THE CONSERVATIVE GOVERNMENT HAS DECLARED WAR ON SOCIAL HOUSING

The front cover of the September 2009 issue of the sadly missed housing magazine Roof highlighted the article by Julian Birch about what kind of plans the Conservatives would bring forward for housing should they win the general election the following year. Birch begins his article by accepting that cuts in the housing budget look certain whoever wins the election. He posed the question; “Do plans already surfacing in think tanks and Tory local authorities signal a radical assault on social housing?” An indication of their plans was contained in a Green Paper they published in April 2009. They included scrapping top-down regional planning targets with bottom-up local incentives. Other than encouraging more shared ownership and backing local housing trusts it is not clear, Birch writes, what the party would do in government. Former Labour housing minister Nick Raynsford had a clearer idea. He believed that there would be drastic cuts in investment as well as the dismantling of the regional planning framework. “What we saw in 1979-80 would be mild by comparison with what is going to happen if the Conservatives win the next election. If you add in the ideological pressure coming from places like Hammersmith and Fulham that is profoundly hostile to social housing and is social engineering on a grand scale, you have the making of a policy that would be disastrous around the country.”

In July 2009 Tory controlled Hammersmith and Fulham council was accused of social cleansing when plans were made public about their plans to demolish council estates within the borough. The plans, obtained under a Freedom of Information request, showed that the council hoped to move out tenants and replace them with private homes and retail developments. Council leader Stephen Greenhaigh, who also heads David Cameron’s Conservative Councils Innovation Unit, states in the report, The Principles for Social Housing Reform, believes council housing is “warehousing poverty” and entrenches welfare dependency.

Stephen Greenhaigh denied the council had any plans to move low income residents out to other areas of London but the question remains where people will go if as plans contained in the Council’s Local Development Framework go ahead to demolish large council estates in White City, West Kensington as well as Hammersmith and Fulham. The council sent a leaflet to all tenants on the White City estate giving them a guarantee that they will “not be left without a home or moved out of the borough” should demolition take place. There was no guarantee, as with other council estates in London under threat of demolition that any tenant exercising the option to return, would be offered a home at the same rent as they paid previously.

The Freedom of Information request, submitted by the Andy Slaughter, the Labour MP for Ealing and Shepherd’s Bush, disclosed how Stephen Greenhaigh and town hall officials helped to draft the proposals in the Localis report. Even more remarkably one note discussed how to handle a backlash from residents. A note states that social housing is “not about giving somebody a £1 million home for life. “Another note says it is “hard to get rid of people” and Porteresque accusations of gerrymandering or social engineering need to be faced head on.” The note adds “funding is needed for political problem of management” and “warns that “political pain is a factor – can local politicians accept the level of pain involved in making it happen.”

The plans that Stephen Greenhaigh proposed were the same as ones included in a report, published in April 2009, he wrote, with John Moss a chartered surveyor and Conservative parliamentary candidate in the 2005, and published by the thinktank Localis. The introduction to the report, The Principles for Social Housing Reform, includes a quote from David Cameron that an incoming will not retreat from social reform because of the current crisis in public finances. “My Party understands something crucially important Fiscal responsibility needs a social conscience, or it is not responsible at all.” For the authors of the report, that meant applying their social conscience to the state of social housing in inner cities.

Greenhaigh and Moss write that “social housing has become welfare housing where both a dependency culture and a culture of entitlement predominate. There is real concern that the current social housing system is failing the very people it was designed to help. Social housing was meant to help people out of the slums. Instead many social housing estates have become the very ghettos of multiple social deprivation that they were supposed to replace.” Whilst this is true it is because of the criterion that determines the allocation system – local authorities are obliged to house the most vulnerable. A fact accepted by the authors when they write, “Estates where deprived households are concentrated because of housing policies are not places sought by people with any choice.” Another reason is the failure by successive governments to return the revenue from the sale of homes under the right to buy legislation. What seems to prick the social conscience of the authors, certainly in London, is that council estates are situated in the inner cities on prime real estate which are worth billions if they were in private hands.

As the authors write, “While the social case for reform is undeniable, the financial case is just as strong. A conservative estimate values public sector housing stock at around £300 billion and yet the return to Registered Social Landlords and councils on this capital investment is barely 1 per cent. There are huge social, economic and financial pay-offs if we get the reform of social housing right. The current social housing is warehousing poverty in the core of our great cities – cities which need to be the very engines of economic growth.” The language used by the authors has a Victorian resonance; they reassure those who cannot house themselves that social housing would be provided for them but believe that the system should be only for people – the deserving poor – who, as they state, work hard and play by the rules.

Greenhaigh and Moss were so confident that their plans will be put into practice after the success of their party’s chances in the forthcoming 2010 general election that the last paragraph of the introduction of the report is solely about their introduction. They write; “Now we just need the incoming Conservative government – which will have an unprecedented opportunity with so many of our councils also being in Conservative control – to be bold and be brave and act on its social conscience by listening to the housing professionals who are fed up with tinkering around the edges and embrace a reform agenda that will contribute hugely to fixing our broken society.”

The proposals contained both in the 2010 Budget and later in the year the Comprehensive Spending Review could never be described as tinkering around the edges. The June 2010 emergency Budget announced £11 billion of welfare savings to be rolled out by 2014. The 2010 Spending Review promised hopefully that welfare costs would fall over the next four years. One housing magazine, 24 Housing, described 2010 as the year that shook housing. Summing up in its December issue what had changed since the general election in May it stated, “Seven months on and the socio-political landscape of this country has changed forever. With funded ring-fenced in areas such as health, education and overseas aid, housing was always going to be vulnerable to George Osborne’s spending axe – and so it proved.” It isn’t just the reduction in the housing budget, it added, that has shaken social housing to its very foundations, and it’s the radical reforms to tenure, welfare and benefits that will force housing providers to take a long hard look at how they operate in the future.” Following the Comprehensive Spending Review another housing magazine, Inside Housing, believed that the sixty per cent cut to the housing budget heralding the end of social housing. Its editorial put the measures into their historical context thus: “What became known as asocial housing was conceived by William Beveridge in 1942 and brought to life by Clement Attlee’s Labour government in 1945. The hundreds of thousands of homes build in the following decades formed the backbone of the welfare state.” The package of reforms, it ends, means the end of social housing as part of the welfare state. Abigail Davies, head of policy at the Chartered Institute of Housing, said, “This clearly appears to be the end of government funded social housing, if not necessarily the end of the provision of asocial housing.”

Whilst the cuts announced by George Osborne in his Budget and in the Comprehensive Spending Review were a surprise it was no surprise that the Conservative took the axe to the boards that set the regional housing targets. Eric Pickles had warned in August 2009 that any incoming Conservative government would abolish them. He abolished them on July 2010.Local authorities had already begun tearing up plans for new housing in May when he wrote to them to confirm that the regional targets were to be axed.

Just as significant as the demise of the bodies that set the regional housing targets was the scrapping of the independent housing affordability watchdog, the National Housing and Planning Unit. Its remit was to advise on how to improve the affordability of housing. A review of the body at the end of 2009 had found that it was successfully fulfilling its role, and recommended it should also conduct research into local housing markets on behalf of local authorities. Before its demise the Advice Unit had calculated that England need to build 240,000 homes a year to meet demand. Peter Williams, chairman of the National Housing and Planning Advice Unit, wrote a letter to housing minister Grant Shapps before it was disbanded warning that the UK faced increasingly severe social and economic consequences of the failure to build more homes. He added “getting back to the level of house building we saw before the recession is nowhere near enough. We need to deliver half as many again extra homes.”

Another organisation that was seen as superfluous to requirements by the new government was the Tenant Services Authority. Its abolition was announced by Grant Shapps at the Chartered Institute of Housing’s annual conference in June 2010. Addressing conference delegates he told them that the “TSA is toast”.

Not to be outdone David Cameron in a speech in Birmingham in August stated he wanted to see the end of life-time tenancies for new council tenants. “There is a question mark about whether, in future. We should be asking when you are given a council home, is it for a fixed period?” His speech was to coincide with the publication of a consultation paper on the subject. Yet the Conservative Party went into the general election stating that it had no policy to change the current or future security of tenure of tenants in social housing. Within a year one of the measures introduced as part of the 2011 Localism Act was the abolition of the automatic long term security of tenure for new social housing tenants. Under the Act, landlords were now allowed to offer fixed term tenancies of only five years as standard if they choose to do so with extension dependent upon good behaviour.

As Professor Rebecca Tunstall of York University writes in her review of the Coalition’s record on housing, “The Act contained what was described as “a radical programme of reform” for social housing (HM Government 2011p.ix), giving local authorities and ‘registered providers’ new options on the length of tenancies, and local authorities on new options on access to and allocation of social housing. The idea was to more closely target tenancies on the periods of greatest need and through this to discourage infinite long term occupancy of social housing.” Professor Tunstall adds social housing allocation by local authorities reformed, with the entitlement to a social home no longer being less strictly determined by housing need, and at the same time greater priority being permitted for economically active households. The automatic long term security of tenure for new social housing tenants was abolished.

The Conservative-led coalition’s approach to social housing besides being ideologically driven must also be seen in the context of the deficit and in which savings had to be made to the overall housing benefit budget. Again, as Professor Tunstall writes, “Spending on housing benefit constitutes a major element of total government expenditure on housing policy across the UK, although it does not directly build, maintain or improve any actual housing stock. Rather than being an investment in housing stock, it is paid to landlords for existing homes.” It was people renting in the private sector that bore the brunt of the cap on housing benefit. From 201, the cap or ‘Local housing Allowance’ was set at the 30th percentile of local market rents. In addition, the LHA was capped at £400, regardless of household size or actual rent. From 2013, LHA caps increased in line with a new, generally less generous measure of inflation (the consumer price index rather than the retail price index) – meaning that the number of properties at rents where the housing benefit would cover all the cost was progressively reduced.

Polly Toynbee and David Walker in their book Cameron’s Coup in their chapter called Waging War on Welfare write “The most devastating cut was invisible to the naked eye. From 2010 all benefits (other than pensions) have been up rated annually using a lower measure of inflation, the Consumer Prices Index (CPI), does not include housing. (The higher measure, the Retail Prices Index (RPI), was kept for tax thresholds and grants to business – and pensions). As a result claimants are losing at least 10 per cent of the value of their benefits over the next decade and onwards. This not only cut the DWP bill, it guaranteed the poor would go on getting poorer in relation to everyone else. Here the Tory legacy is formidable. In addition, the government decreed an even more direct cut in the value of benefits: from 2013 to 2016 no payments are to increase by more than 1 per cent – except pensions.” Also the annual benefit cap for individual households was fixed at £26,000.

The onus on implementing the cuts was passed to local authorities. Council officers were press ganged into administrating the bedroom tax. The benefit helping poor households pay council tax was cut. Toynbee and Walker write, “From April 2013 councils had to devise their own systems, but must exempt pensioners. Support grants were cut by 10 per cent, so councils either passed the cut on to the poorer or subsidised payments out of their depleting resources. The majority pushed the reductions on, but within a year arrears were mounting among the 2.3 million households required to pay council tax for the first time.”

Of all the measures introduced by the Conservative-led coalition aimed at reducing the housing benefit bill it is the so-called bedroom tax that will be remembered. Toynbee and Walker write, “The Coalition, prejudiced against social housing, did no research and rushed ahead with a cut in housing benefit for all working-age tenants deemed to have ‘spare’ rooms. The government tried to call it ‘removal of the spare room subsidy’ but inevitably it became the bedroom tax. It a class measure, a demonstration of housing inequality, when most ‘spare’ rooms are in homes owned by their occupiers. Half a million households in the UK or one in eight social tenants were affected. Housing benefit was cut by 14 per cent – an average of £12 a week – for one spare room and 25 per cent for two.” Such a policy, imposed without any impact assessment gave rise to numerous decisions. One family was charged for the rooms left vacated when their two sons went to fight in Afghanistan. Another family was charged for the empty room after their daughter died. The government rushed to exempt the homes of service personnel and other instances where ‘spare’ rooms were necessary for medical reasons.

So did the medicine work? Less than five per cent of affected claimants downsized in the first year. Two-thirds of those affected were disabled, 220,000 had children and were reluctant to move because of the impact it would have on their education. In many instances, councils had no ‘spare’ smaller flats and instead the only option was to rent more expensive homes in the private sector. Toynbee and Walker commenting on the policy write “nothing stamps the character of the government as clearly as its assault on the welfare state and its campaign to turn public opinion against the needy. Its legacy is a cruel, less civilised country and a hardening of hearts.”

The hardening of hearts was evident in the comments made by Stephen Greenhaigh in an article he wrote for the website Conservative Home about social housing which revealed the thinking behind the proposals contained in his report Principles for Social Housing Reform. They were read out in the House of Commons during a debate on social housing on 5 May 2011 by Labour’s Andy Slaughter. In his article he linked Boris Johnson’s victory in 2008 to the distribution of social housing in the capital. Greenhaigh wrote, “Boris Johnson’s stunning victory in our capital city was largely a suburban revolt. Why is this? The current state and levels of social housing in our inner cities provide part of the answer. All our inner cities have relatively high levels of social housing compared to their suburbs. Today social housing has become welfare housing where both a dependency culture and a culture of entitlement dominate.”

Slaughter added that such comments “should have received more attention from the media, and I wish that they did, but I think there is enough morality in the governing parties for them to go back and look at what they are doing in relation to housing policy and to think again. We are talking about future generations of people in this country who are growing up in conditions that are wholly uncivilised and wholly unworthy of this country.”(Karen Buck’s contribution to the debate deserves mention. She said, “We all agree that the problems facing social housing are complex, long term and difficult to resolve. We know that the supply of social housing has been squeezed for decades, principally through the non-replacement of right-to-buy stock during the 1980s and 1990s, but it is a shame that more properties were not built under the Labour government”

How true, when Labour was elected in 1997 it had the opportunity to resolve the crisis of social housing and failed to do so. It failed to put a stop to council house sales which caused the crisis in social housing, it refused to return to local authorities all but a pittance of the receipts from council house sales and tried to offset the remaining council housing stock to housing associations through the stock transfer option.

Toynbee and Walker’s words about a less civilised country fell on deaf ears following the 2015 general election. Housing policy during the years of the coalition was but a precursor of what was to follow. In the first week of October the government published a new housing bill. It was another nail in the coffin of social housing and another attempt to increase home ownership. The latter was to be achieved by allowing housing association tenants the right to buy their homes. Not for the first time the front cover of Inside Housing magazine summed up the situation. Its headline was “low-cost rented accommodation set to decline as government focuses on ownership”. Its editorial explained that “Higher earning private renters will be bumped into home ownership, but this will be at the expense of secure housing for people in the greatest need. The directing of funds towards Starter Homes and away from new homes for affordable rent effectively means this is a problem that more families will be facing in the future.”

The housing bill produced numerous responses on the Guardian newspaper Housing Network site. An article, by Colin Wiles, titled “David Cameron is on track to kill off social housing. The sub-headline added that no one who had followed the past five years of Tory policy will be surprised that government wants to scrap the requirement to build affordable homes. The article analyses the subtext to the bill; “To understand Conservative thinking on housing policy, it is worth scrutinising some of the reports produced by their favourite think tank, Policy Exchange. A 2010 report on making housing affordable argued that “social housing increases child poverty, mental health issues and inequality of opportunity and wealth. A 2011 Policy Exchange report on growth in cities called for election 106 agreements to be scrapped altogether.” They were scrapped as part of the proposals announced in the bill. Who is the author of both of these reports, the article asks – a policy geek called Alex Morton who was the director of the Policy Exchange think tank and who now works for David Cameron in Downing Street, as a special adviser on housing and planning.

In its last issue of the year Inside Housing published a four page review of 2015. One of the sections highlighted the people it considered to be the villains of the year. It mentioned the deputy chief executive of the Accord Group, who was jailed for stealing £325,000 from them despite being on a salary of £147,000. He was jailed for three years. The section mentioned one other person – Alex Morton. He was included, it explained, because “Many in the (housing) sector would (also) point to number 10 Downing Street adviser Alex Morton, who has been blamed for allegedly pushing government policies such as the rent cut and selling high-value stock.” (Among the reports he wrote whilst he was director of Policy Exchange included one that recommended ending expensive social tenancies.)

On 2 November the Housing Bill was given a second reading. The Secretary of State, Greg Clark, in his speech laid not so much a broad strategy for housing that included a mass housing building but merely a justification for the extension of the right to buy to housing associations and that the bill sought to correct a “30-year injustice that council tenants have had the right-to-buy their homes but housing associations tenants have not.” Furthermore, the funds to compensate housing associations for their loss will come from the sale of council homes. (Clauses 56 to 72 require the forced sell-off of affordable council homes to fund an extension of the right-to-buy to housing associations homes.) The Bill marked the end of the stream of money from section 106 agreements which will now be diverted to subsidise starter homes for first-time buyers. On this specific point Andy Slaughter rose to state that the common thread running through the Bill is an attack on social housing which will exacerbate the social cleansing the Tories are carrying out in London in particular. In response John Healey, Labour’s housing spokesman, said the fundamental flaw with the Bill and the government’s plans is that they “put all their chips on starter homes and on home ownership.” He added, “The Secretary of State devoted most of his speech to home ownership, but that fell each and every year since 2010.” John Healey ended his response by saying that “the Bill is driven by the politics of the Conservative Party, not the housing needs of the country. Like the cut to tax credits, this Bill is the Chancellor’s work, with his political fingerprints all over it. Above all, it fails the same low and middle-income working families that the Tories claim they will represent. It will lead to a huge loss of affordable homes to rent and buy, and (will) be a huge let-down to those who believed the Tories election pledges. The Bill will prove to be bad policy and bad politics.”

On this particular point Alan Brown, the Scottish National Party’s housing spokesman highlighted the idiocy of the policy by comparing the estimated amount that the right-to-buy discount payments to housing associations, approximately £10-12 billion, and the £12 billion the Government is proposing to cut from the welfare budget.

As Clive Betts, chairman of the House of Commons Local Government committee, mentioned irrespective of the merits or otherwise of the starter homes, the provision will not add a single property to those being built over the course of this Parliament. Over the past decade 250,000 homes have been built as a result of 106 section agreements. Furthermore he highlighted the control the Bill would give the government to micro-manage planning permissions on brownfield sites and local authorities will lose their influence to negotiate infrastructure deals. In the case of major infrastructure projects, it will be possible for housing to be approved with no local consent. The Royal Town Planning Institute has described the increase in the powers of Whitehall in this matter as “extraordinary”.

Finally he pointed out the different views between the effect of the right to buy will have in how many homes will be built. David Orr, chief executive of the National Housing Federation, believes that the right to buy proposals that more homes will be built which is contrary to what the Chartered Institute of Housing have stated. They believe that the sale of affordable homes to fund the extension of the right to buy could mean the loss of 195,000 affordable rented homes in the next five years.

Not surprising the Conservative and Labour candidates for Mayor of London contributed to the debate. Zac Goldsmith supported the Bill but proposed an amendment that would see a net gain of affordable housing in London as a result of the policy to sell off council housing. Sadiq Khan replied by stating that the Bill would damage London’s social mix, accelerating the exodus of poorer people out of the capital. London would lose substantial amounts of affordable family homes and that the city’s low and middle-income families will be squeezed out to fund the sell-off of housing associations homes nationwide. He finished by saying that “This Bill is a missed opportunity. It will not fix London’s housing crisis; in fact it will make it worse. It will not deliver the genuinely affordable homes Londoners need to buy or rent.”

Jim Fitzpatrick quoted a House of Commons library briefing paper which confirmed what Sadiq Khan mentioned that there was no requirement in the Bill to replacement homes sold under right to buy locally. He quoted also from the briefing given on the Bill by the Local Government Association that the extension of the right to buy should not be funded by forcing councils to sell off their homes. David Lammy in his contribution said that the Bill will see the decimation of social housing. There was no other area of government policy, he said, where Conservatives would support the idea of giving money to those who have and taking it from those who have not – the poor.

Boris Johnson was in support of the extension of right to buy to housing associations – an historical injustice – and also stated that it must be right where possible “to sell off high-value council homes and use the proceeds to fund not just the subsidy (sic) but the construction of new homes.” He tried to justify the sell off of social housing by comparing London with other capital cities. He said, “Members might not be aware that London already has a huge stock of social housing, with 33 per cent of homes in the centre of the city social homes of one type or another, compared with only 7 per cent in Manhattan and 17 per cent in Paris. Across the whole of Greater London, the figure is 24 per cent. High- value council homes in London could be sold, with the proceeds used to build more low-cost homes in London.” Whatever the intentions of what is being proposed – and in spite of what the Mayor of London has said on the subject about not wanting to see a Kosovo style situation on his watch – the Bill will see the social cleansing of the poor from most of inner London.

Justin Madders, one of the Labour Party’s 2015 general election in-take, said the greatest omission from the Bill is any kind of plan to meet the existing need for social housing. He described the Bill as a “misguided, rushed, contemptible, and ideological, back of a fag packet disgrace.” Another of the new intake of Labour MPs is Daniel Zeichner, Cambridge, and who is equally unhappy about the Bill. It was, he said, a Bill promises a bleak future for young people, struggling to find a home of their own, and too often relying on their parents for financial help. He mentioned the impact would have on local authorities. In particular he cited the case of Cambridge city council which spent years working on a long term strategy to put its housing finances on a strong, sustainable footing as well as developing a business plan stretching over three decades. The Bill, and the cut in rents proposed in the Welfare Reform and Work Bill are combining to scupper all that hard work. “Cambridge City council estimates that the Bill will result directly in the loss of a quarter of our housing stock. Far from securing the city’s housing finances, as was planned, the Bill means that the financial projection is for it to go into deficit. That is where the government’s so-called long-term economic plan takes us.”

