Memorandum submitted by Defend Council
Housing (DEC 40)
SUMMARY
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.
BACKGROUND EVIDENCE
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
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.
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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