The right’s way to more council housing

Originally written as a column for Inside Housing.

England should be building 100,000 new council houses a year, says a new report out this week.

It’s a call that would be routine if it was being made by one of the usual suspects, but this time it comes from, of all places, Policy Exchange.

The right-wing think tank was the incubator for the ideas that dominated the Conservative agenda in the 2010s and its alumni played a key role under successive Tory-led governments. 

Among its greatest hits in the glory days of the coalition were calls for all social homes to be nationalised, with most sold off to tenants and only a rump left for the most vulnerable.

That was followed by proposals to sell off all ‘high-value’ social housing and fully commercialise housing associations.

True, the ideas were usually justified as ways to generate more affordable homes overall but the underlying agenda seemed to be that, far from tackling social exclusion and poverty, social housing was a cause of them

In the wake of the 2024 election, Policy Exchange is playing a less partisan tune and this report comes with endorsements from Labour as well as Conservative politicians.

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Labour’s plan for ‘a decade of renewal’

Originally written as a column for Inside Housing.

The spending review may have given us the headlines but a flurry of announcements on Wednesday fills in much of the detail about what the government is calling ‘a decade of renewal for social and affordable housing’.

On new homes, a key question was how the £39 billion will be spent over the next 10 years and, in particular, what the trade-off will be between maximising total output of affordable homes and giving greater priority to social rent. 

That got an answer in an overnight press release: a renamed Social and Affordable Homes Programme (SAHP) is forecast to deliver 300,000 homes over the ten years (30,000 a year), of which at least 180,000 (18,000 a year or 60 per cent) will be for social rent. 

To put this in perspective, the current AHP was originally meant to produce 180,000 affordable homes over the five years from 2021 to 2026 (36,000 a year) but rising construction costs cut that to between 110,000 and 130,000 (22,000 to 26,000 a year. Of those, just 40,000 (8,000 a year) are forecast to be for social rent.

Importantly, strategic partnerships will be able to bid for funds over the lifetime of the programme, which should give at least some protection from the risk of cuts if a government more hostile to housing wins the next election.

Another trade-off is the split between London, where higher land prices and construction costs mean more grant per home is needed, and the rest of the country. 

Under the current AHP, the Greater London Authority (GLA) got £4.1 billion (36 per cent) and Homes England £7.4 billion (64 per cent) of the grant available. 

Under SAHP, the GLA’s share will be cut to 30 per cent or up to £11.7 billion. It’s hard to reconcile that with the fact that more than half of the 126,000 homeless households stuck in temporary accommodation waiting for a social home are from London. 

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A nod’s as good as a wink in response to committee’s critique

Originally written as a column for Inside Housing.

An intriguing Ministry of Housing, Communities and Local Government (MHLCG) response to a select committee report on Friday might just provide a glimpse into the government’s thinking ahead of the vital spending review due in June. 

Back in May 2024 the then Levelling Up, Housing and Communities Committee sounded the alarm about the finances and sustainability of the social housing sector and called for a whole series of sector-friendly changes. 

The response comes 10 months later (long after what is meant to be a 60-day deadline) but the world has changed in the meantime, with a Labour government elected and a renamed department and committee. 

So in one sense it is a free hit for MHCLG to echo most of the committee’s warnings and pin the blame for what’s gone wrong on the Conservative administration.  

It does not just agree that ‘the social housing sector faces increased financial pressures, exacerbated by years of under-funding and real terms rent cuts’, it also puts some numbers to the flashing blue lights.

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Labour’s first Act on housing 100 years on

Originally written as a column for Inside Housing.

This month marks the centenary of one of the most important pieces of legislation in housing history. 

The Housing (Financial Provisions) Act 1924 – better known as the Wheatley Act – was introduced by the UK’s  first-ever Labour government, a minority administration headed by Ramsay MacDonald that only lasted for 10 months.

A century later, with Keir Starmer only the fourth Labour prime minister to win an overall majority, are there lessons to be learned?

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Juggling without dropping the ball

Originally written as a blog for Inside Housing.

How long can you keep juggling before it all goes horribly wrong?

That’s the question for social landlords posed by a new report from the all-party Levelling Up, Housing and Communities Committee on the finances and sustainability of the social housing sector. 

Juggling a couple of balls is simple. Three gets easier with practice. Four needs intense focus. Add more balls and external distractions and you risk dropping the lot.

The issues that need to be juggled are familiar ones: how do you continue to build new homes, decarbonise existing ones, fix fire safety problems and regenerate older stock when there is not enough grant to go around, construction, energy and insurance costs have soared and supposedly long-term rent settlements keep being revisited?

As the report points out, we are already seeing the results. Fiona Fletcher-Smith of L&Q told the committee that under the affordable housing programme that ended in 2021 it built 10,000 new homes in London but ‘this year in this programme we are bidding for 1,000. It is a dramatic drop.’

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A turning point for social housing?

Originally written as a column for Inside Housing.

For as long as I can remember the social housing business model seems to have been at a turning point.

From private finance to stock transfer, from affordable rent to welfare reform and from austerity to the rent cut, the policy changes have kept coming against a wider backdrop of financial crisis, Grenfell, Covid, Rochdale and the cost of living crisis.

For years it’s seemed that something has to give – until it does and landlords have to do more with less and tenants get less for more and apparent turning points become spinning in ever-decreasing circles.

This time around, though, you really get the sense that things can’t simply continue as they are and as they have been.  

That was what came across quite powerfully both from this week’s first hearing of the Levelling Up, Housing and Communities Committee’s inquiry into the finances and sustainability if the social housing sector and from the written evidence submitted in advance. The inquiry continues with a new set of witnesses on Monday.

