Homelessness In Milton Keynes - A Project

[pipllman]

MK council seeks bids for a 4 month project to

1. Carry out an independent Review of Homelessness: as required by Section 1(a) of the Homelessness Act 2002;
2. Write & consult widely on a Response to Homelessness Strategy for Milton Keynes: as required by Section 1( of the Homelessness Act 2002.

4 months! Consultants leisurely (but diligently of course) knocking out a document that should really be called 'Milton Keynes Homelessness: a statement of the bleeding obvious!'

This on the back of the last set of findings it published

http://www.milton-keynes.gov.uk/social-care-and-health/2014-15-jsna/draft-2014-15-jsna-life-in-milton-keynes/2014-15-draft-jsna-housing

which concluded various things, including

• Around 1,000 people come to the Council for help with housing every month and there are only 100 social rent vacancies per month.
• The number of homeless households in housing need continues to rise. At the end of 2013/2014 the Council had accepted a full duty to 515 homeless households, compared to 84 in 2009/10;
• Families occasionally have to be housed on a temporary basis, (sometimes in out of town bed and breakfast hotels), causing immense disruption to education, employment and family life. At the end of 2013/14 there were 167 households in temporary accommodation, compared to 143 in 2010/11;
• At the end of 2013/14 there were 355 households in “Band 1” that were awaiting housing;[v]
• Average house prices in Milton Keynes are lower than the average for England and Wales. Average earnings are also higher. However many people cannot afford a deposit to get a mortgage and so they rent, which can be more expensive than mortgage repayments.
• Life time tenancies mean that some people may be in social housing who no longer have a need whilst others cannot afford private rents

still, the council has done a lot to sort it out...A key measure to tackle homelessness has been the purchase of 33 homes ...

[TheCountOfNowhere]

it's good to see the council spending our money wisely

[pipllman]

it's good to see the council spending our money wisely

that is what council's do

yet some think that council owned / operated social housing would be a good thing

it would not

[Executive Sadman]

Where do they all come from? MK is swallowing up the surrounding countryside at a steady rate...too many people again.

[Neverwhere]

that is what council's do

yet some think that council owned / operated social housing would be a good thing

it would not

It would be better if everybody had a fair opportunity at owner occupation but, if it is required at all, there is is nothing good about rentier middlemen standing inbetween the taxpayer and social housing and extracting a profit. Any who do so are benefit scroungers of the highest order. They live off of the state and depend entirely on the state for their profits, and they destroy any semblance of a free private sector market for housing. They are simply extravagantly overpaid ersatz council employees.

[pipllman]

It would be better if everybody had a fair opportunity at owner occupation but, if it is required at all, there is is nothing good about rentier middlemen standing inbetween the taxpayer and social housing and extracting a profit. Any who do so are benefit scroungers of the highest order. They live off of the state and depend entirely on the state for their profits, and they destroy any semblance of a free private sector market for housing. They are simply extravagantly overpaid ersatz council employees.

Not so - and we can have the same discussion that has been aired here previously as many times as you want.

Councils are less efficient than PRS and the cost of provision would increase without the PRS.

The costs (and therefore profits) of PRS can be more easily controlled - simply by reducing LHA (which should be done more aggressively than currently) - than the costs of council owned / provided social housing ever could be.

So yes, a PRS LL letting to LHA tenants can easily be labelled as a benefits scrounger. However, if the provision of that social housing was taken on by councils, the staff in that part of the council could be similarly labelled. And they would (with a very high level of certainty) be taking more taxpayers money per tenant than any PRS LL would take. Remember £9k for £1k worth of windows and door from the other thread...

Extravagently overpaid ersatz council employees they may be, but the total bill to the taxpayer is lower. Of that there is absolutely no doubt.

Edited November 4, 2015 by pipllman

[Guest]

And they would (with a very high level of certainty) be taking more taxpayers money per tenant than any PRS LL would take.

So you're claiming that the entire LHA bill for a council is less than the wage bill of the staff in that council's housing department (which we pay for under the current system anyway)?

The ratio of landlords to tenants is vastly larger than the ratio of council staff to tenants would be.

You're going to have to show some figures on that. The housing benefit bill is 25 billion a year. Private landlords are not providing value for money.

[pipllman]

So you're claiming that the entire LHA bill for a council is less than the wage bill of the staff in that council's housing department (which we pay for under the current system anyway)?

The ratio of landlords to tenants is vastly larger than the ratio of council staff to tenants would be.

You're going to have to show some figures on that. The housing benefit bill is 25 billion a year. Private landlords are not providing value for money.

No. I am claiming that the total cost of providing X housing places would cost more if it was entirely in the hands of a council than it would be if the ownership / maintenance and legal compliance of the housing stock was the responsibility of PRS LLs working to the same standards of provision.

And that the cost of the PRS provision (and therefore the PRS LL profit) can be more easily controlled by reducing LHA than the cost of council provision ever could be.

[Guest]

This is the age-old privatisation vs public services argument. I doubt we'll change any minds.

Landlords are in it to make a profit, and take a percentage over and above the cost of providing and maintaining housing. Also their capital investment is financed at mortgage rates, which are above the rate the government pays on its own borrowing.

