Tag: Council housing

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Delivering Labour’s Council house mission

Image by Angela Baker is licensed under Unsplash free license

Labour’s mission to ‘Get Britain building’ is off to a flying start. Within weeks of winning power, Deputy Prime Minister and Housing Minister, Angela Rayner has announced a raft of new initiatives to meet Labour’s pledge to build 1,500,000 new homes by 2029:

  • Mandatory local housing targets for each Council, totalling over 370,000 new homes a year.
  • Low-quality “grey belt” land in green belt areas will be prioritised for new homes with 50% of the new housing affordable.
  • Essential infrastructure, such as schools, doctors’ surgeries and transport links will be provided, too.
  • A new generation of New Towns will be built.

“This is only the first step – we plan to do so much more,” Rayner told Parliament.

And so much more will certainly be needed. In a recent Fabian Ideas pamphlet, ‘Brick by Brick’, Simon Graham sets out the scale of the task:

  • The social housing stock has decreased by a net 21,800 homes a year over the last decade.
  • There are currently 1.3 million households on council housing waiting lists, up from 1.1 million in 2018.
  • In February 2024, London’s largest housing associations said they would start building just 1,769 homes in 2023/24, compared to 7,363 in 2022/23.
  • Over 2 million council homes in England have been sold through the Right to Buy and, following resales, 40% of them are now owned by private landlords.
  • Councils spent £1.7 billion on temporary accommodation in 2022/23, an increase of 62% since 2018.

In July 2024, a cross-party group of 20 local authorities reported that “England’s council housing system is broken and its future is in danger. New analysis from Savills shows that councils’ housing budgets will face a £2.2bn ‘black hole’ by 2028.”

Such is the parlous state of social housing finance, that in July 2024, the ‘i’ newspaper reported, “A snapshot survey of 13 major house builders found that in January each had an average of 1,000 affordable homes with detailed planning permission that were held up because they couldn’t find a purchaser for affordable homes built under s106 planning deals.” If Labour wants to deliver “the biggest increase in social and affordable housing in a generation”, as its Manifesto states, then it needs to find the cash for these 13,000 new homes.

Attlee’s post-war Government transformed the lives of many, building 1 million new homes between 1945-1951, 80% of them council houses. Conservative Housing Minister Harold Macmillan continued Labour’s example, building over 245,000 new council homes in 1953 alone.

From the 1950’s – 1970’s, the country built around 300,000 a year – half by housebuilders for sale and the other half by local councils for rent. The Government will not reach its 1,500,000 new homes target without a massive council housing building programme.

Building new council homes also benefits the economy and saves money. A Local Government Association report argues that every £1 invested in new social housing generates nearly £3 in the wider economy. Also, every new council home saves around £800 a year in Housing Benefits payments to landlords. And, because tenants pay rent, the council homes pay for themselves over time.

To achieve 370,000 new homes a year, local councils need to build at least 150,000 council homes every year. The only way in which this can be done is through every local council in the country playing a part. The maths is daunting. Building 150,000 council homes a year means building over 400 new homes a day, every day, weekends included, for the next 5 years.

So, here is a 10-point plan to deliver Labour’s mission:

  1. Every council should design plans for new council homes on land they own for 50% of the council’s housing target. Councils should also identify other public sector land and start discussions with the landowners.
  2. Using local architects, funded by the MHCLG, plans for each site should be put to local consultation to get buy-in locally.
  3. Where planning permission has been granted for new housing but not yet implemented, councils should discuss with landowners how to get development started, including councils funding development in return for a proportion of new social rent homes.
  4. Metro Mayors should work with constituent councils to coordinate the delivery of local council housing and private sector homes.
  5. In areas where there are no elected Mayors, regional ‘Housing Commissioners’ should be appointed by MHCLG to coordinate housing delivery.
  6. Each Mayor and Regional Housing Commissioner should be responsible for managing construction skills training in liaison with the CITB.
  7. A national Housing Commissioner should be appointed by MHCLG to oversee the delivery of the Government’s housing mission and coordinate the work of the Mayors and Regional Housing Commissioners.
  8. Right to Buy discounts on existing and new council properties should be reviewed and limited to, say, £1,000 for every year the applicant has been a council tenant and capped at £25,000.
  9. The Mayors and Regional Housing Commissioners should report monthly on the number of new housing starts and completions and construction skills trainees and graduates.
  10. Planning rules should be strengthened to stop the current abuse by landlords who let residential property as Airbnb-type short-term lets, taking homes out of residential use.

Finally, building the promised 1,500,000 new homes is a full-Parliament job. In Attlee’s Government, Aneurin Bevan held Minister of Housing job for five years, Harold Macmillan had the job from 1951-1954. This is Angela Rayner’s opportunity to join the ranks of those few Housing Ministers who truly made a difference.

