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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!