Labour's third term should end the era of council-owned housing by compelling all local authorities to transfer their housing stock to third sector landlords, according to a new Fabian Society publication. The Fabian Freethinking paper Transfer of Affections: Housing policy in Labour's third term, by housing policy expert Jeff Zitron, is launched on Wednesday 15th December at a seminar with Housing Minister Keith Hill and Professor Anne Power of the LSE.
84 per cent of tenants' ballots to date have voted for transfer. In part this is precisely because the choice is so loaded. However, where ballots fail residents in areas desperately requiring additional investment can be left behind. Zitron argues that transfer should be mandatory, but that tenants should have a real choice about who the new landlord is. Under these proposals, all transfers would be completed by the end of 2007. This will enable the government to meet its own 2010 deadline for all social housing to achieve the Decent Homes Standard.
Zitron calls for the left to return to its co-operative roots to give tenants more say over governance of their homes and neighbourhoods. Community empowerment must be a fundamental tenet of transfer – with all schemes mandated to emulate the tenants' 'right to manage' in successful schemes like Preston's Community Gateway Model. In addition, all housing association tenants should keep the 'Right to Buy' after transfer: Glasgow's success in doing this disproves claims that it prevents transfer being financially viable.
Zitron argues for a new model of a regulated independent sector to ensure competition, diversity and user involvement, arguing that 'lazy landlords' must not be allowed to claim that empowering tenants is too difficult. Existing housing associations should also accept the empowerment commitments that new landlord would be required to offer, with all social housing tenants gaining the right to manage and right to buy.
Preface
The division between the Labour Government and the Labour Party over stock transfer is undermining the interests of tenants and preventing many of our worst estates from being improved. Both Government and Party have to rethink their approach to social housing. Each has allowed the stigma of Conservative privatisation to hamper the development of stock transfer as a vehicle for community empowerment.
At present, Government and Party seem to be on different sides of a sterile debate over the future of council housing. The Government, whilst claiming that stock transfer is just one of several options available to tenants and councils, offers no comparably funded route for councils that want to retain all their stock. Despite the overwhelming vote at the 2004 Labour Party Conference in favour of comparable funding, John Prescott has made it clear that this policy will not change. But the Party and the Government are both, in their different ways, championing democratic phantoms. The Party's attitude towards council housing reflects a political relationship between local authorities and their tenants that simply doesn't exist any more; tenants no longer control their homes through controlling their council. Meanwhile, the Government creates the illusion that tenants are choosing from a range of investment options. But, in reality, many tenants are simply being asked to choose between transfer to a housing association or no investment.
If there is to be no 'fourth option', we must move to a policy for council housing that makes sense and gives tenants real choices. This involves being open about the role that councils should be playing in housing. This paper proposes that the housing association and co-operative sector should be the provider of social housing, not councils, and that the demonstrable scope of that sector to give tenants greater control should be tapped. New standards of accountability for the housing association sector need to be set, and greater opportunities provided for tenants to shape how the sector develops.
Government should move quickly to a policy of universal transfer, and require councils to divest themselves of their stock. While tenants would lose the choice of retaining the local authority as their landlord, they must be given real choices over the landlord to which they transfer, the terms of their transfer, and their subsequent role in the governance of their homes and neighbourhoods.
The Party needs a transfer of affections. The Government needs the courage of its convictions.
Transfer of Affections - housing policy in Labour's third term
Since 1997, Government policy on local authority housing has been relatively consistent. The Government has introduced a Decent Homes Standard that all social housing must meet by 2010. For local authorities with significant investment requirements this is extremely challenging. Many local authorities cannot borrow sufficient funds to bring their own stock up to standard. However, if the housing is transferred to a registered social landlord, or to external management via a Private Finance Initiative (PFI) or an Arm's Length Management Organisation (ALMO), additional scope for borrowing is created. The Government has repeatedly and consistently said that it will not provide additional revenue support for borrowing to allow more councils to retain their housing stock, the so called 'fourth option'.
