Inside Housing (Thursday) ran an article on a National Housing Federation (NHF) report which says that rent arrears will increase by 51% and extrapolated in money terms about £250m per year.
A single sentence struck me in the article: –
“The survey also found 57 per cent of housing associations are concerned their tenants know little about the upcoming changes, despite efforts by landlords to prepare them for the reforms.”
What that means and fundamentally contradicts itself is that HAs have not been doing enough to educate their tenants. Why do 3 in 5 tenants NOT know becomes the obvious question, and the one it appears HAs and all other social landlords are seeking to sidestep judging by the comments below the article all from housing professionals.
In short social landlords efforts have not been enough and a 43% pass rate is what those efforts have achieved and so that effort has been woeful and ineffective despite the money which is ABOUT to be thrown at it (note that well) as in future tense and not in past tense.
232 HAs each spending £50k is a sum of £11.6m that I remind you is ABOUT to be spent on solving a £245m problem. That’s a spend of 4.73% of the anticipated problem.
What the hell have social landlords been doing for the past 2 years? They will say they have been putting more money in an attempt to educate and prepare tenants, which they have and I’m not denying, but with a 43% success rate those attempts have been woeful and money badly spent.
A (comment 1) talks of controlling the impacts and not challenging. Yet HAs have clearly failed in this so far. D (comment 2) raises some very pertinent points though I argue the alarm is in the past failed efforts more than investor confidence, which ironically adds to lack of investor confidence! S (comment 3) at least still sees a challenge to the bedroom tax, direct payments and other reforms yet social landlords have proved to be pretty inept at this too and DESPITE the many logical and good services put in place she describes there is still tenant ignorance of the bedroom tax et al even in Shepherds Bush.
I’m not having a go at individual social landlords here, some have done very well and had some very well thought through campaigns but a collective one and the evidence of the NHF report proves that with 57% still thought to be unaware of the real issues to come. Landlords need to look again and ask why this situation has come to pass rather than simply bemoan the situation which is what they have done.
Last Sunday I posted a short and what i thought was a throwaway blog which asked (a) what is a bedroom – not the first time this has been asked so nothing new in that – and (b) is the bedroom tax lawful?
This second point captures what I mean. Social landlords and social tenants have been complaining about the impacts of the bedroom tax (and rightly so) but that is all they have done. They don’t appear to have asked the is the bedroom tax lawful question which if it is or maybe would take away all those impacts. That blog has gone ballistic in terms of being very widely read and so much more read than others and I have issued 3 more since all of which have added to the simple two questions of what is a bedroom and is the bedroom tax lawful.
- The 2nd added some further points on its legality and prompted many comments from housing lawyers which tended to agree that tenants wouldn’t have a likely succesful claim ahead of the bedroom tax but they expect huge numbers of claims after it is implemented. Social landlords do however have potentially legal challenges to the bedroom tax ahead of implementation and post implementation.
- The 3rd blog questioned whether the projected £480m per year savings the government expected were reasonable as they too havent been challenged just accepted. It also discussed how the bedroom tax has a significant private sector dimension due to the coalitions failure to define a minimum bedroom size and that the HB cost will rise because of that.
- The 4th blog today argues the bedroom tax, upon which social landlords have focused to the neglect of other reforms such as direct payments and especially the overall benefit cap, both of which present much higher risk to arrears, could cost the public purse and INCREASE the overall benefit bill by more than £1bn per year.
In short, social landlords by tending to look mostly or even only their own bottom lines (the bricks and mortar view) and not how tenants will react (the people view) and by accepting as fact that it doesn’t affect the PRS tenant which is does and by accepting the claimed £480m pa savings which will end up costing more – have failed to consider the bedroom tax correctly and those together I would argue is why just 43% of tenants are aware of welfare reforms such as the bedroom tax.
Further the many Facebook and other groups some of whom have 5 figure followers (10,000+) and many other lobby groups have been raising awareness of the bedroom tax et al and so the 43% awareness rate has not all come from social landlords efforts, only a part of that has.
Social landlords need to relook at the welfare reforms again and reconsider what they will mean and all of them not just the bedroom tax and do so much more about the direct payment and OBC issues and ask themselves how can they do more and how can they deliver much much greater awareness of the impacts AND how they can challenge these unworkable and frankly offensive welfare reforms which will end up costing the public purse more in benefit cost.
So instead of resigning themselves to saying the level of awareness is low DESPITE their wonderful efforts (and some HAs have made wonderful and successful efforts) the sector should genuinely look again and throwaway the assumptions and ‘givens’ they have about the welfare reforms and go back and do it properly and in a more considered way. If they don’t then they will pay the consequences of that and in many respects rightly.
I use the bedroom tax as one example of the raft of welfare reforms and I use it because it is all that social landlords have focused upon, at least until recently and we now see social landlords accepting that direct payments and especially the overall benefit cap present much higher risks to arrears – the typical social landlord bricks and mortar / bottom line view than the bedroom tax.
From working in housing for 20 years one thing typically characterises social housing responses to change and social housing constantly is affected by change. It is the “When does this come in? April. Ok we will look at it properly in January” approach. This hasn’t happened with the bedroom tax as work has been done and landlords have looked at it, yet given 57% of tenants don’t know then landlords have not looked at this properly
The welfare reforms, that entire raft of changes fundamentally affects the social housing model of operation and doesn’t just tinker around the edges like most change does. These are very different changes that present different challenges. They all affect HB which is the principal funding stream of the social housing model. The overall benefit cap (OBC) of £500pw doesnt cut welfare benefits like dole (JSA/IS) etc it ONLY cuts Housing Benefit; Universal Credit (UC) does the same. These are not welfare benefit cuts they are housing benefit cuts – a bloody obvious and simple point I made as long back as 2011 yet the low awareness level of social housing tenants today strongly suggests that social landlords didn’t take on board that simple but obvious fact. These are not just the usual changes social landlords have to deal with these are radically different.
