The Government’s commitment announced earlier this month to build an extra 10,000 affordable homes in each of the next two years looks to be unravelling amid Whitehall in-fighting about its funding. The £1.5bn cost (at an average £75,000 per house) was to be found by making cuts elsewhere, but this is not surprisingly proving difficult to achieve. DCLG has been told to raise £600m, and proposes to do this by cutting both other existing LA housing programmes and refurbishment plans for 44,000 Council and 8,600 privately rented homes. A further £900m has to be found by other Departments. But rather than chopping other essential public services, what is really needed is a mini-public expenditure review across the board. That should certainly involve a drastic reduction in further taxpayer funding of the banks (which already amounts according to the IMF to a staggering £904bn – equal to over 60% of Britain’s entire GDP), chopping Trident and ID cards which are increasingly seen as having no relevant role, and raising taxes on the 2% richest over £100,000 a year who largely caused the financial crisis in the first place. A temporary surcharge of 5% on this latter group for 3 years in the current crisis would yield sufficient funding to build an additional 60,000 affordable homes, and the direct redistribution from rich to poor would galvanise public opinion which has been waiting for just such a message for so long.

The lack of affordable housing is arguably the biggest single source of social misery in Britain today. There are currently according to official figures 1.8 million applicants on Council waiting lists, a 50% increase over the last decade, and a similar number on Housing Association waiting lists (though that involves some significant overlap). At the Government’s proposed rate of build of affordable homes (45,000 per year plus the further 10,000 per year recently announced), it would still take 33 years to clear the 1.8m backlog. That is why a substantial uplift is necessary, both to clear the worst deprivation and to generate a big increase in jobs.
After a 30 year black-out on Council housing – Thatcher reduced the number of new Council houses built per year from nearly 100,000 to just 13,000 per year by 1990, and New Labour squeezed it much further to a miniscule 100 per year in 2005 – the Government has just taken the first few faltering steps to a change of policy. In May of this year the rules were changed to allow Councils to bid for Social Housing Grant which previously was only available to Housing Associations and private developers. New Council homes would no longer be subject to the annual £1.7bn siphoning off of rental revenues to central government, and Councils would be allowed to keep all capital receipts. The effect of these changes, however, it has been estimated, might only amount to some 2,500 new homes nationally – welcome, but tiny relative to the need.
The 3 July Ministerial statement upped this to an extra 10,000 per year – provided of course the funding can be found. But once again there are serious caveats. DCLG and Regional Government Offices continue to pressurise Councils to stock transfer their existing homes. They are also encouraging Councils to sell Council homes and land to fund ‘Decent Homes’ work. Where they can’t sell, they are now proposing Councils should ‘market rent’ Council homes – at the same time as many tenants are being put on short-time by their employers or losing their jobs altogether. The Government is also still pushing Local Housing Companies to build more, but for private sale, not Council homes.
On 29 January this year Gordon Brown, speaking to the Local Government Network conference, said: “We will be prepared to give Councils our full backing and put aside anything that stands in their way….We will not allow old arguments and old ideologies (he meant his own of course) to stop us getting on with the job”. If you really meant that, Gordon, the whole programme has to change much more radically, not only in numbers to cut the backlog sharply, but in all the other policies which pull in the other direction.

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