Guest Contributor Simon Beard looks at the drawbacks of the proposed reforms to council housing tenure
David Cameron's ‘idea' for reforming council housing, which would replace lifetime tenure with fixed terms for all new council and housing association tenancies, has received a great deal of attention this week, most of it critical. People are right to be concerned about the effects of his proposed reforms, yet they do not go anywhere like far enough. Three problems immediately spring to my mind, though many other valid criticisms have also been put forward in the past few days.
The first is that the proposed reforms would create a perverse incentive by forcing people to choose between bettering their financial position and continuing to live in their current house. This is not so much a perverse monetary incentive, but one about risk and security. It is easy to see that some people are currently gaining unfair financial benefit from continuing to live in a council house whilst earning a substantial income, and for such people having to pay full commercial rents or a commercial mortgage may not be a significant problem. However getting to this position often involves taking some form of risk, this could be going back into education, starting a business or undertaking a significant period of voluntary work, all of which carry costs, potentially both social and economic. People's willingness to take these sorts of risks is dependent upon their sense of security in other aspects of their lives, and the fear of having to move house and even change their community should they succeed will significantly undermine this, to the extent that many more people may be put off trying.
The second is that the reforms could damage communities with a large number of council houses, reducing levels of social capital at just the time that such capital is needed to help extend the big society into areas that often have high levels of isolation and anti-social behaviour. Most troublingly, the effect of removing life tenure will be both to remove some of the long term residents, who often have an important role in providing community cohesion through so called ‘linking capital', and reducing the economic diversity within estates, meaning reducing the ‘bridging capital' that might connect those with few opportunities to others who could offer them more. Either of these effects alone could be profoundly damaging, but together they will significantly harm people who are already the socially worst-off.
The third is that they will cause deterioration in the quality of housing estates, both environmental and cultural. People who have the opportunity to move into private housing, but choose not to, are often the most committed to making their neighbourhoods a nice place to live, whilst those who feel they are being prejudiced against are often the source of vandalism and social unrest. Whatever the actual effect of these reforms is on the profile of council estates, they are likely to be seen as favouring some over others, and will not release enough new houses to counter this effect by a significant reduction in waiting times for all. This could be disastrous for community relations and alter people's behaviour in ways that will make many neighbourhoods much worse.
All of these criticisms are based on wide generalisations and there will be many examples of communities or individuals to which they do not apply. However, they can be closely related to one another. People who have social connections with those who are doing well in life tend to flourish themselves, whilst communities where most people feel there are no opportunities open to them, or that are socially isolated from other groups, often feel they are being mistreated and adopt more negative and destructive behaviour.
On reflection however, each of them is not so much a problem with the changes that David Cameron has proposed, but with those he has not...
Part 2 of Simon's post argues that, far from being too radical, the Coalition's council housing reform plans need to be taken even further.