Building an economic recovery

Give the builders a chance

The bankers had their billions, in 2009 a coalition called the Coalition Group argued it was the turn of the builders; only they could save the economy, it was argued. By Mark Cantrell

First published in Northern Housing

SPARE a few billion quid for a beleaguered banker? Before reaching for the chequebook, stop and think. It’s worth considering how many construction jobs and brand new affordable housing units the taxpayers’ ‘ragged trousered philanthropy’ could buy - with all this entails for the national economy.

Certainly, that’s something Gordon Brown’s government is being asked to consider by the new 2020 Group, a coalition of the National Housing Federation (NHF), the housing charity Shelter, the Local Government Association (LGA), and the Trades Union Congress (TUC).

Chaired by Kate Barker, a member of the Bank of England’s monetary policy committee and Gordon Brown’s former housing adviser, the 2020 Group wants to see a massive investment package included in April’s Budget, so that a mass programme of housebuilding can get underway without delay.

The group has challenged the Government to invest billions of pounds to build 100,000 new affordable homes in the next two years alone, to ultimately fulfill its 2007 Green Paper vision of three million new homes by 2020.

The stakes are high given the heavy demands already placed on the Government’s coffers. In its report, ‘Housing and the Credit Crunch’ published at the end of February the Communities & Local
Government Select Committee expressed concern that the Government did not know how its borrowing was going to be paid off.

“We are particularly concerned that the Government is borrowing from future budgets now with apparently no idea how it is going to restore that money at a later date,” said Dr Phyllis Starkey MP, the select committee’s chair. Even so, the committee urged the Government to stick to its targets to build more homes.

Starkey added: “The credit crunch has not reduced the numbers of households needing new housing, nor does it affect the need to address years of under-supply. The message we have received from witnesses during our inquiry was clear: the steps the Government is taking are welcome, but further action is needed if the Government is to have any chance of meeting its targets for home building and achieving the goal of a decent home for all.”

The 2020 Group’s fiscal stimulus package is not calling for money borrowed from tomorrow’s budget, but a massive shot of new investment into housebuilding that will help the country build
its way out of recession - and solve some of the historic housing problems in the process.

“Support for housing today offers excellent value in terms of sustaining economic activity,” Barker said. “And it reduces the risk of a very severe loss of capacity in the housing and related industries. There is real concern that the present fall in home building is sowing the seeds of the next boom.”

The idea of the boom might not sound so bad, until we remember the stratospheric rise in house prices of the old boom, spiralling out of control until the entire bubble burst and dumped the country into ‘credit crunch’ bust. The 2020 Group warns that without action now, by 2020 things might be so much worse.

“For years housing output has failed to keep pace with demand,” it said in its launch statement. “By 2020 on present household projections, if policymakers fail to act, the supply shortage will worsen markedly, with devastating consequential impact on affordability and the social and economic health of the nation.”

In other words, without massive investment to build new affordable homes in the here and now, today’s economic problems will prove but a ‘dress rehearsal’ for those of tomorrow.

“Without radical action many people in construction will lose their jobs and up to five million could find themselves on housing lists by the end of 2010 - this is the Government’s chance to help us make sure that neither of these things happen,” said David Orr, chief executive of the NHF.

“The group’s proposed house building programme could kick start the economy, save jobs, and deliver new homes for more than 200,000 people. This is a one-off chance for the Government to stimulate the economy and help housing need in one fell swoop.”

Adam Sampson, chief executive of Shelter, agreed: “As housebuilding dries up and thousands of construction workers face the dole queue, building the homes this country needs can not only help the thousands of people living in poor housing, it can also give a real and much needed financial injection to the economy.”

TUC general secretary Brendan Barber said: “When the private sector stops spending, the public sector must fill the gap, otherwise the recession will be deeper and longer than it need be. With such obvious housing need, the case for more social and council housing is very strong. When such investment can ensure such an important sector as construction retain jobs, capacity and its skills base then the case for a significant boost in the Budget becomes overwhelming.”

Margaret Eaton, chair of the LGA, added: “Even when the economic good times were rolling, councils saw ever-increased pressure on their social housing stock. Now that the recession is upon the country it appears that many thousands more people will be looking to councils to provide them with a permanent home as they either find it impossible to get on the housing ladder or see their home repossessed.”

So, a new clarion call is sounding, one might say: not ‘billions for the bankers’ but rather ‘billions for the builders’.

Nowadays, there’s a lot of demand for the Government to open its wallet and sub the economy through the harsh times. The car industry and the retail pub sector have both cried help too. In the case of house building and the construction industry, however, the 2020 Group’s fiscal stimulus package is less an up held begging bowl - rather it’s a call to arms.

