MPs defend council housing – report condemns government plans

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The House of Commons Council Housing Group of MPs from all parties yesterday launched its report Support for the Fourth Option for Council Housing.

This report is born out of demands from council tenants and trade unions for the end of John Prescott’s ideological campaign against council owned housing and is sponsored by Amicus, UNISON, UCATT and the GMB trade unions.

All over the country tenants and councils have campaigned against the forced privatisation of housing stock and have called for the fourth option of public investment in council housing.

Support for the Fourth Option for Council Housing is the result of three hearings held by the House of Commons Council Housing Group in Parliament and in Newcastle.

At these meetings tenants, councillors, housing officers and unions from all parts of the country gave evidence about the illegitimate pressure on councils to divest themselves of housing.

It demonstrates the need to give tenants the option they really want: to stay with the council, and shows how this can be achieved.

Austin Mitchell (Chair of the group) said yesterday: ‘This report comes out just as the government’s war on council housing comes to its climax with the July deadline for councils to accept one of three options they don’t want.

‘It arms councillors and tenants to resist.

‘It’s time to stop wasting millions to give away billions of public assets and allow councils to play the part only they can play, in regeneration and tackling Britain’s desperate need for social housing.’

John Allott, Amicus’ National Officer for Housing, said: ‘The Government’s housing policy is the privatisation of council housing by stealth.

‘Tenants are being coerced into giving up their secure tenancies on false assurances of improvements, on which the Registered Social Landlords (RSLs) and Arms Length Management Organisations (ALMOs) have failed to deliver.

‘Local authorities have a good track record of maintaining and managing council homes and should be allowed the same access to borrowing and finance as the private sector does.

‘Council housing is being placed at the mercy of market forces and the government is gambling with the homes of some of the most vulnerable people in the country.’

As part of the Sustainable Communities Plan the government pledged to bring all homes up to the ‘Decent Homes Standard’ by 2010.

The three given options for securing additional finance to achieve this are, Arms Length Management Organisations, Registered Social Landlords and Private Finance Initiatives.

The Housing Group campaigns for a fourth option of direct investment in council housing.

The House of Commons Council Housing group’s inquiry to demonstrate support for the ‘fourth option’ has generated a mass of hard evidence.

It recognises that the ‘debate is stacked against council housing’.

It stresses there is enormous ‘pressure exerted on tenants and elected councillors to accept one of the government’s three options’.

It says people are aware that ‘government subsidies that once went to local authorities are now being offered instead to some of the biggest private building conglomerates.’

Putting the case for the ‘fourth option’, the report says: ‘The evidence we received demonstrates that the current three council housing investment options are not financially necessary or efficient.

‘The “fourth option” – originally outlined by ODPM (Office of the Deputy Prime Minister) itself – is financially viable and offers real choice for three million council tenants and their families.

‘It is an immediate and urgent priority for action.

‘In evidence submitted to this enquiry, UNISON has shown that the cost of using an investment allowance to clear the backlog of work needed to bring homes up to the Decent Homes Standard is easily affordable from the £2 billion surplus generated annually by council housing.’

The report adds: ‘Despite 17 years of sustained pressure from government, more than half of local authorities still own their homes.

‘Many are determined to resist privatisation and strongly support the “fourth option”.’

It quotes examples: ‘Our tenants, our leaseholders, have made a choice. This council has followed that choice. We listened.

‘What we’re saying to government is that they should listen to that choice too.’ (Cllr. Jane Roberts, Leader, Camden Council).

‘With this decision being made in Bristol, we would welcome any change in housing finance that supports this fourth option.’ (Cllr. Matthew Symonds, Executive Member for Housing, Bristol City Council).

Explaining why councils are unable to finance improvements, the report continues: ‘The present housing finance system discriminates against local authorities: it siphons off rental income and capital receipts, bribes councils with debt “write-off” if they get rid of their homes and offers extra investment if authorities set up ALMOs or use PFI.’

Ken Campbell, Corby Federation of Tenants and Residents Associations is quoted as saying: ‘Corby loses approximately £7 million in rent rebate that they don’t get back at the moment.

