So with all the changes going on what is the future of housing in the UK?
Looking at the draft impact assessment for the new round of right to buy there are some interesting leads to find.
Council housing rent will go up 42% in the next three years, for housing associations it is expected they will go up 24%. At the end of this period the long term aim to for the rents of these two sectors should be the same. After this rent will rise by RPI +0.5%.
Benefits on the other hand will rise in line with CPI, which while more stable more often than not falls below RPI.
As a result the gap between rent and housing benefit will continue to widen. Unlike the private rented sector there are currently no plans to regularly review this to ensure the gap does not get too wide.
Council tax changes means that the government will pay the the expected council tax benefit demand - 10%. Full council tax benefit is guaranteed for pensioners and working households. The expected difference for those unemployed is in reality expected to be between 15 and 17% of which unemployed people will have to pay out of their benefits.
The government has been successfully challenged on its 'bedroom tax', a major upset as the government knows that there are not enough homes for people to downsize to, and actually counted on this to add towards its savings in benefits. In particular this would have had a huge impact on pensioners.
Changes in rules, if introduced, will see payments for fines to those on benefits increased to £25.
It is easy to understand why the government is doing this, and while they say it is to make work pay, in reality it is to make sure unemployment does not pay. This is happening in an economy that has long since abandoned the notion of 100% work and an economy that is teetering on collapse.
Last year the government completed the last national census. One important aspect of the census is that it is used to determine the financial needs of councils to meet the needs of their residents. Many of the changes going through will result in major shifts in populations. This will impact not only on budgets but services, including education and health services. Wealthy areas will see their needs lessen while poorer areas are expected to see huge increases on these services in the coming years.
Amazingly the discussion has moved from the responsibilities of the banks and other financial institutions to the unemployed being responsible for the mess we are in. Yet three quarters of the national debt is due to underwriting the banks.
Another oddity, so it seems to me, is that while a lot is made of the subsidy given to those on benefits little attention is given to the subsidies offered to homeowner, and private renters. Much to the delight of many this government has also found a way for the poorest in our society to subsidise home owners and landlords. As the poorest struggle to make ever tightening budgets to meet their needs they will be adding to the funding pool to make homes warmers and cheaper to heat while many of them on pay as you go meters not only pay more for their fuel but will not be able to access these funds.
The government has yet to explain how the new affordable homes will help to reduce the benefit bill considering the rents will be a lot higher.
Will all this make it easier on the tax payer? If the government manages to turn the economy round and plenty of jobs are created then while in the short term life will be hard for many, including the middle income, the long term future could be a lot better. However we are quickly storing up a lot of trouble and additional expense. Further social unrest, higher crime, increased costs associated with homelessness poor health physical and mental and a host of other issues.
Comments
If I compare it to my exper4iance in israel,
The prime minister in Israel was much more tough than here- cutting down to everybody- I hated him and still do for some parts of it - (Old poor generation that built the country, young people that served 3 years for free in the army- and could not afford UNi - I lived on pasta for 4 years!, no family friends etc just work and studies)
BUT One of the results was that after many years of around 10% unemployment it is now on 4%- best ever.
The amount of benefits there are in here is huge- I would not stop it all but for sure there is a room to reduce the 'shameless' part of it.
I sometimes think that If I managed to survive in here in the last few years with no benefits- anyone fit can do, It is just a matter of believe.
I worked for the fire brigade when I had to struggle with severe language barrier... stress from problems at home... and comments against foreigners- not once. ( Why I left when I could).
I built a business online, when I could barely write a line with no spelling or gamma mistakes- I am sure you know that.
2012 will be a great year- If we wish that, we will look at things in a 'can do' attitude.
Yes there are parts in life that are not easy, but when possible we should fight back- take anything needed.
Do not get me wrong, the ones that really can not do anything- Do need support. I just think that England was reach in the history ( due to industry, nature resources and imperialism) and could afford a lot of benefits- but can not anymore.
About half of the world got economy in growth of 4%+ long list of countries were people works had and much more than 37 hours a week ( as It used to be here till few years ago) - you can see that in the private market here in the Uk - It is not anymore 37 hours a week.
( I am sure that not many people here afford to work 37.5 hours a week)
Have you ever wondered in how many countries people that works 15 hours and ones that works 45 hours can get to the same income - just thanks to bennefits claim?
Sorry my friend, I do not want to take the air out of your sails - I think that your job is holy helping people that needs this help, but I think that there is some place for adjusting. ( and it impact me too)
Really best wishes for 2012
Ofer
Hi Ofer,
Thanks for your input, I always find it interesting to hear the experiences of other countries by those that live through them, rather than using assumptions or commentators who tend to put their own spin on things.
I am more than happy to concede that in the long term things may become a lot better.
I agree that something has to be done about the 'shameful' element that has grown around the benefit system. One of my main concerns is that for many of those now being demonised are victims of the system, not abusers. Yes there are people out there deliberately abusing the system and these need to be sorted out.
The basic benefits are actually quite small. By far the largest element are housing elements. One reason for this is the lack of social housing and a policy to house people in the rented sector which has hugely inflated the benefits while providing less value for money and providing a poor return for tax payers. We need to decide if housing is an essential or if it is just another commodity for those who can afford it, because one thing that is clear is that for many it will not be affordable.
I have no idea what the press is like in other parts of the UK but the press here regularly misrepresent facts and figures in a deliberate attempt to demonise people. For a long list of these check out http://fullfact.org/
I am actually quite optimistic about the future for myself, I still labour under the belief that I will get back to full time work. If the review on the right to manage is successful then there is hope that more communities will be enabled to take over the management of their communities and in doing so there is scope is for creating local jobs.
I am currently working on a simple job creation scheme in my own community. Whether or not I could benefit from this directly is another matter. The business plan is simple enough, with much of the income being reinvested into the business and developing the consumer base. There are a few things to still sort out.
In February I'm a speaker at a conference for CEOs and Finance directors of councils and housing associations looking at the new requirements for public finance with regards to social return on investments and value for money. An opportunity to network with some of the most powerful decision makers in the sector I want to work in, and to make a good impression. Opportunities which frankly are not open to many in my position.
So yes, I do agree with you that a lot has to do with attitude, but it has taken 6 years of taking advantage of different opportunities to get me here.