The collective groan that went up when Iain Duncan Smith was reappointed to the Department for Work and Pensions over the weekend could probably be heard from space. For housing workers, it’s five more years of the same: no change in direction, just straight ahead with the pressing business of welfare reform. However, the return of IDS also provides an opportunity for pragmatism in the delicate relationship between the new Conservative government and social landlords.
From the bedroom tax to the social cleansing of London as families hit by the benefits cap are shunted outside the capital, there was a lot for housing experts to criticise during the term of the coalition government – and criticise they did. Much of that was tied up in an understandable moral objection to the changes being implemented. After all, if you’ve dedicated your career to alleviating housing need, it can be hard to work within the constraints of policies which you observe to be undermining a life’s work.
The practical objections, however, have been far more quietly stated, in part because some of them are so complex that they do not resonate with the wider public. In short, their comments don’t make great headlines.
Universal credit is one such example. The policy sounds laudable when described as a simple way of helping benefit recipients transition into employment by handing over full financial responsibility for all their outgoings including rent (previously paid directly to the landlord). But as all housing providers knew, it will be much more complicated than this. Government has never been good at managing large IT projects or handling lots of data. The reality of working life for many low-paid staff can be weeks of employment and unemployment hard up against one another, with no time for state bureaucracy in between. And most frontline jobs are paid weekly or fortnightly, not monthly like universal credit.
For housing associations, the policy introduces a huge financial variable. How can large organisations with loans negotiated on the basis of a reliable income cope with hard-pressed tenants who do not pay up? The housing regulator is now stress-testing accommodation providers to see how they would cope with situations like this. The result is, inevitably, a downgrading in their ratings.
It’s important to remember that universal credit is derided by private and social landlords alike. Both fear for their revenue. The difference between the two is that, while private landlords can refuse to house people on benefits, social landlords will need to make compromises to stay afloat. That’s why, though he is so widely disliked, Duncan Smith’s reappointment should actually be welcomed.
Cameron told MPs at a meeting of the 1922 Conservative parliamentary committee on Monday that their “re-election starts now”. Absolutely. This government can no longer blame the mistakes of the previous incarnation, and nowhere is this more significant than for housing.
After five years of thwarted pilots, up to £663m of IT costs being written off by the Treasury and more stumbling blocks than an army fitness assault course, it’s time for a pragmatic approach to the introduction of universal credit. The Conservative government is unlikely to walk away from the policy, and Duncan Smith cannot claim ignorance of its failings so far. He cannot hide behind excuses or inexperience in the way a new minister to the brief could be tempted.
To survive their new future, social landlords will need to adapt. They will need to have diverse income streams: development will now always be for the private sector alongside the social to make ends meet. So for every social home that is built, a home for sale, shared ownership or private rent must also be built to help social landlords stay afloat.
Yet, also, there’s never been a better time to challenge a minister head on and demand some certainty. The minister will have little choice but to capitulate.