Housing – the most important domestic priority?

Above:  Thorncliffe colleague Oli Hazell leads a discussion on housing policy

For a Prime Minister often supposed to be obsessed with Brexit to the exclusion of every other issue, Theresa May has certainly made many speeches on housing. This week she became the first PM to speak at the National Housing Federation summit, and made clear her policy on social housing.

May reminded delegates of her Downing Street speech on first becoming PM, which committed her to a “personal mission to fix our broken housing system”. She also reminded them of previously announced policies, including several u-turns on Cameron era proposals which were widely criticised and feared in the social housing sector. That includes guaranteeing rents, not going ahead with benefit caps, and delaying extending ‘Right to buy’ to housing association tenants.

It is easy to dismiss the concrete announcement of £2 billion over six years as being negligible, and that not until 2022. Andrew Adonis points out it amounts to just a tenth of the pro-rata spend on social housing in Scotland. But that may be missing the point.

May intends the commitment not as direct subsidy, but to give housing associations a guarantee of long-term funding – through which they can begin to leverage private finance. She emphasised the unique status of housing associations as “public interested, non-profit private institutions”.

This is a shift from the Cameron government, who managed to get so close to housing associations by 2015 that the Office for National Statistics was forced to classify them against their will as public bodies (counter-productively adding housing association borrowing to the national debt).

Former Secretary of State Sajid Javid succeeded in reversing the move precisely to allow housing associations to borrow and build. May is now exhorting housing associations to “lead major developments themselves”, which is exactly what several of the larger groups have been doing; she praised L&Q for their Barking Riverside development, and Peabody for leading on Thamesmead.

Hearing much more positive words, and a Conservative Prime Minister praising social housing, is actually significant in itself. It gives a lead to Conservative councillors who are making decisions on social housing schemes every week: May referred directly to “too many politicians … look down on social housing”. Some may feel, as Nick Clegg reported David Cameron and George Osborne, that “it just creates Labour voters”. May backed up her campaign to remove the stigma with support for tenure-blind design.

May pointedly quoted Nottingham historian Chris Matthews in describing council housing as the “biggest collective leap in living standards in British history” and cited an anecdote from Tony Parker’s 1970s study of the Brandon Estate in Southwark. Yet her speech was to an audience of housing associations, not councils, and her government is still wary about lifting the cap on Housing Revenue Account borrowing which a cross-party local government lobby urges as a way of getting genuine council homes built.

The speech has had criticism from the social housing sector over the low level of funding, with many pointing out that spend on social housing is dwarfed by the amount spent supporting private sector housing through Help to Buy and other schemes. Recent leaks have suggested Help to Buy is now seen as pushing up house prices; the Budget due in November may see changes.

Many have detected an implicit warning in the way the end of May’s speech was constructed: having made policy changes (including embarrassing u-turns) to help housing associations, she seemed to be saying that they had better now deliver. What is unclear is whether there is a plan B should this approach not work.