Even Homeless Jesus can’t support the woeful Housing First model

Homeless Jesus sculpture –  Liverpool

Government guidance defines high level visiting housing support as 21 hours or more per week and today the Housing First pilots are saying intensive support can be delivered in 3 hours per week!

The Housing First model’s support offer is preposterously under specified and its ivory tower ideology is dangerous in the extreme and will lead to huge increases in rough sleeping and single homelessness.

Visiting (floating) housing support definition

In 2001 the circular A47/2001 was issued so local authority decision makers could decide if housing benefit claims to pay for visiting housing-related support were genuine. This is the only definition we have to levels of visiting or floating support and 3 hours per week rather than 3 hours per day reveals the woeful Housing First support offer and level.

• LOW level visiting support is 5 hours or less per person per week
• MED level visiting support is 6 to 21 hours per person per week
• HIGH level visiting support is 21+ hours per week / 3+ hours per day

There is no doubt that the client groups that Housing First seeks to support in single homeless persons and rough sleepers typically have a HIGH level of support need.

When you read Housing First research reports you find the support level of 3 hours per person per week being the norm. The large scale Housing First pilots in the Liverpool and Manchester areas are specifying that each visiting support worker has a caseload of 12 persons and which is 3 hours per person per week which is very LOW level support.

Rough sleepers and other single homeless persons the target client groups for Housing First need a HIGH level of support and a LOW level of support – the staple of the Housing First model – can never be enough to meet its intended client support need.

When you look at any Housing First literature you will also invariably see claims that its support is intensive and often the phrase that Housing First is more than intensive floating support.  These are lies and deceits, known ones too, as intensive can only mean high and Housing First support levels are de facto low level support.

The LOW level support Housing First offers is one reason why landlords private and social will not come forward with the housing offer too and the two matters are inextricably linked.  The recently closed Sheffield Housing First service was abandoned as a mere 10 properties could not be found in a city of 241,000 properties … in two and a half years of trying!

A key practical issue in getting Housing First and any supported housing service off the ground is persuading landlords that their properties would be safe and looked after with the riskier clients groups that all supported housing residents are seen as by landlords and rough sleepers and single homeless persons one of the most riskier groups too.  Therefore a necessary selling point to landlords is the regularity of the visits to these perceived riskier tenants.  Visiting every day as the 3 hours per day of a HIGH level support service means reassures landlords that every day their properties would be seen and any damage or misuse of the property could be nipped in the bud.  Yet Housing First support workers only visit one day per week instead of seven and the landlord rightly sees this as a seven times higher risk and refuses to provide the property!

Note this 3 hours support offer is not face to face but total time from reviewing the case file to travelling to the HF client and then travelling back and updating the client case file.  That is just for planned support and ignores the majority of the support and support time needed by the HF client cohort that will be reactive support to deal with when and not if the proverbial hits the fan (sanctions and other everyday issues) and which the Housing First model ignores totally and why it can never be suitable or effective.

Housing First is ivory tower ideology gone mad when it comes to its support offer.

A few weeks ago I made a point of attending a conference called Homelessness and Rough Sleeping – Who Cares? in Liverpool and where the Homeless Jesus sculpture was revealed to hear the guru (and I use that word correctly) of Housing First, Jon Sparkes the chief executive of Crisis talk about it and the level of ideological and blind belief in this model was not only staggering it was extremely dangerous. Sparkes said:-

1. Only 18,000 of the 170,000 UK at any time homeless need support
2. Housing First is not a bolt-on to existing services but a replacement

Jon Sparkes also said that we have 12,000 at any one time rough sleepers in the UK and we know as fact we also have 42,000 single homeless hostel dwellers making the single homeless and target Housing First cohort 54,000 at any one time.  To say just 18,000 of this 54,000 or only 1 in 3 of them require support is inconceivable as is saying 2 in every 3 only require a roof over their head and do not need any support.  It is delusional in the extreme and extremely dangerous. It also means Jon Sparkes is saying hostel providers are claiming funding under false pretences as 2 in 3 of residents do not have support needs!

This extremely dangerous view of support and support number and for which there is not one iota of substantiation is given by Jon Sparkes, is made a thousand times worse with his assertion that the Housing First model replaces the existing homeless hostel or resettlement model.

To fund Housing First services means that existing hostels would need to be defunded as the funding is finite, in short it means throwing the baby out with the bathwater and once a hostel is defunded it closes out of financial necessity never to be reopened.

Sparkes was exasperated with Government for only permitting the three larger scale Housing First services in the Liverpool, Manchester and Birmingham areas as he said of the talks he had with government “Frankly, why we are having pilots when we know it works…”- a sentence left unfinished.  This reveals his closed mind and his zealotry for the Housing First model and saying he KNOWS it works is a chronic deceit and delusion.

We know it is working in Finland yet as I explained in detail here Finland is not the UK and it has very different variables that are wholly absent in the UK and which I distilled and reproduce below.

Unless Housing First in the UK replicates these necessary conditions above for the Finnish Housing First model to work in the UK then Housing First in the UK will not work!  There is absolute no chance of these variables being replicated in the UK unless you believe landlords will offer 1 bed properties at £30 – £35 each per week which is the UK equivalent of average 1 bed market rent and include free gas, electricity, water and broadband which is what the Finnish Housing First property offers.  The Finnish Housing First residents also get social security benefit that is 3 times the UK level too and a whole host of guaranteed wraparound services also not available here in the UK.

