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Austin has written to Ruth Kelly, the new Communities and Local Government Minister, about council housing.
Dear Ruth,
Best congratulations on your new job but some commiserations too on the transfer from education and the fact that your new one is a bed of nails: portfolios which have long been neglected and certainly inadequately financed.
I’m writing as chair of the Commons Council Housing group. We campaign for investment in council housing and giving tenants a real choice of whether they wish to stay with the council and have the necessary investment and improvement done by it as an alternative to having their houses transferred to an RSL or ALMO.
From that point of view I was concerned about your broadcast on Today, 9th May. You didn’t mention council housing as though it didn’t even exist, though we still have three million council tenants. Moreover you were dangerously complacent about the record and the present situation. This is a mistake for a new minister because if they’re going to devote such skill to justifying the unjustifiable they lose credibility and can’t be believed unless they have genuine achievements to show. We haven’t. Far better to show the situation as it is than get credit for the improvements we hope you’ll make.
Our housing record is in fact poor: pathetic build figures both public and private at a time of growing demand and increasing problems. It makes no sense to portray that as success. Tell it like it is so your own achievements in turning it round will stand out.
You are in fact in a mess for several reasons. Let me list them:
- The campaign to bully, bribe and bamboozle councils into giving up their stock is failing. Almost one in three ballots are now going against transfer, nearly 100 councils have said they want to keep their stock and the efforts of councils who face tenant opposition are getting increasingly desperate – witness Sefton calling a second ballot within three months of losing the first, or Tower Hamlets trying to do the same. Similarly the hyped up bullying. We've been pleading for a code of conduct to make these things fairer and more democratic than they inherently are with only three options on the ballot and none of them the one the tenants most want.
- Those councils where tenants vote against transfer are being left to rot in hell – witness the deteriorating situation in Birmingham. Others are being forced to sell off stock to raise money to keep going, which in urban areas makes no sense when we need more.
- The housing situation is getting worse – more homelessness, longer waiting lists, galloping prices because supply is deficient while demand gallops – a Decent Homes target you're not going to reach and a higher and higher proportion unable to raise the money to buy. The Housing Associations can't deal with this – they are risk-averse, keep huge reserves (£10.8 billion) and run a pre Tax surplus of £276 million rather than investing in housing. Provision of “affordable” housing is failing – most of it is priced well above the reach of those in need, while the lack of interest in shared ownership schemes means that the RSLs are having to sell these off on the open market. The big housing drive we need must concentrate on public housing to rent.
- ALMOs are flagging as well as expensive. No one seems to know what the outcome of the review will be but personally I fear that they will be pressured into the private sector – which will be messy in the 50 metropolitan areas affected.
- The present policy is extremely wasteful. It costs £435 to privatise every council house. Then there's all the Gap funding and ALMO costs. Transfer tenants are paid housing benefit out of social security an increasing burden as rents are forced up and already far too high in the RSL sector which keeps on driving up rents. This puts more people in the poverty trap.
- It is our view that ministers should look to the fourth option which is to let the councils retain all the HRA money as well as the right to buy sales. Government should stop siphoning money out of HRAs (it took £13 billion to finance the housing benefit of poorer council tenants) including money for historic debt. Then let them use the right to borrow they already have (Local Government Act 2004) on a revenue stream. With that they can finance their own repairs and renovations as well as beginning to build. We promised them this in the 2005 manifesto and no house building programme can succeed unless it's driven by the council who know the needs of their area.
All told things have got into a mess which is a good time for a new minister to come in with the new thinking this section needs as the old policies falter and fail. We have put these points to Yvette Cooper who has been the first Housing Minister to listen. We are shortly to have a joint meeting with Yvette and her officials to test out our arguments on Housing Finance. We hope we can meet with you too, to put our concerns to your fresh mind which this sector needs to help generate the new thinking it needs so desperately.
Yours sincerely
Austin Mitchell
Chair, Commons Council Housing Group |
