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The secret of council housing self-financing

On a cold January morning local councillors, tenants’ reps and Stephanie Cryan, Southwark’s lead councillor for housing, are walking around the Longfield estate in South Bermondsey. The estate was built between 1930 and 1950. Next to one of the old blocks are steps down to an air raid shelter, bricked-up when the war ended. There is a big archway built into one of the blocks for coal horses to pass through and the older blocks are only four floors high so the coal man would not have to walk up too far. The kitchens are small because middle class architects thought working class families spent too much time in the kitchen and should spend their time together in the living room.  

The councillors are asking for the communal staircases to be painted. Stephanie runs through the major works needed across the borough. The cost of keeping Southwark’s communal heating systems working, plus decarbonisation is £350m. On top of this is the cost of fire safety works, keeping lifts working and buildings watertight.

Walking around the estate, it is as well-kept as it can be without major investment, with no signs of any vandalism. The active Tenants and Residents Association has successfully campaigned for an outdoor gym and children’s play facilities. It is typical of thousands of estates across the country. If we can understand why residents on the Longfield estate are having to wait for their estate to be decorated we will understand the way council housing is funded, or rather underfunded.

The trail quickly gets tricky. The estate built by the old Bermondsey Borough Council, would have been funded by a mixture of government subsidy and local authority rates (now council tax) and borrowing. Where we are on firm ground is the knowledge that if the rents paid over the years by Longfield estate tenants had been ring-fenced between when the estate was built and today, the debt would have been paid off, the management and maintenance costs covered and there would be a substantial surplus to pay for the extensive modernisation of the estate. Unfortunately for many years the money paid by Longfield estate tenants and the costs of running the estate have been swallowed up by local and national rent and cost pooling. So more investigation is needed.

There is income pooling within the council. Over the years Southwark has had, exactly what Stephanie is describing today, more problematic estates that have demanded more extensive works to keep them liveable.

However the bigger picture is more significant. Historically council tenants’ rent money has leaked away to pay for other national and local commitments, such as keeping the rates bill down. A detailed history is provided by Martin Wicks, Labour Campaign for Council Housing in his blog: 

https://thelabourcampaignforcouncilhousing.files.wordpress.com/2021/02/caseforcancellingchdebt.pdf

In the 1980 Housing Act the notion of a ring-fenced Housing Revenue Account was introduced. The idea was that within each council area tenants’ rents should be spent on paying off historic debts and the management and maintenance of their housing. As Wicks demonstrates, this turned out to be a fiction, with council tenants not on housing benefit paying towards the housing benefits of council tenants who needed support. Also, the Conservative Government imposed the Right to Buy on local councils, which still represents this country’s largest privatisation with 1.8m council homes being sold with an estimated value of £6.4m.

The financing of council housing was under the control of central Government, with councils only finding out what their annual allocation would be three months before the start of the financial year. The effect was that councils who were the custodians of a housing stock with a combined value of billions could only plan a year ahead, when a long-term asset management strategy was needed.

The last Labour Housing Minister, John Healey, listened to campaigners and decided that housing should truly be self-financing, at least in future. The idea of self-financing Housing Revenue Accounts was entirely sound, even in the context of historic injustices. Councils for the first time could implement a proper asset management strategy, over 30 years. Councils had certainty over their income, rents would increase with inflation and they could predict income from leaseholders’ service charges. On the expenditure side, councils could assess their stock and have a long-term plan for major works and management.

The problem with Healey’s sound policy was that the level of debt inherited by councils was determined by the incoming Conservative Government, committed to austerity. Wicks argues that the Treasury manipulated the debt settlement and imposed a debt settlement of £26bm, far higher than the actual debt. The debt was divided, unevenly, between the 169 English councils who still owned council housing. A critical assumption was that at least central Government would let councils get on with the running of their council housing.

The concept of self-financing Housing Revenue Accounts was introduced in the 2011 Localism Act and became operational in April 2012. Since its introduction, the financial situation for council tenants has become significantly worse.  There was no legal protection for local councils written into the Localism Act guaranteeing that the debt would be renegotiated or written-off if circumstances changed. However, critically, Part 7, Chapter 3, clause 169, does allow for the level of debt to be reassessed if there is a ‘change in any matter taken into account when making the original settlement’. Councils do not have a legal right to demand a reconsideration, but the door is open to make a reasoned case.

The primary assumption that underpins self-financing is that there would be certainty over income and that rents would increase at least with inflation each year.  However for wider political reasons, George Osborne imposed a 1% per year rent cut for four years, wrecking newly written Housing Revenue Account business plans.

The Grenfell tragedy has raised the profile of fire and building safety, with legislation on its way requiring councils to undertake billions of pounds of work that no one envisaged when preparing their business plans. Also, not written into business plans is the steep acceleration on spending required to decarbonise council housing as a response to the climate emergency.

Councils are now committed to tackling damp and have accepted that a tenant’s lifestyle cannot be used as a reason to avoid responsibility. Damp is an issue for some tenants on the Longfield estate, as the estate is single brick, rather than the more modern cavity wall, with insulation.

Some councils experienced a significant dip in rent and leaseholder income during the pandemic, particularly as there was a moratorium on taking legal action against tenants in arrears. This problem will outlast lockdown, as the county court system has collapsed, meaning that legal action to recover outstanding debts will take years.

It was optimistically hoped that Housing Revenue Account surpluses could contribute towards the cost of building new council homes. However, building costs have spiralled. There is also an equity issue about whether council tenants, on lower than the local average income, should be paying for tackling the societal problems of climate change and homelessness. Even if the outstanding debt disappears councils will still need significant government capital funding to start to address 40 years of underfunding.

Unsurprisingly, the self-financing settlement is imploding.  Wicks reports that the council housing debt bill was virtually unchanged at £25.95bn in 2019/20. One part of the explanation is that councils have to start by paying off the interest before they can start to reduce the principal.  Additionally there is the irony of councils saddled with debt being forced to borrow more to meet their commitments. At least one council with a high starting debt and huge safety requirements has agreed the deferment of debt payments with the Government.