So, where estates have significant investment needs—usually as a result of long term under-investment and consequent decline—there are very strong incentives in favour of transfer from local authority ownership. This is the case regardless of how good the local authority is at housing management. Local authorities with lower investment needs face fewer powerful incentives to transfer. This is the case regardless of how bad the local authority is at housing management. The Government struggles to explain why it will not allow local authorities which manage well to borrow to invest in their own stock. Meanwhile, tenants must be balloted before a transfer can take place, but many believe this is a fake choice, where the incentives appear to be strongly loaded towards transfer.
The question arises: does the Government see any future role for local authorities as landlords? If the answer is 'only the good ones', then a 'fourth option' is the logical consequence. If the answer is 'no', then an honest statement of that fact, and the creation of real choice for tenants within a more coherent policy, must be the way forward. This paper favours the latter approach, and, indeed, argues that it is long overdue.
One implication of such an approach is that it makes little sense to continue offering tenants a loaded choice about whether or not to transfer. If the Government believes that local authorities should no longer manage housing, the choice offered to tenants should not be about whether to transfer; it should be about who they will transfer to, and how their homes will be managed in the future.
At the same time, a new disposition is needed between the Labour Party and the housing association sector. The Party needs to drop what is often an instinctive suspicion of housing associations, and start to use transfer as the opportunity it really represents. Labour authorities that have pursued or are pursuing transfer are already doing exactly this. By the same token, if existing housing associations are to put themselves forward as prospective landlords, they need to commit fully to tenant and community empowerment. Further, a new generation of community-led associations needs to be developed, building on the achievements of Co-operative activists.
The general argument for transfer is not that local authorities are incapable of managing their housing stocks. The point is that through transfer tenants can regain control of their own homes in a way which local authorities no longer offer. Council tenants no longer have substantial political influence over local authorities (if they ever did), and only in a small minority of cases can they influence voting results in individual electoral wards. Concentrated resident power and influence in well-designed housing association governance structures is now potentially a far stronger instrument than diluted electoral influence upon councils for whom the interests of social (let alone council) housing tenants are just one of many priorities.
If the Labour Party is to embrace a new and universal transfer policy, choice, empowerment and accountability are essential. At the same time, removed from a landlord role, councils need be allowed to focus on ensuring that the housing needs of the community as a whole are met.
The roots of Labour's confusion
It's hard to say when the love died between New Labour and the council tenant, but another man was definitely involved. Well, four, actually.
The first was that bounder, Michael Heseltine. Using the Right to Buy, he demolished an electoral base that Labour had long taken for granted. He also exposed the myth that a collectivist culture existed among council tenants, perhaps unintentionally providing the first clues as to how Labour needed to reposition itself.
The second old rogue was Nicholas Ridley. By giving housing associations the ability to fix their own rents, he made it possible for them to raise private finance to build and repair social housing. He also allowed council tenants to reject their landlord in favour of transfer to a housing association. The left sniggered as, in the early days, tenants largely voted to stay put. But old Nick's legacy now haunts New Labour and hampers its plans to improve the quality of council housing. Even though the vast majority of stock transfer ballots result in a 'yes' vote, too few councils (especially in the cities) are promoting transfer to guarantee that the Government's 'Decent Homes Standard' for council housing will be met by the 2010 deadline.(1)
The third Tory lothario has, apparently, gone on to greater things. Michael Howard performed a remarkable political trick for a Conservative; while accelerating the use of private finance to fund mainstream social housing, he threw billions of pounds of public funding into the Housing Action Trusts (HATs), the most successful housing-based regeneration programme since the war. Having used public funding to start delivery, the HATs were then made to refinance their developments with private money.
Last, John Gummer, not normally linked to political romance in any sense, tempted urban Labour councils into stock transfer with lavish, publicly funded dowries, turning stock transfer into a potential nationwide solution.
