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.
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.
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.
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
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.
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.
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:
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 is an Executive Member of the Labour Housing Group.
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.”
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 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.
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.
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.
In part two of this three part blog contribution we continue to hear from inside the tent to what extent our planning system is truly representative and democratic. Do cries of ‘social cleansing’ hold any veracity, or does left-wing NIMBYism refusal to accept trade-offs manifest itself to the same effect?
Once upon a time, I would’ve stood on Reginald Street in Deptford in searing anger. Even with the land cleared and the hoardings up, I would still be bitter about what my colleagues had been put through. But today I’ve found myself mellowed. As I watch the diggers at work, laying the foundation for 117 new social homes, I wryly smile to myself. Today, the fight for these homes seems so easy, so tiny, so inconsequential.
The old Tidemill school site on Reginald Road had long been earmarked for the development of new homes. Instead of allowing the vacated site to fester, Lewisham Council agreed to a ‘meanwhile use’ leased and the area was handed over to a volunteer community group to operate. With the land, they created a ‘community garden’.
A ‘community garden’ is a bit of a misnomer, as it conjures up the image of an area open and shared by all in the neighbourhood. In reality, due to a lack of volunteers, by the time of its closure, the garden was overgrown, locked up, and open for a few hours each Saturday. Insiders say that a small clique living on well-heeled streets over in Brockley, operated the site as their own semi-private enclave. No big deal, we felt, because at least the land was semi-utilised.
The trouble only started when the council request the stewardship of the land to be returned so that our long-awaited housing development could get underway. Reneging on their promise to hand back the land when the ‘meanwhile use’ was up, the community group refused to hand over the keys. And thus, the ‘Save Tidemill Garden’ campaign arrived.
It quickly snowballed.
Opposite the development site, sits the Birdnest pub in Deptford. I like the boozer, but if I say it wears its counter-cultural chic a little too earnestly on its sleeve, you might get what I mean. It’s filled with students, old rockers and geezers, and was a perfect local meeting point for the Save Tidemill campaign.
Close your eyes and picture a row of wooden tables, on each one, sits a different segment of the Save Tidemill campaign’s coalition.
Table 1: The founders of the garden, mostly your classic NIMBYs, primarily asset-rich and comfortable. They’ll miss their garden when it’s gone and they don’t want pesky social housing spoiling their Saturday afternoon sun-spot.
Table 2: Assorted Left-wing groups. Nearly all older NIMBYs as well, these lot are driven primarily by political opportunism and they want to find a wedge issue to campaign against the local Labour council (internally in the Labour Party, or externally). For this group, they’ll reject any council-led development programme from the pin-head of ideological grounds. Any development that is not 100% council ‘target rent’ is rejected, even if the private sale properties on-site are necessary to fund the building of the social homes. It means that in reality, they reject any new large-scale affordable house building.
Table 3: Eco-Nimbys, probably Green Party members, you know the ones — the type of people who weep over fallen trees on the HS2 path, despite HS2 being a piece of crucial infrastructure to increase our rail and freight capacity and reduce our over-reliance on private cars and lorries which has a huge knock-on effect on our nation’s carbon emissions and the death of more of your bloody trees.
Table 4: Anarcho-crusties / Green-Black Groups. A bit like the Eco-Nimbys but they are more inclined towards violence towards the man.
The Save Tidemill campaign only got as noisy as it did because Tables 1 & 2 framed the building of this new social housing as corporate ‘ecocide’ and therefore managed to connect with Tables 3 & 4. The campaign itself was risible. Misinformation was spread in the neighbourhood and councillors who spoke up for the scheme were relentlessly attacked. Eventually, the rhetoric spilt over into direct action.
Cllr Joe Dromey, one of the few who were brave enough to face the misinformation head-on, would eventually be attacked on the street by masked protestors. Cllr Paul Bell, who led the scheme, would take his address off the Lewisham Council website out of fear of reprisals. He had been accosted in the street as well, while leaving a council meeting.
But as nasty as the campaign got, I never felt like our plans were in jeopardy. Here were 117 new social homes, as well as 41 for shared ownership and 51 for private sale, replacing a ‘meanwhile use’ garden and an old and dilapidated block at 2–30a Reginald Road. The new green space on the development would be accessible to all unlike the Tidemill Garden, and the tenants of 2–30a Reginald Road would be provided brand new high-quality homes on lifetime tenancies. Those in housing need would be given what they deserved. The case was a no-brainer.
