If at first you don’t succeed
Posted: July 13, 2015 Filed under: Affordable housing, Budget, Energy efficiency, Home ownership, Housebuilding, Planning, Shared ownership, Starter homes, Zero carbon homes | Tags: David Cameron, George Osborne Leave a commentOriginally posted on July 13 on Inside Edge 2, my blog for Inside Housing
It may have important new provisions on housing and planning but the name of the government’s new productivity strategy rather gives the game away.
Described as ‘the second half of the Budget’, Fixing the Foundations was published by the Department for Business Innovation and Skills but includes chapters on housing and planning and welfare that amplify decisions taken in the first half.
But does the name remind you of anything? Go back four years and David Cameron himself was launching a ‘radical and unashamedly ambitious’ housing strategy. The title? Laying the Foundations.
Once they’ve stopped sucking air through their teeth, any builder will tell you that once you’ve laid the foundations and built on top of them, it’s enormously expensive to start to fix them. It’s also a pretty good indication that the foundations were pretty rocky to begin with.
Work hard, do the right thing – and get screwed
Posted: July 9, 2015 Filed under: Budget, Housing benefit, Labour market, Tax credits, Universal credit | Tags: George Osborne 5 CommentsHow has George Osborne got away with a Budget that will hurt the very people he claims it will help most: hardworking families?
The headlines are all about One Nation, National Living Wage and tax cuts but, as the dust settles, the calculations that have emerged so far make clear that the poorest households are going to suffer significant cuts in income. While a series of cuts such as the lower benefit cap will hit out-of-work households hard, people in work face a series of technical changes to tax credits and benefits that will make many of them substantially worse off.
To give some idea, here are the three main cuts:
- A four-year freeze in working age benefits saving £4 billion by 2020/21. The Institute for Fiscal Studies estimates that this alone means that 13 million families will lose an average of £260 a year. Of those, 7.4 million are in work and will lose £280 a year. The freeze will also hit child benefit, which David Cameron promised to protect.
- £6 billion worth of cuts to tax credits (and subsequently universal credit) and associated housing allowances from April 2017. The IFS says new claimants will lose credit entitlement for more than two children, losing the average of £3,670 a year that currently goes to 872,000 families (548,000 in work). On top of that, the family element in credits for the first child will be cut for new claimants and housing allowances associated with both will be cut too. Kate Webb of Shelter calculates that just one change – the removal of the family premium, an allowance of earned income before housing benefit starts to be withdrawn for working families with children – could cost a single mother working 20 hours a week at the new national living wage £11 a week. That’s not much less than the bedroom tax.
- Cuts to work allowances that mean working households will lose tax credits/universal credit much more quickly than now. At the moment, credits start to be withdrawn once family earnings rise above £6,420. That will fall to just £3,850. This will cost 3 million working families just over £1,000 a year each. Credits will also be withdrawn at a faster rate once they hit that threshold.
Reconstructing Speenhamland
Posted: July 6, 2015 Filed under: Budget, Economics, Housing benefit, Labour market, Poverty, Tax credits | Tags: Speenhamland 1 CommentWhere do the Conservatives really stand when it comes to supporting workers on low wages?
Are the Tories the One Nation ‘workers party’, cutting tax, increasing the minimum wage and reforming welfare to make sure that work always pays? Or are they the one that’s set to cut spending on tax credits by £5 billion and cost those same workers up to £1,690 per year?
Ahead of Wednesday’s Budget, the rhetoric and the reality simply do not match. In David Cameron’s ‘speech on opportunity’ in Runcorn last month, he contrasted the ‘right track’ of economic opportunity with the ‘wrong track’ of ‘people capable of work, written off to a lifetime on benefits’ and policies that ‘ignore the causes and simply treat the symptoms of the social and economic problems we face’. Rather than redistributing money through the benefits system we have to tackle the ‘real causes’ of child poverty. And our approach to low pay is complacent:
‘There is what I would call a merry-go-round. People working on the minimum wage having that money taxed by the government and then the government giving them that money back – and more – in welfare. Again, it’s dealing with the symptoms of the problem: topping up low pay rather than extending the drivers of opportunity – helping to create well paid jobs in the first place. So this is the change we need. We need to move from a low wage, high tax, high welfare society to a higher wage, lower tax, lower welfare society.’
Needless to say he did not explain how. The key Conservative policy of increasing the income tax threshold to the level of the minimum wage sounds like it benefits low-paid workers most. In fact, anyone paid below the current threshold of £10,600 a year will receive no benefit at all while most of the gains will go to people on higher earnings. It’s the same story with tax credits and housing benefit, both of which are essential to people who are in work but on low pay. All the tax cuts in the world do little to make up for the cuts in the last parliament and the cuts to come in this. As Gavin Kelly argues, the notion that higher wages will somehow fill the gap is fanciful.
Frustrated hopes
Posted: July 6, 2015 Filed under: Housing associations, Legal, Shared ownership Leave a commentFirst posted on Inside Edge 2, my blog for Inside Housing on July 6
What’s stopping shared ownership from fulfilling its potential as the fourth housing option?
Ever since it was launched, shared ownership has seemed to promise more than it delivers to people who can’t afford full ownership, want something better and more affordable than private renting and want something more or don’t qualify for social housing. Its part-rent, part-buy status and the fact that it requires less grant than social housing have ensured support from both Conservative and Labour governments and it’s become increasingly important to the finances of the providers that offer it. Yet somehow something is missing.
