Will welfare reform address problems rather than creating greater ones?

This post is not about the pros and cons of welfare reform.  I think many of the ambitions behind welfare reform are to be welcomed. Rather, this post looks at the practical implementation of these measures and some unintended consequences.

Regarding the Bedroom Tax (I feel I can call it that given that on Monday a government minister at a conference organised by Crisis accepted that that is the phrase he uses) is resulting in a large proportion of tenants failing to pay the resulting shortfall in their rent.  Riverside Group has revealed that around half of its 6,000 households receiving housing benefit had not paid anything at all to cover the shortfall.  A quarter had contributed something but were not paying their rent in full.  Just one in four tenants impacted by the bedroom tax paid the full amount.

Guinness Partnership said that around 1,000 of their 3,000 tenants affected by the under occupation regulations have not met the shortfall.  Their experience is similar to a number of other housing associations around the country.  Inside Housing is covering this issue on its front page in today’s edition.

Because we tend to work almost exclusively with single homeless people, and our housing stock is largely one-bedroom flats, this is not an issue amongst our tenants. However, I would anticipate that, in due course, we will begin seeing tenants of other social landlords presenting at our advice centres in Brighton, Eastbourne and Hastings requiring assistance because they are facing eviction.

There have been warnings about this which have gone largely unheeded.  A more widespread risk relates to the payment of rent direct to tenants rather than to landlords.  This will undermine the confidence of private landlords to take people who are receiving housing benefit, see an increase in arrears and bad debts faced by landlords in both the private rented and social sectors, and cause a loss of confidence amongst financial institutions who lend money for the building of homes for rent.

Julian Ashby, the chair of the regulation committee at the Homes and Communities Agency has warned that housing providers face being hit by a ‘double whammy’ of increased rent collection costs and reduced income due to welfare reform.

In a report published today by Housemark, it has been estimated that social landlords face losing £1.4 billion of rental income a year as a result of welfare reform.

There is also concern amongst social housing providers regarding the move to making claims online.  In a survey taken in November 2012, Ipsos Mori showed that just 60% of local authority tenants and 64% of housing association tenants had access to the Internet.  I’m not aware of any similar research regarding tenants in the private rented sector but, given the efforts taken by social landlords to increase digital inclusion, and in the absence of a similar programme in the private rented sector, I would imagine digital inclusion is much, much lower.

BHT did its own survey around that time and we found that79% of our clients, tenants of both private and social landlords as well as some owner occupiers, and meaningful access to the Internet.  However, when you remove the provision made available to our clients by BHT itself, that number falls to 19%.

There is still time for the government to pause and think about whether it is going about these matters in a way that will address problems rather than creating greater ones.

The Brighton and Hove Independent Drugs Commission: An Opportunity Missed

The presentation of the report and recommendations of the Independent Drugs Commission, and the predictable reaction of local and national media, means that the chance of having a reasonable debate on the issues is lost.  I turned down about a dozen requests for comment or interview , and remained silent on the report until now as there was nothing to be gained from trying to persuade journalists to discuss the wider issue of tackling drugs when all they want to do is discuss consumption rooms.

All this is frustrating as some of the conclusions of the Commission raise some interesting issues, worthy of consideration, but overall the report is an opportunity missed.  This is my response to the Commission’s report.

The Commission addressed four issues:

• Are the current strategies to prevent drug related deaths sufficient to achieve a significant reduction in the coming years?
• Are the policing, prosecution and sentencing strategies currently pursued, effective in reducing drug related harm?
• Are we doing enough to protect young people and to enable them to make informed decisions around drug use and involvement in drug markets?
• To what extent does the treatment system meet the treatment and recovery needs of the citizens of Brighton & Hove?

Unfortunately, the report is presented in a vacuum, giving no acknowledgement of the most radical change in national drug strategy for a generation.  The Coalition Government has called for a treatment revolution and the championing of abstinence. The words “abstinence”, “abstain”, even “drug free” do not appear in the Commission’s report even once. By ignoring the national context, the report is immediately undermined and is, at best, of academic interest.

My disappointment with the conclusions focuses on the first and fourth points above and can be summarised as follows: it lacks ambition, and the presentation of the issues does not create the right platform for a proper debate on how to enhance progress in drug treatment.

According to the report, just 12% of those entering treatment services in Brighton “left the treatment system in a planned way, having overcome their dependency”. This compares to a national figure of 15%. The report is correct to say that “For the system to remain sustainable, the number of successful exits from the treatment system must keep pace with the number of new clients registered. If too many clients are retained in the system for too long, the system will become log-jammed. The Health and Well Being Board needs to find ways to increase the numbers successfully treated each year and support their recovery in order to prevent relapses and a return to dependence, both on drugs and on the treatment system”.

