Why Labour should commit to £10 billion a year for council housing

This article was published by Inside Housing . For those without access to IH you can read on below.

Pete Apps says “Labour should keep it simple on housing”. I agree. The idea of Right to Buy in the private sector undermines the rationale for dispensing with RTB for council homes. Thankfully the idea was not proposed at the conference.

In relation to the balance between council and housing association building, Pete says

“But the party should also move away from its internal battle over whether councils or housing associations should be building them…While party members care deeply about distinctions like these, homeless families are less likely to. If Labour wants housing associations to build more for social rent, its task is to change the political climate to make this possible, not to dismiss a valuable partner as punishment for following the direction set by the previous government.”

In fact the model resolution of the Labour Campaign for Council Housing, which was incorporated into the composite resolution passed, called for 155,000 ‘social rent’ homes. Our resolution did say that ‘at least 100,000’ should be council homes. Logically this could mean funding up to 55,000 housing association homes though the funding would be separate from the £10 billion ring-fenced for council housing. Presuming the same level of grant as proposed for council housing, this could mean up to £5.5 billion a year to fund housing association homes but only in the form of ‘social rent’. So the “punishment” consists of refusing to fund commercial activities and only funding the building of homes linked to their ‘social purpose’.

Even if you think that Labour’s message should be focused on building more ‘social rent’ homes, that does not resolve the question of how much grant would go to councils and how much to housing associations. Putting together a practical programme requires answering that question unless you propose a free for all.

There has been a polarisation in the housing association sector between those which want to hang onto their ‘social purpose’ and those that are acting more and more like commercial businesses. The NHF’s capitulation to the government over the extension of RTB accelerated the process of commercialisation. The NHF readily agreed to council Housing Revenue Accounts being looted to fund them. The receipts from the proposed sale of ‘higher value’ council homes would have been stolen and used to compensate housing associations for the difference between the RTB sale price and the market value. Only a small number of HAs opposed their capitulation.

There is certainly a discussion to be had about reform of housing associations and stopping the process of commercialisation. Can we not agree that whatever government grant goes to housing associations surely it should only support ‘social rent’ homes?

In real life, of course, not all council housing departments are good and not all housing associations are are bad. Council landlords can be high-handed and bureaucratic as well as housing associations. However, as council tenants, at least we have the possibility of voting our (political) landlord out of office if we are unhappy with them. You cannot do that with a business, even one with a charity label. Tenant reps on HA boards are not accountable to tenants. They have a legal duty to “represent the interests of the business”.

The importance of the resolution passed at Labour conference is that it recognises that there can be no solution to the housing crisis without a return to large scale building of municipal housing. We haven’t won the battle for this commitment as yet, though we will be demanding that Shadow Chancellor John McDonnell makes an unequivocal commitment on the £10 billion. That would resolve the issue and overcome any resistance.

We are well aware that councils cannot currently build on such a scale from scratch. They do not have the resources and the personnel to do so. Only a guarantee of grant dedicated to building new council housing on an annual basis will enable them to put together teams to plan and implement the work on an ongoing basis, as they used to.

Pete is certainly right that targets are rarely if ever met. However, if we are to begin to resolve the housing crisis then we have to stop the fall in council housing stock numbers and reverse it. That’s why grant dedicated to council house building needs to go hand in hand with outlawing the sale of council homes, by ending Right to Buy as the Labour conference has demanded last year and this.

Pete says that the simple message that should be promoted is that “it is time for public investment in many more social rented homes”.We certainly need to restrict grant to ‘social rent’ and abandon “affordable rent” etc. If the main emphasis of the resolution was on council housing that is, in large part, because there has been resistance to returning to a large scale council building programme. New Labour channelled all grant to housing associations, barred councils from applying for ‘social housing grant’ until the crash, and blackmailed council tenants into transferring to housing associations. Labour’s current policy has no commitment to any specific number of council homes, nor dedicated grant. That’s why the 100,000 and the £10 billion were in the resolution.

Whatever arguments might be had in relation to the balance of funding between councils and housing associations, surely a return to large scale council building is an indispensable part of resolving the protracted housing crisis.