Labour’s housing policy review – please respond!

The Labour Party is conducting a review of its policy for social housing, and has put out a call for evidence. The deadline for responses is 31st January, and responses must be sent to socialhousingreview@labour.org.uk

We have published the text of the Review as a separate page here

You may also like to read this detailed constructive critique of Labour’s housing manifesto, with additional suggestions, here

If we are to get a really decent Labour policy on housing and related matters such as benefits, it is vital that as many people respond as possible – Labour members or not. As Hands Off Our Homes we have drafted a response which you may want to read through and use as a basis for your own submission, or just for some background information. Or you may want to focus on certain areas about which you have personal knowledge or strong feelings. There is no need to answer all the questions or to write at great length. Some points we think need to come out most clearly include:

  • ending the fetishisation of private home-ownership, and instead investing in making council housing a desirable tenancy, and available for anyone who wants it

  • direct investment, in-house building and services, and accountable management rather than privatisation, outsourcing, PFI schemes, ALMOS etc.

  • we need to build 150,000 council houses to rent each year for the foreseeable future – fund this, not public subsidies for builders which only serve to push house prices up

  • we need to reverse all benefit cuts which make even council housing unaffordable

  • tenants need a democratic and independent voice, including funding for independent tenants associations and full ballots on all proposals for estate regeneration etc.

General Comments on the Review

The first, and one of the most important things to say, is that confining the review to social housing already introduces biases which we would want to challenge. Yes, we definitely want to see social housing (council housing to be specific) as the central plank of housing policy, but we cannot discuss the social sector, private rented sector and homeowner sector separately. Indeed, one of the main problems for social housing has been the fetishising of home-ownership (the Thatcherite “property-owning democracy”) which unfortunately the Labour manifesto for housing uncritically reproduces in its introduction.

This has led to the catastrophic loss of almost 2 million council homes over the last 38 years through publicly-subsidised “right-to-buy”. In addition, billions of pounds of public money has been and is still thrown at corporate builders through schemes that at most make it a little easier for a select few to buy a home (or “get on the housing ladder” as it is ridiculously termed). These are schemes which actually make the problem worse by inflating house prices whilst doing nothing to get more homes built. The whole ideology of home ownership has fed into the marginalising and stigmatising of social tenants which in turn helps to create an ideological “justification” for under-investment in social housing, the downward spiral of residualisation, and punitive benefit cuts. Cuts to benefits are major drivers of the massive increase in homelessness; whilst councils, and any other housing providers with a genuinely social remit (see below) are having increasing difficulty meeting their obligations to house those in need, because of the level of uncollectable arrears cause by cuts such as the bedroom tax and the household benefit cap.

It is looking at the whole picture which makes clear the benefits of a massive programme of council house building. As well as being the cheapest, most direct and most accountable way of providing the decent, safe and sustainable homes needed, such a programme would help to reduce private-sector rents and house-prices, bring down the housing benefit bill and enable a return to the idea of council housing as a tenancy of choice for anyone, not just a safety-net for the most disadvantaged and vulnerable as it has come to be seen. Investment in council housing is about moving towards a positive vision of strong mixed communities, empowered tenants, and housing well-planned in relation to other progressive planning objectives (eg reducing commuter traffic, sociable uses of public space, things like urban food-growing and local publicly or co-operatively-owned energy schemes).

Beyond this, the very use of the term “social housing” serves to obscure important issues, for example to do with governance and rights and empowerment of tenants (council homes and housing co-ops are very different to live in than units let at a “social rent” within a private development!). The inclusion of “Private Registered Providers” (PRPs, previously called housing associations) in the definition of social landlords is increasingly inappropriate and unhelpful given the drift towards abandonment of social remit in lettings policies and rent-setting, away from building homes for social rent, and away from any form of democratic consultation with tenants over policy. Big mergers have accelerated the move towards corporate business models, elimination of tenant involvement and lack of accountability to tenants and communities. Not all housing associations are bad landlords, but even where there is a sincere intention to provide for social need, the balance of incentives is towards increasingly profit-led, not tenants-centred, social needs-led business models.

Housing associations have received over £20 billion of public money over the last decade, yet have failed to build on the scale we need – and most grant has gone to pointless shared ownership and so-called “affordable” housing which is nothing of the kind! In the Tories’ 2017 White Paper, PRPs are identified as potential major players in current government moves toward increased corporatisation of the private rented sector and privatisation of “social” renting.

