Mark D’Arcy (blog), Parliamentary Correspondent with BBC News, interviews the Housing and Local Government Minister to hear about his radical – and controversial – plans for social housing.
This article was originally published in the LGiU’s C’llr Magazine which is distributed to all councillors in LGiU member councils.
The new government wants more private and social housing built – and the instrument by which it plans to achieve that goal is the New Homes Bonus. Shapps (@grantshapps) takes some pride in having secured nearly £1 billion over four years to fund this policy, amidst the painful economies being made across government. It’s a simple, lucrative, incentive for local authorities to promote more house-building on their patch.
For six years from the moment each new home is occupied, the authority gets its council tax take from that property doubled via a grant from central government. New houses will bring a direct financial reward to cash-strapped councils. “In the end local authorities will have to find ways to survive within their budgets,” says Shapps. “They must make ends meet, so there is considerable pressure on communities to do something – and for the first time the pressure will rest on communities, not on some minister
Smart savvy local authorities, says Grant Shapps, should be focusing on how the coalition’s shake up of housing and planning can help them weather the “record problem” of the cuts they face in central government support. Wherever you look across the policy programme of the coalition, whether it is in education, social security, schools or constitutional change, ministers are pushing through radical new initiatives, often in the teeth of dire warnings from their critics. Shapps is no exception. It is worth pausing for a moment to contemplate his job title; he is the Housing and Local Government minister at DCLG – and his combination of responsibilities underlines the change in approach to some key issues by the coalition. Traditionally, the housing brief is combined with planning – and this new combination suggests the incoming government sees the solution to many of the nation’s housing problems very differently, and that it plans to nudge and incentivise local authorities to address them.
Shapps is one of the tier of high-flying Ministers of State regularly tipped for higher office in the coalition or a subsequent Conservative government. And like many of his colleagues he is relishing the chance to push through policies developed in the long years of opposition. And they are his policies, put together while a succession of Labour Housing Ministers – Margaret Beckett, Yvette Cooper, Caroline Flint, John Healey – came and went.
He is evangelical about his approach, repeating several times that what he called the “Stalinist central planning” of the last government had failed to deliver the country’s housing needs – and different answers are required. in Whitehall, who thinks that 10 5,000-home eco-towns are a good idea…” But the government is both pushing for a housing construction boom and promising that unwanted developments will no longer be foisted on unwilling communities. So will the drive to build new homes be resisted by NIMBYs armed with the new powers promised in the
Government’s Localism Bill? Will there be formal challenges and demands for local referendums to block unwanted developments? Shapps thinks not. He believes the effect of the new localism will be to make planners and developers come up with smarter, often more modest, proposals which offer some advantages to existing residents.
New developments, he observes, “don’t have to be Milton Keynes.” And it is often the out of- scale development proposal that causes the most furious objections. Conversely, a small scale development in a village can allow young adults to stay in their community, and provide extra customers for local shops and pubs. Or a community might welcome the clearing of derelict land for new homes – and part of the cost of the clearance might be met by the local authority and recouped from the new homes bonus. It is a mistake, Shapps points out, to see all planning issues through the prism of communities in the South-East which are determined to resist new developments. In other regions the issues can look very different.
Sensible councils, he adds, will make a point of ensuring that the communities directly affected by new housing developments will benefit from the extra funding the housing attracts.
And once the existing funding for the New Homes Bonus runs out, in three years time, it will be continued by top-slicing from future grant settlements (approximately £250 million a year would continue the funding at the current level) – so there will be a pot of money available only to those authorities which facilitate new house-building. The message is clear – get the planners to work now, to keep the money flowing in three years’ time. And incidentally, other government priorities like attracting business will be the subject of similar incentives, top-sliced off the general funding for local authorities, so it will pay to lay the same kind of plans in other policy areas too. “Leadership starts at home and local leaders will have to start looking three years ahead if they want their areas to prosper,” says Shapps.
He has not been impressed by his first experience of the ministerial meetings with unhappy councillors which follow every grant settlement. A number of these encounters have left him cynical about pleas of poverty from what seem to him to be rather well-padded councils: “the sheer outrageousness of having leaders and chief executives coming to my office and explaining that their authority is absolutely broke, when the chief executive is paid £100,000 more than the Prime Minister, was astonishing – I gave them pretty short shrift, because they clearly didn’t see the irony.”
The break with previous policies is equally dramatic when it comes to social housing. Labour spent £17 billion on social housing in
13 years, and ended up with more families on the waiting list than it started with – 1.8 million now, compared to 1 million in 1997, Shapps says. Even without the economic crisis he insists no government could have found the money to put every family on the list into traditional, heavily subsidised social housing – and once again his answer is something radically different.
The centrepiece is the proposal for a new class of housing – a subsidised “affordable rent” sector where rents are higher than social housing, pegged at 80 per cent of the market level – but where providers must use the surplus over the rent received in social housing to build more new homes – creating a funding stream for further building, continuing for years to come.
That is combined with a new approach to social housing tenancies. Shapps believes the present “homes for life offer” should be replaced with a mix of time-limited tenancies – he emphasises for new, not for existing tenants – chosen according to circumstances.
That applies particularly to homelessness – where he thinks that it is not sensible to respond automatically to an emergency in someone’s life, the loss of their home, with the offer of social housing for life. He wants local authorities to be able to discharge their homelessness duty by making a “reasonable” offer of private sector housing for “a couple of years.”
In some cases the new approach might mean a tenancy running for as little as two years, leading to accusations that social housing estates would become transit camps where residents never stayed long enough to put down roots and build stable communities. Shapps disagrees – he expects the advent of affordable rents to mean that social housing becomes more socially mixed – with a healthier proportion of tenants in work.
Very short tenancies, he believes, will only be used in unusual circumstances. He anticipates tenancy agreements will run for perhaps five years for younger people and ten or 15 years for families, after which the tenant might move on, or buy the house, or re-let. There would be a re-assessment of the tenant’s housing need, six months or so before the end of the agreement, and with 250,000 overcrowded homes and
430,000 under-occupied, Shapps’ hope is that the result will be “the holy grail of housing policy,” tenants placed in more appropriate homes. Fewer little old ladies rattling around in a family home, from which the family has departed, would mean fewer families crowded into tiny flats.
He has been impressed by initiatives like Leicester City Council’s Easy Move tenant relocation scheme, which offers council and housing association tenants support to move to a smaller home, with a dedicated worker helping out with transferring utility bills, connecting up washing machines and similar problems – and providing up to £1,000 for redecoration and new furniture. DCLG has found £13 million to help other authorities set up similar schemes.
There’s no doubt that Shapps is a confident assertive minister, with a radical agenda and the media skills to make his case. His task now will be to deliver on his policies – and to do that he needs local authorities to pick up the tools and incentives he is providing, and run with them, and come up with smart decentralised solutions to housing need – the question is, will the incentives he is providing be enough.