ROOF - JULY / AUGUST 2000

Councils have been queuing up to transfer their housing to other landlords, not because they think this is necessarily the best way forward but because this is perceived as the only way of overcoming constraints on major repairs and improvements. When the Government agreed to write off 22 million of Burnley’s housing debt to allow the switch to the Burnley and Padiham Association, the temptation became too great to resist. In Birmingham, stock transfer is being sold to tenants on the basis of a write-off of 650m of debt that will release money for modernisation. In response, tenants question why the money is apparently available if they change landlord, but not otherwise. They recognise this Hobson’s Choice when they see it. So, apparently does the Deputy Prime Minister, who, in introducing the housing green paper to the Commons, acknowledged that "it was unfair that local authority tenants should be discriminated against because local authorities were not allowed to raise resources against their assets and the income stream to improve the quality of their housing". He went on to claim that proposals in the green paper would change this ("I have removed that discrimination" he said).

If only he had!

What is being proposed falls far short of this. Any extra investment will only be available to "the best-performing authorities" provided they establish an "arms length company". It seems illogical that organisations that are performing well should be required to hand over their functions to another body that is less accountable. It is interesting that in the debate on the Transport Bill covering Air Traffic Control, John Prescott pilloried the idea of a non-profit-making trust alternative to manage this service because "trust arrangements" "failed to provide adequate investment or proper accountability". In response to an intervention I made asking whether his comments applied to registered social landlords to which the Government proposes to transfer council housing, he said "While a trust arrangement could raise capital to make the necessary investment, it could not provide the sort of flexibility, management and efficiency that we want".

I would certainly not argue that council housing is well-managed. But is that surprising? Who with any choice wants to work for an organisation that spends most of its time saying "No". In my experience, the most competent housing officers leave as soon as they can, often leaving chaos behind as a result of their attempts to service demands to provide some quick fix to intractable problems. Those in Government who charge council housing as being inefficient, should stop ignoring their own culpability in local authorities’ inability to carry out the renovations needed in an ageing housing stock. Furthermore, it is becoming increasingly clear that, despite their favoured status and extra subsidy, housing associations are experiencing the same problems as councils when they become the tenure of last resort.

There are some good ideas in the green paper, particularly those that follow up on the report of Lord Roger’s Urban Task Force but we have a long way to go to live up to the promise of Quality and Choice, the title of the green paper. It is very welcome that the Government has acknowledged that the deterioration of the housing stock has resulted from lack of investment and pledged to deal with the repairs backlog over 10 years. But how? On this 19 billion question, the green paper only says the Government is considering what levels of public investment should be made available. Rather than addressing the discrimination against council housing and providing real choice, emphasis remains on stock transfer or private finance initiatives as if these provide some magic solution. Private money that artificially does not count as a public sector liability still has to be paid for,either out of higher rents or taxpayers’ subsidy. Just look at the soaring housing benefit bill arising out of similar Tory policies.

With total Government debt at 39% of GDP being well inside the 60% Maastricht criterion and pension fund managers crying out for the issue of more Government bonds, there is absolutely no need for the Government to keep bearing down on investment in public infrastructure. The 22 billion that is coming into Government coffers as a result of the auction of mobile phone licences makes this even more nonsensical. Surely, to use this windfall to pay back dwindling public debt is equivalent to the action of the servant in the parable of the talents, who buries his master’s money in the ground rather than investing it. Prudence dictates that these resources should be used to invest in housing and other projects, such as transport and scientific research that will underpin wealth-creating activities and thus reduce future public expenditure. Who knows, then we might even be able to get to grips with the much-needed reform of housing benefit.