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Have England and Wales ever been further apart on housing than they are now?

Jules Birch, who has recently been appointed as the new editor of WHQ, explores the extent of policy divergence between England and Wales.

With the same constraints on public spending and the same cuts in housing benefit applying across Britain, you might have thought that ministers in England and Wales would come to similar conclusions about what to do with less money. Instead, while England introduces further marketisation of social housing and rejects regulation of the private rented sector, Wales is doing the opposite and is using the next phase of devolution to propose primary legislation with a distinctive Welsh solution to its housing problems.

It’s an exciting time for me to be taking over as editor of WHQ, for the next two issues in collaboration with Tamsin and on my own from next April. I have written about housing and social policy for the last 20 years for ROOF magazine and Inside Housing and more recently for Guardian Housing and 24Housing. My own interests range from homelessness and social housing to private renting and home ownership and the links between housing and other policy areas – something summed up by the Welsh government’s ‘whole housing system’ approach – so I’m looking forward to working with you and to editing WHQ.

The differences are not just in housing, of course. Across a whole range of domestic social policy, and especially in education and health, the English coalition is intent on a programme of reform that goes well beyond what appeared in either the Conservative or Liberal Democrat manifesto and in some cases even their agreed Programme for Government. The spat between English education secretary Michael Gove and Welsh education minister Leighton Andrews over the regrading of GCSEs is just one example of this. It is, of course, complete coincidence that the reduction in the number of C grades in England will trigger inspections leading to the creation of more academies outside of local authority control.

In housing in England, the Department for Communities and Local Government has embarked on a programme of reform described by former housing minister (now Conservative Party chairman) Grant Shapps as ‘the most radical for a generation’. New ‘affordable’ rents charged at up to 80% of market levels have replaced social rents. Landlords have discretion to offer fixed-term tenancies of as little as two years. Local authorities can discharge their duty to homeless families with tenancies in the private rented sector. The maximum right to buy discount has been increased to £75,000 in a bid to generate up to 100,000 sales. A proposal to charge near-market rents to social tenants earning more than a specified amount is out to consultation. However, proposals inherited from the Rugg review commissioned by the previous Labour government for greater regulation of private landlords and letting agents were quickly rejected as ‘red tape’.

As Shapps put it at the time: ‘With the vast majority of England\’s three million private tenants happy with the service they receive, I am satisfied that the current system strikes the right balance between the rights and responsibilities of tenants and landlords. So today I make a promise to good landlords across the country: the Government has no plans to create any burdensome red tape and bureaucracy, so you are able to continue providing a service to your tenants. But for the bad landlords, I am putting councils on alert to use the range of powers already at their disposal to make sure tenants are properly protected.’

The only thing on that list from England that also applies in Wales is the proposal in the White Paper to allow discharge of the homelessness duty in the private rented sector. However, even that is in the context of greater regulation of landlords and agents and a pledge to end family homelessness by 2019 by removing the intentionality test for families with children. Affordable rents and fixed term tenancies have been rejected and legislation is already in place that allows Welsh local authorities to apply to the Welsh Ministers for permission to suspend the right to buy in areas of housing pressure. As Huw Lewis puts it in the introduction to the White Paper: ‘The agenda it sets out is one which is distinctively Welsh, based on our long-term commitments to social justice, tackling poverty and sustainable development. It seeks to more effectively join up housing with other areas of government – economic development, health and social care, just to name a few.’

It’s not just the substance of the reforms that is different, but the political rhetoric behind them too. In England, ‘fairness’ is the justification for giving landlords more flexibility to ‘drive down waiting lists’ and ‘help homeless families’ and the existing system is portrayed as ‘centrally-driven’ and ‘out of date’. ‘Localism’ is deployed to persuade Liberal Democrats that housing reforms they have previously opposed tie in to the party’s wider concern with constitutional reform and the devolution of power to local people. However, for Conservatives ‘localism’ is more about allowing councils and social landlords to avoid national regulation of standards for allocations and tenancies and allowing communities in the South East to block plans for new housebuilding. Meanwhile welfare reform is justified in the name of fairness to ‘hard-working families’.

