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Will direct payment cost social landlords £1.27 BILLION PER YEAR?

This week Moodys, the ratings agency, getting very twitchy and saying that Universal Credit with its monthly payment of benefit to tenants and its direct payment of housing benefit to tenants rather than to social landlords as now, will see costs increase by 6.6%.  In a piece in Inside Housing it said that Moodys…

“…warned that the payment of benefit for housing costs to tenants ‘is likely to increase the risk of non-payment or underpayment of rent’. It pointed to an average 6.6% fall in rent payments recorded under Department for Work and Pensions demonstration projects trialling the payment of direct benefit.”

6.6%?

Inside Housing didn’t comment on this (now there’s a surprise!!) but they should and everyone involved in social housing should sit up and take notice. The national rent roll, the sum of all social housing rents is about £19.5 billion per year (4.1m rents at circa £90pw) so 6.6% of that is £1.27 BILLION PER YEAR

Welfare reform (sic) policy will directly lead to £1.27 BILLION less paid in rent to social landlords each year!!

When I first started writing about the welfare reform (sic) policies I said they were an attack on social housing itself and they are a radical attack on the social housing model, the social landlord and the social tenant.  They require a radical response and all social landlords and social landlord lobbies (who frankly are getting money for old rope) need to grow a set and tell the coalition precisely where it can stick its welfare reforms.

IF as is widely reported the bedroom tax has seen about £140 million or so increase in arrears tol landlords then direct payments risk at £1.27 Billion is more than EIGHT times a greater financial risk

Social housing receives £1.125 Billion per year in subsidy as the last settlement was £4.5 Billion over 4 years and so we see that Universal Credits direct payment alone is likely to cost social landlords more than that each year.

capital funding

UK Social landlords provide much cheaper rents in return for this subsidy which if they only charged the same in rent as private landlords get in LHA the overall HB bill would increase by £4.2 billion.  Yet UK social landlords do not put forward this correct argument that ‘subsidy’ is an invest to save programme for which government gets a bloody good deal in return.  They should be putting forward this economic argument and should also be saying that they are the only sector which is prepared to take in the SODS as well (Sick, Old, Disabled, Supported) as the private rented sector doesn’t do this by and large.

Social Housing provides a phenomenally good economic and socio-economic return to the taxpayer and government….yet they never ever make that point.  They couldn’t lobby their way out of a wet paper bag and because of this successive governments have taken advantage of their lack of influence and ‘power’ and none more so than this coalition who are shafting social housing at every turn.

The private landlord lobbies such as the NLA in response to any suggestion that a new proposal would cost them thruppence more over 50 years lobbies like the the one thing social housing is not, a sector, and they tell government where to go.  Yet inflict direct payment and cost UK social landlords £1.27 billion per year and lets give the tenant a cheap tablet computer is the response.  And even when those landlords reveal that the simplest form of direct payment costs them an additional £1500 per year per tenant as Peter Fitzhenry of Golden Gates Housing Association in Warrington did, the rest of the UK’s social landlord and their woeful lobbies simply ignored.

I have been criticised as being cynical over social housings woeful efforts at influence and lobbying from within social housing.  That just about sums up UK social housing – blame the messenger while burying its head in the sand and ignoring the message which is a wet fish slapping them in the face!  Plus ca change!!

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On a related point of rental income the Statistical Data Return (SDR) was published last week.  This is the annual dataset of all rents by housing associations by the Homes & Communities Agency, or HCA the social housing regulator.  This revealed that housing associations or as the HCA correctly calls them PRIVATE Registered Providers charged and received £130 million MORE in rent through the Affordable (sic) Rent model with almost 80,000 properties let out at an average £31.38 more in rent each week.

SDR2014

This is why so many social landlords are reporting much increased surpluses presumably yet £130 million more income pales into insignificance given that direct payment alone will cost £1,270 million more – and that doesn’t include social landlords other increased costs of rent collection or the much increased arrears from the bedroom tax and benefit cap.

68% of these AR properties were not new build properties but existing properties which were vacated by tenants and then simply relet to a new tenant at the much higher AR level.  The amount of AR units doubled, up 102%, last year and while this varies from one social landlord to the next, does represents a cultural shift of HAs moving away from their founding ethos which will reignite that internal housing debate, yet is also a typical social housing issue – Social landlords don’t lobby they merely reactively adopt  the follow whatever funding is available strategy.

The two issues are very much linked as social landlords, collectively, do have huge potential influence given how much they save the taxpayer and the exchequer and as I discussed here the tenant is about to become a real customer with direct payment and not a captive one as they are now; yet social landlords never proactively attempt to wield or unleash that latent power.  It is time they did and, for once, meet a radical set of proposals which we have in the welfare reforms (sic) with a radical response and finally start to lobby.

