Founder of Red Brick. Former Head of Policy for Shelter. Select Committee Advisor for Housing and Homelessness. Drafted the first London Mayor’s Housing Strategy under Ken Livingstone. Steve sits on the Editorial Panel of Red Brick.
On 28 February, in answer to a Parliamentary Question, the Minister of State at Work and Pensions, Steve Webb, admitted that his department “has not estimated the proportion of tenants in social housing likely to claim housing benefit if rents for new tenants are let at 80% of market rates”.
This would seem a crucial piece of information and illustrates how much prejudice and how little evidence was used to determine the many changes to Housing Benefit the government is committed to introducing.
Fortunately others in the real world have been doing some background. At pretty much the same time as Mr Webb was making his admission, Family Mosaic Housing Association was publishing research based on real life calculations for a sample of their properties and tenants. This showed, in their words, that “setting rents at 80% of market rent would increase our clients’ requirement for housing benefit by 151%”.
Like a lot of housing associations, Family Mosaic does not seem to be hostile to the government’s proposals to introduce flexible tenancies or to put rents up to some extent to fund new development. It appears that quite a lot of landlords think that they should have more ‘freedoms’ and that their tenants should enjoy fewer rights (this is the long-term character flaw in my view). But at least FM deserve a little credit for digging into the issue and publishing the results.
The report states that “the impact on tenants will vary by location, with those living in inner London the hardest hit: for most of those in Essex, social rents are already at 60-80% market rates” and concludes that “for those tenants receiving benefits, the proposed new affordable housing model creates, or worsens, the poverty trap, acting as an additional disincentive to gain employment.” Rents for their properties in London would increase by over £100 per week and in some cases by over £200 per week. The worst affected people will be those on benefits facing large increases in rent but who are also likely to be caught by the overall benefits cap of £26,000, as Tony has pointed out in previous Red Brick posts.
If (when) the new rent regime comes in, income to FM to support their development programme would indeed increase, but this would be significant only in London. The cost would be shared by the new tenants paying higher rents and by Housing Benefit. If the increased cost in HB terms is anything like the figures published by FM, there will be a head-on collision between Godzilla – Eric Pickles’ policy of moving towards market rents as a way of funding development – and King Kong – Iain Duncan-Smith’s policy of cutting housing benefit to the bone.
Founder of Red Brick. Former Head of Policy for Shelter. Select Committee Advisor for Housing and Homelessness. Drafted the first London Mayor’s Housing Strategy under Ken Livingstone. Steve sits on the Editorial Panel of Red Brick.
As I lived in Westminster for nearly forty years, readers will forgive me if I have a sharper focus on what goes on there. There is normally plenty to report. Mostly over the forty years it has been bad news. Always run by the Tories, they sank from being a paternalist council that built an astonishingly high number of council houses in the late 60s and early 70s to the depredations of Lady Porter and the post-Porter policy of shipping as many homeless people as far away from the borough as possible.
But it is their policy on street homelessness that demonstrates that they have been, and remain, fully paid-up members of the nasty party. The latest event in a long history is their plan, through a new bye-law, to ban soup runs and make sleeping on the streets illegal in a defined zone of the city, around Westminster Cathedral in Victoria. (It was in the Daily Mail, under a headline containing the word ‘callous’, so it must be true).
There is a contradiction in the stance taken by Tory Cabinet member for Housing, Angela Harvey. She complains that, of the people attending the soup kitchens, “The majority will not be rough sleepers… you see them going off with large carrier bags stuffed full of food which is for them and their house mates.” Now if that is the case, logically you might ban the soup runs. Or you might exercise your mind and wonder why it is that people need to come out on a freezing night to find free food. But why would you ban street sleeping if the people attending the soup runs are already housed?
Old Etonian and millionaire Cabinet member Sir George Young once said (or ‘quipped’ if you prefer the softer version in Wikipedia): “The homeless? Aren’t they the people you step over when you are coming out of the opera?” Quip or not, it reveals an attitude which many long-term observers of Westminster Council think also reflects the council’s real motivations: keep the place tidy and get the poor out from under our feet.
There is a genuine debate about the effect of soup runs, and whether they save lives daily or encourage people to stay out of hostels and on the streets. Westminster knows it is a balanced argument because it sponsored research from LSE which produced a sensible assessment of the pros and cons in a report less than 2 years ago. The research identified the downsides of soup runs but concluded that they “provide a safety net by making available food and social contact to those who are unable or unwilling to access other services.”
