Cover Story: Monumental failings or deliberate design?

The house that ministers made

With welfare reform, Ministers appear to be rather more concerned about the lifestyle ‘choices’ of the poor rather than focused on fixing Britain’s broken housing market. That’s ironic, given it’s not the poor that got us into this mess, but the policy failings of politicians these past 30 years 

By Mark Cantrell

First published in Northern Housing 

WE'RE hearing a lot about choices these days. Choices and consequences, not to mention duties and responsibilities; there’s a strong whiff of a new moralism in the air and much of it appears to concern the much-derided ‘denizens’ of the country’s social housing estates.

If we’re hearing a lot about choices and consequences, we’re also hearing much about the abysmal state of the housing market; the two are not entirely unconnected. Crude as it may sound, there is some truth to say there are aspects of today’s housing market that are to all intents and purposes dysfunctional by design.

David Orr, chief executive of the National Housing Federation (NHF), has already called the housing market “dysfunctional” – “failing, even failed” – and that applies across all tenures. Writing on his blog back in August, he was moved to make the impassioned plea: “How bad does it have to get before the nation comes to its senses and realises that our housing market is n a complete mess? How bad does it have to get before we understand that housing is absolutely key to economic policy and economic growth? How bad does it have to get before housing finally becomes a political priority?”

The poor man has been banging the drum for years, the message simple but to the point: “build more houses” and his is not exactly some lonely voice in the wilderness. The political class just doesn’t seem to get it, but then again, maybe they do. That’s the problem.

“Over the last 30 years the failure to build the homes we need has left this country with a housing crisis which has resulted in a shortage of 142,000 homes every year,” said Grainia Long, chief executive of the Chartered Institute of Housing (CIH). “Housebuilding is currently at its lowest peacetime levels since 1924, if we do not do something to reverse this trend the impact will be far further afield than just a shortage of houses.”

Indeed. We’re already living with some of the implications of a failure to build sufficient homes; it’s one of the reasons that the social housing tenure has come to increasingly – but not yet exclusively – cater for the neediest and most vulnerable members of society. The shortage of social housing has helped to concentrate and exacerbate the many social ills – of worklessness and social exclusion, of poverty and benefit dependency – that currently provokes our politicians’ moral outrage.

For all the latest reform-minded hand-wringing about the plight of the poor, it’s not the alleged ‘lifestyle choices’ of ‘willfully’ workless benefit dependents that has brought social housing to its knees – nor did social housing tenants break the country’s wider housing market. Yet a casual observer might be forgiven for thinking otherwise.

Housing professionals are well-versed in the very real social problems many of their tenants face; they are also wearily familiar with the casual quips about Shameless and the portrayal of social housing as a breeding ground for ‘feckless, workshy layabouts’. Such caricatures only rankle all the more, given the concentration of the vulnerable and the very needy within the haven of social housing; the collateral damage, one might say, of decisions made in the distant corridors and meetings rooms of Westminster and Whitehall.

At the time of writing, conference season has just drawn to a close. From the general thrust of much of the political rhetoric over welfare reform and social housing there is a clear re-emergence of the concept of the deserving versus the undeserving poor – and it’s a concept that is crossing party divides. Social housing is caught in the thick of it. Worse still, perhaps, the fate of the tenure, as much as the tenants, is up for grabs as the prejudices of the well-heeled work their way not only into policy – but legislation and practice.

Once again, work and pensions secretary Iain Duncan Smith took to the pulpit to preach the sermon of welfare reform. The man who founded the Centre for Social Justice (CSJ) seven years ago has raised eyebrows, expectations, and respect, for his efforts to get to grips with the host of complex and protracted social problems, but as his welfare reform programme progresses he has also provoked much disquiet over the potential implications. Duncan Smith the social realist is clashing with Duncan Smith the politician now that he is back in the business of government, leading to some rather dystopian portrayals of the sector’s inhabitants, especially in the wake of the Summer riots.

In his speech to the party faithful in Manchester, Duncan Smith spoke of the “steady rise of an underclass in Britain” that is characterised by “chaos and dysfunctionality” and “governed by a perverse set of values”. Moreover, he spoke of a “damaging culture” that “generates growing pockets of deprivation”.

