Housing need, a fudge sandwich?

I like fudge. Gooey, sweet, caramel fudge. Some people don’t and that’s fine; it pulls out fillings, it gets caught in your teeth, some say it is just too sweet. But just like blu tack is the best thing to remove blu tack, fudge might be the best thing to deal with fudge.

What am I talking about? Well, we’re back to the perennial issue of identifying housing need, something I’ve been writing about from almost the start of this blog. Here I am calling for a more clear-cut way of calculating need, on the consultation to do exactly that based on a new methodology and here I am taking those to task who try and conflate the draft methodology with anything in the real world. My conclusion- yes it is a fudge but a fudge that provides a much higher level of certainty. With the fudge councils can go off and set local plans that can be enforceable and create plan led development rather than the alternative, which is untrammeled development.

Today the government has announced a new consultation because things haven’t exactly gone to plan. The methodology used by the government relied on two numbers. Firstly the household formation projections- which are made by the office for national statistics based on past trends. Secondly and more importantly the outcome they wanted to see, which had been created by a range of different papers and political debate.

It is important to understand this second number isn’t exactly scientifically derived, just what we as a country have in effect agreed upon as the need for new housebuilding. It went from “between 225,000 to 275,000 or more new homes a year” to the snappier “300,000 homes a year” last year.

So the equation created by civil servants sought to use the household formation figures to get to the conclusion they wanted to see. They achieved that last year by multiplying the household formation projections by another number worked out from housing affordability in the area. Oh, plus some coefficients to make it come out with around the right number. Seriously, here’s the text:

Screenshot 2018-10-26 at 3.00.40 PM

I didn’t mind this, I still don’t. I like fudge. Why? Because it gave certainty and clarity; planners could get on with planning. Really, without getting too maths-y what it meant was that the household projections and housing affordability became a way to divvy up the nearly 300,000 homes a year the government had somewhat arbitrarily decided were needed between different areas. The real politics was how that divvying up affected different areas, as I spent much of the first blog on the methodology looking at.

But now the household projections have altered, with a significant reduction compared to the last lot. There’s a couple of reasons for this, one is because people haven’t been forming new households as much in the last couple of years (the real change) and secondly because the ONS have changed the way they calculate bits of the statistic.

The equation cannot handle this change; it wasn’t designed to. It worked because it came out with the right answer in the first iteration, not because it was describing reality. This meant many areas would have seen massively different (and massively reduced) housing targets, something that isn’t in keeping with the general consensus (with some very vocal dissent) that an increase in housebuilding rates is required.

So here we are, with the news that there is a new consultation saying two important things:

  1. For now, the most recent household projections should be ignored, in favour of the previous ones. Anyone using the most up to date figures will be in serious trouble (ie. not able to adopt their preferred local plan).
  2. The government will, within roughly the next 18 months, come back with a different methodology to replace the current one, because to be honest there are lots of red faces trying to avoid the glare of ministers.

This is embarrassing and for anyone who thinks objectively assessed need should be um, objective. But I don’t, I think it should be a good enough guess that provides enough certainty for the real business of planning to get going. To put that another way, I don’t think every authoritiy will exactly hit their target, so we should probably stop worrying quite so much what the target is and work out how to try and accelerate appropriate housebuilding if that is what we agree should be hapenning. Worrying about numbers on a spreadsheet to the detriment of well planned communities is foolish. So let’s try to not get too worried about our fillings and enjoy our fudge whilst we can.

In time (before the 2018 household formation statistics come out) the government will have to consider a new way to fudge the figures. It would probably be best if they came up with something a little bit more robust. Until then, keep chewing…

Blimey- build, councils, build!

I went to a soft play this morning, fresh with the idea that whatever anyone else has been saying at the party conferences, one person I probably didn’t need to listen to very hard was the current Prime Minister. Well, that’s me schooled.

Details are still light on the PM’s pledge to scrap the housing revenue account borrowing cap, but for those of us who have been pushing for this change it is certainly welcome. Certainly a major sea change was that councils (both individually and through the LGA) started talking in unison. It shows what can be achieved when councils are united instead of being divided and ruled. Could a similar thing happen with social care or fiscal devolution, I wonder?

The SHOUT campaign should also get some of the credit for making the intellectual case so clearly and I suspect that the presence of Toby Lloyd in number 10 has managed to make a positive difference in entrenched thinking.

In my post before last year’s budget I went through why it is a difficult sell to the Treasury. Essentially, in letting councils (and financial markets) choose when they can borrow to build new homes they are spreading macroeconomic power around. The Treasury is not always good at trusting other people with economic levers. Councils may choose to borrow at the wrong time, both for the real economy or for the government’s accounting. Councils are also unlikely to spread around the kudos when they are allowed do something off their own bat. So it looks like the Treasury has been overruled, which can only really happen by very senior ministers (PM or Chancellor) making the decision above permanent civil servant advice.

There is also the issue that past this first flurry, central government won’t get the plaudits for allowing councils to build. I doubt the housing minister will be invited to cut the ribbon on housing that councils have built with debts they have taken on against their own assets.

The important thing now for stock owning councils is to prepare their plans quickly. It is not yet clear when this change will actually be made (it wouldn’t take much time, but I wonder if there is some small print about the start of the next financial year or even the next spending review to come). Given what certain other leadership wannabes said about social housing, it will be interesting to see if the timescale means the change could get lost in conservative internecine warfare. Labour have already stated that they will raise the cap to the prudential limit, so there is, for now, cross party support for this change.

But it is worth remembering that many councils have transferred their housing stock, so if they wish to build again they may have to either consider borrowing off other assets (maybe not quite remortgaging the town hall!) which might be tricky in accounting terms or seeing whether the government can provide some starter funding or borrowing to set the ball rolling. Let’s make no mistake, this is a policy that pays for itself relatively quickly, but a nudge might be required to help some on the way.

Another issue is the vexing role of land. Many local authorities have land, but are being pushed into selling land thought of as ‘surplus’. Indeed, the planning changes proposed earlier in the week (from the same lectern) include further speeding up of that process. If councils are going to be able to utilise the extra borrowing capacity well then building on their own land would be the cheapest way to do it. Otherwise, they will be competing with private builders and housing associations with strategic partnership funds and who knows who else for the same bits of land. Escalation of the bidding war is the last thing our land market needs- councils with land suitable for housing should be encouraged to use this first, not sell it quickly under duress and use the cash to buy part of a smaller site elsewhere.

Then of course there is right to buy. If councils are building a new load of affordable homes -let’s hope truly affordable homes– then they need to be able to do so in the confidence that they will still own them when the loan is paid off. Indeed, this is something funders or economic sense might insist upon. Building homes for a low rent works because the home lasts longer than repaying the borrowing costs- eventually they provide a surplus to fund housing management, repairs and, you guessed it, more building. Right to buy cuts that off at the knees, especially as new homes are more likely to be attractive to borrowers (especially with a higher eventual sales price) to lend to council tenants than older properties. Flogging them off with a discount makes no sense for society and it needs to be stopped. Yes, right to buy is a conservative shibboleth, but times change and if they are interested in seeing more council homes then right to buy needs to end.