Finally, I am not advocating that HAs do become FULLY private organisations by telling the coalition to shove their meagre capital subsidy for which they give so much back in return to the taxpayer: Rather they need to impose the latent ‘power’ they do have and remind this coalition government (and the next) of what a bloody good deal social housing provides in economic terms to the exchequer.

Why not top slice 2p a week off every social housing rent and put into a £4.25 million per year fighting fund charged with lobbying for the sector; a simple and cheap way of flexing their muscles and buying top lobbyists for the sector which currently they are not and stop playing at games with campaigns which look good and are the ‘sectors’ needs and wants yet have little to no influence.

Social housing needs, like every other industry, a powerful proactive lobby in order to survive. Yet all it has is latent power and individual and collective leaders tugging their forelocks at the latest attack on the social housing model.  Though I doubt not even the threat of a further £1.27 Billion per year cost to them will make them wake up and smell the coffee.

The bedroom tax vote – Why I won’t be yodelling naked!!!

The bedroom tax vote will NOT, I repeat NOT change the policy ahead of the General Election in May 2015.  The events surrounding it may cause all sorts of political shake ups but the vote will NOT change the bedroom tax for tenants or landlords affected by it before the next General Election.

It will change diddly squat, nil, zip, nada, and absolutely bugger all …just in case you haven’t yet got the picture.  So, please, please, please ignore all the absolute crap you read about this vote and what it means for the bedroom tax.  It means that the bedroom tax will NOT change one iota before the next General Election.

Here is why.

Read the Bill here if you must which is a proposal to change some of the bedroom tax rules.  A Bill needs to go through numerous stages to become an Act or the law.  Yesterday the Second Reading was past with the vote.  After the Second Reading it then goes to Committee Stage then to Report Stage then to a Third Reading Stage then it goes to the House of Lords who can propose amendments and the Bill gets batted back and forth until final amendments are made  and then it gets sent for Royal Assent which puts it on the statute books, that is becomes law.

bill

Tortuous and not a short process just in practical terms.

Then and those who have read the Bill itself will know and seen Section 7 (2) This Act comes into force at the end of the period of 3 months beginning with the day on which it is passed – So a further 3 months and so just in practical terms the chance of this Bill becoming law before the General Election that is within 8 months are slim to none.

I now turn to look at what the Bill says which you will soon see reader is a crock.

Here is what 2(a) says: -

(a) an adaptation has been made to the dwelling to provide assistance to meet a disability need of the claimant, the claimant’s partner or a close relative of the claimant or the claimant’s  partner who resides at the dwelling and the claimant has provided the relevant authority with 

such certificates, documents, information or evidence as to demonstrate, to the reasonable satisfaction of the relevant authority—

(i) the disability need of a person referred to above;

(ii) that an adaptation has been made to meet that need; and

(iii) that the cost of the adaptation is not less than an amount prescribed in regulations made by the Secretary of State;

In plain English, and as far as that is even possible – where a property has had an adaptation to provide assistance to meet a disability need of

  • the claimant,
  • the claimants partner or
  • a close relative who lives there (a parent, parent-in-law, son, son-in-law, daughter, daughter-in-law, step-parent, step-son, step-daughter, brother, sister, or if any of the preceding persons is one member of a couple, the other member of that couple) then the bedroom tax may change.

Yet what is an adaptation?  A grab rail is an adaptation which meets a disability need.  So is a vibrating pillow for a D/deaf person.  So what type of adaptation is needed to trigger this additional bedroom to be exempted?  Yep that’s one for the MPs to squabble over before this Bill goes anywhere.

And note what 2 (a)(iii) says about that: -

“… the cost of the adaptation is not less than an amount prescribed in regulations made by the Secretary of State”.

So IDS who is the Secretary of State could prescribe that this only applies to any adaptation costing £1 million or more read literally.  Churlish of me reader? No as this Act says it can be amended by the Secretary of State by statutory interpretation so IDS can assuming this Bill reaches Royal Assent before the next election then issue a statutory instrument to this effect!

And does this really apply to anyone who lives at the property and not just as now the tenant or the tenant’s partner?  Yes it would seem to apply to the tenant, the tenant’s partner and any ‘close relative’ which is a specifically defined HB term as long as they live in the property.  So you know you don’t really want your elderly parents to come and live with you….ahem…!  Oh and this will have to be debated ahead of this Bill becoming the law too.

