From the TUC

Policy Exchange on “expensive social housing” – reasons to be miserable.

20 Aug 2012, by in Society & Welfare, Uncategorized

The Policy Exchange report “Ending Expensive Social Tenancies” is in the news this morning.  The basic premise is that  “selling expensive social housing as it becomes vacant could create the largest social house building programme since the 1970s. The sales would raise £4.5 billion annually which could be used to build 80,000-170,000 new social homes a year and create 160,000-340,000 jobs a year in the construction industry.”

There is widespread concern that such a proposal would be a disaster, creating mono-cultural communities, making low paid employees travel further to work, and perhaps opening up local authorities to allegations of seeking electoral advantage – and most damningly, singularly failing to generate much in the way of new social housing.

First, this report begs the question “why does a Conservative think-tank suddenly seem to be enthusiastic about social housing?” One does not have to look far for a clue, as the report goes on to say that such a proposal would be “extremely popular with all sections of society. 73% of people including social tenants think that people should not be given council houses worth more than the average property in a local authority. By 2:1 voters agree people should not be given council houses in expensive areas.”

Frankly, i simply don’t believe this  polling. I think that the answer is very likely to be strongly influenced by how the question is framed. Housing minister Grant Shapps has already told local authorities that they should sell off their most expensive social housing, but there is a real difference between asserting that councils should sell the very small number of properties worth more than £1 million and advocating that the most expensive 25 per cent of social housing must go. The latter would be a policy entirely tailored to appeal to the right wing of the Conservative party.

Reasons why this policy would make the UK a more miserable place:

  • There is compelling academic evidence that mixed communities are more at peace with themselves. Put in simple terms, it becomes harder to stereotype the Porsche-owner when you see them working long hours, or perhaps the one-parent family down the street when you know that they are better off without their abusive partner. This kind of real understanding is fostered when people live together in the same street.
  • Segregating communities means that those engaged in service occupations have to travel further to work. This makes low paid workers poorer and increases emissions and congestion.
  • when social housing is sold, there is an absolute guarantee that all the money will not be re-invested in social housing. First, the Government itself always takes a percentage of all sales revenue. Second, Government policy continues to be that local authorities will use a percentage of the revenue from sales to support their general activities. This means that the sale of an above-average property does not generate enough money to build a below-average replacement social housing unit. For example, the Regulatory Impact Assessment accompanying the Governmnt’s “Reinvigorating the Right to Buy” consultation suggested not a one-for-one replacement, but a ratio of about one new social home for each four sold!
  • Most worryingly, there is a concern that such proposals could be used to generate electoral advantage by moving opposition voters. This proposal would need a rigorous political impact assessment in order to ensure that it would not open the door to a wave of Westminster-style social-cleansing scandals. 

It is the business of think-tanks to think the unthinkable. Often it is the business of the rest of the UK to tell them why the unthinkable remains just that.



17 Responses to Policy Exchange on “expensive social housing” – reasons to be miserable.

  1. Alex Abbott
    Aug 20th 2012, 2:13 pm

    A very interesting blogpost. I note your line about not trusting the polling. I’ve looked into the poll data they use to justify the claim that there’s popular support for the policy and there’s a few things to note which back up, if not exceed your claim.

    First of all the survey data is from March 2011 which in polling terms is quite old. People’s attitudes to a whole range of topics have shifted quite significantly during that time – from austerity to the government, the fairness of cuts and divisions in society. Policy Exchange is a very well-financed organisation. It would only have cost them a few hundred pounds to commission an up to date question – but for whatever reason they chose not to.

    You are right about how the questions are framed:

    ‘People should not be offered council houses that are worth more than the average house in their local authority’

    The language of the question itself uses “offered” suggests that social housing is being handed out willnilly. If it was chance to “apply for” then that’d be different.

    But more worrying is the preceding questions in the poll which seem designed to frame the entire debate in the survey recipient’s mind in a very biased manner. These include:

    Do you agree/disagree: ‘People who have more than three children should not get extra child benefit if they have a fourth’

    How many hours each day do you think a person on Jobseeker’s Allowance should have to be searching for work, applying for jobs, or in order to receive benefits?’