Many councils haven’t really been in the building game for a generation. A few homes here and there have been the preserve of even some of the larger local authorities. So if everything happens according to plan they will need to build up their capacity in planning and construction, whether this is through directly managing projects (my preference) or outsourcing and contract management. There is an opportunity here for councils to really get back into a key part of building a more mixed and egalitarian society. Those who are slow off the ground risk either missing their chance or lagging behind whilst others benefit.

I say ‘missing their chance’ because a change on paper can be changed back very easily. Whatever else, Theresa May is still desperately weak and if this is something that has her name alone on it then it could fall when she does. I do not doubt that the true believers in the Treasury would like to change this back as soon as possible. As I’ve said, this is not just for the accounting reasons but because giving macroeconomic power to a bunch of town halls is simply not the change they want to see.

I think we have to be clear that if councils are not seen to take this opportunity they could face losing it. The case, to so many so obvious for so long, has been won for the present but there are dangers that it could be either undermined or lost in the future. The best way to prevent this is to show what can be done to create genuinely high quality homes for a sensible rent that pays for themselves. It has been done before. Councils just need to be ready, dust off those plans, make some more and get going.

Big numbers for the big players

There is never a quiet week in housing policy, but perhaps we should have known something would happen at this week’s national housing federation summit. And lo Theresa May came down from the mountain bearing many warm words and a policy intervention or two. Oh and what looks like a huge sum of money and a sensible amount of time to spend it.

Now, I’ve spoken before about politicians bearing cheques with lots of numbers on. You’ve got to be careful to understand what sort of a scale we are looking at, how it fits into the wider framework and if this is new money. To paraphrase what we know so far, it is £2 billion over 7 years, starting in 2022 and is expect to deliver around 40,000 affordable homes across this period. So £285 million a year and an average (although it will be skewed towards the end of the period) of 5,700 homes a year. That’s all very good, but it won’t set the world on fire, particularly if high land values persist.

We don’t know where the money is coming from because 2022-2029 is part of the next spending review. Essentially what the Prime Minister has done is earmarked part of government spending in the next long term period. So in one sense the money cannot be “old” in the sense of transferred from somewhere else as the entire long term budget of the government has yet to be decided. The spending review will move money all over the place and like most magician’s tricks you won’t be able to tell where the card in your pocket came from. So a slamdunk “this came from reducing x fund” won’t happen in quite the same way. Sorry.

Nothing I’ve said above hasn’t already been discussed a huge number of times already and at first I was content to take my daughter to the park rather than repeat what everyone else is saying. But one thing I’ve noticed hasn’t been discussed much is what this change might do to the housing association sector.

The funding has been announced as an extension of the “strategic partnerships” the government has already undertaken with many of the very big housing associations. I can only imagine that this will continue, perhaps with some smaller proportion going to the simply big and medium sized organisations and a small amount to the actually small ones. The big organisations will be the ones who can deliver on the scale the government are looking for, who can speak the same language as the government and articulate a large vision. They are likely to share social contacts with ministers or senior civil servants. They will often have a greater degree of financial security and an ability to speak to the markets in a language they will understand. My point is, it is the big boys (gender intentional) who will win at this game. That’s the way the funding is structured.

What does this mean for the smaller housing associations? What should they do. Their options are:

  1. Rely on other funding. Keep purchasing sites from developer’s section 106 agreements or using whatever other affordable homes funds we all expect will exist in the next spending round (even if it is smaller).
  2. Act like a bigger organisation. Get in a management team who can talk the talk (and might need paying to do so) and go to the right conferences, summits and soirees.
  3. Become a bigger organisation. Do what the big players have done and conglomerate, start acting more like a business, maybe look at poaching a manager from one of the larger organisations (perhaps one that already has a deal).

None of this means that a couple of smaller organisations may get deals, but I strongly predict that they will be the exception rather than the rule. For all of the talk about the housing associations’ Victorian beginnings, this looks like another step towards having fewer, bigger, more commercially minded and deal orientated organisations. Whether that is a good thing or not isn’t really my place to judge, but this is something boards will need to think about as they prepare for 2022.

And what does this mean for the homes that will be built? Well, that’s really left to the organisations and the government to decide between themselves, on a rolling basis. This is in part going to respond to housing needs, but let’s face it, it will also be a carve up between the associations and government. If housing associations are designing whole schemes containing market, “affordable” to buy, “affordable” to rent, shared ownership and social housing then their ability to balance these out will be the key factor on how big a difference this can make. But there will be an economic logic- it will have to depend on what they have paid for the site. The bigger, more commercial organisations may also have to balance out any losses made elsewhere.

So what I’m coming to is that there will be a pressure towards the top end of the market- either a greater proportion of market prices or the supposedly affordable homes. Social rented homes will get squeezed unless the government is forceful about demanding these in high enough proportions. Even with the much warmer words on social rent (by which I mean “tepid” compared to Cameron/Osborne’s “absolute zero”) the plethora of price points open to housing associations plus the economic logic as a site’s costs inevitably increase mean we may see fewer social rent units than anticipated.

In conclusion, if I had been an the summit I would have perhaps clapped, but I wouldn’t have got on my feet. This is a large but limited amount of money, may quicken the change of the housing association sector to an oligopoly and may mean there are fewer social rented homes than if the money had gone into the affordable homes programme. It doesn’t do anything to affect land prices and will be very limited for councils, who (to repeat myself for the umpteenth time) really only need a single accounting rule to be changed to get on with building new council houses.

What it really means in totality won’t be known until we see the spending review. That’s not for a while yet and who will be standing at the dispatch box to deliver it may make all the difference.

Promotion from the conference?

Nearly one year ago I wrote about the upcoming 2017 budget, stating that it was hard to get excited about proposed policy changes when Brexit was going to get in the way of everything. I don’t think I was wrong in this (perhaps I was a little too focused on elections) but the key thing was not much has happened in the last year. Even supposedly headline policies like housing have, pretty much, fallen by the wayside in the last 12 months. Just look at the empty state of the social housing green paper or the lack of an official social care green paper.

Well, now that Brexit is truly rearing its ugly head you might think I’d offer the same advice. Oddly, I’m going to do something near the opposite. I actually believe conference season, if we listen hard enough, might offer some policy nuggets that whilst they may still struggle to get off the ground, may become the focus of discussion in the next year.

Put it like this- a number of ministers, shadow ministers or spokespeople are, as ever, going to be giving speeches, attending panels, speaking at fringe meetings, that sort of thing. So far, so normal. But unlike normal times, the uncertainty in the political system is about to come to a head.

Brexit, one way or another, is going to be decided in the next 12 months. I don’t mean to say it will be done and dusted, but that we’ll be on a course that will be ultimately impossible to reverse, past the point of no return and quite possibly staring into an abyss. Perhaps there will still be discussions to be had, but we won’t be at the point where it will be the be all and end all. There will be a policy space, which is likely to get filled, one way or another, with some other discussion.  We need to hope it is meaningful discussion.

I also think it is also fair to assume that, whoever it is, we will have a new Prime Minister in the next 12 months. Put it in your calendar and laugh at me if I’m wrong. I do try hard not to be party political in this blog. I’m interested first and foremost in policies. But what makes the political carnival of the next few weeks important is that those speaking at speeches, panel discussions and so on could be the next Prime Minister, Minister of State and so on. Sometimes these competitions can surprise you- who would have thought Theresa May would have been elected unopposed last time?