Oh and Yes. IDS could issue another SI which says this only applies to any occupant if their name is Maud and they have climbed Machu Pichu after they attained the age of Methusalah

Ok I will stop being flippant.

This Bill is going to get bogged down in Committee and Report Stages and there is so much contention within it not least the intention to not impose the bedroom tax if the tenant cannot downsize due to a reasonable offer of alternative accommodation.  Anyone define suitable for me?

Ah yes that will have the same problem that the absence of a definition of bedroom has for the bedroom tax itself.  And the process for appealing any declaration of a ‘suitable’ offer is?  Yes who the hell knows and another matter for Committee and Report Stages.

In simple terms if the fact remains that 94% of bedroom tax households cannot downsize then that must mean that 94% will not have the bedroom tax applied.  That, dear reader, just ain’t gonna happen.  Unless of course the Minister Mark Harper can magic up 470,000 new properties out of the ether as he magicked up the £1 billion alleged cost of this Bill yesterday!

This Bill is a dog’s breakfast.

It will never come to be law and yesterday was just a game of politics between the parties and absolutely bugger all to do with changing the lot of the bedroom tax tenant or landlord or the policy itself. It was just political chicanery with feigned concern for the bedroom tax affected tenant and MPs looking out for their own backsides and only their own as per usual.I could write many more reasons why this Dog’s Breakfast of a Bill will never materialise but there is no need.

I did tweet earlier this week that if this Bill was passed and in operation before the next general election I will yodel naked from atop Nelson’s Column.  Don’t worry reader and as you can see from the above I have no plans to practise my yodelling!

 

Bedroom tax as a political tool – MPs care not a jot about the tenant

Who would have thought? The little old bedroom tax, the policy which had 70% public support when introduced would be the catalyst for the end of the coalition?  That is ALL that happened today and no changes will happen to the bedroom tax policy itself ahead of the next general election.

Let me restate that – there will be NO CHANGE to the bedroom tax this side of the election.

For all the hundreds of thousands of bedroom tax affected households there is no direct cheer in this at all and no immediate cheer.

However, what today’s vote did was two things which are positive.

Firstly, it means the bedroom tax as a political issue WILL form a significant art of the next General Election campaigns and be a big issue in those campaigns. Secondly, it means the Labour Party now have to be FULLY committed to getting rid of it and getting rid of it as a major political priority should they form the next government.  There is no wriggle room left for them at all.

It also means of course that the next 8 months or so until the election we will be hearing so much more purported fact and assumption about the bedroom tax and what its consequences and impacts are.  That means a more right wing stance will be taken by the Tories and more blame will be cast upon all benefit recipients.  They will be even bigger scroungers than before in Tory spin (of course excluding pensioners who receive two-thirds of all welfare benefits!) and the tens of thousands of tenants and activists on Facebook anti bedroom tax groups will become even more emotional and more irate and will be portrayed that way by the Tories.

Greater infiltration of such groups by politicos of the ‘left’ will happen and the anti bedroom tax groups which are largely grassroots ordinary people most of whom have never been politically active before are now a target group for the Johnny come lately politicos and seen as easy prey for them – After all the humble ordinary tenant has achieved more than any left wing political faction has done in decades with the anti bedroom tax campaign.

Please do not allow this party politics to happen.

The Labour Party is whoopin an a hollerin over today’s vote because it creates huge political division but nothing else.  They are not happy because right and just arguments over the principle of the pernicious bedroom tax policy and its impacts happened, and couldn’t be because that is not what happened at all.  All that happened was the politics of the Parties showed its usual ugly head.

The Lib Dems wanted to persuade the electorate that they have a political spine and to persuade the electorate their previous complicity with the Tories should all be forgotten.  Labour wanted to embarrass the Tories and have a few jibes at the Lib Dems at the same time.  Yet both Lib Dem and Labour MPs know and knew ahead of todays debate that the bedroom tax policy itself would not change before the next election and the wishy washy watered down proposals would not see thee light of day before the election.

There is even a political argument that today’s vote favoured the Tories.  They can now present themselves as even more right wing and now need to in order to hold to their ridiculous view that the bedroom tax saves money and there was a need for the spare room subsidy to be removed from those scrounging layabouts who choose to live on benefits and enjoy larger properties than the working family can afford.

The hundreds of pro UKIP arch right wing dissenters in the Tory MP ranks will cheer that a more strident right-wing message now HAS to come out from Cameron’s government and perversely the adored very right-wing buffoon of the Tory front bench in IDS has actually INCREASED his standing in the Tory Party not reduced it.  We need many more like good ole IDS will be the call from the Tory rank and file – a truly perverse outcome from a truly perverse policy.

