Socialist Worker

New Labour’s privatisation disasters

Issue No. 2080

New Labour housing minister Yvette Cooper has claimed the new government plans for housing are “groundbreaking”.

In fact they follow in a direct line of privatised developments that have made millions for developers and managed to provide even less housing for ordinary people.

The last big idea was the “pathfinder scheme” created by former deputy prime minister John Prescott, and due to run until 2018.

Under the scheme some £2.2 billion went into bulldozing tens of thousands of homes supposedly to smarten up areas in the north of England.

But according to a report by the National Audit Office (NAO) the scheme has had little impact and “heightened stress”.

The report says that over 10,000 homes have been demolished and 40,000 refurbished, but only 1,000 houses have been built in the nine pathfinder areas.

Landlords in some areas bought empty houses earmarked for demolition in the hope of making a profit from compulsory purchase orders, putting the overall bill up by £50 million over five years, the report said.

Gap

In addition, residents who were forced to leave their homes under compulsory purchase orders found that there was an average £35,000 gap between the compensation they received and the amount needed to buy an alternative property.

The NAO admitted that house prices had risen in the nine pathfinder areas, narrowing the gap with surrounding communities.

But it said it was “not possible to identify a causal link between the pathfinder programme and these changes in the housing market, which could be due to factors such as the influx of workers from eastern Europe moving into cheap housing”.

There was also concern in some areas that demolition projects were approved before they had been adequately explained to local people.

The pathfinder scheme in Tyneside was a disaster. The number of empty properties actually went up under the project in Newcastle. In 2006 the project spent £5.4 million on just 115 houses in Newcastle and Gateshead.

By March of next year they will have knocked down 1,700 houses.


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