In short, anyone who believes you can drop in the Housing First model into the vastly different UK housing market is deranged and deluded and nothing more than a snake oil salesman.

When the Housing First model fails and local authority commissioners have closed the homeless hostels in their areas by defunding in order to fund the all bells and whistles Housing First model the shit will really hit the fan and homeless and rough sleeper numbers right across the UK will dramatically increase. The Housing First model is ivory tower madness that nobody must touch with a bargepole.

 

 

 

 

 

 

 

 

It is hugely ironic that the Housing First model means that the housing is provided first yet that housing offer is not achievable because of the risible support offer that is central to Housing First!  As such Housing First becomes a chronic misnomer in the UK.

 

The seismic news this past week that government is proposed to ban no-fault evictions and removing the ease of s21 notices in getting rid of tenants will further reduce the availability of housing availability for Housing First and all vulnerable tenants who need support whether low or high level.

 

I will end and summarise this piece before it becomes overlong and doesn’t get read though there are literally dozens of other issues some of which are highly complex concerning housing benefit regulations that need to be raised and which will create huge difficulties for the Housing First model

 

To summarise the housing offer of Housing First is not achievable, the support offer of Housing First is wholly inadequate and the hyperbole that the Finnish model can be parachuted in to the UK and UK Housing First models can mirror the successes of the Finnish model is delusion of a preposterous level.

 

The huge danger is WHEN Housing First fails commissioners and budget-holders will adopt the position that we have tried the radical option that the homeless ‘experts’ assured us would work and thus homelessness must be unsolvable.  During that time local commissioners will have defunded current homeless hostel provision which will close it and local authorities will have thrown the baby out with the bathwater and be left with a much higher level and cost of homelessness and nowhere for homeless persons to go.  The fact there is so little effective scrutiny and consideration of what the Housing First model actually is simply HAS to change else UK homelessness and UK rough sleeping will explode in number.

 

 

 

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Ban no-fault evictions? Why this is dangerously worse for ALL renters!

Never underestimate the stupidity of a Tory government … and especially when it comes to housing policy. I wouldn’t trust them with housing policy on a …

The lowest home ownership rates since 1983 a 67% increase in recorded homelessness a 169% increase in rough sleeping and an admission that we have a national housing crisis all bear testament to that.  The party that stopped paying grants to social landlords, the party that has cut in massive terms housing benefit to the private sector, cut LHA to as little as £53 per week for those under 35, the bedroom tax, the overall benefit cap, the extension of the right to buy for HA tenants, Help to Buy fiasco and so many more policies of the incompetent absurd characterise Tory housing policy.  And now they announce the most dangerous of the lot – the banning of no-fault evictions!

Eh! You what?  How can getting rid of no-fault eviction be dangerous and anything other than great news for renters Joe?  Ok reader, I’ll rephrase that – banning no-fault evictions is THE most dangerous ill-conceived superficial bollocks that will make the lot of the renter so, so much worse … and below are a few of the reasons why.

First and foremost the private landlord will from today onwards;

• go on a spree of issuing s21 no-fault eviction notices and getting rid of existing tenants ahead of any change leading to a huge spike in homelessness, and;
• will avoid the perceived riskier tenant by beating them around the head with a bargepole in each hand!

Just the announcement of some future banning of no-fault eviction (s21) and which many legal commentators see as not being introduced until 2022 at the earliest will doubtless mean the two points above as the private landlord will see this banning of ‘no-fault’ evictions move as a huge threat.

From today ALL potential new private sector renter will be seen as an increased risk by the private landlord and as with every other industry greater risk requires greater financial reward … or in short private rent levels will increase to reflect this greater perceived risk and private landlords will be even more circumspect over which new tenants they take on.  Both of these aspects and which are inevitable sees the lot of ALL private renters getting worse with this announcement.

Every prospective private renter in every town and city will now see increased private rent levels and many more of them denied private renting because they are perceived as higher risk.

This doesn’t just affect general needs rented tenants but everyone who is in a homeless hostel or in a domestic violence refuge as the exit from these is mostly to the private rented sector.  If hostels and refuges can’t move people on then they can’t move people into homeless hostels or domestic violence and abuse refuges!

Yet today we see Polly Neate the chief executive of Shelter and previously chief executive of Women’s Aid lauding the proposed removal of the no fault eviction on mainstream TV, radio and across social media when the policy will see more homeless on the streets and more women having to suffer domestic violence and abuse because there is nowhere they can flee to that is available! 

Today we also see the rump of the social rented sector lauding this proposal too as good news.  Let’s hope every housing association stops using ‘starter tenancies’ with immediate effect as these too can be ended by a no-fault eviction as they are the same AST tenure as used across the private rented sector and last year official figures show 83% of new housing association tenancies were these no-fault eviction starter tenancies.