There may well be a lot of waste in the public sector, but will there really be more people employed to run council housing than there are amateur one-or-two property landlords at the moment? If nothing else council employees will probably be actually maintaining the housing stock, rather than working another job and waiting for their asset to appreciate.

Either way taking 4 months to write a report is pointless - maybe you're right about public sector waste!

[Neverwhere]

Not so - and we can have the same discussion that has been aired here previously as many times as you want.

Councils are less efficient than PRS and the cost of provision would increase without the PRS.

The costs (and therefore profits) of PRS can be more easily controlled - simply by reducing LHA (which should be done more aggressively than currently) - than the costs of council owned / provided social housing ever could be.

So yes, a PRS LL letting to LHA tenants can easily be labelled as a benefits scrounger. However, if the provision of that social housing was taken on by councils, the staff in that part of the council could be similarly labelled. And they would (with a very high level of certainty) be taking more taxpayers money per tenant than any PRS LL would take. Remember £9k for £1k worth of windows and door from the other thread...

Extravagently overpaid ersatz council employees they may be, but the total bill to the taxpayer is lower. Of that there is absolutely no doubt.

It's not really a discussion if you're simply making statements of belief rather than setting out a mechanism by which they might occur.

Simply claiming over and over again that councils spend more money is not a credible argument that councils inherently have to spend more money. There is no reason why councils couldn't use council land for building and generally operate at cost.

Simply stating that the not-really-private rental sector could be more easily controlled via LHA is not a credible argument that this is in fact the case. The total spend on LHA is dependent on the number of claimants, which can vary. Hence a reduction in LHA per claimant does not necessarily translate into a reduction in the total spend on LHA. Local councils on the other hand are finite. If they are set a budget then that is their budget and any variance in the number of claims will not change that. It is clearly easier to reduce overall spend on a finite set of budgets than it is on a variable number of claimants.

Simply asserting over and over again that the not-really-private rental sector is more efficient is not a credible argument that it is in fact more efficient. There is no motivation in the not-really-private rental sector to make cost savings for the taxpayer, only motivation to maximise profits for the not-really-private landlord. What's more the mechanism by which capitalism increases efficiency in the actual private sector is totally absent: there is no possibility of creative destruction as rents are guaranteed by state largesse.

Simply offering your own certainty on the profiteering of council workers exceeding the profiteering of not-really-private landlords is not a credible argument that this is in fact the case. Council workers are on fixed wages and these wages can be constrained. What's more even if your certainty were credible, which without a supporting argument it is not, it would arguably be significantly better for the economy for said profits to be spread around multiple individuals rather than concentrated in the hands of already asset rich, not-really-private ,extravagantly overpaid, ersatz council employee property hoarders.

The fact that you are quoting an instance of a council passing on costs for social housing to private leaseholders as an example of councils spending too much money rather than saving it is hilarious BTW!

Not only is there every doubt that the total tax bill to the taxpayer is lower for the provision of social housing (and it really is insanity to imply that adding on a profit margin inherently lowers the overall bill) but there is every reason to think that the overall impact on the taxpayer is one of increasingly higher costs.

State subsidy of not-really-private landlords sets an artificial floor under rents. This prevents the operation of a free market in the actual private rental sector and so increases personal costs for renters specifically, in the form of higher rents, and taxpayers generally, by causing increasingly large segments of the working population to rely on Housing Benefit.

State subsidy of not-really-private landlords sets an artificial floor under yields which in turn sets an artificial floor under house prices. This prevents the operation of a free market in actual private housing and causes all manner of social ills and additional and unnecessary costs, both private and public, and again inflates the Housing Benefit bill as it forces people to remain renting indefinitely and into retirement.

To be pro-state subsidy of the not-really-private rental sector is to be anti-capitalist and anti-free market.

Edited November 4, 2015 by Neverwhere

[pipllman]

I would love to believe that the council could provide social housing more cost effectively.

It should indeed be able to:

- stronger covenant and, therefore, cheaper finance

- larger economies of scale leading to lower cost per unit

- reduced administration

etc.

but the truth of the matter is simply that there is no evidence that shows that councils do achieve those benefits in real life.

In addition to the examples I have cited on this forum before (e.g. renting part of an office building for 3x the price of another tenant in the same building), we can look at at the example of a London council dipping its toe into the water. It didn't start so well with the council paying something close to £100k per unit more than the open market value for some flats... http://www.housepricecrash.co.uk/forum/index.php?/topic/206550-london-council-sets-up-as-private-landlord/but it will be interesting to see how that plays out (I am curious if the council bought the freehold to the block if anyone knows).

Moreover, councils do not borrow as effectively as PRS LL. They get their leg lifted there too https://www.opendemocracy.net/ourkingdom/joel-benjamin/dispatches-how-local-governments-are-being-fleeced-by-banks-for-%C2%A315bn

I accept that the example of £9k for £1k worth of work on windows isn't a sound example. Unless you can prove that the council is gouging private owners of the flats in the block, it is no use to you and unless I can prove the council is paying above the market rate for the work, it is no use to me.

It is correct that council workers are on fixed salaries (+ overtime in some cases) whether they do any work or not. The PRS LHA funded LL has to make do with the LHA monies alone to look after his portfolio (except where councils scandalously give away fridges).