But even if you think soup runs should be banned, the first article of the Bye-law is not about that. It bans street sleeping itself. “No person shall lie down or sleep in or on any public place.” And “No person shall at any time deposit any materials used or intended to be used as bedding in or on any public place”.
As Ken Livingstone put it:
“The idea with all the other problems we’ve got, with crime, that we should have police diverted to seizing their soup is just bizarre. I think this is just another: ‘Can we move the poor on from Westminister?’”
Given this government’s restless urge to upend public services, arguing that the ‘grip of state control’ needs to be lessened still further was always likely to lead to more contracting out and privatisation. Of course, as David Cameron does in the Daily Telegraph of 20 February, this can always be presented as moving away from top-down targets, encouraging diversity, delivering at the lowest possible level and, once again, providing opportunities for the voluntary sector.
Yet it is pretty clear that the reality of his promised white paper on public service reform will be something remarkably similar to compulsory competitive tendering. CCT is of course the discredited policy from the 1980s, whose only enduring effect has been to privatise a large swathe of low-paid jobs, such as the very bin collection contracts which on other occasions exercise the mind of the Secretary of State for the Environment.
Cameron now claims that, by reviving CCT:
‘…power will be placed in people’s hands. Professionals will see their discretion restored. There will be more freedom, more choice and more local control.’
To which one can only ask, was he around at the time when this was done before? Does he really believe that contracting out created more diversity of providers, and more choice? As far as I recall, the outcome was either that, after an expensive and time-consuming process, the in-house teams won – or, in a few cases, that a big provider like Serco or Capita won instead. Whatever the virtues of a Serco or a Capita, do they really meet up to the starry-eyed descriptions of services brought closer to the people that Cameron enunciates in the Telegraph?
There are three fundamentals of contracting out of which he seems unaware. First, there needs to be a contract. As those involved in Housing PFI contracts know only too well, a service specified in mind-boggling detail in a contract is not a flexible service. Yet miss out the detail and what you will get is not a flexible service but a poor one. Once contracts are signed, the only flexibility they give is whatever terms can be varied that are already in the contract, at whatever price is specified. Anything beyond this is likely to be prohibitively expensive.
Second, contracts need to comply with EU procurement rules if they are above the minimum size. These rules are strict. The opportunities for including ‘social clauses’ exist, but they are carefully policed by lawyers. Does Cameron’s view of ‘diversity’ include international firms operating British public services? It may well do, but it’s probably not what his Telegraph readers have in mind.
And finally, of course, this does not reduce bureaucracy, it increases it. Cameron talks about ‘bureaucracy over-ruling common sense, targets and regulations over-ruling professional discretion.’ As CCT showed, you need more staff to run a service because to administer a complex contract you need a ‘client side’ to ensure that the contractor is doing their job. Can those on the client side dispense with bureaucracy, targets and regulations? No, they are the essence of any contract. Do they largely have to give up exercising their professional discretion? Yes, because using discretion will cost money that will no longer be available.
Cameron’s vision for public services isn’t a new one. It’s a recycled policy from the 1980s that didn’t work then and won’t work now. It may, however, succeed in what many will think is its covert aim: to get people so disenchanted with public services that they opt out, vote for tax cuts and lose all sympathy with public servants. Taken together with the effects of the spending cuts, that really does look like an objective that he might achieve.
Founder of Red Brick. Former Head of Policy for Shelter. Select Committee Advisor for Housing and Homelessness. Drafted the first London Mayor’s Housing Strategy under Ken Livingstone. Steve sits on the Editorial Panel of Red Brick.
‘The louder he talked of his honour, the faster we counted our spoons.’
I was reminded of this old idiom when I read David Cameron’s latest outburst on public service reform. In his Daily Telegraph article, Cameron said:
“We will create a new presumption – backed up by new rights for public service users and a new system of independent adjudication – that public services should be open to a range of providers competing to offer a better service…… This is a transformation: instead of having to justify why it makes sense to introduce competition in some public services – as we are now doing with schools and in the NHS – the state will have to justify why it should ever operate a monopoly.”
There is an obvious contradiction between the localist agenda and Cameron’s new doctrine of ‘compulsory competition’. Cameron appears to be saying ‘you can do what you like as long as it is what I like, and not otherwise’. There is to be a White Paper called ‘Open Public Services’. I assume that means making public services open to anyone to make a few bucks – hence the need to count the spoons.