    It then asks about whether people who are drug users and criminals should retain their benefits

    Then there’s the question testing support for ‘You can have a fair society even if people’s incomes are quite unequal, as long as you have equality of opportunity’

    But the real biggy is:

    Do you agree or disagree with the following statement: “Some people who are poor are much more deserving than other people who are poor. We should focus help on those who are trying hard and doing the right thing, rather than those who have made themselves poor”

    These preceding questions could all lead the respondent onto a suggestive journey which associates drug-users, criminals, the lazy, unemployed, those on benefits and council houses. On a topic of low knowledge and awareness then this association is likely to have an even greater distorting impact on responses.

    Needless to say if earlier questions on the following lines were asked instead then the responses could be notably different.

    ‘Do you think the wealthiest in society understand the lives of ordinary working people and those in need’

    ‘Should councils make efforts to ensure local communities include people from a range of economic backgrounds’

    Whatever the rights and wrongs of the policy, it seems that Policy Exchange have used every trick in the book to distort polling responses in support of their ideas. The fact they feel they have to is in itself quite revealing.

  2. Shinsei1967
    Aug 21st 2012, 7:58 am

    Your point about the effect on emissions and congestion as service sector workers have further to travel to work is a poor argument.

    1) Low paid service sector jobs aren’t necessarily in the centre of town. Hospitals for instance, even in London, tend to be out of town. Similarly very large office buildings.

    2) Presumably the person who buys this “expensive” social housing will be someone who works locally. Anyone buying a 2 bed flat for £600k in London will be a banker or lawyer. So the property is still being used by someone. Net net there is no increase in congestion or emissions.

  3. Paul Sellers

    Paul Sellers
    Aug 21st 2012, 8:50 am

    I’m quite confident that if this policy would lead to more congestion and emmissions if it was carried through.

    High earners are alreday willing to travel further to work on average, but they are also more likely to have access to flexi-time and homeworking, thus avoiding the rush hour or cutting out the commute altogether.

    Without very careful planning this proposal would be certain to lead to a significant number of low paid workers having longer travel to work journeys, unable to avoid the rush hour as they have little or no say about when they travel.

    If this were a serious proposal, then the travel implications would need to be rigorously assessed.

    I wonder to what extent this paper will be favoured by Government though, given its strong potential to backfire sharply.

  4. Dr Wanda Wyporska
    Aug 21st 2012, 9:42 am

    Excellent blog, Paul, but we also need to look at the impact such a move would have on schooling. This would potentially deprive more children of attending good schools in good areas.

  5. Paul Sellers

    Paul Sellers
    Aug 21st 2012, 9:55 am

    A very good point. A full social impact assessment would include the effects on employment, education, health and equalities.

  6. buddyhell
    Aug 21st 2012, 10:10 am

    Policy Exchange have previous form when it comes to making things up. It doesn’t conduct research in any meaningful sense of the word, it merely attempts to justify class prejudice by couching it in academic-sounding language. By the way, I failed to find a methodology in the report, did anyone else see it?

    Here’s one I wrote earlier

  7. Darren Coan
    Aug 21st 2012, 10:45 am

    Paul, I found your article a very interesting to read. Whilst it alludes to Gerrymandering of wards and boroughs, and the changing demographics of the voters, it doesn’t seem to address one major issue.

    Yes the main impact on boroughs in London (most of the expensive social housing is in London) selling off Social Housing will change the make up of the electorate affecting how local politics is goverened, but future boundary changes driven by the outflux of social tenants should not have a long term effect on representation nationally.

    One issue that hasn’t been addressed is the placement of new social housing. London housing costs are high because of the ecconomics of supply and demand. There are few properties available for sale in areas of high house prices and little opportunity to build new homes. If these homes are sold innevitively the money will have to go into a central pot if no Brownfield/Greenfield building space is available locally do develop the Greenbelt around London. This would also rediuce the chance of social mobility in London with the Rich and Poorer members of society in Concaves which will potentially lead to scenes of social unrest similar to summer 2011.

    As a social tenant I take umbridge to the fact that you state that new build social housing is a below average replacement for an older expensive home in a sought after area. Yes these homes can be smaller, but they are built to above decent home standards and provide better value for money in their upkeep. Older properties require significant investment once the housing stock is freed for a new tenant. The idea is only to sell a home once it is vacant and utilise the profits to build new properties. Ask yourself this, is it better to spend £30000+ updating an old property for a new tenant or to sell that property and use that income to build 1 or more properties with the required Homes Standard with no added costs. The tenant in most cases will not care that they are in an expensive neighbourhood or not but will be grateful for a property that suits their needs.

