Monthly Archives: November 2013

The bedroom tax and the law of unintended consequences

A big thanks to Amelia Gentleman from The Guardian for coming back to Bushbury Hill and writing “Bedroom tax: stress and struggle as benefits clawback hits home” a great follow up to her Bedroom Tax article from March 2013.

Unsurprisingly this got me to thinking about the Bedroom Tax, a policy harsh on some but meant to help others.  However, I dawned on me that it actually makes things harder for those intended to benefit, this post explains why.

One of the reasons the Government gives as justification for the bedroom tax is that it will help the many people on housing waiting lists who are in overcrowded accommodation by freeing up larger homes.  Whilst I don’t believe that the policy is a properly thought out response to the issue of under occupation, the bedroom tax is claimed to be “fairer” to those in housing need.  Like many policies that look good on the back of a fag packet, it doesn’t work in practice.  Specifically it doesn’t help most of those of those who really need a bigger place to live, those who were meant to benefit.

In order to understand this, it is vital to know that on a national basis, social housing for families is biased towards 3 bedroom properties. Yes, there are regional differences, but in many parts of the country there are far more 3 bedroom homes than 2 beds.  As an example, on the estate where I work the ratio of 3 beds to 2 beds is  about 7:1 or 87.5%.  This is a product housing policy in the 65 years from 1925 in which the majority of our social housing was built.  The objective was to provide affordable homes for families, and the most flexible size for those with children was 3 bedrooms.

To quote myself in The Guardian

“If you had equal numbers of one-, two- and three-bedroom properties, you could do the moving-around required, but you can’t, because there has been 70 years of social housing – from the 1920s to the late 1980s – where we have built mostly three-bedroom properties, followed by 25 years of not building much. We have a legacy stock of large houses.”

Now you might imagine that if, as a consequence of the bedroom tax, these 3 bed houses became vacant, this would help exactly those families suffering from overcrowding.  Well this is where the unintended consequences come in to play.  The way the bedroom tax rules are framed mean that the majority of families who might like a 3 bedroom home won’t get one.

Under these under occupancy rules, families with 2 children cannot have 3 bedrooms if the children can share, and they are expected to share until 10 if opposite sex and 16 if the same sex.  For the purpose of this calculation I’m assuming childhood lasts up until the 18th birthday (I realise education & child related benefits carry on beyond the 18th birthday but legally they become adults and the maths becomes unnecessarily hard otherwise).  For 2 child families, 50% will have 2 children of the same sex, only 1 in 9 of these children will be aged 16 or 17 so 8/9ths will not qualify for 3 bedrooms. For the 50% with children of opposite sexes, 4 in 9 will be aged 10-17 so 5/9ths will not qualify for 3 bedrooms.  Taking these together, 13 out of 18 two child families will not be eligible for 3 bedrooms under the bedroom tax, that’s 72%.

Ministerial rhetoric has made it quite clear that the Government considers under occupation, as defined by the bedroom tax policy, is a bad thing and unfair to the taxpayer and those needing larger homes. In response to this many landlords have amended their allocations policies to make eligibility for a 3 bedroom home be in line with the bedroom tax rules.  However, in so doing, as demonstrated above, they have excluded a majority of 2 child families from the majority of their family sized stock.

So even if the bedroom tax encourages or forces people to downsize out of the 3 bedroom homes that dominate the stock in many areas, those who want and need more space for their families cannot take advantage.

For applicants for social housing, not only is this bad news for 72% of families with 2 children, it has a knock on impact on those with 1 child.  It means that a majority of families under many social landlord allocations policies will now only qualify for a 2 bedroom property.  But we know that there are far more 3 bedroom properties than 2 beds.  This is creating enormous demand for 2 beds that landlords cannot possibly meet and simultaneously reducing demand for 3 bedroom homes. Now those 1 child families are suddenly competing against many more 2 child families for a minority of available homes.

I work in Wolverhampton and the feedback from a variety of social landlords in the city is that demand for 3 beds has dropped and they are letting a proportion of these homes to people with no housing need.  Conversely the demand for 2 beds has increased massively and there is no prospect of meeting this demand – the 2 bed homes just aren’t there.

Remember, one of the policy objectives of the bedroom tax was to free homes to help rehouse overcrowded families.  In practice however, for the majority of families it has made their chances of escaping overcrowding a whole lot worse.   Well done Government, as I said, it’s the law of unintended consequences.  This is what comes from allowing housing policy to be made in the Treasury, those making the decisions know nothing and care less about social housing.

I realise that this is the Right to Transfer blog, but I couldn’t make this long argument via Twitter. Fear not, there will be much to report on the RTT over the coming weeks and months.