Competition has been an important element in providing housing services for a long time, especially to deliver hard projects like capital investment, repairs and grounds maintenance, or to deliver IT-based services like some elements of housing benefit. In many circumstances it is the sensible thing to do. But not in all, and much less so in the services that are highly focused on people.
The previous attempt to bring Compulsory Competitive Tendering (CCT) into housing management – under the last Tory government – was an unmitigated disaster and a huge waste of time and money. CCT was an extraordinarily bureaucratic exercise requiring councils to write hugely detailed specifications of the services they wanted to deliver, and in-house teams to write hugely detailed proposals about how they would go about performing the specification. Both sides required teams of people including lawyers and accountants (and humble housing consultants) – I know because I did both on behalf of various councils. The fact that very few housing associations, faced with the same issues but not subject to the regime, chose to put their housing management services out to competition told its own story – they would have done so if it made any sense.
It was – still is – a fledgling market and a few private firms also wasted their time putting in hopeless bids. Where other providers did win contracts it was invariably where the existing service was failing and the council, often with tenant support, concluded that new providers might help bring about improvements. Some providers have done well, but that’s not my point.
A lot was written about HM CCT at the time, why compulsory tendering was an ideologically-driven waste of time and money that also held back real service improvement by diverting resources into pointless activities. Most sensible people think these decisions should be made by landlords and tenants who know their local services. If Cameron chooses to go down the road of centrally-directed compulsion again it will prove that the Tories don’t learn from history or from their previous mistakes.
Founder of Red Brick. Former Head of Policy for Shelter. Select Committee Advisor for Housing and Homelessness. Drafted the first London Mayor’s Housing Strategy under Ken Livingstone. Steve sits on the Editorial Panel of Red Brick.
A Parliamentary Question from Caroline Flint last week elicited the curious information that not one of the Ministerial team at Communities and Local Government department – responsible for housing and local government across the land – had visited the north east of England since their appointments last May. It’s hard to know whether the north east should moan about being ignored or celebrate this as an achievement.
The Secretary of State, Mr Pickles, as a man of the north, did manage a visit to Bradford, where he formerly led the Council. He also made it to Liverpool, presumably before the cuts when it still wanted to be a ‘vanguard community’ for the Big Society. But is it indolence or unpopularity that leads the man responsible for all things delivered locally to make only 6 visits in his official capacity in the 8 months he has been in charge?
His Minister for Housing and Local Government, Grant Shapps, perhaps has more excuse as a professional southerner. He seems to get a nosebleed by travelling north of the Wash, but did brave it by venturing into Manchester and Leeds, and no further. It’s no surprise that his first trip was to Wandsworth, the borough with the highest council rents in the land. The Minister for Decentralisation, Greg Clark, stunningly has made only 4 visits anywhere at all, and none since July, to the places he is inflicting his policies on.
One other curiosity is that none of the Ministerial team has been to Hammersmith and Fulham, allegedly Mr Cameron’s favourite borough, despite the fact that it is the incubator for many of the Tories’ most unpleasant policies. This might be due to embarrassment because they denied vehemently that they would support H&F’s line on ending security of tenure and increasing social rents towards market levels, only to adopt the policies after the Election. Or it may be that the local people fighting the sell-off of their estates wouldn’t like it and might mount large demonstrations of welcome.
Today’s news that the government is dropping the proposed housing benefit rule that people on jobseekers allowance (JSA) would lose 10% of their HB after a year is very welcome. The spin is that Nick Clegg intervened to have this proposal dropped – evidently he needs a boost – but it shows that pressure and campaigning can work, even with this government. With David Cameron wobbling on his policy of selling off the forests and woodlands as well, this should inspire everyone to get organised and to redouble campaigning efforts.
The JSA rule was just one of the welfare reform policies that is giving back to the Tories their reputation as ‘the nasty party’. It was indeed a very nasty proposal, which has been defended on the airwaves by Tories and Liberal Democrats since it was announced in the George Osborne’s June Budget.
Only last week it was denounced in the strongest terms by the National Housing Federation, who published research by the University of York showing that 130,000 households would lose an average of £475 a year which they would have to meet out of their JSA (currently £65 a week for single people over 25). In some areas the number of people on JSA is many times more than the number of vacancies, and the research highlighted constituencies like Hull North (45 claimants per vacancy) and Birmingham Hodge Hill (35 per vacancy). The NHF was right to call it a policy that was “punishing people for failing to find a job in a very difficult job market. The proposal is unfair, unjust …….. people should be encouraged into work, but threatening the homes of those who are unemployed isn’t the right way to go about it.”
