The Financial Times is this morning running a piece about the Queen’s Speech this week that will include the right to buy for housing association tenants. Cue apoplexy from social landlords as the 53% of them that are HAs – or more correctly PRIVATE Registered Providers will really begin to emphasise the first P in PRP – the title by which the housing regulator correctly calls them.
That is the same housing regulator who said at last weeks Capita Conference that all social landlords need to know how the benefit cap – more correctly the overall HOUSING benefit cap or OHBC – will affect them from today and at the end of this parliament. This will also be in the Queen’s Speech and is FAR MORE important than RTB yet the Private Registered Providers do not see that – stupidly – and will only focus on RTB.
I have been writing about the OHBC for many years and almost three years I gave a presentation on it at a housing conference in London only to receive the feedback that it is a London only issue and even then only for private landlords and that despite the DWP original assessment saying 46% of those affected would be in social housing. The other feedback was that we are social landlords and will always house those in need it is our ethos. As I said at the time a nice sentiment but financially naive as social landlords can’t afford to do this.
Then a few months back both the main political parties said they intended to reduce the benefit cap (OHBC) and make the financial naivety an immediate problem and I produced further details, details so simple that even a social landlord could understand them (!!) and way ahead of the social housing regulator calling for them. I reproduce them below.
If the Tories simply stick to their reduced cap limit of £23k per year nationally and not reduce it further in the regions as has been mooted then the column to note is headed “£440 CON” as this reveals the maximum housing benefit the tenant can receive at 2015 and at the end of the parliament in 2020. [The projection has an average CPI of 1.5%]
The maximum HB that a 2 Parent 3 child (2P2C in the left most column) household can receive is £105 this year and reducing to £80 per week in 2020 at the end of the parliament. The average 3 bed that the 2P3C household will have as a minimum will be £116 per week in the regions by them meaning a £36 per week top up; and in London the 3 bed property will be £160 per week making an £80 per week top up. Both of those figures are social rent levels not the much higher and much more financially toxic AR model levels.
Put starkly, the social landlord cannot afford the social tenant and the social tenant cannot afford social housing
Put starkly, the 3 bed and larger property – 36% of all social housing – is a financially toxic product
So even if all social landlords stand four square behind the 53% of social landlords that are housing associations and collectively defeat the right to buy for HA’s then all social landlords will still be in the mire as their core product is financially toxic to its core tenant market.
Right to buy for HA’s is but one battle, a skirmish in comparison to the impact the OHBC will have on social housing.
Yet the housing associations won’t of course see it that way and will rant and rave and frankly moan like hell and pour millions into legal fees and other actions against the RTB while spending and doing next to nothing about the OHBC. They will be sucked into this deflection from the REAL attack on the social housing model that the OHBC is – and it is not the only direct attack on social housing. – because social landlords refuse to see the wood from the trees.
Over the last couple of months I have spoken with social landlords over the OHBC and the general response has been the usual let’s wait and see and/or we are solely focusing on the RTB for HAs policy.
Despite the fact the OHBC could easily be fully operational in 5 weeks time and despite the fact that many former council housing landlords, the LSVTs, inherited up to 75% of all properties being 3 bed or larger and as such financially toxic for any tenant on the main welfare benefits.
Up to 75% of all assets being financial toxic in 5 weeks is thus given less priority than the principle of RTB for social landlords exposing their incredulous financial and general business naivety over the OHBC.
You don’t need to be an economist to see 36% or 35.7% which is the specific figure given in the statistical data return (SDR) is bad enough for toxic assets to kill any organisation, and that emphasises just how much of an attack on social housing the OHBC represents. Yet social landlords will entirely focus upon RTB and moan, moan and then moan some more rather than attempt to challenge OHBC policy as that would be political they will say (and challenging RTB is of course not in their warped logic!)
The OHBC is extremely clever politics. It is divide and conquer of the highest order that will see social landlord A have fewer toxic properties than social landlord B in any one of the 350 very different housing markets we have in every local authority area. Government know that social landlords are timid and do not make a fuss and even when they do they laud the fact they have finally made a fuss – cue the Homes for Britain hyperbole and lauding of the ‘sector’ finally making a fuss…which led to RTB for housing associations being announced less than 24 hours later!!
The social landlord dash for AR over the past three years is also over as the OHBC make AR as dead as a Dodo. This knee-jerk response to the 60% cut in social grant and as an immediate countermeasure to mitigate significant arrears loss in the bedroom tax is even more of a financially toxic product and while AR is under 2% or so of all social housing stock some social landlords have over 5% of stock being the AR model and their organisations are even more financially exposed. Cue, social landlord CEO’s thinking oh God what have I done and how can I extricate myself from the incredibly near-sighted decisions I have taken…hmm!
To even assess the financial risk the OHBC poses all social landlords need to know all welfare benefit data of all tenants and extremely specific data too as while tenants in the ESA support group are exempt, those in the ESA working group are not and are liable for the OHBC toxic financial nightmare. The regulator merely stating that landlords need to know how the OHBC impacts now and in 2020 shows an incredulous naivety that social landlords do not have this critical data to assess the risk, that social landlords have no rights to that data which can only be given with the tenants consent and that social landlords have never before needed such data.
A quick look at the official housing benefit data reveals that when extrapolated (72% of ESA recipients are in working group at 2012 figures) about 1.6 million households are passported onto housing benefit through IS, JSA and ESA and receipt of HB is all that social landlords needed before the OHBC. Specific welfare benefit data was never needed before so never collected by social landlords, yes that’s the same social landlords who laud big data and focus on the latest piece of IT kit rather than on their core business. Social landlords now need this very specific and accurate up-to-date welfare benefit data on all existing tenants, the same existing tenants many social landlords have taken for granted and bombarded with red inked pay up or else communications in the bedroom tax.
Further evidence if needed of how social landlords do not think smartly and operate immediate term policies in their own very immediate terms interests and take tenants for granted in all of this collective housing group think that is not thought through at all! As I said here social landlords can no longer afford to evict the social tenant given that now the welfare reform policies see all tenants as can’t payers not won’t payers – a risk the OHBC ramps up massively while social landlords ignore it s impacts through an inept sole focus on RTB.
Just another bit of passion? Just another rant at social landlords? Just another political polemic? No, no and no!
Just another anything else retort from social landlords to avoid seeing the wood from the trees? Yes!
Did all social landlords read the Beano?….Clearly!