The Tories' focus on 'transforming' social housing set New Labour's agenda, but, perversely, it also panicked much of the left into opposing a strategy that could really put power into the hands of tenants.
Since Labour took power, there has been considerable confusion over what the Government really thinks about council housing. This has baffled Labour councillors, the wider Party and council tenants. Today, many councils and tenants believe that New Labour doesn't give them genuine choice. Tenants and councillors face a range of bewildering private sector funding and governance models, such as whole or partial transfer, Arm's Length Management Organisations (ALMOs) and the Private Finance Initiative (PFI). In many cases, only stock transfer delivers both the necessary resources and meaningful long term tenant and council involvement. Even the author of the most comprehensive (and highly favourable review) study of stock transfer has observed: 'Ultimately, the "choice" offered to tenants [in a stock transfer ballot] consists of no more than an opportunity to endorse or reject a single option, with rejection potentially incurring a heavy penalty in the form of debarred access to capital investment. This is, arguably, hardly a choice at all.'(2)
As I have suggested, it is not just New Labour which has been mesmerised by the Tories' pre-1997 policy for council housing. Margaret Thatcher and John Major also set the agenda for those on the left who oppose any kind of ownership and management other than by councils. In its anxiety to avoid the privatisation label, the left has failed to see — or to allow itself to see — the potential that transfer demonstrably offers for direct tenant control and influence. In the process, it has marginalised the history and track record of comrades in the Co-operative Movement, as well as the experience of the few genuinely tenant led transfers, usually driven locally by Labour Party members.
The left has also revealed an alarming attitude towards council tenants—caring but disempowering, the way of the Victorian parent. As I have observed elsewhere, 'housing people' — politicians and professionals — sometimes act like the love-child of Florence Nightingale and Joseph Stalin.(3) Those who have looked beyond the UK for ideas have realised that we have a particular hang-up over the ownership and management of social housing.(4)
Socialists in other parts of the world expect residents to take full care of their homes, and would have problems with our distinction between landlord and tenant. Our fastidiousness about the ownership of social housing would bemuse socialists in Europe and beyond who have built their social housing system on co-operative structures. The idea that all non-state landlords can be classed together as beyond the pale would cause derision.
A fundamental conceptual point is that housing is not the same as other areas of social policy. Indeed, 'social housing' is not a public service like education or health; it is a market intervention. That is not an issue of economic definition; rather, it recognises that someone's home is not the same as their hospital bed or their children's school place. Whatever our tenure, our home is a personal 'possession', a basis for self-expression for us and our households. It is not a 'resource', except for the occupants. As well as the personal perception we have of our home, the individual contract between landlord and tenant, and the payment at source (i.e., rent), distinguishes housing from most other public services. This means there are far more options for funding and for guaranteeing user rights than are available in other sectors. Furthermore, for over 100 years the Co-operative Movement (in housing and beyond) has shown how the governance models that housing associations employ can be a route to user empowerment.
Council tenants and the democratic deficit
So what should New Labour say about the future of council housing? Giving up the landlord role is painful for many Labour councils and even the most ardent New Labour ministers know to tread carefully. That being said, when Jeff Rooker was Housing Minister (one of the five so far since 1997; a higher turnover rate than under Thatcher), he described the relationship between councils and their tenants as feudal.(5) Austin Mitchell MP captures Labour's traditional spirit: 'Housing should stay under the council's direct and democratic control and management'.(6) Opponents of stock transfer cite some questionable value-for-money arguments and regularly take a swipe at the fat cat consultants who profit from privately funded deals. But the foundation of their case is essentially political. Council tenants, they argue, have a unique source of political power because they can hold their landlord directly to account, ultimately through the ballot box.
So the democratic argument in favour of council ownership is that local authority elections provide the best means of tenants holding their landlord to account. If this argument is sound, it is important for both high moral and low political reasons. Council tenants (and especially new entrants to council housing) are likely to be relatively poor and consequently disempowered. A landlord whom tenants can sack holds an obvious appeal for them. On a cruder level, if the argument is sound, surely Labour is daft to alienate an important group of voters?