I don’t usually tell politicians things they don’t already know, so it is quite likely a number of ambitious souls are already planning what they are going to say. Perhaps they are trying to keep their policy powder dry. Perhaps they don’t really have any policies. But they will have to say something. In an eventual leadership battle (or election, if that’s the way it goes) they will have to come up with some policies- what they’ve just been talking about is likely to make it into the list. You’d expect that anyone who actually believes in a policy will also push for it.

Ministers obviously receive policy support in their roles, so you’d expect that the most worked through and therefore bullet proof policies they may suggest will come from there. But of course it is also worth watching out for people venturing over the lines into someone else’s turf. That not only indicates an ambition wider than their current role, but that they will engage on some policy detail and make an attempt to suggest their preferred way forward. It is a long way off a policy actually being delivered into law, but it is certainly the first step on the way towards that.

Perhaps now is the right time to declare an interest- I wrote my master’s dissertation on policy development through an election, so I’m on record with this being a topic that fascinates me. It is the interaction of the business of policy mixed with the cacophony of an election (whether a leader selection or a general election) that burnishes, alters and ultimately makes or breaks policies. Leaders feel somewhat committed to them. We can all names policies that have fallen by the wayside after an election, but they are often less likely to than other policies floated outside of one.

None of this means we will be able to select the policy that will pop out and become the focus. My hand and my heart yearn for it to be a sustainable answer to social care, but I can’t see how that will happen given the furore last time. But policy space is about to become available. Time in parliament may soon start appearing again after being confined almost wholly to Brexit for so long. A political vacuum will be filled and whoever fills it will need to say and do something. We should just hope it is something worthwhile.

If last year I was saying “don’t listen, none of it will happen” this year I think it is more “listen very carefully, anything could happen!”. That’s equally a warning and an opportunity, depending on what eventually come forward. But I’ll be listening to see what’s there- I hope you’ll join me.

Balance, imbalance and the politics of planning

I’m back at home but it is still August. Unless you take an unhealthy interest in Brexit (and, let’s face it, nothing about Brexit is healthy) there isn’t much else going on in domestic politics. But don’t worry, because here come Lichfields to brighten our week!

In their new report Refused for good reason? the planning consultants look at where planning committees have overruled planning officer advice to refuse an application and this has subsequently been appealed to the Secretary of State. To do this they’ve looked at every instance where this happened for middle to large size housing sites (>50 dwellings) in 2017.

This approach, it has to be said, leads to some major caveats. To their credit, each of these is covered in the text of the report. There are only 78 results, meaning all the subsets are also small-ish numbers and meaning we shouldn’t get too hung up on differences between outcomes in case it is just a statistical blip. It excludes appeals where councils haven’t made a decision in a set time and developers (as is their right) have chosen to go above their heads. Canny councils can do this to avoid such censure -although there is a financial penalty- and it can just happen as time and a developer’s patience runs out. The focus on 2017 is a snapshot, most of the original decisions will be from around the same time (2015/16) so there may be some underlying issues or similar conditions that come from that particular moment in planning- most notably this is before the government started talking seriously about forcing councils to have local plans at all.

There are some headlines they pull out from the numbers- firstly that where councillors have overruled planning officer’s recommendations they are more likely to be overturned at appeal. 65% of the 78 cases where councillors did their own thing against officer advice lost on appeal, compared to 40% when the advice was to refuse and councillors dutifully refused. In 71% of the cases at least part of the appeal was about a 5 year housing land supply, either because there was disagreement about whether the council had it or agreement that they didn’t. Decisions concentrating on technical matters like landscaping were more likely (although still less than even odds) to be successfully defended than highways (74% overturned). Councils without a post-NPPF local plan did just about as well as those with one- what seems to matter more is the 5 year housing land supply position- a requirement of the NPPF which means local plans can be seen as ‘out of date’.

All of that is helpful to know, but for me the report gets a little bit harder to understand when it starts trying to bring in an idea that this relates necessarily to the quality of decision making. Maybe it is worth taking a step back or two here and thinking about planning applications and the process they currently go through.

Let’s say a developer puts in a planning application for a large site. It might be on land designated for housing in the local plan or they might be chancing their arm and trying to get permission for the site outside of the plan. Or there might not even be a plan, certainly not one made since the NPPF came out in 2012 (do we call it NPPF1 now?) . A planning officer will sit down with the developer most likely a number of times, to bash out the scheme and see if it will fit with the local and national policies, including the infrastructure requirements that they think should be in place to facilitate it. Things like roads, medical services, school places or indeed a school. And if we’re really lucky, affordable housing.

The officer bundles all this up in a report and takes it to the planning committee composed of councillors. There are delegated decisions as well but we’re thinking a big scheme here, so let’s assume it is made by the committee. The committee is meant to look at all the issues, balance them against each other and come to a decision on the merits of the application. Key factors will include whether the council is seen to have a 5 year housing land supply and whether other policies in the local plan have been met. Inevitably design and infrastructure matters will be part of that discussion. The committee will then vote on the application.

If the application is refused the applicant has the chance to appeal. At it stands, no similar right exists in reverse- granting planning permission cannot be appealed (although it can go through judicial review). A planning inspector (eventually) swoops in and hears all the evidence again, takes all the factors and balances them on their own merits. They make a decision and then the secretary of state ambles by and decides whether to change that decision or leave it alone. Past this point only judicial review can change a decision.

So, first things first, there aren’t three distinct layers of public decision making. There are four. The secretary of state can and does overrule their own planning experts in much the same way planning committees do. This somehow gets shuffled out of the report, which makes it sound like the answer given on appeal is not only the final answer (which is true) but is also the right answer (which is debatable).

If planning committees are occasionally subject to whims, odd (but not necessarily unreasonable) balancing of factors, deciding an answer first and then writing a report to justify the conclusion and bringing electoral factors into something that should be free of them, then secretaries of state are also right there alongside them. This not only means we should be careful about giving reverence to appeal decisions, it also means we have to try and consider what planning committees were doing when they refused a decision against officer advice. Perhaps they thought the Secretary of State might somehow come to their aid? Perhaps they thought they had a good decision, even against officer advice- perhaps even the planning inspector agreed with them, but the Secretary of State used their power to make the very final decision.

It is also true that planning officers are likely to be more in tune with the financial costs of losing an appeal and less aware or interested in the political costs. I’ll reverse that- politicians (especially backbench politicians from non-majority parties) may not be overly interested in how much an appeal costs but hugely, massively interested in how voting for or against an application makes them look. That’s politics, it is the nature of the beast that members have constituencies that they need to either placate or impress in order to stay in their job. Spending money on a hopeless appeal is money well spent if it means that they don’t look like the bad guy.