There is the possibility that the historic debt on council housing will become a version of the student loan debt, whereby the Government accepts that the debt cannot be paid back, but it stays on the balance sheet as an asset. Whilst delaying debt repayments provides short-term relief, the problem with this approach is that councils will need to hold sufficient reserves in their Housing Revenue Accounts to pay the government the back-payments if they are demanded. This means that council housing will continue to be denied the investment it needs.

What our investigation has revealed is that residents on the Longfield estate, along with most other tenants are not getting the modernization that council tenants collectively have paid for. This issue is disguised because in much of the country council rents are substantially below private rents. Council rents are sub-market, but this is because they much more closely reflect the actual cost of providing and managing housing. Market rents are high because a substantial profit is being made.

Wicks was instrumental in the drafting of the housing motion passed at the Labour Party’s 2021 conference. Attention has been focused on the commitment to build 100,000 new council houses per year. However another important clause in the motion referred to the need to maintain the council housing we already have and specifically to ‘review council housing debt to address the underfunding of the Housing Revenue Account’.

Wicks makes the case that the ‘bogus debt’ should be written off. This is not as outlandish as it may seem. To put the £26bn debt into context, housing expert, Anna Minton, writing in the Financial times on 21.1.22, estimates that the cost of quantitative easing in the 7 years after 2008 was £445bn and the cost of emergency pandemic relief was £455bn. Chancellor Rishi Sunak is estimated to have written off £4.3bn furlough and other business relief payments that were fraudulently claimed. Writing off a bogus debt of £26bn no longer seems such a big ask.

Whilst council housing financing remains so opaque and unfair, the residents of Longfield estate know that they are getting a bad deal, without knowing why.

Andy Bates
Andy Bates

Andy Bates is an Executive Member of the Labour Housing Group.

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The cost of living is rising, so why won’t we talk about housing?

This week saw the cost of living crisis begin to bite. With the energy price cap increasing by £693 from April and the Bank of England predicting that inflation will peak at over 7 per cent, households will face huge financial pressures in the months to come. Given the situation, why is that no one in Westminster wants to talk about the biggest squeeze on the cost of living, housing?

The housing market has indicated for some time that the cost of living was set to rocket. But politicians and media commentators in Westminster have largely ignored the signs. In fact, you might even be led to believe by the way in which rising house prices are reported in the media that a surging housing market is good for the economy. In the past year alone, housing costs have increased significantly. As well as asking prices for homes being sold on the open market rising, private rents have also surged significantly across the country. The trend looks set to continue this year, with social rents also set to rise by up to 4.1 per cent in April.

Burdensome rents were once considered unique to London and the South East. Now, regions outside London and the South East are recording the biggest increases in rental growth. Major northern cities like Manchester and Leeds are not far behind London’s rental growth rebound. While renters in London continue to spend more of their income on rent than others, there are worrying signs that more people in more places will begin to spend over a third of their income on rent alone. In terms of those looking to buy their own home, the picture isn’t much better, with annual house prices rising by over 9 per cent.

Given that housing costs are the biggest single expense for most households, you would think as the cost of living crisis bites, a plan to control house prices and stabilise rents would be top of the political agenda. Instead, runaway housing costs are completely absent from the debate in Westminster.

Politicians have taken for granted that a surging housing market is seen as a measure of a booming economy, but this increasingly isn’t true. Very few people benefit from rising house prices. According to the English Housing Survey, roughly one third of people own their own home outright. Another third of people have a mortgage. This means that surging prices require further borrowing to upsize, with any equity gains only really being realised when a household downsizes. For the other third of the population who rent privately or via social housing, rising prices simply make homeownership an even more distant prospect.

Given that for that majority of the population, housing is the single biggest squeeze on their income, it’s about time politicians started talking about housing in relation to the current cost of living crisis. In terms of tackling it, politicians need to come together to challenge the prevailing narrative on housing. Instead of celebrating surging house prices, they need call it what it is, house price inflation. Being honest with the public and explaining exactly how the country’s runaway housing market will impact them should be a political imperative. This would be a step in the right direction and would help people understand that rampant house prices are unlikely to benefit them or their families in the long-run.

As part of this new narrative, it’s also crucial we finally acknowledge the relationship between high house prices and the low supply of new homes. There’s both an absolute shortage of homes and a distribution problem. This means we are neither building enough homes in England, and we do not have the right policies to create more sustainable credit conditions to ensure fair access to housing for people on all incomes. 

The timing is ripe for us to reframe how we talk about housing in this country. The current moment must be used as an opportunity to forge a new progressive vision for housing focussed on supply, quality and affordability. Our politicians must be brave enough to realise this vision, both to tackle the immediate crisis and secure long-term prosperity and housing stability for millions of people across the country.

J<strong>onathan Webb</strong>
Jonathan Webb

Jonathan Webb is a Senior Research Fellow at IPPR North.

He tweets @jrkwebb

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Let’s Improve Planning, Let’s Abolish It!

I’m the managing director of Positive Homes. Since 2016 we’ve developed five little sites – the last of which won ‘Development of the Year’ at the 2021 Offsite Awards. Everything we’ve done is one version or another of ‘modern methods of construction’ (MMC), and highly energy efficient.

So Red Brick said, how about 1,200 words on what it’s like to be a (new-ish) small housing developer. Well, blimey. Where to start?

How about small developers built a quarter of new homes in the late 1980s. Now it’s 1 in 12. And SME developers always have higher per unit costs. Even worse: At least 99% of all the new homes built since at least 2008 are obsolete the moment their buyers first step over the threshold. That’s because only 1% of new homes are ‘A’ rated for energy efficiency (including all of ours).And ‘A’ is the least they need to be, to avoid a hefty retrofit bill to make homes ‘net zero’ carbon.