Before exploring this argument further, it is worth thinking more about this 'extra level of democracy' for council tenants. Having the state as a genuinely accountable landlord has clear merits above many other kinds of arrangment. However, the state, precisely because of its democratic legitimacy, has a special kind of power, part of which derives from its statutory responsibilities. The state can justify what it does on the grounds of the greater good. In the context of council housing, that might mean demolishing your home or cutting your services.
Local authority 'secure tenants', have rights granted by Parliament. But what Parliament gives it can take away. The Tories have shown this several times in various 'reforms' — i.e., rent increases—as has New Labour in its Right to Buy 'modernisation' — i.e., discount decreases. That kind of power is a special one: it is exercised solely over council tenants. Other kinds of tenant (and owners) have the law of contract to protect them, and the mutual rights and obligations which that brings. Council tenants have the law of fiat, which lies mostly in the hands of their landlord. Now, that may be a price worth paying if the landlord's power is counterbalanced by the tenant's extra democratic rights. But, whilst the former is firmly in place—and endemic to the system of council housing—the latter has withered away.
The figures no longer support the case that council tenants, in any large numbers, can hold their landlord to account. In 1981, 13 per cent of wards in England and Wales had more than 50 per cent of households in council housing. By 2001, this had dropped to 0.7 per cent of wards. In 1981, 38 per cent of wards had more than 25 per cent of households in council housing; in 2001, just 12 per cent.(7) With these figures, it's clear to see that the direct or unique power of council tenants to hold their landlord accountable, if it ever was a reality, has disappeared. Indeed, councils can flout the will of their tenants, or simply provide them with a poor service, and tenants have no direct recourse. The only sanctions are administrative, a nasty report from the Audit Commission or a growl from the Government Regional Office. No-one holds anything like the powers of the housing association regulator, the Housing Corporation, to whip a non-performing or inept landlord into line.
The Corporation can — and does — undertake wide ranging inquiries into housing associations and has a right to see records (including those held by third parties) concerning any association's work. It can—and does—dismiss and appoint board members who fail to manage competently. In the last resort, it can direct that the assets of an association be taken over by another.
Reforming stock transfer
So, is there a solution that gives New Labour a more politically coherent housing policy and provides council tenants with straight answers and genuine rights? I suggest that the solution lies in a reformed stock transfer model which, in turn, means a reformed housing association sector.
By March 2005, over one million UK council homes will have transferred to registered social landlords, about 90 per cent of these being in England. The vast majority of transfer ballots achieve a 'yes' vote, hovering at around 84 per cent of all ballots since 1996.(8) All the independent evidence available—from the National Audit Office and the Heriot Watt University study—shows that transfer has been a success.(9) It has delivered the promises made to tenants, enshrined new ways of involving both tenants and councils, and provided staff with more scope to innovate and improve. Having been involved in 30 transfers, I would argue that it has also become an engine for wider neighbourhood renewal, giving residents the chance to control and influence a range of services that affect their lives. Stock transfer associations are now being used as the kernel for neighbourhood management vehicles, managing or even directly running local services such as youth facilities, training and child care.(10)
There are nonetheless weaknesses, some fundamental, in the way transfer is carried out, and addressing these is at the root of a new, people-based transfer system to replace council housing and fill the democratic deficit. Some transfer associations have performed poorly, as, of course, will organisations in any sector. But, as we have noted, the Housing Corporation's powers provide greater remedies than anything found in other sectors.
Tony Wright and Pauline Ngan have suggested criteria for judging successful, user-based services, based on representation, rights and redress.(11) These are helpful criteria for identifying the gaps in the current system. To these, I would add 'choice'. Choice in the public services is now central to Government policy. Even where choice is, in practice, limited (or even unwanted by consumers), it acts as a spur to better management by providers. In the context of stock transfer, as we have seen, many argue there is little real choice; that point must therefore be addressed in any reformed system.