Roberta Blackman-Woods, summarising the Labour Party’s opposition to the Bill, said she feared there would be another five years of failure to add to the previous five years. In 2014, “the Tories built the fewest affordable homes for more than two decades – fewer than 11,000 homes for social rent compared with 33,000 in Labour’s last year in office. Spending on housing benefit has risen by £4.4 billion since 2010, because of ever increasing rents. It is the same old Tory story: a 36 per cent rise in homelessness and a massive rise in rough sleeping.” She ended by saying the Bill is “an all-out assault on social housing, a smash and grab on council stock and a power steal from local authorities and councils. The Bill does nothing to address five years of failure; indeed, it does not detail how a single affordable home will be built.”

It wasn’t just the progress of the government’s Bill through Parliament that focused MPs minds on housing just before Christmas, the Labour Party a couple of days before the House of Commons shut up shop until the New Year recess chose to have a debate highlighting what it considered the Government’s failure on housing since 2010. John Healey, in moving the debate stated that the government had a shameful record on housing. There had been “rising homelessness, falling home-ownership, escalating rents, deep cuts in investment and the lowest level of house-building since the 1920s.” He claimed when he was housing minister in the final year of the previous Labour government, “we got under way the largest council house building programme we had for more than two decades.”

The Labour Party, having previously tried to wash their hands of council housing, through its stock transfer policy as well as its disinclination to repeal the right to buy legislation, was left with no alternative than to loosen the restrictions that prevented local authorities from building homes again. (Three times the Labour Party conference had passed resolutions in support of council housing but to no avail.) It was an admission that neither housing associations nor the market could fill the void left by local authorities.

As to why the Labour Party, and in particular Gordon Brown, failed to switch to the internationally agreed accounting rules used in the rest of Europe as regards investment in public enterprises is a mystery. It was a mystery that puzzled John Perry, policy adviser for the Chartered Institute of Housing, as he wrote in the letter in The Guardian in July 2009. “Investment in council housing should not be in the main measure of public debt in the first place. Elsewhere in Europe investment in public enterprises which have a significant income is not counted against general government borrowing. So why won’t the government move over towards European accounting rules, and give itself more freedom to invest in services where that investment will generate extra income?”

Ironically it took the Governor of the Bank of England Mark Carney in a speech in 2014 to reiterate that markets must be balanced with a social contract based on a “trinity of distributive justice, social equity and intergenerational equity” to achieve a society in which people place their trust. “Capitalism loses its sense of moderation when the belief in the power of the market enters the realm of faith. In the decades prior to the crisis such radicalism came to dominate economic ideas and became a pattern of social behaviour. To counteract this tenancy, individuals and their firms must have a sense of their responsibilities for the broader system. Prosperity requires not just investment in economic capital but investment in social capital.”

Although the debate nominally was about the record of the government for the five years from 2010 John Healey included in his speech the present government’s proposals contained in the July Budget and the autumn statement. He said, “The Housing and Planning Bill strangles the ability and obligation of both private and public sectors to build the affordable homes to rent and to buy that are badly needed. In addition there is an extraordinary forced sell-off of council homes to fund an extension of the right to buy, with no prospect or commitment of one-for-one replacement in the local area.” He added that in the very last sitting of the Housing and Planning Bill the government introduced plans to scrap secure tenancies for council tenants. The decision will force council to offer fixed-term tenancies of between two to five years which is something David Cameron proposed in 2010.

John Healey mentioned that the Housing and Planning Bill puts 33 new centralising powers in the hands of the Secretary of State, from directing starter homes to be built instead of affordable to fixing rents for so-called high-income tenants. The powers, he said, “include a legalised annual cash grab from councils, which totally undermines their ability to plan for housing need in their area. The Bill also rips up the contract of localising local finance for housing, which until this point has been the subject of all-party support. Ministers will have sweeping new powers to award “automatic planning permission” – the so-called “permission in principle”. That is not simply a policy for dealing with brownfield sites; it is a power and policy for any site allocated for use in a local plan. There will be no need to apply for full planning permission, no limitations on what sort of development can be built and no planning gain or obligation on developers.”

In response the housing minister Brandon Lewis said that in speaking for more than 32 minutes there was no mention of any measures by the Labour Party to solve the housing crisis. The minister defended the measures proposed against rogue landlords in the Bill, the extension of right to buy to housing associations tenants, the starter homes initiative as well as making the system that helps people to develop their own plans for house building more efficient and faster.

Since the 2015 general election the Labour Party has not only to contend with attacks from the Tories but also from the Scottish National Party. Alan Brown’s speech contained several swipes at Labour’s record on housing. “There is no doubt that the roots of the current housing crisis stem from the Housing Act 1980 – an Act that Labour contemplated introducing before it lost power…. Labour could have invested in a council housing building programme but, like the Tories, in the main chose to leave affordable housing to the markets and to social landlords. We have heard about the sorry state of affairs whereby the coalition government actually built more council housing in five years than Labour did in 13 years….On the council housing theme, I point out that in Scotland the Scottish National Party has now delivered more than 6,000 council houses, which compares to a grand total of six that Labour delivered when it was in power.” Alan Brown asked as regards the Housing and Planning Bill what council is going to invest in England in council housing in the future as its stock will be at risk of getting sold off. The same, he said, will apply to housing associations. It effectively privatises housing associations and will lead to social cleansing.

There were a number of notable contributions from backbench Labour MPs, in particular from Karen Buck, Helen Hayes and Theresa Pearce, all representing constituencies in London. Helen Hayes, who sits on the Communities and Local Government committee said, “The minister for Housing and Planning came to the committee and could not give any assurances that the numbers underpinning his proposed radical reform of housing policy add up. Next month, will be asked to vote on a set of ideologically driven, uncosted and unproven proposals in the Housing and Planning Bill, which is a pitifully poor response to the biggest housing crisis that this country has faced since the second world war.”

It is not only politicians who have been venting their feelings about the Bill. Brian Rye, acting general secretary of UCATT, the construction workers trade union, described the Bill as “dictated by right-wing ideology”. He added the government’s aim is to “strip Britain of all social housing.” Stewart Lansley and Joanna Mack writing in their recent book Breadline Britain: the rise of mass poverty agree; “Over the last thirty years, housing policy has been dominated by one overriding aim – to boost levels of homeownership.” All political parties, they continue, have signed up to the “ambition of greater home ownership, promoting it in a myriad of ways, from the relaxation of lending rules in the 1980s to the promotion of low-cost homeownership schemes. But while most of those able to jump on board the homeownership drive have been the winners from this strategy, greater reliance on markets has proved increasingly dysfunctional for those left out. Council house sales have greatly outstripped the volume of new building, leaving a greatly depleted social housing stock unable to cope with demand, so that families in need, and the young, have been left increasingly dependent on an under-regulated and expensive private rental market. The core failure of the housing system has been one of the key drivers behind the rise in poverty, restricting housing choice, trapping rising numbers in unacceptable housing conditions and putting growing pressure not just on household finances but also on the benefits system.”

Peter Hetherington, former editor of the Guardian’s Society section wrote recently in the paper that the government had turned housing policy on its head. “A long-cherished obligation to provide a roof for those on low-income has been abandoned Home ownership is all.” From 2016, as part of George Osborne’s vaunted ‘national crusade’ to build one million private houses build by 2020 English councils will have a legal duty to rush through plans for “starter homes and no obligation whatsoever to deliver affordable and social rented housing.” He adds the housing and planning bill is being fast-tracked through Parliament and the full impact of this proposed legislation even alarms those with no political axe to grind. Under the present system developers – section 106 agreements – were legally obliged to provide an element of social housing (cash or some community facility was an alternative) in new housing as a precondition for planning permission. The proposed Housing and Planning Bill removes this requirement. The chancellor is diverting funds to help hundreds of thousands onto the housing ladder through subsidising home ownership at a time when the demand is for affordable rented housing. Unsurprisingly, Hetherington writes, this is being labelled the biggest housing revolution since the 1980s (a week later the housing minister in the House of Commons stated that “we have announced the largest Government house building programme for 40 years.” Earlier in the debate John Healey said the minister was prone to a bit of “bullish bluster.” Dictionary definition: bluster, to speak boastfully) Hetherington concludes that the government is in denial about the scale of the problem.

It is not just the ‘usual suspects’ who have warned that the one-dimensional blinkered housing policy of the government will run aground upon the rocks and once again sink the economy. (Campbell Tickell consulting – at the heart of housing – in their September briefing has an advert on the back page promoting their services and asks if Perfect Storm 2.0 is on the way?) Again they are not the only people who are warning of the consequences of the government’s direction of travel of a vital sector of the economy. Savills, the property consultants, in their quarterly report for Autumn 2015 put the spotlight on the future of sub-market housing. In its introduction it considers the impact of policy changes. “The Conservative Government has made housing in England a key issue for this parliament. They are particularly intent on reversing the decline in owner occupation seen over the last two decades. To do so the Government is moving ahead with a range of reforms which are focused on increasing the supply of market housing. It remains to be seen how successful this approach will be given the number of outstanding questions.” It adds that the policies likely to have a long lasting effect on the sub-market housing sector and the ability to provide enough homes across the spectrum of housing need. In particular the future role of housing associations is clearly up for debate and the Government wants to see them acting more ‘efficiently’, delivering more market and sub-market homes for ownership rather than social or affordable rent. It remains to be seen whether the economy will be able to ride out the impact of a ‘perfect storm’ if it fails to alter course. There can be no doubt that the impact of any crash will mean that the men, women and children below deck in social housing will struggle to survive.

In an analysis of the situation it comes to the conclusion that the housing market ‘needs’ sub-market housing. It states the case thus; “Annual housing need in England for nearly 250,000 new homes and the Government has recently adopted a ‘target’ of 200,000 new homes per annum over the course of the parliament. Even if we were building this number of homes, current pricing means that 70,000 of these households would not be able to access the market unassisted every year. That’s 350,000 households over the term of a parliament.” This is now the first time that Savills warned about the dangers of a lop-sided housing market. In 2013 in Bridging the Gap in Housing they showed that reduced market turnover and the low levels of new housing supply were preventing 500,000 households per annum from moving onto and up the housing ladder. Transaction levels remained repressed and housing supply continued to fall short of need. Ergo the problem has failed to be resolved.

Due to the erosion of government support for sub-market rented housing does the market have a need for additional sub-market housing? Their analysis shows that the market needs the sub-market. Since housing associations are central to the plans of the government to increase home ownership Susan Emmett from Savills sets out a summary of their analysis in an issue of Inside Housing. She writes that the direction of government policy, which focuses so fervently on home ownership to the detriment of other tenures, risks delivering fewer not more homes overall. It will leave a gaping hole (as if hit by an iceberg?) where truly affordable housing used to be. That is because, she explains, discounted Starter Homes will be unaffordable for buyers on average salaries in the majority of London boroughs and areas in the south of England. Our analysis shows that a 20 per cent discount to the average house price makes it possible to borrow enough in just 45 per cent of all local authorities in England. It is not a surprise that she writes that there are still many unanswered questions about the policy. (Her article begins by even questioning whether it’s worth the debt and massive deposit involved to become a home owner. If H M Bateman, whose observations of social gaffes graced the pages of Punch magazine for decades, were alive he would surely have drawn one about ‘The journalist who questioned the sacrifices of becoming a homeowner’.)

There are other matters to be considered about the policy, she adds. “Such a narrow emphasis on building for home ownership disregards one of the basic principles of developing housing for the open market: absorption rates. House builders will only deliver new homes at the speed at which they can sell them. Nobody wants large amounts of unsold stock on their balance sheet.” Thus by making Starter Homes the new ‘affordable’ tenure it reduces the pool of other sub-market housing. The government’s approach, Susan Emmett writes, “is diametrically opposed to what we really should be doing to speed up housing delivery: diversifying tenure. You can build twice as fast if half of the homes delivered to the rental or affordable sector and not competing with those for market sale. That’s assuming that the market is moving and sales are being agreed.”

Susan Emmett ends by reiterating that what must be remembered is that the property market is cyclical and that demand for homes is driven by economics factors including interest rates, mortgage availability, wage growth, and consumer confidence rather than just housing need. Two disappointing economic indicators just before Christmas will not have helped housing market recovery; firstly, there was the worse than expected borrowing figures and, secondly, growth figures for third quarter of the year were revised down. Following the publication of the economic forecasts Emmett’s final word of caution is timely; it is that developers must bear in mind the risks associated with building for market sale. The same Emmett writes applies to government policy. It remains to be seen whether the government will change course to avoid their plans hitting an unforeseen obstacle. It would seem not from the “bullish bluster” of the housing minister, so far. (The Independent in its editorial 8 December 2015, titled Home Truths, was rather uncomplimentary about Brandon Lewis as well as expressing doubts about the government’s housing policy. “Mr Cameron’s failure to address the balance of supply versus demand in the housing market will leave a lasting black mark against the Conservative legacy. A lack of credible leadership is to blame. There have been four Conservative housing ministers in four years. The current incumbent, Brandon Lewis, has been virtually erased from all public announcements on housing by Mr Osborne, but it reflects poorly on his record that he is so invisible when he is responsible for solving the nation’s most significant domestic problem.” It notes also the lack of government funding available for social housing.)

Even a Conservative commentator such as journalist and author Peter Oborne thinks the situation unsatisfactory that it is near nigh impossible to find somewhere affordable to live in London or the South of England unless you are rich because of the greatly overheated market. He writes, “To believe that those of modest means are not entitled to live in the cities, towns, villages, communities that they also serve, to assert that only wealth confers the ‘right’ is indefensible: to believe that it is of no consequence to society when families are separated, communities and neighbourhoods uprooted and destroyed is frankly insane. It is also a betrayal of genuine Conservative values.”

Before the Bill goes to the House of Lords it returns to the House of Commons for its third reading on 5 January 2016. There have been more than 150 submissions to the Committee regarding the proposals contained in the Bill. They range from councillors, councils, housing associations, tenants, builders and such bodies as the Council of Mortgage Lenders and the Joseph Rowntree Foundation. They include the group, Architects for Social Housing. In their submission titled, The End of Social Housing, they outline their objection to the Bill. They believe, “The Housing and Planning Bill is one of the most dangerous and far-reaching pieces of legislation (that will be) passed in this country in a long time, yet its true impact has been unreported in the mainstream press and is largely unknown to the general public.” It lists the reasons why it finds the Bill so obnoxious. They are, briefly; extending the right to buy to housing associations, oblige local authorities to sell ‘high value’ council housing, pay to stay, class housing estates as brownfield land thus making it easier to obtain and the subsidising of starter homes.

Whether the government will be forced to change course as it did over the tax credits U-turn may well depend upon badly the Bill is savaged, as with the tax credit proposal, when it goes to the House of Lords. Battle plans are well in at an advanced stage and the Lords are battled-hardened from their previous encounter. This particular ‘Dad’s Army’ are ready to show that “they don’t like it up them” to the government once again. Liberal Democrat peers, reports Inside Housing, plan to line-up a not so thin line, numerically speaking, of 102 members in support of any amendment to the Bill. The Labour Party plans several attacks on the Bill with a number of amendments and with the support of crossbench peers should be able to defeat the government on any vote. Furthermore the House of Lords economic committee is currently holding an inquiry into housing and has heard evidence from the economist Kate Barker, who chaired an inquiry a decade ago on housing supply and in 2014 wrote the booklet Housing: Where’s the plan? The committee also heard evidence from Danny Dorling, Oxford University professor and author of All that is Solid: the Great British Housing Disaster.

It says a lot about the priorities of universities and the study of housing that there is now only one degree course in London on housing – quite extraordinary considering the housing situation in the capital – and even that is not about housing policy but housing practice for housing professionals to improve their career prospects. (Likewise politically, housing has been downgraded. In Attlee’s post-war government the housing minister was a member of the cabinet.) Professor Rebecca Tunstall, who was a prodigy of Professor Anne Power at the London School of Economics, left to join the staff of York University, which is one of the last bastions of housing research. Housing is now studied at the LSE only as part of a public policy course. It is also significant that for neither Professor Danny Dorling nor Dame Kate Barker are housing academics. Dame Kate Barker is an economist and Professor Dorling is a social geographer. (A month after the 2015 general election on June 15 the House of Lords held a debate on affordable housing. It was at the instigation of Labour peer Lord (Larry) Whitty. At one and the same time it was an effort to state what policies Labour would have introduced had it won the election along with some helpful suggestions to the Conservative government – let local authorities borrow against their assets – and a request not to proceed with the extension of right to buy to housing associations)

Near the end of Danny Dorling’s book he makes it clear the motivation for writing the book. He writes, “This book has been concerned with why it is that the activity and dignity and freedom of millions of people in Britain, and hundreds of millions of people around the world are at stake because they cannot get secure access to decent housing. Or, to put it more as a politician might, these are people who are not free to be who they could be, to do what they could do, to hold up their heads and live without fear of debt, to live where it would be reasonable to live. These people could be you. They are the majority. In economically unequal countries it is not that poorer or just average people do not work hard enough or try to save enough; it is that we have allowed a few to become too rich, with the result that most of us find it hard to find suitable places to live in at all. Because of actions by the rich – such as buying property for investment purposes and turning 1970s flats back into giant 1920s-style townhouses – housing becomes more and more of a struggle for each successive generation in the UK. People need to stop thinking of decent housing as something that only a few deserve, and realise that it is something we all need. In almost all rich countries we have never had as much housing available as we have now. Never has our financial model for allocating that housing been more obviously wanting than it is now.”

Furthermore, he continues, “The way we organise our housing influences many other aspects of our lives, including our preferred way of getting to work and hence how far from work we live. Public transport and other public policies are more easily improved when housing policy is improved. By contrast, the more individualist is the housing policy that a country adopts, the more individualist its transport becomes. More and more people will come to rely on cars to get them to almost any destination and the more people rely on cars, the more segregated each residential neighbourhood becomes. Make renting attractive and affordable; dampen the expectations of speculative gains on buying property, and poorer areas rise in attractiveness, while places that were mainly popular because they were expensive become both less popular and less expensive. Left alone, the market fails to move towards that equilibrium… Think about what else goes wrong when housing goes wrong. How hard is it to recruit teachers in a city where the prices and rents are astronomical?”) Ditto nurses, doctors, bus drivers, public sector workers and restaurant staff.

With the property boom – and bust – very much in mind, Dorling writes, “Housing shows how markets can fail and a failure in this area matters more than in almost any other area of our lives. That is because we need housing every day, all of us, all of the time.” (Elsewhere in his book Dorling gives his definitive definition of what housing is. He writes, “Housing is of greater political consequence than most other areas of government policy. It’s as near as most people personally get to what is called the greater economy. Employment comes a close send to housing, but most pensioners, children and many others are not employed, whereas everyone is directly affected by housing, all of the time.”)

There is an apocryphal story of a former famous footballer who ordered champagne for himself and his female companion from room service in the hotel he was staying for the night. When it arrived, the waiter asked him ‘where did it all go wrong?’ The same question could be asked of housing in the UK. The answer is not so much that demand has outstripped supply: it goes deep into the prevailing economic ethos of the times and a belief that the rich must be rewarded. It is a question that David Marquand sought to answer in his book Mammon’s Kingdom. The book, he begins, was born of incredulity. He assumed that after the global and financial crash of 2008 there would be a sea-change in the economic orthodoxy as there had been after the Wall Street Crash of 1929 and the Great Depression of the 1930s. He was wrong. He writes, “Just as the crisis of the previous half-century, the crisis of 2008 and its aftermath tore gaping holes in the intellectual system that had underpinned the assumptions of central bankers, ratings agencies, business schools and professional economists for a generation, and had shaped the politics of international economic institutions such as the World Trade Organisation and the International Monetary Fund. On a deeper level, the crisis exploded the dogmas spawned by that system: that government intervention in the economy does more harm than good, that markets should therefore be left to regulate themselves, that rewards reflect productivity, that, since ‘rising tide lifts all boats’, the forces that make the super-rich richer also benefit the poor, that the information available to buyers and sellers in the market place is symmetrical, that the choices made by unfettered economic agents are rational and that the booms and busts which had been capitalism most obvious hallmark were no more.” He was to be disappointed. The hunt for a new politico-economic paradigm to replace the current one never took place. He searched in vain for a modern day Roosevelt who called upon his fellow Americans to ‘drive the money changers from the temple’, instead the years since the crash has been a search for a cleaned-up version of business as usual. Marquand believes that, like a psychoanalyst, in order to resolve the problem it is necessary to dig deep into the buried riches of British history and culture. Cultural changes did far more than technological or economic ones to topple the elites of the post-war era and herald the neo-liberal mindset.

Will Hutton is one of the people whom David Marquand singles out as having tried since the 1980s to provide a narrative to replace the neo-liberal ascendency of the past thirty years. Will Hutton is nothing if not a trier. Will Hutton over the past thirty years has tried through books such as The State We’re In to have politicians, in particular Tony Blair after the 1997 general election, adopt his ideas for a very different economy and society. In his latest book, a sequel to his earlier book, How Good Can We Be, he writes “New Labour’s landslide victory was my generation’s chance. The electorate wanted a government that would address the obvious deficiencies of Thatcherism by providing a more just economy and society with less inequality and les outright poverty, underpinned by renewed, improved and responsive public services.”

Will Hutton was to be disappointed. What the electorate got was a continuation of the Thatcherite settlement. Blair baulked at almost all the substantive reforms that Will Hutton advocated in his book. In his latest book he writes, “Before the 1997 election Blair and his immediate circle were mildly sympathetic to the thrust of the arguments in The State We’re In. But the left of his party told him they had not come into politics to create stakeholder capitalism; Gordon Brown and Peter Mandelson meanwhile, already bitterly at odds, were united in their belief that the agenda would be portrayed as anti-business and corporatist and that Labour could not risk derailing what promised to be a successful election campaign by allowing its policies to be seen to be overtly influenced by one ‘left-wing’ writer/writer/intellectual.”

