Bring Back Council Housing

Today the House of Commons debated housing, and in particular the acute lack of social affordable housing almost everywhere in the country. There are three main problems. One is that the demand for such housing far exceeds the Government’s present plans to provide it. Second, it is unrealistic to rely on the private sector to provide the decent, secure homes that people on lower incomes need at prices they can afford, nor is there evidence that the Housing Associations are rising to the challenge to fill the gap. And thirdly, there is nowhere near enough funding for local authorities to maintain and repair their existing stock, let alone build the new houses desperately needed.
It is good that the Government is proposing to raise the number of houses built per year from 200,000 to 240,000, to reach a total of 3 million new houses built by 2020. But the current baseline is only around 170,000 a year, and that number is anyway likely to fall for some years ahead because of the sub-prime market crisis and the credit crunch. Moreover, the numbers of specifically social and affordable houses needed is estimated to be an extra 50-70,000 a year, rather more than the 30,000 proposed by the Government, if the large backlog of homelessness and poor or unsatisfactory housing for low-income households is to be cleared within a reasonable period.
In the current economic climate there is no way that the private sector can remotely fill the gap. Nor indeed would it be wise for them to try to do so anyway. A Parliamentary Answer I received in November revealed that there are already more than 200,000 households who have taken out mortgages with a house price-to-income ratio in excess of 6:1, including 38,000 in excess of 10:1. We are already in danger of generating our own sub-prime market disaster in this country too, not just in the US, and we should certainly not risk making the present downturn any worse. Besides, there is probably a fifth of the population who have such low incomes and such uncertain employment prospects that they will never be able under present circumstances reliably to afford to buy and maintain a home.
For them what is clearly needed is good-quality secure public housing at rents which they can genuinely afford. And that is the message which the current levels of unmet housing demand are crying out to be heard. There were 1.6 million households on Council waiting lists in 2006, and the number is probably nearer 2 million today. In Oldham the number on the Council waiting list is now 12,000; yet the total Council housing stock in Oldham is now only about 12,500 – down from some 27,000 homes twenty years ago. In addition, across the country there are nearly 100,000 households who are homeless in temporary accommodation, including several hundred in Oldham.
Yet despite the pressure cooker conditions now prevailing in public rented housing, the demand to stay in Council housing, and to have more Council housing, could not be clearer. No less than 2 ½ million existing Council tenants in nearly 200 areas across the country have still opted in transfer ballots to remain as Council tenants even though they have been told that if they don’t vote for either stock transfer to a private landlord or to a housing association or to an arm’s length management organisation (First Choice Homes in Oldham), they will be denied funding for proper repairs and maintenance. Tenants know they will not get from private landlords or even housing associations the same security, socially affordable rents (at least till now) and a publicly accountable Council to complain to if things go wrong.
That’s why it’s now so vital that the Management and Maintenance Allowances and the Major Repairs Allowances which Councils get from the Government should be paid to all Councils (even where the tenants in a ballot have declined to shift) and that they are pitched at an adequate level. At present they are fixed far below this level. A report from the Government itself, issued this month, says that current allowances “undercut basic investment needs by 43% over 30 years”. That is a staggering admission – that the funding provided for Council housing is little more than half of what is basically needed.
It is this huge shortfall in allowances which is driving Councils to privatise their homes, even against the wishes of their tenants. It means also of course that many local authorities can’t meet the Government’s Decent Homes Standard and that many others who may be meeting it now will be unable to sustain this standard in the longer term.
At present, the net funding trail is, perversely, going in the opposite direction. Council rents are actually rising faster in order to close the gap with private rents in the locality, though ideologically that seems to be turning the whole purpose of Council housing on its head. And Council rents are even rising higher than expenditure so that tenants will actually be paying a tax to the Treasury this year of some £180 millions, and a Parliamentary Answer of 18 December even suggested that this would rise to nearly £1 billion by 2022. This is on top of the £1.5 billions already being taken each year from Council Housing Revenue Accounts, ostensibly to repay historic debt, though since tenants don’t own the asset, it is difficult to see why they should be burdened with servicing the debt.
The amendment to the Housing Bill I moved tonight in the Commons is about justice for tenants which is long overdue. I moved it because at every surgery I hold in Oldham I am distressed, hurt and angry that usually half the constituents attending have come because their housing situation has become intolerable, and yet I know that in current circumstances I can do nothing. What is desperately needed is that a major Council house-building programme should now urgently be re-started, and if the Government cannot afford that in the present financial climate, then local authorities should be permitted to borrow the necessary funds on the open market against the collateral of their existing housing stock. It is because I believe this so passionately that I voted against the Government tonight along with 27 other Labour colleagues.





