Unlocking the door

Posted by: Jules Birch

21/01/2009

Bit by bit, regulation by regulation, council housing is being freed from the shackles that have dragged it down over the last 30 years.

The latest change proposed by Communities and Local Government is to allow local authorities to ‘keep all the rental income from any homes they build, as well as keep the receipts from any of those homes which are later sold through right to buy’. 

It’s not exactly the rebirth of council housing that seemed to be on offer from John Prescott when Labour first took power in 1997 but it’s a start. Especially when combined with other changes like prudential borrowing, allowing local authorities to bid for social housing grant and a new funding body that does not also exist to regulate housing associations.

After a long struggle for the fourth option, the tide seems to have turned in favour of supporters of council housing - as Alan Walter of Defend Council Housing argues today.

It’s not just that they’ve won the argument within the Labour party, embarrassed the leadership into abandoning its attempts to block change and broadened their support within housing and local government. It’s also that the lending crisis means the private sector and housing association alternatives no longer seem so obvious. 

In an environment like that, perhaps the time has come to think even more radically about the local authority role in housing - it should not just be about defending the council housing that’s left but using all the resources and borrowing freedoms they can to improve housing for their communities. 

Many fundamental decisions - such as stopping the ‘daylight robbery’ of tenants’ rents and what to do about historic debt - are still to be made by the CLG/Treasury review of council housing finance. Is it too much to hope that in an era when banks can be nationalised and the national debt soar by billions without anyone thinking it unusual, the government might at free council housing borrowing from public debt restrictions? 

In the meantime, the economic crisis is getting worse, house building is slumping and unrest is growing over the 6 per cent increase in rents faced by council tenants from April (based on 5 per cent inflation in September that fell to less than 1 per cent in December). More questions were asked on that in Parliament yesterday. 

But in the meantime the clock is ticking. Time is running out before the next election. A new government may need convincing all over again. And whoever wins will put the squeeze on public spending.