What went wrong?
The rethinking of council housing
Alex Marsh School for Policy Studies University of Bristol
What went wrong? The rethinking of council housing
This paper was originally drafted in 2006 as a chapter for a book. The book never came into being, for a variety of reasons. The piece has been sitting, largely unnoticed and unloved, on a memory stick ever since. I came across the piece again while searching for something else. It struck me that it would be a shame not to do something with it. The argument might be of some interest. We now have – or at least know about - more varied options for making our work freely available than we did back in 2006. So I have posted the piece online at Scribd.com. I have lightly edited the text so that it can be read as a freestanding piece of work rather than a contribution to a broader work. There are one or two places where subsequent policy change has altered the trajectory of the sector’s development, but I have resisted the urge to modify the substance of the argument. This is how I was thinking six years ago. So it stands as a bit of a historical curiosity in its own right.
What went wrong? The rethinking of council housing
… the activity of government is inextricably bound up with the activity of thought. It is thus both made possible by and constrained by what can be thought and what cannot be thought at any particular moment in our history. (Rose, 1999: 8)
Framing change It can be argued that for the sixty years up to the 1970s council housing can be viewed as broadly achieving the objectives set for it. By the 1970s the initial signs of problems – problems that would come to dominate subsequent discussion and policy towards the sector - were beginning to appear. But the significance of these issues was not as clear as it would later become. Stopping the clock in the 1970s would lead to a very different evaluation of the contribution of the sector to housing the British population - that council housing could be considered to have been broadly successful – than that which would be offered in polite company within mainstream political circles, and many academic discussions, in the early twenty-first century. We have come a long way in a relatively short space of time. It took sixty years for council housing to reach its peak - in quantitative terms at least – and less than half that time for it to become, in the popular imagination, the housing provider of last resort, and the minority social housing provider in several regions of England. In the 1970s a prediction of the demise of council housing within a generation would have seemed like wishful thinking among those on the extreme political Right. A prediction of the demise of local authorities as significant providers of housing for the British population within a decade could now be treated as entirely plausible. National political debates over future directions in housing policy take as their starting point that council housing will not be the dominant – or even a particularly significant – means by which housing need will be met. At the general election of 2005 no influential politician of any mainstream political party championed council housing, as traditionally understood, as the way forward for social housing. While there were signs that the position of the Labour party towards council housing had softened slightly during the summer of 2006, there is an apparent political consensus that council housing as a major force in UK housing has had its day. How has this situation arisen? We can line up a range of potential culprits in explaining the decline of council housing: the building of inappropriate properties; the impact of, and failure to respond to, broader social and economic changes; inefficient and ineffective management; poor governance structures; financial systems that led to poor resource allocation or discouraged households from renting council housing, with low demand as a
result. Even were one or more of these factors to be identified as responsible for decline, it is a step further to conclude that decline represents ‘failure’. Here I don’t want to focus on specific causes of the putative failure of council housing. I focus on a rather different issue. My list of culprits in the previous paragraph omitted any reference to political factors. A further argument is that the decline of council housing can be attributed not to any inherent problems and failings with council housing as such, but to reduced political support for, or an overt antagonism towards, the sector over an extended period. Some would see this reduced political support as the outworking of a long-standing political vision of council housing not as an integral component of the post-war welfare state but as a temporary intervention to deal with specific failings of the market economy, or as a consequence of council housing only being a transitional phenomenon to facilitate the modernisation of the private housing market (eg Malpass, 2003, 2005; Harloe, 1995). However it is best interpreted, this change in political support deprived the sector of resources and legitimacy and, as a consequence, precipitated its decline. My primary aim is not, however, to review the detail of the history of the deteriorating relationship between central and local government from the 1970s and reflect on its implications for council housing. Central government increasingly broke away from a relatively benign partnership mode of working with local government. Local government was instead treated primarily as a group of delivery agencies that needed to be disciplined in various ways in order to keep them in line and implementing centrally-determined policy. A number of extended and detailed discussions of these issues already exist (see, in particular, the detailed study of central-local relations in housing policy by Forrest and Murie, 1985). Rather than focusing upon the history of central-local relations I want to take a step back and consider the question of change at a more abstract level. I take the epigraph as my starting point. What is politically possible at any point in time is shaped at an absolutely fundamental level by how politicians and their public make sense of the world. And how politicians – or anyone else for that matter- think about the world is shaped by a range of more or less coherent narratives, which are in turn constructed from congeries of ideas and concepts. Some policies are ‘unthinkable’ at particular times in particular places: they simply make no sense in the context of dominant narratives. This applies not only to what a government might do in response to a problem, but also to what might be viewed as a ‘problem’ in the first place - as an appropriate issue with which a government might concern itself. In contrast, other policies are ‘thinkable’, but they conflict with other deeply held ideas about the way the world is, and hence they face such a level of opposition that they are not politically practical. As Harloe, among others, has pointed out, council housing is socially constructed (eg. Harloe, 1995). I want to consider some key ideas and concepts that have, in my view, 3
provided the resources for the rethinking of council housing. Major changes in council housing were preceded by the reshaping of thinking about the role of council housing within the housing system, the status of council tenants, and the way in which social housing is best provided. My argument is not that this rethinking of council housing led directly to major change or decline in the sector, but that it created the conditions in which change was possible and resistance to change was more muted than it otherwise would have been. The contrast with change in the health service is instructive. The idea of what the National Health Service signifies – broadly, quality health care for all, free at the point of delivery - is tenacious. Change in the health service is met with considerable political and popular resistance. Politicians seeking fundamental change, even if ultimately successful, have a difficult path to negotiate. The constituency willing to defend council housing was, in contast, smaller and weaker. This is in part because it never occupied the same position in national consciousness and affections as other aspects of the welfare state. The role of council housing was less clearly articulated and accepted and more open to contestation and rethinking. Successful rethinking opens the door to significant change.
