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Social housing decline – why has it happened?

It is easy to forget the failings of the social rented sector (SRS) in the last 30 years and too easy to simply blame successive governments of left and right for the housing crisis we have.

Thirty years ago, in 1982, we had 17.47m households with 59% in owner occupation, 11% in the PRS and 30% in the SRS.

Now we have 66% in owner occupation and 17% in the PRS and 17% in the SRS. (English Housing Survey 2010/11 Fig 1.1) reproduced below.

Figure 1.1: Trends in tenure, 1981 to 2010-11

 

 

The above graph shows the change in tenure over 30 years.

It is dramatic change - the rise in owner occupation from 58% to 69% (though now falling back slightly) and the huge decline in the numbers renting in the social sector against a huge increase in those renting privately.

In 30 years, social housing has gone from being three times the size of the PRS to now being smaller.

The same ‘sector’ now worries about the capital grant (the subsidy) it receives being taken away - yet it doesn’t put forward the simple monetary saving it creates of £5.26bn which is the extra cost to the housing benefit bill if social housing received PRS levels of housing benefit – and the SRS would be private housing to all intents and purposes with the removal of ‘public’ subsidy. 

Social housing gives true affordability of rent that works positively for the UK economy by making work pay - even lower paid work.

Yet the old post-war ‘council-house’ model being proposed on such an economic basis is decried by both Labour and the Tories as old thinking and not worthy of consideration.

The SRS – the social rented ‘sector’ - has done next to nothing to promote the massive economic benefits that social housing holds and has seen it become the minority rented sector by all accounts.

We are told there are five million on the social housing waiting lists – one in almost every 4 of the 21,883 households we now have. 

In simple terms, there is huge demand for a product recognised as being better in quality and security than its competitor  - the PRS  - and so much cheaper for the tenant (the customer) and for the public purse too.

Politicians may sneer at social housing, or the ‘council house model’, and dismiss it on political grounds - yet the electorate doesn’t, in monetary terms at least. The electorate recognises the benefits of the true affordability it offers and that is why social housing waiting lists are so staggeringly high.

The EHS survey has 7.443m rented households, so five million additional households who want social housing means it could expand by as much as 67% to meet the demand of these additional five million households who want a social tenancy. 

Even if that five million figure includes all 3.617m existing PRS tenants, it still leaves an unmet demand of 1.383m households. Unmet demand is at its lowest 19%.

Forget for a second that this is housing with all its emotive connotations. Imagine it’s a business like any other sector. Having 19% unmet demand and a further 3.6m customers from the only competition wanting to switch to your product is staggering.  

In any other sector, this would see a ramping up of production to meet demand for such a core product.

How has the social sector been so benign in terms of challenging this?

What is self-evident is that the SRS and its leaders as a lobby and/or in its marketing have been woeful and inept over the last 30 years.

Yet, is there a sector?

By that, I mean a homogeneous body lobbying on its behalf such as the Road Hauliers Association has. Think of the primacy of the car and lorry for transport of the last 30 years, or moreover, rail or other forms of transport, and you start to get my point. The RHA has been one of the most powerful and successful lobby groups in the post war period. By comparison, social housing has no ubiquitous or homogeneous lobby.

It has lobbies such as CIH or NHF and lobbies for sub-sectors such as homelessness in Shelter, Crisis, Homeless Link and others who lobby for parts of the sector; yet there is no lobby for the whole sector – one that fights and lobbies for social housing and the many huge economic benefits it gives to the country and to every taxpayer.

We see successive governments playing divide and rule with the ‘sector.’ Other than that, it’s laying blame on the sector – and its model – as a hot bed of workshy benefit dependency that is riddled with anti-social behaviour, etc.

There are, literally, hundreds of social housing and social housing associated sub-lobbies, yet not one overall lobby that represents and advocates on behalf of the social rental sector to extol and raise awareness of its many economic benefits. 

That is a major reason why social housing has become, or is shortly about to become, the minority rented sector from such a dominant position 30 years ago.

