Cameron proposes ending housing benefit for under 25s

The prime minister David Cameron previewed a speech he is to make later today on the fairness and cost of welfare in an interview with the Mail on Sunday.

The proposal that hit the headlines was Cameron's confirmation that the government is considering removing housing benefit entitlement from most people under 25 - an idea first floated back in April. The Mail says there will be exemptions for "special cases, such as domestic violence."

Cameron said

‘We are spending nearly £2 billion on housing benefit for under-25s – a fortune. We need a bigger debate about welfare and what we expect of people. The system currently sends the signal you are better off not working, or working less.’

Other ideas under consideration include setting time-limits on other benefits and restrict payments to families with more than three children.

The latest national statistics on Housing Benefit produced by the Department for Work and Pensions show [Table 9a] that over 385,000 HB recipients were under 25 in March 2012. Almost 172,000 of these were single parents, and a further 32,500 were couple with a dependent child.

The plans have been widely condemned by the housing sector - Campbell Robb, Shelter's Chief Executive, said:

'At Shelter we know that many young people simply don’t have family and friends to fall back on if they lose their job, and rely on housing benefit to keep a roof over their head.

'At a time when many young people are facing significant difficulties in finding work, these proposals would leave thousands with nowhere else to go. They would also present serious problems for vulnerable young people, for example care leavers and those who have experienced family breakdown.

'Currently over half of young people who rely on housing benefit to pay a private landlord will be on benefits for less than six months while they are unemployed and look for work.

'And since previous changes to housing benefit will force people with spare rooms to downsize and penalise those with adult children living at home, these policies appear completely contradictory.'

The Guardian noted that the shadow work and pensions secretary Liam Byrne was wary of saying whether he agreed or disagreed with Cameron's proposals when he was interviewed on the Today programme this morning. He said it was unfair to expect Labour to have a position because the plans were "pretty hazy and half baked".

MPs call for improved regulation of park homes

The Communities and Local Government Committee has published the findings of its enquiry into park homes that found park home residents – most of whom are elderly - are exposed from exploitation by unscrupulous site owners.

MPs found that malpractice is widespread across the sector, with the most widespread problems being:

• Sale blocking' - where a site owner prevents a resident from selling their home on the open market by withholding 'approval' of the prospective buyer;
• Harassment by site owners;
• An out-of-date licensing regime with a maximum fine of £2,500 for unscrupulous site owners; and
• Confusion over contractual obligations and out of date legislation which gives residents little redress if the site is not properly maintained.

Approximately 85,000 households live on about 2,000 mobile home sites in
England.

The Committee welcomed the government's consultation A Better Deal for Mobile Home Owners, published in April but warned that more needs to be done. The consultation proposed new legislation: welcoming the Committee's findings yesterday, Housing Minister Grant Shapps suggested that the government would back a Private Members' Bill to be introduced by Conservative MP Peter Aldous.

Shapps backs move to criminalise tenancy fraud

The housing minister Grant Shapps yesterday announced that the government would back a new Bill, introduced in Parliament by Conservative MP for Watford Richard Harrington, which would make the subletting of social homes a criminal offence.

In January of this year the government consulted on whether a new criminal offence of social housing tenancy fraud is necessary and proportionate. The consultation closed on 4 April, but the government has not yet published its response.

The Prevention of Social Housing Fraud Bill, which is scheduled for second reading in the House of Commons on 13 July, would:

• create a new criminal offence of subletting; and
• allow for proceeds of subletting to be reimbursed to the social landlord in whose stock the fraud was committed.

In 2010, the Audit Commission estimated that up to 50,000 homes may be unlawfully sublet. With temporary accommodation for homeless families costing Councils’ around £18,000 per family, per year, a recent report estimated that the public purse is being depleted to the tune of nearly £1 billion a year.

Harrington said:  

"It has been a concern of mine for some time that whilst hundreds of people in my constituency are unable to access social housing and may sit on the waiting list for many years, a large number of properties are being sublet improperly - allowing those individuals who do so to profit at the expense of local authorities and preventing hardworking and the most vulnerable individuals and families from accessing homes."

 The minister promised:

"I look forward to working with Mr Harrington to give this Bill the best possible chance of being passed into law."

In 'The guide to tackling housingtenancy fraud' the National Fraud Authority and the Chartered Institute of Housing report that there are mixed opinions in the social housing sector on the merits of criminalising sub-letting. However, the housing law blog Nearly Legal today argued that the Private Members' Bill is unnecessary, as unlawful subletting is already a criminal offence under the Fraud Act 2006, citing successful recent prosecutions by Camden and Westminster councils.

Britain should build its way out of recession

Business Secretary Vince Cable has delivered a speech to liberal think-tank CentreForum urging his government to help Britain build its way out of recession.

