Housing and the Pandemic

Social housing is an essential service. But you’ll find little mention of its role during the pandemic outside of the world of housing professionals.
Yet the benefits – the ‘social good’ - of publicly owned and run housing (i.e. council housing) and social housing (i.e. housing associations or RSLs, and housing cooperatives1) have shone through during this covid-crisis. Social landlords have played an outstanding role above and beyond in caring for the most vulnerable people, including those who are shielding with health conditions.
Take North Lanarkshire Council. It has the largest council housing stock in Scotland and provides homes to over 36,000 households. At the point of lockdown, on 23 March, a third of these households were shielding. Council staff proactively phoned them all. Overnight they set up a system, working shifts from 8am to 8pm, seven days a week, to make sure that tenants were safe and well. From this they began delivering ongoing support to 6,500 people: collecting medicines, delivering groceries, distributing food parcels, walking dogs, tidying gardens. As pupils were not at school, school meals staff began cooking and delivering meals to all of the council’s sheltered housing tenants.
Housing departments can meet these challenges most effectively because they can do things on the scale that’s required, combined with the ‘on the ground’ intelligence of housing officers located in communities. Because of the benefits of public ownership, during the lockdown, some councils were able to make use of resources they was saving in some areas and divert these to where they were urgently needed.
Housing associations and Co-operatives have performed a similar role, building upon their wider social remit within communities. Delivering food parcels, cooked meals, packed lunches, groceries and prescriptions for tenants and members, and providing pre-paid energy cards. Some have provided additional sources of support for those experiencing domestic abuse. Others have taken action to ensure people are digitally connected, or have provided online classes.
There couldn’t be a greater contrast with the private rented sector, which houses ever growing numbers of the poorest households. It is entirely ill-equipped, uncoordinated, and lacking in motive to respond to a crisis of this nature. New research by the UK Collaborative Centre for Housing Evidence supports all of this. It has looked at the social, economic, health and wellbeing impact of social housing and found that:
- Social housing and its lower rents appears to help explain Scotland’s better record on poverty compared with the rest of the UK;
- Social housing investment helps make rural communities more resilient, by providing low cost homes for younger people, so they can remain in the area, helping sustain vital public services and employment.
- Well designed social housing investment can contribute to reducing the fundamental causes of health inequalities. An estimated 53,000 more affordable homes are needed between 2021-26. We must ramp up the pressure for current levels of government funding for social house building to be continued, and for the target of 35,000 social homes for 2021 (which has suffered a set back because of the pandemic) to be achieved. There are few better ways to generate economic activity than building homes.
To sum up, the Covid crisis has underscored exactly why we must shift the balance back towards social housing. It has demonstrated the social value of councils, housing associations and housing cooperatives as ‘anchor’ organisations in our communities. They are a source of social resilience in a time of public health crisis, and also the key to building our way out of the current economic crisis.

The case for fully devolving Housing Benefit

UNISON's case for the full devolution of Housing Benefit has been supported by the respected think tank IPPR. Scotland needs all the policy levers to effectively address our housing crisis.

The command paper 'Scotland in the United Kingdom: An enduring settlement', (love an optimistic title!) sets out the legislative provisions to enact the Smith Commission consensus for further devolution to Scotland. There has been some political froth over who holds power over those aspects of welfare that will be devolved. In fairness, consultation clauses are not unreasonable given the complexity of Universal Credit that will remain reserved to Westminster.

However, this fuss has masked an important debate around Housing Benefit. The draft legislation gives the Scottish government certain powers to vary the housing costs elements of the universal credit and how they are paid. But as UNISON, and now the IPPR have argued, the case for taking housing out of the universal credit altogether is a very strong one.

The rationale is set out in the IPPR North report, Poverty and devolution:

"…the devolved institutions are responsible for key aspects of the housing and property market. They control not just housing policy and investment, but also planning policy. As a result of the Scotland Act 2012 the Scottish government will also have responsibility for all property taxes. Devolved governments can encourage the construction of new houses in both private and public sectors, and in particular facilitate increases in the social housing stock through investment they make, direct or permit, if they wish.