On discourse and policy It might be tempting to style this paper an exercise in discourse analysis, which is an approach that has become very influential within the social sciences and has had a significant impact within the broad field of social policy (following the work of Hastings, 1998) and urban and housing studies (eg. Gurney, 1999a; 1999b; Blandy and Robinson, 2001; Hastings, 2000). It has notably been applied to housing policy as it relates to the social housing sector (eg. Jacobs et al, 1996, 2003; Haworth and Manzi, 1999; Marston, 2002, 2004). It is here that the literature begins to shade into the neo-Foucauldian literature drawing on notions of governmentality – the art of ‘governing without government’ (eg. Flint, 2004; Card, 2001; Cowan and Marsh, 2005; Cowan and McDermont, 2006). This literature shares a concern with what is knowable and what is known; what is thinkable and what is thought. Yet this paper falls short of a rounded discourse analysis. There isn’t the space to develop a fully theorized account of discourse and the way in which it articulates with material interests and other social forces in influencing policy. The role of ideas in shaping policy is an active debate in the analysis of policy making and the policy process (eg. Edelman, 1988; Walsh, 2000; Finlayson, 2004). There are significant differences in perspective. To simplify dramatically, one can take a post-structuralist approach which views discourse as fundamental. Discourse provides the cognitive resources with which to make sense of the world: to those who participate in a discourse the normative ideas embodied in a discourse are not visible – they are part of ‘common sense’ and ‘the way the world is’. An alternative approach is to take ideas, policy narratives or discourses to be resources in the service of 4
powerful social actors and alliances: they are consciously deployed in the furtherance of the interests of these actors. These are very different theoretical positions: in the former, social actors are shaped by discourse, in the latter social actors exist at least partially ‘outside’ of discourse and can shape it to their benefit. Discourses can be thought of as operating at different levels. Some discourses provide cognitive resources across a broad range of thinking – they condition the fundamental normative positions of whole societies. One such discourse is that associated with the belief in the efficacy of the market that has come to dominate contemporary policy at a global level (eg. Hay, 2004). Other discourses represent rather more local systems of sense-making, such as the discourses associated with particular professions or academic disciplines. Discourses of different scope are not entirely separable – local systems may draw their strengths from being attuned to broader discursive systems, but they may also be sites of resistance to and contestation of broader narratives. These are points I consider further below in the context of housing policy. Competition between discourses is central to accounts of policy change: change occurs when a dominant discourse loses its hold over policy thinking and competing discourses begin to influence policy actors. This may mean that new narratives enter policy discussions – for example, the arrival of a concern with the environmental sustainability of policy – or that the meanings or implications of existing concepts are contested and renegotiated – for example, what precisely is meant by a ‘fair’ mechanism for accessing resources. This could be understood as a dominant discourse being disrupted by some form of external shock or it could be the result of a discourse unravelling because of its own internal contradictions. This is again a source of debate. Fischer (2003) has recently reviewed many of these debates at length in the context of understanding the policy process, while authors such as Considine (2005) review them more briefly. Rather than exploring these issues in detail here I will, although it is rather unsatisfactory, leave them open. The important point to recognise is that once we turn to discussing the role of ideas in policy we involve ourselves with some subtle and contested questions of causation. So, the starting point of my argument is that changes in the way council housing is thought have allowed the reshaping of policy, and thereby made a significant contribution to the fate of council housing. Significant policy change has occurred and the possibility of such change is shaped by the context in which change is attempted. A fundamental component of that context is the concepts and narratives that agents use to make sense of the world. In some contexts particular proposals may be viewed as unacceptable or outlandish and the attempt to change policy will not ‘stick’ or will unravel. In other contexts the same proposals are seen as ‘common sense’ or self-evidently sensible: a government will be able to push through changes without significant opposition. I have recently illustrated this elsewhere in the case of social housing rent policy, but also illustrate that an understanding of change requires attention to a broad range of factors (Marsh and Walker, 2006). Here the focus is on 5
the key changes in thinking that have facilitated policy change. I consider six ideas that have been particularly influential in the rethinking of council housing.
