What’s the plan?

The past six months have seen a steady feed of policy announcements that appear to be components of an ideological view of what social housing is for and where it fits within the housing market and wider social policy. It seems to be part of the government’s ongoing programme, started in 2010, to reset the balance between the individual and the state. If we were to join up the policy dots, can we discern a master plan?

But why do we have to do this? Why is the government not being transparent about its vision for housing and for wider social policy? Is it because the big picture is so contentious that it wouldn’t just be providers expressing concern. It might be the electorate too because this is about the kind of world we want to live in.

This lack of transparency means we have to build our own picture based on the Policy Exchange’s back catalogue and CSI-style profiling of the ideological propensities of the current architects of social policy.

Many of us might not like it, but you have to give the government grudging credit for having a go at answering two difficult long-standing questions that others have shied away from:

  •  what is social housing for in the 21st century?
  •  how do we reform the welfare system?

Unfortunately, the ‘mandate’ and unbounded enthusiasm mean the government is taking a somewhat unilateral approach to re-imagining puzzling ‘national treasures’ that were conceived with a reasonable degree of consensus. We have known for some time how radical they want to be with welfare. It is now apparent they will be just as radical with social housing.

Thanks to the bedroom tax and revisiting ‘tenancies for life,’ it looks like they see social housing as a time-limited, needs-based welfare product. For all but the most vulnerable, it’s probably a temporary safety net – a transit lounge-cum-rehabilitation stop on the tenant’s journey of aspiration toward home ownership. It follows, therefore, that we shouldn’t need so much social housing, and the redirection of any capital grant to home ownership, sale of high value council stock and extension of RTB to housing associations seem to underline this. But what is the right tenure mix? What are we aiming for?

Home ownership is valued above all else, and if the sector knows what’s good for it, its efforts should be maximised in that direction. So whilst social housing provision probably has limited value as a safety net, there’s lots more latent value in social housing assets and social housing providers. Both may be usefully deployed in the attainment of a vision of a property owning democracy v2.

Like many others, I’ve been playing ideological bingo with the Policy Exchange’s back catalogue to test the provenance of government policy and try to predict the future. The book of revelation I’ve recently thumbed through is called Making Housing Affordable: A new vision for housing policy. It’s certainly that – unlike the government it does offer a big picture. It includes a number of policies already mentioned, and although five years old, it may still have appeal given that the Liberal Democrats have been a drag on the Tories’ progress.

The basic thrust is that social housing exacerbates the ‘expensive problems of welfare dependency and poverty’, it’s twice the size of the EU average (is there an implied target there?), a rising HB bill just can’t go on and housing associations (as an alternative to council social housing provision) are a worthy but failed experiment. This all sounds a bit familiar too. Its author, Alex Morton, has virtually become a household name (in households where two of you work in housing).

Clearly there’s an alternative story to be told. The problem is Alex got there first, and now as a special adviser to Number 10, he has influence. As a sector we have failed to develop a compelling vision for social housing in modern society. The LSE’s John Hills urged the start of such a debate in 2007. Alex took up John’s challenge and worked it all out as early as 2010. So now, it seems, the definition of VFM in social housing is about public asset stripping and the redeployment of the sector in home ownership pursuits. In other words the value of social housing is what it can do for home ownership.

If social housing ends up with a residual, welfare role the government needs to ensure that other variables are favourable, eg that housing markets work and that we have high levels of people in secure work that pays. It’s not going to happen. Until it does there will always be the potential for an alternative vision for social housing, but to do this the sector narrative needs to switch from a focus on provider survival to product survival.

Here’s a few other ideas from Alex:

  • homeownership ‘to support the goal of well over 80% of the population’ (is that an implied target?)
  • social housing as a route into ownership by gaining an equity stake via rent (isn’t this picked up in the NHF’s RTB deal?)
  • stock transfer associations should have their assets transferred back to government
  • the value of merged stock should be transferred back to the government

The last two are completely outrageous ideas that could never happen, but we live in unusual times.

If only there was a way out. Once again the Policy Exchange has a solution. Freeing Housing Associations, does what it says on the tin and suggests that associations should be allowed to buy their freedom from government control. Might this be achieved by the government selling its stake in housing associations and offering a deregulatory package that re-reclassifies the sector?

Ultimately, what the government would like to do and what they can do are two different matters as evidenced by the tax credit U-turn. Political opposition, including within the Tory party, might limit the vision, as might representations and legal action from those affected. But whichever way you look at it, the role and quantity of social housing is set to change and with it the role and quantity of providers.

In the wake of the spending review, and as further detail emerges, it’s likely that business plans will need to be recalibrated again. It’ll take a while longer before we look back and talk of social housing in the same foggy way we explain British mining to our kids unless we come up with a compelling modern vision for the sector’s principal product.

About Steve Smedley

Steve is an Acuity associate and independent consultant. He is author of "Social Hearts and Business Heads" and his experience in Social Housing and enthusiasm for improving services has led him to become a leading thinker and practitioner in the sector.
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