If our concern is to replicate the democratic accountability that we assume once existed in council housing, the question of representation is fundamental. The typical stock transfer creates a new landlord which is jointly and equally owned by the council, tenants and 'independents' (people who are in neither of the other two groups). This ownership structure is then reflected in the composition of the management board. In reality, this governance structure works with varying degrees of success, but where it does work, tenants have a level of power that is simply unseen in any other sector. My experience suggests that the earlier tenants are involved in the creation of the transfer proposal, the more confidently and effectively they subsequently participate in the management of the landlord. But there are barriers to this happening in many—probably most—areas. These barriers are generally created by the lack of tenant involvement preceding the transfer. Where there has traditionally been little involvement, whistling it up in a matter of months to enable tenants to take on the running of a multi-million pound organisation is simply unrealistic. Assuming that this cannot and will not change is a common, but defeatist, attitude of the lazy landlord. What is needed is a method for building in the capacity to develop tenant empowerment at the speed which tenants want, without slowing down the much-needed investment.
We do not need to invent such a method; the Co-operative Union, through its affiliate, the Confederation of Co-operative Housing, has done so already by developing the Community Gateway Model (CGM).(12) Taken on board by (Labour-controlled) Preston Council , the CGM means that the new landlord is contractually committed to develop tenant (and wider community) empowerment, and to pass over management responsibilities as tenant-run vehicles are created.(13) So, councils like Preston, with the vision and commitment, can transform the traditional transfer model into an engine for empowerment. Other councils, like (Labour controlled) Tower Hamlets and (Labour controlled) Glasgow, are developing their own approaches based on similar principles. But community empowerment is not yet a fundamental tenet of transfer and there is no sanction on councils who do not take it seriously. Indeed, given that building in empowerment costs money, councils can find that taking empowerment seriously slows down the transfer process as government baulks at paying the bill. This was the experience of both Preston and Tower Hamlets. But, given that some councils have moved forwards, are the barriers in other areas really just procedural or financial, or are they barriers in the minds of individual councils that relish the power they have over tenants?
A transfer model that guarantees empowerment addresses the criterion of rights, but only at a global level. We need to think further about individual rights. One of the common criticisms of transfers levelled by opponents is that council tenants trade in a secure tenancy, with rights laid down in law, for a contract-based housing association assured tenancy. It is by no means clear that this issue influences tenants' voting choice, but it is clearly an important one to address. In truth, however, there is no substance to this criticism of housing association assured tenancies. First, these tenancies have existed for more than 15 years and there is no evidence they have proved more (or less) of a tool for disadvantaging tenants than local authority secure tenancies. Indeed, on the touchstone issue of eviction rates, the Heriot Watt study showed that there is little difference between housing associations and local authorities, with transfer associations actually evicting a smaller proportion of tenants. Second, as we have noted, statutory tenancy rights last as long as Parliament wants tenants to have them; whilst assured tenancy rights have a large statutory element, they also have the law of contract behind them. That being said, there are indefensible disparities between the rights of council and housing association tenants. Specifically, housing association tenants have no right to set up tenant management bodies (the 'Right to Manage') and many do not have the Right to Buy.
The Right to Manage rules have been used by around 200 groups of tenants in England to set up their own Tenant Management Organisations (TMOs) to take over a few or many services from their council. As well as providing immediate benefits to tenants—improved services and extra funds through greater efficiency—TMOs have also provided the basis of tenant-led transfers in, for example, Tower Hamlets, Walsall and Manchester. Some form of individually exercised Right to Manage must be part of the transfer model, complementing the contractual commitments made by landlords under the Community Gateway Model.
Council tenants in place at the time of a stock transfer keep their Right to Buy. Tenants coming in after transfer (and many tenants of non-transfer associations) do not have that right. This disparity cannot be justified. It used to be defended on the grounds of practicality; it was contended that stock transfer associations could not raise private finance if all their tenants permanently had the Right to Buy. This argument, if ever true, was demolished when Glasgow City Council's new housing association raised £850million for a transfer under the new Scottish Secure Tenancy regime, where every tenant—current or future — has the Right to Buy. That right, of course, was extended to them by a Labour-led Scottish Government.