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A bold housing strategy means tackling more than building

The UK’s housing crisis is reaching a critical point. Rents are soaring, whilst homeownership remains out of reach for many after years of house price increases outpacing wage growth. In the late 1990s, the average house price was 3.5 times the average income in England – as of 2023, this had more than doubled to 8.2 times, with prices exceeding 12 times incomes in many areas of London. All of this means that homelessness is skyrocketing – with Britain having by far the highest rate of homelessness in the rich world when you include those in temporary accommodation, which is the largest form of homelessness. Combined with decades of declining social housing stock, demand for social homes now far outstrips supply, and local authorities are being forced to spend record amounts on high-cost, poor-quality temporary accommodation from the private sector, driving them into severe financial difficulty. In 2022/23, £1.8bn was spent by councils on temporary accommodation, over double that spent in 2018/19.

It’s in this context that this month, Positive Money and London Renters Union, a grassroots tenants union representing over 7,000 members, brought together parliamentarians, renters unions and policy experts for a discussion in parliament, Beyond Building: Fixing the UK Housing Crisis.

The discussion reflects a growing awareness that addressing the multiple crises that our housing system not only reflects but is exacerbating – from inequity that runs along racial, class and generational lines, to the climate impact of British homes – requires a fundamental shift away from homes from being treated as assets for accumulating wealth. Positive Money’s Banking on Property report sets out why approaching the crisis as a problem of housing supply alone will likely do little to solve it. Available academic evidence (plus UK Government modelling) also suggests that meeting the house building target of the current government is unlikely to bring house prices to an affordable level. As a problem driven by a toxic combination of the weakening of financial regulation and monetary policy, and wider housing policy choices including tax incentives, The Right To Buy and the deregulation of the private rental market, a housing policy agenda fit for the situation we’re in must address these drivers head-on.

Those at the sharpest end of the housing crisis, including private renters, intuitively understand the need to confront the distribution and price of housing. Yet despite an abundance of evidence and the vocal campaigning of those most impacted by the crisis, policy discussions often remain laser-focussed on how to increase the building of new homes. And despite Rachel Reeves’ welcome announcement that ‘a house should be a home not an asset’, Labour has so far announced little in the way of policies that truly reflect this ambition. Doing so undoubtedly requires a bold and multi-faceted policy programme, and a willingness to challenge the interests of those who benefit from our extractive housing system. But with housing costs making up one of the biggest items of expenditure for any household, there is a strong case that doing so would pay off for a future government.

The discussion brought together a range of voices to discuss the solutions needed, focussing on two key policy areas that, in our view, should form important components of a long-term vision for a more affordable, safer and healthier housing system: local authority acquisitions of privately-rented housing for use as council homes; and proper regulation of the private rented sector to provide security and affordability for tenants. As Beth Stratford, economist and co-founder of the London Renters Union, highlighted, the two ideas dovetail well. Since much of the pushback against regulation of the private rented sector cites concern that it could cause landlords to sell properties, acquisition programmes offer an out for those private landlords who may indeed choose to exit the sector, whilst providing the social housing we urgently need.

‘Buy back’ schemes are gaining momentum as a way to take advantage of the recent softening of house prices to rapidly increase the stock of council homes and support the sustainability of local government finances. As social housing expert and crossbench peer Richard Best reflected upon during the discussion, such programmes are not new – in the 1960s and 70s, tens of thousands of privately rented-properties, often ‘entire streets’ of houses in poor condition, were purchased and renovated by local councils. London’s buy-back schemes are key recent examples, but remain limited in scale in comparison, and do not match the ambition of similar programmes being pursued in cities like Barcelona.

Alex Diner, Senior Researcher at the New Economics Foundation (NEF), presented an analysis of how London’s buy-back scheme would more than pay for itself through both directly reducing council payments to private housing providers, as well as indirect benefits from health and earnings improvements. NEF’s proposed reforms, including establishing a national fund to support acquisitions at scale, could replicate such savings across the country whilst providing much-needed social housing. Similar programmes could be designed to support the acquisition of privately-rented homes for community-led housing, like cooperatives and community land trusts. But as speakers discussed, central to this will be a new government setting a goal to actively shift tenures away from the private rented sector’

Whilst acquisitions could offer a rapid route to expanding social housing stock, it’s unlikely that even the most ambitious agenda could alleviate the urgent situation faced by so many renters. As members of the renter unions in attendance highlighted, in the face of record price increases, insecurity, and poor quality of privately rented housing that disproportionately impacts Black, Asian and ethnic minority communities, rent controls in some form are needed.

As representatives of Living Rent, Scotland’s largest tenants’ union, explained, Scotland’s experience – where a temporary in-tenancy rent freeze has led to landlords’ hiking rents for new tenancies – is something that the rest of the UK can learn from. Policymakers should take solace from the fact that far from being put off by such experiences, major unions like Living Rent and the London Renters Union, which organise thousands at the sharpest end of the housing crisis, are instead mobilising members to call for long-term and well-designed policies to get rents under control.

