I wrote the following article for
Roof Magazine in November 2004
LABOUR CONFERENCE BACKS FOURTH OPTION FOR COUNCIL HOUSING
Last January, in the aftermath of the rejection of stock transfer by
tenants in Birmingham and the vote of Camdens tenants against the proposal to set up
an ALMO, the Housing Minister, Keith Hill, was grilled by the ODPM Select Committee on the
Government promise to bring all social housing up to the decent homes standard by 2010. Hill was clear that there were only three options
for local authorities like Birmingham and Camden that need additional resources to bring
their housing stock up to standard. They would
either have to revisit the two options rejected by their tenants or look to bid for
funding under the Private Finance Initiative, a cumbersome scheme allocated resources
insignificant in comparison with the repair bills they faced. There
will be no so-called fourth way. The Cavalry
will not come over the hill with alternatives the Minister told MPs before going
on to liken the situation of tenants who voted against changing the ownership or
management of their homes to that of an individual tenant who refuses to have work carried
out to their property. In effect the Minister
was blaming the tenants for their councils inability to fund the necessary repairs
In its report published in May, the ODPM Committee condemned the
Governments dogmatic pursuit of privatising council housing as
unjustified and denying tenants real choice. The
Committee recommended that councils be granted wider rights to borrow prudentially against
rental income streams and a new investment allowance.
This was an idea first floated by the Government as part of the 2002
blue skies review of housing finance but then abandoned because, according to
Hills evidence to the Committee, there
were simply no takers. In fact many
councils had responded positively to the idea.
The weaknesses in Government policy were also exposed in reports from
the National Audit Office and the Public Accounts Committee.
They showed that housing transfers are more expensive (an additional cost of
£1300 per dwelling) than equivalent local authority repair and renovation. These reports also challenged Government
claims that transferring ownership or management resulted in a substantial increase in
tenant satisfaction and participation.
Despite such overwhelming evidence that stock transfer is poor value
for money, the Government stuck to its line that the fourth option of
resources being allocated for direct investment by local authorities was a non-starter.
But a week is a long time in politics.
As a result of a vote at this years Labour Party Conference, the
Government is being forced to think again. Delegates
voted 8 to 1 in support of a motion committing Labour to ensure that tenants will not be
financially disadvantaged if they wish their homes to remain with the local authority and
demanding that funds available for stock transfer should be equally available to councils. A vote of such overwhelming magnitude should ensure
that it automatically becomes Party policy. However,
in the past, this has not stopped the Government from ignoring previous Conference
decisions it didnt like such as those on the restoration of the link between the
state pension and earnings and on a review of the private finance initiative. This time it may be different. In an unsuccessful attempt to get the vote deferred,
the Deputy Prime Minister acknowledged that public financing of housing does not treat
local authorities on a level playing field. He
said this should change and promised an inquiry. He also agreed that authorities should be
able to bid for funds for new build.
The Government must not be allowed to wriggle out of these
commitments. Thats why the pressure for
the fourth option must be kept up. The
signs are good. The Local Government
Association is backing the idea of an investment allowance and 126 MPs, 99 of them Labour,
have now supported a parliamentary motion backing investment and choice for council
tenants. The Commons Council Housing
Group has asked for an urgent meeting with the DPM to urge him to tell local authorities
to put stock option appraisals on hold until after the promised inquiry has been
completed. There should also be a moratorium
on councils completing stock transfers or embarking on the costly business of setting up
ALMOs and PFIs until the new funding options are in place.