Select Committee on Office of the Deputy Prime Minister: Housing, Planning, Local Government and the Regions Written Evidence

Memorandum submitted by Defend Council Housing (DEC 40)


  1.  Council tenants throughout Britain are absolutely in favour of improving all council housing through substantial investment in repairs and modernisation as quickly as possible.

  2.  Tenants do not accept the bullying and blackmail that says we must accept privatisation or half-way privatisation through ALMO as the price of any improvements.

  3.  The short- and long-term risks to tenants' rights and conditions posed by privatisation undermine our security, affordability, accountability of our landlord and long-term maintenance of decent homes standards.

  4.  The Government attempts to use decent homes targets to force us into stock transfer, PFI or ALMO has been imposed without any public debate about future of council housing, or any new legislation. This is not democratic and makes a mockery of ideas of "tenant choice".

  5.  The machinery of local government is being annexed and local democracy over-ridden in this process.

  6.  It is only through the opposition from tenants that any debate, newspaper headlines, enquiries etc have drawn attention to the injustice of current government policy towards council housing.

  7.  RSLs, lenders, ALMOs all have "trade bodies" and well organised, energetic lobbying groups to speak for them. Council tenants do not have a national representative body speaking up for them. It is crucial that local and national political representatives speak up for the four million council tenants and our families in Britain.

  8.  We call on the Select Committee to stand up for real tenants' choice and expose the con-trick being worked on us in the name of much-needed improvement work to ensure we all have decent homes.

  9.  This means defending the right to real tenants' choice by:

    —  ensuring a full and fair debate at national and local level examining the pros and cons of stock transfer, PFI and ALMO, with equal resources and access to information for the anti-privatisation case;

    —  reinstating the fourth option of direct investment in council housing in any choice process;

    —  a level playing field for council housing, so that funding available through transfer, PFI and ALMO is also made available to councils for direct investment in directly-managed council housing.


  10.  When tenants are asked an unloaded question, as in the British Social Attitudes survey and others, they prefer to remain as council tenants with direct investment in our homes. Tenants all over Britain are campaigning against transfer and other forms of privatisation. Some have had to defend their rights as council tenants several times over, with repeated attempts to introduce stock transfer, PFI or ALMO.

  11.  The aim of making sure all homes reach a decent standard is being manipulated all over the country by councils trying to meet government targets.

  12.  We understand that up to 200 councils have so far not been pushed into selecting one of the three options for investment dictated by the Communities Plan, and we believe non-compliance will help build the movement for direct investment in council housing.

  13.  However, wherever more money is needed to address the £20 billion backlog of repairs and improvements, tenants confront the attached threat. We are being told that to meet the Government's decent homes target requires investment which is only available through stock transfer, PFI or ALMO. This in itself is an abuse of democratic process. The ODPM Communities Plan, which has never been publicly debated or democratically endorsed, dictates that the option of direct investment without strings in council housing is not "available" although this is the option that tenants want.

  14.  Direct investment without strings is only "not available" due to a political decision. The money is available, as the expenditure on set up costs, debt write-off, PFI credits and all the other subsidies to transfer, PFI or ALMO show.

  15.  The ODPM position is not about money but political dogma:

    —  The National Audit Office and Commons Public Accounts Committee's reports on stock transfer show that it is better use of public money for councils to do up their housing stock that to carry out the same improvements via stock transfer. Stock transfer directs investment randomly, to meet standards set by lenders over 30 years (the "gold taps" effect). It does not focus investment in areas of most need. Transfer exposes tenants to higher costs, less security and accountability and the risks of a private sector landlord.

    —  PFI is a high-risk, high-cost option with all risks effectively financially underwritten by the public sector.

    —  Arms Length Management Organisations are costly to set up, and are financed with money which comes from, and should be available to, all council housing. ALMOs spend public money `on balance sheet' and cannot even therefore be justified as part of a Treasury book keeping exercise.

  16.  If existing funding was made available to council housing it would be enough to meet the repairs and improvements backlog and achieve decent homes.

  17.  Instead millions of tenants are being blackmailed, using the decent homes target as a stick to beat us. The Sustainable Communities Plan is an attempt to make the privatisation of council housing stick, against growing opposition from tenants.

  18.  It is shameful to see something as fundamental as the need for warm, secure homes manipulated in this way.

  19.  We are including evidence from tenants around the country, about the local impact of the decent homes—investment shortfall—stock options—transfer, PFI or ALMO "three card trick".

  20.  What is here is only a small sample. There are many more examples tenants could offer from Birmingham, Sheffield, Manchester, Liverpool, Hammersmith and Fulham and other places but we ran out of time to include them here.

