A plague on all your houses

Are you a tenant in social housing? Then you’re a tax thieving blaggard and a burden on us all. Not exactly what Housing minister Grant Shapps has said, but you don’t really have to read too hard between the lines of this Daily Mail article to see it.

To my mind, social housing is (was?) one of the great achievements of this country, earning its place alongside the NHS and state education as one of the most important factors in creating a better (bigger?) society for all. It’s not a perfect system, but I’ve always felt that you cannot have perfect systems and, that being the case, it’s probably better to err on the side of helping the majority rather than hindering the minority. Foolish and idealistic, I know, but pragmatism to me means using a kettle rather than holding a matchstick under a mug of cold water, not making decisions that will affect the lives of millions under the guise of ‘necessary’ cuts.

The Tory attack on social housing hasn’t just started, though; in fact, its major blow was dealt nearly three decades ago. I speak, of course, of Madame Thatcher’s pushing through of the Right to Buy scheme for council properties. This killed two birds with one stone; it was a gerrymandering process attempting to create a new electorate of working class home owning Tories, and also an attack on the society she claimed didn’t exist – heaven knows what she thinks of David Cameron’s ‘big’ one!

The effects of Right to Buy have been devastating. From my window I can see the first 20 houses in the next road. Like my estate, this road was formerly all council stock – now, however, 12 out of those 20 houses have extensions on them. This means that 60% of that stock is now privately owned, and 12 three bed properties are no longer available to those on the waiting list. I don’t even live in a particularly desirable area, or so people have told me. And it’s not just about the loss of properties; Right to Buy has also lead to a severe reduction in the amount of rental income councils receive, income that is needed to maintain their properties. But what about the income from the sale of properties, you ask. Well, apart from the fact that all council properties are sold at a discount of the market price – in a lot of cases up to 72% under the original scheme – the proceeds of sale go to central government, not the councils themselves. Hence no new council housing in the past 25 years. Attempts have been made to plug the gap by using housing association properties, but these have provided neither the numbers or the same ‘benefits’ that council housing once offered.

Labour have played their part in the attack on social housing as well. In 2000 they implemented Arms Length Management Organisations (ALMOs). Under this scheme councils can ‘choose’ to transfer management of their stock to an ALMO. I say ‘choose’, but there was a caveat. Labour also brought in the Decent Homes standard, and set councils the task of upgrading their stock – they generously offered funding for this, but only if councils would implement their own ALMO. Nothing wrong with that, you might say, but you’d be wrong. ALMOs are widely seen as the first step in a two part privatisation process, where the needs of tenants would be balanced against the greed of shareholders, and we’ve all seen how greedy shareholders can be. The arguments against ALMOs are detailed here by the admirable Defend Council Housing organisation. Despite Tory protestations otherwise, my view is that the neo-Liberal, Blairite Labour were not out to defend public services, but trying to polish them up in order to sell them off.

So now we come to the latest attack on social housing. Grant Shapps posits that it’s unfair we have people living in council stock who earn a decent amount of money. Seems reasonable, doesn’t it, and as a young housing officer I was once myself an advocate of means testing being a part of allocating properties. I was put right by a more experienced and far wiser housing officer than I, a man who knows social housing inside out and I have much respect for. To put it bluntly, introducing means testing into the allocation process will serve to create ghettos of the low paid and unemployed and reduce social mobility. This would not be on the part of the tenants themselves, but as a result of society’s own prejudice against council housing which will only worsen as a result of the Tory proposals. We already have the situation where council housing has a stigma attached to it, imagine if it was ‘official’ that it was only for dole skivers and low paid skivvies going nowhere. Organisations that take postcodes into account when recruiting (they won’t admit it, but they do) would be doubly wary of an applicant from a ‘notorious’ council estate. The Mail’s own headline does nothing to alleviate this, implying as it does that council tenants are a burden on tax payers.

And just what exactly is a decent wage? In their article the Mail refer to a ‘study’ where they found that 43,000 council households were earning £50k or more. Sounds very comfy, no? Well, perhaps if the household is a single person or childless couple in a one bedroom flat, they might just be able to afford a one bed flat in the outer reaches of London, in the less desirable boroughs. But I suspect that a lot of these households are families, with either one parent earning a good wage or, more likely, both parents working. Let’s take a nuclear family comprised of mum, dad, and two kids (boy,girl). They have a three bedroom council house/flat which costs them, say, £100-£120 a week in rent. Looking at Rightmove I see that in my borough, one of the less desirable ones, there are no properties available at less than £150k, the 3x times earning level for single mortgage applicants, and of course for joint applicants the level is set at 2.5x joint earnings. This means that in order to buy a property our family would have to consider borrowing more than is usually advised and risk overstretching themselves. There are some properties available up to £180k (about 20 out of 242), but 90% of those are ex-local authority, and the damage to social housing has already been done there. As for renting privately, the cheapest on offer is a flat above a shop in a busy shopping centre for the princely sum of £850pcm – there are four such properties (out of 290) before the rent shoots up to £1000pcm. Our family, then, would have to pay out at least double what they were paying in rent, and that’s if they were ‘lucky’ enough to successfully find one of the few properties at that price. I would suggest that paying out an extra £400-500 a month might have a detrimental impact on even a ‘high earning’ family.

