That this House takes note of the case for a long-term commitment to increased provision of social housing to help to reduce housing costs, homelessness and housing benefit expenditure.
My Lords, this year marks the 100th anniversary of the Addison Act of 1919, which first gave general powers for local authorities to build and manage council housing. For decades, council housing was the ambition of millions of families in all walks of life, and for many it still is.
For my main text I have taken the recent report from Shelter’s Social Housing Commission. It starkly sets out how we got here, what are the consequences, and makes proposals for drastic and strategic action to restore the central role of council housing in our housing provision.
I am of course grateful that such a large number of speakers wish to speak in this debate, but I am particularly pleased to see a member of that Shelter commission: my noble friend Lady Lawrence. I look forward to her speech, as well as to the maiden speech of my noble friend Lady Osamor.
It is still the ambition for millions of people in the often exploitative and squalid private sector to obtain social housing provided by local authorities and housing associations. That is why 1.1 million households in England—about 4 million people—are on council waiting lists and desperate for a council house. In London, the ratio of those households on the lists to available property is over 20:1, and in central London it is even higher. Lest this is seen as a purely urban issue, the CPRE estimates that at the present rate it will take 133 years to clear the current waiting lists in rural counties of England.
In the last few decades, from the 1980s onwards, social housing—council housing in particular—has been first disparaged by Governments and media, then curtailed, and then directly attacked. Successive Governments share some of the blame, but the inheritance of the 1980s has done the greatest damage.
Building of social housing has fallen from an average of 126,000 per annum to a few thousand a year—fewer than 7,000 last year. Originally, the Thatcher Government’s right to buy saw 3 million council homes lost, without the proceeds being used to provide for their replacement. Stock transfers and allocation of management to ALMOs has also often removed councils from their housing management role, sometimes with disastrous consequences.
Successive Governments have championed the growth of home ownership, and I do too, but that growth has reached saturation point and gone backwards. It has fallen from 70% to 63% in recent years. In the private rented sector, renting privately often means unaffordable housing costs. Indeed, even within the social housing sector, the insistence on “affordable rent”—which in practice works out at up to 80% of rapidly rising local private rents—has meant that housing costs have been too great for many families. In the private sector, it has meant multiple tenants in overcrowded rooms or even, in some cases, in sheds and outhouses. At the end of this line, it means the tragically burgeoning number of homeless on our streets, which has doubled over the past few years and, as we have seen in the figures today, has gone up again. Those figures are regarded by almost everybody as an underestimate.
My Lords, I declare an interest as the leader of South Holland District Council and the chair of the Local Government Association. I am also a small-scale private landlord, for what it is worth. I thank the Opposition for using their time to control the agenda of the House and use it for this most important of subjects.
It is an undisputable truth that every child in this country deserves to be born in a decent, safe, secure and affordable home. For the vast majority, council-owned or social landlord-owned properties are probably the only way to meet that affordability criteria. As the noble Lord, Lord Whitty, said, successive Governments over the past 40 years have fallen out of love with council houses for various reasons. That has not gone well for those of us who believe that safe, secure and affordable homes are best provided through the social sector. We saw at the start of the coalition Government and the recession that the post-war consensus that we would always invest in bricks and mortar was changed to an investment in tenants. That is why we are now spending, or wasting, more than £20 billion a year on housing benefit.
Probably the most reassuring statement from the current Prime Minister was made two years ago at the party conference. She is the first serving Prime Minister that I can recall to have a positive conversation about council houses. She talked about the benefits to children if they are able to grow up in a council house. That is the first time I can remember such a statement. She followed it up at last year’s party conference by doing the one thing that will mark her out as probably one of the best Prime Ministers of the 21st century: she reversed the actions taken by successive Governments to prevent councils borrowing against the assets they already own. Our councils own a few million houses and we should be able to sweat that asset. She is the first Prime Minister to turn this around and she must be remembered for that. However you dress it up, she will be largely responsible for hundreds of thousands of children in this country being able to grow up in decent, safe, secure and affordable homes.
My Lords, I congratulate my noble friend Lord Whitty on securing this debate and I look forward to the maiden speech of my noble friend Lady Osamor. I declare an interest as the chair of the National Housing Federation.