The Welfare Reform Bill, to be launched by Cameron and Iain Duncan Smith, contains some proposals with potential that are worth debate – like moving to the Universal Credit – but will also have plenty of other nasties in it. Taken together, the remaining housing benefit changes and the total benefits cap will make it harder and harder each year for people on low incomes to afford decent housing, in all areas of the country, whether they are private or social tenants.
Campaigners should be encouraged that they might win more U turns as the Bill goes through Parliament.
Founder of Red Brick. Former Head of Policy for Shelter. Select Committee Advisor for Housing and Homelessness. Drafted the first London Mayor’s Housing Strategy under Ken Livingstone. Steve sits on the Editorial Panel of Red Brick.
Make huge cuts. Change a few rules. Devolve responsibility. Then wash your hands, it’s nothing to do with us.
Passing the buck developed as an art form. Pontius Pilate has nothing on these guys. Nothing could be clearer than the one underlined and emphasised sentence in Grant Shapps’ introduction:
“So Government is getting out of the way where it needs to, and is supporting you where it can. Ultimately, though, delivery depends on the initiative of providers, and the support of local authorities and local communities. It is now up to you to deliver the homes we need.”
The mis-named ‘Affordable Rent’ (AR) product will be the main form of provision in future. Providers will be able to get some grant from the Homes and Communities Agency, but the pot is about half what it used to be. They will have to show how they can generate resources by borrowing (I thought the government didn’t like borrowing?) against the increased rental stream from letting new homes and a proportion of re-let homes at AR levels (up to 80% of market rents), together with other resources such as existing surpluses, s106 planning gain, free or cheap public land, recycled grant from previous developments and so on.
But there are no numbers – no specific expectations, not even a regional distribution of the HCA’s funding (although London is expected to get the same share of outputs as now, around 27%), no expected or even hoped-for split between city town and country. The outcome will depend on the bids, what providers think they can do and where they think they can do it. From housing strategy to housing chaos in one easy step.
The HCA paper does include some detail about AR. The product (and therefore the rental income) will only be available to Registered Providers who achieve an HCA contract for delivery, so that will exclude virtually all councils and all non-developing housing associations and any existing developing HAs who do not win a contract. So that will keep the numbers of AR lettings down and ensure that most re-lets across the stock will be under a continuation of the existing ‘rent restructuring’ rules. Under AR or social rent, the terms of tenancy will be up to the landlord to decide within a policy framework set by local authorities – subject to a 2 year minimum term for AR tenancies. So all future tenancies could be short or long term at the landlords’ whim.
The relationship between AR and housing benefit is going to be crucial. The HCA paper implies that HB will be payable on an AR letting even if the 80% market rent takes it above the local LHA limit. That might offer some protection to tenants who will be on benefits for a long time. However the overall benefits cap of £26,000 will still apply, irrespective of the rent being covered: in high rent areas, that will be the worst of all the new rules in practice. If the aim of building 150,000 new affordable homes is achieved, and say 90% of them are AR and say 60% of those are let to HB tenants, then the cost to the government will run to several hundred millions of pounds, proving yet again that cuts in one place often pop up as extra costs somewhere else.
Providers have to submit their ‘offers’ by 3 May and initial contracts are expected to be sign in July.
Founder of Red Brick. Former Head of Policy for Shelter. Select Committee Advisor for Housing and Homelessness. Drafted the first London Mayor’s Housing Strategy under Ken Livingstone. Steve sits on the Editorial Panel of Red Brick.
Sometimes an innocuous news story grabs your attention and triggers a strong emotional reaction. Well this time it was the seemingly unremarkable story of a former Head teacher who was made a Dame in 2000 for her services to education, then was sacked for misconduct to do with staff appointments. But yesterday she had her Dame Commander of the British Empire honour cancelled and annulled by the Queen.
My problem is that I can’t hear the word ‘Dame’ without a shiver going down my spine because of its association in my mind with the name of Dame Shirley Porter. In the late 1980s I became one of the ‘objectors’ to Westminster Council’s accounts over the policy that became known as the ‘Homes for Votes’ gerrymandering scandal. Over many years the case was investigated by the Auditor and then meandered through the Courts, ending conclusively in a House of Lords judgement against her for “wilful misconduct” and “disgraceful and improper gerrymandering”. Those with a keen interest can read the Lords’ judgement . The case concerned the unlawful sale of council houses for electoral purposes, which was illegal, but Westminster’s other noteworthy policies including closing homeless hostels, being ‘nasty to the homeless’, and rehousing people in temporary accommodation in tower blocks known to be riddled with asbestos.
