Gordon Brown’s recent remarks, which have gone largely unreported, potentially herald a major change in housing policy. He said: “In the past we have placed restrictions on local authorities delivering social housing…..we will now put aside any of the barriers that stand in the way of this (building social housing) happening….We will not allow old arguments and old ideologies to stop us getting on with the job together”. The only problem is, does he mean it? How exactly will it be funded and delivered on anything like the scale of what is required to solve the problem?

Under the Impact Assessment of the recent Housing Act it was stated by the Government that they expected 2,500 social housing units to be built a year. But that compares with the 1,770,000 households on Council waiting lists, so that it would take 708 years to clear the current waiting list. So how much more social housing is Gordon Brown now envisaging building to tackle this enormous repository of need? The target needs to be at least 50,000 a year; even that would take 35 years to clear the backlog.
Recent precedent is not encouraging. In 2004-5 the Government built a total of precisely 100 Council houses, and the next year was scarcely much better at only 299. Even in Thatcher’s last year, 1990, 1300 Council houses were built. Nevertheless, the prospect ought to be good. To revive the economy in a steep recession, one of the best ways of generating a multiplier effect in manufacturing jobs across the country is house-building. Even without that, diverting the £12 ½ bn now largely wasted on the VAT cut would build 100,000 social housing units – the social, economic and political impact of which would be enormous.
A second question Gordon Brown urgently needs to answer is: since the Government is trying to bring poor-quality Council housing up to Decent Homes standard, are they committed to properly maintaining the rest of the Council housing stock to stop it deteriorating? If so, the Building Research Establishment (BRE) calculated that in 2001-2 the Management and Maintenance (M&M) Allowances necessary for this purposes would be £5.5bn, whereas only £3bn was made available – a £2.5bn shortfall. We were told in 2004 (PQ 29 April 2004) that “the 2004-5 level of allowances would have to increase by about 67% in real terms to reach the estimated level of need”. Adjusted for today’s prices and stock numbers, BRE’s findings show that M&M allowances are now about £1.3bn a year too low.
In addition, current Major Repairs allowances have “undercut basic investment needs by 43% over 30 years (according to Inside Finance, March 2008). That amounts to a further shortfall of £950m a year, making a total annual shortfall in allowances for maintaining Council housing stock of £2.25bn a year. What do Gordon Brown’s words mean
about eliminating this massive annual failure?
A third question for the Prime Minister which could dramatically transform the prospects for the 2 ½ million remaining Council tenants across the country concerns their rent levels. At present, they pay on average £60 a week in rent, but Councils are allowed to keep only £46 a week on average, and the remainder is siphoned off by Government to pay off historic debt. That works out at £1.7bn a year extracted from rental income which, if retained by Councils, could be used to cut the rent of their tenants, some of the poorest people in the country, by 23% or alternatively to build more social housing that is now so desperately needed.
There are two good reasons why that is not an unreasonable demand. One is that outstanding historic debt on Council housing, now amounting to some £12bn, has already been paid off more than three times over. Government receipts from right-to-buy sales have yielded altogether around £45bn, of which only a quarter has been recycled into improving public housing. In addition, stock transfer has produced a further £6bn, making a net total of £40bn extracted from the Council housing estate. So why should Council tenants still have to clear any remaining historic debt? In effect some of the very poorest people in the country are having to subsidise the Exchequer whose public expenditure has been shown in regular surveys to disproportionately benefit the middle classes.
There is another, even more fundamental, reason why the present rental system is untenable. There is no justification in charging tenants to pay off historic debt when they have no financial interest in the value of the asset in the first place. They are tenants, they do not own the property. The historic debt should therefore lie with the owners of the housing assets, namely Government, who anyway have already received back between 3-4 times the total sum needed to pay off the historic debt.
So, is Gordon Brown really serious about giving social housing the big boost, bereft of ideological prejudices, that he seemed to be implying? Are Councils really going to get the funding required to make significant inroads into cutting their waiting lists (12,000 in my constituency alone) which are perhaps the biggest repositories of social misery in Britain today? Or will Councils be relegated to a mere token enabling role with the bulk of the funds directed at public/private Local Housing Company partnerships which will build mainly housing for sale, while the small number of houses for rent will be ‘assured’ tenancies (with lower entitlements than ‘secure’ tenancies), subject to higher rents, and managed with much less accountability by Housing Associations?

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