Archive article from The Socialist Issue 436
Fight to save our council housing!
TONY BLAIR has a touching faith in the private profit system's ability to solve all ills in society. But this system is making Britain's housing crisis worse - the private housing 'market' is just not building enough homes at prices people can afford.
Many workers, even those in jobs with chronic staff shortages, cannot get on to the so-called 'property ladder'. So why doesn't the government put more resources into public-sector housing, especially council housing? After all, who else can provide affordable, secure, high-quality public housing for all people who want it?
However, since 1979, successive governments have attacked council spending, restricting how councils spend their money while forcing councils to sell off much of their stock of council houses.
Meanwhile, private-sector developers concentrate on building homes for the most affluent sections of society, where even the minority of 'affordable' properties are out of reach for the average working-class family. So there is little chance of getting 'social housing'. The number of new homes that housing associations and councils have built for rent is at its lowest level for 80 years.
The government insists that housing associations (HAs) should be responsible for all new 'socially rented' accommodation. But they only built 20,000 houses last year, down from 50,000 a decade ago. By contrast, between 1949 and 1954, local councils built 230,000 council houses on average each year.
Even worse, the HAs have been under instructions to run like businesses and put tenants' interests way below those of balancing the books. So councils are about the only source of affordable rented housing.
But, at the government's command, local councils sold off more houses in Blair's nine years in office than the Tories did in twice as long! Before coming to power, Labour said they wanted to release money from 'right-to-buy' sales to councils so they could build or buy homes. Now Blair's government is blackmailing councils to get rid of what's left of their housing.
Councils plan to transfer homes to new landlords. This directly affects all council tenants and leaseholders as well as new people seeking accommodation.
Councils have to bring their housing up to national 'decency standards' by 2010, and claim that they can only get the money needed by hiving off homes under one of three 'options': selling homes to housing associations; private finance initiatives (PFI); or setting up an 'Arms Length Management' company (ALMO).
But all these 'options' will mean higher rents and service charges, less input by tenants and leaseholders, and less secure tenancies. They are all steps to the privatisation of council housing - just like the railways and many other public services have been sold off to private companies who put profits before peoples' needs.
What do 'housing transfer' plans really mean?
What happens to rents if your home is 'transferred'?
Usually, rents rise after transfer. In Wyre in Lancashire, rents went up by 56% in seven years after council homes were transferred there. 15 of the 20 fastest rising housing association rents in England from 1997 to 2004 occurred in areas where council homes had been transferred.
Aren't all rents rising anyway?
The government is pushing councils and Housing Associations to 'equalise' rents for similar properties by 2012 ('equalise' up, of course, not down). The 'target rent' will be based on 'market values' of local properties and local earnings.
But rents need not necessarily go up - local areas can elect councillors who could refuse to make massive rent rises! Socialist Party councillors will oppose all rent increases above the rate of inflation. But if homes are transferred to a Housing Association landlord, we tenants have no say over what they do.
But won't transfer give tenants and leaseholders more of a say?
There are tenant reps on Housing Association (HA), PFI companies or ALMO boards. But they are in a minority, dictated to by New Labour appointees and board members representing commercial interests.
Elected councillors can always say no to rent rises or service charge hikes, and insist on better housing services - if they're prepared to fight for tenants and leaseholders! And ultimately if tenants don't like what these councillors do, we can always elect new ones. No HA or ALMO board, however, has ever been voted out of office!
Aren't housing associations non-profit organisations?
They are, but they borrow money from banks and finance companies (at commercial interest rates) to fund their activities. So, like other commercial organisations, they can be hit by unanticipated financial pressures and even go bust.
That's why their lenders insist on business representation on their boards - and make sure that commercial interests come before tenants' needs. Banks aren't charities - they lend money to make a profit!
But isn't funding guaranteed if we transfer?
No. In 2003 some government grants to Housing Associations were scrapped at seven weeks notice, forcing even big organisations like the Peabody Trust - with 18,000 properties - to drop improvement plans and sell-off homes. Last year John Prescott told HAs to find £830 million annual 'savings' - 8% of their budgets - by 2008. That's a sign of things to come.
What about ALMOs?
Under an 'Arms Length Management' company (ALMO) homes are still council-owned, at first. But they are managed by the ALMO company, with 'independent' business directors on the board. If the ALMO passes a 'best value' test, it is then able to bid for limited gov-ernment funding for 'decency standard' home improvements.
Later on, after it has completed its 'decency standard' works, the ALMO company could become completely independent of the council. So, ALMOs mean privatisation in stages.
Will there be a vote before our homes are transferred?
Tenants have a legal right to a ballot before a transfer to a Housing Association. But although the government recommends a ballot, there is no legal requirement to have one before an ALMO can take over your home.
Scared of giving us a chance to vote yes or no to privatisation, many New Labour councils are setting up an ALMO without a ballot. If you're fortunate enough to have Socialist Party candidates standing in your ward, May's local elections could be your only chance to vote against transfer!
Will tenancy rights change?
Transferring to a Housing Association - or if the ALMO later on becomes a 'stage two' ALMO company completely independent of the council - means a change from a 'secure tenancy' to an 'assured tenancy'. Some things won't change at first - the right to a housing exchange, for example. But 'assured tenants' can be more easily evicted.
And Housing Association evictions have risen recently as commercial pressures increase. A Citizens Advice Bureau report showed that, in 70% of cases, proceedings began before checks were made whether there had been housing benefit problems.
But if rents rocket, won't housing benefit help?
Not only does the government aim to end council housing, it is also looking at ending housing benefit. Last year a 'pilot scheme' replaced housing benefit with a 'housing allowance' to cover the standard rent in the area. If the actual rent is higher than the 'housing allowance', their argument goes, that gives you an 'incentive' to move to 'more appropriate' housing!
