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Joint response to the Institute for Public Policy Research consultation document Social Housing in the 21st Century

October 1999

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Introduction

The future of 'social housing' lies in transferring ownership and control to community and co-operative housing. Housing Co-ops have been one of the most successful and undervalued forms of housing in the country. They are sustainable community organisations. They are organisations which promote social inclusion and capacity building and have been doing so for as long as 25 years in some cases. They are about self-help and people taking pride in their homes and environment. They are about ordinary people (nominated from council and other waiting lists in the same way as any other housing provider) taking responsibility for their communities. However, the successes of Housing Co-ops have been achieved in an environment that has not been supportive of them, and it remains very difficult for tenants to establish co-ops. Housing co-ops have demonstrated themselves to be 'what works', and the means should be found to stimulate their development.

Research has indicated the effectiveness of housing co-ops. Management consultants Price Waterhouse concluded in a DOE commissioned research report in 1995 that housing co-ops "outperformed their local authority and housing association counterparts and provided more effective housing management services with usually better value for money'" [1]. Their findings were subsequently confirmed by 2 other related studies. In 1998, researchers from 3 universities studying the benefits of community and co-operative ownership in Scotland concluded that "although a major programme in Scotland, the approach has not been adopted in England and Wales. The continued success of community ownership argues strongly for the model to be adopted more widely".[2] A further study, carried out by researchers at Nottingham University and published by NIACE, the National Organisation for Adult Learning, demonstrated that the personal and social benefits of voluntary organisations went beyond the simple provision of and management of housing and concluded that participation in organisations such as housing co-ops led to increased knowledge, skills and confidence and the ability to control one's own life. [3]

Housing co-ops have been one the most successful and undervalued forms of housing in the country.

The current Labour government was elected on a radical agenda to shift power to local people and communities. While some steps have been taken towards this agenda, the housing co-operative option, with its long track record of being one of the most successful ways in which power can be devolved to ordinary people, remains largely ignored in public housing policy. Despite some public recognition of the significant benefits of housing co-ops, it remains next to impossible to establish them within current frameworks.

The original vision of local authority housing recognised that whoever owned social housing and its assets would ultimately determine in whose interests the housing would be run. Local Authority housing set out to ensure that housing was to be run in the interests of the community, through public ownership of land and assets.

However, there are 2 key reasons why it has been impossible to make democracy work at a neighbourhood level in local authority housing, and these problems have led to its downfall:

  1. The way that 'social housing' is provided to people is based on a feudal relationship, where the landlord grants the tenant a tenancy agreement, where in return for money and compliance with the tenancy agreement, the tenant can remain in the home. What this means is that the tenancy is seen as a one-way relationship where the tenant expects the landlord to do things to or for them. This gives the tenant little reason to take any active responsibility for their home, environment or community. Both landlord and tenant perceive the assets of the organisation as belonging to the landlord, and tenants do not make the connection between the rent that they pay and the service that they receive. Tenants see problems of the organisation as being nothing to do with them.
  2. Tenants taking responsibility is further discouraged by the size of most social housing provision. While most tenants will find it comparatively easy to relate to issues that affect their street or immediate locality, 'social housing' has been about doing things on a scale that the ordinary person cannot relate to.

However, these are problems that affect RSLs as much as local authority housing, the size issue particularly affecting RSLs whose properties are spread over a wide geographical area. Therefore, the current trend for transferring stock to RSLs from local authorities may prove to be only a short term sticking plaster on the problem, and underlying problems of disenfranchisement and alienation will surface in RSL properties as they have done in many local authority neighbourhoods.

To rectify these problems, a vision is needed that is about:

Housing co-ops have demonstrated themselves to be 'what works', and the means should be found to stimulate their development.

Democratic community ownership of land and assets at a neighbourhood level is the natural successor to local authority housing and would keep alive the vision of public sector housing run in the interests of the community. Small scale community solutions that are owned and controlled by the community and bring people together in socially inclusive communities have the capacity to build community responsibility and so accountability at neighbourhood level. This is the radical agenda which should drive forward housing policy into the next century.

What are the objectives of 'social housing'?

What should be the mission statement for social housing in the first 20-30 years of the twenty-first century?

Housing policy should move forward under the following mission statement:

Housing policy should ensure that all people are housed to acceptable standards; at affordable costs; in a manner that requires increasingly less subsidy from public resources; in an environment that stimulates socially inclusive communities and breaks down the barriers between tenants and home owners; and that provides the basis for individuals to realise their potential.

What are the objectives of social housing? Are there other means of achieving these objectives that are more suited to today's society and economy?

