LGIU | Housing and Homelessness – Where are we now?

LGIU Policy Briefing

November 24, 2016

Housing and Homelessness – Where are we now?

Author: Sheila Camp, LGiU associate

Summary

This briefing looks at the changes heralded for housing policy by the post-Cameron Conservative government. Is it, as Inside Housing proclaimed in the wake of the Tory party conference, “a new dawn” or merely a slight shift in government rhetoric? At present, details are scarce but a Housing White Paper is promised before 2017.

We also look at the broad conclusions of the Communities and Local Government Committee’s inquiry into homelessness (PDF document) and ask whether the potential policy changes will start to address the main contributory factors to the rise in homelessness which the Committee identified. It also looks at the proposals in the Homelessness Reduction Bill, a Private Members Bill introduced by one of the Committee members, Bob Blackman, and now backed by government.

This briefing will be of particular interest to members and officers with responsibility for housing, housing advice and support for vulnerable residents and of general interest to other elected members and officers.

Note This briefing was written just before the Autumn Statement – we will be publishing a detailed briefing shortly on the Autumn Statement which will include the housing measures in it.

Briefing in full

Following the referendum result and with few “big beasts” from the previous administration remaining in government, the stage was set for policy changes, most notably the abandonment of the previous Chancellor’s austerity programme, designed to produce a budget surplus by 2020.

Housing policy under the Cameron government was based largely on the belief that the current housing shortage could be resolved by prioritising home ownership and doing little to assist households who could not afford it – other than further welfare benefit restrictions. Social landlords, their development plans already constrained by the one per cent rent cut over the next four years, found that central government investment was to be restricted to home ownership schemes, with “starter homes” now dubbed affordable housing.

The Housing and Planning Act 2015 underpinned this policy drive, with right to buy extended to housing association tenants, a mandatory requirement for starter homes to be included in new build schemes, and various measures – for example “pay to stay” and fixed term tenancies – designed to make renting from councils less attractive, though Pay to stay has now been dropped by the government.

Against a background of housing shortage, rising private sector rents and increasing homelessness, the Communities and Local Government Select Committee begun an enquiry into homelessness in December 2015. Their report was published on 18 August 2016, shortly after the May government took office, and identified many of the underlying aspects of the housing crisis which were contributing to the rise in homelessness.

At the beginning of October, the Prime Minister in her Conference speech set out the broad issues on which her government’s housing policy would be based, signalling somewhat of a break with the previous emphasis on home ownership and prompting Inside Housing’s enthusiastic headline “a new dawn”. Whether that turns out to be the case is yet to be determined.

Potential Policy changes

In keeping with her pledge to govern for the whole country when she took over as Prime Minister, Theresa May’s main message in her conference speech was that housing policy should work for all. In perhaps a tacit admission that her predecessor’s policies to boost home ownership above all else, would not solve the housing crisis, she said “we simply need to build more homes”. So, what are the major policy changes heralded by May and fleshed out a little by the incoming ministerial team of Secretary of State Sajid Javid and Housing Minister Gavin Barwell?

Housing supply

With the Prime Minister indicating a more interventionist approach to housing supply than simply promoting home ownership initiatives, the government announced a new Home Building Fund of £3 billion (made up of unallocated funds from existing programmes) to be used both for infrastructure and to assist small builders; and a £2 billion Accelerated Construction programme to underwrite housing development – in the event of the market proving difficult, builders know properties can be purchased by the Homes and Communities Agency.

Increasing supply will focus on 100 local authority areas where demand greatly exceeds local supply; these areas have not yet been identified publicly, but may in fact be concentrated in the south east to the detriment of other parts of the country.

More flexibility over tenure

In keeping with Theresa May’s assertion that “we simply need to build more homes”, the new Housing Minister indicated that the Shared Ownership and Affordable Homes programme may be expanded to enable schemes for sub- market rental dwellings to be funded.

Redefining Starter Homes

At present, Starter Homes are defined in the Housing and Planning Act 2015 as properties for first-time buyers under 40 with a discount of at least 20 per cent. The new Housing Minister indicated that he would consider widening the definition to include other types of Starter Homes. No details are yet available.

Brownfield land

Details are also awaited on a promised package of measures to encourage urban regeneration and building on brownfield land.