I too want to refer to Shelter. Its social housing commission—my noble friend Lady Lawrence was a commissioner—recently set out graphically the damning consequences of poor provision of social housing, including increased homelessness. This is clearly a crisis and the true cost is staggering. The Government spend billions of pounds a year on housing benefit, much of it going to private landlords. Councils are spending hundreds of millions on housing homeless families. In stark terms, the housing crisis costs lives. Recently a homeless man died just outside this building.
The National Housing Federation and Crisis have shown that, to meet demand, we need to build 340,000 homes a year, but numbers alone will not solve this. The type of tenure is vital to tackling the root of the problem. We need to build 145,000 affordable homes a year and 90,000 must be for social rent. Last year, we built just 42,000 affordable homes. There are no quick fixes. We need a long-term, joined-up plan to build vastly more homes for social rent.
I want to use my three minutes to identify briefly some key issues and ask the Minister some questions. Housing associations will play their part as the largest providers of social homes, and the Government too have made a commitment to build 300,000 homes. How many of them will be genuinely affordable? How much investment has the Treasury calculated will be needed? Each area faces its own unique challenges, which require local solutions. In some places regeneration is needed, not new build. Does the Minister agree that different solutions are required, including investment for regeneration? Partnerships with local authorities are vital. The removal of the housing revenue account cap should empower local authorities and housing associations to work together to tackle the crisis. However, barriers remain. Will the Government reform the Land Compensation Act 1961 so that a fairer proportion of the uplift in land value can be shared with the local community, including for affordable homes? Will the Minister commit to delivering 50% of affordable housing across public sector land?
My Lords, I congratulate the noble Lord, Lord Whitty, on securing a debate on such a significant issue. For too long, in all political parties, social housing has been the poorer cousin of affordable housing—which, as we know, is no such thing, being 80% of market rate. Having spent over 30 years plundering stocks of social housing—with the high peaks of sales in 1981, 1989 and 2003—all political parties have failed abjectly to replace those stocks. Every political party has been guilty of inaction when in power and has failed to properly acknowledge that. The change in policy in 2012 to replace properties sold with affordable housing was in effect sticking a broken finger in a dam long since washed away. From the JRF to the IFS, calls for yet greater numbers of social housing properties to solve this are matched only by the Treasury’s increasing deafness.
Gordon Brown’s golden rule was but one example of the negligence the Treasury has shown for over a quarter of a century. The IFS suggests that this has suppressed social housing build over a long period. In 1996 I met with Gordon Brown and lobbied him on this issue. He was on the eve of an historic win, with an eye-watering majority and money to spend. The lack of commitment to turn this issue around, in spite of progress in other areas such as homelessness, was tragic. Today we have a housing benefit cost of £21 billion, down from £25 billion because of harsher criteria. Any normal business would look at these swingeing levels of ongoing current expenditure and ask: why is there no capital expenditure to turn this around?
So what of the future? First, all parties must accept that we have failed over a long period on this crucial policy. Secondly, all parties must work together with a real target for social housing instead of the usual arguments over the least lamentable record. It often sounds like a dispute about the size of the head of a pin rather than the sledgehammer required. Only yesterday we saw this in a speech from James Brokenshire promising £500 million—money that is not new and certainly not enough. Thirdly, the Treasury must be held to account and use the forthcoming spending review to make substantial change. Fourthly, no plans by any political party will deal with the immediate and urgent shortfall. The private sector must therefore be supported to be fit for purpose. Given that the main cause of homelessness is the end of an assured shorthold tenancy, this requires urgent attention and I look forward to hearing the results of the Government’s current review.
As Bishop of Chelmsford, I am also proud to be the Bishop of Becontree, Harlow and Basildon, three of the nation’s boldest attempts by policymakers in the last century to address the housing needs of London and the south-east. When Becontree was built in the 1920s, it was Europe’s largest public housing development. The Government were then building homes fit for heroes after the First World War, and London County Council had a bold vision for 27,000 new homes and the infrastructure that went with them, which we do not see in housing estates today. There are many being built across Essex. It is great to move in, provided that you do not own a car—there is nowhere to park it—and provided that nobody who ever visits you has a car, because there is nowhere for them either.
