Back to Bricks and Mortar

Last week the Scottish Fabians published a pamphlet of essays by Scottish Labour MPs called A pragmatic vision for a progressive Scotland. In my essay I put the case for Scotland investing in affordable housing so as to bring the Housing Benefit bill down. Today Politics Home published a summary of my essay, and I’ve reproduced this in full below.

In 1980, £16 of every £20 spent by the Government on housing went towards building homes, and £4 went to helping people afford rents. In 2014, only £1 of every £20 goes on building homes and £19 goes on Housing Benefit.

This all stems from the shortage of affordable housing.

In September 2013, Edinburgh’s housing register had 2,100 households (70% single or childless couples) holding ‘silver’ priority (the second highest category) because they were homeless. Most weeks, there are between 50 and 90 properties of all sizes available for let across the council and all housing associations in the city. This gap between the number of applicants and the number of available homes has been rising for years.

People like this – and others on low incomes – end up having to move into the private rented sector, which they can only afford by claiming Housing Benefit. So government spending on the benefit side of housing has been inexorably increasing year-on-year – £23.9bn in 2012/13, almost five times what we spend on Jobseekers Allowance – and this is expected to continue.

That’s why I used my essay in the Scottish Fabians pamphlet ‘A pragmatic vision for a progressive Scotland’ to make the case for moving away from subsidising rents and back to ‘bricks and mortar’.

Unfortunately the Coalition’s attempts to do so can, at best, be described as tinkering around the edges, and their own predictions are for ongoing annual increases in spending on Housing Benefit. Ministers claimed that reducing Housing Benefit payments in the private rented sector would lead to landlords reducing rents, but in most places there is no sign of reduction, and there are increases in the highest demand areas.

Tinkering is at its worst in the Bedroom Tax, which manages to combine casual callousness with crass ineffectiveness as a savings mechanism. Labour has committed to abolition. But –abolishing the tax only restores the position to where it was, and does nothing to address the issues of a lack of housing supply and the growth of Housing Benefit spending.

Investment in new homes needs to come from the state, but the key lies in tackling these problems at the level of local authorities. There are two possible models for this. The first is to simply devolve housing spending to local authorities. The second is to seek agreements with local authorities whereby investment in housing is linked to a reduction in housing benefit spending. The second option may be preferable as it provides greater financial control to the centre, from where the money is being provided.

There are a number of ways that the council could save money to invest in more affordable housing. Edinburgh currently has 1,680 properties as part of Private Sector Leasing (PSL), where the council leases properties from private landlords. The rents for this scheme are considerably higher than for council-owned properties, and the housing benefits bill soars as a result.

In return for receiving additional capital investment for acquiring new affordable homes, Edinburgh could set itself a target of reducing its use of PSL properties by an agreed number per year. This would eventually save around £9m per year, to be retained by the local authority for further investment in additional homes.

The number of people living in temporary accommodation is also growing. In June 2013, Edinburgh had 849 households in such accommodation, up from 595 in 2007. Costs of temporary accommodation are considerably higher than permanent tenancies, and 98% of those living there are on housing benefit. A reduction in the amount of temporary accommodation used could provide extra funds for building more affordable housing.

Scottish Labour’s proposal to devolve responsibility for Housing Benefit from Westminster to the Scottish Parliament could be hugely helpful in putting some of these ideas into practice, but we also need to face up to the policies of the current Scottish Government, which have contributed to investment in affordable housing falling in Scotland.

In particular councils are being hamstrung by the ongoing, underfunded, council tax freeze, which is regressive in its impact. I believe councils should be able to go to their citizens with proposals to increase council tax to help build more homes. This is the type of political conversation we need to be having.

facebooktwittergoogle_plusredditpinterestlinkedinmail

Press Release: Government must reform ‘fit for work’ test after Atos quit contract

Reacting to the news that Atos Healthcare will no longer carry out Work Capability Assessments, Edinburgh East MP and Work and Pensions Select Committee member Sheila Gilmore said:

I regularly meet sick and disabled people who are unable to work but who have been declared fit to do so following a flawed Work Capability Assessment.

While I welcome today’s agreement, Atos withdrawing from its contract won’t be enough to address the failings of this policy. Ultimate responsibility must rest with Work and Pensions Secretary Iain Duncan Smith.

Amongst the many changes the Government should now make to the assessment, amongst the most important are dropping the audit targets that force staff to refuse claimants benefits, ensuring all assessments are recorded, and reducing the regularity with which people are called back.

Unfortunately Ministers are set to miss this opportunity by handing out a similar contract to yet another outsourcing firm. I will make the case for a different approach.

