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Labour Studies Plan To Shift Housing Power To Councils

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http://www.theguardian.com/society/2014/jun/06/labour-housing-benefit-subsidising-rent-housebuilding

Billions of pounds paid in housing benefit could be handed to England's councils to shift spending from subsidising high rents to building homes, under proposals to be studied by Labour's Treasury team.

The plan could mean the transfer in a five-year budget of almost £1.5bn for west Yorkshire, more than £1.4bn for Greater Manchester and Liverpool, just under £1bn for south Yorkshire and just under £700m for the north-east.

The proposals would be a large shift in the architecture of British welfare, reversing a 30-year trend of subsidising high rents rather than housebuilding. They would also transfer power from Whitehall to England's regions.

The plan has been drawn up by the centre-left Institute for Public Policy Research, which warns of the consequences for welfare spending if housing benefit is not reformed. The plan comes as Sir Michael Lyons is examining reforms for Labour to boost housebuilding.

During this parliament, 95% of government spending on housing will go through the benefit system, with just 5% invested in new homes, reversing the balance of spending in the late 1970s.

Although the government has sought to constrain benefit through the bedroom tax, the housing benefit caseload is expected to rise by 150,000 by 2019, with more recipients in work unable to pay their rent without a subsidy. The bill is projected to rise in real terms in the next five years, reaching £25.4bn by 2019, settling around £8bn a year higher in real terms than before the recession.

The rises have been triggered by a combination of above-inflation rent increases in the private and housing association sectors, as well as a growing share of claimants in the private sector. Nearly 40% of housing benefit spending – over £9bn a year – is going to private sector landlords, many of whom charge more than £50 a week more than council housing.

The IPPR says the current "distribution of power and incentives means that local government is left administering a rigid system over which it has little control, while gaining no rewards and facing no penalties for its performance".

The thinktank proposes a phased transfer of control to local authorities that would firstly give councils greater scope to borrow against their housing assets, to provide an injection of additional local housing investment to reduce the pressure on housing benefit in their area. Estimates suggest this could support the construction of between 12,000 and 17,000 new affordable homes a year.

In a second transfer it suggests councils be entitled to set rent subsidy levels in their local private sector. Sheffield council alone believes it could reduce its housing benefit deal by £300,000 a year through this reform.

In a third phase councils would be given control over central government capital housing budgets, and also empowered to set higher rent levels for richer tenants. It has been estimated, for example, that if a premium was charged on 115,000 higher income tenants in London, nearly £300m would be raised.

In the final phase of the reform, big councils and combined authorities would be given multi-year budgets to oversee affordable housing expenditure earmarked for their area.

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The proposals would be a large shift in the architecture of British welfare, reversing a 30-year trend of subsidising high rents rather than housebuilding.

It is obvious to anybody with half a brain that the current system is somewhere between waste and criminal. But it took a major politicial party only 30 years to find out. What f...ickng morons they all are ...

Edited by Damik

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This would actually get me to vote Labour if they seriously put this on the table. It does seem to benefit the people far too much for a mainstream party to implement though.

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This would actually get me to vote Labour if they seriously put this on the table. It does seem to benefit the people far too much for a mainstream party to implement though.

Exactly. The Grauniad story says the Labour party is "looking" at the IPPR's plan.

Having seen the party's half-arsed-hearted proposals on the private rental sector, I don't think I'm particularly hopeful.

As with all politicians, it'll undoubtedly depend who leans on them hardest.

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My first response to this is the same as my response to EVERYTHING related to building new housing, that is, if it happens I hope someone will oversee build quality and this country doesn't see a pile of badly built timber framed properties which will not last 50 years! And then there is cost of maintenance along the way due to bad build quality.

The UK went through a terrible time in the 60's 70's with bad build quality Council housing, but the standards of new builds is appalling, so Councils will not just be financing housing and reducing rents etc., but at the current standards of house building a never ending maintenance bill, but I guess it is all employment! And anything HAS to be better than £9b in private landlord's coffers. But why oh why can't we build quality homes with quality plumbing, quality windows, quality roofing, is quality impossible to build in in current systems? If property had not been allowed to bubble, a house now valued at £200000 would probably (depending on where we are looking in the UK) be valued at £120,000, so how would someone build a property to include the cost of land, for £120,000, if property had not bubbled? Of course I realise everything else has bubble too, but before anyone builds any more properties, I wish someone would address the build quality of new builds!

