SCSH Briefing

November 2001

Choice-based lettings - A Discussion Paper

There is a growing debate in the UK about how to improve choice for prospective tenants in the social rented sector, whilst maintaining the primary role of the sector: to meet housing need. Already a number of local authorities in Scotland have begun to explore how to improve choice or even move to a choice based approach.

In areas of housing shortage such an approach is likely to change the profile of who gets housed and produce both gainers and losers. SCSH is monitoring developments with interest and are keen to assess the potential affect on homeless people. To this end, SCSH is publishing this discussion paper by Hal Pawson, Research Fellow at the School of Planning & Housing, ECA/Heriot-Watt University.

Choice-based Lettings: Implications for Homeless People

Hal Pawson, Research Fellow, School of Planning & Housing, ECA/Heriot-Watt University

In a drive to modernise what has traditionally been a highly bureaucratic aspect of housing management practice, growing numbers of social landlords are embracing the concept of choice-based lettings. Whilst the pace of recent change in this area has been fastest in England, it is already apparent that Scottish housing will not be immune from this trend.

At its heart, the concept of choice-based lettings seeks to open up the allocations function, transforming applicants from passive subjects into active participants in the process. Under conventional approaches to allocations the matching of applicants to vacancies is an entirely administrative procedure. Referring to recorded information about an applicant’s needs and preferences, a housing officer makes a judgement as to whether a given vacancy seems to be ‘suitable’ to offer to that applicant.

The ‘lucky’ household – for whom the contact may well come largely out of the blue – will then be faced with a ‘take-it-or-leave-it’ choice of accepting or rejecting the offer. Refusal often carries with it a penalty that no further offers will be made for a specified period.

By contrast, choice-based approaches aim to give applicants more control over their own situation, and to operate in a more open and less coercive way. Through the advertising of vacancies, applicants are given the opportunity to scan the range of properties available at any one time, and to match these against their own requirements. This opens up opportunities for them to consider ‘trading-off’ their housing priorities against one another just as would be the case for someone buying or renting in the private sector – e.g. compromise on the type of property sought in favour of the location.

Much of the inspiration for choice-based lettings in Britain originates in the Netherlands, where systems involving the open advertising of vacancies have become increasingly dominant over the past 10 years or so. As they are operated in Holland, choice-based approaches tend to involve very simple systems for prioritising competing applicants. New applicants, for example, are often ranked according to age, whilst existing tenants are ranked by length of residence.

The case in favour of simplified prioritisation systems of the sort used in the Netherlands is that they are easy to understand from the applicant’s point of view and this ‘transparency’ – in combination with the publication of lettings outcomes – confers a legitimacy on the lettings process which is often lacking under the more complex systems familiar in Britain. Nevertheless, the Dutch model does incorporate an element of ‘needs-based priority’, albeit only to a limited extent: households considered to have an ‘emergency need’ for rehousing are given time-limited overwhelming priority over other applicants.

Although the British housing system has more in common with the Netherlands than with most other European countries, the two countries clearly differ in terms of their housing traditions and circumstances. Consequently, the choice-based systems being developed by social landlords in England and Scotland – although inspired by the Dutch experience – are adapting rather than attempting to copy it. Even so, the development of choice-based approaches – and, in particular, the belief that systems of this sort are an alternative to ‘needs-based’ approaches, has raised some worries here.

Concerns about the possible negative impact of choice on homeless households have been classed under two headings: (a) problems relating to the method of application, and (b) problems related to the system of prioritisation.

Method of Application

The main concern here is the possibility that the increased onus placed on applicants within CBL systems could disadvantage more vulnerable households, some of whom may be homeless or in insecure housing. Clearly, there are dangers that the more active input required from applicants could pose problems for those with poor literacy or language skills or for those with learning difficulties.

In designing CBL systems, it is essential that this potential problem is fully appreciated and counter-measures put in place. In particular, there will be a need to develop and/or expand advocacy and advice services to help less-able applicants navigate their way through the application process.

Although resources will need to be found for this, the Dutch experience suggests that, in net terms, the operation of CBL systems should cost no more than current methods. Because CBL largely eliminates the costly and arguably wasteful ‘shortlisting’ process of matching applicants and vacancies, this should generate staff-time savings which can be re-directed into improving advice and assistance for those applicants who need it.

Many of the English local authorities developing CBL systems see a key role for web-based advertising of vacancies, with home seekers being able to apply on-line. This has raised particular concerns about the possible implications for homeless people and others lacking the appropriate skills and/or physical opportunities to access the internet. Such anxieties would clearly be valid if CBL systems were designed to be accessible only via the internet.