But sod politics…the real issue is still the poor bedroom tax victims who will still have this pernicious bedroom tax applied and still have to go through hell and stress unbounded for a further 8 months and more and all the while politicians pat themselves on the back for stabbing the bedroom tax in the back with a limp pencil which is what happened today.  Rest assured you will be bombarded with leaflets and emails telling you what a wonderful job the Labour Party has done and how the Lib Dems finally saw sense etc…yet still the bedroom tax household goes without essentials.

While parents skip meals each and every week so their children can have a less then two year old school uniform, while those parents put two or three jumpers on of an evening and put extra blanket on their children’s beds as they cant afford to heat where they live. How parents will always smile and tell their children everything will be ok while they worry sick and don’t answer the phone and don’t answer the front door.  All of that remains for a further 8 months at least reader and is no cause for celebration at all

So much shite (no apologies for that correct language) will be spoken about and written on social media and on TV and radio and printed in tomorrows papers about today in Parliament.  That shite is written to sell newspapers or get a higher TV or radio audience share and will undoubtedly miss the points above – that this pernicious policy with its horrific and offensive consequences will still continue to be inflicted on 480,000 households or about 1.1 million men women and children.

I am being emotive her reader?

No far from it. IF the Tories are not taken out of power at the next general election, that is they don’t win an absolute majority or form another coalition, then God help the tenant and God help social housing too. Six months ago many were certain the Tories would lose the next general election and especially social landlords who had not made contingency plans for the Tories remaining in power after next May.  Yet even after today is anyone certain the Tories will be voted out of office altogether?  If they are they are very quiet about it.

Today’s vote also means “welfare” and “welfare benefits” will be high on the election campaign issues not just the bedroom tax in isolation.  The general public like the benefit cap and man other welfare reforms such as direct payments and monthly payments of benefit.  The general public still like to believe that all those on benefit are scoungers, that their 40 hours a week on minimum age zero-hour contracts makes them better than the benefit recipient and keeps that benefit recipient as THE figure of blame that justifies their shite lot in life for working so many hours for buttons.

You still in the mood for false celebration after today’s vote?  Don’t be. Tenant and other activist grassroots groups have done fantastically well so far opposing the bedroom tax, they have done ten, twenty, a hundred times more than any political party or any politicos have done; yet know the real hard work begins as we have to convince the general pulic that the benefit cap and monthly payments and direct payments and Universal Credit is just as bad if not worse than the bedroom tax, and that is a much bigger undertaking ad so little time to do it in.

Apologies for the downbeat tone reader but that just reflects what today was – political shenanigans and bugger all to do with the lot of the bedroom tax victim

Inner to Outer London homeless diaspora and HB cleansing is all there in DWP figures

HB cleansing from Inner to Outer London characterises the coalition welfare reforms and the figures which prove it are the latest official DWP HB statistics. These also prove the homeless diaspora I first discussed back in 2011. These HB figures were published a few weeks ago and account for a full 4 year period from May 2010 to May 2014.

In that time the overall number of HB claimants has increased by 4.93% and in keeping with my previous post on inter and intra regional different impacts of the welfare reforms I have looked at the HB official figures in the same way.

Here are the regional increases in HB claimants since the election:

North East 4.93 % : North West : 4.49% : Yorks & Hum 6.43%:  East Mid : 5.36%: West Mid 4.2% :

East : 5.69% : South East 5.81% : South West 6.02% : London (Inner & Outer) 4.93%

Notice how very similar they are and no marked regional differences in England?  Now look what has happened in Inner London and Outer London in the graphs below and note the average increase in Inner London is a mere 0.1% in the HB claimant count yet in Outer London it is 8.55% and way above any other area of England.

Inner London

innerlondon hb claimant count may10 to may 14

If the economy in London is booming as we are often told by the coalition then you would expect all of London to have a marked reduction in the HB claimant count as many more would be employed. Yet we only see 6 Inner London boroughs with a reduced claimant count.

Outer London

Outer london Hb claimants since election to may 14

Oh dear it can’t be that London is booming as look at the above figures in which you would expect the HB claimant count to have fallen!  Yet in every single one of the Outer London boroughs the HB claimant count has risen and risen on average by 8.55% which is a whopping 73% more than the national average increase in the HB claimant count.

The ONLY explanation is that Inner London boroughs have been moving the HB claimant out of Inner London into cheaper Outer London boroughs.  Inner London is being cleansed of the HB scrounger under the coalition.