Perhaps the clearest message that emerged is that many of those involved in developing and campaigning for policy solutions to the housing crisis understand that building new homes, while useful, is not a silver bullet solution. We need a suite of measures, which must include reversing financial deregulation and tax changes that incentivised property speculation, which have been major drivers of house price inflation. But reclaiming privately rented homes, and protecting those in the private rented sector, must be key pillars of a progressive housing agenda.

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What’s holding back estate regeneration? Personal reflections and hopes for joined-up policy

Sylvia Court, Hoxton, Simon, is licensed under CC-BY-2.0

I don’t know exactly when it started to set in, this pessimism about housing I’ve had lately.

If I had to put a date on it I’d say 2021, probably the summer, when I was working as a Housing Operations Manager, responsible for thousands of residents’ homes across different estates and schemes across London. I knew our plans for the renovation of 1940s walk-up blocks were held back again by failure demand, due to the mounting backlog of routine and emergency repairs to our homes and estates which stripped away our allocated maintenance routine and planned budgets. Inflation, to my eye mysteriously low until now at a headline level, could also go up at any time.

The Office for National Statistics Housing Construction output prices indices shows that between June 2018 and June 2020 the cost of housing repairs and maintenance rose from 104.8% of 2015 prices to 106.9%. Between June 2020 and June 2021,  it rose to 109.3%. Thereafter, the index spiked sharply, peaking at 120%) where it has stayed since. Our economic circumstances in housing and homelessness are now vastly different, just like those early Covid-predictions.

From my viewpoint, financial instability, deprivation and lack of clear national direction were already biting local communities, holding back housing reinvestment and regeneration and stressing our social housing workforce.

The national headlines about an exponential rise infood bank and emergency food relief usage were played out in the real world in front of our eyes as residents set up or expanded food banks and emergency food delivery schemes, which we supported financially and with our own system of well-being calls and free food deliveries for those who needed help.

While this was ongoing,  the pressure on our finances began to tighten with soaring maintenance and repair costs, cross-subsidy demands for new building, loan repayments, while our income was restricted by rent freezes, capped increases and constricting credit systems that usually serviced a 100,000 unit housing association smoothly but were starting to tighten as interest rates began to rise.

This meant residents and some frontline housing workers – many living in social housing themselves – were not only living through a pandemic but also an outbreak of delayed and broken promises of home and estate improvements.

Across the country, we knew from forums and Inside Housing, some of the most alert housing associations were scrambling to adapt to a new post-pandemic future – they didn’t expect much yet from the government given how little they were used to being guided on housing management since de-regulation after 2011 and 2015!


When Covid started looking serious in early 2020, we’d been so relieved both for our residents, and as a team,  that the first phase of the renovation plans were completed, not knowing how long or severe the disruption to housing services would be. Never had the phrase “fix the roof while the sun is shining” had so much relevance when storm clouds were gathering around again. 


This was work for me, but it was personal as well. As we discussed in the neighbourhood office every day, long-term plans for individual homes and whole neighbourhoods underpinned thousands of people’s lives. People who I quickly learned from doorstep conversations, in meetings and by email frankly didn’t care much about what their social landlord thought. As long as they could get on in life with their lives, education, work, personal challenges, life plans – they were happy to leave their social landlord to competently operate in the local economy and manage their home and neighbourhood in partnership with the council, social services, police, faith and charity groups.

Trust was fragile, and there’d been very little of it in the area when in autumn 2018 I was first set a very stretching target of implementing plans rapidly developed with residents to rebuilding trust with the residents’ associations and residents of several estates, all told it would amount to around 3,000 homes.

I was determined to rebuild that trust with my team and colleagues, by driving rapid improvements to estate reinvestment and regeneration locally, improving routine maintenance and delivering neighbourhood communication for the age of social media, enabling people to live in their homes without the need to chase their landlord or complain.

Trust needed constant work with a section of residents, many with lived experience of homelessness, with bad experience with private landlords or insecure housing in the past, as we understood from speaking with them.

From the many personal conversations I had with residents on the doorstep and in meetings, emails, Twitter and newsletter feedback received to our dedicated inboxes between 2017 and 2022, I also knew that some also felt that delay and disappointment from their social landlord meant they were reliving their own journeys of the insecure private housing, being asked to leave or being evicted and then approaching hard-pressed local authority housing departments, only to be advised of long queues to be offered the chance to bid on precious social housing flats. 


As a trainee, in constant dialogue with the residents’ associations and local Labour councillors, I’d drawn estate reinvestment plans for each of the big estates with an assembled taskforce of senior colleagues. 