Tenure neutrality The first ideas I want to consider is ‘tenure neutrality’. This is a concept that arises most directly in technical debates about the distribution and incidence of housing subsidies. But recognising and accepting ‘tenure neutrality’ as a goal of policy has broad and significant implications. One characteristic of council housing that has traditionally been taken as significant is that it is ‘decommodified’ because, unlike the private market, access to housing is not based primarily upon competition between consumers on the basis of ability to pay. Subsidizing rents meant that it was possible to break the link between household income and housing quality and allow households to access housing of a quality that would be out of their reach if it were only available on a market basis. For much of its history, the subsidies needed to keep council rents low had their origins in a combination of central (‘exchequer subsidies’) and local taxation (contributions from the Rate Fund). Providing access to quality housing at a price within the means of lower income families has, in broad terms, been the objective of council housing for much of its history, although the interpretation of which families should have access has changed over time. The use of subsidized rents was the dominant mechanism with which to deliver this objective for the first fifty years of its history. During this period it was arguably the only mechanism that was politically feasible across the country. However, this is a subsidy mechanism that does not meet with universal approval. In particular, if you approach the issue from the perspective of mainstream economics – with its concern for incentives and self-interested behaviour – offering good quality accommodation at relatively low cost is likely to result in increased demand for council housing simply because it is cheaper than private housing, rather than because people actually want or ‘need’ council housing. That is, artificially lowering the price of council housing distorts housing consumers’ decisions. This in turn can, and did, lead those on the political Right to argue that any popularity that council housing might have is a product of an overly generous subsidy regime rather than consumers’ genuine preferences for council housing. By housing a substantial minority of the population, as council housing was doing by the 1960s, it was inevitably housing people who could, should they have needed to, find accommodation on the private market. Thus, relying on subsidizing rents leaves council housing open to the charge that subsidy is poorly targeted – that it is ‘indiscriminate’ – rather than going to those who ‘genuinely’ need it. Moreover, because there was apparently no equivalent subsidy flowing into private renting or owner occupation, otherwise similar 6
households could receive very different levels of subsidy as a result of living in different housing tenures. Since at least the 1960s much of the debate over housing finance and its reform has been framed in terms of the desirability of ‘tenure neutrality’. That is, that the amount of subsidy to which a housing consumer has access should not depend upon the tenure in which they reside. The pursuit of greater tenure neutrality has been invoked as justifications for all sorts of changes in housing finance regimes. Tenure neutrality is a powerful idea. It is an idea that forms part of the professional consensus among those who think and write about housing finance. At a normative level it can find itself allied to notoriously vague notions such as ‘fairness’. At the level of technical economic argument, it is seen as a means of addressing concerns about subsidies distorting consumers’ decisions – that is, concerns that government interference with prices is affecting the workings of ‘the housing market’. If subsidy systems were tenure neutral then households would make their housing decisions on the basis of their ‘pure’ undistorted preferences between tenures. This argument relies upon the premise that council housing is best thought of as part of ‘the’ housing market. Hence it implicitly (re)commodifies council housing. The idea of tenure neutrality leads fairly directly to a view that it is better to subsidize people rather than property: subsidies should be portable so that they can be accessed whichever tenure one resides in. Housing decisions should be based upon undistorted prices and then, once consumers have secured accommodation, those who require assistance in meeting their housing costs can be subsidized. For much of the early history of council housing there was no widely-accepted mechanism for delivering this alternative form of policy. However, following the Second World War housing allowance schemes began to develop in individual local authorities to assist low income households in meeting their housing costs. Following the implementation of the Housing Finance Act 1972 - which was debated in terms of the fairness of subsidy distribution between renters, owners and local ratepayers - a national system of housing allowances was created. Means-tested assistance with housing costs was available to eligible households. This development put in place mechanisms that would facilitate a switch in subsidy from prices to people. However, it did not lead immediately to such a change. This requires a mechanism by which central government could withdraw price subsidies and produce a corresponding increase in council rents. The mechanism for achieving this proposed by the 1972 Act was found to be politically unacceptable and quickly repealed. It was not until the Housing Act 1980 that a suitable mechanism – the notional housing revenue account - was implemented: a mechanism that became ingrained at the core of council housing finance and instrumental in engineering substantial increases in the real level of rents (see Hills, 1991).
While tenure-neutrality is a powerful idea that finds its justification in mainstream microeconomic theory, it is important to recognise that its deployment in policy discussion is strategic and by no means consistent. While it has been invoked as a reason for pursuing a policy of raising rents in social housing to market levels, it has not been conspicuously successful as the basis for the argument that low income home owners should have access to an equivalent to Housing Benefit, which is only available to renters. Yet, as should be evident, such a benefit to owner occupiers would follow almost by necessity if policy fully embraced the concept of tenure neutrality. This illustrates the point that ideas are a resource to be drawn on selectively to advance a particular agenda.
