Tag: Council housing

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Compromise and Council Houses

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. 

<strong><span class="has-inline-color has-accent-color">Leo Gibbons-Plowright</span></strong>
Leo Gibbons-Plowright

Leo is a Labour and Co-Op Party Councillor for Forest Hill in Lewisham.

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Building the New Jerusalem – How Attlee’s Government built 1 Million New Homes

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.

<strong><span class="has-inline-color has-accent-color">Paul Dimoldenberg</span></strong>
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.

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It’s Tory v Tory as tenants scent victory

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.

Continue reading “It’s Tory v Tory as tenants scent victory”
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The Daily Mail does the minister's dirty work – again

By regular guest blogger Monimbo
Once again the Daily Mail is the favoured news outlet for a government minister, and once again it fails to check if he’s actually right.  This time the story is about 6,000 council tenants who allegedly earn more than £100,000 per year, and how Mr Shapps wants to make sure they either leave their homes or pay a market rent, because they are costing the taxpayer more than £100 million.  Poor Frank Dobson is rolled out once more as the prime example.
Let’s take a look at some of the facts. First, the article says that not only do 6,000 council tenants earn more than £100k but that 720,000 earn more than the national average wage. What we know is that 18,000 council tenants were identified as earning more than £50k annually in the English Housing Survey, so it’s perfectly possible that Grant Shapps has got his staff to break these figures down further and has found that one third of this group earn over £100k. Let’s give him the benefit of the doubt. What is implausible is that 720,000 households earn above the average wage: the true figure of council tenants earning more than £20k annually is 405,000, and earning more than £30k is much smaller at 154,000.  The Mail is confusing council tenants with all social tenants.
Now it’s important to remember that citing these figures does not mean that anyone knows where these 6,000 high earners actually are. The figures are based on sample surveys, grossed up to apply to all English households.  Apart from a few celebrity cases like Frank, neither Mr Shapps or anyone else could identify the culprits.
Mr Shapps wants to introduce an upper income level above which tenants will have to pay full market rents. But the obstacles he faces are formidable: first, it needs legislation with some careful wording, then it needs a way of rewriting existing tenancy agreements to change the tenancy terms of households who have probably enjoyed them for many years, and then it needs to impose a means test on people who almost certainly have never had to reveal their incomes to the council (e.g. to claim housing benefit).
Finally, given that rent-setting is and for many years has been a power that rests with councils and not with government, he needs a way of telling Camden council to raise Frank’s rent.  The irony, of course, is that he’s floating these plans at the very time when he’s giving councils even more freedom over their council housing finances.
The other part of the Mail’s story is, of course, that it’s the taxpayer who is subsidising these high earning tenants, and who will therefore get the benefit if they pay their full whack.  Wrong on both counts. It might suit Mr Shapps in peddling the story to the Mail to woo their tax-paying readers, but as he well knows they don’t subsidise council housing.  If high earners pay more, it’s councils and other tenants who will benefit. If high earners move out, which is what he and the Mail seem to want, there will be no savings at all, simply a new tenant paying the same rent.  Of course it would free up a council house, but that isn’t a direct saving to the taxpayer.
There is sufficient confusion in the financial aspects of this story that I haven’t even touched on the arguments for having a number of better-off people in council housing, and I’m sure Red Brick readers are well aware of the case that can be made.  The next time the Daily Mail links council estates with the riots or the chronically work-shy, it might pause to ask what the opposite might be. Having a few more people living in those estates who have good jobs and earn above the average wage, perhaps?

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Homeless people are 'the likes of us'.

