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Ealing and Northfield

The economics of sheds with beds

On Friday the Southall sheds with beds story made it onto the BBC 10 o’clock news again. BBC investigative journalist Chris Rogers has now done three big pieces on this issue:

The Sun also covered this issue in its own inimitable fashion in October 2011. The most recent raid has been covered by the Gazette and ealingtoday.co.uk which both pretty much just re-hashed the CLG press release. The council also did its own press release. The actual raid happened on Tuesday and it took until Friday to make the media.

Some facts emerge from this coverage:

  • This has been going on a long time. In the Sun piece Bilhar says: “I’ve been here nine years and have never had a visit from the council.”
  • The going rate for the rent seems to be £40 per man per week with 4-5 men per shed making the sheds worth £500-800 per month each to the landlord.
  • The people seem to be overwhelmingly single, working-age men of South Asian and mainly Punjabi origin in the case of Southall.
  • The estimate given for the number of these buildings is 10,000 in the South East of which the highest number are in Southall and Slough with 2,500 in Ealing.
  • The men work at a rate of £50 per day for cash in hand.

It is not hard to work through the economics of this activity. If each shed is worth £500 per month say then rogue landlords are potentially pulling in £60 million a year in rent from these 10,000 sheds, £15 million per annum in Southall alone. You can double or treble this number when you add in people in main buildings sharing rooms. This illegal workforce probably numbers near enough 100,000 across the South East. Previously the police have told me that their working estimate for the Southall component of this workforce is 20,000. At £50 per day these men are potentially earning maybe £10K per annum each and doing a billion Pounds worth of labour at maybe half the cost of legally employed, semi-skilled UK citizens doing the work (where you have to pay Employer’s NI and properly take out Employee’s NI and PAYE).

With the economic crisis this workforce maybe working less often and at lower rates than they were 4-5 years ago but across the South East thousands of dishonest employers are employing these men and potentially denying tens of thousands of UK workers a job.

The council might claim that this is an issue of planning enforcement that it is ill-equipped to deal with due to the law as it is currently framed. But, at base this is a massive, illegal enterprise that has been going on under the noses of the authorities for years. To tackle it you need to follow the money. As soon as we get the employers and landlords in court or being assessed by HMRC the sheds will quickly become home offices, gyms and tool sheds – and stay that way. The men will disappear as soon as the money does.

2 replies on “The economics of sheds with beds”

While the economics argument is of interest the real issue is the political one. To what extent is the Government and Ealing Council minded to work in unison using the so called laws which do not need 24 hours notice before invading suspicious premises?

The Council should publish a 3 monthly results list on their website.

George,

I will cover the politics tomorrow. I wanted to establish the facts, and the huge size of the problem, today.

From your comment it sounds like you have been taken in by the Labour/council line that it is all about enforcement and legal issues. It isn’t. Tomorrow.

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