Both of these facts are the inevitable consequence of a dysfunctional planning system, that has created an oligopoly of large companies. Hardly a surprise that 94% of small developers say planning is their biggest problem. Why? Because the system makes something not scarce at all (land) into something beyond valuable, by restricting its supply.

Some more facts: According to Savills, we consistently lose around 26,000 hectares of agricultural land a year. Which sounds like a lot – except we have more than 18 MILLION hectares of farmland, and only 6% of the country is actually built on. So we aren’t running out of land any time in, oh, the next several centuries!

Land use is a choice. But it’s a choice we aren’t allowed to make as a society, because it’s been hived off to a group of anonymous, over-powerful ‘planners’. The public are treated like patronised children, being told what’s good for them. Hardly surprising then, that people act accordingly and kick off when it feels like things are being done to them, not with them. There are people from across the political spectrum fighting to stop new homes. We call them NIMBYs, rather patronisingly. But surely these are just reasonable people not liking the concreting over of the precious countryside?

What a mess. So now for the seemingly counterintuitive leap: The best way to get better results – that benefit the whole community – is to abolish the planning system as we know it. Huh?

We need more affordable homes (of all tenures). We need better built, more energy efficient homes. We need better use of existing buildings. We need a resurgence of smaller developers to bring choice to the market and drive innovation. And we need to protect and enhance the environment.

What prevents that happening? Land use restrictions. By preventing the productive use of something we have in vast abundance, we do nothing other than make our society poorer (house price inflation is a mirage). Instead, we would rather blame the big builders for being ‘too successful’, than acknowledge how the current planning system distorts the market. If land is ‘scarce’ and therefore expensive, there’s obviously less money for environmental improvements/ bigger rooms/ better built homes.

So let’s try a different tack: Let’s abolish planning. (Specifically, the post war planning system, and all its evolutions – yes, including the green belt). But wouldn’t scrapping the planning system produce some sort of mass free for all? Actually no –

because there are numerous essential protections and provisions in place that wouldn’t disappear.

First, you need some guiding principles. So how about the Protocol to the Convention for the Protection of Human Rights and Fundamental Freedoms, Article 1, Protection of Property (humour me)*:

“Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.”

Or, in other words if it’s my land, I should have the right to do whatever I want with it – the ‘peaceful enjoyment’ of my property, providing it doesn’t affect my neighbours’ ‘peaceful enjoyment’ of their property.

From that, you can set (the smallest necessary number of) questions which developers need to answer. And if the answers are right, then there’s nothing to stop you getting building.   Or is there? Actually there’s rather a lot. We need answers to questions like:

  1. Could the highway network handle the extra traffic?
  2. Can the local electricity supply cope with the extra demand? (Especially with electric cars and heat pumps coming in etc)
  3. Does the land flood? Could this be overcome?
  4. Can the water supply and sewer systems cope?
  5. Will every home be ‘net zero’ carbon?
  6. What about local school places? The local GP? Biodiversity?

But hang on – it can’t just be as simple and easy as that can it? If I can successfully answer everything positively, then I can just build? No site identification in the takes-forever-local-plan? No months and years spent on a subsequent, expensive application process? Yes, it really is that simple, with one condition – that additional question I mentioned: 

7. ‘Does the scheme meet the local design code?’

One of former Housing Minister Robert Jenrick’s most interesting reform proposal of 2021 was the idea of local codes, written by residents to recognise what makes their communities great. New housing boss Michael Gove has taken this on by proposing street by street design code referendums.For me, these are a logical extension of neighbourhood plans which, if done right, encourage the voices of the vast majority who don’t get involved in the current system.

Where I live, our village plan process involved a huge number of local people making positive contributions. That included identifying potential sites, along with the type and quality of homes that should be built there. There are now 700 homes under construction, and all the developers embraced the village’s requirements in their designs with minimum fuss.

Is it really so wrong so say we should trust local people to know what’s best for their communities? Most people are capable of weighing up competing priorities to arrive at a sensible, democratic outcome that benefits everyone. Or would we rather continue the ‘who shouts the loudest’ moanathon as the balance to the anonymous planners, who think they know best for your community?

Instead, let’s replace the centralised planning system with….. you and me: Human beings who want the best for their children and their community. Hopelessly optimistic?

Well it happened in Tottenham just recently. The council’s role? To facilitate the development of a design code that local people wanted and needed – and to then get out of the way and let them get on with it. Why wouldn’t you want that where you live too?

(PS: I started writing this when Housing Minister Robert Jenrick was proposing some highly sensible reforms to the planning process. I finished it with Michael Gove fundamentally abandoning the zoning model – while the House of Lords says we need action to support smaller developers and build more homes. And we wonder why nothing ever gets done around here!)

<strong><span class="has-inline-color has-accent-color">Martin Valentine</span></strong>
Martin Valentine

Martin is the Managing Director of Positive Homes.

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Let’s take action and act together – the Social Housing Tenants’ Climate Jury

In recent years, many policy-makers have recognised that people need to be put at the heart of decision-making on long-term challenges like social care and climate change. At local, regional and national level, citizens’ juries and assemblies have been instigated to enable ordinary citizens to deliberate and reach conclusions together. Here in the North of England, a first-of-its-kind Social Housing Tenants’ Climate Jury has recently made 19 recommendations to the social housing sector. So why was a Jury needed, what has the process involved, and what have tenants recommended?

A quarter of the North’s carbon emissions come from our existing homes. If we’re to meet the challenge of net zero, that needs to change. That means upgrading homes to make them as energy efficient as possible and transitioning home heating to renewable sources. It’s a huge challenge – we estimate over 4million homes across the North will need energy efficiency works by 2035.

That’s 4million homes, personal spaces, that will require change: the prospect of potentially disruptive works that might mean clearing your loft, having scaffolding around your house, and needing to redecorate afterwards. However considerate the tradespeople are, that’s a prospect most of us wouldn’t relish.

