"Tenants Optimism and Government Disarray" – from Defend Council Housing

Posted: March 17, 2005 | Filed under: Privatisation / Sell Offs |Comments Off on "Tenants Optimism and Government Disarray" – from Defend Council Housing

Tenants, councillors, council officers and trade unionists from thirty areas gave evidence to the inquiry organised by the House of Commons Council Housing group of MPs at Parliament last Tuesday (March 8th).

140 people from across the country took part making it a hugely successful event. A wide range of evidence was given to MPs (see below). Both MPs and councillors expressed the view that it is only a matter of time before Ministers are forced to announce concessions on the “fourth option”.

The latest government figures show that their privatisation programme is in disarray. More councils are declaring for stock retention, and there is a low take-up for the next round of transfers and ALMOs (see the DCH website).

There are also energetic local campaigns in a number of areas facing ballots. Let us know what your council is doing and how we can help. In a sure sign of nervousness, and pure desperation to keep the transfer programme going, the government has caved in to pressure from lenders and dropped its plans to tie stock transfer gap funding to the performance of the landlord. (Inside Housing, 11 March).

Yet on March 3rd Housing Minister Keith Hill, speaking in a Commons debate on Decent Homes, said “We are under an obligation to ensure that where we provide extra resources, we also drive up performance.”

Ministers are clearly getting squeezed between a rock and a hard place. This is further proof that privatisation is bad value for money. Please contact your MP and use this example to get him/her to sign the current motion in Parliament and back the demand for the “fourth option”. [HI comment – This is DCH’s point of view. Hackney Independent does not see parliamentary motions as a priority].

A further sign that the privatisation programme is hitting the buffers was the news that the Community Housing Task Force, set up to “enhance the stock transfer product”, is being disbanded. The Task Force has been central to driving councils to stock transfer and ALMO.

Amusingly, Phil Morgan, chief executive of TPAS (an ODPM/landlord funded organisation that acts as so-called Independent Tenants Advisors), expressed concern that the remaining councils “are either ones where people have been loathe to go through the process or are very difficult and demanding. They are precisely the ones that you need the expertise of the CHTF to operate on”. (Inside Housing).

TPAS regularly tries to eject tenants distributing DCH material at public meetings and refused a request from Austin Mitchell MP to help publicise the group’s first inquiry session last year.

We need to get this information out to tenants, trade unionists and councillors. Can you help organise a fringe meeting at the Local Government Association Conference, trade union conferences or a major public meeting in your area/region? Have you distributed the latest DCH newspaper?

Evidence given to MPs on March 8 included:

A Sunderland councillor who reported that tenants had suffered a 17% rent rise after transfer – but only 26 out of 4000 promised new homes have been built.
Two tenants from Hackney told how they were kicked off the board of the new company for rocking the boat, and refusing to accept confidentiality clauses.
Tenants from Tower Hamlets and Lambeth reported on their respective campaigns against mass demolition of council homes to make way for private homes for sale.
Camden councillors and tenants reported they are continuing their joint campaign for direct investment
Councillors from Bolsover, Melton, Lewis and elsewhere reported on recent decisions to keep their homes after consulting tenants.

For more information, see http://www.defendcouncilhousing.org.uk
Sold for the sake of it: This government’s knee-jerk drive to privatise public housing reveals a contempt for choice –
Austin Mitchell, Tuesday March 15, 2005 -The Guardian

This could be John Prescott’s finest hour. Our deputy prime minister is embarking on what he hopes will be the final stages of his eight-year war against councils and council housing. A battle of bluff, bashing and bluster is reaching a climax, with Prescott doing his utmost to force councils who want to keep their houses to meet his July deadline for the submission of plans to get rid of them.

Nominally, the councils are being given three choices: stock transfer (ie privatisation), PFI (ie privatisation) and Almos (arm’s-length management organisation – the first of a two-stage privatisation process). As this Hobson’s choice demonstrates, Prescott’s purpose is to privatise housing that councils have taken years to build up. In the main this is being done by forcing as many councils as possible to choose the first option and hand their stock over to a hungry financial interest poised to grab easy profits.

Despite the stark choice tenants are being offered – vote for privatisation, or go without repairs and improvements – this policy has been vigorously opposed all over the country. Leicester, Greenwich, Wandsworth, Cambridge, Ceredigion, Bridgenorth, Darlington, Barking and Dagenham, South Derbyshire and Broxtowe are the latest local authorities to decide to keep council housing after consulting their tenants. In Birmingham, two-thirds of the 88,000 council tenants voted against privatisation, forcing the government to give the council an exemption from the July deadline.

