A new stage in the campaign to defend Council housing?

This is a discussion document which considers what strategy the Defend Council Housing Campaign needs to follow in the light of the coalition government’s attack on Council housing and Council tenants.

Download a PDF here dchdiscussion

The coalition government’s housing policy not only fails to tackle the national housing crisis, it is making the situation worse. Whilst it’s new enhanced ‘right to buy’ is not finding many takers, ‘one for one replacement’ is in any case fraudulent as the example of Swindon shows, where for each 30 houses sold, the Council will only have sufficient money to build 7 to 9 new homes. So new sales will worsen the shortage of available homes.

Less than half the homes necessary to keep pace with household formation (according to the government’s own figures) are being built. In the absence of any subsidy for Council and ‘social housing’ there has been an increase in private rented accommodation. The government appears intent on getting institutional investment into the sector, as a means of tackling the shortage of rented accommodation. However, given the lack of any control over rents, the Housing Benefit bill is rising sharply, with working households in receipt of HB closing in on the million mark. Since 2009 there has been an increase of 417,830 working people claiming it.

The government’s war against the poor is hitting ‘social housing’ tenants hard. The ‘bedroom tax’ hits tenants of working age. The Council Tax Benefit cut provides a double blow. Although we don’t know the outcome of the ‘consultation’ as yet, ‘pay to stay’ may impact on existing tenants, unless the government decides that it will only apply to new tenants. If it applies to all tenants then everybody will be means tested.

‘Self-financing’ has probably ended the threat of ‘transfer’, at least on a large scale, because the government is unlikely to have the finances to write off debt as happened under the previous government. Despite the fact that existing tenants will keep their ‘secure’ tenancies, the biggest threat we face is the introduction of flexible, or fixed term tenancies, which would, over time transform Council housing into a means tested tenure.

In this new situation how should Defend Council Housing face up to this challenge? Its “Housing Emergency – Time for An Alternative” statement included seven Action Points to campaign around:

  • Opposition to benefit cuts;
  • Opposition to big rent rises;
  • Opposition to the coalition government’s “affordable rents”;
  • No scapegoating of migrants;
  • Defending security of tenure;
  • Regulation to control private sector rents;
  • A programme of investment in Council and other housing at genuinely affordable rents.

Other than putting security of tenure at the top of this list, it’s fine. The one thing missing which I would have added was opposition to ‘right to buy’. I believe it’s time to end DCH’s ‘neutrality’ on this issue. But before I come on to that I’d like to assess the situation we face given the coalition government’s housing policy.

Secure tenancy under threat

Council tenants are facing an unprecedented assault on our ‘secure’ tenancies (Housing Association tenants on ‘assured’ tenancies). Every Council is in the process of drawing up a ‘tenancy strategy’ which will determine whether or not they will introduce fixed term tenancies, many for five years, some for two. These will only apply to new tenants. They will be means tested, with an income threshold above which their tenancy will not be renewed. They will be forced out into private renting or to get a mortgage, if they can. These thresholds vary widely. For instance, from £32,500 in Barnet to £74,000 in Westminster. Some Councils are not only including income, as in wages or salary, but also taking account of how much people have in the bank, counting interest as income, or deciding that if tenants have a certain amount in the bank then they would not qualify for a tenancy. For instance Northampton would not give a tenancy to a single person with £16,000 in the bank, or a couple with £32,000.

For propaganda reasons the government likes to refer to ‘lifetime tenancies’ rather than ‘secure tenancies’. In reality they are open-ended tenancies, but not necessarily for life, since if you don’t pay your rent or behave in an antisocial fashion you can lose your tenancy as some do. The government presents them as unreasonable because they are ‘for life’ as opposed to ‘when needed, for as long as they are needed’.

I don’t have a detailed picture of what is being done nationally but from the research I have done, I have not found a single Council adopting a position of ‘secure tenancies’ for all tenants, existing and future ones. Conservative Councils are adopting ‘fixed term’ tenancies enthusiastically, treating Council housing as if it is charity. Introducing these tenancies gives Councils more power over their tenants than they have ever had. They have the power to make life-changing decisions, the power to evict people who have done nothing wrong, and to force people to move against their wishes. ‘Tenant choice’ has been buried.

Some Labour Council like Oxford and Reading have defended the general principle, though even in the case of Oxford it admits to (undefined) ‘limited circumstances’ in which people might not be given secure tenancies. Reading says:

“Whilst it is acknowledged that it is argued that these flexibilities provide an opportunity to address issues such as under-occupation, and encourage the best use of Reading’s limited affordable housing stock, the Council in general does not support the use of fixed term tenancies.      We believe that their use will have a detrimental affect on communities and limit community cohesion and sustainability. It is unlikely that a person will be able to remain in their existing neighbourhood should a fixed term tenancy not be renewed, and therefore will have to move away from existing services and schools. It is our view that if people are granted a tenancy for life, this provides security and may increase their feeling of belonging to their neighbourhood.     This in turn may make it easier for people to connect with support networks and increase their willingness to look after their home or engage with the community around them.”

