Written evidence submitted by Dr Stephen Jollands and Professor John Burns (TH0004)
Background to evidence submitted:
- The evidence submitted is based on an ongoing research project, ‘Accounting for the Vulnerable’, that has a focus on homelessness. This research project is being undertaken by Dr Stephen Jollands and Professor John Burns (both based at the University of Exeter). Initial fieldwork for this research was supported by the British Academy and Leverhulme Trust under grant number SRG18R1\180810. Further, the Institute of Chartered Accountants in England and Wales (ICAEW) provided funding related to the researchers presenting the 2019 PD Leake Lecture and producing a corresponding journal article (Burns & Jollands, 2020), which covers the rationale for the research and some initial findings.
- The Accounting for the Vulnerable research project mobilises sociologically driven qualitative research methods to investigate issues surrounding homelessness through examining practices and deriving knowledge from three case studies. These case studies are Mumbai in India, Auckland in New Zealand, and London in the UK. The London case study has, to date, primarily focused on one specific borough council’s efforts to tackle the issues of homelessness that they are statutorily bound to address.
- The following evidence is based on the knowledge gained by the researchers while undertaking the Accounting for the Vulnerable research project. Specifically, this submission is based on the call for evidence that was issued, along with an in-depth analysis of the corresponding National Audit Office (2024) report (hereafter referred to as the NAO Report). The structure of the following evidence starts by first providing a summary, before examining each of the three parts to the call for evidence, and concluding with recommendations.
Summary:
- The evidence presented below covers the following:
- Increasing levels of homelessness in the UK is an outcome of broader issues than is recognised in the NAO Report.
- The major driver of these increased levels of homelessness is the structural inequity built into the UK economic system.
- The costs of economic inequity and increased levels of homelessness is placed on the taxpayer, while the richest few continue to reap the benefits.
- No amount of economic growth will address the issue of homelessness.
- Housing is a need, not a want, with the priority being the provision of everybody’s needs before attending to individual wants.
- In practice housing tends not to be treated as a need and is lumped in with all other economic activity.
- Housing is usually referenced in financial terms and its role within economic growth, where such focus crowds out its provision of a basic human need.
- Consequently, homelessness issues are understood as a housing supply issue rather than an issue of access to housing.
- Measuring progress on homelessness in terms of ‘value for money’ is misleading at best, compounds the issues in practice, and is dangerous at worst.
- Meeting statutory obligations, with limited funds available, places undue pressure on councils to deliver on homelessness issues beyond their control.
Evidence on Government’s understanding of the extent, causes and costs of homelessness:
- The scale of homelessness in the UK is an outcome and a symptom of broader issues. Only part of these broader issues is recognised in the NAO Report. Importantly, the broader issues that are driving homelessness are typically not ones that individuals and families who become homeless have any control over (Burns & Jollands, 2020). Therefore, to tackle homelessness requires first the acknowledgement of these broader issues that are the main contributing factor and reason for the increasing levels of homelessness.
- The major issue and the key driver that is resulting in increased levels of homelessness is the structural inequity currently built into the UK economic systems. Evidence is clear that trickle-down economics has failed and in practice it results in the trickle-up of monetary benefits to the richest few within the world (see for example Conceição, 2019; Riddell, Ahmed, Maitland, Lawson, & Taneja, 2024; Veldman, 2019). That is, there is a global trend whereby the richest few are becoming increasingly materially prosperous while most of the world’s population are becoming increasingly materially poor (Stiglitz, 2012, 2015; Wilkinson & Pickett, 2010). As highlighted in a United Nations report (Alston, 2019), the UK, one of the wealthiest nations in the world, is not immune to this trend, with much of it being driven by political choice. Taken collectively, this evidence suggests that a sizeable proportion of people within the UK are not materially benefiting from (growth in) economic activity. Increases in household incomes are not keeping pace with the cost of housing, which, combined with the cost-of-living crisis, significantly contributes to levels of homelessness.
- The evidence is also clear that the costs of economic inequity, including those associated with homelessness, is placed on the taxpayer, while the richest few continue to reap the benefits from the trickle-up financial flows within the UK economy. This is not to lose sight of the greatest impact being on the lives of the individuals and families experiencing homelessness, but rather is an acknowledgement that the economic inequity that is at the heart of the issue results in taxpayer funds being used to pick up the pieces while others are profiting off the situation. As recognised within the NAO Report, this includes the issue of homelessness placing pressure on other taxpayer funded services and benefits. One key example is the topping up of wages by government provided benefits, which enable workers to be in a condition to contribute to economic activity that, due to the forementioned economic inequity, the richest few gain the large percentage of benefits from (Burns & Jollands, 2020). This results in a vicious circle that entrenches the economic inequity and underpins calls for the establishment of a true living wage (Skilling & Tregidga, 2019). Yet, evidence also suggests that everyone, rich and poor alike, would benefit across a raft of different factors including life expectancy, literacy, infant mortality, crime rates and rates of mental illness from an economic system that results in more equitable outcomes (Stiglitz, 2012, 2015; Wilkinson & Pickett, 2010). It has been suggested that addressing such inequity would further unlock additional and far-reaching value from people constrained by the shackles of homelessness (Burns & Jollands, 2020).
