On housing, Theresa May promised a revolution, then delivered a damp squib. Again

Theresa May handed a P45 by terrible comedian Simon Brodkin. Image: Getty.

As I write these words, Prime Minister Theresa May is still giving her speech to the Tory conference. The section on housing just finished – I’ve yet to even see the text written down. If journalism is the first draft of history, these are the scribbled notes on scraps of paper that may or may not make it into that draft. 

Nonetheless, some first thoughts.

1) They massively over-stated how radical this would be

Last night the Sun reported that May would be “the first PM in decades to unveil a major programme to build council houses” – a statement based, one assumes, on briefings by May’s team.

The rhetoric leading up to the meaty policy part of the speech seemed to back up the suggestion that something radical was on the way. “I will dedicate my premiership to fixing this problem,” May told us.

What we actually got was an extra £2bn for affordable housing. At first glance, that looks like a significant bump – it takes the total budget to £9bn, so amounts to an increase of more than 28 per cent. Wow!

Except, in 2010, George Osborne cut the annual capital funding for housing associations from £3bn to £450m. This new money isn’t even enough to make up for that cut.

It’s also not clear if this £2bn is an annual contribution, or a one-off – which obviously makes quite a big difference.

At any rate: they’ve oversold this. By a lot.

2) Affordable housing still isn’t the real priority

Something else about that £2bn figure: it’s a lot less than the extra £10bn May promised for Help to Buy. This, she claimed, would help another 130,000 families gather the deposits they need to buy their own homes.

But it’s unclear, to say the least, that this sort of government support has actually increased building rates. As the housing charity Shelter has put it

“although the scheme genuinely helped some people on middling incomes buy bigger new builds in nicer areas sooner, over half of those using the scheme didn’t really need it. This implies that a large chunk of Help to Buy Equity sales could at best be a waste of public money and at worst, an inflationary boost to house prices.”

That’s a big enough screw-up it’s worth restating it: it’s possible that throwing more money at the housing market through Help To Buy actually inflated prices, making it harder to buy.

And Theresa May has just promised it another £10bn – five times as much as her much-trailed pledge to get councils building again.

We should probably hold the champagne for the moment.

3) Councils are still constrained

There was another change promised in the speech, of course: “We will encourage council as well as housing associations to bid for this money.” That will make it easier for councils to build, so should be viewed as significant.

What would have been much more significant, though, is letting councils borrow to invest. That would likely have had much bigger impact on housing supply than allowing them to beg for a sliver of Treasury largesse.

Once again, Theresa May has promised revolution, but all she’s delivered has been small, technical changes.

4) Seriously, these numbers are tiny

Oh, and while I’ve been writing, the FT’s Jim Pickard tweeted this:

Experts believe we need to be building about 250,000 extra homes a year to keep up with demand. We’ve not made it within 100,000 of that in a decade.

If Pickard’s figures are right, this “revolution” will deal with less than 5 per cent of the problem.

Honestly, this is nothing. Why on earth did they decide to brief this would be a revolution?

4) There is some good news

For one thing, May promised that some of the money would go to “social rent” homes in areas of higher need. That’s a shift from the last few years where such funding has focused on “affordable rent” – which, since it can be 80 per cent of market rent, has often been anything but affordable.

And some of the noises coming from the housing sector are positive, too. Here’s Shelter’s head of policy, Kate Webb:

While David Orr, of the National Housing Federation, which represents housing associations, says:

“The additional £2bn will make a real difference to those let down by a broken housing market.”

So yes. These are steps in the right direction.

5) Seriously though – Is that it?

All over the Tory conference this week, I heard Tories worrying that the housing market would destroy their standing with the under 40s. They are all too aware of the problem.

And yet this is their solution: another 5,000 homes a year, and shouting a bit at developers in the hope they’ll change their ways. That’s all they’ve got.

There will be a lot of snarky commentary about the problems with Theresa May’s speech: the P45 handed to her by a comedian as a stunt, the lengthy coughing fits, the fact the sign behind her literally started disintegrating as she spoke.

But none of those are the reason that she’s doomed. The real problem is the mismatch between rhetoric and policy. Once again, she’s promised a revolution and then bottled it.

Jonn Elledge is the editor of CityMetric. He is on Twitter as @jonnelledge and also has a Facebook page now for some reason. 

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To see how a city embraces remote work, just look to Helsinki

A deeply rooted culture of trust is crucial to the success of remote work. (Sean Gallup/Getty Images)

When I speak to Anssi Salminen, an account manager who lives an hour outside Helsinki, he’s working from a wooden platform on the edge of a Finnish lake. With a blanket laid out and his laptop set up, the sun low in the sky, Anssi’s remote work arrangement seems blissful. 

“I spend around half of my time working somewhere else other than the office,” he says. “I can work from home, or on the go, and I also travel to the Netherlands once a month and work from there.

“The emphasis in my work has always been that it doesn’t matter when or where I work, as long as I get things done.”

