There’s a new scheme about. One that could net you £1000 for doing nothing. The catch? You have to be a tenant in social housing.
Housing minister Grant Shapp has launched this new scheme. Like many other schemes announced by government and promoted by the minister responsible, this is more to do with making a song and dance about something to pretend that something is being done. When in actual fact not much is being done. Even worse, it’s usually to bury a problem or try and offload a problem. And worse still it likely to create more problems than it solves and cost more than the money it saves.
So what is this money making scheme? It’s one where you do DIY work on your rented property, or privately arrange for the work to be done.
Yep, something that you get your landlord to handle as part of the contract in paying rent is instead being dumped back on you to sort out.
That’s a bit harsh really. Many a landlord would be quite happy if their tenants actually looked after the property properly. In fact many might give their tenant a discount if they decorated the property. Though I doubt that they would give their tenant a grand to do the maintenance as well.
Part of the benefits in renting is that you don’t have to worry (other than chasing the landlord) about maintenance issues. If the boiler breaks, you phone up the landlord (or their agent) and tell them to “sort it”. You don’t need to take time off work while you wait for the plumber to come in, that’s the landlord’s job. It’s in the landlord’s interest to get these maintenance jobs done because their property will be worth less when they eventually sell.
If you own your own home all that hassle is what you have to do for the pleasure in potentially making some profit after a few years. By the way, have you budgeted the cost of maintenance on top of the cost of the mortgage and the bills as part of being able to afford that nice house you have your eyes on?
Anyway, back to the scheme.
So what’s wrong with it? I say that because like any government scheme it won’t have been thought out properly and will have been invented more for political reasons than practical reasons. Saying that it will give house proud tenants more control over their lives and that they will actually save their landlord money and that local tradespeople will benefit from the extra work shows that they haven’t actually thought it through as these aren’t really positives.
There are many things wrong with the scheme.
When will the tenant get the money? Before or after the work. If before how will the council ensure that the money is only spent on the task. A handwritten receipt for the local handyman. If after then how will the tenant afford the cost of the work? They will also be effectively extending the council credit period as the council will not be paying back the money immediately.
How will the owner ensure that the work is done to the correct standards. Will they examine every job? Grant Shapps says that checks can be done at the same time as the annual gas check. But gas checks are done by Gas Safe certified workers, not by people who know if a some minor electrical work has been carried out properly.
But this is checking that the work has been done. What about checking that the work is required? What’s to stop a tenant just claiming the money anyway. Or worse, damaging something to create the work getting the money and not actually fixing it. Someone who looks after their home so that maintenance is not need is being penalised compared to someone who doesn’t look after the property and gets to keep some of the maintenance money.
Will the landlords only allow work to be done by anyone or only by tradespeople on an approved list? The approved list effectively being the council’s outsourced tasks. But how will tradespeople get on the approved list? It won’t be by a simple process of free registration. There will be checks and regulations and stipulations and terms and conditions. All this is a cost which the tradesman will pass on to the tax payer because that is who is paying at the end of the day.
Housing associations and councils already have companies who do the maintenance work for them. These companies have the benefit of scale and use that to make a profit. Getting a tenant to have it done by a local handyman will not mean that money is being saved. Grant Shapps says in part of the announcement that groups of tenants can get together and take advantage of scale themselves – to do things like install photovoltaics. Using this as an example just shows that the scheme is useless that they have thought up such a bad example. For one thing installing photovoltaic is not maintenance, it’s capital investment. For another it’s installing something that the owner is paying for but the tenant benefits from in terms of lower electricity bills.
Part of the benefit that is being touted is that the tenant will be encouraged to keep some of the money that they have saved from getting it done more cheaply. The tenant can then use this money as they wish. But this won’t save the council any money. They pay the maintenance budget to the tenant that they would have spent anyway. So in these time of cutting back it’s not the council who cutting back. It does nothing to drive down the cost of maintenance. The tax payer is effectively giving money away to tenants to use for luxuries.
Like any scheme it will be abused and will do nothing to the good tenants who do look after their home. Good tenants are already decorating their home or doing the minor jobs that need to be done because it’s quicker, they can do it, and they can do just to their taste. They aren’t paid to do it either.
This scheme is like the one Labour thought of where rather than pay housing benefit direct to the landlord the tenant gets the money and has to pass it on to the landlord. Labour touted that as empowering tenants and getting them to be in control of their financial affairs. The fact that the unintended consequence of this was that landlords weren’t paid their rent when the tenants used the money to pay for emergencies (or even on non-emergencies) was not obvious to Labour, and still isn’t.
What’s good about it? It’s only a pilot and it hasn’t started yet.