Public Policy and Politics and Housing Finance - Essay Example

155494 PART ONE: Development of social housing in London covers the history of the great from the early philanthropic dwellings of the Victorian city to| post-war construction and developments planned for twenty first century in the Thames Gateway. London coffee houses and social housing has come a long way and they are the landmarks of the city through centuries of its development and they reflect the social and economic dimensions that the city has gone through over a period of time. In every aspect, somehow London has managed to remain unique and it is so in housing too. To trace the development of housing, we have to understand the council houses of London. Council houses are another name for public housing in Britain and they are mainly operated by local councils and housing associations like, to mention one of the largest in the world, Becontree, Dagenham with a population of over 100,000. In 2001, Labour promised to improve all social housing into 'Decent Homes Standard' by 2010, and according to this requirement, bathrooms beyond 30 and kitchens beyond 20 years should be repaired immediately. "Warm, wind and weather tight, a good state of repair and modern facilities were the criteria upon which the Government based its judgement of a decent home" reported BBC http://www.bbc.co.uk/london/insideldn/politics/politics_070304.shtml But government is not ignorant of monetary drawbacks, difficulties of getting skilled labour. To trace the history of London housings, it is necessary to have a look at the recent growth of housing in London. The pressure of housing was felt in Victorian days of 19th century and some decent tenement blocks were provided by kind philanthropists and factory owners such as Saltaire, Post Sunlight, Bourneville, Silver End etc. Housing of the Working Classes Act, 1890 encouraged local authorities, who started building flats and houses in early 20th century. First World War indirectly provided new impetus and the Home fit for heroes was launched in 1919 paving way to Housing Act, 1919 and Cottage Estates. Housing Act 1930 contained increase of slums. Onset of Second World War saw a boom in council house construction as four million houses were destroyed during these unfortunate years. New Towns Act 1946 and the Town and Country Planning Act of 1947 gave inspiration to terrace houses, semi-detached on 7 by 7 yard grid, at least 12 per acre which gave a good house surrounded by sufficient space around it with indoor bathrooms and toilets and this model was highly popular amongst working class. 1950s saw the rise of modernist architecture like system building (prefabricated) and tower blocks on the argument that more dwellings could be provided. There were complains of poor standards, dampness, weather ingress, design defects, poor quality of material; but over the years, councils and building associations eradicated most of the shortcomings. But the gas explosion in 1968 in Newham resulting in partial collapse of Ronan Point brought the problems connected with tower blocks sharply into focus. War had profound effects on London. In three centuries, that was the first time when the city was directly attacked, unleashing 'blitzkreig' a terrifying new dimension in September 1940. It continued for eleven weeks and while death-toll rose to 20,000, London was reduced to a landscape of ruins. One third of housing stock was either damaged or destroyed. Cynically speaking, it heralded an immediate social change and women became the at-home work force and houses had to be built as no London family escaped the scar of Second World War. Bombs left empty spaces where buildings had been. Beginning of 1950s saw rampant homelessness in London as well as in other cities. "As it showed itself an actual homelessness, the peak of the post-war housing shortage was in 1951, when just under 3,500 homeless people were living in the London Country Council's 'rest centres' and ex-Poor Law institutions," Greve (1971, p.58). Talking about the war effects on London and on investment companies like London Country Freehold, Hamnett (1988, p.141) says: "But the war abruptly halted expansion, and in the post-war period there were nothing like the opportunities which had existed before 1939 to expand the residential lettings business successfully." Returning to housing, Council housings are typified with good sized rooms, especially so after Parker Morris standards of 1970s; but had been blamed for being built with scant imagination and ruthless rules that prevented occupiers from personalising them in any way. Also the tenants were quite stuck to property. Thatcher years saw deep decline of Council housing as Government encouraged home ownership, restricting council investment in housing and preventing subsidising from local taxes. Council tenants were