housing policy

Anthony Mason gives an initial assessment of the white paper on housing and planning in England

First impressions are not always very reliable. When Sajid Javid replaced Greg Clark as Secretary of State for Communities and Local Government following the post-vote governmental putsch last year (sorry, change of Prime Minister following the referendum), local government figures were very wary. Clark had, and still has, a reputation for understanding local government and can connect the local to the national in discussions around the cabinet table in a way that few of his colleagues are able to. Javid, however, was an unknown quantity – said to feel that the DCLG role was a demotion and giving every indication that he was unexcited by the move.

Yet, for those of us specifically interested in housing policy, Clark – alongside his spiky and confrontational housing minister, Brandon Lewis, presided over some rotten housing policies, as I suggested in this place last year. Indeed, the Housing and Planning Act 2016 will, I suspect, go down in legislative history as the Dangerous Dogs Act of housing policy in England. Gratifyingly, a number of the craziest measures enabled by that Act have proved so difficult to implement that the “new” government has simply shunted them into a siding and (we hope) left them there to rot.

And now comes the first comprehensive white paper on housing policy in England for almost a generation. Bearing the less than poetic title-as-ambition of Fixing our broken housing market. Javid and his refreshingly rounded housing minister Gavin Barwell, set out in 104 pages and many supporting papers their ambitions to do just that. To their great credit, Javid and Barwell have spent many weeks on careful consultation with local government, sector interests, and Number 10 before getting this far; delaying the publication of the white paper somewhat while doing so. They have even persuaded the PM to pen a lengthy introduction to the paper – presumably in the hope of corralling rural Conservative NIMBYs into line.

The white paper sets out many proposals and poses 38 carefully framed policy questions for response (by 2^nd May 2017, if you’d like to contribute). But in quick summary, it:

Acknowledges that England needs around 250,000 new homes each year going forward. This was expressed as “between 225,000 and 275,000 homes” – and is up from the oft-quoted 200,000 previously accepted (but never consistently realised)

Proposes that each local authority will have to draw up and regularly review an “honest assessment” of local housing need – methodology to follow.

Says that developers could be forced to build within two years of planning consent, or see that consent lapse. At the moment, permission usually lapses after three years. The paper also proposes new compulsory purchase powers for councils where sites lie undeveloped – details to follow.

Suggests an expanded and more flexible affordable homes programme, for housing associations and local authorities, with £7.1bn of (already announced) funding. It drops the “old” government’s fixation with starter homes in favour of a more balanced approach.

Encourages building rates at higher density – including of higher buildings – to make best use of land (and to avoid having to give a view on releasing green belt).

Dodges the question of future housing association and council rent levels after George Osborne’s compulsory rent reductions “We will provide clarity over future rent levels. In return, we expect them to build significantly more affordable homes over the current parliament.” Is what ministers promise.
Says that smaller building firms will be given assistance to expand, including support for off-site construction (where components are fabricated off-site and factory-assembled). It also encourages “build to let” where private companies build large-volume rental flats for tenants.
Continues a focus on leaseholds, proposing what it calls “an end to leasehold abuse” where home buyers are locked into leases with spiralling ground rents.

Most of us acknowledge the general need for new homes while protesting loudly if those homes are to be built near to us – and for years, housing policy in England has tried not to upset voters and yet deliver new homes. And the white paper has had to throw titbits in all directions to keep sector interests at bay. Local authorities are both excoriated for planning failures and mildly encouraged to build new homes. Those who worship at the altar of home ownership will be pleased that there is a threat to close a loophole that has allowed councils building homes through wholly-owned companies to avoid the right to buy. Those who see renting as the most realistic way forward will be pleased that much of the white paper acknowledges this reality and makes gentle proposals for longer tenancies. Big developers are both criticised for not building out sites as well as encouraged by some anti-planner language.

But ministers have failed to resolve some longstanding conundrums – and a couple of new ones – in their paper:

Successive governments have tried to combine bottom-up and top-down policies on housing which appear to conflict in their efforts to encourage and coerce. For example, communities and parishes have been given more control over developments and yet principal councils are still required to provide new homes. Housing associations should develop more and yet have no control over the rents they can charge for these new homes.
Government has long had an intellectual tendency to support developers over planners – even though planning consents have been running ahead of homes built for some time. This white paper at last begins to recognise that not all is well, with our developers while avoiding the obvious response: councils’ potential contribution to building at scale.
There is a cherished belief that brownfield sites can provide the majority of our new homes, but these sites no longer match need. Not surprisingly, they are disproportionately in cities, but not all housing need is city-based. The white paper avoids the question of building on the green belt, even though, in our own city, we’ve faced a highly charged debate about this topic.
A further concern is around labour and skills. We’ve long worried that not enough UK youngsters express any desire to work in the building industry. This is now compounded by fears of the actual or apparent impact of Brexit on the non-UK workforce.

The fundamental question that the paper avoids is whether any combination of our present arrangements for building can ever deliver the amount of housing we need; as the answer to that question may be too hot to handle. It’s old evidence now, but the Calcutt review of the housebuilding industry commissioned a decade ago set out a straightforward graphic showing who has built what in the UK in the years since the Second World War (see figure one on page 10).

untitled This evidence was summarised in a beautifully simple graphic (above) by the University of Sheffield School of Architecture. It evidences that the three decade long gap in our housing provision is simply because we’ve stopped building council houses. The answer to the fundamental question would seem to be to let councils (and housing associations) build again at some scale in order to supplement the relatively fixed-but-declining contribution of private developers.

