Housing - no trust in private investors

THE NATIONAL conference of Labour councillors will discuss housing policy on 5 March. This is at a time when council services are being decimated, benefits slashed and policy changes introduced that would mean the end of social housing in Britain. The stakes are high, what will Labour councillors' response be?

Paul Kershaw

In a move that points to the future that the Tories have in mind, giant house-builder, Barratt, announced plans to move into private rented housing; the boss says he is thinking in terms of 1,000 homes a year in London. This announcement follows a deal last September between the Homes and Community Agency (HCA) - a government body - and Berkeley Homes which created a private rental fund as part of the agency's private sector initiative.

The HCA is investing £45.6 million in this scheme. A recent report jointly published by the British Property Foundation and London Councils suggests that institutions are poised to invest up to £1 billion each year in the private rented sector and expect to get an 8%-10% return.

Councils would help with discounted land, funding initial rent costs and by brokering land deals - no mention of a fee for this. Would private investors go to a private landowner and expect them to hand over discounted land and to fund brokering and rents?

At a time when proposals for spending more on social housing are "off the agenda", you might think Labour councillors would be absolutely against the state propping up the 'for profit' sector. But in fact the report's forward is signed by a Labour mayor, Steve Bullock from Lewisham.

It says the public sector has entered a new era with lower government spending for house-building. It notes that high prices and stringent mortgage conditions make it difficult for people to buy. But the way forward apparently is giving handouts to the private house-builders.

Government plans would mean an end to social housing, with new housing built by housing associations subsidised by charging rents set at 80% of the local market rent, and the introduction of short term tenancies for new tenants. But meanwhile Labour councils are busy rescuing the private house builders with taxpayers' money.

Instead of supporting the profit agenda, councillors could provide a focus for opposition to the destruction of social housing and the welfare state by refusing to pass on cuts and by setting needs budgets. Instead they act as standard bearers for the coalition's housing policy.

Government's latest attacks on social housing

THE GOVERNMENT'S u-turn over the plan to cut housing benefit for the longer term unemployed shows that they can be susceptible to pressure. However, the plans are still a disaster for the poor, or anyone who might lose their job over the next few years.

Much attention has so far focussed on the plight of tenants of private landlords who rely on support to cover high rents. But the plan is to make even bigger "cost savings" from council and housing association tenants.

A new Department for Work and Pensions "impact assessment" gives a glimpse of the real effect of these changes for people in social housing. The report says most tenants only "under-occupy" by one bedroom, and will therefore lose around £11 a week in 2013/14, when the change comes into play.

People with two or more bedrooms that they do not sleep in will lose an average of £20 a week, the assessment says.

The numbers affected varies around the country; around 46% of social tenants in North-east England will see their housing benefit cut by around £12 a week.

In London high levels of overcrowding mean that only around 19% will lose, which still represents a lot of hardship. The National Housing Federation believes that almost 700,000 people will effectively be forced out of their home.

Councils should pledge not to evict tenants adversely affected by these changes. Unions also need to factor in the impact of the changes on pay claims.

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In The Socialist 23 February 2011:

Anti-cuts campaign

Public services: Not For Sale!