The UK housing regulator gives housing associations their correct name of PRIVATE Registered Providers with good reason – they are private landlords and private companies.
Today I read that one of the largest housing associations in the country in London & Quadrant (L&Q) has announced plans for 25,000 private rented homes that are mostly in London and other high rent areas.
25,000 PRIVATELY rented homes from a (so-called) social landlord!
Housing Associations operate and develop properties for their own profit while council landlords are social and operate and develop for local housing need.
This L&Q announcement is the epitome of that very simple fact – a fact housing associations do all they can to conceal.
30 years ago over 20% of UK housing was under public ownership with council landlords. Today it is down to around 5% an so three-quarters of housing that was under public ownership and could be used for social housing need has now gone in a generation to the private housing associations or to private ownership.
That is a monumental change and has massive impacts on how the country provides for those most in vulnerable housing need which is a cornerstone of any democracy or first-world country to ensure is provided. Now the UK cannot do that as 95% of housing in the UK is in private hands and operates according to profit rather than to need.
Housing associations like to say they are social landlords a term that has only been around 30 years as in 1988 over 6 in every 7 social housing properties were council houses. Now housing associations have around 2.7 million of the 4.3 million total social housing stock and circa 2 in every 3 social housing properties.
Housing associations receive around 13% more per property in housing benefit at an average £94.22 per week to council landlords £82.94 according to the latest housing benefit figures. If housing associations received the same levels of housing benefit as council landlords then the housing benefit bill would reduce by £1.1 billion per year.
The taxpayer is paying £1.1 billion more per year in revenue subsidy to these private registered providers through housing benefit and that figure will only increase each year.
Yet are their properties any better than council ones? As over 1.6 million of them or 60% are former council properties that is unlikely and a strong argument that the taxpayer is being conned can be made.
The emergence of housing associations as the main social (sic) housing provider came about for one simple reason – local council’s were prohibited from borrowing to improve their existing housing stock or to develop new housing by central government.
The rationale was such borrowing while making perfect economic sense over the medium and longer term went onto the Public Sector Borrowing Requirement (PSBR) in the immediate and short-term. It as a political rationale and a political decision not an economic one that today sees the crisis of under supply and costs today’s taxpayer hugely.
The same 100% logical economic rationale for local councils borrowing to build new social and public sector housing still holds good today as even very laissez faire economists admit in the SHOUT report and even the BBC admits this to be the case that I reported on here.
YET because of the PSBR factor local councils were effectively forced to transfer their housing to (mostly) newly created housing associations in what was called Large Scale Voluntary Transfer or LSVT though there was nothing voluntary about it and, more importantly, it transferred public ownership of rented housing to private ownership in housing associations.
Housing associations because they are private companies by definition meant their borrowings were not included on the PUBLIC Sector Borrowing Requirement.
Housing Associations are private and always have been as the LSVT and PSBR discussion makes clear and unambiguous … yet that hasn’t stopped them from citing at every turn they are charitable and social and hoodwinking all and sundry that they are deserving of the benefits of being classed as social landlords and quasi-public sector ones, whilst being able to act in exactly the same way as private landlords.
Ever since 2010 when the Tory government cut what is wrongly called ‘subsidy’ to social landlords by 60% we have seen housing associations become increasingly private in outlook and less and less social. In crude yet valid terms the government is giving us less money so let’s take more from the social tenant by consequence.
The increase in intermediate housing model which rapidly increased with the affordable (sic) rent model are examples of this screw the tenant for all you can operational activity. Now with the L&Q announcement we see this in all its capitalist glory of bugger the lower rent paying social tenant let’s go direct and in huge numbers to maximise our rental stream.
I am not making any political judgements on that or arguing either way whether housing associations need to or should do that – I am merely stating what IS happening as the L&Q announcement epitomises. Housing Associations as private organisations are free to do what they wish because they are private organisations and I hasten to add it is NOT all of the 1500 or so UK housing associations who are doing this.
It is a tiny majority of mostly London-based housing associations -the G15 cabal – the largest 15 housing associations in London who are doing this of which L&Q is one. Yet while the G15 having just 15 out of 1500 may appear to be just 1% of housing associations those 15 private housing associations account for 550,000 properties and 21% of all HA properties and have a combined turnover of £4.6 billion per year.
It is these housing associations who are chasing the money, who are being anti-social not just asocial and who are giving every housing association the reputation of being overtly private ‘money-grabbing bastards.’ Reputation and perception are two extremely important business issues and just ask Gerald Ratner if you are foolish to not consider their importance.
The L&Q announcement of the choice of a purportedly social landlord choosing to develop 25,000 houses for private rent and to take advantage of their bottom line first, second and third reveals what housing associations are in PRIVATE Registered Providers.
Doubtless some will offer up the one bad apple defence and many LSVT’s will rightly claim as they only operate in one locale and therefore do include local housing need and do not chase the tenant money through widescale private renting options. Yet the die has been cast and all housing associations will be seen as the private and private and profit focused organisations they have been all along.
Even if L&Q were the only ‘bad apple’ that reputation would spread to all housing associations yet L&Q are not the only one.
We had Kate Davies the CEO of Notting Hill Housing Association trying to justify that less than 10% of its developments over the past 7 years have been for social rent and that in that time NHHA has reduced its social rent capacity by 15%.