Housing White Paper (November/December)

The Housing Minister has indicated that the Housing White Paper, promised before the end of 2016, will provide a “detailed strategy” on increasing the supply of new homes. Hopefully, it will also flesh out the other changes the government has heralded, including any necessary legislative changes, for example any redefinition of Starter Homes. It will provide an opportunity for everyone with an interest in solving the country’s housing crisis to assess whether the new regime is really on track to increase supply to the degree necessary

Homelessness inquiry CLG committee

The Committee’s main conclusions and recommendations to stem the rise in homelessness are set out below.

Factors contributing to the increase in homelessness

There is no one single cause of homelessness, although there are trends in factors which contribute to the loss of a home.

The private rented sector (PRS)

The ending of a fixed term Assured Shorthold Tenancy is an increasing reason for a household becoming homeless, up to 30% in 2015 from 13% 10 years’ earlier (DCLG figures). Rising rents mean households are often unable to find affordable alternative accommodation, given the level of Local Housing Allowance – the housing benefit payment based on the 30th percentile of market rents in the area, which frequently does not cover the actual asking rent.

In addition, there is evidence that landlords are less willing to let to people on housing benefit and even more wary about letting to homeless households.

The Committee concluded that the government should look at ways of giving greater confidence to both landlords and tenants to let to homeless people, including reviewing LHA levels and promoting longer ASTs.

Availability of social housing

The Committee concluded that problems in the PRS were exacerbated by the shortage of social housing, which, despite the demonstrable demand, is no longer funded by government. Whilst accepting there is a demand for the home ownership initiatives, particularly starter homes, not everyone can afford them. The current government definition of “affordable housing” should be reviewed so that it includes social rented housing.

Changes to the welfare system

The Committee identified several changes which have contributed – or have the potential to contribute – the increase in homelessness. These are

  • the freezing of working age benefits for 4 years
  • the reduction in the household benefit cap from £26,000 to £20,000 (£23,000 in London)
  • excluding 18-21 year olds from claiming housing support (from April 2017)
  • extension of the Shared Accommodation rate of housing benefit to single people under 35
  • the payment of housing benefit direct to the tenant

The Committee concluded that, taken as a whole, the welfare reforms of recent years have increased pressure on levels of homelessness.

The role of local authorities

Gatekeeping and support

Local authorities have a duty to secure accommodation for homeless households in priority need. For other homeless people, they only have a duty to provide advice and support which, the Committee found, varied considerably throughout the country.

Whilst recognising the pressures on local authorities, the Committee concluded that the Government should monitor local authorities in order to promote best practice, to identify authorities which are not meeting their statutory duties and implement a code of practice to which local authorities should adhere. The Homelessness Reduction Bill, which now has government support, should go some way to ensuring a more uniform level of advice and support throughout the country.

Councils placing households outside of their administrative boundaries

Whilst recognising the reasons for some councils placing households away from their home authority, the Committee considered this should only be done as a last resort; the families should be supported in their new areas; and the receiving authority should be fully informed

The need for accurate statistics on Homelessness

Accurate statistics on homelessness are vital if the issue is to be addressed.

The Department for Communities and Local Government (DCLG) publishes three sets of data on homelessness – statutory homelessness; prevention and relief; and rough sleeping. Statutory homelessness includes those households who are unintentionally homeless and in priority need. Prevention includes action by the local authority to prevent households becoming homeless; relief is where the household, on becoming homeless, has been helped to secure accommodation by the local council. The rough sleeping statistics are based on a snapshot of of the numbers sleeping rough on a particular night, ascertained either by a headcount or, more usually, an estimate by the local council.

The UK Statistics Authority assessed the DCLG data last December and concluded that only the statistics on statutory homelessness could be considered as national statistics; the two others were potentially misleading.

The Committee considered urgent action was needed to improve DCLG’s data collection so it more accurately reflected the actual scale of homelessness, including “hidden” homeless households. They resolved to monitor progress and review in 12 months.

Other issues identified by the Committee

The service user’s perspective

The Committee took considerable evidence on the perspective of the recipients of the homelessness service. They found that the main issues were:

  • Being treated with respect and compassion

At a time when they are extremely vulnerable, homeless households should be treated sensitively and not made to feel they are part of the problem.