New Labour “Did not want to portray itself as a great reforming government, improving the lot of ordinary people as part of a wider challenge to the deformed institutions of contemporary British capitalism. It preferred to do what it could under the radar and not frighten the horses. After all, the economy seemed to be working as free market theory said it would. Reform required political bravery, a willingness to take on powerful vested interests, convictions that they needed reform and a readiness to risk being called anti-business. New Labour had no appetite for any of that.”

Hutton writes, looking back on the warnings about the impact of marketisation society and the shredding of the social contract now seem self-evident. The sale of council houses has a few rivals as a self-defeating policy. “The sale of council houses without replacing them would lead to cherry-picking of the best properties, leaving behind concentrations of the disadvantaged into ghettos of the worst, rising long-term homelessness and an explosive rise in the housing benefit bill as ever more tenants were forced to rent privately (at increasingly extortionate rents), so that more of Britain’s population receive cash allowances to pay their rents than any other (country) in the OECD.”

The announcement that the Conservative government’s proposal to extend the right to buy to housing associations tenants came after Will Hutton’s book was published. Although he is no longer editor of the Observer, Will Hutton still writes a column for the newspaper. On 20 October 2015 he wrote about the government’s decision to do so. The headline to his article made it clear what he though of the decision: The broadening of right to buy will inevitably worsen the housing crisis if housing associations are forced to sell to tenants as the impact on the market will be catastrophic.

The British housing market is crazy, perhaps the craziest in the world, he begins. Hutton explains why; “Would-be homeowners, with minimal deposit, now need to earn more than £100,000 a year to buy an average house in much of London and the south-east. Yet prices are still rising.” The rest have to rent but even that has risen by 10 per cent from the previous year. Hence social housing has never been more important. What the government is proposing is a ‘double whammy’ for social housing. To compensate housing associations for the sale of their stock, local authorities will have to, by law, sell off vacant ‘high value’ stock. Hutton believes that offering huge bungs to sitting tenants of both council and housing associations is perverse.

Danny Dorling believes that vested interests in British housing are currently stoking up the embers of the last crash to create a new crisis. Who are the ‘vested interests’? Why they are none other than the pantomime villains – the banks. Let Will Hutton explain; “Everything has its roots in unaffordable property prices. As Adair Turner, former chair of the Financial Services Authority, argues in his remarkable new book Between Debt and the Devil, banks in every country are diverting an ever higher share of their loans to real estate. That amounts to now 60 per cent of all lending across 17 countries, (as shown by recent research by three economists about the banking system in these countries) doubling over the last 50 years. It is real estate that is the principle cause of the increase in private sector debt, rising in the UK from 50 per cent of GDP in 1960 to 170 per cent today – a much more concerning figure than public debt (Ann Pettifor, the economist, highlighted the dangers of First World debt some years ago). Individual banks like lending against real estate: it is such good collateral that they rarely lose money, so they – and their regulators – judge that they can allocate less of their capital to underwrite any risk, making it especially profitable. The more they lend, the higher the price and the more secure the collateral.”

The snag, Turner says, is that it interacts with the capacity of today’s banks to create money. As they are obliged, even under the Basel agreements, to hold such tiny reserves of their own capital, modern banking has become a debt creation monster – churning out mortgages and naturally and naturally inflating real estate prices because real estate is in fixed supply, as Mark Twain remarked. Although this is a global phenomenon it is particularly acute in densely populated Britain with tight planning laws and property largely untaxed. British banks have become an acute exemplar of a global trend, directing as much as 85 per cent of all their lending to real estate and thus driving property prices to incredible heights.

To change this situation, Britain will need to tax property more, relax planning laws build more housing and above all control the debt process monster. This would have the effect of unwinding the spiralling house prices rise and lessen the prospect of another financial crash and at the same time avoid the devastating impact it would have on millions of people who have a mortgage millstone around their neck. Hutton believes it would also make “conservative politicians” feel less need to pillage social housing for opportunities for home ownership because the whole structure would work better. (Hutton also believes that the Labour Party can learn the lesson of its defeat and make a comeback in 2020)

The situation is not going to change in the foreseeable future, writes Hutton, “Prices will carry on rising. Already people in their early 30s owe twice as much debt as their parents, the next cohort of 30-year-olds will owe even more – facing the prospect of servicing a mortgage until they die. Ultimately, there will simply be too much debt in relation to income, and like any Ponzi scheme, the whole edifice will unravel – generating yet another banking crisis while real estate prices fall back, but not before an epidemic of housing distress.”

Will Hutton ends his article by lamenting that it is a commentary on our times that what he calls ‘mainstream Labour’ when in power and right to the 2015 general election did not have the courage to state the bleeding obvious when it came to housing. National debate, the Labour Party and the country are the poorer as a consequence. It is to Will Hutton’s credit and perseverance to point out again, to coin a phrase the state we’re in. As Private Fraser from Dad’s Army might have said ‘we’re all doomed’, unless there is a wholesale structural and democratic overhaul of the state.

The credit for putting into context what the government is proposing to do belongs to Will Hutton. He writes, “The great intellectuals of the Enlightenment movement proposed that if society was to transcend theocracy, anarchy or despotism, then it had to be underwritten by such a social contract embodying notions of social justice. To organise society as an individualistic war in which each person was pitted against another was barbaric, while other models, slavishly following the rules of one religion or one supreme leader, denied freedom.” By raising the pursuit of home ownership above all other models of tenures in the Housing and Planning Bill the Conservative Party has, in its own barbaric way, pitted one person against another person. The Conservative government has declared war on social housing.

Terry McGrenera, the House Party: Homes for Londoners

HOW MANY STUDIES DOES IT TAKE….

HOW MANY STUDIES DOES IT TAKE TO DISCOVER THAT THE SUPPLY OF NEW HOMES IN LONDON HAS FAILED TO MEET THE DEMANDS OF A GROWING CITY?

Great! Just what everyone either living or working in London needed – a commission headed by Lord Kerslake, the former head of the Civil Service, to see how the number of affordable homes could be increased in the capital. How many studies does it take for the message to permeate that the supply of homes, new or not, has to be vastly increased. It is somewhat ironic that it is the Institute of Public Policy Reform has set-up the commission as Lord Kerslake has said that London’s housing shortage is one of the “biggest public policy failures of the last fifty years.” (This will be, as far as I can tell, the seventh time that the IPPR will have put its name to a report on housing in the last five years.)

Lord Kerslake has said his job is not about blaming anyone although he did criticise the proposal by the present government to extend the right to buy to housing associations. That is to Lord Kerslake’s credit but if it is a failure of public policy therefore someone in public office is to blame. The biggest cause of the shortage of supply in housing has been the failure to replace the millions of homes that were sold off since the passing of the Right to Buy Act in 1980. The billions from the sell-off went largely into the coffers of the Treasury and were not returned to local authorities. The folly of not replenishing the diminished housing stock continued under Labour. They foolishly believed that by transferring the housing stock belonging to local authorities to housing associations that they could also transfer their responsibilities and that housing associations and the private sector would fill the void left by local authorities. Yvette Cooper, secretary of state for communities and local government at the time, was asked, in an interview with Rowan Moore for Prospect magazine, if the decline in house building over the last 30/40 years was almost entirely due to the end of council housing building. Cooper stuck to the line that it was market failure that was the problem.

As journalist Anna Minton, formerly of the Financial Times, writes in her book Ground Control, the Labour government were in denial when the market failed to build enough homes to meet demand. At a debate on housing held at the Royal Society of Arts again Yvette Cooper was in denial when she was asked whether there was a housing crisis. She replied that the situation was “challenging”. Once more she blamed the failure on the private sector for not responded to the rising demand for private housing. Ultimately the failure, Minton concludes, was caused by politicians who were ideologically opposed to public housing building.

Ken Loach, who began his career as a film director with the BBC documentary Cathy Come Home in the 1960s, was asked at a housing rally recently who he considered was to blame for the housing crisis. The politicians were to blame, he said, and “We keep electing the wrong politicians.”

Terry McGrenera, the House Party; Homes for Londoners

 

INTERIOR HOUSING

INTERIOR HOUSING

GETTING INSIDE HOUSING
THE HOMES FOR BRITAIN RALLY ON ST.PATRICK’S DAY ORGANISED BY THE NATIONAL HOUSING FEDERATION, THE BODY THAT REPRESENTS HOUSING ASSOCIAITONS, IS NOT ABOUT HIGHLIGHTING THE HOUSING CRISIS BUT A PRE-ELECTION PUBLICITY STUNT TO PROMOTE HOUSING ASSOCIATIONS

This year, as in previous years, in the weeks before the annual Budget statement by the Chancellor of the Exchequer, George Osborne, many organisations make representations to him on behalf of their industries and interests in order that he looks kindly upon them, particularly since the downturn in the economy. This year’s budget will be the last before the general election in May. The National Housing Federation, the organisation that represents housing associations, is organising a “huge” rally the day before the budget not to seek any financial reward or leniency from the Chancellor of the Exchequer. The rally is the climax of the campaign organised by the National Housing Federation (NHF) to highlight, supposedly, the housing crisis. That is not the case. There is an alternative motive to the rally. It is intended to be a show of strength to the government that, as a letter in The Times, 7 February, written by the chief executive of the National Housing Federation David Orr, and signed by other people such as the chief executive of the Chartered Institute of Housing, Grainia Long, to say to the government that they were “ready to play our part but need the next government to meet us halfway by providing real leadership and a commitment to solve the issue.” The letter is a little coy as to what is meant by real leadership. Although they don’t say what they want, it is to fill the void left by the local authorities as the main provider of social housing.

Their chances of doing so were boosted by the terms of reference of the Elphicke-House review into the role of local authorities in housing supply which made it clear that the review must not produce any recommendations that breached the government’s fiscal consolidation plans or require changes to the government’s national accounting framework. It meant that the limit on local authority borrowing would remain in place. Boosted also by the key recommendation of the Elphicke-House review that the role of local authorities was to change from being a statutory housing provider to one of being merely a housing delivery enabler represents an opportunity for the NHF to take their place. Finally the NHF hopes to benefit from the decision by the government to release public sector land to build 100,000 homes by March 2015. Whether the use of the word “huge” by the NHF is appropriate to describe the rally they have organised for St Patrick’s Day remains to be seen. Westminster Central Hall has been booked to hold the multitude. Its capacity isn’t huge; it is 2,200.

George Osborne made his intentions for social housing clear in his Comprehensible Spending Review in the autumn of 2010. There was to be no new direct grant for social housing. The decision was described by the Inside Housing reporter Carl Brown as heralding its slow death as a form of tenure. The magazine’s editorial said it was a bleak week for social housing. “Above all, it was a bleak week for tens of thousands of England’s poorest who the coalition government has effectively abandoned.” He added the hundreds of thousands of homes built in the post war decades formed the backbone of the welfare state. He ended by saying that the packages of measures in the spending review mean the end of social housing as part of the welfare.

George Osborne in the 2013 Autumn statement announced a review of the role of local authorities as regards housing supply. Its purpose was to consider the role that councils can play going forward in helping to meet the housing needs of their local population, within the context of the need to ensure good value for money and fiscal discipline. In January 2014 the two people who were to conduct the review were announced. They were Natalie Elphicke and Keith House. Natalie Elphicke, a housing finance lawyer who chairs the housing working party of the think tank established by Iain Duncan Smith called the Centre for Social Justice. In 2010 she wrote a report for the think tan Policy Exchange called Housing People; Housing Finance which called for housing associations to be allowed to raise equity finance in order to build social housing without grant. In 2014 she co-authored with Calum Mercer, former finance director Circle Housing Association, a report titled Million Homes, Million Lives: A Better Deal for Nation Rent. Natalie Elphicke is a former director of the Conservative Policy Forum and is the wife of Charles Elphicke, Conservative MP for Dover. Keith House is the Liberal Democrat leader of Eastleigh council in Hampshire and a former vice-chair of the Local Government Association. In 2012 when he was vice-chair of the LGA he wrote to the government stating that councils were “desperate” to do more to help solve the housing crisis and called for the government to help by “arming councils with greater freedom and financial flexibilities.” So it is rather ironic that he was appointed to a review did not include lifting the limit on local authority as part of its remit.
Whilst the choice of Elphicke and House might not have been to everyone’s liking it was the limitations placed on their remit by the government that riled some people. “The review”, the terms of reference stated, “must not produce any recommendations that breach the government’s fiscal consolidation plans or require changes to the government’s national accounting network.” The reason given for limiting the scope of the review was that the government wanted to support stability in the local government housing sector.

Elphicke and House in the foreword to the review write that the roles and responsibilities of councils have been transformed by the Localism Act 2011 and the self-financing settlement for council homes. It was for this reason that the review was established. As a result of the new context in which councils must function the review wanted to see “if more could be done by councils to boost house building and to create strong and sustainable communities.” In addition whether “what extra steps, measures and reforms could be taken forward to enable councils to boost the building of new homes, to support growth and prosperity for the communities they serve.”

Besides trying to see what more councils could do to support housing supply by making maximum use of their existing asset base to support new development through asset sales the review wanted to see how data on local authority Housing Revenue Account assets, including housing and land could be made more transparent in line with the government’s recent Transparency Code measures.

Sometimes the recommendations by reviews or reports commissioned by government, especially into contentious matters, are muffled or resemble clues for a cryptic crossword. That is not the case with Elphicke and House’s review although they write rather glowingly of how the very best councils can shape a vision for the communities they serve and well as being dynamic, original and in making that vision happen. They write, “Our review was established in the context of the new roles and opportunities for councils. We believe that councils could achieve much more by taking a more central role in providing new homes. Our key recommendation is that councils change: from being statutory providers to being Housing Delivery Enablers. Councils have a primary rope in setting out a vision for the development of their areas. They can be active in creating housing opportunity. Councils can be proactive in identifying housing need, growth and opportunity. They can work closely with businesses and other partners to share ideas and experience – and actively use their assets and knowledge to unlock housing opportunities and deliver more homes, to build strong and sustainable communities.” Local authorities were to be treated like brood mares.

To achieve such objectives they believe partnerships are important and point out that the overwhelming majority of councils are already working in housing associations. They add, seeing and hearing first-hand accounts of what many councils can and do achieve has been inspiring. Considering the role that local authorities played during the twentieth century and the powers at its disposal a generation ago the language used by Elphicke and House must be demeaning and insulting to anyone from that era. Their capacities to borrow to build homes having been restricted local authorities are being forced to dispose of land for nominal amounts in order to accelerate development. Furthermore, the review recommends the establishment of development panels to speed up the construction and development of homes on public land. Elphicke and House write, “Delivery Panel Partners can provide a framework panel of prequalified housing developers, and are available to a wide range of public bodies that may own land that they wish to dispose for housing.”

The review also looked at the disposal of larger areas of public land that could be disposed. It has been estimated, the review states, that central and local government owns £370 billion worth of land and property and that the government is taking action to release to release its vacant or disused land. The coalition government aims to release public sector land with capacity to deliver 100,000 homes by March 2015. The Homes and Communities Agency will be the government’s land disposal agency. Devolved power to the Greater London Authority, or more to the point the Mayor, will perform the same function in London. Elphicke and House recommend that a Housing and Finance Institute should be established to promote and support the sharing of ideas and drive innovation in housing finance.

The evolution of the key recommendation of the Elphicke-House can be traced to a policy paper on housing written by Natalie Elphicke for the Policy Exchange think tank in 2010. As regards local authorities she writes it has been suggested that local authorities could have a larger role to play in housing delivery. “However, the scope for significant development being financed and delivered by them will be restricted by the national requirements to significantly and quickly reduce public sector borrowing. The government is committed to reducing the total public net borrowing from £154.7 billion to £20 billion by 2016 and to reducing revenue spending by 25 per cent. Borrowing undertaken by local authorities is included within the calculation of the public net borrowing.” Natalie Elphicke writes that small scale house building programmes may be delivered, such as converting garages, by the reform of the Housing Revenue Account but “it seems unlikely that local authorities will be able to secure significant funds to assist with large scale developments, although they may be able to stimulate activity by deferring consideration for land which they own, or by taking part in joint ventures with other parties.” (It is a view not shared by Grainia Long, the departing chief executive of the Chartered Institute of Housing in an article in July 2014 for Inside Housing. She reminded readers that “In 1968, at the height of England’s house building efforts, 40 per cent of all homes were built by councils. Whenever output by the private sector has been high, councils’ contributions have been high too, and they have been working in partnership. While models of housing supply have change, there is now widespread recognition that the necessary levels of house building will not be achieved unless local authorities are fully engaged and contributing.” At the time of Grania Long’s article the Elphicke-House review was taking contributions from many organisations, councils and others and there can be no doubt what she wrote cannot have escaped their notice.)

It cannot have escaped anybody’s notice that since the government announced that it intended to release surplus public land for housing in June 2011 by the housing minister Grant Shapps and its progress report a year later housing associations as well as commercial developers have eyed the prospect of sharing the spoils. (It set up also an advisory group led by Tony Pidgley, chairman of the Berkeley Group to provide commercial expertise. Berkeley Homes were responsible for the One Tower Bridge skyscraper. Its next big project is to redevelop the demolished Ferrier council estate in Kidbrooke. They plan to build more than 4,000 homes and a 31 storey tower block).

Savills the property specialists in their Autumn 2014 report estimated that public land could deliver as many as two million new homes based on their analysis of public records of the central government estate in England and the land holdings of the Greater London Authority. One of the biggest landowners in the United Kingdom is the National Health Service with total assets valued at more than £31 billion. Hitherto the NHS followed well established ways of disposing of land which include selling on the open market but the Department of health to encourage the process set up the £100 million Growth and Efficient Fund to incentivise and support NHS organisations to make savings by releasing land for housing by 31 March 2015. In the chancellor’s Autumn statement in December 2014, the government increased its ambition for public sector land, confirming its aims to release land with the capacity for up to 150,000 homes between 20105 and 2020.

The NHF in a pamphlet titled Surplus NHS land; a best value alternative sets out its case. It states, “This policy paper sets out the alternatives to the NHS’s traditional and well-established approach to disposing of land, which usually involves selling it at market price. Working with housing associations, this new approach would offer an ongoing revenue stream from the NHS estate through the development of affordable housing, rather than a one-off capital gain, achieving even greater financial returns over the medium to long-term. By working in partnership with housing association, the NHS could use the profits from its estate to cross-subsidise the building of high quality supported housing schemes for patients recovering from mental health problems.”
The policy paper goes on to argue for an alternative definition of best value. Too often best value is interpreted as achieving the maximum upfront price for land. It argues, “The Federation believes that best value should be quantified in terms of wider social, economic and environmental value, not simply price, and has been urging government to broaden the definition of best value along these lines.”(Another NHF publication called Making creative use of NHS estate makes the same case and it is obvious they are singing from the same hymn sheet by the use of the same language on occasions – ‘there are well established ways in which the NHS disposes of land’ and ‘the NHS has well established ways of disposing of surplus land’).It is worth mentioning that housing associations have land banks with a value in excess of £1.3 billion and collectively recorded a surplus of £1.9 billion in 2013. This was despite the introduction to an article in June 2014 in Inside Housing reviewing the sector’s performance as “a bit plodding” in 2013.

By way of explanation the article quoted Richard Hill, at the time chief executive of the Homes and Community Agency, saying that the huge drop in house building numbers of recent years was down to a change in schemes from the old grant funding to the 2011 to 2015 affordable homes scheme. He added that from next year that there will be more reason to be optimistic. David Orr, chief executive of the National Housing Federation, outlining his vision of the future in 2003 in the foreword to a pamphlet called An Ambition to Deliver: Housing Associations Unbounded published in 2014 reflected this feeling. He writes, “We are optimistic about the future and looking forward to embracing the opportunities and challenges ahead.” By 2033 he sees housing associations owning and managing more than double the number of homes we do currently, setting our own rent, deciding who lives in our homes and selling a greater number of homes too.

Why is David Orr optimistic? There are only above 100,000 new homes being built a year when in excess of double that number are needed and the number of council homes has fallen by 250,000. Government capital investment in affordable housing fell by 63 per cent in 2010 whilst the people on housing waiting lists have doubled in the last decade. As to how housing associations will achieve their ambition to deliver David Orr is just as coy as in his letter, 7 February, in The Times. He believes it can be done by stretching government investment (sic) and unlocking under-used capacity in new innovative ways.

Exploring new and innovative ways of accessing finance for housing associations was the subject of Natalie Elphicke’s policy paper for the Policy Exchange in 2010. She writes, “Until the late 1980s, associations were overwhelmingly reliant on government finance to build new affordable housing. Since that time the share of government grant required to finance new building has fallen to around a third. Since the credit crunch, the government has had to provide high levels of additional finance to support the housing association sector – without this continuing support, the 1980s financing model for housing associations is broken. Given the state of the public finances, reliance on this is neither realistic nor viable.”

Using a quote from Kate Barker’s review of housing supply in 2004 – ‘A weak supply of housing contributes to macroeconomic instability and hinders labour, market inflexibility and constraining economic growth’ – Natalie Elphicke remarks that circumstances have changed and that today the problem is money. The problem could be solved by housing associations transforming themselves into social enterprises to unlock additional investment in order to provide new homes and stimulate economic growth, without government grant. Three models are mentioned; the BUPA model, the John Lewis model and the Coop model.

