2010: This is now

The second part of my review of the year looks at how the world changed even more than anyone was expecting following the election in May. 

May

Eric Pickles and Grant Shapps emerged as the key ministers for housing in the Conservative-Liberal Democrat coalition government. A leaked memo to senior officials at the Department for Communities and Local Government advised them to expect the questions from Pickles such as ‘Why are we doing this? How soon can we stop doing it? Can we take 40 per cent of the costs out?’ and to use Tory-friendly words such as ‘families’, ‘neighbourhoods’ and ‘progressive’.

The dynamic duo were quick off the mark in scrapping home information packs and regional spatial strategies. But there was no place in the coalition programme for government for Conservative pledges on the right to move, equity stakes for good social tenants or that promise to ‘respect the tenures and rents of social housing tenants’.

The spin said there was an extra £170m for social housing but the reality of the government’s first cuts announcement saw £230m lopped off the Homes and Communities Agency’s budget and projects worth hundreds of millions of pounds more froze pending the Budget in June.

June

In his first major speech as housing minister, Shapps promised an ‘age of aspiration’ on homeownership but the signs were not good: the proportion of mortgages advanced to first-time buyers fell to its lowest level since the credit crunch. Ominously, he also told his audience that ‘the cash for affordable housing has run out’.

Housing benefit was the big target for cuts in the emergency Budget, with chancellor George Osborne warning that costs were ‘out of control’. Proposals for bedroom size caps on the local housing allowance took most of the headlines but the package of cuts went further and faster than anyone was expecting. The key principle for the coalition was that ‘if you can work you should always be in a better position than if you don’t work’.

July

The dynamic duo ran into some turbulence. Shapps had described the Tenant Services Authority as ‘toast’ but the Treasury insists on a full review of social housing regulation under pressure from lenders. Pickles had scrapped regional strategies but legal uncertainty forced him into another statement saying they were being revoked now and abolished in legislation later in the year. It sounded like a tempting target for lawyers and so it proved in a High Court case later in the year. 

An impact assessment of the housing benefit cuts estimated that 939,000 claimants would lose an average of £12 a week each. And that was just for the first round including the bedroom caps that only accounted for a third of the overall savings being sought by the government.

August

David Cameron came out in favour of fixed-term tenancies.  He told a Q&A session in Birmingham: ‘There is a question mark about whether, in future, should we be asking, actually, when you are given a council home, is it for fixed period, because maybe in five or 10 years you will be doing a different job and be better paid and you won’t need that home, you will be able to go into the private sector?’ Cameron was immediately criticised by Lib Dem deputy leader Simon Hughes and it emerged that more than half of his parliamentary party were on record as opposing the idea. Surely there was nothing in it then?

September

The Lib Dem conference failed to debate Hughes’s motion calling on the government to rule out removing security of tenure. The man himself hit back with an attack on Labour’s record and a startling claim that ‘there’s a commitment across both coalition parties to build more social housing every year under this government than in any year of Labour government’.

Former housing minister John Healey accused the coalition of shedding its duty on housing. ‘On every front they are looking to withdraw national government and we have Tory and Lib Dem ministers washing their hands of any national role or responsibility in meeting the needs and aspirations that people have in this country for their homes for the future,’ he told the Labour conference. ‘Meanwhile, local authorities, increasingly Labour local authorities, will be picking up the pieces. And if we don’t help people see what is happening they’ll be picking up the pieces and picking up the blame.’

October

The spending review brought yet more cuts in housing benefit. Total benefits would be capped at £26,000 a year or £500 a week – effectively an upper limit on housing benefit – and the shared room rent extended from the under-25s to the under-35s.

The TSA was finally killed off in a bonfire of the quangos that would also see the HCA become a ‘smaller enabling and investment body’ and its London role transferred to the mayor. It sounded an awful lot like the recreation of the Housing Corporation and the GLC.

George Osborne cut the affordable housing budget by 60% in the spending review but simultaneously pledged to create 150,000 affordable homes. He got over the apparent contradiction by revealing plans to offer new tenants fixed-term tenancies on intermediate rents set at up to 80% of market rents. Nick Clegg later goes even further by pledging 400,000 ‘affordable’ homes over the next decade.

November

Iain Duncan Smith was forced to issue a clarification after I revealed that statistics on private rents that he claimed came from the Office for National Statistics in fact came from a property website. The Department for Work and Pensions had contrasted a 5% fall in rents recorded by findaproperty.com to a 3% rise in local housing allowance rates over the same period. In fact, the findaproperty index shows asking rents rather than actual rents, it covers a different part of the market to the LHA and it’s seen a strong increase in rents since the period chosen by ministers. 

Grant Shapps launched ‘the most radical reform of social housing for a generation’ with plans to give landlords the option of two-year tenancies and near market rents and local authorities the freedom to discharge their homelessness duty in the private rented sector. The consultation period (normally 12 weeks) was cut to eight including Christmas and it later emerged that the second reading of the legislation was scheduled for the day it ended.

December

In the wake of a highly critical report from the Social Security Advisory Committee, last-minute concessions from the DWP offer transitional relief to existing housing benefit claimants and give local authorities the discretion to offer direct payment to landlords. 

Housebuilders celebrated after the government said it would abolish a range of development standards and regulation. They had previously put the cost of the red tape at £60,000 per plot but even taking that with a pinch of salt the value of their land holdings could rise by hundreds of millions of pounds. The top six companies owned 245,000 plots in 2009 – at £20,000 a plot the combined value of that land would rise by £5bn.

An equality impact assessment on Supporting People and the spending review says that some councils could decided to spend more on services despite a 3% cut in the budget and the end of ringfencing. But the evidence from around the country suggests that they are already raiding it to pay for other services with Nottinghamshire looking at a cut of 67%, Cornwall 40% and Rochdale 30%.