Questions 1. 2. 3. How did we get to where we are? What are the most important decisions made in recent decades for social housing – good and bad? (Tory and Labour)

  • Bad: Thatcher’s Right-to-Buy in 1979 councils not allowed to use receipts to replace lost stock. In 2012 the discount was increased to £75,000 or 60% of market value. As of 2016 RTB had caused the loss of 1.82 million council homes in England alone since 1979, of which 40% were by then in the hands of private landlords (House of Commons, 2016).

  • Bad: Labour govt generally continued movement towards privatisation and stepped up stock transfer targets. Decent Homes Standard (good, but not good enough, eg standards of insulation/energy-efficiency often still abysmal) promised to tackle a backlog of underinvestment and disrepair, to modernise every council home. But funding for improvement work was made conditional on privatisation, via stock transfer, PFI or an Arms Length Management Organisation. ALMOs have proved incompetent and unaccountable. Many council estates are suffering the consequences of PFI in the form of substandard work, unresponsive and unaccountable management and maintenance, along with additional service charges and higher rents to pay off the corporate loan sharks profiteering under PFI schemes imposed without full and fair consultation of tenants.

  • Bad: Localism Act of 2011Housing Revenue Account devolved to local authorities; a cap on borrowing prevents any significant newbuild; councils were allocated “debt” relating to capital investment in existing stock. Repayment to central govt has already been exceeded by around £8bn, yet Local Authorities are still paying. Council rents are subsidising the tax-payer, not the other way round!

    – Large-scale stock transfer to housing associations to enable “debt” write-off. Shifting grant-funding to housing associations has been catastrophic for levels of newbuild and new social homes: for example, in 2015/16 HAs built only 40,000 homes, and only 14% of them (5,464 homes) were for social rent. The remainder were “affordable homes” at up to 80% of the market level (18,592), shared ownership (8,767), and homes for private sale (5,205)

    – Introduction of the deliberately deceptively-named “affordable” rent of up to 80% of market rates, which rapidly began to replace genuine social rents and in Leeds would be a good 30% higher than a comparable council rent and around 20% more than a typical “social” housing association rent.

    – Ended the right to secure tenancies. Means-testing and vetting creating fear that a change in circumstances could mean eviction.

    – Local authorities allowed to restrict who can be eligible for social housing, and definition of homelessness narrowed, obscuring the scale of the burgeoning problem and shutting more vulnerable people out of council housing.

    – Local authorities can discharge their responsibility to house homeless persons by offering private-sector tenancy, some of which are grossly inadequate (eg tiny squalid bedsits) but by being housed then lock the person out of council housing

  • BAD: Housing and Planning Act 2016allows means-testing of rents at the provider’s discretion, likely be taken up by PRPs (housing associations) in particular. Intends to entrench residualisation of council housing to those with the very highest “social need” and reinforces the false public belief that council tenants are being “subsidised”

– Right to Buy extended to PRPs, with discount funded by forcing councils to sell off their most valuable council houses and remit proceeds to the treasury. This is still being piloted, but again the intention is clearly to reduce council housing (and social housing in general) to the most marginal possible position.

– “Permission in principle” to develop on “brownfield” sites – could include existing council estates.

– Secure council tenancies to be phased out, with mandatory reviews of new tenancies every 2 – 10 years (depending on circumstances), means break up of communities and further residualisation of the tenure – an increase in income or change in household composition could mean losing one’s home.

  • Problematic: Labour’s 2017 manifesto is a major row-back on what supporters had been expecting based on what Jeremy Corbyn had said previously. The manifesto says 100,000 “affordable” houses “for rent and sale” by the end of a five-year termto include part-ownership, housing association as well as council. This is manifestly inadequate and nowhere near the 100,000 council homes a year promised initially. Even if the new “affordable” homes were all council houses, this is not even enough to replace the 174,000 net loss of council houses since 2010.

    – The right-to-buy would be suspended only if councils were unable to show that they had viable plans to replace the lost homes – but that would still prevent them building the thousands of additional council homes which are needed.

    – The Manifesto says that Labour will “begin the biggest council housing programme for at least 30 years”. However, the number of council houses built in England 30 years ago was only 16,000.

– Shadow Housing Minister John Healey has said: In real terms, grant funding in 2009/10 was over £4 billion. Average annual funding under Labour would be restored to around this amount.”

