Failure to deliver
18/08/09 Jonathan Birdwell argues that devolving responsibility and the power of setting social rents is both good policy and good politics…
The Times reports today that the Government has decided to allow for a reduction in social housing rents of up to 2 per cent in line with deflation. The Government’s political reasoning is straightforward, but the dilemma is a difficult one. There would no doubt be public anger if it were to emerge that, despite a drop in inflation Government refused to lower social rents accordingly, allowing a greater “profiting” by Housing Associations and other registered social landlords. I mean, in the interest of fairness, if the Government demands the raising of social rents each year in line with inflation shouldn’t it give vulnerable individuals a break when things go the other way?
The problem is that such a decision conflicts widely with the cornerstone of the Government’s social housing policy – to drastically increase the supply of housing stock – announced with great fanfare only a month ago in the aptly titled Building Britain’s Future. As the National Housing Federation notes with incredulity, for a small reduction in rent – approximately £1.36 a week – Housing Association’s income will fall by at least £260 million; money that is crucial to increasing supply of homes (the decision would decrease the target number of new homes by 4,000 next year) as well as the economic and social services landlords supply to support their most vulnerable residents.
This highlights two points about governance in general. First, that leading a country requires an extremely delicate balance of interests, which will inevitably leave some people worse off. Sometimes, public anger and hysteria can cause governments to make bad policy, for fear that good policy would lead to further (and often irrational) backlash. Does policy ever win when it conflicts with politics?
Second, this decision is further evidence of the need to devolve power downwards. If the Government allowed local authorities and social landlords to determine their own levels of rent they wouldn’t be contending with this problem. Rather, some authorities may decide to cut and others may not, and the rightness of the decision would play out before us. In this case, devolving greater power downwards is not only compelled by policy considerations, but political as well. If this decision were devolved downwards we wouldn’t hear about the Government’s ineptitude. Instead we’d hear how some local authorities had decided one way, and others had gone the other route, and then hopefully, we could engage in a debate about which is the best decision.
Can you imagine? I wonder if the Prime Minister dreamed of such a blissful alternative while dozing on the beach this August.