The objectives behind this mission statement can only be achieved if 'social housing' aims to empower individuals and communities at a very local neighbourhood level to take responsibility themselves, so that the issues facing landlord and tenant increasingly become one and the same.

It is very difficult for any large-scale 'social housing' to produce these characteristics. Even on the level that is currently being envisaged for neighbourhood management (4000 properties) or in smaller scale geographically defined community based housing associations, the challenge is still much the same as it is for larger housing providers - how to engage residents on a neighbourhood level.

The only method that has consistently been about local people taking community responsibility for their environment over the last 25 years have been small scale housing co-operatives and other community controlled organisations. Housing Co-ops are both about the self-reliance of home ownership and local community solutions. A system that supports co-operative housing could have far-reaching effects. Having successful models of housing co-ops in every town and village would act as a catalyst to transform many neighbourhoods.

Is social housing in terminal decline? Is the 'brand' so damaged that it has no long-term future in its current form - like the nationalised industries of old?

Small-scale resident control should be mirrored by wider community control through the 'community land trust' model, a model commonly used in the United States. A Community Land Trust is a cross between an RSL and a housing co-operative and exists as a non-profit, community-driven company [4]. A CLT has the advantage of bringing individuals together as communities, regardless of tenure, in mutually sustaining organisations, as well as enabling wider strategic local government interests to be represented. It is a unique method of enabling the local community to take responsibility for and determine the future of their homes and environment.

Who should 'social housing' be for?

Who should social housing be for? Should we admit it is now welfare housing, providing shelter for the poorest with options - more like the approach we take to education and health provision?

In many quarters 'social housing' has come to mean 'welfare housing', not because that was what it was supposed to be, but because that was all that was possible under public subsidy of housing benefit rather than bricks and mortar. If we do not take an inclusive approach to housing in this country where a greater section of the community benefits from publicly funded housing, then the drift towards 'welfare housing' looks set to continue. The consequence of this will be that society will have to accept that there will always be the socially excluded. Accepting this will continually damage the fabric of society. This approach is very expensive for the taxpayer, calling for continual public subsidy, and the majority of those that pay taxes do not want policies that stimulate social polarisation.

Should social housing be seen as only meeting people's short term housing needs, perhaps at particular stages in their life cycles?

We should stop seeing publicly funded housing as a short term safety net for those on welfare. Transitory populations and the migration of those that can afford to leave are part of the problem on run down estates and neighbourhoods, not the solution. Rather than encouraging people to leave their communities when they reach a certain stage in their lives, we need to be finding ways to build sustainable balanced communities, where people want to live and remain.

To develop inclusive communities, we need mutual social and community structures that bring all people together, and housing, being one of the fundamentals of life, should be the cornerstone of these structures. Publicly funded housing needs to become accessible to a wider section of the community, in the same way that education and health programmes are of relevance to all.

Is it good that in the UK people tend to aspire to owner occupation, and become owner-occupiers earlier, than in most of the rest of Europe? Should public policy encourage a particular housing tenure pattern or seek to create a level playing field between tenures? What are the implications for the balance between owning and renting of the continuing rise in affluence?

While many people aspire to be homeowners, many people have also been forced into home ownership as a result of the public policies during the 80s and 90s that made alternative forms of tenure unattractive or inaccessible to the majority of the population. [5]

Realistically, home ownership as a part of public housing policy to deliver good quality homes for people on low, or even middle, incomes, requires substantial state support. Most freehold owners cannot afford to make plans for future maintenance, and hope to be able to deal with problems as they arise. For example, in Birmingham, an estimated 40,000 home owners in the city own properties that they cannot afford to maintain. Similarly, the freehold owners of most leasehold properties have made no provision for future maintenance. 'Right to buy' leaseholders on some regeneration schemes, many of them pensioners, can testify to the large increase in their annual service charges to cover the costs of future maintenance, with no access to state benefit to help with the costs.

Furthermore, while 'Right to Buy' policies and other home ownership schemes have responded to individual aspirations, this has not been achieved without some detrimental effects to fabric of the community. Increasing social polarisation has been devastating to so many estates and neighbourhoods, where those that have the ability to do so, have left. Even where home owners remain, it is difficult to build sustainable communities where the interests of tenants and home owners diverge. We need to build models that potentially bring home owners and tenants together as one community. Housing Co-ops and other community based organisations have demonstrated that common housing issues can be an effective building block for communities, and this potential may be limited by increasing percentages of home owners.

Should social housing policy specifically encourage mixed tenure?