Lewisham Council has a Residents’ Charter that guarantees all residents impacted by a regeneration scheme are given the right to remain on their estate and guarantees an increase in genuinely affordable housing. To me, these guarantees are not only morally right, but they also make political-strategic sense.
Left-wing groups and other opportunist political opponents have desperately and repeatedly tried to leap into our estate regeneration proposals for political gain. And while they may have recruited a few new paper-sellers in the process of campaigning, they have failed to stop any major schemes.
Take the regeneration of Achilles Street, New Cross. Despite a campaign by left-wing NIMBYs spreading fearmongering and disinformation among tenants and leaseholders, an estate ballot returned 73% in favour of the regeneration. The likely outcome of this renewal will be 450 homes on site, with a minimum of 50% of the total homes built being affordable, and a minimum of 35% of the total homes built will be Council-owned homes for social rents.
Similarly, even Lewisham Council’s joint-venture with Grainger to build 324 new homes for rent off Besson Street in New Cross slid fairly comfortably through planning, with the ward’s left-wing councillors speaking in favour of the proposals. On the Besson Street scheme, 65% will be leased at market rent to fund the 114 homes which will be lease at London Living Rent. The scheme also delivered an array of other amenities for the area including a new GP surgery and community space for the New Cross Gate Trust.
The left-wing NIMBY groups rejected Besson Street because London Living Rent is not social housing. Instead, these are genuinely affordable rents set by the average incomes in the Telegraph Hill ward. Each household will sign a secure 5-year tenancy that is automatically rolled-over if they want to remain. In Lewisham, we need to build all sorts of tenures, not just social housing, and these homes are designed and will cater to our key workers who will never be eligible for social housing.
On the hoardings that line Besson Street today, someone has scrawled ‘stop social cleansing’. But in fact, these new homes will help key workers — your nurses, your police officers, your school teachers, remain in our borough near where they work. Even more absurdly, the cries of ‘gentrification’ and ‘social cleansing’ were used for Achilles Street and Tidemill Garden. These schemes offer net-gains in social housing — they are a firewall against gentrification and help low-income families remain in our community.
The left-wing NIMBYs have tried to peddle the falsehood that these estate regenerations are not supplying social housing because the new homes will be provided at London Affordable Rent — which is pegged at 2016 social rent levels. London Council target rent is now £105.87pw for a two-bedroom property, while London Affordable Rent is £158.85pw. The 13 residents of Reginald House who would be offered a new home on the development, would continue to be housed at their target rent. For the 104 homeless families being offered a new home, it’ll be a huge fall in rent and for many, the first time they’ve ever had a secure, decent home for their family.
Affordable housing funding is extremely restricted by an austerity-driven Conservative government. But as this article highlights, in 2016, Sadiq Khan as Mayor of London, managed to negotiate funding from central government for new affordable homes. While funding for social homes, at target rent, were ruled out, the government did agree to fund new homes at Khan’s London Affordable Rent. London Affordable Rent is sent at 2016 target rent levels and is deemed a social rent. While target rent levels have fallen since, year on year – a plan devised by George Osborne to reduce the housing benefit bill — London Affordable Rent has stayed static, that’s caused the disparity.
The long and short of it is that for these homes to be funded and built at all, they’ll need to be at London Affordable Rent. Working with a charitable provider and building at London Affordable Rent was the only way Lewisham Council could get this many genuinely affordable homes built at the Old Tidemill site. For activists, it’s a choice of viable developments, providing social homes at London Affordable Rent, or no new social homes at all. Sadly, I know where some groups would side.
The refusal of these left-wing activists to accept those trade-offs, reveals, more than anything else, just how out of touch they are with the lives of London’s precariat and working-poor. The median rent for a two-bedroom property in Lewisham is £365.75 per week, above the housing benefit cap. Moreover, ‘no DSS’ discrimination remains rife in the private sector. Many of our poorest residents cannot afford the private sector and if they can, they remain in overcrowded sub-par accommodation.
Even if new homes on Achilles Street and Tidemill Garden are more expensive than target rent council homes, they are seismically cheaper and more secure than the private sector. The homeless families moving into these homes will care more about a new chance in life than the fact that a registered charitable provider is supplying them a life-time tenancy and not the council. Nor are they likely to quibble about a rent far more affordable than their temporary accommodation or home in the PRS.
Don’t let perfection be the enemy of the working class.
