Letter to the Chancellor about the housing crisis

Rt Hon Rishi Sunak MP

Chancellor of the Exchequer

Dear Rishi,

I am writing to urge you to use the opportunity of the Spending Review later this month to adopt a visionary approach to solving the housing crisis – one that helps address all of the interconnected crises we face from jobs, housing, health, to economy and climate, in a joined-up and comprehensive way; to push towards our climate targets at the same time as creating jobs, providing good homes and enabling people to thrive and contribute to their communities, to the best of their abilities.

For too many, the experience of lockdown has been one of being trapped in unsafe, unhealthy, overcrowded and unsuitable accommodation. Health conditions are exacerbated by poor housing conditions  and mental health suffers too. People living with domestic violence and child abuse feel even more isolated and vulnerable. Reduced incomes have led to rent arrears and insecurity. And when schools were closed, children living in poor quality housing were badly affected by stagnating education and further increases to levels of inequality.  It has never been more vital or urgent for Government to address housing supply and standards.

A Green New Deal for housing would simultaneously reduce climate emissions, create jobs, boost the health of the nation, and provide genuinely affordable housing. Well-built and well-insulated homes won’t just help us reach our climate targets, they will also cut energy costs so people don’t have to choose between heating and eating. And they will keep people healthier with savings for our health service - avoidable illnesses caused by poor-quality homes costs the NHS £2.5 billion a year.

Investment in low-carbon homes is key to creating jobs and resetting the economy as we come through the coronavirus crisis. Recent research from Oxford University suggests that investing in green infrastructure delivers a better return than more traditional forms of economic stimulus, whilst  the Government’s expert Committee on Climate Change says “In the long term, a transition to a low-carbon, efficient and resilient economy will bring productivity benefits throughout the economy.”

Recommendation 1: Extend emergency support to prevent mass destitution

The Government’s short term response to the pandemic is crucial. Earlier this year, the Treasury provided Local Authorities with the resources to accommodate thousands of homeless people. In my constituency, this enabled Brighton and Hove City Council to ensure  393 people had a roof over their heads, showing it is possible to end homelessness if the Government chooses to do so. Further extensions to these efforts have, so far, been piecemeal and temporary, which leaves homeless households in a precarious position. If these efforts are not extended, there is a risk that we will see thousands of households become utterly destitute, especially when other support schemes, such as the Job Retention Scheme (JRS) are scaled back or closed. 

The Government should enable councils to build on the good work they have done so far by:

  • Extending the eviction ban and Everyone In scheme to help people stay put and prevent the spread of the virus, providing unequivocal guidance to local housing authorities that everyone at risk of sleeping rough must be accommodated during the national lockdown, including those deemed to have no recourse to public funds.
  • Reverse the changes to the Immigration Rules to prevent rough sleeping from being grounds for refusing someone’s right to remain in the UK.
  • Extend Discretionary Housing Payments (DHP) funding to help renters who have fallen into arrears through the pandemic.
  • Deliver the necessary funding to every local council to enable them to procure suitable accommodation (not night-shelter beds) and support services, including the “wrap-around” support needed to help homeless households sustain tenancies, in line with the recommendations of the Crisis Home for All report.

Recommendation 2: Build new, energy-efficient homes

The Government should invest in a programme of energy-efficient social housing to provide homes for those in greatest need, to tackle the root causes of homelessness and increase employment. Shelter estimates the UK needs 3 million new social homes. The Chartered Institute of Housing recommends a fundamental restructuring of government incentives and programmes, to retarget those most in need of support in the housing market and to enable the required level of new investment to take place. Analysis by the Centre for Economic and Business Research on behalf of the National Housing Federation shows that, in England, building 90,000 new social homes a year would add £4.8bn to the national economy and support 86,000 jobs. Investing in social housing will strengthen the economy, create jobs and improve people’s lives when our nation needs it most.

The Government should:

  • Allocate funding and authority for Local Authorities to build new homes; bring empty homes back into use; and create 100,000 new council homes a year, built to Passivhaus or equivalent standard.
  • Ensure new developments are built in consultation with communities,  based on the needs of their area, use high quality designs that respect local architectural heritage, and are located and designed to ensure that residents have safe pedestrian access to local shops and schools, or are within 1km of a local rail, tube or tram station, or 500m of a high frequency bus service.
  • Renew the Community Housing Fund (CHF) as part of this investment. The previous round of CHF may only have been open for 18 months but it created a pipeline of 10,780 community-led good-quality homes, providing excellent value for money. 

Recommendation 3: Retrofit existing homes

The UK has the least energy-efficient housing stock in Western Europe, which means high heating costs and poor health for low-income households. It is also responsible for generating 15% of our greenhouse gas emissions.  So alongside the building of new homes, we need to invest in improving the energy efficiency of existing homes. In its 2019 manifesto, the Conservative Party promised £9.2 billion for a public sector energy efficiency programme over the course of the current parliament. This ambition must be expanded to start a retrofit revolution for the UK.

Social landlords have a greater proportion of homes that meet high energy efficiency standards compared to other tenures, but the sector must not be left behind. Social housing is responsible for 10% of the greenhouse gas emissions from our current housing stock, so decarbonising social housing remains critical.

In addition to the climate and health benefits, Transition Economics calculate that an emergency house building and retrofitting energy upgrade would create 735,000 jobs over the next two years. As our economy recovers from Covid-19, investment needs to be targeted smartly at providing social, economic and environmental benefits. A mass programme of retrofitting ticks all these boxes.

