By Sharon Connor, Garston and Halewood CLP and Unite member
I write this article as someone who has relied on social housing my whole life. I also have a career in social housing. It has been a lifeline for me and my family. However, I am now deeply concerned that this lifeline is under attack.
Taxpayers’ subsidised housing is the term used by the millionaire government of today. Their campaign myths have created the view that social housing is part of the problem, not a solution. There have been attempts since the 1980s to diminish social housing with RTB (Right to Buy) discounts of up to 70%. But this current attack goes deeper, opening the social housing market up to private sector competition.
The Welfare Reform Act 2012 brings whole new challenges to social housing providers. With changes to the welfare system, housing associations face being shifted into responding to the situation with rigorous risk management and aggressive rent pursuance. Organisations have identified immediate risks such as not being able to fulfil demand for smaller properties, an increase of hard to let voids, high rent transaction charges, not meeting loan covenants and an escalation of rent arrears. Social housing will no longer be sustainable, resulting in failure to deliver on their (till now) successful social return to communities.
Rent arrears are anticipated to increase from a national average of 3.7% to 5%. This figure is confirmed by recent disappointing results from six pilot direct payment projects. Social housing providers are desperately investigating a range of initiatives from creating credit unions to loyalty reward incentives in order to support rent payments. Organisations will have to make decisions on how to manage failure to pay rent while knowing such failure is due to the reforms. Like my colleagues I have chosen to work within social housing in order to make a difference, not to demean those who live in it.
Along with welfare reform, organisations also have to tackle housing reform. The Affordable Home Programme 2011–15 brings changes to tenancies, allocations, the way homelessness is dealt with and introduces so called affordable rents. The government will spend £4.5bn and says it will deliver 150,000 affordable homes. The Programme is in fact masked privatisation. Housing associations will be forced to offer affordable rented homes at up to 80% of the market value rent. This moves social housing into direct competition with the private sector and mirrors the residualisation from the 1980s RTB.
In reality housing associations have seen a significant decrease in new builds. Completed new build units will continue to decrease during the Affordable Home Programme 2011-15. New build funding has fallen from 50% to 20% leaving 30% to be covered by housing associations. Long term costs for new builds will continue to increase as a result.
I feel I should correct certain myths.
It is a myth that social housing is a burden on the public purse. Research confirms social housing receives £1.2bn per year in subsidy. The average Housing Benefit paid out for a social housing rent is £80.85 per week compared to the £107.06 per week needed for private sector accommodation. This actually means approximately £4.626bn is saved by the public purse by the use of social housing.
Evidence also suggests that every £1 spent on social housing generates a return of £3.70. A study commissioned by the Northern Housing Consortium confirms housing organisations are worth over £10bn a year to the northern economy. Spending in this sector can only be a good thing for the economy.
The Social Value Act 2013 requires housing associations to demonstrate how their work benefits local communities. The facts speak for themselves. Social housing delivers a progressive and sustainable resource, a lifeline and beacon of hope within the community.
Social housing increases housing standards across all sectors, taking a lead in design, planning and asset management. It offers safe, secure housing, reduces crime, enhances opportunities and improves health and wellbeing.
Research recently carried out shows clear links between quality housing and good health resulting in less demand on NHS. Yet in spite of all this we have a government determined to diminish social housing. There can be no doubt, choosing to invest in an unregulated private sector will add cost for the taxpayer with high rents that provide no social return.