So, starting from here, the most cost effective way to reduce the cost of social housing is to simply reduce the LHA to the point where PRS LLs' pips squeak. Beyond that, there is a case for allowing councils to provide social housing on their own initiative for less cost (and no possibility of budget increases above inflation). If they can, great. But they can't. They just can't.

[Neverwhere]

...If they can, great. But they can't. They just can't.

Which is about the strength of your argument.

The median weekly rent remaining after housing benefit is paid to households in social housing provided by Local Councils is £0. The median weekly rent after housing benefit is paid to household in the not-really-private rental sector is £28.

This clearly indicates that landlords in the not-really-private rental sector of 1.12 million households are maxing out housing benefit and then taking additional rent out of other benefits and/or income as well. Effectively without Housing Benefit the actual average weekly rent of these properties would simply be £28, and even then it would in all likelihood still be being paid for by the taxpayer!

Conversely the evidence very clearly suggests that Council's operating in the social housing sector of 1.045 million households are generally working within the constrains of Housing Benefit and potentially well under it. The Council housing we already have is cheaper and better value for money than the not-really-private sector that we are currently subsidising.

(All data from the Department of Communities and Local Government Social and private renters statistical data set.)

As I am arguing that the state should not be preventing the operation of a free market by privately contracting services and funnelling money into the private sector, and you are arguing against a free market and for continued state involvement and subsidisation of private markets, your examples of Local Councils overspending when privately contracting services and funnelling money into the private sector support my argument and not your own, which they in fact undermine.

(What's more with the anecdotal £9k charged to leaseholders for window upgrades both of your alternative options support my argument. The thing which you would need to prove support your own would be that the council were directly employing people - potentially shared between more than one Local Authority - to do such work on a fixed annual income and that this was more expensive overall than what they would pay to contract all such work from for profit businesses, and that the detrimental effects of Council involvement in this private sector and disruption of the free market would be outweighed by the overall benefit to the taxpayer.)

The idea that effective borrowing is a plus side for the not-really-private rental sector is hilarious. The not-really-private rental sector are a large part of what broke the banks, caused the financial crisis and resulted in the taxpayer-funded bank bailouts!

BTL was back at the expense of taxpayers and savers, as the ability of banks to service this relatively new market was undoubtedly saved by the British government's bank bailout. BTL only formally started in 1996. Yet, remarkably, in 2010 I established that 56 per cent of BTL mortgages ever lent in Britain were sitting on the books of bailed-out banks.

Roughly half of the outstanding BTL mortgage stock is being nursed by the state in some form. At the time of the bailout, Bradford & Bingley and Northern Rock had, between them, BTL mortgage liabilities worth £30 billion, all of which came into government hands. I subsequently found out - from figures that the mortgage industry did not want released - that about 65 per cent of BTL lending in the year after the banking bust was coming from banks that had been bailed out. In the absense of the bailout, little of this business would have been done, and the existing BTL mortgages would have been dealt with far more harshly. Buy-to-let had become a quasi-nationalised industry.

- Faisal Islam, The Default Line

Obviously there is no reason why the state has to borrow at higher rates than private individuals and it clearly generally does not do so. In fact we now have the ridiculous situation where Central Government is currently incurring interest on money borrowed in order to pay Housing Benefit to leveraged landlords who in turn pay the majority of that money in interest on their own borrowings, a large percentage of which are with bailed out banks! It's totally bonkers. How anyone can think that this is a good thing rather than an ongoing risk to financial stability is beyond me.

This is a key point which you keep failing to address or even acknowledge: the wider costs of the current set-up are both large and incredibly negative for wider society. The not-really-private sector landlord is not just making do out with the LHA monies, which are excessively generous as it is, they are socialising all kinds of other costs - from insecure tenancies to infrastructure costs, prevention of a free market in housing, artificially high private rents, reduction of the housing stock available for owner occupation, state subsidisation of their financing costs with bank bailouts, ZIRP, etc, etc, etc - and privatising the profits.

When all of these costs are taken into proper consideration there can be no doubt that the not-really-private sector is exceedingly bad value for the taxpayer. What's more, regardless of the relative value to the taxpayer, no convincing argument has been made - or could be made IMO - as to how the relative costs involved could ever justify the significant harm state subsidy of the notionally private rental sector does to genuinely private market participants by preventing a free market in private rents and, by extension, preventing a free market in private house prices.

[pipllman]

Median rents for local authority provided housing will likely increase as a result of the 2015 budget. Up to then, rents were set at 80% of market rates and have, therefore, easily been covered by LHA. Once the new rules come in, anyone earning more than £30k (£40k in London) are no longer eligible for that discount and will have to pay the full market rent. Whether that pushes the median up to the £28 / week seen in the PRS remains to be seen.

Also, if you look at council HRA accounts (which can not legally run at a deficit these days), the forecasts for the next 5 years look remarkably balanced to achieve 0 net surplus / deficit. There are examples of councils that made a surplus in the last year or two and examples of councils that had to dig into reserves to cover deficits. With social rents now set to decline 1% for the next 4 years, those neatly balanced budget forecasts are all in deficit unless the cost side can be reduced.

