LibLink | Andrew Stunell: Social housing to get first boost in 30 years

Andrew Stunell, the Communities and Local Government Minister, has an article in the Huffington Post today, announcing Government plans to increase social housing after decades of declining numbers and soaring waiting lists:

Liberal Democrats in government are ensuring this trend is reversed. We fought hard to make sure that the Comprehensive Spending Review last October included money for a social housing building programme of 150,000 new social and affordable homes to be built up to 2015. A key part of this was the new Affordable Rent model that we introduced, with an invitation to social housing providers to bid for funding.

We now know that demand from affordable housing providers to be involved in the programme has been huge, bigger even than our own expectations. And as can be seen in the details of yesterday’s announcement, every part of England is set to benefit. New homes will be delivered across all the country – rural and urban communities alike – and will include family homes.

We’ve been able to announce support for 145 schemes, sharing the £1.8bn pot of funding. This means that not only are we set to achieve our social house building target, we are set to exceed it. The Government is now on course to deliver up to 170,000 new homes by 2015, safeguarding some 80,000 jobs in construction, and other related trades in the process. We can now confidently say that we will be the first government for over thirty years to finish with more social and affordable homes than we started with.

Housing is a complex issue, and there are no easy solutions to the myriad of problems we face. Whether it’s overcrowding, under-occupation, waiting lists, or housing quality, we need a large package of solutions to tackle these issues. There is no one-size-fits-all option. But clearly the best place to start is by increasing the social housing supply. This won’t end our housing problems, but it is a big step in the right direction.

We all know that times are tough, and we need to learn how to do more with less in every aspect of government policy, including social housing. But even at a time when we are borrowing £400 million every day, government will still be spending billions on getting on with the job of tackling the housing problem in this country. And unlike Thatcher, or Blair, we will deliver an increase in affordable housing.

Read the full piece at Huffington Post.

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12 Comments

  • Paul Holmes 18th Jul '11 - 6:44pm

    Between 1997-2010 Labour built an average of 23,000 units of social housing per year (Labour Govt figures) which was exactly half the 46,000 units per year that were needed just to keep waiting lists static (Barker Review carried out for the Labour Govt). Almost all of these houses were Housing Association with just 4,000 Council Houses (compared to the 100,000 built by Thatcher in 10 years in office), due to New Labour’s attempt to close all Council Housing down by starving it of funds and ‘blackmailing’ Councils into transferring all stock to RSL’s regardless of tenants wishes.

    The Coalition’s aim to build an average of 34,000 units of social housing per year is therefore a definite improvement on Labour’s record in office but still short of what is needed even to keep waiting lists static. It is also based on forcing rents up to near market levels when the whole point of social housing is that (these days) it is almost entirely let to those who cannot afford market rents in the private sector.

    At last Autumn’s Liverpool Conference I asked my old friend (since 1984) Andrew Stunnell whether ‘Localism’ would mean allowing Council’s the power to finance Council House building out of future rental income -especially now that the Coalition were going to let Council’s keep all rental income (like HA’s) instead of diverting much of it to the Government in London. ‘No’ said Andrew, ‘because the public sector debt was growing rapidly towards 70% of GDP by 2015’ as a result of the Financial crash and of Labour’s inability to balance a budget since 2003. Council House building would of course count against PSBR whereas HA borrowing, like PFI, was ‘off the books’ even when primarily fuelled by taxpayers grants.

    But now we are told that Councils will be able to borrow against income from Business Rates. So why not against income from Council House Rents? Or is this the Eric Pickles version of ‘Localism’ that allows Councils only the freedom to do what fits with Conservative/Central Government beliefs?

    Paul Holmes. Former Liberal Democrat Housing Spokesman.

  • Erm, are these the 80% of market rent properties that completely re-write the book on what is an “affordable” home?

  • Paul asks a good question – particularly as HCA grants are available, and the higher rent levels are (essentially) a bankable income stream. If we allow housing assocs to borrow, why not councils? They can borrow more cheaply than HAs, after all.

    In many parts of the country social rents are already at roughly market rents, so the move to affordable rents only covers part of the country. We need a bit more nuance on that. Even at market rents social housing offers real advantages – particularly security of tenure.

  • Peter Thornton 19th Jul '11 - 9:48am

    The simple fact is that the UK needs many many more houses almost everywhere. The build cost of a “nice” house is well under £100,000 and the current high prices in most areas are a product of speculation aided by the shortage of supply. Housing is not high enough on our agendas, the housing minister is not even a member of Cabinet!
    We need many more social rented homes and this initiative hardly scratches the surface.

  • @Peter Thornton
    “and the current high prices in most areas are a product of speculation aided by the shortage of supply. ”

    The overwhelming evidence points to the fact that the absurd rise in house prices over the last decade was due to speculation aided by an increase in demand (in the form of easy credit), not a shortage of supply. You can’t cure a problbem if you don’t recognise the cause. The lenders and borrowers that borrowed unsustainably and forced up house prices have been bailed out by slashing interest rates. There are plenty of tax changes that would remove the unfair imbalance that exists towards current homeowners at the expense of those that would like to buy and also to make better use of inefficient use of housing. 800,000 houses stand empty – almost 5% of the total housing stock, and that’s before we take into account the number of houses that are empty whilst advertised to let or for sale and the large number of second homes that stand empty most of the year.

    It is our unfair tax regime (and the effects of monetary policy) that has led to stupidly, and unfairly, priced housing across the country – it is not a shortage of supply.