‘And yet in spite of a stronger understanding of their respective national and local housing market conditions, their unique housing problems, and the housing competencies needed to influence the supply and type of housing, they do not have control over rent subsidy. Control over such a key investment stream is the missing piece of the puzzle for better housing policy and a clearer, more local focus on tackling the cost of housing.

‘First, rent subsidy control would allow the administrations to determine problems and priorities that accord to their local circumstances, rather than policies set in Whitehall (such as the spare room subsidy) which appear to be of little relevance to housing markets in the devolved nations – as evidenced by the deal that was struck with Northern Ireland – but nevertheless can force rent subsidy recipients into destitution. For instance, rather than the Scottish government having to invest resources in reversing the effects of the spare room subsidy, Scotland should instead be making rent subsidy budgeting decisions themselves, in a manner that would target Scottish allocation problems, not ones in London.

‘Second, devolving rent subsidy budgeting could over the long run increase the supply of affordable housing and reduce the costs of rent subsidy. By calculating the long-term trade-offs, devolved governments could target their investment in social housing to reduce the costs of housing benefit. Allowing the devolved governments to use a proportion of housing benefit money to build new social housing, and in turn reduce expenditure on the more expensive private rented sector, would result in socially useful assets (which potentially could be sold when no longer needed) and is arguably a better long-term use of public money. Cutting reliance on the private rented sector by offering cheaper rents offers social tenants a quicker route out of poverty.

‘Third, control over rent subsidy would also bring much more stability and certainty to their substantial housing investment budgets. With the ability to control how rent subsidy policy is made, the devolved institutions can provide revenue certainty to their own public housing investments, and provide a more stable platform for affordable housing supply from the registered social landlord sector. As IPPR has argued elsewhere, the devolving of housing benefit would, over time, potentially contribute to reversing the 30-year drift in public spending from building homes to subsidising rents. In the long run it would be far better to invest more in bricks and mortar than in paying private landlords. The devolved administrations have proven much better at investing in new supply of social housing, and are as a result more active in helping families to reduce the housing cost pressures that have such an impact on policy discussions."

UNISON did not argue for the devolution of welfare benefits in total because we accept that there are a number of benefits that should remain a shared risk across the United Kingdom. Mainly because they are cyclical and that creates particular financial challenges for a devolved government. However, this doesn't apply to housing benefit and only the misplaced desire to protect the integrity of the Universal Credit prevented this happening when the original Smith Commission proposals were being developed. The Tories under pressure from the DWP, already in a mess over Universal Credit implementation, changed their position from the original submission.

The announcement from Labour that, if elected, they will fully devolve Housing Benefit is a welcome commitment. Controlling all the levers of housing policy is important if Scotland is to tackle our housing crisis.

 

Scotland's housing crisis - listen to the workers

Scotland's housing crisis needs urgent action and the staff who deliver the service agree.

UNISON Scotland has published a survey of Scotland’s housing staff today. It has exposed the reality of frontline staff trying to cope with the huge scale of Scotland’s housing crisis. 'Open the door: housing staff on the homes we have and the homes we need' – looks at the real experiences of members involved in all aspects of providing housing services: housing officers, housing assistants and lettings officers.

The majority of those surveyed (68 per cent) said funding for their service had gone down, negatively impacting on the quality of service they can provide. Three quarters of respondents said changes in welfare and benefit legislation has contributed to the problem. At its bluntest, welfare changes have made life more difficult for tenants and this in turn has created problems for housing staff.

While numbers matter, the best part of these surveys for me is the comments from staff. They tell real members stories in their own words. Here are a few examples from this survey:

"I work with homeless people. The pressure is increasing relentlessly. Demand is increasing as resources dwindle."

"[Benefit changes] have impacted massively and it will only get worse. Rent arrears have risen and you cannot take what people don’t have."

"Due to bedroom tax and direct payments of housing benefit to tenants we are seeing an increase in rent arrears and homeless rising due to more evictions."

"How is it possible for them to provide for the future of their housing with less staff and more homelessness. It’s not possible."

More than half of respondents (55 per cent) said they regularly work over their contracted hours while 58 per cent said staff numbers are in decline, meaning they don’t have as much time to spend with clients. Like other workers in public services, housing staff have been experiencing years of zero or minimal pay. Almost 70 per cent of workers said their standard of living had dropped in the previous three or four years, with many struggling to make ends meet.