There are also questions about council's keeping up appropriate maintenance and repair schedules by diverting money from their HRA into other pots. Lest we forget, this article also reminds us of the massive backlog of repairs built up across the council house stock in the 1990s http://www.insidehousing.co.uk/systematic-raiding-of-housing-revenue-accounts/7004227.article

So I remain unconvinced that the current provision of social housing by councils is better or more cost effective than that provided by the PRS in financial terms

Moreover, I still contest that it is easier / quicker to reduce PRS social housing costs (from where we are now) by simply reducing LHA than it is to deal with councils housing departments cost base

I agree with you wholly about the disaster of the bank bail out and with Faisal that the situation where taxpayer owned (and funded at interest) banks are carrying (loss making for the state) BTL loans is ridiculous. It would have been better to not bail out the banks, not do QE etc. etc.

[Neverwhere]

Median rents for local authority provided housing will likely increase as a result of the 2015 budget. Up to then, rents were set at 80% of market rates and have, therefore, easily been covered by LHA. Once the new rules come in, anyone earning more than £30k (£40k in London) are no longer eligible for that discount and will have to pay the full market rent. Whether that pushes the median up to the £28 / week seen in the PRS remains to be seen.

Also, if you look at council HRA accounts (which can not legally run at a deficit these days), the forecasts for the next 5 years look remarkably balanced to achieve 0 net surplus / deficit. There are examples of councils that made a surplus in the last year or two and examples of councils that had to dig into reserves to cover deficits. With social rents now set to decline 1% for the next 4 years, those neatly balanced budget forecasts are all in deficit unless the cost side can be reduced.

There are also questions about council's keeping up appropriate maintenance and repair schedules by diverting money from their HRA into other pots. Lest we forget, this article also reminds us of the massive backlog of repairs built up across the council house stock in the 1990s http://www.insidehousing.co.uk/systematic-raiding-of-housing-revenue-accounts/7004227.article

So I remain unconvinced that the current provision of social housing by councils is better or more cost effective than that provided by the PRS in financial terms

Moreover, I still contest that it is easier / quicker to reduce PRS social housing costs (from where we are now) by simply reducing LHA than it is to deal with councils housing departments cost base

I agree with you wholly about the disaster of the bank bail out and with Faisal that the situation where taxpayer owned (and funded at interest) banks are carrying (loss making for the state) BTL loans is ridiculous. It would have been better to not bail out the banks, not do QE etc. etc.

It couldn't possibly push the median rent remaining after Housing Benefit is paid, and therefore for those in receipt of Housing Benefit, above £28 as it does not affect this cohort. None of what you present offers an unfavourable comparison with the not-really-private rental sector - the comparison rather being the point - and therefore it does nothing to further your argument.

Indeed it concedes that the anti-free market sector which you favour has previously been the cause of financial instability and is in receipt of further taxpayer subsidy above and beyond Housing Benefit in the form of subsidised financing costs via bank bailouts, and is therefore orders of magnitude more expensive than any form of direct social housing provision.

...The median weekly rent remaining after housing benefit is paid to households in social housing provided by Local Councils is £0. The median weekly rent after housing benefit is paid to household in the not-really-private rental sector is £28.

This clearly indicates that landlords in the not-really-private rental sector of 1.12 million households are maxing out housing benefit and then taking additional rent out of other benefits and/or income as well. Effectively without Housing Benefit the actual average weekly rent of these properties would simply be £28, and even then it would in all likelihood still be being paid for by the taxpayer!

Conversely the evidence very clearly suggests that Council's operating in the social housing sector of 1.045 million households are generally working within the constrains of Housing Benefit and potentially well under it. The Council housing we already have is cheaper and better value for money than the not-really-private sector that we are currently subsidising.

(All data from the Department of Communities and Local Government Social and private renters statistical data set.)

As I am arguing that the state should not be preventing the operation of a free market by privately contracting services and funnelling money into the private sector, and you are arguing against a free market and for continued state involvement and subsidisation of private markets, your examples of Local Councils overspending when privately contracting services and funnelling money into the private sector support my argument and not your own, which they in fact undermine.

(What's more with the anecdotal £9k charged to leaseholders for window upgrades both of your alternative options support my argument. The thing which you would need to prove support your own would be that the council were directly employing people - potentially shared between more than one Local Authority - to do such work on a fixed annual income and that this was more expensive overall than what they would pay to contract all such work from for profit businesses, and that the detrimental effects of Council involvement in this private sector and disruption of the free market would be outweighed by the overall benefit to the taxpayer.)

The idea that effective borrowing is a plus side for the not-really-private rental sector is hilarious. The not-really-private rental sector are a large part of what broke the banks, caused the financial crisis and resulted in the taxpayer-funded bank bailouts!

BTL was back at the expense of taxpayers and savers, as the ability of banks to service this relatively new market was undoubtedly saved by the British government's bank bailout. BTL only formally started in 1996. Yet, remarkably, in 2010 I established that 56 per cent of BTL mortgages ever lent in Britain were sitting on the books of bailed-out banks.

