The Coalition’s Record on Housing:
Policy, spending and outcomes
Social Policy Association Conference 2014
14th-16th July, Sheffield
Delivered 15th July
Becky Tunstall
Centre for Housing Policy, University of York
01904 321 475
Becky.tunstall@york.ac.uk
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This paper is a small part of a large programme:
‘Social policy in a cold climate’
Three year research programme running 2011-2015
Lead by Prof Ruth Lupton, University of Manchester
Funded by JRF, Nuffield, Trust for London
Aims:
• To track social policy goals, funding, implementation, impacts 20072014
– A series of reports on New Labour policy were published 2013
– Now assessing change 2010- due to the recession, austerity, and other
Coalition policy
For more information:
http://sticerd.lse.ac.uk/case/_new/research/Social_Policy_in_a_Cold_Climate
.asp
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Contents of paper
1)
2)
3)
4)
5)
6)
Introduction: Context and inheritance
Broad policy goals 2010Actual policies 2010Resources expended 2010Outputs and outcomes achieved 2010- (data to date)
Summary
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1) Introduction: Context/inheritance (i)
• Housing implicated in credit crunch, recession
– Drop in housing devt 2007- = drop in employment, demand, GDP
– Drop in house prices 2007- = reduction in consumption, demand, GDP
• Housing directly affected by credit crunch, recession
– Increased caution of lenders 2008- added to existing affordability
problem
– Provision of new housing generally procyclical
– Low interest rate policy 2009- protects borrowers (but creates future
risk)
• Labour govt policy 2008- started with some of main potential
responses:
– Stamp duty holidays
– Bridging funds for stalled development schemes
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(ii)
• But Coalition diagnosed long term problems too: housing system
“dysfunctional”, with “persistent market failure” (Cameron and
Clegg in HM Government 2011) before 2007
• Interpretation widely shared (eg Whitehead and Williams 2011);
increasingly part of public discourse (2013-)
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2) Broad Coalition policy aims
How to identify them - sources used:
• Coalition agreement (HM Govt 2010)
• Emergency and other budgets, CSR
• Legislation esp Localism Act 2011, Welfare Reform Act 2012;
regulations and orders
• Other policy documents esp Laying the Foundations: A housing
strategy for England, 2011
• Statements on www.gov.uk
• Ministerial speeches and departmental announcements; some pre2010 shadow speeches
• Some pre- and post-2010 think tank papers esp CSJ, Policy Exchange
• (Circular but) – significance of inputs
• Academic commentary – as yet in short supply
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Constraints on aims (i): The Coalition’s broad
approach to housing policy
• Housing policy was a means to achieve economic policy goals:
– “We need to get the housing market… moving again. This is central for
our plans for economic growth” (HM Government 2011 pvii).
• To some extent, economic policy could be a means to achieve
housing policy goals
• However, housing policy goals were clearly subsidiary to, and
constrained by, economic policy goals:
– “Housing must take its share of the burden. If we don’t there is a real
threat to the economic future of this country” (Shapps 2010b npn).
(and - principally by improving access to home ownership housing policy might contribute to social mobility, health and
wellbeing (HM Government 2011)).
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Constraints on aims (ii)
Central government’s role was, and should be, limited:
• “Housing is the most market-oriented of all my Department’s
responsibilities. Policy should go with the grain of the market”
(Pickles 2011a npn).
• “When I say ‘we’, I really mean you [private and voluntary sector
audiences] . You are the ones who will do all the hard work” (Shapps
2011c).
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The Coalition’s specific stated policy aims
1. Increasing the number of available homes (CLG)
2. Improving the rented sector (CLG)
3. Providing housing support for older and vulnerable people
(CLG)
4. Helping people to buy a home (CLG, HMT and HCA)
5. Simplifying the welfare system and making sure work pays
(DWP)
6. Achieving strong and sustainable economic growth (BIS,
HMT and UKEF)
Table 1: Housing and housing-linked policies amongst the Coalition government’s 224 overall
stated policy aims, and responsible departments
Source: www.clg.gov.uk Accessed January 2013
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Comments on specific stated aims
Specific, stated policies are only part of policy – need to examine
resources and ‘non policy’
Specific, stated policies include contradictory policies
Eg Stated aim 1. Actual policy package includes policies likely to
delay/decrease the number of general needs homes available
compared to trend and ceteris paribus
• Affordable Housing Programme – a substantial cut in funding and
unprecedented ‘end to new social housing’
• Abolition of Regional Spatial Strategies and house building targets;
new National Planning Framework, neighbourhood plans, powers to
stop ‘garden grabbing’, other use class changes, reissue of PPG 3 (in
interests of localism)
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3) Actual policies 2010My view of the most significant policy tools and policies 2010-2014 in
terms of the precedents set; people/homes affected; resources…
– ‘End of social housing’ (emergency budget)
– Commitment to increase private renting (Laying the Foundations)
– Restructuring of planning system (Coalition Agreement 2010;
Localism Act 2011)
– Substantial change in Housing Benefit eligibility (regulations and
orders, Welfare Reform Act 2012)
– Help to Buy (Budget 2013).