However, they concede too much in saying in relation to RSL’s:

“The Council is keen to ensure that any assessment of financial capacity is managed in a manner that does not act as a disincentive to work and does not expect tenants to be required to move, should they choose not to, purely as a result of an increased income. It is acknowledged that the point of tenancy renewal is an opportunity to discuss alternative accommodation options for tenants that have experienced a change in financial circumstance.”

This implies acceptance of a ‘threshold’. Of course they can’t stop RSL’s introducing fixed term tenancies with means testing but they could have expressed their opposition to them.

Some Labour Councils are introducing fixed term tenancies. For example, Brent Council is introducing five year tenancies. Although it says “renewal should be the assumption and non-renewal the exception”, ending the tenancy would be applied

  • in cases of “under-occupation”, with the offer of alternative social housing “in most cases”
  • where there is (undefined) “high household income”.

So Brent Council is in favour of means tested housing and accepts the ‘bedroom standard’ which, if applied as it suggests, would mean than if a young person leaves home then a couple or single parent would be forced to move because they are deemed to be “under-occupying” based on a rigid application of the ‘standard’.

Newham Council is introducing 5 year tenancies as a sort of extension of the one year introductory tenancy. It tenants “successfully complete” this then they will be given a “lifetime tenancy”, that is a ‘secure tenancy’.

Lambeth Council opposed flexible tenancies and “affordable rent” in the government consultation.  However, they have subsequently decided to introduce ‘flexible tenancies’ for bedsit/one bedroom properties and four bed or more. Their rationale for doing this is that young people can be ‘supported’ to move through a housing ‘career’ into other forms of accommodation in other sectors and thus freeing up social housing. Permanent tenancies in these properties will only be given to ‘vulnerable’ people.

Derby Council says:

“The Council accepts that more effective matching of stock with those in most need is essential. However we are also concerned that such tenancies may not be appropriate for certain vulnerable groups, such as those in supported housing for example. There is also the danger that terminating tenancies on the basis of income may result in disincentives to aspiration and the ‘residualisation’ of estates. Our initial approach therefore is to use these tenancies for general needs applicants only, and that on expiry of the fixed term renewal will happen by default unless under-occupation or unused adaptations are present.”

So despite the danger of ‘residulation’ Derby abandons the principle of secure tenancies for all tenants, and will move people who are ‘under-occupying’ based on the ‘bedroom standard’. They will use them for all new ‘general needs’ tenants. They also say they reserve the right to use income as a factor in renewal in future.

If there are some Councils defending the principle of ‘secure tenancies’ for all tenants, I will be pleased to hear it. However, what is clear from this brief sketch is that there is an absence of widespread principled opposition to ‘fixed term’ tenancies and the government’s transformation of Council ‘social housing’ into a means tested tenure.

In Swindon we have managed to get the Labour group to oppose ‘fixed term’ tenancies and we are pressing them to make a public commitment that if the Tory Council brings them in, then they will reintroduce ‘secure tenancies’ for all tenants if they win a majority on the Council. This is something we should press Labour on at the national as well as the local level.

Time to campaign for an end to ‘right to buy’

The failure of Labour to break with the housing policy of New Labour was reflected in its Opposition Debate in Parliament on housing, a couple of months back. The new Housing Minister Mark Prisk put Jack Dromey on the spot, pointing out that the Labour group in the Local Government Association was opposed to the government’s new enhanced ‘right to buy’. He was asked: “ Do you agree with them?” Labour is a “party of aspiration” said Jack, “we support the right to buy”.

The Defend Council Housing campaign has for a long time had a policy of ‘neutrality’ on the issue of ‘right to buy’ (RTB). The main emphasis of the campaign was resisting the sell off of Council homes to Housing Associations. After all, the New Labour government had a policy of transferring 200,000 Council homes per year. If it had been successful there would hardly be any Council housing left today.

The position of ‘neutrality’ might have been justified because of the need to build a united front bringing together tenants, trades unions, and Labour MPs. However, the situation has changed. The main threat today is not transfer but the coalition government’s ‘reforms’ which lead to turning Council housing into a means tested tenure, by way of ‘fixed term’ tenancies and possibly ‘pay to stay’ (for which we await the outcome of the consultation). The ‘secure tenancies’ that we have had for so long are now under threat. Fixed term tenancies are being introduced widely. If they remain in place then over time ‘secure’ tenants will literally die out.

Of course, a key part of DCH policy has been to campaign for a new round of Council house building to address the housing crisis. ‘Neutrality’ on RTB was always in contradiction to this because the continuation of RTB as government policy has lead to an erosion of the number of Council homes to the point where there are only somewhere in the region of 1,700,000 left in England.

