Thursday, 24 May 2012

Council Housing is not subsidised

Posted in: Discussion | On the ground

11/06/2011 12:16 pm

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Rick Campbell

Rick Campbell

Location: Macclesfield CHESHIRE
Posts: 416

11/06/2011 5:00 pm

Prior to transfer nigh on 5 years ago, the government was whipping away about one-third (approximately £5,000,000) of our rent money.

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Melvin Bone

Melvin Bone

Posts: 190

13/06/2011 8:53 am

So the rent on a Council property in central London is not indirectly subsidised in any form at all?

I think you require a reality check!

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Paine

Paine

Location: Outside Housing
Posts: 19

13/06/2011 9:33 am

Melvin, don't be coy.  Do tell.

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Chris

Chris

Location: All over the place
Posts: 283

13/06/2011 9:51 am

Do produce the figures Melvin - then look into Hansard and see the London MPs representing their constituents by asking for reform so that they do not have to pay the treasury so much each year as the 'negative subsidy' is a removable burden.

That said - I would welcome the return of housing subsidies, especially if that meant properties in our commercial powerhouses were made more affordable to the workers in those businesses. But of course, the demoniser apologists will flock to explain why this goes against individualism and the market, and we all know just how successful that philosophy has proven.

Who needs a reality check?

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Melvin Bone

Melvin Bone

Posts: 190

13/06/2011 10:33 am

One stat then. Decent homes. This was introduced in 2000 and was even then estimated to cost £19 Billion in 1997*.Was this also available to the private sector? No.Therefore is it a 'subsidy'? Yes. (IMHO).

*http://www.nao.org.uk/publications/0910/the_decent_homes_programme.aspx

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Melvin Bone

Melvin Bone

Posts: 190

13/06/2011 10:54 am

What the hell...2nd stat. The maximum rate of LHA even at the reduced rate since April always covers 100% of social housing rent and is always able to be paid to the landlord direct not an option available to the private landlord...in effect another 'subsidy'.

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Anonymous

Anonymous

13/06/2011 11:08 am

I've no real view on this debate having not researched anything about it....BUT- a question: If council housing is not subsidised, why is it not? It is, after all, a national resource, administered by the public sector and recieving at least part of it's income via HB which is public money.

I've never worked for a council or lived in a council property...but I really don't understand the passion often created by the suggestion that council housing is subsidised. The railway is subsidised but I don't hear train users getting all worked up about that! OMG....the state is paying for part of the cost of me getting to work ****shock**** 

If council housing is subsidised (in my view) so what? It is in theory at least available to anyone that needs it at lower rents than the private sector and thus is a response to a social need....so if it's not subsidised...then maybe it should be!

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Chris

Chris

Location: All over the place
Posts: 283

13/06/2011 11:18 am

I bet you are glad straws float Melvin.

Nony has a better grasp, and the railway comparison is interesting. Councils do not make profits, but the many tiers of private rail companies, sub contractors, and ex-Tory Ministers do make huge profits out of their operations, all of which are subsidised many £bns by the tax payer at the same time as passengers paying the highest fares in the world. As models go, this is the one the Tories wish for every service: max-tax + max-charge - min-value = max-profit for them.

For some reason voters want to pay more tax, more at the point of use, and see their 'betters' invest the profits on off-shore accounts. Perhaps they like hairshirts too - how about it Melvin?

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Melvin Bone

Melvin Bone

Posts: 190

13/06/2011 11:26 am

I love a hairshirt me. Oh BTW I'm waving not drowning.

I'm not against social housing being 'subsidised'. I'm against people stating it is not 'subsidised' when I think it is. It then seems to turn into a 'discussion' of semantics.

Seconds out...

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Chris

Chris

Location: All over the place
Posts: 283

13/06/2011 11:58 am

I want the shirt back from Thursday remember - you only have it for half the week, and it's my turn to have the whole weekend this week!

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Sancho

Sancho

Posts: 199

13/06/2011 12:39 pm

I'll try to avoid getting too embroiled here so will ask one question:

If Council/Social Housing is not subsidised and 'profit' is being made and returned to the treasury, why doesn't the private sector provide it?

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Chris

Chris

Location: All over the place
Posts: 283

13/06/2011 1:14 pm

The answer is simple Sancho - the private sector is more interested in a fast buck than sustainable income.