On the grounds of consistency and fairness, we also need to see the Right to Manage and the Right to Buy extended to all housing association tenants. In their different ways, they are central to empowerment. The Right to Manage clearly and directly gives tenants control over their homes and estates. But the Right to Buy provides the seeds of empowerment in a different way. Given the relatively low income of social housing's customers, the Right to Buy is about encouraging mobility and wealth transfer to tenants. It has been an important mechanism for doing just that. The better-off, including many politicians and housing professionals, accumulate capital (and then use it as an additional source of spending power) with help from the taxpayer through tax relief on pensions, saving schemes and, in the past, mortgage tax relief. They release equity and do so without attracting derision. Why cannot social housing tenants have the same kind of economic power?
Even with strong representation and enshrined rights, things will go wrong, or will be perceived to go wrong by individual tenants. So, redress is as critical in social housing as in other sectors. Means of redress are already at least as strong in the housing association sector as in local (and, indeed, central) government. Associations are highly regulated so tenants' individual statutory rights are supplemented by minimum standards enforced by the regulator. There are a variety of means of redress, backed by enforcement powers far stronger than those usable against local authorities.
What housing role for local authorities?
My case so far is that stock transfer, properly reformed, provides council tenants with a more accountable, empowering landlord. The reformed process draws directly from the experience of the Co-operative Movement and ought to be embraced by all those on the non-authoritarian left. But that just tells us about what councils shouldn't do in housing; what is it that they should do? The conventional wisdom within government is that councils—including those that have transferred their stock—have an important (indeed, statutory) role to play covering the whole range of housing needs and tenures in their area. That includes: identifying and quantifying housing demand; promoting housing development to meet demand; assessing energy efficiency across tenures; supporting owners and commercial landlords in improving their stock; enforcing standards, particularly in high-risk tenures such as hostels and multi-occupied houses; assisting homeless people and households, including asylum seekers and other vulnerable groups. Much of this, in our jargonised world, falls under the heading of 'strategic' or 'enabling' functions. But a policy of wholesale stock transfer begs the question of whether the state, and particularly local and regional government, has any role in developing or managing housing?
As Michael Howard showed with the Housing Action Trusts, a judicious use of public funding to tackle the most intractable regeneration problems is a sensible and properly targeted use of the state's muscle and the community's will. A policy of wholesale stock transfer is, in effect, an acknowledgement that there is no justification for a universal or permanent public housing tenure. The case has been put here that this is because state-run housing is not a genuine platform for tenant or wider community empowerment. That argument is quite separate from the fiscal policy justification often cited — that transfer brings in private finance, thus taking the strain off the public finances. That argument is sound inasmuch as current accounting conventions make housing association borrowing look better than council borrowing for exactly the same type of spending. Given the arbitrary nature of such definitions, it does not carry anywhere near as much weight as the empowerment arguments. However, in the context of Gordon Brown's fiscal policy—which has delivered and sustained one of the strongest economies in the world—the borrowing argument must surely be taken seriously. The point about social housing is that, with rent income paid at source, it has far greater potential to attract private finance than other services. If our aim, therefore, is to lever in more private finance to a sector that can clearly support it in relatively large quantities, we need to consider whether a smarter use of public funding — and even direct public procurement of housing development—could be used to pump-prime complex new projects that cannot initially support private finance. This is a big issue in areas of changing — particularly decreasing — demand for housing and in large brownfield regeneration areas where someone needs to kick-start the regeneration process in order to create the values needed to secure borrowing at reasonable rates. In these situations, there may well be an economic justification for 100 per cent public funding (or fully publicly guaranteed private loans) on the basis that the homes produced will be refinanced conventionally, and therefore transferred from the authority, after completion. In many cases this approach would be far more straightforward than the complex system of gap funding and dowries that authorities have to grapple with in regeneration projects in low value areas. It also mirrors elements of the current pilot programme of Treasury-guaranteed loans for certain PFI schemes.