And that’s why these campaigns do not work and never build traction beyond those four tables. Because their arguments are devoid from the lived-reality of the housing crisis and the trade-offs necessary to build new social housing. Despite our reputation, councillors are not daft. We clock that no young renters joined the chorus against the Tidemill Garden development at our local Labour meetings, even if they did follow the Momentum whip.
During Lewisham Labour’s manifesto working groups in 2017, it was noted that it was our young Momentum members who were the ones most enthused by our Besson Street plans. Not only did they like that the income generated from the scheme would help provide services for our residents, they knew from personal experience how life-changing it would be to move into long-term, stable housing in the private rented sector. Like me, they can only dream of a home at London Living Rent.
Councillors speak to residents in our wards all the time and we know that the overwhelming majority accept schemes like Achilles Street, Tidemill and Besson Street are positive. Of course, we still take precautions — we ensure we engage early on any estate regen project and we ensure the facts of a scheme are widely disseminated. On Achilles Street, we held meet-and-greet drop-ins to tackle misinformation. Yet when push comes to shove, sensitive and policy-compliant council-led schemes to build new social and affordable housing are going to have broad support.
While not as politically-heated as large estate regeneration, smaller social housing developments, such as estate-infills can be trickier. Faced by densification of their area without an offer of a new home, current tenants and leaseholders on an estate often take a ‘what’s in it for us?’ approach to the building of essential affordable housing. Moreover, infills often only remain viable if they are larger in scale than many residents are willing to accept.
However, colleagues, alongside the wider public, accept the trade-offs needed to deliver social housing schemes and policy compliant applications will often be looked upon sympathetically. Broadly, public and institutional support (i.e. amongst the council’s political group) work in tandem. It is why councillors can feel emboldened to champion our promised new social and affordable housing schemes and face down the political pressure from noisy campaigns to abandon policy complaint schemes.
But in the grand-scheme of things, I know that all these battles for social housing are small-fry. Local authorities do not have the resources to purchase new land to build social housing on. The scope of what we can achieve is extremely limited. Despite our good work, we can’t even build enough council homes to replace the ones we continue to lose from right-to-buy.
In short, only the private sector is going to get us out of this housing crisis. While affordable housing programmes have institutionalised support, across the political spectrum market-rate builds are viewed with suspicion. This suspicion leads to a widespread lack of public support for market-rate builds and in my view, this in turn leads to councillors having a pre-disposition to be swayed by NIMBY-campaigns.
In part three of this series, I’ll explain that if we don’t accept this reality, and take a new approach to development, the housing crisis will never be beaten. We need to build a new consensus — one that agrees that a lack of supply (+ building in the wrong places) is causing our housing crisis and that we need market-rate developments at large scales that we cannot deliver without reform.
This is option two, and the only one left.
Leo Gibbons-Plowright
Leo is a Labour and Co-Op Party Councillor for Forest Hill in Lewisham.
Everyone knows that Clement Attlee’s 1945-1951 Labour Governments created the NHS, brought the coal mines and railways in to public ownership and gave India and Pakistan independence. But one of Attlee’s lesser celebrated achievements was building one million new homes at a time when building materials were in short supply and when the construction labour force was reduced to a third of its pre-war size.
From a slow start in 1945 -1947, new housing completions averaged around 200,000 a year for the next four years from 1948 -1951. By 1951, a total of 1,016,349 new homes were built, of which 806,857 were new Council houses. On top of that, 156,623 ‘prefabs’ were built, many of which provided decent and much-loved homes for many years to come. In addition, hundreds of thousands of existing homes were repaired and converted in the six years after the war.
Michael Foot rightly claims, “This achievement was no small one in the first years after the war when the country was also engaged in a big factory-building programme. It far surpassed anything achieved in Britain after 1918 or in most countries after 1945”.
However, despite the heroic efforts of Aneurin Bevan and his colleagues, more could have been achieved had Labour stuck to its Manifesto commitment and created a separate Ministry of Housing and Town Planning. Attlee gave Bevan the job of ‘slaying’ two of Beveridge’s ‘five giants’ – Squalor (caused by poor housing) and Disease (caused by inadequate health care provision). As Nick Thomas-Symonds argues:
“Having the same Cabinet minister responsible for both the creation of the NHS and housing the nation after the destruction of the Second World War was more than overload. It left Bevan to deal with the intricacies of both sides of his department when either half in itself would have been too much for a single minister.”
Should the housing building programme have been led by a ‘National Housing Corporation’, as Douglas Jay had recommended in the first few months of the Government, rather than by the local authorities, many of which had little experience of building new homes at scale.