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The right to transfer is here, but there’s not much time to use it

The transfer window is open

On 12th November 2013 the Department of Communities and Local Government (DCLG) published the final version of the Statutory Guidance to the Right to Transfer Regulations.  On the same date they published the new Housing Transfer Manual and the responses to the consultation on the manual.  On 14th November 2014  The housing (right to transfer from a local authority landlord) (England) regulations 2013 were laid before Parliament. These should come into force on 5th December 2013.  Taken together, these documents provide council tenants a window of opportunity to exercise their Right to Transfer.

But it’s not a very big window

The title “Housing Transfer Manual period to 31 March 2015” says it all, the Government is emphatic that any transfer requiring debt write-off must be completed by this date. With a fixed term Parliament this is clearly tied to the expected date of the next General Election.  There’s so little slack in the timetable it’s hard to predict what would happen to transfers in progress if the Coalition fell apart and there was a snap election.  That leaves only a little over 16 months to put together a transfer proposal, conduct a tenant ballot and if tenants’ want it, set up a stock transfer landlord and complete the transfer.  As Pete Apps said in Inside Housing “Councils hoping to use a debt write-off scheme to complete stock transfers face an ‘unrealistic’ race against time to tie up the deals.”

An uphill race

So if councils with all the resources of a local authority at their disposal face a struggle to complete a stock transfer in time, where doe this leave tenant groups hoping to use the Right to Transfer (RTT)?  Almost by definition tenants only need to use the RTT process where their landlord is not willing to support their desire to explore stock transfer, so from the start these tenant groups are at a disadvantage.  Whilst the RTT regulations require local authorities to co-operate, there are still myriad ways an unscrupulous council could slow down and seek to derail the process.  Given the incredibly tight timescales there is little scope for slippage in any stock transfer plan, so delay introduced by a council could prove fatal.  There is also a complete mismatch of resources, even the largest and best run tenant management organisation doesn’t have the resources in manpower and finances to match their landlord.

It may appear that forcing a local authority to transfer stock against its will is an unwinnable fight, and so it may prove.  However tenant activists have been successfully overcoming bureaucratic indifference and political opposition for decades; sometimes David does beat Goliath.

Who do you trust?

Tenant groups do also have some factors in their favour, the trust and support of their local community is a huge benefit and may help overcome one of the big hurdles as outlined again by Pete Apps in his article:

Jonathan Hulley, a partner at law firm Clarke Willmott, said: ‘The timescale is unrealistic given the critical issue of consultation. As lawyers we would never say it’s impossible, but it is certainly unlikely.’

A tenant group that genuinely represents the local community has a built in advantage over any council when it comes to understanding the needs and desires of tenants and what is important to them when considering stock transfer.  There is also the issue of trust, an effective ad accountable tenant group should be able to persuade tenants more easily that its intentions are bona fide than even the most honourable local authority.  It is natural that people are more likely to believe what they are told by people they know and live amongst.

When a local authority undertakes Large Scale Voluntary Transfer (LSVT) it is most unlikely that the key decision makers will be directly affected.  The odd local councillor may be a tenant, but the overwhelming majority of members and senior officers won’t be.  In contrast, tenant activists are subject to the outcome of the transfer, as are their family and friends, so they have a critical personal interest in ensuring that the proposal brings immediate and long term benefits to their community.  This gives their message credibility – it is a lot easier to believe when someone tells you stock transfer is a good idea if you know they are going to go through it themselves.

Size matters

Being small can work to the advantage of tenants pursuing RTT.  With timescales being so tight, speed of thought, decision making and implementation will be of critical importance.  Most tenant groups are small cohesive organisations with the ability to take decisions quickly.  If they employ staff then they will typically have a close working relationship between tenants and officers and very flat management structure.  This can help to get staff buy in to the process, make it quicker to get decisions acted on and make it is easier to be flexible in how to get tasks done.

By contrast local authorities are large, unwieldy organisations with fairly rigid decision making  processes and timetables that will tend to introduce delays to any project.  They also tend to have party politics as well as pork barrel issues to contend with and far more external stakeholders to work with and satisfy.

Big Politics

Whilst the local political landscape may be unhelpful, tenants do at least have some friends in high places.  The Right to Transfer came about through Central Government support tenant groups thwarted at local level.  Although we have been through umpteen Housing Ministers and a change in government since it was enacted, RTT has always had general support at departmental and ministerial level as part of the tenant empowerment and localism agendas.  In the Ministerial Foreword to the new Housing Transfer Manual, Kris Hopkins says:

We want to encourage not only stock-holding local authorities, but also tenants and existing private registered providers to consider the opportunities which stock transfer may provide.  Alongside this manual we are laying before Parliament the Right to Transfer Regulations which will for the first time give local authority tenants a statutory right to initiate a transfer process and require the local authority to co-operate as tenants explore the options.

That RTT gets such a prominent mention in this critical document suggests that tenant groups with a strong business case for transfer will get a fair hearing from the Government.