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From The Socialist newspaper, 22 November 2006


Privatising the problem

THE BBC launch their homelessness season this week to mark the 40th anniversary of the famous TV drama Cathy Come Home. In a speech last week, Ruth Kelly MP commented that Cathy's chances in the modern day would be significantly better and claimed that the government had made huge progress in preventing and tackling homelessness. The statutory homeless figures have gone down over the past 18 months but is it true that homelessness has really been prevented? Holly Eaton answers this question.

THE STORY of Cathy, her husband Reg and their children highlighted the plight of those unable to find decent, affordable housing in the 1960s. It showed a downward spiral of poverty, high private rents, arrears followed by eviction and eventually children being separated from their parents and taken into care. The drama documented well the problem homeless households faced as they were sent from pillar to post in search of a solution. Homelessness was treated by officialdom as a consequence of individual actions, the result of personal inadequacies.

It was not until 1977 that legislation was passed, firmly acknowledging homelessness as a housing, rather than a social services issue. It put a duty on local authority housing departments to accommodate those who, through no fault of their own, found themselves homeless.

This statutory safety net sought to address family homelessness and this was reflected in the criteria for assistance. Those seeking help from a local housing authority needed to show not only that they were homeless but also that it was not their own fault.


In addition, they had to have dependent children or, if this was not the case, they had to prove they were so vulnerable that they couldn't fend for themselves. In practice, those without children found it difficult to get assistance.

Despite these hurdles, the legislation was historic in that it incorporated a number of important premises. Firstly, that there was a very low threshold for assistance. Councils only had to have reason to believe that someone might fit the necessary criteria. Then they were under a duty to provide temporary accommodation while they looked into the case. This specifically sought to address the problems faced by the likes of Cathy in being sent from place to place before help was offered.

Secondly, if councils were satisfied that all the necessary criteria were met, the legislation required local authorities to accommodate them temporarily until a lasting solution could be found. Whilst there was no requirement to make an offer of council housing, in practice this was the way in which local authorities discharged their duties to homeless households.

It was widely acknowledged that council housing played a key role in breaking the link between bad housing and poverty and provided a long-term answer to homelessness.

Successive Conservative governments tried to review the homelessness legislation on the basis that the 'undeserving poor' were exploiting the system and making themselves homeless in order to get a council house.

However, they found it harder than they expected to ditch the legal safety net. Their third attempt to review the Act in 1988 resulted in the then Department of the Environment admitting that it was working 'reasonably well'. Later in 1996, however, they did manage to play the housing and race card, inserting an additional criteria for assistance, that of immigration status.

However, the system started to silt up. The local authority housing stocks were dwindling. Council houses were being sold off and not replaced and the government provided housing subsidy to promote owner occupation, rather than new build council homes.

Homeless households waited longer and longer in temporary accommodation, before being made an offer of permanent accommodation. Britain at the same time was becoming more and more unequal, with growing gaps between the haves and the have-nots.

The Conservatives wanted to increase the private rented sector, so that it could complement owner-occupation as a housing choice. They deregulated the private-rented market, reducing tenants' security of tenure and lifting restrictions on rent levels.

Rents rocketed. For a brief period in the early 1990s, the Treasury picked up the bill through increased housing benefit payments, but not for long. The government then amended entitlement to housing benefit, capping not the rents but the amount of housing benefit payable. This meant that tenants picked up the bill for profiteering landlords.

The national housing benefit bill went down but as it became harder for low-income households to rent privately, the number of households needing state assistance under the homeless legislation went up.

By the time New Labour came to power in 1997, there was a significant housing problem.

There was a crying need for an increase in the supply of permanent, low-cost homes to rent. These policies of the 1980s and 1990s have been continued and expanded under New Labour, with more council homes sold in the first three years under Blair than under the previous nine years under the Conservatives. Around 1.3 million council homes have been lost under the Right to Buy and the drain continues at around 60,000 per year.

The numbers of homeless households were rising year on year.

In 1997/8, Blair's first year in office, there were 102,000 households accepted as homeless by local authorities. By 2003/4, this had risen to 135,000. Those in temporary accommodation were waiting not just for weeks or months but for years without offers of permanent accommodation. In the meantime, they would be moved from one temporary accommodation to another.

In practice, temporary accommodation meant whole families living in one room in a B&B, with shared kitchen and toilet facilities, often on different floors. In 1997 there were 43,720 households in temporary accommodation. By 2004 this had more than doubled and stood at 101,300.