This opposition is particularly admirable given the dirty war that councillors and tenants say is being fought against them. The government’s technique is simple. Because the government siphons off a portion of council house rents, councils are unable to take on the £19bn backlog of repairs and renovations that built up under 18 Tory years of sale and disinvestment.

Tenants are then told they can climb the stairway to paradise by voting for privatisation to a Registered Social Landlord (RSL), financed by private-sector money. To help them make up their minds they are deluged with glossy propaganda – brochures, videos and DVDs. These are supposed to put both sides of the argument, but in fact say only that the local council is an abject failure, while every house on the estate will be brought up to a high standard if tenants vote yes.

Every dirty trick is then mobilised, from starting ballots early to prevent opposition material reaching voters, to using housing officers – council employees – to canvass support on behalf of private companies. Prescott’s task force instructs councils on these tricks, introduces private-sector friends who will help, and warns that if the tenants vote the wrong way they’ll have to ballot again. Or rot in hell.

Like any other war this is an expensive business: costs of £435 in fees, consultancy and propaganda for each house, high sums in debt write-off, around £800m lost per year plus CAP funding for negative equity and the extra grants paid by the Treasury for Almos.

The government and local councils are spending millions to give away billions of public assets. It is unnecessary, too. There is a fourth option, which most tenants want but aren’t allowed to vote for: letting councils retain and repair their own housing. This would be less expensive than any of the three options on offer. If councils retained all their housing revenue without the government siphoning money out (they’ve taken £13bn over nine years to pay tenants’ housing benefit and are still taking around £700 per house for historic debt), retained their own right-to-buy proceeds and added in some borrowing, they could refurbish the stock themselves and even begin to build again.

All this would be less expensive if it was done by councils. It costs £1,300 less over 30 years for them to repair and renovate than for RSLs, which have higher interest charges and management costs. This was the option the Labour party conference voted for, yet Prescott has refused to consider it.

Horrifying stories of dirty tricks were given in evidence last week to the Council Housing Group of MPs. The whole process demonstrates contempt for local democracy and the real choices which are supposed to be central to Labour. It undermines councils and puts tenants, who normally vote Labour, right on the frontline. Yet it is government policy.

It is exemplified in what is happening on the Clapham Park estate in Lambeth, south London. Polly Toynbee wrote about that on these pages in glowing terms which were contradicted by the local delegation giving evidence to us. Her article has been reproduced in the glossy pro-privatisation brochure given to every tenant on the estate – minus the three paragraphs that were highly critical of Prescott’s privatisation plans.

I can’t claim to have lived on the estate, as Toynbee did for her book Hard Work, but some of her assertions require correcting. She says, for example, that rents won’t go up if tenants vote yes. The experience of other estates shows that they do. New tenants and anyone benefiting from improvements can be expected to pay more and service charges will go up. RSL rents are 20% higher on average. Evictions will increase, too. RSLs replace secure tenancies with “assured” tenancies, which are not the same in law and allow the eviction of tenants in arrears.

The tenant participation that Toynbee praises withers under RSLs. Two tenant board members from Hackney told our group that they were kicked off for “rocking the boat” by raising tenant issues.

No one is opposed to bringing private capital into council housing. But it is feeble to insist that it can only be done by giving council housing to the private- sector financial interests which permeate the office of the deputy prime minister and its task force. Instead of helping councils to improve practice, it is paid by the public to work for the private sector – and hand over the stock, land and the profits which will flow from both once initial borrowing is paid off.

Clapham Park may turn out to be the successful assertion of tenant power that Toynbee hopes for. There are good housing associations and bad, like councils. But councils are ultimately subject to democratic control and can be thrown out, while RSLs cannot.

This is about more than Clapham Park. It is about all tenants who find themselves in the frontline of a war that a Labour government should not be fighting. As house prices escalate, we need more public rented housing, not less. We should not be paying lip service to localism while pushing councils out of a sector they handled successfully right up to the Tory years of disinvestment.

This is an ideological battle waged by a government that has a knee-jerk distrust of the public, and puts its faith in the private sector instead. A bit of thought and flexibility could easily have developed a way of bringing private capital into council housing renewal without giving away this national asset.

The government can’t prevail totally. Several areas have voted no and several councils won’t back down. No Labour government can force them to do so. So why continue to drive down this ideological impasse, rather than think through the alternatives and work with councils instead of trying to emasculate them?

Austin Mitchell is the Labour MP for Great Grimsby and chair of the Council Housing Group of MPs

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