Roughly half of the outstanding BTL mortgage stock is being nursed by the state in some form. At the time of the bailout, Bradford & Bingley and Northern Rock had, between them, BTL mortgage liabilities worth £30 billion, all of which came into government hands. I subsequently found out - from figures that the mortgage industry did not want released - that about 65 per cent of BTL lending in the year after the banking bust was coming from banks that had been bailed out. In the absense of the bailout, little of this business would have been done, and the existing BTL mortgages would have been dealt with far more harshly. Buy-to-let had become a quasi-nationalised industry.

- Faisal Islam, The Default Line

Obviously there is no reason why the state has to borrow at higher rates than private individuals and it clearly generally does not do so. In fact we now have the ridiculous situation where Central Government is currently incurring interest on money borrowed in order to pay Housing Benefit to leveraged landlords who in turn pay the majority of that money in interest on their own borrowings, a large percentage of which are with bailed out banks! It's totally bonkers. How anyone can think that this is a good thing rather than an ongoing risk to financial stability is beyond me.

This is a key point which you keep failing to address or even acknowledge: the wider costs of the current set-up are both large and incredibly negative for wider society. The not-really-private sector landlord is not just making do out with the LHA monies, which are excessively generous as it is, they are socialising all kinds of other costs - from insecure tenancies to infrastructure costs, prevention of a free market in housing, artificially high private rents, reduction of the housing stock available for owner occupation, state subsidisation of their financing costs with bank bailouts, ZIRP, etc, etc, etc - and privatising the profits.

When all of these costs are taken into proper consideration there can be no doubt that the not-really-private sector is exceedingly bad value for the taxpayer. What's more, regardless of the relative value to the taxpayer, no convincing argument has been made - or could be made IMO - as to how the relative costs involved could ever justify the significant harm state subsidy of the notionally private rental sector does to genuinely private market participants by preventing a free market in private rents and, by extension, preventing a free market in private house prices.

[pipllman]

My position remains that councils are not good providers of social housing. The fact that the median rent after benefit is £0 is admirable. That does not, however, mean that councils are actually providing the appropriate quality of housing.

I referred earlier to previous backlogs of required maintenance. Unfortunately that lackadaisical approach to providing properly maintained housing persists.

Sheffield seems a good example to illustrate this with, as it gives a detailed breakdown of how it has performed on the maintenance and repair of its housing stock in its 15/16 Capital Programme. (http://*******.com/os5nrpl)

The plan states that only 93% of the council's housing stock will continue to meet the government decent homes standard. Hard luck if you live in a property within the other 7%.

Moreover, there is then a reasonably detailed breakdown of the backlog of maintenance that needs to be done across the estate, including:

- Despite being 'tackled systematically since 2009' there are around 4,000 boilers remaining across the city that are classified as obsolete and need replacing, of which only 2,300 will be renewed in 15/16

- 1,600 homes had no work carried out during the Decent Homes Programme (kitchens, bathrooms, windows & doors essentially); an unspecified number of homes had work started, but not completed under the programme

- the scope of electrics works backlog is not quantified, but it is acknowledged that a programme needs to be brought forward to deal with this backlog of work

Sadly, Sheffield isn't alone. London's local authorities are in a similar state: Even after spending £821m in 11/15 to improve c.52,000 homes, 11 of the 12 local authorities in the country where more than 10% of their homes do not meet the Decent Homes standard will be in London (https://www.london.gov.uk/priorities/housing-land/improving-quality/existing-housing-stock).

Of course, all councils set out grandly detailed plans for the future. This time, they cry, it will be different. We have robust plans to maintain houses properly, the plans are properly costed and resourced and all will be rosy.

I rather suspect it won't. Judging them on their performance to date, they are good at saying they can do what is necessary with the money available but, when push comes to shove, they simply do not deliver.

[Neverwhere]

While I'm glad to see that you have effectively acknowledged - by moving on from arguing about costs to instead trying to argue about quality - that council housing is cheaper than throwing money at overleveraged property hoarders acting to maximise profits in a rigged and captured market, you are still not presenting any comparative data with the not-really-private sector and so have not actually presented anything that actually supports your argument.

You understand that showing council housing isn't perfect is not the same as demonstrating that the anti-free market solution you are so in favour of is better, right?

(By the by also hilarious that you are complaining about small percentages of council housing not meeting the Decent Homes Standard in some areas when 100% of the not-really-private sector in the entire country isn't even assessed on the Decent Homes Standard or required to keep up to date with it at all! Again, your choice of examples only undermines your own position.)

Additionally, you have failed to address any of the wider negative costs to society imposed by this overleveraged, anti-free market set-up:

...If they can, great. But they can't. They just can't.

Which is about the strength of your argument.

The median weekly rent remaining after housing benefit is paid to households in social housing provided by Local Councils is £0. The median weekly rent after housing benefit is paid to household in the not-really-private rental sector is £28.

This clearly indicates that landlords in the not-really-private rental sector of 1.12 million households are maxing out housing benefit and then taking additional rent out of other benefits and/or income as well. Effectively without Housing Benefit the actual average weekly rent of these properties would simply be £28, and even then it would in all likelihood still be being paid for by the taxpayer!

Conversely the evidence very clearly suggests that Council's operating in the social housing sector of 1.045 million households are generally working within the constrains of Housing Benefit and potentially well under it. The Council housing we already have is cheaper and better value for money than the not-really-private sector that we are currently subsidising.

