Research Paper on The Challenges Facing the Social Housing Sector

Introduction

Different housing and welfare reforms during the tenure of the Conservative government have taken place, but there is still a context on their implications to social welfare in the United Kingdom (Murie, 2012). Social housing refers to the shelter provided by the government mainly with the aim of improving the quality of life for the people within a particular locality (Hudson-Sharp, Munro-Lott, and Rolfe, 2018, p. 16). Social housing is a critical social aspect that seeks to ensure that all the people have access to affordable shelter and also aims to reduce the exploitation of the poor by companies and individuals by helping to regulate the housing market price (Gregory, Mullins, Murie, and Redmond, 2016). Social housing in the United Kingdom is a significant issue that is addressed by every government as one of the approaches to meeting the basic needs of the people. As a basic need, social housing has a significant impact on the electorate, and it is used to increase government legitimacy by delivering the needs of the people (Shelter, 2019). The housing and welfare policies that are considered in this paper include the Localism Act, the Welfare Reform Act of 2012, and the Housing and Planning Act of 2016. This research paper will research the potential challenges caused by the Conservative government housing and welfare reforms and policies and the mitigation efforts that have been introduced to deal with the problems.

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Challenges Facing the Social Housing Sector under the Conservative Government's New Housing Policies

A housing policy refers to any government action which includes legislation and programs that have a direct impact on the housing supply, standards, planning, and availability in the United Kingdom (Hilber and Schoni, 2016).

Decentralization of Housing Limited a Centralized Approach to Housing Solutions

The social housing sector has undergone significant changes since the Conservative government took power from 2010 (Burman, Greenstein, Bragg, Hanley, Kalambouka, Lupton, McCoy, Sapin, and Winter, 2017, p. 16). The Localism Act of 2010 was a significant conservative government housing policy that led to the decentralization of housing management and planning to the local authorities and the associations (McKnight, Stewart, Thomson, Tunstall, and Vizard, 2015, p. 12). The new Localism Act which was passed in March 2011 aimed at eradicating the bureaucracy in the housing sector by decentralizing housing regulation to the local authorities (McKnight et al., 2015). As a result, different councils and could adopt different regulation frameworks which did not factor the collective housing problem in the United Kingdom. The new decentralized housing framework was prone to abuse by local authorities which limited the ability of the national government to act as an oversight body which could protect the interests of the tenants.

Local Authorities Response to the Localism Act: The Localism Act made it possible for the local authorities to act towards local priorities with different frameworks being associated by different local authorities (McKnight et al., 2015). In this case, the local authorities were able to adopt housing policies that were best suited for their locality needs without restrictions previously posed by a centralized housing approach. Standards were introduced to ensure quality and protect the rights of the people from substandard products.

Housing Associations Response to Localism Act: The housing associations took advantage of the Localism Act to micromanage tenancy tenures which was aimed at improving housing supply by eliminating lifetime tenancy agreements. As a result, the housing associations garnered more control of tenancy agreements.

Reduction of the Ability to Fund New Projects

Local Authorities: After 2015 the Conservative government in power aimed at reducing the state burden in social housing and identified it as a significant cause of welfare dependency in the United Kingdom. The government changed its approach by ensuring a 1% rent reduction annually for four years in England (Disney and Luo, 2017). This reform posed a significant threat to the ability of housing associations to finance future housing projects. The move by the Conservative government extended the Right to Buy to the tenants of the housing associations through the Housing and Planning Act of 2016 which are private entities and reduced the ability of the private entities to raise revenue to be able to construct new houses which cut the housing supply in the United Kingdom (Jarman, 2015, p. 34).

Local Authorities Argument: Framed as an austerity measure after the economic crisis the Act led to the capping of the benefits as well as universal council tax irrespective of the income and those that had a spare room faced reduced housing benefit for the social housing tenants (Cracknell and Keen, 2016, p. 26; Cole, Powell and Sanderson, 2016, p.24). Since its implementation in 2013, the bedroom tax has affected many social tenants in England and Wales which have reduced the overall housing benefit (McKnight, Stewart, Thomson, Tunstall, and Vizard, 2015, p. 12). The tax reform on welfare led to the view that the social tenants who are mostly low-income earners were living in unjustly privileged settings through the government housing benefit and aimed at reducing the overall benefit for the low-income earners (Nowicki, 2018, p. 658).