The Northern Housing Consortium’s members – councils, housing associations and ALMOs across the North – told us that the fact that ‘these are people’s homes’ was top of their minds when considering retrofit – they saw meeting the challenge of net zero as much as a tenant engagement issue as an asset management issue.

So we came to the conclusion that tackling climate change in the North’s homes and neighbourhoods needed to start by listening to the people who live in those homes and neighbourhoods – and the Social Housing Tenants’ Climate Jury was born.

Five of our members – First Choice Homes Oldham, Karbon Homes, Salix Homes, Thirteen and Yorkshire Housing – worked with the NHC to bring deliberative democracy to the social housing sector. Shared Future CIC brought their extensive experience of citizens juries and assemblies, and we established an expert Oversight Panel to ensure the independence and integrity of the process.

7,500 tenants across the North were invited to get involved, and from the expressions of interest received, a Jury of 30 tenants was selected, using random stratified selection to ensure they reflected the diversity of the population of tenants across the North, and a range of attitudes to climate change.

The Jury met for 30 hours over the Summer, taking evidence from over 20 expert commentators, to answer the question set for them by the Oversight Panel – ‘How can tenants, social housing providers and others work together to tackle climate change in our homes and neighbourhoods?’  Commentators included academics, technical experts, fellow tenants, housing association representatives and a Government minister.

This was an intensive process. The Jury gave up their time to go on this journey together, and reflected that they had:

‘Brought together different levels of knowledge, experience and different opinions to create shared understanding and shared solutions in the form of recommendations that we have all worked hard to create and agree upon’.

The recommendations are comprehensive, and cover four themes:

  • Recommendations on retrofit technology
  • Recommendations on costs and managing disruptions to tenants
  • Education, raising awareness, communications and housing association collaboration
  • Tackling climate change in our neighbourhoods.

On technology, tenants concluded that landlords needed to take into account the urgency of climate change: ‘We are running out of time’. The jury wanted landlords to speed things up, whilst keeping an open mind about how technology might develop in future. The quality of installation was very important, and tenants wanted to see the best quality of technology used, with landlords working to ‘optimum standards’, and independent inspection of completed work. Residents recognised that ‘new skills are needed’ and suggested that housing associations should be proactive and look to train and employ their own skilled workforce.

Throughout the Jury’s deliberations, costs were a real concern. Tenants wanted assurances that the huge cost of retrofit wouldn’t push rents up; were keen to ensure that retrofit works delivered on the promise of lower energy bills, and that residents weren’t left footing bills for redecoration. They made practical suggestions – for example, the Jury was concerned that residents might experience fuel poverty as they adjusted to the most efficiency way to use new heating technologies and suggested a pot of money that could help people who found themselves in this situation.

Disruption was a real worry, and the Jury made practical suggestions to minimise this, calling for clear and timely information from their landlords, with named regular contacts who could work with them throughout the process. Tenants asked for clarity about the input that would be required from them – stressing that they can’t take time off work without notice: ‘Full disclosure from both sides, on all matters, will help efficiency, lessen delays and be most cost-effective.’

It was clear that Jurors had learnt lots through the process, and they were keen that awareness was raised with everyone in their communities – so that residents had ‘the information to be able to make their own decisions’. The Jury stressed the importance of good communication, sharing progress and being open about delays and problems. They wanted to see housing associations working together and with councils and other agencies.

Jurors were clear that tackling climate change didn’t end at the front door and made a series of recommendations around the use of green spaces, highlighting the potential for growing food, for collaborating with local businesses like supermarkets; and for showcasing action taken by tenants

This was a hugely inspiring process – and it’s difficult to summarise the breadth of insights and wisdom that the Jury process elicited. Read the Jury’s recommendations, and take the Jury’s advice: ‘Go forward with an open mind, listen to what we have to say and above all – let’s take action and act together’.

<strong><span class="has-inline-color has-accent-color">Brian Robson</span></strong>
Brian Robson

Brian is the Executive Director (Policy and Public Affairs), Northern Housing Consortium.

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Our failure to plan for rural housing development

Rural housing is one of the most pressing, and contentious, issues facing this country. If Labour is to stage a rural revival then we must confront this issue head on.

In my home constituency of North East Somerset, and across rural England, there is a great distrust around the idea of house building. It is common for people to feel that residents have little to no say over when and where new housing is built and that housing developers are unaccountable. These concerns are not misplaced. For too long we have seen housing developments simply bolted on to towns and villages with little to no thought about the impact these new developments have.

When housing developments are built without infrastructure such as shops, restaurants and healthcare facilities it puts pressure on the existing infrastructure in a town, particularly road infrastructure. Most towns and villages in North East Somerset are simply not equipped to deal with increases in traffic, often due to road size and layout.

When infrastructure is already crumbling under 11 years of Tory misrule these strains can be devastating. But this lack of infrastructure is equally damaging to new residents, a lack of shopping or healthcare provision nearby harms the ability to forge a community spirit in new developments. The Covid-19 pandemic has demonstrated clearly the dangers of isolation and it is incumbent on the Labour Party that our housing strategy acknowledges this.

As a consequence of austerity, rural communities have seen much of their infrastructure disappear. With police stations, fire stations and GP’s being closed in small towns and villages and often converted in to flats. This has increased the distrust around housing developments for many people. But it also contributes to the poor conditions of new housing: as a parish councillor who sits on the planning committee I have seen many examples where buildings are converted in to flats or flats are built.

Often, these flats do not have an appropriate number of parking spaces, which further contributes to the weakening of road infrastructure. If you live in a small town with roads designed in the late 19th and early 20th century, and there are cars parked on the road due to a lack of parking spaces, it can become very difficult to drive around.

We must also face up to the climate crisis. It is not possible, or desirable, to continually build on every field in perpetuity given the environmental consequences. Our green spaces must be protected, not just for the environmental benefit – and biodiversity benefits they provide, but for the mental health benefits the existence of these spaces provide for the people who live near them.