This approach also has potential benefits for tenant and community empowerment. The inflexible position, that private finance must be in place before anything much happens on an estate, currently means that tenants and councils often spend years in a never-never land of feasibility studies, options appraisals and bids. That is the experience of the New Deal for Communities areas, launched by New Labour on its first day in power but (more than seven years later) having very little to show, and that of councils with negative or low value transfers. A crucial part of building empowerment is proving to tenants that taking part means that things get done. Current approaches too often seem to prove the opposite.
The role of choice
Where, then, does choice fit into all this? As we have seen, many council tenants—especially those living in the poorest stock—do not currently have much real choice. The choices are 'vote for transfer', or go for an ALMO (and get less investment), a PFI contract (and lose effective control of the management of your home for 25 years), or stay as you are (and get little or no investment). For councils, the actual choice is less; ALMO funding needs top-level performance which many cannot achieve; PFI is not suitable for every estate and, in any event, is too costly and impractical for many refurbishment schemes; 'stay as we are' won't work if the council cannot reach the Decent Homes Standard. And if tenants vote 'no' to transfer, what do you do next? That's a question still being pondered in Birmingham, more than two years after the failed transfer ballot. The recurrent question is this: if, as Ministers insist, the Government doesn't really want to end council housing, why can't even top-performing councils have the funds to invest directly in their housing stock? That's a question so far without a convincing answer. If, as former Housing Minister Nick Raynsford used to say, the Government simply wants to 'let a hundred flowers bloom', it could pay a price for letting Mao Tse Tung set policy.14 Other than as a gesture to pluralism (which could be used to justify councils doing anything and everything), allowing some authorities to keep their housing stock but preventing others from doing so has no obvious logic; nor is it a policy centred on tenant interests. Of course, some argue that the Government simply mistrusts councils, doesn't want to say that too openly, and instead sets targets that make stock retention impracticable. Be that as it may, the right approach to providing and managing social housing should surely have inherently attractive qualities, like the ability to attract and use funds flexibly and scope for community empowerment?
So, if choice is currently a nonsense, the options are either to stop pretending there is a choice, or to give tenants a real one. If New Labour believes that reformed transfer leads to better, more tenant-influenced services, and that councils should be focusing on other housing issues, then asking tenants to vote about whether to stay or go makes no sense. If the options are not real, choosing between them also has little point. The real area of choice is over who the landlord should be. In theory, tenants are supposed to be consulted in the formative stages over the choice of landlord but this is, in practice, a soft process, and the question is almost never put to a ballot. But, within the context of a commitment to choice—of services and service deliverer—and to empowerment, the choice of landlord is the most tangible — and arguably the most important — one of all. A reformed transfer system should therefore make the choice of landlord, on the basis of what they have to offer, a central part of the system. In Scotland, competition between potential transfer landlords has been used extensively, and Scotland has a far more impressive record of tenant-run housing associations and co-operatives than does England and Wales.
If the Government adopts a wholesale transfer policy, how could this transition happen? The logic of my case is that transfer would be mandatory but that tenants would now have a real choice of new landlord. Housing associations—existing and newly formed, community based ones — could offer themselves as potential landlord for the authority's stock. As already happens in some places, the stock of an authority could go to several different landlords, and this would be the right way forward in large authorities or in ones where there is no single geographical identity. This approach also allows for the creation of tenant co-operatives and other small or neighbourhood based landlords. Tenants in each area would choose from a selection of different types of landlord, a process successfully followed in Scotland for many years, and, more recently, in Tower Hamlets. The chosen landlord's promises would form the cornerstone of the legal agreement to transfer the homes.
