Housing Today looks at the lobbying leading up to the government’s rent reform announcement – and the delay that came and went
Only hours before the government last week announced the final shape of rent restructuring, back bench London Labour MPs still thought they had a deal to delay the whole thing for a year.

The week before, sector organisations were equally sure that ministers were signalling a delay. Two weeks before, junior housing minister Sally Keeble, asked by Housing Today whether the government still planned to start restructuring in April 2002, replied “we have not ruled anything out”.

The week before that, a delegation from the Tenants’ and Residents’ Organisations of England came away from a meeting at the DTLR so certain that secretary of state Stephen Byers would announce a delay that they broadcast this at a conference.

Local authorities, well aware that their information technology systems might not cope, were also pushing for a delay and thought they had been successful.

RSLs were ready to demand an equivalent delay if councils were given a year’s grace. But they were all wrong.

Housing minister Lord Falconer stuck to his timetable of a 10-year restructuring programme starting in April 2002.

Of his three concessions, one was relatively minor – that councils with implementation problems can use average values for rents for a year, rather than moving straight to values for individual properties.

Concession number two was to allow RSLs to use reserves to keep rents below target levels, a possibility which may require lengthy explanations to tenants where a landlord judges this ill-advised.

The third caused tremors.

London councils, tenants, landlords and MPs all feared that restructuring in high-value and high-income areas would send rents through the roof. The capital’s Labour politicians, sensing a mauling in next May’s council elections, pressed hard for a delay and modifications.

What they got was a £100-a-week cap on social rents for homes with four or more bedrooms.

Landlords suddenly found that a move designed to solve a problem in London created fresh problems anywhere they had made calculations that assumed that some rents would be higher.

Black and minority ethnic landlords, many of whom develop homes for large families, discovered to their horror that they would be able to charge no more for a home with eight bedrooms than they would for one with four.

Given that the MPs, tenants, local government members, and many sector experts cannot all have been mistaken in picking up signals of a deferral, what changed?

Baldly, other forces more than countered the pressure behind a delay. There is a widely held belief that the drivers of rent restructuring are not politicians, but civil servants anxious to impose order on the untidy array of social housing rents.

The alarm of London’s Labour MPs suggests there are political dangers. But rent restructuring is also the prerequisite for the government’s market reforms of housing benefit – a manifesto commitment.

Chancellor Gordon Brown would not want his policy of tax credits and work incentives derailed by an unchanged housing benefit system.

Insiders have said that when Falconer took office last June he was puzzled as to why Labour intended to increase rents for poor people in expensive areas.

Falconer appears to have won the £100 rent cap to mitigate this, though had to concede to the Treasury that this would rise by RPI plus 1 per cent a year.

The clinching factor may have been a realisation at the DTLR that it was now or never. A year’s delay would give ample time for further holes to be picked, anomalies aired and political objections raised that could have unravelled the whole restructuring model.

Matters came to a head at a meeting between senior civil servants and council housing specialists on 14 November, which, as far as the former were concerned, was not called to discuss delay.

But the latter assumed that the problems were sufficient that delay had to be discussed, both because of fears about the adequacy of local government software, and another factor that had attracted little attention: the overloading of the valuation profession.

Grappling with the prospect of having to value every property, councils simply could not find enough qualified valuers in time – at least not without incurring exorbitant costs.

According to some present, other ideas for amendments to restructuring began to surface uninvited.

If this happened in one closed meeting of experts, what could happen in a year’s worth of further public argument?

Whether Byers and Falconer decided they might as well get the flak over with, or believed they had defused objections, the next day saw briefings from civil servants that there would be no delay and that the subsidy determinations had already been decided anyway.

Subsequent reassurances given to MPs and others were still taken by them to imply a delay – but it turned out that they were references to the rent cap and average value concessions.

Will rent restructuring work as smoothly as the experts behind its elegant calculations believe?

The law of unintended consequences is due for a stern test.