Of course individuals should continue to be able to become home owners if they have the means and the desire to do so. However, as a public housing policy, individual home ownership is not an efficient way of housing the community, or of maintaining housing stock. Public housing policy should neither encourage or discourage home ownership or mixed tenure, but should aim to ensure that all people have a level playing field from which they can make a choice about whether they wish to rent or own.

Who should own 'social housing'?

Should the social rented and the private rented sectors have different functions and meet the housing requirements of different people? Does it matter who owns the housing as long as it is affordable and well managed and maintained?

Ownership of social housing and its assets is important because whoever owns the assets ultimately has control over them, and will determine in whose interests housing will be run. Affordability and effective management and maintenance are important, but they will only be by-products, if tenant and community interests are secondary to the ownership organisation's interests. Therefore, simply transferring local authority housing to RSLs may simply be replacing one form of large and unresponsive landlord with another, and most housing associations (particularly the larger ones) will be even less accountable to tenants, the community, central and local government, than the local authorities they are replacing.

Should social landlords compete between themselves? Is competition good for the cost and quality of the service, or a bad use of public resources?

RSLs competitively bidding for Social Housing Grant throughout the 1990s has been the most important factor in the move to 'welfare housing'. Having established welfare dependency, the interface now between tenants and RSLs is sometimes like the relationship between welfare benefit staff and claimants, a relationship that starts from the assumption that all tenants are out to 'pull a fast one'. Of course, there are imaginative and supportive staff in RSLs. However, RSLs have a long way to go to change their culture to one that will be conducive to building neighbourhood democracy and many transfers of properties from local authorities to RSLs in their present form will lead to poor quality housing, if this culture is not significantly changed.

Does it matter who owns and provides social housing? Should for-profit companies be allowed to own social housing, as well as run it? Should Housing Associations diversify into provision such as rented housing at market rents?

These problems would be even worse for for-profit RSLs or in a larger private rented sector. Housing for profit will not be able to take the community approach that is necessary to run social housing, and factoring in the profit element could only be achieved by cutting back on the services provided or raising rents to unacceptable levels. Market driven solutions have been shown not to work. Relaxation of fair rents and other incentives for private landlords in the late 1980s did very little to increase the supply of good quality rented housing, and contributed to an escalating housing benefit bill. Opening up 'social housing' to the 'market' will lead to large unresponsive landlords who will be very difficult to monitor, to increasing social polarisation, to increased costs and will do little to tackle social exclusion.

Tenant ownership & control

The answer is that ownership and control of 'social housing' should pass to tenants and communities wherever possible, and wider strategic control to community organisations that bring together tenants, the local community and local authority representation.

Should tenants and residents be encouraged to own and/or manage their own estates on a far larger scale than is now the case?

There is clear evidence of housing co-ops and tenant controlled organisations being 'what works', both through the many successful examples where tenants and residents have taken control, and through government research. The Price Waterhouse report concluded that most housing co-ops and other tenant controlled organisations:

Given this research and the other research we have highlighted, and the examples of successful tenant owned and controlled organisations, it is surprising that tenant control is not already a central plank of government housing policy. Regrettably, the examples of housing co-ops and tenant control currently in existence are what has been achieved in environments that have not been supportive to tenant control.

Is it the case that, as social housing was conceived in a different era, with very different economic and social needs, the time is now right to move to different forms of ownership and control, allowing people greater consumer choice?

On the one hand, tenant management was perceived by many local authorities as a threat to their housing, and in many cases tenant management was not allowed out of the starting blocks. Where tenant management organisations have been set up, in too many cases, this has been despite the local authority, rather than through a partnership approach.

On the other hand, ownership co-ops registered with the Housing Corporation have been forced to exist in an environment dictated by large RSLs. In this environment, it is a testament to the strength and vitality of the housing co-op movement that 269 remain registered.

Should all social housing tenants have a say in how their homes are run and what should these be?

We are asking the IPPR to consider carefully what could be achieved through housing co-ops and tenant control in an environment that is supportive, where structures exist throughout the country to support tenant control. Only a minority of local authority tenants and next to no RSL tenants have come across tenant control options, and there is a massive potential to set up tenant controlled housing. Many that have come across the options are put off, because there is little support for the option and few housing staff have skills or the will to work with tenants who wish to take control.

The specific steps that need to be taken to build the housing co-op and tenant control movement are outlined in the CCH's document 'Tenants Taking Control' [7], and in the UKCC's document 'Realising the Potential' [8]. The key elements involve:

  1. Ensuring that there are financial mechanisms that enable the development of small-scale community owned RSLs.
  2. Ensuring that revenue support funding is available to develop tenant controlled housing co-operatives (i.e an RSL equivalent of the Section 16 Grant programme).
  3. Ensuring that support structures are available for tenants to establish and maintain tenant controlled organisations.