The era of large housing estates has gone, but so has the vision to build proper communities. I therefore very enthusiastically support the Motion from the noble Lord, Lord Whitty, and the need to increase our commitment to provide social housing. This debate is very timely. We all see the reason for this in the terrible rise in homelessness. I pay tribute to the work done by churches and charities up and down this country to support those who are homeless.
Until fairly recently, most of us would grow up, live, work and raise a family in the same place, but we now live networked lives. We therefore end up gravitating towards living beside people who look and think as we do. But the danger is that a networked, aspirational society becomes a disintegrated society, a society with rising levels of aspiration but correspondingly higher levels of discontentment and unhappiness. Let me put it plainly: there is something wrong and we store up great trouble for ourselves when people cannot even aspire to live in the communities where they grew up.
Creating more diverse but integrated communities is challenging but it provides a better context for human flourishing, so please forgive me for making a theological point: you cannot be yourself on your own. The only way we can fully be what we are meant to be is in community with each other. The answer is plain and it is, of course, our common expectation: builders and developers must ensure that a significant proportion of the dwellings they build is affordable social housing.
I too join my noble friend Lord Porter in thanking the noble Lord, Lord Whitty, for using the Opposition-day debates to focus on this important and topical subject.
It is clear to us all that successive Governments have not done enough to build more affordable and social housing since the stock was depleted by the right to buy. With only three minutes, l am going to focus on the present and ways in which the Government could create a more sustainable model for the provision of social housing than currently prevails.
There are three elements to the cost of housebuilding: the land, construction and the profit margin. As the costs of both land and construction have escalated, profits—the incentive to build—have declined. When those are added to the many problems within the planning system, it is difficult to see how the Government will meet their target of building 300,000 new homes per year without both a new financial model and changes to the planning system.
The London Mayor Sadiq Khan’s worthy but ill-advised aim to require 50% of new homes built to be affordable or social makes the finances of a scheme completely unworkable and has resulted in a 23% decline in housing starts.
Of the three component costs, we must find a way of reducing the cost of land and ensuring that public land is used for future social housing needs, particularly in London, where 80% of boroughs report that access to social housing for their homeless clients is very difficult. I do not see an argument for subsidising or fast-tracking land acquisition by the private sector in return for an increased proportion of social housing. This merely leads to a perpetual housing shortage and escalating rents.
If the aim is to provide genuine social and affordable housing, then public land should be treated as the Crown Estate treats its land—as a long-term asset which is managed and looked after for long-term benefit, in this case of the community. It can be used for the provision of housing, and the nomination rights of who can occupy this housing should remain with the local authorities or housing associations.
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Lord Pendry (Lab)
My Lords, it is most unfortunate that the terms of this debate, so ably moved by my noble friend Lord Whitty, are so broad that our time to speak on such important matters is so limited. As a result, I shall focus my short remarks on the pressing need for the Government to resolve this housing crisis, so that we can see an end to the diabolical increases in homelessness and the deaths of homeless people that we have seen over the past eight years.
By the Government’s own figures, the number of people sleeping on the streets has more than doubled since 2010, and charities warn us that this is a strong underestimate. It is shocking beyond belief that the Government started publishing only last December the numbers of people who have been dying in this situation. The news that 600 people died while homeless in 2017 should chill us all.
The factors contributing to this are clear. We have a chronic undersupply of affordable housing following 40 years of failure in housing policy, driven in part by the ideological selling-off of our council houses. This Government have pushed the situation to breaking point, with their record lows in council housebuilding. Their cruel austerity measures and the capping of local housing allowance have exacerbated people’s inability to pay expensive private rents.
Councils are struggling to find social tenancies for the homeless, and more and more people are becoming homeless because they cannot afford to pay their rent. When serving on Paddington council in the early 1960s, I witnessed the inhumane activities of a certain Peter Rachman towards his housing tenants. Rachman has gone, but the spirit of Rachmanism is alive today in the extortionate rents of this housing crisis and the increasing number of people forced to live in shocking conditions. The Government’s attempts finally to address this crisis of their own making come too late. We must tackle the root causes of homelessness by committing to a long-term vision for the building of social housing, giving greater security to renters and ensuring that people have access to the benefits and support they need to help them keep their homes. If the Government cannot facilitate the most basic human need in our society—for people to have shelter—they must move aside for a Government who will.