encouragingly given right to buy on attractive and affordable financial terms with an up to 60% discount for houses and 70% for flats depending on dwelling time and even though succeeding Labour relaxed reinvestment policy of sales proceeds, it has not abandoned the right to buy which was popular. Current council housing position is rather stigmatised and marginalised, though popular amongst people depending on social security and refugees, asylum seekers etc. In twentieth century there had been state intervention in mass production of housing for working class and suburban expansion both of which overlapped. The dire state of working class housing has been improved by trusts like Peabody Trust. Slums are demolished and inhabitants were re-housed. London Country Council built Boundary and Milbank estates in central London, which gave some attention to people's quality of life and tenements, did not resemble barracks much. The main focus had been on the acute homelessness and its eradication. "Homelessness increased in scale and seriousness in the seventies to the point where legislative intervention became necessary. Under the Housing (Homeless Persons) #Act, 1977, local authorities were given a statutory duty to provide accommodation for homeless households in priority need, and in addition, they provide for some not in priority need," Burnett (1978, pp. 333-334). Both world wars produced acute housing shortage, ill health due to dampness, woeful sanitary conditions. 1940s saw the flourishing middle classes with servants and comfortable living in well-planned and spacious dwellings like Tudorbethan villas where modernist simplicity was looked down upon. Slowly focus was shifting on the user, his needs and his mobility. "Our view is that tenants wanting to move from one part of the country to another can best be helped through the housing departments of their own local authorities, whom they should inform of their wish to move, having first (if they are tenants of a private owner) obtained their landlord's agreement in principle to the idea of an exchange," says Fourth Report of the Housing Management Sub Committee (1953, p.10). Economic depression of 1930s slowed down the pace of house building all over Britain and to top it, by 1945, half a million homes had been destroyed, a quarter million damaged seriously and another three million lightly damaged and this led to rapid construction of 125,000 prefabricated houses. During the 12 years of war, two and a half million houses were constructed and three quarters were by local authorities. Labour hardly had any housing plan of its own, but worked carefully and by 1963, it started slum clearance, redevelopment, refurbishing of substandard housing. At one time there was serious criticism of Greater London Council and the way in which it worked. "But one of the fundamental errors of the GLC's housing policy is that it is by its demolition of the older parts of London destroying the character of these areas; that it is by its encouragement of young people to move out to New and Expanding Towns and out into the Home Counties further undermining the family relationships that are the very basis of a living community;" Smith (1979, p.124). In 1966 Shelter created awareness of homelessness as a social problem and Housing Act, 1977 made local authorities to provide housing for the needy. Labour's Rough Sleepers Initiative mainly centred on London, where homelessness was acutely concentrated, with the goal of completely stopping street dwelling once for all. More than twenty New Towns were built between 1950 and 1970 resulting in Milton Keynes and mixed developments of houses, pubs, pedestrian hubs, employment opportunities, offices have started appearing. In 1980s and 90s, local authorities' building activity reduced and housing associations' housing of style and comfort has made appearance. In the end of 1990, there was a collapse in housing prices causing negative equity where sale would have brought lesser amount than pending mortgage. 20th century saw enormous improvement in housing conditions and reduced high-rise blocks and South East housing was given attention and Thames Gateway provided houses between 60,000 to 90,000. Continued dependence on private sector has made social housing unrealistic and rising house prices for an aging population is somehow incompatible. Decline of manufacturing industries in the area have reduced the work force and today's labour is very different from what it used to be before Second World War. An architectural drawing of an 18th century house in Bethnal Green, London http://www.english-heritage.org.uk/server/show/ConWebDoc.9804 An example of a small scale 18th century house (Ibid). http://www.lddc-history.org.uk/housing/index.html High income is concentrated in the Central London and compared to poorer cities like Liverpool, London