  • LondonLiberal 19th Jul '11 - 11:59am

    I’m afraid that, as others above have pointed out, Andrew Stunell is simply , to use unparliamentary language, lying.

    lie # 1. “We fought hard to make sure that the Comprehensive Spending Review last October included money for a social housing building programme of 150,000 new social and affordable homes to be built up to 2015. ”

    65,000 of these homes were/are being built under money committed by Labour. Due to construction times, they just happen to be completed now. It is tosh to claim that they are part of Coalition plans.

    lie # 2. “And unlike Thatcher, or Blair, we will deliver an increase in affordable housing.”

    No. You will deliver an increase in homes that are not genuinely ‘affordable housing’ but rather are slightly cheaper than market housing. If council housing is characterised by cheap rents and secure tenancies, then the homes the coalition is building, with two year tenancies and 80% of market rents, are NOT social housing. Redefining the word ‘affordable’ to mean housing that isn’t actually ‘affordable’ does not wash, nor does it make you net increasers of social housing when compared to Thatcher or Blair.

    Andrew, you are guilty of an Orwellian misuse of the word ‘affordable’ and a deceitful changing of definitons to make it look like you are better than you really are. This is shameful from one of our people, really shameful.

  • LondonLiberal 19th Jul '11 - 12:03pm

    @ Paul Holmes
    “At last Autumn’s Liverpool Conference I asked my old friend (since 1984) Andrew Stunnell whether ‘Localism’ would mean allowing Council’s the power to finance Council House building out of future rental income -especially now that the Coalition were going to let Council’s keep all rental income (like HA’s) instead of diverting much of it to the Government in London. ‘No’ said Andrew….”

    Andrew may need to talk with his civil servants, who have told me that reform of the Housing Revenue Account next year will indeed allow councils to use their borrowing headroom to borrow money to build new homes (or to invest in current stock). Councils up and down the land are planning to do exactly this. Whoever briefs Andrew needs to do his research in future.

  • Paul Holmes 20th Jul '11 - 2:05pm

    London Liberal comments that future HRA changes ‘may’ allow Councils to borrow against Council rents.

    To be fair to Andrew’s ‘briefing’ in Sept 2010, that was only 4 months after the Coalition began and Andrew’s pressure behind the scenes may well be producing a change in approach which we may or may not see next year. It would be a massive and fundamental change as Cons and Lab Governments for the last 30 years have been absolutely opposed to giving Local Authorities real freedom to operate (in any area of policy) outside of Central Dictat.

    IF -and it is pure speculation so far – Councils are allowed in the future to borrow against Council Rents for investment in existing housing stock, or for new build, that would be a massive turn around in opposition to traditional Conservative Party prejudice against Council Housing and against the explicit policy from Thatcher in 1979, to Blair and Brown up to 2010, of getting rid of Council Housing.

    The next step -if ‘Localism’ is genuine and not pure fluff -would be to give Council’s power over the Right to Buy. Many these days would not scrap it but would apply it as a sensible part of social housing policy rather than as a smoke screen for getting rid of Council Housing at ‘fire sale’ prices (as Thatcher did) whilst refusing to allow a single penny of the receipts to go back into building new (as both Lab and Cons Governments did).

    For example most Councils (bar the few remaining fundamentalist ‘old’ Labour ones), would want to sell some housing in areas of high concentration and use the money to build new elsewhere along the pepper potting lines so ably pioneered in recent years by Joseph Rowntree in York. Or to demolish some of the surplus flats built for young couples in the heyday of the baby boomers and build family houses and OAP bungalows to meet today’s needs instead. But other Councils such as in rural areas might well prefer not to sell off at all the few remaining Council Houses in such desirable commuter belt or holiday home areas. The point is that:

    a) These decisions should be in the direct, democratic, control of local councils and not behest to the prejudices of random Ministers in London such as Nick Raynsford who launched the onslaught for New Labour or Pickles and Shapps for the Tories.
    b) There would be no point in building new family houses if within a few years they HAD to be sold off at bargain basement prices because of Central Government dictat. Deliberately building such houses and using them to help people onto the property ladder through shared ownership and flexible ‘stepladder’ purchase policies would on the other hand be an approach that many Councils today would want to adopt.

  • Andrew Stunell MP 20th Jul '11 - 5:20pm

    All housing figures and numbers are hotly contested, but it may help to set out the numbers recorded by the Department in their annual statistical compilations. These show that between 1979 and 1997 the number of homes rented from Local Authorities fell from 5.1 million to 3.4 million. Taking into account gains in the HA sector, there was a loss of 1.1 million homes in the social rented sector overall, 62,333 per year lost under the Tories. Between 1997 and 2010 there was a further fall in LA home numbers, to 1.8 million. Again, taking HA gains into account, there was a loss of a further 420,000 social homes for rent, a fall of 32,308 every year that Labour were in power.

    Last year and every year this Parliament there will be a net increase. Of course I would like it to be more, but I would gently make the point that for the first time in 30 years it is going in the right direction. And, as will be seen when announcements are made shortly, these will be genuinely affordable homes, being built in every part of the country. Believe me they are there because of Liberal Democrat commitment, not the Tory manifesto! “Labour’s homes”? Labour’s chutzpah, more like!

  • LondonLiberal 21st Jul '11 - 10:03am

    Hi Paul,
    I agree with the bulk of your email.

    To clarify the borrowing against future rents point, as you know each stock holding local authority will have a debt ceiling allocated to it as part of the devolution of the housing revenue account. If a council’s actual debt is below this ceiling, it will be able to borrow up to that ceiling’s level. A number of councils are already looking at this – in factWandsworth is looking at the possibility of issuing a £250m bond, as area group of essex local authorities. The HRA revenue will then be used to service this debt.
    Hope this helps

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