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4) Resources expended: Following the money
Defining total UK govt housing resources =
DCLG expenditure on housing (England)
+ HMT on-going expenditure on housing and new schemes
(some UK, some England)
+ DWP expenditure on Housing Benefit (UK)
+ Scottish, Welsh, NI govt expenditure on housing?
+ LA expenditure on housing (in addition to ring-fenced
budgets from central govt)?
+ Registered Provider (housing association) expenditure?
+ How to deal with capital expenditure and loan support over
eg 30 years?
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Data: UK govt accounts
Department of Communities and Local Government (DCLG)
expenditure , ‘resource’ (revenue) and capital (England)
All UK govt expenditure on housing and housing-linked things
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DCLG expenditure (England)
i.
‘Departmental Expenditure Limits’ (DEL) (fixed budgets), a)
‘resource’ and b) capital
+ ‘Departmental Annual Managed Expenditure’ (AME) (budgets
fluctuate according to need, rules), a) ‘resource’ and b) capital
ii.
– Both available for 2 parts of DCLG:
•
•
‘Communities’: includes: housing to buy and rent; tenant
empowerment; homelessness, rough sleepers and supporting people
to stay in their homes; building standards; support for homeowners;
‘Local govt’: includes financial support to Local Authorities, including
revenue support grant.
– DCLG DEL + AME not all govt‘s housing expenditure
– Not only housing expenditure
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i) a) DCLG Departmental Expenditure Limits,
Resource (England), real terms (2012/13 prices),
£m
£40,000
£35,000
£30,000
£25,000
£20,000
£15,000
£10,000
£5,000
£0
2008/09
2009/10
2010/11
2011/12
2012/13
2013/14
CLG Communities
CLG Local Government
Source: PESA 2013 Table 1.4
2014/15
2015/16
DCLG DEL Resource: Summary
2009/10 £37bn
2015/16 £12bn (planned) (real terms, 2012/13 prices)
Biggest percentage reduction of all departments: -66% local
government section; -76% communities section
Other big losers: Foreign and Commonwealth Office - 49%; Transport 44%; DWP - 38%; DEFRA - 37%
BUT - Up to £8bn of the £11bn real terms budget drop due to changes
in responsibilities (eg transfer of some business rates to LAs, Council tax
benefit to LAs)
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i) b) DCLG Departmental Expenditure Limits,
Capital, (England), real terms (2012/13 prices),
£m
£10,000
£9,000
£8,000
£7,000
£6,000
£5,000
£4,000
£3,000
£2,000
£1,000
£0
2008/09
2009/10
2010/11
2011/12
CLG Communities
2012/13
2013/14
2014/15
2015/16
CLG Local Government
Source: PESA 2013 Table 1.9
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DCLG DEL Capital: Summary
-62% 2009/10-2015/16
Largest percentage reduction amongst depts with significant capital
budgets
Autumn Statement 2012:
– DCLG (Communities) got one of largest absolute increases in capital
DEL for 2013/14 and 2014/15: £0.7bn and £0.8bn (HMT 2013 p47).
Budget 2013:
– New funds for Help to Buy and Build to rent schemes, mainly for
DCLG’s Capital DEL budget: £1.3bn in 2013-14 and £1.9bn in 201415 (HMT 2013 p47)
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(iii) UK govt expenditure by type
Total UK govt housing expenditure =
‘Housing and community amenities’
• Housing development (LA devt and ‘other social’ devt) (28% of the
total in 2009/10)
• Community development
• Water supply
• Street lighting
• R&D housing and community amenities
• Housing and community amenities n.e.c.
+ ‘Social support: housing’ (Housing Benefit)
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‘Housing and community amenities’
expenditure, UK, real terms (2012/13 prices),
£bn
£18
£16
£14
£12
£10
£8
£6
£4
£2
£0
Source: PESA 2013 Table 4.3
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UK govt ‘housing and communities’ expenditure
–
–
–
–
Dramatic increase in spending from 2nd Labour term, 2001Peak 2008/09
Fall under Coalition 2009/10-2011/12 was £6.7bn or 43%
Stablised in 2012/13.
Expenditure remains at or above level seen for the 1990s and early
2000s.