  • Choice and autonomy

Households reported that they felt when using the homelessness service  that they had lost all measure of choice and autonomy

  • Quality of service

The Committee considered that the Government should review and reinforce the statutory Code of Practice to ensure it outlines clearly the levels of service that local authorities must provide and encourages regular training of staff to     ensure a sympathetic and sensitive service. Services should put users first with a compassionate approach that gives individuals an element of choice and autonomy.

Vulnerable groups and multiple complex needs

The Committee concluded that the homelessness services often dealt poorly with many vulnerable groups, particularly those who had more than one vulnerability. Such people frequently found their needs dealt with in isolation, even to the extent of being given conflicting appointment time. There was often a tendency for each group of professionals to deal with their specific area of expertise, rather than deal with whole person.

The Committee recommended focus on the individual and more cross-speciality working to ensure all vulnerabilities were addressed

Cross-Government working

A similar problem was identified in central government, where a lack of communication between departments or conflicting policies could work against the individual. A common approach to homelessness was needed.

Homelessness legislation

The Committee compared the approach to homelessness in England, where households not in priority need receive very little assistance in practice with the more recent legislation in Scotland and Wales.

The legislative approach in Scotland and Wales

In Scotland, priority need was abolished as from 31 December 2012, leaving Scottish local authorities with a duty to secure accommodation for all homeless households. As the legislation was passed in2003, councils had a 10 year lead in time to prepare.

In Wales, the 2014 Act placed a duty on local authorities to prevent households threatened with homelessness within 56 days (up from 28 days) from actually becoming homeless. For those households who are homeless when they seek assistance, councils must help secure accommodation for 56 days, but only have a continuing responsibility for households in priority need.

The Committee considered the Scottish approach was not appropriate for England because of the different housing markets. Having found support provided to homeless households not in priority need was at best variable in England, they welcomed the Welsh emphasis on prevention and linked this to their support for the Homelessness Reduction Bill.

The Homelessness Reduction Bill

The Homelessness Reduction Bill, now proceeding as a Private Member’s Bill but with government support, is designed to ensure that all households who are either homeless or threatened with homelessness within 56 days receive genuine help and advice from their local council. This is regardless of whether they are in priority need. Originally, the Bill would have given councils a duty to secure accommodation for 56 days, (the Welsh approach) but this was withdrawn as impractical in the England context. The current wording will impose a duty on councils to assist all homeless and potentially homeless households; the government has indicated it will provide additional to councils to cover their costs.

Comment

Policy changes

The under-supply of new homes has been identified for some years as being the root cause of the country’s continuing housing crisis. It fuels increases in housing costs – both rents and purchase price – which, in turn, leads to housing becoming increasingly unaffordable, contributing to overcrowding and, in the worst case scenario, homelessness. Ever higher rents place a huge burden on the country’s social security budget, which government seeks to address by cuts to benefits, rather than measures to control rents.

The recognition by the May government that the necessary increases in supply will not happen by the market responding to measures to increase home ownership alone is welcome and the emphasis on a cross tenure approach to the supply issue must be the way ahead. The target of one million new homes by 2020 is commendable – but we have had targets before. Delivery is key and a thorough assessment of the government’s plans must wait for the “detailed strategy” promised in the forthcoming White Paper.

Nothing so far is proposed to stem the potential loss of existing social housing stock through extending RTB to housing association tenants, to be funded by the sale of “higher value” council homes. Nor does there seem to be any indication of reviewing benefit cuts, which exacerbate affordability issues.

Homelessness

Affordability and housing shortages runs through the Select Committee’s recommendations on homelessness. A major increase in supply will, in the medium to long term, help greatly with stemming the rise in homelessness and promoting that increase across all tenures is also vital.

However, given the lack of any intention to review benefit changes, which are impacting on low income households being able to afford their homes, it does not seem that there are any short term answers to increasing homelessness. The new duty for councils to take steps to prevent people becoming homeless will only have meaning if there is somewhere available that they can afford; in many high pressured areas, this is not the case.

Related briefings: 
Housing and Planning Act 2016

Neighbourhood Planning update: Autumn 2016

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