Rethinking council tenants Even at its peak the majority of households in Britain did not live in council housing. The reputation and popular image of council housing is therefore constructed for many through the media and second hand information rather than direct experience. By the 1960s a component of the popular image of council tenants was households who were taking advantage of the state, and in turn taxpayers, because they receiving subsidized housing even though they had enough money to secure accommodation privately. Jacobs et al (2003) have argued the scandal of affluent tenants and the characterisation of council tenants as ‘limpets’ was a feature of popular discourse during the 1960s. The 1960s were also characterised by a continuing, though decreasing, absolute shortage of housing and waiting lists for rehousing by the council. Councils were engaged in programmes of new building to address this shortage, but in addition relied upon a continuing flow of vacant properties to meet housing need locally. This was not a fertile environment in which to encourage council tenants to exit the sector through the purchase of their home. On the one hand, this would appear to be providing a further subsidy to households who were already benefiting substantially from state assistance. On the other, purchase by a sitting tenant would remove a property from the council stock and reduce the flow of properties that would, eventually, become available to those in continuing housing need. Even though sitting tenant purchases had been possible, the Labour government of the late 1960s were not supportive of such purchases, particularly in areas of continuing housing need. However, the Conservative opposition of the period – and the Conservative government elected in 1970 – strongly supported the sale of council properties. This support was accompanied by an argument that sought to redefine the mechanisms for meeting housing need: a council tenant who purchased their property would release resources that could help those in bad housing and on the waiting list sooner than if they had to wait for the property to be vacated and relet (Forrest and Murie, 1991, pp.50-51). In this sense, a council house purchaser could be seen not so much as helping themselves to further subsidy but rather helping others less fortunate. It only takes a 8
moment to realise that this is an attempt to rethink completely the way in which council housing interacts with the rest of the housing system. However, even with this rationalisation and with significant subsidy available to council house purchasers, the level of sales continued to be relatively modest during the 1970s, although it increased towards the end of decade. For council house sales to really take off would require something more than an appeal, particularly a rather implausible one, to the altruistic significance of council house purchase. What was needed was a more significant shift in thinking about the status of council tenants. During the 1970s therefore Conservative thinkers and those on the right of the Labour party articulated the idea that rather than conceiving of council tenants as undeserving beneficiaries of state largesse they should be thought of as exploited and oppressed (eg. Walker, 1977). Jacobs et al (2003) identify three strands to this argument. First, council tenants lack choice over their housing consumption and constraints on their mobility. Second, there was stigma inherent in renting. Third, the experience of residing in the council sector was largely unpleasant. A key element of the argument advanced by Walker (1977) was that tenants lacked control over their housing consumption. In contrast with owners, they would be paying rent in perpetuity without it resulting in the ownership of an asset that they were free to dispose of as they saw fit. As tenants they lacked any incentive to invest in their property or their neighbourhood. The idea that occupying a council tenancy represented a kind of ‘serfdom’, from which the tenant needed to be freed, gained currency. If this idea were to be accepted and become engrained in popular understandings of policy then the sale of council housing to its tenants appears in a much more positive light. It should be applauded for assisting tenants to achieve the ‘freedom’ of ownership, rather than condemned for its profligacy in handing out more subsidy to the undeserving. The success of this rhetorical strategy was demonstrated by the success of the Right to Buy policy during the 1980s. The focus of the Right to Buy was upon those ‘escaping’ council housing. While the policy attracted criticism from the outset it was only once the policy had become firmly embedded and electorally popular that sustained attention was directed at its negative consequences both for those trying to access low cost rented accommodation and those tenants who were unable to purchase and found themselves residing in an increasingly residualised and stigmatised tenure (Forrest and Murie, 1991; Jones and Murie, 2006).
Towards a residual tenure Reconceptualising council tenants as oppressed and in need of liberation facilitated the implementation of a policy that allowed individual households to change tenure and ‘achieve’ owner occupation. The residualisation of council housing was already under way by the time the Thatcher government implemented the Right to Buy (see eg. Murie, 1983), but a by-product of the uptake of the Right to Buy by better off households in the council 9
sector was that this residualisation process accelerated. We might think of this as what was happening to council housing. We can distinguish this from normative views about what should be happening. Yet, the rethinking of council housing also operated at this more fundamental level: its role in the housing system was being problematized. There are two broad models of the role that social housing such as council housing should play in the housing system. It can act as mainstream or mass housing, for households with a cross-section of socio-economic characteristics. Or it can act as welfare or residual housing provided for low income households who are unable to secure housing through the market (Harloe, 1995). Broadly speaking, the history of social housing in some countries can be characterised as a relatively consistent commitment to one or other of these models. In the US or Australia, for example, public housing has never accounted for a substantial proportion of the housing stock and has been intended for those unable to provide from themselves through other means. In contrast, in the Netherlands or Sweden, for example, at least until recently, social housing has been viewed as a mainstream or mass tenure, which accommodated households with widely differing incomes and social circumstances. The history of debate over the role that council housing should play in the British housing market has been one of changing understandings of who such housing is intended for. At a practical level, this manifested itself most clearly in policies regarding who should be giving priority in the allocation of council housing. While there has been a long-standing commitment that council housing should ‘meet housing need’, the understanding of what constituted housing need and whose need should be met has been renegotiated. As council housing developed, the understanding of who it was intended to house shifted between ‘the aristocracy of the working class’, those being displaced by clearance of private sector slums, a broad cross-section of society, and those unable to find housing through the private market. The mass and residual models have repeatedly been in competition: policy appeared to pursue one model for a period of time, only for attention to switch to the other. A key factor in the evolution of council housing since the 1970s is that the discourse of council housing as a tenure for those unable to provide for themselves gained the upper hand. This had happened before, during periods of when the numerical expansion of council housing continued, so in itself this discursive shift is only the initial step. Equally important was the fact that this discourse ‘stabilised’ and was sustained over an extended period. This allowed a range of policy initiatives, the Right to Buy being the first and most prominent, to be brought forward that would allow the tenure to be progressively dismantled. Policies such as the re-engineering of the local authority subsidy system – which effectively ended council house building – could have been implemented, and possibly succeeded, in a hostile policy environment. However, establishing a prevailing discourse through which the role of council housing is to act as a ‘tenure of last resort’ for those unable to provide for themselves makes this easier because it could be argued that the millions of council properties already in existence are sufficient for that purpose. The importance of the 10
stability of the discourse of a residual tenure – associated primarily with a long period of Conservative government - is that it allowed the process of transforming the tenure into a residual tenure to be sufficiently far advanced that, even should political opinion shift, a return to a genuinely mass tenure is not politically practical. The current government in exploring the scope for moving away from the residual model and this is highlighting some considerable difficulties and tensions (see Fitzpatrick and Pawson, 2007).