When we do build it must be with a with a long term plan in mind, rather than for the short term financial interests of housing developers. This means, building homes that can last for 100 years – and – envisioning what the community will look like at that point too, including its green spaces. A climate combating housing strategy must also include retrofitting old houses, as we’ve seen championed by our Labour Metro Mayor Dan Norris.

Despite this, there is a need for more housing in North East Somerset. In the towns and villages of my constituency there has long been a strong community spirit. However many people are concerned that children and young people are unable to afford housing in the communities they grew up in – and are forced to move to Bristol and Bath (further contributing to the housing issues faced in those cities) – never to return.

The only way to combat this loss of community, is of course to build more housing in these areas. But this house building must be accompanied by a strategy to assist people in renting and buying their own houses at a reasonable rate. Otherwise for many people the dream of living in the town they grew up in is unreachable.

I believe firmly that there is public support for building the houses we need to combat the crisis we face. But I also believe that more work needs to be done to gain the full confidence of people that under Labour housing will be a benefit to everyone.

<strong><span class="has-inline-color has-accent-color">Jonathan Wallcroft</span></strong>
Jonathan Wallcroft

Jonathan Wallcroft is a parish councillor in North East Somerset as well as the Secretary of the South West Branch of the Labour Housing Group and a steering group member of Labour Coast & Country. 

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Community power: empowering councils and building more housing

Councils are often unfairly criticised. They have many difficult responsibilities, and they are hamstrung by Treasury rules on financing. The Treasury often sees tax revenues as its own money, when nearly every penny was generated, in one way or another, from activities by citizens within the area of a particular local authority.

That local authority must maintain the roads, deal with the schools, provide social care, and furnish a range of local services – not forgetting, of course, the bins. Voters wouldn’t let the council forget the bins, even if it wanted to.

New Local’s new report highlights many successes where giving local communities more power and resources led to better outcomes for their citizens. We make the case for a community-powered approach to housing and planning, rather than one imposed from above by national government.

There are plenty of real-world examples where councils and communities working together generated far better outcomes than would otherwise be possible. In Halton, near Lancaster, a community built 41 homes for themselves as co-housing, all at Passivhaus standards to help get to net zero. Housing cooperatives like that are a stunning 18% of all apartments in Zurich, Switzerland.

In Switzerland local governments have far more autonomy. When a council approves more housing, it reaps the tax benefits. That makes locals far more supportive. Similarly, when a German town hosts a factory, it may see huge benefits from those profits.

In this country, councils have far less power. Trapped between strict limits on revenues and ever higher expectations for delivery, many councillors and officials are deeply frustrated. Their residents want a decent place to live, with good schools for their children and good care for those who need it. Too often, councils find themselves tied in knots by Treasury rules that only an accountant could love. 

We argue that this country has not yet learned the lessons of Nobel laureate Elinor Ostrom. She showed how, given the power and the resources to do so, communities can often achieve much more than the central government. We have recently seen the backlash against top-down methods like permitted development. Allowing more bottom-up processes to add housing could be a much more popular way forward.

When elected members take political flak to allocate appropriate sites for housing, they are disheartened if those sites sit unused for years. They have little power to ensure faster build out. Our report argues  that councils should be able to levy an annual tax on the value of allocated but undeveloped portions of large sites, up to  half a percent of value a year. That would help to mitigate the damage caused to the surroundings by blank hoardings and derelict sites, apparently abandoned. It would also give locals, who might be frustrated that builders ask for more sites without using the ones they have already secured, more faith in the certainty and control in the planning system.

We also propose methods for  councils to let communities take the lead on urban infill to use waste land, where appropriate and subject to strict rules to protect others and the environment. In addition to the ‘street votes’ idea to allow each street to set its own design rules to add more housing, endorsed recently by a number of housing associations and housing campaigners, we point to the wasted backlands sites in some 20th-century developments: derelict former garages that are now too small for today’s cars, served by dead alleys that have become little more than refuges for drug dealers or convenient access routes for burglars. 

We suggest that, where the surrounding residents agree, they should be allowed to take the lead on setting out what additional housing can be added, for example by replacing those derelict garages with affordable housing for members of the community. Those new homes will increase housing density and help to make better public transport more viable, which will help to reduce carbon emissions and enable healthier, active travel.

The Treasury has failed to ensure that local government here, like local government in most other countries, has powers to provide, improve, and reap the benefits. In fact, the Treasury has deliberately gone in the other direction. By some measures, we have the most centralised governance  in the OECD. We also have among the least affordable housing. That is not a coincidence. It is partly cause and effect.

There are many brilliant council officers and members across the country doing their level best for their communities. If we can give them the power to enable the right decisions and to capture the benefits for their communities, we can create more affordable housing, fairer opportunities and help the environment too. 

Housing Beyond Markets and State can be downloaded here. 

<strong><span class="has-inline-color has-accent-color">John Myers</span></strong>
John Myers

John Myers is a housing campaigner with YIMBY Alliance, which campaigns for more housing and better places with the support of local communities.

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Declaring a housing emergency

A model motion for CLPs and unions

The housing composite motion which was passed at Labour’s recent conference did not just focus on Labour policy for a future Manifesto. It called on the Party to “demand that the Government takes action now to end the housing crisis” by a series of measures listed (see How Labour must hold the Government’s feet to the fire on the housing crisis). These included a large scale council house building programme and ending Right to Buy.

The Labour Campaign for Council Housing believes that conference vote should be used as a springboard for developing campaigning activity. We have drawn up a model resolution (see below) for CLPs/union branches which

  • Calls on Labour at the national level to implement the composite resolution as a matter of urgency and
  • Proposes that Labour council groups, be they in power or opposition, put a motion to their council declaring a housing emergency. Councils will therefore publicly call for large scale council house building, ending right to buy etc.