Many do not realise that housing associations used no-fault eviction tenancies for 5 in every 6 new tenancies (as CORE data reveals) and are but one step removed from the 6 in every 6 no–fault eviction tenancies used by the private landlord … and today’s news is being mis-sold as stopping no-fault evictions in just the private rented sector when they are common in housing associations too! In short all purported social landlords put up or shut up and stop being hypocrites!

The explosion in homelessness this NFE announcement means as inevitable means that local councils costs of rehousing those who are homeless in dingy, mould and vermin ridden private sector B&B’s and chicken coops will rise exponentially and we were told last week that 75% of councils can’t afford their new duties under the Homeless Reduction Act and which with today’s announcement could easily double the number of homeless cases local authorities have to deal with!!  Shit, fan and proverbial for local government!

You still think the NFE announcement is a great deal for renters reader?  Oh dear it is an unmitigated disaster and I have barely touched on the issues that will inevitably flow from just the announcement and from today and 3 years ahead of this policy ever coming in!

The Housing First model has been dealt a mortal blow as there is no way in the world now that properties will ever become available for this deluded theoretical nonsense that cannot work in the UK with this announcement so there is at least some good news.  Rough sleepers are perceived as the riskiest of all ‘client groups’ to rehouse direct from the streets and by private and by social landlords … and today’s NFE announcement also means social landlords are going to have massive increased demand for social housing properties as consequence of PRS eviction and de facto unwillingness to house any risky client group at all … which in turn means that even those social landlords who wanted to get in on the Housing First financial gravy train will now have to go back to the drawing board and revise all such business plans.

Why would social landlords house such risky clients when they can have far less risky full-time and in-work prospective tenants banging on their door?  Increased risk equals increased cost in the social landlord mentality just as it does in the private landlord one and with social landlords constrained from increasing rents then bye bye Housing First clients will happen!

I could go on and on but the case is proven that the NFE announcement means that ALL things are going to get much worse for ALL renters and the policy proposal is THE most dangerous of the lot from this idiotic Conservative government who any sane rational person would not allow to determine housing policy for a Wendy House!

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UPDATE – The government has formally announced this here yet still nothing more as to substance or timing

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SIGNIFICANT UPDATE – 9PM

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This blog has received many kind comments and as many detracting ones and the latter have unsurpisingly come from the SRS and lawyers in the homeless field who will see their incomes soar with the banning of NFE – so no surprise there!  But let me put this really simply staring with two questions:

1. Do you pay a higher interest rate if you have a poor credit rating? YES!
2. Do you pay more for medical insurance if you have a health condition? YES!

Two obvious examples when you pay more if you are considered to be a higher risk and symptomatic of how business works and always will work. I ask a third question equally rhetorical:

What deluded minds think making all existing and future private renters being seen by private landlords as a greater risk and will pay more makes any sense?

Rest assured that is what banning no-fault evictions will do and private landlords wanting increased revenue for this perceived increased risk is inevitable and how business works and always will work.  This is no counter-intuitive nonsense about the superficiality of the morally correct decision to ban no-fault evictions, it is merely a case of stating the bloody obvious.

It is also much more than perceived risk to PRS landlords it is actual increased risk and actual increased costs to private landlords and that can only manifest in increased costs passed on to private renters … and is another statement of the bloody obvious that sees banning no-fault evictions mean higher costs for private renters.

Increased PRS landlord costs and why homeless lawyers love the banning of NFE?

Currently, any private tenant who receives a s21 notice is told by a housing lawyer that he has a miniscue legal chance of challenging the private landlord wish to take the property back.  By consequence most private tenant leave and do not go to court as it is extremely cost-ineffective for them to go to court.

The private landlord knows this too and hence does not incur legal filing costs or the costs of legal representation because the private tenant invariably leaves.  When NFE is banned the private landlord will incur court filing costs and the costs of legal reprsentation and these will be significant added costs of managing private rented properties and means those added (anticipated) costs will be passed on to the private renter in higher rent costs … another case of stating the bloody obvious … as is saying the homeless and housing lawyers are cock-a-hoop at the prospect of NFE being banned as their income will increase significantly.

Thus anyone who says private renting tenants will win out with the banning of no-fault evictions (NFE) is severely misguided and mistaken.

Additionally, I mention Shelter in my original 10-minute post and said how they are euphoric at the banning on NFE when it will, undoubtedly, increase homelessness and domestic violence.  The same Shelter (with the National Housing Federation) are running a campaign to #EndDSSDiscrimination and the banning on NFE will only make far more private landlords operate it!

Finally, this policy will vary significantly across different English locales and however the legal wording is phrased.  For example the typical English town or city has 19% of its housing in the PRS yet my home city of Liverpool has 29% of its housing being in the PRS, or 53% higher than the average English city.  So the adverse impacts I describe above will impact far more severely in Liverpool and other high PRS areas.

Another locale impact will be Blackpool which has 72% of all housign benefit claimants living in the PRS and compares to the average town or city having 30% of its housing benefit claimants in the PRS.  Blackpool like all coastal towns has a high PRS percentage of its housing stock and 11 of the 13 highest proportion of housing benefit claimants being in the PRS are in English seaside / coastal towns.  The adverse impact of banning NFE will impact far more adversely in English coastal towns.

