Labour commits to review council housing ‘debt’

DSC01333Not surprisingly all the attention in relation to the housing part of Labour’s General Election Manifesto has been on the commitment to work towards building 100,000 council homes, welcome as it is. However, tucked away in the housing section is one thing which has received no attention in the media but could have an impact on existing council tenants. This is the commitment to review the debt currently held by local authority housing revenue accounts.

“We will review the case for reducing the amount of housing debt councils currently hold.”

This opens the door to a serious discussion on the 2012 ‘debt settlement’ which resulted in 136 council HRAs being loaded up with more than £13 billion of what could be described as fake debt.

Some months ago a couple of members of Swindon Tenants Campaign Group took part in a meeting with Shadow Secretary of State for Housing, John Healey, when he visited the town. One of the things we spoke to him about was the injustice of the ‘debt settlement’ and the need for the bogus debt to be cancelled. He said he was prepared to discuss this issue and asked us to write to him on the case for cancellation. This we did. You can read the document here. We haven’t thus far managed to get the meeting he promised. We will obviously be pressing for it in the light of the Manifesto commitment.

STCG raised this issue in a pamphlet in 2016. The most that John Healey said then was that cancellation was “an interesting idea”, but there was no follow-up. Later we produced an Appeal calling on Labour to press the government to reopen the debt settlement and to at least cut the debt in line with the rent income lost as a result of government policies. It was supported by these people and organisations.

We attempted to get the issue onto the Labour conference agenda. A resolution from South Swindon CLP calling for debt cancellation was forwarded to the Labour conference. Unfortunately, it was excluded from the housing section of the agenda which meant that it stood no chance of being prioritised in the ballot. It was therefore something of a surprise to see a review included in the manifesto.

Unknown to us the FBU had taken up this issue from our pamphlet on Labour’s Housing Green Paper and argued for cancellation in the Clause 5 process (the discussion on the content of Labour’s Manifesto). Whilst they did not secure a commitment to cancellation they did secure the concession of a review.

Obviously the outcome which would provide us with the best opportunity to press the case for cancellation would be a Labour government. However, whatever government emerges, we will continue to argue for cancellation and to present evidence from various local authority areas that show the reality of under-funding which HRAs face. For the fact is that unless this injustice is rectified then HRAs have insufficient resources to maintain and renew existing council housing stock over the long term. The latest example of this is the Medium Term Financial Plan for Swindon which shows a shortfall £81 million for capital spending (the difference between what is needed and what is available) for the next five years alone.

In Swindon we did manage to persuade the Conservative Lead Member for housing to write to the government asking for them to reopen the ‘debt settlement’ in light of the shortfall of resources. It was no surprise that the government rejected the proposal because it was worried that if it made a concession to Swindon then other authorities would demand the same.

The success of the Labour Campaign for Council Housing in promoting a radicalisation of Labour’s housing policy shows what can be achieved with a broad-based campaign across the country. Pursuing the issue of the ‘debt’ has sometimes felt like a lonely furrow to plough. Council housing finance has long been considered to be an esoteric subject, which has been very complicated. However, you cannot change national policy in relation to housing, council housing, in particular, without a grasp of the finances.

During the balloting process when Swindon council was proposing to transfer our homes to a housing association a very senior manager told me that I had no right to comment on the finances because I had had no training. How could a mere tenant understand such complicated issues? But you do not have to be an accountant or an ‘expert’ to understand them. You do have to make the effort to investigate how HRAs function and the system which was introduced in 2012. Indeed, tenants cannot hold housing management and councils to account unless we have a grasp of council housing finance. Council tenants can be no less intelligent that housing ‘professionals’.

Examine the historical record and it is clear that council tenants have paid more in rent than the historic costs of borrowing to support building programmes. We have long been fleeced by various means. Fundamentally, our homes cannot be allowed to deteriorate. The costs of putting them right later will be higher. A society which does not give people the right to a decent home just because they do not have the resources to buy one does not deserve to be called civilised.

We hope for a Labour government, but Labour, in government or not, has a responsibility to challenge the under-funding of council housing and to campaign for funding sufficient to maintain and renew our homes. The review gives us the opportunity for redoubling our efforts.

Martin Wicks
Secretary, Swindon Tenants Campaign Group

One thought on “Labour commits to review council housing ‘debt’

  1. I believe the Labour Party manifesto talks of REDUCING fictitious council housing debt, we don’t want it reduced we want it scrapped, so-called council debt has been used as a milk cow by the conservative party for years and coupled with the austerity programme has meant a deterioration in our homes, so we have got a lot of ground to make up. A good start would be to rid us of the bogus council debt

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