Now, it’s up to the Government to answer the call by filling the war chest.

This article was written for Northern Housing magazine (circa March 2009) and was subsequently re-published on the Housing Excellence website, 3 June 2009.

Is Yosser Hughes about to make a comeback?

Where there's a will there's a way

Worklessness and unemployment are entirely different beasts, but with the recession purging the ranks of the employed, action to ensure they don't become trapped in a cycle of exclusion is all the more crucial, writes Mark Cantrell 

 First published in a 2009 edition of Northern Housing magazine

IN the words of Yosser Hughes (pictured) - "Gizza job... I can do that."

The character in Alan Bleasedale's hard-hitting drama Boys From The Black Stuff, screened in late 1982, went on to become symbolic of the despair born of mass unemployment. Bernard Hill's portrayal of a man stripped of his job, his prospects, his self-respect, and his hope, provided a vivid demonstration of the toll the recession of that era was taking on ordinary families and individuals the length and breadth of the country.

Fast forward to 2009, and Yosser Hughes' desperate plea becomes symbolic of another generation of recession-hit families. Mass unemployment has returned, and though it remains below the Eighties' peak of three million, at just under 2.5 million it isn't far off.

Here is another emerging generation whose cry echoes that of Hughes, but the painful irony of this 'sequel' is that his fictional grandchildren may not to be among them. Rather, in the final indignity for this once proud and hard-working man, his descendents are more than likely to be among the ranks of the workless - trapped in a cycle of poverty and disadvantage. This is the grim potential lurking within the statistics as the recession munches its way through jobs.

The TUC has called rising unemployment the country's 'Number One Emergency' and urged the Government to do all it can to protect and create jobs as a means of steering both society and the economy out of recession.

"Unemployment is rising relentlessly. It will pass the 2.5 million mark next month and could hit three million by the end of the year. Behind these statistics are millions of people struggling to pay their mortgages and support their families," said TUC general secretary Brendan Barber.

"What grates most is that ordinary working people are paying the price for the mistakes of an elite few who have laid the system to waste and still walked away with their millions. Even as unemployment rises at its fastest rate for 30 years, some City players are already talking about recovery in the financial sector, as if the spectre of three million unemployed doesn't matter," Barber added.

"There is only one indicator of economic recovery that matters, and that's when unemployment starts to fall and people can get back to work. Let us be clear, no recovery will be possible while there are millions of people out of work. We saw the price of unemployment in the 1980s - communities devastated, industries destroyed, and widespread social unrest. We cannot afford to go back to those days."

As in the '80s, as now, the lingering after-effects may well boost levels of deprivation, financial and social exclusion, and steadily erode community cohesion. It is feared that today's recession will make the problems of worklessness even worse; with the waves of redundancies, and fresh school leavers facing ever-lengthening dole queues, there is concern that it will promote long-term unemployment, leading in turn to even more workless households, and those 'not in education employment or training' (NEETS). According to the Office of National Statistics (ONS), this latter group is four times more likely to occur in households where no adults work, demonstrating how the 'institutionalisation' of unemployment can all to easily transmit down the generations.

Unemployment disproportionately hits the young, which is why the TUC has welcomed the recent Budget's 'war chest' of £2 billion for schemes to help young people unemployed for over a year, though the organisation was concerned about the timing of its implementation. Some 111,000 young people (aged 18-24) have been unemployed for over 12 months, it says, and it fears that number will increase to 250,000 or more by early next year.

"We will not abandon a generation of Britain's young people to the unemployment scrapheap," said James Purnell, work and pensions secretary, announcing the new £1 billion Future Jobs Fund.

This is intended to help social enterprises and local authorities create at least 150,000 new jobs. Set against the sheer numbers of unemployed, however, that target might seem like small beer, but every little helps as it were. A new National Worklessness Forum has also been launched, to help councils spearhead job creation in their areas.

If nothing else, it shows a crucial difference to the hardline attitudes of the 1980s. In that unsympathetic age, mass unemployment was regarded in high office as the necessary price of economic modernisation. Of course, it's always easy to be blasé about the bill when someone else is reaching for the wallet: a truism as applicable to the current MPs' expenses scandal as it is the collateral damage of economic policy.

Given that many of today's problems around worklessness and deprivation had their primordial origins in the 1980s recession, it is perhaps just as well that the Government says it has 'learned its lesson' and eschewed the 'scrapheap' approach to managing mass unemployment, but the challenges - especially for those at the sharp end of implementing real measures - will be immense.

