The desperate search for shrinking votes has pushed Iain Duncan Smith into yet another spectacular own goal. His latest pet idea is to extend the Right to Buy to Britain’s 2.5m housing association tenants. However, whilst social homes are owned by Councils, this latest Tory brainwave means selling off housing association assets which are private property because housing associations are independent charities so that their £65bn in borrowing is securely off the public accounts. But as Osborne must know only too well, compelling housing associations to sell to tenants using the same Right to Buy discounts enjoyed by Council tenants (up to £102,000 in London and £77,000 elsewhere) would cost serious amounts of taxpayer money and bankrupt some housing associations. This is yet another unfunded Tory commitment.
Next, on the last sitting day of Parliament to which all the bad news is kept in the hope that hardly anyone will notice, the latest facts came out about homelessness. The number of children in temporary accommodation reached 90,000 in the 4th quarter of last year, up 25% on 2010. The number of families with children living in B&B hostels has quadrupled in that time to 2,040. Of these, 780 were in B&Bs for more than the legal limit of 6 weeks – almost 5 times higher than in 2010. Yet contrary to his own Department’s statistics, the hapless Tory Communities minister was telling Parliament that the government was “being clear that the long term use of B&B for families with children is both unacceptable and unlawful”!
Then there is the scandal whereby many of the poorest households have been hit by a £70m rent increase as housing associations quietly switch thousands of tenancies on to higher rents to compensate for a shortfall in government funding. Already nearly 25,000 homes in London have been converted from ‘social’ to so-called ‘affordable’ housing since 2012, and thousands more are to follow. Social rents are typically half the market rate, whilse ‘affordable’ tariffs are up to 80% of private rent levels – a description that has been called Orwellian. Many housing associations have exploited the category change to set rents at the highest level so that only affluent people can afford to live in homes originally meant for the poor. Changing the housing category when new tenants move into a property means neighbours in identical flats can pay vastly different rents.
The real reason behind all these changes which are now hitting poor tenants hard is that the government in 2010 made a 63% cut in capital investment budgets for housing associations – effectively a £3bn reduction in available funding. Moreover the policy could well turn out to be counter-productive because raising rents is a future burden on the public purse through increased housing benefit costs, and that could potentially outweigh any savings they are trying to make.