Notice Enfield above with a rise of 13.65% in the number of households claiming HB in that borough since the election.  Then read an excellent but overlong (pot calling kettle with me I know!) article in the Guardian in the last day or so which says that one London borough has placed 1000 households in Enfield.  It gave a few outline figures to show what this is costing Enfield:

The 300,000-resident borough has sprouted what is in effect a large village of 2,200 households, say 9,000 people, living in temporary accommodation. That’s the seventh highest of all local authorities, and it keeps climbing. Housing families who no longer receive the benefits or other income to house themselves costs Enfield £3.3m a year. Growing demand and rising rents means that sum is projected to more than double this financial year, to £7.8m

Not only do we have central government transferring cost to local government generally with the welfare reforms and especially in London with the LHA reforms and the overall benefit cap; we also have Inner London boroughs transferring cost on to Outer London boroughs.

The cleansing of Inner London is just a double whammy for Outer London boroughs…and to all the other parts of the country that all London boroughs are transferring the families made homeless by the LHA reforms and benefit cap.

Here’s a very recent report on LB Brent having a 426% increase in out of borough homeless placements which goes into some detail on how these households became homeless.

Here’s an earlier piece from July in Inside Housing which says the number has tripled since 2012/13 which has some information on out of area placements from London to nearby areas of the South East.

Since the national media  brouhaha over the Newham to Stoke proposal was made public back in 2012 it has been clear the homeless diaspora has been taking place incrementally with the impact of the LHA reforms and more recently the overall benefit cap.

We have also seen the likes of Sandwell in the West Midlands put into operation unlawful council tax policies which included a residency requirement before a reduction was given in council tax replacement to those on benefit – as has Tendring.  Further we have seen the likes of Barnet state that you need to have a demonstrable residence of 5 years there to qualify for the housing waiting list there which is a reaction to the influx of the homeless diaspora and the Nearly Legal article discusses whether this is legal.

Yet regardless of whether the Barnet reaction to this homeless diaspora and HB cleansing of Inner London is lawful or not or however moral or not it may be you only have to look at the graph above to see its HB claimant counts has increased by over 17% since the election and due to the LHA reforms and benefit cap.

This piece in summary highlights the outrageous consequences of the back of a fag packet welfare reform policies of the coalition.  While IDS et all may chirp this makes HB claimants cut their cloth and not live where others cant afford, it also dumps them and their costs onto Outer London boroughs and further afield and simply exports London’s ridiculous house price inflation in an ever widening bubble to the rest of the UK – in short the HB bill will rise even further.

If London is supposedly so booming and exhibiting so much economic growth too as we are told by the coalition then the HB figures, the official DWP produced figures prove that growth is a chimera which is not translating into lower HB claimants.

Sorry IDS its those pesky facts again!!

 

 

 

 

IDS Rachmann – the dangerous slum landlord of the bedroom tax

Spot the difference?

Private landlord in Darlington fined £32,000 for putting tenants lives at severe risk

darl

Note in the above:

EVERY SINGLE SPACE IN THE PROPERTY OTHER THAN THE KITCHEN OR BATHROOM WAS USED AS A BEDROOM….

Contrast that with what Iain Duncan Smith says about the bedroom tax and I quote directly from a DWP argument put into the Upper Tribunal which says:

a. the Government intended that all rooms that are capable of being used as a bedroom should be classified as such (see for instance DWP circular U6/2013);

The Government INTENDED THAT ALL ROOMS THAT ARE CAPABLE OF BEING USED AS A BEDROOM SHOULD BE CLASSIFIED AS SUCH….

Spot the difference reader? No me neither!!

IDS is Rachmann personified! Let’s squeeze as many tenants into as small a space as possible

capable

IDS and capable in the same sentence?  Apologies reader!!

 

 

£2 in every £3 of welfare benefit spend goes to pensioners IDS confirms

IDS confirmed in Parliament yesterday at DWP Questions that more than £2 in every £3 spent on welfare benefits goes to pensioners.

Hansard states:

Mr Philip Hollobone(Kettering) (Con): How much his Department spent on benefits in 2010; and what estimate he has made of such spending in 2015. [905107]

The Secretary of State for Work and Pensions (Mr Iain Duncan Smith): In 2010-11, the Department for Work and Pensions spent £54 billion on working age claimants and children at today’s prices, and £106 billion on pensioners. Total expenditure was 9.8% of GDP. In 2015-16, as a result of our changes, the Department will spend £54 billion on working age claimants and children at today’s prices, and £116 billion on pensioners.