These had focused on the basics, first cleaning and antisocial behaviour, then security and safety for the day-to-day challenges people faced: including stronger communal doors, new lifts, better lighting, roof repairs, water pumps. These plans were formed only in late 2018 in answer to and with residents’ associations and the local councillors, and were delivered just in time for the end of 2019/20. The next phase would focus on warmth, decency and efficiency: new heating and energy systems including heat pumps, more efficient boilers, solar panels (several residents’ associations had declared climate emergencies and were discussing community energy schemes), and communal cleaning. 

Now I felt sick speaking to my colleagues in the Repairs, Reinvestment, Neighbourhoods Department, as we looked at the plans for 2021/22 and realised how difficult it would be to deliver them. Inflation, already bad after 2016, was going south on ‘specialist’ parts for lifts, door entry systems and for window frames, certain heating system parts. Wages were increasing too. The cost of some maintenance projects had doubled, due to contractors being unwilling or unable to deliver work – they had plenty of quotes themselves. Even with an in-house contractor the same issues with materials and wages arose rapidly, and even our in-house team and trusted suppliers were unable to keep up by summer 2021.

The quotes we’d shared for full transparency with the residents’ associations would now be just promises we’d made standing up in front of a room of residents, that we’d written down and sent to our local councillors. 

Should I have felt so ashamed and angry about the prospect of my organisation, which I was proud to be the local face of for many residents, being unable to deliver everything we’d promised? 

Well, reflecting on it, the picture was more complicated. After all, successive Conservative Governments had caused a great degree of this instability, successive rent freezes and rent caps and with price shocks, material shortages, distortions in the skills and labour market, meaning that Maintenance and Planned Reinvestment and Regeneration budgets, often possible to squish together in the process of cutting them to meet straitened income was increasingly stretched or disappeared to build new homes, service debts or deal with other more pressing issues, especially fire safety checks and works.

Looking back, I can see from a policy perspective what I knew from a personal conversation with a resident talking to their housing teamthat each disappointment of a delayed repair, each broken promise to fix up their estates communal parts and gardens could seem to compound their history of bad experiences in their homes and with local public services.

But it felt like a betrayal, and we would do all we could to put it right. In the end we delivered almost everything in those neighbourhoods, a little late, to everyone’s relief by the Summer of 2022. But only after some very difficult financial decisions, including rearranging funding allocated to other high need, high priority neighbourhoods, and some brave communication with residents and their associations.

We kicked so many things down the road that residents told us would be needed which we could confirm from our stock data, and which I know will still be needed now.  Not least the local employment scheme, the solar panels, the heat pumps and the fundamental renovation of the fabric of estates and, where the residents and data pointed us, regeneration, things that my predecessors and colleagues had felt forced to push into the far future due to funding pressures and constantly changing political priorities. This showed the Conservative illiteracy of the basics of how social housing ‘worked’ on the ground.

We were far from perfect as a social housing provider, and we welcomed the new Social Housing Regulatory Regime that the Conservatives finally realised was needed, after scrapping consumer standards as a neo-liberal, austerity experiment, and yet we did try to keep up with everything and deliver new homes to boot.

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Tackling Temporary Accommodation: Labour Housing Group’s Recommendations

When we talk about homelessness, our thoughts often turn to people in doorways and tents, living on the streets of our towns and cities. Rough sleeping is the most extreme and dangerous form of homelessness and the increasing numbers experiencing it is easy to see. Shocking as this is, it is just the visible tip of the now vast homelessness crisis.

Earlier this month Hannah Keilloh set out both the human and financial cost of this hidden crisis. 123,000 homeless families are living in temporary accommodation (TA) including 140,000 children. More than £1.7 billion spent in 2022-23 to “temporarily” house people, often in appalling conditions.  Two thirds of the families have been in TA for more than a year, some for more than a decade – their lives on hold as they wait for the settled and secure home that everyone deserves.

There is an urgent need for action to tackle this and last summer I was pleased to join Labour Housing Group’s policy working group to help develop proposals we would like to see Labour’s manifesto.

The Group’s aims were to bring forward proposals to reduce the cost of temporary accommodation and to improve the quality of accommodation being used. But also to work towards a greater mission – to prevent people from becoming homelessness and, when that isn’t possible, to ensure that temporary accommodation is truly temporary and their homelessness ended as quickly as possible.

Strategy and leadership to enable change

Tackling homelessness requires consistent, coordinated action and commitment across multiple areas government – national, regional and local. It requires a true team effort with government and public agencies working hand in hand with housing and third sector support providers and communities.

Adopting an overarching homelessness strategy might not sound like the biggest ask, and yet the UK is one of the few nations in Europe that does not have one. The next government should swiftly correct this. It should be coproduced and delivered in partnership with people with lived experience of homelessness, and the local authorities and voluntary & community organisations working on the frontline. It won’t be easy to break the silos. Strong leadership will be needed to develop and deliver this across government – the report recommends the appointment of a homelessness Tsar, who will need political support at the very highest level.

