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www.londoncouncils.gov.uk
Emerging Housing Policy Issues
for London
West London Lead Members for Housing
16th June 2011
Nigel Minto Head of Housing & Planning
London Councils
[email protected]
0207 934 9813
www.londoncouncils.gov.uk
Agenda
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Universal Credit/Welfare Reform
Affordable rent model
Housing revenue account
Mobility
Starlets issue - Population movement
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www.londoncouncils.gov.uk
Universal Credit/Welfare Reform
Background
 Welfare Reform Bill published Feb 2011
 Includes proposals for a Universal Credit
 National scheme with national parameters
 Commissioned the Centre for Social and
Economic Inclusion (CESI) to research the
impact in London
www.londoncouncils.gov.uk
Research outcomes
 A large number of households will be worse off under Universal
Credit than under the current scheme (up to £5,000 per year)
 benefit households in London will have less spending power
than their equivalents in the rest of the UK
 There are a number of perverse outcomes - some families will
be worse off if they start work/increase the hours they work
 Work incentive is reduced in London
 Caused by London’s higher childcare/housing costs not being
reflected within the benefit design
www.londoncouncils.gov.uk
Research outcomes-case studies
 Lone parents with 2 or more children will need higher wages, even
when working full time, to be better off in work under Universal
Credit.
 The research found that even the London Living Wage would not
be sufficient for to make work pay for these households.
 For some households in London, the financial incentive to work is
low.
 A couple with two children both moving into full time work at the
average entry job wage in London would only have an increase in
spending power of just over £10 per week. A couple outside of
London would see their spending power increase by almost £50 per
week.
www.londoncouncils.gov.uk
Housing asks
 Separate London Benefit provisions required
 Childcare support that matches the market
 Benefit cap that reflects London’s earnings and housing
costs
To raise the overall benefit cap for London as a whole. A London cap is related to
the earnings of Londoners in the same way as the GB cap is proposed to be related to
earnings. This would be a fair way of assessing and updating a London total benefits
cap.
Raising the housing element of the cap for London. One of the aims of the welfare
reform agenda is to influence the rental market and consequently reduce rent levels.
However, because of the particular nature of the London market (London has essentially
a limitless level of housing need and a chronic under supply of new build which results in
an extremely active private rental market) these reforms are least likely to work in the
Capital
www.londoncouncils.gov.uk
Next steps
 Research has been published and circulated
 Seeking early meeting with DWP officials
 Lobbying opportunities -Potential
amendments/House of Lords
 Working with GLA/third sector/RSLs/London
Business
 Challenge Secondary legislation
www.londoncouncils.gov.uk
Affordable rent model
• Activity Timeline
• 13th June
• During June
• June/July
• 20th June – 4th July 2011
programme
• 7th July
• w/c July 2011
• July/August 2011
HCA Board Meeting, to review
indicative bids
RSL/HCA discussion with Boroughs
on bids
Period for any ‘London’ lobbying
nationally to influence London’s share
of the national ‘pot’.
National aggregation and analysis of
HCA London Board meeting (Final
sign off bids)
HCA National Board meeting (Final
sign off of national bids)
Initial contracts signed off and
awarded
www.londoncouncils.gov.uk
Affordable rent model – Borough
issues and concerns
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Level of conversions
% of new which are 3 bed and larger
% of market rents, that 1 and 2 beds charged at
Location of programmes
Scope for borough influence in the RSL programme
Overall size of the programme and where the
conversions are and where the new build is delivered
in London.
• % of the national pot (£1.8bn not committed) which
London secures.
• No ‘leakage’ out of London.
www.londoncouncils.gov.uk
Housing revenue account research
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Exploring individual and multiple borough
options
Specifically looking at models/approaches
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Manage debt
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Transactional costs and interest payments
Investment as opposed to debt reduction
The scope and opportunities for joint
working
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Pooling of debt
Trading borrowing headroom
www.londoncouncils.gov.uk
Mobility
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The exclusion of borough new build properties (unless a borough so
chooses)
The scheme would only be available to existing tenants
Boroughs should not have to pay for the establishment and operation
of a mobility scheme
The scheme would not attempt any ‘redistribution’ of new housing
between boroughs.
Households who have a history of rent arrears or anti-social behaviour
are not eligible to apply for a move through the scheme.
The scheme would be reciprocally based - boroughs do not put in more
than they can ‘get out’ of the scheme.
The scheme is ‘governed’ by the HCA London Board
The scheme excludes larger-sized properties
It is intended that it will go live with a ‘soft launch’ in October/November
2011. It will be fully launched, however, in January 2012.
www.londoncouncils.gov.uk
Strategic issues - Population movement – The impact on
Councils costs and services
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Exploring six core questions
If London is unduly disadvantaged by the Universal Credit provisions.
– and do they overly restrict areas where households will be able to afford to
live?
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Whether or not the Government’s view that 350,000 children and
500,000 adults (nationally) will be lifted out of poverty through Universal
Credit provision stack up for London?
– If not, what is the level of increase in the numbers in poverty in London that
we should be expecting?
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What is the scale and direction of population flow that is likely to occur
as a result of the introduction of a capped Universal Credit?
As a result of this flow what is likely to be the impact on local authority
service provision?
What are the potential knock-on consequences of these population
flows on social policy areas such as housing, education, crime,
transport and community cohesion?