Karen Buck MP, who was involved in exposing and pursuing Porter, has recently pointed out that the number of people displaced under Porter’s plans was tiny compared to the clearances that will shortly happen with the changes to local housing allowance. That is the battle to come. But for those interested in the history, Andrew Hosken’s book ‘Nothing Like a Dame: The Scandals of Shirley Porter’ tells the whole story and Paul Dimoldenberg’s book ‘The Westminster Whistleblowers: Shirley Porter, Homes for Votes and Scandal in Britain’s Rottenest Borough’ looks at events from the point of view of local campaigners. Both are excellent reads. There was also a BBC radio 4 play broadcast in 2009 called ‘Shirleymander’.
Since the case was finalised – Porter eventually paid back £12m of the losses – Westminster Labour councillors, MPs and Ken Livingstone have raised a number of related issues. One is that there should have been a serious investigation by the Met into allegations of perjury against Porter. And another was that it was improper for a person found guilty of such acts to remain as a Dame given the endorsement that implies. Neither of these points have been satisfactorily answered.
No Tory Leader has ever apologised for what Porter did. That would be good to hear. It probably will never happen. But it is reasonable to ask – why is she still a Dame?
Founder of Red Brick. Former Head of Policy for Shelter. Select Committee Advisor for Housing and Homelessness. Drafted the first London Mayor’s Housing Strategy under Ken Livingstone. Steve sits on the Editorial Panel of Red Brick.
It’s no surprise that Liverpool City Council has pulled out as one of the government’s ‘vanguard communities’ for the Big Society. The city faces huge cuts and many of those cuts will have a big impact on projects that could be described as furthering the big society, and not only in the voluntary sector. For the government to accuse Liverpool of pulling a political stunt shows how crude their spin machine has become.
Despite some elaborate language and a smattering of half-decent projects, the Tory concept of the Big Society is floundering because it has become a subterfuge for devolving and diverting blame for the cuts. Its key themes – empowering individuals and communities, encouraging social responsibility, creating an enabling and accountable state, and, more controversially, public sector reform – often sound ok but when thay are twisted to fit Tory ideology and deliver Tory policies they have little to do with the Big Society and a lot to do with the Small State and deficit reduction.
Insofar as it means anything at all, the Big Society should be natural territory for the left and for Labour. It is not necessary to have a ‘Small State’ as a precondition for a Big Society, indeed public spending is the essential underpinning. As Labour’s policy reviews get under way, it will be a good thing if many of the new policies that emerge have a clear focus on building stronger individual rights, stronger communities and stronger local government. Labour’s politics should welcome and encourage a flourishing civil society in all its forms, even if it sometimes makes life harder for Labour politicians.
The Big Society is a new presentation, recycled and rebadged, of age-old ideas. Community action in its various guises, community control of buildings, tenant participation and control, mutualism, community involvement in local decisions, these are all natural elements of progressive left politics.
Tenants and Residents Associations are perhaps the best example in housing, and they have been a feature of the landscape for a century or more. Often with no resources at all to speak of, they organise and promote projects of all shapes and sizes to match community needs and interests, ranging from social activities to youth projects to festivals to advice surgeries to crime reduction to befriending schemes to consultations on council policies to managing buildings to managing housing estates. They are the front line in holding landlords to account. The list is endless, as is the commitment of the people involved. An effective TRA can make the difference between an estate failing and it being a place where people want to live. TRAs demonstrate the ability and potential of ordinary people to achieve things and put the lie to the negative and stigmatising media image of social tenants.
The reality of this government’s approach to the Big Society is exemplified by its decision to strangle the National Tenant Voice at birth immediately after the Election. Seen by the Labour Government as the third arm of the new architecture for social housing (together with the investor, the Homes and Communities Agency, and the regulator, the Tenant Services Authority) the NTV was fashioned by the existing national representative tenant organisations not only to organise tenant self-advocacy at a national level but also to provide support and encouragement to the many thousands of TRAs and individual tenants who struggle in isolation to improve their communities.
The NTV would have cost less than two pence a year for everyone living in social housing but its Big Society impact would have been enormous. Closing it down shows that saving a few pence means more to the government than all the rhetoric.
Senior housing policy expert writing under a pseudonym.
