Sunday, 27 July 2008

Time to rethink Welfare Housing

Good to see that Newmania has found time in a busy breeding cycle to start blogging again, and no surprise that his last couple of posts see him on brilliant form. Including this post on council housing. Now, whenever I post about council estates being modern rookeries, secure retreats for the criminal underclass, I usually get at least one comment or email along the lines of "I grew up on a council estate in the 1960s ..." or "Mum still lives on a council estate". So I need to make clear that I'm not condemning anyone on the basis of personal association with council housing, that small blocks of council houses in the country don't count as estates in this sense, and that, yes, many better people than me have made their way in the past from council estate to grammar school to Oxbridge in a realisation of personal potential and demonstration of social mobility of a kind I wholeheartedly support.

Council housing used to be allocated on a waiting list basis; anyone could go on the list. Council estates were therefore socially mixed places, and in many cases teachers lived next to welders and civil servants across the road from train drivers. All that changed when council house allocations became needs-based; overnight those most adept at playing the Welfare system went to the front of the queue and large metropolitan council estates rapidly became
Stews of Hogarthian squalor, idleness, ignorance, disease and want. The Hills Report, commissioned by government from the LSE and quietly buried thereafter, catalogues a litany of failure in Welfare Housing;
  • The economic cost to the country of subsidised welfare rents is £6.6bn a year
  • We (the taxpayer) own £400bn in capital value of welfare housing, but our return on capital after management and maintenance is barely 1% per annum
  • It's a myth that council tenants all want to be owner occupiers; given the choice, 39% would prefer to stay as subsidised tenants
  • Barely a third of heads of welfare housing households are in full time work
  • One in eight private house moves are work related, but just a very few thousand moves a year amongst 4m welfare tenants are for employment reasons
  • Welfare tenants stay put in the same house for a very long time. Over twenty years, they will enjoy the benefit of subsidised rent worth £65,000 at Net Present Value.
  • Despite subsidised rents meaning that in theory it's much easier for a welfare tenant to move from benefits to work than for a private tenant, very few do so.
Amongst those of working age on welfare estates, around half are without paid work. Two groups predominate amongst these; those on incapacity benefit, and single parents. The higher-rate disability benefit is the holy grail of the long-term claimant.

The system itself, including welfare housing, actually creates the disadvantage and deprivation it is meant to tackle. The LSE report finds that if you have no qualifications, you will be 43% likely to be workless if you live in non-welfare housing, but 70% likely to be workless if you live in welfare housing. 35% of single parents outside of welfare housing are without work, but 64% of those in welfare housing are out of work.

Moving from benefits to paid work should be very much easier if your rent is only £35 a week; common sense suggests that those in private rented accommodation paying 3 times this at market rates should be the ones 'trapped' on benefits. Yet it is those in welfare housing that show a minimal propensity to make this move.

And these new rookeries command a disproportionate part of our taxes; they suck in police, criminal justice, health, social services, education, public health, regeneration and social care resources, yet unless the populations are broken up and dispersed there is never any real improvement.

Yet welfare housing is still the shibboleth of the socialist central State, the elephant in the room. And as Newmania comments "Any reform of the Coucil house citadels brings New Labour into direct conflict with Old where they have been dug in for generations. Picking fights its a delicate business and this poisonous turf war allows scandalous waste to go on unreformed"


Newmania said...


Bessie said...

Hang on ... The council house shown in your picture is bigger than the house we own. And we have a joint income twice the national average. And three kids.

No wonder welfare tenants tend to stay put!