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Alex Morton: Striking the right balance in the social housing sector

AMAlex Morton is Research Director for Housing, Planning and Urban Policy at Policy Exchange.

The issue of social housing was a key part of the recent Spending Review. Mark Prisk, the Housing Minister, is to be congratulated on having struck a sensible balance between supporting the sector and requiring that it uses its assets in a fair and efficient way. The combination of rises of CPI plus 1 per cent for social rents untill 2025 and the allocation of £1.1 billion a year in grants during the 2015-18 period gives social housing providers the stability to plan for new homes.

This£3.3 billion will build 165,000 new homes over three years, allied to receipts from a reinvigorated Right to Buy. The grant per home will be just over £20,000 per property, a third of what was being spent by Labour – without adjusting for inflation. This will mean more social homes every year from 2015 to 2018 than in any year under Labour, and the argument that spending less cannot go along with better outcomes is yet again shown to be false.

Of course, in the long run we must resolve issues around a dysfunctional land market, development and planning systems, but these new social homes will be a boost to the economy and help move some of the 1.8 million households currently trapped on the social housing waiting list.

Much of this improvement is due to the concept of ‘something for something’ deals with social housing providers. Rather than falling for the argument the only solution is more borrowing and debt, Mark Prisk argued at the Chartered Institute of Housing that:

“we expect providers to take a rigorous approach in looking at every re-let and asking how it could best help build more homes to help more families. I expect the result to be a significant change in the number of homes that are either converted to Affordable Rent or sold when they become vacant.”

This policy of selling off the most expensive properties when vacant to pay for more homes was set out in a Policy Exchange report, Ending Expensive Social Tenancies. This pointed out that even on cautious estimates such a policy would raise around £4.5 billion annually, leading to the construction of tens of thousands of extra homes each and every year. It is to be strongly welcomed that there is now clear leadership and movement forward on this issue.

Vigorous stock management is clearly key to the Government’s approach. Many areas are having to become more efficient as the welfare state is made fit for purpose. It is therefore completely right that empty, expensive social properties are sold to provide receipts for multiple decent but not excessive homes, rather than a single mansion given to a single family at the taxpayer’s expense. This is the strong view of the public. Just 15 per cent thought that social tenants should get more expensive housing than the average in an area – even only 24 per cent of Labour voters agree with this idea. The public are well ahead of the political debate.

There is of course much to be done before we can stop the double injustice of expensive social tenancies both to those on the waiting list and taxpayers. Myths about employment, which our report comprehensively debunked, are likely to return, as well as other arguments around ghettoisation (the implicit assumption if you can’t live exactly where you want you are somehow a victim, or that anyone who lives more than ten minutes from work is somehow living in a slum). Local authorities and housing authorities must publish data on their re-lets to identify those who are effectively wasting money and refusing to help those in need on the waiting list.

Given the interest in the issue of welfare reform, it is odd that these proposed changes are not being promoted more vigorously. MPs, councillors, the press and public should be aware the proposal from the Coalition post-2015 is both for more homes and a fairer welfare state in housing provision. This is a popular, and more importantly, right policy.

Prisk is to be warmly congratulated on leading in this area and developing policies that are fair, popular, and will deliver more homes. The next step must be to see if the Labour Party is prepared to defend the indefensible position of expensive social tenancies, and for the Minister to set out the detail of how these reforms to social housing will operate in order to make it fairer for tenants, taxpayers and those on the waiting list. 


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