Wednesday, 04 March 2015

Opposition parties fear Southwark homes sell off

Opposition parties in London’s largest stock-owning local authority have raised concerns about suggestions the council should sell off nearly half its homes.

An independent report commissioned by Southwark Council released on Tuesday said one of the ways for the council to improve the quality of its housing would be to reduce its stock from 39,000 to 20,000 homes over the next thirty years.

But the Southwark Green Party has called for the council to reject the idea of reducing its number of homes.

It pointed to a Freedom of Information Act request it got from the local authority in August, which showed the council sold 10 per cent of its stock through the right to buy in the past nine years.

The council had 46,055 homes on 1 April 2003 and sold 4,496 homes through the right to buy between 2003/04 and 2011/12.

Tom Chance, chair of Southwark Green Party, said: ‘Instead of demolishing 20,000 homes, the council needs to be making the case for building 20,000 more. This could clear the waiting lists and help people escape the overpriced and low quality private rented sector.

‘The council is in a very favourable position to borrow, compared to other councils, so it should use this to make Southwark a flag bearer for council housing, not a pallbearer at its funeral.’

The Southwark housing commission report, Investing in council housing: options for the future, suggests three options for the council: the reduction to 20,000 homes, a less severe reduction to 30,000 homes, or an investment programme to maintain existing stock and build 5,000 new homes.

It says the local authority’s existing stock is ‘of poor quality’ and ‘ageing fast’ and there are ‘no quick fixes’ to improving the homes. It warns ‘sustained levels of investment will be needed to bring and keep council housing up to acceptable standards’. 

The Liberal Democrats in Southwark suggested the report was ‘softening people up for a council home sell-off’. It questioned whether the £104,000 report was value for money.

Southwark Liberal Democrat spokesperson Tim McNally said: ‘Over £100,000 has been spent on this report, yet it doesn’t tell us a lot we don’t already know.

‘It looks like the main purpose of the report is softening people up for a council home sell-off. It suggests the amount of council housing in the borough could even halve.

‘Southwark Lib Dems continue to believe we should retain council homes across the borough and build more of them – particularly family sized properties.’

Leader of Southwark Council, Peter John, said: ‘The council is wholly committed to council housing provision. In line with this commitment, and demonstrating the importance we place on understanding the way forward, the council commissioned an independent report.’

Readers' comments (5)

  • Chris

    The loss of such housing in Southwark would have a severe and a positive effect on The City. Currently, those low-waged workers running essential services for City Workers can just about make ends meet commuting from Southwark, but forcing them into either Private or Shapfordable Rents will mean them having to exile themselves or give up their jobs. On the other hand, the converted former socially rented homes will no doubt be let at exclusive rents, enabling City Workers to shorten their commutes and live in a very popular central area too. What is needed is a political party that represents common people to take control from these most un-labour like creatures currently running the show.

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  • Lee Page

    Chris I think that's a bit of a simplistic response to the report as are the comments by both the Greens and Lib Dems. Given the the results of recent elections in Southwark it would be political suicide to suggest halving the current number of tenanted stock.

    What the report makes clear is that there are no easy financial solutions given the need to invest in the sub-standard stock currently in existence. What would make sense is for the council to make room of one the largest amounts of borrowing headroom in the country (£126m) to invest in both maintenance/refurbishment and new build. This could be made affordable by re-financing the current debt which has a consolidated interest rate of 6.8% due to the high interest rates in force when much of it was borrowed.

    Southwark is also enjoying a boom in commercial development in the north of the borough along the river with overspill from the City (e.g. the Shard) and is receiving very large commuted sums from developers. Used prudently (not always something politicans do well I know!) this could go a long way to financing the improvements needed to the current stock and developing new build. Selective demolition of the large system built estates, which very few love, and replacement with modern, albeit more densely populated social housing would be a vote winner and increase levels of social housing.

    My reading of the report is that how quickly one wants to see this happen, and should it be the council or RSLs who do it, will be one of the major factors in deciding which option to take.

    I just wish the respective parties would move away from ideological debates and actually work together to decide on a solution which is right for the residents of Southwark

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  • Lee Page

    Sorry, the other point I wanted to make is that it is refreshing that here is a high level document which recommends tenant management as one of the options to address the current poor management service being delivered for residents.

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  • Chris

    True Matt - but if the option of tenant management removes the supposed issue that is the driver for all this, the poor state of the housing stock that has suffered years of poor management and repair, then just how poor a state can it be in that a simple management change would put it all right.

    What would make viable sense would be for those communities wishing to convert to a cooperative form of housing management, or full tenant ownership and management, should be premitted to do so with a proportion of stock in good repair to assist with the funding of repairing that in poor repair. If this meant taking 50,000 homes from the Council and into tenant / coop management then all the better. What is not desirable is the hiving off of repairable homes to private landlords to meet the needs of the better off by displacing those who work for them.

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  • I think this is an important report and highlights the serious problems facing Southwark Council. It was good that the current council took the significant step to look long term, rather than just the next four years.

    However I do not think that Tenant Management is the solution to the problem. Tenant management Organisations take a long time to set up (5+ years), involve a great deal of investment of public money (circa 200K in direct costs for example) and have a very weak legal framework that is open to abuse.

    I would much prefer the Commission's "ambitious scenario" of retaining the existing homes, and refurbishing and rebuilding. Getting rid of homes in an area of severe housing need would simply exacerbate existing problems for people in need of homes; council housing is a very cost-effective solution for people on low incomes - and that cannot be said of the market or rising-to market-rents from private landlords and RSLs.

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