For those who like the numbers, they paint an equally depressing picture. Scotland has 179,954 households with outstanding applications for social housing; of these some 29,500 are households on transfer lists meaning 150,000 households are waiting to enter social housing. The response to this in terms of house building is woefully inadequate. Only 10,686 dwellings were built between March 2013-14 by the private sector, 2,911 dwellings built by housing associations and 974 dwellings built by local authorities.

Allied to this are issues around the quality of housing. 349,000 homes in Scotland are affected by dampness or condensation. 647,000 households are in fuel poverty in Scotland. A total of 54 per cent of Scotland’s social housing currently falls beneath the Scottish Housing Quality Standard. 65,000 households are overcrowded in Scotland.

UNISON hasn't just outlined the inadequacy of current approaches. In our paper 'Making Homes for a Fairer Scotland' we outlined a new housing programme for Scotland. Equally importantly, we also showed how this could be funded, using some of the assets represented by public sector pension funds in our publication, 'Funding and Building the Homes Scotland Needs'. This would put these funds to a socially (and literally) constructive use in building a fairer Scotland. Alex Rowley MSP helpfully highlighted this plan in the recent debate on housing in the Scottish Parliament.

We also need to devolve Housing Benefit. Responsibility for housing policy without the main benefit makes no sense. This appears to have welcome cross party support, so should be one of the easier issues for Lord Smith's commission to agree on. We need to do this quickly before Universal Credit is rolled out in Scotland and the experienced council staff transfer or leave the service.

We have a crisis with the availability, the cost and the quality of our housing and we urgently need large scale investment to reverse Scotland’s housing crisis. Any plan for social justice in Scotland has to put housing at its core.

 

 

 

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Building a Better Scotland

Scotland has an inadequate and inelastic supply of housing. That’s the conclusion of the RICS Scottish Housing Commission in its report ‘Building a Better Scotland’. They argue that there is not a simple, single factor that can solve this difficulty. Development, planning, design, management, finance and taxation systems, singly and together, all shape Scotland’s housing challenges. A smarter Scottish housing system, with better outcomes, will not emerge from some fast individual measure or sector change.

The report identifies Scotland’s deteriorating housing outcomes: 

• In the best case scenario, it could take more than 20 years (from 2011/12) before enough new homes equate to the projected increase in new household formations; 
• Burdens of paying for housing are historically high for both private tenants (23% of their incomes in contrast to 18% a decade ago) and younger home owners face loan to income ratios of 4 to 5; 
• The number of households in need and applying for social housing is rising sharply, with over 184,000 households on local authority housing lists, whilst social housing output has fallen in the midst of a static vacancy turnover; 
• More households in need are renting in the more difficult segments of the private rented sector: 190,000 Scots in poverty now reside in the social sector, and 120,000 rely on market rental provision; 
• The rate of improvement to social housing is falling, and neighbourhood renewal schemes are small in scale in contrast to a decade ago; 
• Starts in the private sector remain at historically low levels almost everywhere in Scotland; 
• After the 1997-2007 boom, Scottish house prices fell back in the wake of the global financial crisis (GFC) but largely stabilised by 2012, and are now showing signs of significant annual increases in the range of 5 to 10 percent in areas where employment is recovering. 

Put simply, as UNISON Scotland’s own report ‘Making Homes for a Fairer Scotland’ does - we need to build more homes.

The RICS report makes a series of recommendations:

1. a Scottish Housing Observatory is established
2. the Scottish Parliament debates an Annual State of the Scottish Housing Market Report
3. the post of Housing Minister is elevated to a Cabinet Secretary position
4. there should be new and continuing assessment of key housing market indicators
5. the Scottish Government should continue to explore new methods of supporting the housing market to sustain demand
6. the Scottish Government makes an effective private rental housing market one of the key pillars of the future housing system for Scotland
7. the Scottish Government shapes a skills programme for planning
8. the Scottish planning system should deliver at least a 100% increase in effective supply of land for development by 2016, and that all local authorities should be able to demonstrate a 10-year effective land supply as standard
9. the Scottish Government, in partnership with planning authorities, undertakes a review to assess the nature of existing planning consents in Scotland
10. the Scottish Government develops a new emphasis on consumer research to inform a local housing systems analysis approach to assessing housing need and demand in Scotland.
11. the Scottish Government establishes a Scottish Land Delivery Agency (SLDA)
12. the Scottish Government endorses effective provision in growing areas by enabling the delivery of six to eight major new communities
13. there is a reduction in VAT to 5% on refurbishment and maintenance building works
14. the Scottish Government puts in place a change fund for the social housing sector
15. the Scottish Housing Regulator should take a greater role in effecting system performance knowledge and change in Scotland.