Ultimately, the Tory proposals are using a sledgehammer to crack a nut – even if there were 43,000 households earning this extravagant wage and they could reasonably afford to enter the private market, that’s only a small percentage of all council properties in England and Wales. As I said above, measures like this could affect the future lives of millions against the possibility that a few people may be ‘living it up’ at ‘our expense’. It’s part of the ongoing mythology that anyone who uses services offered by the state is somehow stealing from ‘us’, a myth that Cameron and his millionaire cabinet are only too keen to promote in an attempt to quell dissent regarding their dismantling of public services.

The main reason we have such long waiting lists isn’t because people are bludgers, or because of immigration, or any other specious reasoning by neo-Liberals and Tories. There are three main reasons: the first being the decimation of council stock by Right to Buy; the second being fetishisation of property ownership in terms of status and keeping the economy going; and thirdly the lack of regulation in the private rental sector. I’ve already explained the first, the second has lead to house prices being artificially inflated in order satisfy people’s aspirations and ‘stimulate’ the economy. These artificial prices feed into the third reason where buy to let landlords charge more rent as they have to take on bigger mortgages, but that’s not the main problem in the private sector – the lack of regulations governing private landlords and the lack of decent housing available has essentially lead to a sellers’ market where the tenants have little or no choice in what they pay. For every decent landlord that charges a ‘reasonable’ rent and provides decent accommodation, there are many who will charge as much as they can and provide as little as they feel they need to. Why pay £600pcm for a room in a shabby house when you can get on the waiting list and try to get a one bed flat at £60-80 a week? There needs to be tighter restrictions on what private landlords charge and provide before they can be considered a true alternative to social housing, as they need to be after the attacks on social housing over the past few decades.

The cost in human terms of the prevailing Conservative orthodoxy that public service users are somehow defrauding the honest taxpayer is immense. It leads to whole swathes of society being stigmatized for no reason other than being in need of some assistance with some aspect of their lives. More often than not these people will be taxpayers themselves, also paying taxes for something they don’t use. Isn’t that what being part of a ‘Big Society’ means, everybody chipping in to help one another? In relation to housing and Shapps’ proposals, this will take away the security that people need and their aspirations. Going for a new job? But what if it takes you above the earnings threshold set for council housing? Can you afford to move into the private sector, even with an increased salary? What if it’s only a fixed term employment contract? Is it worth risking the security of your family home? These are decisions that the likes of David Cameron and Grant Shapps will never have to make, aren’t we lucky that they can make them for us…

  1. Pete
    February 14, 2011 at 11:02 pm

    There’s a fair question asked of social housing and it is this: When did a crisis loan turn into a home for life?

    I’m all for sticking a roof over people’s heads but buying them a house?

    Then again, I hate and despise the idea of throwing people out who have lived somewhere for all or most of their lives.

    Is there not some sensible approach where those who were brought up with “housing for life” continue to receive it and the rest of us get housed when we need to get housed?

    • February 14, 2011 at 11:40 pm

      I think there’s another issue here concerning expectation and dependency on the state – why is it that extended families end up occupying multiple council properties, that parents expect the council to house their kids when they hit 18? It’s more of a societal thing that leads into housing and perhaps needs a more holistic approach. Of course, with house prices as they are and the state of private rental accommodation, it’s harder now than ever for people to make the jump from social housing to their own place.

  2. Pete
    February 15, 2011 at 10:01 pm

    House prices have been absurd in recent years, especially down South and yes, it’s almost impossible for people to get on the property ladder in some parts of the country.

    And, what’smore, there are a lot of people out there on stupidly high mortgages as a result. With interest rates set to rise, repoes are going to be right back on the agenda and in huge numbers. Housing stocks will be under more pressure than ever.

  3. April 1, 2011 at 6:32 pm

    Just to say I like what you’ve made of this blog so far, and as someone with a similar(ish) professional background, I shall be following closely…

    • April 12, 2011 at 12:53 am

      Thanks! Planning to do another blog on social housing once I’ve had a watch of the BBC4 doc from last night.

  1. March 18, 2012 at 3:38 pm
  2. May 17, 2012 at 12:22 am

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