(All data from the Department of Communities and Local Government Social and private renters statistical data set.)

As I am arguing that the state should not be preventing the operation of a free market by privately contracting services and funnelling money into the private sector, and you are arguing against a free market and for continued state involvement and subsidisation of private markets, your examples of Local Councils overspending when privately contracting services and funnelling money into the private sector support my argument and not your own, which they in fact undermine.

(What's more with the anecdotal £9k charged to leaseholders for window upgrades both of your alternative options support my argument. The thing which you would need to prove support your own would be that the council were directly employing people - potentially shared between more than one Local Authority - to do such work on a fixed annual income and that this was more expensive overall than what they would pay to contract all such work from for profit businesses, and that the detrimental effects of Council involvement in this private sector and disruption of the free market would be outweighed by the overall benefit to the taxpayer.)

The idea that effective borrowing is a plus side for the not-really-private rental sector is hilarious. The not-really-private rental sector are a large part of what broke the banks, caused the financial crisis and resulted in the taxpayer-funded bank bailouts!

BTL was back at the expense of taxpayers and savers, as the ability of banks to service this relatively new market was undoubtedly saved by the British government's bank bailout. BTL only formally started in 1996. Yet, remarkably, in 2010 I established that 56 per cent of BTL mortgages ever lent in Britain were sitting on the books of bailed-out banks.

Roughly half of the outstanding BTL mortgage stock is being nursed by the state in some form. At the time of the bailout, Bradford & Bingley and Northern Rock had, between them, BTL mortgage liabilities worth £30 billion, all of which came into government hands. I subsequently found out - from figures that the mortgage industry did not want released - that about 65 per cent of BTL lending in the year after the banking bust was coming from banks that had been bailed out. In the absense of the bailout, little of this business would have been done, and the existing BTL mortgages would have been dealt with far more harshly. Buy-to-let had become a quasi-nationalised industry.

- Faisal Islam, The Default Line

Obviously there is no reason why the state has to borrow at higher rates than private individuals and it clearly generally does not do so. In fact we now have the ridiculous situation where Central Government is currently incurring interest on money borrowed in order to pay Housing Benefit to leveraged landlords who in turn pay the majority of that money in interest on their own borrowings, a large percentage of which are with bailed out banks! It's totally bonkers. How anyone can think that this is a good thing rather than an ongoing risk to financial stability is beyond me.

This is a key point which you keep failing to address or even acknowledge: the wider costs of the current set-up are both large and incredibly negative for wider society. The not-really-private sector landlord is not just making do out with the LHA monies, which are excessively generous as it is, they are socialising all kinds of other costs - from insecure tenancies to infrastructure costs, prevention of a free market in housing, artificially high private rents, reduction of the housing stock available for owner occupation, state subsidisation of their financing costs with bank bailouts, ZIRP, etc, etc, etc - and privatising the profits.

When all of these costs are taken into proper consideration there can be no doubt that the not-really-private sector is exceedingly bad value for the taxpayer. What's more, regardless of the relative value to the taxpayer, no convincing argument has been made - or could be made IMO - as to how the relative costs involved could ever justify the significant harm state subsidy of the notionally private rental sector does to genuinely private market participants by preventing a free market in private rents and, by extension, preventing a free market in private house prices.

[pipllman]

It shows that the reason council housing can be shown to be cheaper is simply because it isn't properly maintained. A council with a backlog of significant repairs that were identified as far back as 2009 and have not yet been completed is not a sign of a good provider of housing. Having one house with a boiler that was noted to be obsolete in 2009 would be quite bad. Having 4,000 of them is almost beyond belief.

I contest that were proper maintenance and improvement programmes followed, the costs of the council provided housing would be higher than PRS equivalents - because councils are not good at spending money effectively. They should be, but the evidence suggests that they are not. Even allowing for a profit margin as a reward for their improved efficiency and effectiveness, good PRS providers would be better value for money than councils.

Whether existing PRS properties measure up to the proscribed standards or not remains to be seen - the new bill that you link to will enable reasonable comparisons to be made. If they don't then the owners of said properties should be forced to bring them up to standard quickly (on their own bill).

Whether councils have the ability to make that happen by proper enforcement of the appropriate legislation also remains to be seen. I suspect the lack of credibility caused by their own failings to achieve the required standards might hamper that.

[Neverwhere]

It shows that the reason council housing can be shown to be cheaper is simply because it isn't properly maintained...

It shows no such thing. In order to demonstrate that council housing is cheaper in relation to the not-really-private anti-fee market sector "because it isn't properly maintained" you would have to demonstrate that the not-really-private anti-free market sector which you are championing is better maintained. I very much doubt that you can do any such thing but go ahead and give it a try.

The fact that the bill that I linked to has been prorogued and will make no further progress gives a faily strong indication that the the not-really-private anti-free market sector would not be able to meet these standards and is, as well as being more expensive, generally of lower quality than council housing.

Additionally you have still not addressed all of the additional costs imposed by the not-really-private sector, from the social costs to human welfare of insecure tenancies to the economic cost of leveraging-induced financial instability and the prevention of a free market in housing.