housings have seen better development and comfort. But Surrey areas have more income and houses reflect it. Berkshire and Buckinghamshire are in par with Surrey. There are a lot of differences in what Max Webber called 'life chances' between London and other cities in United Kingdom because London has 40% more income than the cities in the northern side and this automatically reflects in housing. In this race, Sheffield and Yorkshire fair badly while Huddersfield is lifting its head in recent times. Housing in Sunderland, Sheffield, Plymouth, and Swansea are quite average compared to London, and have seen a rather sluggish growth over decades. PART TWO Housing sector funding is very different from other funding. Social landlords, as they charge for their services separately, their funding is only partially based on central government grants. Here their budget need not be fixed. Revenue funding was reformed in 1990 with rent guidelines and annual subsidy like amounts get adjusted for the council's rent rebates and debt charges under the housing benefit system of tenants. Councils desirous of spending more have to collect the funds from higher rents. Here the rent guidelines are based partially on relative capital values and partially on reflection of local earnings plus maintenance allowance and stock composition formulae. In case of charging higher rent, it will be met by higher housing benefit and will be added to central government subsidy. But the government reimbursement stopped after 1997 and councils have lost this yield in recent years. Here councils are not free to borrow, even to carry out repairs for repair or for building new units and allocations depend on General Needs Index and DETR. Authorities carrying different levels of debts get equalised by reflecting it in revenue funding as well. Housing associations had been steadily growing in the last few decades like Labourer's Friendly Society. Registered social landlord housing tenants (also known as Housing Association Tenants) can apply to the Council for re-housing if they have a legal right to reside in this country. Housing Associations provide housing to all sizes of households. Housing laws vary according to the region. Council is reviewing its policy on financial assistance for private sector housing repairing and regeneration according to new legislations and situation might change to get financial assistance for maintenance and repair. This assists the disabled to improve the home and quality of life. There are Equity release schemes in the offing and House renovation grants. Home repair assistance grants will be available on a routine basis after sometime. Earlier it was available for applicants who are freeholders or leaseholders of the property. Now there are possibilities of private or housing association tenants becoming eligible to such assistance. For older people keeping 'selective evolution' in mind, housing providers that design and layout differences should depend on income, culture, ethnicity, age and mobility and sometimes even the number of children in the family. Supply of affordable rented accommodation is necessary, while cutbacks in investment in social accommodation have increased pressure on housing associations and local authorities, who are more focussing on the demand than on the quality of the houses. "While accepting that the cost of improvements due to inherent limitations in much existing housing are a largely. Talking about the single homelessness in connection with London, says: "London is a useful example to take, not only because of the size of the problem there, but also because of the specific short term and long-term programmes which have been developed," Fisher (1993, p. 12). Helping community development had been lauded, and also had been bitterly criticized. "Tenant participation is said to improve the knowledge and skills of individual tenants and to contribute to changes in attitude towards their landlord and to society in general. Many housing managers, councillors and committee members consider that tenants do not understand the constraints within which landlords have to work," says the Report on Tenant Participation (1994, p.6). All landlords are not impressively helpful and while considering the tenant, they have their own personal agendas to pursue. Some of the landlords had letting preferences: "On the other hand, for some landlords, letting to people on Housing Benefit may be more attractive than to other types of tenant because of the prospect of getting the benefit paid direct to them rather than to the tenant," Beven et al (1995, p.4). Low cost schemes had been always popular among certain classes of society. "Low cost home ownership schemes have some very obvious benefits. In particular, they solve the problem of subsidy take-up, in most cases those involved receive their subsidy and its