While it is hard to disagree with the thrust of these recommendations, they are very process driven. It may be true that there is not a simple single factor that will solve Scotland’s housing problems, but there are a few absolute essentials. The UNISON Scotland report argues that building more social housing is the most important of these.

The recommendations are also weak on the recent rapid growth of the private rented sector. It largely ignores the need for better regulation and rent controls, at a time when private rents are rising twice as fast as wages. The vast majority of those in private rented accommodation are not there by choice. Only 6% of private renters want to be in that sector, most want a secure social housing tenancy. The campaign group Generation Rent, has recently launched its Renters’ Manifesto that highlights these issues.

Housing policy in Scotland has been diverging from the rest of the UK since devolution and constitutional change, whatever the outcome of the referendum, could enable further change. In particular, the devolution of Housing Benefit provides the scope for a more creative solution. This point has recently been articulated by housing bodies including, CIH, SFHA and Shelter.

The RICS report is therefore a welcome contribution to the debate, but perhaps lacks the radical edge needed to tackle what is a growing housing crisis.

Housing Bill could be more ambitious

Housing is about to get some long overdue scrutiny in parliament with a generally worthy Bill. However, it doesn't address the big issue, which is building new houses or take radical steps to strengthen tenants rights in the private sector.

The Housing (Scotland) Bill covers a wide range of issues concerning social and private housing. The big ticket item is the abolition of the right to buy. This is very welcome although the three year implementation time period is too long. Tenants are already being bombarded by adverts from lenders.

There is welcome flexibility for social landlords in allocating housing and new tools to tackle antisocial behaviour. Additional protections for tenants, particularly those with a short Scottish

Secure Tenancy is also a good idea. However, the criteria on 'tolerable standard' and 'overcrowding' should remain in order to safeguard quality of housing and tackle overcrowding, which is a problem in both private and social housing. The inclusion of a 'local connection' criterion should also be considered.

Transferring jurisdiction for civil cases relating to the private rented sector from the sheriff court to the First-tier Tribunal should make it easier for tenants to get redress. However, that's only useful if they have rights to enforce. There has been a big increase in the amount of privately rented accommodation in Scotland, from 7% to 12% of the housing market. Private tenants in Scotland have very few rights and some of the worst abuses are in this sector. The solution is the introduction of rent controls, security of tenure and other regulatory measures. It is often argued that this would reduce the supply of properties onto the market. However, in Germany they have highly regulated tenancies and a growing supply of properties - so it can be done.

Measures to establish a registration system for letting agents is a welcome step forward. Some in  the sector argued for a voluntary code that would have been toothless, so credit to the Scottish Government for taking a tougher line. Provisions that amend the site licensing requirements for mobile home sites with permanent residents are also welcome.

Strengthening local authority powers to enforce repairs and maintenance in private homes are also welcome, although they could have gone further with improvements. The upkeep of communal areas is a particular problem.

That leaves the need to build more houses and to have a long term strategy as Audit Scotland highlighted last year. Investment in social housing is the key to solving Scotland's housing crisis. In UNISON Scotland's housing policy document 'Making Homes for a Fairer Scotland' (June 2013) we argue that there is an acute shortage of homes - with official figures showing 335,000 households on social housing waiting lists across Scotland and 71,000 overcrowded households - 65 per cent of which included families with children. Shelter Scotland estimated a need to build a minimum of 10,000 affordable homes a year, almost twice the current level of social house building. We also show how new houses could be financed using council pension funds.

Improving our housing requires more than just the regulatory reform as proposed by the current bill. The housing crisis requires a massive programme of social housing investment from the public sector. The private housing sector needs stronger regulation to make it a realistic choice, rather than a tenancy of last resort. 