Michael Collins is styled as a biographer of the working class, with his best known work being ‘The Likes of Us’ published in 2004.  The book’s rosy view of working class culture in history and how it was destroyed by social change was controversial, with black writer Mike Philips saying ‘the book… appeals to the most destructive form of nostalgia.’
Recently Collins has meandered through the history of council housing.  I mainly enjoyed his TV film history ‘The Great Estate: The Rise and Fall of the Council House’ earlier in the year, but took issue with his analysis of what had gone wrong over the last 40 years and in particular the blame he attaches to the 1977 Housing (Homeless Persons) Act, an argument he returned to this week in a piece for the Independent.  The core of our difference is that I think the homeless are ‘us’ too.
Comparing a distorted view of how awful council housing is now with an exaggerated view of how great it used to be only benefits those who wish to undermine its future.  The  golden era was just as mythical as the right wing press’s modern view that it is a failed sector populated by ‘Shameless’ characters, everyone skiving, dependent on benefits and getting their home by conning the State that they were homeless.
I don’t look back on my childhood in Newcastle, on the Montagu Estate in Kenton, as some great heyday when everything was right in the world.  Still in the desperation of the post-War housing shortage, it was without doubt a pretty good deal: a brand new Bevan house, with partial central heating, front and back garden, close to both the Town Moor and the countryside stretching towards the tin hut called the airport.  Virtually all the men were in work, most had skilled trades or were clerks, so I suspect there had been social selection going on.  It could still be a tough place, with gangs and fights and flick-knives, and we didn’t venture onto neighbouring estates.  Periods when men fell out of work, as most did from time to time, were hard.  There were no shops, just travelling vans, and no community facilities apart from the neighbourhood school.  The front door was the colour the council said it would be, no-one had security of tenure and anyone not paying their rent got kicked out.  So my nostalgic memories are reserved for Len White or Stan Anderson playing at St James’s Park (now forgodsake the Sports Direct Arena) and a youthful visit to the Club A Gogo to see Eric Burden and the Animals.
So where specifically do I think Collins gets it wrong?  Let’s start with his tirade against the homeless persons’ act. “It was Labour who demolished a fair letting system. In 1977, the homeless were made a priority and a system of “need” was introduced that was open to abuse. Unsurprisingly, a lot of “homeless” people appeared, to the annoyance of locals who had waited patiently for years on the housing lists.’ 
This revision of history, that allocating council housing according to housing need is the root of the sector’s perceived problems, has been gaining currency, influencing ‘Blue Labour’ and the Labour’s front bench.  The reality is that the impact of the homelessness legislation on allocations after 1978 was slow.  The Act encouraged a high degree of gatekeeping (and still does), and there was a high refusal rate for applications, rigorous application of the ‘intentionality’ rule, and many people suffered the purgatory of a period spent in bed and breakfast or single mother’s hostels.  It was a process no-one would choose to go through if they had any real alternative.  Local connection was vigorously applied and people with a connection to another place were sent back.  Virtually all homeless applicants were local and on the waiting list.  Crucially, the homeless only became a significant proportion of total allocations when supply collapsed in the 1980s as homes were sold and not replaced.  Most homeless people would have been rehoused off the waiting list before becoming homeless in the 1970s when supply was much better.
I also disagree with Collins when he says ‘The Government should clarify who the houses are for. In the past it was clear who was entitled.’  My view is that it was only in late 1960s and early 1970s, following ‘Cathy Come Home’ and the rise of Shelter, that council allocations policies came under greater scrutiny.  Before that there was a variety of local practices, but rarely were they transparent.  Applicants were subject to subjective assessments of their housekeeping standards by home visitors, and the practice was often discriminatory as the poorest were kept out.  In many areas, individual house allocations were made by councillors, a practice that would be condemned today.
Collins lauds ‘sons and daughters’ schemes which ‘ensured extended families remained on the same estates, in the expectation that further generations would remain locally.’  But it is worth remembering that in many places black people were excluded either by schemes that favoured existing families or by direct discrimination.  The National Front used the phrase ‘sons and daughters’ to mean ‘no blacks’.  It was right that these practices were challenged vigorously by the Community Relations Commission and others.
There’s plenty wrong with council housing, now as in the past.  But it is better run and managed than it ever has been.  Tenants have gained security of tenure and reasonable rents in a profit-making and improving  sector.  5 million households have expressed their demand to live in it.  Council housing is a success story, just as it was in the past, and could have a great future.  Its role in providing decent housing to millions of ordinary people deserves proper recognition and proper assessment – with a lot less spin.

