Public Policy: Using Market-Based Approaches - Department for ...

Public Policy: Using Market-Based Approaches
‘reasonable preference’ to certain groups as defined in The Housing Act 1996,
and amended by The Homelessness Act 2002. When the household came to the
top of the waiting list, it was offered a property deemed suitable by the local
authority. Although households were able to specify to a certain extent the area
and type of property, refusing an offer frequently resulted in penalties such as
suspension from the waiting list. In spite of this penalty practice, some areas
also reported high refusal rates. 123
There were growing concerns about the traditional allocation system in terms of
the way in which it assessed needs and priorities, as well as the extent to which
housing officials determined the outcome of choices regarding location and type
of property. The following key drawbacks were identified.
● The complexity of the system was making it difficult for users to understand
and therefore participate effectively in the process. Under the traditional
allocation mechanism, customers had no understanding of the number of
points required to obtain a given type of property, and did not know how their
points assessment related to others in their area. Furthermore, housing
associations and local authorities would often use different points schemes.
This created confusion over how need was assessed and was also thought to
impede mobility between neighbouring authorities.
● A lack of transparency was leading to customer concerns about the fairness
of the process. Users were often unaware not just of the mechanisms behind
the allocation process, but also of the availability of social housing in their
area.
● The unfairness and undesirability of processes relying heavily on housing
officers’ discretion was becoming increasingly apparent and at odds with the
modernising government agenda. The Government was concerned that the
dependency of applicants on social housing officials encouraged by an
administrative allocation mechanism had adverse implications for
individuals’ sense of empowerment and community stability.
● The system created undesirable incentives. Points-based allocation systems
suffered the drawback that they generated ‘points-chasing’ behaviour in
some users, who lobbied housing officials in an attempt to increase the
assessment of their housing need because this was the only means available
to increase their chances of being re-housed. This potential for capture is
common to many public-sector regulators and often a major source of publicsector
inefficiency. It was hoped that introducing a greater element of the
market into the allocation mechanism would increase transparency and
thereby limit this practice by providing incentives instead for customers to
make themselves better informed about CBL and alternative housing options.
123 For example, Dover reported a 70% refusal rate prior to its implementation of a CBL scheme. (From interview
with officials at ODPM).
118