Can the government afford to improve council homes?
Yes! After all, if the money's there for HAs, PFI contracts or ALMOs, why can't it be made available for the council to fund home improvements?
In fact, the government won't save money by privatising council homes - at least in the short term. It costs £1,300 more per property to make 'decency standards' improvements by transferring homes than it does by using public money!
Why is New Labour doing this?
Alongside the National Health Service (NHS) and free state education, council housing has been an important part of the welfare state. It has protected people against a 'free market' in housing - big landlords and housing companies whose real interest is not meeting housing needs but private profit.
But now all the establishment parties support the Tory 'free market system', which puts the profits of the super-rich ahead of people's needs. The last two budgets, for example, have set out plans for new American-style 'real estate investment trusts', to provide tax breaks for property companies to make more money from residential properties. Shares in property companies spiralled up after Brown's recent budget!
'Market competition' may be OK in helping people decide which toothpaste to buy - but having a good quality, affordable and secure home should be a fundamental right, not a by-product of a company's search for bigger profits.
Stop the privatisation conveyor belt
LOIS AUSTIN, Socialist Alternative candidate for Cathedrals ward in Southwark, is secretary of Southwark Street Peabody Estate tenants association and helps lead Save Peabody Homes Campaign. She says:
"Peabody was a 19th century philanthropist who built 'subsidised housing to the working class.' Now Peabody Trust, one of Britain's biggest Housing Associations (HAs), is part of a privatisation 'conveyor belt' where it buys up large quantities of council stock, then sells it off at public auctions to greedy private landlords.
"HAs operate like businesses. Peabody Trust plans to sell 1,100 homes, 3% of their stock, on the open market over the next few years. Peabody flats are market-rented and a one-bedroom flat near the Thames will set you back £250 a week.
"The Socialist Party fights to stop the sell-off of HA homes. HA tenants don't have the same rights as council tenants, but our homes have a protected rent and many working-class people benefit from them.
"HAs have had a lot of public grants from government and local councils, so selling homes directly on the open market is transferring public sector wealth into private hands. We can only stop this conveyor belt of privatisation through joint campaigns to defend council housing and to keep HA properties as social housing."
Labour's failing policies
LEWISHAM COUNCIL'S recent 'tenants' conference' brought some problems facing housing to light. Murad Qureshi, a Labour Greater London Authority member, gave some facts exposing the failure of his party's policies.
Peter Redfarn (Lewisham tenant)
To buy a home in London, you need an annual income of over £75,000. Even if you go for a cheaper 'part rent, part buy' plan, the minimum income you'd need for a one-bedroom flat in Lewisham was £17,736 or £20,800 single or £21,622-23,500 joint. For a two-bedroom flat it was £26,000 single or £30,000 joint. For a three-bedroom flat or maisonette in Bermondsey you'd need £37,000 single or £42,000 joint.
Clearly the housing market is not satisfying most people's needs. Think what will happen on rents or mortgages when there's an economic downturn.
Many of those who can afford housing will lose their jobs, and the likely rise in interest rates will push up mortgages. Mortgage payers will face "negative equity", as they did under Thatcher, owing more to the building societies than their homes are worth.
At the conference, a speaker from Hounslow Homes revealed that they had to sack a contractor for bad work. As more ALMOs are set up, contractors are charging more and more.
Contractors are out to make a profit. Wouldn't it be cheaper and more efficient for all repairs and much refurbishment to be done by councils' direct labour force? There are also economies of scale and buying power in purchasing by large organisations.
Decisions don't have to be taken bureaucratically and centrally. Tenants and leaseholders are represented on local area boards now, and this will continue under the ALMO. What is different is the reduced role for elected councillors on ALMOs and the presence of "independent" members, local business people, some with links with housing associations, that dominate ALMOs and would take over if they failed.
Some people support stock transfer because they aren't satisfied with the council's housing service. But transfer is a one way ticket.
Although the government-favoured Registered Social Landlords are called not-for-profit, whether they see themselves as businesses, charities or cooperatives, they are dependent on banks and contractors, which are decidedly "for profits". The housing associations will increase rents, sell off properties and worsen services.
Tenants vote no!
TENANTS IN many areas have voted no to transfer of council housing. Recent victories by tenants in Waveney, Cannock Chase, Selby and Mid-Devon means they join tenants in Sedgefield, Sefton, Ellesmore Port, Camden, Kingston, Wrexham, Aberdeen, Birmingham, Dudley and Southwark who have all voted no to privatisation, whether through HAs, PFI or ALMOs.
Join the fightback!
THERE'S NO reason why the government can't bring council homes up to 'decency standards' while keeping them as council homes. Lewisham council estimates that it needs an additional £170 million over the next five years for home improvements. But that's less than the government spends every 34 days keeping troops in Iraq!
So why can't Labour councils insist that a Labour government gives them the money needed without transferring their homes? It's because New Labour, locally and nationally, won't stand up for tenants and leaseholders unless they're forced to.
Lewisham Socialist Party councillor Ian Page helped lead a campaign against the council's attempts to sell off council housing back in 1999.
Now Ian and fellow SP councillor Chris Flood have launched a 'Hands Off Our Homes' petition demanding a real housing choice for Lewisham's tenants and leaseholders, ie the option to stay with the council, with full public funding to meet the 'decent homes' standards.
New Labour is trying to push the control of housing even further into the hands of grasping banks, private landlords and big property companies.
Socialists believe that no long-term solution can be found to the basic problem of getting a secure roof over everyone's head in a society run for the rule of rent, interest and profit.
Join the fightback now
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