The sharp end

Originally posted on August 11 on Inside Edge 2, my blog for Inside Housing

Wales is setting an example on homelessness prevention but can it escape the UK-driven logic of austerity in housing?

The question is prompted by today’s Homelessness Monitor Wales 2015, the latest in a comprehensive series of assessments from Crisis and the Joseph Rowntree Foundation on progress (or otherwise) in the UK nations. This one arrives just at the point where Wales is using its relatively new legislative powers to take a different path to England on housing policy.

Reforms including significant changes to the homelessness legislation and regulation of private landlords and letting agents are already law thanks to the Housing (Wales) Act. Right to Buy discounts are being halved and the right to buy could even be scrapped altogether after the next Assembly election. And the Renting Homes (Wales) Bill will mean a substantial shake-up of tenancy law along lines recommended but then abandoned in England.

The Homelessness Monitor represents an independent assessment of what this will all mean for people at the sharp end of the housing system. The positive points are that:

• The Welsh homelessness legislation now has a much stronger emphasis on prevention and relief of homelessness for all households, irrespective of priority need, intentionality or local connection, rather than just the existing ‘all or nothing’ statutory framework. This should represent a more flexible system that will benefit single people as well as families and means a move away from the sort of unlawful gatekeeping (prevention of homelessness applications rather than homelessness) seen in some cases in England. Jon Sparkes of Crisis calls this ‘a major step forwards’ that could be an example for the rest of the UK
• As in England, local authorities are able to discharge their main homelessness duty into the private rented sector. Unlike in England, private landlords and letting agents have to be licensed and registered.
• Supporting People is still ring-fenced in Wales, unlike England and Scotland, so that the huge cuts seen in services to vulnerable people seen in some English authorities have not materialised.
• The Welsh Government is on track to meet its target of 10,000 additional affordable homes in this Assembly term (though this is still short of the 15,000 needed according to independent assessments).

But the Monitor also raises some negative points too:

• The Housing Act allows discharge of the homelessness duty into a six-month private rented tenancy. In England, it’s 12 months
• One reason for that is interaction with the Renting Homes Bill, which proposes the abolition of the six-month moratorium on ‘no fault evictions’ in private rented tenancies. Supporters say this will make the whole system more transparent, that the six-month moratorium makes little difference in practice and that it and could encourage landlords to let to more vulnerable households. Critics argue it leaves Wales with among the least secure tenancies in the developed world. The Monitor calls it ‘a very surprising development’
• The Housing Act provisions on homelessness are weaker than originally proposed with, for example, no provision for an independent housing inspectorate to monitor implementation by local authorities
• There has been a marked decline (from a quarter to 18%) in the proportion of social lettings going to homeless households. One reason for this may be the introduction of financial capability assessments by some social landlords in response to welfare reform.

While some of these points remain controversial and will be debated during the passage of the Renting Homes Bill, there is strong overall support in Wales for the measures taken by the Welsh Government. The contrast between the ‘one housing system’ approach of the devolved administration and the increasing tendency in England to concentrate on home ownership alone could hardly be clearer.

For more on the impact of the homelessness legislation so far, see this piece by Jennie Bibbings and report by Shelter Cyrmu. But, as Jennie points out, the system will also have to cope with the impact of policies not devised in Wales.

Austerity and benefit cuts mean there are limits to what devolution in housing can achieve. Thanks to its less than generous settlement under the Barnett Formula, Wales does not have the same scope as Scotland to protect its housing budget or, for example, mitigate the impact of the bedroom tax in full. It also does not have the same say over welfare reform as Northern Ireland (though that is proving to be a bit of a poisoned chalice for Stormont).

All of this leaves Wales highly vulnerable to cuts in benefits. Five of the 20 areas where working age adults lost most from the coalition’s cuts are in Wales (Merthyr Tydfil, Blaenau Gwent, Neath Port Talbot, Rhondda Cynon Taff and Caerphilly). A fifth of Welsh social tenants were affected by the bedroom tax compared to 15% in England. Sanctions are biting hard and fears remain about the impact of direct payment under universal credit.

And that was before the latest cuts announced in the Summer Budget: the end of automatic entitlement to housing support for under-21s; cuts in universal credit allowances and tax credits; the five-year freeze in working age benefits including the local housing allowance; and perhaps above all the reduction in the overall benefit cap from £26,000 to £20,000.

Meanwhile, last week’s Inside Housing report that the Welsh Government has asked social landlords to model the impact of an English-style 1% cut in rents shows that there could be practical limits to devolution even in policy areas that are fully devolved. It sounds sensible to assess the impact before making a decision but, as Mike Owen points out, there are political as well as policy considerations ahead of next year’s Assembly elections.

Overall though, this report is evidence that Wales is making progress on housing and homelessness that will be the envy of many English regions (despite limited moves to devolution within England). And if I’m ever threatened with homelessness I think I know where I’d rather be.