Hiving off council housing

Liz Davies looks at the Government's enthusiasm for local housing companies.

Prior to the 1945 Labour Government, most working class families lived in private rented accommodation. There was no security of tenure and rents and building standards were subject to minimal regulation. The post-war Labour Government embarked on a major public housing drive, building some 100,000 new dwellings a year. This programme was continued under the Tories and by the 1970s over one third of all housing was in the public sector.

Thatcher's right to buy legislation, enacted in 1980, began to reverse the process, and the Housing Act of 1988 took matters further by channelling funds to housing associations. A year later the Tories prohibited local authorities from subsidising council rents by ring-fencing housing revenue accounts. By 1990, councils across the country had virtually stopped building new homes. As existing stock deteriorated money for repairs was constantly squeezed.

The Labour Government could have taken a number of positive steps to improve the situation. It could have restored fair rents in the private sector and released capital receipts for improvements in the public sector. It could have introduced a single tenancy for all social housing so that tenants are not caught between the greater security of council tenancies and the more restrictive security offered by housing associations. Above all, it could have abolished the ring fencing of housing revenue accounts.

Instead the Government seemed to embrace the Tory presumption that private is best. The flavour of the month is local housing companies, an arrangement in which estates are funded through housing associations and managed by a tripartite body made up of the association, the council and tenants representatives. Under present legislation, tenants will have less security, and fewer rights to succeed to parents' tenancies.

The landlord will not be directly accountable to tenants through the ballot box, as with council housing and the assignment of tenancies cannot be part of a larger policy for social justice and equality. Unless the council retains 100% nomination rights, the estate effectively enters the private sector, and the availability of accommodation on it will not be determined by need, but by market forces. With investment being channelled into local housing companies and away from local authorities, the result could be the creation of a two or three tier system in which the lucky ones end up on well-resourced estates, and the unlucky are left behind on estates even more deprived of resources than at present.

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