There’s also an issue when it comes to the interaction of the local plan and individual planning decisions. The local plan is adopted by all the council members on a majority vote, but in reality it is put in front of them by the executive (whether this is a cabinet or committee system). So the local plan, through all of the consultations and discussions around it, up to an including the examination in public, is a document that the executive has signed up to and, in the final analysis, is the one that they can rally enough support to see it through the full council. Let’s be clear, majorities have waned, council leaders have fallen and all heck has broken loose trying to get local plans through to adoption. But when they achieve that it doesn’t mean that hell is back in its box. Members of a planning committee who didn’t like something in the plan, the housing targets (and therefore 5 year supply) most obviously, but anything else in reality, might choose to ignore the officer advice which is predicated on the plan. Again, this may be a way of making a specific development ‘someone else’s fault’- in this case the executive, the planning inspectorate and possibly the secretary of state.

I suppose the last two paragraphs come to the same conclusion. Perhaps appeal overturns of this kind are more about politicians being politicians than politicians being ignorant or untrained? Politicians manage risk and responsibility, they reflect, moderate (sometimes) and amplify community views. If planning is a political system, and our current system is deeply political, then this is one outcome.

Another point mentioned, but slightly glossed over in the report is that the types of applications may be very different in different areas. I’ve talked before about the principle of development and how in essence once this is confirmed it is very hard to lose it. You can achieve this for an individual site by getting it included in the local plan or by getting planning permission for it. You are more likely to get planning permission for an unpopular site when areas don’t have a 5 year housing supply. Take a developer or land speculator who has options on a number of sites in an area, some included in a local plan, some not. Which do they make an application for? They can bring the local plan site forward whenever they want and make a profit on it. But the site not in the local plan gives them an opportunity. This goes before the planning committee and the officer making a recommendation ruefully says it is probably acceptable given the 5 year housing supply position. The committee may refuse this and off it goes on appeal- where it will more than likely be overturned given the local housing supply position.

In an area with a 5 year housing land supply this is unlikely to happen, so the developer will bring forward a more acceptable site. Those going to appeal are likely to be where the developer is, in one sense or another, extracting the Michael so it is more than possible the appeal will support the committee’s view.

Nothing about these two outcomes can be solved by members undergoing additional training or by publishing outcomes. A more structural change is required, either to step back from the “5 year housing supply is the only important matter” ethos (which now combines with the housing delivery test) or to double down on it and make clear that when a 5 year housing supply isn’t shown there is simply no point refusing applications on anything but the most obvious grounds.

Maybe there’s a better way to put that- planning committee members feel that they can make individual decisions on individual applications, even when they don;t have a 5 year housing land supply. That is, at least theoretically, a lynchpin of our planning system. But the focus on 5 year housing land supply and now the housing delivery test effectively overrides almost all of the individual decision making. If that’s honestly the case then is it worth saying this outright in the NPPF or is there some merit in still being able to take out the worst applications? If it is the latter then we are going to keep seeing this outcome- planning committees not following officer recommendations and this being overturned at appeal.

Almost all the changes outlined by the report: better reasoning by committees, cooling off periods, better statistics and training are all fine, but don’t change the key issues I’ve outlined. Politicians and officers are in different roles and have different incentives, they will come to different views. The 5 year housing land supply and housing delivery test are tools of the government’s making specifically to increase housing supply. Some comeback on that is required and, if so, might be an unfortunate but necessary part of the system as it stands.

Two proposals are a little bit fractious. Firstly, Lichfields the independent planning consultant suggest that councils should use independent planning consultants to help them in hard cases. Well, they’ve got to pay for the report somehow! I’m not convinced, given what I have said above, that another view is going to make a huge difference in a large number of these cases. It could in some, but if an officer is already advising approval then another person coming along to check their working isn’t necessarily going to sway a committee.

Secondly, they suggest changing when a council can be in a form of special measures. That means the secretary of state can make decisions directly themselves without worrying about the whole rest of the planning system, local democracy or so forth. There’s a reason this is barely used in practice, it is cumbersome, undemocratic and time consuming and (coming back to politicians managing responsibility) means that they are the bad guy rather than the local planning authority. 7 years after the NPPF first came out and we are only just getting to the point where the secretary of state is intervening for a few authorities that don’t have a local plan. Changing the definition of what is an isn’t failure won’t change that political calculus.

Having a system reliant on individual applications, seeking to decide each case on its own merits against local and national policies sounds positive. But what Lichfields have done is tease out one of the messier bits of it. Local politicians, national politicians and officers at both national and local level are going to disagree. Once you lose the pretense that there is a “right” answer it gets even messier. My view is we need to either embrace the mess (knocking off sharp corners where possible) or change the system fundamentally.

A fundamental change will either mean shifting the balance towards democratic decision making (with all its foibles) or towards technical, policy based decision making. The former has the potential for exacerbating the housing crisis, the latter removing democratic controls. It is our choice.

Housing: weak

There are plenty of times to talk about housing. Some of my friends and close relatives wished I talked about it less, especially when I am holiday. Yet here we are. I’m typing this on a sofa in our holiday cottage, hoping that the bairn stays asleep for long enough for me to finish it.

I didn’t choose for the social housing green paper to be published when many people are on leave or looking after children. I would have been much happier if they had published in the spring, as previously indicated, or even before the summer recess as latterly promised. I even prepared mentally for the last couple of days before the summer recess/ school holidays (Ms Lattepapa being a teacher) to bash out a reply. But here we are.

You might have to ask yourself why government waited until the quietest time of year to publish the paper. We certainly did, although all the changes of Secretary of State and Housing Minister made it possible that different sets of approval were being sought and ministers brought up to speed. It was also possible that they were fighting to get changes from the Treasury, something I have already talking about being occasionally difficult. But the more cynical thought perhaps it would be a disappointing document, particularly compared to the Labour green paper, which I have previously written about. And so it is here and you most likely agree it is a disappointment.

I know I’m late to this and that most people have already published their accounts, so I’m going to assume most people know the key measures announced and talk through what I think this means.

The paper was promised following the fire at Grenfell Tower and that social housing tenants lost their lives through what seems like avoidable causes. Of course separate proceedings are taking place to this paper to look into the causes of the fire and we are yet to see whether any criminal proceedings will follow. A key message the government told us they had heard was that social housing tenants needed to be treated with dignity and more respect. It was supposed to look at this and whatever it achieves or does not achieve should be measured against this.

But this focus on the dignity for current social housing tenants shouldn’t become placed at odds with the need for more social housing. To create dignity for social housing tenants you need to create more social housing tenants and make it something people can have for life. I’ll put that another way, for decades politicians and society at large have given explicit social cues and financial support for social housing tenants to buy their properties when they had a moderate income. Living in social housing has gone from something different groups of people may expect to do for their entire life to something that must be escaped from at the earliest possible point. At the same time, the lack of determined building of social housing means the overall number has reduced. Only the most needy are allocated homes and they stay in them; either until their circumstances change dramatically and they can buy them, or forever. The ‘forever’ group are seen as the most lamentable, with society seeing permanent accommodation in social housing (and certainly on an estate populated by people predominantly living in social housing) as either failures or failed by society.

So when we talk about dignity we also need to talk about the dignity of social housing tenants as a community- with shared life experiences and an ability to move through life and still be connected. Which is why tinkering with right to buy to, at best, replace homes 1 for 1 is about dignity. If you see homes around you being bought up and you cannot afford to do the same you will feel marginalised and like a failure. Your community will crumble before your eyes- you will see yourself as society sees you- someone who cannot get on.

