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Social Rented Housing in the (Dis)United Kingdom

Despite Theresa May’s much-trailed announcement on social housing, housing policy in the UK is diverging. But how far can divergence go? Mark Stephens reflects on his new article, which asks the question: “Can different social housing regime types exist within the same nation state?”

It is now 20 years since referenda in Scotland (emphatically) and in Wales (hesitantly) approved the creation of the Scottish Parliament and Welsh Assembly. Northern Ireland had already embarked on the peace process that included the restoration of the Stormont Assembly.

An obvious question for anyone interested in housing is: what difference have these new democratic institutions made to housing policy? The challenge for academics is identifying a framework through which to answer the more fundamental question: what difference have they made to housing regimes and housing systems?

In other words, can we be a bit more ambitious than the existing studies that identify nuance, and move beyond the descriptive identification of policy differences, and instead think about what shapes

Professor Mark Stephens

and defines the institutions that make up the housing system as a whole?

Comparative research normally takes place at the level of the nation state. However, regime theory is, a priori, suitable for re-application to sub-state jurisdictions because it demands respect for the institutions that have shaped the historic British housing system, the evolving and asymmetric powers that the devolved administrations have enjoyed over a relatively short period, as well as those that they do not. The approach rejects structural approaches in which some overweening external force (most popularly, though not necessarily, neoliberalism) necessitates universal convergence.

Over the past 20-odd years I have been developing a form of regime theory to help understand how housing systems work. It explicitly links the operation of the housing system to the “wider welfare regime” which shapes the operation of labour markets and the tax and social security system. Together these represent the “wider welfare system” which has distinctive distributional tendencies, which are reflected in measures of poverty and income inequality. Crucially they define what I have called in this paper the “boundaries of possibility” for the way in which the social rented sector operates. The “boundaries of possibility” are crucial in identifying what housing policy can and cannot achieve.

Economists almost always interpret housing policy as representing a “corrective” to the operation of the market. Typically, they use the attainment of economic efficiency as the yardstick against which to judge such interventions. The most novel contribution made by Jim Kemeny in his work on housing systems was to identify how social (or “cost rental”) housing could define the entire housing system. A social rented sector could be designed in such a way to be popular and require the private rented sector to match its quality and costs in order to compete with the social rented sector. In turn a rental sector configured in this way could compete against home-ownership. Where Kemeny’s thesis is deficient is in failing to recognise the “boundaries of possibility”: the kind of housing system that can be designed depends on the wider welfare regime.

So let’s see how this approach helps us to interpret housing policy after devolution.

The starting point is that in 1999 there was an identifiable “British” housing system. There were, of course, some differences due to administrative devolution. But if we were to examine the critical junctures in twentieth century housing, then each applied across the whole of the UK: state subsidies for council housing after the First World War, the focus on slum clearance from the mid-1950s, the scaling back of investment in social housing after the IMF crisis in the 1970s, the impacts of the homelessness legislation (admittedly introduced later in Northern Ireland), the hiking of social rents and increased dependency on housing benefit, and, of course, the Right to Buy.

Moreover, the housing system interacted with a common “wider welfare regime” that drove rising levels of poverty and income inequality from the historic lows of the mid-to-late 1970s. With the existence of an internationally large social rented sector, allocations targeted through mechanisms such as the homelessness legislation, post-rental incomes protected by housing benefit, the social rented sector operated as a safety net across the UK.

This contrasted with the “social markets” that operated in some other north European and Scandinavian systems, where much lower levels of poverty and inequality enabled social systems to house a broader range of households, to compete with private renting and to an extent with home ownership. In these countries, the social rented sector performed what a “wider affordability function” in contrast to the UK’s “safety net.”

During the first decade or so of devolution there was little divergence in social housing policy within the UK. However, since the Coalition and subsequent Conservative majority and minority governments were returned to Westminster, there has been growing divergence, particularly between England and Scotland.

The key points of difference are these. In Scotland the scale of the social rented sector is being protected by the withdrawal of Right to Buy (in 2016). Wales is set to follow Scotland’s lead. In England, Right to Buy has been first “reinvigorated” and now housing associations have been coaxed into piloting an extension of it to the sector. In England, local authorities can discharge their responsibilities to statutory homeless households by housing them in private tenancies, whereas in Scotland, the convention remains to use social housing. Moreover, the “priority need” category has been abolished. In each of the devolved administrations, investment in social and other forms of affordable housing has been increased. For example, the Scottish Government is committed to delivering 50,000 units of affordable housing in the current parliament (35,000 of them social rented). In England subsidy was first switched first to housing at higher “affordable rents”, and then to home-ownership. Only in England have fixed term tenancies for social tenants been introduced.

Mrs May’s widely-trailed boost to social housing announced at the Conservative Party conference yesterday, turned out to be something of a damp squib. The headline figure of 25,000 new homes amounts to just 5,000 units a year (implied by the £80,000 grant per unit), and is dwarfed by the additional £10 billion pledged to bring home-ownership to another 130,000 households through Help to Buy.

Whilst some of the most contested proposals in the 2016 Housing and Planning Act (such as “pay to stay”) have either been abandoned or postponed, the directions of travel are clear. Within the devolved administrations the “safety net” function of social rented housing is being maintained, and, in the case of Scotland, strengthened. England has begun to move away from this model and appears to be transitioning towards an “ambulance service” – the type of system that operates in the United States and Australia where social rented housing is conceived of as a temporary form of assistance to people in acute need, rather than providing a home for life.

But this isn’t the end of the story. There has been little or no devolution of the institutions that are derived from the “wider welfare regime” to Scotland, Wales or Northern Ireland. Legally social security is devolved in Northern Ireland for historic, but the “parity principle” meant that they were almost identical. The convention was challenged as a result of the post-2010 welfare reforms although the Northern Ireland executive was penalised financially. The “bedroom tax” was delayed, but not stopped. Scotland gained some social security powers after the referendum, but these are limited. For example, the Scottish Government has been able to mitigate the “bedroom tax” through enhanced Discretionary Housing Payments, and is able to alter the housing cost element in Universal Credit, but is fundamentally constrained legally as well as financially.

What does this mean?

Devolution has enabled the devolved governments to protect the safety net function of social housing. However, within the powers available, the devolved governments are boxed in, and are unable to make more fundamental changes, even if they wanted to.

Reference

Stephens, M. (2017). Social Rented Housing in the (Dis)United Kingdom: Can different social housing regime types exist within the same nation state?, Urban Research and Practice DOI: 10.1080/17535069.2017.1381760

A limited number of e-prints are available from the author: m.stephens@hw.ac.uk

 

 

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