In practice, British social landlords developing CBL systems typically envisage any web-based advertising of vacancies taking place alongside more conventional methods such as mailshots, freesheets or bulletin boards. Additionally, some plan to set up public access computer terminals in public buildings such as libraries, as well as in housing offices – and, in at least one case – supermarkets.

It could be argued that the facility to view and, possibly, apply for vacancies via the internet might be particularly beneficial for vulnerable applicants being assisted by voluntary agencies (or housing officers) who are likely to have internet access and whose staff are likely to be web-literate.

Systems of Prioritisation

The main concern here is that an emphasis on waiting time or length of tenancy as key ‘currencies’ underpinning applicants’ priority will be to the detriment of homeless households and the badly housed. The argument here is straightforward: if waiting time confers priority, those least able to wait because they are in the most precarious or unsatisfactory housing circumstances, will find themselves at the back of the queue. Conversely, those living in more tolerable conditions will be able to accumulate priority by simply delaying their move.

These concerns would be valid under a system which wholly replaced needs-based priority with time-based priority. However, as noted above, this is not true even of most choice based systems as operated in the Netherlands. In this country, a prioritisation methodology which completely dispensed with assessed need would be unlawful. It would conflict with both the homelessness legislation and the more general requirement that reasonable preference is accorded to those in housing need. It is worth bearing in mind that both these requirements remain in place in England where dozens of local authorities and RSLs are now working up choice-based systems.

Although the ‘choice-based’ schemes emerging in Britain generally seek to simplify the prioritisation of applicants and to lay greater stress on waiting time, the belief that they seek to wholly abandon needs-based priority is misinformed. Most of the local authorities developing CBL systems in England envisage operating a ‘priority card’ system for homeless households and others with an emergency need for rehousing such as urgent medical cases and decants. Those issued with priority cards will be able to select from advertised vacancies alongside other home seekers and they will have precedence over ‘non-priority’ applicants whilst their card is valid.

There is, however, an understandable concern on the part of local authorities that unlimited priority card status for statutory homeless households could leave them open to meeting unlimited temporary accommodation costs. Consequently, priority cards are likely to be issued for specified periods of time only, though their validity might, perhaps, be renewable following a review.

In the end, if a priority card has not been ‘played’ during the specified period of its validity, a local authority might revert to making a single offer of accommodation in the traditional way. This would enable it to discharge its duty under the homelessness legislation.

However, in cases involving ‘expired priority cards’ it would probably be considered ‘good practice’ to review the specific circumstances involved before taking such action. For example, it would be important to confirm whether there had, in fact, been any potentially suitable vacancies advertised during the relevant period. And, if so, whether the applicant had bid unsuccessfully for these (some vacancies might attract applications from two or more priority card holders).

Ultimately, therefore, a priority card system may lead to a household being made a single take-it-or-leave-it tenancy offer. However, to portray such systems as ‘no different from one offer only policies for the homeless’ is clearly quite misleading.

Going beyond the issue of homeless households and others in need of emergency rehousing, many of the local authorities setting up CBL systems in England are planning to set up needs-based groups systems as advocated by the 2000 DETR Housing Green Paper. Typically, three broad bands might be established – say, for emergency, urgent and non-urgent priority applicants. Within each group, priority would be determined by waiting time as a ‘currency’ easily understood – and generally accepted – by applicants themselves.

In developing systems of this kind, the CBL pioneers are attempting to achieve greater transparency whilst at the same time retaining a significant degree of needs-based priority.

Clearly, none of this will increase the overall supply of affordable housing. And there is the potential for sharpening the existing disadvantages experienced by the most vulnerable applicants – including homeless households – and others in urgent need of rehousing. To ensure that this outcome is avoided, safeguards clearly need to be built into any CBL system, and monitoring systems need to be put in place to identify how effectively these operate. But it would, in any case, be mistaken to assume that current ‘needs-based’ systems produce wholly equitable outcomes in spite of the complexity of the mechanisms developed in an attempt to realise this objective.

The development of CBL approaches may be portrayed as another example of obliging poor people to take more responsibility for their own situation. But it is at least as valid to see such systems as empowering social housing customers, giving them a degree of control over their own lives which is taken for granted by those accessing their accommodation through the private market.

SCSH is keen to hear your views as we develop our opinions on choice based lettings. Contribute to the debate by phone, letter or e-mail.

© 2001 Scottish Council for Single Homeless