We have had the National Housing Federation openly stating they want 120,000 new units of which precisely ZERO are for social rent yet forever claiming to be social when they are not. The NHF have 554 members out of the 1500+ housing associations just 35% yet they speak on behalf of the housing association ‘sector’ while many believe they are merely the mouthpiece and puppet of the G15 and focus solely on the perverse London housing issues that do not affect the 87% of UK housing outside the capital. The NHF is as privately focused as you can be.
It is little surprise that the NHF choose to focus exclusively on one single housing crisis of under supply when their principal members simply want to be the new feodary – the feudal landlords of the 21st century. Around 80%+ of all housing associations do not develop new properties and yet the NHF exclusively focus on build build build and propagating the myth they they have the capacity to address the under supply of housing which they do not.
The NHF do not care a jot that housing benefit policy change in the benefit cap will mean that all fully occupied housing association properties are financially toxic to the benefit tenant and despite over 70% of current HA tenants being on housing benefit. Just allocate to the non benefit tenant when the 270,000 existing properties have new tenants each year and refuse the benefit tenant, which they can as they are private landlords.
Socially dumping the benefit tenant is not their problem and is a problem for councils to house as Genesis HA CEO Mark Hadden said. Yet when for example we find that in 36 of the 39 local authority areas which comprise the North West have no council housing, a whopping 93%, we begin to see the horrors and consequences of transferring public ownership of housing to the private ownership with housing associations has. One such impact could be 500,000 more homeless children per year as a result as HA’s refuse to take the benefit tenant.
The benefit cap hammers the nail in the coffin of affordability and social purpose of housing association properties – the shit hitting the fan in simple terms – that will soon be there for all to see and by which time it will of course be too late.
It is policies such as the benefit cap that in essence force housing associations to abandon social rent, social purpose and the social housing model and a strong argument exists for that. However, housing associations have been more than complicit in this in not challenging such policies whilst having eyes like cartoon characters with $ signs in them at the prospect of just how much more than can charge the London tenant with announcements such as 25,000 in the private rented sector – kerching!!
Tenants are expendable. They are mere customers who cannot chop and change provider when something goes wrong or they dislike. Tenants can like it or lump it is the distinctly asocial and feodaric position they are now taking. That same principle was found in Severn Vale Housing Association the former Tewkesbury council landlord (see here) who now have as policy that they will not allocate a property to anyone under 36 years of age as a result of another HB policy change in the shared accommodation rate or SAR they announced last year.
How housing associations are RESPONDING TO the many change in housing benefit entitlement that we wrongly call ‘welfare reform’ is the issue. Severn Vale if they were still the council landlord would NOT be able to impose sweeping allocation policy changes such as banning all under 36 if they were still a council landlord. Yet as a housing association they can … and yet another example of HA’s putting their profits ahead of local housing need.
Yet housing associations are also negligent in their housing view as only this week saw David Orr issue his 12 pronouncements and priorities for housing associations this year which while include the LHA Maxima Cap housing benefit change for supported housing saw him miss the fact the same policy will affect 500,000+ pensioners in general needs social housing! Such is the state of the London-only focus of the National (sic) Housing Federation they fail to see this consequence as it does NOT affect pensioners in London in general needs social housing!
The love of money being the root of all evil could have been specifically written for the National Housing Federation and its G15 puppet masters.
Social landlords? No. Housing associations are rapidly and incessantly becoming the new feudal landlords obsessed with profits and not giving a damn about the tenant as the L&Q announcement today illustrates just the latest in a long line of travelling down the privateering route.
I genuinely have sympathy for the many housing associations and particularly their staff who do have a social conscience, who do believe in the social housing model and all it means and for the many who do go above and beyond to be social in all its meanings. They are and will be all seen as the same as the money grabbing bastards who run L&Q and other G15 housing associations (and other non London based non embers of the G15 too.)
Yet my real concern is for the social tenant who typically does need to claim housing benefit an regardless of because of low pay, being disabled or sick or unemployed or even a pensioner. It is 3,181,638 social housing tenants who are HB recipients as well as an unknown number who are on Universal Credit and receive its version of housing benefit who are getting shafted by the wolf in sheep’s clothing who are PRIVATE Registered Providers. That number will also increase as these so called social landlords increasingly become ever more private landlords in their operations and focus.
The feudal housing association landlords have won the day and the naturally fit with the Tory government’s stance of eradicating the social housing model founded in the 1948 Welfare State. Yet despite huge evidence that more and far deeper cuts and more damage has been inflicted to the housing solution the Welfare State create than to the health creation in the NHS, the general public shows little concern about it.
Very soon Where will my children live and Where will my grandchildren live and even Where will my ailing parents now live will become phrases spoken by the same couldn’t care less general public with increasing frequency and exasperation and anger.
And it will only be then that the taxpayer will really start to say why with all the ‘welfare cuts’ is this costing me more and more an why are so many more people begging on the streets and why does my local council say they can only afford to collects the bins once a month.
The current and apparently unstoppable direction of travel of what we misname as social housing adversely affects the tenant, the private tenant, the home owner, the taxpayer, the local council and the UK government finances. It is unchecked madness in societal, political and economic terms and housing associations are a major part of this obfuscation and problem and perhaps the biggest wolves dressed in wool that they love to pull over our eyes.
Appearances can be deceptive