Opinion: The housing policy jigsaw – identifying the pieces

Yesterday, I suggested that it would be valuable to piece together the housing policy jigsaw in order to reflect on the picture that emerges. Policy in this field speaks directly to our fundamental values -freedom, equality and community – and how they are to be reconciled. My aim today is to identify more fully the key pieces of the current policy jigsaw.

So what can we make of the way policy towards housing is developing?

The key proposals on social housing reform in the Local Decisions consultation paper were heavily trailed. Many are embodied in the Localism Bill. They have been discussed in a number of posts here at Liberal Democrat Voice (for example, here and here) and beyond. The proposals are being pushed towards the statute book with what appears unseemly haste (as I discuss further here).

The idea of flexible tenancies has attracted most attention. These would allow social landlords to move away from offering secure/assured tenancies. Instead they will have the power to offer fixed term tenancies of two years or more. There will be the possibly that the landlord can choose not to renew such a tenancy for a range of reasons. These include the situation in which a household’s economic circumstances have improved to the point where they are deemed no longer to ‘need’ the property. The other major innovation is the proposal for ‘affordable’ rents in the social rented sector, set at 80% of market rents. Tenants unable to afford these rents will be assisted by Housing Benefit. The increased revenue streams generated by higher rents are intended to allow the development of further affordable housing, although that will require that lenders take a positive view on the long term future of Housing Benefit.

It is also a policy based upon assumptions about the relationship between social and market rents – affordable rents will generate more revenue because they are higher than social rents. In fact, since the policy announcement the professional press has reported that a bit of a rethink is already occurring. It has been pointed out that the relationship between social and market rents is rather different in parts of northern England. Of course, had the Coalition asked someone who knew something about social housing before they pronounced on the matter it would have been possible to have avoided that rather obvious pitfall.

Another significant component of the proposals is to change the way in which local authorities are able to discharge their homelessness duties. Instead of the current offer of a secure or assured social rented tenancy, local authorities will be able to discharge duty into a 12 month tenancy in the private rented sector. A similar manoeuvre was undertaken by the Major government but reversed by the first Blair government.

We can layer on top of this the fact that the Coalition are handing down to local authorities swingeing budget cuts which are likely to percolate through to cuts in the Supporting People budget. The net result of these cuts will be that reductions in support will make it more difficult for some households to continue living independently. At the same time voluntary sector services such as debt advice are under increasing pressure.  This would appear to be an explosive cocktail: more homeless households being housed in the private rented sector but weaker social support for those who are unable to live fully independently. We might well be about to revisit the “revolving door” problem.

Less well explored are Local Decisions’ proposals to address the problem of empty homes more vigorously and to address under-occupation in the social rented sector. The latter include proposals to restructure the social housing allocations system ostensibly to make it easier for existing tenants to trade down to smaller properties, thereby freeing up accommodation for households on the waiting list. There are also rather vague proposals to consult on clarifying the definition of overcrowding. This could bring some much needed clarity, but might auger something unpleasant, if we place any weight on the comments made by Lord Freud when he strayed into CLG territory (as discussed here).

Similarly, the proposals for reform of the Local Housing Allowance in the private rented sector have been discussed previously on Liberal Democrat Voice (for example, here) and elsewhere (including by the Work and Pensions Select Committee).  The Government’s express aim is that the ‘changes to the Local Housing Allowance arrangements will both significantly reduce the levels of rent met by Housing Benefit in expensive areas and apply downward pressure on expenditure more generally’. The headlines have been dominated by the proposal to cap weekly entitlement to Housing Benefit, which will have implications for very high cost areas – primarily London , and the proposals to cut 10% from housing benefit payments to households who have been unemployed for more than 12 months. The former measure could well have a severe impact upon a relatively focused group of households, while the latter could be of much wider significance and has little obvious justification other than vindictiveness.

Yet, as the Impact Assessment for the changes to the Local Housing Allowance (LHA) makes clear, the real savings in government spending are expected to come from tying the LHA to the 30th rather than the 50th percentile on local reference rents, the subsequent linking of LHA uprating to the CPI, and from the removal of the £15 excess for those tenants able to secure accommodation at a rent below the relevant LHA level.

Recent changes to Housing Benefit also include more focused measures such as curtailing the Housing Benefit entitlement of any social housing tenant deemed to be significantly under-occupying their property and changing the adjustments for (non)dependant members of a household.

Then we have the planning components of the Localism bill (discussed in more general terms here). The key moves here are the dismantling of much of the strategic planning structure and the devolution of key decisions to local level. There will be positives from moving decision-making power to a more local level, but there is always the risk that such powers can be used to close communities, preserve privilege, and exclude those deemed to be different and undesirable. The Bill follows in the wake of the earlier policy decision to remove local housebuilding targets, which has already led to accusations of resurgent NIMBYism in some localities. Articulation of such concerns and examples of where the proposals are already beginning to bite are not difficult to find (for example, here and here).

These are the pieces of the jigsaw. The question is whether, once assembled, they are likely to reveal a positive picture for the development of the housing system, or something more problematic?

Alex Marsh is a Liberal Democrat member who blogs about housing and other social policy issues at alexsarchives.wordpress.com. This is the second of a four part series which we are running from Alex this week.

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