But this is entirely inadequate: the grant which was made available by New Labour financed the three-year National Affordable Homes Programme of 2008-11, providing not much more than £1 billion a year. Little of this went to council house building: In 2008-9 there were 830 council homes built in the entire UK. In the following year it was 780 and in the next 1,760. Some of the programme was delayed and carried over to the period of office of the coalition government. Yet the highest figure reached, in 2011-12, was only 3,000 council homes. Most of the money went to housing associations which in three years built only 96,000 homes.

  • Some good stuff in the Labour manifesto:

– “Affordable rent” concept to go, replaced by “Living rent” meaning rent no higher than a third of average net local incomes.

– lifting the borrowing cap for Housing Revenue Accounts

– restore statutory secure council tenancies

– caps on private rents, and “homeowner guarantees” to improve protection for unemployed or low-paid homeowners

– legislation to protect leaseholders from unfair ground rent increases

and at conference Corbyn said that no major regeneration schemes (such as those which are decimating the London housing stock and resulting in mass “social cleansing”) would be able to go ahead without proper tenant consultation.

  • Catastrophic: Benefit Cuts – a series of cuts which remove the principle that rent is always affordable for social tenants if reliant on benefits (and reinforce the myth that benefits are generous and that claimants are scrounging).

– some of these only affect private-sector tenants; however, these cuts are a primary cause of the soaring rate of homelessness creating even more urgent need for council housing – eg, lowering of Local Housing Allowance to meet 30th percentile of local rented housing, down from 50th percentile; the Shared Accommodation Rate for single people, from 2013 applied to claimants under 35; benefits (including housing benefit) frozen for 4 years.

– Since 2013 the bedroom tax has affected hundreds of thousands of social tenants; Also in 2013, the Overall Household Benefit Cap was introduced, lowered in 2016/17 to £20,000, or £23,000 in London. The cap means many families – even smaller and average-sized families – are unable to cover their rent even in the social sector. Larger families are left with little or no money at all towards their rent. The majority of those affected are single parents of young children and people with disabilities/chronic sickness. Some PRPs and even councils are resorting to affordability assessments and rejecting potential tenants affected by the Cap. Moving to Universal Credit leaves 90% of claimants in arrears. Councils and other providers are left with major rent revenue shortfalls, and councils have to meet the cost of resultant homelessness.

– For the sake of both desperate tenants and social housing providers, we must fight for immediate repeal of the bedroom tax and Benefit Cap, and a moratorium on the roll-out of Universal Credit.

  • Bad: 2017 budget offered a derisory £2bn for “affordable” housing (against £10bn for Help to Buy). Social rents to rise by CPI+1%pa from 2020, supposed to help social landlords but actually only benefiting housing associations who restrict lets to non-benefit households, whilst pricing unemployed families out even further due to interaction with benefit cuts (especially, bringing more in scope for benefit cap, and with even larger shortfalls)

  • Bad: February 2017 Housing White Paper was a manifesto for corporate building for let

Definition – what should ‘affordable’ mean?

4. What vision and role should social housing have under a Labour government?

5. Does social housing need rebranding? In name, in concept, or both?

6. What should we mean by social/affordable housing, both to rent and to buy?

Basic principle of tying rents (and mortgages) to incomes rather than to market rates is a good one, so that the term “affordable” can mean no more than one third of local average net income.

Council housing pays for itself, covering the cost of building, managing and maintaining homes. The principle that rent is there to cover the cost of management, maintenance and the pooled historic cost of building (as opposed to market-linked rents and profits) is not only sound and workable but can easily be seen to be fair and economically sound.

However, it is important to recognise that no tenancy is affordable if the benefit system cannot guarantee to cover it for all those that need it. This principle would have to be restored by at least abolishing the bedroom tax and the overall household benefit cap, and making it impossible for housing support to be subject to “sanctions” (as is now possible under Universal Credit).

As regards the term “social housing”, it would be great to reclaim the positive collectivist connotations of the term “social” and rescue it from the derogatory connotations which have arisen as part of the “scrounger” narrative and the vilification of those who are deemed “failures” under a market-driven system and fixation on ownership as a badge of merit. However, the term has been used to blur crucial distinctions between models of housing provision, specifically between council and housing association (PRP) models.

Council housing is publicly-owned, with secure tenancies (the best tenancy available in England), the lowest rents, rights to repair and decent standards, and underpinned by democratic accountability of the landlord. Housing associations (Private Registered Providers) are in the private sector, with higher rents and eviction rates, and no democratic accountability, although they receive large-scale public funding. Mergers and takeovers now mean most HAs have moved away from their charitable and social goals, and behave like other private developers and landlords, building to maximise surpluses.

