Housing associations correct name according to the housing regulator is PRIVATE Registered Providers. They are private companies not public sector companies as a matter of fact and many don’t see that given their charitable origins and status. Yet that is what they are.
All social landlords (HAs 60% and 40% council landlords) get derided with the tag that they are subsidised, which they are and yet they are not. Social landlords receive grant of £1.125 billion per year as the latest settlement was £4.5 billion over 4 years as seen below.
So yes social landlords collectively receive capital grant or capital subsidy – they are ‘subsidised’ but this is acutely misleading as it is never considered what they provide in return. Or put another way WHY has successive governments ‘subsidised’ them as it is not for any altruistic purpose.
Firstly social housing is the ONLY place where the SODS can live – Sick, Old, Disabled, Supported tenants as the private rented sector landlords do not accommodate these ‘problem cases’ (excuse the language) as they simply do not fit into the profit-making PRS model. The PRS do not do sheltered housing, they do not do adapted housing for those with disabilities etc as it costs too much. Given that social housing is the only place where the SODS are able to live then it has by definition far more HB claimants and that also plays a part in the pejorative perception.
Secondly, and in purely economic terms, in return for this capital subsidy social landlords charge much cheaper rents and that translates into less cost for the taxpayer and public purse in terms of Housing Benefit. If we look at the official HB data we see social landlords receive on average £85.66 per household in HB yet the private landlord charges and receives £106.80 per week.
This means the initial capital subsidy returns a saving of £21.14 per week or £1,100 per property per year LESS is paid by the taxpayer to the social landlord than to the private landlord.
The same latest figures have 3.34 million social tenants claiming HB and so if this ‘subsidy’ was not paid these social landlords would be charging the public purse and the taxpayer £1100 more on 3.34 million properties – or about £3.67 BILLION per year more.
In simple terms the subsidy that is always referred to in negative and pejorative terms actually saves the taxpayer a huge amount each year. It is quite simply an invest to save project and has benefited all governments over many years.
SO – and here’s a really radical thought – why don’t housing associations tell the government to stick their subsidy where the sun doesn’t shine. Bugger off minister we don’t want your pittance and instead we are going to charge the HB bill the same as the private landlord in HB.
Yes pretty far-fetched but not something to be dismissed as pie in the sky as the figures show.
Average PRS rent level is £165 or so per week and PRS landlords receive an average of £106.80 in housing benefit towards that.
If Housing Associations were to put up their average rent from £89.94 per week to this £106.80 per week – and note this is still significantly cheaper than PRS rent levels – then they would receive £16.86 more per week in Housing Benefit. HAs have 1.925 million tenants claiming HB and so they would receive about £1.7 billion per year more in HB.
This of course would see the remaining council landlords all transfer their stock to become PRIVATE Registered Providers too and suddenly, the taxpayer is faced with a further 1.42 million ex-council rents receiving a further £2 billion per year in Housing Benefit.
That of course is NOT going to happen. As apart from the huge taxpayer increase in cost it also means so many more will be made unemployed as current social housing tenants could not afford their existing jobs as their rent has increased. It would also mean that all social housing becomes PRIVATE and so they could tell government to go bugger off in terms of accommodating the SODS – the Sick, Old, Disabled, Supported – which they alone do now.
Looking at social housing in this way, however much a flight of fancy in that such a move will never happen, is the right way to look at what social housing is. Social housing provides huge economic benefits and economic savings to the public purse and it needs to be presented that way rather than seen as some dinosaur model of post-war council house building that is not fit for the 21st Century.
Where all of the above figures could and should be used, but never are, is in negotiations with the government of the day in which the social housing ‘sector’ is extremely weak and has been for decades as the old council house model has fallen out of political fashion. Social housing is not seen it is economic light which the above crudely outlines yet it needs to be. Instead we see this by stealth as HAs become the largest part of social housing by far accounting for 60% or more while the council housing percentage shrinks ever more.
Those HAs are increasingly becoming more and more private by the day as they develop their private arms and build more house for sale and introduce AR models, though perversely take on more responsibilities from ASB and now positioning themselves as best placed for work incentives for their tenants. Yet such services are bound to reduce as direct payment of HB is made to tenants shortly and all social landlords will not be able to afford to do such ‘housing plus’ services.
This incremental privatisation of social housing will lead to the radical position above of telling government to stick their subsidy where the sun doesn’t shine eventually as the social housing model is eradicated piecemeal by radical attacks such as the welfare reforms. Social landlords have a strong negotiating position here of leading the agenda and being proactive with government rather than tugging their forelock and accepting whatever morsels the latest administration throws at them.
Time the ‘sector’ got off its backside and forced that agenda onto government and got government to cough up a realistic level of subsidy, oops sorry investment, that is in the best interest of the tenant, the landlord, the taxpayer, the employer and everyone else. Social housing is a very cost-effective invest to save programme and all governments as well as Joe Public needs that ramming down their throats.
It is all too easy, and remiss, for the ‘sector’ to blame Right To Buy, albeit correctly, for the mess social housing is in and yes it is governments of all persuasions over the last 30 years that have not been supporting the social housing model when it is clearly in the best economic interest of the country and individual taxpayer to fully support it. Those within the ‘sector’ – there is not even one lobby and one voice for it – need to look at themselves and their own roles in this demise. They have not promoted social housing, never have yet badly need to and especially its huge economic benefits. Instead they have sat idly by simply moaning about the problem rather than focusing on the solution to it.
The ONLY way social housing can be saved is if it gets its head out of its proverbial backside and starts selling the huge benefits of social housing; yet on past performance we can say that is not going to happen and the social housing model is dead and the speed of that death is rapidly accelerating for every day they sit blithely by and do bugger all about it.
I note there is going to be a housing demo marching to Westminster shortly and (no this is not made up) this is by ticket only invitation!! What the F…! Somehow can’t see a noisy march with the chanting of
You can stick your housing subsidy up your arse,
You can stick your housing subsidy up your arse
You can stick your housing subsidy
Stick you housing sub-si-deee
Stick your housing subsidy up your arse!
Ah well, plus ca change!
UPDATE 22.40pm Mori just issued the top ten election priorities of Joe Public. Now surely the housing crisis is bound to make the Top Ten eh reader? Ah!… What’s that couldn’t lobby their way out of a wet paper bag. You may say that I couldn’t possibly comment!