Just imagine a simple precept that saw every social landlord give 1p per rent per week to such a lobby – that’s about £2m per year for an overall pressure group to lobby for social housing. Very simplistic, yes, but as 60% or more of this would be met by government through Housing Benefit, then it’s not going to be any sort of strain on the sector.

As we will shortly enter a new radical system that will see Housing Benefit as the ONLY benefit being cut in the overall household benefit cap and the introduction of Universal Credit, such an overarching lobby is needed even more.

Each cut or cap is a cut in Housing Benefit and each cut in Housing Benefit is a potential cut in income for every social landlord. 

The bedroom tax, the overall benefit cap, the affordable rent programme which increases the likelihood of the overall benefit cap (OBC) applying, the fundamental flaw in Universal Credit that penalises and cuts HB for larger families and the systemic flaw that sees rent inflation rising faster than the cap which will see more and more families hit by the OBC – the time for an overall lobby has come.

If it doesn’t happen, then social housing and the SRS will become a nostalgic memory until someone realises on economic grounds alone it is the most economic model for the whole country and for everyone – the taxpayer, the tenant, for business and for the public purse.

Political parties are largely in agreement that we have a national crisis of housing supply, yet all of them advocate right-to-buy and the demise of social housing supply. Even many within the housing sector are swayed by ‘pay-to-stay’ – making working social tenants pay more because they are working – an absurd penalty; or by banning under 25s from receiving Housing Benefit, a similarly bizarre and unworkable disincentive.

Yet it seems despite these ‘knee-jerk’ spin policies, some councils are planning to introduce them - like Barnet (and do read Nearly Legal’s withering expose of how ridiculous this is) or the larger Housing Associations such as Family Mosaic no longer giving assured tenancies and security

This is a classic example of the divide and rule policy of successive governments. Family Mosaic are one of a handful of super-sized HAs that are and will continue to swallow up smaller ones and dominate the market and become more and more removed from their customers and from their original ethos. 

We even had one larger HA last week promoting the £705,000 affordable property!!!

This divorcing from the original purpose of benevolent societies seeking to safely accommodate the less well-off has been marked over the last 30 years and seen the rise of the 50,000+ social housing landlord – the super HA – through aggressive takeovers to seek market share is the result of this divide and rule and absence of one overarching lobby. 

These super HAs have benefitted massively from looking after themselves alone and we see large regional power players in these super HAs each promoting their proprietary agendas and not a universal one. 

This is what the lack of a sole lobby has allowed the fragmentation of the sector into a small number of power players - each with their own different agendas.

Even if you view this reality as an inevitable consequence of economies of scale or other business theory, in every other sector you still see a universal overarching lobby for that sector…..except in social housing.

Yes the CIH, NHF and others do get together on single issues such as the bedroom tax, but these are single issues and only occasionally happen. The impact and influence they have had is marginal to say the least. This characterises the last 30 years of the SRS - the same 30 years that has seen social housing implode into a minority and fragmented sector of little influence and even less power.

One simple factor for every taxpayer, according to Grant Shapps, the Housing Minister, is for every extra billion pounds the government spends, it costs every taxpayer £40 per year in additional tax. Social housing investment at its current record low still saves the taxpayer £225 per year or over £4 per week each and every week of the year. That includes every taxpayer. Under the previous government, that was £450 per person per year. At today’s rates as social grant – the public sector investment or subsidy – has halved.

You don’t need to be a fan of its theory to appreciate the massive economic benefit social housing gives to every person. 

In fact, politically, you can rant and rave against it and blame all social ills on it - however, economically, it makes sense to quadruple the current ‘subsidy’ as you will have an extra grand in your pocket every year through reduced taxation. 

It also means less spend and less of you taxes being spent on homeless costs, higher policing costs and higher NHS costs the current halving of the housing investment obviates and will cost even more as a result of this political ‘norm’ that sees social housing being perceived as a dinosaur from a bygone age because it is viewed politically and not economically.

Crossposed from Joe Halewood's SPeye blog. You can read the full post here.

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