The Labour Campaign for Council Housing has called for the new Labour leadership to commit to the 2019 manifesto pledge to build 100,000 council homes per year, and to fund this through a £10bn annual grant.
In a letter to Keir Starmer, Angela Rayner and Shadow Housing Secretary Thangam Debbonaire, the group told the new leadership team that the coronavirus crisis would “undoubtedly make the housing crisis worse”.
The campaign also asked the new leader and his team to go further than the December policy by campaigning for the cancellation of local councils’ housing revenue account (HRA) debt, £26bn, owed to the Public Work Loans Board.
Secretary of the campaign Martin Wicks wrote: “Government has created a precedent by cancelling the £13.4bn NHS debt. £26bn is not much higher given the scale of government action.” He declared that this would give local government a £1.25bn boost in annual income.
Local authority housing is contained within the HRA, a ring-fenced budget. The local authority takes rent and service charge from its tenants to put into this pot, and can only spend the money on building and maintaining housing.
Local authorities are able to borrow money within their HRAs in order to finance the building of more social homes in their areas, as well as to regenerate and refurbish existing stock.
The Labour Campaign for Council Housing wrote to all candidates in the leadership contest in February, asking that they commit to the 2019 manifesto commitments.
During his campaign, Starmer pledged to build a “new generation of council and social homes” but stopped short of signing the pledges from the campaign.
Below is the full text of the letter sent by Wicks to the Labour leadership today.
On behalf of the Labour Campaign for Council Housing congratulations on winning the Labour Party leadership/deputy leadership election and Thangam’s appointment to Shadow Housing Minister.
We are asking for a commitment from the new leadership to stick to the Manifesto policy of 100,000 council homes a year funded by £10bn annual grant and to press the government to provide such a level of grant for building social rent council homes.
You come into office at an extraordinary time. The coronavirus crisis will undoubtedly make the housing crisis much worse. Even with the moratorium on evictions (be it for three months only or extended) there will be a big increase in rent arrears as a result of tenants losing their jobs or being stood down for a period. Many small businesses will not reopen. It is likely that at the end of this period there will be a spike in evictions and councils simply do not have the resources to cope with a big increase in the numbers in temporary accommodation.
The low level of council homes (now less than 1.6 million in England) is a key problem when dealing with homelessness. Placing people in the private rented sector is much more expensive than placing them in council housing. The question of a large scale council house building programme therefore becomes even more urgent when we emerge from the lock-down. Obviously we are not in power to implement the commitment to building 100,000 council homes a year but the government is more susceptible to pressure than might have been the case before this unprecedented crisis erupted.
Even the Tory dominated LGA recognises that a return to large scale council house building is necessary to resolve the housing crisis. Putting building workers back to work building homes for social need will be a key means of dealing with the impact of the current crisis. So long as house building is dominated by commodity production then the building industry swings between feast and famine. Large scale council house building creates more job security.
Our Manifesto included a commitment to a review of Council housing ‘debt’. Our campaign supports the cancellation of the bogus £26bn debt held by the Public Works Loans Board. This is an historic injustice. Council tenants have paid more rent than the costs of borrowing for past building programmes. The current figure is the result of Treasury manipulation which has fleeced tenants for many years. HRAs are grossly under-funded. The current crisis will exacerbate their financial problems.
With most housing departments now only doing emergency work there will be a big backlog of maintenance and renewal work. HRA income streams will be hard hit by increasing rent arrears and loss of rent from ‘voids’ being empty for longer. We are therefore asking the Labour leadership team and Shadow Cabinet to press the government to cancel the HRA debt.
A few weeks ago this might have been considered ‘extreme’. However, the government has created a precedent by cancelling the £13.4bn NHS debt. £26bn is not much higher given the scale of government action. Because they wouldn’t have to service the debt council HRAs would have at least £1.25bn (last year’s debt charges paid to the PWLB) a year extra income, probably more.
Safe, secure and genuinely affordable Housing should be a human right rather than a commodity. So long as house building is dominated by the big builders/developers then most housing will be speculative, designed not to address a human need but to create a profit for companies that have made a fortune from Help to Buy.
Secretary, Labour Campaign for Council Housing