  21.  Local authorities are using the "decent homes standard" to force tenants to accept LSVT, or other forms of privatisation. In none of the cases here does this represent "tenants' choice". It is being forced on them by government and their council

22.   Stroud DC

  Tenants in Stroud are midway through their ballot on LSVT. Stroud DC currently has the finances available to meet the decent homes standard by 2009. But the council claim this deadline would impose a sufficient strain on the council's finances to mean a cut of £2 million to housing services.

  Stroud's housing has a market value of £500 million. But the valuation used for stock transfer will net the council somewhere in the region of £25 million.

  Local tenants are aware of the inconsistencies in the Council's plan and have campaigned for the transfer scheme to be halted. The response has been very worrying:

    —  The Council has introduced an elected members protocol preventing individual councillors or party groupings from opposing the council's policy. One elected member been told she will be called before the standard board.

    —  Senior council officers intimating that tenants who were actively opposing the transfer of their homes may cause themselves trouble. The local MP, David Drew has a full transcript of this event, which took place in a local café in Stroud.

    —  Tenants supporting transfer have attacked individual anti-transfer tenants in leaflets, using council resources and council offices as their contact address.

23.   Macclesfield and Welwyn/Hatfield

  Both Macclesfield and Welwyn/Hatfield are debt free authorities. Macclesfield have opted for LSVT because of uncertainty over future funding and the likelihood that they would lose capital receipts under the proposals currently being discussed by the ODPM. The suggested net capital receipt for Macclesfield from the LSVT is around £18 million. At current levels of capital receipts Macclesfield would be able to claim back between £12-£13 million.

  Welwyn/Hatfield's concerns are identical, although the suggested way forward there is ALMO. Both case show that the local authorities proposals are based on the authorities continuing financial liquidity rather than what is in the best interest of their tenants.

24.   Nuneaton

  2.Q—"Hasn't the Government said it will give Councils the money they need for improvements?"

  A—"The Government has said that Councils must meet its `Decent Homes Standards' and that they believe that most Councils have enough money to do this. They have not said there would be any more money for major improvements . . ."—extract from "A Brighter Future"—Nuneaton Council leaflet for tenants promoting its proposed stock transfer, rejected by tenants xx 03

25.   Doncaster

    "Dear Fellow Tenants

    In October this year it is the intention of DMBC to ask all their tenants to vote on the future of their homes. Remember the newspaper we had about 12-18 months ago, which gave everyone the options? Housing Matters it was called.

    Stock Transfer

    This is where the carrot to have ALL your repairs done, ALL anti social behaviour solved, better management, better environment, is waved under our unsuspecting noses . . .

    There ARE alternatives. The Government has had to alter their criteria because of the very strong objections to this option. They cannot allow the country's housing to crumble away any more, so there has to be another way. It means not being swayed by silver-tongued promises. It means being involved and making sure YOUR money is spent how YOU want it to be spent!. . ."—Letter to all Doncaster tenants from Doncaster Tenants Federation, August 2003.

26.   Edinburgh

  "Stock Transfer has collapsed on the Dumbiedykes estate, just 200 yards from the new Scottish parliament building. For over four years, Edinburgh Council has pressured tenants in this its most high profile stock transfer with the big lie that changing to a Housing Association was the only alternative to cold, draughty homes . . . Holyrood Lochview Residents Association has always argued for us staying Council tenants . . .

  Now starts the struggle to have the estate improved by the Council, "the only game in town" as they used to describe stock transfer. The New Labour government in Edinburgh is still refusing to release to the Council the millions that they had budgeted for Dumbiedykes had we changed landlords."—Holyrood Lochview Residents Association, January 2003

27.   Rotherham

  The decision by Rotherham Council to press ahead with ALMO for its council housing is a dark day for Rotherham and a further betrayal of one of Labour's key cornerstone policies. Providing decent, affordable council housing for its people and communities. It is the half way house before full privatisation to the un-elected, unaccountable housing . . .

  The "consultation" was a sham. It deliberately sought to mislead people with only three clear options:

    1.  The total transfer of the Council's housing stock to a Housing Association.

    2.  Private Finance Imitative where money would be raised from the private sector to invest in modernising and repairing the Housing stock.

    3.  Arms Length Management Organisation where the Council would retain ownership but the houses would be managed by a management board.—Ged Dempsey Vice President, Rotherham TUC and Chair, Greenfields TARA.

28.   Haringey

  "Haringey Council is beginning a Stock Options Appraisal . . . There is pressure within the council to limit the consultation to the three privatisation options of stock transfer, PFI or Arms Length Management (ALMO). The Office of the Deputy Prime Minister (ODPM) promotes tenant involvement in the Stock Options Appraisals, outrageously referring to this as "tenant empowerment", and tenant reps are invited to choose an "Independent Tenants Adviser" for the consultation. Such "independent' consultants are certainly independent of the tenants: in fact they often shamelessly promote the privatisation agenda."—Paul Burnham, Haringey tenant.