Which is why using the fact that many people in social housing would like to be owner occupiers as a reason to continue sales of council homes is bottom-backwards. Governments help make society and they have certainly made property owning democracy. If they are serious about treating social housing tenants with dignity then they need to be thinking about how to stop reducing the number of real social housing units, whether through right to buy, linguistic wheezes like the definition of “affordable” homes or through large scale regeneration of existing estates that is predicated on the bottom line rather than the number of social housing units that be made. Make social housing something people want to live in for the rest of their lives and are able to live in for the rest of their lives. Yes that is about design and customer relations, but it is also supply and policies designed not to move people out quickly.

Conversely, the need to prevent social housing from being a temporary and unsavoury experience is why the u-turns on both fixed tenancy length (be a social housing tenant until your circumstances have improved) and high value homes (being a social housing tenant means living in a cheap house in a cheap area) are good things. But here we hit the next point the most positive changes in the paper are reversing policies legislated for or implemented since 2010.

This is true for the two changes above, having a monitor for social housing (hooray for the return of the Tenant Services Authority or similar) and even having a national focus on tenant empowerment (doubly hooray for the return of the National Tenant Voice or similar!). Even more so getting rid of the terrible “democratic filter” designed to turn MPs and Councillors into some sort of notary public for housing complaints. So what we really have is a set of u-turns and walking away from policies that have been on the statute books but unimplemented for a few years. All that is good, but not the same as actually doing anything new and positive. In a way it is a return to the Major-Blair-Brown consensus: talk positively about social housing but do very little to create new supply. Plus bunting. You’ve got to have bunting if you want to be the best neighbourhood.

At its most techy this is exemplified by the already announced measure of councils being able to increase rents by CPI+1%. This is better than the rent cuts that had been forced on the sector, but still means there will be significant rental diversity out there between different areas, often based on how much they frontloaded rental convergence when that was still a thing.

Whilst we are on payments to landlords, the intensely milquetoast section on universal credit, a whole 2 paragraphs of telling us what they’ve already done, doesn’t begin to explain why people are worried about this benefit. Tenants are worried because managing a low and changing income is intensely difficult, particularly if you have any deductions or work hours that change. Landlords are worried because all of this means tenants may struggle to pay their rent and they’ll have to run around trying to either help them through a tough spot or make arrangements to repay.

I’ll put that another way, if social landlords need to assume that each and every working age tenant will, at one time or another, be 8 weeks in arrears (the amount usually needed to set-up direct payments) then it will have to amass large revenue reserves. This means putting less money into capital spending and, therefore, making fewer non-urgent repairs, not looking after communal areas so well, choosing not to put their own money into building and so forth.

Funding community housing is positive, but the question must always be about where the money is coming from. If it is cash that would have been spent on social housing then this is a much harder decision. Similarly, worrying about the organisational capacity of some tenant management organisations (Kensington and Chelsea TMO was the landlord of Grenfell) but simultaneously mulling giving more power to collective community or resident-led groups has an air of circularity to it. Rather than focus on a patchwork of small landlords with an occasional community focus I’d rather time is spent improving the organisational capacity of larger landlords, including in community building. This probably won’t be a popular view, but if it is about using scarce resources then it is my preference.

Making grant funding partly dependent on tenant satisfaction is a sensible bit of tinkering. But it is only that. There’s no new money or ataboys for the sector as a whole increasing satisfaction, just a slightly bigger piece of the pie for those who, all other things being equal, can do it better. And slightly smaller bit of the pie who don’t.

Finally, I don’t think the government have thought through the proposal to buy your house 1% at a time. Making lots of people very small shared owners is full of dangers in the current shared ownership system. Will people be liable for repairs if they own 1%? Will they have liabilities for water running under their house? Some wags have already worked out that owners of 1% would not be liable for the bedroom tax- surely that’s been considered somewhere? Shared ownership doesn’t work for everybody- under the current rules I would be very cautious about advising anyone to do it (my advice would be to seek more expert advice!). Trying to pretend it is right to buy via hire purchase is simply worrying.

There is plenty more little changes (or, actually, proposals in the consultation) in there; these are just the ones I think are worth pulling out and expanding in more detail. But they are mostly little changes. Most social housing tenants won’t have heard about this green paper and I doubt any of them will ever really feel any benefit from it. It’s a return to situation normal after 8 years of utter nonsense being thrown at them. That’s good, but it isn’t good enough.

Commercial property purchases: Bizarro ft. Brassneck

I’m a fairly placid guy, most of the time. But last week I did get a touch fuming about an off the cuff comment from the Leader of the Liberal Democrats. This one is going to get a little bit technical at times, but stick with me, because it is worth thinking about the changing nature of local authorities and the choices and risks they have little option but to take.

What wound me up was Sir Vince Cable’s statement about councils purchasing capital investments out of their areas, labelling this activity ‘utterly bizarre’. Even more, he seems concerned that some councils are exercising their right to borrow from the public works loan board in order to buy these investments.

So let’s take a few steps back and state the bleeding obvious. Councils are under intense financial pressure, with a combination of reduced spending power and significant demand on statutory services. More people need help from social care, especially as the population ages and there are more conditions that are debilitating but no longer fatal. The Public Accounts Committee last week stated that councils with social care responsibilities overspent their service budgets by £1 billion in 2016/17. To be clear, in the vast majority of cases this is after significant attempts to balance a budget, cutting back as far as is possible and making sacrifices that would have seemed unthinkable even a few years ago.

I’ve written elsewhere on social care funding and some options. We’ll keep waiting to see what the social care green paper says. Given we now have a new secretary of state we don’t know if there will be yet further delays for this. But the key message is that councils are having to make hard, tough-headed decisions, in terms of shrinking non-statutory services, using up revenue reserves or doing things to create an income.

What Sir Vince will definitely know is that councils have, since 2011, had the power to do anything an individual can do. If a council wishes to start a company, it can do. If it wants to buy and rent houses for profit, it can do it. If it wants to buy a building, wherever it is located, it can do. If it wishes to instruct contractors to start building a rocket ship without not quite knowing the purpose behind it, well, that one is probably out. There are plenty of things that councils cannot do- almost all cannot franchise buses (neither can an individual), raise new taxes (nor can an individual), print money (nor can an individual) or declare war (you get the idea).  Sir Vince will know all of this because he was the business secretary in the government that gave councils this power.

The thing that puts these powers in check is that councils, collectively and individually, are democratically elected and responsible for their actions. They can and will be held legally responsible, just like an individual, if the company pays below the minimum wage, if a building is poorly maintained and the tenant sues them, if a commercial building is empty and in void, or if the rocket ship falls into a ditch. Councillors of major authorities are not co-opted school governers choosing what colour the tea towels should be: they are elected politicians, often with slender majorities looking to make hard decisions in hard times.

Moving on the the public works loan board, this is a fund established by central government that loans to “major” local authorities (as well as town and parish councils) at rates similar to those the government can itself borrow at. There are guidelines to what councils can borrow, as set out in CIPFA’s prudential code (a steal at £260) but crucially this is really a decision for the local authority to ensure it is not breaking the code. As the PWLB website says:

“The PWLB does not require information on the purpose for a loan. Responsibility for local authority spending and borrowing decisions lies with the locally-elected members of the council, who are democratically accountable to their electorates.”