The speech, which reads like an economic history text book, compares the world of finance during the inter-war period to that of today, making the following points:

• Recovery requires a big expansion in social and private house building -  government guarantees could trigger a significant volume of housing investment, replicating the recovery model of the 1930s - a virtuous circle of new building lending to increased affordability and also increased private demand - led by building societies.
• The massive increase in private housebuilding - from 130,000 in 1931 to 300,000 in 1934 - contributed almost a third of all employment increases in that period. Today construction accounts for 20 per cent of the manufacturing sector, so a replication would have a massive boost for the economy.
• The destruction of the British building society movement from the 1980s was one of the great acts of economic vandalism in modern times as there is now no institutional structure in place to offer countercyclical lending - as there was in the 1930s.

Dr Cable concludes that his government is looking at:

"some radical solutions" encompassing "monetary policy, liquidity policy, credit easing and banking policy to ensure that financial institutions perform the role played by building societies and banks in the 1930s"

Adding, "Innovative approaches to public policy - making the most of the fact that our resolute action has given us a strong balance sheet - are the key to unlock this potential."

Pay to Stay consultation

After much ballyhoo in the press, most recently in today's Telegraph, the government has published a consultation paper on the government's plans to ensure that social tenants on higher salaries pay a market rent to live in their homes.

Housing Minister Grant Shapps argued that this "handout to the very rich" must end if social housing is to offer the vital support system to those in need.

High Income Social Tenants: Pay to Stay Consultation seeks views on:

• the income threshold above which tenants might be asked to pay a higher rent
• what the higher level of rent should be
• disclosure of income by tenants
• whether the policy should be voluntary or compulsory for social landlords

Shapps said:

"For far too long, millions of people on waiting lists have watched helplessly as high-earning social tenants continue to occupy homes designed to help the most vulnerable. These high-income tenants are not only blocking homes that could benefit those in greater housing need, they're also relying on poorer taxpayers to subsidise their lifestyle."

Making the case for reform the consultation claims, 'that in social rented housing in England there are between 1,000 and 6,000 households where the Household Reference Person and partner have a combined income over £100,000 per annum; and 12,000 to 34,000 earning £60,000 or more.'

The consultation paper makes it clear that there are lots of practical and legal obstacles to be overcome before the Pay to Stay could be introduced, especially for existing tenants, and the paper glosses over the logistical problems of assessing tenants' incomes.

Former CIH Head of Policy John Perry, writing in Public Finance last month, addressed some of these issues, along with the irony that many of the higher earners are likely to exercise their Right to Buy and gain a windfall profit of up to £75,000 from the public purse:

"In Westminster, 175 high-earning tenants are forecast to do this over the next three years, costing a potential £13m.  This is a real loss to the public sector, unlike the current ‘subsidy’ they receive which is simply the gap between social and market rents.

"The mooted ‘pay to stay’ plans would bring in a claimed £21.6m per year by hitting the pockets of better-off tenants, but at what a price? While some tenants might pay up, most are likely to hit the right to buy button and claim their big discounts. Furthermore, to make a surplus from this exercise at all implies being able to assess and monitor the incomes of four million tenants for less than £5 per tenant per year, which is clearly absurd."

Statistical controversies

The Coalition Government has this week been under multiple attack for its questionable use of statistics to justify its policies.

Director of the National Institute of Economic and Social Research Jonathan Portes said of the 120,000 families that the government claims are the cause of £9bn state spending, and are to be the subject of its Troubled Families programme: ‘it is difficult to conclude anything except that the Department [of Communities and Local Government] and the government have become hung up on the 120,000 number despite the fact that they are well aware that it is now completely discredited, either as a national estimate of the number of “troubled families” or as a sensible guide to local policy.’

The non-partisan factcheck organisation Full Fact cast doubt on the accuracy and derivation of the £9 billion cost attributed to “troubled families”.

Meanwhile, shadow housing minster Jack Dromey has written to the new chair of the UK Statistics Authority (UKSA), Andrew Dilnot, to complain about Housing Minister Grant Shapps's “consistent misrepresentation and misuse of statistics” in relation to housing and homelessness. Dromey says:

“I am deeply concerned that this casual attitude to accuracy is not only confusing to the public but is obstructing genuine public debate. Furthermore, it undermines legitimate calls for real action to deal with our nation's housing and homelessness crisis.”

He lists six specific examples of ‘misrepresentations’, and asks for UKSA to give its views on each use of statistics. For example, Shapps has on two occasions told MPs that there was a net loss of homes under the previous government, whereas Labour claims official figures show the actual number of homes in England grew by 2 million during the period.

According to 24Dash.com, Shapps responded by describing Dromey’s criticisms as an “incomprehensible rant”.

A briefing published last month in the RadicalStatistics blog estimates that the Pickles's Communities and Local Government department has shed between 25 and 32 per cent of its statisticians since March 2009, which poses the question, how much is any misuse of statistics down to political spin and how much to the lack of resources in Eland House?