While the recommendation that “The development of a city wide recovery culture is promoted and embedded throughout the treatment system, and related settings”, it is an after thought, appearing on page 23 of the 23 page report. It illustrates a lack of ambition. This issue should be upfront and should set the tone for the rest of the report, creating the climate where the more sensationalist issues, such as consumption rooms, could have been dealt with in the context of recovery and abstinence.

A bold ambition, of say 40% or 50% leaving treatment drug free, would have been a defining contribution to the debate and the development of services in Brighton. Such an approach would be right for clients, it would help them achieve their aspirations, and would assist them to cope with the fundamental changes we are experiencing in welfare reform. A failure to address the addiction of a sizeable cohort will result in them finding themselves further outside the structures of society with all the predictable consequences for them, their families and society at large.

The presentation of the report attracted predictable, yet avoidable, headlines. The media focused exclusively on consumption rooms. How different it could have been had the report recommended a treatment revolution locally, with the ambition that Brighton will replace the unwanted headline of “drug death capital” to the “recovery capital” of the UK.

That would have created a climate where more controversial steps could have been introduced as a minor part of a process aimed at getting people into recovery and abstinence.

I previously urged the Commission to look again at its report so that it could strengthen its recommendations and thereby becoming a defining point in the evolution of drug policy and the start of a real drug revolution locally. I am sorry it did not do this.

BHT and partner QED get the go-ahead for our container housing scheme

At BHT we are very excited to have secured planning permission for the proposal to provide temporary homes in converted shipping container at Richardson’s Yard, Brighton. The scheme is a joint venture between BHT and our development partner, QED. What was particularly gratifying was the unanimous support received from members of the Brighton and Hove Planning Committee.

Planning officers recommended approval, saying that the containers were an “imaginative and appropriate” way to meet a very real need for affordable accommodation.

To find out more you can read various post from the last few months:

How BHT hopes to use shipping containers for temporary accommodation for homeless men and women

Reaction to BHT’s plans to provide temporary accommodation in converted shipping containers

Support for our container housing application from the local action team

Some concern on the BBC website this morning focused on a report that the land is ‘contaminated’ and that it would not be suitable for permanent housing.

Richardson’s Yard has been used as a scrap metal yard, and there is, inevitably, some contamination, including from oil. However, a full environmental assessment has been made and was considered by the Council before permission was granted. The plan is to place a membrane on the contaminated land before a concrete base in put in place. All planting areas will be in raised beds and there will be no risk to future residents. If there was the slightest risk, BHT would not risk the health and wellbeing of our residents.

This is an exciting development and I look forward to seeing the first residents move in at the end of the summer (assuming we have a summer!).

Welcoming the government’s move to regulate rogue letting agents

Further to my post on Sunday evening, “Calling on Sussex Members of Parliament to ensure letting agents are required by law to belong to an ombudsman scheme“, I am delighted that the Housing Minister, Mark Prisk, has tabled an amendment to the Enterprise and Regulatory Reform Bill to require letting agents to belong to an approved redress scheme, or ombudsman, to deal with complaints from landlords and tenants.

While the amendment isn’t the full scheme that is being called for, it is a step in the right direction and, given that the ERR is not a housing Bill, it is probably as much as can reasonably be expected.  It is a move forward to dealing with rogue letting agents.

Ian Fletcher of the British Property Federation (BPF) said that the housing minister has listened to the sector’s representations and reached the right conclusion.   He said: “There are still issues left on the table, however, and we should not kid ourselves that this will expunge the sector of bad letting agents. For example, we will continue to campaign to have client money protection insurance extended so that money paid over by landlords and tenants to an agent is properly accounted for and not at risk”.

Ideally, I would have liked the government to back a Lords Amendment 40 introduced by Baroness Hayter which called for the Office of Fair Trading, which regulates property sales, to be given stronger powers to ban rogue letting agents.  Nevertheless, I am pleased that the government is doing the right thing to protect tenants and landlords alike.

Calling on Sussex Members of Parliament to ensure letting agents are required by law to belong to an ombudsman scheme

On Tuesday, the House of Commons is discussing an amendment to the Enterprise and Regulatory Reform (ERR) Bill.  If approved, the changes would see letting agents required by law to belong to an ombudsman scheme. I have written to the six Members of Parliament in the areas in which BHT works, to encourage them to support the amendment.  The MP’s are Amber Rudd (Hastings and Rye), Stephen Lloyd (Eastbourne), Norman Baker (Lewes), Simon Kirby (Brighton Kemptown), Caroline Lucas (Brighton Pavilion), and Mike Weatherley (Hove).

Since 2008 estate agents have been required by law to be part of an approved redress scheme, but letting agents are not.