Should faster moves be taken towards tenant management and control, and if so, what should these be?

To build systems of tenant and community control, it would seem obvious that the successful examples of ownership and management housing co-operatives should be examined. We suggest that the IPPR visit some of the many successful housing co-ops and tenant controlled organisations, both in England and in Scotland, and if requested we can arrange such visits.

Many of the most successful and durable ownership housing co-ops have been those that have bought services from the 5 dedicated housing co-operative agencies and we need to examine what it is about these agencies that has led to effective housing co-ops being established and maintained for many years. Similarly, the examples of successful tenant management organisations have generally benefited from good quality agency support to help establish them, a good working relationship with their local authority, and from the DETR Section 16 grant programme. The successful tenant controlled organisations should become the building block for a new tenant and community empowerment programme.

Wider community & neighbourhood control

How do we ensure that all the mainstream funding programmes - housing, education, health, benefits, New Deal, police, and so on, work in a co-ordinated way for the poorest communities? How do we ensure that the myriad of initiatives do not undermine the objective of improving co-ordination and neighbourhood action, focusing attention on outcomes rather that the bureaucracy of so many initiatives.

Ultimately all neighbourhood issues should be co-ordinated through the community. The key to the success of all regeneration programmes is mobilising the common sense approach of the local community and once that energy is stimulated and focused, this will provide the strongest way to ensure co-ordination of all the services in any one area.

Neighbourhood management schemes and regeneration programmes should have as their goal that the community will become empowered to own and control its own assets. This may not be an easy task, and there may be steps along the way to achieving this goal. However, although people who are external to a neighbourhood have an important role to play in supporting the community, they cannot solve the neighbourhood's problems in the long term, regardless of how well-intentioned they are.

Each neighbourhood should be taken as a whole, and wherever possible a Community Land Trust should be established. 'Social landlords' should be encouraged to transfer ownership of the land to the Community Land Trust to build a community controlled asset base. The Community Land Trust model would be a unique way in which to bring together the interests of all residents in an area, regardless of tenure, as well as ensuring that the interests of the local authority and the 'community in general' are represented. [9]

Should there be a policy of merging and restructuring RSLs to get greater economies of scale or should there be a larger number of smaller RSLs? Should RSLs rationalise into clearer geographical areas, eg. by swapping stock? How should other 'stakeholders' be involved and represented - the community in general, the taxpayer, future social housing tenants, and so on?

The properties on the land should be leased back to the landlord of the properties. Giving tenants the right to transfer to the landlord of their choice would be messy, would not contribute to building communities and would not deliver any benefits to the tenant. However, all tenants in a neighbourhood, regardless of whether properties are owned by RSLs or local authorities, should actively make a choice about whether their homes should be tenant controlled, and/or tenant owned.

Economies of scale in providing housing and services to a larger numbers of properties can be made through smaller organisations using support agencies over whom they have some measure of control. The Community Land Trust itself could establish a support agency if necessary and the model would also allow for the advantages of a collective economic approach to be extended to home-owners working together in a neighbourhood to get cheaper building and renovation costs.

Should tenants' rights include the right to transfer to a different landlord whatever form the current landlord takes?

The situation in Northern Ireland is that the Northern Ireland Housing Executive owns the bulk of 'social housing' alongside 34 comparatively small, but non-neighbourhood based, RSLs. The large size of the Housing Executive is more to do with encouraging non-sectarianism and transferring stock is barely an issue as yet. Currently there is a policy that prevents the establishment of new RSLs and this policy may need to be rethought if transferring stock does become an issue. Furthermore the Community Land Trust approach should be considered, particularly in rural areas, to ensure affordable housing remains an option as land values increase in the future.

Building balanced communities

From our experience the following points are important in building sustainable communities which will take responsibility for their homes and environment:

While people external to a community may lend support and help the community to develop its vision, the only people who can sustain communities are the people who live in the community.

It is often the less confident and articulate members of a community organisation who are the bedrock of the organisation, carry out the day to day tasks and have the best ideas for their neighbourhood.

Should lettings policies be specifically geared towards creating more balanced communities? Can this be done without prejudicing the interests of people in housing need?

How should the interests of homeless people, people needing transfers, and others in housing need, be protected?

Should anti-social tenants be more easily evicted from and then excluded from social housing in order to protect communities, and what should happen to the people who are so excluded? What are the implications of policies which try to protect 'decent' tenants from 'anti-social' elements on estates?