Certainly, a national organisation with regional offices would have made planning, direction and control easier, but it could also have taken some time to establish. By harnessing the experience of the big city housing departments in London, Manchester, Birmingham, Leeds and Glasgow, which had been building new out-of-town estates for over a decade and more, Bevan was able to combine real expertise with local knowledge.
The downside was that outside the big cities, experience was strictly limited with many local councils simply unable to move quickly. Overall, perhaps a key factor in this debate is that, six years later, Harold Macmillan was able to build 300,000 houses a year based on the same local authority ‘delivery system’ established by Bevan.
Should Labour have been more pragmatic and built more homes at lower standards, as Macmillan did during the 1950s? The average new three-bedroom Council house increased in size, from 860 square feet in the pre-war period, to 1,026 square feet in 1946, to 1,055 square feet in 1949, falling back to 1,032 square feet in 1951 and down to 947 square feet in 1952.
By 1959, the average size of a three-bedroom Council house had fallen to 897 square feet. Bevan was surely correct to increase space standards, remaking famously in Margate on 22nd May 1947, “We shall be judged for a year or two by the number of houses we build. We shall be judged in ten years’ time by the type of houses we build”.
There is little doubt that the new, larger Council houses built in the years immediately following the Second World War were some of the best ever built and have stood the test of time. In 1950, the first four blocks completed on the Churchill Gardens estate in Pimlico won Festival of Britain Architectural Awards. It wasn’t just the architectural critics who praised the flats. In 1962, tenants in the ‘posh’ private flats in Dolphin Square next door opposed a rent rise arguing, that “many of the flats are not as nice as those put up by the Council in Churchill Gardens opposite”.
Other post-war estates were similarly feted. In 1998, English Heritage listed the Spa Green estate in Finsbury as Grade II*. The Survey of London describes the Spa Green Estate as ‘heroic’. Nikolaus Pevsner called it ‘the most innovative public housing’ of its time.
Perhaps where Labour’s lofty ambitions most obviously failed was in the goal to create new communities where the ‘spirit of companionship’ would flourish and “wartime sentiments of social solidarity and shared purpose could be maintained and strengthened in the post-war world”. Aneurin Bevan harked back to the time where “the doctor, the grocer, the butcher and the farm labourer all lived in the same street”.
Similarly, Lewis Silkin’s ambition that class distinctions would fade away in the New Towns was never achieved. He hoped that “different income groups living in the new towns will not be segregated” and that after attending a town centre event, “When they leave to go home I do not want to see the better-off people to go to the right and the less well-off to go to the left. I want them to ask each other, ‘Are you going my way?’”.
There can be no denying Labour’s fundamental achievement to meet the aspiration of very many working class families to live in high quality affordable housing – which the Conservatives followed with great success over the next 13 years. The lives of so many working class families – who had been ignored by every previous Government – were transformed for the better.
As the historian Kenneth Morgan so clearly concludes:
“The rehousing of several million people in new or renovated houses, at a time of extreme social and economic dislocation, was a considerable achievement. Housing, therefore, deserves its honoured role in the saga of Labour’s welfare state.”
His book, ‘Building the New Jerusalem: How Attlee’s Government Built 1 Million New Homes’, is available in paperback and Kindle https://www.amazon.co.uk/dp/B08N1H3PYL
All royalties will be donated to Foodbanks in Westminster.
Paul Dimoldenberg
Paul Dimoldenberg was first elected to Westminster City Council in 1982. He was Leader of the Labour Opposition Group from 1987-1990 and from 2004-2015.
He is the author of ‘The Westminster Whistleblowers’, published by Politicos in 2006, which tells the story of the Westminster ‘Homes for Votes’ scandal of the 1980s and 1990s. He also has recently published Cheer Churchill. Vote Labour.
Tenants fighting the controversial sell-off of estates in Hammersmith and Fulham are celebrating the long-awaited publication of the draft regulations for the Right to Manage and Right to Transfer.
The regulations, when finally approved, offer the real prospect that the tenants will be able to fulfil their wish to take over the estates themselves, scuppering the Tory Council’s plan to sell them to private developers as part of the massive redevelopment of Earls Court. It is a reprise of the story of the Walterton and Elgin estates in Westminster, where residents also used Conservative legislation to take control of the estates under tenant control. Community organiser Jonathan Rosenberg, who led the W&E campaign in the 1980s, is assisting the Hammersmith tenants today.