The idea of councils declaring a housing emergency came from our members in Cornwall where the crisis is particularly acute as a result of the second homes/holiday homes phenomenon. We think this is an idea which Labour and trade union members should pick up on. Councils should declare a housing emergency as a springboard for campaigning to pressure the Government to fund the building of social rent homes, end RTB and to adequately fund existing homes.

Since 2010 the number of council homes in England has declined by 203,000. There has been an increase in building by housing associations over that period but they have built more and more homes for sale/shared ownership and the social housing they have built has been largely at so-called affordable rent.

Anybody who is renting is facing a ‘perfect storm’ of increased gas prices, food price inflation (foodbanks are bracing themselves for a big increase of people approaching them), the loss of the extra £20 Universal credit and so on. We can expect rent arrears to rise. Social tenants face five years of above inflation increases courtesy of Government policy and London housing associations have even come up with the mad idea of above inflation rent increases for 30 years.

There are signs of a big increase in numbers on the housing waiting lists. My own local authority, Swindon, has seen the households on its list increase by 33% in the last year alone. The Local Government Association has warned that numbers on the list could double over the next year owing to the impact of the pandemic, the end of the furlough scheme, and increasing evictions. Councils are paying a fortune to place homeless people in private accommodation because of the acute shortage of council homes.

The ratio of earnings to prices for median market homes in England is 7.65 times median earnings and 6.91 times lower quartile earnings for lower quartile homes. For new builds there has been an extraordinary increase to 9.60 times median earnings and 9.77 times lower quartile. The average price for median new build in England increased from £190,000 in 2012 to £304,000 in September 2020, the latest available statistics.

Even lower quartile homes increased over that period from £142,995 to £223,995. Promises to turn generation rent into generation home ownership are ridiculous at these prices. Housing is not a competitive market. The big builders are not going to build on a large enough scale for prices to fall since that would erode their profit margins. They have never built for social need.

According to a recent Yougov poll 61% of Tory MPs are in favour of the Government funding more social housing. The Local Government Association, with a Tory majority has said that there can be no resolution of the housing crisis without councils once again being large scale builders. They have called for the Government to fund 100,000 social rent homes a year.

Yet there is a gulf between the word and the deed. They have relied on private lobbying which will not shift the Government. To shift them mass pressure is required, combining councillors with tenant groups, campaigns like Shelter and those directly suffering the consequences of the housing crisis. The pandemic has given us a sharp reminder of the connection between housing and health. Covid has had a far greater impact in poorer and over-crowded homes.

“Generation Rent” will only be liberated from its current circumstances, being forced to live in the private rented sector, with high rents and often poor living conditions, living at home with parents, or sofa surfing, by the building of social rent homes on a large scale.

We are asking branches/CLPs and union branches to move our resolution and use it as a means of promoting campaigning activity aimed at building pressure on this Government of U-turns to make another one on funding of council housing, existing and new build.

Model resolution

“This CLP welcomes the housing composite resolution passed at the Labour Party conference which included the main demands of the Labour Campaign for Council Housing. It called on the Labour Party to “demand that the Government takes action now to end the housing crisis by”

➢ Fully funding councils to deliver the building of 150,000 social rent homes each year, including 100,000 council homes

➢ Ending Right to Buy

➢ Reviewing council housing debt to address underfunding of housing revenue accounts

➢ Fund the retro-fitting of council housing to cut greenhouse gases, provide jobs and promote a shift from outsourcing to Direct Labour Organisations

➢ Ending Section 21 (no fault) evictions

It also said: “Conference also calls upon Labour to place these actions at the centre of its housing policies.”

The passing of the composite resolution needs to be a launching pad for campaigning activity. We therefore

➢ Call on the Party nationally to implement the composite resolution as a matter of urgency.

➢ Call on our Labour Group to propose that our council declares a housing emergency to campaign for those key demands. This may include lobbying local MPs, the Local Government Association and other organisations, working with tenant groups and trades unions.

The CLP agrees to affiliate to the Labour Campaign for Council Housing.”

<strong><span class="has-inline-color has-accent-color">Martin Wicks</span></strong>
Martin Wicks

Secretary, Labour Campaign for Council Housing.

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Not just in November

Remembrance Day gives us pause to reflect on the contributions made by those who have served or currently serve in our armed forces. It is more than anything, an opportunity to remember those who sacrificed everything for our freedom.

It is important we also think about how we, as a country, want to support our veterans not just in November, but all year round.

The Coronavirus pandemic has shown that our armed forces keep us safe in so many more ways than we can even imagine. It was the armed forces that were deployed to test people at the start of the crisis and who ensured that vital supply chains kept running.  Even more recently, the army will be drafted in to help support with deliveries during the fuel crisis.

Given how each of us benefits from the safety our armed forces community provides, it should be seen as a responsibility and a duty of all of us to support the armed forces in any way that we can.

In the UK today, there are around 320,000 people without a home. Of those without a home, the Royal British Legion claim that 6,000 are men and women who served this country as a member of our armed forces.

Earlier this year, we hosted a fringe event at Labour Party Conference with SME4Labour on how we can tackle homelessness amongst veterans. At that event, the Labour Housing Group highlighted that the pandemic has shown us exactly what is wrong with our housing market.

At the same event, Sarah Church, former armed forces personnel, spoke about how many veterans feel a shock to the system when leaving the army after serving for decades. What is needed, she said, is support to help with the military to civilian transition. It is because of this that Community is committed to campaigning year-round to support our armed forces.

As part of our campaigning, Community has ran, walked and cycled to raise money for a local charity to help end veteran homelessness and between us we raised over £6,000.

We have created a bespoke learning and training offer for veterans and have been setting up bespoke learning plans, and our members up and down the country have been collecting warm winter clothes, toiletries and other necessities to support veterans. We offer skills courses such as CV writing exclusively to veterans, to support them in the military/civilian transition and equip them with skills needed for everyday life.

