Government housing policy and the impact on local authorities Housing Schemes: A Case of Camden Council

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Introduction

The interest on the future of social housing in the UK has intensified greatly over the years. The demand for social housing in the UK is high and various concerns have been raised over the years. One of the main issues that have been raised is the concentration of social housing in areas that can be deemed disadvantaged.

Another issue is the poor level of financial activity among tenants. In the UK, social housing was originally provide by non-governmental organizations looking to solve the problems faced by particular groups of people such as women, employees, those living in unsanitary conditions and those who lived in unsafe environments (Stephens, Whitehead & Munro, 2005).

The local authorities started to provide subsidies to the supply of rented housing in the late 19^th century, but to a very small extent (Holmans, 1987). Between World War I and World War II, tenure neutral supply side subsidies were provided to enlarge the total housing supply.

It was only in the post World War II era that social housing began to play a vital role in housing provision, with almost a half of all new production concentrated in the subsidized local authority sector.

In England, the extent of the social rented sector achieved its peak in 1979 when there were over 5.5 million social rented units. At the time, private renting accounted for about 12% of the stock and a large percentage of this sector was either rent free or regulated (Stephens, Whitehead & Munro, 2005).

From this period, the size of the social rented sector has decreased considerably but the ownership has also been extensive reorganized; enhancing the part played by non-profit Housing Associations at the cost of local authority housing (Mullins, Pat & Moyra, 1995).

Government housing policies have played a major role in guiding the social rented sector. These policies have various impacts on the housing schemes adopted by local authority across the country. It is therefore important to understand the exact nature of this influence and its possible impacts.

Problem Statement

In the current age, the housing issue has raised a lot of debate in the United Kingdom just as in most parts of the world. Lack of adequate housing, increase in cost and poor housing policies have been the centre of attention for many scholars, politicians and policy makers.

Prior to the post World War II era, the local authority housing schemes were virtually nonexistent. However over the years, the local authorities have been playing a huge role in the housing sector. Changes in government housing policies however have had a significant impact on local authority housing schemes.

There is a need for more studies since the literature on the effects of government policies on local authorities housing schemes are very little. This paper will therefore seek to add to the existing literature on the subject by exploring the impact that government housing policies have on local authority housing schemes with a special look at Camden Council

Objectives of the research

Over the years, the UK housing policies have undergone various changes to meet various social needs. In the last 2 decades, the most important aspect of the UK housing policy has been the overwhelming priority directed towards home ownership promotion throughout the 1980s, and the consequent withdrawal from that policy in support of policies looking to reverse the century long decline of the private rented sector in the United Kingdom (MacLennan, 2007).

This paper will try to find out the changes in the United Kingdom government housing policies that have taken place over the years and their impact on the local authorities housing schemes. The paper will look at some of the most important housing policies in the government and how they have affected the housing schemes of Camden Council.

Research Questions

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In order to meet this objective, this study will try to answer the following questions:

What are the important housing policies that have been instituted in the UK after the Second World War?
What have been the impacts of these policies on the housing sector in the country?
What are the Camden’s local authority housing schemes?
Looking at the government’s housing policies, how has the Camden’s local authority housing scheme been affected?
Are these effects good or bad and if so, what changes should be instituted to rectify this condition or improve this condition?

Significance of the study

This study seeks to find out the impact of government housing policies on local authority housing schemes looking at the case of Camden Council. The study will look at the various housing policies instituted in the post World War II United Kingdom and their impact on the housing sector of the country.

Understanding the various important changes that have taken place in the government’s housing policies will enable one to understand the shape of the current housing market and therefore predict its possible future.

This study is very important as it will provide more details about the impact of government housing policies to policy makers, home owners and other politicians in the country. Through this, it will be possible to identify failures in local authority housing schemes and determine if they are as a result of poor application of policies or as a result of poor polices in the first place.

Literature Review

In the UK, public housing is a term that describes accommodations that are owned and managed by governmental (public) bodies. Prior to the 1980s, the main providers in this century were the municipalities (elected local authorities).

The other main providers of public housing were the New Town Corporations however these bodies have now relinquished the ownership of their properties to local authorities.

