Christmas past, present and future: a seasonal analysis

Part 1: Another year over and a new one begun … nearly

Through autumn the mood music mellowed to one that is more agreeable to the sector. The regime change afforded by the departure of the three kings of housing policy – Cameron, Osborne and special advisor Morton – ushers in the possibility of a break with the ideology that has prevailed since 2010. Nothing particularly wise about these men, arguably they have fuelled a homelessness and housing crisis and undermined the capacity of councils and housing associations to be part of the solution.

They will also be remembered for ending state support of social housing – a product that served the nation well since 1919 when the electorate expected payback for the price it paid in a ‘total war’. Social housing became a tool for maintaining the social contract between state and citizen – smoothing the rough edges of inequality and a hopelessly dysfunctional housing market. The kind of intervention you need when a considerable percentage of your citizens are disaffected with the political system and frightened by the uncertainty associated with global economics. Not content with ending investment in social housing, the three apocalyptical cavaliers even killed off the contentiously named ‘affordable’ rented product before they rode off into the sunset.

Star of wonder

The star they followed – homeownership – seems to have led us down the garden path. A selection of homeownership gifts failed to get the volume builders building. The result is not only a failure for homeownership but for supply of any kind. The builders are in the dog house and associations are in a very strong position to step in and save the day.

Voluntary Right to Buy (VRTB) – possibly the most wondrous homeownership product because, with a little sprinkle of aspiration, it turns a social tenant into a homeowner – has led to trench warfare between the government and local authorities over its funding. It won’t be over by Christmas or any other Christmas in the next few years. A Treasury-funded pilot –VRTB reloaded? – rumoured to be set in the West Midlands, effectively kicks it down the road. It is argued that this is what happens when Ministers don’t listen to their civil servants about tedious practicalities – same can be said for a number of other policy U-turns – and press ahead with manifesto commitments they never expected to have to implement because a Tory majority was never on the cards. We have learnt that democracy throws up surprise results.

Simply having a wonderful Christmas time?

Not limited by the dream of Lithuanian levels of homeownership, Barwell, the new Housing Minister, seems to ‘get’ housing issues and talks of product flexibility and the need for more homes of every type. Supply of any kind is now the priority. This has carried across to the Autumn Statement where housing is now recognised as part of the nation’s infrastructure – its under-supply a contributory factor to the UK’s longstanding comparative poor performance on productivity. It includes the product flexibility NHF has lobbied for and £1.4bn new money for affordable homes. It’s an amazing turn of events given where we were. What might also help, going forward, is that Downing Street calls the shots, not Treasury, and so far, May is throwing her weight behind housing supply. The risk here, however, is that her control freakery might hold certain key policies up.

Whilst this is blessed relief for the sector, May’s recognition of the widespread disaffection underpinning the Brexit vote has not been reflected in steps to shore up household finances in anticipation of the economic hardship that will be visited on the ‘just managing’: a pincer movement incorporating a largely unmodified and regressive welfare reform programme together with Brexit-related challenges such as inflation. Reports of the zombie apocalypse following the Brexit vote didn’t spread further than Marmitegate, but the economic risks remain real – it’s just a case of when they bite and how hard. As many of the people worst affected by the crystallisation of these risks live in social housing, associations will feel the impact on revenue as well as community well-being.

Disquiet is also growing amongst Tory councillors and MPs regarding the crisis in social care and the fact that the Autumn Statement was silent on addressing it. In November David Behan, CE at the Care Quality Commission, also suggested that adult social care was now at a tipping point – continent people with mobility problems being left to wet themselves is an uncomfortable truth in every sense. All of which throws the recent decision to apply the Local Housing Allowance (LHA) housing benefit (HB) limit to all supported housing tenants from 2019 in stark relief – supported housing is part of the social care solution and is being undermined when it is needed most. A business model that requires a ‘discretionary local pot’ to make up the difference between what HB pays and what the rent costs provides a shaky foundation going forward, and for most means no further development of supported housing. A consultation on reforming the funding of supported housing ends in February.

Neither should we assume Barwell has been sent to save us just yet. Homeownership will not go away and neither will the state of the nation’s finances, the bleakness of which served as the backdrop to the Autumn Statement. Barwell, like others in government past and present, thinks the sector is inefficient and could do more. He did however bring ‘affordable’ rented back from the dead. It is suggested his Thatcherite boss, Javed, the Secretary of State for Communities and Local Government, hasn’t formed a view on associations yet, but is unlikely to be as enthusiastic as Barwell, which underlines the importance of the sector’s relationship with the latter.

The government will continue to view the sector as sub-optimal in terms of operational costs and supply until a compelling evidence-based counter narrative is proffered. As David Orr has recently suggested, the way to kill off the sector’s VFM question, as far as government is concerned, is to increase supply. Thankfully it’s easy to measure, but will the sector respond? Flexibility and the reinstatement of grant help. Supply, of course, is not the answer in all parts of the country and not all associations have the financial capacity to develop – it’s important that such context is communicated and understood.

That’s the view from the Ghosts of Christmas Past and Present, so what can we expect in 2017? You’ll have to wait for Part 2: ‘I’m dreaming of a White Paper. (published next week)’

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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