Social housing” needs to be understood not as just a safety-net for those unable to survive in the private sector, but as a model of choice for housing provision, based on the principle of decent housing as a human right rather than a pillar of profit, and as a desirable tenancy for people in all kinds of occupations because decent, secure, environmentally sustainable and accountable. The mass building programme this would require would pay for itself many times over in terms of jobs, tax revenue, lower Housing Benefit and other social costs etc, and would help stabilise the private housing markets (rental and ownership), and reduce the inevitable glaring inequalities which arise when home-ownership is the primary distinction between the “haves” and “have-nots”.

Building – how do we build the scale of social housing required?

7. How many genuinely affordable homes are needed?

The Department of Housing and Communities says we need 300,000 new homes in total per year, to meet growing overall housing demand and eliminate the accumulated shortfall. The so-called “housing shortage” is in fact a shortage of genuinely affordable housing, so of the 300,000 per year needed, at least two thirds (200,000) should be built for genuinely affordable rents. Of these, at least 150,000per year should be council homes – the rest could be cooperatives/co-housing/community land trusts etc, as well as those housing associations which could demonstrate a high (and statutory) standard of accountability, abiding by a social remit in all areas of policy, and collaborating with councils and local communities in terms of providing for local need.

8. What groups of people are most in need of new affordable housing, to rent and to buy?

It’s hard to imagine home-ownership being a desirable thing for people on lower-to-average incomes if rents were lower, tenancies secure, and such tenancies available in most locations!

If thinking of those in the most obvious need: obviously, people with disabilities or chronic illness; people with dependent children; older people; the low- or precariously-waged; people needing to relocate, for example due to family, work, domestic violence issues or carer responsibilities; people needing to downsize. People living and working in areas where private rents and/or house prices are high; to enable better town planning and reduce commuting. People living and working in rural areas, especially where local economies have become distorted by population decline and increased second-home ownership pushing prices up…. That is, pretty much everyone!

As the campaign group Defend Council Housing states: Housing scarcity is managed by waiting list points and scoring. We need to minimise waiting lists by building and letting homes. Creating more categories of need and playing one group off against another is potentially wasteful and divisive”.

  1. What range of agents and actors should be involved in delivering these homes?

    Councils, community-based cooperatives and collectives, independent tenants groups and tenants unions. Councils should bring construction and services back in-house, with a labour force directly employed by the local authority, with a high-quality apprenticeship programme to develop the necessary skilled workforce. Where outside procurement is necessary it should aim to support small-to-medium local/public interest businesses and co-ops, with an emphasis on workers’ rights and conditions, and environmental sustainability.

10. Our manifesto committed us to building 100,000 genuinely affordable homes to rent and buy each year including the biggest council housebuilding programme in over 30 years. Besides extra public subsidy, what other measures could be taken to boost investment to meet our target?

As discussed above, the target is far too weak and places unhelpful emphasis on tenures other than genuine social/council rent. Social housing needs to be taken out of the market: housing must be seen as a human right and a public asset, not an investment opportunity. Direct investment pays for itself over time both directly and indirectly in knock-on benefits for the economy (research by the TUC has shown that government investment in new, energy efficient housing is good value for money, with the economy gaining £3.50 for every £1 spent). Based on a central government grant of £80,000 per property for new builds, £8 billion per year would be required to help build £100,000, etc.

It goes without saying that the (bogus) historic “debt” needs to be cancelled, the Right-to-Buy unconditionally suspended, and PFI schemes eliminated.

In addition, though, we need to see an end to private developers wriggling out of S106 agreements and claiming it is financially unviable for them to include substantial numbers of social-rent homes in new developments. Local authorities should not be relying on this route to achieving local housing targets. Viability assessments and planning decisions need to be transparent and accountable, and planning permission must be given only to developments which meet local need. Adequate direct capital investment should remove the need for local authorities to set up risky and expensive “Special Purpose Vehicles” or Private Housing Companies which by their nature cannot deliver sufficient genuinely affordable housing but demolish existing council housing and become speculative developers of private housing for sale and rent.

