Aggregating poverty: cheap homes in cheap neighbourhoods

There has been, as was surely the intention, a lot of coverage of the proposals by Policy Exchange to ‘end expensive social tenancies’, which seems to be a clear outrider for government policy to follow in short order. Discussing this report on a New Start blog might be considered the equivalent of shooting fish in a barrel but it is the holiday season so everyone is allowed some fun, although the proposals this report sets out seem unlikely to be fun for quite a number of social tenants.

To be fair, the report does advocate more social housing and the benefits of stimulating construction, which shouldn’t be taken as a given from this point on the political spectrum. And the notion that receipts from sales have a part to play in funding new stock is clearly one that has merit and is accepted practice.

Sadly, much of what follows is less welcome. The report adopts two initial techniques that seasoned observers will recognise:

(a) shameless support for popular prejudices that have already led to the cap on overall benefit payments and to the ‘reform’ of housing benefit eligibility which is having such disastrous consequences in London

(b) the use of anecdote and example to then justify a massive extension of approach. There are indeed some social properties worth over £1m – largely because there are lots of properties in some areas which are worth over £1m. Moving on from this to advocate mandatory sale of 21% of all social housing is breathtaking.

This arbitrary approach to sale based solely on market value generates the response that any sales should be for local decision and that they should be based – as they are now – on a range of considerations including location and cost effectiveness of maintenance and servicing, not just the market value of the property.

Looking at median costs on a regional level (in itself the cause of some hollow laughter given the degree to which regions have been dismissed) will have some marked effects in some sub-regions, but there is a clear expectation to replace the units lost on an equivalent basis and then build additional units in line with some very precise assessment of need across the region. The number of additional homes that can be squeezed out of the receipts does, of course, depend on the land auction approach, advocated by the authors, proving effective.

Lurking in this section of the paper there is then a rather telling remark – on which there is no further elaboration: ‘To build in line with current need means some movement of funds between regions and building smaller properties.’

So taken at face value we end up with a strict national planning system in which there is mandatory sale of particular properties to finance very specific replacements and additional properties. So much apparently for local discretion. Oh, and by the way, there probably is some need to shift funds around to make this happen. And any of this new money can only fund units on top of the existing local plan numbers, even though presumably some of these are not yet funded.

That is strange territory particularly at a time when we are supposed to be fostering the Big Society. The effect of this policy would be to forcibly move people out of areas in which they may have lived for many years and away from relatives and friends. The report is remarkably sanguine in its view about that people would only be forced to move nearby; this translates as being under 30 miles.

This in a week in which Tory MPs complained about the effect of higher rail fares on their lower paid constituents who spend a massive proportion of their income on transport costs.

We then move onto even more problematic issues. One can question – as the report does – whether mixed communities as a policy has achieved all the results that its proponents envisaged. But what is clear is that if you are concerned to create communities and not just build houses then concentrating and aggregating poverty is a bad way of going about it.

That seems the inevitable consequence of this approach even on the phased basis that the authors envisage. Putting cheap housing in the places where it is cheap because there are no jobs is just aggravating the problem. Somewhere or other I seem to recall this being described as residualisation.

My grapeshot is nearly spent but a final volley needs to be discharged in the direction of the largest fish in the barrel. The basic justification for this policy is that government cannot find the necessary public funding at a time when borrowing costs are at their lowest for generations and stimulating house building is towards the top of every single wish list for supporting growth.

At this point both the barrel of the gun and the barrel itself explode.

Photo by LHOON


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