Research carried out in 2004 revealed that 78% of those in temporary accommodation were suffering from depression. Children in temporary accommodation missed an average of 55 school days due to the disruption of moves between different temporary flats.

With numbers at an all time high, New Labour pledged to tackle the problem. Changes were introduced which saw an end to the wholesale placement of homeless families in bed and breakfast hotels. Instead, homeless households were placed in self-contained accommodation while they waited for an offer.

In addition, the safety net was extended to incorporate some new categories of homeless people who could get help. Homelessness charities cheered at the prospect of 16 and 17 year olds being able to access timely assistance before sleeping on the streets and teenagers in care being deemed a priority for rehousing for the first time.

Campaigning organisations such as Shelter and Homeless Link breathed a sigh of relief and embraced the government policy wholeheartedly. They took as given the basic principles of local authority homeless assistance for 25 years, namely a low threshold for assistance and for those to whom a duty was accepted, a permanent council or housing association home.

Yet at the same time as the door appeared to be opening to vulnerable groups, measures were being introduced which would make it increasingly unlikely that they would be rehoused. Having won over the big homeless charities, New Labour pressed ahead unchallenged with its plans to privatise solutions to homelessness. Its new approach was called 'homelessness prevention'.

Under this banner, the low threshold for assistance has been beefed up. Rather than offering homeless households temporary accommodation, they are required to have a 'housing options' interview. This is not necessarily immediate and often requires those in significant need to go away and come back on another day. Precisely the kind of practice Cathy was subjected to in the past.

The purpose of the 'housing options' interview is to identify alternatives to local authority assistance, putting the emphasis on individuals to source solutions to their homelessness privately, rather than relying on the council. The rehousing role of the local authority is largely replaced with advice-giving and referral to the private rented sector.

According to local authority statistics, the main reasons why people are accepted as homeless are relationship breakdown, including domestic violence and the ending of an assured shorthold tenancy in the private sector.

For those who have been asked to leave by family or friends, mediation is put forward as a solution. There is a presumption with young people in particular, that homeless is caused by a temporary falling out with relatives and what is needed is not rehousing but help in managing personal relationships.

It is obligatory in many local authority areas now for young people to have to go through mediation. Homelessness is, just like in the 1960s, being portrayed as a personal failing rather than a housing problem.

Whilst mediation is taking place, the council looks for alternative accommodation, either in the private sector or in the homes of volunteers in the community, rather than taking on a rehousing duty themselves.


For those fleeing domestic violence, councils are encouraged to offer 'sanctuary schemes'. This involves the council installing security measures such as bars at windows, reinforced doors and alarm systems to create a safe room, usually the master bedroom, in the home. This is intended to provide a secure place within the home for women to flee to whilst waiting for the police to arrive. It is presented as a way of enabling women to remain in their homes rather than having to move.

Increasing the amount of options for those in dire housing need is not necessarily a bad thing. Some may be happy to use mediation in order to resolve difficulties. Similarly, there may be women experiencing violence who genuinely opt to remain in their home rather than move.

The significance of these 'options' is the context in which they are being introduced. They want to divert applicants away from relying on the council for help and instead offer quick fixes.

Councils are now required not only to offer sanctuary schemes to those fleeing violence but also to show that the number of people being rehoused under the homeless legislation has reduced as a result. Similarly with mediation, councils are required to provide central government with statistics to show the number of households whose homelessness they have 'prevented' in this way.

For those who have lost tenancies in the private rented sector, the answer is referral back into another private sector tenancy, even though the lack of security and high rents have often been the cause of homelessness in the first place.

Some argue that the increased use of the private market for those in extreme housing need is a good thing. After all, there is a shortage of social housing. Yet, only about 10% of all households rent privately. The tenancies available offer almost no security. Deposits are routinely required and rent levels are higher than those on low incomes can afford.

According to a piece of Shelter research, Safe and Secure?, the tenants are: "...more likely than average to be young, on low incomes, non-white and not in employment. More properties in the private-rented sector are old and in poor condition, than in any other sector... This leaves a picture of the most vulnerable people paying the highest prices for insecure tenancies in some of the worst properties in the country."

This is the government's preferred option for those who find themselves homeless. Those who might make a demand on the local authority are effectively headed off at the pass and diverted to the private-rented sector before the council's duties kick in.

Those households in temporary accommodation and to whom a duty is owed are systematically encouraged to accept a short-term tenancy in the private sector rather than wait for social housing.