Hills (2007) argue that social housing in the United Kingdom does not just describe public housing but other accommodation subsidized by public sources. Bloch and John (1990) undertook a study to identify the various housing policies and the attitudes local governments had towards these government policies.

They found out that most local authorities have had several conflicts with the central government over the housing issue. During this era of conflict, councils were controlled by the Liberal Democratic Party or the Labour Party.

The local authorities were considered to have failed in their duty to provide high quality housing, an observation supported by a large percentage of the public. This was mainly due to the significant estates of high rise blocks and the detested system built concrete estates that were built in most cities during the 1970s, most of which were torn down within 20 years of construction.

Coleman (1980) however argued that the stereotypical views held about council housings were however unjustified since other emerging problems affected a wider range of council housings. These problems were mainly social polarization and physical deterioration of council estates.

He argues that while restructuring and redesign of council estates can reduce crime and enhance security, the connection between housing management and social troubles and the built environment is far more complex than most scholars and theorists have desired to believe.

Bloch and John (1991) and Young and Davies (1993) noted that the conflicts between local authorities and the central government led to several changes in the housing sector. Of these changes, the most important one was the limiting of the role played by the local authorities by the central government.

Since 1979, the conservative governments have preferred the expansion of owner occupation on political and social grounds, believing in a property owning democracy. In as much as subsidized rented housing was essential, these governments preferred providing it via the more pluralist housing association division rather than local authorities.

The first policy by the central government in reducing the role played by the local governments was the Right-to-Buy sales. In 1980, the local government introduced the Housing Act that introduced the right to buy through which local councils had to sell to sitting tenants at substantial discounts.

Rao (1990) notes that council tenants could acquire their homes after two years of occupation at a discount of about 60% of the market value of these houses.

The public housing sector has thus lost over 1.5 million homes out of the total 6.4 million homes present in 1981. The right to buy policy brought with it several impacts. First, the policy allowed many households to successfully transfer into owner occupation under very good terms.

Secondly, it has resulted into a mix of tenure in most estates owned by local authorities, thereby maintaining people who might otherwise have sought the advantages of owner occupation in some other place (Kerr, 1988).

According to Ford and Wilcox (1992), another impact of right to buy is that some of the tenants who purchased their housing, even under favourable terms, have undergone various difficulties such as arrears, possession by lenders and homelessness.

During the economic recession in the 1980s, and the following severe property market crash, some purchasers were unable to meet their repayments and also were unable to find buyers for their properties.

Between 1986 and 1991, property repossession increased threefold while mortgage arrears at the same period increased dramatically. The final impact is that right-to-buy sales have reduced the collection of homes for rent.

Family sized houses have been eliminated from the rented sector and cannot be availed to those on the local authorities’ waiting lists. Even though the properties still survive, this shift does not lead to overall shortage, but it however means that those seeking for rented homes have fewer opportunities.

The second policy that affects local authority housing schemes is the transfer of ownership of public housing. The housing act instituted in 1988 availed to all tenants of local authorities the collective power to exercise Tenants’ Choice that allowed them to choose a new landlord who would be permitted to acquire the ownership of their estates.

The government had expected that the Housing Associations would be the main contenders for the job however almost no tenants took this right of choice.

According to the Institute of Housing (1990), a survey of tenants showed that most tenants had a firm attachment to the traditions and security of council housing, even though they considered local authorities as ineffective and inefficient landlords. The government thus decided to abolish the Tenant’s Choice policy as it was ineffective.

Despites these policies, various studies have been carried out on the overall nature of council housing. One of the most important issues investigated is rent determination. Previously, rents were determined from historic costs such that incomes from rent were expected to cover financial expenditures less subsidy.

In the local authority sector, rents were also subsidized from the general rate fund. In the Housing Association sector, rents were directly controlled on the same principles as in the private rented sector. Housing Associations were allowed to set their own rents by the 1988 housing act.

In 2002, the central government chose to introduce a rent restructuring regime on the whole social housing sector. This was so as to ensure that individual rents will be established on a formula founded on property values, dwelling size and local manual worker incomes.

The next issue that has received attention has been who lives in the social sector. According to Mullins, Pat and Moyra (1995), the composition of the social sector differs a lot from that in other tenures. People in the social sector are excessively young and old, economically inactive, retired or lone parents.

