Government sounds death knell for social housing in England

The Queen’s Speech on 27 May formally enshrined the Conservative Party’s manifesto promise to extend the Right to Buy scheme to more than a million housing association tenants. The consequences will be the decimation of already appallingly low stocks of public housing, the accelerated sell-off of council housing in London and other affluent areas, and a steep rise in homelessness for the poor, compounded by the overall cap on benefits. CAT WIENER reports

Right to Buy: the sell-off of public housing stock

Just under two million council homes – 37% of the total stock – have been lost since Margaret Thatcher introduced Right to Buy for local authority tenants in 1980. Only 345,000 local authority homes have been built in the same period. Housing associations – which in England are now private registered providers – control just under half of all public housing stock, serving around 2.5 million tenants. Those that have lived in the same property for more than three years will now have the opportunity to buy their home at a massive discount worth up to £102,700 in London and £77,000 in the rest of England. (Both Wales and Scotland are in the process of abolishing Right to Buy completely).

As a vicious corollary, the government will force local councils to fund this discount by selling off their most valuable properties, using any surplus to pay for replacement homes on ‘brownfield sites’. Given that councils can now charge up to 80% of market rent, they will be able to empty out their most desirable properties very quickly. Working class estates in central London will be up for grabs. Estate agents are rubbing their hands in anticipation. Last month a refurbished council flat in well-heeled Kensington was marketed for £1 million.

This move – to attempt to bury the very concept of social housing forever – is purely ideological. It has faced stringent criticism from the Institute of Fiscal Studies, Confederation of British Industry and the ratings agency Moodys amongst others, on the basis that it will create a huge hole in public finances. But it is not about economics: it is about trashing social housing and the total dispossession of the working class. Its evil twin comes in the form of the reduction in the overall benefit cap.

Benefit cap: vicious and inhumane

The cap on overall benefits of £26,000 which came into effect in April 2015 has been devastating, coming as it did with the housing situation already at breaking point. The new government is now further reducing the amount of benefits any household can receive to £23,000 in London, with a manifesto promise to implement regional reductions. In practice, the cap operates as a cap on housing benefit. The numbers who will be affected are huge. Nationally, there are about 300,000 households with three of more children dependent on out-of-work benefits – 1.2 million children in all. At its lowest estimate, the reduction will affect 90,000 such households, rising year on year. The social housing campaigner Joe Halewood estimates at least 100,000 children will be made homeless. The Department for Work and Pensions’ own impact assessment estimates that the immediate effect will be that:

• 11,390 households lose more than £150 a week;

• just over 8,000 lose between £100-150;

• 17,400 lose £50-£100;

• more than 30,000 lose up to £50.

Rents, particularly in London, will immediately become unpayable for thousands more people. For example, a very low-income or unemployed family that is paying £600 a week for a three-bedroom home will find its housing benefit suddenly capped to £340, with no way of making up the difference. For an unemployed family with three children living in London, even a one-bedroom flat now takes you above the cap. The acting leader of the Labour Party, Harriet Harman, has been quick to voice her party’s support for the reduction in the benefit cap.

Housing associations, with an eye to their profits, have been brutally honest about what the effect on their policy will be: ‘[Some say] they will no longer build family houses for social or affordable rent and others warn they may refuse prospective tenants from council waiting lists if they are dependent on benefits. Where those tenants will be housed, no one seems to know’ (Patrick Butler, in discussion with National Housing Federation CEO David Orr, The Guardian 27 May 2015).

In a survey by spareroom.com, nearly two-thirds of private landlords said they would not take tenants on housing benefit. Meanwhile the housing charity Shelter revealed that in 2013 landlords received £1.4bn in tax breaks. Overall, buy-to-let has offered wealthy landlords investing in homes as commodities returns of 1,400% in the last 20 years – a far better investment than shares or bonds.

Even before April, 1.36 million households – around 3.4 million people – were on waiting lists for social housing in England. That is despite councils callously using their powers under the Localism Act to disqualify large numbers from even getting on the waiting list. In February 2015, Homelessness Monitor also showed how councils cover up real figures for homelessness by offering ‘informal support’ which does not need to be recorded. Rough sleeping in London is up 15% since last year – the fourth consecutive annual rise. The combined effects of the bedroom tax, cuts in benefits and low pay saw evictions reach a six-year high in England and Wales in the first three months of this year, fuelled by a 19% increase for rent arrears. That’s 126 families evicted by bailiffs every day. Social landlords – councils and housing associations – were behind the majority

of evictions. (The Guardian 14 May 2015).

All this to save a paltry 0.1% off the total £94 billion non-pensions benefits bill – which will in any case be wiped out by the vast costs of emergency housing, under local authorities’ legal obligations, for families with children who are made homeless. This is not economic management. This is capitalism in the raw, determined to roll back every vestige of state welfare, every hope of a decent and dignified life for the poor. The campaign for homes – for decent, affordable, social housing – is at the heart of the fightback. Get involved, get angry, get organised. No one else is going to do it for us.

Fight Racism! Fight Imperialism! 245 June/July 2015

 

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