country’s housing, with the so-called cottage industry of the PRS having commissioned new-builds, repaired decrepit housing, converted commercial premises into residential use and optimised the use of buildings, in particular through the development of mostly excellent quality Houses of Multiple Occupation. The housing shortage would have been so much worse without this.
The way forward now has to be for the Government to reverse its attack on the PRS, to unfreeze Local Housing Allowance to prevent a rise in homelessness, which will cost considerably more to deal with and to look towards incentivising the millions of private individuals who could be part of the solution to the housing shortage by building on small plots. Private landlords make up around 90 per cent of the PRS (the rest are corporates) and the Government needs to work constructively with them as allies and partners.
The private sector is ready and able to assist; the social sector is not and in any case, provides an inferior service which we do not necessarily need to see more of.
Even encouraging private individuals to resume developing new housing is not a solution in itself, however, given the disappearance of the small building firms and the shortage of material and skilled tradespeople; bringing on more of the latter should be treated as a national educational emergency – we need a change in the prevailing view that youngsters are failures if they don’t go to University; apprenticeships in all the building trades should be pushed and these seen as valued career paths to aspire to.
In sum, it is time for the Government to abandon its left-wing housing agenda, to stop the recent negative ways of thinking about housing, whereby it is all about fining and taxing and regulating and it is time to develop a new vision for positive ways forward. Unsubstantiated assumptions – mostly taken from the left – need to be discarded and a new Conservative path set.