This composition mainly became about due to the right to buy policy that enabled several economically active households to acquire their own houses. One of the major concerns at the moment has been the level of unemployment witnessed in the social sector.

Another issue is that over two thirds of the occupants in social houses are outside the labour force, including 30% of all tenants of working age in the social sector. People from the black and minority ethnic groups comprise 12.5% of all tenants in the social sector. This is an under-representation when the household structure, poverty and employment status are taken into account.

Methodology

The methodology to be used in this study will be a multi-perspective study on the local authority housing schemes and how they are affected by government policies.

In order to obtain a comprehensive perspective on the subject and to obtain reliable information to assess our research questions, different research tools shall be used.

First, the analysis of literature shall be carried out. Next, survey using questionnaires provided to the various stakeholders involved will be utilized and finally, direct interviews with individual clients shall be carried out.

Research Units and Samples

This study will utilize two research units. The first unit will be the government policies on housing while the second unit will be the local authority (Camden Council) housing schemes. By choosing these two units, it will be possible to understand the relationship between the two thus enabling us to answer our research questions.

The sample utilized in this study will involve council tenants, housing associations, and some employees from the Camden Council.

The study will mainly involve a review of previously collected data from the Camden Council. Research will also be carried out on previous studies on the characteristics of council housing schemes elsewhere in the country and the various factors that affect these schemes.

Research Design

This research is a quantitative study that requires an analysis of two sets of data. The first set of data will involve the local authority housing schemes and policies.

The next set of data will involve the housing policies provided by the central government. The local authority housing schemes can be retrieved from the internet or from the various documents present in the Council headquarters.

Another set of data that are of importance are the various surveys carried out on the council tenants that include household characteristics, rent determination and employment status.

Government policies can be easily retrieved from internet databases and also from libraries belonging to the local authorities by utilizing the two sets of data; it can be possible to derive the impact relationship between the two.

Analysis

This study mainly involves a review of literature and the various policies that are relevant to the study. No statistical analysis is required and the analysis carried out will mainly involve an in depth look at the government policies and how they have affected the local authority housing schemes.

Data collection will mainly be carried through a search of the various databases that holds the various government policies and those of local authorities. Similar studies on the subject will also be reviewed in order to set up an objective argument on this subject.

Conclusion

Government housing policies have several impacts on local authority housing schemes. Since the post World War II era, various housing policies have been instituted and these policies have shaped the way local authorities plan their housing schemes.

Some of the government policies instituted have led to various conflicts between the central government and the local authorities. In the 1980s, the government embarked on a campaign to reduce the power of the local governments in dealing with housing issues.

This was as a result of the widely held view that local authorities were ineffective and inefficient. During the 1980s, the government housing policy was mainly geared towards the expansion of home ownership.

Home ownership however brought up several problems such as repossession and varying interest rates. This study will thus try to identify the ways in which government policies have affected the local government housing schemes.

References

Bloch, A. & John, P., 1991. Attitudes to Local Governments. York, England: Joseph Rowntree Foundation

Coleman, A., 1985. Utopia on Trial: Vision and Reality in Planned Housing. London: Hilary Shipman

Ford, J. & Wilcox, S., 1992. Reducing Mortgage Arrears and Possessions. York, England: Joseph Rowntree Foundation

Hills, J., 2007. Ends and Means: The Future Roles of Social Housing in England. London: CASE, LSE

Holmans, A., 1987. Housing Policy in Britain: A History. London: Croom Helm Institute of Housing, 1990. Social Housing in the 1990’s: Challenges, Choices and Change. Coventry, England: Author

Kerr, H., 1988. The Right to Buy. London: HMSO

Maclennan, D., 2007. Looking forward; aiming higher: the future of social housing in England. York: Joseph Rowntree Foundation

Mullins, D., Pat, N. & Moyra, R., 1995. Evaluating Large Scale Transfers of Local Authority Housing. London: HMSO

Rao, N., 1990. The Changing Role of the Local Housing Authority. York, England: Joseph Rowntree Foundation

Stephens, M., Whitehead, C. & Munro, M., 2005. Evaluation of English Housing Policy 1975-2000 Overview. London: ODPM

Young, K. & Davies, M., 1993. The Politics of Local Governments. York, England: Joseph Rowntree Foundation

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