There are already some 4.5 million people living in workless households, according the CIH, even before the impact of the recession is factored into the equation. While the race is on to prevent today's unemployed becoming tomorrow's workless, the hard slog of combating pre-existing worklessness continues.

Late last year the CIH launched its 'Worklessness Toolkit' to assist social housing providers to tackle the problem. Some thought the recession inevitably made a hopeless mockery of the sector's efforts, but the CIH, and the Toolkit's author Helen Cope proved adamant that while the challenges have become so much harder, the recession made it all the more crucial a task.

Unemployment, of course, is not quite the same beast as worklessness, and so requires different strategies, but it is clear that the former - if not addressed - has the danger of nurturing the latter. As Tom Murtha, chief executive for Midland Heart, said: "It is the barriers to work that fuel worklessness, rather than the recession itself, which continues to feed unemployment. Worklessness and unemployment are two very different issues, however, both have a significant impact on people's lives and communities and therefore are of importance to us.

"We and other housing associations are perfectly positioned to provide the catalyst for change through our existing relationships with many of those affected. By coming face to face with worklessness, we are very well placed to assist individuals. It is clear that housing associations have a unique and increasingly important role to play in helping to tackle worklessness at a time when the need to bring about economic and social change has never been higher."

The echoes of Yosser Hughes are carrying across the decades; whether his rage is finally appeased, or drowned beneath the laments of another generation, will all depend on the outcomes of a wide range of agencies and individuals working together.

They may fail, of course; we won't know until long after the recession, but at least this time round there is a will to make a difference.


This article first appeared in Northern Housing magazine, circa April or May 2009. It was subsequently re-published on the Housing Excellence website, 12 June 2009

The perennial problem of fuel poverty

Zero carbon beats the frost

While ‘Jack Frost’ was making himself an unwelcome guest in the homes of the fuel poor in the winter of 2009, the Government announced an ambitious strategy intended to evict him for good, reports Mark Cantrell 

First published in Northern Housing

THE weather’s certainly been more than a tad chilly of late; when the country shivered in the grip of the coldest winter for a decade, the snow and ice proved a dramatic and timely reminder of the urgency of tackling fuel poverty.

There were around 3.5 million households languishing in fuel poverty as of 2006, according to the latest annual progress report of the UK Fuel Poverty Strategy published last year. This figure represented a rise of one million households from 2005. The culprit blamed for the rise was an increase in fuel prices. Since then, rising fuel costs have continued to squeeze the fuel poor, and the fallout of recession has added to the sorry saga.

Fuel poverty, defined as where households are spending 10 per cent or more of their income on keeping warm, has long been a problem. Low income is one factor, but so too are old, damp homes with inadequate heating and insulation. More recently, rising fuel prices have also impacted on household finances, placing rising numbers of people in the unenviable position of choosing ‘eating or heating’.

February witnessed the heaviest snowfall for 18 years, according to the Met Office. Without doubt, that was great for snowball-happy kids, but it wasn’t so great for the elderly or otherwise vulnerable nor for those struggling to stay warm indoors let alone outdoors. So it was an appropriate time for the Department of Energy & Climate Change (DECC) to announce the ‘Great British Refurb’.

“We need to move from incremental steps forward on household energy efficiency to a comprehensive national plan,” said energy and climate change secretary Ed Miliband. “We know the scale of the challenge: wasted energy is costing families on average £300 a year, and more than a quarter of all our emissions are from our homes. We cannot afford not to act. Every home must be able to access the help and technology it needs. Most importantly, I want to ensure that help to meet costs is available to people house by house, street by street, and that lower-income families don’t miss out.”

The Heat and Energy Saving Strategy was opened to consultation in early February and is certainly ambitious in its aspirations. Existing energy efficiency schemes are to be improved under this strategy, but longer-term things became rather more grandiose. By 2050, the Government intends to have reduced the national carbon emissions by 80 per cent. Homes will play a major part, as Miliband said, home by home and street by street, they will be upgraded and improved to reduce their carbon emissions to near zero.

By 2015, the draft plan says that cavity wall and loft insulation will be provided for all suitable properties. There will be ‘whole house makeovers’, with a target of 400,000 homes a year to have undergone this process by 2015. By 2020, the plan is for seven million homes to have benefited from the makeovers, and by 2030 it is hoped that the strategy will be “well on the way” to all homes in the country having access to such improvements.

“We don’t only need more housing, we need better quality housing as well,” said housing minister Margaret Beckett. “These proposals can ensure that a more sustainable lifestyle is available to everyone, not just a luxury for those with the money to invest in the latest green gadgets.