The normalisation of home ownership Constructing social housing as an undesirable tenure in which to live is a negative strategy. It needs to be situated in the context of a broader, and complementary, strategy of promoting owner occupation as the tenure of choice and aspiration. Since the 1920s commentators have been promoting owner occupation as a means of encouraging social stability, responsibility and quiescence (eg. Murie, 1998; Cowan and McDermont, 2006). Government promotion of the virtues of ownership means that both push and pull factors come into play in shaping people’s housing aspirations: social housing is something to avoid if possible, while ownership is something to be sought and embraced. These are preferences and aspirations formulated in the abstract – separate from any particular positive or negative experiences of either tenure. Surveys have consistently shown a substantial majority of respondents aspire to enter owner occupation. The strategy of promoting owner occupation has been immensely successful in reshaping the way in which housing is thought about in Britain. It is not just about aspirations to ownership. The desire to own one’s own home has come to be characterised as ‘natural’. The Labour government’s 1977 housing Green Paper could talk of the desire to own one’s own home as ‘a basic and natural desire’ (DoE, 1977, p.50). Gurney (1999a) has highlighted the way in which ownership has been associated with ‘home’ in policy discourse in a way that is not the case for renting. ‘Home ownership’ and ‘owner occupation’ are treated as largely interchangeable terms. The term ‘home rental’ is not commonly used. These are not trivial matters: ‘home’ has deep psychological and emotional associations for most people. If a discourse can be established in which ownership is intimately associated with ‘home’ then this can have a powerful effect on the way people think about housing. In this context those who are not able to participate in owner occupation come to be seen as not fully citizens (Murie, 1998) or as ‘flawed consumers’ (Flint, 2004). They can be constructed as having failed to become fully members of society. This notion of renting being decidedly inferior is embedded in popular discussion in the use of terms such as ‘the housing ladder’. Those renting their homes have not managed to even get ‘a foot on the ladder’. The ladder metaphor carries with it the implication that it is natural and desirable to seek to ‘scale the ladder’ through the accumulation of housing assets.
This focus upon the acquisition of assets has assumed an increasing significance over time through the development of the concept of asset-based welfare. The current government has revisited ways of giving social tenants who do not have the resources or inclination to exercise their Right to Buy access to equity either in their current dwelling or through moving to another dwelling. Ideas such as shared equity and recent initiatives such as Social Homebuy (DCLG, 2006) have considerable currency at present. The important point about these initiatives for our purposes is that they reinforce the idea that to own housing assets even if partial and relatively illiquid - is a more desirable position than to rent one’s home.