I welcome this opportunity to talk about social housing and I thank the noble Lord, Lord Whitty, for tabling the question for debate. Harold Macmillan responded to Rachman, who had died a few years before, by having a unified House that brought in the rent tribunal. The rent tribunal meant that people like me could rent a flat, disagree with the rent, go to the rent tribunal and spend three or six months playing around so that the landlord did not get his money. This led to a 40% fall in the amount of cheap housing in the private sector. Until that point, only 30% of the population of the UK was in social housing. Enormous pressure was put on social housing, which meant that local authorities, and then the increasing number of housing associations, dealt only with the desperate. That ended social housing once and for all. You then have a new form of social housing, full of ghettos of profoundly needy people, instead of it being sociable housing, as it was before, with a mix of tenants, including working people.
I was born in a London Irish slum. We eventually got a council flat in Fulham in 1956. In the block of flats that we lived in, there were policemen, teachers, our first parking warden, caretakers and lorry drivers, and mixed in with them were the needy—people who were disabled and so on. It was sociable housing. We lost sociable housing when, with the best will in the world, the Rent Act took out of circulation a large amount of private housing, putting enormous pressure on local authorities. The local authorities, unable to meet the housing need, said that people had to fulfil the most dreadful criteria to be given social housing. So the next generation of my family, who lived in Fulham, never got social housing. We have to avoid that situation.
We also have to avoid what happened in the 1970s and 1980s, when we pulled down the crap put up in the 1950s and the Ronan Points that went up in the 1960s. We have to be very careful how we do this. We can call for all the social housing that we want but let us make it sociable. When only 0.5% of children living in social housing will get to university, it means that we have the worst form of social engineering possible.
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Meanwhile, from the Government’s point of view, over the past three decades, state support for housing has not diminished but has shifted dramatically from subsidies for building, improving and managing homes to providing welfare benefits for tenants. Instead of the Exchequer investing in building for the future, state spending goes on an escalating benefit bill, a large proportion of which is now going to private landlords, increasing housing shortages in town and countryside alike.
I often feel angry about this, and the last time I intervened in a housing debate, I just had a rant because I had only four minutes. Colleagues today have only three minutes, so I expect some more of those as well. I was blaming successive Governments, but also the overconcentration of housebuilding and developers, so that their ability to evade any social housing targets has grown. The difficulty that arises for local authorities and housing associations when dealing with private developers is that developers are in a position of strength to argue for a diminution in social housing.
Many simply blame the right to buy; I do not completely. In principle, the right to buy gave the possibility of home ownership to a lot of people who would not otherwise have had it, but local authorities need the right to suspend it and, as noble Lords will know, in Scotland and Wales it has been abolished. The main opposition to right to buy as it has been practised has been because of the failure to use the proceeds to develop new social housing. If we had ploughed all that money back, we would have thriving mixed tenure communities, instead of which we have monolithic areas and misery in the private rented sector.
We often talk about social housing in terms of individual tenants and families, but homes also form communities. I am in favour of mixed tenure communities, but I am not in favour of new developments and regenerations drastically reducing the provision of social housing. For three decades, provision of housing overall in all forms of tenure has been inadequate; the Government acknowledge this, as do all political parties. We have created homes at only about half the rate of the creation of new households, but the social housing sector has suffered most, particularly council housing. Of course, other forms of housing provision ought, in a progressive policy, to play a significant part. Housing associations have a key role to play, as do the various schemes for shared ownership, and there is some scope for bringing back empty homes into use and conversion. But unless we have a strong and clear commitment to a long-term programme of building and converting for new social dwellings at social rent, we can solve neither the housing crisis, nor the social crisis, nor the problem of escalating housing benefit, nor ultimately the problem of homelessness on our streets and of hidden homelessness in many families up and down the country.