“Social housing must be at the forefront of these changes. People living in social housing stand to gain the most from the proposals, as they are among the most likely to be living in fuel poverty. Some of the greenest homes in the country have been built by housing associations, and I believe that through this programme we can go even further.”

Obviously, such measures to make every home in Britain more energy efficient and therefore easier to heat will make a major impact on fuel poverty. Of course, for those who are still shivering in fuel poverty, the target dates to achieve the various stages of the ‘Great British Refurb’ are something of a chilly long-haul.

“Last winter, during average temperatures, the cold was blamed for more than 25,000 extra deaths in England and Wales, the vast majority among the over 75s. Unless we act quickly, more people will die unnecessarily because of the cold,” said Sir Jeremy Beecham, vice chair of the Local Government Association (LGA).

“The long-term plans to help people have warmer homes and cut their energy bills are a major step forward [but] the freezing conditions have taught us that there also needs to be some urgent short-term measures to cut bills and keep people’s homes warmer. A comprehensive home insulation programme is the best long-term solution to tackling fuel poverty, cutting domestic carbon emissions, creating jobs and saving people money.”

The LGA is calling on energy suppliers to pay a £500 million annual charge to help fund such a programme and lift half a million people out of fuel poverty. Extra investment in council-led home insulation schemes, the organisation added, would also save 10 million households £280 a year on their energy bills and create up to 20,000 new ‘green’ jobs.

There’s already the Warm Front Scheme, the Government might counter, but as the National Audit Office (NAO) said in its February report on the scheme, though it has helped considerable numbers of households, many more are yet to be reached.

“The Warm Front Scheme has helped to alleviate fuel poverty in a large number of households, but despite changes intended to improve the targeting of the scheme, over half of vulnerable families in fuel poverty still do not qualify, while many households unlikely to be fuel poor are able to claim a grant,” said Tim Burr, head of the NAO. “The DECC needs to improve the way it assesses eligibility for the scheme, so that the most vulnerable households are the first to receive the assistance they need.”

Broadly speaking, the Government’s grand energy efficiency programme has been welcomed, but given the timescale and the need for more immediate measures in the interim; it’s understandable that the reception has been rather lukewarm rather than glowing. Consultations do not make a summer, but it may be a harbinger of spring, as Help the Aged’s special advisor Mervyn Kohler put it.

“Spring has not yet arrived but this package of policy holds out the prospect of some warmth,” Kohler added. “The targets set by the Government on fuel poverty are still in jeopardy and even if there were significant falls in energy prices, they would be unlikely to come to the rescue. Far from the full answer, Help the Aged will support these steps if they lead us forward to a dynamic, sustained and properly funded programme which simultaneously addresses the challenges of fuel poverty and climate change.”

Age Concern’s director general, Gordon Lishman said: “This is a welcome sign that ministers are at last accelerating efforts to tackle fuel poverty. These measures must be tackled at the poorest households living in the least energy efficient homes. But it is not yet clear how these plans will be paid for. It would be counter-productive for people who are already fuel poor to get higher bills to cover the cost of this initiative.

“The Government must do more to support today’s pensioners who are struggling to heat their homes. It is essential that social tariffs are reformed and that pricing penalties leaving cash, cheque and pre-payment customers paying more for their energy are removed.”

So much remains to be done. For many households, Jack Frost, it seems, will remain an unwelcome winter visitor for a while yet, but at least the eviction proceedings are underway.



First published in Northern Housing magazine, circa April/May 2009, and subsequently republished on the Housing Excellence website, 3 June 2009

We're still waiting for the rebirth of council housing

Back from the brink, maybe

Not so long ago, the consensus was that the days of council housing were numbered. Then came the credit crunch - and hints of a resurrection. Mark Cantrell reports

First published in the February 2009 edition of Northern Housing

THERE'S little doubt that council housing was once expected to undergo a managed extinction, but since the housing market became the epicentre of today’s economic quakes, there has arisen the tantalising prospect of the resurrection of the much-maligned notion of public housing.

The prospect first began to peer over the parapet shortly after Gordon Brown became the incumbent at Number 10. Since then, there have been what are best described as ‘nods, winks and hints’ that a new era for council housing is on the cards. For many, however, that’s the problem - it’s still on the cards and not becoming any kind of reality. Patience in some quarters is wearing a little threadbare.