With that £7 million we’d do as good a job, or better, than any RSL in the country. There is no doubt about that. . .’

Chris Medley, Head of Housing, Shetland Islands Council is quoted: ‘The current housing debt . . . prevents this council from providing a sustainable council housing service into the future. . . For these reasons we would welcome consideration of a “fourth option” for funding council housing into the future.’

The report cites the ‘Post transfer/ALMO experience’.

It says: ‘Registered Social Landlord (RSL) rents are consistently higher than Council rents, and despite rent guarantees, the fastest rising RSL rents are concentrated in transfer areas.

‘The gathering pace of RSL mergers means tens of thousands of tenants no longer have the landlord they were offered at transfer, while promises made to tenants become legally unenforceable.

‘Tenants report dissatisfaction and disempowerment after transfer; security is undermined, direct labour organisations suffer and homelessness becomes worse. And they (the government) want to take ALMOs into the private sector like RSLs.’

Cllr. Bryn Sidaway, Sunderland city council warns: ‘Rent has gone up about eight times the rate of inflation, service charges up 25 per cent . . . and there is an £18 a week charge for parking in the central areas.

‘What we’ve experienced is frightening. . . Now it’s too late for us in Sunderland to make any difference to what’s happened.

‘But if anyone has any doubts about not going down the privatisation road . . . get on a bus and go into Sunderland.’

The report says tenants are denied real choice.

‘It’s blackmail – not choice. There is no evidence that tenants voluntarily opt to change landlord.’

‘To make choice a reality for tenants, government has to provide a level playing field between the different options available and guarantee a “fair and balanced debate” before tenants make a decision by a formal ballot. . .

‘The government should:

‘1. Provide a level playing field for council housing giving local authorities the same rights as RSLs to borrow against stock and rental income;

‘2. Write off historic debt or take direct control of maintaining the cost of the debt and remove this element from the housing subsidy system altogether, making housing finance fairer and much simpler;

‘3. Ring fence the national Housing Revenue Account and ensure that, as a principle, all council tenants’ rents are spent on council homes;

‘4. Increase the management and maintenance allowance and the major repairs allowance to enable councils to maintain their stock;

‘5. Ring fence all right to buy receipts to be used to improve existing and build new council housing – stop councils from using them for any other purpose. Allow councils to use as much as they need to meet the Decent Homes Standard, pool any excess;

‘6. Release the remaining reserved capital receipts and allow these to be used as (in 5) above;

‘7. Create an investment allowance as a revenue stream to allow councils still in investment need to make use of prudential borrowing as outlined by the ODPM ‘The Way Forward For Housing Capital Finance’ 2002;

‘8. Encourage improved performance and best practice by setting up a ‘Continual Improvement Task Force’ at the ODPM to encourage short term secondment of officers with an excellent record in a particular area of housing management or strategy to authorities who need help to improve their performance;

‘9. Produce guidelines for local authorities and a clear code of practice that insists on a fair and balanced debate so that tenants hear both sides of the argument including:

‘a. The right of tenants to choose between all of the options and for these options to be factually presented (not ‘more investment’ v ‘stay as you are’);

‘b. Any proposal/process to change from one option to another should be tenant led;

‘c. Public access to all the relevant information (financial information, stock conditions reports, address lists of all those entitled to vote);

‘d. Equal access to meeting halls and other facilities to allow the fullest possible debate;

‘e. Tenants are given one clear month’s advance notice of when the ballot will start and finish and this timescale will be strictly adhered to;

‘f. Tenants receive material putting both sides of the debate and a commitment that council staff will not be instructed to selectively take down material on estates opposing the proposal;

‘g. A financial limit on the overall cost of consultation to ensure the maximum resources are spent on improving tenants’ homes.’

This report is valuable in providing more evidence of the disaster of council house privatisation.

However, no amount of appeals or pressure will get the government to change course.

The solution to the housing problem is the nationalisation of land, banks and building societies, as part of a socialist planned economy.

This can only be achieved by the working class taking power by revolutionary, not reformist means.