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This would actually get me to vote Labour if they seriously put this on the table. It does seem to benefit the people far too much for a mainstream party to implement though.

Like no more boom and bust. No housing bubble.

Stop voting, its the only way. Who cares what they say, theyre all lies. All of them.

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They're looking into it and it might become a policy. Some hope. Then if they get voted in it'll be reneged on or applied half heartedly.

It doesn't matter whether it's the Labour, Conservative or LibDem wing of the LibLabCon party it's just promises promises to be reneged on.

They're accusing UKIP of populism but the LibLabCon is expert at it.

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My first response to this is the same as my response to EVERYTHING related to building new housing, that is, if it happens I hope someone will oversee build quality and this country doesn't see a pile of badly built timber framed properties which will not last 50 years! And then there is cost of maintenance along the way due to bad build quality.

The UK went through a terrible time in the 60's 70's with bad build quality Council housing, but the standards of new builds is appalling, so Councils will not just be financing housing and reducing rents etc., but at the current standards of house building a never ending maintenance bill, but I guess it is all employment! And anything HAS to be better than £9b in private landlord's coffers. But why oh why can't we build quality homes with quality plumbing, quality windows, quality roofing, is quality impossible to build in in current systems? If property had not been allowed to bubble, a house now valued at £200000 would probably (depending on where we are looking in the UK) be valued at £120,000, so how would someone build a property to include the cost of land, for £120,000, if property had not bubbled? Of course I realise everything else has bubble too, but before anyone builds any more properties, I wish someone would address the build quality of new builds!

But isn't this the case because the private developers, obviously working for a profit, have to cut costs as much as possible to offset the ludicrous land prices? and so be able to produce a product that can still be sold at something that some people can still afford.

IF councils start to effectively allow land to become much more available for development than at present then prices will fall? Combine that with the councils exercising their powers and mandating that properties to be built on said land shall be of no less than such-and-such standard (to reduce their long term exposure to maintenance costs) and there is no reason why newly built properties cant be of decent quality and affordable.

But, as said above, anyone with a brain can work this out - which is why the mainstream political parties still cant quite grasp this!

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But isn't this the case because the private developers, obviously working for a profit, have to cut costs as much as possible to offset the ludicrous land prices? and so be able to produce a product that can still be sold at something that some people can still afford.

IF councils start to effectively allow land to become much more available for development than at present then prices will fall? Combine that with the councils exercising their powers and mandating that properties to be built on said land shall be of no less than such-and-such standard (to reduce their long term exposure to maintenance costs) and there is no reason why newly built properties cant be of decent quality and affordable.

But, as said above, anyone with a brain can work this out - which is why the mainstream political parties still cant quite grasp this!

I wonder if not having a "brain" is the problem, or whether it is working out how to use the brain then combing that skill with using the heart and foresight coupled with a whole lot less self-interest perhaps. But maybe even the self-interest part shifts when using the mind wisely, increasingly seeing that a whole lot more equality serves self and others interests rather than living in a serious lopsided system, not even on the verge of bankruptcy, more beyond the realms of straightforward bankruptcy where there would have been a chance of something which existed pre crash existing post crash....

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So the plan is to hand the housing benefit to the council, do they not then have to pay it out to the claimants or their landlords. Maybe I am confused, this money is being claimed to pay current tenants rents how does it help housebuilding.

What are they going to do let people claim benefit, then when it is awarded say "sorry that money is going to be spent on new houses which aren't built yet, you will have to live in a cardboard box until they are built."

What is needed is extra money to build massive numbers of council houses. Then you need to reform the priority system to what it used to be. Council houses where for the working class primarily. There are other amendments I would make, like limiting housing benefit rates to only pay out more for up to 2 children in a household. You want 3-12 kids then you fund them or they have to share rooms.

What is also needed is root and branch reform of the planning system. The concept of greenbelt needs to go. Nimbies need to be told where to get off, its all well and good them wanting a nice view of the countryside, but their house did not exist at one point what would have happened if at that time the current planning regime had been in place.

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The proposals would be a large shift in the architecture of British welfare, reversing a 30-year trend of subsidising high rents rather than housebuilding.

It is obvious to anybody with half a brain that the current system is somewhere between waste and criminal. But it took a major politicial party only 30 years to find out. What f...ickng morons they all are ...

Damik, I actually agree with you on something.

I'm going to have a cup of tea and lie down. :blink:

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