Problematizing provision From at least the late 1960s Conservative thinkers expressed concern at the prospect of a society in which a large proportion of the population were content to rent their home from their local council. The rethinking of council tenants and council housing as the tenure of last resort, coupled with the normalisation of owner occupation, represented intersecting ideas which set the context for policy interventions that made significant in-roads into council landlordism. However, they did not in themselves address the way in which council housing itself was provided. The early 1970s was an era of significantly contrasting strands in thinking about the provision of public services. On the one hand, it was an era in which the belief that big is not only beautiful but also efficient was influential: a local government reorganization of 1974 amalgamated authorities to create larger bodies that were intended to be more effective through the development of corporate strategies and reap the benefits of economies of scale. On the other hand, in the wake of key theoretical contributions to the public choice school of economics (eg. Niskanen, 1971), it was during the mid-1970s that the ‘government failure’ critique of big government gathered pace on the political Right. From this perspective, the absence of market incentives to be efficient and competitive meant that government provision was inherently inefficient and unresponsive to consumers. Furthermore, local politicians were ultimately responsible for key areas of local service provision and this was seen as injecting even greater uncertainty and irrationality into the process, as individual services competed for resources in a political game. The fact that the units of local government in Britain were getting bigger only made the problem more pressing. Councils could be referred to as ‘monopoly landlords’ – a valuable discursive strategy for critics of councils because it tapped in to the view, well-established among economists, that private sector monopolies are generally undesirable and should be tackled. The analogy was not, however, perfect: for example, one of the primary reasons economists are concerned about private monopoly is that it results in higher prices and lower output than is socially desirable, which is hardly relevant to council housing. Nonetheless, that councils were
‘monopoly landlords’ was freighted with significance because monopoly is in economic terms ‘bad’, almost by definition. The 1970s witnessed key developments in organisational economics such as principal-agent theory and transaction cost economics (see Walsh, 1995; Ricketts, 2002). These approaches went inside the ‘black box’ of the firm to examine incentive problems – how you get workers or contractors to do what you want them to? – and how transactions between parties should best be arranged to maximise efficiency – is it better to make or buy? These ideas open up a space in which to discuss whether it is sensible and efficient for local authorities to be responsible for both housing strategy and all aspects of provision. It allowed the question to be asked as to whether it was desirable for a single landlord to be managing thousands or tens of thousands of properties. It equally raised the question as to whether it might be more efficient for services to be ‘unbundled’ so that local authorities relied more upon specialist providers of services such as accounting or IT, rather than trying to provide everything inhouse (Baker et al, 1992). The idea that the role of local councils in the housing sphere is one of ‘enabling’ has a long history (Goodlad, 1993). There is a well-established strand of local authority housing activity that is directed at facilitating the operation of, and addressing problems in, the private sector. Until the 1980s this role was largely marginal to the core activity of providing housing. However, during the 1980s the idea of an enabling authority received much greater attention. The spectrum of opinion emerged as to what this might mean. At one extreme were those who saw local authorities as having a major strategic role overseeing the operation of the housing market in their locality. At the other end of the spectrum were those, typically on the more extreme political Right, who saw the local authority role in rather more circumscribed terms – as identifying what sorts of services needed providing and occasionally letting contracts to private sector and other independent bodies to supply services. A debate at the level of principle – what should the role of local authorities be? – was influenced by developments at an empirical level – how well are they doing their job currently? A pivotal moment in the story of council housing was the publication of the Audit Commission’s report Managing the crisis in council housing (Audit Commission, 1986). The report identified a range of failings of council housing, such as difficult to let accommodation and its management, with the implication that urgent action was required. The report was, I would suggest, more influential at a discursive level than in its substance. The naming of the situation in council housing as a ‘crisis’ was immensely powerful in giving government a mandate to act to change the sector. It is almost incidental that the report places the blame for some of the problems facing local government squarely on central government. It is equally incidental, in terms of impact upon policy, that subsequent research developed a more nuanced understanding of the relative efficiency of local authority and housing association landlords (CHR, 1989; Bines et al, 1993). On the basis of 13
the Audit Commission report, the government managed to repackage what could have been viewed as a crisis in council housing as a crisis of council housing (Cole and Furbey, 1994). Following soon after the report, the Conservatives’ 1987 housing White Paper articulated a new vision for council housing. The White Paper for England and Wales includes the statement that: ‘The future role of local authorities will essentially be a strategic one identifying housing needs and demands, encouraging innovative methods of provision by other bodies to meet such needs, maximising the use of private finance, and encouraging the new interest in the revival of the independent rented sector’ (DoE, 1987, p14). This articulation of the future role places no emphasis upon local authorities as housing providers. Interestingly, the companion White Paper for Scotland placed the ongoing management of the council housing stock on a par with the strategic role, reflecting the fact that council housing played – and continues to play – a much bigger role in the Scottish housing system then it does south of the border (Goodlad, 1993). The debate over the appropriate housing role for local authorities is a point at which developments in housing policy intersect with broader policy developments. The Conservative government of the 1980s and early 1990s had a vision of a world in which there was a mixed economy of housing provision – with housing associations, making use of private finance that was not available to local authorities, playing the role in providing new rented housing for low income households that had hitherto been played by local authorities. This vision, however, was made considerably more powerful by its intersection with a broader global movement to ‘reinvent government’ (Osborne and Gaebler, 1992). The British government’s policy experiments in the 1980s to create quasi-markets in health and education meant that terms such as ‘purchaser-provider split’ entered the lexicon of those thinking about public sector reform as a means of capturing the separation of strategy and oversight from provision. The broader reinventing government discourse offered slogans such as ‘steering, not rowing’ to encapsulate the reconceptualisation of the role of government. Such slogans fit very neatly with the key housing policy innovation of the late 1980s and early 1990s – the transfer of local authority stock to housing associations. These ideas became embedded in the loose intellectual framework that underpinned a global movement towards a ‘new public management’ (eg. Hood, 1991). Discursively this is highly significant. It is one thing for critics of a contemporary policy initiative to present arguments against the idiosyncratic policy innovations of a particular administration. It is quite another to seek to resist something which is portrayed as part of a ‘global’ rethinking of the role of government. The practical significant of this rethinking of the role of government and the new public management is illustrated by considering the policy of stock transfer in a little more detail. The first stock transfer occurred in 1988. The initial handful of stock transfers were evaluated by a team of researchers who reported in the early 1990s (Mullins et al, 1992). The researchers reported that in the early 1990s these initial stock transfers were being watched 14
with curiosity by other local authorities but that they were not making concrete plans to make similar moves. In particular, local authorities were waiting for the outcome of the 1992 general election. There was seen to be a strong possibility of a change of government in 1992 and the Labour party that may have formed the next government was still committed to the principle of council housing as a key part of the housing system. If a change of government had occurred then the few early transfers could have remained as a curiosity of the late 1980s. However, apparently against the odds, the Labour party lost the 1992 general election. Not only did this allow the Conservative administration to formalise and institutionalise the stock transfer programme, but in opposition during the 1990s the ‘modernisation’ of the Labour party saw it largely embrace the prescriptions of the new public management. By the time it came to power in 1997 the Labour party had significantly changed its thinking on the question of council housing and supported, indeed following the 2000 green paper accelerated (DETR/DSS, 2000; Nevin and Murie, 2001), the stock transfer programme.