Any neighbourhood would suffer if it was only allocated emergency and potentially vulnerable people, and there is a need to ensure that a balance of people are allocated to each neighbourhood, balanced between those with family ties in the area and those without, balanced between families and single people, balanced between the young and the elderly, balanced between those on welfare benefits and those in employment, balanced between people from different ethnic backgrounds, balanced between the socially excluded and the socially included. There can be no hard and fast rules about how this will be achieved, but the current methods of allocations through local authority nominations to RSLs would be adequate (and would continue to protect the interests of those in housing need) if there was dialogue between the local authority and community organisations in each neighbourhood about the balance of its nominations. While there will always been a need for a percentage of emergency allocations, it would greatly assist the community building process if local authority tenants were pre-allocated to properties wherever possible.

Is there an optimum size for a social landlord? Should there be a limit on the size of registered social landlords?

Should transfers be subject to a maximum size?

The issue of 'anti-social' tenants is always an emotive one. The majority of neighbourhood disputes are best resolved by sensible mediation and dialogue, and tenant controlled organisations usually have a good record in promoting such an approach. Community pressure, structured by proper training and support for community volunteers, is the most effective way of ensuring compliance with acceptable standards of behaviour. For example, a noise nuisance case in a housing co-op will usually be dealt with by the complainant referring the matter to an appropriate co-op officer who will usually deal with the issue immediately, and in most cases the problem will be resolved without the need for further action. Co-ops build tenants' sense of responsibility and it is usual in a co-op that if a member wishes to have a party they will communicate with their neighbours beforehand to ensure that it is held in a mutually acceptable fashion. In more serious cases, housing co-ops are the best placed organisations to resolve problems that need more serious action because they are 'on hand' to develop whatever action is necessary.

The issue of size

What are the objectives of transferring local authority stock? Is it just to get round the investment rules or will it lead to improved management as well?

The size of many social landlords has been a significant factor in ensuring that it is difficult to establish communities or genuine accountability, and this problem is exacerbated by geographical remoteness. However, whatever the size of the social landlord, the key to developing social inclusion and community is to engage with the community at a level of property numbers that enables residents to relate to the method of interaction and identify with it.

For some people this might be no more than 50 properties, but if necessary the method of interaction must ensure that all people at this level are actively given the opportunity to democratically exercise genuine decision making powers. This is as true for a housing association that has 40,000 properties spread over a wide geographical area as it is for a resident controlled housing association that owns 1,000 properties in one geographical area.

Stock Transfer

Are tenants given a proper choice when voting on whether to transfer?

Transferring stock has been focussed on bringing in investment. It is unlikely that many transfers would have happened had investment been possible while maintaining local authority ownership. Despite promises of rent control, agreement to have tenants on the transfer board, and policies for accountability and consultation, many tenants see stock transfer as a demonstration by the state of a lack of commitment to their interests and do not trust RSLs to act in the interests of the community.

Should there be a single form of tenancy for social housing, making it possible to transfer landlord without losing tenancy rights?

The important question that needs to be considered with regards to investment is how will that investment be safeguarded. With transfers being increasingly dependent on private loans, and with increasing rents and the introduction of service charges, it is vital, once investment has come in, that there is a sustainable future for the properties because further substantial investment will not be possible. A sustainable future can only be guaranteed if transfers are seen as an opportunity for communities to discuss the future of their homes and environment and to build the capacity of the local community to take responsibility for their area. Although the initial impetus and investment in the transfer vehicle are likely to produce a short term focussed vision, it is unlikely that these gains will be sustained unless the community is genuinely engaged through a participatory democracy in the transfer. Therefore, no stock transfer proposal should progress until Section 16 Tenant Options Studies have been carried out with tenants in all neighbourhoods of the proposed transfer. Given the need to create local participatory democracies, it is unlikely that whole local authority stock transfers will work.

Should all social housing tenants have the same tenancy rights?

Currently, many stock transfers work against small scale community solutions. There are cases where the wishes of a local neighbourhood to set up a housing co-operative have become subordinate to a wider transfer or regeneration programme. In such cases it is seen as preferable to break up long established communities rather than to support and develop what they want. There has been one instance, and there are likely to be more, where transfers have been proposed that include established tenant management organisations. In such circumstances, especially where the tenant management organisation is the hub of community activity in an area, and has been running its properties to a high standard, it would seem absurd not to support and encourage the organisation to determine its own future.

Should there be one body for allocating funding for social housing?

The loss of secure tenancy status has been a major issue in transfer proposals. Again, this is more because tenants do not have trust in the transfer landlord to protect their interests, and if that trust was there the legal loss of rights would not be so important. This is the case for tenants of fully mutual housing co-ops who legally enjoy less formal rights because they only receive contractual tenancies. However, a fully mutual housing co-op tenant, being a member of the co-op, and therefore both landlord and tenant, has the right and the responsibility to be involved in the community decision making structures of the co-op. This is the strongest way to protect individual rights.