It’s a conundrum the government is trying to resolve through changes introduced in April and a review of longer term options out this summer. It would do well to take heed of a new report from Bristol, Kent and York universities and the Leverhulme Trust launched at an event at the House of Lords last week that I chaired.
From a wider policy perspective, shared ownership has huge potential. As Lord Best put it at the launch, we could create three to four times more home owners through shared ownership than through the Right to Buy.
Enemies of the state
Posted: July 5, 2015 Filed under: Home ownership, Housebuilding, Housing associations, Housing benefit, Right to buy | Tags: Conservatives, David Cameron, George Osborne Leave a commentOriginally posted on July 5 on Inside Edge 2, my blog for Inside Housing
Bring it on. We are determined take you on. Who do David Cameron and George Osborne have in mind?
If you haven’t seen it yet, you need to read their op-ed in Saturday’s Times on ‘Here’s how to build a homeowning Britain’. They mean England of course. You can read extracts on the Number 10 website but that only gives a flavour of the full article so I’ve posted it here.
Ahead of the Budget, they promise that ‘a shake-up of inheritance tax and crackdown on nimby councils will give young people a foothold on the property ladder’. It is not just an explicitly, distinctively Conservative vision for housing but also a declaration of war against anyone opposed to that vision. Here’s my take on the key points:
‘Having your own place is an important stake in our economy. It’s also one of the best expressions of the aspirational country we want to build, where hard work is rewarded.
‘It’s also about social justice. We don’t want this to be a country where if you’re rich you can buy a home, but if you’re less well off you can’t. We want it to be One Nation, where whoever you are, you can get on in life.’
‘Here’s how to build a home owning Britain’
Posted: July 5, 2015 Filed under: Affordable housing, Help to Buy, Home ownership, Housing associations, Housing benefit, Right to buy, Starter homes | Tags: David Cameron, George Osborne 1 CommentHere is the full text of the belligerent op-ed on housing by David Cameron and George Osborne in Saturday’s Times. My post on the implications is here.
Here’s how to build a home owning Britain
David Cameron and George Osborne
A shake-up of inheritance tax and crackdown on nimby councils will give young people a foothold on the property ladder
At a time of uncertainty abroad, here at home we will be delivering a budget next week with economic stability at its heart, offering security for working people.
Encouraging home ownership is central to that. Having your own place is an important stake in our economy. It’s also one of the best expressions of the aspirational country we want to build, where hard work is rewarded.
It’s also about social justice. We don’t want this to be a country where if you’re rich you can buy a home, but if you’re less well off you can’t. We want it to be One Nation, where whoever you are, you can get on in life.
Read the rest of this entry »
Under pressure
Posted: June 24, 2015 Filed under: Bed and breakfast, Homelessness, Temporary accommodation Leave a commentThe latest homelessness figures confirm some disturbing trends over the last five years in why people lose their home and what happens to them once they get help.
The statistics for England published by the DCLG on Wednesday run up to the end of 2014/15 and so allow the record the coalition to be assessed for the first time. The headline measure of households accepted as homeless (unintentionally homeless and in priority need) rose 36 per cent between 2009/10 (the year before the coalition took power) and 2014/15 to 54,000.
But this figure is heavily influenced by other government policies, not just the coalition’s reforms of the system but the last Labour government’s too. For example, the acceptances figure was more than double what it is now in the early 2000s, before prevention and options approaches were widely adopted by local authorities.
As the UK Housing Review briefing pointed out on Monday, combined acceptances and prevention cases (not published yet) are likely to top 300,000 in 2014/15 compared to just over 200,000 in 2009/10. And even these figures take no account of hidden homelessness, whether it’s overcrowding or concealed households or single people and childless couples who do not have priority or rough sleeping.
If the cap fits
Posted: June 23, 2015 Filed under: Benefit cap, Social housing, Tax credits, Universal credit | Tags: Iain Duncan Smith Leave a commentWorried about the impact of the benefit cap, social landlords? You should be because what happens next seems to be your responsibility.
As housing organisations slowly wake up to the dire implications of reducing the cap to £23,000, Iain Duncan Smith was asked about it at work and pensions questions on Monday. Labour’s Clive Betts asked what consultations the DWP had done with social landlords on the effects of the introduction of universal credit and the benefit cap on direct rent payments to landlords. After the usual guff about roll-outs from IDS, Betts pressed him with a points raised by Tony Stacey of South Yorkshire Housing Association (and Placeshapers):
‘Currently, if a household is in rent arrears and gets housing benefit, the benefit can be paid directly to the social landlord. When universal credit is introduced, if the family also gets a welfare cap, it is the housing cost element that is squeezed by the cap. No longer will the amount of universal credit be paid directly to the social landlord to cover the rent. Can the Secretary of State not see that that could lead to a rise in evictions? Is he aware of the problem, and what will he do about it?’
The context for this was highlighted ahead of this week’s CIH conference in Manchester in a UK Housing Review briefing on Monday. After allowing for other benefits and tax credits, the £23,000 cap will leave a couple with four children just £33 a week to spend on their rent and a couple with three children just £110 a week. Here are the impacts by family size:
Effectively that means larger families will be priced out of even social housing throughout the UK and a couple with three children will not be able to afford the average housing association rent anywhere in the Midlands or South of England. The impact will be felt far beyond inner London and the CIH estimates that four times more households could be affected than under the current £26,000 cap.
Jules Birch 