Precisely. Once again, the key players here are the councils themselves, those locally elected politicians making hard decisions based on officer advice. They have a source of credit for capital decisions and are empowered to decide what to do with this, subject to their local mandate and wish to remain in post. This isn’t dewy-eyed romanticism but the decision of central government to give powers to local government and, rightly, to expect them to be held to account if they use them poorly.

But why would councils wish to buy commercial property? It comes back to the financial question I started the blog with. You are unlikely to have got this far in this if you don’t know the difference between revenue and capital. So hopefully it won’t be a huge surprise to know that letting a commercial property generates an income. As long as that income is greater than the loan repayments (if indeed a loan has been taken) and other costs, then you can use that surplus income to pay for other capital spending. Things like repairing buildings, replacing broken machinery, improving physical infrastructure. Not having to fund capital spending from revenue means you can spend it on improving services, paying frontline staff, collecting bins, helping people. You know, the things we all (Sir Vince included) want to see councils doing.

Now if I was a private commercial landlord I might be a little nonplussed at this. Councils are able to borrow at a lower rate than them to compete for the same properties, isn’t that unfair? Well, it certainly isn’t a brilliant outcome of a complex system, but it also certainly isn’t bizarre. There are plenty of things councils can do, often because of economies of scale, that a smaller business cannot. But that certainly doesn’t add up to bizarre- there are certainly enough situations where a private company can outmanoeuvre or work policy, law or tactics in the other direction. If councils are investing in existing buildings then they are only competing against other rentiers and most likely doing something more worthwhile with the surplus. If they are investing before completion and helping the building come forward then they are helping bring investment to the area (whether it is in the region or not). Finished buildings with tenants pay business rates, which is doubly good for the council where the building is based.

An alternative approach would be for councils to use up their capital reserves to fund revenue expenses; selling off land and buildings and using up cash reserves quickly. You don’t need an advanced finance degree to know that would be a bad, temporary idea.

Perhaps this rankles more than it should, but in essence, Sir Vince is complaining that councils are looking for novel ways to safeguard services (using powers given to them by a government he was part of) in the light of huge cuts to spending power (forced upon them by a government he was part of). No, this wasn’t part of patronising the 50 ways to save document sent out in 2012; councils have tried to do something that would bring in much more money than opening a cafe in the library.

Nothing that I’ve said here means I would support every commercial property decision made by councils. There are risks, but they have to be managed and understood, not ridiculed out of hand before they have been considered. But that’s the point- if local authorities make mistakes they are responsible for it. To their auditors. To their audit committees. But mostly, to their residents.

Po-tay-to Po-taa-to, Letwin’s latest

Housing reports coming from all angles- how can a naptime blogger cope? Well, if you’ll let me, I think I will concentrate on the recent update from the Letwin review (or “build out review” as it is now apparently named). This is because it is the one commissioned by government and so the one with the highest potential for serious reflection from them.

If you’ve read my previous post on the launch of the review, you’ll know that my main concern was that we already had a welter of reports, reviews and recommendations from industry insiders, academics and politicians. What I would argue we haven’t had is the political will to redress the balance of power and financial flows between the different groups of people who are involved in the process, whether that is landowners, developers, housebuilders, prospective owners, prospective tenants, local communities or so on. This doesn’t mean that the state is being neutral, merely that it was not yet willing to actively change the existing rules; benefitting those who are already benefitting at the cost of those who were not.

So what is the latest from the review and what policies does it mean he might be coming out with in the budget? Is there a sea-change on the horizon or am I mixing my metaphors?

Sir Oliver has been to see some larger sites, including spending a trip visiting three locations in Cherwell. Indeed, outside the Ledsham Garden Village in Cheshire and a statistically fruitless trip to Solihull, the furthest north he went was Cambridge. I’m not one for drawing a random north south divide on a map, but that is pretty stark, justified by the draft report on the notion that the south east has the highest demand for housing.

There is a growing argument that different areas have different issues with regard to housing. What happens in London or South Oxfordshire might be different from what happens in Manchester, Bradford, Oldham or Gateshead- and they might even be different from each other.

Even with the same planning system issues relating to housing and land supply, skilled labour, incomes, access to financing (both for builders and prospective buyers) and so on will make a difference. The local planning system, especially as it is dependent upon supply (even more so if the housing delivery test comes in) makes this even more difficult to unpick. So staying almost wholly within spitting distance of London may make his statistical findings a little specific and mean he may have missed something going on elsewhere.  A big elsewhere, like almost all of the midlands and north.

Indeed, Sir Oliver is now fixed on the idea of looking almost wholly at improving delivery speeds larger sites. He’s been engaged in some pretty strong mythbusting- deciding that issues like utilities, most skilled trades and finances may make some difference, but they are not fundamental to slow build out rates. He has also batted away the suggestion that developers sit on sites with planning permission without building- holding sites as an asset to be sold rather than where they will build in the fullness of time.

Whether that means Sir Oliver has disproven (not at last, but once again) land-banking is taking place something else entirely. Indeed, he tries to unpick this, but it is understandably difficult because what people call “land-banking” is so flexible and fudgey that it can mean everything and nothing. I’ve had a quick check and I haven’t used it on this blog before now, despite writing quite a few times on housing supply issues and strongly on the actions of developers. It simply isn’t a helpful term because it is used so loosely. There’s a strong argument to be made that titles are swapped around before planning permission is given, but Sir Oliver feels that this is outside of his remit.

What Sir Oliver is convinced upon is that developers drip feed homes into the market in order to hold the price of properties level. This, he argues, is because they have paid for the site based on the current market rates for selling the eventual properties and need to recoup their money and expected profit levels. Call that land-banking or don’t, it is developers using the tools at their disposals to make a profit.

Without getting overly-detailed Sir Oliver is arguing that the current method of site valuation leads to the outcome of slow build out rates. If developers increased supply they would decrease prices, make less money and perhaps fail to break even. He also argues that a lack of diversity of both design and tenure means that builders are only working in one market (broadly: high value, repetitively designed, large-ish homes for sale) which means their actions affect this one small part of the wider economy.

I can happily agree with almost all of that. I’m not wholly convinced that increasing supply necessarily reduces price in the current housing market- it is a lot more complicated than a couple of intersecting curves in a perfectly competitive market. There’s a lot of pent up demand to get through first and people tend to borrow what they can (based on their deposit and lending rates) and bid based on what they can borrow. But here’s the thing, one person who is convinced of this is Dominic Raab, the Minister of State for Housing. He keeps referring to housing affordability and the panacea of increasing supply of housing for sale to resolve this. So is Sir Oliver advocating to change the method of valuation? Er, no.

Here we cut back to my concern from the earlier post– there seems to be an explicit worry that impacting on developer’s business cases (at least for their current homes) will send huge shockwaves through the economy. We have to accept this is possible, but we also have to consider if proposing to pay £110 million bonus to a single person is a sign of a well functioning economy? Is rebalancing away from a system with so much stacked in one direction so bad? I’ll put that another way, Sir Oliver seems intent on -at least in the short run- trying to improve build out rates whilst not significantly changing the existing relationships and hierarchies between those involved.