The Property Ombudsman received more than 8,000 complaints about letting agents from landlords and tenants in 2012 – an increase of 9% on the previous year.  Yet only 12 prosecutions were carried out last year by trading standards teams in 20 of the biggest councils in England, Scotland and Wales.

Baroness Hayter has said: “Legislation already requires estate agents to be part of an ombudsman scheme. What this amendment would do is extend that so that letting agents would also have to be members of an ombudsman scheme.  At the moment anybody could set up as a letting agent. They don’t have to promise to give minimum standards to the tenants or to the landlords.”

A spokesman from the Department for Communities and Local Government said: “People living in private rented homes should be treated fairly and honestly, but we want to avoid excessive red tape that would push up the cost of rents and reduce choice for tenants.  The first priority must be to make sure that landlords and tenants are well informed and empowered to exercise their rights. Agents are subject to consumer protection laws and dissatisfied customers can report bad practice to local trading standards officers.”

My concern is that with changes to Legal Aid, specifically the reduction in what we can do under legal help, as well as a reduction in the numbers we can assist, it is unlikely that tenants will have the necessary power to exercise their rights.

Landlords, too, do not get a fair deal from letting agents.  The Association of Residential Letting Agents (ARLA), the leading trade body, has said it was disappointed by the low numbers being prosecuted and that if there was seen to be a robust procedure then that in itself would be a deterrent.

The Housing Minister has said he is not keen on new regulations, but I understand that he has said he is open to debate.  I have urged the six MP’s to support the amendment on Tuesday.

Where is the justice or common sense in continuing with the Right to Buy?

A young woman from Lithuania, 25 year old Judita Simkeviciute, has secured a three bedroom council house in an area where she has no local connection and where there is acute housing shortage for local people.

No, you haven’t accidently strayed onto the Daily Mail Online website.  In all regards, other than one fact, this is the sort of story that would normally outrage the good folk who run the Daily Mail.

The missing fact is that Ms Simkeviciute bought the former council house sold through the Right to Buy.

The house in question was first bought in August 1980 for £8,315 after the original tenants qualified for a 40% discount.  It has been sold on a further four times, in 2001 for £101,000, in 2004 for £145,000, in 2007 for £183,000 and now for £180,000.

I have always had a problem with the Right to Buy.  Having spent public funds building (and probably refurbishing) the property that the original tenants secured because of their housing need, how is it right that it can then be sold to achieve huge profits, a real case of something for nothing.

I understand the populism of this policy for the lucky few, but with one in three former council houses now part of the buy to let market, I do not understand the economic or justice arguments for continuing this policy.

Mrs Thatcher offered a sense of certainty, whether you agreed with her or not

This week I have been reflecting on the passing of Margaret Thatcher and one aspect that has struck me is the sense of certainty she offered, whether you agreed with her or not – “the enemy within”, “the Lady’s not for turning”, and “there is no alternative” being just three examples. John Major said she was never stronger than when she had an identifiable enemy or an identifiable cause. She was unwavering, at least in public, of her convictions. She said things with such certainty that it closed off any contradiction: “Every housewife knows that you can’t spend more than your household’s income”. Actually, many do out of necessity. Much of today’s society is based on debt – student loans, mortgages, credit cards, payday loans – and many households are surviving on debt because there just isn’t enough money coming in.

But it is the certainty of Mrs Thatcher’s outlook that won over many people. Certainty offers comfort, and it allows you to plan.  But what is certainty in these uncertain times? People are concerned about their jobs, or how to manage their household outgoings when salaries are staying, at best, level while food and fuel costs are increasing.

For charities, certainty is what we need in order to plan. In recent years we have not had that certainty as there has been a squeeze on many of our traditional sources of income. BHT is in a better position that some of our partners since we have some secure income from our property portfolio.  But even that now has a lack of certainty as we don’t know what the impact of welfare reforms will be on our rent collection rates.

In more traditional housing associations, our business model lacks certainty as much of our income is dependent on short-term contracts. Some housing associations will avoid ‘short term’ funding such as that offered by the Big Lottery because it is often for ‘just’ three years. But many charities would dearly love to have the level of certainty afforded by a three year contract.

BHT has been very successful in recent years when it comes to Big Lottery funding. This success is due to a large extent to the amazing skills of my colleague Jo Berry who crafts bids like no one I have ever met. She is well assisted by others in the organisation who understand the needs of clients. Our funding is usually for three or four years but in that time we can make a huge difference to the lives of our beneficiaries.  For many of our clients, three years is a lifetime that can see them move from chaos and exclusion into housing, education, training and work.

So while we are faced with much uncertainty, we will continue to apply for Big Lottery funding and thereby have services that impact on the lives of local people in ways that large, national programmes, such as the Work Programme, are not likely to achieve.