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UK govt ‘housing and communities’ expenditure in the
nations of the UK, 2007/08-2011/12, gross terms, £ per
head
£800
£700
£600
£500
£400
£300
£200
£100
£0
2007-08
2008-09
Northern Ireland
2009-10
Scotland
2010-11
England
Source: PESA 2013 Table 9.15
2011-12
Wales
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UK govt ‘housing and communities’ expenditure
by nation: Summary
Much higher spending per head in NI
Cuts varied: Under the Coalition, 2009/10-2011/12, spending
per head changed:
- -45% England
- -14% in Scotland
- -15% in Northern Ireland
- +8% Wales
Spending per head rose slightly in the second year of Coalition
government 2010/11-2011/12 in all nations except England
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‘Housing and community amenities’ expenditure in the
regions of England, 2007/08-2011/12, gross terms, £
per head
£500
£450
£400
£350
£300
£250
£200
£150
£100
£50
£0
2007-08
2008-09
2009-10
2010-11
London
North West
North East
Yorkshire and the Humber
South West
South East
East Midlands
East
West Midlands
Source: PESA 2013 Table 9.10
2011-12
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UK govt ‘housing and communities’ expenditure
by region: Summary
Much higher spending per head in London; somewhat higher in
NE
Cuts varied: Under the Coalition, 2009/10-2011/12, spending
per head changed:
- -60% East
- -51% South West, South East
- -48% London
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UK govt ‘housing devt’ expenditure (part of
‘housing and communities’ expenditure),
2007/08-2011/12, gross terms, £m
£12,000
£10,000
£8,000
£6,000
£4,000
£2,000
£0
2007-08
2008-09
2009-10
2010-11
2011-12
Source: PESA 2013 Table 10.1
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UK govt ‘housing devt’ expenditure: Summary
Peaked in 2009/10
Fell 44% to 2012/13
Changes for UK housing devt in gross terms closely match the
extent of reduction seen for DCLG Capital Departmental
Expenditure Limits for England in real terms over the same
period
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UK govt ‘Social protection: Housing’
expenditure, 2007/08-2011/12, gross terms, £m
£30,000
£25,000
£20,000
£15,000
£10,000
£5,000
£0
2007-08
2008-09
2009-10
2010-11
2011-12
Source: PESA 2013 Table 10.1
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UK govt ‘social protection: housing’ expenditure:
Summary
Unlike all previous forms of housing expenditure, social protection:
housing rose under the Labour government and continued to rise
under the Coalition
Gross spending increase 2009/10-2011/12:
• +£3.0bn
• +13%
Unlike all previous forms of housing expenditure, change was similar in
the nations of the UK:
• +13% England
• +13% Wales
• +12% Scotland
• +15% Northern Ireland
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Final summary on money
2009/10-2011/12:
+£3bn (gross) increase in ‘social protection: housing’
<£6.7bn (real) reduction in ‘housing and community amenities’
<£4.7bn (gross) reduction in ‘housing development’
Did housing “take its share of the burden” (Shapps 2010b npn)?
• In England, DCLG and ‘housing and community amenities’ spending took
more than share. Big difference between England and other nations
• ‘Social support: housing’ did not take its share
• Result has been a switch in mix between ‘housing and community
amenities’ (inc new devt) and ‘social support: housing’:
– Social support housing 58% -> 72%, housing devt 28%->18%
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5) Outputs
Comparing baseline - 2010/11- (depending on policy start date), with most
recent – 2012/13 and 2013/14 in some cases ie 1-3 years
Eg For Policy 1. Increasing the number of general needs homes
available – Potential indicators: a) New housing completions; b) net
increase in total stock; c) public subsidy per additional affordable unit
2.Improving the rented sector – Potential indicators: a) Change in
number/proportion of rented homes meeting the Decent Homes Standard; b)
Reduction in registered disputes between landlords and tenants; c) Increase in
tenant satisfaction…
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Eg Aim 1a): UK housing completions, all tenures:
Q2 2010-Q1 2013: Increased number of homes but no rise in rate of completion
60,000
50,000
40,000
30,000
20,000
10,000
0
1997
1998
1999
2000
2001
2002
2003
Private Enterprise
2004
2005
2006
Housing Associations
2007
2008
Local Authorities
2009
2010
2011
2012
2013
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Outputs: Who (if anyone) gained
Need to add in assessment of impact on equity
Usually absent in housing studies – hard to get data on housing
cost/affordability/quality/disadvantage split by income on inequalities
in these measures
Eg 1. For Policies to increase the number of general needs homes
available, potential indicators =
• Net impact on size, percentage of affordable housing stock (proxy
for supply to poorer)
• Net impact on ‘housing need’ – harder to assess; can state not great
• Net impact on ‘housing cost induced poverty’ - negligible
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6) Summary
Follow the money
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References
HM Government (2011) Laying the Foundations: A housing strategy for
England London: Stationery Office
HM Government (2010) The Coalition: our programme for government (‘The
Coalition agreement’) London: HM Government
HM Treasury (2013) Public expenditure: Statistical analyses (‘PESA’) 2013 July
2013 Cmd 8663 London: HM Treasury
Pickles, E (2011a) Speech to the Home Builders Federation ‘One year on'
conference, Home Builders’ Federation, Savoy Place, London, 31st October
Shapps, G (2010b) Speech to the National Housing Federation annual
conference 2010, Birmingham, 22nd September
Shapps, G (2011c) Speech to ‘No second night out’ Homeless Link conference
12th October
Whitehead, C and Williams, P (2011) ‘Causes and consequences? Exploring
the shape and direction of the housing system in the UK post the financial
crisis’ Housing Studies 26(7-8), pp1157-1169???
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