Should local housing authorities concentrate on the strategic housing issues in their area, and is this role helped or hindered if they are major providers themselves?

Nonetheless, if a single tenancy status is to be created, it would be ignoring the significant successes of the Section 16 programme, if the 'Right to Manage', currently only enjoyed by local authority tenants, were not extended to all public sector housing tenants.

The strategic and monitoring roles

Funding of public sector housing should be carried out by Local Authorities who are democratically elected and best placed to determine priorities in their areas. Regional Development Agencies should apportion funding to local authorities within each region. Both Local Authorities and Regional Development Agencies should carry out these functions according to broad policy criteria set by government.

The current regulation and monitoring programme through the Housing Corporation is not as effective as it needs to be. The system is centralised and bureaucratic, and is often about statistics that bear little relation to what actually happens on the ground. Consequently it is easy for larger RSLs to present figures that do not reflect the true picture in all areas they are operating in. Alongside this, many of the key issues that need to be measured are very difficult to quantify and the Housing Corporation has little effective sanction against larger RSLs if they do not meet performance standards.

Ultimately, the best monitors of service provision are the people who receive the services - the tenants and the community. Tenants should be empowered to determine standards of service that are acceptable to them, and be able to monitor whether services are being provided at those standards. To make this happen, there is a need for monitoring information to be available on a borough-wide basis.

Who should regulate rented housing? Should there be one body regulating rented housing in England?

Therefore, to establish stronger local accountability, Local Authorities should be responsible for monitoring all public housing within their boroughs. All RSLs should publish 'stewardship' reports that both outline borough-wide performance details and give an overview of their housing provision and how it relates to Local Authority and government priorities. This overview should clearly identify the work that RSLs are doing to transfer power and decision making to local communities.

If a Local Authority is not satisfied that an RSL is meeting appropriate standards, the Local Authority should refer the matter to the Audit Commission, particularly to examine matters relating to probity, malpractice and mis-administration.

The government should retain the role of determining broad policy criteria, and the DETR should continue to monitor that Local Authorities are applying these criteria. The government should also encourage the development of good practice through the National Housing Federation, the Chartered Institute of Housing and other appropriate bodies.

Should local authorities be allowed to borrow against their housing assets and future revenue streams to fund the backlog of repairs, subject to prudent controls?

The role that the DETR has played to encourage the development of small-scale community solutions, particularly through the Section 16 programme, has largely been successful. What has marked the success of the Section 16 programme has been the manner in which it enables tenant groups to access independent funding and consultants to go through an established framework to develop tenant empowerment. This approach should be extended to tenants in RSL properties.

Financing 'social housing'

How should the government distribute the resources available for housing investment - should it be based simply on assessments of need, or on the strength of the local housing strategy, or on performance?

There is clearly a need for public sector investment in social housing to tackle repairs in the local authority sector and to meet the needs of future tenants, but targets would be arbitrary and hard to ensure compliance with. The taxpayer has a right to expect that resources spent now should lead to developments that will require less future public expenditure, both through bricks and mortar funding and through housing benefit. Therefore, public sector housing should only be funded and social landlords (including local authorities) should only be allowed to borrow against assets, if there is a future means of safeguarding investment, with minimum recourse to further public sector funding. That means of safeguarding investment will involve having an active community that is empowered to make decisions about the neighbourhood.

What should be the balance between personal subsidy and 'bricks and mortar' subsidy?

Public funding should only be spent on housing schemes that can demonstrate sustainability and which are about developing community control. For small RSLs and housing co-ops, the current grant rate of 54% means that the only way for small RSLs to develop properties is through partnerships with larger RSLs, whose culture is often alien to the small-scale community approach of co-ops. A few small RSLs have carried out developments in partnership with larger RSLs owning the freehold, until it can be passed on the smaller RSL, but there is very little information available about such relationships, and the Housing Corporation does not allow RSLs to lease to non-RSLs, which makes the formation of new co-ops very difficult. Furthermore, subsequent transfer of ownership from the freeholder RSL to the leaseholder co-op incurs stamp duty, which, for a small organisation can have a significant impact on rent levels.

The government has a role to determine levels of affordability and grant rates need to reflect both the delivery of affordable rents and the encouragement of small-scale developments. This will require higher grant rates, and in some higher cost areas, a grant rate as high as 75%. However, grant funding should also take into account the level of free reserves available to the RSL, and grant funding should only be possible for community and resident controlled schemes.