Social landlords havent taken these radical changes on board as social landlord’s customers are 95%+ the general needs tenant – mainstream housing and the ‘bricks and mortar’ approach has always been used there. We’ve adopted this strategy in the past and its worked then so why won’t it work now appears to be the social landlords (errant) position.
I inhabit and love the real part of housing that deals with and needs the ‘people’ approach – namely supported housing, that tiny part that has to view the impact of changes on people and understands how people especially vulnerable people react to such change: the type of approach that mainstream general needs housing hitherto doesnt and hasn’t typically used or had to use. Yet this in many ways is the KEY change in the welfare reforms – that social landlords have to adopt the people approach and bin the ‘bricks and mortar’ one that sees tenants not as customers but as units or occupants or a figure on a spreadsheet. Tenants are real people. Yet in true social landlord mainstream housing whether they are called a tenant or a customer takes pride of place! Yes the semantic and theoretical arguments have priority in the Ivory Towers of social landlords rather than what a tenant needs or how they will react to change.
Similarly, the past 18 months has seen social landlords concentrate on the medium and not the message. How many articles on how wonderful social media is and how social landlords can use this in ‘communicating’ with tenants have been published and read. Let’s all get (over?) excited about the medium and forget the message has been the result as while often interesting and thought-provoking ways to work with tenants have been the focus, the medium, the message simply hasn’t been delivered as the NHF survey shows with 3 in 5 tenants thought not to be aware of the welfare reforms and their impacts.
So we can add technocrats (a nice word for geeks) who are blinded by science and the medium to the abstract theorists (tactful term for those with heads in clouds often revered as ‘blue sky’ thinkers!) a reasons why two in three tenants don’t know what the hell is going to happen…..despite the best efforts (sic) of social landlords!
In summary social landlords need a rocket up their backsides for their woeful attempts so far and they need to consider very carefully what the welfare reforms actually mean to all aspects of their business and especially to tenants.
One final point to social landlords. Please take your head out of you a**e first before (a) you place the rocket there if you have the sense and balls to admit and accept you have severely buggered up this so far; or (b) before your tenants stick the rocket there and light the touch-paper because they blame you for being complicit in the likes of the bedroom tax. Yes I know you are being wrongly blamed for the bedroom tax when it is a dog’s breakfast imposed on you by the dogma ridden coalition. Yet your inept response to it has made you appear complicit in tenants eye so whose fault is that!
PS – I suspect some social landlords will still get highly scorched elbows
PPS – Hey mainstream social landlord, you know all those wonderful hardworking charities that you have as managing agents…you know the ones you talk at once every year or so…yes them that the Housing Corporation said 20 years ago need shorter repair response times because their tenants (often licensees) are more vulnerable than the mainstream general needs tenants…yes the ones that you have no idea what the hell it is they do……….Well they deal with ‘people’ and have the answers for you on how to raise awareness of welfare changes, after all they have done it for years and know how to speak with (not at) people too.
They’re the ones I mean when I say supported housing. Just thought I’d mention that in case you thought I was talking about sheltered housing…you know the one housing area you pump in oodles of time and money. That’s not supported housing it’s sheltered and anyway 90%+ of those there are immune to the welfare reforms. Be careful elbow scorch marks can be quite nasty!
PPPS – All of the issues around the bedroom tax, the 3 bed / 4, the half of a person, the minimum bedroom size issue, the fact that asylum seekers are more favourably treated in terms of bedroom size as are others in HMOs than in mainstream housing, the lack of exemptions, the 13-week rule and how soldiers families will be penalised, etc, etc, etc, – are nothing new and nothing I have suddenly come up with. These issues have been well-known in housing for years so why don’t tenants know this? These issues, pertinent ones for bedroom tax have not been communicated by the ‘sector’ to the tenant. Because they haven’t social landlords have placed themselves in a position which appears they are complicit. And that will get worse too.
Yesterday one council put up its rents by 5.1%. From the figures supplied this appears to be the usual formula of (RPI+0.5% and then plus £2) and as i have always argued social landlords given the risk to arrears from the raft of welfare reforms were always likely to issue the maximum permitted increases. Yet the focus will be on 5.1% while benefits rise by 1% and while CPI is 2.2% and tenants will see the rise in this context as so much more than the usual rent increase and will blame the landlord. it’s a bloody obvious point that like any business with a much higher threat of non-payment and arrears that the welfare reforms present that rent levels will increase to mitigate this. Any business would do this and has to do this, and in that regard the welfare reforms have always presented landlords with a massive reputational risk. So why don’t tenants know this? They should and its extremely damaging to social landlords that they havent been open with tenants over this issue.
Social landlords run a further risk of being perceived as secretive and just money-grabbers to add to the complicity risk. That rocket up your backsides is well deserved and very much needed. If that enables you to take a step back and think (should that be THINK!) then it will do a lot of good and makes good business sense. Get off the fence and get behind your tenants instead of appearing to be making that fence higher and higher with you on one side and the tenant on the other! Perhaps then tenants will correctly realise that you are being shafted by the welfare reforms too!
When the real proverbial hits the fan with the overall benefit cap and Universal Credit which we know are car crashes waiting to happen tenant and social landlords will need to to be singing from that same hymn sheet. Yet the way social landlords have gone so far, they will be your fault too!