COUNCIL HOUSE PROVISION - A POINT OF VIEW

by Roger Hayman

 
 

Introduction

 
 

One morning in late August 2006 I decided that on return from a holiday in Menorca I would hand in my notice and quit housing. That I did, the very first day back in the office. I had no job to go to but thought I would rely on the bit of money I had saved to tide me over untill I got a job and carry on doing this for the next 4 and a half years untill getting my local authority pension. In that time I did a number of jobs including invigilating, canvassing for voter registration and field work for a map company.
     Before getting out of touch I wrote down my thoughts just about a year later. Since then I have given further notes in 2010 and 2020. Times have changed since the ALMO days when it was thought (wrongly) that it would change council housing provision into something like an independent company and governed by a board.
     Some good came out of it in terms on increasing standards (at least for a while) but it seems now to be a concept of its time and I would guess that the structure is in effect still along the bureaucratic and politcal lines of the local authority as before. There is no reason to assume different as Councils are expert at providing low cost housing for those lucky enough to get one and for those in need and they manage it well. Why change it? Having worked in both the public and private sector managing council housing requires a much wider range of skills than doing it on an investment or commercial basis in the private sector. This expertise should be used to provide more houses and bring about a solution to homelessness and lack of affordable dwellings either to rent or to buy.
    You will see that I have suggested reasons why there has been reluctance by successive Governments over the last 40 years to use council housing as a resource to solve the problems.
I hope this will change.


November 2007

     After a career in property investment in the City from 1970 and general practice surveying at Thames Water from 1978 I started a new job in council housing in 1981 collecting rents over a counter and worked my way up over 25 years to managing the estate services and staffing for 3000 units in Upper Holloway. Eventually I called it a day in October 2006, feeling that what is commonly called "social housing", but is essentially simply council housing, had lost it's way, as successive governments wanted control, rather than leaving this important provision in the hands of local authorities. This is my brief analysis as to what went wrong and how there is still time to change it.
     The Government has just realised that restricting the housing supply by not building local authority dwellings is inflationary and accordingly contributed to property price rises. It has taken 28 years to realise that selling off Council homes and not building more is not a good idea. It is one of the biggest privatisations.
     In the 70's there was a fantastic legacy of council housing as a result of pre and post war building. Had this been maintained and council ownership expanded, what an amazing help it would have been to social services. By providing the basic need of secure housing it would have taken pressure off other services leading to greater well being and generally overall more wealth as persons would have more money to spend, rather than on high rents and mortgages. From 1980 council tenants had a right to buy their home, but councils were prohibited from using this money to build new homes.
     As it is, apart from those who are fortunate enough to have a council tenancy (by whatever route - homeless, waiting list, vulnerable or succession) or other affordable tenancies or homes, housing goes to those who have the most money either to rent or to buy. Consequently the “have's”, have more and the “have not'”, are stuck thinking how they can either get on the property ladder or find some affordable way of leaving home and starting on their own. However those wealthy enough or are already with an affordable property are ok.
     Had social housing been sustained and developed, access to housing would have been available to more on lower incomes, effectively reducing the income divide by allowing more money to be spent on other things. Under the council housing allocation system all council housing eventually returns to the council as persons die and/or succession runs out ensuring the pot of available council properties remains at least constant. Had council building continued, this country would have continued to provide a good supply of affordable housing like no other with people happier, wealthier and more contented.
     Instead we have stagnation whereby it is hard to find an affordable dwelling. This leads to all sorts of ingenious schemes and incentives. For example; so that persons can qualify for a mortgage based on income, they can part own and part rent a dwelling but still large amounts of income goes on their housing and they can own as little as 10 per cent. The rental market has alarmingly high rents due to shortage of supply as affordable housing declines in proportion to need.
     After two decades of incentives of trying to lure council tenants away from council ownership the government played a powerful card; on condition management boards are set up to run local authority housing grants will be available for new kitchens and bathrooms. Councils, seeing no other way of securing funds (or not wishing to be in bad light) set up the ALMO's (Arms Length Management Organisations) and quickly found themselves under scrutiny where the Government could interfere further with the running of the housing organisation. The Government via the Audit Commission and a body of inspectors rate the ALMO's on their performance. So they still might not get the money if they do not do as the government wish.
     To tighten the noose the government brought in the decent homes standard putting more pressure on local authorities but not giving access to funds, unless they became an ALMO!
     All this was put forward on one premise and that is the success of social housing was an embarrassment to the Government. There are two reasons for this:-
     Firstly they believed that the private market would provide. But how could it? Housing Associations are one way, but self controlled they have their own rules and regulations and can only be regulated by grants and favourable loans. Local authority tenants prefer their council and view Housing Associations as a lesser secure option. Housing Associations generally provide housing for specialist areas of need and do a good job but could not be part of a nationwide plan as the government may have hoped.
     Secondly the government is worried by subsidised rents preferring to issue benefit by housing and council tax benefit for which they give local authorities a subsidy provided of course they do everything correctly! The complete dismantling of local authority housing would have given them the control they wanted but this has not happened.
     Is it to late to save council housing? I think not if we get back to basics and put the provision of affordable housing in the hands of local authorities who are experts in this, whether or not the government find it embarrassing.
The debate on globle warming, immigration, terror and knife attacks may have made politicians sit up and think about reality rather than politics, as we see both the major parties taking a more socially conscious view about housing.
     I look forward with a degree hope but it is sad that it had to come about as a result of past failures when much damage has been done. As the parties continue to align with each other, they dig deep to find something new. They continue to make the same mistakes, as they should be looking to develop a safer and more just society rather than looking for political initiatives. Let them be judged on their good decisions rather than trying to score points over their rivals One way to do this would be to scrap ALMO's forthwith and return social housing to be directly managed by local authorities and build more homes.