How should the government distribute the resources available for housing investment - should it be based simply on assessments of need, or on the strength of the local housing strategy, or on performance?

Setting up tenant and community control is not an easy option. There is a need for revenue funding to enable tenants to examine their options and establish tenant controlled organisations. The DETR Section 16 programme should be maintained, and an equivalent extended to all RSL tenants and to tenants in regeneration and neighbourhood management schemes. This funding should be initiated by tenant and community groups themselves, although applications should identify statutory and other partners involved in the project. Tenant and community groups should be free to work with consultants and agencies of their choice. In very exceptional circumstances, for example to generate community activity where there is none, grants could be made available to other agencies (in conjunction with the local authority), but applications should clearly indicate how and when the community will be empowered to determine the future of the project. Community empowerment programmes cannot be funded through rents and need to be funded publicly, but the short-term costs of community empowerment will be outweighed by savings made through future improved management and through the wider benefits of community development.

How should non-core activities be funded - for example housing plus, regeneration, neighbourhood management? Should none, part, or all of the cost fall on rents?

To establish a widespread system of community empowerment will also require significant national publicity on a similar scale to the publicity that accompanied the government 'Right to Buy' policies of the 1980s.

Housing Benefit

That tenants on housing benefit have no reason to be interested in the rent they pay has contributed to rents becoming unaffordable. It is not uncommon for tenants on housing benefit to believe that they don't pay their rent. Divorcing housing benefit tenants from the realities of rent payment encourages the dependency culture and a lack of individual responsibility.

What are the principles that should determine how housing benefit or its replacement should operate?

Furthermore, the dual benefits system, where central government pays income support, and the local authority pays housing benefit, is a muddle, where a significant amount of administrative work is duplicated. The system is not efficient for the government, the local authority, social landlords or for the tenant themselves, who often need to have skilled knowledge of a complicated system to make a claim, and are penalised with loss of benefit if they fail to understand it.

In parts of Europe a more generous flat rate of income support is paid to claimants, which includes an amount for rent. This has the advantages of being cheaper to administer, and of giving tenants on benefit an interest in rent levels.

However, with escalating rents in the RSL sector, it is difficult to envisage how a flat rate could be set that did not severely penalise RSL tenants with high rents. It is probable that any change to the housing benefit system will cause hardship for some tenants, and will cause problems in housing management departments, and in the legal system, as housing benefit tenants are taken through the courts for non-payment of rent. If changes are to be made to the housing benefit system, gradual change (a gradually increasing percentage that is 'flat rate'; a gradually decreasing percentage that is based on current rents) would be appropriate. Nonetheless, changes to the housing benefit system are necessary, because the current system encourages benefit dependency.

Is it possible to introduce a 'shopping incentive' through reform of the system of housing support? What are the implications of such a change in terms of social exclusion?

The reason for altering the housing benefit system should not be to stimulate tenants to 'get on their bikes' to look for cheaper rents. It should be to encourage more tenants to question why their rents are high, to get involved with the management of their properties and put pressure on landlords to find ways to reduce rents and not to carry out high cost developments.

A 'shopping incentive' is unrealistic, because demand for affordable properties in many areas exceeds supply, and for most prospective tenants having a number of housing options is not possible. If changes to the housing benefit system lead to significant numbers of tenants moving to areas with cheaper rents that are already suffering from social polarisation, a large influx of tenants on housing benefit will only exacerbate those problems.

Tackling social exclusion and employment issues

Social housing is increasingly seen in the wider context of social inclusion, economic regeneration and regional strategy - but what does this mean for the way it develops in the future?

Many regeneration schemes equate tackling social exclusion with tackling unemployment, and suggest that empowerment is about finding people jobs. This is only a part of the story. In many neighbourhoods, a consequence of finding a person employment will be simply that the person has the means to move away from the community, and the problems remain in the neighbourhood that they have left. Some employment programmes, even in areas of high unemployment, will still find it hard to recruit people to job vacancies, because often the problem is about motivation and alienation. A recent study carried out for the Joseph Rowntree Foundation found that "everyday life in deprived neighbourhoods is characterised by households' inability to complete a large number of basic tasks necessary for maintaining a reasonable quality of life". 82% of those studied wanted "to engage in more activity for themselves and others". The report goes on to say that "people are prevented from getting work done and from helping themselves and others by their lack of money, equipment, time, skills, confidence, social networks, as well as a perceived lack of a local sense of community". The research concludes that "the current approach of creating job opportunities to provide people with greater income needs to be complemented by more direct measures which harness people's abilities to help themselves and others." [11]

Therefore, although developing individual employment prospects is important, tackling social exclusion is about building individual self-help, motivation and wider empowerment. Tackling employment issues in neighbourhood regeneration programmes should be carried out in a 'bottom-up' fashion, that provides options that build individual and community social entrepreneurial spirit, and which are clearly identified as being self-sustaining in the long term. These options should include setting up worker co-operatives and community enterprises that are led by the community, and small-scale housing developments could be linked to small-scale community workspaces.

