SWINDON TENANTS CAMPAIGN GROUP (STCG) is publishing a pamphlet, The Case For Cancelling Council Housing Debt. It explains the serious funding crisis which council housing is facing as a result of coalition and Tory government policies. When a new council housing finance system was introduced in 2012 the government redistributed to stock-owning local authorities what it said was the national housing debt. 136 councils were given over £13 billion extra debt. The debt was largely fictitious, the product of creative accounting by the Treasury rather than the result of actual borrowing.
STCG is calling on Labour to do two things to address this funding crisis. Firstly, to demand that the ‘debt settlement’ of 2012 be reopened by the government, which has the power to reduce debt if the value of stock changes. The 1% a year rent cut alone is estimated to produce a loss of 12% of expected income over four years.The debt each council was given was based on estimated rent income over 30 years. At the very least the debt should be readjusted to take account of the difference between the 2012 estimates and the actual, much lower income that councils are collecting.
Secondly we are calling on Labour to make a commitment that if elected it will cancel the council housing debt. The so-called debt has been an elastic figure which has been manipulated by governments to increase the take of the Treasury.
Tenants have paid more in rent than the historic cost of building their homes. Cancelling the debt is an essential first step towards providing councils with the finances to maintain their homes, renew key components on a timely basis, and to begin building more council housing. Without debt cancellation councils will have a declining income which will inevitably lead to a deterioration in the condition of their housing and hence the living conditions of tenants.
STCG is asking tenants organisations, trade unions and CLPs to call on Labour to make these commitments. When we previously wrote to Shadow Housing Minister John Healey, he said our idea of debt cancellation was “an interesting idea”. Events in the Labour Party prevented any further discussion. With Jeremy Corbyn’s re-election it’s time to press the issue again.
» The 20 page pamphlet will be available in November (£1 plus postage). It includes a model resolution. To order copies or for more information email email@example.com or ring 07786 394593.