Spinning the death of affordable housing

[Originally posted on Liberal Democrat Voice, 03/11/10]

At the heart of politics lie battles over meaning. In an uncertain world there is plenty of scope to contest the definition of problems and the perceived effectiveness of solutions. Under Labour we came to think of agenda management as “spin”, and to condemn it. But the Blairites were simply the most egregious and effective exponents of the political arts. All politicians face decisions about the message and how one would ideally like it interpreted.

This seems particularly pertinent in relation to current discussions about affordable housing. We’re seeing the government providing some creative readings of what is on offer.

One component of the debate is the battle over “fairness”. The term is, of course, utterly meaningless without further specification. We can all agree fairness is desirable, even though we mean radically different things by it. That is its strength and its weakness in political discourse.

The government, particularly its bluer contingent, are trying rather successfully to shift the dominant interpretation of fairness away from the appropriate assistance to the disadvantaged and towards the interests of the tax-payer. It isn’t a new debate, but clearly an opportunity has presented itself for another lap around that particular track.

But that’s not my principal concern here. I want to consider the current agenda relating to the supply of affordable housing, to the extent this is yet clear.

The government has announced the construction of 150,000 affordable social rented homes over four years. At one level this is fair enough. The claim is that this is a faster rate of addition to the social housing stock than occurred under Labour. That claim needs a bit of unpacking. It only makes sense if you compare the net addition to the stock under Labour – new construction minus Right to Buy sales and other disposals – with gross additions to the stock under the current regime. Which of course doesn’t make sense.

It could be forced to make sense if the Right to Buy were to be suspended and demolition ceased. It isn’t clear these are formal policies, but de facto a move to 5 year tenancies for council tenants could render the Right to Buy ineffective and reductions in the availability of funding could do for demolition.

But never mind its plausibility, as an argument it plays well on Question Time.

And all this is to leave aside the point that an addition to the stock of 150,000 units over four years falls a long way short of expert estimates of what is required. At least there is the consolation that Labour didn’t really get very close to what is required either.

The further confusion is that the government has cut the social housing capital budget in half. The plan is to square the circle by allowing rents on properties managed by social landlords to rise to 80% of local market levels.

This raises the question: what do we mean by “affordable housing”? The term has had a relatively stable meaning for many years – rented housing let at rents (significantly) below market levels. It can also encompass other types of provision, such as some low cost homeownership initiatives. This meaning is now being destabilised.

The government’s proposal will see social rents in some areas quadruple, although in other areas the impact would be much more modest. The government seems to be taking the position that if a dwelling can be made affordable because the tenant is eligible for assistance through housing benefit then it is an affordable dwelling. But that is no different from the private rented sector. The distinctive understanding of “affordable housing” dissolves.

The consequences of this policy being implemented are potentially significant. It is in tension with broader policy objectives to smooth the transition off benefit and into work. More households will be caught in a deeper benefit trap. Equally it is unlikely that the policy will save much public money if housing benefit has to take the strain. Social rents also feed into the calculation of the rate of inflation and therefore rent increases have an impact on the achievement of broader macroeconomic objectives.

We appear to be destined to repeat history here. In the late 1980s and early 1990s the previous Tory government pursued a similar strategy of raising social housing rents. The policy ran out of steam in the mid-1990s when it was pointed out that it was costing the government more in benefit payments than it was saving in subsidies to prices.

In those days the problem was not just housing benefit but also that the uprating of a wide range of welfare benefits was tied to RPI. So the public spending implications were considerable. In this respect the current government has the advantage that it has already taken the decision to decouple many benefits from RPI and base uprating on CPI. But clearly it isn’t going to be hugely advantageous for those who rely on assistance from benefits to secure an acceptable standard of living.

It may be that the government considers it has no option but to build fewer houses, charge more for them, and offer less generous assistance to those in need. But it would be more honest to say they are doing something different than to go through a tortuous process of claiming they are not. There are signs that views are hardening and the tactics are to shift in this direction. The substance may not be palatable, but at least it has the virtue of honesty.

While policy discussion is being conducted in familiar language, the death of affordable housing as we have known it is imminent – unless there is the will to contest attempts to manipulate language and reframe the debate to the disadvantage of the already disadvantaged.

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