Home truths about public housing
There is and will be plenty of rightly outraged comment about the Coalition’s plans, now confirmed, to chuck people out of public housing if they’re earning too much, and to end secure tenanncies.
As I set out here in satirical vein and here more straightforwardly, the contradiction between this policy and the rhetoric of big society and community togetherness is stark enough, and reveals in all its glory the fact the the Tories and their LibDem lapdogs simply do not understand or want to understand the world most of us inhabit.
For them, housing is about assets, not about homes.
I’ll leave others to do the outrage, though. Here I’ll simply do my bit to counter the inevitable argument by the Right, in papers and on talkshows up and down the land in the next few days. that the state shouldn’t be subsidising public housing rents for those who can afford private sector rents.
The state doesn’t subsidise public housing rents. Tenant rents now subsidise the state.
This parliamentary report from June makes that clear enough:
In 2004-05 182 councils paid a total of £615.3 million into the HRA subsidy system……..The figures indicated that the subsidy regime was heading for surplus: in 2001-02 the Government contributed £351 million; this figure fell to £252 million in 2002-3 and £191 million in 2003-4.
There was “mounting speculation” in the housing industry that in 2008-9 the system would finally “tip over into surplus”, i.e. the Treasury would pay out less in HRA subsidy than it received from those authorities contributing to the pooling regime. Then Minister, Iain Wright, confirmed that the overall HRA did, in fact, move into surplus in 2008-09:
“In recent years the system of council housing subsidy has been in deficit throughout the country, with the Treasury making up the shortfall. It is only from 2008-09 that the position has reversed with the overall system moving into surplus…………….”
Public Finance Magazine carried an article on 18 January 2008 in which it claimed that figures based on projections by six councils taking part in a Government pilot to assess the implications of leaving the HRA indicated that in 2008-9 the national HRA “will be running at a surplus of £194 million.” The article claimed that “within in ten years, the annual surplus is forecast to exceed £500m, with the trend set to continue well beyond 2020.
This tip over into surplus, and continuing trend, is confirmed in this recent letter to the housing minister:
ARCH [Association of Retained Council Housing] members are net payers in to the national subsidy system. Our 56 members are likely to contribute an estimated £255m in net negative subsidy payments in 2010/11.
This plan is about ideology, not facts.
I don’t know that much about Housing Benefit. But the one thing that strikes me as weird is that the Treasury estimate that Housing Benefit reform will save them £1.6bn in 2013-2014. Unless they have completely made that number up where do your figures fit into this?
*Lethe – HRA isn’t related to Housing Benefit. HRA refers to the Housing Revenue Account. Council Houses take financial resource to build and maintain – basically, the HRA (and rules) determine levels of council house rent that are required to ensure sustainability of council housing.
Thanks for the blog article. I grew up in Council Housing and would have no qualms about returning – if there were houses available. My childhood council house was a home – something that will be denied renters of the future. I despair – the poor are not permitted the safety and security of a home – merely a temporary roof over their heads.
Ah, thank you very much Yvonne.