What does the Housing Strategy offer local government?

My colleague Steve Hilditch at Red Brick hit the nail on the head when he says of Grant Shapps’ Housing Strategy:

“Reading the strategy document is a bit like watching rolling 24 hour news; the same few points are repeated endlessly.”

The strategy is little more than a compilation of Shapps’ greatest (media) hits and makes no attempt at assessing the need for housing in Britain, which parts of the market work well and which don’t, who the different elements of the strategy should support, and makes no attempt to tie it into the rest of the government’s policies.

If we have seen the Housing Minister’s strengths in his articulacy and media savvy, his faults as a man with little vision and little ability to think or plan over the longer terms is painfully, indeed embarrassingly, evident in this document.

So what are the tracks from this particular re-release that local government should take note of?

First the positive (though again a repetition); the government is continuing with Labour’s reform of council housing finance. This is a reform that constitutes genuine devolution. Councils will keep all the rents their housing stock generates and will have enough revenue to cover repairing and maintaining their stock and their debt obligations. This deal includes, over the medium term, the opportunity for some councils to generate surpluses and use additional borrowing capacity, which they can invest in new homes or in further improvements to existing homes. And the buck will now stop with local authorities for failures in management, if their stock falls into disrepair or they fail to deliver savings from their housing business. A good thing.

Second, the issue that’s gained most attention in local government circles, the attempt to warm-up Right-to-Buy (RTB), the numbers of which have fallen to historically low levels. By doubling the discount for those tenants buying their property, they hope that the proceeds of these revived sales will allow further housebuilding.

It’s unlikely to work. The average incomes of those in social housing now mean, even at greater discounts, few are going to be in a position to take on a mortgage. If the banks need to be indemnified for loans for well-off first-time buyers, then there is little prospect of seeing RTB re-emerge at scale for social tenants.

But let’s assume there is some capital released through this scheme, the Treasury first take a cut, then what’s left will be invested in new homes, by the council or by the centre. Here the government is set to lurch back into an instinctive centralism. The statement says:

“Under local delivery models councils would be better placed to identify local needs and opportunities, but less able to secure the wider efficiencies that could be achieved through a national programme.” (my emphasis)

If it goes back to the centre, we’ll see the new homes built in the cheapest places, not going back to the same local authorities that have just lost social homes. The replacement homes will definitely be at 80% of local market rents, not at genuinely affordable social rents. Local councils however may be able to provide a replacement social home, through their own programmes.

Alongside the general platitudes of urging or encouraging local authorities to do more, (for example on using their powers against rogue landlords), there are thin pickings:

The government wants to require councils to reconsider their S106 deals with developers. In lay terms, try to get them to strip out affordable housing requirements from private developments.

They’re making it harder for councils to use Empty Dwelling Management Orders to get empty homes back into use.

They’ll be requiring tenants in social housing earning over £100,000 a year to pay market rents.

There is a long restatement of the government’s planning policy, the results of which are highly uncertain, but the effects of the continued uncertainty is holding back housing development and causing major schemes to be scrapped. Tetlow King (a planning consultancy) now says the number of planned dwellings pulled by councils in England stands at 261,624.

The key point to recognise about this housing strategy is that it isn’t a housing strategy. It’s a poor and desperate attempt by the government to provide a housing stimulus to the economy, in the way Labour did during the recession. After cutting billions from the housing budgets and introducing planning changes which sunk a quarter of a million homes, the government is reaping the rewards of hobbling one of the most labour-intensive industries in the UK.

Unwilling to commit further public money, scared to touch planning reform again (in case it turns into another (forest sell-off debacle), they are trying to revive the very thing they choked off with the few ineffective tools they allow themselves to use.

 

Tony Clements blogs at Red Brick

 

 

 

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