In the four years since 2010 that Natalie Elphicke wrote her policy paper the consequences of the coalition government’s reduction in capital grant funding the housing crisis has got worse and will get worse because the population is expected to increase by nearly 5 million over the decade to 2020. Rather than wait for the earth to move and the government to adopt what she proposes Natalie Elphicke has founded a not-for-profit company to put your ideas into action. The company is called Million Homes, Million Lives. Her plans were set out in two policy documents, co-written with Calum Mercer, called Nation Rent and A better Deal for Nation Rent. The documents have been made possible by the assistance of many organisations including housing associations as well as think tanks and institutional developers. As much as Elphicke is disgusted by the housing crisis it is the total failure of everyone involved, from government to housing associations and housing charities to come up with a “cunning plan” or otherwise to help solve the housing crisis.

Over the past decade the authors write in the introduction to Nation Rent the composition of the housing market has changed. Since the credit crunch the finance markets which delivered funding for residential rental housing, particularly housing association market, have undergone permanent change. The authors ask the question whether this is the end of home ownership and will we become a nation of renters. Although the authors see home ownership as the ultimate goal their two reports are a call to arms to everyone involved in housing who want to build a long term housing market catering for all tenures. Their aims are grounded on three principles; a whole market solution to increase the housing supply of social rent through to home ownership, an investment portfolio demonstrating good long term returns set at levels to be attractive to long term institutional investors and the provision of subsidised homes equivalent to the predicted need for affordable homes, without reliance on government capital. The report Nation Rent sets out why the authors have established their company and A Better Deal for nation Rent explains how what is proposed.

It is a sign of how the upheavals of the past decade in the economy since the credit crunch, the welfare changes that have been imposed and the cack-handed policies that have been adopted by the coalition government, that it is not a surprise to learn Natalie Elphicke is not alone in thinking there must be a better way. Whilst Natalie Elphicke and Calum Mercer had housing associations in mind as the vehicle whereby more homes could be built, Christopher Walker in his policy paper published by the think tank Policy Exchange is more direct as to how the housing crisis might be solved. It is, as the title of his policy paper states, by Freeing Housing Associations. He is the head of housing, planning and urban policy at Policy Exchange. Previously he worked as a civil servant in the Government’s Economic Service. Walker begins by declaring that there is a housing crisis and that it is the poorest in society who are the worst affected by the lack of new homes that are being built. Housing associations are building most of the new affordable homes but the tragedy, he writes, is that within the housing association sector there is certainly sufficient financial capacity to build many more affordable and market homes than are currently being built. He believes the sector as a whole could deliver as many as 100,000 affordable and market homes each year. What is stopping the sector is a “byzantine system of regulatory rules and financial constraints.” The situation is exacerbated by a significant number of significant housing associations that build few or no new affordable homes.

As it is the housing association sector made a profit of £1.9 billion in 2013 but he believes the sector could be making a much bigger surplus of around £3.billion a year if housing associations were given more freedom to use their balance sheet capacity through strategic asset management, were encouraged and supported to build more market homes for sale, and had access to cheaper debt finance.” His frustration comes from the fact that he considers the current system of government funding, through modest levels of capital grant is no longer fit for purpose. Despite reductions in capital grant funding from 2010, it still costs the exchequer £1.1 billion a year at a time when the public finances remain tight. The grant levels on offer to housing associations are no longer commensurate with the burdens and risks that grant (funding) places on them. “In short, the grant deal model where the government invested generous levels of repayable equity in housing associations homes, instead of providing a grant with its multitude of restrictive conditions, could be a more attractive deal to both parties. Furthermore such a model could, ultimately, cost the government nothing in terms of public expenditure because the investment could be treated as a financial transaction, and would almost certainly provide better financial support to housing associations.”

Chris Walker’s in his report believes that a sector-wide annual surplus of £3 billion a year could be achieved, and a better funding model supplementing it, housing associations could be building or acquiring 60,000 affordable homes a year. Building more affordable homes will not bring down the waiting lists on its own but along with building homes for sale would improve affordability and reduce the pressure on the social sector. From 2015 housing associations are planning to build around 7,500 homes for sale yet they could be building as many as 22,500 without being overly exposed to housing market risk. This chimes with the long term plans contained in the NHF’S Ambition to Deliver document which sees housing associations building 120,000 homes a year in total.

Walker’s report outlines what the areas that are currently stopping housing associations providing the increased numbers of homes for sale and for rent; the economic regulation and system of allocations attached to historical grant, the reduction in the level of grant coupled with affordable rents imposes unacceptable financial risks on housing associations following the coalition government welfare reforms., the failure of some housing associations to use their surpluses to cross-subsidise building affordable housing, and lastly, housing associations that do not develop or acquire new build affordable homes. It is not hard to detect Walker’s annoyance with the present state of affairs that holds back housing associations from building more homes. “It is likely that central and local government are not going to have funds to increase expenditure on affordable housing due to continued fiscal constraints. The funds necessary to increase affordable housing supply have to come from elsewhere, ultimately from bigger housing associations surpluses and alternative private sector funding.” Walker admits that the vision for delivery is ambitious and that some difficult policy changes are needed to make it happen but that the potential prize is great.

Central to Walker’s plans is the creation of new category of housing association that is independent of historical housing grant. “All housing associations would be allowed to apply to become independent. Successful applicants would need to have shown a strong and long-track record of new affordable housing delivery. The new giant-independent housing associations would be the exemplars and beacons of new housing deliver in the sector.” (It all sounds somewhat similar to the creation of the Premier League when they broke away from the Football League in 1992) The overarching principle behind grant-independent housing associations is freeing them up to use their balance sheets and assets to increase the affordable housing stock. The current arrangements, Walker writes, “belong in the 1970s and are no longer fit for purpose.”

In return for their ‘freedom’ the grant-independent would offer to pay off the historical grant – at a discount – over a thirty year period to minimise any impact on housing association cash-flows and surpluses. (This would not to the liking of local authorities who in return for retaining the proceeds of their housing revenue account agreed to pay off their historical debt owed to government) Also grant-independent status would allow housing associations to sell vacant social homes or convert them into market rented properties, absolve housing associations of most of its local authority nominations obligations and give housing associations the freedom to set its rent policy, subject to certain limits in accordance with housing benefit provisions.

David Orr commented upon the publication of Chris Walker’s report in his monthly blog last November. The new report, the sub-heading stated, recommends greater freedoms for housing associations but it also contains some more controversial proposals. Yet more than half of his post is about the NHF’S “visionary” Ambition to Deliver, which he reminds readers was published some months before in February 2014. He describes NHF document as being “indeed a remarkable and visionary ambition.” For housing associations to deliver their “visionary” ambition some important “things” need to change. The next paragraph of his post highlights the most important of the changes that need to be made. They are “that housing associations and their boards must be genuinely in control of their own futures and their own decision making. They must be able to set their own rents and make their own decisions about who their homes are let to. At present government controls housing associations rents – and has made an abject mess of it. We have all kinds of variations, mostly based on short term political considerations rather than effective housing policy. Housing associations know the neighbourhoods and places where they work. They know the economic circumstances of their residents. They need to be able to set rents that affect those realities. They need to be able to decide who their homes are let to – often but not always in conjunction with local government partners. And they mist be able to decide what is the very best use of their property assets, which includes being able to sell vacant homes where to do so allows them to build more.”

As for the Chris Walker’s report, David Orr writes many of the issues he raises are discussed in an “interesting”, as in Steve ‘interesting’ Davis, report. Adding that it is “hugely”, as in “huge” rally, welcome that that this critical debate is given an airing as much of the detail in the report reinforces the need for housing associations to be free to use their creativity even more effectively. Again in bold type, he writes that not everyone will warm to the idea that historical grant should be paid off and even fewer will support the implicit idea that public capital investment may be unnecessary in the future. He warns to be wary of assuming mechanisms that work in some markets today will work in all markets in the future. A sixty page report on the future of housing associations is given less than sixty words. The word ‘independence’ is mentioned elsewhere, once.(David Orr needs a sub-editor for his blog to help him with his sentence construction; “We are delivering half of that”, “Housing associations understand this” and “We are clear that housing associations are central to doing this”. He writes, “There are too many rules and regulations at present”. Delete “at present” or put “At present” at the beginning of the sentence.)

“Housing associations exist for the benefit of the community”, writes the chief executive of the NHF. Some housing association tenants in Tower Hamlets have had cause to doubt that housing associations do exist for the benefit of the community. Council meetings in the second half of 2014 saw several petitions presented to the council. At the July meeting of the council Cllr. Rabina Khan, cabinet member for housing, said, in response to a question about housing associations, said there were nearly fifty housing associations in the borough with responsibility for over 30,000 homes. “This means that there are hugely differing standards of management and service and we have to make sure they work in the interests of their residents and the wider community.” Cllr. Khan added, “I am currently deeply disappointed with the overall performance of three of the housing associations in the borough where there has been a steady of complaints and disputes relating to poor performance and poor customer care.”

At the September meeting of the council two petitions were presented by members of the public and both of them involved the conduct of housing associations. The first petition was about a proposed development by Polar HARCA on Burdett Estate in Poplar. The proposed development, the petition stated, will result in the last bit of open space being taken from the community. The petition started, “To have a major development on our estate should be in consultation with the wider community and not a select few. Consultation with the estate board has been at best amateurish, and at worst, a sinister ploy to pursue its interests over the interests of the community.”
The second petition presented to the meeting was from 800 residents of a group of sheltered housing blocks that had been transferred from Tower Hamlets council to Bethnal Green and Victoria Park Housing Association which subsequently merged with Labo housing association to become Gateway Housing Association. They wanted to demolish some blocks which was contrary to the terms of the Offer Document at the time of transfer. In response to the petition Cllr. Oliur Rahman said that by coincidence he was invited to the Annual General Meeting of Gateway Housing Association only two days before the council meeting. He said that the chief executive, Sheron Carter, gave a glowing report of how it supported its vulnerable residents and that it had a very active resident group. In response the petitioner said there had been very little consultation between residents and Gateway. Cllr. Rabina Khan, responding on behalf of the council, said that she had written to the chairman of Gateway Housing Association and that officers had spoken to its chief executive. Cllr. Khan referred him to the council’s Older Persons Statement and was “deeply disappointed” that Gateway Housing Association had failed to comply with its contents.

Cllr Peter Golds, leader of the Conservative group on Tower Hamlets council mentioned a similar experience with Gateway Housing Association in his ward on the Isle of Dogs. He added what had happened to Bethnal Green and Victoria Park Housing Association was systematic of local housing associations being “gobbled up” when they merged with another housing association to form a larger organisation.

Peter Hetherington, former editor of the Society Section of The Guardian, in December 2007 asked the question whether housing associations were losing touch with their founding values. He wrote, “It is a long historical journey from medieval almshouses to the great charities of the nineteenth century philanthropists providing shelter for workers and the multi-billion pound businesses now delivering social housing. Today, those businesses, called housing associations are still overwhelmingly registered as charities, but their links with the past can appear tenuous as they morph into full-blown development “companies” – albeit without shareholders – to become big players in the wider housing market.”

Housing associations are at a crossroad, he added, facing pressure both from within and outside the movement. They are divided about their role; some associations clinging to their historical roots whilst other associations wanting more freedom to pursue a more commercially driven approach. To critics the core function of the provision of homes to rent now appears secondary to building home for sale to land development – thus making them indistinguishable from private corporations. The transformation and growth of housing associations over the past thirty years was a consequence of government policy during that period. As Alan Murie, professor of Urban Studies at Birmingham University, in his history of the Housing Corporation titled Moving Homes writes, “Housing associations became the chosen vehicle for the decentralisation of state funding through the transfer of development activity and assets from local government. In the subsequent period expansion was very rapid but the terms on which housing associations expanded were also very different. Private finance introduced powerful new stakeholders in the form of business. Those involved got used to growth, which itself became a major rationale for some organisations.”

David Orr insisted at the time the mixture of public and private money has brought huge benefits, with government grants of £30 billion over the past thirty years levering £35 billion of investment from associations borrowing against their assets. He maintains “this is the most successful mixing of public and private investment anywhere in the economy. I think we have quite a compelling offer and that comes from being independent.”

Although David Orr in his blog writes that the implicit idea that public capital investment may be unnecessary in the future has little support, Chris Walker believes the current grant levels will not be sustainable beyond 2018/19. Yet David Orr in the introduction to Ambition to Deliver writes that “We are not relying on others to play a part – though it would help. It is about what we can do ourselves.” What if that help came in the form of an pre-election announcement not of a continuation of current grant levels but an announcement from the government to offer a “heavy discount and with repayments spread over 30 years” on historical housing grant, would that be considered as helpful and at the same time constitute real leadership. (It is worth mentioning that Alex Morton, Chris Walker’s predecessor at Policy Exchange, is now part of the Prime Minister’s policy unit in Downing Street) Where better to make such an announcement than at a “huge” rally hosted by the National Housing Federation. It would give those assembled at Westminster Central Hall something to celebrate on St Patrick’s Day.

The National Housing Federation is not the only organisation that has set out a programme for the next government to put into practice. The GMB trade union published a report in 2014 which offered solutions that they want an incoming Labour government implement after the general election. It states that an incoming government will need to make affordable housing a central part of its economic and social strategy and that “some of the strategic institutional and legislative changes will take time but the intention needs to be clear from the start with some legislative commitments and an immediate emergency programme. There will a central role for local authorities within existing legislation and tight expenditure constraints.” As regards local authority borrowing powers the Treasury should adopt international standards for definition of Net Public Sector Borrowing and General Government Financial Deficit which would have the effect of excluding Local Authority borrowing for housing development from general government borrowing. At the same time as Chris Walker is seeking a write down on historic government grant for housing associations the GMB report that the Treasury should allow a write down of the inflated historic debt provision taken on by local authorities in return for keeping their Housing Revenue Accounts receipts.

The report acknowledges the number of new homes that Housing Associations have built has been impressive “but has gone nowhere near making up what used to be carried out by local authorities.” The 25-page report by the GMB is a much more impressive programme of what is required to solve the housing crisis because it accepts that there needs to be a very substantial strategy for council house building to be put in place urgently and that the resolution of the long term housing crisis is not possible without some significant public investment in housing of all kinds. As to whether in the present context any proposals for increased expenditure on housing is affordable the GMB’s report response is that the economic and political case for a massive increase in house building would have a multiplier effect on the economy. Building homes does more than provide a boost to the economy; housing is, as Danny Dorling writes in his book All that is solid, the great Housing Disaster, as near as most people personally get to what is called the greater economy because everyone is directly affected by housing, all of the time.

Terry McGrenera

HOUSING HAS BECOME A POLITICAL FOOTBALL

As to why there is a housing crisis is quite simple; politicians over the past thirty–five years have used housing as a political football. The exchanges between David Cameron and Harriet Harman at the first Prime Minister’s questions after the recent general election were proof beyond any possible doubt of how both of the main political parties have given housing a good kicking.

The first question to the Prime Minister from Harriet Harman was about how many homes had been replaced under the “reinvigorated” right to buy scheme introduced by the coalition government. They had promised that for every home sold it would be replaced on a one-to-one basis. The PM failed to answer the question but responded by asking Harriet Harman whether it was still her party’s policies to oppose extending the right-to-buy to housing associations or had her party changed their position since the election. Harriet Harman answered her own previous question by stating that only one in ten homes that had been replaced. So it continued. Housing, for the PM, was about the “aspiration” of owning your own home. Harriet Harman replied by saying that the percentage of people owning their own home had fallen since the 2010 election.

Under the proposed scheme to allow housing association tenants to buy their homes it is not the government who will refund housing associations for the loss of their stock but local authorities. The money will come from local authorities by forcing them to sell off council homes in expensive areas when they become vacant. This was a policy contained in a report by the think-tank Policy Exchange before its director moved to be part of the set-up at Downing Street.

In 2011 David Cameron was asked what he regarded as the single most significant piece of legislation since the 1960s. He replied the 1980 right to buy Act. It certainly had a significant effect upon the housing stock of local authorities. Also local authorities received a quarter of the revenue from the receipts. Labour further weakened the viability of local authorities with their stock transfer policy which reduced the support grant from central government.

It seems appropriate to compare the way housing has been kicked around by politicians over the past thirty five years to the governance of world football over the same period. Kate Allen, property correspondent for the Financial Times, writing on the state of housing in the UK stated that the housing market is now dominated by a handful of big players who are reluctant to increase output. Such is the control of the big players in the housing market that any party is now afraid that any large scale publicly backed building programme would have an adverse effect upon house prices. The last Labour government was too timid to embark on a house building programme when a senior advisor argued “If we did that it would hit house prices and we would lose the election”. Currently the Bank of England dares not increase interest rates because of the effect it would have not only on the mortgages of millions of people but on the economy as a whole. There seems no way out of the present state of the housing market apart from unforeseen seismic events that will have the same impact as those that are convulsing football’s governing body.
Zoe Williams, Guardian columnist, in the chapter about housing in her recent book about doing politics differently writes that recent governments have been doing whatever it will least cost to hold the present situation together the longest to the advantage of their own party. “Bland, institutional self-interest is suffocating the future.” Either, she writes, “we wait for a political saviour or a massive crash, or more likely the second and then the first.” The alternative is doing housing differently. Imagine, she writes, what it would be like, facing the system, if you were the only one. In fact, you’re one of millions. You’re one of almost everybody, except for the people for whom the system works in their favour. The hard bit of any process is building support. That will not be the hard bit she believes. I hope she is right.

Terry McGrenera

HOMES FOR BRITAIN

THE HOMES FOR BRITAIN RALLY ON ST.PATRICK’S DAY ORGANISED BY THE NATIONAL HOUSING FEDERATION, THE BODY THAT REPRESENTS HOUSING ASSOCIAITONS, IS NOT ABOUT HIGHLIGHTING THE HOUSING CRISIS BUT A PRE-ELECTION PUBLICITY STUNT TO PROMOTE HOUSING ASSOCIATIONS

This year, as in previous years, in the weeks before the annual Budget statement by the Chancellor of the Exchequer, George Osborne, many organisations make representations to him on behalf of their industries and interests in order that he looks kindly upon them, particularly since the downturn in the economy. This year’s budget will be the last before the general election in May. The National Housing Federation, the organisation that represents housing associations, is organising a “huge” rally the day before the budget not to seek any financial reward or leniency from the Chancellor of the Exchequer. The rally is the climax of the campaign organised by the National Housing Federation (NHF) to highlight, supposedly, the housing crisis. That is not the case. There is an alternative motive to the rally. It is intended to be a show of strength to the government that, as a letter in The Times, 7 February, written by the chief executive of the National Housing Federation David Orr, and signed by other people such as the chief executive of the Chartered Institute of Housing, Grainia Long, to say to the government that they were “ready to play our part but need the next government to meet us halfway by providing real leadership and a commitment to solve the issue.” The letter is a little coy as to what is meant by real leadership. Although they don’t say what they want, it is to fill the void left by the local authorities as the main provider of social housing.

Their chances of doing so were boosted by the terms of reference of the Elphicke-House review into the role of local authorities in housing supply which made it clear that the review must not produce any recommendations that breached the government’s fiscal consolidation plans or require changes to the government’s national accounting framework. It meant that the limit on local authority borrowing would remain in place. Boosted also by the key recommendation of the Elphicke-House review that the role of local authorities was to change from being a statutory housing provider to one of being merely a housing delivery enabler represents an opportunity for the NHF to take their place. Finally the NHF hopes to benefit from the decision by the government to release public sector land to build 100,000 homes by March 2015. Whether the use of the word “huge” by the NHF is appropriate to describe the rally they have organised for St Patrick’s Day remains to be seen. Westminster Central Hall has been booked to hold the multitude. Its capacity isn’t huge; it is 2,200.

George Osborne made his intentions for social housing clear in his Comprehensible Spending Review in the autumn of 2010. There was to be no new direct grant for social housing. The decision was described by the Inside Housing reporter Carl Brown as heralding its slow death as a form of tenure. The magazine’s editorial said it was a bleak week for social housing. “Above all, it was a bleak week for tens of thousands of England’s poorest who the coalition government has effectively abandoned.” He added the hundreds of thousands of homes built in the post war decades formed the backbone of the welfare state. He ended by saying that the packages of measures in the spending review mean the end of social housing as part of the welfare.

George Osborne in the 2013 Autumn statement announced a review of the role of local authorities as regards housing supply. Its purpose was to consider the role that councils can play going forward in helping to meet the housing needs of their local population, within the context of the need to ensure good value for money and fiscal discipline. In January 2014 the two people who were to conduct the review were announced. They were Natalie Elphicke and Keith House. Natalie Elphicke, a housing finance lawyer who chairs the housing working party of the think tank established by Iain Duncan Smith called the Centre for Social Justice. In 2010 she wrote a report for the think tan Policy Exchange called Housing People; Housing Finance which called for housing associations to be allowed to raise equity finance in order to build social housing without grant. In 2014 she co-authored with Calum Mercer, former finance director Circle Housing Association, a report titled Million Homes, Million Lives: A Better Deal for Nation Rent. Natalie Elphicke is a former director of the Conservative Policy Forum and is the wife of Charles Elphicke, Conservative MP for Dover. Keith House is the Liberal Democrat leader of Eastleigh council in Hampshire and a former vice-chair of the Local Government Association. In 2012 when he was vice-chair of the LGA he wrote to the government stating that councils were “desperate” to do more to help solve the housing crisis and called for the government to help by “arming councils with greater freedom and financial flexibilities.” So it is rather ironic that he was appointed to a review did not include lifting the limit on local authority as part of its remit.

Whilst the choice of Elphicke and House might not have been to everyone’s liking it was the limitations placed on their remit by the government that riled some people. “The review”, the terms of reference stated, “must not produce any recommendations that breach the government’s fiscal consolidation plans or require changes to the government’s national accounting network.” The reason given for limiting the scope of the review was that the government wanted to support stability in the local government housing sector.

