A Great New Idea on Council Housing

The more I think about it, the more I see the Cameron/Shapps plan for five-year council house tenancy reviews as little short of brilliant. At the moment, anyone who makes it to the finishing line of the housing list is allocated a subsidised home more-or-less for life, regardless of their future circumstances.

This has two effects: first, even if they become much better off, and would no longer meet the criteria for social housing, they get to keep the house indefinitely (while the rest of us keep paying for it). We all hear of council houses with multiple wage-earners who could well afford to move to the private sector. They become “bed-blockers”, denying homes to those on the waiting list who actually merit subsidised housing.

Secondly, council house tenure is inimical to labour mobility, and therefore a huge drag on our economy. An unemployed man in Liverpool who wants to follow Norman Tebbit’s advice, and “Get on his bike”, dare not go, say to London, because he’d be back on a waiting list and could be homeless for an extended period. And never mind London – he dare not take a job on the other side of Liverpool, for the same reason. Council tenancy is a ball-and-chain on labour mobility. This surely must be a significant factor in our unemployment problem.

Imagine for a moment that we offered unemployment benefit on the basis that once you started to get it, you got it for life, even though you got a well-paid job next year. That is palpably lunatic. Yet it is essentially what we seem to be doing in social housing. Of course people need a degree of security in their homes (although unemployed home-owners have little enough security when they can’t keep up with their mortgage). But council-houses-for-life regardless of circumstances is absurd.

Yet the charity Shelter just doesn’t get it. According to the Guardian, they say “We do not believe the big question in housing policy is security of tenure for new tenants. The prime minister has sidestepped the fundamental cause of our housing crisis – the desperate lack of affordable housing supply.” It hasn’t crossed their minds that the lack of availability of social housing may result from the fact that much of it is occupied by tenants who would not now qualify, and could well afford to move to the private sector. The only solution Shelter seem ready to accept is more spending and more subsidy. Haven’t they noticed the fiscal crisis? Don’t they see that we need to use existing resources better – not splurge on new spending?

And Shapps has had not one but two great ideas. Alongside the five-year tenancy reviews, he proposes a new swap system to help overcome the barriers to labour mobility – a national database where a council tenant in one location can identify a council house in his target area and arrange a swap. Of course there are no guarantees that it will work in any individual case, but in those cases where it does, it is likely to result in two people getting into jobs and off unemployment. It will increase labour market mobility and flexibility at a very low cost. It will remove a huge barrier to employment.

So well done Dave and Grant. But black marks for Shelter – wake up and smell the coffee.

This may look a little less dramatic than Maggie’s decision to sell council houses, but it is perhaps as important in its own way. It is a blow for freedom that will provide homes for those who need them, and release thousands from state dependency.

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