Socialist Worker

Who gets a £75,000 house for just £4,000?

by an AMICUS union steward in Sedgefield council
Issue No. 1931

A CRUCIAL struggle over council housing has begun in Tony Blair’s own consituency of Sedgefield in the north east of England.

At the centre of the battle are privatisation, democracy and New Labour’s trampling on even the most basic belief in social provision.

Sedgefield Labour council wants to sell off its entire council housing stock of more than 9,000 homes.

None of the usual fake excuses for such a policy exist in Sedgefield’s case.

The council is set to meet the government’s decent homes standard on all its properties by 2010, it has little debt, and a survey a couple of years ago found 97 percent of tenants were satisfied with the council as their landlord.

Despite this councillors have decided that the only option is transferring the housing stock to Sunderland Housing Group (SHG).

If the transfer goes ahead SHG will pay around £4,000 for each unit of property. If teneants wanted to buy the same property, it would cost them £75,000.

It was recently reported in the Sunderland Echo that SHG made a loss of more than £31 million in the last financial year. And the group’s total debt is predicted to rise to more than £500 million in the coming years.

This is one of the concerns of those campaigning against transfer.

SHG does not have the cash to pay for the housing stock, so it would raise the money by mortgaging the property. The company would be wholly responsible to the banks, not to the tenants.

Kevin Rowan, TUC Northern Region secretary, says, “This is a really poor choice for tenants in Sedgefield. Stock transfers have produced higher housing management costs and higher rents, and have done nothing to improve the housing situation in this country.

“The choice of Sunderland Housing Group as the preferred option adds to our concerns. There are a string of outstanding allegations regarding the company and about the involvement of Peter Walls in the running of SHG.”

Back in 2002 Peter Walls was the director of housing at Sunderland City Council on a salary of around £70,000.

When the council transferred all of its 36,000 homes to Sunderland Housing Group, a newly formed housing association, Walls was appointed its chief executive.

His salary almost doubled to £135,465.

There have been several complaints about the group’s policy of knocking down thousands of former council homes in Sunderland.

Former council tenants who bought their properties under right to buy have allegedly had to sell their property for a third of the real value.

In some areas the company then allegedly built luxury apartments on these sites that sell for over £100,000.

SHG has been forced to justify that policy to the Housing Corporation which is looking into the level of compensation offered to those who bought their homes under right to buy.

But even if SHG were a housing association without blemish, there would still be a campaign against the transfer.

Tenants want the council to be their landlords. We have a housing crisis in this country. There are not enough decent homes for people, let alone affordable homes.

If the council housing is sold off then what happens to the vulnerable in society or to those on a low wage?

In Sunderland the council has recently taken back responsibility for the homelessness service from SHG.

Evictions go up by around 14 percent when council housing is transferred. What happens to those people?

A campaign against the transfer was launched at a public meeting on Tuesday this week.

The campaign has been organised by several local groups, Defend Council Housing and the TUC Northern Region.

The ballot is due to take place in April or May next year—around the rumoured date of a general election.

This is a real opportunity to deliver a high-profile defeat for one of this government’s most damaging policies.

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Article information

Sat 11 Dec 2004, 00:00 GMT
Issue No. 1931
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