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Introduction to British Isles
Welfare State and Housing in the UK

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Welfare State - Background

• Termed coined 1940s by Archbishop William Temple
  (but cf German Wohlfahrtstaat)
• National Insurance and social security first
  introduced 1911 (David Lloyd George)

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David Lloyd George
Archbishop William Temple
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• 1941-1942 Minister of Labour, Ernest Bevin (Lab)
  commissions Willam Beveridge (Liberal) to make
  recommendations on social security

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William Beveridge
Ernest Bevin
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• The Report to the Parliament on Social Insurance
  and Allied Services
• Weekly National Insurance contribution
• Benefits to sick, unemployed, retired, widowed
• Minimum standard of living below which no one
  should be allowed to fall.
• National health service free at point of use.
• Care of the population from cradle to grave
  (from womb to tomb)

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• 1945 Labour government
• Prime Minister Clement Attlee
• From 1946 Implementation of main terms of the
  Beveridge Report

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Today

• Department for Work and Pensions
• Secretary of State John Hutton, MP
• Benefits such as Jobseekers Allowance, Income
  Tax Credit, State Pension, Child Benefit, Housing
  Benefit...
• Current retirement age 60 for women, 65 for men
• Proposals to raise retirement age to 68 by 2046
  (Pensions Bill due for first reading December
  2006)

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Focus National Health Service

• National Health Service Act 1946
• Launched July 5th 1948
• Health minister Aneurin Nye Bevan

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• 1980s Thatcher Government
• Introduction of modern management processes
• 1988-89 Review of NHS
• 1990 Introduction of internal market
• Providers independent trusts
• GPs as fundholders, purchasing treatment for
  patients

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From 1997 Blair Government

• Practice-based Commissioning
• Outsourcing of medical services to the private
  sector
• Private Finance Initiative (PFI) /Public-Private
  Partnership (PPP) contracts between public
  service authority and private operators
• National Programme for IT (NPfIT) budgeted
  2.3 bn currently estimated at
• 20-30 bn and rising. Worlds largest civil
  information technology programme

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NHS basic structure
Secretary of State Patricia Hewitt, MP

• NICE National Institute for Health and Clinical
  Excellence
• NHS Direct

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OECD Social Security Expenditure
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Housing in the UK

• Ca. 60 owner-occupied housing
• 20 housing owned by local councils or housing
  associations
• Largest council estate in Becontree, Dagenham
  (East London) population over 100 000

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Background

• Overcrowding in cities from early 19th century
• Public housing by philanthropy, eg Bournville
  Village, Port Sunlight
• 1919 Housing Act Homes fit for Heroes.
  Government required local councils to provide
  housing
• 1930 Housing Act slum clearance
• Major boom following WW2
• New towns such as Welwyn Garden City, Milton
  Keynes, Glenrothes, Livingston

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Decline in social housing

• 1980s Thatcher government
• Rules restricted councils reinvesting
• Right to buy
• Discounts for tenants of up to 60 for houses,
  70 for flats

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Types of housing

• Detached often villas or bungalows

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Semi-detached Usually two storeys
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• Terraced housing
• (cf town house)

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Residential property market

• Affordability ratio long term 3.5 (average
  house price/average annual income)
• Currently 6 (suggests overpricing)
• Rent to mortgages average buying cost over 25
  years about 380 000, vs rental costs over same
  period of 400 000

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Average UK House Prices March 2006

• Overview
• Average Cost 184,924
• Detached 285,697
• Semi-detached 170,650
• Terraced 143,512
• Flat 174,052
• Change in previous quarter0.78
• Change in previou year 5.43

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• Buying a house Banks and building societies
  provide mortgages (home loans)
• Estate agents advertise properties and help
  negotiate between buyers and sellers(Scotland
  solicitors more commonly used than estate agents)
• First-time buyers is the term for those buying
  their first house/flat
• Most see buying a house as a financial investment
  and hope to later sell their house at a higher
  price in order to move up the property ladder
• Significant differences in house prices between
  regions London most expensive
• Danger of negative equity if prices drop (eg 30
  drop in early 90s)

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• Differences in purchase system between Scotland
  and England/Wales/NI
• England/Wales/NI purchaser makes offer. Not
  binding until exchange
• Problems delays possible due to chains of
  purchases if one person in the chain has a
  purchase fall through, everybody elses purchase
  falls through, too.
• Scotland offer binding as soon as it is made.
• Problems you can only make one offer at a time,
  with no guarantee of acceptance (eg sealed bid
  system). Expense due to repeated surveys etc.

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Current issues

• Not enough housing stock to meet demand
• Social exclusion (essential service personnel
  priced out of the market in eg London)
• Second home buyers or buy-to-let buyers in eg
  Wales, Scotland push up prices for local
  population

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Some proposed solutions

• Government allowing new build on previous
  greenbelt areas
• The 60 000 house (kit house)
• Sellers packs

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Quiz

• The government department responsible for
  benefits and employment is called theDepartment
  for and Pensions
• Who is the current Secretary of State for the
  above department?
• When was the NHS founded?
• What does GP stand for?
• Who wrote the report on which the modern welfare
  state was based?
• Who was the health minister who oversaw the
  implementation of the NHS?
• What is a PFI?
• What is the main source of funding for the
  welfare state?
• What percentage of people own their own homes in
  the UK?
• Under which prime minister were council house
  tenants first able to buy their homes?
• Name three types of housing common in the UK (eg
  flat)
• What is negative equity?
• Name two new towns in the UK

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• The government department responsible for
  benefits and employment is called the Department
  for and Pensions
• Who is the current Secretary of State for the
  above department?
• When was the NHS founded?
• What does GP stand for?
• Who wrote the report on which the modern welfare
  state was based?
• Who was the health minister who oversaw the
  implementation of the NHS?
• What is a PFI?

Department for Work and Pensions John
Hutton 1948 General Practitioner Sir William
Beveridge Aneurin Bevan Private Finance
Initiative private sector ownership in
state-owned businesses, such as hospitals
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8. What is the main source of funding for the
British welfare state?9. What percentage of
people own their own homes in the UK? 10. Under
which prime minister were council house tenants
first able to buy their homes?11. Name three
types of housing common in the UK (eg flat)12.
What is negative equity?13. Name two new
towns in the UK
National Insurance About 60 Margaret
Thatcher Detached houses, semi-detached,
terraced houses... When the value of a house
drops so far that the amount owed to bank or
building society is greater. Livingston,
Glenrothes, Milton Keynes