These are just some of the undeniable factual variables that sees any generic notion of the PRS as one universal construct that will have one set of impacts being as naive as the Monopoly player who believes a house on Old Kent Road is worth the same as a house on Mayfair!

This NFE banning proposal IS ill-conceived in the extreme and just my quick points on locales above demonstrate that a full impact assessment of the proposal needs to be completed by government and well ahead of any consulation on this proposal.  That will not happen as the proposal is nothing more than electioneering and knee-jerk … and if enacted will be distastrous for the private renting tenant of today and tomorrow and all tomorrows.

 

 

Social rents increase 70% more than private ones … but Who Cares?

Between 2010 to 2018 median rent increases in England were social landlords 50% more than inflation and private landlords 12% less than inflation – facts that are undeniable yet run contrary to typical housing commentary which ignores these facts.

The official data from the English Housing Survey (EHS) is tabled below and I have added the CPI inflation figure and the percentage increases from 2010 to 2018:

These figures reveal many things:

• that the so-called social landlords have been immune from the austerity that tenants have suffered since the Tories came to power in May 2010
• that any claim council and housing association landlords make to have social purpose need to be taken with a very large pinch of salt as their net rents have increased by 50% more than inflation during the Tory austerity period
• that the vast majority of the housing commentary that blames housing inaffordability on just the private landlord is both lazy and wrong
• that private landlords have shown restraint in rent increases over the period yet social (sic) landlords have not – largely due to housing benefit (LHA) increases of less than 1% in the PRS while SRS HB increases have been 22% over the same period
• that social (sic) landlords still believe they have an automatic entitlement to inflation busting rent rises, at view shared by the Conservatives in permitting them
• SRS average (median) rents were 59% of PRS rents in 2018 up from 54% in 2010
• SRS rent rises have been 70% more than PRS rent rises (28.6% to 16.8%)

The tenant has been getting shafted by these staggering rent increases from council and housing association landlords whether they are claiming housing benefit or not.

• Wage increases have averaged just under 13% yet rents have increased across the social rented sector by 28.6% and rent has taken a far higher percentage of income for those not claiming housing benefit.
• Low paid and out-of-work tenants have had the same 28.6% increase yet housing benefit has increased by 22% and working-age benefit increases have been just 8.8% meaning a far greater proportion on non-housing welfare income is used just to meet social (sic) housing rent increases
• NB that housing benefit has NOT kept pace with SRS rent rises and that more than a quarter of all housing benefit recipients at 1.1 million are in work

English housing associations made a 35.1% surplus last year (see official Global Accounts figures here) or £26 of profit per tenancy per week on their median £99 per week that now sees them collectively have £48 billion of surplus. There are no comparable figures for council landlords in terms of rent profit per tenant per week or surpluses.

The social tenant has been and continues to be shafted by asocial landlords with their execessive rent increases but … Who cares?

You would think that the purported social tenant lobbies such as TPAS and others would be bombarding the media with outrage at rent increases of 50% more than inflation yet they have not done so at all. When utility bills increase by more than inflation or costs of travel do there is front page news and media attention yet that never happens with council and HA rent rises.  We see masses of articles about the ‘nasty’ private landlord rents but none about the offensive social (sic) landlord rent rises that have far outweighed private rent rises.

We see the housing media bombarded with HA landlords and their apologists bemoaning the imposed 1% (net) rent cut from 2016 yet HA landlords rents, turnover and surpluses have all increased since 2016 as matters of fact and which goes unreported once again with the national media and social tenant lobbies being silent.

That silence and complicity goes further with the likes of Shelter teaming up with the National Housing Federation in campaigns to end what they term as the discrimination of No DSS in the private sector and ignoring that No DSS increasingly occurs in social housing, to which they give a softer term of ‘lack of welfare assistance’ yet is precisely the same thing as the emotive No DSS.

In summary it is far too simplistic to see rent affordability as only a matter in the private rented sector and far too negligent, wrong and lazy to believe it does not exist in the social rented sector.

In fact the social rented sector does not exist and it a charade that asocial landlords promote to differentiate themselves from the ‘nasty’ private landlord arguments they persist in promoting while they impose far nastier rent increases on their customers the social tenant.

A tenant is not a customer who can switch suppliers of housing like they can switch utility providers and they are not yours as council and HA landlords deliberately refer to in the possessive and paternalistic way they do and which is just another deliberate charade as part of the bigger charade they call social purpose

The social tenant has been getting shafted for too long as the facts show and their lot has been neglected by all and sundry and I the question of Who cares needs to stop being a rhetorical one.

 

HAs only have themselves to blame for getting a deserved media ‘kicking!’

Housing associations in England are getting a good kicking from national television media with the Sanctuary C4 Dispatches programme last week and the Paradigm ITV programme last night – or at least that’s how HA’s and their staff and spin merchants would want it to be perceived.

I say it is (a) deserved and (b) not before time and (c) expect a lot more TV and other national media attention and reputation kicking as being inevitable.

It is inevitable due to the extent of discussion the Sanctuary and Paradigm programmes have created and also inevitable due to how much profit that English housing associations make and which the surplus counter-argument is and always has been a false one permissible by the lack of past scrutiny.  Unless you also argue that profits made by Eton and Harrow are surpluses as they are also charitable organisations  – hmm!

