It’s great that the wider left recognises the need for a massive wave of council house building but we mustn’t forget New Labour’s role in our current situation, writes SOLOMON HUGHES
THERE is a growing consensus on the left that we need a new wave of council house building, though there seems less understanding that this is only close to possible because of Labour’s move left.
Building 100,000 new council houses a year is now central to Labour’s manifesto.
But previous Labour leaderships — from Tony Blair to Gordon Brown to Ed Miliband — were against building more council houses. They wanted private developers to lead on housebuilding, which meant they contributed to the crisis in housing.
This crisis has been building over decades — or rather not building. Britain doesn’t build enough houses and so prices are way too high. More and more young people are stuck in the private rented sector, paying more for less.
In truth the private sector never built enough volume housing in Britain. If the state hadn’t stepped in, building millions of council houses in the 20th century, we would be in an even worse state now.
The long running housing crisis shows why we need more council houses. The recent, violent shock of the Grenfell fire adds urgency.
First, 80 or so people killed for cost-cutting in council flats shows we need investment to make good, safe social housing.
Second, stuffing the survivors of Grenfell into hotels shows just how bad the shortage of social housing has become. Our social housing stock can’t deal with an emergency like Grenfell.
Under Jeremy Corbyn, Labour had put council house building at the centre of its manifesto even before Grenfell.
I was pleased to see Polly Toynbee and other Guardian columnists supporting this call for more council houses. However, they do so without giving Corbyn much credit.
But if you want to see where the rest of Labour stands, consider Yvette Cooper, still an occasional hero for Guardian columnists and “moderate” Labour MPs.
Cooper was Labour’s housing minister from 2005-8. Back then, under Blair and Brown, Labour did put money into existing housing stock. The party brought existing council houses and flats to what was called the “decency standard,” improving kitchens, windows and heating.
But while it spent money, it also made structural changes that created long-term problems. This was a key “New Labour” failure. It increased social spending, but did so through privatised structures that caused long-term damage.
Cooper promoted the Private Finance Initiative (PFI) — a form of privatisation — for council housing. Under PFI, a business consortium borrows money from the bank to do repairs and maintenance, which the council pays back over time. These can be long, 15-year maintenance contracts during which time the private consortium takes over maintenance of the council estate. In June 2005 Yvette Cooper announced: “There can be no doubt that PFI helps redevelop areas in great need and to provide new housing.” However, Cooper’s PFI was not good for housing. In 2010 the official spending watchdog, the National Audit Office, examined the schemes Cooper launched and found “most projects have suffered significant cost increases and delays” and that “early programme management was weak.” As with other PFI schemes, the private consortia exploited the public sector, taking big payments for poor work. The Chalcots Estate in Camden was one of the schemes listed in Cooper’s 2005 announcement. The Chalcots PFI was launched in 2006, while Cooper was housing minister. The National Audit Office found that there was a 52-month delay on getting work started on this deal. These delays happened because the banks and building contractors haggled over price and work. The Audit Office found the price of the “capital costs” — the initial work — on the Chalcots scheme went up from £30.6 million to £65m. The PFI Contractor, called “Partners for Improvement in Camden,” is still in charge of maintenance until 2021, and will earn around £150m over the whole period. There is worse news. The PFI contractors on the Chalcots estate got a firm called Rydon to do the external cladding of the tower blocks. That is the same firm which did the cladding at Grenfell Tower — this was likely a major cause of the disaster. The tenants of the Chalcots towers were evacuated overnight last June because of worries their cladding was also dangerous.
The Chalcots towers were also evacuated because other fire protection, like fire doors, were inadequate. Tenants were allowed to return after remedial works.
But a BBC investigation found the repairs, carried out under Cooper’s PFI scheme, were still inadequate.
Cooper had other plans beyond PFI. According to her press notice: “PFI was identified as one of the three options for delivering decent homes along with the setting up of an Arms Length Management Organisation (Almo) and stock transfer.”
Under Cooper, councils handed controls of their flats to “arm’s length” bodies, as in Islington or Sheffield. However, these councils have now started taking the estates back under direct control.
The “arms length” bodies were undemocratic and inefficient. The “stock transfer” handed millions of council flats to housing associations. However, this led to a reduction in the available housing stock — housing associations sold more houses than they built — and another loss of democratic control and council influence.
Under Cooper and the rest of “New Labour,” the government would only go with the three options for council housing — PFI, Almo and “stock transfer.” New Labour firmly resisted what was called the “fourth option” of council house building, even though its members voted for it at Labour conference. Consequently, social housebuilding ground to a halt under “New Labour.” The Tories followed suit.
When Ed Miliband became Labour leader in 2010, the party acknowledged more new social homes must be built. But even under Ed’s small shift left, the party still resisted just letting councils build these homes.
Instead it based policy on the “Lyons review,” which was run by a mix of housing developers, financiers and consultants.
The Lyons review, which became the manifesto commitment, proposed “the creation of a generation of new homes corporations to act as delivery agencies working across housing market areas.”
These corporations would be a “partnership” with “private developers, Housing Associations and investment partners.”
These kinds of “partnerships” are already “redeveloping” some council estates — they tend to kick out social tenants in favour of money making house sales.
Building mass council housing was once a mainstream Labour programme. While some estates were built too cheaply, without mass social housing we would be in an even bigger crisis now.
Building more, good social housing is now a key Labour promise, but is only possible thanks to Corbyn’s leadership.