30TH JANUARY 2018 could prove to be a significant date for the future of UK housing - and the Labour Party. The political demise of Claire Kober in Haringey was a major setback for Labour’s right wing and their unholy alliances with the private sector. But the danger of pro-market housing policies hasn’t gone away. It’s estimated about half of English local councils have established Special Purpose Vehicles (SPVs).
These may not be as nakedly commercial as the Haringey Delivery Vehicle (HDV), but they flow from the same legal and ideological font.
I recently debated these issues with councillor Matthew Bennett from Lambeth, one of the places that are going down the SPV route. It was noticeable that Matthew was distancing Homes for Lambeth, the private company the council has set up to build new homes, from the HDV. It was also interesting to hear him refer to estate regeneration as “a dirty word”. Lambeth is perhaps the place where most damage has been done to the reputation of the Labour Party by ill-conceived redevelopment projects. But SPVs run the real risk of repeating the mistakes of the past.
One thing should be made absolutely clear about SPVs. They are not council housing (perhaps that’s the real reason some politicians want them). The homes they build will not be publicly owned and tenants won’t have the same secure tenancies or rents as council tenants.
There will be considerable flexibility for SPVs to engage in what Homes for Lambeth refers to as “commercial development for the benefit of local people”. This could include setting up subsidiaries and forming joint ventures with private developers. Ultimately, as councillor Bennett acknowledged, Lambeth council could sell all or part of the SPV and its assets.
There’s a real déjà vu quality to all this. Precisely the same arguments and reassurances were made under New Labour’s stock transfer programme, which saw 1.8 million council homes change hands to private housing associations (HAs) between 1998 and 2008. Tenants were told they’d barely notice the difference by having a HA landlord and that this was the only way to find the money to invest in their homes and build more for those in housing need.
Those claims were false at the time and have become part of the policy failure that’s led to today’s housing crisis. There have been multiple examples of HAs breaking promises to transferred tenants, who then found it very difficult to take action against a private landlord where decisions were taken behind closed doors with little, if any, democratic accountability.
More generally, HAs have singularly failed to deliver the homes we need. Opposite the council estate where I work in Islington, one HA, Southern Housing Group (SHG), is currently marketing a development of 65 new homes, built on formerly public land, where 16 apartments are advertised for sale at over £1 million. By comparison, only 19 are for dubiously defined “social rent”.
This is the pattern of HAs undertaking “commercial development for the benefit of local people”. Overall, HAs are now more involved in market-related activities than fulfilling their social purpose, something that’s becoming easier for them with the relaxation of government regulation. What is to stop the same happening with Homes for Lambeth and the other SPVs?
The retort of Kober and co is “what’s the alternative?” But the truth is, they haven’t really looked for one. Even with the severe government spending restrictions, local councils could and should be challenging the kind of thing SHG and other private developers are getting away with in Islington. They could also be doing far more to join with other councils and local communities to campaign against government policy.
The real message of SPVs is “if you can’t beat ’em, join ’em!” There are plenty of local politicians and housing managers who fancy themselves as property developers. As with other forms of privatisation, SPVs will give lots of lucrative work to consultants and lawyers and fat salaries to bosses.
But the tide may be turning. Events in Haringey - and other areas too - are the result of people seeing through the phoney claims of those who say the market can be tamed in the interests of working class people. That’s why Jeremy Corbyn’s description of estate regeneration projects like those in Lambeth as “social cleansing” struck such a chord.
SPVs are a continuation of the failed and discredited PFI and public-private partnership approach that the new Labour leadership has rightly rejected. The overwhelming evidence is that direct investment by public authorities is the best way to build the homes and infrastructure we need. Beware of imitations!
Unite Housing Workers branch and Defend Council Housing (personal capacity)