At its heart, Labour’s approach should have an understanding that the causes and impacts of homelessness are diverse and unequal. Women make up 60% of adults in temporary accommodation with violent relationship breakdown as a leading cause.  Black people are three and a half times more likely to experience homelessness as White British people and a quarter of young people at risk of homelessness identify as LGBTQ+. Labour’s strategy must recognise disadvantage and discrimination. It must enable person centred and trauma informed approaches to meet diverse needs.

Low cost, high impact changes

Preventing homelessness and the need for temporary accommodation is our ultimate aim, but to alleviate the immediate TA crisis Labour must act swiftly to lower the barriers people face to moving on from TA, refuges and other homelessness accommodation. Too often people are stuck on social housing waiting lists and blocked from private rental tenancies. It is in many ways akin to bed blocking – people unable to move to somewhere more suitable and the “beds” in good quality, local accommodation unavailable for newly homeless people.

The report recommends that social housing allocation policies should give greater priority to people experiencing homelessness and that more housing association lettings should be reserved for people experiencing homelessness. The report particularly recommends that policies should far greater support to those who have spent more than a year in TA.

Action should also be taken to remove barriers from securing private rented accommodation. This should include increasing the budget and eligibility for Discretionary Housing Payments and enabling local authorities to expand of funding of deposits and rent in advance. Reforms should also require landlords and agents to accept offers of written guarantees (for instance from local authorities) instead of cash deposits.

Investing in the future

The working group recognises the financial and economic challenges a Labour government would face. However, there is strong evidence that investing to end homelessness is money well spent with PWC finding every £1 invested could save up to £2.80 of spending across the public sector.

We recommend a comprehensive, cross government review of current spending on supporting the homelessness crisis – both direct spend on TA and homelessness support and the hidden costs of homelessness including within health, social care and criminal justice budgets. Our proposals for investment include additional ring fenced funding for homelessness prevention, a local authority TA acquisitions programme and funding of a robust inspection and enforcement regime to ensure existing legal standards for TA are met.

Ultimately Labour must make it their mission to end poverty and destitution. That means investing to tackle the housing crisis by building at least 90,000 new social homes per year and, alongside the new deal for working people, fixing the gaping holes in the social welfare safety net.

With real determination and ambition we believe a Labour government could end the homelessness crisis and we urge Labour to take up this challenge.

Find out more

There will be an online launch for Labour Housing Group’s policy paper on temporary accommodation on Tuesday the 27th of February at 10am. Register for that here.

Click here to read the full report.

Fiona Colley is Director of Social Change at Homeless Link, the national membership body for organisations working directly with people who become homeless in England.

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From ‘homes for votes’ to ‘homes for people’

It was a moment of great drama when long-time former Labour Group Leader, Paul Dimoldenberg, won his nemesis Shirley Porter’s old seat of Hyde Park Ward last May and Labour took control of the council that had once been notorious for her ‘Homes for Votes’ policy in the 1980s. 

Labour arrived at City Hall with a detailed Manifesto and a raft of housing commitments. One promise was to establish a Housing Review as part of the ‘Future of Westminster Commission’. Strong groups of experts were appointed to fundamentally examine housing supply and homelessness and a new citywide Residents Panel was appointed to look at how to improve the management of the council’s own homes. 

The Review started by studying in detail the pipeline of schemes on the council’s own land, quickly re-setting the relationship between Westminster and the London Mayor, leading to the council gaining over £60m extra in grant in addition to a major increase in the use of its own resources. Scandalously, the Tories had refused to hold ballots on the two big regeneration schemes, Church Street and Ebury, meaning that they did not qualify for grant. By going out to residents and explaining our strategy we held very successful ballots, gained tens of millions of extra grant, and increased the number of social rent homes in these two projects by 158. Overall, we added over 300 council homes for social rent in current Council building schemes. 

The current state of play is that over the course of  this council term (to 2026/27) we are on course to build over 1000 social rent homes (nearly 700 net taking account of reprovision) on our own land, alongside around 200 new homes for intermediate rent. Our longer-term pipeline contains many more truly affordable homes, and we are continuing to look for ways to strengthen this position further. Council homes for social rent on council land is our mantra because we have around 3000 households in temporary accommodation and over 4000 on our housing register and, when it comes to building social rent, land we already own gives us the best bang for our buck. 

Despite all our efforts we will only put a dent in the problem rather than solving it – only sustained government action over a decade and more will do that. But every home provided means a family or individual has a real opportunity to build a life in a genuinely affordable home. 

There is no silver bullet on housing supply. We have made a good start on our own land, but we will leave no stone unturned to try to get more truly affordable homes. For example, we have embarked on a revision of the City Plan to get more truly affordable homes out of the planning system (for example by requiring small luxury developments to contribute to tackling the housing crisis) and we are talking to the city’s registered providers about what more they can do. 