  8. Paul Sellers

    Paul Sellers
    Aug 21st 2012, 11:10 am

    I agree with you totally on the placement of new social housing. This is a growing problem in that the small ammount of new homes being built are not usually in the ideal location.

    Don’t take umbridge about replacement homes though. The point that i was getting at was not that new homes will not be as good as the existing ones. Rather, it was that the Government and local authorities are committed to take 3/4 of the reciepts from sales and use the money for other things. It follows that you have to sell 4 existing homes to build 1 new one. This is not a good deal.

  9. Fact checker
    Aug 21st 2012, 11:23 am

    Shinsei1967 says “Hospitals for instance, even in London, tend to be out of town. Similarly very large office buildings.”

    What?? You looked at a map of London recently or the skyline? What are all those big buildings in the centre?

    Re hospitals, how do you define “out of town”?
    Are London and and Westminster Bridges “out of town” They are the locations of two major London hospitals. Guys and St Thomas’s. Not to mention Barts, UCH, Moorfields, GOSH, ENT and loads of private ones. Did you do the research for Policy Exchange?

  10. Shinsei1967
    Aug 21st 2012, 11:45 am

    @Fact Checker.

    Thanks, I’m well aware of the location of the likes of Barts and Great Ormond St. I used to live next to one and worked next to the other.

    1) My comment re hospitals was primarily directed at places outside London. As far as I have seen most cities and large towns have large hospitals on the outskirts. It’s a long commute from expensive central Cambridge to Addenbrookes. It’s a long commute from the expensive West End of Edinburgh to the Royal Infirmary.

    2) Even in London the large hospitals you mention are predominantly in poorer areas of town. There is (by London standards) lots of cheapish accommodation near Guys, St Thomas’s, Moorfields etc. My point was that there aren’t lots of hospitals in expensive west London. Most of the hospitals you mention are to the south and east of London which is the cheaper half. If you are living in South Ken or Notting Hill and commuting to work at Moorfields you really aren’t living in the most sensible part of town.

    3) And regarding office buildings. If you are a cleaner at Barclays in Canary Wharf, again, living in west London makes no sense. The only reason bankers do it is because they are snobbish about where they live. They find the commute a real burden.

  11. Brian Moylan
    Aug 21st 2012, 2:51 pm

    This is from the same “Policy Exchange” who in 2008 wrote that there is no point in helping some less well off areas, “Cities in northern England such as Liverpool, Sunderland and Bradford are “beyond revival” and residents should move south”
    Northern cities ‘beyond revival’

  12. Guido Fawkes
    Aug 22nd 2012, 8:39 am

    My London home is on a street with a mixture of private and social housing. Houses go for prices approaching a million. Maseratis, Mercs and Range Rovers line the street. Some of those cars are owned by the people living in the social housing. Something very wrong here with people working the system.

  13. Alex
    Aug 22nd 2012, 2:06 pm

    I don’t think even you believe that, Paul.

  14. Alex
    Aug 22nd 2012, 2:09 pm

    On topic, surely what does the work in the poll is the idea that someone is “given” a council house worth yadda yadda. Nobody is proposing that (except the Tories under right-to-buy extension). People in council houses are tenants.

    The really weird thing is the idea that somehow there’s a recurring cost to social housing being in central London. Of course, all this policy actually offers is a one-off squandertunity.

  15. Guido Fawkes
    Aug 22nd 2012, 2:12 pm

    It is an undeniable fact.

  16. Paul Sellers

    Paul Sellers
    Aug 22nd 2012, 3:38 pm

    To be honest, I think that this is rather a red herring. It does not address the Policy Exchange proposal, which is not about near-million pound houses or tenants who have a nice car (although I must note in passing that a tidy second hand Range Rover starts at about £5,000 – perhaps not too unaffordable).

    Rather, what PE proposed is that all social housing worth above the regional average house price should be sold off. The latest figures from the authoritative Land Registry for England and Wales record that the average house price within their jurisdiction is currently £161,777. This is rather a long way below an address in Millionaire’s Row.