29.   Tower Hamlets

  The borough has been split into 84 different areas. Each is being told that LSVT is the only option. There are to be up to 60 individual ballots on partial LSVT. Tenants had been told that the Government would pay off any existing housing debt if they choose to transfer their estates to an RSL. Now in light of the ODPMs decision not to underwrite partial LSVT there is no suggestion of where these funds might come from. The inference from a report to the council is that funds must be raised from "positive" valued estates to subsidise the transfer of "negative" value estates. Since there would not be enough funds raised from such a venture some estates would be left within the council's remit. Tenants are being told that the council cannot promise what level of services they would be able to provide for these estates.

  And despite all this, the council say they will fail to meet their decent homes target.

30.   Camden

  "The Council asserts that the ALMO is necessary in order to obtain the £283 million that they require. They describe the "fourth option" as "Stay as we are" or "Do nothing". This is highly misleading because it implies that, without an ALMO, there will be no money for capital improvements and therefore tenants with leaking roofs or other serious disrepair will have to "stay as they are". This is not true—Camden has substantial resources for capital works anyway, £338 million to spend by 2010, and much more over the long term . . .

  Moreover, the figure of £283 million is disputed by campaigners and the Council has, in the face of opposition, changed the number of non-decent homes, without any justification, from 16,525 to 21,275. In addition, the costs that Camden asserts are needed to improve properties are disputed. They describe the cost of a new kitchen (chipboard cupboards only) and bathroom suite and tiling as £10,000"—Letter from Camden Tenants to Council chief executive.

  31.  In many places demolition of council housing is proposed as the only way to meet decent homes targets (by knocking down what you can't find the money to do up) or to help make transfer or PFI more profitable for RSLs or developers. This is in areas of dire housing shortages where the effect must be to increase numbers homeless and on waiting lists.

  32.  Since stock transfer set up costs must be taken from within the housing revenue account, during this process repairs and improvements will take a back seat. The NAO found an average of £430 per home was spent on set up costs. For any authorities this is a hefty amount to lose from management, maintenance or the major repairs allowance.

  33.  It is inevitable that services will suffer at all levels while resources are diverted to produce slick brochures, videos and training staff to sell a promising rose tinted future to tenants. Little effort is given to paint a more realistic picture of the future under a privately funded housing company. Little is published of the findings of the national audit office, audit commission, or public Accounts Committee findings on LSVT.

  34.  One councillor in Wakefield recently denounced the NAO report as "lies, put about by Defend Council Housing". While we are happy to be associated with the findings of parliament's watchdog we do feel it is important that tenants be given ALL the facts about stock transfer or ALMO, rather than just the one sided view of a future life in paradise.

  35.  Real tenants' choice also demands a fair and democratic process. This cannot happen when representative tenant organisations are threatened with the removal of funding if they challenge council policy of stock transfer (as in Liverpool, Leicester and many other areas). The threat of loss of funding silences some, so we have the ridiculous situation where the main traditional tenant organisations, who have provided leadership and advice for council tenants over decades, are bullied into taking a "neutral" position and saying nothing about the stock transfer, PFI or ALMO process.

  36.  This is particularly worrying because councils produce such one-sided promotional material.

  37.  The District Auditor in May 2003 judged against Bath and North East Somerset Council over the one-sided way their pro-stock transfer campaign was conducted. The judgment says publicity material was unlawful and the costs therefore "contrary to law". The council propaganda was unbalanced, one sided and misleading, included information which would have led tenants to regard the transfer option with favour but omitted information which could have led tenants to regard that option with disfavour, and put the case for transfer but did not put the case for staying with the Council.

  38.  The judgment concludes that "the difficulties and unlawfulness arose because Mr Alan Ward and others were so persuaded by the case for transfer that they were unable to recognise that others might reasonably have held contrary views and, in consequence, failed to reflect those contrary views in the publicity material. It is unfortunate that those acting on behalf of the Council appear to have lost sight of the need to maintain an objective and balanced approach . . ."

  39.  This finding describes what is the norm in stock transfer ballots, and we know other tenants are using this judgement to try to stop councils abusing their powers. We need the support of the ODPM select committee however, to highlight the abuses of democracy and "choice" taking place around the country, and to spell out what should be the minimum standard for a fair debate.

  40.  We hope the evidence here shows that without the right to a fourth option, of direct investment in council housing without any strings attached, the decent homes targets has become a means to attack council housing and tenants' rights and security. This is bad for tenants, for all who need or want an affordable, good quality home, and for the future of working class communities in Britain.

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