How likely is this to be successful? Well, that will depend on the policies he comes out with for the budget. The focus seems to now be on diversifying large sites. Not splitting them up, but making them able to attract a range of tenures and making more attractive, less cookie-cutter developments.

This weeks Onward report seems to be opening the door to much wider collective work- with councils taking a strong role in joining up the dots in large scale development. There is a sense I get from Sir Oliver’s report and the interviews he gave over the weekend that he may be minded to suggest something more collective in the long run- at least for very large sites. What that might be remains to be seen. It would most likely be welcome, but trying to square the circle of increasing delivery whilst defending builders margins may be impossible. On what side he falls could make the difference between a change and none.

It very positive to see Sir Oliver talking so openly about the role of social housing and the very high demand for this across the country. Clearly, somehow separating the speed of delivery of social homes from the slow delivery of market housing would be of huge benefit, both for society and general house building. How this is achieved is quite another matter, in particular if there is a wish not to see enclaves of social housing separate from the rest of a site. Local plans (or indeed government guidance) could have set percentages of different tenure types, with design matters being even more strongly part of local authority decision making. (Yay more long planning committees about brick finishes!) How likely this is to make any positive change will actually come about in appeal decisions. If the quantum of new homes outweighs any design or tenure issues -which is often how appeals decisions can be perceived- then it is more words for little effect.

One way to try and achieve additional quickly built social homes could be allowing the part payment of the Community Infrastructure Levy (or indeed a similar development tax) to be in land (valued at existing use) or completed properties (valued at affordable rates). Developers could pass over a section of the site to be built by the authority- or indeed sold to fund housebuilding elsewhere.

And finally, how much of this actually coming about is wholly dependent on quite a few different political processes. Will the current government still be here for the Autumn budget? Will legislative changes be passed given the amount of parliamentary time needed for Brexit? Will developers see whatever proposals coming forward as a threat to their margins, even if Sir Oliver has specifically designed them not to be? How in favour are developers right now? Will there be the focus and drive for accelerating delivery when it comes to the crunch? How will any changes to social housebuilding dovetail with the social housing green paper?

I have at least one comforting thought- land is the one thing that cannot really be taken off shore.

Universal creditors

It has been another terrible few weeks for the ministers and civil servants at the heart of the universal credit debacle, what with the release of the NAO report into the roll out, their own full service survey and the legal case which showed that they were discriminating against severely disabled people who moved between areas during the roll out period. I’m trying not to shed a tear, but it is pretty hard. Not for the politicians and civil servants, you understand, but for those on the receiving end of the clearly failing benefit.

There are plenty of reasons for this failure- the reports I have already linked to have more than enough detail, but to fully understand why this is so damaging (and to get some wider context into people’s lives rather than simplistic models often used by government) then you need to look no further than the JRF’s 2018 report on destitution in the UK.

Rather than rewrite a very sensible report, I want to try and unpick why people claiming universal credit might find themselves destitute in a bit more detail. If you want, all I’m doing here is fleshing out a couple of sentences closely and with some examples. Crucially I want to point out that this isn’t just “shocks” but in many ways the general running of the benefit that can lead to a spiral of debt and destitution.

The starting rates of universal credit are myriad, but a single person over 25 has a personal allowance of £395.20 a month, with any elements (including the housing element) paid on top. That’s £73.34 a week, roughly equivalent to other means tested benefits.

Private renters may find that their housing element doesn’t cover the rent, if this is seen as “too high” (ie. above the 30th percentile) in the area. Most under 35 year olds will be particularly hit by this, as they can only claim for a room in a shared house, no matter what their actual living circumstances are (or where they can reasonably move to). Social tenants will find their housing element may be reduced if the are seen to have a “spare” bedroom under the much loved bedroom tax. Homeowners will only be able to claim an interest only loan to cover some of their mortgage interest costs.

I’ve written elsewhere about the lack of a severe disability premium in universal credit. Needless to say, compared to the previous benefits system, those who live by themselves who have care needs are going to be significantly worse off.

As you can see, before we even get to the nitty gritty of people’s lives, the amount they receive is at or below a subsistence level. Those subject to the bedroom tax or living in higher rental properties (often because that was what was available when they moved and they could afford it) will be struggling to make ends meet from their remaining income.

So, let’s start at the beginning of a claim: the NAO report shows that 60% of people who claim universal credit also claim an advance. This is a loan from the DWP, that has to be repaid over the next 12 months (it used to be 6, but the government increased it last year following public outcry).  The NAO also stated that the average advance are around £43 a month, so that comes off before payment is made.

Of course the size of the debt (and therefore the size of repayments) is based on how long the household had to wait for the benefit. So it is worth pointing out that the NAO is expecting up to 338,000 households to be paid “late” (at the end of the first month-long assessment period) in 2018. So this is well over a month of having to rely on a DWP loan (or other begging/ borrowing) for a very large number of households.

Then payments get going, claimants might be paid in arrears, but they’ll spend it when they have the money. Payments will usually be based on the last month’s income (although woe betide anyone on very variable earnings subject to the surplus income rule) so what people get in one month and what they need in that same month may be two different things.

If people pay the rent (including any surplus bedroom tax or amount above the local housing allowance) then the money left after deductions and after rent may not be enough to see them through the month. They may be flush at the start, but even very careful spending is going to make the last weeks very difficult. So whilst the headline rates of universal credit may allow for a subsistence existence the sheer act of going through with the claim could be enough to push the household into destitution.

One way out of that trap, to smooth the curve, at least in the short run, is debt. Debt can happen in many ways- some less active than others. Households might not pay all of the rent. They may take out a short term, high cost loan. They might not pay their bills (those that they can not pay- prepayment meters abound).

They may get help from family or friends- a form of social debt. The ebb and flow of universal credit payments may mean that such support is reciprocal- if you’ve just received your payment and someone who loaned you £30 a week ago needs help, would you say no because you’ve got to get to the end of the month? They may also as a last resort look to the less friendly and scrupulous lenders you can find if you really need money quickly.

The other options are of course going without essentials (which is about as clear as destitution can be) or relying on charities or other non-reciprocal social giving.

Any debt taken on of course has to be paid off and if that comes with interest then you’ll have to pay more next month, leading to exactly the same (or worse) situation again in the next month. Give it a few months and reputable organisations (landlords, utility companies, council tax, etc.) can take repayments straight from your universal credit entitlement, meaning at least they get paid, but the amount the household receives gets smaller and smaller and the challenge of making ends meet becomes harder and harder. Just about managing becomes occasionally struggling becomes struggling all the time.

The point I’m trying to make is that whilst the actual allowances for universal credit are arguably slightly above the minimum level, the way that the system works means that households will actually be paid (or have after housing costs) puts them below what they need to fund their necessary expenses. Attempts to even stay afloat in those conditions is destined to make the situation worse in the long run.

This isn’t necessarily about monthly payments, but it is clear that on such a low daily income it is hard to manage a budget over a month. It isn’t also necessarily about paying rent to tenants- but again paying an amount less than their living costs including rent means that they have to make a hard choice-like it or not rent arrears are a choice people make to put food on the table for another week.