- No amount of economic growth will address the issue of homelessness. Successive governments, propelled by the dominant thinking of many prominent economists and the general population, have viewed economic growth as the way in which to gain more financial resources, through the likes of taxation, to utilise in addressing a range of social ills including homelessness (Burns & Jollands, 2020; Glasser, 2019). However, as per the arguments above, the inequity built into the current economic system will result in those that are already in a position of wealth utilising their influence and resources at their disposal to capture the vast share of the growth, while a significant proportion of people become further impoverished, thereby exacerbating the issue of homelessness (Schumacher, 2011). GDP, the dominant measure of economic activity (and growth therein), only provides a blunt account of financial value derived within an economy. GDP is blunt because it measures all economic activity regardless of whether it relates to things that are desirable or not (Glasser, 2019; Schumacher, 2011). Hence, economic growth can be achieved, as measured by the likes of GDP, but if this is through less desirable activities (as exemplified in 9 below) and without equitable distribution of benefits (as argued above) then the issues of homelessness, and a multitude of other societal ills, have no possibility of meaningful redress.
- Housing should be seen as a need, not a want, with the priority of an economic system being the provision of everybody’s needs before attending to individual wants. Most economic textbooks start through providing a differentiation between needs and wants. Once this differentiation is in place, economic textbooks then proceed to examine economic activity as one homogenous group, with this important distinction all but forgotten. This example is stated here largely to exemplify how the importance of this differentiation is known but largely ignored. However, it is also referred to due to the evidence that suggests that what is taught based on such textbooks will impact on the way in which economic activity is undertaken (MacKenzie, 2008). It is, therefore, less surprising that only the minority of economists and political commentators draw from and argue for this distinction to be more profoundly observed within society (see for example Schumacher, 2011; Sen, 1999; Stiglitz, 2012, 2015). An economy that is set up to address the needs of its citizens before addressing individual wants would provide the capabilities for people to live the lives they value and have reason to value (Sen, 1999). It must not be forgotten that access to safe and habitable housing is a precursor to many things of importance to individuals and families. That is, from such a perspective, it is not the economic activity that provides the money to purchase or rent a house that matter per se, but rather how it allows a person to use the house to achieve things of importance, such as security, happiness, health, and wellbeing.
- There are many reasons why housing is not being treated as a need and being lumped in with all other economic activity. One such reason that requires addressing to move the issues and crisis of homelessness forward is the divisive and political commentary that surrounds it. For instance, promoting unfounded claims, such as presenting all homeless people as lazy addicts who are in the position they are because of their own actions, has not assisted in providing focus on the underlying causes and complexity that are involved with this issue. This is particularly compounded when individuals in positions of influence are the ones making these unfounded claims. One prominent example are the comments made by a former Home Secretary that homeless people living in tents on footpaths was a ‘lifestyle choice’ (Leigh, 2023). This also demonstrates the unhelpfulness of promoting economic growth as the means to addressing such issues. Tents have a variety of uses. For the outdoor enthusiast they are used for pursuits that result in many positive outcomes. Likewise for the music festival attendee, albeit this often results in the single use of a tent before disposal, resulting in a range of negative impacts, including the use of scarce resource that could be put to better use (Iqbal & Harris, 2019). For a homeless person the tent is not a replacement for a 'home' and only slightly better than rough sleeping directly on the footpath. Thus, a homeless person using a tent, especially during winter, is not going to be able to access things of importance, such as security, happiness, health, and wellbeing, as they would in a secure and habitable house. Therefore, linking the use of a tent by homeless people to being a lifestyle choice obfuscates the issues of importance. Of note, the tents in each of these situations may have a similar price tag and, thereby, contribute the same amount to economic growth but with each having a differing outcome from its use. Indeed, from an economic growth perspective, the single use festival tent is preferable given the need to purchase a new one each time, even though this is reckless from an ecological sustainability perspective.
- As housing is usually referenced in financial terms and its part within economic growth, such a focus crowds out (Sandel, 2013) its role in providing for a basic human need. Of note here is that the financial value of a house is not linked to its role in providing for basic human needs. That is, the financial value of a house is related to many factors, such as the overall availability of housing, geographical location, or general economic conditions, that do not have any relation to how it can be utilised to meet needs or resolve homelessness issues. Hence, the focus on the financial value of this ‘asset’ crowds out its meaningful place within addressing homelessness issues.