Elphicke and House in the foreword to the review write that the roles and responsibilities of councils have been transformed by the Localism Act 2011 and the self-financing settlement for council homes. It was for this reason that the review was established. As a result of the new context in which councils must function the review wanted to see “if more could be done by councils to boost house building and to create strong and sustainable communities.” In addition whether “what extra steps, measures and reforms could be taken forward to enable councils to boost the building of new homes, to support growth and prosperity for the communities they serve.”

Besides trying to see what more councils could do to support housing supply by making maximum use of their existing asset base to support new development through asset sales the review wanted to see how data on local authority Housing Revenue Account assets, including housing and land could be made more transparent in line with the government’s recent Transparency Code measures.

Sometimes the recommendations by reviews or reports commissioned by government, especially into contentious matters, are muffled or resemble clues for a cryptic crossword. That is not the case with Elphicke and House’s review although they write rather glowingly of how the very best councils can shape a vision for the communities they serve and well as being dynamic, original and in making that vision happen. They write, “Our review was established in the context of the new roles and opportunities for councils. We believe that councils could achieve much more by taking a more central role in providing new homes. Our key recommendation is that councils change: from being statutory providers to being Housing Delivery Enablers. Councils have a primary rope in setting out a vision for the development of their areas. They can be active in creating housing opportunity. Councils can be proactive in identifying housing need, growth and opportunity. They can work closely with businesses and other partners to share ideas and experience – and actively use their assets and knowledge to unlock housing opportunities and deliver more homes, to build strong and sustainable communities.” Local authorities were to be treated like brood mares.

To achieve such objectives they believe partnerships are important and point out that the overwhelming majority of councils are already working in housing associations. They add, seeing and hearing first-hand accounts of what many councils can and do achieve has been inspiring. Considering the role that local authorities played during the twentieth century and the powers at its disposal a generation ago the language used by Elphicke and House must be demeaning and insulting to anyone from that era. Their capacities to borrow to build homes having been restricted local authorities are being forced to dispose of land for nominal amounts in order to accelerate development. Furthermore, the review recommends the establishment of development panels to speed up the construction and development of homes on public land. Elphicke and House write, “Delivery Panel Partners can provide a framework panel of prequalified housing developers, and are available to a wide range of public bodies that may own land that they wish to dispose for housing.”

The review also looked at the disposal of larger areas of public land that could be disposed. It has been estimated, the review states, that central and local government owns £370 billion worth of land and property and that the government is taking action to release to release its vacant or disused land. The coalition government aims to release public sector land with capacity to deliver 100,000 homes by March 2015. The Homes and Communities Agency will be the government’s land disposal agency. Devolved power to the Greater London Authority, or more to the point the Mayor, will perform the same function in London. Elphicke and House recommend that a Housing and Finance Institute should be established to promote and support the sharing of ideas and drive innovation in housing finance.

The evolution of the key recommendation of the Elphicke-House can be traced to a policy paper on housing written by Natalie Elphicke for the Policy Exchange think tank in 2010. As regards local authorities she writes it has been suggested that local authorities could have a larger role to play in housing delivery. “However, the scope for significant development being financed and delivered by them will be restricted by the national requirements to significantly and quickly reduce public sector borrowing. The government is committed to reducing the total public net borrowing from £154.7 billion to £20 billion by 2016 and to reducing revenue spending by 25 per cent. Borrowing undertaken by local authorities is included within the calculation of the public net borrowing.” Natalie Elphicke writes that small scale house building programmes may be delivered, such as converting garages, by the reform of the Housing Revenue Account but “it seems unlikely that local authorities will be able to secure significant funds to assist with large scale developments, although they may be able to stimulate activity by deferring consideration for land which they own, or by taking part in joint ventures with other parties.” (It is a view not shared by Grainia Long, the departing chief executive of the Chartered Institute of Housing in an article in July 2014 for Inside Housing. She reminded readers that “In 1968, at the height of England’s house building efforts, 40 per cent of all homes were built by councils. Whenever output by the private sector has been high, councils’ contributions have been high too, and they have been working in partnership. While models of housing supply have change, there is now widespread recognition that the necessary levels of house building will not be achieved unless local authorities are fully engaged and contributing.” At the time of Grania Long’s article the Elphicke-House review was taking contributions from many organisations, councils and others and there can be no doubt what she wrote cannot have escaped their notice.)

It cannot have escaped anybody’s notice that since the government announced that it intended to release surplus public land for housing in June 2011 by the housing minister Grant Shapps and its progress report a year later housing associations as well as commercial developers have eyed the prospect of sharing the spoils. (It set up also an advisory group led by Tony Pidgley, chairman of the Berkeley Group to provide commercial expertise. Berkeley Homes were responsible for the One Tower Bridge skyscraper. Its next big project is to redevelop the demolished Ferrier council estate in Kidbrooke. They plan to build more than 4,000 homes and a 31 storey tower block).

Savills the property specialists in their Autumn 2014 report estimated that public land could deliver as many as two million new homes based on their analysis of public records of the central government estate in England and the land holdings of the Greater London Authority. One of the biggest landowners in the United Kingdom is the National Health Service with total assets valued at more than £31 billion. Hitherto the NHS followed well established ways of disposing of land which include selling on the open market but the Department of health to encourage the process set up the £100 million Growth and Efficient Fund to incentivise and support NHS organisations to make savings by releasing land for housing by 31 March 2015. In the chancellor’s Autumn statement in December 2014, the government increased its ambition for public sector land, confirming its aims to release land with the capacity for up to 150,000 homes between 20105 and 2020.

The NHF in a pamphlet titled Surplus NHS land; a best value alternative sets out its case. It states, “This policy paper sets out the alternatives to the NHS’s traditional and well-established approach to disposing of land, which usually involves selling it at market price. Working with housing associations, this new approach would offer an ongoing revenue stream from the NHS estate through the development of affordable housing, rather than a one-off capital gain, achieving even greater financial returns over the medium to long-term. By working in partnership with housing association, the NHS could use the profits from its estate to cross-subsidise the building of high quality supported housing schemes for patients recovering from mental health problems.”

The policy paper goes on to argue for an alternative definition of best value. Too often best value is interpreted as achieving the maximum upfront price for land. It argues, “The Federation believes that best value should be quantified in terms of wider social, economic and environmental value, not simply price, and has been urging government to broaden the definition of best value along these lines.”(Another NHF publication called Making creative use of NHS estate makes the same case and it is obvious they are singing from the same hymn sheet by the use of the same language on occasions – ‘there are well established ways in which the NHS disposes of land’ and ‘the NHS has well established ways of disposing of surplus land’).It is worth mentioning that housing associations have land banks with a value in excess of £1.3 billion and collectively recorded a surplus of £1.9 billion in 2013. This was despite the introduction to an article in June 2014 in Inside Housing reviewing the sector’s performance as “a bit plodding” in 2013.

By way of explanation the article quoted Richard Hill, at the time chief executive of the Homes and Community Agency, saying that the huge drop in house building numbers of recent years was down to a change in schemes from the old grant funding to the 2011 to 2015 affordable homes scheme. He added that from next year that there will be more reason to be optimistic. David Orr, chief executive of the National Housing Federation, outlining his vision of the future in 2003 in the foreword to a pamphlet called An Ambition to Deliver: Housing Associations Unbounded published in 2014 reflected this feeling. He writes, “We are optimistic about the future and looking forward to embracing the opportunities and challenges ahead.” By 2033 he sees housing associations owning and managing more than double the number of homes we do currently, setting our own rent, deciding who lives in our homes and selling a greater number of homes too.

Why is David Orr optimistic? There are only above 100,000 new homes being built a year when in excess of double that number are needed and the number of council homes has fallen by 250,000. Government capital investment in affordable housing fell by 63 per cent in 2010 whilst the people on housing waiting lists have doubled in the last decade. As to how housing associations will achieve their ambition to deliver David Orr is just as coy as in his letter, 7 February, in The Times. He believes it can be done by stretching government investment (sic) and unlocking under-used capacity in new innovative ways.

Exploring new and innovative ways of accessing finance for housing associations was the subject of Natalie Elphicke’s policy paper for the Policy Exchange in 2010. She writes, “Until the late 1980s, associations were overwhelmingly reliant on government finance to build new affordable housing. Since that time the share of government grant required to finance new building has fallen to around a third. Since the credit crunch, the government has had to provide high levels of additional finance to support the housing association sector – without this continuing support, the 1980s financing model for housing associations is broken. Given the state of the public finances, reliance on this is neither realistic nor viable.”

Using a quote from Kate Barker’s review of housing supply in 2004 – ‘A weak supply of housing contributes to macroeconomic instability and hinders labour, market inflexibility and constraining economic growth’ – Natalie Elphicke remarks that circumstances have changed and that today the problem is money. The problem could be solved by housing associations transforming themselves into social enterprises to unlock additional investment in order to provide new homes and stimulate economic growth, without government grant. Three models are mentioned; the BUPA model, the John Lewis model and the Coop model.

In the four years since 2010 that Natalie Elphicke wrote her policy paper the consequences of the coalition government’s reduction in capital grant funding the housing crisis has got worse and will get worse because the population is expected to increase by nearly 5 million over the decade to 2020. Rather than wait for the earth to move and the government to adopt what she proposes Natalie Elphicke has founded a not-for-profit company to put your ideas into action. The company is called Million Homes, Million Lives. Her plans were set out in two policy documents, co-written with Calum Mercer, called Nation Rent and A better Deal for Nation Rent. The documents have been made possible by the assistance of many organisations including housing associations as well as think tanks and institutional developers. As much as Elphicke is disgusted by the housing crisis it is the total failure of everyone involved, from government to housing associations and housing charities to come up with a “cunning plan” or otherwise to help solve the housing crisis.

Over the past decade the authors write in the introduction to Nation Rent the composition of the housing market has changed. Since the credit crunch the finance markets which delivered funding for residential rental housing, particularly housing association market, have undergone permanent change. The authors ask the question whether this is the end of home ownership and will we become a nation of renters. Although the authors see home ownership as the ultimate goal their two reports are a call to arms to everyone involved in housing who want to build a long term housing market catering for all tenures. Their aims are grounded on three principles; a whole market solution to increase the housing supply of social rent through to home ownership, an investment portfolio demonstrating good long term returns set at levels to be attractive to long term institutional investors and the provision of subsidised homes equivalent to the predicted need for affordable homes, without reliance on government capital. The report Nation Rent sets out why the authors have established their company and A Better Deal for nation Rent explains how what is proposed

It is a sign of how the upheavals of the past decade in the economy since the credit crunch, the welfare changes that have been imposed and the cack-handed policies that have been adopted by the coalition government, that it is not a surprise to learn Natalie Elphicke is not alone in thinking there must be a better way. Whilst Natalie Elphicke and Calum Mercer had housing associations in mind as the vehicle whereby more homes could be built, Christopher Walker in his policy paper published by the think tank Policy Exchange is more direct as to how the housing crisis might be solved. It is, as the title of his policy paper states, by Freeing Housing Associations. He is the head of housing, planning and urban policy at Policy Exchange. Previously he worked as a civil servant in the Government’s Economic Service. Walker begins by declaring that there is a housing crisis and that it is the poorest in society who are the worst affected by the lack of new homes that are being built. Housing associations are building most of the new affordable homes but the tragedy, he writes, is that within the housing association sector there is certainly sufficient financial capacity to build many more affordable and market homes than are currently being built. He believes the sector as a whole could deliver as many as 100,000 affordable and market homes each year. What is stopping the sector is a “byzantine system of regulatory rules and financial constraints.” The situation is exacerbated by a significant number of significant housing associations that build few or no new affordable homes.

As it is the housing association sector made a profit of £1.9 billion in 2013 but he believes the sector could be making a much bigger surplus of around £3.billion a year if housing associations were given more freedom to use their balance sheet capacity through strategic asset management, were encouraged and supported to build more market homes for sale, and had access to cheaper debt finance.” His frustration comes from the fact that he considers the current system of government funding, through modest levels of capital grant is no longer fit for purpose. Despite reductions in capital grant funding from 2010, it still costs the exchequer £1.1 billion a year at a time when the public finances remain tight. The grant levels on offer to housing associations are no longer commensurate with the burdens and risks that grant (funding) places on them. “In short, the grant deal model where the government invested generous levels of repayable equity in housing associations homes, instead of providing a grant with its multitude of restrictive conditions, could be a more attractive deal to both parties. Furthermore such a model could, ultimately, cost the government nothing in terms of public expenditure because the investment could be treated as a financial transaction, and would almost certainly provide better financial support to housing associations.”

Chris Walker’s in his report believes that a sector-wide annual surplus of £3 billion a year could be achieved, and a better funding model supplementing it, housing associations could be building or acquiring 60,000 affordable homes a year. Building more affordable homes will not bring down the waiting lists on its own but along with building homes for sale would improve affordability and reduce the pressure on the social sector. From 2015 housing associations are planning to build around 7,500 homes for sale yet they could be building as many as 22,500 without being overly exposed to housing market risk. This chimes with the long term plans contained in the NHF’S Ambition to Deliver document which sees housing associations building 120,000 homes a year in total.

Walker’s report outlines what the areas that are currently stopping housing associations providing the increased numbers of homes for sale and for rent; the economic regulation and system of allocations attached to historical grant, the reduction in the level of grant coupled with affordable rents imposes unacceptable financial risks on housing associations following the coalition government welfare reforms., the failure of some housing associations to use their surpluses to cross-subsidise building affordable housing, and lastly, housing associations that do not develop or acquire new build affordable homes. It is not hard to detect Walker’s annoyance with the present state of affairs that holds back housing associations from building more homes. “It is likely that central and local government are not going to have funds to increase expenditure on affordable housing due to continued fiscal constraints. The funds necessary to increase affordable housing supply have to come from elsewhere, ultimately from bigger housing associations surpluses and alternative private sector funding.” Walker admits that the vision for delivery is ambitious and that some difficult policy changes are needed to make it happen but that the potential prize is great.

Central to Walker’s plans is the creation of new category of housing association that is independent of historical housing grant. “All housing associations would be allowed to apply to become independent. Successful applicants would need to have shown a strong and long-track record of new affordable housing delivery. The new giant-independent housing associations would be the exemplars and beacons of new housing deliver in the sector.” (It all sounds somewhat similar to the creation of the Premier League when they broke away from the Football League in 1992) The overarching principle behind grant-independent housing associations is freeing them up to use their balance sheets and assets to increase the affordable housing stock. The current arrangements, Walker writes, “belong in the 1970s and are no longer fit for purpose.”

In return for their ‘freedom’ the grant-independent would offer to pay off the historical grant – at a discount – over a thirty year period to minimise any impact on housing association cash-flows and surpluses. (This would not to the liking of local authorities who in return for retaining the proceeds of their housing revenue account agreed to pay off their historical debt owed to government) Also grant-independent status would allow housing associations to sell vacant social homes or convert them into market rented properties, absolve housing associations of most of its local authority nominations obligations and give housing associations the freedom to set its rent policy, subject to certain limits in accordance with housing benefit provisions.

The establishment of independence housing associations would have particularly significance for tenants nominated by local authorities. As it is housing associations have no powers to be able to refuse tenants nominated by local authorities. This is a source of complaint for many associations who feel that local authorities pass onto them tenants that have proved to be a problem. Grant independent housing associations would be freed from such an obligation. The freedom to do so would reinforce the assumption that housing associations were in some way one rung above local authorities in social status.

David Orr commented upon the publication of Chris Walker’s report in his monthly blog last November. The new report, the sub-heading stated, recommends greater freedoms for housing associations but it also contains some more controversial proposals. Yet more than half of his post is about the NHF’S “visionary” Ambition to Deliver, which he reminds readers was published some months before in February 2014. He describes NHF document as being “indeed a remarkable and visionary ambition.” For housing associations to deliver their “visionary” ambition some important “things” need to change. The next paragraph of his post highlights the most important of the changes that need to be made. They are “that housing associations and their boards must be genuinely in control of their own futures and their own decision making. They must be able to set their own rents and make their own decisions about who their homes are let to. At present government controls housing associations rents – and has made an abject mess of it. We have all kinds of variations, mostly based on short term political considerations rather than effective housing policy. Housing associations know the neighbourhoods and places where they work. They know the economic circumstances of their residents. They need to be able to set rents that affect those realities. They need to be able to decide who their homes are let to – often but not always in conjunction with local government partners. And they mist be able to decide what is the very best use of their property assets, which includes being able to sell vacant homes where to do so allows them to build more.” (Sentences in bold type are as was written)

As for the Chris Walker’s report, David Orr writes many of the issues he raises are discussed in an “interesting”, as in Steve ‘interesting’ Davis, report. Adding that it is “hugely”, as in “huge” rally, welcome that that this critical debate is given an airing as much of the detail in the report reinforces the need for housing associations to be free to use their creativity even more effectively. Again in bold type, he writes that not everyone will warm to the idea that historical grant should be paid off and even fewer will support the implicit idea that public capital investment may be unnecessary in the future. He warns to be wary of assuming mechanisms that work in some markets today will work in all markets in the future. A sixty page report on the future of housing associations is given less than sixty words. The word ‘independence’ is mentioned elsewhere, once.(David Orr needs a sub-editor for his blog to help him with his sentence construction; “We are delivering half of that”, “Housing associations understand this” and “We are clear that housing associations are central to doing this”. He writes, “There are too many rules and regulations at present”. Delete “at present” or put “At present” at the beginning of the sentence.)

“Housing associations exist for the benefit of the community”, writes the chief executive of the NHF. Some housing association tenants in Tower Hamlets have had cause to doubt that housing associations do exist for the benefit of the community. Council meetings in the second half of 2014 saw several petitions presented to the council. At the July meeting of the council Cllr. Rabina Khan, cabinet member for housing, said, in response to a question about housing associations, said there were nearly fifty housing associations in the borough with responsibility for over 30,000 homes. “This means that there are hugely differing standards of management and service and we have to make sure they work in the interests of their residents and the wider community.” Cllr. Khan added, “I am currently deeply disappointed with the overall performance of three of the housing associations in the borough where there has been a steady of complaints and disputes relating to poor performance and poor customer care.”

At the September meeting of the council two petitions were presented by members of the public and both of them involved the conduct of housing associations. The first petition was about a proposed development by Polar HARCA on Burdett Estate in Poplar. The proposed development, the petition stated, will result in the last bit of open space being taken from the community. The petition started, “To have a major development on our estate should be in consultation with the wider community and not a select few. Consultation with the estate board has been at best amateurish, and at worst, a sinister ploy to pursue its interests over the interests of the community.”

The second petition presented to the meeting was from 800 residents of a group of sheltered housing blocks that had been transferred from Tower Hamlets council to Bethnal Green and Victoria Park Housing Association which subsequently merged with Labo housing association to become Gateway Housing Association. They wanted to demolish some blocks which was contrary to the terms of the Offer Document at the time of transfer. In response to the petition Cllr. Oliur Rahman said that by coincidence he was invited to the Annual General Meeting of Gateway Housing Association only two days before the council meeting. He said that the chief executive, Sheron Carter, gave a glowing report of how it supported its vulnerable residents and that it had a very active resident group. In response the petitioner said there had been very little consultation between residents and Gateway. Cllr. Rabina Khan, responding on behalf of the council, said that she had written to the chairman of Gateway Housing Association and that officers had spoken to its chief executive. Cllr. Khan referred him to the council’s Older Persons Statement and was “deeply disappointed” that Gateway Housing Association had failed to comply with its contents.

Cllr Peter Golds, leader of the Conservative group on Tower Hamlets council mentioned a similar experience with Gateway Housing Association in his ward on the Isle of Dogs. He added what had happened to Bethnal Green and Victoria Park Housing Association was systematic of local housing associations being “gobbled up” when they merged with another housing association to form a larger organisation.

Peter Hetherington, former editor of the Society Section of The Guardian, in December 2007 asked the question whether housing associations were losing touch with their founding values. He wrote, “It is a long historical journey from medieval almshouses to the great charities of the nineteenth century philanthropists providing shelter for workers and the multi-billion pound businesses now delivering social housing. Today, those businesses, called housing associations are still overwhelmingly registered as charities, but their links with the past can appear tenuous as they morph into full-blown development “companies” – albeit without shareholders – to become big players in the wider housing market.”

Housing associations are at a crossroad, he added, facing pressure both from within and outside the movement. They are divided about their role; some associations clinging to their historical roots whilst other associations wanting more freedom to pursue a more commercially driven approach. To critics the core function of the provision of homes to rent now appears secondary to building home for sale to land development – thus making them indistinguishable from private corporations. The transformation and growth of housing associations over the past thirty years was a consequence of government policy during that period. As Alan Murie, professor of Urban Studies at Birmingham University, in his history of the Housing Corporation titled Moving Homes writes, “Housing associations became the chosen vehicle for the decentralisation of state funding through the transfer of development activity and assets from local government. In the subsequent period expansion was very rapid but the terms on which housing associations expanded were also very different. Private finance introduced powerful new stakeholders in the form of business. Those involved got used to growth, which itself became a major rationale for some organisations.”

David Orr insisted at the time the mixture of public and private money has brought huge benefits, with government grants of £30 billion over the past thirty years levering £35 billion of investment from associations borrowing against their assets. He maintains “this is the most successful mixing of public and private investment anywhere in the economy. I think we have quite a compelling offer and that comes from being independent.”

