Housing transfer - it’s time to take stock

At my clinics housing is regularly the biggest issue raised — cramped accommodation, poor facilities, dampness, overcrowding, rigidity in transfer to meet family needs, lack of repairs, endlessly long waiting lists, to mention just a few of the complaints

The situation in Oldham is like a pressure cooker where the relentless pressure of demand for more and better housing is growing all the time, but almost no houses are being built.

There are now 1,800,000 households on the waiting lists for council housing across the country, and 12,000 in Oldham alone.

How has this happened? Under Margaret Thatcher’s government, housing was cut from 6 per cent of government spend in 1980 to only 1.5 per cent in the 1990s.

Crisis

What this means is that if that 6 per cent level of spend on housing had been maintained, government would today be spending some £22billion more per year on social housing. That is the fundamental root of the crisis.

However, the problem was compounded when the Blair government, wrongly in my view, decided to promote owner occupation still further by giving council tenants a powerful incentive to transfer out of council housing.

It did so by giving local authorities management and maintenance allowances and major repairs allowances set at only half the level of what a government report said was needed to bring council housing up to a decent standard.

If, however, tenants agreed to transfer to a private landlord or a housing association or to out-source the council housing stock to an independent management, then much higher levels of funding would be provided.

The obvious alternative, the so-called fourth option — to stay with the council but still receive the allowances at the full and proper level needed — was not allowed.

It is sobering that council tenants in no less than 185 local authorities have so far resisted this blackmail.

That is all the more remarkable when the Government added two further big incentives which have really put pressure on local authorities to support the transfer away from their control.

Switch

One is that if the switch to a private landlord or housing association is made, the Government will then write off the council’s accumulated historic debt on the housing which can run up to tens or hundreds of millions of pounds.

Second, housing associations are allowed to borrow on the open market, using the value of their existing housing stock as collateral security for the loan, and that can double their funding.

The obvious questions remain unanswered. If the Government can afford the full level of management, maintenance and repairs allowances in the case of transferred housing, why not in the case of properties remaining with the council? The issue should be need, not the type of housing tenure. And if the Government can afford to write off historic debt and allow borrowing on the open market in order to double housing expenditure in the case of estates transferred, why not in the case of estates that have chosen to stay with the council?

The Government is now listening to these arguments. Recent rule changes make it easier for councils to build, and new funding for some 2,500 new council homes is now in the pipeline.

This is very welcome, but given the length of the waiting lists it is still very far short of what is urgently needed.

So what should be done? First, all allowances should be funded at the full level of need irrespective of type of tenure. This would produce a level playing field for all tenants and remove the blackmail.

The Government is moving in this direction, but has not yet done it. It should do so, quickly.

Second, a massive investment building programme in social housing is now urgently needed. Instead of building 100-300 council housing units a year as we have been doing for nearly two decades, we should be aiming to build at least 100,000 a year.

Apart from meeting need, there is the further overriding reason for doing this that a massive building programme in housing and infrastructure is the best way of countering the recession and cutting medium-term the swollen budget deficit. Above all, the Government should recognise that council housing is not an embarrassing hangover which needs at all costs to be privatised, but rather an essential part of the nation’s housing which we should all be proud of and upgrade to the same level of excellence as we rightly expect in other public services like health and education.

Up to a quarter of the population may never have the security of income and employment to take on home ownership, but that does not mean that they cannot expect the same decent high-quality homes.

If the Government followed through these changes, which it is starting to do, and wrote off historic council housing debt and allowed councils to borrow on the open market, there would be no need for transferring Oldham’s Council housing stock to First Choice Homes as an independent self-standing housing association. But until that happens, which would be the best solution, we should be cautious.

Cautious

While understanding the pressures that are pushing this transfer, tenants who will soon be balloting on this question should be cautious.

A huge cash injection has been promised, but when all the political parties are now promising big cuts in public expenditure, will it materialise?

Will rents be kept down to an affordable level indefinitely into the future? Do housing associations offer as much accountability as elected councillors?

And given that housing associations are heavily dependent on the financial markets, can they offer as much security as public bodies?