Gone missing

At first sight, the Chancellor’s pre-budget report last month only confirms that housing issues do not feature prominently in the government’s policy agenda.

The report reviews how the government’s taxation and spending decisions contribute to its policy goals and sets out its intentions for next year’s comprehensive spending review.

Some policy plans are clear, but others are less so, including “achieving additional improvements in the delivery of housing”, in the context of the review’s statement that “proposals for new spending will also need to be accompanied with stretching targets and clear plans for effective delivery”.

Out of 120 pages there are three paragraphs directly concerned with housing provision, and four on the negative effect that housing benefit has on work incentives.

Housing gets a passing mention under the headings of ‘New Deal for Communities’ and ‘spending in rural areas’, under ‘reduced VAT for residential conversions and energy saving materials’, and in ‘plan for the removal of stamp duty on some transactions in deprived areas’.

Perhaps therefore the first priority of any ‘housing’ submission to the comprehensive spending review should be to clarify the relationship between housing and health, education, child poverty and the environment, all of which are given substantial attention in the report. These connections are not difficult to make.

The government has set itself the task of eradicating child poverty within a generation. Responding to this agenda, the report sets out in some detail how changes to child and income-related benefits, the working families’ tax credit, and the forthcoming child tax credit, most favour families on the lowest incomes. But under a heading of ‘public services to tackle child poverty’ there is no mention of housing.

However, we know that living in bed and breakfast accommodation is unhealthy, disrupts attendance at school and any chance of doing homework, cuts people off from the informal support of family and friends, and makes accessing statutory services and finding or maintaining a job more difficult.

The solution lies partly in housing allocation decisions, but also in the volume and distribution of housing investment.

This has all the right characteristics for a public service agreement, which would link resources (additional investment in affordable housing), a robust measurement of outcomes (fewer households in bed and breakfast), and a vehicle for assessing performance and delivering improvements (the Bed and Breakfast Unit working in partnership with local authorities).

More widely, we know that even in a secure home overcrowding means that children have difficulty studying, and lack of space to play safely inhibits psychological and social development.

Housing in England 1999/2000 shows that 5.5 per cent of all social rented sector tenants need one or more additional bedrooms in order to meet the standard of adequate accommodation. Comparative figures for the private rented sector and owner occupation are 3.5 per cent and 1.4 per cent respectively.

Again this suggests a ready-made combination of measurable outcomes (reduction in children living in overcrowded homes), and government priorities (child poverty and development) with which to make the case for investment for affordable housing in areas of insufficient supply.

The report states that the 2002 Spending Review will examine “links between departments…to ensure that services are being designed for citizens and customers rather than for providers”.

Again, the housing sector has a lot to say here. Most housing need is met in the social rented sector, with the help of capital subsidies and, where necessary, housing benefit.

In 1999 there were 540,000 households in the private rented sector who also depended on housing benefit – down from 760,000 in 1995.

If we assume an annual turnover of only 10 per cent among private sector tenants who claim housing benefit, this is a loss of 22,000 lettings per year to people in housing need, comparable to the entire output of the Housing Corporation’s Approved Development Programme.

We know that at least part of this fall is due to problems in the administration of housing benefit: in many areas private landlords mistrust the system’s ability to provide the income stream they expect. There is no better case for urgent reform to the administration of housing benefit.

But beyond this, at a time when public subsidy for additional affordable housing provision has to compete with priorities such as health and education, the comprehensive spending review is an opportunity to provide incentives for institutional finance and responsible landlords to enter the market with reasonably priced, good quality accommodation that is accessible to households on low incomes.

The obvious areas for attention are tax incentives combined with planning agreements covering access and price.

Recent work by Sheffield and Cambridge universities demonstrates that further affordable housing could readily be secured by use of the planning framework, though the proposals need further development to link them to purely private investment in rented housing.

These are only two areas where the housing sector could readily contribute across the government’s agenda. Other obvious candidates are environmental protection and global warming.

Equally important is the public service agreement framework under which, to quote the report, spending departments must link funding to outcomes, reforms and modernisation, and effective delivery.

By casting its arguments in this framework, the housing sector could be involved in much more than it already is.