- The financialisaton of housing results in homelessness being seen as a housing supply issue rather than an access to housing issue. Politicians, economists, and other such commentators, always state the solutions to homelessness as being the building of more houses to overcome shortages in supply. In reference to the arguments presented above, the dangers involved in such a solution, with its contribution to economic growth, is that it may result in further entrenching the structural inequity issues causing the homelessness crisis. That is, most of the economic benefits created by house building is likely, due to the way in which the economy is currently structured, to be captured by those that are already materially wealthy. Before even getting to successive governments not achieving the levels of house building required by their own estimates, is an acknowledgement that (as discussed with the use of two examples in 13 below) the likelihood is that those being able to purchase and utilise the newly built houses are not those that require them to meet the need of housing. In contrast, existing data suggests that this issue may usefully be examined through, and progress made by, understanding it as an issue of access to housing. The government’s own statistics estimated that within England in Autumn of 2022 there were 3,069 people sleeping rough[1], 154,630 households assessed as local councils having statutory duty towards in relation to homelessness, and 101,300 households in temporary accommodation[2]. At the same time, it was estimated that 676,304 dwellings were vacant within England, of which 248,149 had been empty for a long period of time[3]. This raises many questions, including why are these dwellings empty during a housing crisis? Are the dwellings concerned not to a standard fit for human habitation? Are they the result of materially wealthy people having the means to purchase holiday homes? Or is the reason that many houses sit empty related to more nefarious concerns, such as money laundering? Given that the number of empty dwellings far exceeds those in need of housing, such fundamental issues could be fixed if there were a willingness to do so. At the very least it signals that the UK Government could well be in breach of its obligations under article 25.1 of the United Nation’s Universal Declaration of Human Rights towards homeless members of society.
- The NAO Report identified that homelessness is being aggravated by landlords leaving the private rented sector. Two examples, among the many possible, are presented here to expand on the implications of landlords leaving the private rented sector and demonstrate how this links back to homelessness being caused by the structural inequity within the current economic system. Specifically, they exemplify how the focus on building more houses and the contribution this makes to economic growth (as discussed in 11 above) may result in outcomes that place further pressure on the housing market, thereby exacerbating and reinforcing the already complex issue of homelessness. They are the outcome from the UK being a known centre for money laundering and the Airbnb effect.
- The International Consortium of Investigative Journalists investigation into the FinCEN files[4] highlights the scale and scope of money laundering throughout the world. Specifically, it identifies the City of London as one of the hotspots for these illicit activities. Of interest, once laundered through the City of London the money is often funnelled into the UK property market, where a reasonable return on investment, through capital gains, can be attained on a secure holding for the money. This injection of illicit money into the property market will increase demand, place pressure on available supply, and result in increased prices, thereby crowding out many UK citizens who wish to purchase a house to live in. Further, there is the incentive to leave these properties empty, due to rental income possibly resulting in unwanted attention from HMRC. Such empty houses will result in a further contraction of housing supply and add to the statistics discussed in 12 above. It is of note that this money laundering and purchase of housing will contribute to (temporary growth in) economic activity within the UK.
- The NAO Report identified a reason for landlords leaving the private rented sector being to benefit from using their properties as short term rentals. Such an approach can maximise returns on investment while lowering the risks associated with the private rented sector. Web-based facilitators enable the use of properties for short-term rentals, allows seamless connections to be made between customers and suppliers, but has much wider impacts for homelessness issues. The most well-known web-based facilitator of short terms rentals is Airbnb, hence why we label these wider impacts as the ‘Airbnb effect’. The most obvious and direct impact is that it removes supply from the private rented sector. This has resulted in many major cities around the world introducing restrictions on the use of properties as short-term rentals. However, there are numerous other repercussions of this business model for homelessness issues. For example, many holiday hotspots around the UK, some of which have been created through celebrity endorsements, have seen increased levels of property purchases that are then used for short-term rentals. This has resulted in locals no longer being able to afford to buy or rent a property for themselves meaning they are forced to move away. As highlighted in the discussion above, this resonates with treating housing as a need first and foremost, rather than a normal economic asset. Another aspect of the Airbnb effect is that most of the financial benefits that are derived go to the wealthy individual that can already afford to invest in housing, thereby reinforcing the structural inequity at the heart of the homelessness crisis. These financial benefits would previously have been channelled through traditional short-term rental accommodation, such as hotels, which provide employment and other such wider benefits.