Notes to Editors:

facebooktwittergoogle_plusredditpinterestlinkedinmail

House Magazine: Dialogue – Bedroom Tax

Earlier this week, I participated in an exchange of emails with Tory MP Stephen Mosley. We were responding to the question ‘Is the so-called ‘bedroom tax’ a fair way to tackle under-occupancy and rising welfare spending?’ Our exchange was initially published in the House Magazine, but I have re-produced it in full below.

FROM: STEPHEN MOSLEY; SENT: 10 MARCH 2014 19:02

Dear Sheila,

Labour was once a party who claimed to believe in fairness, but their opposition to removing the Spare Room Subsidy shows that this is no longer the case.

It is only fair that Housing Benefit should be based on someone’s housing need. If you need a larger house you should receive more Housing Benefit than if you need a smaller house. But the Spare Room Subsidy meant that the larger your house, the more money you got, irrespective of whether you needed that larger house or not!

A system that simply pays out more for a larger house, irrespective of need, is simply unfair. It is unfair for those people who are forced to live in overcrowded conditions because they can’t afford to live in a larger house or because there are no larger houses available. And it is also unfair on the taxpayers who pay for our welfare system.

People should have a choice in housing and if they want to live in a house larger than they need then I have no objection to them paying a little extra towards a larger house.

The Labour Party used to think so too, which is why they introduced the Local Housing Allowance in 2008 making Housing Benefit fair for private sector tenants. If the Local Housing Allowance is fair for taxpayers and tenants in the private housing sector, why is scrapping the Spare Room Subsidy unfair in the social housing sector?

Yours Ever

Stephen

FROM: SHEILA GILMORE; SENT: 12 MARCH 2014 11:03

Dear Stephen

The ‘bedroom tax’ combines casual callousness about individuals and crass ineffectiveness as a savings mechanism. There is a fundamental incoherence at the heart of this policy. In the Government’s budgets a saving is included which assumes that those affected remain in their homes and ‘pay the tax’. How that fits with the justification that the aim is to achieve better use of council and housing association properties is not clear. If everyone could ‘reshuffle’ into the ‘right’ size of house the saving would disappear.

Strangely your argument about the Local Housing Allowance was never mentioned when the Bill was being debated, and it is a last minute attempt to defend the indefensible. The Bedroom Tax applies to tenants in their existing homes who have their income reduced regardless of whether there is anywhere else to move to. Like my constituent made redundant a year ago at age 59 who has suddenly to find £12 per week from her £ 71pw Job Seeker’s Allowance.

In contrast when LHA started in 2008 it applied to new claims and to existing claimants only if they moved. Before 2008 individual rents were checked for eligibility for benefit, which took size of property into account. The main change in 2008 to a standard area payment for each size of property was quite different in its impact on claimants.

Best Wishes

Sheila

FROM: STEPHEN MOSLEY; SENT: 12 MARCH 2014 14:13

Dear Sheila
Thank you for your reply, although I must say it was a typical politicians’ response – not answering the question!

We can all draw on the cases of constituents. Before the removal of the Spare Room Subsidy I frequently heard from families living in overcrowded conditions who were desperate to find suitable larger accommodation. With the increased availability of larger houses, this is now becoming much less of a problem.

You raise concerns about your own constituent; however she does have a choice. She is not being forced to live in a house larger than she needs. She can choose to spend her money on a larger house, or save money and downsize. This is the reality for everyone in the private sector, and this should be the reality for those in social housing too. We are ensuring that there is a level playing field and that fairness is restored to our welfare state.

For those who do want to downsize we have launched Home Swapper Direct, to make the process of downsizing (or upsizing!) easier than ever before.

However, it is important to remember that this is not a blanket measure. There are exemptions, as is the case with Labour’s Local Housing Allowance. Disabled people, who require an extra bedroom for medical equipment or their conditions are either exempt or can claim Discretionary Housing Payments. Pensioners, who may have lived in the same house for their entire lives, are also exempt. This seems to be a fair and balanced implementation.

It is also interesting to note that you call the removal of the spare room subsidy a ‘bedroom tax’. We all know that this is misleading. Removing the Spare Room Subsidy simply makes Housing Benefit based upon need rather than the size of your house. Fair for tenants, taxpayers and people on Housing Lists too.

Yours Ever

Stephen

FROM: SHEILA GILMORE; SENT: 14 MARCH 2014 08:46

Dear Stephen

My constituent (one of 3500 in the city) doesn’t have a real choice. This week only 20 one bedroomed properties were advertised for let across all the city’s council and housing association properties. Of these 5 were in sheltered housing. The number is falling, between 25 and 30 last year, and now most weeks being below 25. Turnover is greater in the private rented sector. But if my constituents swap their two bed council flats for one bed private lets the cost to housing benefit would be £115.37 per week instead of £92.97.