There is also great urgency to tackle the crisis in temporary accommodation (TA) that we inherited, especially as homelessness is likely to grow as the housing market deteriorates. We are putting around £170m into acquisitions for temporary accommodation which should provide around 270 homes either in the city or within a 30-minute bus journey. We will inevitably still rely on procurement of private rented homes, but we are determined to try to make sure they are of a decent standard and as close to support networks as possible. This is not at all easy, given that the Government’s frozen local housing allowance means less than 0.5% of homes in Westminster are affordable for those reliant on housing benefit. 

We are also working on improving the package of support to households in TA to reduce the impact it has on them, and especially on children.  

Even people on decent incomes struggle to find affordable homes in Westminster, so through changes to our Affordable Housing Supplementary Planning Document  and reform of our practices we are repurposing ‘intermediate homes’ so they directly benefit key workers, mainly those earning less than £60K, rather than general demand. We think a local offer to health and transport workers and others will be very popular and will help our city in many ways. Collaboration with the private sector and other public bodies over their developments and use of local assets will play a crucial part in helping build the key worker housing we need for the future.    

More than most places, Westminster is associated with global dirty money being put into property that is often not used as a home. We are adopting an empty homes strategy and have appointed an empty homes officer to assess the scale of the problem and tackle the most egregious cases and find new ways to help homes back into use and to bring life back to communities at risk of being hollowed out. This also fits our dirty money strategy which has attracted attention because of the strong action being taken against ‘candy shops’ as well as on residential. 

These are our main initiatives on housing supply; we have also been active on the private rented sector, starting a review of housing allocations, and rethinking our Rough Sleepers Strategy – another big issue with a Westminster focus. Our Residents Panel has been getting to grips with a wide range of issues in housing management, including starting work on our proposed Repairs Charter and our Leaseholders Charter, and we are delivering on our promise to increase the number of housing officers and to re-open estate offices.  

There is a strong overlap between housing and our vitally important work to help people through the cost-of-living crisis. We have set up a £1m+ rent support fund to assist those facing the 7% rent increase without full benefit support and, amongst other things, we have provided over £14m in cost-of-living support to local families and are extending our free school meals offer, currently for all primary pupils as of January, to include nursery and key stage 3 pupils thanks to some help from Sadiq Khan.  

The housing crisis is now so severe that there is no way out without strong and sustained government action. The General Election is drawing closer but, in the meantime, we will do everything we can to make as big a contribution as possible from Labour Westminster.

Cllr Adam Hug is the Leader of Westminster City Council.

Steve Hilditch is Chair of the Westminster Housing Review

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A more equitable housing model for Cornwall

Hundreds of thousands visit Cornwall every year, and who can blame them? With our long beaches, hidden coves, world-famous cream teas (jam first) and stunning scenery, it’s no wonder that so many people want to enjoy everything our wonderful part of the world has to offer.

Growing up in Cornwall I know how important tourism is to our local economy, but over the last few decades the money tourism brings in is also driving people out. A dream holiday destination is turning into a nightmare for locals who are being forced out of the place they grew up in.

Right now in Cornwall there are vastly more properties on AirBnb than on RightMove – to rent or buy, and those that are on the market often come with astronomical price tags. On top of that, house prices are rising much faster than wages, which in Cornwall are already significantly lower than the national average.

This is a situation that’s been decades in the making, but has been made even worse by the cost of living crisis and historically high inflation rates.

The huge expansion in holiday lets and second homes has collapsed our private rented sector, and pushed house prices so astronomically high that even so-called ‘affordable’ properties are far beyond the grasp of those who need them.

We’ve found ourselves in the perverse situation where the very workers who support our key industries, like tourism, have been forced to move out of the county because they can’t afford to live here. It’s not simply a problem for those workers either, our already understaffed health services are struggling to attract staff when the cost of housing, and living, is so high.

The vast majority of my school friends have left Cornwall because they either couldn’t find the jobs they wanted here, or more often – they just couldn’t afford to live here any more. And for the ones that have stayed, there’s little hope of them being able to branch away from the parental home any time soon. Ask anyone of my generation down here and they’ll tell you the same story.

The huge increase in holiday lets has therefore exposed the instability and unreliability of a housing model that relies on private letting and sales, but for those who are priced out of the private market, the social housing and council housing sectors offer little to no comfort.

The housing stock lost through right to buy has never been replenished, and the urgency of the problem makes it even more shameful that over the last year Cornwall Council built just 14 council houses.

Meanwhile, waiting lists get longer and longer – almost 15,000 in Cornwall at the last count, with families being offered emergency accommodation not only out of the region – but out of the country – with the nearest help available in Wales.

Local politicians can and must take action now. As part of its “asset release” scheme the council should evaluate which sites are suitable for housing development and work with communities and local developers to build council, social, and genuinely affordable housing.