Some of the main unions were reluctant to challenge New Labour on RTB. However, opinion on RTB has shifted. At the recent TUC Congress a resolution from UCATT was passed which called for an end to it. It is now TUC policy. It can of course remain a paper policy but it gives us the opportunity to press the issue. We need to press the unions, especially the Labour affiliated ones, to call for an end to Labour’s support for it. There are already points of support inside the Labour Party. The Labour Representation Committee supports an end to RTB, and recently Labour Youth adopted it as policy at its conference. The Party apparatus, however, ignored this decision and there is a campaign by members of Labour Youth against this bureaucratic attempt to bury the Youth conference decision.

The one open question in relation to the TUC resolution relates to its call for mass building of ‘social housing’. Does this this mean Council housing or Housing Association housing, or both, with what balance between them? This is an important question given New Labour’s opposition to Council house building. Even DCH stalwart Austin Mitchell, speaking in Labour’s Commons debate said that he wasn’t bothered whether the new building was Council Housing or Housing Association homes.

What exactly is Labour’s current position? It’s not clear. Jack Dromey has said that you cannot have social housing without subsidy but I suspect that the would be Chancellor Mr Balls will not be overly enthusiastic. After opposing Council house building for many years, the New Labour government did eventually concede the right of Councils to apply for ‘social housing’ grant, though with no enthusiasm and only if it was proved to be ‘value for money’. A breakthrough was made but on a puny scale, with only a few thousand new Council homes built. How much is Labour prepared to commit to investing in a new Council house building programme? We don’t know as yet. Jack Dromey has talked about Councils being able to borrow money to build but who from? Private sources or the Public Works Loan Board? The former would be more expensive.

Write off the debt

DCH has always called for writing off Council housing ‘debt’, not only because much of it was fictitious but because the New Labour government wrote off debt in the case of transfers, so long as the tenants voted the ‘right way’. When the national Housing Revenue Account was wound up and ‘self-financing’ was introduced many local Councils were loaded up with debt; a “one off settlement” which was the price of ending “negative subsidy”. This payment from these Councils added up to somewhere in the region of £13 billion, on top of which they will have to pay interest on the loan they were given by the government to hand the money back to…the government.

One simple thing that this government or a future Labour government could do to enable Councils to start building Council housing again (if they wanted to), would be to write off this debt. At a stroke Councils would have hundreds of millions of extra money a year. The result would provide an economic boost in increased work and jobs resulting from extra new build and repairs which Councils would be able to afford. There would still be a need for national subsidy for a house building programme on the scale required, but this single measure would both take the pressure off of Councils and provide a boost to local economies. DCH should put this demand on Labour and press for the unions to take it up. In the current economic circumstances such a step would boost socially useful economic activity.

We might put together a policy document along the lines of ‘what policy to tackle the Housing crisis?’ which would be directed at Labour. It’s outline would be along the lines of the “Housing Emergency” document, plus ending RTB, but with some demands related to overturning what the current government is doing, such as:

  • Reintroducing ‘secure tenancies’ and ending means testing of housing;
  • Ending the ‘bedroom tax’;
  • Reversing the Council Tax Benefit cut.

And the “opposition to big rent increases” should be strengthened by a demand to end the “equalisation” of rents. In reality this meant driving up Council Housing rents towards Housing Association levels. It was designed as a means of undermining opposition to transfers, the rationale being that if the rents were the same in each sector, what difference would it make who owned your homes. “Equalisation” has been one of the drivers of the big increase in the Housing Benefit bill.

The ‘bedroom standard’

One other thing which I think we need to take up is the unrealistic ‘bedroom’ standard which was introduced by New Labour. Under this, couples only ‘qualify’ for one bedroom. What is the sense in placing young couples in a one bed property when as soon as they have a child they qualify for two beds and would have to be moved, if one was available. So-called ‘under-occupation’ is the inevitable result of the most usual lifecycle, when grown up children leave home. The shortage of accommodation of the ‘right size’ cannot be resolved by forcing tenants out of their homes, and moving us around at the whim of some local bureaucrat. As the example of Swindon shows, it would take 8 years or more to move those tenants caught by the ‘bedroom tax’ to a property of the ‘right size’, even if nobody on the housing waiting list was given a tenancy during this period.

The shortage cannot be tackled by treating us as if we were recipients of charity, to be forced to go where we are told. The shortage is the result of RTB and the failure to build new housing. It can only be addressed by a Council house building programme on such a scale as to begin to reverse the rise in the number of households on the waiting list.

Conclusion

Overall then I would suggest that the changed situation requires a change of emphasis by DCH. In a few months many Councils will start introducing fixed term tenancies for new tenants. We need to build a campaign which reasserts the principle of ‘secure tenancies’ for all tenants. Since Labour is currently the only governmental alternative we should press it for a commitment to reintroduce ‘secure tenancies’ if re-elected, and an end to means-testing of housing. This is a demand which the affiliated trades unions should be pressing. We should welcome the decision of the TUC and press for the unions to seek a commitment from Labour to end RTB. At the same time opposition to RTB is connected with the call for a new Council house building programme which will be necessary if the housing crisis is to be tackled.

Martin Wicks

November 1st 2012

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