5 November 2007 18:50
BACK IN the 1990s 'local housing companies' were a way of sugar-coating the idea of stock transfer for reluctant local authorities. The same name is now being used to describe the new special purpose vehicles that will masterplan housing development on council-owned land in 14 areas - but for critics the coating looks just as sweet.
Local housing companies noughties-style were first proposed in the housing green paper in July and the idea is set out in more detail in an announcement today by housing minister Yvette Cooper. More detailed guidance was also due to be published on the CLG website - look out for it here.
Cooper presented the idea both as a boost for home ownership - 'councils could offer thousands of affordable housing deals to help key workers and first time buyers onto the property ladder' - and for councils' role in housing - 'this marks a return of the local authority to the centre stage in providing homes for communities but in a new way'.
She said the incentive for local authorities was that they would be able to retain more influence over how the land is developed, including the type and quality of housing provided. They would be able to 'double affordable housing levels to at least 50% on sites, and directly offer key workers and first-time buyers shared equity deals'.
Under the proposals to be piloted, councils would provide their
surplus public sector land to the local housing company. The local
authority would play a full part in agreeing the development plan,
including being able to directly offer low cost housing deals to meet
local needs.
In return for free land, housebuilders and housing assocaitions would provide
equivalent investment and the construction expertise needed to build
the homes. Local authorities could also benefit from the
increasing value of land on the site that could be ploughed back into
providing more affordable homes.
The idea sounds like a win-win and was welcomed by organisations including the Chartered Institute of Housing, which invented local housing companies mark one, in their response to the green paper.
Companies will be piloted in 14 local authorities and the government says each has the potential to deliver 1,000 homes. Plans are furthest advanced in Barking and Dagenham, which has already announced the creation of a local housing trust with Southern Housing Group to own all the new social housing on the Barking Riverside development and says it eventually wants to set up a local housing company for the whole borough.
However, Defend Council Housing is so suspicious that two weeks ago it issued a supplementary response to the green paper [download word doc here]. It argues that:
* There has been no public debate. It submitted freedom of information requests to the 14 pilot authorities but found that the only ones that could give any detail were those which already had advanced plans for land sales. None had carried out any public consultation or endorsed the idea at committee meetings. One even thought thta it would have to scrap its existing plans for rented homes through housing associations in favour of shared ownership.
* ownership of the land will have to be transferred to the special purpose vehicle to ensure that local housing companies do not lead to an increase in public expenditure.
Based on English Partnerships guidance, Defend Council Housing argues that 'it now seems apparent that "local housing company" means that at least half of the public land is lost through private sale; and the other half is lost through transfer to a private sector company which will not be accountable through the local electoral process. If this is indeed the case then LHCs are a clever ruse devised to sound as though councils are once again being placed centre stage of delivering housing – but actually ensuring that land on which democratically accountable council housing could have been built is forever lost to the public. In this form LHCs should be opposed.'
The idea may still prove attractive to local authorities keen to get at least some benefit from developing their land. However, many will find the argument that it will enable them to 'return to centre stage' too much to swallow - no matter how sweet the coating.
Posted by Jules Birch, Nov 5
Posted in Social housing, Local housing companies