Trends in Housing Policy - Case Study Example

Introduction The welfare-based approach to housing in the UK used in the previous years focused on the well-being of typical service users in different areas to calculate housing allowances. Obviously, the welfare approach did not make them equal, due to the fact that housing price is not the only factor that affects their well-being. However, due to its ambiguity it does create some inefficiency in the housing service providers. This paper discusses the factors influencing the shift to contractual resource management in housing, that is when business approach is used. It also indicates changes in the structure of affected housing service organizations, and gives an insight into the implications associated with the shift. Political Factors The change of social housing organizations was hastened by a number of political, economical, and social factors. The first group of political accelerators comprises of governmental policies and regulations aimed at the increase of private housing in the UK. In the post-WWII period the housing policy of the UK government was focused on rebuilding, and providing new homes for the population. However, three reasons were hindering rebuilding processes: first, the government could only spend on housing what the country could afford; second, governmental investments in housing policy required better targeting on the neediest classes of population; and third, the efficient use of public spending were ought to be achieved through drawing in private funding (Collier and Luther, 2002). Thatcher's conservative policy on housing included two main phases: the extension of home ownership and the privatisation of rented housing. Through the increase of private housing among the population the government was able to focus on social groups, which could not afford to buy a house. Tax incentives, efficiency agenda, and right to buy policy was the next step to increase home ownership among the population: "The rights of council tenants and, later some housing association tenants, to buy their homes under the Right to Buy and Right to Acquire policies has enabled significant numbers of people (over 2 million) become owner occupiers" (Shelter, 2005). Nevertheless it had a negative impact on the supply of affordable housing for rent in many UK regions, "where the provision of new affordable homes has failed to keep pace with the numbers being lost through sales" (Shelter, 2005). The new problem has arisen: in 2002 Britain saw the lowest number of new houses built(measured in starts) since the end of World War II (Cameron, 2003). The housing supply was short, but moreover it mismatched the demand in the cities and regions. Thus, along with the stimulation of private housing governmental policies have created several obstacles on the development of UK housing market. Economic Factors Economical factors that lead to the shift from the welfare to contractual resource management in the housing industry identified in the literature are connected to further development of globalization. The success of Western economy, and the spread of the US way of life has entailed the rapid development of private sector in housing. It also has another effect. World Trade Organisation not only reduces barriers to international trade, but also increases the commercial exploitation of public services, including social housing. Pollock and Price (2000) indicate that market-orientated policies including privatisation of public service infrastructure through public-private partnerships is a part of a larger trend of privatization, and redefining of public goods as private responsibilities. The hopes of WTO are concerned with the commercial exploitation of public funding streams, and promoting the commercial interests of transnational corporations. Promotion of privatisation leads to the increase of competition among housing organisations as transatlantic players enter the housing market of the UK (Pollock and Price, 2000). On the one side it allows government to reduce funding to minimal, allowing private owners to take care of themselves. On the other side, the basis of public services were always based on need, not the ability to pay, and such changes may lead to the increase of homelessness in the country. Social Factors The third group of factors leading to structural changes in housing organisations comprises the changes in the society. Currently, there are two trends in the UK, which lead to the increase of private housing demand: ageing of the society, and the increase of single-person households. "Rising living standards mean that each household today expects to live in a self-contained house or flat. In the early 1900s, a terraced urban house or a rural cottage might have been occupied by three generations, including five or six children" (Darton and Strelitz, 2002). Nowadays, old people prefer to live with their children only if they cannot afford their own house. And the increase of population income leads to the increase of private houses demand. Additionally, statistics provided in the paper of Darton and Strelitz (2002) shows that more people are becoming partners and parents later in life. This leads to larger number of working age single-person households. As the paper shows, the trend will continue fir the next 20 years (Darton and Strelitz, 2002), which will lead to further increase in housing demand. All the factors described above have influenced the transition from welfare to contractual resource management in housing, from public housing services to private. Of course, it implied the structural changes of housing organizations. The next part of the paper outlines the structural changes within those organizations and gives appraisal of those shifts. Structural Changes within Housing Organisations Housing associations are currently pressured by political, economical, and social factors to change their