Edited November 5, 2015 by Neverwhere

[pipllman]

I will rephrase it a little then

In order for council provided housing to be properly maintained, the councils needs more money (amongst other things). To achieve the same standard of housing, the council costs would be higher than that of good PRS providers, even allowing for a profit margin.

Moreover, if the council agrees to pay LHA on a PRS property that doesn't meet the necessary standards, that is as much the fault of the council as it is the LL. Why doesn't the council simply say no, we aren't paying until you do X, Y, Z?

The other costs that you refer to should be dealt with wholly separately from the cost of providing the actual housing. There is no reason why PRS providers can't provide secure tenure for instance.

[Neverwhere]

I will rephrase it a little then

In order for council provided housing to be properly maintained, the councils needs more money (amongst other things). To achieve the same standard of housing, the council costs would be higher than that of good PRS providers, even allowing for a profit margin.

You have provided no logical basis or evidence for this whatsoever. It's purely your personal belief and as such it is not a credible argument. In fact all of the evidence discussed so far indicates the exact opposite to be true. At least council housing has a Decent Homes Standard!

Moreover, if the council agrees to pay LHA on a PRS property that doesn't meet the necessary standards, that is as much the fault of the council as it is the LL. Why doesn't the council simply say no, we aren't paying until you do X, Y, Z?

In your attempt to abdicate not-really-private anti-free market landlords from any responsibility you admit that your not-really-private anti-free market sector needs monitoring to maintain standards and that this must therefore impose additional costs on the council, thereby adding to my argument that you are advocating for the more expensive option.

The other costs that you refer to should be dealt with wholly separately from the cost of providing the actual housing.

No they shouldn't and you have made no argument as to why they should. In fact by attempting to wilfully ignore all of the wider costs of your preferred anti-free market, state-subsidised, not-really-private, property speculating sector you are effectively admitting that they far exceed the total costs of direct council provision of social housing and an actual free market in private housing for everybody else i.e. the majority.

There is no reason why PRS providers can't provide secure tenure for instance.

Firstly, there is no legal way for the not-really-private sector to provide security of tenure, as you well know.

Secondly, there is no practical way for individual anti-free market landlords to provide true lifelong security of tenure as individual landlords are subject to decay and death in a way that councils and proper businesses are not. (And - although it really shouldn't need stating - in a way that does not impact on the security of tenure of outright homeowners, whose own personal deaths will obviously not upset their own lifelong tenancy, and will instead simply end it.)

Thirdly, many of the costs involved - such as the prevention of a free market in housing - are utterly inherent to the system which you are championing. They are non-optional costs because they are the system.

[pipllman]

As there is no possible way for me to ever be convinced that a council can provide anything more cost effectively than it could be provided by a for profit organisation

And as there is no possible way for you to ever be convinced that privately owned housing should play a large part in social housing provision

There really is nothing more that I want to add that wouldn't be a rehash of previous posts

I will leave the discussion with something on which we can maybe both agree: the current way of providing social housing is not the best way

[Neverwhere]

As there is no possible way for me to ever be convinced that a council can provide anything more cost effectively than it could be provided by a for profit organisation

Thus conceding that it is a matter of personal belief for you. It runs counter to all available evidence and logic, as discussed above, so your conviction either way is rather meaningless.

And as there is no possible way for you to ever be convinced that privately owned housing should play a large part in social housing provision

Which is to entirely misunderstand my point, which runs in the opposite direction: social housing should not be playing a large part in privately owned housing.

To be pro-state subsidy of not-really-private landlords in the notionally private sector is to be pro-state interference in the private housing market and anti-free market for all other wholly private participants.

Edit: also, to be clear, while this may not be the case for you there is on all matters a possible way to convince me of something other than my current understanding, and that is to provide convincing evidence and a logical rationale.

Edited November 5, 2015 by Neverwhere

[Neverwhere]

Am I getting the most rent out of Housing Benefit?

I have several families who are potential tenants for me on housing benefit and was wondering if anyone knows about freelance housing benefit consultants.

Would it be best for me to use one to help me do a pre-assesment of the maximum benefit they would be entitled to?

My house is a 3 bed EX LA property. The housing benefit departments do this but a freelance consultant can sometimes help maximise the claim through their experience of the system.

Many thanks in advance.

Peter

[spacedin]

Not so - and we can have the same discussion that has been aired here previously as many times as you want.

Councils are less efficient than PRS and the cost of provision would increase without the PRS.

The costs (and therefore profits) of PRS can be more easily controlled - simply by reducing LHA (which should be done more aggressively than currently) - than the costs of council owned / provided social housing ever could be.

So yes, a PRS LL letting to LHA tenants can easily be labelled as a benefits scrounger. However, if the provision of that social housing was taken on by councils, the staff in that part of the council could be similarly labelled. And they would (with a very high level of certainty) be taking more taxpayers money per tenant than any PRS LL would take. Remember £9k for £1k worth of windows and door from the other thread...

Extravagently overpaid ersatz council employees they may be, but the total bill to the taxpayer is lower. Of that there is absolutely no doubt.

I've always found it odd how people suddenly think economies of scale don't apply when local government operates/builds housing. Do you have much experience of the PRS? If councils were to operate like many private landlords they would have to break the law, The PRS is an absolute mess and although the social rented sector has its problems, it's better much better regulated and standards are higher.