The real cost of the bedroom tax

The Scottish Federation of Housing Associations (SFHA) has published a report 'The Real Cost of the Bedroom Tax' that estimates a bill of almost £80m for Scottish Housing Associations and Co-operatives. 36,000 housing association tenants and 47,000 council tenants will be affected by the Bedroom Tax.

It breaks this down into tenancy management costs covering expenses such as the reallocation of homes as thousands of tenants look to downsize, unpaid rental income and legal costs which it says will amount to at least £55,264,800 over the first three years of the policy.

Communications such as advice provision, tenant surveys and newsletters were costed at £9,250,000. System changes such as staff training and updating policy, procedures and IT systems are expected to cost £14,592,800.

Maureen Watson, SFHA head of policy, said the extra cost has not been built into the business plans of its members. She said: "This will drive up rents for all tenants and increase the housing benefit bill for the UK Government.The SFHA is strongly opposed to the bedroom tax. We are continuing to make representations to the UK Government, seeking to have this unfair and incompetent policy repealed."

A coherent approach to housing taxation

The funding of local government has been a difficult issue for political parties. At best proposals have been sticking plaster solutions because change is viewed as being politically challenging. UNISON Scotland is arguing that we simply cannot go on as we are with short-term fixes that damage services and undermine local democratic accountability. We need to develop a new consensus that provides a long-term solution. To that end we have published a briefing and a discussion paper on a new property tax for Scotland.

The Institute of Fiscal Studies have also recently made a contribution to this debate with a paper, "Housing Taxation and Support for Housing Costs" by Stuart Adam.

He argues that the the UK’s system of housing taxes and benefits falls well short of a coherent design, “housing is a consumption good, an asset and an essential for life, and its treatment in the tax and benefit system needs to reflect all of those aspects.”

These are some of the key reforms he believes would help to improve the system:

Housing consumption should be taxed like other consumption: subject to VAT when new or to an equivalent tax levied on the stream of services it provides. Britain’s council tax, which is currently based on 1991 values in England and Scotland, should be reformed to relate it more closely to actual property values: levied as a uniform proportion of up-to-date rental values with no cap and no discount for unoccupied or single-occupancy properties.

Taxation of rented housing should be reformed by offering landlords an allowance against a ‘normal’ return to their investment (and by aligning capital gains tax rates with income tax rates).

The UK’s stamp duty on housing should be abolished and the revenue replaced by part of the reformed council tax.

There is a case for allowing home-owners who lack the liquidity to pay the tax to defer payment (with interest) until sale of the property or death.

Those who lack both current income and assets should be entitled to financial help towards their housing tax, and indeed towards their housing costs more generally. Preferably this would form part of a larger integrated benefit rather than requiring a separate means test and procedures.

Stuart Adam said: “There is a set of principles for housing taxation that should be applied in any modern economy. Large changes need to be phased in carefully, but this is an area where current UK practice is a long way from an economically rational and efficient system.”

 

Another fall in new house building

The Scottish Government has published the latest statistics on new house building. It doesn't make happy reading.

Historically, from a high point of about 41,000-43,000 completions a year, mainly in the public sector, the level of new build fell during the Thatcher years to under 20,000 completions per year.

There was then an upward trend which peaked in 2005 at 26,468 completions. However, this trend has since reversed and by March 2013 was 13,803, 48% below the peak in 2004-05.

The number of starts decreased by 9% in the latest year (to 31 March 2013). The latest quarter shows the number of starts decreased by 19% compared to the same quarter in 2012.

There were 1,189 new council houses started in the latest year (to 30 June 2013) and 1,010 were completed. In essence there was a decline in building new social homes, private sector homes and housing association homes at a time when demand in all three sectors has never been higher.

 

The Scottish Government blamed economic conditions and UK budget cuts. The Opposition blamed the SNP Government. No shock there then!

 

The SNP Government has cut the capital budget for housing by almost 30% since they came to power in 2007. However, they maintain they're still on track to build 30,000 affordable homes during the lifetime of this Parliament.

 

Those sitting on waiting lists will hope for marked improvement in house building soon. UNISON Scotland has set out how this might be achieved, and even more importantly, how it could be financed.