“Council debt settlements risk hurting existing tenants and should be recalculated”

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Here is an article I have had published in Inside Housing. You can read it here if you have access to the magazine http://www.insidehousing.co.uk/comment/council-debt-settlements-risk-hurting-existing-tenants-and-should-be-recalculated-54504  For those who don’t the text is shown below. The Headline was written by IH.

Self-financing for councils was introduced as part of the 2011 Localism Act. The act gave government the power to ‘reopen the settlement’; that is the amount of debt redistributed to each local authority in 2012.

It allows the government to make ‘payments’ to councils “if there has been a change on one of the factors taken into account in calculating the previous payment”. In practice this would mean cutting the debt they were given because the ‘previous payment’ is now out of sync with their actual income.

Government guidance said this was necessary to “protect both the government and local authorities from being locked into a deal that, because of changes to policy affecting either a landlord’s income or costs, no longer reflects a fair valuation and could have a material impact on viability”.

Today councils are locked into such a deal as a result of government policies such as the enhanced Right to Buy and the four-year rent cut. More


“Borrowing to build” is no solution to the council housing shortage


Is lifting the “borrowing cap” for council Housing Revenue Accounts the solution for large scale new council house building?

Councils in England are building very few council homes. In the seven years from 2010-17 only 10,840 homes were built. This compares with 18,220 demolitions and 60,567 sold through Right to Buy (RTB). In the six years to 2016 council housing stock in England declined by 174,000. One suggested remedy for the shortage of council housing has been the proposal that councils should be allowed to “borrow to build”. The Local Government Association, Shadow Housing Minister John Healey, and others have recently repeated the call for the borrowing cap, set for each council in 2012, to either be eliminated or at least raised. John Healey suggested that this would enable councils to build “tens of thousands” of new council homes. What his evidence is for this we don’t know.

It’s our contention that only central government grant towards the cost of house building can provide the resources necessary to build new council housing on a scale sufficient to begin to tackle the housing shortage. Proposing that councils increase their debt takes no account of the financial crisis being faced by local authority Housing Revenue Accounts (HRAs). Read on below or download a PDF here  borrowing

Under-funding of council housing – Time to “reopen the (council housing debt) settlement”


At a recent meeting of Swindon Council’s Housing Management Cabinet Member Advisory Group1 an Asset Management Strategy was discussed. This document brings together planning of the work that needs to be carried out to maintain the housing stock in good condition over the long term. One of the factors which it has to take account of is that 42% of the stock is “non-traditional”, i.e. pre-fabricated. It’s upkeep is more expensive than traditional building. A Stock Condition Survey carried out by the company Penningtons proposed that in order to prolong the life of the “non-traditional” properties, certain structural work would be necessary. They said this would require spending £7 million a year for 10 years. However, the council is currently spending only £2.5 million a year on this work. If spending remains at that level then it would take 28 years to do the work rather than 10!  Read on below or download a PDF here octobercmag More

What is Labour’s council housing policy?


One of the expectations of Labour supporters is that a Labour government with Jeremy Corbyn as leader would build council housing on a large scale once again. From the start of his first leadership election campaign up to just before the General Election Jeremy spoke of building 100,000 council homes a year. In April the Guardian reported that his “top priority” was to build more council housing and introduce tougher regulation in the private rented sector. However, Labour’s policy as expressed in its Manifesto was far different from Jeremy’s statements.

The draft version of the Manifesto which was leaked to the media spoke of a commitment to building 100,000 council and housing association homes, with no indication of the proportion for each. Yet even this figure, which diluted the council housing component, did not survive in the published document. It was transformed into 100,000 “affordable homes” for “rent and sale” by the end of the Parliament; i.e. by year five. There was no indication of how this would break down. Would it, for instance, be 50,000 of each? The Manifesto does say that Labour will “begin the biggest council housing programme for at least 30 years”. However, we checked how many were built then. In England it was only 16,000.  Read on below or download a PDF here labourschcommitment More

Underfunding of council housing – the impact on Bristol

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Underfunding of council housing – the impact on Bristol

Swindon Tenants Campaign Group has shown how the coalition and Tory governments have under-funded council housing. We have explained the impact on Swindon’s Housing Revenue Account (HRA). All local authorities that own council housing are being starved of funds as a result of ‘self-financing’, the new council housing finance system introduced in 2012 and policies implemented since then. More than £13 billion of extra ‘debt’ was loaded onto 136 councils in what was described as a ‘debt settlement’. What was said to be the national council housing debt, though largely fictitious, was redistributed amongst stock owning councils. The amount of debt each authority was given was based on an assessment of how much rent income they would collect over 30 years, the cost of managing the stock, and the number of homes expected to be sold under RTB (each one being rent income lost). To enable them to pay off this ‘debt’ each one was given a loan from the Public Works Loans Board (PWLB). To service this debt they are obliged to pay an annual interest charge to the PWLB. They have discretion on how they deal with the ‘loan’ itself, how much they pay each year towards paying it off. They were told that the settlement would ensure that all councils would have sufficient money to maintain their housing stock over 30 years. However, the 30 year business plans which councils had to draw up have been blown out of the water by changes which the coalition and Tory governments introduced. Here we look at the situation facing Bristol council’s HRA. (Read on below or download a PDF here bristolhra )

Swindon Labour Group supports call for cancellation of council housing ‘debt’

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Swindon Council’s Labour Group has supported our campaign for Labour to press the government to reopen the 2012 ‘debt settlement’ and to commit to cancelling the bogus council housing ‘debt’ if elected to government. Below is Labour Group Leader Jim Grant’s letter to Jeremy Corbyn.

“Dear Jeremy,

I am writing to you on behalf of the labour Group of Swindon Borough Council to give our support to to the  growing campaign for an incoming Labour Government to commit to cancelling council housing debt . This campaign initiated by the Swindon Tenant Campaign Group  has two key elements

  • To re-open the 2012 debt settlement and write off council housing debt in line with the significant loss of rental income resulting from the governments’ policies since 2012
  • Commit to cancelling all council housing debt on election to government


Leicester Labour Party supports call for cancellation of council housing ‘debt’

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Harry Stannard from Leicester sent us this report.

At its members’ meeting on January 10th, Westcotes branch of Leicester West CLP (Liz Kendall is the MP), passed the following resolution unanimously:

We welcome the Shadow Cabinet’s decision to call for the ‘Right To Buy’ in England to be suspended, and that rent control legislation should be introduced in the private sector.  Along with the Swindon Tenants Campaign Group we also recognise that council housing is facing a serious funding crisis as a result of the so-called ‘self-financing’ policy since 2010, which has led to a growing loss of rental income to local authorities.

We call on the Labour Party and in particular the Shadow Cabinet, National Policy Forum and Leicester City’s Labour group to:

1) Press the government to reopen the 2012 ‘debt settlement’ and demand that it reduces the debt given to local authorities in line with the loss of income resulting from government policies since then.

2) Make a commitment that in government they will cancel the so-called ‘council housing debt’ imposed in 2012, which is draining resources as rental income declines significantly. This should be part of our commitment to making a massive council house-building programme one of the corner-stones of a Labour government.

We resolve to contact the STCG to enquire more details of their campaign, and will send this resolution to our CMC and other branches in our CLP”

Westcotes is the second largest branch in the constituency, and the motion was seconded by one of its councillors, Andy Connelly, who is Leicester City Council’s Assistant Mayor for Housing. Andy explained how council house building in the City had almost dried up for lack of funds, whilst sales enforced on us by the so-called ‘Right to Buy’ are now running at over 300 per annum.

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