04 May 2007
A council tenancy used to mean a home for life. But all that's set to change, as the government takes steps to break the link between social housing and welfare dependency.
Social housing has been a vital fixture of the welfare state for decades, with residents enjoying the comfort of a secure tenancy for life. Almost 4 million people now live in council or housing association homes in England.
Yet over the past 20 years, as resources have been squeezed with funding cuts and housing sell-offs, the composition of those living in social housing has changed markedly. Instead of the mixed-income households of old, today 70% of social tenants are among the poorest two-fifths of the country and half of all households of working age are economically inactive or unemployed, twice the national rate. Many are lone parents or on disability allowances. These figures reflect an increasingly polarised society, within which a significant minority – the poorest and most vulnerable – are still stuck in a cycle of dependency.
The New Labour government – under whoever's political leadership – is determined to push ahead with its welfare reform agenda of reducing spending and meeting its child poverty and employment targets. But, on the way, many old assumptions are being questioned and final taboos challenged: notably those that revolve around the 'right' to social housing and benefits. The ideas being floated are as controversial in their own way as those that surrounded earlier debates over the right to buy.
It has taken an academic from the London School of Economics to make the link between social housing, worklessness and poverty – and, in the opinion of some, provide the Trojan Horse for Communities Secretary Ruth Kelly's more radical proposals on the way welfare and housing are provided.
Professor John Hills' March report, Ends and means: the future roles of social housing in England, pointed out that rather than helping people back into work, social housing provides perverse incentives that keep them benefit dependent. 'There is no sign of a positive impact on employment of the kind that sub-market rents might be expected to give,' says Hills. 'Housing and employment tend to operate in separate boxes, but what often initially appears as a housing problem may have its roots in problems in the labour market.'
He adds that housing benefit is a major contributor to the 'poverty trap'. Hills also found that there was little mobility for social tenants, with only a few thousand moving areas a year. And, perhaps more starkly, 80% of those living in social housing today were in it ten years ago.
Hills' report has been described as 'devastating' in its analysis of the root problems of social housing, but he is very clear that it still has a vital role – it just needs to work better. He suggests a more flexible approach, including a 'menu of options' that moves away from the traditional 'one size' secure tenancy for life. This includes more routes into shared ownership, as well as integrated support with employment, and a system to review residents' financial situation every few years to assess their real need, rather like a Jobcentre Plus interview. Kelly has already given Hills her backing and has suggested measures such as a 10% shared equity scheme to help people on to the housing ladder.
Significantly, the Department for Work and Pensions is singing from the same hymn sheet when it comes to flexibility and tackling hard-to-reach groups. Its recent review of the welfare state, conducted by former Financial Times journalist David Freud, suggests more local support to ensure those on the 'revolving door' of work and welfare get into long-term employment. He looked at largely the same groups of people as Hills and came to similar conclusions: that more targeted and flexible support was needed. He also talked about using the private and voluntary sectors to create an employment market, just as Hills suggested that social landlords could play a wider role in job creation.
'This is a radical reform designed to reduce the social dependency of the most disadvantaged,' Freud promised at the launch in March.
Of course, it is entirely coincidental that these two reviews should dovetail. Departments are certainly under the same financial pressures but as a senior government source at the DWP concedes: 'Sometimes it takes someone from outside to pull all the strands together. Hills highlights an unequivocally strong link between benefits and social housing that wasn't there 20 or 30 years ago.
'There is a graphic lack of physical mobility, people don't even want to move to a different part of the region, in stark contrast to what happens in the private sector.'
The official adds that there are too many clusters of estates where worklessness is endemic and these need imaginative solutions as well as housing help. 'If we don't tackle this problem, we are storing up social and economic problems for the future. We have set ourselves an ambition of getting 80% into employment, which would have tremendous gains for the country, but we are not going to make that without getting this hard core back to work.'
The DWP and its secretary, John Hutton, are adamant that this is the right time to go further with a more 'attractive' benefits package slotting into place, including child tax credits and universal childcare. Kelly seems equally determined to push on with reforms to housing policy.
For its part, the Treasury is already working closely with the DWP to assess the problems Hills highlights in his report, some of which will be fed into the Comprehensive Spending Review. 'Hills clearly shows that the apparent “benefits” of social housing aren't being translated into better employment outcomes,' says a senior Treasury source. 'Identical households do less well in social housing than those in the private rented sector facing greater potential costs. So something else is going on.'