Landlords try to help with exchanges, but getting a suitable match is difficult. Most one bed properties are already occupied by single people.

Seventy per cent of homeless applicants are single or childless couples. Last year that was 3051households, also chasing one bedroom properties. Even if all the ‘ones’ go to ‘downsizers’ it will take years to move them and that leaves the homeless applicants in much more expensive private lets or even more expensive temporary accommodation for longer. In the meantime the ‘underoccupiers’ are still having to pay the ‘tax’. Not much of a choice for someone on £71pw!

Other areas face different pressures. The policy wasn’t researched or modelled. Spare rooms in Newcastle won’t help overcrowded families with jobs in London. There is little evidence that this is easing overcrowding.

Among the disabled only those with a disabled child unable to share a bedroom or with a non resident overnight carer are exempt. Others can apply for DHPs but not all get it, especially where Disability Living Allowance is seen as income from which payment can be made. Then there is the need to keep reapplying and the uncertainty that brings. Your Government won’t even exempt all those with homes adapted to their needs or severe conditions!

FROM STEPHEN MOSLEY; SENT: 14 MARCH 2014 17:13

Dear Sheila,

In previous emails I have outlined how removing the Spare Room Subsidy is fair for people living in overcrowded conditions and I have shown how it is fair on the taxpayer, remodelling the welfare system so it costs less and is directed at those in need.

Every step of the way, this policy has confounded Labour’s expectations. Let’s not forget what the opposition said about this policy. They said it would lead to an increase in rent arrears, when rent arrears have fallen over the past year.

They claimed it would lead to an increase in social problems, when a greater focus on early intervention has helped tackle social problems more effectively.

And they claimed that there simply wouldn’t be the homes for people to live in. But we now know that housing providers have started to build more one and two bedroom properties.

When this Government came in to office, the housing benefit bill had ballooned while it was serving the interests of fewer families. If we were going to fill the monstrous financial black hole left behind by the last Labour Government and deliver a welfare system that worked for people, that had to change.

Because of this Government’s actions and in spite of scaremongering by the opposition, things have changed. Our welfare bill is falling and thousands of people who were once living in overcrowded homes now have a home that fits their needs.

I will leave the last word to Beveridge, who wrote “In establishing a national minimum, it should leave room and encouragement for voluntary action by each individual to provide more than that minimum for himself and family.” Removing the Spare Room Subsidy is a step on the way to realising Beveridge’s vision.

Yours Ever

Stephen

FROM SHEILA GILMORE; SENT: 16 MARCH 2014 22:37

Dear Stephen

The National Housing Federation research on the experience of housing associations shows that, although arrears fell in the first three months of 2013, in the six months from April 2013 there was an 11% increase. Only 6% of tenants downsized by transfer or exchange. In six Scottish councils covering half of affected Scottish tenants, at 31st March 37% of affected tenants had arrears, but by 30th September this was 68%.

This is an inefficient way of ‘saving’ public spending. As well as the cost of DHPs , councils are bearing the expense of administering so many claims. On average housing associations each spent £73,250 on additional advice and help in the year to April 2013 and expect to spend £109,000 each this year.

I agree that the total housing benefit bill is too high, but, sorry Stephen, the ‘bill’ isn’t reducing. The DWP’s original forecast was for a cut in real terms from £24.4bn in 2012/13 to £21.6bn by 2014/15. Now revised projections are showing £24.3bn for 2014/15 and £26bn by 2018/19.

Much of the increased cost is in the private rented sector, where the gainers are landlords not tenants. We need a real shift to building substantial numbers of new homes at affordable rents (not the 80% of market rents your Government is insisting on, another recipe for rising benefit bills).

The irony is that despite real financial loss and upset caused to many (like my constituent faced with less money every week while trying to find somewhere else, as well as leaving the home she and her late husband invested in, or the woman who has just got a wheelchair accessible home after waiting four years in a second floor flat), the savings claimed aren’t happening.

I stick by my original description – a policy both harsh and pointless.

Best Wishes

Sheila

facebooktwittergoogle_plusredditpinterestlinkedinmail

My speech in the budget debate – cost of living, unemployment, childcare and taxes

Yesterday I spoke in the first day of debate following the budget. You can read the full debate here, but I’ve reproduced my speech in full below.

