Opinion: Call for chancellor to give social housing a break
Published by Max Salsbury for 24dash.com in Central Government and also in Housing
The Welfare Uprating Bill: The facts behind George Osborne's cunning plan
By John Morris, chief executive, Trident Social Investment Group
The Chancellor’s Autumn Statement is likely to encourage a faux feel-good factor through continuation of the help to buy scheme, reductions in the rate of increase in fuel bills at the expense of green levies and other pre-Christmas giveaways. Yet these approaches do little for those at the bottom of the economic heap, many of whom live in social housing.
The reality of austerity and the consequences of welfare reform are putting increasing pressure on the already denuded living standards of most social tenants. The majority were surviving on low incomes before the financial crisis struck in 2008. Since then, most have seen their incomes fall in real terms and now face a future living on the margins in one of the world’s wealthiest economies.
Reports by the Office of National Statistics, the Resolution Foundation, the Human City Institute and others point to an increasing gulf between the richest and poorest in our society where the top 1% control more wealth than at any time since 1918 and where the incomes of those on average or low incomes are stagnating.
As well as a growing income gap between social tenants and the national average wage, there is a yawning wealth gulf between home owners and tenants of at least £100 to £1. Few tenants have much in the way of assets upon which they can depend in times of crisis, with almost half of the minority with any savings at all having less than £1,000 to fall back on.
The average tenant’s income has been eroded by more than one tenth over the last five years - equivalent to £17 per week - as wages and benefits have been overtaken by the rapidly rising costs of living, with high food and fuel inflation cutting deep into tenants’ incomes. This will only get worse with the 1% increase in benefits for the next three years.
Social housing is also experiencing worsening levels of economic inactivity and rising rates of benefit reliance thanks to persistently high unemployment and cutbacks in grants for further and higher education. The ‘net’ economic activity rate - excluding retired tenants - has fallen from 41 to 37% since the international financial crisis began. Today, 53% of tenants have incomes that are wholly derived from benefits with 16% partly derived in contrast to 50 and 13% respectively five years ago.
With the social fund effectively abolished, as many local authorities redeploy the reduced and localised fund to prop-up other services, tenants are left with few options at a time of need except to seek out illegal loan sharks or take up loans from doorstep lenders or from payday loan companies charging massive rates of interest. This puts further pressure on incomes already stretched to breaking point.
Chancellor Osborne’s mantra that we are ‘all in it together’ rings especially hollow at this time of year. Social tenants, among society’s poorest, are bearing the brunt of austerity. Further expected downward pressure on welfare benefits will make the lot of social housing tenants even worse. Many will see further erosions of their incomes. At the same time, massive subsidies are driving homeowners to subsidise mortgage deposits while social housing construction withers on the vine and the replacement rate for the ‘rejuvenated’ right-to-buy is stuck at one new home for every seven sold.
So Chancellor, prove that we ‘all in it together’. Give social housing and those who live in it a break in the run-up to Christmas. Let’s hear no more about welfare cuts, repeal the bedroom tax and, above all, let’s see some real public investment in social housing and communities to stimulate local economies and give millions of tenants some hope for the New Year.