The recent Shelter report sets this problem out squarely and comes up with some proposals. In recent months and years, the Government have shown some recognition of the need to build more council homes, particularly in their recent document with a foreword by the Prime Minister herself, but the reality is that the number of homes being brought into being by councils has continued to diminish. The Shelter report calls for a major long-term programme; it envisages 3.1 million social homes being built, mainly by councils, over the next 20 years. That requires a drastic shift to capital and management investment in council housing, away from the growth in housing benefit now caught up, regrettably, in the difficulties surrounding universal credit.
That target is ambitious but it is shared by almost every housing commentator. I was slightly surprised to find, for example, the Centre for Social Justice—normally seen as a right-wing organisation—coming out with not quite the same but rather similar targets and propositions on land reform. Most experts in this field realise that we cannot reverse the current problems in the housing market without councils playing a major role in the building programme. Since the 1920s, they have not: council building has fallen drastically and is now close to zero. The problem has got worse and other solutions, such as the growth of home ownership, are now grinding to a halt.
The situation has been aggravated by two other aspects. The Government have started to address one: the absurd restriction on local authorities building and investing in social housing. That was partly reduced in the recent Budget but it will take some time for that to have any effect. The other dreadful consequence of austerity has been local authorities losing a lot of expertise in their housing, architecture and planning departments, meaning that they are less able than they were in the past to commission new builds and improve their existing estates. That also needs to be reversed; the Government need to see that the money provided to local authorities is there to do just that.
This issue requires a long-term strategy, as Shelter and others have recognised, but the Government and everyone involved in the building industry and housing provision must ensure that the strategy starts now so that we build enough homes for the next generation—homes that families can afford and in which they can be safe and create effective and functioning communities. I will give other speakers an extra four minutes because my voice is going but I hope that they will support the provisions of the Shelter report and my speech. I beg to move.
I agree with most of the other comments made by the noble Lord, Lord Whitty. Like him, if I stand up for too long I will rant, so I will add one of my minutes to the four that he has already offered back to the House.
The freezing of working-age benefits, the design of universal credit, the spare room subsidy and changes in the way benefits are paid have all made life harder for many tenants. They have certainly contributed to, if not driven, the huge rise in homelessness. I am pleased that the Government have promised to provide impact assessments in their rough sleeping strategy. Can the Minister tell the House what data he and/or DWP have on the impact of benefit changes on homelessness?
The Government have taken positive steps to invest more in social housing, but to provide a sustainable solution they must act on longer term funding for genuinely affordable homes and on access to land. My final question therefore is: will the Minster commit to doing so in the upcoming spending review?
The long-awaited ban on fees for tenants is a great first step, but more needs to be done. Failure to act urgently on this, on a huge scale, means another Christmas with 130,000 children in Britain in temporary accommodation—a number that shames us all.
However, we know that this is not happening. Let me point out one reason that we could address. Using what are known as viability assessments, developers can avoid or reduce the proportion of dwellings set aside for social or affordable housing, arguing that such housing undermines the overall profitability of the development. I am not suggesting that builders develop sites without profit but we could look at this—it could be more transparent—and then we could build not only housing developments but communities.
A potential model is that of a community trust partnership. This model is based on using long-term institutional funding—say 25 to 35 years—to provide multi-tenure housing in urban and metropolitan areas. The CTP would bring funding and expertise to assist a local authority to develop land that it already owns. However, the local authority would retain ownership of the land, guaranteeing a return to the investor over the long term in the form of rents, retaining enough income to cover maintenance and fees. The CTP would not need to allocate a majority of housing for private sale; rather, it would enable a balance between private first-time renters, affordable rents for key workers and social housing.
Finally, to address the component of construction costs, I direct noble Lords to the conclusions of the Science and Technology Committee in its excellent report on offsite manufacture for construction. The Government have a welcome presumption in favour of this in the construction sector deal. Benefits include faster delivery; better quality, lower cost, low-rise buildings; fewer labourers; increased productivity; improved sustainability of buildings and infrastructure; and less disruption to communities.
I hope that the Government’s commitment to offsite manufacture will be backed up by specific measures enabling this sector and its pioneering technology to flourish here and abroad, whilst at the same time introducing welcome competition to the housebuilding industry.