Facts are often pesky and they reveal English HA reserves have increased by £19bn over the past three years, a time when (a) the government has imposed a 1% (net) rent cut yet they have recorded a 26% increase in turnover too, and (b) a period when ‘accounting changes’ have supposedly meant that reserves would appear less and not increased by this over 60% figure!

How long before a national media outlet or for that matter government says this £19bn increase in reserves over the last three years has produced precisely what in terms of new housing development and solving the UK Housing Crisis?

That charge – in isolation – is a false one yet when has that ever stopped such an argument being made to deflect blame away from government and portray in this case HAs as the fall guys!? C’mon guys it is never governments fault because  … they have better spin merchants and better access to a compliant media than the housing association and any other sector has and all governments are very quick to take the first-move advantage when HAs are notoriously slow to do so and often inept at doing.

My niche within housing for more than 25 years is the supported housing sector and which has always had risk to reputation as the number one risk. Who wants a NIMBY service to ex-offenders or a homeless hostel on their doorstep crudely simplifies that point.  Yet general needs housing has never put any consideration at all into the same risk to reputation and believing they are somehow immune to it.  The Sanctuary and Paradigm national TV programmes over the past week has exposed that business stupidity of the HA sector!

The truly inept response of Craig Moule the CEO of Sanctuary here is also revealing.  This deny at all costs any criticism approach and donning of yet more Teflon coats has always been the HA sector approach and that galling stance has now had its day and simply will not wash with the general public who have become much more aware of HA poor and bad practise by these television programmes.  The fact the public has become more interested and aware only guarantees more TV programmes will be made and the HA sector is notoriously poor at PR.

For many years I have criticised social landlords including the HA sector for NOT saying that social housing is the cheapest and best quality rented housing option which it is.  I am passionate about social housing and what it can and should do despite having strong yet valid criticisms of HAs and of council landlords who are often no better. The ‘sector’ has failed to promote itself and doesn’t even agree a body who does stand up and promote the sector and is probably the only sector in the UK that does not promote itself!

The current sector-perceived problem is how on earth has social housing attracted such stigma and without of course no HA blame for not promoting social housing and which simply reflects their narrow and inept business thinking!  Nothing could be a better example of explaining the bubble within a bubble that is the UK housing sector or of explaining the sectors huge ineptitude in marketing terms and THE key business function that they perceive they are somehow exempt from!

The Sanctuary expose led me to comment on it here and also look at the official figures called Global Accounts of all English HAs with more than 1000 properties under management and which revealed in 2018 they made £6.33bn in profit as I posted here.  It then led to a further investigation into the official figures and I cut and paste the extract below from another post I am writing about this …

English housing associations increased their reserves by £19.13 bn over the past three years – from £30.42 bn in 2015 to £49.55 bn in 2018 according to official figures. Some significant issues flow from this increase of £6.38 bn per year in reserves:

• It means the £6.33 bn they made in 2018 was not unusual
• It means they are highly profitable
• It means turnover increased by £4.28 bn and 26% in the last 3 years
• It means reserves stand at 2.4 years turnover
• It means reserves stand at 3.5 years expenditure costs
• It means they are NOT reinvesting in new housing just accumulating reserves
• It means they are, at best, deferring new housing development until a later date

The stock responses HAs make to claims they make profits after the how dare you say that pretext  (the spitting out of dummy strategy) is they are surpluses as we reinvest the ‘subsidies’ back into the business – a general point that the last three year figures reveal to be implausible: It always has been implausible in any case given the accepted posit that only 20% of HAs actually develop new housing and thus 4 in every 5 do not while all of them make these profits or surpluses.

In 2015 turnover was £16.27 bn and increased to £20.55 bn by 2018 and is the 26% increase of £4.28 billion stated above and in a period when the English HA sector has been vociferously moaning that the government imposed a 1% cut to the net rent; so any defence they have of deferring new developments because of the 1% rent cut cannot be supported using the 1% net rent cut reason.

I could go on and on making a great many more valid points about English housing associations as I am sure many will due to the factual data listed above as they present a huge number of points of enquiry.  There can be absolutely no doubt that the Sanctuary and Paradigm examples thrust upon the general public awareness will lead to a surge in scrutiny of the housing association sector and with that will come outrage from the public not just social housing tenants. It will bolster social tenants groups to scrutinise more and more vociferously too

Housing associations are due to get a right old kicking in the media and they are ill-equipped to deal with it and the more they adopt the Teflon coat donning approach of how dare you say that then the greater and more prolonged the kicking will become.

I know there are many good housing associations as I have worked for and advised them but that also means I know of many poor and bad ones too.  I also know as housing associations should that when it comes to risk to reputation the one bad apply syndrome is very much at play and reputation that have taken 20 years or more to be good become bad ones in 20 minutes.

When that happens, which it will, and it will be soon, then all housing associations will have nowhere to blame but themselves.

Private Registered Provider is the correct name for housing associations

English HA’s profit from social tenants in 2018 was £6.33 BILLION

English housing associations in 2018 made a profit from their tenants of £6.33 billion.

The largest surplus of any UK housing association was the £299 million of the Clarion Group and Clarion were one of nine English HAs to report surpluses of over £100 million and one of thirty seven of them had yearly surpluses of over £50 million.