Besides, have you seen the council housing rents? They're often well below the market rate and pay for themselves. That would not be possible in the private rented sector and most social tenants in my opinion are very happy to be rid of all the vagaries of the PRS when they move into social housing. The secure tenancy wouldn't be profitable to the PRS either and there is definitely a need for stronger tenant rights in this country.

[spacedin]

It shows that the reason council housing can be shown to be cheaper is simply because it isn't properly maintained. A council with a backlog of significant repairs that were identified as far back as 2009 and have not yet been completed is not a sign of a good provider of housing. Having one house with a boiler that was noted to be obsolete in 2009 would be quite bad. Having 4,000 of them is almost beyond belief.

Things being in a state of disrepair in my experience tends to be the norm in the PRS and it can be difficult to get landlords to do anything, as that's their nature, their standards vary.

A council cannot leave a boiler 'obsolete' for any prolonged length of time without very good reason. Please read about the 'Right to Repair' which exists in the social rented sector, legislation among many which barely exist in the PRS and what does isn't even properly enforced anyway. Can you imagine the uproar among landlords and the increased costs for them, were these same strict standards to apply to the PRS?

Right to repair scheme

The right to repair scheme aims to get councils carry out small repairs quickly.

Key advice

• Your council can tell which repairs are covered by the scheme
• You can get up to £50 compensation if the work is not carried on time

The right to repair scheme

The right to repair scheme sets out a list of repairs which have to be done within a certain time limit. The repair must cost less than £250 to carry out.

You are entitled to claim compensation if a repair is not completed within the time limit.

Under the scheme, tenants must allow the council's contractor to carry out the work.

Contact your landlord for further details of their right to repair scheme including a full list of the repairs that are included.

Repairs covered by the right to repair scheme

The right to repair scheme covers certain repairs, known as qualifying repairs, which cost less than £250 to carry out. They include repairs to:

• unsafe power, lighting sockets or electrical fittings
• blocked flues to fires or boilers
• leaking roofs
• toilets that won't flush
• blocked sinks, baths or basins
• leaking or flooding from pipes, tanks or cisterns
• loose or broken banisters or handrails

All tenants should report repairs as soon as a fault is noticed, before the problem gets any worse.

Landlords usually need to visit to see if the problem is covered by the scheme.

Costs for repairs under the right to repair scheme

Councils do not charge tenants for having repairs carried out under the right to repair scheme.

But your council may charge you if it decides you're responsible for the repair, for example for:

• repair of broken glass in windows and doors (unless they were caused by criminal damage, such as burglary)
• replacement of lost keys or the repair of locks where damage was caused by misuse.
• replacement of items in the home that were broken by misuse, such as broken toilet seats or cupboard doors.
• any other repair or improvement caused by tenant neglect or misuse

How to report repairs to your landlord

Councils should have a system for reporting and dealing with repairs. Many councils have an online reporting repairs form. Most have a telephone number to call.

Use the Gov.uk local council finder to find contact details for your council.

When you report a qualifying repair, your landlord should:

• tell you how long it should take to fix the problem
• explain your rights under the right to repair scheme
• give you the contact details of the contractor who they usually get to do this type of repair
• arrange for you to be at home to let the contractor in

How long repairs take under the scheme

How long a repair covered by the scheme will take depends on the urgency of the repair.

All work on a qualifying repair has to be carried out within one, three or seven working days.

Repairs should be carried out within one working day if:

• you have no water or electricity
• you have no gas, or the supply is reduced
• windows or doors are not secure (for example following a burglary)
• there is a leak from a pipe, tank or cistern
• the flue to an open fire or boiler is blocked
• the heating or hot water are not working between 31 October and 1 May
• the sewage drain or soil stack are blocked (or you only have one toilet and it can't be flushed)
• electrical lighting or other fittings are unsafe

Repairs should be carried out within three working days if:

• there is a partial loss of water or electricity
• the heating or hot water are not working between 1 May and 31 October
• a sink, bath or basin is blocked
• a tap cannot be turned
• you have a loose bannister or handrail or rotten wood on the floor or stair treads

Repairs should be carried out within seven working days if:

• the roof is leaking
• a door entry phone is not working
• an extractor fan is broken

If you can't be home when the contractor arrives

The repair work will be cancelled if you're not home at the arranged time to let in the contractor. You'll need to start the procedure again.

Tell your landlord if you know you're not going to be home and try to make alternative arrangements.

Take action if repairs aren't done in time

Contact the council again if the contractor doesn't turn up to do the work by the last day of the time limit set. The council should call the other contractor on its list to arrange the repair work.

You are usually entitled to £10 compensation if the second contractor doesn't do the repairs by the time limit. For every extra day you wait, you get another £2, up to a maximum of £50.

If you have rent arrears, the amount is deducted from your arrears rather than being paid to you directly.

You are not entitled to compensation if the repairs didn't happen because you didn't report the repair or don't allow access to your home.

You probably can't claim compensation if the repair work is cancelled because of unforeseen circumstances such as extreme weather.

http://england.shelter.org.uk/get_advice/repairs_and_bad_conditions/repairs_in_social_housing/right_to_repair_scheme