Choice in housing As noted above, part of the rethinking of council tenants during the 1970s was the argument that they lacked choice over their housing consumption. With traditional allocation systems – under which it was the primarily the responsibility of local authority officer to match households looking for properties to the properties available – it is arguably the case that the scope for applicants to choose their dwelling was constrained. It became more constrained through the 1980s and 1990s as the depletion of the housing stock meant that in many areas pressure on rehousing became more intense. Not only was choice at the point of access constrained, but critics such as Saunders (1990) highlighted council tenants’ lack of flexibility in the use of their dwelling. The scope for modifying the property, for example, to take account of changing household needs was much less than that available to owner occupiers. The scope for choice over housing consumption is equally limited in much of the private rented sector and so, it could be argued, households entering the council housing from the private sector – which for much of the history of council housing is the majority – were not significantly disadvantaged by this lack of choice. However, council housing needs to be understood in the context of the broader consumerisation of society during the 1980s and 1990s and the elevation of choice to a citizenship defining attribute (Bauman, 1998). Choice was viewed as a key characteristic of empowered consumers, and the absence of choice available to the clients of public services was seen as an explanation for the perceived relatively poor performance of those services. Economic theory was taken, in partially digested form, by politicians as indicating that greater consumer choice could deliver a more efficient and socially optimal allocation of resources. Hence the quasi-market reforms of the 1980s and 1990s were designed to introduce greater choice into the provision of education, 15
health and social care. Choice in public services has taken central place in the current government’s thinking about public sector modernisation, with initiatives such as Direct Payments for social care or the change from Housing Benefit to local housing allowances being informed by this type of economistic, consumer-focused thinking. In this context, council housing could be characterised as anachronistic and in need of reform because it offered very little scope for choice. Since the 1980s choice has been brought to the sector through several routes: most strikingly, the transfer of stock to the housing associations can be represented as a choice to opt out of the sector entirely, as can exercising the Right to Buy. Since the 1980s government thinking on the desirability of a mixed economy of provision for rented housing has led to council housing increasingly competing with other providers to house low income households. The development of housing options services – through which local authorities seek to advise households on the range of options that are available to meet their housing need, of which council housing is only one – take these developments a step further (see Munro et al, 2005, for a review of relevant policies). Notions of choice have been brought much more centrally into the heart of the operation of council housing by the current government through the policies of rent restructuring and choice-based lettings, which are progressively being implemented across England. These policies embody an understanding of council tenants as rational consumers making choices about their housing consumption on the basis of information about the prices and availability of the range of social housing locally. The government anticipates a range of benefits being delivered as a consequence of choice that could contribute to an upturn in the fortunes of particular local areas and council housing more broadly (DETR/DSS, 2000). To what extent it is plausible to conceive of council tenants as acting as consumers in the ways assumed by this policy can be questioned (Marsh, 2004). To what extent the policies, as implemented, realise the underlying model of consumers responding to incentives can be questioned (eg Walker and Marsh, 2003). To what extent the policies deliver genuine choice can be debated (eg Brown and King, 2005). Yet, what is clear is that they have established choice at the centre of policy. They are reshaping the way in which council housing is priced and allocated and, to some extent, to whom it is allocated (Marsh et al, 2004; Pawson et al, 2006). The consequences for lettings outcomes of emphasizing choice in this way have yet to become fully apparent. It could lead to local communities that are more sustainable or it could lead to greater polarization and inequality within the sector. What is indisputably the case is that choice-based lettings in particular is reconfiguring the relationship between landlord and tenant. Many councils have rethought their relationship with applicants and tenants, and perceive that the balance of power has shifted in favour of the tenant. They have moved from a view of households as clients to a view of households as consumers who could, in principle, take their custom elsewhere. Whether this is a realistic proposition depends on the state of the local housing market.
Introducing choice into council housing in this way means that it is coming to operate very much as an imitation of the private sector, with consumers making choices and financial assistance focusing upon those who can least afford to pay. This makes answering the question what is ‘social’ about social housing more difficult (Cowan and McDermont, 2006). It has led to renewed arguments that it would be appropriate to go the whole way and do away with council housing entirely (King, 2006). Hence, ‘choice’ could prove to be the discursive concept that triggers the complete commodification, and unravelling, of council housing.