English housing associations collectively made a £6.6 billion surplus in 2018 on a £20.5 billion turnover and they are in rude health and Table 1 below is a list of English HAs who made more than £50m of profit from tenants in 2018.  I list in alphabetical order so that any tenant can easily see just how much their housing association made last year in profit – and note well these are YEARLY not accumulated profits or surpluses.

Table 1 – 2018 Profits of English Housing Associations

Average surplus was 36% overall including cost of sales and 29% on rents alone meaning for every £100 per week a HA tenant pays in rent it costs their landlords £71 to provide – a 41% mark up by charging £100 per week on what costs them £71 to provide.

Numbers do not lie unlike politicians and HA landlords …

This week I posted on Sanctuary housing association and the Channel 4 Dispatches programme in which they were featured and commented that the £198.5 million surplus they made in 2018 was a pertinent factor in their woeful practises (e.g. purposely delaying repairs and thus repair costs) that the programme revealed.

Many were shocked and outraged that Sanctuary made £198.5 million in surpluses so the Clarion £298.5 million surplus will also surprise and outrage, as will the £267 million surplus reported by London & Quadrant – these being the two HAs to make more than Sanctuary in surpluses / profits in 2018.

I have posted these figures to make all those with an interest in social rented housing to wake up and smell the coffee as to what housing associations are – private registered providers (PRP) which is their correct name – are businesses who profit substantially from tenants and who hide behind their charitable status and social purpose to disguise the fact that they do profit substantially.  As for charitable status it is worth remembering that Eton and Harrow and the public schools are charities yet we would never perceive their profits as surpluses would we?

The argument housing associations make over profit and all surpluses are ploughed back into new housing doesn’t hold with the facts. The £70k figure they claim to need as an English average for a new house at a social rent level would see the £6.6 billion yearly profit result in 94,000 new build properties developed when last year they developed 5,000.

The facts on the scale of these profits / surpluses answers many questions and blow apart many of the long standing myths that housing associations themselves promote.

• Why would any housing association (or council or LHC landlord) give tenants funding or even the time of day when they know the same tenants want to restrain the worst excesses of that landlord and want to reduce the profits they make from them? A strong argument is made to say any form of tenant engagement / involvement / participation is little more than top show superficiality and a rude wake-up call for HA tenants who believe they can have a meaningful say on how their landlord operates.
• The scale of the profits in terms of number and percentage of surplus on turnover totally destroy the myth that social housing is subsidised when in fact social housing is highly profitable.
• Note this £6.6bn per year English housing associations make is AFTER they have paid out all costs including interest and past ‘subsidy’ repayments so the notion that social housing is provided at less than cost is a massive fiction and myth.

The above are just two obvious points that the FACTS of English housing associations demonstrate with no ambiguity and why everyone involved and interested in what we misterm as social housing has to rethink what housing associations are.

We – all actors on the social housing stage – need to thoroughly re-evaluate the prevailing view that housing association are beneficent organisations who have the best interests of housing the poorest and most vulnerable in society and are riddled with social purpose. They are not.

They are highly profitable businesses who pretend they are in order to make the vast profits they do make as the facts show. They are Private Registered Providers who have no legal duties at all to house or rehouse the housing vulnerable and that includes those who are legally deemed as homeless. They are and they promote a deceit that they are social (yet never even attempt to define what that means) as their vast profits reveal as fact.

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Other impacts and issues

Homelessness and supported housing?  When looking at the official figures (here) one issue that is of huge interest to the question of Why don’t housing associations do more for those who are homeless?  This is a very pertinent question at all times and not just given the current focus on it by ‘leading’ housing associations and the profit figures tell us a lot.

Those who are are principally involved in homelessness and are also housing associations such as the Salvation Army at less than 6% had significantly lower surpluses on turnover than general needs housing associations as did the YMCA at the same 6% and other principally supported housing HAs such as Anchor had a 7% surplus on their £325 million turnover.

In short homelessness and other supported housing provision generates significantly less profits for housing associations and that is the main reason why they are not more involved in this truly social aspect of what we misterm as social housing.  Or housing associations make greater profits by NOT housing and rehousing those most in housing need.

I have no doubt that the housing association ‘sector’ will be outraged at this and respond with the counterclaim that How dare I suggest that HAs do not house those who are homeless or vulnerable because there is no money in it.  YET that is what these facts reveal and reveal very, very clearly and without any ambiguity at all; it IS the reality as however much opprobrium the HA sector generates it is what the facts reveal.

Anyone who still sees English housing associations as beneficent charitable organisations that they claim to be is very much deluded and the very definition of a stubborn closed mind.

Global Accounts 2015

Global Accounts 2018

A 37% increase in 3 years!!  Nice to know that someone is doing well out of austerity eh!

The housing week – A tenants home is not a Sanctuary – The housing weak

This week in housing has seen (a) the Tories announce £100 million over three years to ‘solve’ the entire UK rough sleeping problem AND (b) Channel 4 Dispatches programme announce that just 1 housing association, Sanctuary, made a surplus of £197 million last year alone.