Councils would follow the reformed stock transfer process described in this paper, and would need to do so in time to make sure the Decent Homes Target is met. If existing housing associations want to be recipient landlords, they would have to take on all the empowerment commitments that any newly formed landlord would be required to offer. Under this package of proposals, their tenants would, in any event, be given the same rights as any other social housing tenant, including the Right to Manage and the Right to Buy.
Where the stock could not support enough private finance (for example, where demand for the stock no longer matches what the council actually owns), public funding (or guarantees) would be made available to support the redevelopment and remodelling, but on the basis that it would be refinanced with non-guaranteed private loans in due course. All transfers would follow the Community Gateway Model, or meet the same minimum standards of empowerment. All tenants would be given a choice of new landlord, including support to create their own, co-operatively run body.
The Government would need to set a realistic deadline for transfers to be completed, and one that reflects the 2010 target to achieve the Decent Homes Standard universally. In practice, that means all transfers would need to happen by no later than the end of 2007. This also means that the Government would have to keep a watch on the speed at which local authorities move forward with their transfer plans, and be ready to step in if there is too little action. The fall back if transfer does not happen by the deadline would be an asset transfer rather like those that have happened in the past when local authority functions (like public health and the utilities) have been transfered. If government sees that a council's transfer progress is too slow, it will need to set up other arrangements — for example, establishing a commission of tenants, representatives from other authorities and from the Audit Commission — to ensure that tenants still get a proper choice.
Conclusion
New Labour needs to renegotiate its relationship with council tenants. It must be frank about the choices that are genuinely available. It needs to change the shape of stock transfer so that it brings about tenant and wider community empowerment. In doing so, it has to redefine the role of the state — and particularly local government — in housing. Social housing development and management should be delivered through a regulated independent sector, with the regulators ensuring competition and diversity, and actively supporting and enforcing user involvement. Whilst using social housing's unique features to maximise the amount of private finance that can be raised to fund investment, the Government should not be reluctant to use public finance in a targeted way to kick-start investment. Local and regional government should firmly focus on developing and delivering housing policy with and for the whole community.
The fundamental commitment of the left to ensuring that all people can live in decent homes is rightly immovable, but a new framework for delivering this commitment is urgently needed.
References
- The Government insists that it is on course to meet the Decent Homes Target by 2010 although the ODPM Select Committee doubts this. For the target to be met, the rate of decrease in non-decent homes, and the number of homes improved each year to 2010, will have to rise dramatically. See the Government's response to the ODPM Select Committee's Report on Decent Homes, Cm6266 (July 2004).
- Hal Pawson, 'Reviewing Stock Transfer', paper to Housing Studies Association Conference (April 2004).
- Housing (February 2003), p.13.
- Carol Kay, 'Lessons Learned from abroad', Inside Housing (13 September 2004); David Rodgers, 'The New Mutualism', The Co-operative Party (January 1999).
- Inside Housing (27 September 2002).
- Camden New Journal (30 January 2003).
- 1981 and 2001 Census.
- Hal Pawson, 'Reviewing Stock Transfer', paper to Housing Studies Association Conference (April 2004).
- National Audit Office, Improving Social Housing Through Transfer: Report by the Comptroller and Auditor General (2003); H. Pawson, and C. Fancy, Maturing Assets: The Evolution of Stock Transfer Housing Associations (Policy Press, 2003).
- For examples, see 'HARCA Life', issued by Poplar HARCA (www.poplarharca.co.uk) and S. Rowe and J. Zitron, Beyond Bricks & Mortar: Bringing Regeneration into Stock Transfer (Chartered Institute of Housing, 2002).
- Tony Wright and Pauline Ngan, A New Social Contract: from targets to rights in public services (Fabian Society, 2004).
- Growing Confidence: introducing the Community Gateway Model (Co-operative Union, 2003).
- Empowering Communities in Preston (Preston City Council, July 2004).
- Interview in Housing Today (23 September 1999) in which Nick Raynsford quotes from Mao Tse Tung's 1957 speech launching the Cultural Revolution.
