Potentially £20bn would be available for a direct cash benefit using money from the present Housing Benefit and social housing subsidy schemes. The cash benefit would be paid directly to the recipient and depend on local housing costs, but would not have to be spent on housing.
King argues that the present system of support for social housing means that government – rather than tenants or landlords – increasingly take decisions about rent levels and quality of housing. Despite government rhetoric, housing policy is becoming more centralised. Decision-making power has been removed from tenants and landlords, so that tenants have little incentive to drive down rents and landlords little incentive to improve their properties.
The provision of high quality, affordable housing for those on low incomes can be best attained by providing those on low incomes with choice and autonomy. Hence, King argues for more choice via direct payments and the end of social housing.
These policies have been successful in Australia, New Zealand and some continental European countries. They would end the stigma attached to social housing as individuals rather than particular forms of housing would receive government support.
Choice and the End of Social Housing by Peter King, published by the Institute of Economic Affairs can be downloaded here.