direct total," Booth and Crook (1986, p.74). In the recommendation of the London Housing Board London housing strategy 2005-2016, more affordable homes are planned and it is stated: "The Board looked at the option of putting all available funding to social rented into the provision of new social rented units, but decided that it wanted to make a modest provision to meet broader objectives identified in the draft London Housing Strategy, including initiatives such as estate/area renewal and 'Temporary to Permanent' schemes, that are also consistent with national policy objectives" http://www.gos.gov.uk/497417/docs/202207/221836/LHS_Funding_Submission.pdf There is a need for high quality management of private rented housing, consistent standards, and code of practice. A need of support and training for landlords; they depend on proper revenue funding. Local authorities too need funding for at least three years, especially for DFC. Local authorities cannot meet all capital costs and this can create a draw back. Capital grant had been given based on years. There was no capital grant before 1990 and it was funded by payment from the LCD to paying authority of loan charges grant, which was covering almost 80% of capital part replying while paying authority pays the remainder of the cost. After 1990, LCD provided the paying authority with 80% capital grant and also issues a Supplementary Credit Approval and this enables the paying authority to borrow total contribution of the project while it also receives Revenue Support Grant, from Department of the Environment Transport and the Regions. It is assumed that London does not need apportionment costs right now, though in Inner London Costs are apportioned by the Receiver. Usually paying authorities meet the costs as they arise, while LCD contribution is made at fixed times by grant payment. This means, LCD pays revenue and capital grant four times a year. The general principles of 80-20 funding is maintained in London because quite a few aspects of financial mechanisms are peculiar only for London keeping the city's unique situation in mind and this includes GLMCA help. Under Revenue funding LCD pays 80% of revenue expenditure or as determined by Lord Chancellor, whichever is the less, and this goes directly to GLMCA. Local authority cost is apportioned between two authorities based on Council Tax etc. Capital funding is of two kinds. Pre 1990 loans: LCD paying 80% directly to local authorities and they will pay the remainder and post 1990 loans where LCD is uninvolved while Central Government Grant finances in the long term to the individual local authorities. There is a slight difference in the Inner London funding regime. Post 2001, new capital expenditure is paid by LCD to GLMCA and Inner London boroughs reimburse the same. 2001 is considered to be the transitional period for local authorities. There had been radical changes in funding. Government is trying to make it less confusing, fairer and affordable. It is connected with HRA funding regime rent restructuring, and supporting vulnerable people. "On 1 April 2003, local authorities took responsibility for the funding and delivery of a wide range of support services for vulnerable people including the homeless, older people, refugees and those at risk of domestic violence" http://www.londoncouncils.gov.uk/cat.aspcat=1905 Funding affordable social housing, through capital grants, revenue subsidies and subsidies to tenants has become part of the current housing policy and government interest could not avoided. BIBLIOGRAPHY: 1. Booth, Philip and Crook, Tony (1986), Low Cost Home Ownership, Gover, Aldershot. 2. Beven, Mark, Peter A. Kemp and David Rhodes (1995), Private Landlords and Housing Benefits, The University of York 3. Burnett, John (1978), A social History of Housing, Methuen, London. 4. Fisher, Kevin, John and Collins, John (1993), Homelessness, Health Care and Welfare Provisions, Routledge, London. 5. Greve, John, Dilys Page and Stella Greve (1971), Homelessness in London, Edinburgh. 6. Hamnett, Chris and Randolph, Bill (1988), Cities, Housing and Profits, Hutchinson, London. 7. Smith, Maurice Temple (1979), George Tremlett Living Cities, Billing and work Ltd., London. 8. Transfers, Exchanges and Rents (1953)., Fourth Report of the Housing Management, Her Majesty's Stationery office, London. 9. Tenant Participation in Housing Management, (1994), Chartered Institute of Housing, London. ONLINE SOURCES: 1. http://www.bbc.co.uk/london/insideldn/politics/politics_070304.shtml 2. http://www.english-heritage.org.uk/server/show/ConWebDoc.9804 3. http://www.lddc-history.org.uk/housing/index.html 4. http://www.gos.gov.uk/497417/docs/202207/221836/LHS_Funding_Submission.pdf 5. http://www.gos.gov.uk/497417/docs/202207/221836/LHS_Funding_Submission.pdf 6. http://www.londoncouncils.gov.uk/cat.aspcat=1905 7. Read More