It also isn’t necessarily about shocks such as sanctions or payment hold-ups, but these no doubt cause destitution themselves. A sanction is enough to put many people into destitution and even if a hardship payment is authorised this is itself a debt, which has to be paid back- reducing payments when they do return.

So sanctions are one way into the destitution-spiral that can happen under universal credit, but it isn’t the only way by a long shot. According to the survey commissioned by the DWP, only a quarter of people say they do not struggle with financial commitments (a further 2% do not know). The rest, some 73% say that they struggle in one way or another. 35-36% of those surveyed stated that they were in housing arrears.

There is a contradiction at the heart of the DWP’s responses to all this. On waiting for payments they argue that advances are available, and they are- as a loan. On sanctions they argue that hardship payments are available, and they are- as a loan. On ‘extra’ housing costs such as the bedroom tax or above local housing allowance rent they argue (inaccurately, mostly) that people make a choice and can pay for this through their standard allowances. Finally, on payment amounts they argue that they are enough to cover basic living expense- and they possibly are unless there are other deductions, such as loan repayments or payments towards rent.

In very few cases are all of these things true at the same time- indeed, it needs someone not to have the first three for the fourth to be right. And that is why people end up somewhere below the safety net, wondering how the heck to get out.

The wood from the trees

If a tree falls somewhere other than a leafy lane, does anybody hear it? That’s a question I’ve been asking myself for a day or so, since the Sunday Times uncovered their “investigation” into municipal tree felling. I use the word investigation because they did, although I’m not convinced an FOI followed by a few interviews and statements actually counts.

Much like my earlier post on empty homes, I am easily frustrated by this kind of thing. You see, I’m really not sure what the numbers they have provided and the comparisons they have made really mean in context. At least the Sunday Times tried to give a bit of proportion by also asking for an estimate of the number of trees each council is responsible for. But after that it falls down quite a bit, leaving me scratching my head in trying to work out what they want to prove. Whatever it was, I’m not sure they have achieved it.

Councils are responsible for lots of trees. Trees at the side of the road, trees on school playing pitches, in parks, on unused land, on farms, in woods, between homes, on housing estates and some common land. Trees where it isn’t clear who owns them, but someone has definitely got to do something about them. So when we talk about big numbers (such as the number of trees felled) we also have to give the bigger number (how many tree there actually are). The report gives this for individual councils, but not the country as a whole, or even for those councils who replied to the FOI.

Councils are not an equal size and they don’t look the same. One might have lots of street trees but no woodland, another might have lots of woodland but no street trees. One might have sold off bits of their woodland to build houses years ago and so may not be felling many trees- keeping them out of this survey. Another might be using a patch of ill-kept land to build their own council housing, which will add to their number of trees felled but have a greater social benefit. Without greater context we don’t know.

Diseases can ravage areas and don’t (as you’d expect) respect local authority areas. But that doesn’t means they spread nationwide. So one area might be fighting a disease that others don’t currently have to worry about. The article even mentions Edinburgh are having just this issue with dutch elm disease.

So what are we really meant to understand by the outcome of the investigation? Councils -who have a responsibility for a huge number of trees- fell a large number but small proportion of those trees, with some felling more than others, as you would expect given the heterogeneity of landscapes, local authority boundaries, exposure to disease and previous policies. That’s a sentence with a lot of commas that doesn’t add up to much, let alone a scoop.

The accusation of the piece, which isn’t proved by the numbers (and I doubt can be proved by numbers) is that some councils are felling trees that others would not in order to save money. Well, there is quite a lot to unpack there as well. But let’s take a step back and think how we would actually try and look at that, given a numbers-first approach isn’t going to work.  This is where we actually get to looking at policies, not through a proxy like numbers, but by actually looking at the policy.

You see, guidelines for tree management are not usually hard to find. Keeping away from the controversial ones, here’s the one for Leeds, another for Worcester and here is Rutland’s. Of course there is plenty of wriggle room in there and that’s where implementation comes in. The person with the policy making the decision, whether they work for the council or a contractor. But if the Sunday Times wants to do some proper investigative work it would need to try and speak to people making the decisions or getting to the bottom of differences between areas, not just stating numerical differences as if they must mean something.

Hanging over all of this is Sheffield and whatever else it is quite clear that Amey and Sheffield City Council have not covered themselves in glory in the way they have approached dealing with local communities and the media over their tree felling antics. But the crude way of trying to assess if this is a national problem doesn’t help either. Indeed, it can tar other areas with someone else’s brush either by having an active tree management policy or a large number of trees under their care to begin with.

Of course the cheapest thing would be to do nothing and hope dangerous or dying trees don’t fall on individuals or property. I’m sure that’s not something anybody is agitating for, but that would have course kept a council out of the Sunday Times list.

What’s more, the issue of finances is danced over in the report, as if councils are choosing to save money for the kicks. In reality, councils have seen such significant reductions in finances that all decisions are hard. Try to nurse a potentially mortally wounded tree back to life for £3,000 or fell it and plant 3 replacement trees for £1,000 (these numbers are made up)- but know that for every 10 trees you “save” the local library has to close for an hour a week. How do you make those decisions?

That doesn’t matter for your one-issue-at-a-time journalist or single-issue pressure group. Everything can be seen in the context of this one matter. Next week, when you’ve sent around an FOI on how many children’s centres have been closed, you can mourn that there isn’t money from somewhere else. But balancing the books week in week out is exactly what councils have to do. Some do it better than others. Clearly, Sheffield is learning that outsourcing may not be the silver bullet they hoped it would be.

For all the words and bluster, it looks pretty clear to me that the central issue of the report is actually street trees- or at least trees in “more ‘leafy’ residential areas” as the representative from the Arboricultural Association calls them. So it is affluent people in affluent areas worrying that their are not seeing a full return on their council tax.

I suspect one popular answer (in those areas) is to throw more of the limited council resources at street trees. Another, perhaps more reasonable response is to try and do something about council funding- not only slowing the pace of cuts but reversing them and sorting council tax out in the process. Saving vital services like the childrens centre and library should come first, but if prime quality tree works can afforded after all the truly urgent spending then why not? To be blunt, given the regressive nature of the current council tax system any change should mean people in affluent areas paying more.

Another possibility would be for areas to volunteer to adopt their street trees, taking financial responsibility and collective risk. This will allow consenting areas to manage their own affairs will mean they can have checks as often as they like and decide what interventions to make with their own money. I’m sure councils will look to win the contract any work that they decide needs doing and if they want to give a tree palliative care instead of a quick coup de grace, then that can be their choice (and their risk). Of course councils will have to act (and charge for it) if there is damage to their property or a risk to pedestrians or road users. Perhaps as part of the process they could detail the historical costs of maintenance and repairs so that the areas know what they might have to pay in an average year.

This could end up being expensive for the individuals involved (it could be more than making council taxation much more sensible and progressive), but it would at least give them an option between what they think is a second rate service and what they would do themselves. I do wonder if it would turn out to be that different when it is their own money and their own opportunity cost to consider instead of council’s. Could they end up spending more of their own money to give themselves the same level of service?