Rethinking council housing The central contention of this paper is that changes in the ideas deployed in, and underpinning, debates about council housing have an important role in understanding the trajectory which council housing has experienced. Six key ideas have been reviewed. The argument is not that changing ideas are the cause of the dismantling of council housing as it existed in the 1960s. A number of more specific and concrete developments need to be appreciated to make sense of what has happened to council housing. The argument is rather that changes at the discursive level create a more hospitable climate for radical change: if council housing is successfully rethought and a new discourse comes to dominate then this reduces the scope for, or inclination towards, effective resistance to change. While this paper has pointed to several examples of rethinking that have been significant for the trajectory of council housing, not all such attempts to rethink housing provision are equally successful. For example, during the mid-1990s there was an attempt to pin down a common ‘social housing product’ that would allow a clearer dissociation of the services provided from who provided them. This idea ultimately failed to establish itself in housing policy discussion. Similarly, the 1987 housing White Paper sought to construct an ‘independent rented sector’ comprising housing associations and the private rented sector (DoE, 1987). Discursively this was an interesting move because it sought to align housing associations with the private sector as ‘independent’, rather than alongside local authorities as part of the ‘social housing’ sector (on which see Cowan and McDermont, 2006). This would have represented a radical rethinking of the relations between tenures, and it was ultimately unsuccessful. However, it can equally be argued that in the long run this failure proved a benefit to those seeking to dismantle local authority housing: by emphasizing the commonality between local authorities and housing associations as ‘social housing’ landlords – when there are significant differences – it eased the path of the stock transfer programme, which accelerated the restructuring of the tenure. This illustrates the point I made at the outset – the way in which concepts and ideas articulate with the policy process is by no means straightforward.
The ideas I have discussed in this paper are the most prominent ideas that influences the trajectory of council housing, but they do not represent an exhaustive list of ideas that have been important in reshaping thinking about the sector. Space precludes discussion of other important developments, particularly more recent developments the consequences of which have yet to become entirely clear. An important set of ideas that have powerful effects relate to the Labour government’s drive to ‘modernise’ public services and, in particular, the way in which detailed changes to the accounting conventions within which local authorities operate shape the incentives they face. Accounting is not, in general, a topic that sets the pulse racing. How you account financially for council housing is not something that those outside of the specialist sub-field of social housing finance spend a lot of time worrying about. Yet, the move in the late 1990s towards ‘resource accounting’, which was rationalised as a modernisation of accounting to bring local authorities in line with good business practice, forces councils to think about housing in a different way. Requirements to develop business plans, appraise options and draw up asset management strategies force local authorities to ask questions such as whether it is sensible to keep investing money in maintaining the stock in certain areas or whether they are better off divesting themselves of parts of the housing stock that do not make a satisfactory return on capital. These are not questions that were framed in this way or indeed in some cases framed at all - prior to the change in accounting requirements. Approaching the question in this way can point to conclusions such as that investing in housing in poor areas does not represent a good use of resources. Hence, thinking about council housing in this way can come into conflict with what many would take to have been its primary purpose. I am not arguing that these changes are a bad thing or inappropriate, rather the point is that once you start to rethink local authority housing as a ‘business’ that needs to make a return on capital it sets in train a whole set of processes that will reshape the way local authority housing operates. We could similarly examine the way that the idea of a ‘sustainable community’ has been used in housing debates over the last five years or so (eg. ODPM, 2003). In relation to housing, the term has been used primarily to signify the desire for tenure restructuring and the dilution of local concentrations of social renting through the replacement of rented homes by owner occupation developed through ‘low cost’ home ownership initiatives. But that is to seek to use tenure to address a problem of social diversity and social sustainability. This fits well with the broader agenda surrounding the normalisation of home ownership, but the logic of the analysis and the prescription of more home ownership as the solution is by no means self-evident. The alternative of addressing the social diversity and sustainability within social rented housing receives rather less attention.
These more recent examples demonstrate the continuing need to be sensitive to the way in which ideas are deployed, contested and renegotiated as part of policy development and debate. The contribution that ideas have made to the fate of council housing may be less immediately obvious than some of the more concrete policy developments that more typically preoccupy us, but ideas operate at a fundamental level and their influence is both subtle and profound. The rethinking of council housing has had far reaching consequences.
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About the author Alex Marsh is Professor of Public Policy at the University of Bristol. He has been Head of the School for Policy Studies since 2007. Alex’s research and writing has encompassed a wide range of topics in the fields of housing studies, public policy and regulation. Between 2005 and 2009 Alex has been managing editor of Housing Studies, the leading international academic journal in the field. He continues as a member of the journal’s Management Board. Alex worked part-time as a Visiting Academic Consultant to the Public Law team at the Law Commission between 2006 and 2010. His work with the Commission addressed compliance issues in the private rented sector and systems of redress against public bodies. From 2004 until 2012 Alex was a trustee of Brunelcare, a Bristol-based charity providing housing, care and support for older people. For six years he chaired Brunelcare's Audit and Scrutiny Committee.
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