The Government should:

  • Improve the insulation of every UK home that has inadequate insulation, by 2030, as well as provide for the deep retrofitting of 10 million homes in the same timeframe.
  • Significantly reduce heating bills by improving 1 million existing homes and other buildings a year, so that they reach the highest standard of energy efficiency.
  • Deliver on its 2019 manifesto commitment to set up a £3.8bn social housing decarbonisation fund.
  • Transform the planning system and building regulations, so that all new buildings built by private developers are built to the Passivhaus standard/equivalent, and incentivise renovation, extension and improvement of existing buildings, and the use of sustainable materials.
  • Enhance building regulations so that all external renovations improve the energy performance of the building.
  • Reinstate the requirement for local council building control inspectors to carry out (covid-19 safe) inspections themselves of new build properties and renovations, to ensure this work is carried out to the required standards.
  • Provide clear legislation (rather than guidance) on fire safety remediation in the light of Grenfell and the unfolding EWS1 fiasco, and make an investment in the provision of surveys and remedial works to make homes safe where necessary.

Recommendation 4: Reform social security

The coronavirus crisis has seen millions excluded from financial support through no fault of their own. Those already contending with precarious situations are struggling still further, whilst my inbox is full of emails from the self-employed and business owners who have lost or risk losing their homes, because the Government’s financial schemes have left them out in the cold.

The Spending Review should include funding for a Universal Basic Income (UBI) for the recovery, helping prevent people from falling through the gaps in our welfare safety net and becoming destitute. In April of this year, 100 parliamentarians made this recommendation in letter to the Treasury  and the Work and Pensions Select Committee is currently considering UBI as a way forward for dealing with the changes in the world of work that they anticipate following the pandemic. 

Within the existing welfare benefits system, there are specific and immediate reforms that would help lift everyone up. To target support at reducing homelessness for people on low incomes, the Government should:

  • Ensure Local Housing Allowance (LHA) fairly reflects the cost of housing, and not leave people with a shortfall to make up to cover their rent.
  • End the five-week wait for Universal Credit (UC) payments to begin.
  • Allow UC claimants to request direct payments of their rent from the start of their claim – rather than requiring them to be at least two months in arrears.
  • Remove the benefit cap.
  • Immediately extend Shared Accommodation Rate exemptions for homeless under-25s and care leavers.
  • Reinstate work allowances for people on all benefits to aid the transition into work.

Recommendation 4: A real renters’ reform bill

Properties marketed as housing or accommodation should be fit to live in. The quality, energy-efficiency, and fire safety of accommodation in the Private Rented Sector is poorly regulated, whilst associated issues such as Anti-Social Behaviour are disruptive and damaging for residents and communities. As the Time for Change report by Shelter demonstrates, better regulation of the PRS is desperately needed.

Houses in Multiple Occuption and short-term lets are a particular concern.  East Sussex Fire & Rescue Service say that short-term lets present 'one of the largest emerging issues for fire services', as they are not regulated in the same way as businesses ad are therefore not subject to the same fire safety regulation.  Local Authorities need the powers and resources to establish licensing schemes for these properties, to enforce minimum standards and tackle difficulties.  This is the route to ensuring that tenants have safe, decent homes that are affordable to run and to rent, and are located in thriving neighbourhoods.

For those landlords who do not wish, or cannot afford, to undertake the work required to bring their property up to minimum standards, the option to sell their properties into a nationwide "Buy Back" scheme (such as that proposed in the Private-to-Public 'Buyback Housing' by London Assembly Member Sian Berry), which will carry out improvement works and let properties at affordable rates, should be provided.

The Government should also:  

  • Use its proposed Renter’s Reform Bill to enshrine rights for tenants; enable local authorities to license landlords; and regulate the standards of housing in the private rented sector.
  • Adequately resource Local Authorities to meet their statutory responsibilities.

Recommendation 5: Empower Local Authorities

Local Authorities are central to tackling the housing crisis. They are uniquely-placed to deliver national initiatives in ways that reflect the make up of local communities and meet local needs. The Government should provide adequate funding and resourcing for Local Authorities to deliver the homes, regulation, support and services required to recover from the pandemic, and so our housing sector can successfully meet ambitious climate targets.

Yet Government funding for Local Authorities has been halved since 2010 and councils now face a funding gap of £5.3bn and cost pressures of £9bn by 2023/24.  These gaps must be addressed if councils are to be at the forefront of the mass programme of home-building, home-improvement, regulation and housing-first support that our communities need, as well as other services.

The Government should:

  • Immediately address the historic and pandemic related funding gaps facing Local Authorities.
  • Provide adequate resources to support all new activities and responsibilities being given to Local Authorities.

Unprecedented times call for ambitious choices

The spending review comes at an unprecedented moment in history when we are facing so many interconnected crises. We need to simultaneously reduce climate emissions, create jobs, boost the health of the nation, and provide genuinely affordable housing. These are ambitious aims, so it is absolutely essential that the Government makes ambitious choices at this time, not least because the climate science says we have less than 10 years to act.

I urge you to use the massive opportunity that this Spending Review presents, to take the steps I have outlined above, in order to genuinely tackle the country’s housing, employment, wellbeing, and climate emergency.

Yours sincerely,

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