How can housing make a bigger contribution to the development of local economies and the generation of local employment?

Regrettably, many regeneration schemes approach employment in an opposite top-down fashion, with very few schemes and enterprises set up to become sustainable within the community. This lack of sustainability and the consequences of having the same large agency providing housing, employment schemes and possibly even welfare benefits extend the dependency culture, and does nothing to promote self-help or community responsibility.

Conclusions

The original vision that founded the co-operative movement over 150 years ago was about ordinary people working together to provide their own mutually beneficial solutions. This vision, started in this country and exported throughout the world, is the radical new vision that is required to attack the current problems of social exclusion, dependency and the breakdown of community throughout the country.

Change in public sector housing provision is urgently needed. Local Authority and RSL 'Social Housing', with its inherent top-down nature, continues to drift towards being 'welfare housing', where individuals and communities are trapped in benefit dependency. Self-help is rarely encouraged and the gulf that separates the underclass from those more affluent, homeowners and tenants, the socially included from the socially excluded, looks as wide as ever.

The natural successor to the wider democratic vision of local authority housing is local community and neighbourhood democracy, through housing co-ops and tenant and community control. The small-scale community control approach is the answer, an answer that has been there since the 1970s and earlier when housing co-operatives were first set up.

It is through building the balanced communities that housing co-operatives and other tenant controlled organisations establish, communities built and sustained by their members taking real responsibility and accountable democratically to all local residents, that social exclusion will be beaten, and that the taxpayer will be freed from the burden of permanently funding social exclusion. Real community ownership should be the foundation of all neighbourhoods, a foundation that will enable communities to build their own solutions, tailored to address the problems in their own neighbourhoods.

References & notes

1. 'Tenants in Control: an Evaluation of Tenant-led Housing Management Organisations', a report by management consultants Price Waterhouse, HMSO/Department of the Environment 1995 [Back to text]

2. Clapham, Kintrea & Kay, 3 university study 1998, first reported in the May 1998 issues of the Journal for Co-operative Studies [Back to text]

3. 'Voluntary Organisations: citizenship, learning and change', K T Elsdon with John Reynolds and Susan Stewart, published by NIACE, ISBN 1 872941 87 7 [Back to text]

4. Community Land Trusts are characterised by dual ownership, where the CLT owns the land in perpetuity (often gifted to it by local government), while residents own the housing, usually on a 99 year lease. Most American CLTs are involved in either developing affordable co-operative housing or home ownership, dependent on the local housing market. In neighbourhoods where property costs are low, the objective is to extend either co-operative housing or owner occupation through mutual mechanisms, and thereby reverse neglect and abandonment through local land stewardship. Where property costs are rising, the objective is to protect and preserve affordable home ownership. [Back to text]

5. In order to find out if people actually positively want to own their own homes, it would very much depend on how the question is asked. Simply asking if one wants to own their own home is equivalent to asking:

"Would you like to own your own home, if the alternatives are:

Probably most people would choose the third option. However, if you ask:

"Would you like to own your own home, if the alternatives are:

It is quite probable that the answer would be quite different. [Back to text]

6. Ibid Price Waterhouse report [Back to text]

7. 'Tenants in Control', Confederation of Co-operative Housing 1999 [Back to text]

8. 'Co-operative Housing: realising the potential' published by the UK Co-operative Council 1998 [Back to text]

9. An example that is close to the Community Land Trust model is being established in Redditch, where Redditch Borough Council, with cross-subsidy from a housing association, are establishing Redditch Co-operative Homes, who will eventually take ownership of properties that will be leased to a number of autonomous housing co-ops. The board of Redditch Co-operative Homes consists of representatives from the local authority and residents of the housing co-ops (and from the housing association until the cross-subsidy is paid off). While this development does not have a relationship with home owners, its similarity to the Community Land Trust model is that the development is establishing an over-arching body with representation from residents and local government whose aim is the establishment of a number of autonomous tenant controlled housing co-ops. [Back to text]

10. 'Community Training and Enabling', The Housing Corporation 1999 [Back to text]

11. 'A helping hand: Harnessing self-help to combat social exclusion',Colin C Williams & Jan Windebank ISBN 1 902633 42 3 [Back to text]

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