January 2010


     So what has happened since then? Not a lot. To be fair the Local Authority Housing Departments have done well. They went along with the setting up of ALMO's and secured money to improve their service. They tried as best they could preserve their identities with no fancy names and all were either called (the council name) Homes or Homes for the (the council name). Council tenants realised that they were still dealing with the same outfit but were impressed with a better service, although some complained that they did not need a glossy magazine as money could be better spent.
If the setting up of management companies was needed to make Housing departments sit up and smell the coffee then who can say that the exercise was not worth it. A word of caution ....... fine if it ends there. The urge to tamper with social housing is strong as it is successful and governments would like to see it as a profitable organisation in private hands so they can tax it and effectively make money out of it.
     Also the responsibility could be off loaded taking this powerful resource out of public hands and losing a powerful political tool. Depoliticising local authorities is clearly to the government's advantage as they prefer central regulation (benefits, grants and watchdogs - eg Ofhouse perhaps!) to local control.
     Whilst all is quiet at the moment a future change of government may see the housing football kicked back into the arena when a piece of legislation may require Authorities to put their ALMO's out to tender. The alternative is to let the ALMO's remain as an ugly embarrassment that serve no function but to just be there and really get in the way of a unified Local Authority structure.The ALMO's should be scrapped. Keep the names and their more modern image (glossy magazines and all). Keep the aims and standards. Keep the board but call it something else and give it only advisory status. Merge the management back to the local authorities. That's easy, just delete the word ALMO.


March 2020


     So 10 years later and still very little has been done to address the housing shortage. Homelessness, the "Big Issue" is not a new phrase, the sale of the magazine giving useful income to those not so well off. The issue is big. The vast majority do not sleep on the streets although 1000's genuinely do and is a shocking reflection on governments that have done very little to help those who due to unfortunate circumstance simply have nowhere to live.
     You would have thought that at the extreme end of homelessness, living on the streets that is, something could be done to help what is the suffering of these people and would visually be seen to be a step in the right direction. In addition the those on the streets the homeless include "Sofa surfers", those in hostels for the homeless, or anyone forced into substandard accommodation as they cannot afford their own place. Include couples and singles still staying with parents out of neccesity and the housing shortage runs into millions. Also little is done to help those who are key to our society doing valuable jobs but do not earn enough to either buy or rent on their own.
     In the last 10 years less than 1500 dwellings have been built per year by local authorities, less than 1% of what councils were bulding in the 50's. A small proportion of new private new builds include so called "affordable" properties which are nothing of the kind; 80% of market value is still way out of reach to make much impact.
     To compond the problem those paying exhorbitant rents are unable to save for a deposite for a place to buy. That siad the "Help to Buy" has been useful in enabling first time buyers to borrow at a market low rate to meet a shortfall in the deposite money (Good sums say £100,000 achievable) but they would have needed a good percentage of the asking price saved say 10% to qualify. Add to this, those with parental help and these are the fortunate ones able to buy on an average income but is a very small percentage.
     All we seem to get are comments like "We need to build 100,000 homes per year to deal with the problem" and that is about it. Councils have had the cap on borrowing lifted. Yes but they are cash straped already. Large sums have been set aside (2bn?) but in the absence of a concrete housing policy other issues will compete for available money and we know what they are. Also modern environmental issues such as climate change and flooding, polutuion and clean energy and viruses are extra expenses that were not around in the 50's when council housing was a direct way of improving living standards.
     Poor living standards take place behind closed doors unseen and therefore unaddressed. Build more homes now and stop just talking about it. Instead we see valuable land such as around the Town Hall Crouch End being sold off by the council in 2018 and some 200 units currently being built. The original scheme had 8 so called "affordable" units later expanded to 12 as a concession! Not an indication that the council cares much about real affordable provision for it's own local community which could have been provided by council building. These properties will be bought by either investers or double incomed professionals keen to get into this popular area.
     With low interest rates buy-to-let has risen as a way of getting a good return on capital keeping demand high as property otherwise available for owner occupation is snapped up and given a high rental price tag. To create some discouragement tax relief for high rate tax payers on loans was reduced to the basic level. They will swallow this and put the rent up. Tax relief on loans should be scrapped completely and some degree of rent control introduced not neccesarily by legilation but filling the gap left by properties withdrawn from the rental market with council provision increasing supply and therefore rents low. To use housing rental as a hedge against poor investment returns is plainly wrong.
     More to follow!