I hesitate to say that the government has published its final proposals for the self-financing of council housing, since they’ve made so many announcements about it they are rivalling the quantity issued by the previous government. And strangely enough, despite this the broad shape of the package is pretty much the same as that put forward by John Healey when he offered his ‘prospectus’ last year. One key difference, of course, is that a prospectus implies choice, whereas the current package will – after a bit of negotiation around the edges – be imposed by statute from April 2012, on all 171 councils that still have housing stock.
On the face of it, the figures involved look alarming, and no doubt some on the left will use them to oppose self-financing outright, as they did when Labour put it forward. The headline figure is that councils will take on around £19bn of new debt, to enable them (in effect) to buy their way out of the system. While the LGA originally demanded that all ‘historic’ debt be written off, this was always an unlikely call on public funds, even more so with Mr Osborne in charge at the Treasury. More recently, among local authorities there has been gradual and – almost – universal acceptance of the principle that extra debt would have to be taken on as the price for escaping from the so-called ‘subsidy’ system. (The word ‘subsidy’ increasingly means, of course, that tenants subsidise the Exchequer, not the other way round.) And the other side of the coin is that a minority of councils will have part of their debt paid off.
Inevitably, the Treasury had its fingers in this pie well before the general election. The cap on each council’s borrowing, which restricts them to the levels to be included in the settlement itself, was already envisaged in Labour’s prospectus. Not only that, but it was always likely that the Treasury would ensure that it kept the surpluses the government would have earned from council housing in the future, however much these are correctly argued to amount to ‘daylight robbery’ from tenants.
In terms of the arithmetic, the spreadsheet experts have so far concluded that the current deal is similar to, and perhaps even a bit better than, the one in John Healey’s prospectus. However, whatever the overall deal, what will matter to authorities is how their individual figures work out. Given that there is a fair amount of local detail in the latest paper, this is where the focus of interest on the figures is likely to shift.
There is already a danger, of course, that hard-pressed councils whose revenue support grant has been cut are looking at their housing revenue accounts to see if they can help make up the shortfall. Labour was alive to this, and included updated guidance about maintaining the ‘ring fence’ around the HRA in its prospectus. In the current document, the guidance has been dropped and there is only a brief reminder that the ring fence needs to be kept. It seems to me that it’s always been down to tenants to be vigilant on this issue. Their vigilance needs to be even greater when, after April next year, the only income to the HRA will be their rents. The first call on rents will be to pay the debt charges, then maintain the stock, then run the landlord service. Councils and tenants can’t afford to let any of their rental income be siphoned off to make good cuts elsewhere.
There remain several points of contention about the caveats in the overall deal the government has put on the table, and all of these are a result of those greedy Treasury fingers looking for the meat in the pie. The new one to emerge as part of Mr Shapps’ package is that councils will have to continue paying three-quarters of right to buy receipts back to government. Labour can hardly rail against this iniquity, since they introduced it, but credit was due to John Healey that through his package it would have been brought to an end. The Treasury have locked their fingers round this tasty morsel, and must now somehow twist the settlement so that it reflects 30 years of future stock losses through right to buy. This introduces a high and unnecessary degree of uncertainty, since predictions of right to buy sales are invariably wrong.
The Treasury also wants the facility to reopen the settlement if circumstances change. One of these might of course be a wayward forecast of the effects of the right to buy, but the very prominence of this caveat is making councils think that ‘self-financing’ might be maintained only as long as it suits the Treasury. This is not what the deal is supposed to be about.
However, it’s the debt cap that really grates with councils, in part because of the context of overall spending cuts. If it was a bad idea under Labour, it’s a far worse one when grants from central government and other sources of finance apart from borrowing are likely to be extremely scarce, to put it mildly.
The debt cap, the continued repayment of receipts and the constant threat that the settlement might be reopened are all eroding councils’ supposed autonomy. Interestingly, as was revealed last month, councils have an unlikely ally in the deputy prime minister, who is said to have asked for councils’ borrowing powers to be reconsidered in a letter to Eric Pickles about the imminent local government finance review.
Of course, if the Treasury were to listen, at last, to the case for taking council borrowing out of the main national accounts, they could use self-financing to get council debt off the government’s books completely. Council housing is anyway now classified as outside government by the Office for National Statistics. Because most of its income comes from charges (rents). Where councils have ALMOs, these are considered separate public corporations (like, say, the BBC). Taken together with likely changes to the accountancy rules about housing revenue accounts and the separating out of housing debt, this could be the moment for the Treasury to take a step towards giving council housing – like housing associations – real autonomy. However, none of us will be holding our breath.