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The build up to HRA reform

Monimbo
With self-financing for council housing just 139 days away we can expect a plethora of reports and advice to councils on what they can do to maximise the benefits.  The latest has been produced by Navigant for London Councils, which adds to an earlier one by PwC for the Smith Institute.  CIH has been producing bulletins for members and has teamed up with CIPFA to create an online resource on self-financing.  What are they all saying?
As everyone knows, the big prize from self-financing is that councils get to control their rental incomes for the first time (or, at least, for the first time in recent memory).  PwC emphasises the magnitude of this by assessing the total income as being more than £300bn over the next thirty years, though of course the real figure could be very different from this.
However, as everyone also knows, the big snag is the cap that will be imposed on each council’s borrowing, which will vary in its effects: some councils will have very little ‘headroom’ above the cap for extra borrowing on top of the new level of debt they have to service, others will have quite a lot.
For the first time, there are real political decisions to be made about setting rents and using the revenue they generate.  Not surprisingly, this is also causing real tensions. First, do you put rents up to maximise income and borrowing, or do you keep them down to reflect tenants’ difficult financial circumstances, particularly those who pay rents from their own incomes?  There is no formula that can give an answer to that conundrum and each council will have to decide for itself, hopefully in full consultation with tenants.
The second tension is how to spend the spare cash.  There are multiple choices here too:
completing decent homes programmes where there is still a shortfall, doing works to improve the security of and amenities in estates, starting to make the stock energy-efficient through retrofit programmes and – of course – new build.
A common feature of all the advice being published is that the key to maximising resources is creative asset management.  Until now, council haven’t had the same incentives to manage their assets constructively as housing associations have had, and there are still limitations on what they can do, but for example it might make sense to demolish some stock that is no longer in the highest demand and is costly to improve.  It is also going to be vital to reconfigure planned maintenance programmes so that they take account of the need to radically improve energy efficiency, factoring in outside resources such as the Green Deal.
These are demanding tasks, and the key question is whether or not the resources expected to be available from April onwards will be enough to satisfactorily manage and maintain existing assets, before even contemplating new build.
The London Councils report suggests that some boroughs (the public document doesn’t say which) will struggle to balance their business plans, ie. both meet the new debt costs and effectively invest in and maintain their assets.  Most, though, will have some headroom, limited of course by the cap.
What is clear though from the various reports is that no one has yet come up with an idea for adding to councils’ resources beyond the basic options that have always applied, which are:

  • fully use the funding you will have in the self-financed HRA – including potentially build new homes with grant from the HCA if you are willing to go for ‘affordable’ rents
  • lever more funds into the existing stock through PFI
  • transfer the stock
  • use land and other assets to bring in affordable housing through other routes, mainly via housing associations.

Even the new options for ALMOs, which I blogged about in June, involve transfer, albeit to a community-led body and maintaining a close link to the local authority.  The London Councils report suggests transfer as an option, too, but focuses on the merits of using it for parts of the stock – either good stock that will bring in some money, or poor stock that will remove a liability.  But will partial transfer be attractive either to councils or to tenants?
My conclusion from reviewing this material is that the choices largely remain as they were when the current self-financing deal was put on the table.  Given that the government (like
the previous one) insists on sticking to the current borrowing rules, the options for bringing in resources that are ‘off balance sheet’ are essentially the same ones, with their respective pros and cons.
Councils without ALMOs are well-advised to concentrate on making the most of what they have already got, and be as well prepared as possible to finalise and start to implement their business plans when the final debt levels are known in the New Year.  For councils
with ALMOs the advice is the same, but those who are planning to close their ALMO down should be aware that – whatever the other arguments – they are foregoing options that just might be attractive once self-financing gets underway.