Total 'troubled families' takeup

The government has announced that every eligible council has agreed to run the Government's Troubled Families programme in their area.

A 'troubled family' is defined as one that has serious problems, including parents not working and children not in school, and causes serious problems, such as youth crime and anti-social behaviour, and causing high costs to the public purse.

The Prime Minister has pledged to turn around the lives of 120,000 troubled families in the next three years through an intervention programme launched in March this year.

Councils will be paid by results up to £4,000 per family towards the cost of successfully intervening with eligible families across England, but will have to meet the remainder of the average cost of £10,000 per intervention themselves. The government's £448 million three-year budget is drawn from across seven departments.

Communities Secretary Eric Pickles said:

"The fast and unanimous level of take-up shows that the Government has got the confidence of local councils that together we can tackle a problem that councils have long grappled with. We cannot go on spending so much taxpayers' money on such a small amount of families without turning their lives around once and for all.

"We now have an opportunity to offer real and lasting change for these families and the communities around them. Everyone will benefit from getting kids off the streets and into school; getting parents off benefits and into work; and cutting youth crime and anti-social behaviour. But it is also right that we will only pay councils in full if they deliver the results that we require."

In an interview in yesterday's Independent on Sunday, the Communities Secretary revealed that he draws inspiration from a photo of a gun-toting John Wayne in The Man Who Shot Liberty Valance – "just in case I get any feelings of self doubt".

Speaking of the Troubled Families programme, he said "more forceful in language, a little less understanding," adding "sometimes we've run away from categorising, stigmatising, laying blame."

Rather embarrassingly, Prime Minister David Cameron, the driving force behind the programme that aims to tackle poor parenting, accidentally left his eight year old daughter Nancy behind in a country pub yesterday, according to a report in the Daily Mirror.

'Rental Britain' is here to stay

A new study from Cambridge Centre for Housing and Planning Research (CCHPR) and reported in yesterday's Observer predicts that, unless the economy picks up, England will be more and more dependent on rented housing.

The report, Housing in Transition: Understanding the dynamics of tenure change, finds that patterns of housing tenure in England have changed dramatically over the last twenty years. Looking forward, and depending upon the nature of economic recovery, it predicts there could be even greater change.

Mortgaged home ownership could fall to little more than 25% of all households from over 40% in the early 1990s, with overall home ownership dropping from a high of around 70% to perhaps 62% in 2025. In policy terms, we can no longer discuss home ownership as a single tenure – outright ownership and buying with a mortgage are two very different segments of the market, with different age profiles.

Private renting could increase by nearly 40% to house over 5.5 million households. For families in London, if the economy remains stagnant, private renting is projected to become the dominant tenure within 10 years, where it will house more than 300,000 families with children – a 50 per cent increase over the period.

The report finds that social renting continues to play a core role in housing provision, especially for those on low to middle incomes, and still houses 46 per cent of low income households in the capital where it plays a mainstream role in the London economy. It concludes that the tenure is a key factor in London’s competitive position, not least in relation to its very substantial service sector.

Shelter's chief executive, Campbell Robb, said:

"This report shows what is fast becoming the new reality of our housing market in the current economic climate: home ownership continuing to fall while renting becomes a way of life for British families.

"Yet despite the growing pressure on the rental market, the government's recent housing strategy virtually ignored the sector and did little to address the issues of affordability, stability and quality that so many renters face. It's time government woke up to the fact that 'rental Britain' is here to stay."

A summary report is available from Resolution Foundation and Shelter.

Free up councils to tackle the housing crisis

The Local Government Association (LGA) is today launching a ‘Housing the Nation' campaign, calling on government to remove some of the restrictions hampering local authority efforts to tackle the nation's housing crisis.

The 'Housing the Nation' campaign is calling for:

• New housing developments with the necessary roads, schools and public amenities to support the people living there.
• Giving councils access to the money they need to build new homes and bring existing ones back up to scratch.
• Speeding up the process of bringing empty homes back into use.

A survey of frontline councillors carried out by the LGA reveals that public opposition is the single biggest barrier to the building of new homes. However, development which comes with appropriate infrastructure is nearly four times more likely to be supported by the public, according to the survey.

The LGA is warning that councils' efforts to ensure that all new developments come with the appropriate infrastructure like roads, schools and parks risk being undermined by government proposals to allow developers to force councils to re-open Section 106 agreements previously agreed with developers.

Cllr Keith House, Deputy Chairman of the LGA's Environment Board, said, "It is widely recognised by all that we desperately need new homes and at the moment, there simply aren't enough being built."

"Councils play a crucial role both in providing affordable and social housing and working with developers to plan new private sector housing. But to do this more effectively, local authorities need greater freedom and financial control to invest in new and existing homes. The constraints of Whitehall are preventing local authorities from tackling the housing crisis."