Although David Orr in his blog writes that the implicit idea that public capital investment may be unnecessary in the future has little support, Chris Walker believes the current grant levels will not be sustainable beyond 2018/19. Yet David Orr in the introduction to Ambition to Deliver writes that “We are not relying on others to play a part – though it would help. It is about what we can do ourselves.” What if that help came in the form of an pre-election announcement not of a continuation of current grant levels but an announcement from the government to offer a “heavy discount and with repayments spread over 30 years” on historical housing grant, would that be considered as helpful and at the same time constitute real leadership. (It is worth mentioning that Alex Morton, Chris Walker’s predecessor at Policy Exchange, is now part of the Prime Minister’s policy unit in Downing Street) Where better to make such an announcement than at a “huge” rally hosted by the National Housing Federation. It would give those assembled at Westminster Central Hall something to celebrate on St Patrick’s Day.

The National Housing Federation is not the only organisation that has set out a programme for the next government to put into practice. The GMB trade union published a report in 2014 which offered solutions that they want an incoming Labour government implement after the general election. It states that an incoming government will need to make affordable housing a central part of its economic and social strategy and that “some of the strategic institutional and legislative changes will take time but the intention needs to be clear from the start with some legislative commitments and an immediate emergency programme. There will a central role for local authorities within existing legislation and tight expenditure constraints.” As regards local authority borrowing powers the Treasury should adopt international standards for definition of Net Public Sector Borrowing and General Government Financial Deficit which would have the effect of excluding Local Authority borrowing for housing development from general government borrowing. At the same time as Chris Walker is seeking a write down on historic government grant for housing associations the GMB report that the Treasury should allow a write down of the inflated historic debt provision taken on by local authorities in return for keeping their Housing Revenue Accounts receipts.

The report acknowledges the number of new homes that Housing Associations have built has been impressive “but has gone nowhere near making up what used to be carried out by local authorities.” The 25-page report by the GMB is a much more impressive programme of what is required to solve the housing crisis because it accepts that there needs to be a very substantial strategy for council house building to be put in place urgently and that the resolution of the long term housing crisis is not possible without some significant public investment in housing of all kinds. As to whether in the present context any proposals for increased expenditure on housing is affordable the GMB’s report response is that the economic and political case for a massive increase in house building would have a multiplier effect on the economy. Building homes does more than provide a boost to the economy; housing is, as Danny Dorling writes in his book All that is solid, the great Housing Disaster, as near as most people personally get to what is called the greater economy because everyone is directly affected by housing, all of the time.

Terry McGrenera

INTERIOR HOUSING – GETTING INSIDE HOUSING

COUNCIL TENANT SACKS CHIEF EXECUTIVE OF TOWER HAMLETS HOMES

GAVIN CANSFIELD TOLD: ‘YOUR’RE FIRED’

Gavin Cansfield, the chief executive of Tower Hamlets Homes, the Arms Length Management Organisation, that was established to manage the council’s housing stock, has been sacked.

His sacking follows his failure to obey a direct order from the cabinet member of housing, Councillor Rabina Khan, regarding decent homes work on a particular block on Lincoln Estate. Tenants on Lincoln Estate over the past couple of years have had to endure work being carried out on their homes at the same time as trying to continue with their daily routines. The standard of work has been at times shoddy, the main contractors have left jobs to subcontractors whose employees have been unskilled – some subsequently sacked. Representatives of the main contractor on several occasions have appeared before the local TRA in Lincoln Estate to apologise for their performance to angry but articulate tenants to tell them what they have had to endure. As a result it was not surprising as a former chairman of the TRA that I asked Cllr. Rabina Khan to halt any plans for decent homes work in the block next in line to have decent homes work done until the future of the block was decided rather than face the misery of having their homes and lives ripped apart. The block, mostly bedsits, is set aside from the rest of the estate as it was designated sheltered housing when run by the GLC but in recent years has been used to house homeless people. Twice it has been due to be demolished and that is still the preferred option, with tenants transferred to the new development at Watts Grove across the road, rather than waste money on repairs. It was for these reasons that I asked Cllr. Rabina Khan to call a halt to work beginning on the block. The chief executive was told of the decision last September by phone in my presence at the town hall. Since being told of the order Axis has pestered tenants with phone calls about having decent homes work done on their homes. The final straw came when decent homes work began on the block in January on the home of a tenant who had been subletting his home – the chief executive knew and failed to investigate the matter in such a way that the tenant was evicted. Whilst the work has been taking place he has been living elsewhere. As someone who lives next door, it hasn’t been a pleasant experience to endure the drilling and hammering whilst the work has been taking place. No prior notice was given of the work. Also work has started on two other flats in the block. Both of whom are also living elsewhere for the duration of the work. It is not only the failure to obey an order but the chief executive’s response when notified of the work that made has sacking necessary.

The money for the Decent Homes Work was allocated to Tower Hamlets by the coalition government in 2011 in order to carry out repairs on homes on what remains of the borough’s housing stock which is now managed by Tower Hamlets Homes. They include a number of estates that were transferred to the borough on the demise of the Greater London Council. It was the decision of a previous Conservative government in passing the 1985 Local Government Act which abolished the Greater London Council the following year that landed Tower Hamlets with a collection of housing estates that were badly in need of remedial work. No dowry came with the properties for their upkeep. A guidebook published at the time by Tower Hamlets Council on the borough stated, “Public housing in the borough is in need of improvement. Many inter-war and post- war blocks need extensive repairs, and even estates which are structurally sound need money spent on them to make them attractive.” Rather than do so at the beginning of the twenty first century the Labour council embarked upon a policy of stock transfer which led to thousands of homes being transferred from council control. They did so despite a subcommittee, containing Liberal Democrat councillors, recommending it shouldn’t proceed with stock transfer. Their argument for doing so was that there was no money to fund the extensive repairs that had occurred the Thatcher years. In the beginning a number of estates were transferred but tenants grew resentful of the means by which some local housing associations campaigned during the consultation process. (The transfer of several estates in Bow to Old Ford Housing Association led to the result being challenged unsuccessfully in the High Court despite the ballot taking place on the day of the 7/7 bombings in 2006 and which resulted in one polling station being closed.)

The denouement for the stock transfer option was the outcome of seven ballots that were held on the same day in September 2006. Tenants in five out of the seven ballots voted to reject the offer to transfer to another landlord. The largest ballot took place on the Ocean estate in Stepney. The highlight of the campaign was a debate at Stepney Green School in front of a packed assembly hall between George Galloway MP and Cllr. David Edgar, lead councillor for housing. Cllr. Edgar argued that there was no money for repairs. George Galloway replied that the government had plenty of money to fight wars. George Galloway poked fun at the housing association, Sanctuary, who wanted to take over the ownership of the estate. They had no connection with the area. Their head office wasn’t even in London, it was in Worcester.

Over the next year Tower Hamlets Labour run council were forced to come up with alternative plans as 2006 was the last opportunity to apply for stock transfer funding. Even before the outcome of the seven ballots Tower Hamlets council considered a report on the delivery of decent homes in the borough and agreed to submit a bid for funding to the government’s Decent Homes programme for an Arms Length Management Organisation. A further report on the Housing Investment Strategy was considered by the cabinet in February 2007 which set out the options available and recommended setting up an ALMO. The report also set out the proposed application under section 27 of the Housing Act 1985 to transfer the management of the council’s housing stock to Tower Hamlets Homes.

Between February and October 2007 Tower Hamlets council conducted what it called a “consultation and engagement” exercise with tenants and leaseholders. The decision to set up an ALMO was ‘called in’ by councillors on behalf of tenants who questioned how the survey produced by the consultation came to the conclusion that a majority of people supported the proposal to establish Tower Hamlets Homes from “sample phone calls and door to door surveys”. The survey found that only 11 per cent of people showed support for the ALMO. Despite the deputation of tenants at the November 2007 meeting of the Overview and Scrutiny committee meeting the decision to establish remained altered. At the time it was established in October 2008 it was responsible for 25,843 homes. This was a reduction from 37,000 homes in March 1997 just before New Labour came to power. In March arch 2009 the cabinet agreed an annual management fee of approximately £38 million payable to Tower Hamlets Homes.

Between February and October 2007 Tower Hamlets council conducted what it called a “consultation and engagement” exercise with tenants and leaseholders. The decision to set up an ALMO was ‘called in’ by councillors on behalf of tenants who questioned how the survey produced by the consultation came to the conclusion that a majority of people supported the proposal to establish Tower Hamlets Homes from “sample phone calls and door to door surveys”. The survey found that only 11 per cent of people showed support for the ALMO. Despite the deputation of tenants at the November 2007 meeting of the Overview and Scrutiny committee meeting the decision to establish remained altered. At the time it was established in October 2008 it was responsible for 25,843 homes. This was a reduction from 37,000 homes in March 1997 just before New Labour came to power. In March arch 2009 the cabinet agreed an annual management fee of approximately £38 million payable to Tower Hamlets Homes.

One of the aspirations of the Labour government between 1997 and 2010 was that all homes should meet the decent homes standard by 2010. Like its aspiration to end child poverty by 2010 it failed to do so. In both cases it more difficult than they realised. The size of the task was outlined in the Housing Investment Programme report 2007/8 to 2011/12. Under the section headed Decent Homes, it states “Achieving the Decent Homes target is extremely challenging, given the current levels of disrepair.” In a list of the top twenty council landlords published by the Homes and Communities Agency in April 2010 with the highest percentage of non-decent homes stock Tower Hamlets came fourth with 54 per cent.

In September 2010 Tower Hamlets Homes published its first annual report. The report highlighted its priorities and promises. The annual report also included a summary of the self-assessment that it had submitted to the Audit Commission prior to its inspection from 22 November to 3 December 2010.The document, it states, provided an honest appraisal of the journey, somewhat Blair-like, and what lies ahead. There were separate sections on asset management and stock investment, tenant satisfaction with major works, equality impact assessments, value for money, allocations, work on four decent homes pilot schemes and resident involvement. As regards resident involvement Tower Hamlets Homes, in preparation for the inspection by the Audit Commission, had an event at The People’s Palace, Queen Mary College. The day was an opportunity for residents to “feed into business planning for the organisation, suggest ways to improve service delivery and the strategic direction of Tower Hamlets Homes.”

In addition residents in the months before the inspection began, residents were bombarded with literature. Tenants in both October and November received six separate leaflets as well copies of Open Door, Tower Hamlets Homes 12 page quarterly publication. Housing officers, as they were empowered to do so by the tenancy agreement, went on a mission to clear hanging pots, bikes and other obstructions from balconies. The removal of washing lines made the front page of the local weekly paper as well the Evening Standard.

By coincidence just as the inspection began the government announced that local authorities need not win two stars to receive Decent Homes funding over the next four years. It was good news for those who failed to apply but bad news for councils that, as the editorial in Inside Housing magazine in November put it, “have jumped through a variety of hoops to access investment” for their housing stock.

Tower Hamlets Homes was able to tell residents who came to one of the meetings held in November 2011 following the announcement that they had been successful in being awarded £95 million to continue the work they had begun over the previous couple of years in meeting the Decent Homes Standard. Besides the number of good points mentioned in its report the Audit Commission did identify some weak points. Replying to correspondence and in the approach to meeting diverse communication needs. The Asset Management Strategy is not good. In particular it highlighted that resident engagement at a strategic level is limited – a matter that the chairman of Tower Hamlets Tenants and Residents Association, Phil Sedler, raised at the meetings held at Oxford House in Bethnal Green. He wanted to know why the decision was taken to close some housing offices without prior consultation with tenants. The organisation fails to address under occupation as strongly as it should or resolve anti-social behaviour cases promptly. Overall the Audit Commission is improving value for money and making successive efficiency gains, which as I have mentioned, have failed to have everybody’s support because of the way they have done.

After the meeting at Oxford House I spoke to the chief executive and asked him to sum up what the money for Decent Homes work had meant. (It was part of an assessment I had to complete for my masters’ degree in housing at Westminster University – a waste of time and money) “Boilers”, he said. Previously the policy was ‘make do and mend’. He highlighted one particular instance where contractors were a tenant that it was fixed but it still wasn’t working. The decision was taken that it was cheaper to replace boilers than to pay contractors to repair old boilers. In the past two years 0ver 900 boilers have been replaced.

Replacing old boilers may have been a simple job but it was when work started replacing old kitchens and bathrooms as part of a four year rolling programme that the problems and the complaints began. A committee member of Lincoln Estate TRA mentioned that he had heard of stories from tenants in Bethnal Green about the standard of the work of the contractors. The TRA was reassured that lessons had been learned and everything now was fine.

In October 2013, as chairman, I invited Cllr. Rabina Khan to the monthly meeting of the Lincoln Estate TRA and give a talk as well as cut a birthday cake. After she left a discussion followed about the experiences of a couple of tenants where decent homes work had began. Also at the October meeting was Jenny Fisher, secretary of the Tower Hamlets Federation of Tenants and Residents Association. So disturbed was she by what she heard from a couple of tenants that later that evening she sent an email to Rabina Khan. (Re: disturbing insight into THH kitchens and bathrooms) Her testimony is worth quoting at length. She begins, “It was good to catch up with you earlier this evening at the Lincoln TRA meeting. However, you will be sorry that you missed a discussion on kitchens and bathrooms which took place after you left. It was very disturbing. It seems that kitchen and bathrooms work was generally thought to be starting in the early New Year, but as permission to proceed has been received on some properties, work to replace kitchens and bathrooms has begun. Two residents were whose kitchens are being done. One of them described how work had begun and it was so unsatisfactory that she has had to phone every number for the contractors and THH and Decent Homes.

“Of greater concern”, Jenny writes, “was a second resident, a senior citizen, who described how contractors had come to rip out her kitchen. Someone then came to fit a temporary sink, but they had not connected the drinking water to it and she been without drinking water for three days. She described herself as a prisoner in her own flat for a week. She was getting up at 6.30 in the morning in case someone wanted access. One of the workers who dropped in briefly was a plasterer. She warned him not to use the sink as it was not connected to the waste pipe. He used the sink and water apparently ruining the floor that had been newly laid.” Jenny wondered whether that occurred is a systematic problem rather than just a couple of isolated incidents. As a result some residents are wondering whether it is wise to proceed with the work.

Contacting contractors was another problem for residents. Jenny again; “Someone asked who residents contacted in the event that they were being left alone without contractors coming back.  Both residents had brought a letter with them to the meeting. The letter gave a phone number to ring. When she rang the number nobody answered. . Another number provided did not even ring. Both residents had eventually got hold of someone from the contractors; the first resident found him so rude she said never to speak to him again. He promised the second resident he would send someone round but nobody came.”

Jenny concluded, “I said at the meeting that my opinion was that this was an extremely unsatisfactory state of affairs. I said that I advised the TRA to contact THH immediately and ask that all further work be put on hold until systems can be put in place which can ensure that work is carried out properly in future. Substandard work takes to re-do and the human cost of being treated in this way is not something we should be asking residents to pay.”

In 2014 decent homes work began on Lincoln Estate in Poplar. Scaffolding was erected but unfortunately there was a delay before work began. In the meantime a number of burglaries occurred in the blocks on both sides at the bottom of Campbell Road. This was brought to the attention of the TRA at their monthly meetings. Throughout the summer of 2014 work progressed on homes. Unfortunately once again a meeting had to be convened with the main contractors Axis to answer – and apologise – for the standard of work being done. The meeting was held at Gayton House on 26 August 2014. The meeting lasted more than two hours during which residents lambasted the assembled members of Axis sitting along one side of the room about the experiences they had endured. Also present was Cllr. Rabina Khan.

Cllr. Khan was not the only politician who was invited to come to a monthly meeting of the TRA. All candidates standing for the Bromley South ward in the local elections in May were invited to come. Only the two candidates for Labour came. They were Helal Uddin and Danny Hassell. During the election campaign Danny Hassell leafleted my block and asked what was happened to the block. I told him I had a meeting with Gavin Cansfield in September 2013 at the Lincoln Centre and put to him rather than waste any decent homes money on the block to think about demolishing the block. Accompanying me at the meeting was my neighbour Rob Skelton. He showed Gavin Cansfield the photos he had taken of the structural cracks along one wall of his flat. No response had been forthcoming from him since that meeting more than a year later. Danny Hassell said he would make a member enquiry if he was elected about the future of the block. He duly did so. He sent me the response he received from Tower Hamlets Homes in July 2014. It stated that there were no plans for decent homes work on the block. My conclusion was that Tower Hamlets Homes had decided to demolish the block. Later that month I received a letter from the Mayor’s office telling me that my home had been included in the next phase of the Decent Homes work. On 11 August I received a phone call from Lionel, who worked for Axis. It was about decent homes work. I told him I didn’t want any work done. A couple of minutes I received a phone call from a girl at Tower Hamlets Homes saying that she had heard that I had turned down the opportunity to have a new kitchen and bathroom. By this stage I was totally sure that the right decision would be to demolish the block and move residents to the proposed new development of 148 homes at Watts Grove on the other side of Devons Road.

That being the case, the logic of proceeding with installing new kitchens and bathrooms on the block was itself demolished. Other tenants received phone calls from Axis about decent homes work and following the tales of woe from residents in Campbell Road and as a result I felt that I had to speak to Cllr. Rabina Khan to request that until notice no decent homes work should proceed at 250 296 Devons Road until its future was decided.

It was for this reason that I decided to speak to Cllr. Rabina Khan. I did so on 3 September at the town hall just the monthly cabinet meeting. After I explained the situation to her Cllr. Khan rang Gavin Cansfield and told him – in my presence – that until the future of 250-296 Devons was decided no decent homes work should go ahead. In return Cllr. Khan asked to write a presentation arguing why the block should be demolished. I duly went away and wrote a three page article setting out the case for demolition. In essence I argued that the block was no longer fit for purpose. My home has a fireplace, it has a gas cupboard, it has a coalbunker, none of which I use. The floor tiles, we were warned, contain asbestos when they crumble. Photographs illustrated each point I made.

Meanwhile six days after my meeting with Cllr. Khan at the town hall I received a phone call from Lionel. I told him that Cllr. Khan had called a halt to all proposed decent homes work on the block. Nobody told him, was his reply. It was during this time that Gavin Cansfield requested that we should meet. I declined to do so because two previous meetings had failed to produce an answer on the future of my home.

It was also during this time that the future of Watts Grove, a council owned site where rubbish vehicles start and end their journeys came to the fore. It had been a bone of contention in the year before the local elections in May 2014 when the Labour Party accused Mayor Rahman of wasting money on a feasibility study to build homes on the site and then to drop the idea. There is no doubt that the Labour Party tried to use the Watts Grove site as a political football as part of their election campaign against Mayor Rahman from the time that the site might be used for housing. It was the manner in which the decision not to proceed with the original plan was taken by Mayor Rahman – in private – in July 2013  – that allowed Labour to make political capital from the decision. At a full meeting of the council on 18 September 2013 a motion was passed asking the Overview and Scrutiny Committee to investigate the reasons for the cancellation of the proposal to build homes on the site. The Committee did so at Its January meeting. The Labour majority on the committee concludes that the model used for the development of Watts Grove was flawed and had cost £350,000 at the time of its cancellation. (It is worth noting that the Overview and Scrutiny committee report on Watts Grove in the agenda for the 22 January 2014 meeting of the full council was “corrected” by an amendment that was agreed at the meeting held two days previously. The amendment changed the wording of one sentence. The original sentence read, “A partnership with a RP, or another more economically viable model such as council housing would have been a better option.” The amended sentence deleted the words such as council housing and inserted the word alternative between viable and model. The committee had a Labour majority of members)

If Labour’s candidate for Mayor had won the election there is no doubt that he would have handed the site over to a housing association. There were rumours at the time as to why they wanted to do so. As it was after the election the current administration decided not to involve a housing association but use nearly £20 million from the housing reserve, plus a grant of £6.9 million from the GLA to fund the total outlay of £26.33 million. By doing so it would allow the council to retain ownership of the housing stock to ensure more secure tenancies. A second consideration was that a housing association would likely have charged 80 per cent of the market rent for the homes in order to meet the needs of their business plan which would have made the homes unaffordable for local residents.

In July 2014 local residents received by post leaflets about the dates for public consultation on the plans to develop Watts Grove. The Lincoln Estate TRA saw this as an opportunity to push for the plans to include a community hall to hold their monthly meetings as well as committee meetings. Including with my apologies to the secretary of the Lincoln Estate TRA for not being present for the July meeting I mentioned the forthcoming consultation on the plans for Watts Grove and it would be an ideal location to hold monthly meetings and it save paying to use Poplar HARCA’S premises. When I went to one of the September dates at Watts Grove I asked for the inclusion of a community hall. I was told it wasn’t possible. I pointed out that the plans proposed to have two gardens for residents. It was a simple matter of turning one into a community hall. Residents had been presented with a fait accompli as regards the plans; the council and the architects were asking residents to comment upon designs that had already been drawn rather than asking what they wanted to see included in the plans. (Re: community hall)

On 1 October 2014 I emailed Cllr. Rabina Khan about the need to have a community hall and later in the month spoke to Kamlesh Harris, the planning officer who was writing the report on Watts Grove to present to the development committee in December. She invited me to write to her so that it could be considered before the plans were discussed in December. In doing so I was revealing my hand to her in the belief that it would be included in the altered plans when they came before the committee on 17 December. It is now my belief that it allowed her to argue against the inclusion of a community hall in the report she gave to the meeting. (People wishing to speak at the meeting had to do so nearer the date of the meeting)

The report in the agenda regarding Watts Grove contained something else which was unexpected. It was the rents set out for the homes to be provided. The weekly rent for a one-bedroom flat was out of proportion of that proposed for two, three and four bedroom flats. The weekly rent for a one-bedroom flat was £172. The weekly rent for two, three and four bedroom flats was £202, £230 and £254 accordingly. It wasn’t equitable. Comparable flats advertised in East End Life in the same week as the development committee meeting were £117 and £127. It might be council housing but the rents were ‘affordable’ rents. Cllr. Rabina Khan is trying to get them reduced following a meeting I had with her on 12 January.

