Surge of support for social rented housing

The deadline for Labour’s Lyons Housing Commission brought a burst of last minute submissions from organisations and individuals.

The Commission, chaired by Sir Michael Lyons, was set up after Labour’s Annual Conference in September 2013 when Ed Miliband announced his plans for a Labour Government to increase the supply of new homes in England above 200,000 a year by the end of the next Parliament. It is tasked with drawing up a road map for the housing and planning policies and practice that are required to deliver the new homes and communities we need.

One of the most interesting submissions is from the new campaign group SHOUT, a cross Party group that is arguing the case for a return to traditional social rented housing. It says that, if Labour plans to build 200,000 homes a year, then 100,000 of those need to be at genuinely affordable social rent levels. The group argues that this is the only way to meet the needs of people on low incomes and to increase the extent to which work pays. Rather than ever increasing housing benefit bills, a new social rented programme will create major new assets that will generate social and financial benefits indefinitely. The net impact of the £4.5 bn capital cost would be much less as there would be savings in welfare, health and other programmes. The group also says there is a ‘strong case for reclassifying the housing borrowing and spending of local authorities outside the core public sector definitions in line with international practice and the self-financing business model of social housing’.

In a comprehensive submission the Chartered Institute of Housing make the case for fully restoring ‘s.106’ requirements. They remind us that ten years ago a significant amount of housing association output came via s.106 planning gain. They raise concerns about the operation of the Community Infrastructure Levy and the fact that it excludes funding for affordable housing. They make the point strongly that achieving 200,000 homes a year requires an increase in investment and that much of that will have to come from the public sector: the private sector has only exceeded 150,000 homes a year 3 times since 1950. They argue that there is a strong value-for-money case for a ‘higher-grant lower-rent’ (ie social rent levels) programme rather than ‘lower-grant higher rent’ (as in ‘affordable rent’). Like almost everyone, they emphasise the need to give councils more freedom to borrow by either raising the ‘cap’ on housing revenue account borrowing or by changing borrowing rules to bring them in line with international conventions.

Former Housing and Planning Minister Nick Raynsford MP sets out some of the key principles that should be followed to reach the target of 200,000 homes. But he emphasises that there is no single magic bullet – the contribution of every provider will have to be maximised to achieve the goal. Mixed tenure development has the most potential for achieving higher volumes of output, schemes involving social and private renting as well as part and full sale. He also supports councils having greater freedom to borrow. And he is one of many making a plea for a ‘benefits-to-bricks’ approach:  ‘While in the short-term it is difficult to see how the current level of [housing benefit] expenditure (c. £23 billion) can be reduced without causing substantial homelessness and hardship, the long-term objective must be to redress the unsatisfactory balance in public spending between investment incentives and revenue subsidies.’

The Riverside Group complains of a planning ‘free-for-all’ – ‘a lack of local direction and thus less predictability in securing planning approvals’ and identifies the lack of resources in planning department as a growing barrier to the progress of specific schemes. They argue that the current ‘affordable rent’ regime is unsustainable, dependent on higher rents at a time when welfare reform and uncertain household incomes is causing uncertainty about income streams, and that a doubling of grant per unit is needed. They also focus on issues around regeneration: ‘We are calling for a national enquiry into the future of regeneration, considering how housing and economic regeneration can be considered as part of a single, complementary framework with appropriate investment streams and incentives.’

And finally in this little selection, the London Labour Housing Group identifies the failure of Boris Johnson’s housing policy, especially his removal of requirements in relation to social rented housing from the London Plan and the removal of grant for social rented homes from his affordable housing programme. LLHG say ‘London has been characterised by its inclusivity and social mix, it is rapidly becoming socially polarised.’  They call for a new programme of grant for social rented housing in London – genuinely affordable homes – and a return to the objective of building mixed communities. They say that the principle of ‘planning gain’ must be restored and that it is a disgrace that luxury developments are being built across London with no social housing because it is supposedly ‘not viable’ to include it. They also call for a ‘benefits to bricks’ policy: ‘It is wrong that 95% of public money spent on housing is in the form of housing benefit and only 5% in the form of investment grants. The initial subsidy for social rented keeps rents low for the lifetime of the homes, but it pays for itself eventually through savings in housing benefit compared to either ‘affordable rent’ or requiring people to rent privately.’

There are many other contributions posted on the Your Britain/Lyons website and no doubt more have been received and will be posted shortly. This is undoubtedly a key debate for Labour and we will keep an eye on developments as Sir Michael Lyons and his team complete their review.


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