This is not just about the impossibility of squaring the circle between competing priorities, of continuing to deliver new homes at the same time as fixing unsafe buildings, regenerating ageing estates and decarbonising existing homes.

And it’s no longer just about doing more with less either. The return of inflation, and even larger increases in construction prices, mean delivering the same with much less.

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Fine words on social housing only go so far

Originally written as a column for Inside Housing.

‘Homes for social rent are a fundamental part of our housing stock—a lifeline for those who would struggle to obtain a home at market rates.’

It’s a sign of how much has changed in the last six years that statements like that from Conservative politicians (in this case housing minister Rachel Maclean in a Commons debate last week) have become almost routine. For good measure, she also reaffirmed  ‘the unshakeable commitment of the government to drive up both the quality and the quantity of this nation’s housing stock’.

The comments are part of a steady conversion by ministers to the merits of a tenure that not so long ago they seemed intent on dismantling. Since Grenfell, there has been a steady softening in tone and relaxation in policy, with Theresa May as prime minister and Michael Gove as housing secretary prominent among the converts.

But all the fine words and tweaks to policy are not yet matched by results. As MPs from both sides of the house pointed out in the debate, the current output of 7,500 social rent homes a year fails to match the 21,600 a year lost to the Right to Buy and demolition, let alone the 90,000 a year that the all-party Levelling Up, Housing and Communities Committee has consistently argued are needed.

All this in the same week as research by the National Housing Federation (NHF) showed that two million children are living in overcrowded homes with no personal space because they cannot access a suitable and affordable home.

Much of this is obviously down to the fact that the Treasury remains unconvinced about these arguments. True, £11.4 billion for the Affordable Homes Programme (AHP) over four years represents huge progress on the days when it seemed like there would be no AHP at all. True, the government has titled the balance slightly more towards social rent and Right to Buy replacements. But this is still a fraction of what is required and the AHP been badly eroded by inflation.

And so much of the baleful legacy of 2010 to 2016 is still in operation and yet to be unravelled. As Inside Housing reported last week, affordable rent is now generating rents at double social rent levels in some areas. Pointedly, the biggest gap of all is in the Surrey Heath constituency of Michael Gove, where the rent on a three-bed affordable rent home is £1,125 a month compared to £557 a month at social rent.

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The legacy of the Clay Cross rebellion

Originally written as a column for Inside Housing.

This Saturday marks the 50th anniversary of legislation that triggered one of the most famous rebellions in the history of housing – and it is a story with a contemporary twist.

October 1, 1972 was the date that ‘fair’ rents were imposed on council housing by Edward Heath’s Conservative government. Under the Housing Finance Act 1972 all local authorities were forced to increase their rents by £1 a week (around 50 per cent).

Many in England, Wales and Scotland resisted interference by central government in their right to set their own rents but, threatened with the appointment of a Housing Commissioner, all but one eventually complied.

Clay Cross Urban District Council in Derbyshire refused point blank to increase rents that were the lowest in the country at around £1.65 a week.

The Labour-controlled council had a long track record of going its own way and finding loopholes in legislation it did not like: there were rebellions not just over rents but also over free school milk and pay for council staff.

Led by Dennis Skinner until he became the MP for nearby Bolsover, Clay Cross saw housing as one its top priorities as it replaced slums that had been built by the mine owners before nationalisation with new council houses at low rents.

As one councillor put it: ‘On this council we like to think of ourselves as basic socialists. We regard housing here as a social service, not as something the private sector can profit from.’

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Two symbolic results in the politics of housing

Originally published as a column for Inside Housing.

The overall results may be more mixed but the Conservative loss of its flagship councils Wandsworth and Westminster could hardly be more symbolic in terms of the politics of housing.

Westminster has been Conservative-controlled since its creation in 1964 while Wandsworth has been run by the Tories since 1978.

Both were retained by the party at the height of Mrs Thatcher’s unpopularity in 1990 and throughout the Blair and Brown Labour governments between 1997 and 2010 but not anymore.

Together with Barnet, which also went Labour for the first time, they represent a sea change in politics in London, as former housing minister Lord Barwell noted in a tweet this morning:

That gives some idea of the resonance of the results for the Conservatives, but Wandsworth and Westminster are possibly even more significant in the history of the politics of housing.

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Can Gove put the social back in ‘affordable’?

Originally written as a column for Inside Housing.

Michael Gove’s challenge to ‘Thatcher-worshipping’ Tories to want more social rented housing feels like another significant milestone in the Conservative journey on the issue but the final destination remains unclear.

Speaking at a conference organised by Shelter, the levelling up secretary said he was exploring ways to increase support for social rent and change rules that restrict funding for it outside of the most unaffordable parts of the country.

He also admitted that previous Tory policies have ‘tilted more towards a particular set of products that are not truly affordable and have not enabled housing associations and others to generate the housing at the social rent that they need’.

The speech followed a report in the Sunday Telegraph that he is set to scrap the Section 106 of planning contributions and replace it with an infrastructure fund that will pave the way for a ‘council housing explosion’.

John Rentoul in The Independent sees all this, plus his success in bullying developers into paying up for building safety, as evidence that Gove will be a strong contender in the undeclared 2022 Conservative leadership contest.

At the same time, Telegraph columnist Liam Halligan, another speaker at the Shelter conference, argues that ‘council housing should be central to the Conservative brand’ and that the party should shift subsidies from benefits to bricks. 

Now keen-eyed readers may spot the odd example of cognitive dissonance in this reversal of 40 years of Conservative orthodoxy.

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