Now there’s a comparison for you reader! Just one housing association makes surpluses of 6 times what the government thinks is needed to ‘eradicate’ rough sleeping across the UK at £33m per year (and yes the Tories policy does use the word ‘eradicate!)

In the same housing week we have seen the same housing association sector have a large Homes For Cathy conference to talk about how they should and must do more to solve UK homelessness! How nicely that dovetails in terms of irony eh!

The official global accounts for housing associations revealed that housing associations combined surpluses for 2018 came to £6.3 billion or almost 200 times what the government believes is enough funding to eradicate rough sleeping at £33m per year.

The same official global accounts for housing associations show that the repairs and maintenance spend of housing associations as a percentage of turnover has been cut by over 10% since 2015 alone … which dovetails nicely with Dispatches revealing that Sanctuary’s internal emails reveal they deliberately put off doing repairs due to cost.

The CEO of Sanctuary in a very ill-considered response in (the very friendly industry magazine) Inside Housing berates Dispatches for not understanding how housing associations operate – and fails to give any examples of why or any other substantiation to this vacuous assertion!

I also note a number of existing and former HA chief executives are defending Sanctuary HA by claiming Dispatches was (a) a hatchet job which it most certainly was not, and (b) that the exceptional items the programme chose to use were exceptions to the norm.  Oh dear!

IF 1 housing association does 1 piece of good work then the other 1500 UK housing associations all say as one how good the HA sector is … YET IF 1 housing association is rightly pilloried such as Sanctuary was then the opposite applies and this is an exception?

The incredulity in seeking to have their cake and eat it HA strategy beggars belief and is extremely inept in business terms.  Perception matters and the Sanctuary Dispatches programme may turn out to be just as seminal for the HA sector as Cathy Come Home was for homelessness. This was no Dispatches TV such as its last attempt when a smarmy and not so clever journalist drove about in a white sports car, this was a compelling 26 minutes of television journalism that ALL 1500+ housing associations cannot dismiss or disparage in aggregate terms that they did before.

Issues such as being culpable in the death of a pensioner through failing to undertake repairs and exacerbating if not directly causing severe respiratory disease in a baby by their neglect are entirely different matters to ANY TV programme that has gone before about any social landlords. If it takes 26 years to build a good reputation this programme proved the old adage that is takes just 26 minutes to totally lose it.

The far more prominent response from existing and past HA CEO’s on social media and in other correspondence has been outrage at the response of Craig Moule the CEO of Sanctuary and rightly so. I have included this abject response below.  Every other housing association is affected by this programme by implication and for so many reasons such as:

• Sanctuary is one of the very largest housing associations so its example of woeful negligent practises is perceived in that light
• Sanctuary’s pitiful response perversely says the new Together With Tenants inchoate proposals will solve any such poor practises and in doing so it slurs that programme and especially as Sanctuary wish to be seen as leading players in that campaign
• The totally dismissive tone Craig Moule uses with charges that Dispatches does not understand how housing associations operate yet gives nothing further than this vague vacuous assertion by way of evidence or substantiation

I could easily add more bullet points to the above and add many more general points that some will always believe there is no smoke without fire that all lead to the key points of perception and reputation.  The Dispatches programme does call into severe question all 1500+ housing associations and is not limited to the abysmal example it portrayed of just Sanctuary.

One other issue is truly perverse and that is the negligent and foolish downplaying of the risk to reputation that characterises housing association in general needs rented housing when those housing associations that are and have been heavily involved in supported housing know that reputational risk there is the biggest risk of all. For one crude example who wants a direct access homeless hostel or other NIMBY service on their doorstep explains why those housing associations that run such supported housing services are acutely aware that risk to reputation is THE biggest risk.

It is noticeable that the CEO of Sanctuary who was worked there for years as the Finance Director knows nothing about such reputational risks as Sanctuary does have a significant supported housing element to their business.  Just one of easy criticisms of how removed Craig Moule is from the reality that Sanctuary tenants face – and note well he opens his response to the Dispatches programme by saying he has only been CEO a few months – so we can add cowardice and offence with his non mea culpa personal style of management to not giving a stuff about tenants approach.

The alarm bells are ringing for all housing associations because of this Dispatches 26 minutes of a fair representation of the abysmal practises of Sanctuary and I strongly believe this 26 minutes could be as seminal in terms of HA reputation as Cathy Come Home was for homelessness – a posit that is not as absurd as it first looks when reading.

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Sanctuary Housing Association and Dispatches 26 minutes (link)

The risible Inside Housing response of Craig Moule

You may have seen the Dispatches on Monday night in which Sanctuary was featured, which asked whether housing associations are the new landlords from hell.

When I started in post as Sanctuary’s group chief executive at the beginning of this year, I didn’t know that within a month we’d find out a programme was being made about us. I wanted to share a little about the reality of the programme and my thoughts on what this means for our sector.

If you work for a housing association, chances are you do it because you are motivated to make a difference to the lives and homes of the people you serve. In my 30 years of working in social housing, I can count on one hand the people I’ve met who I’ve thought neither care nor respect tenants – everyone else cares deeply about providing the services and homes they deserve. So when anyone calls our values into question, it hurts.

We first found out about the programme when some of our residents contacted us and said they’d been approached by Dispatches and they wanted us to know they weren’t going to take part. At that stage we didn’t know what it was about.