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Not just deserts, just puddings

It’s a complicated business, housing.  Those poor souls at the Policy Exchange and their pollsters YouGov apparently can’t tell the difference between social housing and council housing.  Despite generating alarming headlines (‘Public backs limit to social housing areas’ – thanks, Inside Housing) a glance at the detail of the poll (and the base data, entitled ‘Fairness’ presumably with a touch of irony) shows just a little confusion.  Although the discussion in the Policy Exchange report ‘Just Deserts’ is about social housing, the actual questions asked were about council housing.  Just as well they didn’t wander into the fantasy world of ‘Affordable Rent’?*
Strange questions they were too.  “People should not be offered council houses that are worth more than the average house in their local authority” Agree or disagree?  Despite requiring considerable knowledge – what is the average, how do council houses compare in value, might there be a different answer for housing associations, does this ever happen in reality? – the question is really quite leading.  So no surprise that a majority say they agree.  It tells us very little about public attitudes to council houses, and nothing whatsoever about public attitudes to housing association properties to rent (because they weren’t asked about that). 
And the second question was “People should not be offered council housing in expensive areas” Agree or disagree?  Also rather leading and confusing. 
This selection of questions tells me more about Policy Exchange and the point they wanted to make in the first place.  I suspect they know – and if they don’t, YouGov should – that if you ask positive questions about mixed and balanced communities you get very different answers.  But that wouldn’t fit PEx’s obsession with contradicting the pro-equality conclusions in The Spirit Level, would it?  
*PS I’ve started calling ‘Affordable Rent’ SCARE tenancies – standing for So-Called Affordable REnt.  Will it catch on?

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Right to transfer

<strong><span class="has-inline-color has-accent-color">Steve Hilditch</span></strong>
Steve Hilditch

Founder of Red Brick. Former Head of Policy for Shelter. Select Committee Advisor for Housing and Homelessness. Drafted the first London Mayor’s Housing Strategy under Ken Livingstone. Steve sits on the Editorial Panel of Red Brick.

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Attracting virtually no comment at the time it was passed, an obscure clause in Labour’s 2008 Housing and Regeneration Act could offer council tenants a unique but controversial way of owning and running their own homes.

Section 34A, as it is known, requires a local authority to co-operate with a formal notice from a tenant group to transfer ownership of council homes and estates to them.  The government has decided to press forward with making regulations under the section and has branded it the right to transfer.  A draft is expected in February.

As a policy, S34A is a direct descendant of the Tenants Choice legislation that was introduced by the Conservatives in 1988.  The political belief at the time was that tenants would rise up to take control of their housing from Labour councils who ran their housing badly.  In practice, and famously, it was used by Walterton & Elgin Community Homes (WECH) to take over their estates when Westminster Council, led by Shirley Porter, tried to sell them to developers.  As it didn’t lead to the hoped-for tenants’ revolt in Labour areas, and caused embarrassment in Westminster, it was repealed in the mid 1990s. 

WECH is still going strong, a leading example of tenant control working in practice.  Based on its experiences, the organisation has become a strong advocate of the principle that genuine empowerment through community ownership and control can lead to measureable improvements in happiness and wellbeing.

The right to transfer is seen by the ConDems as furthering both Localism and the Big Society.  So we have Labour legislation and ConDem implementation, does this mean there is a consensus that the right to transfer is a good thing?  The left has often been divided on the issues of tenant control and, in particular, tenant ownership.  The co-operative and mutual traditions run deep, but there has often been hostility to moving ownership out of the public sector and away from traditional democratic control.  Is transfer from a council to collective tenant ownership and control ‘privatisation’ or a different form of socialised ownership?  I go for the latter as long as the model does not allow for private gain (as some earlier co-ownership models did) and the homes are properly used to meet housing need.

There are of course dangers to negotiate.  If tenants wish to transfer part of a local authority’s stock to their ownership, coming out of the housing revenue account is hugely complex and has risks for both sides.  Other major issues to deal with include the viability of the new tenant organisation and the long-term relationship with the parent authority over issues like allocations and future development. 

The right to transfer will also cause bigger political divisions in the Conservative Party.  In Hammersmith and Fulham, normally the incubator of Tory housing policy, tenants on estates threatened by demolition as part of the huge Earls Court redevelopment have already served notice that they want to take over their estates, potentially scuppering the council’s plans to reduce the amount of social housing in the borough.  Will the government be willing to effectively overrule the Prime Minister’s favourite council to pursue its policy?

Given the need for the Labour Party to develop a new stance on housing, my own view is that Ed Miliband and the housing front bench should support tenants interested in using this new power. 

PS – In legislative technicalities, S296 of the Housing & Regeneration Act 2008 introduced a new Section 34A to the 1985 Housing Act.