Estate demolition needs to be replaced by refurbishment/renovation which can increase capacity through appropriate infill, and improve environment/living conditions/safety and sustainability standards more cheaply and without displacing tenants. The group Architects for Social Housing have demonstrated how well this could be done, eg in boroughs like Haringey – which has instead opted for a £2bn deal (still being disputed over) with the company Lendlease. This company is already responsible for the loss of over 1,000 council homes through its partnership with Southwark council over the “regeneration” of the Heygate estate.

11. High land prices make it expensive to build social housing. How can we reduce land costs and increase the availability of land for social housing?

Public land used for housing should be for 100% council housing at council rents. Set up a Land Value Tax to capture unearned income from speculation and incentivise productive investment. Compulsorily purchase new land for housing development, at a fair price that does not reward unearned income. Stop investors sitting on land without using it, or profiting from land-banking – councils should have the right to purchase unused land for council housing, at no more than the price originally paid for it.

12. What should we do to increase the acquisition and conversion of empty homes?

Reduce the use of residential properties primarily as investments through a Property Value Tax. To reduce under-use and prevent properties being retained simply as repositories of value, local authorities must have the power to compulsorily acquire any property lying empty for six months or more and let it at social rents. This should also apply to private-rented accommodation: if it fails to meet safety standards, for example, the local authority should have the power to acquire it to bring up to standard and let as a council house.

Home owners who are struggling to pay their mortgages, for example due to unemployment, ill-health or other personal circumstances, should have a “Right-to-Sell” – they should be able to sell to the local authority and stay on paying rent as council tenants. This could be extended to reduce under-occupancy by older people occupying homes too large for them, and indeed to a wider range of homeowners in general. If there were sufficient suitable council homes it would be possible to incentivise (through the tax and welfare systems) people under-occupying in the private sector to downsize to them, freeing up more family housing.

13. What should we do to increase the contribution that private developers make to providing more affordable homes?

We want to see the role of private developers reduced, not increased. Privately-owned and managed housing is not the same as, and does not substitute for, social housing. However, whenever private developments are planned, affordable housing obligations (Section 106 agreements currently) need to be more stringent – for example, at least 50% of new homes for private rent or sale should be for rents or mortages not exceeding the proposed new “Living Rent.” All planning proposals need to be consistent with local need, prioritising affordability, sustainability and contribution to local planning objectives. Planning proceedings need to be transparent and accountable. Developers should not be able to avoid affordability obligations on the basis of manipulated viability assessments, and consultancies profiting from selling strategies for avoiding Section 106 agreements need to be brought to book!

Standards – how do we secure decent standards in current and new social housing?

14. Our housing stock is ageing and over half a million council and housing association homes are classified as non-decent. How can Labour deliver decent homes for all?

15. How should we make new and existing social homes greener and more energy efficient?

Decent homes are energy-efficient homes. We urgently need to invest in a comprehensive programme of really-adequate insulation, triple-glazing, updating heating systems and installing solar panels. Government cuts to feed-in tariffs need to be reversed. This can’t be separated from energy policy in general; domestic energy production can also be tied in with local energy-generating and storage schemes and local authority-run energy distribution, within nationally coordinated systems of sustainable generation, storage and distribution. All new housing whether social or private should be to Passiv-Haus (ie at least energy-neutral) standard or a net energy producer.

We need direct investment, not outsourcing, PFI or other privatisation/public-private schemes; and renovation rather than demolition in the majority of cases (see above).

Tenants and residents – how do we improve involvement, voice and rights?

16. How do we make the regulation of social housing more tenant-focused?

17.How do we best ensure a voice for tenants in national standards and policy-making?

18. How do we ensure an effective voice and role for tenants with their landlords, including on estate regeneration?

  • All social tenants could automatically become members of an independent tenants’ union, with the same access as in a workplace union to legal advice, support and representation, and the ability to campaign and make decisions (eg the right to suspend rent payments if landlords’ obligations are not met) by collective/democratic agreement.

  • Tenants associations and tenants federations need to be adequately funded and resourced by the local authority or other housing provider, but they must be autonomous, not simply become subsumed into the local authority governance system where they have no real say and may not necessarily democratically represent the views of other tenants. Tenants sitting on management committees and having specific briefs with regard to particular areas of interest or expertise (eg sustainability, older people’s needs) is fine and should be routine practice. But tenants need independent forums and the right to represent their interests through democratic collective decision-making and without interference from landlords.

  • Labour should oppose stock transfer, and must guarantee full, independent and binding estate ballots on issues such as stock transfer, regeneration/redevelopment proposals etc.

How to respond

Please send your responses by email to: socialhousingreview@labour.org.uk

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