On the continent, where the private sector does provide considerable proportions of affordable housing, the private businesses there recognise the strength of long term relaible returns on investment, even where these may be at a low level. That is why the government is now whoring the sector abroad in the hope of attracting such businesses to invest in the UK. This may work if ever the government grow the balls to reshape the economy back into a manufacturing base as well as service base, and go back to a sustainable lower return longer term investor market. And that's as likely as a Tory nationalisation of the banks.

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Rick Campbell

Rick Campbell

Location: Macclesfield CHESHIRE
Posts: 416

13/06/2011 1:17 pm

My housing assopciation carried out improvements and decent home work over the past 5 years -- the dosh to pay for these came from the bank loan at transfer -- we, the tenants pay for the bank loan -- so. therefore, we paid for the decent homes standard and the improvements.

Also, leaseholders had their contributions to improvement works capped at £5g and some of the work was around £30k (plus VAT) -- we, the tenants, subsidise the leaseholders .. many of whom see us as scum.

Could someone, Melvin preferably, how decent homes work was subsidised BECAUSE it wasn't for us -- or perhaps the loft insulation was in the form of government (or other) grants?

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Peter Wicks

Peter Wicks

Posts: 29

13/06/2011 2:01 pm

Greed rules...

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Chris

Chris

Location: All over the place
Posts: 283

13/06/2011 2:11 pm

Sssh Rick, don't let Melvin know that the Government gave homeowners and private landlords taxpayer money to fund upgrading their homes - it will shatter his delussions.

But to shatter them some more, Private Landlords have had access to grants to increase the thermal efficiency of homes, the age of their amenity, and in certain cases the safety of their structure. Owners have had access to funds for increased thermal efficiency, including the replacement of boilers and windows. The cost to the taxpayer for these will not be recovered. The cost of the reciprocal items installed in tenant's homes will be recovered through the rents, and total rents will still exceed total cost. On that basis the currently subsidised sector is the privately owned sector.

Going back to before the installation of the great Thatcher god, the highest levels of subsidy were paid to owners with a mortgage.

So Melvin - you are not only wrong now, but where wrong before, and indeed appear to have been very wrong for a very long time. I think you should keep the shirt. I'll just roll around in my state funded loft insulation instead.

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Melvin Bone

Melvin Bone

Posts: 190

13/06/2011 2:16 pm

Sorry Rick. In this case I was specifically referring to 'Council Housing' as that is what the original question referred to.

;)

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Rick Campbell

Rick Campbell

Location: Macclesfield CHESHIRE
Posts: 416

13/06/2011 2:31 pm

Melvin. I''m not having a go at you but can you please explain how council housing was subsidised in relation to decent homes standard work -- would it be somewhere on the lines of ALMO.

I used to be au fait with council housing finance but am perhaps sorry to say that my interest in it wained when we transferred.

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Sancho

Sancho

Posts: 199

13/06/2011 2:32 pm

Ok Chris, let me put it another way, given that there are large private sector landlords (eg Grainger) investing long-term in residential property throughout the UK, charging higher rents and making more profit, how can Council/Social housing not be subsidised, if only in terms of opportunity cost?

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Chris

Chris

Location: All over the place
Posts: 283

13/06/2011 3:01 pm

Hi Sancho - I think you answered your own question.

Council Rent + no subsidy = Private Rent - profits

Seems simple enough even a Tory Chancellor should get their head around it.

Simplistic in that the management costs of the private units are likely to be higher, either because of cost floor difference and/or unit scaling of cost, plus ongoing agency and other management middlemen costs (never forget the Southern model of ideal). The surplus rent from the council stock is a direct income to the treasury. The tax offsets for income and trading to the private sector are a direct loss to the treasury.

As I said before, I wish that the Council stock was subsidised and so rents were even lower, or at very least much more stock was being built because of direct grant funding for low cost social rented homes. The demonisers who queue up to knock tenants over subsidy either are ignorant of reality, or trying to hide the absence of available affordable rented housing for the majority of our working population.

If only such money was spent on social housing, every one would gain.

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Melvin Bone

Melvin Bone

Posts: 190

13/06/2011 4:24 pm

Chris am I wrong in that Council Housing has never received any government funding from any source ever that could be considered to be a subsidy?

PS: I had all the various wings of my house and the gatekeepers cottage insulated with a generous government grant. Thanks!

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