In June 2010, the Chancellor led his band of merry men, straw men and tin men on the yellow brick road towards his emerald city: the elimination of the deficit by 2015, the cutting of public sector net borrowing to £60 billion in this financial year—in fact, it will be £108 billion—and growth of about 2.5% every year during this Parliament. The trouble was that he fell off his yellow brick road fairly quickly and started wandering around in the wilderness of low growth and higher borrowing. Suddenly, after four years, he seems to have found himself back on his road, albeit not as far down it as he expected. Like all expeditionary leaders, he is quick to tell us that he always knew where he was, and where he was going, and that it was all part of his long-term plan, despite the fact that he has not gone as far as he expected.

Does all that matter? It does, for a number of reasons. We are being asked to believe that someone who gave us that fantasy journey can still give us something credible. It also matters very much to the people who had to accept the austerity measures that we were told were essential to get us down the road as quickly as possible. People have suffered, and to find out four years on that we have not actually made much progress is bitter gall for many.

What about the people left behind? The cost of living crisis is real. People’s real earnings have fallen. All the Treasury and Institute for Fiscal Studies figures show, slightly differently, that the people who have lost out most are those at the bottom and the top of the earnings scale. However, for someone to lose 5% when they are earning £3,000 or £4,000 a week is very different from losing 5% when earnings are £150 or £200 a week. The impact on everyday life in the latter case is far greater, because the issue is not about having to cut out a few little extra luxuries—perhaps not go out for a meal as often as one might otherwise have done—but about basic foodstuffs, heating the house and buying clothes for the children. It is not good enough to say that the situation is all right because the people at the very top have also seen an income drop, which makes it fair; in the real world, that is not fair.

The other group that the Budget has rather lost sight of is the unemployed. People often say that unemployment has dropped by such and such a percentage, but the number is still very high. In April to June 2010, 2.46 million people were unemployed; according to today’s figures, the number is 2.33 million. I make that only 130,000 fewer than in 2010. Unemployment, of course, went up between 2010 and now and has come down again, and that doubtless explains some of the percentage drops that people are talking about. However, 130,000 fewer unemployed people, although better than before, is quite marginal.

What are we doing for the 2.3 million unemployed people? There are still 700,000 more people unemployed than before the recession. Where are the measures to get those people into work and to help the young people about whom my hon. Friend the Member for Rotherham (Sarah Champion) spoke so eloquently? There are very few such measures. Talking about percentages going up and down as if we have solved the problem is no answer to people struggling on very low incomes who, in many areas, cannot find jobs no matter how hard they try.

On the child care proposals, at least one Government Member made a lot of the fact that child care costs for those on universal credit are now to be met by up to 85%. We have now had, or will have had, at least five years of this Government cutting help with child care costs from 80% to 70% for people on tax credits—the predecessor of universal credit. So for each of these five years, those people will have found things much more difficult. It is not clear when families in this situation will even be on universal credit, given how that is going at the moment. Will this provision start when the tax relief starts, or will it start only when these families finally get on to universal credit, if that happens? We have not been told.

Moreover, the proposal is to be paid for not by people who are better-off but by another group of people on universal credit. We do not know which group of people because we have not yet been told; apparently, we will know in the autumn. The change will be financed entirely out of the universal credit budget, so some families with children on universal credit will get a little bit more, but somebody else is going to get a certain amount less.

We always make choices in policies, and that is why debates about matters such as raising the tax threshold are exceptionally important for all of us. The 5 million people who are already below the tax threshold will get nothing out of this move. Some 10% of the total cost, which has already been about £10 billion, goes towards lifting people out of tax; 15% of it goes to people on median earnings of up to £26,000; and three quarters of it goes to people earning above the median. That choice has been made, but it could have been made differently. The money could have been used, and could still be used, to help people on lower earnings. If we want to help low-earning families, there are number of other measures that we might want to use, but we are not using them. This is a choice that the Government are making. Constantly portraying it as something that is there only to help low-earning families does a disservice to those families. They know the situation; they know that they do indeed have a cost of living crisis that is not being resolved by today’s Budget.

facebooktwittergoogle_plusredditpinterestlinkedinmail

Events in Parks Manifesto consultation

Edinburgh’s parks are an asset much loved by all residents because they serve as great venues for summer events.  I am therefore pleased that the Council Parks department has begun to consult on an Events in Parks Manifesto.  I am keen to ensure that the manifesto recognises how all parks can be used for vibrant and enjoyable events balanced with the needs of local residents and their environmental concerns.

The consultation closes tomorrow (21 March) and you can read the letter of submission I have made here.

facebooktwittergoogle_plusredditpinterestlinkedinmail