“For millions, home ownership is an unattainable dream and many people are now questioning whether it’s worth dreaming as repossessions rise and property values fall again,” said Tony Kearns, deputy general secretary of the Communication Workers Union (CWU). “Instead of subsidising the private market, it makes sense for government to improve existing council homes and estates and start building a new generation of first class council housing for people on the waiting list.”

Kearns was speaking in support of the long-standing Defend Council Housing campaign on the eve of its national conference back in November last year. The arguments are nothing new in the pursuit of the “Fourth Option”, but such views have gained a fresh sense of urgency and impetus given the current economic woes.

Bob Russell MP, in questions to the then newly appointed housing minister Margaret Beckett, said: “Hundreds of thousands of children are living in accommodation that is deemed unsuitable for them and their families, and that is a direct result of 25 years of failed housing policies by successive Governments who have refused to allow council houses to be built. Given the collapse of the housing market... if the Government can find billions to bail out bankers, why can they not find sufficient money to build the family council houses for those hundreds of thousands of children?” (Hansard, 14 October 2008).

Beckett responded that the demand “does not all have to be met through council housing” but that the government “will be happy to see a greater expansion of provision by councils”. She added: “The Government have announced their intention to change the revenue and capital rules that apply to new council homes in order to remove financial disincentives to new build by local authorities.”

While it may not satisfy many, it does reflect a certain thawing in the policy landscape. There is still a long way to go, however, before the political permafrost melts enough for the sector to begin generating new homes at anything like the rate its housing association cousins have achieved to date.

A report from the Local Government Association (LGA), published last summer, said that in 2006/07 local authorities built 245 council homes, compared to 22,194 units built by housing associations. It argued that if councils had the same freedom and flexibility enjoyed by housing associations, they could easily match the figure.

In theory, paying into the central Treasury fund is a redistributive measure whereby stronger authorities assist the weaker, but in practice more and more councils paying into the fund feel it has become a ‘negative subsidy’ that is dragging down the capabilities of the 60 or so councils who have retained stock. This year the central fund, after payouts to around 50 local authorities, is said to be in surplus to the tune of £194 million. This figure is expected to grow substantially in the years ahead - up to £894 million by 2022.

“Councils could be using this money to build thousands of new council homes to help solve the housing crisis and to improve the homes of existing tenants,” says Councillor Paul Bettison, the LGA’s spokesman for housing. “The rents that tenants pay to their council should be spent entirely on their housing needs and the needs of local people. If this tenant tax continues, there could be serious long-term consequence for the future of council housing.”

Right-to-Buy is another bone of contention, not just because councils are required to surrender 75 per cent of the capital receipts from the sale of every home to the government’s coffers. The long-running policy has massively depleted stock. And it isn’t just hurting local authority stocks - housing associations are feeling the pinch too.

Right-to-Buy, introduced in 1980, has been described as Margaret Thatcher’s most successful privatisation programme; it helped many people to buy their way into the property market but led to a massive depletion in the number of council homes, with over two million sold by the end of the last century. It clearly proved a successful programme for the ferociously pro-market PM - it achieved its aims of boosting levels of home ownership while undermining public ownership long after her government faded into history.

There were wider consequences of the policy too, noted by the Joseph Rowntree Foundation as long ago as 1998. Then, it reported that the “remaining social rented housing stock is disproportionately concentrated in areas with lower demand for housing with fewer opportunities for employment” and that “Right-to-Buy, alongside other policies, has contributed to the increased concentration of low-income households in the social rented sector and in particular estates”.

Right-to-Buy remains a serious issue, such that the NHF has called for a “temporary ban” on new tenants buying their homes. Simply, more homes were bought - at a discount - between 1999 and 2007 than were built, the organisation said. That is, 440,000 were sold off, while only 205,123 new homes were built in that time.

“For those able to take advantage of the big discounts available to buy their home, the right-to-buy policy has unquestionably been a massive success,” said David Orr, the NHF’s chief executive. “But for the four million people currently stuck on waiting lists, the mass sell-off of affordable housing has deprived them - and future generations - of a home. Set against a backdrop of rocketing waiting list numbers, rising repossessions and unemployment, the country cannot afford to sell off any more affordable homes on the cheap.”

There’s a long way to go, even with the largesse of political will and financial capital, it will take time for the machinery of housebuilding to gain momentum and contribute to the stock being built by housing associations, but some councils are already beginning to take their first small steps back into the housebuilding business.

For this to grow into anything more than a token gesture, however, demands clear action from government - not just hints and nods. The sector is waiting for a clear lead - and for those old ghosts to finally be laid to rest.

This article first appeared in the February 2009 edition of Northern Housing and was subsequently republished on Housing Excellence, 3 April 2009.