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What will housing look like at Christmas 2014?

<strong><span class="has-inline-color has-accent-color">Steve Hilditch</span></strong>
Steve Hilditch

Founder of Red Brick. Former Head of Policy for Shelter. Select Committee Advisor for Housing and Homelessness. Drafted the first London Mayor’s Housing Strategy under Ken Livingstone. Steve sits on the Editorial Panel of Red Brick.

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Just published on the Labour Housing Group website is a fascinating article by LHG Executive member Graham Martin, who tries to predict what will happen to the 3 main tenures between now and Xmas four years hence, when we will be 5 months away from the most likely date of the next General Election.  What will the Labour Party, when returned to government, be facing in housing?  Here is a summary of Graham’s conclusions (figures are for England only).   

Social Housing

Housing Associations currently own around 2.3m affordable homes.  Given the size of the stock, the overall numbers will change slowly despite the planned changes. 

  • The current (inherited and new) social rented programme will produce about 100,000-120,000 extra ‘target rented’ properties.  But between 100,000-170,000 existing target rent homes will be relet at intermediate (upto 80% market) rents.  In 2014 it is likely to be 50,000 fewer in total than now.
  • There will be around 285,000 more homes let at intermediate rents (say 135,000 relets and 150,000 new build). 
  • The debt funded/rental cross-subsidised new Intermediate rented homes will be produced mainly in London and the South East (with some in the South West and Midlands) as it is here that the maths work best.  In other parts of the country, intermediate rents will result in either a small increase or even a rent reduction, making development on the new model unviable. 
  • The biggest impact is likely to be caused by the interaction of the various benefit changes, and in particular the overall benefit cap of £26,000, restricting tenants’ ability to pay.

Council house numbers will change slowly.  There is little appetite and resources for significant stock transfers.  Some other conclusions: 

  • The reform of Housing Revenue Accounts is likely to improve councils’ financial strength and their ability to invest in their own stock.  There is a risk that there will be a smash and grab raid on HRA money (rising rents, financially more secure) to cross subsidise the General Fund.
  • The provision by councils of Intermediate rented housing is likely to be slow.
  • Management issues around benefits are likely to be the same as with Housing Associations.
  • Changes to statutory homelessness rules, and changing letting priorities will have a significant impact.

Home Ownership

Graham projects that house prices might fall another 20%, maybe 25%-30%, as measured against inflation. This will be mainly due to the long term ‘deleveraging’ of the residential mortgage market – i.e. there will not be the money to lend to home owners to buy new homes (such money as there is will go mainly to those buying the nicest properties with the biggest deposits).

Home construction for home ownership will be remain low until 2014, after which is may start to increase again (from a very low base).

The lack of affordable homes for (all but the best off) first time buyers will result in increased pressure on the rental market, and more adult children living in the parental home.

Private Rented Sector

The hardest to predict. The only certainly is that there will be big change.

The changes to Housing Benefit (and total benefit) rules will profoundly impact on the sector. Landlords may split their properties into smaller flats to respond to the benefit caps and ceilings.  Savills are projecting that the impact will be, first, large falls in demand for and rents of 1 bedroom flats (due to under 35’s now being subject to the ‘single room rate’ rule), and, secondly, increased demand for larger ‘shareable’ properties.

The new 30% centile cap on maximum HB and the plan to greatly widen the ‘Broad Market Rental Areas’ will have a big impact.  There are areas where over 30% of private tenants are dependant on HB, but will be constrained to living in the 30% of cheapest properties. 40% into 30% just does not go….

It is likely that the gap in housing (especially ‘green’) quality between other tenures and the private rented sector will grow significantly upto 2015.

Regulation and quality control are likely to be drastically reduced due to spending cuts, and there is a danger that undesirable landlord practices will increase. This is unfair to tenants but also to responsible landlords and managing agents.

There is an opportunity to promote high quality institutional landlordism, with investment available if the regulatory structure is right.  REITS – Real Estate Investment Trusts – could work well in residential letting, kick starting the UK residential construction industry, and providing high quality, long  term rented property at market rents.