A simple way to view these figures is below:

wb£

Cue howls of derision from the older persons lobbies and just about everyone else!  How dare I say that!!  Pensioners have earned this money and ‘worked all their lives’ and other arguments will spew forth which of course fail to consider that those on the dole have contributed too.  Yet mention that pensions are part of the welfare benefit spend – which ALL governments past and present maintain.

We need to get over that view as this has significant consequences for the welfare benefit bill such as the HB bill will always increase given people are living longer.  It also has huge issues for the ‘welfare reform’ policies such as will the next government apply the bedroom tax and benefit cap to pensioners? Given that 31% of all social housing tenants are retired yet only 7.4% of private tenants are retired and four in every five retired tenants lives in social housing then the fact that £2 in every £3 goes to pensioners has significant consequences for social housing such as how do we afford sheltered housing.

You cannot merely dismiss the FACT that £2 in every £3 of the welfare benefit spend goes to pensioners by saying they are worthy recipients yet working-age persons in receipt of welfare benefits are not.  If all benefit recipients are scroungers – as government rhetoric and Benefit Street and other TV ‘reality’ programmes want us to believe – then the biggest scroungers are pensioners?  Of course not yet why are we taken in with this political blame game and why are we stupid enough to believe it?

I will be discussing what this means in a series of posts but for now the simple point of this short blog is to get the FACT out there that over £2 in every £3 in welfare benefits goes to pensioners….FACT!!

Direct Payments – the tenant moves from captive customer to real customer

One of the welfare reform policies is direct payments or DP and this is the one that will change the face of social housing more than any other.  Forget the bedroom tax or any other welfare reform policy, DP is the one policy that has council and housing association landlords worried sick.

Yet, as with all welfare reform policies DP is ill-considered by government and yet again social landlords are making a pig’s ear of a response by not thinking it through fully and being ill-prepared for this particular change.

3.4 million or so social housing tenants have their rent paid through Housing Benefit. This goes directly to the social landlord with the HB money never passing through the tenants hands.  Landlords like this arrangement and have become accustomed to it.  Tenants like this too as they have never had to worry about paying rent if on benefit.

To put that into context the coalition admits 1.4 million of social housing HB claimants are not affected by any welfare reform policy by being pensioners and so this DP change will affect the other 2 million social housing tenants of working-age who claim HB.  Eventually that is 2 million rent accounts each week that will be affected and 2 million rent accounts with rent payments no longer guaranteed.   Social housing has just over 4 million tenant households so DP sees a change from roughly two in every three rents being guaranteed by Housing Benefit to just 1.4 million being guaranteed out of 4 million or about one in three.

This is a huge change and quite rightly has social landlords and especially their finance directors worried as hell.

The coalition says in its spin on DP that it wants to make tenants more responsible by paying them directly so that they can pay the landlord. This is an issue of control between tenant and social landlord with the current system seeing landlords in control of the payment of rent: Yet that changes with DP which puts the responsibility and the control of rent payment with the social tenant – and that is a monumental change as the social tenant finally becomes the customer is what DP means.

At present the social tenant is at best a captive customer who does not change his housing provider because he can’t easily do so.  The social tenant is the same captive customer forced to pay £4 for a bottle of water on the Ryanair flight or £6 for two sausage and two rounds of toast at a motorway service station.

The social tenant moves once every 14 years and to date has to put up with the level of service his landlord provides.  Thankfully social housing is regulated and social landlords average service level is good compared with the private unregulated landlord.

However social landlords service levels vary significantly and tenants currently have little klout in forcing their landlord to undertake repairs or the like.  Yet that changes dramatically with DP as the tenant becomes in control of the payment of rent.  If and when the tenant has any form of beef with the landlord he can potentially, and will in practice, withhold rent.  It makes no difference that social tenants withholding rent while awaiting repair has a highly dubious legal basis as tenants will withhold rent for this reason in far greater numbers.

Even if no particular beef over repairs with his landlord the tenant has the power with DP to reduce the priority of paying rent.  I note a report issued today which says that only 32% of tenants are satisfied with their social landlord. All social landlords are well aware that at peak expenditure times DP will mean that rent paid at Christmas will inevitably fall as even the most  responsible tenants have the choice to skip a payment or two so that they and their children have a happier Christmas. There will be other ad hoc peak expenditure times too for the social tenant; a family celebration such as a wedding or other typical occasion.

Yet what these all do is see the social tenant in control of the payment of rent and become the real customer not the captive one.

