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LABOUR’S housing green paper Housing for the Many has a fundamental flaw at its heart. It says that a Labour government “will introduce a new duty [on councils] to deliver affordable homes.”
Instead of abandoning the risible “affordable housing” label, the party proposes to redefine it with “a new affordability standard with three elements.” These are:
- Social rented homes. “Homes for social rent will form the core of Labour’s affordable housing programme.”
- Living rent homes. These will have rents set at “no more than a third of average local incomes.”
- Low-cost home ownership homes. These will include first-buy homes where the mortgage will be no more than a third of average local income.
We have been told that a £4 billion annual housing grant would be available under a Labour government.
Asked at a recent meeting how it would be divided up between the “three elements” above, shadow housing secretary John Healey said it is up to the councils to decide.
What that means is that a council could carry out this duty without building a single council home. They could just bid for a grant for low-cost home ownership properties.
What will Tory councils do given this freedom from having to build council homes? How can Healey talk of “the largest council house building programme for 30 years” when it is left to the discretion of local authorities to decide whether they bid for a grant to build any and there is no commitment from Labour to build a specific number?
Even those councils keen to build will have to compete with housing associations for grants in a bidding process.
Housing associations are in a much stronger position because of their higher rents and the regular building programmes they have been carrying out.
So far as “living rent” is concerned, it's not clear whether this would be in the framework of housing revenue accounts (HRA) or outside them. This could mean that council homes could have much higher rents than social rent.
In London, the living rent for a two bedroom property is said to be around £1,000 a month, as compared to the average social rent of about £450 a month. Why waste money on living rent homes that could be spent on social rent homes?
The green paper supports the private local housing companies councils have set up. Some see them as a means of circumventing the right to buy, but for others they have a commercial purpose.
The Haringey Development Vehicle was one such company. Some Labour councils use these companies to build homes for the private rental market rather than council housing.
If grants will be available for building social rent council housing, why then would Labour councils want to maintain or set up private companies to compete with private developers?
The councils funding crisis cannot be resolved by them entering the housing market. Labour should abandon support for local housing companies and make it a requirement for councils to build council homes in the framework of the HRA.
The green paper is silent on the funding crisis of local HRAs, which are losing hundreds of millions of pounds as a result of government policies since the 2012 debt settlement, which imposed £13bn bogus extra debt on 136 councils.
As a result of Tory policies, such as the four-year rent cut and increased discount right-to-buy sales, the shrinking resources of HRAs are forcing councils to cut back on necessary renewal of key housing components. Underfunding of HRAs was one of the factors in the Grenfell Tower fire.
Why is the shadow housing minister failing to challenge the Tories’ underfunding of council HRAs?
Labour could hardly demand the Tories cut the bogus debt without making a similar commitment themselves. Silence on this issue appears rooted in a refusal to commit Labour to cancelling the fictitious debt through which tenants are being fleeced. Healey has fought shy of this ever since we raised it with him in late 2016.
The green paper spends much time lauding housing associations. It fails to take account of the commercialisation of the sector.
The National Housing Federation, the industry body, capitulated to the Tories in making the “voluntary” agreement on the extension of right to buy to housing association homes.
It happily agreed to the robbery of council right to buy receipts on “higher value” homes, to compensate them for the difference between the discounted price and the market value.
They are private businesses which are unaccountable to their tenants. Even when they have tenant reps on their boards, they are legally accountable to the business rather than to the tenants who elected them.
The housing crisis cannot be resolved without a council building programme of somewhere in the region of 100,000 council homes a year. This would require £8bn a year grant to help fund them, with an £80,000 grant per property.
We know that councils are not currently in a position to build on that scale. To be able to put together the human resources to plan and implement building programmes councils require an assurance of annual funding rather than having to compete in a bidding process.
In place of a duty to deliver “affordable homes” Labour should commit to introducing a duty to build council housing and provide the necessary grant for councils to begin again to build on a large scale.
At a recent Labour Party conference in Leicester, at which I spoke, I asked the audience to raise their hands if they thought that Labour’s first housing priority should be a large scale council house building programme.
A forest of hands went up. Leicester Labour members and supporters are no different to those elsewhere.
This sentiment needs to be mobilised. Labour needs to be told in the consultation that its primary housing priority should be a large scale council house building programme.
Martin Wicks is secretary of Swindon Tenants Campaign Group.
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