"By allowing local authorities the flexibility to finance new homes and make best use of the homes already available councils can play a role to turn the tide on the housing crisis and get to work providing the new homes the country so desperately needs."

Tax breaks for granny flats?

Communities Secretary Eric Pickles was reported at the weekend as planning to exempt 'granny flats' from council tax in a bid to tackle the housing crisis.

He told the Daily Telegraph that the government is considering abolishing council tax for annexes used by family members, removing ‘red tape’ such as planning regulations governing the conversion of outbuildings and garages, claiming it was “fundamentally unfair” for households to be charged twice by paying council tax on their homes as well as the annexes.

Pickles told the Daily Telegraph:

“We are keen to remove tax and other regulatory obstacles to families having a live-in annexe for immediate relations. We should support homeowners who want to improve their properties and standard of living. These reforms should also play a role in increasing the housing supply.”

The paper reported that DCLG officials estimate that the change could benefit as many as 300,000 households in England.

Currently self-contained units of accommodation within a property must each be treated as separate dwellings for council tax purposes. However, there is an exemption for an annex, occupied as their main residence, by a dependent relative (aged 65 or more, or severely mentally impaired or substantially and permanently disabled) of someone who is a resident in the main dwelling.

The latest proposals would extend the exemption to relatives of any age and could provide an separate home for adult children unable to afford to move away from home.

In a consultation document published in March the government asked "in what circumstances if any do the rules requiring the separate banding of self contained units of accommodation within a hereditament give rise to unfairness?". The majority (84 per cent) of respondents said that the rules were not unfair or that they were unfair if the annexe is no longer used separately.

Hilary Benn, Labour's communities spokesman, claimed:

 “This cynical spinning shows that, once again, the Tory-led government is over-claiming and under-delivering for our nation's pensioners.

“This seems to be nothing more than an attempt to deflect attention from their housing crisis. We need to get building and get the economy moving again.”

Serious concerns on government's Gypsies, Roma and Travellers policy

A group of UK academics with extensive experience of researching Gypsies, Roma and Travellers (GRT) communities have expressed serious concerns about coalition government policy.

In a paper published today on the Equality and Diversity Forum the researchers found the government's GRT policy does not engage with or adequately promote community groups and opposes forms of positive action.

The paper analyses a Progress report by the ministerial working group on tackling inequalities experienced by Gypsies and Travellers, published in April 2012, and its integration strategy Creating the conditions for integration, published in February 2012.

Whilst concerns and commitments expressed by the government to reduce inequalities are welcomed by the academic researchers, the paper makes a number of proposals to ensure GRT community equality:

• to enable the state to ensure equality rather than acting as a passive spectator, some form of positive action mechanism may be required to counter institutional racism as well as overt, race based opposition to the delivery of tailored services and particularly, Traveller sites.
• a return to a statutory obligation or duty on local authorities to provide sites, as well as formal recognition of the disadvantages experienced by vulnerable groups (such as former prisoners in bail hostels, learning disabled adults or residents of social housing).
• to bring about change, there is a clear need for representation and open access to policy makers by GRT communities.

The Count of Gypsy and Traveller Caravans in England which took place on or around 19 January 2012 has recently been published. It reports that the total number of Gypsy and Traveller caravans in England has increased by 400 to almost 18,750.

Could construction kick-start the economy?

News has emerged that the government will shortly launch an urgent plan to kick-start construction, as the Prime Minister looks to the housing sector to rescue the nation's flagging financial fortunes.

Intuitively, this is a logical 'next step' for the coalition following April's GDP figures - published by the Office for National Statistics (ONS) - which pinpointed poor construction output as the trigger for a double-dip recession.

However there is disagreement about how a renaissance in construction would be financed, and essentially the government wants to create growth without raiding its own funds. According to Inside Housing:

'Options being considered include using government guarantees to encourage private sector investment in housing, and the possibility of using housing association balance sheets to support further development through extending the £1.8 billion affordable rents programme.'

However, Kate Barker, author of the 2004 Barker Report into housing policy, is sceptical of this approach saying, 'I’d be surprised if this this turned out to be the way forward.'

Danny Alexander, the chief secretary to the Treasury, recently met with housing association chiefs, exploring plans to make it cheaper for them to borrow money from capital markets. According to news site 24dash:

'...it is understood that the plan could feature the Bank of England purchasing social housing bonds as part of its quantitative easing programme.'

While Inside Housing focuses on housing associations' potential to finance a construction boom, Matthew Warburton from the Association of Retained Council Housing writes:

'Current government incentives are insufficient to stimulate more new house building', arguing that council self-financing is a desirable alternative - promoting the view that central government should encourage this by removing debt ceilings, paving the way to prudential borrowing.