The title to this post is a common misquotation of the Hippocratic Oath. It suggests that a first duty for medics is not to do harm “Primum non nocere” – and the new white paper seems to pass that test, at least. If a second duty is “then to do good” – then I’m not yet convinced that the paper will achieve that in any significant way.

Anthony Mason is an Associate at INLOGOV and works mostly on local government systems and organisation and on improving public sector partnerships. His early career was in local government followed by more than 20 years in PwC’s public sector consultancy team.

Alan Murie and Christopher Watson

The Housing Act 1980 and the Tenants’ Rights etc. (Scotland) Act 1980 mark a watershed in housing policy. In the aftermath of the First World War and the slogan ‘Homes fit for heroes to live in’ the introduction of exchequer subsidy for new housebuilding in 1919 resulted in sixty years of steady growth of council housing. Council housing, along with the expansion of home ownership, had transformed the condition of and access to good quality housing. By the late 1970s some 1 in 3 households were council tenants. But the election of 1979 and the new legislation passed in 1980 saw a change in the long established cross party support for council housing, ended the period of growth in the sector, and heralded a period of deregulation and privatisation.

The Housing Acts operated in the context of reduced public expenditure on housing and introduced the ‘Right to Buy’, the ‘Tenants’ Charter’, a new subsidy system for council housing and changes to the Rent Acts. They led directly to the decline of council housing, rapid growth in home ownership, a new and enlarged role for housing associations, and an eventual revival of private renting following a century of decline.

The Conservative Manifesto at the General Election of 1979 echoed ‘Homes for heroes’ in its emphasis on ‘Homes of our Own’, ‘The Sale of Council Houses’, and ‘Reviving the Private Rented Sector’. While the primacy given to home ownership was not new, the specific policies designed to achieve it marked a break with previous policy and were a challenge to local autonomy.

When the Conservative Party won the 1979 election, they saw their housing policies and the ‘right to buy’ in particular as factors contributing to their electoral success. Throughout the subsequent period the government continued to regard its initial policy stance as an electoral asset. It was also advantageous fiscally – delivering the largest capital receipts of any privatisation programme: though none of the capital could be spent on replacing the council housing that was sold.

The right to buy in 1980 did not introduce the sale of council houses for the first time as discretionary powers enabling sale had always existed. These were replaced in 1980 by a statutory RTB. It applied to almost all secure tenants with three or more years’ tenancy and to almost all properties where the landlord was a council, a new town, or a non-charitable housing association. A statutory procedure for sale was laid down to limit local variation over implementation and the Secretary of State was given very strong powers to monitor and intervene in local administration. Generous sale discounts were introduced, rising from 33% of market value to a maximum of 50% depending on the length of tenancy; and these were further increased under later legislation, to 60% for houses and 70% for flats.

The RTB was highly publicised and made more attractive to tenants because of a related policy to steadily increase council rents. After some initial nervousness on the part of building societies and other lenders, these institutions adopted the RTB with enthusiasm and more than nine out of every ten sales under the scheme were financed with private sector loans. By 1990 some 1.8 million council, new town and housing association dwellings had been sold into owner occupation in Great Britain and sales continued thereafter, making it the most successful privatisation ever. With reduced funding for new council housing the sector went into sharp decline.

The 1980 Act was a game changer not only in its own right but also for the future changes it signalled. Despite many protests, the Act subjugated local government to the will of central government. In this respect, the government’s approach was brazen, unlike the less transparent later attempts at privatisation in health and education.

The decline in the proportion of council housing from 33% in 1980 to 8% today has speeded the residualisation of the sector, moving council housing towards an American-style welfare housing sector, as intended by the Thatcher governments of the 1980s. The decline of council housing has been made more dramatic because of the transfer of a large part of its role to housing associations: in many parts of the country, associations now are more important housing providers than local authorities, further weakening the direct role of local government, especially district councils.

But with the combined housing stock of housing associations and local authorities, we still have a social rented sector in the UK which, at 18% of the stock, remains one of the highest in the world and which would now be difficult for governments of a neo-liberal persuasion to further challenge, especially in today’s situation of housing shortage.

The Labour governments of 1997 to 2010 were criticised by some for their continuation of the policy of council house sales but their encouragement of the further transfer of council housing to other registered providers (ie housing associations) has served to protect the provision of social housing, even if at the same time it has further weakened the direct role of local government. For these reasons, it can be concluded that the long term consequences of the Housing Act 1980 have profoundly changed the role and responsibilities of local government and weakened the position of council housing within the UK housing system. What remains, however, is a tradition of publicly provided not-for-profit housing and an organisational structure which continues to provide an essential alternative to the private housing sector.

Alan Murie and Chris Watson are former Directors of the Centre for Urban and Regional Studies at the University of Birmingham. Alan Murie is Emeritus Professor of Urban and Regional Studies and Chris Watson is Honorary Senior Lecturer. Both are members of the Housing and Communities Research Network in the University’s School of Social Policy.

INLOGOV Blog

The Institute of Local Government Studies, University of Birmingham

First, do no harm – An assessment of the Housing and Planning White Paper