Labour's Housing Green Paper 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, Labour's Shadow Housing Minister proposes to redefine it. The document proposes “a new affordability standard with three elements”. These are:
Social rented homes. It say that “Homes for social rent will form the core of Labour's affordable housing programme” but with no numbers.
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. Shared ownership and rent to buy will be other low cost options included in this category.
Asked in a recent meeting how the £4 billion annual grant which is said to be available will be divided up between these “three elements”, 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. It could bid for grant for low cost home ownership properties alone. What will Tory councils do given this freedom from having to build council homes? How can John Healey talk of “the largest council house building programme for 30 years” when it is left to the discretion of local authorities as to whether they bid for grant to build any and there is no commitment from Labour to build a specific number?
Even those councils which want to build them will have to compete with housing associations, bidding for grant from Homes England. Housing associations are in a much stronger position because of the higher rents and building programmes that they have been carrying out. Under this system which was applied by New Labour for their National Affordable Homes Programme, the most council homes that were built in any one year was 3,080.
The £4 billion a year, if devoted to council housing could help to pay for 50,000 homes a year with grant at £80,000 per property. But the Green Paper says that this money will be available for home ownership as well. £4 billion is the amount which was available 10 years ago. It is completely inadequate.
So far as 'living rent' is concerned it's not clear whether this would be in the framework of housing revenue accounts or outside them. If in the HRA this would 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 £107 a week. Why is it proposed to waste grant on 'living rent' which could be spent on 'social rent'?
The Green Paper also supports Local Housing Companies which councils have set up, some to substitute for central government grant for building council homes, others to raise money for council General Funds. Even Labour councils are using these vehicles to build homes for the private rental market rather than council housing. The Haringey Development Vehicle was one such company.
This poses the question, if grant will be available for building council housing with 'social rent', then why would Labour councils want to maintain or set up private companies to compete with other developers and builders in the housing market? Labour should abandon support for LHCs and make it a requirement for councils to build council homes in the framework of the HRA.
The document is silent on the funding crisis of local Housing Revenue Accounts which are losing hundreds of millions of pounds as a result of government policies since the 'debt settlement' of 2012, when 136 councils had more than £13 billion of 'debt' imposed on them. As a result of Tory policies such as the 4 year rent cut and increased discount for RTB 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 this reticence to challenge the Tories under-funding of council HRAs? Labour could hardly demand the Tories cut the bogus 'debt' without making a similar commitment if elected to government. The Shadow Housing Minister has fought shy of this ever since we raised it with him in late 2016. Silence on this issue appears rooted in a refusal to commit to cutting the fictitious debt through which tenants are being fleeced.
The document spends much time lauding housing associations. It fails to take account of the process of commercialisation of the sector. At a meeting I recently attended with the Housing Minister Dominic Raab, three groups of housing association tenants told him that their landlords had abandoned their 'social purpose'. They had all faced huge rent increases, and/or, their homes being sold off without being consulted. The National Housing Federation, their industry body, capitulated to the Tories in making the 'voluntary' agreement on extension of RTB. They happily agreed to the robbery of council RTB receipts on 'higher value' homes, to compensate them (HAs) for the difference between the RTB discount price and the market value. They are private business 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 Green Paper is a consultation document, so there is scope for further movement. Currently, the document is completely insufficient for resolving the housing crisis. What is required from Labour is a programme of 100,000 council homes a year. This would require £8 billion a year to help fund them. We know that councils are not currently in a position to build on that scale. The key is providing them grant on an annual basis so they can develop the teams to organise the work.
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 to councils to begin again a large scale council building programme. There is a gulf between the Green Paper the 100,000 council homes a year which Jeremy Corbyn spoke of. Pressure needs to be brought to bear to demand that this is Labour's “first housing priority”.
Secretary, Swindon Tenants Campaign Group
For a more detailed analysis see http://martinwicks.files.wordpress.com//2018/04/greenpapercomment.pdf