MPs back calls to scrap housing debt
MPs and council housing activists came together yesterday to call for a massive build programme, and the scrapping of £18 billion of housing debt.
Members of the House of Commons Council Housing Group and pressure group Defend Council Housing launched a report, Council Housing: Time to Invest, at an event in Portcullis House, Westminster.
Their demands include increased funding for repairs and maintenance of existing council housing, money for a ‘mass programme of first class council housing building’, and the scrapping of £18 billion of housing debt.
The report is a response to the government’s review of council housing finance, which closes for consultation on 27 October. This proposes a system where councils would get greater freedom over housing finance, but in return they would each have to take on a portion of the debt.
Under the current housing revenue account subsidy system, councils pay income from housing to the Treasury, which then services the debt and reallocates the funding.
DCH argues that the difference between the amount paid to the Treasury and the amount reallocated means the debt has already been repaid several times over. But housing minister John Healey has said writing off the debt is not an option.
Austin Mitchell, the chair of the council housing group, said: ‘The government wants to put [housing finance] on a more sustainable basis. And that is our aim too. We want it on a more generous sustainable basis than the government does, but we want it on a sustainable basis.’
He also argued that the government should bring forward proposals in the Queen’s Speech, which outlines the legislative programme for the current session of Parliament. ‘We want the proposals in the Queen’s Speech so we can get a framework before the election, win or lose,’ he said.
The government has said that self financing could be put in place next year if all stock-owning councils agree to take on debt voluntarily, but that if legislation is needed reform may take until 2012/13.
Michael Meacher, MP for Oldham West and Royton, and a member of the council housing group, said the amount spent on council housing has fallen from about 4.5 per cent of gross domestic product in the 1970s to around 1. 5 per cent today.
He said: ‘Today, if we put the same proportion as we put in during the 1970s it would be about £65 to £70 billion, whereas we are actually spending between £20 and £25 billion.’
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Readers' comments (6)
Michael Read | 21/10/2009 10:08 am
As the election looms ever closer, up pop this band of fantasists with another gasp of nonsense.
For Labour politicians - it ain't going to save you
For Defend Council Housing - the provisional wing of housing unions - it ain't going to save you
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Mark | 21/10/2009 10:24 am
It is utterly disgraceful that the Government refuses to write off £18bn debt if the Councils retain stock, but will write off if they stock transfer. It is even more disgraceful in the context of £180bn quantitative easing for the banks - ten times the value of the requested debt write off. And the greedy "bankers" (ahem) want to pay themselves £6bn of OUR money to feather THEIR nests when it is THEM that got us into this £180bn hole in the first place.
Not only is it the case that the debt has been paid back several times over anyway as per the article. The government fails to consider the value to the economy and jobs of debt write off that would enable a substantial new build programme alone that would be worth billions to the economy. That should be factored against the £18bn debt (but won't be).
Anyone who thought voting Labour was a socialist thing to do or just indicating they don't agree with privatising assets - more fool you. At least in Scotland we have the SNP which is actually investing in housing here, despite the debt issue.
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kass | 21/10/2009 1:59 pm
"Mark | Wed, 21 Oct 2009 10:24 GMT
Anyone who thought voting Labour was a socialist thing to do or just indicating they don't agree with privatising assets - more fool you. At least in Scotland we have the SNP which is actually investing in housing here, despite the debt issue.... "
Scotland is doing 'greet' in social housing. Keep on the good fight in shaming Westminster.
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Len White | 22/10/2009 3:07 pm
Comparing council housing with the bank bail outs is silly really. There was a severe risk last year that I would have gone to the RBS ATM and there would have been no money - for me or for tens of millions of others. Gordon Brown was the key figure in saving the world banking system - that's why he won global statesman of the year - and we should all be grateful for his extraordinarily brave actions.
John Healey's council housing deal is basically fair. There is an argument that debt should be writtten off because of previous capital receipts, but there is also an argument that the government should get a share of future surpluses because it has financed the creation of the assets over many years. There is also a big capital programme to do catch-up major repairs which has to be funded. There is a chance now to get reform of the system - and if the chance is missed then council housing will not be sustainable - the Tories might want that but DCH shouldn't help bring it about. We should be doing all we can to grab the opportunity while it exists.
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Melvin Bone | 22/10/2009 4:18 pm
Labour seems to be procrastinating over every possible decision as the general election looms.
I'm no fan of all their plans but I wish they would show some backbone and be decisive.
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john citizen | 25/10/2009 6:34 pm
how about a better idea, lets stop all spending on social housing. The £20/25 billion could be returned to the tax payers.
Councils and central government should leave it to the private sector to provide housing. it should be up to private individuals to sort out their own housing.
this works in most other countries in the world, and as a result the housing is much better cared for and available.
companies and individuals should not have debt written off.
Lets roll back nanny state and reduce taxes dramatically, let people decide what to do with THEIR money, rather than all these money wasting schemes
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