For decades social landlords have positioned themselves as more than just a landlord by delivering anti social behaviour services and other ‘community’ functions that sees tenant’s look to social landlords to provide.  Landlords have made a rod for their own backs with this as tenants will expect and do expect more and more from their social landlord yet as landlords will have less guaranteed income they will have to reduce service levels making them less responsive to the now full not captive customer and more tenants will withhold rent or at least pay less or less frequently or more sporadically than before when they never had that option.

IF social landlords have less income to deliver these ‘housing plus’ services which will be the case with DP then tenants will ‘judge’ their landlords just as they judge other providers.  If a tenant has a bad experience with Tesco they can take their custom to Aldi and they do this and so if a landlord does not deliver as tenants ‘expect’ or landlord staff don’t come up to a standard the social tenant ‘expects’ then tenants will further de-prioritise the payment of rent.

Tenant expectations and tenant perceptions which currently are not a real factor in the provision of social housing become very real factors with DP as the tenant takes control of the payment of rent.

Over the last 18 months or so I have met and spoken with hundreds of tenants (and landlords) across Merseyside and beyond.  Some landlords have far more money than others in terms of repair and in terms of standards of properties because of this.  The age old landlord tenant problem of your property is not damp its condensation sees significantly different outcomes for tenants and all down to how much money each landlord has.  Often tenants in the same street can have different social landlords with Landlord A who has money deals directly with the ‘damp’ issue yet Landlord B who has much less repair money saying it is not damp its condensation and down to the tenant not opening windows and drying clothing on the radiators etc.

Yet when DP comes in the tenant of Landlord B above will be just as aggrieved as he is now but ABLE to do more about it by attempting to withhold rent.  That tenant with DP has other options and no doubt the no win no fee Philadelphia lawyers will be targeting such tenants of Landlord B soon enough to seek redress and to get some ‘compo!’

That is just another example of how DP will change the landlord tenant relationship and there are scores of other similar examples that will emerge and BECAUSE the tenant becomes in control of the payment of rent and has influence and power over the payment of rent.

Landlords know that DP means tenants have influence and take control of the payment of rent yet they tend not to see the above issues.  Landlords see the bottom line issue and only the bottom line issue of much less rent being guaranteed and how this may affect their borrowing levels and interest rates paid on borrowing which is a huge and legitimate concern and one I am not downplaying at all.

However landlords have not paid enough attention to the landlord tenant relationship and how the dynamics of that will inevitably change; or how the power balance shifts dramatically from the landlord to the tenant in terms of the DP tenant becoming a real not a captive customer.

The DP tenant will hold the aces yet landlords who are rightly acutely worried about the impacts of DP come up with hare brained schemes such as the Halton Housing Trust response to DP of only communicate with us via digital means in return for a cheap tablet device and internet access.  While we must assume the bare costs of such a scheme have been considered for financial viability of such a project, what this does to the landlord tenant relationship dynamic clearly have not.

DP means that aggrieved tenant have more influence and power to get redress and as I outline above DP also means that more social tenants will be aggrieved and come forward with their grievances – whether deserved or not – because DP gives them much more potential influence over issues of grievance.  Very simply the social tenant will see more prospect of success for any grievance issue they have because they hold the power lever which DP gives.

More grievances and with a higher chance of redress is what DP holds for the tenant and more cost for the landlords is what DP really means. Whether the tenant tells the landlord by digital means or by snail post doesn’t change that and as a matter of obvious fact digital communication hugely increases that.

I like the radical nature of the HHT plan for so many reasons not least that it gives tenants digital access and there is much to applaud in it.  Yet as we saw in the KHT example social media is a very dangerous animal indeed.  KHT issued a standard letter to tenants in essence saying pay your (bedroom tax) rent else we will tell social services who will come and take your kids and was an unfortunately drafted as well as offensive letter.  That letter was seen 140,000 times in the first weekend thanks to social media and universally condemned.

The reputation of the landlord KHT took a hammering.  It also hardened the grassroots activist’s response to the bedroom tax in Knowsley.  Tenants have long memories and over time 2 plus 2 does become 5 and therein lies a huge problem and an ineptly neglected issue for social landlords panicking over DP.

Social landlords before all of the welfare reform policies paid scant attention to reputational risk unless they also delivered NIMBY supported housing services for ex-offenders, single homeless hostels and the like where reputational risk is THE biggest risk.  General needs or ‘bog standard’ social housing never held any real reputational risks to mainstream social landlords.

Yet the emergence of social media and the welfare reforms hugely increased reputational risk and why I have long maintained that social landlords should be supporting tenants to appeal the bedroom tax.  Aside from rent levels staying the same and more HB coming in and a significant back payment when a bedroom tax appeal succeeds, it also makes the social landlord a good one in tenant perceptions MY landlord is supporting me and the landlord achieves huge tenant goodwill.  By contrast the landlord not supporting the tenant to appeal receives the opposite.