Councils are using public funds to give lump sum incentive payments to private landlords to encourage them to accept homeless households. In addition, they are paying rent deposits to the landlords.

In many areas, this is claimed back week-by-week from the homeless household.

As government minister Ruth Kelly said in her speech last week, the numbers of people accepted by councils as homeless has dropped. The latest figures show a reduction from 135,430 in 2003/4 to 93,980 in 2005/6.

The government claims that their homelessness prevention approach is working. Today, Cathy would find herself assisted and brought in from the cold.

However, the truth of the matter is that Cathy would once again find herself sent to mediation, or referred back to the private sector where her homelessness originated.

It is not so much homelessness that is being prevented as homeless applications. Those local authorities which most confidently implement this new approach and manage to deflect the most number of applications are awarded Beacon status for tackling homeless or are made Regional Champions.

This wholesale shifting of homeless households into the private rented sector is unprecedented. There is an underlying assumption that short-term tenancies and high rents are acceptable. And government housing policy prioritises the private ownership of housing. It sees housing as vehicle for accumulating wealth, rather than as a place to live.

The very important role that council housing has played in breaking the link between poor housing and poverty has been pushed aside. This policy towards those in most housing need is part of a bigger picture, in which the ownership of council housing is being transferred out of local authority control.

Housing associations function more and more like big businesses. Rents in the social-rented sector are being restructured upwards and the permanent nature of social tenancies is under threat.

The government's way forward for housing involves private ownership and private renting and any 'social' housing provision takes the shape of low-cost home ownership.

Today Cathy would be less likely to have her children taken off her, although this couldn't be ruled out. However, she is less likely to be suitably rehoused, than she would have been, even than under the Conservatives.

We say:

Care Matters

Making money out of vulnerable children

IN OCTOBER 2006, the government published its plans to overhaul the way children in care are looked after. The document, Care Matters, sums up the very real hardship faced by children in the care system, including long after they have left care.

About 6,000 young people emerge from the care of the state every year. 4,500 leave with no educational qualifications whatsoever. Within two years of leaving care, 3,000 are unemployed.

Out of the 6,000, just 60 make it to university. Many children are cut adrift at the age of 16, with little or no on-going support.

The government acknowledges that the role of the local authority as a corporate parent is often lacking, not least of all due to a high turnover of staff on the front line. Children repeatedly have to get to know new workers.

But what does it suggest as a solution? Better-paid jobs, with more secure contracts and good training provision to help create a stable social services environment and a consistent key worker relationship for the child?

No. The answer is to contract out the corporate parenting role and have it delivered by the private sector.

Care Matters goes on to say that the private company would hold an individual budget for each child in care, would be paid a set amount per child and would be free to retain unused funds as profits.

Just like payment by results in the health service, such a system of set payments would open up the way for private companies to take on the most straightforward cases. They would avoid the more resource-intensive cases from which they could make least profit.

The government claims to put the needs of the child at the centre of the care process. However, it is clear that the heart of the matter is the invitation to business to make money out of vulnerable children.

Facts and figures

The number of people accepted as homeless by local authorities:

1997 43,720
2004 101,300
2006 93,910

According to the Empty Homes Agency figures for 2005, there were a total of 680,412 empty homes in England. 585,539 of them were privately owned.

The number of households living in temporary accommodation waiting for a permanent offer of accommodation:

1997/8 102,430
2003/4 135,430
2005/6 93,980

Around 60% of all those in temporary accommodation are in London.

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In The Socialist 22 November 2006:

Public health not private profit

Nurses against 'natural wastage'

Swansea says no closures

Ipswich campaign saves nurses' jobs

Pensioners lead the way

Socialism 2006

Socialism 2006 main rally

Films show a world of rising struggles

Socialist Party youth rally

Socialism 2006: a great success

Collection a big success

Socialism 2006 closing rally: defend the NHS

Sri Lanka


Stop the fat cats! No to Cutbacks! Fight tuition fees!

New Socialist Party publication

Marxism in Today's World

The Socialist Interview

Can Labour be reclaimed?

Homelessness Feature

Homelessness: Privatising the problem

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Worldwide protests at MP's murder

Leicester protest

Thatcher's monetarist guru dies

Prodi government under siege

US rages but Ortega's victory is no revolution

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Queen's speech says 'work till you drop'

Lincoln organises against the far right

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Local government pensions: We're no April fools!

Disciplinary action against UNISON secretary

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