Local Authorities Response to the Challenge: As from May 2019, the government changed the eligibility to the housing benefits by requiring only families that have reached state pension age to be eligible to housing benefits. The Conservative government introduced a change in government subsidy to be able to reduce the growing government spending in the housing by offering its subsidies only to starter homes or first-time buyers (MHCLG. 2017). Besides, the Pay to Stay which was introduced through the Housing and Planning Act of 2016 aimed at reducing the government burden further by requiring tenants in both private and public housing to pay higher rents. All tenants earning above PS40, 000were affected in London alone and PS31,000 in other areas in the UK. In response to the housing benefits cuts, the local authority's involvement and participation in housing construction have increased which aims at stabilizing the high cost of housing in the United Kingdom. The extended Right to Buy to the housing associations gave the local authorities a significant share of revenue to help increase their funds to construct new homes for the poor (Morphet and Clifford, 2017). These measures are mainly aimed at improving the ability of the councils to collect more revenue to be able to offer social welfare programs to those that need them in the community (Beatty and Fothergill, 2018, p. 953). The bedroom tax is one of the Conservative government welfare reforms that is viewed as a challenge for many people in the United Kingdom mainly due to its ambiguity in implementation and ability to increase the cost of social housing (Moffatt, Lawson, Patterson, Holding, Dennison, Sowden, and Brown, 2015, p. 14). The reforms of the Conservative government on the housing benefits has reduced its overall contribution with the aim of cutting down government expenditure (Moffatt et al., 2015, p. 33). The bedroom tax has received criticism as unduly invasive even by the Conservative party members (Clarke and Williams, 2014, p. 12).

Housing Association: Before the Housing and Planning Act of 2016 the housing associations were able to raise 60 billion pounds of private borrowing, this was taken away after their reclassification into public entities through the extension of the Right to Buy. The creation of the Housing and Planning Act of 2016 required the councils to offset all the value vacant houses to raise capital to finance the Voluntary Right to Buy reform issued to the housing associations (Gregory et al., 2016). The policy did not have any benefits to the UK housing shortage problem because it did not increase the number of houses on construction and the resulting price increases canceled the respective incentive provided by the government to own homes.

Housing Associations Response: Introducing the voluntary Right to Buy which means that the housing associations can control to regulate the prices of their housing units will create a favorable business environment to facilitate the construction of new houses. Introducing the voluntary Right to Buy reduced the number of people seeking discounts for privately owned homes which limits the ability of the poor to benefit (Fee and Kober-Smith, 2017, p. 20; Murie, 2016, p. 13). Housing associations are more involved in guiding the tenants on rent management due to the decline of housing benefits and the growing tenant poverty in the United Kingdom (Power, Provan, Herden, and Serle, 2014). Through programs such as the Housing Plus, the housing associations seek to invest in communities to empower people to be able to raise the rising cost of housing (Power et al., 2014).

Challenges Facing the Social Housing Sector Under the Conservative Government’s Welfare Policies

Welfare refers to any support provided by the government towards the people such as housing benefits for the poor (Hilber and Schoni, 2016).

Reduction of Welfare Benefits Which Affected the Low-Income Households

Local Authorities Argument: The Welfare Reform Act of 2012 significantly reduced welfare benefits with the aim of cutting the overall cost of the treasury. The bedroom tax leveled down the benefits further for those in social housing and was aimed at freeing up larger homes by facilitating mobility especially for small families occupying large houses. The election of the Conservative government in 2010 reduced welfare benefits spending key in reinvigorating the United Kingdom economy in further mandates given to the Conservative government in 2015 and 2017 maintained a similar approach to welfare reforms (ONS. 2017). The United Kingdom responded to the housing and welfare benefits reforms through universal credit, benefit freeze, the benefit cap, rent reduction and size criteria in taxation by introducing the bedroom tax and removal of the spare room subsidy (ONS. 2017). The bedroom tax has been associated with increased poverty and estranged social relationships in the society which has previously been the source to call for an end to the tax. Most of the affected people are in the low-income bracket individuals who face reduced benefits (Hickman, Pattison, and Preece, 2018, p. 32). The cut of the housing benefits exposes the vulnerable members of the society such as the disabled (McKnight, Stewart, Thomson, Tunstall, and Vizard, 2015, p. 40). The Conservative government reform has increased the financial burden on tenants on social housing, and its orientation falls far from seeking to end poverty which has caused many people previously receiving housing benefits to depend on food banks for survival (Department for Work and Pensions. 2011; Greenstein, Burman, Kalambouka, and Sapin, 2016, p. 18).

Local Authorities Response: The local authorities adopted the discretionary housing payment budgets which aimed at cushioning the low-income earners who suffered from the government housing benefit cuts (McKnight et al., 2015). In response to the welfare reform which reduced the overall benefits for the tenants the local authorities increased their discretionary b...