Earlier this year, Community resigned the Armed Forces Covenant to reaffirm our commitment to the armed forces community.

We want to ensure that those members of the armed forces community who are currently employed by us or will be in the future have the conditions and working environment that suits their needs and their service.

Another one of our renewed commitments is to encourage those employers where Community is the recognised union to also take the step to sign the Armed Forces Covenant.

As a first proactive step to standing true to that commitment, we have written to every employer we have a good relationship with and asked them to sign up to the Armed Forces Covenant.

Community also intend, as part of our campaign to end veteran homelessness, to continue to work alongside the armed forces to secure better protections and extended rights for those currently serving or who have served.

As part of a broad coalition of organisations and individuals working together, we will ensure that no one who has served our country ends up on our streets, and instead is offered safety and protection and for those who want it – good quality, highly skilled employment and the safety net that provides in every aspect of life.

Community will be continuing to work with a wide range of organisations and will make supporting our veterans part of the core of our campaigning work. We pledge to support our veterans, not just in November, but all year round.

<strong><span class="has-inline-color has-accent-color">Melantha Chittenden</span></strong>
Melantha Chittenden

Head of Communications and Media at Community Union.

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How scrolling through ‘Nextdoor’ made me a YIMBY

A few weeks ago, I was scrolling through Nextdoor, an app and social media platform for neighbours to connect and share information based on their location. For those unfamiliar with this, Nextdoor is probably best described as Facebook residents’ groups gone wild. Not my favourite place to be on the internet, but I’ve only recently moved into my current area of London and I’m nosy.

There was the usual fare. A mixture of missing animals, requests for decorators, and the occasional whinge about closed roads. I usually scroll past without a second thought. However, on this occasion I saw something that gave me pause for thought. A headline in bold and all caps read:

“6 STOREY BUILDING WITH NO PARKING MUSWELL HILL RD AT JUNCTION WITH WOODSIDE AVE”

No parking? Oh the horror!

I can’t say it was sympathy that made me pay attention.

I read on. It claimed the development would cause a “parking crisis” if allowed to go ahead. Fourteen car parking spaces would be lost, it went on to state. Furthermore, the planned buildings were “atrocious” and there was the classic objection of being “out of keeping with the area”.

And then, the final nail in the coffin for me was a comment that read “it is for social housing, so a good cause, but current plans ignore local impact”. The author might as well have literally used the words:

“Not In My Backyard’ or NIMBY for short.

It was this bit that really enraged me. I work as a Caseworker for two Members of Parliament in two London Boroughs. My job is trying to help people who are so desperate, who have tried every other option, that their last resort is to seek help from their MP. One of the biggest and most frequent issues by far is housing.

Now, I have many friends who know a lot about housing policy. I know people who look at the data and statistics in great detail, and who engage in debates with people about why most people my age will never be able to own property. I am not one of these experts. I have no idea about the detail.

But what I do know is that we simply do not have enough affordable places to live. I have dealt with too many people who are living in terrible conditions, properties in serious disrepair. I am sick and tired of telling people that they will have to use their living room as a bedroom, because they simply don’t have as great a housing ‘need’ as other people.

Every single person deserves a safe, warm and comfortable place to live. That should not be a controversial statement. Yet we’ve reached such a shortage that local authorities are put in the terrible position of having to tell families that there’s a waiting time of over 15 years for a property with enough bedrooms for their children.

Of course, unsuitable accommodation is only one issue. How can children focus on their schoolwork when they have no quiet place to study; when the block that they live in is a hotspot for anti-social behaviour because the front door is regularly damaged? How can anyone build a life in one place when their ceiling suddenly caves in and they have to be moved to temporary accommodation on the other side of the city?

Housing is more than just a place to sleep. It’s a place to live, a base from which to take advantage of opportunities. It should not be a luxury but sometimes, especially doing the work I do, it feels like it is.

It is for these reasons why I found it so enraging to see this kind of NIMBYism on my local Nextdoor social network. Social housing is great. But…not here. My car goes here.

I had a look at the plans for myself. 41 new properties, 32 of them let at social rent levels. 32! I couldn’t believe that so many new council properties might be built only an 8-minute drive from my house. The design didn’t look too bad, certainly not as jarring, and different as some blocks I’ve seen. Nor what I would describe as out of keeping with the area.

As for the parking, the plans included five wheelchair-accessible spaces. That was my last possible worry alleviated. I went straight to my council’s planning website, hoping I wasn’t too late, and wrote a comment informing the authority I support application “HGY/2021/2727”.

I’d never done this before, engaged with the planning process. As a 23-year-old renter, I’d never stayed long enough in one place to feel part of a community, the kind of person who should comment on these things. But this time I did.

To be honest, and without any research to back this up, I have to say that the entire process felt loaded towards objections. I remember being given several easy options to click for issues with the plans, but not very much at all in favour.

I wrote something short about the need for good social housing, with a reminder about the need to reduce private car journeys for good measure and submitted. Mine was the first comment in favour.

After a few YIMBYs (‘Yes In My Back Yard’ – those in the pro-housing movement in contrast and in opposition to the NIMBYs) I know spread the word, the application now sits with five supporting comments. And over 170 objections. Now, I’d like to think that more than five people in my borough would be supportive of this scheme, but the planning process does not seem set up to hear from them. Planning is too often associated with a ‘bad’ thing that must be fought, rather than a way for local residents to express what they want in their area.

At the time of writing, no decision has been made on this development. I haven’t got my hopes up, if I’m honest. NIMBYs are very well organised, and some political parties feed the beast as a way to win support. But if I’ve learned anything from this experience, it’s that I need to speak up more. I’ll be checking the Major Developments of my council’s planning website more often from now on. And hope other supporters of new housing do the same.

<strong><span class="has-inline-color has-accent-color">Hollie Wickens</span></strong>
Hollie Wickens

Hollie is on the Executive Committee of the Young Fabians and currently works as a case worker for Wes Streeting MP and Sarah Jones MP.