Evidence on delivery of system leadership on homelessness by the Department:
- Without acknowledging the complexities involved, especially the need for systemic change in the UK economy, measuring progress in dealing with homelessness in terms of ‘value for money’ is misleading at best, compounding the issues involved in practice, and dangerous at worst. That is, a focus on value for money outcomes will only treat the symptoms of homelessness but will not address the underlying causes, especially the role of structural inequity that is built into the UK economy. For the Ministry of Housing, Communities & Local Government to provide leadership on the issue of homelessness requires them to go beyond a focus on sticking-plaster measures. Rather, to provide meaningful leadership requires them to become advocates for approaches that seek to understand and engage with the underlying complexities that are driving the economic inequity and the resulting homelessness crisis. Further, it is about recognising that there is a need to go beyond treating the homeless as problematic and costly statistics which need to be managed (Merry, 2016; Miller & O'Leary, 1987; Wällstedt, 2020). It is about understanding and highlighting that for the homeless person it is an uneven playing field, with the economic power at play skewed against them (Desmond, 2012, 2016). Approaching these issues with ‘efficiency’ and ‘value-for-money’ at the forefront reduces individuals and their lives to financial items to be managed, with the resulting outcomes that are less than ideal and largely do not put in place the capabilities needed to have lives of value (Evans & Masuda, 2019; Lapsley, 2009; Sen, 1999).
Evidence on response of and support for local authorities:
- As alluded to in the NAO Report, the pressure to deliver statutory required obligations to the homeless with the limited funds available to them is placing undue pressure on councils to deliver miracles in relation to a complex issue that they do not have within their powers to address the root cause of. The borough council that has been a focus within the London case study of the Accounting for the Vulnerable research project spends a significant proportion of its budget each year to be able to be accountable to the statutory requirements. They go above and beyond in developing innovative approaches to make the limited financial resources available to them go further in meeting their prevention, relief, and main statutory duties. Yet the size and magnitude of the homelessness crisis in London, and the UK in general, results in their efforts being the equivalent of trying to shovel snow off a footpath during a blizzard. Further, as also recognised within the NAO Report, the significant pressure that addressing homelessness places on council budgets results in less resources being available for all other services that they provide. It is, therefore, not surprising that many councils struggle to meet their prevention, relief, and main statutory duties and are also being pushed onto an unsustainable financial footing. This is compounded when recognising that no amount of financial resources will be able to assist councils to meet the statutory duty to take reasonable steps to prevent homelessness, due to it not being within their powers to address the structural inequity built into the UK economy.
- Some of the measures taken within the government’s approach to addressing the issue of homelessness is placing further types of undue pressures on councils, and result in undesirable outcomes for society in general. One key example of this is that, as part of successive government’s strategy of building a set number of houses each year, targets for new builds are pushed down to local councils. In turn councils then must find suitable areas for the new houses to be built on. The areas selected by councils do not necessarily match up with homelessness hot spots and often results in houses being built in areas where infrastructure is not keeping pace with the expanding number of people living within the area.
Recommendations:
- Given that the central issue that is driving the homelessness crisis is the structural inequity built into the UK economy, it is virtually impossible to make recommendations as to how to address this problem and bring about a sustained reduction in the number of individuals and families experiencing this scourge on society. Rather, what follows are a set of recommendations that are developed from the above analysis and evidence that are manageable and within the scope of what the Ministry of Housing, Communities & Local Government can put into place. They are as follows:
- Promote across government and society at large that the structural inequity built into the UK economy is the root cause of the homelessness crisis.
- Calls for (both qualitative and quantitative) research to be undertaken into the wider implications of using taxpayer funds to cover the costs imposed by the inequity within the economic system.
- Promote the view that housing should be understood as a need, thereby distinguished from other economic activity.
- Promote homelessness as an access to housing issue rather than a housing supply issue.
- Advocate for meaningful action to be taken to crack down on money laundering through the City of London, especially where it is being funnelled into the UK property market.
- Research and advocate for schemes, as seen in many other major cities around the world, that prohibit or severely restrict the use of housing for short term rental in areas with significant levels of homelessness.
- Move away from measuring ‘success’ in addressing homelessness in terms of ‘value for money’ and move towards measuring progress in terms of improvements made, including how financial resources are utilised to provide capabilities for homeless individuals and families to live the lives they value in terms that make sense to them (as advocated for in Burns & Jollands, 2020).
- Advocate for changes to be made so that local councils are only made accountable for the aspects of homelessness that they have the financial resources and ability to address, and not, for example, their prevention statutory duty, which the government itself needs to take accountability for.
- Provide analysis of, and highlight where and how, the measures taken by the government results in further undue pressures being placed upon councils.
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November 2024