If the answer is cutting the council stock by 50%, we’re asking the wrong question

Towards the end of the last century I spent some months working in Southwark preparing and drafting the Council’s then housing strategy.  So it was interesting to read the report of the Southwark Housing Commission some 14 years later.  Surprisingly, most of the issues were much the same, showing that not enough progress has been made in the intervening period.  Strategies are an important but not sufficient element in achieving change.

The Commission makes many recommendations about the future of council housing in the borough that are sound.  Many, like the need to improve repairs and maintenance and the responsiveness of housing management are not new and are not controversial.  There are many examples around the country of councils that have made significant progress in these areas.  Nor will there be much argument about the Commission’s conclusion that the council will need to run its housing with ‘a more business-orientated mindset’.  The controversy lies in the Commission’s discussion of the future role of council housing in the borough and in particular whether the council should aim to retain its stock at its current size or reduce it by as much as 50%.

The Commission comes to stark conclusions about the state of the council’s 39,000 homes – with 18,000 homes still below the decent homes standard and a growing proportion of the stock reaching the end of its useful life without major investment.  This is a consequence of the type of construction undertaken after 1950 and the inadequacy of investment in long term maintenance since.  Southwark did not benefit enough from the ‘decent homes’ funding made available by the Labour Government after 2000 – although different people will have different views as to whether this was the Government’s fault for insisting on ownership and management options that tenants did not want or just the inevitable outcome of the council and tenants’ own decisions on issues such as stock transfer and setting up ALMOs.  Most tenants still continue to prefer to keep the council as their landlord, and that should be the starting point.

If it is easy to be dazzled by the scale of the challenge in Southwark, and to descend into doom and gloom, the Commission’s analysis provides some new grounds for optimism.  In particular, HRA (housing revenue account) reform – proposed by Labour and implemented by the Coalition – could be the game-changer.  Back in 1999 the council did not want to go down the road of large scale stock transfer, so the success of the housing strategy depended almost entirely on national government funding decisions – the annual HRA settlement and annual investment allocations.  The council now has choices and much more power over the destiny of its housing stock.  It has control of its own rental income and a sizeable borrowing capacity.  It has a real opportunity to prepare a genuine (rather than a hopeful) 30-year strategy for its stock and full responsibility for its implementation.  The report shows that a judicious mix of redevelopment in the worst cases, physical improvement in many others, and using borrowing capacity to build new homes to replace those lost through right to buy and demolition, together with a major drive to improve the quality and responsiveness of housing management services, could mean that council housing in Southwark has a positive future.

The Commission considers three options for the future size of the council stock – maintaining the current number (39,000), reducing to 30,000 and reducing to 20,000.  I am not convinced that they have got to grips with the option of reducing by almost half – there is no real discussion about who the stock would be transferred to, what might happen to it and whether it would be guaranteed to continue to meet housing need rather than be marketised in some way.

The Commission itself concluded that even a stock of 39,000 – the largest of any London borough – would be insufficient to meet the predicted need for homes that are affordable to people on low and moderate incomes.  Even if it could meet the borough’s own needs, those with long memories will recall that most of Southwark’s homes were built by the LCC/GLC, with resources provided by all Londoners, partially to help relieve housing pressures in other boroughs with less land.  As the ‘social cleansing’ of poorer people from high value central boroughs takes place, Southwark may need to fulfil this role again.

Crucially, the Commission’s assessment is that all three stock sizes would be viable options: “The Commission holds the view that all three options are possible and potentially financially sustainable, and that each has its advantages and disadvantages.”

Social rented homes have become such a precious resource that it is surely right that the Council Leader, Cllr Peter John, in response to the Commission’s report, has ruled out drastic reductions in the stock and has also reiterated the borough’s commitment to building 1,000 new council homes by 2020.

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2 Responses to If the answer is cutting the council stock by 50%, we’re asking the wrong question

  1. bernard crofton says:

    Your headline sums it up Steve. Actually according to them,: “The independent Commission’s task was to propose innovative, but deliverable, long-term ideas to respond to issues created by the unprecedented demand for council housing, that will ultimately help future generations of families prosper in the heart of central London.”.

    They don’t seem to have considered, as one of their options, responding to “the unprecedented demand for council housing” by ..erm…. providing council housing. .
    I can’t see how they stumbled over that, however, because their report will not download from the council press site, nor from the Cabinet agenda.

  2. Dear Steve,
    I agree both with you and the Council Leader, there will no doubt have to be some redevelopment but the objective should be to retain the present stock in so far as possible, first priority bring the remaining stock up to DHS ASAP and secondly seek to have a new build programme. Graham Facks-Martin

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