Economic Theory

The Social Housing (Regulation) Bill: an expensive smokescreen

The Government has announced that all social housing managers in England will now be required to gain formal housing qualifications. This requirement will be tacked on to the Social Housing (Regulation) Bill, currently going through Parliament.

This seems to be a response to two egregious tragedies: first, the Grenfell Tower fire of 2017, which killed 72 people in west London and second, the sad death of little Awaab Ishak who was fatally exposed to mould in run-down social housing in Rochdale.

Managers will in future have to possess a Level 4 or 5 housing diploma from an Ofqual-registered provider, or a Foundation Degree linked to the Chartered Institute of Housing. They will join the six million or so workers in this country who have to meet government regulations before they can hold a job.

The new rules have unsurprisingly been welcomed by pressure groups and politicians such as Housing Secretary Michael Gove. The feeling is that qualifications ought to increase managers’ knowledge and awareness, and reduce the likelihood of further tragedies in future.

This type of occupational regulation has increased sharply over the last twenty years, approximately doubling as a proportion of the workforce. Often, as in this case, it has been a response to a tragedy or a scandal. Social work is now a strictly-regulated all-graduate profession because of various awful events. Private investigators have had to be trained and licensed since Theresa May took umbrage at the behaviour of one such gumshoe in the newspaper phone-hacking scandal, while Sajid Javid reacted to criticisms of estate agents by instituting, uniquely in Europe, individual licensing for selling houses.

But there are grounds for suggesting that occupational regulation of this kind is not quite as beneficial as it might seem. Academic studies in the UK and the USA (where such regulation extends to everything from make-up artist to florist to interior decorator) suggest that it reduces competition, restricts access to employment for disadvantaged groups and raises costs. It can also, paradoxically, lower pay for some employees, at least initially.

There are approximately 25,000 social housing managers currently in post. Some will already possess relevant housing qualifications; many more will possess degree qualifications of greater or less relevance. Typically adverts for these posts already seek graduates – preferably with degrees in social policy, housing studies or building – and/or prior experience in the housing field. As with other changes to occupational rules, I expect that existing managers will therefore be ‘grandparented’ – in other words, their current roles and experience will be taken to obviate the need to acquire new qualifications.

The burden will fall, then, on new entrants. Lucky ones may be taken on as graduate trainees and have their fees paid (although this will likely be reflected in lower pay while in training). But others, probably already burdened with thousands of pounds in student debts, will face substantial costs even for part-time study and will further delay their entry into responsible posts – which are, incidentally, not particularly well-paid. Social housing providers may find that they face further difficulties in recruiting managers.

Campaigners are typically pleased when government imposes new qualification requirements – in childcare, in transport, in security firms or wherever – as this is taken as proxy for improvements in service quality and seen as reducing the chances of accidents or malpractice.

However, this may be overly optimistic. Qualified social workers did not prevent the death of Baby P in Haringey. Historically, the earliest profession to be government-regulated was medicine, but the GMC is constantly in business disbarring delinquent doctors.

In the current case, the tragedies at Grenfell and Rochdale were not the result of ignorance or obvious lack of qualifications by those responsible. They were the result of poor management supervision and people not taking their responsibilities sufficiently seriously. They also had something to do with the problems created by the pressure on social housing brought about by immigration of large numbers of poor and disadvantaged people whose needs were neglected, possibly as a result of conscious or unconscious racism.

These are issues which are not easy to tackle, whereas the standard recommendation for more training and more qualifications is very easy to make, particularly if the costs fall on other people.

Once entry qualifications to a field are introduced, their relevance is never subsequently questioned even though they permanently raise costs and restrict entry. You can guarantee now that no housing manager in the future will ever say ‘perhaps our qualifications are unnecessary and we should widen recruitment’, while the Chartered Institute of Housing and other providers will continue to have a nice little earner into perpetuity.

Editorial and Research Fellow

Len Shackleton is an Editorial and Research Fellow at the IEA and Professor of Economics at the University of Buckingham. He was previously Dean of the Royal Docks Business School at the University of East London and prior to that was Dean of the Westminster Business School. He has also taught at Queen Mary, University of London and worked as an economist in the Civil Service. His research interests are primarily in the economics of labour markets. He has worked with many think tanks, most closely with the Institute of Economic Affairs, where he is an Economics Fellow. He edits the journal Economic Affairs, which is co-published by the IEA and the University of Buckingham.

Leave a Reply

Your email address will not be published. Required fields are marked *