RAAC and Ruin
Another month another building safety crisis. Soon we will be having all meetings outside as we will be too worried to go indoors, demanding a risk assessment before entering any property.
How have we gotten into this position? In the mid-1990s I took over responsibility at Bristol City Council. Fairly quickly it was clear that we owned an estate of deteriorating buildings. This was the days of the rate cap and year on year reductions in local authority finance (sounds familiar although this was in the heady days when councils remained solvent). It was explained to me that when the department was asked to make cuts, it avoided redundancies by cutting the repairs and maintenance budget, a few tens of thousands each year had a cumulative impact on the portfolio. Something similar was happening in the council housing estate where the right to buy saw the better quality homes sold off at a cut price and the benefits of rent pooling diminishing and the political pressure to keep rents as low as possible seeing local councils chipping away massively at the planned maintenance budgets. This had also followed housing’s own concrete cancer scandal among the PRC (Precast Reinforced Concrete) homes built mainly in the 1950s (does this sound familiar?). Under the 1984 Housing Defects Act councils were instructed to repair those homes which had been sold under the right to buy first, massively reducing the investment in retained council homes.
Currently social media has been deployed to highlight the poor quality of some social housing. As a councillor in the 1980s and 1990s I saw many properties in a similar state. The answer of the incoming Labour Government was to force social landlords to improve their homes and in 2002 John Prescott introduced the Decent Homes Standard (focus on decent, it wasn’t a particularly high quality standard but a bare minimum possible when starting at such a low base in many areas). All councils had to assess whether they could actually afford to bring their homes up to the standard, in turn leading to many councils setting up housing associations to remortgage and improve their homes by transferring them out of council control or setting up Arm’s Length Management Organisations backed up with Government cash for improvements. By 2010 a million ‘council’ homes had been improved. Without this standard and the Government initiative it is unlikely that anywhere near this number of homes would have been improved.
In 2010 the world changed for housing. The coalition government massively cut the grant funding for new social housing and invented the ‘affordable rent product’ which basically encouraged housing associations to fill the gap in funding with higher rents, basically requiring existing social housing tenants to replace the funding cut by the Government, an incredibly regressive form of taxation moving costs from the general taxpayer to the poorest people in the country. This started to see more money from rents switching from repairs to development.
In 2016 the Government used the Welfare Reform and Work Act 2016 to require social housing landlords to cut their rents by 1% per year for four years. The requirement to fund development from rents continued and this cumulative cut of 16% over four years fell largely on planned maintenance, undoubtedly leading to many of the problems highlighted recently. The Government mood had also moved against demolition programmes and funding for completely rebuilding estates disappeared and landlords were expected to retain and maintain homes which were past their sell by date.
The Government which has turned on the sector over standards of repair have spent over a decade squeezing money out of maintenance budgets. Grenfell and the spotlight on some appalling homes has reversed the trend. At a time when huge numbers of families are living in temporary housing and street homelessness is on the rise again housing associations are switching resources back into their repair programmes. More and more associations are announcing cuts in their development programmes and the private sector is doing the same as interest rates rise and house prices fall.
The problem highlighted this month in schools is not an outlier or unusual, it follows a long period of financial short-termism. Cutting back on building investment is an unseen cut but a completely unsustainable one.
13 September 2023