The meeting produced another surprise. As nobody had asked to speak against the development no speaker were allowed in favour of the development. People will not be surprised that I became a little annoyed at the proceedings. Directly after the meeting I sent an email to Cllr. Rabina Khan. I told her I was “very, very angry” and in bold type I explained the reason why I was angry. The following morning I got a phone call from Cllr. Khan saying she would look into the matter. On 22 December I submitted a complaint against Kamlesh Harris for the reasons contained in her report for refusing to include a community hall in the plans for Watts Grove. I received a reply dated 8 January 2015 from Jerry Bell, another planning officer. (The complaint procedure is not independent) His reply is very revealing. He writes, “Ultimately it is the prerogative of the applicant to determine the type and form of the development rather than the planning officer unless the site is safeguarded by planning policies for specific use. Accordingly he continues, “The Council’s adopted planning policy is clear, in that there is no specific policy requirement for new developments to provide a new community Hall as part of the development. Rather the Council’s position regarding the provision of new Community Halls is such that it is dealt with through the collection of planning contributions (section 106 agreements) from new major developments rather than on-site provision. New community halls are then provided strategically across the borough, typically within town centres as required by the Council’s adopted local plan policy (dm8). Watts Grove has not been identified by the Council as a site for a new community hall and it is not within a town centre.”

He concludes by saying that he believed this issue (a community was adequately addressed in the officer committee report in paragraph 8.11. which states that the other community benefits contained elsewhere in the development. Prepare to laugh as paragraph 8.11 in the report states, “This report will show that the proposal includes community benefits such as a community garden.” Who asked for a community garden? The punch line for not providing a community hall “It is noted that some shops/local amenities are situated along Devons Road” Did she include the two betting shops? The only change to the plans for Watts Grove from when they were announced was the reduction of homes from 149 to 148 to accommodate an energy savings unit. (All the more reason to question the size of the weekly rent)

The development committee gave its approval for the Watts Grove development. Three representatives from one particular political persuasion said nothing. The planning department willingness to ‘help’ developers was the subject of an article in Tribune in December over the plans for the former News International offices in Wapping. The journalist wrote, “The councillors from Lutfur Rahman’s political grouping failed to stifle their yawns convincingly while the chief planning officer laid out a very comprehensive argument for St George (the developer)”.

Besides the present predication of the Lincoln Estate TRA of having to use premises that belong to Poplar HARCA the issue of community halls is one that touches a raw nerve for people who were involved in the Defend Council Housing campaign during the stock transfer era. If tenants on an estate vote to transfer from council control what happened was that a public notice shortly afterwards was placed near the back of the council’s publication East End Life thereby giving notice that the open spaces on the estate and any other properties, such as community halls, would be transferred to the new landlord. At a subsequent cabinet meeting the decision was rubber stamped by the Labour, Labour administration. It is therefore no surprise that one of the aspirations of Tower Hamlets Federation of TRAs is to push for more community halls.

By coincidence on the same day that Jerry Bell wrote his letter to me I was awaken by drilling coming from the flat next door to me. When I opened my door I discovered that this wasn’t a case of some repairs being done; this was to be a wholesale renovation. Later that day I sent an email to Gavin Cansfield, chief executive of Tower Hamlets Homes. I began by saying that I have never written an email that I have regretted later this email if I wasn’t careful would come as close as is possible. I added, if so it will have been worth it, but that would be a pity as it would defeat the purpose of why I have bothered to write the email.

What happened when I spoke to the workmen is best explained by quoting directly from the email I sent to Gavin Cansfield. “This morning I was awoken by the sound of workmen next door. I went next door and spoke to one of the workmen – one Polish, the other English. I asked were they doing private work or work initiated by the council. I knew the answer before I had finished asking the question from the Axis apparel they were wearing.” The English workman said I should speak to his manager and phoned him on his mobile. “I spoke to someone called Will and explained that there was a STOP order on all decent homes work on the block. The conversation ended when he told me to FUCK OFF.”

Whilst I was wondering what I should do next I thought shouldn’t the housing officer told me that this was going to be done on a certain date as a matter of good practice. What I did next was to ring Tower Hamlets Homes. Again I will let the email I sent to Gavin Canfield tell the story. “I spoke to someone sounding Oriental. I asked to speak to Linda Sung, the local housing officer. Then I was interrogated as to why I wanted to speak to Linda Sung. (I told him) He told me that I needed to speak to the decent homes coordinator. Fine, I said I waited. The person wasn’t available, I was told. More waiting on the phone, I asked to speak to Rupert Stevens, Michael Lepiniere, anyone! Eventually I asked to be put through to your office, not possible. (At several times during the conversation the person told me he what he was going to do. I told him to stop telling me what he was going to do and just do it. He told me to stop shouting. I replied that I wasn’t shouting merely trying to get through to him that it was a very unsatisfactory situation where nobody was available. I asked for his name.  He disconnected my call.” I ended my email thus; “So in conclusion, I tested the system from top to bottom and it failed. I have no confidence in you or anyone else within Tower Hamlets Homes to listen, to do and then take the appropriate action. I will finish by saying that I have no alternative but register a complaint against you – as the buck stops with you –for your failure in this matter.”

A couple of hours later I received an email from Shamima Begum, senior executive support officer. She had been asked by Gavin t arrange a meeting with me and include several dates. I didn’t reply. Once before I had notified I wanted to register a complaint against one of his officers and he did the same. The officer in question was Michael Lepiniere. It followed an encounter with him and local housing officer Linda Sung. As he was newly appointed to his position Linda was showing around the area. What followed was a disagreement as to his authority and that of the local TRA. It became very petty and I walked away. I wrote to Gavin Cansfield asking that he should be sacked. Gavin suggested a meeting. In organisations there are certain procedures that should be followed. They are there for a purpose. The alternative is Tony Blair ‘sofa’ style diplomacy and we know the consequences from such a way of operating.

This was not the only instance that Tower Hamlets Homes failed to follow proper procedure. In early I agreed to meet Gavin, hoping he had some news about my block, and afterwards I took the opportunity of showing him my block on his way to his next meeting and to explain why I wanted it demolished. I pointed to the various faults inherent in the building and mentioned that a couple of the flats were being sublet but that the local housing officer was aware of the situation. Shortly afterwards on 28 February 2014 the local housing officer and another temporary member of staff visited one of the flats. There was no response. On 6 March the temporary member of staff called again to see the tenant. It was a Thursday which was the day he came and collected his mail. The meeting lasted a short while. There was then a knock on my door. It was my neighbour. He explained what happened. He left only to return again. He told me that the temporary housing officer had accused him of subletting, by now a criminal offence, and that unable to prove that he was, she said “but your neighbour says you are subletting”. I told him that I had never met the person, which was true. I mentioned what happened when I met Gavin Cansfield on the 13 March 2014.

On Thursday evening 8 January 2015 I spoke to one of my neighbours. In the past she has signed a couple of petitions I have presented to council meetings and keep her informed of the outcome. I had explained the situation as regards Watts Grove as she, like me, was interested in the prospect of moving to the site. I told her about the drilling and hammering from the flat next door to me. I had previously told her about the misery endured by residents and advised her not to have any decent homes work done. To my astonishment she said they were coming the following week. I turned and left as I felt it had been a waste of time trying to keep her posted and advising her of her options. Five years ago when she moved in I told her to get a steel gate for her front door. She didn’t listen and was burgled. (Before she moved in the flat received a complete refurbishment as squatters had set fire to the fire as they left) I wrote to Gavin informing him of the situation. He replied that he had checked with the team and they felt works were needed to the property. His response proves beyond any doubt that the direct order issued by Cllr. Rabina Khan – in my presence – is being blatantly ignored by the chief executive of Tower Hamlets Homes.

On 21 January 2015 there was a full council meeting and Cllr. Rabina Khan, in response to a question from a member of the public about housing, mentioned that the council realised the importance of housing to people and that the Mayor was reviewing the situation as regards the Tower Hamlets Homes and whether it would be better to bring the management back under the control of the council. If it did so it would be following the decision of Hackney Council recently to wind up its arms-length organisation after tenants voted in favour of the proposal.

I wrote one final email to Gavin Cansfield. It was to inform him that work had started on a third flat in the block. In my email I described the tenant as a ‘ghost’ tenant as he is only occasionally seen going in and out. That is equally true as regards with the other two tenants and even less so whilst the work is being done. In my email I wrote that I suppose all the walking I am whilst the work is being done is healthy. He replied that he was glad the walking was doing me good. Due to his failure to obey an order it is he that will be doing the walking.

Terry McGrenera

NOSE PEG TIME….

THERE IS A GENERAL ELECTION COMING AND SO POLLY TOYNBEE – LABOUR’S CHIEF CHEER LEADER AT THE GUARDIAN – SAYS IT IS ‘NOSE PEG’ TIME AGAIN: VOTE LABOUR OR THE TORIES WILL WIN

In December the novelist Margaret Drabble announced that come the general election in May 2015 that Labour and Ed Miliband had lost her vote. Polly Toynbee, columnist for the Guardian and Labour Party cheer leader, in response to her announcement accused the novelist in an article in The Guardian, 9 December, of “losing the plot, now of all times, as we face a greater assault on the state than anything Thatcher had dared”. Polly Toynbee returned to the subject of the forthcoming general election in her final article in 2014. She wrote that from the start of the New Year to Election Day there are only 127 days.  So it is fair to conclude that the prospect of another Tory-led government is something that occupies her thoughts on a daily basis.

Polly’s conclusion at the end of her article on 9 December is that there are only two choices for non-Tory voters – vote Labour or let the Tories win the election. Polly regards a vote for any other party as escapism. Polly’s argument can be best summed up as saying “there is no alternative” – that’s how arrogant it sounds. (It is not the first time she has asked voters to keep voting Labour. As a result of the animosity towards Tony Blair and the Labour government caused by the Iraqi war, Polly Toynbee was worried that voters would want to give him a bloody nose by voting for the Tories in the 2005 general election. Her solution was rather than give Tony Blair a bloody nose that revengeful Labour voters should forget about retribution and think of the future. Polly ended her article on 6 April by telling readers that there was a basket of wooden nose-pegs on her desk available to anyone reluctant Labour voter.) Labour won less votes in the 2005 general election than it did in 2001 and at the 2010 general election, people, having seen their living standards deteriorate as a result of the credit crunch, voted in even more lesser numbers for Labour.
Polly has stated that she isn’t a Labour tribalist but asks people in the May general election not to waste their vote on the “minor parties” despite all appeals to do so. Voters instead should again wear a nose peg; choose Labour as the “least worst of the two main parties from which they feel increasingly alienated.” Polly may not call what she proposes as tribalism but it is tribalism by any other name.

Suffice it to say there is an alternative to the Hobson’s choice to what she is proposing. In the days that are left to the general election she could to do more than just write about tactical voting but tell Ed Miliband to include in his manifesto a proposal that an incoming Labour government would introduce proportional representation. Such a proposal would give voters in favour of proportional representation a reason to vote Labour other than asking voters to obey what she calls the “iron rule” of tactical voting and vote for Ed Miliband and the Labour Party. By doing so it would render unnecessary her hope that voters sometime in the future (again) would rise up against the present unjust voting system and demand proportional representational. (Polly’s faith in the future reminds me of what Benjamin Franklin said about people who live upon hope, they will die fasting.)
Polly wanted the 2005 general election to be the last election with no choice. (Rather ironically the Liberal Democrats, the party most associated with proportional representation, failed to mention proportional representation in their 2005 election manifesto) One of the consequences of a change in the voting system would be that it would inevitably force Labour to change its twentieth century mindset and accept the political reality of the twenty-first century that the duopoly of the Conservative Party and the Labour Party that dominated the twentieth century is over. It was Labour’s failure even to entertain any alternative than a Labour win before the 2010 general election that left them ill-prepared for the negotiations that occurred after the election.

If as Polly believes that if the Tories win there will be a greater assault on the state than anything Thatcher had dared why more efforts are being made by Polly and the Labour Party to prevent such an occurrence. All it would take would be for Labour to withdraw their candidates in a number of seats where it has no chance of winning and where another non-Tory candidate is likely to win. Labour would have won the 1992 general election had they done so. So why is such the decision to withdraw candidates in certain constituencies seeming so obnoxious to Labour if it provides an insurance policy that prevents the Tories winning in May and continue with its Herodian slaughter of public services?

The reason why it is not going to happen is because Labour still believes that they are the only alternative to a Conservative government. Nobody in the hierarchy of the Labour Party is prepared to break ranks and even talk to another party in order to insure that the Tories are kept from out of Downing Street. The failure in 1992 by Labour and the Liberal Democrats to engage in an electoral pact resulted in five more years of a Conservative government. In May the loss of most of Labour’s seats in Scotland could see the Conservatives back in power despite any losses to UKIP.

John Harris, a Labour Party member and who also writes for the Guardian, is one who is prepared to accept that the “party’s old majoritarian dream” is over as he states in his article – Election 2015: Labour isn’t working – for the January issue of the magazine Prospect. He writers, “Across the country, Labour’s problems are clear. In whole swathes of the English south, it is no longer part of the political conversation. In Scotland it finds itself in the unenviable position of being still nominally in the game, but now dwarfed by the Scottish National Party and a range of left-of-centre groups who see it as a conservative relic of a failed past. Meanwhile, in the party’s remaining heartlands, from the south Wales valleys to the post-industrial expanse of south Yorkshire, Labour’s decline is something you can almost feel. The old dualistic politics is over. Only the electoral system, which may yet break under the strain, keeps the show going. The politics of the future, on left and right, will be pluralistic and often chaotic; at this rate, it may eventually not involve Labour at all. I do not say that with any relish, bit if era-defining political shifts are afoot, you can hardly pretend that your own side will somehow be immune.”

The beginning of the twentieth century was a previous occasion when era-defining political shifts were afoot. In the 1906 general election an informal pact was struck between Herbert Gladstone, the chief whip of the Liberal Party, and Ramsay Macdonald. As a result it enabled Labour to achieve a major representation in Parliament for the first time when they won 29 seats in the House of Commons. As Martin Pugh in his New History of the Labour Party published in 2010 writes, “As a result of the Gladstone-Macdonald pact fifty candidates stood in 1906, thirty-one had no Liberal opponents. Of the twenty-nine Labour MPs elected, no fewer than twenty-four had enjoyed Liberal backing. On this limited scale the pact proved surprisingly uncontroversial.”

There can be no doubt that an important factor in Labour’s success in 1906 was their campaign that the “state should provide the financial assistance to enable local authorities” to build homes for the poor. As housing academic Peter Malpass writes in his book Housing and the Welfare State the Labour Party saw housing as a good issue for campaigning in elections and regarded a substantial house building programme was a politically inescapable commitment. By the end of the twentieth century the demands on the Labour Party to build homes for the poor was still the same as it was in the beginning. During the eighteen years of Tory government ending in 1997 there was a continuous decline in the amount of grant that local authorities received for housing from central government. At the same time the number of people on housing waiting lists rose. They hoped that the incoming Labour government in 1997 would allow local authorities to start building homes again. They were to be disappointed and left with a sense of betrayal as Labour began a policy of forcing local authorities to offload their existing council housing stock to housing associations.
The change in Labour’s approach to housing can be best understood from the response Tony Blair gave to one of his own backbenchers, Ken Purchase, at Prime Minister’s questions when he asked about allowing local authorities to restart building homes. Blair replied that his government was helping one million people buy their own homes. Just as council tenants felt abandoned and betrayed by the Labour Party the same is true of people living in the private rented sector. (See Dr Eoin Clarke’s essay – Private Renters: the Forgotten Millions who abandoned Labour.)

Equally damaging to Labour’s support was its decision to demolish thousands of perfectly habitable homes under the Pathfinder programme. Labour sought to demolish 400,000 homes in a number of northern cities in order to tackle “areas of market failure” and raise land values. Anna Minton in her book Ground Control: fear and happiness in the twenty-first century city tells of seeing posters in the windows of people who objected to their homes being bulldozed posters saying ‘Vote Labour, Never again’.

It was hoped that when Gordon Brown became Prime Minister that housing would become a major priority. Alas there would be no housing building programme as it clashed with Gordon Brown’s desire to continue riding the asset price boom – of which the rise in house prices were the star performer – that prevailed over the previous decade. As William Keegan, associate editor of The Observer, in his booklet Gordon Brown Reconsidered, writes, “The boom in asset prices in general and house prices in particular has by now become notorious for its ‘distributional effects’ – the way the ‘haves’ and ‘possessors’ did well out of the house price boom, but many natural Labour voters in rented accommodation did not.” When it came to planning the strategy for the 2010 general election it was “natural Labour voters in rented accommodation” that were the losers as Labour were reluctant to alienate the ‘possessors’ who did well out of the house price boom. The situation is best illustrated by an account of a pre-election meeting, quoted by William Keegan, at which housing was discussed. An aide mentioned the housing crisis and the urgent need to build more social housing. A more senior aide replied, “If we did that it would hit house prices and we would lose the 2010 election.”

So whatever the outcome of the general election this year the Labour Party may discover, that following the failure of Sir Michael Lyons’s housing review, commissioned by Ed Miliband, to come up with a set of measures to solve the housing crisis, which the cuts by the coalition government to the housing budget since 2010 have made worse, it is not only Margaret Drabble’s vote they have lost as some voters may not be able to decide which party – Labour or the Conservatives –  is the lesser of the two “from which they feel increasingly alienated” on election day.

Terry McGrenera, the House Party

SIR MICHAEL LYONS’S REVIEW

SIR MICHAEL LYONS’S REVIEW OF HOW THE LABOUR PARTY COULD SOLVE THE HOUSING CRISIS IN GOVERNMENT

Even before I had read a word of Sir Michael Lyons’s 175 page housing review I knew what to expect. I knew what to expect after seeing the names of the people on the advisory panel that helped him during the year it took to write the review. Of the twelve members of the panel there were five chief executives, two academics, two heads of planning, the managing director of Legal and General’s property division, the head of housing at the accountancy firm PWC and the chairman of a company that specialises in urban regeneration.

Of the twelve members there was only one involved – indirectly – in building homes. That was David Orr, chief executive of the National Housing Federation, the body that represents housing associations. The NHF sees itself as the “voice” of affordable housing and recently published a report titled Broken Markets, Broken Dreams; let’s end the housing crisis within a generation. Earlier this year the NHF became part of a coalition, Homes for Britain, consisting of housing charities and lobbying groups which calls upon political parties to end the housing crisis. I have no objection to the NHF fighting its corner and trying to position itself as the preferred means whereby the next Labour government seeks to solve the housing crisis, but any review that fails to include a representative of local authorities is liable to be accused of favouring housing associations at the expense of local authorities as was the case when Labour came to power in 1997.

Although there were no members of the panel from the Local Government Association, the body that represents local authorities, in the foreword Sir Michael writes that its research director was seconded to the review and was integral to its work as well as being responsible for the drafting of the final report. I just wonder whether the Local Government Association had second thoughts about the decision as the review didn’t see local authorities as being the “silver bullet” in providing the number of affordable homes needed. Also the review does not recommend the lifting of the spending cap on local authorities. It does mentions that the way local government borrowing for housing is treated against public debt is peculiar to the UK. The UK uses a wide measure of public sector debt. In Europe general government debt would excludes council housing because it is self-financing. (Adopting the European system was all to do with sending the wrong signals to the market about joining the euro)

The aim of the review was to set out the means by which the Labour Party can, by 2020, build 200,000 homes a year. Yet to do so it will require housing to be a top priority for capital expenditure in the next Parliament. Their argument is that reaching the target by 2020 could generate over 230,000 new jobs and add 1.2 per cent to the economy. Also analysis by the National Audit Office showed that a capital based approach to investing in housing offers the highest ratio to costs and so represents the greater value for money and could save money in the long term.

Emran Mian, the director of the Social Market Foundation, says it makes economic sense to borrow for investment. “After all by investment in fixed assets such as buildings, government creates an asset on the other side of the balance sheet to the debt. Borrowing for these items may even be fairer than funding them through taxation.” Lyons concludes that there is a limit to the amount councils and housing associations are able to do. He disagrees.

Alex Hilton, from Generation Rent, believes that Labour doesn’t want to spend any money or interfere in a failed housing market. He writes, “The problem seems to be that the ambition was not to solve the housing crisis but to come up with a set of proposals that neither have a negative impact on house prices nor any cost implications for the Treasury. As a renter, my heart sinks as this represents a political willingness for me and for people like me to be exploited in perpetuity to the benefit off homeowners, landowners and property developers.”

Whilst he understands the political desire not to upset homeowners and rich people, he can’t understand why it’s okay for taxpayers and renters to continue to subsidise their own exploitation for the foreseeable future. Such schemes as help to buy, rent to buy, shared equity and shared ownership are ever more complicated ways of getting a generation into hideous debt just to prop up the house prices and land values of much more wealthy people.

Matt Hutchinson, of the UK’s biggest flat share website, Share Room, said, “Ed Miliband has missed a trick by sweeping great swathes of the electorate under the carpet – those people in private rented accommodation  who are facing soaring rents, with little to no prospect of ever owning their own homes.” (See Private renters: the forgotten millions who abandoned Labour by Dr Eoin Clarke, Queen’s University, Belfast, Labour Left: the Red Book.)

What are the prospects of housing being given top priority in the next Labour government? Sir Michael Lyons sets out a parliamentary timetable for Ed Miliband to follow. However something else is needed as Owen Jones discovered when he interviewed Hazel Bears for his book Chavs. He wanted to know why Labour between 1997 and 2010 let the housing crisis get worse. “There wasn’t a big housing character whose passion it was to do housing,” she says. That there is no obvious candidate in its ranks does not bode well that Labour in government will “build the homes our children need”, as Sir Michael writes. Not just the Labour Party should be reminded of what the nineteenth century social reformer John Ruskin said about the first duty of a state; it was to see that all children born wherein shall be well housed.