The \’distinctively Welsh\’approach

In Wales, by contrast, the White Paper is framed in terms of ‘home’ (‘where our memories and formative experiences are made’), security (‘the need for safe, warm, comfortable shelter’) and a challenge to be met with ‘ambitious action, innovation and collaboration’. The ‘distinctively Welsh’ approach is a very different conception of ‘localism’ under devolution and is defined as ‘stewardship’ of ‘the whole housing system’ and welfare reform is something ‘outside our control’ and imposed from England.

In the run-up to the reforms in England, ministers looked to the advice of right-leaning think tanks such as Localis and Policy Exchange and local Conservative politicians from west London boroughs such as Westminster and Hammersmith and Fulham. Even more radical proposals are in the pipeline, including a report by Policy Exchange that recommended selling off all social housing in expensive areas as it becomes vacant to fund construction of new homes in cheaper areas. The housing sector in England has been left to make the best of implementing policies such as affordable rent and the Chartered Institute of Housing is now promoting ‘a decade of sector-led solutions’.

That again is a huge contrast with Wales, where housing organisations have been closely consulted and intimately involved with every step of the housing White Paper. Responses to the White Paper make clear that there is not complete consensus on issues such as the discharge of the homelessness duty and removing the intentionality test but there does seem to be general agreement within the social housing world that things are moving in the right direction.

It is also noticeable that Wales has taken on board recommendations made in England that have since been sidelined or rejected by the Westminster government. The Welsh Government has taken up the Rugg review proposals and gone further by proposing licensing of all landlords and letting and managing agents. It has looked at the key area of housing options advice highlighted by John Hills in his report on the future of social housing in 2007 and proposed the creation of a national housing options and welfare advice service. And it is set to implement proposals on tenancy reform made by the Law Commission in 2006 via a separate Bill to follow the Housing Bill that will provide a much simpler legal framework for landlords and tenants.

Implementation

What matters now is implementation. Private landlords and agents in Wales are of course the big exception to the consensus in Wales and are already warning that the proposed mandatory licensing scheme will be too costly and bureaucratic and could reduce badly needed supply. That debate will be watched closely from across the border in England where pressure is growing on the government to improve conditions for private tenants who now include more than a million families with children. Some English councils are pressing ahead with their own plans for greater regulation in the absence of action at a national level, with the plan by the east London borough of Newham to introduce mandatory licensing a prime example.

Huw Lewis and his English counterpart Mark Prisk are both tackling their brief knowing that their options are constrained by public spending cuts made by the Treasury and welfare reform introduced by the Department for Work and Pensions. The next round of housing benefit cuts including the social sector under-occupation penalty or bedroom tax comes in next April amid fears of widespread rent arrears and potential evictions in both England and Wales. An overall household benefit cap of £500 a week comes into operation at the same time. Further down the line is the introduction of the universal credit from October 2013. Ahead of the next spending review, pressure is mounting on the Conservative side of the Westminster coalition for another £10 billion of welfare cuts and David Cameron has already floated ideas such as scrapping housing benefit for the under-25s.

Housing cannot expect to escape the consequences of all that in either country. In Wales, a greater proportion of social tenants will be affected by the bedroom tax than any other part of the UK, according to the impact assessment. Huw Lewis warned in an Inside Housing interview recently that: ‘Some of the housing benefits changes are already starting to bite, but when they really start to take hold next spring we could see hundreds of thousands of households in Wales pushed over the edge into a precarious situation where holding on to their home really becomes a doubtful thing.’ While Wales will do everything it can with its own resources, and the national housing advisory service will be vital, he adds that: ‘We don’t have control of those macro-economic levers, we don’t control housing benefit, we don’t control the consumer law around the buying and selling of homes. We’re doing what we can while our hands are tied and we’re being beaten by a large stick wielded by David Cameron.’

However, the same problems and more will apply in England, where the government does have the power to change the wider policy environment, but is determined to press ahead with its Plan A of deficit reduction. The contradictions between its welfare and housing reforms will be especially acute in areas with high house prices like London and the South East, where the combination of soaring private rents, higher affordable rents and the household benefit cap looks especially toxic. And the contradictions between the government’s determination to use housebuilding to deliver growth and the reforms of the planning system made under the ‘localism’ agenda grow wider by the day.

Jules Birch can be contacted at [email protected] or on twitter @jules_birch.


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