Were it not so tragic, it might be amusing for the crass irony of it all, for his words might equally well describe the prevailing political culture and policy decisions that have combined to shape the catastrophe that is today’s housing market. A lot of the problems are the result of what might be called the law of unintended consequences, not to mention old-fashioned human fallibility, but it
would be disingenuous to dismiss elements of deliberate intent these past 30 years that have accumulated to land us in this mess today.

More and more people can’t buy a home, whether because prices have left them behind, or they can’t get a deposit, mortgage finance or both; private sector rents are bubbling up beyond the means of low and middle income groups; and social rented and council provided homes are tightly rationed after years of sell-offs and decline in replacement newbuild; some five million are on the waiting lists for a social or council home and cannot get one; and for years not enough new homes across all tenures have been built to meet a growing demand.

Now, under the direction of current Government policy, the ‘pincer move’ of welfare reforms and the introduction of the new Affordable Rent programme seems likely to price out the very people who need affordable housing, even when the allocation process is opened up beyond those in direst need to favour those who are working. One is tempted to suggest that politicians do have a sense of humour after all. Yet there is nothing remotely amusing about the implications of a steadily worsening housing crisis.

Faced with the scale of the problems, the Zacchaeus 2000 Trust (Z2K) wants to see a Royal Commission on Housing to address the “intrinsic inequality” in the provision of housing, which it says produce “poor, sometimes even disastrous, social and economic outcomes”.

“It is apparent that the UK has a financial crisis of its own making... None of the rise in the price of houses or rents is the responsibility of housing benefit claimants, but they are being punished for the errors of successive governments by the requirements to pay that balance of rents above arbitrary caps on housing benefit out of means tested wages or unemployment benefits, or be threatened with eviction or consequent misery,” said the organisation.

“There has to be something wrong with 30 years of housing policy which produces a huge bailout of the banks, a consequently severe public finance deficit, a very large housing benefit bill, five million people in over-crowded housing and five million on local authority waiting lists, the lowest output of housing in all sectors for 70 years – and then asks the poorest citizens to pay rents they cannot afford.”

Z2K is part of the Pro-Housing Alliance, along with the organisation Housing Justice and the Chartered Institute of Environmental Health (CIEH). In September, the Alliance published a report into the housing crisis that said the housing conditions in Britain are among the worst in Western Europe. The report, calling on the Government to make major reforms of housing policy, also included a supplement on London’s housing problems – described as “bleak”.

“Housing has been one of the biggest casualties of the Government’s massive cutbacks to public expenditure with some of the most vulnerable members of society paying the heaviest price for the financial crisis brought on by the banking community,” said Dr Stephen Battersby, president of CIEH and Chair of the Pro- Housing Alliance. “I fear that we are also moving to a situation where unscrupulous landlords proliferate as better landlords move up-market. Councils will not be in a position to control and regulate this effectively. This is not a problem that is going to disappear conveniently.”

The Alliance claims that the lack of genuinely affordable housing, the cuts to local authority housing services, and “short-sighted” welfare reforms are combining to create “real hardship, misery and ill health” for some of the “most vulnerable” people in the country. This, one might say, is the flipside of the new moralism emergent among the current political class. Be that as it may, the Alliance is calling for the construction of 500,000 new “green and affordable” homes per year for the next seven years, including the re-use of empty properties, reform of land supply and taxation, and rescinding changes to housing benefit among other measures.

“The lack of a coherent housing policy for the past 30 years has created an expensive housing market with a shortage of affordable housing,” Dr Battersby added. “Too many people are paying too much for their accommodation relative to incomes, too many properties pose a risk to health and safety and the cost to the NHS of treating housing related illness is way too high. Housing is fundamental to public health and well-being and the Government needs a completely new way of thinking about housing.”

The Alliance report warns that without urgent action, the deteriorating housing situation holds bleak consequences, especially for the capital, with increased overcrowding, rising homelessness, rising rents, all of it exacerbating social inequalities and fostering a divide between the ‘haves’ and ‘have nots’. Clearly, this carries implications not just for community cohesion – but for public order. As Orr has said of the housing crisis: “It doesn’t have to be this way. It is not inevitable.”