For many people around the world, the shift to remote work was sudden, sparked by the coronavirus pandemic. Finland, however, is finding the transition much less significant. Before Covid-19, the Nordic nation already displayed impressive levels of remote working, with 14.1% of its workforce reporting usually working from home. Only the Netherlands has a comparable percentage of remote workers, while the UK lagged behind at 4.7%, and the US’s remote workforce lingered at around 3.6%

Anssi works for one of many Helsinki-based companies that offers its employees flexible policies around when and where they work. That arrangement is in part due to the Finnish capital’s thriving start-up scene. In spite of being a relatively small city by global standards it is home to over 500 technology start-ups. These companies are leading the way when it comes to keeping employees connected wherever they choose to work.

“Our company has a completely location-free working policy,” says Kasper Pöyry, the CEO of Helsinki-headquartered software company Gapps. “All meetings are made available for online participants and facilitated accordingly. Some employees have worked extensively from abroad on a working holiday, whilst others prefer the comfort and social aspects of the well-stocked office. Whatever works for our employees is what works for the company.”

Like Gapps, many Helsinki-based firms are deeply preoccupied with providing the necessary technology to attract talent in a vast and sparsely populated country. Finland has only 15 inhabitants per square kilometre, and companies understand that in order to compose teams of specialised expertise, they may have to seek talent outside of the city. Local governments take a similarly proactive stance toward technological access, and Helsinki offers free, unrestricted, high-speed Wi-Fi from city-wide hotspots, while the country as a whole boasts some of the best coverage in Europe. 

But encouraging remote work isn’t just about optimising the potential of Finland’s workforce – companies in Helsinki also recognise that flexibility has clear benefits for both staff and employees. 

“The idea of a good work-life balance is ingrained in Finnish culture,” says Johannes Anttila, a consultant at organisational think tank Demos Helsinki. “It goes back to our rich history of social dialogue between labour unions and employers, but also to an interest in delineating the rules of working life and pushing towards people being able to enjoy their private life. Helsinki has been named the best city in the world for work-life balance, and I think that this underlies a lot of the mentality around remote work.” 

For Peter Seenan, the extent to which Helsinki residents value their free time and prioritise a work-life balance prompted his move to the city ten years ago. He now works for Finnair, and points to Finland’s summer cottages as an example of how important taking time to switch off is for people in the country. These rural residences, where city residents regularly uproot to enjoy the Nordic countryside, are so embedded in Finnish life that the country boasts around 1.8 million of them for its 5.5 million residents

“Flexible and remote work are very important to me because it means that I don’t feel like I’m getting stuck in a routine that I can’t control easily,” he says. “When I’m working outside of the office I’ll go down to my local sauna and go ice swimming during the working day, typically at lunchtime or mid-morning, and I’ll feel rejuvenated afterwards… In winter time especially, flexibility is important because it makes it easier to go outside during daylight hours. It’s certainly beneficial for my physical and mental health, and as a result my productivity improves.”

The relaxed attitude to working location seems to pay off – Finland is regularly named the happiest country in the world, scoring highly on measures such as how often its residents exercise and how much leisure time they enjoy. With large swathes of unspoiled countryside and a national obsession with the outdoors, sustainability is at the forefront of its inhabitants’ minds, leading to high levels of support for measures to limit commuting. In January, Finland passed a new Working Hours Act, the goal of which was to help better coordinate employee’s work and leisure time. Central to this is cementing in law that employees can independently decide how, when, and where they work.

Yet enacting the new ruling is not as simple as just sending employees home with their laptops. For Kirsimarja Blomqvist, a professor of knowledge management at LUT University, perhaps the most fundamental feature that remote work relies upon is a deeply rooted culture of trust, which Helsinki’s residents speak of with pride. The anecdotal evidence is backed up by data which suggests that Finland boasts one of the highest levels of trust and social cohesion in Europe, and equality and transparency have always been key cornerstones of political thought in the country.

“Trust is part of a national culture in Finland – it’s important and people value it highly,” she explains. “There’s good job independence, and people are valued in terms of what they do, not how many hours they work for. Organisations tend to be non-hierarchical, and there is a rich history of cooperation between trade unions, employers, and employees to set up innovative working practices and make workers feel trusted and valued. 

“It’s now important that we ensure that this trust can continue to be built over technology, when workers might have been more used to building it face-to-face.”

As companies begin to look hopefully toward a post-Covid future, the complexities of remote work are apparent. Yet amid issues of privacy, presenteeism, and social isolation, the Helsinki model demonstrates the potential benefits of a distanced working world. The adjustment to remote work, if continued after the crisis, offers a chance to improve companies’ geographical diversity and for employers to demonstrate trust in their workforce. On these issues, Blomqvist believes other cities and employers can learn a lot from Helsinki.

“People are now beginning to return to their workplaces, but even as they do they are starting to consider the crisis as a jumping point to an even more remote future,” she says. “The coronavirus pandemic has been an eye-opener, and people are now interested in learning from Finland’s good practices… We are able to see the opportunity, and the rapid transition to remote work will allow other countries to do the same.”