ECONOMIC GROWTH

It's time to review housing

A major rescue and recovery programme is needed for social housing – and local government needs to lead the charge, as John Healey argues

For the first time since the Second World War, more people are now living in the private rented sector than in social housing.  Thirty years ago a third of the population lived in council or housing association homes, today it is barely one in six.

This long-term decline, which Labour made steps to arrest in the last years of government, started under Margaret Thatcher.  But coalition ministers have now slapped a ‘do not resuscitate' notice on the ailing social housing sector which no one is challenging, not even its family and friends.

As a senior civil servant confided to me, there is a deep hostility to council and housing association homes at the heart of this government:  ‘David Cameron thinks social housing means sink estates; George Osborne just sees Labour voters'.

This is evident in the dramatic increase in right-to-buy discounts, which leaves councils unable to build enough homes to replace those sold.  It was clear in the first Spending Review when government funding for new affordable homes was slashed by 60%, and since, in successive cuts to housing benefit forcing councils and housing associations to pick up the slack.

It is also apparent in the ‘affordable rent' programme which is partially privatising the cost of social housing, not just for newly-built homes but also for re-lets.

Analysis I have commissioned from the House of Commons library shows that, in many places, the Government's ‘affordable rent' at 80% of market rates is simply not affordable.

The problem is predictably most acute in London.  A standard yardstick of ‘unaffordable' is housing costs topping 35% of net earnings. A two-bed property in London which is let at ministers' ‘affordable' rate, would cost 52% of the average fulltime worker's monthly earnings. 

In many areas, affordability means an astonishingly high level of income – £41,600 a year in Hackney, £52,300 in Camden and £74,300 in Kensington and Chelsea.

The impossibility of paying such rents is greater still for those currently in social housing.  Their average household incomes are lower and they'd see almost two-thirds of their net income spent on housing costs in London if they had to pay 80% of open market levels.

The director of one leading London-based housing association recently told me:
‘We're a charity set up to relieve poverty by providing homes which people can afford, but the new "affordable rent" level puts our housing beyond the reach of most people, especially working families with kids.'

Despite these seismic shifts in public policy, there has been little in the way of sustained opposition.  Much of the housing sector seems reluctant to pick a fight with hostile ministers. 

Charity and campaign groups prefer to talk about shared ownership and intermediate tenures, while housing associations stretch their ‘social purpose' and some talk openly of operating in a ‘post-grant' world.

As advocates of decent affordable homes, perhaps we've allowed social housing to become seen as simply part of the housing safety net at a time when public opinion has been hardening, and the majority believe this is money wasted on those who shouldn't receive support.

I've always hated the term ‘social housing' because it reeks of welfare when it's an essential part of our social and economic fabric.  Council and housing association housing provides people in and out of work with somewhere to get a start in life, have a family, put down roots and play a part in the community, as well as necessary support for the most vulnerable.

Aneurin Bevan was the housing minister who launched the massive post-war programme to build council houses, as well as the NHS.  He challenged the Commons in 1945 to ‘consider the grave civic damage caused by allowing local authorities to build houses for only the lower income groups and private speculators to build houses
for the higher income groups.

‘What is the result? You have castrated communities'.

Shelter's research shows support for council housing and, after tougher rules to make it ‘harder for immigrants and scroungers to get social housing', the top priority for government housing policy is ‘ensuring people on low wages have an affordable social housing option'.

If the sector's family and friends – national providers, professionals and politicians – won't challenge the prevailing policy prescription or prognosis then it's important that councils do.

This means creating more headroom to build in the reformed housing revenue account, changing borrowing rules, overhauling the new homes bonus, strengthening local planning and land purchase powers, toughening standards in private rented sector, showing the willingness to build and, above all, arguing that new publicly-sponsored homes are in local residents' social and economic interests.

Bevan famously said of the NHS that it will ‘last as long as there are folk left with the faith to fight for it'.  This is now the hard truth for social housing too.

John Healey is former Labour housing minister

 

John Healey

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