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 SLL: Proposals for Housing Law Reform

The Society of Labour Lawyers (SLL) has produced a think-piece Proposals for housing law reform, containing ideas from the SLL’s housing law sub-group. Our focus is on detailed proposals for legal reform. We hope that it complements Labour Housing Group’s publication The Missing Solution: Council Housebuilding for 21st century.

SLL’ s Proposals can be read here:

https://societyoflabourlawyers.org.uk/2021/09/21/out-now-proposal-for-housing-law-reform/ .

In order to help councils purchase land and embark on significant council house building, we suggest that the Land Compensation Act (LCA) 1961 should be amended. Land could be bought at current value without additional ‘hope value’ (the ‘hope’ of estimated increased value if residential planning permission were to be granted to the landowner).

The current Empty Dwelling Management Order powers should be strengthened, so that empty properties in private ownership would be transferred to public ownership after they had stood empty for a certain number of years (one or two) (see Housing Act 2004).

Council tenancies should always be granted for life, so the power to grant flexible tenancies (fixed-term tenancies for a minimum period of two years) in the Localism Act 2011 should be repealed (not least because the Government has already announced its intention not to implement the subsequent legislation requiring flexible tenancies).

Right to Buy should be abolished in England, as it has been in Scotland and Wales, or at least very severely restricted. We call for substantial benefit reform by repealing the Bedroom Tax and benefit cap, linking Local Housing Allowance to the retail price index, Discretionary Housing Payments funded in full by government, and ending the two-child limit.

The SLL has been working with Labour’s front bench on building safety proposals. We propose that a Labour Government should follow Australia’s lead on fire safety. That would involve conducting a full audit of all residential multi-occupancy buildings regarding fire safety, assessing which buildings are the highest risk and need to be prioritised for remediation without delay, and funding remediation works in full, without reclaiming the costs from leaseholders.

Leaseholders would assign the right to sue those responsible for the defects to Government. The Limitation Act 1980 needs amendment to allow so that developers can be sued for building defects installed earlier than six years previously (the current position) or 15 years (as proposed in the Government’s Building Safety Bill).

We call for legislation so that those responsible for installing defective products can be traced, through a sometimes complex network of dissolved companies. Some costs could also be recouped by a levy on developers and product manufacturers.

We call for reforms in the area of home ownership, including a holistic review of housing costs so that home ownership becomes more affordable. The contributors support the Law Commission’s proposals to reform leasehold and make commonhold much more widely available.Specifically, planning legislation should provide that consent for new flat building would carry a legal presumption that units (including communal facilities and shops in the residential development) are held under a commonhold agreement, not leasehold.

We also call for wealth-based property taxation, through progressive council tax, and penalising owners of vacant properties (with the aim of those properties either being transferred to the public sector or available for private letting). We support London Mayor Sadiq Khan’s call for councils to buy back homes that were bought under right to buy.

In relation to the private rented sector, the SLL supports the commitment to abolishing ‘no fault’ evictions under Housing Act 1988 s21. Once section 21 possession claims are abolished, then private residential tenants will be assured tenants. In effect, therefore, there would be security of tenure in the private rented sector.

We propose that existing defences to section 21 possession claims should apply to all possession claims brought against private rented tenants, so that if the landlord has failed to comply with tenancy deposit regulations or gas safety or energy performance certificate requirements, or where possession proceedings are in response to a complaint about the condition of the property, possession cannot be ordered.

We also propose repealing the mandatory Ground 8 possession claim for assured tenants who have accrued eight weeks’ rent arrears. All grounds for possession concerning rent arrears should be discretionary, so that courts can consider the reasons for the arrears and the personal circumstances of the tenant. Along with security of tenure, Labour should introduce rent controls, with rents set by a locally based expert tribunal, taking into account the condition of the property as well as market scarcity. Labour should take steps to abolish all aspects of the ‘hostile environment’ discriminatory measures against migrants, including ending the right to rent.

The best way to reduce homelessness is to increase the supply of affordable houses, delivered through the social rented sector, and to invest in genuine homelessness prevention. With more affordable homes, the numbers of people sleeping rough or seeking homelessness help from local authorities should diminish. For those who do face the catastrophe of homelessness, the SLL proposals are that emergency accommodation should be provided to everyone who is homeless, and the tests of eligibility, priority need and ‘becoming homeless intentionally’ should be abolished.

While in emergency accommodation, everyone would receive an offer of suitable accommodation, and local authorities would be encouraged to use the Housing Firstmodel whereby the priority is to provide secure accommodation along with support to maintain the accommodation, budget etc. These proposals derive from Crisis’ Plan to End Homelessness. The punitive Vagrancy Act 1824 should be repealed and public spaces protection orders should not be used to prevent rough sleeping or begging.

None of these proposals for legal reform will work without effective, accessible legal remedies. SLL argues that dismantling the provisions of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 is necessary, and that Labour’s future policy on legal services should be to restore and enhance a comprehensive system of legal aid advice and representation. The courts themselves have been beset by cuts, closures and fee increases, delaying justice and placing it further out of reach.

Labour will have to rebuild a well-functioning judicial system, and effective methods of alternative dispute resolution. Finally, there is a debate about a single-access housing court or tribunal. The authors of the SLL proposals prefer a re-invigorated county court system to a specialist housing tribunal. We emphasise that, whatever reforms are undertaken, civil justice must function as a level playing field and legal advice and representation must be adequately funded.

The proposals are put forward as personal contributions by their authors, for discussion and consideration by the Labour Party but also all those who are campaigning for better housing and a fairer justice system.

<strong><span class="has-inline-color has-accent-color">Liz Davies</span></strong>
Liz Davies

Liz Davies is a barrister specializing in housing and homelessness law. She is co-convenor of the Society of Labour Lawyers Housing Law Sub-Group.

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