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Innovation. Influence. Information.
Southwark Council’s Housing Commission Report published last autumn took an in-depth look at the state of the council’s housing stock. Councillor Gavin Edwards, Chair of Southwark’s Housing Scrutiny Committee explains the difficult choices that lie ahead.
Southwark Council’s Housing Commission Report is that rarest of things – a report about local government housing policy which you will find readable and interesting. The report, written by the Smith Institute and published in October 2012, provides a detailed analysis of problems afflicting one of Britain’s largest social landlords. It also offers up options (none of them painless) for how Southwark can confront these problems.
The fact that the report had to be commissioned at all tells you something about the level of importance placed on this issue by Southwark’s ruling Labour administration. Sadly, it also tells you something about the scale of the challenge facing the council.
Southwark has 39,000 tenanted properties and 16,700 leasehold properties and far too many of these homes are in poor condition. This is in part the legacy of the council (and the old GLC) building homes on the cheap in the 1960s and 1970s. These problems have been compounded by decades of poor repairs and maintenance and long-term underinvestment. For many years and under successive administrations of varied political stripe, Southwark has been avoiding the difficult questions about how to secure the long-term future of its housing stock.
Southwark’s Labour councillors commissioned the report because we knew that lack of investment and failure to properly manage the housing stock would, in the long-term, lead to a reduction in the number of affordable homes in the borough. That is not something that we were prepared to let happen. The Commission was asked to do two things: firstly, explore options for the financing, ownership and operation of Southwark’s housing stock beyond 2015 and make recommendations for a sustainable investment strategy over a 30 year period.
The conclusions of the report are fascinating, although it does not make pleasant reading for anyone seeking to defend the Southwark’s housing management record over the last 50 years. In short, the Commission concludes that the council has built poor quality estates on the cheap, failed to invest in maintaining them, consistently delivered a poor quality repairs service and failed to effectively engage with tenants. The long-term solutions identified by the Commission boil down to three main areas:
I won’t go into detail regarding the changes the Commission suggests with regard to two and three, otherwise this post is at risk of being longer than the report itself. But if you’re interested, take a look at the sections on “Housing Management Options (pages 63-65) and “Support for council housing” (page 67-72).
As you would expect, the headline issue which the report gives most attention to is the level of good quality council housing which Southwark can seek to sustain over the next 30 years. It also examines how this balances with the provision of other forms of affordable housing.
The three options for council housing proposed are:
Option 1: “The council could manage a slow but steady decline in its stock to around 30,000 homes. This would release extra funds to improve the retained stock and enable major restructuring of estates but do nothing to address the shortage of affordable low-rent housing. Over time the council would gain a relatively large financial surplus from its rents, which it could reinvest.”
Option 2: “Maintaining the stock at around the current level of 39,000 homes over 30 years would necessitate a substantial and sustained refurbishment and new-build programme. This more ambitious scenario would help ease the borough’s housing problems, but it requires the council to undertake a higher level of borrowing against the value of its larger stock to cover the funding gap. It also requires a step change in the quality of strategic and project management.”
Option 3: “A carefully managed reduction to 20,000 homes should cut management and maintenance costs and release more resources for improving the existing stock. Fewer council homes would mean more pressure on other social and private housing providers, as well as probably many more leaseholders as a result of tenants exercising their Right to Buy. But this option would also generate a larger financial surplus for reinvestment, which could be used in partnership with other providers.”
What is clear from these three proposals, is that there are no easy answers. The options involve either looking at managing down the number of council homes and doing more partnership work to deliver affordable housing OR maintaining more of the housing stock via increased borrowing.
That said, I think it’s clear that a Labour Council will not be seeking to make dramatic reductions in the housing stock, when what we need is more affordable housing, not less. As the Labour Leader of the Council recently said: “At a time when Southwark Labour has pledged to build 1,000 new council homes by 2020, it would go against all our beliefs to reduce our stock by 20,000 in the 20 years after that.”
My personal view is that we should be looking to be as ambitious as possible with regard to funding good quality social housing. I’m not interested in condemning people to sub-standard council housing based on ideological dogma. But neither do I think we can even begin to address these issues without a big role for the Council as a social landlord. Getting the funding model right is going to be difficult, but crucial to the success of this policy. The money has to be there to maintain the properties and regenerate those homes which are beyond repair. A key line in the report regarding the council’s ability to borrow to invest in housing states: ”The council has £126 million of headroom borrowing for investment in existing stock and new homes. This places Southwark in an extremely favourable position compared with other landlord authorities.”
The council will soon be carrying out a full consultation on the 30 year strategy and we’re encouraging as many local people as possible to get involved. Southwark councillors are not yet at the point of decision on Southwark’s affordable housing policy for the next 30 years, but the time for decisions is getting close. At least now we have the information we need to make our choice.
Councillor Gavin Edwards is Chair of Housing Scrutiny at Southwark Council.