The links between housing and welfare have now been made – although some are still disputing them – and a potentially positive outcome of these reviews is closer working between the departments and service providers. This could fundamentally change the way we provide welfare.
Kelly has already outlined this in her initial response to Hills. 'Part of the problem here is that for too long we have thought about housing in isolation, rather than in relation to other services. We need to co-ordinate that support, and to bring housing together with advice on jobs and training,' she said.
Jim Bennett, senior research fellow at the Institute for Public Policy Research, says he doesn't buy into the belief that social housing is the problem, but does concede that more joint working and a more localised approach should be the way forward. 'There needs to be a more personalised approach to these groups, as Freud suggests in his report. And greater partnership working to allow for more local flexibility.'
Sarah Webb, deputy chief executive of the Chartered Institute of Housing and a member of the advisory panel set up to take Hills' ideas further, says the DWP and the DCLG are already working closely together. She adds that there have been capital programmes to create jobs and training in the housing sector for at least 15 years but there hasn't been an acknowledgement that 'we might link someone's tenancy to their ability to work'. She points to a successful scheme in Sheffield where the Jobcentre Plus and housing office have been relocated together to give advice under one roof. But she admits that there are still some landlords that dispute Hills' findings and are reluctant to add job creation and employment to their list of responsibilities.
On the other side of Whitehall, the DWP is indicating a willingness to devolve some of the welfare-to-work policies with its Cities Strategy. Fifteen areas are piloting the scheme, in which local consortiums of government agencies, local government and the private and voluntary sectors pool resources to tackle worklessness. They are due to set their targets this month. Landlords are conspicuously absent from these partnerships.
But with such potential changes come what many view as the punitive elements of reform, and this is where the controversy creeps in. In the case of Freud, it is the review of rights and responsibilities in welfare, most notably proposals to get lone parents back to work when their children turn 12, rather than 16. In housing, it really is a last bastion that is being questioned: the right of a secure tenancy for life.
Hills alluded to the change as part of his 'menu of options' although he did not support ending secure tenancies. But Kelly is known to want to push it further, stating that lifetime tenancies rarely solve the problems of homeless 16-and-17-year-olds. And she has the support of a surprising caucus in housing. The debate was first sparked last June by a report from the Smith Institute, notably launched at Number 11, Rethinking social housing. Edited by policy consultant Tim Dwelly, it included a chapter from Housing Corporation chief executive Jon Rouse, which echoed much of Hills' later conclusions on welfare and social housing.
Dwelly says Hills marks a huge change in perception that will pave the way for reform. 'We need to get away from rent-free homes for life. It provides perverse incentives. It should be about people creating their own security and stability, about helping people to help themselves and this doesn't do that.' Dwelly forms part of a growing movement to change secure tenancies to mirror the six-month assured tenancies in the private sector, arguing that this would allow greater mobility.
Webb says that it's not a discussion that should be shied away from and it's not, as some have interpreted, a tool to force people out of their tenancies. She indicates that much of the debate has been overblown. 'We should be creating just as much fuss about the fact that we put people in social housing for 20 years and just leave them there without asking what else we should be doing. We do have a real duty of care to these people.' She adds that the sector is interested in Hills' idea of circumstantial reviews every few years.
But for the housing stalwarts, even considering ending secure tenancies is anathema, particularly when it is coming from a Labour government. 'To say that social housing is holding people back is nonsense,' says Austin Mitchell MP. 'We set up housing for the less well off so there is going to be a higher proportion of unemployed, that's a fact.'
Mitchell, who has been campaigning for more resources for housing, says the government can't treat social housing 'like a transit camp' for people to move out of when they get a job. He doubts that Kelly would end the right but accuses some in the government of chipping away at the welfare state. 'They won't succeed, the Tories have tried it and now Labour. We have an obligation to provide welfare and housing.'
The Child Poverty Action Group has also raised concerns about the government's direction and says both changes would undermine the most vulnerable. 'We would oppose any removal of secure tenancies that would force tenants into other accommodation as their income rises,' says chief executive Kate Green. 'It would create a work disincentive and undermine mixed communities.
'Most lone parents say they want to work, so extending sanctions is not needed. Children at 12 face major life changes with new risks to their health and emotional stability. So lone parents should continue deciding themselves when their children's needs allow them to return to work.'
But is clear that we are at the start of a new period of reform, with the government determined to look again at traditional parts of the welfare state.
As for social housing, Hills is on record as saying he hopes his report will 'spark off a debate'. It's certainly done that.
PFmay2007
