The Housing Bill: From bad to worse

Originally posted on January 13 on Inside Edge 2, my blog for Inside Housing 

If it is an achievement to pilot a Bill through the House of Commons and end up with legislation that is worse than what you started with, then congratulations Brandon Lewis and Greg Clark.

Back in October I blogged that the Housing and Planning Bill is written on the back of a fag packet. On Tuesday it completed its report stage and got a third reading with additions and amendments scribbled all over the front as well. It was hard to disagree with the verdict of shadow housing minister John Healey in his closing speech: ‘Usually, we hope to improve a Bill as it goes through the House. This was a bad Bill; it is now a very bad Bill.’

Healey cited late amendments to change the definition of ‘affordable’ to include starter homes costing up to £450,000 (‘the Government are not building enough affordable homes, so they are simply branding more homes as affordable’) and to force councils to offer fixed-term tenancies (‘meaning the end of long-term rented housing, the end of a stable home for many children as they go through school, and the end of security for pensioners who move into bungalows or sheltered flats later in life’).

It was hard to disagree either with his view that ‘the Bill sounds the death knell for social housing’. That much will be obvious to anyone working in housing or who has followed the progress of the Bill. The tab for the Conservative manifesto pledges of extending the right to buy and building 200,000 starter homes is effectively being picked up by councils that still own their homes, tenants and people who will not get the chance of a social tenancy in future.

The Bill accelerates the slow death of social housing through a combination of deliberate culling (forced sales, Pay to Stay and fixed term tenancies for council housing), euthanasia (voluntary right to buy for housing associations plus conversions) and redefining the conditions for life (‘affordable’ will now not just mean starter homes but anything the secretary of state says). It is also now official that a private rented home does not have to be fit for human habitation.

You might think that most Conservatives would see it as good news that the chapter of the Bill called ‘the future of social housing’ effectively means that there will not be one. To quote two examples of triumphalism, Croydon South Tory MP Chris Philp called starter homes of £220,000 to £250,000 ‘extremely affordable’ while Brandon Lewis told a Labour MP worried about the loss of 500 council homes in his constituency to ‘google #ownyourownhouse’. Other Tories seemed too delighted with the Bill is the first to be passed under English Votes for English Laws to bother much about what’s in it.

But Tuesday’s debate also showed that more and more Conservative MPs have woken up to aspects of the legislation that are already causing their colleagues in local government deep concern. There are long-term worries, summed up by Cities of London and Westminster MP Mark Field, about the impact on communities and the economy of both forced sales and the thresholds for Pay to Stay. On a more basic level though the penny has dropped that the high-value council houses to be sold will be in areas with higher house prices that often have Tory MPs.

That was most obvious in one of the sub-plots of Tuesday night’s debate, which was effectively a hustings for London mayor. Zac Goldsmith’s amendment, put forward in the name of Greg Clark and now part of the Bill, will ‘require the authority [councils selling high-value stock] to ensure that at least two new affordable homes are provided for each old dwelling’.

Sadiq Khan’s unsuccessful amendment stipulated one affordable replacement but insisted that it be of the same tenure, in the same local authority area or borough and in accordance with locally assessed housing need.

Two may sound better than one but not so fast. First, it’s not at all clear that two for one will be legally enforceable. Second, when taken in conjunction with the change in the definition of affordable, one council home in Westminster could be replaced by two starter homes in the outer reaches of the tube map and beyond. Third, this effectively means that forced council sales will end up as yet more subsidy for starter homes if (when?) the government realises it is struggling to meet its 200,000 target.

This opens up new territory for the Bill. There is a debate to be had about selling social rented council homes and replacing them with, say, shared ownership. Supporters might argue it will mean more homes overall and whatever your view on that the subsidy will be retained within the housing system. Replacing them with starter homes means the subsidy goes straight into the back pocket of the lucky buyer (see last week’s blog on failed attempts to amend the Bill on this) and precious assets of council houses and land are lost for ever.

Lewis and Clark are also under intense pressure from other Tory MPs who argue that what’s good enough for London should also apply to their constituencies outside the capital. The Goldsmith amendment also allows the secretary of state to create exceptions for other housing authorities. Lewis said this flexibility would allow the DCLG to consider local circumstances and housing need and added that he looked forward to working with (Tory) MPs from Oxford, Altrincham, Hertford, Aldershot, St Albans, Ipswich, Tonbridge, Braintree and other areas, quickly adding South Cambridgeshire to the list.

However, Nicola Blackwood, Tory MP for Oxford West and Abingdon, did not sound too sure. ‘Such an exception would be essential for Oxford to ensure that we have sufficient social and affordable housing. However, I remain to be convinced that the power will be sufficient to ensure that this is delivered, following the challenges that we have faced.’ She added that she and Tory colleagues from other Tory areas would ‘if necessary look to the House of Lords’.

And what impact would reserving more of the receipts for certain areas have on the overall policy and on lower-value areas? Forced sales will have to pay for housing association discounts, the outstanding debt on council homes and a brownfield fund as well as replacement homes. Well-founded doubts about this have already been raised by the IFS, CIH and Shelter. When you add two for one replacements in high-value areas into the equation, that must either mean less than one for one in low-value ones or an even greater dilution of the meaning of replacement and affordable across the board. At the very least it will require a considerable adjustment to the modelling of the policy that’s been done at the DCLG.

Except that we learned on Monday at the Communities and Local Government Committee that the modelling has barely even begun. As Labour’s Helen Hayes put it:

‘I was dismayed to hear senior CLG officials confirm that they have not yet completed any analysis of the likely sums that will be raised from right-to-buy sales and the forced sale of council homes. The Government therefore simply do not know whether the funds will be available to replace housing association homes that are sold under right to buy, and still less at a rate of two for one.’

The Conservatives first announced the policy during the election campaign on a wing and a prayer and some dodgy calculations by Policy Exchange. Eight months later, and after the Bill introducing it has passed all its stages in the Commons, things are not much clearer. That even applies to what would have been the central element of the Bill were it not for the voluntary deal: the right to buy. Tenants hoping to exercise their ‘right’ any time soon are likely to come away disappointed. With so much left to secondary legislation and ministerial assurances, the same lack of clarity applies to many other aspects of the Bill (for example, we know there will be a Pay to Stay taper but none of the detail).

All of which leaves quite a job for the House of Lords. Improvements are still possible but don’t expect too much. By coincidence, at the same time as MPs were making a bad Bill worse, peers were attempting to improve another piece of legislation with huge implications for housing – the 1% rent cut in the Welfare Reform Bill. Attempts to get an exception for supported housing did appear to get far, with the government relying instead on case-by-case help for providers in financial difficulty. And the number of references to manifesto commitments by ministers in the Commons on Tuesday seemed designed as a warning to peers not to interfere.