Now with DP starting to roll out across the country and tenants taking control of the payment of rent the real significance of that becomes very apparent.

Social media and the digital way so beloved and advocated by Nick Atkin at HHT holds huge dangers in and of itself.  Combine that with the tenant becoming the real customer and having full control of the payment of rent and you disregard what all of this means to the landlord tenant relationship.  The aggrieved tenant, whether they are rightly or wrongly aggrieved, is a real concern for all social landlords and something they have to consider in much greater detail than they have to date.  Social landlords reputational risk for mainstream ‘bog-standard’ general needs lets which is 95%+ of their business, their core business, is just as prone to reputational risk as the tiny percentage their NIMBY supported housing lets have had for decades.

When the IT cocks up, as it will, as IT always does, and when the HHT tenant has stopped looking at cats doing stupid things on YouTube and realises they can’t get redress for any issue face to face, these HHT tenants will become aggrieved.  When they are bombarded with emails because the administration of Universal Credit and its DP element is such a farce as neighbouring Warrington states here, the tenant will be aggrieved by this IT cock up.  Those HHT tenants will find more reason to be aggrieved and matters of repair will take on a new and higher significance and importance and HHT tenants will bombard HHT with more and more repair requests and more and more why aren’t you doing anything about drug dealing and ASB on my estate etc.

IT is always sold as a panacea and those who advocate it are radical and innovative and those who diss any part of the idea are by definition a Luddite.  That is crassly naive and in business terms incredibly inept even as a superficial selling point which is what the HHT plan is.

The HHT plan is ‘sold’ on this naive basis by HHT and given undue credence by the National Housing Federation (NHF) who also publicise this ill-considered idea to sell seminar places.  Regrettably this is the all too typical ‘omniscient landlord’ response to a welfare reform policy of ‘we are landlords so we know best.’  The social landlord blinded by the panacea and deluded belief that IT will save the day fails to address the landlord tenant relationship dynamic at huge peril.

DP makes the social tenant the customer and social landlords treat the tenant the same as Gerald Ratner treated his customers, with contempt and chronically inept consideration.  The HHT plan lauded as the radical innovative way forward is a classic example of how landlords may change the name of housing directors to customer service directors yet fail to understand and appreciate what customer service means.

Once the social tenant becomes a real customer, which is precisely what DP entails, landlords are going to have to radically change their modus operandi and look at what a customer is and what a customer expects and that customer is going to be a far more powerful and real customer than any social housing tenant has ever been before.

Social landlords dismissed and still dismiss the benefit cap as a ‘real’ issue for them despite 46% of all those affected being social tenants. Oh this doesn’t affect us they say it is only a problem in London and only then with high private rent levels when it is an issue for all larger families irrespective of where they live.  The same indifferent approach is seen in the bedroom tax appeal with social landlords showing antipathy there despite it being a financial no brainer for them to support tenants appealing.  The same landlords are accused of becoming overly commercialised too and moving away from their ethos and core values and they are with a much greater uptake of AR and other ‘non-traditional’ income sources to compensate for the income reduction policies of bedroom tax, benefit cap and that will have to increase too with DP.

Despite #4councilhousing and the Shout campaigns which have sprung up to fight for social housing social landlords still don’t sell what they offer and still hold on to some ethereal notion of being ‘social’ landlords while their finance directors within social housing increasingly take control and direction away from chief executives and boards.

With DP they will make the same mistakes again of bombarding tenants with red inked letters and make these now customers even more aggrieved and expect everything to be as before the welfare reform policies were implemented, or in simple terms not know the industry in which they work and especially not know the customer that the tenant becomes with DP.  If ever you wanted a classic case of we have always done it this way and a steadfast refusal to change then look at social housing.

Again the HHT plan comes to mind.  It can be portrayed as radical and innovative all you like by its developers HHT and by NHF and others who want it to work and naively believe it will.  Yet this plan is a huge risk too far and a risk which will alienate and take tenants for granted even more and once more just another example of social landlords not knowing who their customers are or what they require.  With DP and the increased take up in digital and social media landlords need to fundamentally think what impacts this will have, yet they do and have not – Plus ca change!

Overlong? Yes

Bit of a rant? Yes

Repeats itself? Yes

Too long and too involved for the zealots who state IT is a universal panacea and only issue superficial subterfuge in bit size chunks because the housing reader cant be bothered to pay attention for more than the length of a gnat and are not prepared to stop and think for once? Undoubtedly!

 

 

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