Socialist Worker

Is the government planning a new programme of council house building? The devil it is

by Simon Basketter
Issue No. 2062

Gordon Brown talks of housing as “one of the great causes of our time”. Last week his new government launched its “green paper” discussion document on the issue.

Jack Dromey, deputy general secretary of the Unite union, responded positively. “Gordon Brown has listened to the millions struggling to buy or rent a home,” he said.

But he added, “The green paper does not go far enough in putting right all past wrongs, when tenants were told to transfer from the council if they wanted desperately needed repairs and renovation.”

At the Defend Council Housing annual conference last month, Dromey warned that the “devil is in the detail” as far as housing policy is concerned. And indeed it is.

The overwhelming thrust of the government’s plans is to resolve the lack of decent housing by cajoling the private sector into building more houses for people to buy.

Brown has promised to boost the number of new homes built by 20 percent. This would mean an increase in the current target to 240,000 homes per year.

In terms of concrete plans, as opposed to paper targets, the figure is nearer 160,000. A recent survey found that only 18 percent of new housing developments could be classed as “good” or “very good”.

Some 53 percent were classed as “average”, while 29 percent were “poor quality”. But even “average” quality is not a good prospect for housing built on a flood plain – as the green paper actively encourages.

Social homes

Regardless of how many homes are built and what quality they are, the question is – who are the homes being built for? The average house in England and Wales costs around £210,000 – more than eight times the average salary.

Now we have the promise of some 70,000 more “affordable homes” by 2011, along with at least 50,000 new “social homes”. These will involve promoting “greater private sector involvement in social housing”.

But most of the “affordable” housing currently available is way beyond the reach of ordinary people. There are some suggestions for helping people get mortgages – but even for those who do manage to get into enough debt to buy a house, more problems await.

Since 1990, more than 500,000 homeowners have lost their homes because they were too poor to pay their mortgages. Some 12 percent of households are currently behind with their mortgage payments or are having difficulty meeting them.

The other key set of problems with Brown’s green paper concern the issue of planning. The government claims it is necessary to tackle the “structural inefficiencies” of the system by making it easier for planning permission to be granted to private housing developers.

But removing or downgrading controls over the release of land and over planning permission means handing over more power and influence to the bosses of the building trade.

The green paper proposes relaxing the planning process, with clear indications that the government intends to override local authority planning powers.

In contrast, proposals on encouraging the private sector to reveal the extent of their land banks are vague in the extreme, while promising that taxes on developers “will be kept to a minimum”.

Boosting the private sector and building more houses for sale are not the solution for the 1.6 million people on waiting lists for council housing – or for the millions more currently in inadequate or substandard housing.

The simple solution is build more council houses. Yet under Labour. council housing building has virtually ground to a halt. A grand total of 277 council houses were build nationally in 2006 – just four of them in London.

The green paper proposes that councils should deploy currently unused public land to build houses “in partnership” with the private sector. It does discuss reforms that would allow councils to retain income from tenants’ rents and the sales of council houses. It even alludes to allowing councils to build new council homes.

But this is all limited to “pilot schemes” – and even then councils must set up a “local authority company” for the scheme. This is yet another way of getting the private sector involved.

The paper unveils 14 pilot local housing companies to act as “master developers”. Local authorities will supply development land, while private and public sector partners will actually build the houses.

“We expect councils to undertake direct development only where it offers better value for money than other options,” says the paper.

“But where they choose to invest their own money in new supply, we think councils should be able to keep the income and capital returns from those additional new homes.”

Just in case there is any confusion, the green paper adds, “In most cases, we would expect models which offer access to private finance to provide better value for money.”

In sharp contrast to the situation for council houses, housing associations are promised a light regulatory touch. They will be allowed to monitor their own performance, rather than be subject to an external inspection regime.

The government is reluctant to encourage councils to build council housing since it claims such spending would be counted towards public sector borrowing figures.

Even on its own terms, this is a false argument. Debt from PFI and PPP deals might not show up on the public accounts, but as the Metronet scandal on London Underground shows, the taxpayer ends up footing the bill anyway.

Truth

The truth is that keeping the figures on public sector borrowing artificially low is far more important to the government than really starting to solve the housing problem.

Pressure from campaigners has forced the government to talk about councils been involved in the process. But there is a danger that they will use talk of “social housing” rather than council housing to push through yet more privatisation.

The housing market is incapable of solving the housing crisis. Despite they hype and promises, the proposals in Gordon Brown’s paper are at best vague and at worst counterproductive.

We should demand that the “fourth option” of direct public investment in council housing be implemented in an explicit and unequivocal manner. We need an end to all housing privatisation, including semi-privatisations such as transfers to Almos.

Instead of handing over public land to the private sector, councils should be taking unused land from the private sector to build on.

And they should build council housing – publicly owned and democratically accountable – rather than tinkering with second rate substitutes such as “social housing” or “affordable housing”.

Finally the market madness in housing needs to be tackled head on, with an end to tax breaks for buy-to-let mortgages, increased taxations on second homes – and punitive taxation on speculators who buy homes and leave them empty in the hope of making a fast buck on rising property prices.


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Features
Tue 31 Jul 2007, 18:49 BST
Issue No. 2062
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