Councillors can also ensure the local development plan (LDP) prioritises housing, introducing and enforcing quotas on social and genuinely affordable housing in new developments. The LDP and neighbourhood plans also need to recognise that curbs on second homes can’t focus only on new builds, they need to include redevelopments to address housing stock in areas popular with tourists that are being decimated through a backdoor.

We also need fundamental changes to legislation, putting power into the hands of local people to ensure we have a system that works for the people of Cornwall, and one that unlocks our ability to build all types of home for all types of people.

The government makes much of its commitment to localism and levelling up, but we must challenge them to put their money where their mouth is. They must also devolve power to Cornwall to set our own housing priorities, allowing for council tax hikes on second homes, limiting holiday lets, and the creation of stronger protections for renters as vital first steps in reshaping our housing system.

The system is broken and we need radical political action now to not simply fix it, but to build a more equitable housing model that offers a secure future.

I grew up in a council house in St. Agnes, and I count myself lucky that our family didn’t simply have four walls and somewhere to sleep, but a home that gave us security – a place we could call our own, that we could decorate how we wanted, keep pets and build a future. We didn’t have to worry about our home being converted to a holiday let, face extortionate rent rises, or worry about leaving the community we’d for so long been a part of.

Our council house was a home, and everyone deserves to know that feeling.

<strong>Joe Vinson</strong>
Joe Vinson

Joe is from Truro and Falmouth CLP. He is also the National Secretary of LGBT Labour and Secretary of the Socialist Societies affiliated to the UK Labour Party.

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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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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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Council housing is the missing solution to the housing crisis

LHG’s new report on council homebuilding – called ‘The Missing Solution’ – is launched at Labour Party Conference today.

As a country we have not built anything like enough new homes since Thatcher virtually ended council housebuilding in the early 1980s. The other sectors – private sector and housing associations – have been left to shoulder the burden but have never got close to bridging the gap.

Despite its faults, council homebuilding is a proven model, it is tried and tested, and it works. Grant is put in at the start to make it viable to build and to meet infrastructure costs, but no subsidy is needed thereafter – subsidising investment rather than consumption is the best use of resources. Because rents are much lower than market-related homes, large savings in housing benefit are made over the lifetime of the homes. And huge savings will be made in other services like health and education because so many more people will live in high quality, affordable and suitable homes. It’s a great investment in bricks and mortar that will eventually pay for itself – and contribute hugely to mitigating climate change.  

After a decade in which the government virtually ended support for new homes at council rents, there has been a spirited fight back in defence of council homebuilding. Councils are doing as much as they can to get building again, but they need a better partner in government. Councils must have the confidence to plan, better powers and resources to buy land and regenerate sites, more support from government to manage the risks inherent in a growing programme, and support generally to build the capacity needed to run a large programme. The responsibility is on government to provide sufficient grant and to reform land and planning to make the job doable.

If this government doesn’t act, Labour needs to think through now what is needed to hit the ground running when re-elected into government. There will be no time to lose.

The report makes a big start on this task. Written by a range of political figures who have recent experience of building council homes around the country and a range of experts who have worked in the field for many years, it considers the gamut of financial, governance and organisational issues that have to be tackled, with lots of local examples of successes and challenges.

Lucy Powell’s speech to Conference this afternoon and the excellent composite resolution moved by Labour Housing Group Chair John Cotton, followed by the launch of the report, are a good start. As John said, the aim of all this work is to make a reality of Labour’s commitment to build 150,000 social rent homes a year including 100,000 council homes by the end of a Parliament. Detailed work and a comprehensive plan are needed to make this ambition a reality. We hope the report will help us in these tasks. 

The report is available here: https://labourhousing.org/wp-content/uploads/2021/09/Missing_Solution_Online_20-09-21.pdf

And the Executive Summary is available here

https://labourhousing.org/wp-content/uploads/2021/09/Missing_Solution_Executive_Summary.pdf

THE MISSING SOLUTION: COUNCIL HOMEBUILDING FOR THE 21ST CENTURY

Is edited by Rachel Blake, Nick Bragger, Steve Hilditch and Sheila Spencer, with additional editing and design by Simon Hilditch, and contributions from Rachel Blake, Steve Cox, Aileen Evans, Paul Hackett, Steve Hilditch, Jenny Hill, Alison Inman, Satvir Kaur, Janice Morphet, James Murray, Julia Park, Steve Partridge, Jerry Swain, Sharon Thompson, Mike Todd-Jones, Ed Turner and Martin Wheatley.

<strong>Steve Hilditch</strong>
Steve Hilditch

Editor and Founder of Red Brick blog.
Former Head of Policy for Shelter. Select Committee Advisor for Housing and Homelessness. Drafted the first London Mayor’s Housing Strategy under Ken Livingstone.