*Terry McGrenera founded the House Party to highlight the issue of housing in London and stood as a candidate in the elections for the London Assembly in 2012. [email protected]

LOCAL GOVERNMENT IS FACING FURTHER CUTS OVER THE NEXT TWO YEARS

“I love bashing local government”
Eric Pickles, Secretary of State for communities and local government

Chris Holme, interim finance corporate director, provided a summary presentation to the Committee, he reported that:
“The savings requirements due to the reduction in the government’s revenue support grant were a significant challenge for Tower Hamlets Council.
The grant is being cut by 40 per cent between 2013/14 and 2015/16 and then by a further 20 per cent between 2015/6 and 2016/7.”
Minutes of Overview and Scrutiny Committee, 20 January 2014

Two announcements during the first full week of 2014 outlined how the next two years will be for the people in Tower Hamlets and in the UK. The first announcement was by George Osborne. He told workers at a factory that 2014 would be the year of “hard truths”. The years ahead would bring more cuts of £12 billion to welfare and £13 billion to local government and centrally administered services. “There are no easy options here,” he warned. His speech marked a change of tactics, one in which the Conservatives will, under the direction of election strategist Lyndon Crosby, force Labour to say what they will do to reduce the debt. (His speech itself might have been prompt by the view taken by some Conservatives that he had been somewhat modest in reducing the size of the state. Typical of such sentiments was Fraser Nelson, editor of the Spectator, writing in the Daily Telegraph before Christmas. He wrote, “He (Osborne) inherited a disaster, but has gone so slowly with the cuts that he has ended up increasing the national debt by more than any country in Europe. Labour, during the IMF’s bailout cut more in one year than Osborne is now doing over eight years.”)

His £25 billion of planned cuts is a trap for Labour. As Andrew Grice, political editor of The Independent pointed out in his weekly summary of politics in January identified, “If they (Labour) match the cuts, the challenge will challenge them to spell out where the axe would fall. If they refuse to match them, he will warn that a Labour government would increase borrowing and taxes. The Tories are desperate to re-run their favourite election campaign – the Labour tax bombshell – they launched in 1992, the last time they won a majority.”

For the time being he is asking others to make cuts, in particular local government. Councils are bearing the biggest cuts of the public sector. In 2014-15 the ten most deprived local authorities in England will lose six times more than the ten least deprived local authorities compared with 2010-11. While deprived areas such as Liverpool, Hackney, Blackpool and Middleborough lose most, the prime minister’s own local authority, West Oxfordshire, one of the wealthiest, is actually seeing its spending power increase, as are other wealthy council areas.

Lutfur Rahman, executive Mayor of Tower Hamlets, commenting on the cuts included in his budget proposals for 2011/12 he said at the cabinet meeting held in January,”2011/12 would be just the first year in which Tower Hamlets council faced cuts, and there might well be three, four or even five more years of cuts.” Introducing the report outlining the cuts Cllr. Choudhury said, “The Mayor and his administration are extremely unhappy that cuts in funding, of an unprecedented scale, forced upon them by the Coalition government, now left them with the very difficult task of having to find £72 million of savings over the next three years. It is acknowledged that local government was the more affected than other parts of the public sector by the government cuts. The key issue being the front funding of the funding settlement in 2011/12 and 12/13 which resulted in savings of approximately £30 million required in 2011/12. The budget proposals amount to £56 million in efficiency savings and will deliver a balanced budget in 2011/12 and make a significant contribution to years and three.”

Since 2010/11 the council has used five key strands to deliver savings which have worked their way through the budget process. They are having a leaner workforce; smarter working-enabling council officers to do their jobs at less cost; vacation of Anchorage House opposite the town hall; better use of assets; income optimisation when renewing commercial charges and finally better buying by using the third sector.
In 2012 there were further cuts to the overall budget of some £18 million. Despite this the Mayor stated that his main priority was to protect Tower Hamlets and the most vulnerable sections of society from the government’s cuts agenda and to give value for money. For example continuing to provide free home care for the elderly; maintain youth centre provision; ensure that no libraries were closed and to protect lower paid staff. The budget would also protect the level of voluntary sector grants and would ensure that council tax would be frozen for the third year in succession. (The government since it came to power in 2010 has tried to control local government spending by offering subsidies to English councils that freeze council tax, and requiring referendums on large increase. The carrot and stick approach has led to a fall in council tax bills over the past four years, but equally a fall in local government spending that some claim is putting basic services at risk.)
In a statement before the cabinet meeting of 13th February 2013 the Mayor added “This year our budget reduction was 8 per cent in real terms, allowing use to use this budget process to focus on the services which mean most to residents and shape the borough of the future.”The Labour Party, who has an overall majority as regards numbers of councillors, used the budget process to try and curtail the Mayor’s expenditure because they believed would leave a black hole in the budget amounting to £55 million by 2016/17.Closing this black hole would require the equivalent of a £600 per household increase or further cutting services provided to the disabled and elderly. The Labour group has been wanted to know how the Mayor proposed filling the black hole. Accordingly they tabled amendments to reduce the size of the budget and the Mayor’s expenditure. They asked the council to note that many of the Mayor’s biggest spending commitments – including free school meals, enforcement officers, educational award fund and council tax benefit – are only funded up to the election in 2014. It took two council meetings before the budget was passed. After failing to do so at a council meeting on 27th February the council reconvened on 7th March 2013. A revised budget was proposed by the Mayor subject to the amendments accepted by him at the February meeting.

Planning for this 2014/15 budget had to wait for the Chancellor’s Autumn statement in December 2013. Due to lack of growth in the economy it is now clear that the government’s austerity programme is likely to continue until the end of the decade. The budget deficit will continue to exist regardless of what political party will win the 2015 general election. This means that there cuts will continue to be made to local government budgets. The council forecasts that over the next three years there will be a budget shortfall of £67 million. The budget for the coming financial year, starting in April, will be threshed out in the months to come. Politicians engaged in the budget discussions in the coming months will be conscious that European elections, local elections and the election of a Mayor are being held in May.

The financial settlement for local authorities for the coming year was debated in the House of Lords in January 2014. Opening the debate was Lord Smith who is also the leader of Labour controlled Wigan Council. He began by quoting what the Conservative chair of the Local Government Association had to say about the settlement. He said it, “confirms that councils will continue to be at the sharp end of public end of public sector spending cuts up to 2016. Councils have so far largely restricted the impact of the cuts on their residents.

They have worked to save those services that people most value and have protected spending on social care for children and the elderly, but even these areas are now facing reductions. That impact will only increase over the next two years”. The Chartered Institute of Public Finance and Accountancy, the local government finance body, commented that the financial announcement was, “stronger on spin and misleading presentation”.
Lord Smith took issue with the claim that cuts could be achieved by so-called sensible savings. That, he said, ignores the fact that ever since 2010 there have been significant cuts. All the examples of low-hanging fruit have gone. He stated that the government are probably not alone in misunderstanding the way that local government works today and the way it had changed. The same applies to Parliament and the complex changes that are taking place. “What concerns me is that our current major forms of local funding the council tax and business rates are both heavily reliant on government subsidies from the government to make them justifiable. The council tax is still based on 1991 values. We now have layer upon layer of council tax freeze grants which are effectively the government subsidising the council tax. At some point we are going to think of a system of local government finance which is really local, which really works and which has cross-party support”.

Next to speak was Lord Beecham. He referred to his 17 years as Labour leader of Newcastle City Council during the 1980s. He said, “I thought I had times of great difficulty. They were nothing like as bad as the problems facing today’s council.” Lord Tope gave the Liberal Democrat perspective. He said “it is clear that the financial year 2015-16 will be the crunch year for probably most local authorities. The cuts required for 2015-16 are of such magnitude that the public generally will be affected and will notice. Decisions on those cuts will have to be made in the coming financial year before the May general election”.
Lord Snape mentioned a report by the Local Government Association which warned that the figure for the reduction in overall support for local authorities by 2016 could increase to £1billion. Former Labour Party general secretary Lord Whitty spoke of the regressive nature of the distribution of the cuts. “It moves money away from cities to shires and, for example, authorities which face the biggest cuts over the next two years, such as Tower Hamlets, Hackney and Newham”. He stated there was a direct correlation in the opposite direction between need and the size of cuts that local authorities have had to endure. Due to highest level of centralisation local authorities are heavily dependent on the government grant. The taxes they can increase such as the council tax have been capped or frozen. They have virtually no flexibility on the business tax and severe limitations on their ability to borrow, even from the public sector loan board.

This is particularly true as regards housing. He said, “There is a role for local authorities both as leaders and providers in this area, yet the rules that govern their ability to do anything serious about housing effectively stymie their ability to play a key role. The interventions by the government, who started by cutting social housing funding, including their positive intervention in relation to the new homes bonus, have been shown by the House of Commons Select Committee to be pretty ineffective.” As far the Help to Buy scheme he said that it had certainly helped a number of first-time buyers but increasing the supply of homes all it will do is raise house prices even further with the knock on effect of doing the same in the private and public rented sector.

He said it made no sense for local authorities to be prohibited from going to the markets to borrow money to build homes. It was, he said, a major bar to local authorities or ALMOS being able to build more homes. “It all reflects the definition of the public sector borrowing requirement or the public sector net debt that is adopted by the Treasury and imposed on local authorities in this country”. It is a different definition from the one that applies in Europe. When the government reports to international bodies such as the IMF and the EU on the national borrowing requirement it excludes the kind of borrowing that is allowed in other European countries.

Lord Whitty said this is not an act of nature; it is a positive decision by successive Treasury officials. (Although he fails to say so, Labour when in government chose not to challenge Treasury officials) The situation is “one that makes nonsense of the ability of local authorities to do anything about the housing crisis that is facing them in most areas, either on an immediate basis or on a long-term strategic one. We know, and this has been reiterated by all parties, that we need to double the level of the new supply of housing. This is an inhibition on the public sector directly. I am not just talking about the ability to build traditional council housing. I am talking about the ability of local authorities to engage in joint ventures with housing associations and to support developers in the private sector in building houses. If all this is barred to local authorities, there is no hope of resolving the housing crisis that faces us.”

He ended by asking the government- as well as Labour’s front bench what would Labour do – would they at the very least review how this definition of the public sector net debt is impacting on the ability of local authorities to do their job in one very important area, one that is vital to the future health not only of the economy, since housing could provide a much needed local and national boost to economic activity. It was a situation that could be resolved by the stroke of a pen.

Lord Liddle began by saying that if Labour had won the 2010 general election Alastair Darling made clear that there would have been deep cuts in public spending. What he asked from Eric Pickles was that just, for once, to at least acknowledge that local government has responded this realism and responsibility. Local authorities, certainly his local authority in Cumbria, feel that the response from the Secretary of State has felt like a vicious kick in the backside along with a lot of disingenuous information and bluster.
The Government, he said, claim that the overall reduction in the spending power of local authorities is only 2.9 per cent and 1.7 per cent the following year. That was questioned by several speakers in the debate. “Without the NHS money, which is not free money, coming into local government the reduction in central government support for local authorities is going to be 15.0 per cent over the next two years. That is a huge body blow. Lord Liddle ended by saying that the Conservatives have looked after their own supporters which he found “a bit of a disgrace”. It was time that the realism and responsibility that local government has shown since 2010 is matched by a similar attitude on the part of the Secretary of State.

Local government and how it was financed was the subject of a short debate in the House of Commons in January. Opening the debate was Labour member Gisela Stuart. It was, she said, neither sustainable nor local, and it certainly does not confer any authority. Reiterating the lament heard in the debate in the House of Lords about the centralisation of power in England and how it stymies growth and results in cities not being able to provide the level of public services that its cities deserve. Also that local government by 2015 will have suffered 33 per cent cuts while Whitehall departments only 12 per cent. She suggested an alternative to the present system of local government which relied on an out-dated council tax banding system which favours affluent areas. She wanted to see cities being allowed tax raising powers.

Bob Neill, a former local government minister, said that local government has historically been too dependent on central government grant for its finance. The problem is highlighted by the London Finance Commission report. The report, which was commissioned and endorsed by the Mayor of London, points out that some seven per cent of all the tax paid by Londoners and businesses are retained locally, as opposed to New York, where the percentage is 50 per cent.

Clive Betts, chairman of the Communities and Local Government Committee, agreed with Sir Merrick Cockell, the Conservative leader of the Local Government Association, who said that the position of local government finance is not sustainable following the extent to which local government services have been singled out for disproportionate cuts. The most significant impact the cuts will have is to undermine the basis of local government finance to such an extent that a future government simply will not be able to come back and build on what was there previously. There has to be a fundamental and radical change. He ended by mentioning that the National Audit Office had been very critical of the government for failing to undertake an impact assessment on the cumulative impact of cuts to local government.

Andy Sawford, Labour’s local government minister, said that local authorities have suffered the biggest cuts of any part of the public sector, despite being recognised as the most efficient. The leader of Birmingham City Council, he said, stated that the cuts would mean the end as it has been of local government and that the next Labour government would not be able to stop the cuts or turn back the clock. Labour would start by putting fairness at the heart of the relationship between central and local government and our approach to local government finance. In the next year 2014-15 the ten most deprived local authorities in England will have lost six times more than the ten least deprived authorities, compared with 2010-11. He asked where was the fairness in a policy that takes from the have-nots to give to the haves. In addition to the National Audit Office the House of Commons Public Accounts committee raised serious concerns about the viability of some local authorities as a result of the cuts. He ended by saying that Labour had set up a local government taskforce to look at how it could respond to the challenges facing local government. They will see how their role can be enhanced as well as giving them more freedom over their own affairs.

The challenges facing local authorities are more immediate, in London there are local elections in May and every opportunity must be taken to present by those councils to show that they are miserly custodian of the public finances in these times of austerity. One way of doing so is to information people of their plans. It is good politics. At meetings to explain the budget proposals to the public Chris Holmes, chief finance officer for Tower Hamlets, set out the plans as presented to the January meeting of the Cabinet before a final decision is taken in February, or March, as it was last year. He began by outlining the plans for the year ahead but also by putting them in the wider context for local government as contained in the government Autumn Statement in December over the next two years. (the council’s three year financial plan extends until 16/17)

Local government, he said, does face a prolonged period of financial austerity. Tower Hamlets is in the fourth year of significant savings and that will continue for another four years. For the financial years 2013/14 and 2014/5 there have been savings totalling £33.4 million. The financial projections are calculated on that basis. He added that the decision regarding next year’s savings had already been agreed by the council last year. “But the longer term-scale (of savings) for local government is significant larger than we previously forecast. The government said in June 2013 that there would be a reduction in local government spending of around 10 per cent. For local authorities in London the budget gap that they will have to address will be even bigger. Also local government reduction has been and will be greater than any other public sector. As regards how that affects London, it means that between 2012/13 and 2019/20 there will be an overall reduction of funding of around £1.4 billion across the capital. In the next two years. For the next two years there will have to be a funding gap of £840 million. This is taking time at a time when the population is growing rapidly. London councils are being asked to do more for less. It has been calculated that the cost to provide services for the additional numbers is around £2 billion. In the government spending review is a measure called the New Homes Bonus which applies only to London. It is a sort of reward to cover the costs to councils that build more homes or bring empty homes back into use. From 2015/16 £69 million of that pot of money will be transferred from councils and given to the Mayor of London and his Local Enterprise Partnership. As yet the Mayor it is unknown that the Mayor will use the money will be put. (meeting his homes target?)

The implication for Tower Hamlets will be significant because of the reliance of the borough on government grant. Between the census of 2001 and a decade later there has been an increase in population of thirty per cent. Furthermore it is predicted that there will be a further increase of another thirty per cent by the time of the next census in 2021. Reduced funding and increased numbers creates pressure on existing services. Describing it as a challenge is certainly an understatement.

Local government gets its money from council tax revenue, the business rates and thirdly the revenue support grant which comes from taxpayers. For the past three years Tower Hamlets has accepted the government’s council tax freeze grant which was equivalent to a 1 per cent tax increase in each of the years and therefore has frozen council tax during these years. Tower Hamlets in 2014/15 will receive £0.846 million in council tax grant, which is equivalent to a 1 per cent tax rise. As regards the business rate it is estimated that by the end of the current financial year the council will have received £100.800 million which is in line with the budget set by the council for 2013/2014. Tower Hamlets in the current financial year will receive £151 million in revenue support but that will be reduced by 40 per cent to £69 million in 2016/17. Overall it is 40 per cent reduction between now and 2015/16 and a 55 per cent reduction between now and 2016/17. The crunch will come the next two years when estimated savings/reductions will have to approximately £28 million in 2015/16 and £39 million the following financial year. In conclusion Chris Homes said that Tower Hamlets was in a “relatively healthy financial situation” as a result of good financial control and with the council’s reserves it has allowed us to mitigate the impact of the cuts that will come in the two years ahead. The estimated budget for the coming year ahead will be around £295 million. Reserves will be used in the next two years to keep the cuts to a minimum and to balance the budget but the level of reserves will remain at £20 million.

The latest attack on local government has just known disclosed following a study by the Joseph Rowntree Trust. Using Freedom of Information requests the information released showed that another 48 councils are reducing protection to vulnerable residents following cuts to the means tested benefit by £500 million. This latest cut has left councils with a choice of between charging council tax to the working-age poor and finding additional savings on top of the 40 per cent cuts being made to council budgets by the government. Peter Kenway of the New Policy Institute, which conducted the research, said: “The data suggests that around a quarter of local authorities are amending their council tax support schemes for 2014-15. Most of those amending their schemes were in receipt of the transitional grant funding. As this grant was available for one year only, many local authorities have decided to pass on more of the cut to vulnerable residents in order to make up the funding shortfall.” The Local Government Association pointed out that if council tax support finding is reduced in line with cuts to overall funding, the total cut to council tax support finding between 2013-14 and 2015-16 would be 28 per cent or £1 billion.

Hilary Benn, Labour’s local government spokesman, said: “This new poll tax – the responsibility for which lies squarely at Eric Pickles doorstep hits the poorest hardest, forcing up council tax bills for those least able to pay them. These figures are shocking. The government claims that those with the broadest shoulders must bear the biggest burden, but they are doing the exact opposite and hitting the poorest communities hardest.”Councils in the 10 most deprived areas of England are facing cuts averaging 25 per cent in the financial years 2010-11 to 2015-6, compared with just over 2 per cent in the ten least deprived areas. The figures were calculated by Paul Woods, the experienced treasurer of Newcastle City Council. Woods took the government figures on the level of cuts to the 326 local authorities in England and compared them with the multiple indices of deprivation issued by the Department of Communities and Local Government.
One wonders what local government did to deserve such treatment by the government. Local government are statutory compelled to balance their books each year unlike central government. Unlike banks they didn’t have to be rescued by the government and were not to blame for the present austerity. The only logical explanation left seems to be that Eric Pickles does like bashing local government.

Terry McGrenera

DAVID ORR LECTURES AT THE LAND TRUST AGM

This year’s annual general meeting of the East London Community Land Trust marked a departure from what has occurred in previous years. Up until this year the focus has been very much on the internal workings of the organisation, getting to the point whereby they will be able to submit a planning application to Tower Hamlets council for permission to build upon the former St Clement’s Hospital site on Mile End Road in December. David Orr, chief executive of the National Housing Federation, was asked to become part of the team taking the scheme to fruition. In addition he was asked to give a lecture after the formalities of the AGM were completed. In keeping with the progress on the development of the Land Trust and the introduction of the various changes to housing benefit the title of his lecture was ‘Where do we go from here?’

David Orr was named earlier in the year by one housing magazine as the most influential person in housing ahead of George Osborne, the welfare minister in charge of the benefit changes and the housing minister at the time. He began his lecture by criticising the aforementioned housing minister. He mentioned that the minister at the annual general conference of the National Housing Federation in his speech to delegates said that he failed to see why housing associations were reluctant to accept the new affordable rent level. David Orr was equally mystified, he said by the ‘bedroom tax’ which he described in uncomplimentary terms. The housing crisis, as he explained to politicians at the various party conferences, was a consequence of political choice. As proof he said that despite the consensus that more homes needed to be built the government slashed spending on housing by sixty per cent in the 2011 spending review.

Earlier in the day there was a conference organised by Social Housing magazine reflecting upon the changed political scene. In the latest issue of the magazine, published to coincide with the conference, there was an article by David Mayer former chief executive of the Housing Corporation and presently chairman of One Housing Group. He wrote that “the affordable housing programme introduced by the 2010 Housing Act is not sustainable. Under the terms of the affordable housing programme is it the benefit system that is talking the strain – resulting in higher rents. It is ruining housing associations balance sheets.” Taking questions after his lecture David Orr was asked to response to what Anthony Mayer had written. His answer was broadly in line to what he wrote in his blog in October in that he believed that housing associations were so resilient and had a clear commitment to what he called ‘the mission’ as they were underpinned by social purpose and strong values that many housing associations would be celebrating lots of anniversaries for years to come. (He began his blog by saying that he had attending several anniversaries recently)

David Orr concluded his lecture by predicting that the future of housing lay in the hands of the public. This seemed somewhat contradictory at a time when the trend for housing associations is to lessen the role of residents in the running of their affairs. As to what role housing will play politically in the near future, he said a report complied for the NHF found that various factors were responsible for it rising up the political agenda. Recently the rose in house prices or the failure to build enough homes are regular front page stories. In the past month there has been a debate in the House of Lords about housing, in Westminster Hall, where backbenchers can raise issues of individual concern, and in the House of Commons where the government would have been defeated without the support of their partners in the coalition. What the future holds for them as a result of the benefit cap and bedroom tax will be seen in local, European and general elections over the next eighteen months.