What Gove’s levelling up plan needs to do to improve lives and not just ‘tart up’ town centres

When it comes to the finer details of levelling up it is hard to look beyond two places, Jaywick on the Essex coast, which has been the most deprived neighbourhood in the last three indices of multiple deprivation (since 2010), and Blackpool, which has the next eight most deprived neighbourhoods in the league table.

Both are coastal locations with economies that were historically based on tourism. Housing is central to the deprivation problem in both places. And it is hard to describe the human suffering that lies behind these statistics. Think Charles Dickens and his description of Jacob’s Island in Oliver Twist.

Jaywick was an interwar ‘plotlands’ development that was part of a pattern at the time. A London based (Dulwich) developer bought poor quality agricultural land, typically land prone to flooding, divided it into small unserviced (grass tracks and communal standpipes for water) plots, and sold these off at considerable profit to aspirational working-class Londoners who self-built basic, typically one or two bed, huts, for summer use.

This is a form of development is common, and popular, in many countries, but one which the historic experience of the plotlands, and our land ownership patterns and planning system, have crushed.

In Jaywick, during and after the second world war, displaced families from London’s East End relocated to escape the bombing. Huts became homes, although it was decades before utilities and made roads arrived. 

These poor quality, low value, flood risky properties became homes of last resort for some.

In the 1953 southern North Sea floods 37 people died in Jaywick and this, and the poor quality of many of the buildings, put a cap on house prices as mortgages became almost impossible to get.

These poor quality, low value, flood risky properties became homes of last resort for some. Purchasers were mainly investors who worked out that rents from letting to tenants on benefits provided high yields.

Today rents for people on benefits are limited by the Local Housing Allowance (LHA) cap which is calculated by the valuation office based on average rents in Broad Rental Market Areas (BRMA). The word ‘broad’ is critical here. LHA in Jaywick is, in effect, set in relation to properly built homes that aren’t at risk of flooding in Colchester.

You can almost hear the landlords’ cash registers pinging.

Blackpool has a similar problem though here we saw the Victorian and Edwardian bed and breakfasts in the centre of town converted into houses in multiple occupation, again let at the LHA cap, this time at the average for the whole of the Fylde coast BRMA, as overnight tourism, and property prices, declined with the advent of cheap European flights. Again, yields were high.

Things have moved on again in Blackpool with some private landlords using the supported housing exemption from the LHA cap to get even more revenue per property, inevitably from some very vulnerable people on benefits. Gross yields in some instances can only be described as astronomic.

There are good reasons why the benefit system has been designed in this way but the outcome is, in many cases, unscrupulous landlords, gaming the system and providing substandard accommodation to vulnerable people.

This isn’t a new issue and there have been attempts, in places like Hastings, in the past where local authorities and housing associations have collaborated to enforce against these landlords, encouraging them to sell, and then buying and refurbishing properties, often returning them to single family dwellings or fully self-contained standard flats.

I remember that, when Ed Milliband’s Labour brought Arnie Graf, who taught Barrack Obama community organising, to the UK nearly a decade ago, private landlords were time and again the number one community issue.

This time it is Michael Gove who will be leading the charge. A new Decent Homes Standard 2, plus updated minimum energy efficiency standards targeted at the private rented sector, and, critically, funding for much stronger enforcement, are the principal tools being planned to address the current issues in Blackpool and Jaywick, and many other places across the country.  

If anything signals that levelling up really is about improving the lives of those most in need, and not just a series of town centre tart ups, then success in Jaywick and Blackpool is it.

So what is likely to happen? We’ve already started to see that landlords have responded to the ban on letting EPC F & G rated properties by selling to owner occupiers to avoid having to invest in insulation. That’s just creating a future problem for low-income owner occupiers and no doubt we will see more of that unless the public sector can intervene in other ways.

For some landlords it will be economically rational to invest to avoid enforcement and preserve their income but for many selling will be the sensible choice. Others will follow landlords like Grainger and utilise the regulatory exemptions and put their private rent sector properties on the ‘sub-standard properties register’ or, as it is now officially called in an interesting name change, the EPC Exemptions Register.

The market is unlikely to achieve a positive Levelling Up outcome in these circumstances.

In Blackpool the council has a wholly owned company, My Blackpool Home, that, for the last seven or so years has been buying poor quality properties, doing them up, and renting them out. But the scale of investment available, and the financial constraints around making a return, limit the impact in a place as big as Blackpool that has an annual churn in the centre of somewhere around 8,000 people, while the company is buying 80-100 homes a year. 

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This isn’t the only initiative in Blackpool that will need substantially more public funding if Blackpool is going to see a proper Levelling Up turnaround.

The same is true in Jaywick where the council has put its toe in the water with ten new build flood resilient homes for local people to provide homes for local people to allow enforcement activity on sub-standard rented properties to ramp up.

These are huge challenges in both places but if anything signals that levelling up really is about improving the lives of those most in need, and not just a series of town centre tart ups, then success in Jaywick and Blackpool is it.

Chris Brown, executive chair and founder, Igloo