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The Systemic Tory Under Funding of Council Housing

Housing Revenue Accounts (HRAs) manage council housing. They receive no subsidy. Their income is overwhelmingly from tenants’ rent and service charges; 94% of the collective income of all HRAs. The quality of the homes, and hence the living conditions of tenants, depends upon key housing components (bathrooms, kitchens, central heating, roofs etc) being renewed in good time. If they are left beyond their useful life then the homes deteriorate.

Today, HRAs have insufficient funding to renew existing homes over the long term. My own council, Swindon, has a shortage of capital funding of £80 million over the next five years alone. This is unexceptional amongst councils. Whatever the differences between them all HRAs are short of sufficient resources.

Why are they short of funding? In 2012 a new council housing finance system was introduced – self-financing. It involved a ‘debt settlement’ in which what was deemed by government to be the national council housing debt was disaggregated and shared out amongst stock owning councils. £13 billion extra bogus debt was imposed on 136 councils.

In this fraudulent paper exercise the Public Works Loans Board (an agency of the Treasury) ‘loaned’ them £13 billion. Together with ‘historic debt’ councils owning housing are burdened with around £26 billion debt.

This isn’t in any real sense debt. It is the result of what you might call creative accounting by the Treasury. It’s a means of fleecing tenants whose rent pays off the loans and the interest charges. Currently, it costs councils £1.25 billion a year – 15% of the £8 billion total income of HRAs – to service this debt. Only 12%, £970 million, was budgeted for capital spending last year. That covers renewal of existing stock, cost of new build and purchases.

We can say this debt is bogus because we know that council tenants have paid more rent than the costs of borrowing for past building programmes. The House of Commons Council Housing Group discovered that in the 25 years to 2008, tenants paid £91 billion in rent but councils only received £60 billion ‘allowances’1. The £31 billion difference was more than outstanding debt for past building programmes. That’s why the demand to cancel this so-called debt was made by Defend Council Housing, the House of Commons group, even the LGA. Unfortunately John Healey refused to agree, as did the Tories when elected.

Grant Shapps, Housing Minister in 2012, said that it would provide sufficient funding for councils to be able to maintain their stock to the Decent Homes Standard, over the 30 years of their business plans. This wasn’t true. The previous government’s own research showed that if funding was based on actual need, it would require a 67% increase. Yet the increase was just 24%. So under-funding was built into the system from the very start. Then from 2012 the coalition and Tory governments introduced policies which resulted in the amount of income councils collected being much less than projected in the ‘debt settlement’.

The amount of so-called debt which each council was given was based on an estimate of their rental income over 30 years and the number of RTB sales (each home sold is rent income lost to HRAs). However, the government

  • increased discounts on RTB as a result of which there was a five-fold increase in sales. This meant that councils lost far more rent than estimated in 2012.
  • introduced a 4 year rent cut of 1% a year.

Since HRA business plans were based on projections which are now completely out of synch with actual income, councils are collecting hundreds of millions of pounds less rent than incorporated in their business plans. For example, Swindon is projected to collect approximately £360 million less rent over the course of the business plan than the 2012 estimate, Newcastle in the region of £500 million less. Overall, councils will take in many billions less rent income than estimated in 2012.

The result of this is that HRAs have insufficient funds to renew their existing stock in the long-run. Key components which are left in place beyond their useful life not only lead to worse living conditions for tenants and the irritation of repeated job requests as components fail regularly, but they also drive up responsive repair costs.

Labour’s 2019 general election Manifesto included a commitment to review council housing debt. Obviously it cannot do that directly without being in government. However, it is time for Labour to end its silence on this issue. It can challenge the Tories under-funding of HRAs. Under the 2011 Localities Act the government has the power to reopen the ‘debt settlement’ and readjust the debt if there are significant changes in income or costs. Labour should be demanding that the government do just that and write off debt at least in line with the projected losses that have resulted from their policies since 2012. Through its group in the LGA, Labour could collect statistics which highlight the scale of the shortfall faced by councils over the course of their business plans and organise a national campaign.

Labour should also make a commitment itself, to cancel the debt if elected. The Labour Campaign for Council Housing has just published a pamphlet, The case for cancelling council housing debt, which examines the historical reason for this financial crisis in more detail than I have space for here.

Debt cancellation would address the under-funding of HRAs in relation to the existing stock. The extra £1.25 billion would enable more than double the level of investment in renewal of key components to be spent. Labour should be demanding from the government funding sufficient to maintain and improve the standard of existing homes. Moreover, with a Decent Homes Standard review currently taking place Labour has a duty to highlight the consequences of this under-funding. Proposals to improve the standard of the DHS would be worthless without councils having the wherewith-all to carry out the necessary work.

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

Martin is the Secretary of the Labour Campaign for Council Housing.

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1 This was not government money. The ‘allowances’ were in reality councils’ rental income. The government decided how much of it they could keep.