No, it isn’t. And that brings us back to where we started. The housing crisis is rooted in choices; the solution to the housing crisis is also rooted in choices. The question is will politicians ever choose to resolve the issue?

Back in September, Orr picked up on the theme of choices during his session at the NHF Conference and Social Housing Exhibition in Birmingham. Making his case for more money to be made available to build more homes, he asked how might this money be made in a time of financial constraints? His suggestion: not building an aircraft carrier, say, or simply by making the choice to invest in housebuilding rather than grandiose projects such as High Speed Rail. “There are always choices,” he said. “Every Government always, whatever the financial environment, has an opportunity to make choices.”

They do indeed. Margaret Thatcher chose to implement Right to Buy, offering tenants the opportunity to buy their homes at massive knock-down prices. She also chose to bar councils from building replacement stock, thereby ensuring numbers dwindled and that those remaining had to be ever-more tightly rationed. She also chose to use a welfare benefits system never designed to cope with mass unemployment to ‘warehouse’ the people ejected from work during the era’s painful process of economic restructuring and recession. In doing so, her government sowed the seeds of [alleged] trans-generational worklessness and ‘welfare dependency’ that today so vex Duncan Smith.

Moving onwards, Tony Blair chose to accelerate a programme of mass stock transfer that further depleted the availability of council housing and massively boosted the housing association sector. In itself, no bad thing, but – no disrespect to the NHF and its members – the cards were deliberately stacked against councils by political choices made for political reasons.

Not every successful stock transfer represented an enthusiastic endorsement of the process, it must be said, but a resigned acceptance by councillors and tenants alike that it was the only realistic path open to them if they were to obtain the necessary investment in the stock. The unprecedented degree of funding largesse available to housing associations for Decent Homes and capital investment in Labour’s time is in stark contrast to the starvation diet that was granted to council landlords.

Meanwhile, the problems associated with the Housing Revenue Account (HRA) were long ignored, even as the system steadily deteriorated the position and state of council housing, in the drive to promote the concept of home ownership. Building enough homes to meet need was long neglected; the rest could take care of itself. And it did, in its way, finally culminating in the crash that brought the whole economic house down in 2007.

Finally, Gordon Brown ‘got it’: he chose to make housing a priority, setting in motion the end of HRA, opening up the prospect of a new era of council housing and made his grandiose claims of three million new affordable homes. A desperate, albeit failed, gambit to win him an election, maybe, but for a while it raised the prominence of housing out of the backrooms and into the heart of Cabinet thinking. Now David Cameron has promised a new “Tory housing revolution”. The promise, made at conference, is to be fleshed out in a Housing Strategy document to be published shortly that will detail the latest round of ministerial choices. The cautious anticipation wonders if finally Ministers understand the scale of the problem and are to finally decide to do something about. Time will tell. For now, the sector and the nation remain trapped in the morass created by the failed policies – the choices – of Ministers past.

The last “Tory housing revolution” gave us Right To Buy 1.0; David Cameron’s is due to give us Right to Buy 2.0. What goes around, comes around as the saying goes, and this time the proceeds of selling off the two million or so remaining council homes will go towards building new “affordable homes”. The Prime Minister has promised a ‘one for one’ ratio, but critics say the numbers don’t
add up; after the discounts the capital receipt will be insufficient to build a replacement home.

Another failed policy in the making, then? Maybe, but don’t expect the Prime Minister to reveal all his cards at the first hand. Right To Buy 1.0 is considered the most successful post-war privatisation. The scheme achieved its objectives: it massively boosted homeownership, proved popular (even ‘Red’ Ed approves), and it massively depleted the available stock of council housing. On its own terms, then, mission accomplished. Cleaning up the long-term ‘collateral damage’ was somebody else’s responsibility.

So we come full circle. Today’s dysfunctional housing market stands as a monument to failure but what is perhaps rather more worrying as we contemplate the possible consequences of the Coalition’s choices and policies – quite possibly it stands as a chilling monument to success.


First published in the combined Northern, Midlands and Southern Housing magazine, October 2011. It was subsequently re-published on the Housing Excellence website, 19 October 2011.