A year to remember

21^st Century Britain needs a third generation of council homes. The private housing market has failed to deliver and millions need a secure tenancy, low rents and a democratically accountable landlord that council housing offers.

Government is ideally placed to make this happen. Instead of unconditionally bailing out bankers and builders it can insist that they support a massive council house building programme in exchange for government help. And this time we need to learn the lessons of the 60s and 70s and not try to do the job on the cheap. We need first class council homes that are well built, well designed to the highest environmental standards with adequate transport and community infrastructure.

It’s only eight years since the publication of the Labour government’s first housing green paper when ministers and many housing pundits were confidently predicting the end of council housing. Determined opposition from council tenants, trade unions and many councillors and MPs not only means that this privatisation has stuck in the government’s throat more than any other but we have now got ministers talking up building new council homes.

But is this really the beginning of a new dawn? Certainly government acceptance that the Treasury can’t treat new council housing like a cash cow is significant. Logic dictates that they should immediately end the ‘robbery’ from tenants’ rents and capital receipts on existing council housing too.

The press statement announcing the consultation explains ’75 per cent of the capital receipt from any council home sold under the right to buy is currently pooled nationally to reflect the historic investment in council house building’. This justification just doesn’t hold up. The Joseph Rowntree Foundation reported back in 2005 that ‘receipts from right to buy sales of council housing that have yielded around £45 billion’ and the government has taken several billion pounds in receipts from stock transfer. 

It’s wrong that government has not reinvested this money back into council housing but even more outrageous that they are then taking more than £1 billion a year from tenants’ rents to support historic debt. A notional debt they could have paid off four times over.

It’s time for the blatant discrimination against council housing to stop. The statement acknowledges that ‘council house building is not currently supported by social housing grant or any other capital or revenue subsidy from government ‘. Home ownership receives massive public subsidies – the bank bailout is the greatest public subsidy ever. There’s been no policy to recover mortgage interest tax relief from home owners or social housing grant from housing association tenants. Penalising 2.5 million council tenants is neither morally or politically sustainable.

It’s time for ministers to withdraw gracefully, draw a line under this debt and agree that all tenants’ rents – including the £1.1 billion earmarked for debt support - can be spent on the management, maintenance, repair and improvement of our homes and estates.

With the private housing market in meltdown and general acceptance that the housing association business model is ‘broken’ we need a sustainable national council housing sector more than ever.

Council housing is an important national public service. The common interest between council tenants across the UK has been a key factor in enabling us to oppose privatisation, see off attacks on our tenancies and campaign against the ‘robbery’.

Defend Council Housing and others are arguing that rents and receipts should be ring fenced within a national housing revenue account to fully fund allowances to local authorities at ‘level of need’.

This maintains the common interest and unity that a national HRA provides, avoids councils and council tenants taking on financial risks caused by fluctuations in interest rates and inflation, provides all authorities with the level of resources they need (the main concern of tenants) and leaves decisions about how to spend these resources with elected councillors and tenants locally.

The government’s ongoing review of council housing finance gives the opportunity to provide a lasting settlement that guarantees the future for council housing. It is essential that it comes up with the right recommendations – and that government agrees to implement them straight away. In the meantime there should be a moratorium on any further expensive stock options appraisals and ballots for stock transfer.

The House of Commons Council Housing Group is also conducting an investigation. Already a number of major authorities have indicated that they will be submitting written evidence and organising a broad based delegation of tenants, elected members, officers and others to come to Parliament to support the inquiry on 25 February.

Hopefully tenant participation officers and elected councillors in other authorities will be discussing how they can contribute and empower tenants to come down too. Together we can make 2009 a year to remember for council housing.

Alan Walter is chair of Defend Council Housing

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