As time went on and various cases were presented to us, it struck us how little the programme makers knew about how housing associations work. It also struck us that they seemed to misunderstand our purpose.This upsets me deeply because I know how hard our people work to get things right for our residents.

We might be tempted to dismiss this programme as sensationalist and not presenting a fair account of our actions, but it’s important we stopand reflect on what we can learn.

We welcome scrutiny in our sector; we know we are better organisations because of it – whether it’s scrutiny from residents, the regulator or the media. I truly believe that accountability and transparency is at the heart of everything we do.

As a sector, we recognise that there is a growing conversation among tenants about the quality of their homes and the services they receive. This takes place in many forums but most often it is highlighted in discussions on social media.

The National Housing Federation’s ‘Together with Tenants’ goes some way to answer this challenge, by focusing housing associations on getting better at listening to tenants, and encouraging all of us to raise our game. I am proud to have added Sanctuary’s name to the growing list of early adopters and to use this as an opportunity to strengthen our relationship with our residents.

We must now turn this commitment into action and continue on the path of building trust.

I also strongly believe that a housing association’s first priority should be looking after the homes of its residents, ensuring they are safe, energy efficient and meet their needs. For this reason, we are starting a conversation with our residents about the quality of their homes.

This discussion needs to include an honest review of the Decent Homes Standard and whether it is demanding enough. It was the right tool at the right time, and as a sector we should be rightly proud of what we have achieved, but times and expectations have moved on; does decent really mean decent any more?

One of the biggest challenges for all of us now is how we ensure the homes our residents live in are fit for purpose, not just for now but for future generations.

The quality of homes and how we are seen by the people we exist to serve are big issues that go to the heart of who we are as Sanctuary but also as a sector. It’s an opportunity for all of us to step up, show leadership and ensure our homes and communities are places where tenants choose to live.

Craig Moule, group chief executive, Sanctuary Group

Social landlords sham concern over UK homelessness … as the facts reveal

Council and housing associations rehouse no more than 1 in 5 of the minimum 110,000 single homeless the UK has each year.  They are insignificant minor players in UK homelessness when we look at facts such as they only have around 20,000 suitable 1 bedroom properties that become available each year.

So if EVERY available 1 bed property that ‘social’ landlords have is allocated solely to those leaving UK single homeless hostels the best that can happen is 1 in 5 of the UK’s single homeless are rehoused by councils and housing associations.  Yet they are not as for example the bedroom tax has created a much higher competing need for 1 bed properties since 2013 and there are other single homeless competing groups such as the circa 30% of women who need to be moved on from refuges as they are single persons.

I discussed at length the numbers of all GB homeless both single and family cohorts here a few weeks back and which total a cautious 425,000 each and every year.  The notion that council and housing association landlords want to project that they are social who do all they can to and are the natural rehousing option for ‘the homeless’ is a huge myth, as is the counter-argument that you can’t get social housing because they all go to those who are homeless as just 28% of all SRS properties last year were allocated to them as CORE data reveals.

Today sees the great and the good of the SRS have yet another love-in called the Homes For Cathy conference to discuss 9 vague principles they should all sign up too regarding homelessness.  The main drivers appear to be Crisis and the Chartered Institute of Housing.  The SRS also has an ongoing NO DSS campaign led by Shelter and the National Housing Federation that also alludes to the sector being the natural home of those who are homeless that is also denied by the fact that ‘social’ (sic) landlords increasingly operate NO DSS practices themselves but which they euphemistically call refusals due to a lack of welfare assistance – a softer term for what is still NO DSS.

So we have ALL the major social rented sector players extolling how they aid ‘the homeless’ when the factual reality is they do not.  As I have said frequently I am always amazed at the surprised anger I receive when I state social landlords have no legal duties whatsoever to rehouse even those who are formally homeless at various housing and other events.

Council and housing association landlords overtly and knowingly seek to deceive the public and others by claiming they are ‘social’ with such pithy phrases as we will always house those most in need or similar.  The facts are they do not.

To return to just (!!) the 110,000 single homeless who leave GB homeless hostels each year and which social landlords can rehouse no more than 1 in 5, it means that the overwhelming majority of the UK’s single homeless fall to be rehoused by the private rented sector which is the most insecure form of housing.  How often do you read the ‘great and the good’ of housing moan that the ending of a private rented tenancy is the biggest cause of UK homelessness … yet they are more than happy that ‘the homeless’ are rehoused in that very same insecure sector!!  Maybe I should run a poll to see whether this is more irony that hypocrisy or vice versa?

This is the same ‘great and good’ of housing and homelessness who have been lauding the Housing First model as panacea to solve UK homelessness, that’s the same Housing First model which last month failed spectacularly as despite huge levels of funding it was unable to find just ten available properties in a city the size of Sheffield after two years of trying!

WHEN will the same great and the good of housing and homelessness in the UK come to terms with the reality of homelessness in the UK … and realise they are peddling dangerous levels of hope and little else? Oh sorry reader this is just me being overtly negative yet again isn’t it … you know the stock response of the same ‘great and good’ to those damn pesky things called facts that they shy away from at all costs. Ah plus ca change!