structure in accordance with the contractual or property-based approach, which has replaced the previous welfare-based approach to housing services. Housing associations wanted to recapture some aspects of the welfare approach to housing management to provide services to increasingly welfare-dependent tenants. However, as Walker (2000) states, tensions between the property and welfare approaches are likely to lead to the domination of a property-based approach; the ongoing managerial and external pressures on housing associations are too heavy to resist. Therefore housing services providers have to change. In the case study described by Currie (2003) out of 27 local housing authorities 20 (74%) had experienced a significant change in the division of responsibility for housing functions since local government reorganisation in 1996. Author also points out that changes mainly reflect a council-wide restructuring, but not housing-led service reviews. Organisational location of housing services has changed significantly over that period. Th most commonly reported change was the movement of Housing Benefit. Out of those 20 11 authorities reported of significant structural changes, including most frequently Housing Benefits and repair services. 8 authorities indicated partial or whole movement of housing service to a different department. 5 were involved in a merger of two departments, and 6 identified the merge of two or more divisions/services from the same or different departments to form larger housing service. Only 1 of the 11 changed authorities have reported of the name change only. "From the authorities that provided detail, it is clear that all these planned changes related to internal restructuring rather than being imposed by the corporate centre" (Currie, 2003). These changes illustrate the whole picture, when smaller, more fragmented housing services are inefficient in terms of performance management. Implications of Shifting from Welfare-based to Business-based Approach Some of the implications were already briefly indicated previously. Let us analyse them with better detail. The first and the most obvious implication of housing industry is the possible increase of homelessness and anti-social tenants, which "could have their housing benefit withdrawn under government plans to restore civic tranquillity to neighbourhoods" (Burns, 2003, p. 10). The main points of this reforms were: housing benefit withdrawn from unruly tenants; local authorities to get new powers to fine, evict and withdraw the "right to buy" council housing; licensing scheme to improve standards of private landlords; fines for parents of unruly children; begging to become a recordable offence. Along with the refusal of the welfare-based approach it closes the possibilities for people with low income to become house owners, and can increase the number of homeless across the country. The other important issue is concerned with land use planning system. With further privatization, it becomes difficult to plan spatial patterns, the preservation of the green belt, and the overall effectiveness of future infrastructure. "The requirement for high volumes of new housing will create tensions in the system" (ECOTEC, 2004). Therefore, although the shift will make overall housing service departments more efficient it will create challenges for further construction and social policy. Conclusion As can be seen from the arguments presented in the first part of the paper, business-based approach in housing service delivery is no longer an option but a necessity. The external and regulatory pressure is too high, therefore even the least socially protected groups of population will experience the effect of changes from welfare-based to contractual approach. Hardly, it will be a good change for them, but on the larger scope, this shift may bring efficiency to a lousy housing policy, often blamed by the population. After all enlarging the service delivery companies and the increase of competition may lead to better quality of service. References Burns, J. (2003). "Anti-Social Tenants Could Lose Their Housing Benefits". Financial Times, March 13, p. 10. Cameron, G. (2003). Barker Review of Housing Supply. Some Analytical Comments. Published on August, 21, University of Oxford. Collier, P. and Luther, R. (2002). The Use of Tax Expenditures by the Thatcher Governments: 1979 to 1990. Working Paper, published on September 4, University of the West England, Bristol. Currie, A. (2003). Housing Performance Review & Self Assessment Techniques. Survey Report. Built Environment Research Paper, No.2, Herriot-Watt University. Darton, D. and Strelitz, J. (eds.) (2002). "Britain's Housing in 2022" in Tackling UK poverty and disadvantage in the twenty-first century. Published by Joseph Rowntree Foundation on March 7, 2003. ECOTEC. (2004). Trends in Housing Policy: Implications for Research and Development Programmes. Retrieved December 2, 2005 from http://www.odpm.gov.uk/embedded_object.aspid=1161432 Pollock, A. and Price, D. (2000). Globalisation Privatisation! Healthmatters Magazine, Iss. 41, Summer 2000. Retrieved December 2, 2005 from http://www.healthmatters.org.uk/issue41/privatisation Shelter. (2005). Home Ownership and the Right to Buy. Retrieved December 2, 2005 from http://england.shelter.org.uk/policy/policy-962.cfm. Walker, R.M. (2000). "The Changing Management of Social Housing: The Impact of Externalisation and Managerialisation". Housing Studies, Vol. 15, No. 2, pp. 281-299. Bibliography Bramley, G. Munro, M. and Pawson, H. (2004). Key Issues in Housing: Policies and Markets in the 21st Century. Palgrave. Hastings, A. McArthur, A. and McGregor, A. (1994). Local Government Decentralisation and Community Involvement (Occasional Papers). University of Glasgow. Holder, A. et al. (1998). Surviving or Thriving - Managing Change in Housing Organisations. Coventry, Chartered Institute of Housing. Read More